Wall Street eyes Fed, bitcoin volatile

US stocks should have a boring lead up heading into a wrath of central bank decisions, with many focusing on the Fed.  Financial markets should teeter from the cyclical rotation trade to this big-tech discount might be too good to pass up.

Wall Street seems to be posturing for the Fed to cap the rally in Treasury yields and for oil prices to pullback.  Financials and energy stocks are leading the decline as utilities and consumer discretionary stocks post modest gains.

Global equities don’t want to rally until Europe’s outlook improves and the AstraZeneca vaccine suspensions across France, Germany, and Italy is very damaging.  Confidence in COVID vaccines in Europe is taking a hit despite assurances from the EMA.  Reports of serious side effects from AstraZeneca shots, such as blood clots, could lead to more hesitancy by those who have not been vaccinated, throwing another wrench at what has been a sluggish vaccine rollout in Europe.  Until COVID cases broadly trend lower, European equities could struggle.

Bitcoin’s rollercoaster ride

Bitcoin’s rollercoaster ride was intense and for many they were unable to take advantage of it.  The drawback for some crypto derivatives is that they don’t trade 24/7 like Bitcoin.  Over the weekend, the rise above USD61,000 was sparked by some stimulus checks, growing NFT purchase interest, continued support from Elon Musk, and as many traders locked in on hefty profits.

The bitcoin pullback accelerated after many bitcoin whales moved their money to the exchanges and after the Reuters story on India’s potential crypto ban included punishment for holding or mining Bitcoin, the strictest stance by any major government.  The thing that scares cryptocurrency traders the most is regulation and India’s potential punishment scared many in the crypto world.  China has already banned mining and trading but refrained from fining individuals for holding cryptocurrencies.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Ed Moya

Ed Moya

Senior Market Analyst, The Americas at OANDA
With more than 20 years’ trading experience, Ed Moya is a senior market analyst with OANDA, producing up-to-the-minute intermarket analysis, coverage of geopolitical events, central bank policies and market reaction to corporate news. His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies. Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Most recently he worked with TradeTheNews.com, where he provided market analysis on economic data and corporate news. Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business and Sky TV. His views are trusted by the world’s most renowned global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Breitbart, The New York Times and The Wall Street Journal. Ed holds a BA in Economics from Rutgers University.
Ed Moya