June 18, 2021 | by sandeep
5 Market Movers to Look Out for This Week – 21/6/21
By Mateo Jarrin Cuvi
Three PMIs. An interest rate decision in the UK. Crude oil. US tech. Electric vehicles.
Plenty of diverse action this week to help power your trades!
Tightening Up & Slowing Down?
The UK’s Bank of England (BOE) will release its latest monetary policy and interest rate decision on Thursday, June 24th at 11 am GMT.
The BOE already slowed down its quantitative easing (QE) plans.
Now, attention will probably turn to rising inflation rates, something the BOE believes could force policymakers to further tighten its monetary policy and slow down the country’s economic recovery.
In late May, during a UK Treasury Select Committee, BOE Chief Economist Andy Haldane said, “An upside surprise to inflation is among the greatest risks” since it might pressure the government “to tighten policy even more rapidly or on a more significant scale, or possibly both, in a way that would take the legs out of the recovery.”
Lo and behold, the UK’s latest CPI, which was released on June 15th, topped out at 2.1%, exceeding the BOE’s preferred target.
As reported by Reuters, “the figure represented the first time inflation has gone above the BoE’s 2% target in almost two years and was above all 33 forecasts in a Reuters poll of economists which had pointed to a rise in inflation to 1.8%.”
A rise in the price of clothes, food and beverages at restaurants and bars, and fuel sparked this surprising spike in UK inflation.
Will the UK act quicker than, say, the US or will the BOE opt to keep interest rates unchanged for the foreseeable future?
Pay very close attention to what will be announced and prepare those GBP trades!
Last week we had a CPI double. On Wednesday, June 23rd, we have a PMI triple to facilitate your trades.
What: EU PMI
Time: 8 am GMT
Note: EU PMI for May moved up to 57.1 following a reading of 53.8 in April. May’s figure is the EU’s highest since February 2018. With economies opening up, demand growing across the globe and the ECB’s loose monetary policy still in place, PMI for June is expected to remain comparably high.
What: UK PMI
Time: 8:30 am GMT
Note: UK PMI for May recorded its highest level ever at 65.6, almost 5 points higher than April’s reading. Growth in new and export orders and employment figures spurred these record-setting highs. Will the extension of the UK lockdown until mid-July have any impact on June’s PMI?
What: US PMI
Time: 1:45 pm GMT
Note: Just like with the UK and EU, US PMI for May shattered all records, coming in at 68.1 after a reading of 63.5 a month prior. Analysts expect the US economy to run on all cylinders well into the summer and beyond.
Pay close attention to each one of these announcements as they might provide a great opportunity for you to trade some of your favorite currencies!
Back to Black (Gold)
Oil has made a remarkable recovery during the past year, moving up to above $70 after hitting historic lows in April of 2020.
And by historic lows we mean people were getting paid to store excess oil barrels under their beds.
Is this climb sustainable?
Or will oil prices pull back in the coming months?
According to some of the world’s oil traders, prices will stay above the $70 per barrel mark for the foreseeable future and should return to their pre-COVID levels by the middle or end of 2022.
Of course, a lot of this depends on the ongoing negotiations between the US and Iran on its nuclear program and the reintroduction of Persian crude into the market.
Speaking at the FT Global Commodities Summit, Russell Hardy, CEO of Vitol, a Dutch energy and commodity trading company, said, “Iranian production is probably going to come back at some time during the September to November period,” and “OPEC [will] want to manage their situation to allow that to happen relatively smoothly…supportive of prices.”
Keep your eyes peeled for any and every oil event this week (including the US’s weekly Crude Oil Inventories on Wednesday, June 23 at 2:30 pm GMT) and place your trades when the time is right!
Bullish Times for Tech
Nvidia (.NVDA.OQ), the US chip unit and GPU manufacturer, has been performing admirably well ahead of its four-for-one stock split on July 20th.
During the past month alone, Nvidia’s stock price went from just shy of $550 to well over $700, and analysts expect its price to continue to surge.
Even better, during the past five years, the US tech giant has rewarded investors with 1400% in gains.
In 2021 alone, the company’s stocks have added 33% in value on the back of a record-setting Q1 revenue of $5.66 billion, which was 84% higher than that recorded for 2020.
Furthermore, revenues for both its gaming and data center divisions grew by 106% and 79%, respectively.
This shouldn’t come as a shock considering Nasdaq is breaking all sorts of records, setting new all-time highs on a weekly basis.
Now’s the time to trade tech firms like Nvidia, which is the 8th-ranked company on Nasdaq with a weight of 3.35, and tech-heavy indices like Nasdaq.
Don’t miss out on this action!
Will Tesla’s Stock Hit $1000?
Despite all the success of Nasdaq, which hit record highs in recent days, Tesla’s (.TSLA.OQ) stock has been moving sideways and further consolidating.
Nevertheless, some analysts expect Tesla’s stock price to rise to anywhere between $900 and $1200 by the end of the year with both the company’s fundamentals and technicals lining up to make this happen.
Michael Bapis, who heads Vios Advisors at Rockefeller Capital Management, recently told CNBC’s Trading Nation that Tesla is here to stay.
“Any time you get the chance to buy it, buy it,” Bapis said.
Furthermore, Bapis explained that the difficult barriers to enter the electric vehicle (EV) industry play in Tesla’s favor.
“Unless someone comes in and breaks through the difficult barriers to entry, you’re going to continue to see [Tesla’s] stock grow long term,” he concluded.
Of course, to a certain extent, Tesla stock’s success depends on Elon Musk’s big mouth and itchy trigger fingers when tweeting.
So keep your eyes open for any of Musk’s statements or Tesla announcements and trade the world’s premier EV company!
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