European Markets Advance on Monday while the US Takes a Break

European Markets Advance on Monday while the US Takes a Break

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Key Takeaways

• European indexes open in green territory
• GameStop saga continues with a hearing on Thursday

US financial markets are closed on Monday in honor of the Presidents’ Day holiday while China is closed until Thursday for the lunar new year. European markets, however, operate under normal conditions and indicate a slight increase in the early trading hours. On Monday and for most of the week, the markets present a fairly light calendar.

Throughout the week, traders and investors will be monitoring quarterly reports on earnings from UK banks. Barclays and NatWest will be the first of the UK banks to release full-year results. Additionally, Walmart, the US retail corporation, will report earnings on Thursday. Investors will watch out for a rise in sales over the holiday period, and for details around Walmart’s subscription service, Walmart Plus. Nestlé, Daimler, Marriott, and Credit Suisse will also reveal their earnings figures on Thursday.

Markets across Europe kicked off the week pointing to the upside. All European indexes reach higher on Monday with DAX up some 0.40%, while the FTSE100 and the CAC40 are higher by over 1.00% each.

The GameStop Saga: A New Chapter

Later in the week, on Thursday, the GameStop saga will be in the spotlight again. Managers of two large hedge funds are called in to testify along with Reddit and Robinhood executives at a US congressional hearing. Ken Griffin of Citadel and Gabe Plotkin of Melvin Capital will appear before Congress joined by Reddit’s Steve Huffman and Robinhood’s Vlad Tenev. Keith Gill, the person who emerged as one of the key players in the GameStop out-of-control trading, is also expected to appear. The money managers and CEOs of Reddit and Robinhood will testify on the stock market upheaval that lifted GameStop shares nearly 2,000% in January.

The situation surrounding GameStop attracted political attention at the beginning of February when Treasury Secretary Janet Yellen called a meeting with high-level representatives of the CFTC and the Federal Reserve. The financial regulators discussed investors’ security and the fairness of trading practices in the stock market. GameStop shares, which were trading at a peak of $348 on January 27, have now tumbled and trade around the $50 mark.

Investors will monitor recent economic data coming out of the US, Japan, the UK, and the eurozone. The latest PMI data will reveal how economic activity fared for February. Services and manufacturing data in the US are expected to show a slight fall. Anything above the 50 marks would signal expansion. In Europe, the reports will show if the current restrictions in most countries have weighed on the data. And in the UK, investors will be on the lookout to see if the successful vaccine rollout will result in a better reading for the UK’s economy.

This week will be relatively quiet for central banks. The event likely to be of interest will be the minutes from the Federal Reserve’s last meeting. Chairman Jerome Powell will provide some insights into the current economic state, recovery, and the chances for inflation. At the White House, President Joe Biden will continue to heap pressure on Congress for his stimulus package.

Learn more about market trends in 2021 over in our forex trading education section.