US Stocks Today: Records in sight again as CCIV trends and Bitcoin busts it
US stocks look set to continue from last week's records with most markets in the green on Tuesday. The week ahead sees some relatively benign data as a four-day week beckons in the US and Chinese markets remain subdued with lunar new year holidays.
See US Stocks week ahead outlook
Nevertheless, this hasn't dented the bullish optimism. European markets are calm but mostly positive. UK FTSE is up 0.2%, EuroStoxx up 0.1% and Dax flat.
Asian markets were strong on Tuesday. Hong Kong shares were boosted by strong holiday activity in China. Cinema attendance was at record highs over the Lunar holiday in China. The Hang Seng closed nearly 2% higher with the Nikkei closing a more modest 0.3% higher. BoJ Governor Kuroda said the Bank had no plans to reduce its ETF purchases as stocks in Japan hit fresh 30-year highs.
US futures are currently in the green with continuing positive momentum. Fears over a reduced, politically divisive, US stimulus have faded. Increasing optimism over the vaccine-enabled opening of economies continues to underpin stocks as any inflation concerns are ignored for now. The Fed has continued its doveish stance talking down inflation concerns and committing to low-interest rates for the foreseeable future.
Dow futures are currently up 0.6%, S&P up 0.5% and Nasdaq futures ahead by 0.4%.
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European shares were not as exuberant as their US counterparts as lockdown continued to weigh on economic activity and sentiment. UK shares outperformed as the UK vaccination program continued to meet targets. Mining stocks boosted the FTSE which is weighted to miners and oil stocks. Commodity prices continue to rally on hopes of a global economic recovery in H2 2021.
European GDP was -5% for Q4, more or less in line with expectations. German ZEW was also close to expectations but the sentiment index did outperform.
US indices were boosted by Fed's Bullard generally positive interview with CNBC, saying financial conditions were "generally good" and US inflation was "in good shape, right now". Bullard also told CNBC that the economy could be "roaring" and could outpace Chinese growth.
Goldman Sachs increased its earnings estimates for S&P 500 stocks, saying "the 4Q 2020 earnings season surprisingly revealed that S&P 500 profits have already surpassed their pre-pandemic level". Bank of America said on Tuesday “The only reason to be bearish is… there is no reason to be bearish."
US 10-year yields continued higher, touching 1.26% on Tuesday, still not enough to cause alarm amongst investors or indeed Feb members. Bitcoin continued to surge, breaching $50,000.
Energy prices were higher as a severe weather system affected large parts of the US with multiple power outages. Oil and gas prices at US hubs rose as a result. Energy stocks were set to continue 2021's strong performance as a result.
Earnings season has officially closed but some companies still had results on the block for Tuesday.
Palantir Technologies (PLTR) released a surprisingly disappointing earnings report for Q4. Shares fell 5%. CVS results were strong, beating on EPS and revenue.
Facebook announced it is designing a smartwatch as Apple/Nissan joint venture on an EV was denied by Nissan after an earlier report in the FT.
Ups and Downs
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Author
Ivan Brian
FXStreet
Ivan Brian started his career with AIB Bank in corporate finance and then worked for seven years at Baxter. He started as a macro analyst before becoming Head of Research and then CFO.
