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August 05. US stock market demonstrates growth

On Thursday, futures for US stock indices are growing moderately in anticipation of internal statistics, which may indicate the state of the world's largest economy.

So, the futures on the Dow Jones Industrial Average (DJIA) grew by 0.22% – up to 34,792 points, on the NASDAQ high-tech index – up to 15112.25 points, on the S&P 500 broad market index – up to 4407.25 points.

Markets today await fresh statistics from the US on the labor market and foreign trade. In particular, the Ministry of Labor is to publish data on the number of initial applications for unemployment benefits in the country over the past week. Analysts predict a decrease in the indicator to 384 thousand from 400 thousand a week earlier.

In addition, the Ministry of Trade will present data on the state of the trade balance in the country. According to experts' forecasts, the trade deficit increased in June to $ 73.9 billion from $ 71.2 billion a month earlier.

In general, experts are optimistic about the stock market prospects, including against the backdrop of strong financial performance of large American companies. Analysts expect that the stock markets may continue to grow next year, which will be 5-10%.

August 4. Retail sales in the eurozone in June increased by 1.5% compared to May

Eurozone retail sales rose 1.5% in June from a revised figure in May, according to a press release from the European statistical agency Eurostat. Analysts predicted an increase of 1.7%. May's estimate was revised downward: Eurostat now estimates growth at 4.1% instead of 4.6%.

On an annualized basis, retail sales in the euro area rose 5%. Analysts had expected an increase of 4.5%. The May figure was also revised to 8.6% from 9%.

In all EU countries, retail sales increased by 1.2% compared to May, and on an annualized basis – by 5.3%.

The countries with the strongest growth in retail sales are Bulgaria (+ 22.7%), Lithuania (+ 15.3%) and Slovenia (+ 12.8%). In Luxembourg, a decline of 3.2% was recorded.

 

August 06. American stock indices rose 0.6-0.8%

The number of Americans applying for unemployment benefits for the first time last week fell by 14 thousand, that is, to 385 thousand people, according to a report from the US Department of Labor. This is the minimum level for the month. Analysts on average expected a decline to 384 thousand.

Meanwhile, the US trade deficit in June 2021 was $ 75.7 billion, up from a revised $ 71 billion in May, according to the country's Commerce Department. Experts on average expected the US foreign trade deficit to increase to $ 73.9 billion in June from the previously announced $ 71.2 billion in May.

Traders continue to closely monitor the worldwide spread of the new COVID-19 delta strain in an attempt to assess the potential impact on the global economy. The number of registered infections with the coronavirus COVID-19 in the world as of Thursday morning was 200 million 239 thousand 381, the American Johns Hopkins University reported. Since the beginning of the spread of the virus, the number of victims of diseases related to COVID-19 has reached 4 million 256 thousand 797 people.

Also in the spotlight are the statistics on the labor market, the publication of which is expected on Friday. Experts suggest that they will be key for the Federal Reserve System (FRS) against the background of the fact that the regulator is considering the possibility of tightening monetary policy.

According to investment strategist Edward Jones Angelo Kurkafas, this will be a big event this week, as it will directly affect the Fed's actions. Tomorrow's data and September's are critically important for the representatives of the regulator's management before deciding on the curtailment of stimulus measures and when and at what pace to implement it.

By the close of trading, the Dow Jones Industrial Average rose by 271.58 points (0.78%) and amounted to 35,064.25 points.

Standard & Poor's 500 gained 26.44 points (0.60%), rising to 4429.10 points. The indicator has renewed its all-time high.

The Nasdaq Composite rose by 114.58 points (0.78%) and amounted to 14895.12 points.

Uber Technologies shares rose 3%. The American taxi-ordering and food delivery company hit profitable levels in the second quarter of 2021 thanks to an unrealized revenue of about $ 1.9 billion from a revaluation of its stake in Didi Global Inc. and Aurora Innovation Inc.

Occidental Petroleum Corp. share price rose by 2%. The American shale producer cut its net loss in the second quarter of 2021 by 3.5 times compared to the previous quarter amid rising oil and gas prices.

Electronic Arts Inc. fell in price by 2.2%. One of the leading PC game manufacturers in the world reduced its net profit in the first financial quarter by 44%, but increased its revenue.

Etsy Inc. decreased by 9.7%, although the US online trading platform increased net income and revenue in the second quarter stronger than expected.

Moderna Inc. declined 0.7%, despite the fact that the American biotech company reached profitable levels in the second quarter of 2021. At the same time, profit significantly exceeded expectations on the background of the sale of 199 million doses of the coronavirus vaccine developed by the company.

 

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August 9. Gold price reaches lowest since March

At the beginning of a new trading week, the price of gold fell to its lowest level since the end of March, reaching $1.677.90 an ounce. The precious metal was put under pressure from strong statistics on the US labor market, which heightened fears of the Fed curtailing stimulus measures. In the middle of the day, the asset managed to recover somewhat: the current quotation is $ 1.745 per ounce.

Last Friday, the US Department of Labor presented statistics on the labor market in the country, which turned out to be better than forecasted. In particular, unemployment in the country in July fell to 5.4% from the June level of 5.9%. Analysts had expected unemployment to fall to 5.7%.

The number of people employed in non-agricultural sectors of the economy increased by 943 thousand instead of the expected 870 thousand.

The pressure of these data on gold is explained by the fact that strong statistics on the labor market, indicating the recovery of the American economy, may prompt the Fed to limit support measures, which will provide strong support for the dollar. And the strengthening of the greenback will inevitably restrain the demand for gold, which will become less available when purchased in another currency.

 

August 10. Bitcoin Price Prediction: $100,000 In Near Future

The first cryptocurrency is about to break the record again. It is expected to rise to $ 50,000. At the same time, the value of $100,000 is not the limit for bitcoin, experts believe.

In the last month of summer, the outlook for the digital asset market is positive. Many marketeers expect the uptrend from the BTC to continue, given the fact that it periodically demonstrated growth during the summer. The positive trend of the last few days indicates the bullish mood on the crypto market. Traders and investors expect BTC to return to the $ 50,000 level, which kicked off a massive Bitcoin sell-off in May this year.

According to technical analysis, the leading digital asset received a bullish momentum at the support level near the 200-day moving average. This happened following the resistance level breakout of flat near $ 40,000. On Tuesday morning, Bitcoin was trading at $45,701, giving hope for further growth.

According to analysts, over the past month, cryptocurrency has risen in price by 33%. And this is only the start. According to experts, the successful implementation of the London hard fork on the Ethereum network became the driver of the Bitcoin's growth. This helped Ethereum to rise, giving Bitcoin a chance for similar growth.

At the moment, the crypto market is far from euphoric, but it is on a positive wave. According to Fairlead Strategies experts, the leading digital asset has successfully overcome three resistance levels and is ready to move on. Over the past three weeks, the rise in price of bitcoin occurred at a gigantic pace. If this rate is maintained, it will be able to rise to $ 51,000, Fairlead Strategies emphasize. Currency strategists for Bloomberg Intelligence proceeded further with their forecasts. According to Mike McGlone, the capabilities of the first cryptocurrency are truly limitless. A Bloomberg Intelligence analyst claims that BTC will reach $100,000 in the near future.

Only negative economic factors can interrupt the success of the first cryptocurrency, experts say. They are mainly related to the current monetary strategy of the Federal Reserve and the tough policy of the American authorities. It should be noted that the White House has set a course for strengthening economic and political control. Cryptocurrencies also fell into the scope of its activity. The main tasks of the American authorities are to increase taxes on digital assets and abandon anonymity in the cryptosphere.

However, positive initiatives can lead to negative consequences, experts warn. On the one hand, risks for investors are reduced and the transparency of cryptocurrency transactions increases, and on the other hand, there is an opportunity for various frauds and a number of initiatives that can redound on holders of digital currencies. This particularly applies to the increase in taxes to financially support the American economy, which is showing long-awaited signs of recovery and rebound.

 

August 11. The fall in oil prices has slowed down

World oil prices on Wednesday show a slowdown in the decline after the release of statistics on crude oil inventories in the United States.

The current Brent oil price is $70 per barrel. A few hours earlier, the price of «black gold» dropped to $69.30 per barrel. WTI futures fell to $ 66.97, later recovering to $67.90 a barrel.

The quotes were supported by data from the US Department of Energy, according to which stocks of raw materials in the country fell by 0.4 million barrels to 438.8 million. However, these figures turned out to be worse than the forecast for a decline of 1.27 million. US gasoline inventories fell by 1.4 million barrels, to 227.5 million.

At the same time, the asset is still under pressure. The media reported that the United States is calling on OPEC + to increase oil production to curb the rise in gasoline prices. However, the organization has not yet considered this issue, not excluding, however, discussion in the future.

 

August 12. Macroeconomic indicators of Great Britain

Today was quite rich in macroeconomic publications from the UK.

According to a report by the UK's National Statistical Office (ONS), the country's GDP growth rate increased by 1% in June 2021, compared to 0.6% growth in the previous month (revised from 0.8%). Analysts had forecast a 0.8% rise in the indicator.

UK GDP in the second quarter of 2021 increased by 4.8% qoq after falling by 1.6% in the first quarter (revised from -1.5%). The statistics were in line with analysts' forecasts.

In addition, the department provided data on industrial production in Britain. Industrial production in June fell 0.7% month-on-month after rising 0.6% in May (revised from 0.8%). Analysts predicted a growth of 0.3%. In annual terms, the indicator in June increased by 8.3%.

Construction output fell 1.3% in June from the previous month, after falling 0.7% in May (revised from -0.8%). Analysts had forecast an increase in June by 1.1%. In annual terms, the value of the indicator increased by 30%.

The UK trade deficit was £ 12bn in June, compared with a £ 9.6bn deficit in May (revised from £ 8.5bn). Analysts had forecast a June trade deficit of £ 9.1 billion.

 

August 13. German Ministry of Economy: The jump in inflation is temporary

The German authorities expect that the recent acceleration in inflation in the country will be temporary, as it is largely due to special factors that will disappear early next year.

According to the country's Federal Bureau of Statistics (Destatis), annual consumer price inflation in Germany has accelerated more than expected and peaked since 1993. The figure, according to final estimates, rose to 3.8% in July from 2.3% in June.

The main reason for the jump in inflation was the base effect from a temporary reduction in VAT rates in the second half of 2020. Moreover, the department expects that inflation will slow down significantly after this effect disappears. «There are now no signs of a wage-price spiral that could lead to persistent high inflation,» the Economy Ministry said.

The ministry also noted that the service sector benefits from the easing of coronavirus restrictions, while the manufacturing sector is struggling with supply chain bottlenecks.

 

August 16. US stock exchanges decline amid risk aversion

US stock exchanges are declining on Monday amid a deterioration in risk appetite after the release of morning macro statistics from China, which did not meet expectations.

In particular, industrial production in the country in July grew weaker than expected – by only 6.4% y/y instead of the expected 7.8%, and retail sales increased by only 8.5%, although analysts had predicted an increase of 11.5%. Asian stock indexes immediately showed a decline, as well as European stock exchanges.

Analysts note that economic data from China «spoiled the mood» in the markets, and weaker retail sales and industrial production raised questions about whether it is realistic to maintain the momentum of the economic recovery.

American stock exchanges are also in the red zone. The Dow Jones Industrial Index (DJIA) fell to 35,414.53, the NASDAQ index of high-tech companies – to 14,652. 01, the S&P 500 broad market index – fell to 4,448. 57 points.

Tomorrow, the macrostatistics block is expected to be released directly in the United States. Data on industrial production and retail sales in July will be announced. Forecasts suggest an increase in industrial production by 0.5% m/m and a decrease in retail sales by 0.2%.

 

August 17. Oil prices are rising, despite weak demand in Asia

The price of oil is growing moderately on Tuesday, recovering from yesterday's fall to the level of $68.27 per barrel. The current Brent quote is $69.80. WTI crude oil has recovered to $67.30 per barrel.

At the last session, the pressure on the «black gold» was exerted by data from China, according to which, the daily volume of oil refining in China, the largest importer, fell to the lowest since May 2020 in July. This was due to a reduction in production by independent factories due to tighter quotas, high inventories and lower profits.

Growth in industrial production and retail sales in China also slowed sharply in July and turned out to be weaker than expected, as new coronavirus outbreaks and floods reduced business activity.

What else is going on in the oil market:

US shale oil production in September is expected to grow to 8.1 million barrels per day, the highest since April 2020.

Last week, the US called on OPEC to increase supplies to contain the rise in gasoline prices, which they consider a threat to the global economic recovery. However, neither the organization itself nor its partners recognized the need to increase oil supplies to the market beyond the planned one.

 

August 18. China intends to tighten regulation of excessively high incomes

The Chinese authorities intend to tighten control over «excessively high incomes» and to encourage those companies that will share their wealth with the public. At the same time, the ruling party called «common prosperity» its top priority.

This became known from the results of the meeting of the Central Commission on Financial and Economic Affairs of the Chinese Communist Party. Securing «common prosperity» has become a major topic of political debate in the country in recent months. This term is usually understood to mean moderate wealth for all, not just some. In particular, the government will force the wealthy Chinese to pay more taxes, which will help to resolve the resulting inequality in income.

Recall that China's largest entrepreneurs have begun to feel pressure from the authorities since the $34.4 billion IPO of Jack Ma's Ant Group was canceled last year, which would have been the largest in history.

A little later, the Chinese taxi aggregator Didi held an IPO on the New York Stock Exchange, ignoring the ban of the authorities. Then Didi raised more than $4.4 billion. However, this did not pass without consequences, and two days after the IPO, the local regulator launched an investigation into Didi, demanding that it stop registering new users, and later demanded that the service be removed from the app stores.

In early July, the State Council of China announced a review of the rules for IPOs of Chinese companies abroad and increased supervision of those companies that have already conducted a listing. To regulate placements abroad, Beijing has already begun to develop changes in legislation that will close the loophole to circumvent restrictions on attracting foreign investment. Such news led to the fact that many large investment funds sold securities of Chinese companies that are listed in the United States.

 

August 19. Analysts predict the growth of Ethereum 10 thousand times

Analysts expect that after the upgrade of Ethereum to protocol 2.0, the altcoin price will rise from the current $3 thousand to $20-40 thousand.

In January 2021, experts already predicted that the cost of the cryptocurrency could exceed $10 thousand. In their opinion, the Ethereum update will allow the blockchain to approach such payment systems as Mastercard and Visa in terms of transaction volume.

Moreover, protocol 2.0 will allow the original blockchain to scale and make it more user-friendly. The main feature of the update will be the network's transition to Proof-of-Stake (PoS) consensus – it will replace the Proof-of-Work (PoW) consensus on which the blockchain is currently running.

The main difference between PoS and PoW is that in order to maintain the operation of the PoS network, miners who generate computing power are not needed. The efficiency of the blockchain is provided by the holders of digital coins, who receive a reward for this.

On August 5, the London update already took place on the Ethereum network, which completely changed the mechanism for calculating transaction fees. Now part of the commission that miners previously received as a reward is burned.

Experts also note that Ethereum will be able to surpass Bitcoin in capitalization only if the main cryptocurrency remains at $50 thousand, while ether will rise in price to $10 thousand.

 

August 23. Oil rises in price after seven days of falling

At the beginning of the new trading week, oil prices began to rise after several days of decline. The current price of Brent is $67.35 per barrel, WTI has risen in price to $64.70. The decline in quotations continued for seven consecutive sessions, which is the longest such period since February 2018.

The market was supported today by news that the Chinese authorities were able to contain a new wave of the spread of Covid-19: on August 23, not a single new case of coronavirus infection was detected in the country. However, the new Delta virus strain continues to pose a threat to many other countries, as well as to global oil demand.

An additional factor in the growth of oil prices, analysts say, the purchase of assets at low prices and the positive dynamics of other asset classes.

The focus of the markets this week is the annual economic symposium in Jackson Hole and the speech of the chairman of the Federal Reserve System (FRS) Jerome Powell. Investors are interested in the question of when the American regulator intends to start curtailing the asset repurchase program. In addition, traders are looking forward to the next meeting of representatives of the OPEC + countries, scheduled for September 1.

 

August 24. Oil accelerates growth amid favorable demand forecasts

On Tuesday, oil prices continued to rise thanks to upbeat demand forecasts. During the day, Brent quotes rose to $70 per barrel. The price of WTI crude oil rose to $67.25 per barrel.

Demand forecasts are improving amid the suspension of production at one of the drilling rigs in Mexico and full US approval of the coronavirus vaccine developed by Pfizer and BioNTech.

On Sunday, a fire broke out on an oil platform off the coast of Mexico, as a result of which production was suspended in the amount of 421 thousand barrels per day, or about a quarter of the country's total production.

Additional support for the «black gold» is provided by the approval of the US Food and Drug Administration (FDA) for the use of the coronavirus vaccine for people over 16 years of age. Authorities hope the news will further boost vaccination adoption.

This week, oil market participants are awaiting data on fuel reserves in the United States. Analysts predict a decrease in oil and gasoline reserves, as well as an increase in distillate stocks.

 

August 26. Gold drops in anticipation of Jackson Hole symposium

Gold prices continued to decline for the third day in a row on the back of a strengthening dollar and rising US Treasury yields. The dollar index rose 0.1%, putting pressure on gold, while the yield on the 10-year US Treasury bonds held near a two-week high.

Investors are also awaiting tomorrow's symposium in Jackson Hole and possible signals about the curtailment of incentives during the speech of the head of the Fed, Jerome Powell.

The current price of gold is $1,787 per ounce, palladium has fallen in price to $2,400 per ounce, silver has dropped to $23.67. The platinum price dropped to $987.65.

J. Powell will speak at the Fed's annual economic symposium on Friday. Market participants hope to receive more detailed information about the regulator's plans to roll back economic support measures. Many people do not realize this is possible, as the spread of the delta strain of coronavirus continues to cause concern.

 

August 27. Oil continues to rise as a storm approaches the Gulf of Mexico

At the end of the week, oil prices continue to rise amid an approaching storm in the Gulf of Mexico. Investors fear that major supply disruptions could reignite in the market as energy companies cut production in the Gulf ahead of the weekend.

As a result, Brent quotes rose to $71.50 per barrel on Friday, while WTI rose to $69 per barrel.

Additional support for the oil market is provided by the expectation that OPEC + may resist the increase in production, given that the new strain of the delta coronavirus has affected oil demand.

An important factor for the further dynamics of oil will be the results of today's speech by the head of the US Federal Reserve in Jackson Hole, since they will have a strong impact on the dollar rate. Market participants expect Jerome Powell to give signals regarding plans to cut the bond buying program in the 4th quarter.

 

September 1. Trump criticized cryptocurrencies again

Former US President Donald Trump in his speech on the air of Varney & Co said that investing in cryptocurrencies is a «potential disaster.» Trump also added that he is not a fan of cryptocurrencies, does not invest in bitcoins and calls for investments in the American currency.

According to the ex-president of the United States, investing in cryptocurrencies harms the dollar, since bitcoin generally looks more like a «scam», and the euphoria around this cryptocurrency weakens the dollar. Trump boldly reiterated that «the dollar should be the currency of this world.» However, as long as Bitcoin and other cryptocurrencies remain unregulated in the US financial system, they pose a threat to the US dollar and reduce its value. In addition, according to him, cryptocurrencies can be fake, and few people know what they are.

During his tenure as President of the United States, Trump has maintained both the weakness and the strength of the dollar. When the dollar weakened, it was more profitable and cheaper for foreign countries to buy American goods. Trump has also frequently accused China of deliberately undervaluing its currency, the renminbi, in order to reduce the cost of exports.

The head of the US Securities and Exchange Commission (SEC) Gary Gensler shared a slightly more positive view of the crypto market, who noted that he supports digital currencies, but believes that this industry should be within the framework of laws related to money laundering, tax compliance and investor protection.

 

September 2. Why is Bitcoin unable to overcome the $ 50K level?

The calm that was observed on Wall Street at the end of August also affected the cryptocurrency market: Bitcoin stabilized below $50,000 after its rally. Recall that from January to mid-April, the most popular digital currency rose to $60 thousand, subsequently falling below $30 thousand.

The reason for the inactivity of bitcoin today can be called the fact that investors are switching to other currencies on the crypto market. In particular, according to CoinShares, in August, the inflow of funds to Ethereum funds amounted to $22.4 million, and the inflow to Cardano funds (which has a blockchain platform similar to Ethereum) amounted to $18.7 million. the growing popularity of non-fungible tokens (NFT). Basically, NFTs are digital assets similar to Bitcoin, with the only difference that each NFT is unique.

On the largest exchange NFT OpenSea, the volume of token trading over the past 30 days amounted to $3.5 billion, while until August, the total trading volume since its foundation in 2016 was about $1 billion.

Interest in NFT was also boosted by news that two large American companies, Visa Inc and Facebook Inc, have taken steps in this market. Visa acquired NFT under the name CryptoPunks, and Facebook said it is considering building services for NFT in its new digital wallet.

 

September 03. Oil price exceeds $73 due to hurricane disruptions

On Friday, crude oil prices rose above $ 73 a barrel. The reason for the growth was the message that it may take longer than anticipated to resolve disruptions in the operation of the energy complex in the Gulf of Mexico. About three quarters of offshore production is still not functioning.

The current Brent quotation is $ 73.15 per barrel, the price of WTI oil is $69.95.

Additional support to prices was provided by data on oil reserves in the United States. According to a report from the Ministry of Energy, over the past week, hydrocarbon reserves in the country decreased by 7.2 million barrels. The decline has been noted for the third week in a row.

Analysts note that petroleum product inventories are generally at their lowest for this period of the year since 2018, while refining capacity in Louisiana continues to slowly recover.

Moreover, yesterday, US President Joe Biden ordered Energy Secretary Jennifer Grenholm to use the strategic oil reserve to combat the surge in fuel prices in the country caused by Hurricane Ida.

 

September 06. The European market started the week with growth

On Monday, European stock indexes showed a rise on the background of an increase in industrial orders in Germany, as well as a disappointing employment report in the United States, which indicated a delay in tightening the Fed's monetary policy.

In particular, the DAX index in Germany rose to 15,900, the CAC 40 in France rose to 6,746, and the British FTSE 100 – to 7,191.

The positive sentiment was helped by the news that orders for German industrial goods unexpectedly increased by 3.4% month-on-month in July, reaching a maximum. Analysts had expected that the volume of orders would decrease by 1.0% compared to the previous month.

Also, investors are still «digesting» Friday's US employment report, which showed a much smaller increase in the number of vacancies in August than expected. The number of jobs outside the agricultural sector increased at the lowest pace since January – by only 235 thousand, while analysts expected an increase of 750 thousand. The unemployment rate fell from 5.4% to 5.2%, as expected. These statistics delayed the timing of the reduction of the Fed's bond-buying program, while the US central bank is assessing the economic impact of rising Covid infections.

On Thursday, it is worth paying attention to the results of the meeting of the Board of the European Central Bank, since it is expected that the regulator will discuss the issue of reducing incentives at the meeting. Recent reports indicate that inflation in the euro area has risen to a 10-year high (by 3%). And this may lead to a slowdown in the ECB's asset purchase program.