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Frankfurt – 16/02/2021
50k Bitcoin and other highs
Even if Wall Street could not maintain the new records today, the mood on the stock markets remains very good. Investors’ optimism can also be recognized in the substantial price gains of cyclical stocks and gold’s falling price.
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Overarchingly, US investors are hoping, as in other regions, that the economy will recover quickly as vaccination campaigns progress and new corona infection figures fall. They also continue to bet on the government’s expected stimulus package of around $1.9 trillion.
US Markets at a glance
The US stock markets moved with different tendencies after the long weekend. The Dow Jones started trading higher and also closed 0.2 per cent higher at 31,521.76 points. The NASDAQ Composite also started the day higher. However, it fell into negative territory in the day, ultimately ending 0.34 per cent weaker at 14,047.50 units. Shortly after the start of trading, both indices marked new highs. The broader S&P 500 index also initially marked a new high at 3,950 points but then closed little changed at 3,932 points.
Positive signals came from the prospects of the economic stimulus package and support from central banks, which should ensure a broad recovery of the economy. A draft of the 1.9 trillion US dollar aid package is to be prepared this week.
Further, vaccine hopes and declining case COVID-19 numbers in some countries also provided positive impulses.
Far East Markets at a glance
On the Asian markets, the signs were predominantly green on Tuesday.
The Japanese benchmark index Nikkei closed with a gain of 1.28 per cent at 30,467.75 points. Thus, the Japanese benchmark index defended the 30,000 mark, which it had surpassed on Monday for the first time since 1990.
On the Chinese mainland, trading is still suspended up to and including 17 February. In Hong Kong, trading continued, and the Hang Seng rose 1.90 per cent to 30,746.66 points by the end of the session.
The upward trend on the East Asian stock exchanges thus continued. Investors’ risk appetite grew because of the ongoing global vaccine deployment against the coronavirus and the resulting economic recovery prospects.
European Markets at a glance
Trading on the European stock markets was characterised by caution on Tuesday. The EuroSTOXX 50, for example, moved close to its previous day’s closing price after starting almost unchanged. At the close of trading, it then lost 0.23 per cent to 3,725.56 points.
The German benchmark index DAX ended the day 0.32 per cent weaker at 14,064.60 points. In contrast, the TecDAX started the day with a small gain and then extended it. At the end of the European trading session, a plus of 0.55 per cent to 3,592.98 points was on the board.
Investors were waiting for fresh impetus after the recent gains. Although contrary to expectations, the ZEW economic expectations of the stock market and financial experts had increased significantly in February, this was hardly able to move prices. The DAX record high of 14,169 points reached the previous week remained within reach.
Forex, gold, oil and crypto
The euro exchange rate ultimately moved little on Tuesday after a small up and down ride in European trading. The common currency was last traded in New York at 1.2113 US dollars. It had risen close to 1.2170 US dollars during the day, but also briefly slipped below the 1.21 dollar mark. Economic data published from both sides of the Atlantic had a price-moving effect on the Forex market’s euro-dollar ratio during the day. The greenback ultimately gained against all major currencies because robust economic data from the USA gave it some impetus. A regional industrial indicator for the New York region brightened more than expected in February. The US economy recently proved more robust than the Eurozone in the pandemic. Besides, the outlook is improving because of more rapid vaccinations.
Commodity market investors also continue to bet on rapid economic recovery. The important industrial metal copper price temporarily rose to a nine-year high of 8,437 dollars per tonne. Investors also stocked up on platinum in anticipation of a recovery in car sales.
On the oil market, on the other hand, investors took a breather and prices trended inconsistently. North Sea Brent’s barrel price rose slightly to 63,17 US dollars, while that of US WTI fell slightly to $59,86.
After trading sideways in a narrow range for days, gold took a big hit today and dropped to under $1,800, closing at $1,791 per troy ounce.
It was Bitcoin’s big day – once again – today. Even if only briefly, the most popular cryptocurrency breached the $50,000 mark for the first time, marking a new all-time high at $50,475 before retreating to around $49,000. The overall market sentiment in digital assets was very mixed today and saw daily winners and losers constantly changing sings. Ethereum lost 1 per cent to $1,768 while XRP and Stellar came under heavier pressure, losing around 7 per cent to $0.51 and $0.48 respectively. Altcoins are often seen to trend higher after Bitcoin had its run-up.
Corporate and world economic news
The corona crisis caused the number of German industry employees to shrink in 2020 for the first time in ten years. Manufacturing companies with at least 50 employees employed a good 5.5 million people on average for the year. That was 2.2 per cent fewer than in 2019, as the Federal Statistical Office announced on Tuesday. The last time a decline was recorded was in 2010 due to the financial market and economic crisis, which led to a minus of 2.4 per cent.
The renewed lockdown measures in the fight against the second corona wave hurt the fourth quarter’s eurozone economy. As the statistics authority, Eurostat, reported in a second publication, the gross domestic product (GDP) fell by 0.6 per cent compared to the previous quarter.
Contrary to expectations, the economic expectations of the stock market and financial experts in the eurozone increased significantly in February. The ZEW index of economic expectations rose to 71.2 points from 61.8 in the previous month, according to the Centre for European Economic Research (ZEW). Economists surveyed by Dow Jones Newswires, however, had expected a decline to 59.8 points.
Manufacturing business activity in the New York metropolitan area rose more than expected in February. The Federal Reserve Bank of New York’s index of general business activity in the NY District’s manufacturing sector rose to plus 12.1. Economists had predicted a reading of only plus 5.9.
Steff has been actively researching the financial services, trading and Forex industries for several years.
While putting numerous brokers and providers to the test, he understood that the markets and offers can be very different, complex and often confusing. This lead him to do exhaustive research and provide the best information for the average Joe trader.