Today on Wall Street: Move Along, Nothing to See Here

04/08/2021 | 09:26am

Futures tracking the Nasdaq are bouncing back this morning on Wall Street, after the Federal Reserve reassured investors that it will maintain its dovish stance in the long term. The central bank releases the minutes of its last meeting yesterday and acknowledged that the economic outlook is improving thanks to stimulus plans and vaccination.

Overall, these minutes did not bring any new elements. The Fed will remain supportive of the economic recovery by keeping an eye on inflation, which does not scare it too much. 

April is traditionally a calm month for equity markets, but the respite is usually short-lived before the arrival of the first quarter corporate earnings. This starts next week with the US banks, LVMH and L'Oréal. Until then, the world's stock markets should continue to be buoyed by the economic recovery and the hope of a return to a more normal daily routine, synonymous with the reopening of new areas of activity.

New weekly jobless claims unexpectedly stayed above 700,000 last week after rising at the end of March. Data from the Department of Labor showed that initial jobless claims for the week ended April 3 reached 744,000, while 680,000 was expected. This followed 728,000 claims during the prior week.

Financial markets had a generally calm session yesterday, with variations of less than 0.5%, both up and down, in the United States, France, Germany and Switzerland. The CBOE's volatility index, the Vix, fell back below 20 points, a sign that there are few trouble spots in the markets. The Vix had peaked at 66 points in March 2020, at the worst of the stock drop, and has been steadily declining since, despite a few mood swings with no end in sight. For comparison, its 2019 average was close to 15 points.

Meanwhile, Peter Thiel, the venture capitalist and conservative political donor, called on the U.S. government to consider tighter regulations on cryptocurrencies. “I do wonder whether at this point, Bitcoin should also be thought [of] in part as a Chinese financial weapon against the U.S.,” he said during an appearance at a virtual event held for members of the Richard Nixon Foundation, quoted by Bloomberg. “It threatens fiat money, but it especially threatens the U.S. dollar. If China’s long Bitcoin, perhaps from a geopolitical perspective, the U.S. should be asking some tougher questions about exactly how that works.”


Economic highlights of the day

German factory orders and new jobless claims in the US are the main stats today.

The euro and the dollar are neutralized at USD 1.1891. The gold ounce remains in the USD 1745 area. Oil is little changed at USD 63 per barrel of Brent and USD 59.5 per barrel of WTI. Calm also on the T-Bond with a stable yield at 1.67% on 10 years. Bitcoin is rebounding towards USD 57,500.


On markets:

  • The U.S. antitrust regulator (Federal Trade Commission, FTC) and a group of numerous U.S. states asked a federal court Wednesday to deny Facebook's request to drop antitrust proceedings related to the social network's acquisitions of messaging services Instagram and WhatsApp.
  • Apple plans to point to the stiff competition it faces in video game deals to defend itself from accusations by Epic Games, the publisher of Fortnite, that it is being sued for removing the game from its app store, the tech giant said Thursday.
  • Twitter held talks with Clubhouse a few months ago to buy the voice-messaging social network, valued at $4 billion (€3.4 billion), Bloomberg reported Wednesday.
  • Tesla is seeking sites in three Indian cities to establish dealerships and has hired an executive to help it enter the Indian market, Reuters has learned from sources familiar with the matter.
  • Conagra Brands reported Thursday an 8.5% increase in quarterly sales, ahead of expectations, supported by increased home consumption due to health restrictions and telecommuting.
  • Box, the online data storage specialist, announced a $500 million investment by a group of investors led by KKR, an amount that will be spent for the most part to finance share buybacks.


Romain Fournier
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