Stocks fly high, Ukraine tensions, bitcoin bulls return

US stocks climb 

US stocks are rallying as supply chain issues improve, mega-cap tech stocks will lead the charge as global growth outlooks get upgraded, and as South Africa continues to see mild COVID cases. The post-Thanksgiving panic appears to be over and many investors are scrambling to get back in this stock market.

While bottleneck issues are from over, it appears some progress is being made.  A Port of LA executive noted that the domestic supply chain is becoming more fluid.

FAANG and Tesla stocks got hit hard on both global growth concerns and after the Fed turned hawkish.  While optimism is high that the Omicron won’t lead to widespread lockdowns in the US, some restrictions could threaten the outlook and allow the Fed to wait a month before accelerating its taper plan.

In South Africa, the news is still mostly positive after Mediclinic said, “a lower percentage of admitted Covid-19 patients require intensive care and ventilation.”  South African epidemiologists noted that there are still concerns that South Africa is seeing an increase with reinfections, which implies past reinfection is not providing much protection and the data is limited with vaccinated patients.

Ukraine

President Biden and Russian President Putin had a discussion for over two hours, covering a wide range of topics from the escalating tensions between Russia and the Ukraine, hacking attacks, Iran, and another round of Russian-US strategic stability.

President Biden delivered a clear warning that if a military escalation in the Ukraine occurs, that would be met with strong economic sanctions and other responses.

Bitcoin

Bitcoin bulls are scaling back in, as most traders remain optimistic that this week’s grilling of crypto CEOs on Capitol Hill will not yield any immediate landmark legislation.  Fears of a dead-cat-bounce appear to be over and many traders are targeting a return to the USD 55,000 to USD 60,000 trading range within the next couple of months.

The end-of-year bullish calls of USD 90,000 or USD 100,000 were a bit too optimistic, but that is how the cryptoverse works.  Next year, we will quickly know if those frothy targets will later get justified.  The biggest risk for bitcoin no longer seems to be regulation, it is if investors decide to go big on altcoins.

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