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Record Deficit, AstraZeneca, Dimon’s Letter, Cryptos Pullback

US stocks edged higher after a record deficit showed that US consumer and business demand is heating up, prompting investors to continue to buying reopening stocks. Market moves across most asset classes has been somewhat limited ahead of the release of the Fed’s minutes. Many Fed watchers will look for any indication from policymakers that they are concerned the economy is likely to run too hot and drive up pricing pressures. The taper tantrum is a big fear for stock investors but these minutes will likely show continued optimism with the recovery and expectations for an early overshooting of their inflation target due to base effects. Wall Street might have to wait until the June or July policy decisions to see if inflationary pressures are becoming worrisome.

AstraZeneca may have link with blood clots

The AstraZeneca COVID vaccine took a small setback after drug regulators noted a possible link between the Astra shot and blood clots. The UK’s vaccine advisory board said the UK will offer the Moderna and Pfizer jabs to people under-30 years old. The AstraZeneca vaccine is still deemed safe, effective and that benefits outweigh the risks. The MHRA noted that the link between the Oxford-AstraZeneca vaccine and rare blood clots is extremely rare. The British pound was initially dragged down over the AstraZeneca vaccine headlines, but the hit to vaccine distribution seemed to be only a couple of weeks.

Dimon

JPMorgan CEO Dimon’s annual letter provided another bullish case for US stocks. The key takeaway from his 60+ page note is that the economy is booming and that could easily run into 2023. The risks to the Goldilocks scenario remains that the new COVID-19 variants may be more virulent and resistant to the vaccine and an increase in inflation that may not be temporary and force the Fed to raise rates.

It appears that my daily note can no longer just focus on bitcoin. Yesterday, the cryptocurrency market value tentatively rose above USD2 trillion, but has since pulled back slightly. The surge was mainly attributed to record gains in Ether and after XRP recaptured the USD1 level for the first time in three years.

The highly anticipated Coinbase IPO seems poised for April 14th and the buzz is growing following a better than expected first-quarter trading update. Coinbase saw revenue skyrocket to USD1.8 billion and anticipates net income to grow between USD730-800 million from USD31.9 million a year ago.

Bitcoin continues to drift lower and will likely need a new massive endorsement for prices to recapture the USD60,000 level.

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