February 8, 2021 | by elpidios
Every Monday, we will be highlighting some of the main events, news or trends that you should be following during the upcoming week and beyond.
Many of these will offer you immediate opportunities to trade, while others might do so in the not-so-distant future.
So make sure you start your week right by checking out our Monday series!
US Consumer Price Index
Despite consumer prices increasing in the US in December 2020, inflation has remained stagnant as the country continues its battle against both COVID-19 and the economic hardship wrought on the labor and services markets.
Will this trend continue as the US releases its Consumer Price Index (CPI) for January 2021 on Wednesday, February 10th?
Here’s a reminder for you. The CPI is a great indicator of inflationary pressure, which in turn affects the country’s policy on interest rates and therein the US dollar.
Preliminary GDP for the UK
On Friday, February 12th, the UK’s Office of National Statistics will release its preliminary report on the country’s GDP results for 4Q of 2020.
As we all know from the Introduction to Macroeconomics course we slept through during college, GDP is one of the prime indicators of a country’s economic activity and financial performance.
2020’s results for 3Q were stellar with the UK economy growing by 16 percent, making it one of the highest rates of growth witnessed since 1955.
However, with lockdown measures being brought back into the fray in October, this historical upswing is highly unlikely to continue for 4Q and the foreseeable future. Plenty of prognosticators expect a recession to kick in as a result of COVID-19 and the Boris Johnson administration’s policies.
Whatever the case, this announcement will lead to plenty of discussion, some price volatility and ample opportunities for you to trade GBP pairs.
Earnings Reports for Walt Disney, Nvidia, Cisco and Amazon
Several earnings reports for large American conglomerates will be released this week, which gives you a chance to trade a few of the companies you know and love.
Despite COVID-19 having temporarily shut down the world’s favorite amusement parks, Walt Disney (DIS) exceeded expectations in 2020 thanks to Disney+, the company’s video-on-demand and streaming service, and its more than 73 million paid subscribers. Plenty of pundits see a bright 2021 for Mickey Mouse’s home and we’ll find out whether this is true or not on Thursday, February 11th.
Nvidia (NVDA), the American tech company that produces graphics, wireless communication, PC processors, and automotive hardware/software, received an unexpected boost from the ongoing pandemic. With more people working from home, an increase in demand for e-learning and gaming allowed the company to post impressive growth in sales and revenue. Will supply constraints exacerbated by COVID-19, however, lead to a bearish market at the start of 2021? Find out on the 11th of February!
Tech giant Cisco (CSCO), which provides the market with networking hardware, software, telecommunications equipment and other hightech services and products, performed admirably well in 2020 despite the obvious difficulties. This is not surprising considering the company’s stocks have increased in value by 33 percent during the past five years thanks to its balance sheet, which contains very little debt, and its solid work in network and web security, cloud-based solutions and the Webex portfolio. Will this upward trend continue following the announcement of Q2 results on Tuesday, February 9th?
Finally, fan favorite Amazon (AMZN) reported a record-breaking revenue of $125.56 billion for Q4 of 2020 as a result of an extremely healthy Christmas holiday season. Results for Q1 in 2021 are expected to be a touch lower but still hover between $100 and $106 billion, a 33 to 40% increase from 2020’s Q1 figures. What will be interesting to monitor is the effect Jeff Bezos’ stepping down as CEO after Q3 will have on the company moving forward.
A Death Cross Coming for Gold?
It seems gold is about to experience its first death cross in more than two-and-a-half years.
What is a death cross, you ask?
A death cross marks a potential sell-off of a product or the start of a bearish market for said product.
Technically speaking, Investopedia says a death cross occurs “when [the] short-term moving average crosses below its long-term moving average” with “the most common moving averages used in this pattern [being] the 50-day and 200-day moving averages.”
Considering the USD’s unexpectedly strong performance so far in 2021, it makes sense that the price of gold might soon be experiencing a downturn. Remember that the price of gold and USD are inversely related; as one goes up, the other tends to fall.
So keep your eyes peeled on gold as a potential death cross, despite its macabre name, brings plenty of trading opportunities.
Time to Start Investing in Electric Vehicles?
The electric vehicle industry received a significant boost earlier this year when US President Joe Biden encouraged the federal government to replace its vehicles for ones with zero emissions.
Part of Biden’s plan is to stimulate the economy by having these electric cars made in the US using unionized employees and creating close to one million jobs for the automotive industry.
Despite the many challenges still left to navigate, this announcement is a sign the Biden administration is committed to the electric vehicle industry as a way of fighting climate change and safeguarding the environment.
Large American car manufacturers are joining the fray. Earlier this year, General Motors announced an ambitious plan to produce only zero-emission vehicles by 2035, a move that might exert greater pressure on other automotive companies to ramp up their own schemes for their electric vehicle portfolios.
Similarly, tech giant Apple is close to wrapping up a deal with Hyundai-Kia to start producing in 2024 its own American-made electric vehicle at Kia’s factory in Georgia.
If this trend continues, battery manufacturers such as LG Chem Ltd., Ultium Cells, Viking Plastics and Contemporary Amperex Technology, among plenty of others, will also receive a boost.
Will this executive decision provide the electric vehicle industry with the additional push it needs to join the mainstream and no longer be a niche product for the world’s largest economy?
It might definitely be time to look into trading stocks in the electric vehicle and battery industries!
To check out a list of all of our ongoing promotions and offers, have a look at our website HERE.
*Any opinions, news, research, analyses, prices or other information contained here are provided as general market commentary and do not constitute investment advice. FXPRIMUS does not accept liability for any loss or damage, including without limitation to, any loss of proﬁt, which may arise directly or indirectly from the use of or reliance on such information.