Turnaround Tuesday, Pepsi’s inflation warning, dollar rebounds, bitcoin 50K

US stocks are rebounding as investors find value in beaten-up tech stocks and are coming to the realization that the global natural gas crisis is good news for energy stocks.  Yesterday, the Nasdaq selloff brought the recent slide to 8.5% from recent record highs.  US growth exceptionalism will be the theme for the next couple of quarters and that will help make it easy for fund managers to buy every dip.  Turnaround Tuesday might not lead to a substantial rally as Evergrande uncertainty remains, DC drama will last a couple more weeks, Treasury yields are consolidating ahead of Friday’s employment report, and Shanghai markets are closed for Golden Week.

The risks to the outlook remain and trading over the next couple of days may start to become rangebound.  Pepsico’s results and commentary provided another check to the inflation is persisting camp, and if that theme appears apparent across all sectors, risk appetite will struggle.

Energy stocks will see continued support over surging oil prices.  Oil prices are getting extra demand from the shortfall in natural gas.  The oil market is heavily in deficit and that won’t change until after the winter.

Pepsi points to supply chain problems

Pepsico delivered strong third-quarter results with beats on the top and bottom lines, along with raising its full-year organic revenue guidance.  Pepsico acknowledged they are navigating through the impact of higher commodity, transportation, and supply chain costs.  Wall Street set the bar high for the beverage and snack maker, but with no optimism that the cost/inflationary environment will improve, the outlook for next year is on shaky ground.  Pespico’s share price isn’t doing much this morning.

Pepsico CFO Johnston told CNBC that we’ll probably see a little bit more pricing increases in the first quarter.   Inflationary pressures are not easing anytime soon and if this earnings season delivers broad price increases for the US consumer, the 2022 outlook will start to come into question.


The dollar extended gains after the US trade deficit widened to a record as demand for imports surged.  The 10-year Treasury yield is back above 1.50%, but still unlikely to deliver a substantial move above the last week’s high of 1.5565% until after Friday’s employment report.  With oil prices potentially entering skyrocketing mode, commodity currencies are faring better than high-beta currencies.


Bitcoin is closer to USD 100,000 than it is to zero.  Recapturing the USD 50,000 level is a big deal for bitcoin and significant for the cryptoverse.  Bitcoin is starting to show bullish signs despite whatever risk mode is happening on Wall Street.  It appears large parts of both the retail and institutional world have evolved and have embraced becoming Long-Term-Holders(LTH).  The upcoming regulatory guidelines could prove to be disruptive over the short-term, but many cryptocurrency traders are gladly buying now in anticipation that we’ve seen the majority of the selling pressures.  A Bitcoin ETF might take a little longer to get done, but it seems like it will certainly happen.  That is expected to pave the way for the next boom.

Bitcoin volatility is always elevated on the passing of key psychological levels and that should remain the case this week.  If Bitcoin rallies above the USD 52,000 level, that could trigger another wave of technical buying.  Bitcoin could trade a handful of times through the USD 50,000 over the next couple of days.

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