Markets Weekly Recap
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- Stock indexes gyrated wildly, driven by a mix of fears and hopes
- Upbeat earnings reports helped improve the market sentiment
This week’s trading saw heightened volatility caused by increased fears and elevated optimism. On Monday, the trading week kickstarted the action with a steep sell-off in global equities caused by concerns that the rapid spread of the Delta strain of the coronavirus will dent the economic recovery. The uncertainty of whether the expanding economy will slow down or even derail triggered a heavy selling wave.
Major European and US indexes finished Monday action deep in the red with main stock averages losing as much as 3%. The Dow Jones Industrial Average slid over 700 points on its worst day since October. The pan-European Stoxx 600 declined 2.30%.
The same concerns were largely shrugged off the next day as market participants returned to stocks in a buy-the-dip mode and ready to hunt for bargains. The Nasdaq Composite was lifted to levels above Monday’s opening, suggesting the risk appetite remained strong among investors. By Wednesday, the Dow Jones and the S&P500 had recouped their steep Monday losses.
Blowout earnings reports also helped buoy major stock averages. Coca-Cola, Johnson & Johnson, UBS, Thule Group, Blackstone, and others delivered better-than-expected financial results and improved the market sentiment on both sides of the Atlantic.
Biden’s Infrastructure Plan Gets Blocked
Netflix also announced its second-quarter results. The report wasn’t a stellar one and the streaming giant turned lower in the trading session on the following day. Netflix said it added 1.54 million new paying customers in the quarter ended June. The figure arrived above the 1.19 million. Earnings per share, however, fell short of the consensus, $2.97 per share, vs $3.16 expected.
In Washington, President Joe Biden had to take a loss on a voting battle on Wednesday when Senate Republicans blocked his $1tn infrastructure proposal. Mr. Biden and his Democratic party remain committed the big-ticket stimulus plan will receive the needed 60 votes when it lands for voting in the Senate again early next week.
In cryptocurrency, Elon Musk provided some needed fuel to Bitcoin’s price on Wednesday. The Tesla chief was joined by Jack Dorsey and Cathie Wood in a Bitcoin discussion called “The B Word”. During the event, he praised bitcoin and said Tesla will be open to accepting it again as payment if it could guarantee that at least 50% of the energy used for the mining came from renewable sources.
The highlight of the event, however, came when Elon Musk revealed his space exploration company SpaceX has bought bitcoin.
The panel and the positive comments propelled bitcoin’s price higher by about 8% on the day. Bitcoin hovered above $30,000 throughout the week as it made a push to levels near $33,000 on Friday.
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