US Futures Higher After Stocks End Weekly Winning Streak

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Key Takeaways

• Stock futures opened for trading slightly higher early Monday ahead of the regular session
• The price of bitcoin floats near $66,000 after successful activation of the Taproot upgrade

Stock Futures Higher After a Losing Week

Stock futures were floating slightly higher early Monday as investors prepare to enter the trading week. For a start, futures contracts on the major averages were higher by about 0.1% or more. Dow Jones Industrial Average futures, for example, jumped about 0.1% with S&P500 futures and Nasdaq futures in a similar fashion.

This said, the three major benchmarks finished higher on Friday but snapped a streak of five winning weeks. That happened due to the indexes’ weak performance over the sessions early in the week. In more detail, the broad-based S&P500 declined 0.3% over the week. In addition, the 30-stock Dow Jones lost 0.6%, while the tech-heavy Nasdaq slipped 0.7% for the week.

Investors Play Defense on High Inflation

Investors turned largely defensive after the recent US inflation report showed consumer prices rose 6.2% in October. In other words, this was the fastest price increase since 1990. The three-decade high in inflation levels elevated concerns that an interest rate hike could arrive earlier than anticipated.

On that note, the US Federal Reserve has said it expects to start raising rates sometime in deep 2022.

Still, the US dollar advanced against its major peers last week as traders expect the US central bank to act sooner than planned. More precisely, the EUR/USD reached a 16-month low under 1.1450, while the GBP/USD dipped to a 10-month low of 1.34.

In the early hours of Monday’s European session, the US dollar has retreated moderately from its highs reached last week.

What’s the Latest News on Bitcoin?

Bitcoin, the most valuable cryptocurrency, continues to improve its technology as mainstream adoption grows. In fresh signs of making the Bitcoin network work better, the community rolled out a highly-anticipated major upgrade.

The new changes, called the Taproot upgrade, envision several new features on the Bitcoin blockchain.

First, Taproot promises lower transaction fees through the so-called Schnorr signatures named after their creator, the German cryptographer Claus Schnorr. Second, the upgrade brings increased privacy for certain transactions, also through the same signatures.

And third, the most significant change is the better use of smart contracts. More specifically, the current smart contracts on the Bitcoin network are too expensive and weigh a lot on the blockchain. As a result, they have been widely avoided by Bitcoin users.

Against this backdrop, early on Monday, bitcoin trades near $66,000 after the upgrade was successfully rolled out on Sunday. Moreover, the orange coin made it in the green over the past seven days. Nevertheless, the crypto community witnessed a new all-time high for bitcoin when its price soared to $69,000 last Wednesday.

Tesla Stock in Focus after Elon Musk Spars with Bernie Sanders

Market participants will be watching several market developments unfold this week. Among others, Tesla stock is likely to experience increased volatility. The electric-car maker is having a period of elevated turbulence since Elon Musk started selling shares last week. So far, he has sold almost $7 billion worth of stock. As a result, the share price of Tesla dropped over 15% in the past week.

Fresh comments from Mr. Musk sparked increased interest in Tesla stock. On Sunday, Elon Musk tweeted in response to US Senator Bernie Sanders, who said: “the extremely wealthy must pay their fair share.”

“I keep forgetting that you’re still alive,” Elon Musk said to Mr. Sanders. In a subsequent tweet, the Tesla CEO asked: “Want me to sell more stock, Bernie? Just say the word…”

With this in mind, the price of Tesla could be in for another volatile trading week.

Today’s Economic Calendar (EST times)

• 07:30 pm, AUD, RBA Meeting Minutes