Black Friday is Now! Don’t miss out on up to 60% OFF InvestingProCLAIM SALE

U.S. Opening Bell: Ongoing Sector Rotation Lifts Stocks; Bitcoin Cracks $50K

Published 23/08/2021, 11:28
EUR/USD
-
GBP/USD
-
USD/JPY
-
UK100
-
XAU/USD
-
SBRY
-
DX
-
GC
-
LCO
-
ESZ24
-
CL
-
RTYZ24
-
1YMZ24
-
NQZ24
-
IXIC
-
GB10YT=RR
-
DE10YT=RR
-
US10YT=X
-
STOXX
-
MSCIEF
-
MIAP00000PUS
-
USD/CNH
-
BTC/USD
-
  • European retailers outperform
  • Treasury investors signal potential reversal 
  • Bitcoin breaches $50,000
  • Key Events

    US futures on the Dow, S&P, NASDAQ 100 and Russell 2000 advanced on Monday, along with European shares, ahead of the start of the US session as investors continued buying last week’s dip. However, market sentiment remains cautious due to the ongoing spread of the Delta variant, China’s ongoing regulatory clampdown and the upcoming, potentially market moving Federal Reserve Jackson Hole Symposium starting on Thursday.

    The dollar retreated, boosting oil and gold. 

    Global Financial Affairs

    Although Friday’s rally was supported by investors buying into defensive stocks along with the tech industry, today's rally in US futures shows that the reflation trade is leading the move up. 

    In Europe, retailers led the STOXX 600's rally, which is set to be the sharpest advance in a month. A takeover bid for supermarket chain J Sainsbury (LON:SBRY) catapulted its shares almost 13%, to their highest level since mid-2014. Contracts on the Russell 2000—whose members tend to be small, US domestic businesses that have the most to gain from a reopening economy— outperformed, up 0.8%, at the time of writing, nearly three times that of the 0.3% rise at present for NASDAQ 100 futures, which represents growth stocks that tend to benefit from economic contraction, making them especially in demand in a stay-at-home environment.

    MSCI’s Asia Pacific benchmark also jumped by the most in a month due to a dip-buying bounce in Chinese technology stocks, after a protracted selloff.

    Investors loosened their grip on safe haven Treasuries, including the 10-year note, allowing yields to rise for the second day, for the first time in two weeks. 

    10-year Treasuries Daily

    Rates are heading higher along a fledgling rising channel (green), which will have to overcome the more mature falling channel (red). Notice, that if the green channel overtakes the bottom of the red channel, yields will have completed a bottom.

    The decreased demand for Treasuries allowed the dollar to slip for the second day.

    Dollar Index Daily

    The greenback’s decline comes at a confluence of resistance points: The Mar. 31 high. If it's surpassed, the USD will complete a double-bottom at the top of the rising channel since July and the shorter one since the August bottom. Therefore, the two rising channels will likely support the price, giving it another opportunity to take on the Mar. 31 peak in a more decisive manner.

    Gold rose for the second day, in mirror image of the dollar.

    Gold Daily

    The yellow metal is possibly forming a falling flag, whose upside breakout will take on the falling channel’s bearish bias.

    Bitcoin surpassed the key $50,000 level, reaching its highest point since early May.

    Bitcoin Daily

    The digital token has the momentum to keep going higher, after completing a bullish pennant within a rising channel.

    The weakening dollar reduced some of the pressure on commodities, including oil prices, allowing dip buyers to take advantage. However, we expect the rally to be short lived.

    Oil Daily

    The current rise for WTI is a return-move to retest a top in the shape of a descending triangle.

    Up Ahead

    Market Moves

    Stocks

    • The FTSE 100 increased 0.5%
    • The STOXX 600 rose 0.6%
    • Futures on the S&P 500 climbed 0.3%
    • Futures on the NASDAQ 100 gained 0.3%
    • Futures on the Dow Jones Industrial Average added 0.4%
    • The MSCI Asia Pacific advanced 1.2%
    • The MSCI Emerging Markets Index rose 1%

    Currencies

    • The Dollar Index was little changed
    • The British pound rose 0.1% to $1.3639
    • The euro was little changed at $1.1709
    • The Japanese yen fell 0.2% to 109.98 per dollar
    • The offshore yuan was little changed at 6.4968 per dollar

    Bonds

    • Britain’s 10-year yield advanced two basis points to 0.54%
    • The yield on 10-year Treasuries advanced one basis point to 1.27%
    • Germany’s 10-year yield advanced one basis point to -0.48%

    Commodities

Latest comments

Loading next article…
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.