Yesterday’s rally in United States equities showed that the mood has changed after the sell-off last week. The three major indices had strong rebounds but this was followed by the tech, financial and retail sectors being beaten down. The Dow Jones Industrial Average closed near its day high posted 354 points in gains, while the S & P 500 and Nasdaq Composite gained over 1.5 percent and 2 percent respectively.
Over the strong holiday sales and a slight recovery in oil prices helping boost the oversold market, people are feeling a little optimistic. The 45th President of the United States, Donald Trump has made comments on the Wall Street Journal saying that he is likely to increase tariffs on $200 billion on Chinese goods and slap tariffs on the remaining $267 billion of imports which will likely complicate the markets even more.
As reported by FX Street, the economy around the world is in somewhat of a desperate state and needs to end to the ongoing trading dispute between the two biggest economies. We have already been seeing several signs of economic slowdown in Emerging Markets, Europe and even in the US investors are likely to become more concerned that the G20 summit which is kicking off on Friday and won’t lead to a truce or a framework agreement between China and the United States considering we live in a world with Trump as President there is always a chance that there will be some last minute changes.
For now, we can expect the markets to be more unstable than usual until then.
Fed talks will be the things most investors will be focused on this week with the Vice Chairman, Richard Clarida due to speak later today followed by the chair of the federal reserve, Jerome Powell.
In terms of the cryptocurrency market, to put it the market is in a huge slump with Bitcoin dropping below $4,000 and looking like it’s going to be dropping below $3,500 in the near future. Of course, with Bitcoin dropping as did the rest of the market since Bitcoin spearheads the fate of the other altcoins. Some might say that we have seen a similar correction previously when prices dropping near the $1,000 mark in 2013 however, the difference between then and now is the market cap.
What are your thoughts? Let us know what you think down in the comments below!