Global Stock Jitters Renew, Bitcoin Price Slips Under $50,000
Global stocks waver to kick off the trading week as a key Federal Reserve update is expected to define markets. BTC under $50K.
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Principal Points
- Global stocks decline as they open the trading week with Fed update slated for Wednesday
- Bitcoin slides below $50,000 as cryptocurrencies turn lower after a weekend of gains
What’s Moving in the Markets?
Global markets were largely in defense mode Monday as traders worldwide prepared for a key event slated for tomorrow. Stocks and cryptocurrencies fell while currencies wobbled as markets positioned for the Federal Reserve’s final meeting of 2021.
As a result, US stocks slipped across the board. The S&P500 retreated from its record high set Friday, while the Nasdaq and the Dow dropped 1.4% and 0.9%, respectively.
Further, the stock market decline was the biggest single-day loss for the major indexes in almost two weeks. Not only that, but the drop spilled over to the nascent cryptocurrency market.
On that front, the price of bitcoin dived back under $50,000 with a Monday low of $45,700 per coin. As the decline was widespread in the crypto market, the price of Ether also tumbled. The Ethereum network’s native coin lost about 10% to slide below $3,700.
The broad-based retreat brought bitcoin’s losses to 33% since it hit a record of $69,000 on Nov. 10. Ether, on the other hand, is lower by roughly 24% since its own all-time high of $4,860 per token.
What’s the Big Picture for Traders?
Looking ahead into the week, investors will follow the two-day meeting between US central bankers. The gathering, which ends with a press conference from Chair Jerome Powell, will highlight several important issues.
First, Mr. Powell’s speech, slated for 2:30 pm ET on Wednesday, will arrive half an hour after the Federal Reserve decides on interest rates.
While the US central bank is expected to leave rates unchanged at ultra-low levels, surprise announcements are possible. For example, economists expect the Fed would bring forward its first interest rate hike to early 2022.
If confirmed by Chairman Powell, financial markets could experience increased volatility due to the importance of the news.
In addition, the Fed Chair might choose to highlight current inflation pressures that have rattled stocks recently. To this end, a quicker tapering, or withdrawing, of the Fed’s $120bn-a-month asset purchase program might be on the cards.
What to Watch in the Markets?
Still, as traders prepare for the conference tomorrow, the dollar is a potential play if you are looking to take advantage of volatility. The EUR/USD, for example, is floating around a multi-month low at 1.1275 due to the stronger greenback in forex markets.
Also, gold could react to any surprises in either direction. Presently, the precious metal is trading at levels near $1,790 per troy ounce. Nevertheless, gold is so far having a losing year as its price is down over 6% since January.
Economic Data Coming Up Today (EST times)
On Tuesday, the US Federal Reserve gathers for its two-day policy meeting. On that note, no updates are expected today from the US central bank. At 08:30 am, however, the US will release its producer price index (PPI) report for November.
Later, the Reserve Bank of New Zealand will have a press conference at 02:00 pm. Volatility could be expected in the New Zealand dollar.