So far, so good.
As I’ve maintained, as long as the Fed is willing to play ball, there is no reason that the market shouldn’t continue moving higher. In Monday’s session, stocks gained 580 points for the Dow’s best day since March 5.
The upside may continue today (and through the summer) but, it all comes down to the Fed.
Today, Fed Chairman Jerome Powell will testify before the House of Representatives on the central bank’s reposes to the pandemic. His remarks (already released) will suggest the Fed IS willing to being talk of removing some of the stimulus efforts put in place during the pandemic.
“Inflation has increased notably in recent months,” Powell will say. Nonetheless, he will also argue that the effects are temporary. His testimony begins at 2 pm ET.
Any effort to pull-back on Federal Reserve induced liquidity is still expected, however, to be pushed out later into the year. It is possible the Fed will telegraph a stronger message if need at Jackson Hole this summer, but in the meantime, investors are still making money in equities.
Elsewhere, cryptocurrencies continue to drop after the Chinese government intensified its crackdown on Bitcoin mining.
Dogecoin is probably the biggest loser among the more popular cryptocurrencies. Within a week, it has lost more than 40% of its value. The “Dogefather” has not been posting memes lately.
U.S. stock futures were steady in premarket trading.
- S&P 500 futures: 4,217.75, +0.09%
- Nasdaq futures: 14,160.25, +0.21%
- DOW futures: 33,774.00, +0.04%
U.S. Dollar and Treasuries
10-year Treasury yields decreased. The dollar rallied — once again, suggesting that down is up and up is down in this brave new world of investing.
- U.S. Dollar Index (DXY): 92.05, +0.16%
- 10-year Treasury yield: 1.484%
- 2-year Treasury yield: 0.270%
Stocks To Watch
Stocks of a pharmaceutical company Adial Pharma spiked over 30% after a bullish report from Seeking Alpha. The report focused on the Ondansetron, Adial’s drug treatment for alcoholism. The company has sought approval for the drug in the U.S. and Europe.
Torchlight Energy shares increased in premarket trading, after increasing more than 60% on Monday’s regular trading hours. The shares spiked because Torchlight and Metamaterial agreed to push back the announced merger, just in time for Torchlight to pay its shareholders a special dividend the company promised.
New Concept Energy shares dropped in premarket trading, after surging more than 60% on retail investor purchases. The “meme-stock cycle” is not easy to time.
Gamestop shares climbed after the company revealed that it sold five million additional shares, raising $1.13 billion in capital to accelerate growth. Investors are seemingly not worried about the dilution of their holdings and expect the company to continue its e-commerce transformation. The stock is up nearly 1000% in 2021.
- ADIL Adial Pharma $3.800, +32.40%, 1.92M (volume)
- TRCH Torchlight Energy $10.38, +4.64%, 5.02M (volume)
- GBR New Concept Energy $7.700, -18.09%, 104.01K (volume)
Commodities To Watch
Oil continues to drop with the market. Gold continues to strengthen as investors seek a hedge against an erratic Fed.
- WTI crude: $72.59, -0.72%
- Brent crude: $74.42, -0.64%
- Gold: $1,785.80, +0.16%
Crypto markets are still falling after the Chinese crackdown on Bitcoin mining. The global crypto market cap decreased by -5.32% in the last 24 hours. Bitcoin is trading below $32,000. Dogecoin is at the lowest level since April.
- BTC: $31,575.11, -1.89%
- ETH: $1,883.19, -2.06%
- DOGE: $0.189, -14.48%
- XRP: $0.5801, -12.17%
- ADA: $1.11, -12.17%