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Stocks Drift Higher After Worst Weekly Run Since June

The ECB announced it would cut the monthly rate on its bond-buying. After Thursday’s losses, European stock markets rise moderately.

SageFX - Sep, 14, 21

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Principal Points

  • Stocks in Europe and the US bounce back from last week’s losses
  • US equity futures hold steady; bitcoin hovers slightly below $46,000 per coin

US and European Stocks Turn Higher

US equities and European shares advanced broadly on Monday amid improved market mood following a week of losses on both sides of the Atlantic. Stocks on Wall Street pared back some of the losses over the previous week which turned out to be the worst weekly performance for US shares since June.

A solid push to the upside on Monday led Dow Jones to finish the day higher by over 260 points. The S&P500 also pressed forward, gaining 10 points. Both blue-chip stock benchmarks snapped a losing streak of five consecutive days.

The technology-centred Nasdaq Composite failed to kickstart the week in the green and closed 0.1% lower on the day.

Despite last week’s stumble, the Dow Jones and the S&P500 remain close to their all-time highs set earlier this month. Recent market jitters have increased the level of cautiousness in investors who expect to see fresh signs that prove the economic recovery is moving on an upward trajectory.

US Futures Pressured Ahead of Tuesday’s Regular Session

In signs of weakening optimism after a largely positive day, futures contracts on the major indexes point lower on Tuesday. Futures tied to the 30-stock Dow Jones index hovered in the red by about 40 points or 0.11%. S&P500 futures were down roughly 0.1%, while Nasdaq futures floated lower by 0.2%.

Across the Atlantic, European shares opened for trading fairly flat and slightly in negative territory. The region-wide Stoxx 600 is lower by about 0.3% after it gained 0.3% on Monday. Oil stocks, banks, and utility shares helped lift the broad stock gauge yesterday after four straight days of losses.

Investors in the old continent are cautiously optimistic that the strong eurozone economic recovery would stay robust despite the risks of a global slowdown. Last week, the major averages in Europe drifted lower on concerns that inflation would dent the recovery while the European Central Bank is preparing to reduce the volume of monthly asset purchases under the €1.85tn emergency stimulus program.

Bitcoin Climbs Near $46,000

Bitcoin remains steady above $45,000 per coin as the cryptocurrency market’s recent rally has paused. Major tokens have traded stable over the past few days. Crypto enthusiasts now await the next price catalyst that would propel the crypto space to its next peak.

The original cryptocurrency, bitcoin, has added about 1.5% today and is currently trading around $45,700 per coin.

Looking Ahead into the Day

For crypto players, the Senate Banking Committee today is scheduled to bring in for questioning Gary Gensler, Chairman of the Securities and Exchange Commission. Mr. Gensler will discuss how can the SEC introduce investor protection and regulations over cryptocurrency exchanges.

For the broader market, US inflation data will be released today. The consumer price index report for August will show if price pressures have eased, as the Federal Reserve expects. Depending on the inflation number, the release may cause increased fluctuations in the US dollar and jitters in the stock market.

In tech, the Apple launch event scheduled for today will reveal the new iPhone 13 and the Apple Watch Series 7. Rumours have spread that the event may contain surprising news regarding electric cars and smart glasses. The event could bring higher volatility in Apple shares.