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Opening Bell: Stocks Extend Records Ahead Of Earnings; Bitcoin Passes $63K

By Investing.com (Pinchas Cohen/Investing.com)Market OverviewApr 14, 2021 06:56AM ET
www.investing.com/analysis/opening-bell-stocks-extend-records-ahead-of-earnings-bitcoin-passes-63k-200572954
Opening Bell: Stocks Extend Records Ahead Of Earnings; Bitcoin Passes $63K
By Investing.com (Pinchas Cohen/Investing.com)   |  Apr 14, 2021 06:56AM ET
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  • S&P 500, NASDAQ 100 hit new records
  • JNJ vaccine paused due to side effects
  • Dollar falls as yields may top out

Key Events

Futures on the Dow, S&P, NASDAQ and Russell 2000 as well as European stocks edged higher in trading on Wednesday, and global gauges scored fresh records, ahead of the next major market catalyst, earnings season.

The dollar remains under pressure and fell for the third consecutive day, while Bitcoin continued rising.

Global Financial Affairs

In Europe, the STOXX 600 Index managed to advance toward Friday’s record after shares in luxury-goods group, LVMH (PA:LVMH) surged 2.6% to an all-time high on better than expected performance and a stronger revenue forecast, overshadowing a selloff in Barclays (LON:BARC) andTesco PLC (LON:TSCO) shares.

The British multinational grocery retailer’s year-on-year sales were chipped away by increased costs. From a technical perspective, the stock is facing long-time pressures that are catching up with it.

TSCO Daily
TSCO Daily

The price is developing a H&S pattern after finding resistance by the downtrend line since the 2007 all-time high.

Most Asian benchmarks followed the move higher on Tuesday in US stocks. Japan’s Nikkei 225 dropped 0.4%, bucking the trend, on concerns of rising cases of coronavirus just 100 days ahead of the postponed 2020 Olympics, which Tokyo is hosting in July.

MSCI’s broadest index of Asia-Pacific shares outside Japan climbed 0.6%, while the MSCI benchmark of equity performance in 49 countries rallied 0.15%, carving out another new record.

Yesterday during the Wall Street session, the S&P 500 and the NASDAQ 100 hit new records, despite Federal officials recommending pausing Johnson & Johnson (NYSE:JNJ) vaccination program, as it emerged that 6 women suffered serious side effects—including one death—due to rare blood clots. The Dow Jones Industrial Average, which includes JNJ, fell more than 2% and was the only gauge in the red, with 17 of 30 stocks closing in negative territory.

Goldman Sachs (NYSE:GS)—which reports earnings today before the US market opens—underperformed, plunging more than 4%, after falling yields reduced expectations for rising rates, banks’ bread-and-butter.

US Consumer Prices—a measure for inflation —climbed more than expected in March, but the move was not deemed sufficient to move a staunchly dovish Federal Reserve to reverse policy.

Investors are still unsure about the direction of yields, including for the 10-year note, which have been moving sideways for a month.

10-year Treasuries Daily
10-year Treasuries Daily

Yields have been ranging, but a fall below 1.6% would complete a top. Alternatively, topping the 1.8% would likely trigger a resumption of the bond selloff, sending yields toward the 2% highs not seen since mid-2019.

The dollar fell for a third straight day, its longest losing streak since Mar. 11, taking us by surprise.

Dollar Index Daily
Dollar Index Daily

At this point, we believe that a rising wedge has been completed. That's bearish after the preceding plunge since March. The wedge’s target is its base, which would retest a preceding, much larger falling wedge since the March peak. Now, we expect the dollar could be falling toward 90, which could be triggered by the aforementioned top in yields.

Declining yields and a falling dollar could boost gold.

Gold Daily
Gold Daily

This would return the yellow metal towards the top of its falling channel since the March peak, which would happen if the previous bearish flag blows out and the price tops the $1,770 level, an important support-resistance level.

Bitcoin posted a new all-time high of $64,374, ahead of today's direct listing of crypto exchange Coinbase (NASDAQ:COIN). The cryptocurrency is inching toward the $65,000 level. However, keep an eye on its trajectory, as it might be forming a bearish wedge.

Bitcoin Daily
Bitcoin Daily

The Coinbase offering will likely create a buzz, attracting new investors to the stock and the digital currency and incentivizing other crypto-related endeavors to go public while also boosting additional digital tokens.

Oil opened higher, overtaking the $61 level.

Oil Daily
Oil Daily

However, it remained within a potentially bearish range, the right shoulder of a possible H&S top.

Up Ahead

Market Moves

Stocks

Currencies

  • The Dollar Index dipped 0.1%.
  • The euro gained 0.1% to $1.1965.
  • The British pound gained 0.4% to $1.3799.
  • The onshore yuan strengthened 0.1% to 6.536 per dollar.
  • The Japanese yenn strengthened 0.1% to 108.97 per dollar.

Bonds

  • The yield on 10-year Treasuries jumped two basis points to 1.63%.
  • The yield on two-year Treasuries increased less than one basis point to 0.16%.
  • Germany’s 10-year yield decreased less than one basis point to -0.30%.
  • Britain’s 10-year yield declined one basis point to 0.774%.
  • Japan’s 10-year yield decreased two basis points to 0.091%.

Commodities

  • West Texas Intermediate crude increased 1.3% to $60.96 a barrel.
  • Brent crude increased 1.2% to $64.43 a barrel.
  • Gold was little changed at $1,745.12 an ounce.
Opening Bell: Stocks Extend Records Ahead Of Earnings; Bitcoin Passes $63K
 

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Opening Bell: Stocks Extend Records Ahead Of Earnings; Bitcoin Passes $63K

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Comments (3)
Jenny Lu
Jenny Lu Apr 14, 2021 8:30AM ET
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My chart says bitcoin is 64k where did you see 63k?
Pinchas Cohen
Pinchas Cohen Apr 14, 2021 8:30AM ET
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Not where but when. I"ve written the post at 5 AM ET and you made your comment at 8:30 ET.
Farah Exilant
Farah Exilant Apr 14, 2021 8:01AM ET
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I'm get cash app now you do help me it because I'm here deaf in live my Haitian true it
Thomas Stokes
Thomas Stokes Apr 14, 2021 7:52AM ET
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Thanks for a very informative analysis of the market. They have proven to be quite profitable.
Pinchas Cohen
Pinchas Cohen Apr 14, 2021 7:52AM ET
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You're welcome, Thomas. So glad to hear it! Happy trading!
 
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