US Stock Futures Edge Higher As 2021 Trading Kicks Off
The year 2020 was one wild ride for Wall Street, to say the least. If you are a fan of tech stocks, you may know that the Nasdaq Composite surged 43.6% in 2020. That was its biggest one year gain since the financial crisis in 2009.
“The stock market is positioned for further gains in 2021 based on the twin pillars of coordinated fiscal and monetary policy from the U.S. Treasury and the Federal Reserve Board and a successful COVID vaccine rollout,” wrote Marc Chaikin, CEO of Chaikin Analytics. “However, we envision some bumps in the road on the way.”
U.S. stock futures and major international markets rose on the first trading day of 2021. Many are hoping that the rollout of vaccines globally will accelerate the reopening of economies. In addition, government stimulus could also be contributing to positive sentiments in equities. The major future indexes are all trading in the positive territory. The Dow, S&P 500, and Nasdaq 100 futures were all in positive territory, moving 0.61%, 0.56%, and 0.42% higher respectively as of 6.18 a.m. ET.
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Bitcoin Blasts Past $34,000 For The First Time
Another day, another thousand dollar gains for Bitcoin. The virtual asset saw its price reaching a peak of $34,600. And that happened less than 24 hours after it breached the $30,000 mark. Perhaps you are wondering, what exactly is happening with this cryptocurrency? You see, the meteoric rise is not without reasons. The Fed has been keeping interest rates at dovish levels amid a severely weakening dollar. And investors are looking for ways to hedge against the weakening dollar. And bitcoin appears to be an attractive choice these days. Also, the participation of institutional investors is also perceived to be the driving force behind such massive rallies.
“Bitcoin’s price is being driven by institutional money and there is not enough supply,” Laurent Kssis, managing director at 21Shares, told CoinDesk. “The number of family offices asking to invest in our ETP is just staggering. I’ve never seen this before. In 2017 it was just retail knocking at the door now it’s only institutional.”
Chinese EVs Reported Strong Deliveries
Many would argue that 2020 was the year of electric vehicle stocks. With gains of such magnitude from Tesla (TSLA Stock Report), all eyes are on the red-hot industry. But let’s not forget the world’s biggest EV market is not in the U.S. or Europe, but China. Understandably, it makes sense for investors to look for homegrown EV companies in China.
If you are an early investor in Chinese electric vehicle stocks, you might have celebrated the new year with champagne. Over the new year’s holiday, the trio of Chinese EVs have all posted strong monthly deliveries. Clearly, they are starting the year with a bang. XPeng (XPEV Stock Report), Nio (NIO Stock Report), and Li Auto (LI Stock Report) all posted triple-digit percentage gains in their December delivery figures from a year ago. With China expected to invest heavily in clean energy, including electric vehicles, you would expect the music to continue playing in 2021.
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Oil Climbs Above $49 Before OPEC+ Meeting On Production Levels
The oil industry was brought down to its knees in 2020. Oil demand came to a screeching halt during the onset of the coronavirus pandemic when international travel came to a standstill. The OPEC+ ministerial meeting comes after oil consumption tanked in 2020 due to the COVID-19 pandemic and a price war between Saudi Arabia and Russia. Despite the pickup in oil prices towards the end of 2020, there are still a lot of uncertainties lingering in the oil market.
“Finally, we saw a strong demonstration of OPEC+ will and capability to manage the market, laying the groundwork for Brent’s recovery to over $50 per barrel despite remaining demand uncertainty in the market,” JBC Energy analysts.
From oil’s futures curve, it appears markets have mixed short- and longer-term outlooks. Sentiments are neither too optimistic nor too pessimistic. That can be seen from Brent’s prompt time spread of 2 cents a barrel in contango, whereby later-dated prices are higher than near-dated prices.
Earnings Report
Earnings for cloud computing, e-commerce, and electric vehicle companies have seen them crushing analysts’ estimates. As we continue to wind down the earnings season in the first week of 2020, there are still some big names reporting their results this week. These include Tata Consultancy (TTM Stock Report), Micron Technology (MU Stock Report), and Constellation Brands (STZ Stock Report). As such, if you are looking for top EV stocks to buy amid strong deliveries, chasing the high price tag of Bitcoin, or to follow the OPEC+ meeting, there is enough to get you all warmed up this week.
