Stocks rise, mixed US data, FX, Netflix, Bitcoin ETF to trade tomorrow

US stocks are higher after both energy price pressures eased and as big-tech rallies ahead of earnings.  Last week, earnings impressed with the banks provided optimism that the US consumer will be able to handle the recent pricing pressures hitting most industries.  It was a good day to be a mega-cap tech stock as Microsoft rose to fresh record highs, Netflix rallied ahead of earnings and Apple’s event on AirPods, MacBooks and new music plan were positively received.

US Data

The US industrial/manufacturing slowdown in September was a lot greater than anyone anticipated.  Higher commodity prices, prolonged shutdowns in activity due to hurricane season, and the global chip shortage are having a greater impact on the economy.  The short-term problems still exist for industrial production, but the outlook is still bright for next year.

The NAHB index of homebuilder activity suggested the hot housing market is not ready to cool.  Homebuilder sentiment climbed to a three-month high at 80, better than the consensus estimate of 75 and prior reading of 76.  Supply chain issues and labor shortage problems still are delaying completion times, but demand still remains strong.

FX

The dollar is little changed on the day, with the euro and offshore yuan both rising 0.1%, while the Swedish krona fell over 0.5%.  The dollar will continue to take its cue from the direction of Treasury yields which currently want to signal immediate rate hikes after tapering is done in the middle of next year.

Netflix

Netflix is still the king of streaming after over 130 million have watched Squid Game and Barclays downgraded Disney’s stock.  A very violent South Korean show has become a global sensation that is dominating all social media platforms.  A Bloomberg story noted that Netflix hit has produced an estimated USD 891 million in impact value, as the stock has outperformed competitors since the September 17th streaming release.   Netflix reports on Tuesday after the close.

Bitcoin

The cryptoverse is about to get a whole lot bigger now that the first US Bitcoin-linked ETF will launch on Tuesday.  Cryptocurrencies will now play a larger role on Wall Street and that has brought bitcoin within striking distance of record high territory.  ETFs mean that this year bitcoin interest could see several billions of dollars come under management which should keep the entire space buzzing.

Initially, this new wave of traders will most likely only have the ability to go long these new ETFs, so a buy the rumor, sell the event reaction won’t likely happen.   Robust demand for Bitcoin ETFs is what is required to help Bitcoin break above the record high of USD 64,888.  If traders view the Bitcoin ETF performance as promising, short-term resistance might come from the USD 70,000 level.  Lackluster trading volumes for the new bitcoin ETF(s) could trigger a selloff into bear market territory.

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