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Market volatility remains elevated, another stock market comeback, US data, bitcoin base formed

Market volatility remains elevated as investors are still feeling jittery over a very tense Ukraine-Russia situation, a whole range of inflationary issues that include a potentially aggressive Fed and a global chip problem that just won’t get any better.  Optimism remains that a massive correction is still unlikely to happen because the US growth story will likely remain intact this year, but Wall Street is not seeing many buyers emerge ahead of the Fed and as the conflict in Ukraine escalates. Earnings season temporarily has fallen to the backburner as mixed results and hesitancy to provide any upbeat outlooks will remain the case as supply chain issues seem poised to extend beyond the summer.

After lunch, Wall Street was staring at these discounts and said they are too good to pass up. The geopolitical risks to the outlook are going to remain elevated going forward, but pricing in an overly aggressive Fed may have been overdone. Money managers are thinking I can start buying the S&P 500 at 12% now and if the Fed kills this bull market I can average in probably ahead of 4,100.

US data 

US consumer confidence softened in January as the omicron impact weighed on the American economic outlook.  The headline confidence reading fell from 115.8 to 113.8, better than the expected 111.2 forecast.  The present situation improved while the expectations component fell 4.6 points as income expectations decelerated.

Is the crypto bloodbath over?

After a few days of steadying around the USD 35,000 level, bitcoin traders are growing confident that the bloodbath may be over.  It has been tough to have diamond hands, but many social media influencers remain committed long-term to bitcoin despite the over 50% plunge. Today’s price action was very promising for many crypto traders as equities were sold heavily and many emerging market currencies appear poised to have heightened volatility this year.

Bitcoin managed to trade in the green despite some negative headlines: The IMF reiterated that El Salvador using bitcoin as a tender entails a large risk and Kazakhstan will keep the power off for bitcoin miners for the rest of the month. Altcoins are also rallying as optimism is brewing after this broad market selloff for risky assets is over, it could be a strong altcoin season. If bitcoin can manage to claw its way back to USD 40,000 over the next several trading days, that would be a very positive sign for the cryptoverse.

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 [4]

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