Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Powell in Congress, Lucid - SPAC Deal, Bitcoin Plunges - What's up in Markets

EconomyFeb 23, 2021 06:45AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters

By Geoffrey Smith 

Investing.com -- Federal Reserve Chairman Jerome Powell starts two days of Congressional testimony as fears about inflation push 30-year bond yields to new highs. Lucid Motors finally ties up its deal with Michael Klein’s SPAC Churchill Capital IV , Bitcoin and Ethereum plunge but sterling and U.K. stocks surge after Boris Johnson maps out a road out of lockdown. Here’s what you need to know in financial markets on Tuesday, February 23rd.

1. Jerome Powell and the great inflation scare

Federal Reserve chief Jerome Powell starts two days of testimony to Congress on the state of the economy, at a moment when concerns about inflation are triggering a heavy sell-off in long-dated bonds.

Powell’s appearance promises to be the highlight of the week for global markets, giving the clearest indication of whether the Fed will remain committed to letting the economy to run hot in order to quicken and complete the economic recovery from the pandemic.

The Fed’s repeated assurances that it will keep policy loose this year have been one of the factors behind the sharp run up in assets such as commodities, as well as other assets that are implicit bets on dollar devaluation.

2. Crypto sell-off gains pace

First and foremost among such dollar-devaluation bets have been cryptocurrencies, which are correcting sharply as investors take profits on what has been an extreme move over the last three months.  

Bitcoin prices fell another 13.6% overnight to $47,410 on the Bitfinex exchange. They’ve now fallen 20% from their peak two days ago, although they’re still up by more than two-third since the start of the year, a rally driven by a rapidly expanding range of ways to play the asset.

The sell-off was sparked over the weekend by a tweet from Tesla (NASDAQ:TSLA) CEO Elon Musk, who noted that prices for Bitcoin and Ethereum seemed “quite high” after their recent runups. Ethereum was down 19.5% overnight at $1,463.

3. Tech set to drive stocks lower again; Home Depot , Medtronic report

Tech stocks are set to drag U.S. markets lower for a second straight day when they open later, as concerns about a possible slowdown in money-printing by the Fed raises the incentive to take some profits on a rally that now stretches back years.

By 6:30 AM ET (1130 GMT), Dow Jones futures were down 60 points, or 0.2%, while S&P 500 futures were down 0.6%, but Nasdaq 100 futures were down a hefty 1.5%, extending losses of 2% posted on Monday.

Among stocks likely to be in focus are Tesla (NASDAQ:TSLA) and Churchill Capital IV (NYSE:CCIV), the SPAC which overnight formally announced the terms of its merger with Tesla rival Lucid Motors. Tesla lost 8.6% on Monday on the emergence of its first real U.S.-based challenger in the luxury electric vehicle segment.

Also under the microscope will be Home Depot (NYSE:HD), whose stock fell 1.5% in premarket trading after it said it couldn’t say whether 2021 will be as strong as 2020, when it rode a pandemic-driven boom for home improvement. Medical device maker Medtronic (NYSE:MDT) is also due to report before the open.

4. U.K. assets surge as Johnson outlines exit from lockdown

The pound hit its highest in a year against the euro and its highest since April 2018 against the dollar after Prime Minister Boris Johnson outlined what he called a “cautious and irreversible” path out of lockdown by July.

U.K. stocks also surged in response to Johnson’s TV address, given late on Monday. The FTSE 250, a midcap index that concentrates on domestic-focused stocks, rose nearly 1%, while the FTSE 100 also outperformed other European markets, which followed the general downward trajectory on Wall Street on Monday.

Johnson’s upbeat address overshadowed labor market data on Tuesday morning that showed unemployment reaching its highest in five years in December, along with another 114,000 contraction in employment over the last three months.

5. Rotation in commodity rally

Agricultural commodities were playing catch-up with industrial ones in overnight trading, on perceptions that base metals have moved too far, too fast.

Coffee, oats, rough rice and soybeans were all outperforming copper, aluminum and zinc on confidence in a broad-based increase in consumer spending power.

Crude oil futures, meanwhile, retreated from another 13-month high, which they had posted on the back of reports that Goldman Sachs analysts now see the rally going as far as $70 a barrel. By 6:30 AM ET, U.S. crude futures were up 0.9% at $62.26 a barrel, while Brent crude was up 0.8% at $64.89 a barrel. The American Petroleum Institute releases its weekly assessment of U.S. stockpiles at 4:30 PM ET.

Powell in Congress, Lucid - SPAC Deal, Bitcoin Plunges - What's up in Markets
 

Related Articles

Pakistan receives $3 billion loan from Saudi Arabia
Pakistan receives $3 billion loan from Saudi Arabia By Reuters - Dec 04, 2021 4

By Syed Raza Hassan KARACHI, Pakistan (Reuters) - Pakistan on Saturday received a $3 billion loan from Saudi Arabia, the prime minister's finance adviser said, as part of an...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (7)
All in Buffett Turtle
Turtle Feb 23, 2021 10:29AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Liquidity is abundant and the market will turn upward again. The rise in bond prices is temporary, and Fed Chairman Jerome Powell will not be just watching the rate rise. Now it's giving me another chance. Don't be afraid of fear. Enjoy the variable!
Joshhua Ray
Joshhua Ray Feb 23, 2021 10:11AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Did BTC plunge to $13,000?
Bulent Ok
Bulent Ok Feb 23, 2021 8:27AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Lucid spac deal means jack to tesla.. Tesla 950 very soon.. Not long to go..
Yankee Steve
Yankee Steve Feb 23, 2021 7:29AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
You are correct Mike. All the Fed had to do is jawbone. Also, we are in a deflation which is diffetent from inflation expectation. 10 million people still unemployed and not producing but collecting unemployment or assistance. What they are doing is just filling up 1/3 of the 2/3 GDP hole.
Mike Chen
Mike Chen Feb 23, 2021 7:11AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Powell will say, “ Relax guy, interest rate remains flat. Unemployment rate still high, things are still messy. 120b still intact, trillions stimulus”
Hassan Salloum
Hassan Salloum Feb 23, 2021 7:11AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
I hope they declare yield curve control
perplexed76 .
perplexed76 . Feb 23, 2021 7:11AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
another therapy session
Jenn foster
Jenn foster Feb 23, 2021 7:00AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
how low do you think the nasdaq will go?
William Smith
William Smith Feb 23, 2021 6:59AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Looks like Biden's anti business policies are beginning to effect the market. Just wait till he raises taxes and starts the next depression.
Show previous replies (3)
Luke Lee
Luke Lee Feb 23, 2021 6:59AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Sir, this is a casino
Rajesh Kumar
Rajesh Kumar Feb 23, 2021 6:59AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
James Tindell - Only way to fund $1.9 Trillion stimulus is by going to war against China. In 2010, Bush went to war against Iraq, this time it is China.
Star Boi
Star Boi Feb 23, 2021 6:59AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Rajesh Kumar Seriously? Lol, are we talking trade war or kinetic warfare. I think you've had too much Bhang.
David David
David9 Feb 23, 2021 6:59AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Rajesh Kumar We do not dare go to war with China. China is a beast now...
Star Boi
Star Boi Feb 23, 2021 6:59AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
David David What rubbish. When China steps out of line, there will be a price to pay....a very steep one. No one wants this, not China or anyone else. Its about time the Chinese grow some ***and wise up to the nonsensical propaganda of Emperor Xi and his deluded sense of self important grandeur. The Chinese people deserve better. Its fine to want a Chinese way of life, just don't go bothering your neighbors or telling them what they can and cant do. If Emperor Xi or the CCP wants trade concessions and free an open trade, then open up the country and bring it on. Otherwise shut up and keep your power trip on your own turf. It has to be a two way street.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email