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06 Dec 2021
3 min read

Futures Aim to Erase Steep Losses, Bitcoin Near $50K After Selloff

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Key Takeaways

  • US stock futures aim to pare some losses from Friday’s steep decline
  • Bitcoin price gains nearly $8K after a major selloff over the weekend

What’s on Focus in the Markets?

US stock futures traded higher early Monday morning after a strong selloff swept the wider financial markets on Friday. Stocks across the board drifted lower out of the gate on the final day of the trading week.

In detail, major indexes in the US dropped 1% or more with the Nasdaq Composite losing as much as 1.9% on the day. The tech-heavy benchmark was pressured as the technology sector sold off amid increasing uncertainties on several fronts.

On the one hand, the US Federal Reserve is likely to reduce its monetary stimulus earlier than planned. The quicker tapering, or withdrawal, of the $120 billion in monthly bond-buying, according to Fed officials, could alleviate inflation jitters.

The same action, however, would suggest that those $120 billion injected into the economy would soon disappear. The prospects for no stimulus from the Fed weighed on the buying momentum, alongside other concerns.

Furthermore, stocks were jolted after Omicron’s fears increased following reports that the new strain is already in the US. Also, a drop in new jobs created dented the optimism for risk assets.

What’s New Around the Markets?

To this end, hiring slowed sharply in the US for November as US employers added 210,000 new people to the workforce. In other words, this was the lowest monthly job growth since December last year. It was also under half the number reported a month ago, 546,000.

In that context, investors were quick to offload aggressive bets on the leading stock gauges as well as individual stocks. Tesla shares, in particular, plummeted nearly $70, or 6.4%, to finish Friday trading near $1,014.97.

Other big tech names that endured a heavy drop included Microsoft and Netflix, lower by about 2% each.

What’s Next for Traders and Investors?

The Omicron variant, coupled with stimulus reduction and surging inflation, is likely to maintain higher volatility for the foreseeable future. With this in mind, traders will be looking for chances to grab major stocks at discount.

On this note, shares of Meta Platforms (formerly Facebook), are lower by roughly 8% over the past week. In addition, Netflix stock has lost about 10% of its valuation in the past five trading days.

Besides Wall Street stocks, leading cryptocurrencies like bitcoin are also likely to attract investor attention this week.

What’s the Latest News on Bitcoin?

Bitcoin, the world’s biggest cryptocurrency, fell as much as 22% on Saturday as the stock selloff spilled over to digital assets. More specifically, the orange coin dropped from levels near $54,000 to $42,000 in a matter of hours.

The aggressive decline, however, was relatively short-lived as bitcoin erased about half of its losses by the end of the day.

Presently, the price of bitcoin hovers near $50,000 as crypto traders prepare to kick into gear for the trading week.

Against this backdrop, cryptocurrency participants are confident the cryptocurrency market will recover as it had done before. It’s worth noting that during bitcoin’s relatively short history, it had lost more than 80% of its value at least three times.

This said, many crypto traders use the current price drop as a chance to enter the fast-developing market as they buy the dip.

Today’s Economic Calendar (EST times)

  • 10:30 pm, AUD, RBA Interest Rate Decision (Dec)
  • 10:30 pm, AUD, RBA Rate Statement

Check our calendar right here.

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