Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Tapering Debate, Climate Change, Bitcoin - What's Moving Markets

Published 08/10/2021, 05:29 AM
Updated 08/10/2021, 05:31 AM
© Reuters

© Reuters

By Peter Nurse

Investing.com -- The Federal Reserve tapering debate intensifies, while the corporate earnings season continues. Companies look to address the climate change issue, while bitcoin and crude prices push higher. Here's what you need to know in financial markets on Tuesday, 10th August.

1. Tapering debate intensifies 

The market won’t be able to accuse the Federal Reserve of a lack of communication if the central bank does start reining in its extraordinary monetary stimulus later this year.

Atlanta Fed President Raphael Bostic on Monday joined a growing chorus of policymakers saying the central bank should move quickly, saying it could taper its asset purchases with another strong month or two of employment gains.

His colleague from Boston, Eric Rosengren, suggested September for a tapering announcement, matching previous comments from St. Louis Fed President James Bullard, who suggested the taper could be started in the fall and end by March.

Chicago Fed President Charles Evans continues the dialogue later Tuesday and Kansas City Fed President Esther George is set to speak on Wednesday.

Fed officials began debating when and how they should taper the $120 billion monthly asset purchases at their July meeting, pledging to keep this up “until substantial further progress” has been made toward its goals of maximum employment and 2% inflation.

2. Stocks seen flat; AMC) in focus

U.S. stocks are set to open largely unchanged, with investors still digesting the ongoing corporate earnings season.

By 5:35 AM ET (0935 GMT), Dow Jones futures were down 20 points, or 0.1%, while S&P 500 futures were effectively flat from Monday’s close. Nasdaq 100 futures edged up 19 points, or 0.1%.

AMC Entertainment (NYSE:AMC) is likely to be in the spotlight after the troubled movie theater chain reported a lower loss than expected after the close Monday, also announcing it would begin accepting bitcoin at all U.S. locations this year.

Coinbase Global (NASDAQ:COIN) is set to report quarterly earnings later Tuesday, with the crypto exchange’s stock receiving a boost from the recent sharp gains in bitcoin.

Likely to weigh on sentiment was the weak trading debut of Tencent Holdings-backed South Korean company Krafton, closing down 8.8% from the IPO price, with analysts citing an expensive valuation and China regulation risks.

3. Companies need to address climate change - StanChart CEO

Climate change is becoming a pressing issue in the corporate sector, with a report from a UN-backed panel warning Monday that global warming is dangerously close to spiralling out of control.

Companies should not rely on governments to reach agreement at a global summit on climate change in Scotland in November, but rather take more action themselves, Standard Chartered (OTC:SCBFF) CEO Bill Winters said on Tuesday, at an online industry event.

StanChart has said it aims to reach net zero carbon emissions from its operations by 2030 and have the companies it finances reach net zero carbon emissions by 2050.

4. Bitcoin receives U.S. regulatory boost

Bitcoin is climbing again, with the largest cryptocurrency by market capitalization boosted by the news that U.S. lawmakers have reached a compromise on cryptocurrency tax provisions.

By 5:35 AM ET, Bitcoin traded at $45,879, up 2.3% on the day, having topped $46,000 earlier, a new three-month high.

Concerns had been growing that the original loose definition of “broker” in the highly awaited infrastructure bill would mean certain crypto companies would suffer from cumbersome regulatory reporting restrictions, potentially stifling innovation in the crypto space.

However, a couple of senators revealed an amendment on Monday, which seeks to exempt non-broker type entities from the legislation.

5. Crude bounces, but sentiment still weak

Oil prices bounced Tuesday after falling to three-week lows during the previous session amid worries the growing number of Covid-19 cases, primarily in China, will curb crude demand.

By 5:35 AM ET, U.S. crude futures were up 1.4% at $67.38 a barrel, after falling 2.6% on Monday, while Brent futures gained 1.1% at $69.78 a barrel, having dropped 2.3% during the previous session.

The fast-spreading delta variant of the virus has arrived in China, the second largest consumer of oil in the world, resulting in renewed mobility restrictions, with domestic air travel hit hard. 

This has raised concerns about the short-term demand outlook and interrupted a strong rally which saw prices advance more than 50% over the first half of the year.

Attention will now turn to the release of U.S. crude oil supply data from the American Petroleum Institute later in the session, as a gauge over whether rising Covid U.S. cases have also had an impact.

Latest comments

"Companies need to address climate change". Translation: We want to trade Carbon Credits
When are the lockdowns to save the planet from climate change?
End The Fed.
They cant taper the machine will blow up
That is not "debate", that is just talk, FED wants to keep both the cake and eat it too. FED just want to scare everyone so that inflation will go down because people think FED will sooner or later taper and raise interest rates WITHOUT actually doing anything.
Really
Agreed. Inflation has a psychological component that the FED is attempting to address. The issue is more and more people and investors are calling its bluff.
There is no tapering "debate". None of these people calling for early tapering matter.
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.