Market volatility is making a comeback–and, judging by the growing uncertainties facing the global marketplace, it’s likely here to stay for a bit.
I would anticipate that by October’s earnings season the markets will have a better sense of whether companies can live up to investors’ lofty expectations (and valuations.)
Indeed, the so-called “fear index” (VIX) which measures volatility gained 18% and it could stay high through the week.
That makes sense given all that is happening.
First, there are growing worries about how higher energy prices will effect our markets, including in corporate earnings. WTI oil topped $74 dollars a barrel Monday morning. Companies are paying for these costs via higher shipping of their goods and often through increased production costs at their factories. Meanwhile, consumers are also hurt by higher energy costs since more money at the gas pump, means less spending power for everything else.
As I’ve repeatedly said, I would expect oil to continue gaining as the economy recovers — so higher oil is an idea investors should grow used to. Amid increased regulation from Washington and a decline in investment in the sector, combined with a more stabilized and growing world wide economy, one should anticipate growing demand for oil. As such, it’s quite likely we could see a trading range of $75-100 in the near future.
Meanwhile, the looming debt ceiling in Washington is (as usual) causing some concern.
Lawmakers are scrambling to pass a new budget by the end of September in order to avoid a government shutdown. Lawmakers must find a way to increase the debt ceiling limit in October. Without the increase, the U.S. would default on its debt for the first time in its history. The consequences of that (including much higher interest rates and a global shift away from the U.S. as the world’s reserve currency would be significant.)
And then, in Asia, we’ve got the Chinese tech crackdown on cryptocurrencies like bitcoin as well as the Evergrande crisis is taking its toll. Nomura Securities cut its Chinese GDP forecast to 7.7%, down from 8.2% last year, as a result.
U.S. Dollar and Treasuries
The yield on the 10-year Treasury rose four basis points. The dollar strengthened against a basket of major currencies.
|U.S. Dollar Index (DXY):||93.47||+0.14||+0.15%|
|U.S. 1 Year Treasury Bill||0.079%||0||0.079%|
|U.S. 2 Year Treasury Note||0.284%||0.004||0.280%|
|U.S. 5 Year Treasury Note||0.978%||0.025||0.953%|
|U.S. 10 Year Treasury Note||1.490%||0.035||1.454%|
|U.S. 20 Year Treasury Bond||1.958%||0.029||1.929%|
|U.S. 30 Year Treasury Bond||2.010%||0.024||1.986%|
Stocks To Watch: Memes
The meme stock surge is behind some of the largest market moves today.
Stocks of an investment company Vinco Ventures were up in premarket trading on retail investor interest.
Stocks of apparel business Naked Brand Group increased in premarket trading increased on retail investor interest. The stock was up 15% on Friday. $NAKD is a popular meme stock.
Stocks of video chatroom company Paltalk were up in premarket trading after surging 35% on Friday.
Red Cat Holdings subsidiary Skypersonic received a contract from NASA to provide drone and rover support for the simulated Mars mission.
Pre market open, here is how some of those names looked.
|Red Cat Holdings||RCAT||$3.65||+1.250||+52.08%||10.70M|
|Vinco Ventures Inc||BBIG||$7.38||+1.060||+16.77%||6.66M|
Commodities To Watch
Oil rose on supply constraints and the global energy crunch. Gold was stable.
|WTI Crude Oil||$75.07||1.47%|
|Brent Crude Oil||$78.38||1.49%|
The global crypto market cap is $1.94T, a 1.93% increase over the last 24 hours. Bitcoin’s dominance is currently 42.32%, a decrease of 0.35% in the same period.
|Symbol||Price||Chg. %||Market Cap.|