Nasdaq rebounds, Bitcoin struggles | Forex action

We are finally seeing some relief in global equity markets; a good rebound in European indices yesterday followed by a decent advance led by tech stocks in New York suggests that inflation concerns are easing for now, although these inflation fears will often be heated up and reinstated in the market from now on, unless we see a lasting deceleration in the commodity recovery, or soft, but not too ugly economic data that would suggest stabilizing inflation without necessarily hinting at a poor economic recovery. It’s a fine line for the Federal Reserve (Fed) to walk.

The US dollar is softening, again, and the US 10-year yield has fallen below the 1.65% handle.

For those who are ready to explain the positive vibes of the US stock markets, we have a choice. Bloomberg chooses to focus on better-than-expected weekly jobless claims in the United States, which fell below the half-million mark for the third week in a row: this is a sign that the Fed’s policy is working, and if the Fed is forced to start cutting its bond purchases in a few months, at least a stronger economic recovery will be there to cover the backs of investors. But for those who like bad news, that’s the good news theory, we were also served yesterday a manufacturing index from the Philly Fed; employment, new orders and trading conditions were all looser than expected except for prices paid, meaning that despite rising inflation, the Fed would be pushing its limits to stay as accommodating as possible .

Today, flash PMI figures across the world are expected to confirm the resumption of economic activity in May, especially in Europe where most countries have relaxed restrictive measures and are returning to normal life. In addition, some reports indicate that companies with more exposure to Europe and European equities are expected to outperform their peers in the coming weeks and months, as vaccination efforts bear fruit and the period of reflation is also expected to outperform their peers in the coming weeks and months. help increase appetite in the region. I still believe that the enthusiasm and euphoria in European stocks should remain subdued compared to those seen in US stocks. Europe is increasingly contained in terms of growth spurts, whether due to strict market regulations or the more conservative mindset of the old continent.

In the crypto-space, Bitcoin that shattered after Elon Musk expressed environmental concerns over Bitcoin’s energy-intensive mining process, Janet Yellen’s Treasury Department gave crypto another punch -investors yesterday claiming that companies receiving digital tokens were worth more than $ 10,000 should report it to the IRS. In a way, this is normal. The idea is to have a financial revolution, not to have a large-scale tax evasion tool. Therefore, in theory, this kind of news should not bite investors’ appetites in the long term. But alas, Bitcoin is struggling to go below $ 40,000. Technically, we are in the bearish consolidation zone, and further bearish consolidation could be on the menu this weekend.

Coinbase’s struggle, on the other hand, justifies the theory that good volatility – when people rush to cryptocurrencies doesn’t have the same impact as bad volatility – when people rush to exit. This isn’t too surprisingly, but in terms of transaction fees, any volatility is supposed to be good for a business like Coinbase’s, if the sale remains temporary. Coinbase’s next major price test is the $ 200 per share, a slide below that level could keep the downward pressure intact on the rather unlucky new member of the Nasdaq.

Finally, Oatly Group shares also debuted on Nasdaq yesterday and were warmly received by investors as the company offers a revolutionary line of products that fits perfectly into the current vegan and pro-environment trend and is likely to attract l attention from ESG funds. However, at the current valuation, the price is somewhere close to 24 times last year’s sales, relatively high compared to Beyond Meat’s 16 times and Danone’s miserable 2 times. The latter are expected to exert some downward pressure on current prices as competition in cow-free dairy products will be stiff, as traditional big names like Nestlé and Danone are not twiddling their thumbs.

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About Kristopher Harris

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