Ipek Ozkardeskaya
Swissquote Bank Ltd
The Federal Reserve (Fed) Chair Jerome Powell’s doggedness about the ‘transitory’ inflation starts being a problem for an increasing number of investors, as, although investors love cheap liquidity and favourable market conditions, an increasing number of them think that the fast monetary expansion should no longer happen at any cost. Powell’s ignorance of the accelerating inflation is now bringing up the question of, is he making a policy mistake, and whether the US monetary policy and hence, the markets are safe in his hands.
European and US indices were mostly offered yesterday. Dow Jones eked out slight gains, but Nasdaq slid 0.70% as the US monetary policy fears eclipsed the idea that rising Covid cases would re-fuel demand in most beloved tech stocks.
With thin summer volumes and mounting pessimism, we could see Nasdaq correct some 5 to 7% to the downside, toward the 50 and 100-day average levels respectively, but the medium-term outlook remains positive on the back of strong earnings growth and more-than-favorable monetary conditions, despite rising prospects of an early policy tightening.
Elsewhere, sustainable investing is a trending theme as European policymakers step up efforts to reduce CO2 emissions. What is the best way to play the green revolution?
Why cannabis stocks are sputtering despite encouraging legislation news, and what could happen if Bitcoin breaks the $30K support?
This report has been prepared by Swissquote Bank Ltd and is solely been published for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any currency or any other financial instrument. Views expressed in this report may be subject to change without prior notice and may differ or be contrary to opinions expressed by Swissquote Bank Ltd personnel at any given time. Swissquote Bank Ltd is under no obligation to update or keep current the information herein, the report should not be regarded by recipients as a substitute for the exercise of their own judgment.
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