Markets Open Q3 With a Bang
- At the end of a shortened trading week, Wall Street indices finished higher, including a new all-time high from the Nasdaq 100 index.
- Job data released on Thursday showed the 15th straight week in which initial claims remained above 1 million (1.43 million). Future claims number below 1 million could be the next turning point for investors.
- Alongside the job data from the US, the Caixin China services PMI rose to 58.4 in June from 55.0 in May, reaching a 10-year high and contributing to the global rally.
Oil Consolidating Around $40
- Oil prices crossed $40 and remained around the mark throughout last week.
- The number of active oil rigs in the US has declined by 70% (!) since the beginning of 2020. These rigs cannot be reactivated instantly, as 37% of rigs are old and it would take time to get them back to work.
- After the last drawdown of 2014–2015 it took 2.5 years to get all the old rigs back to work.
- If and when we fully reopen, this could put pressure on supply and may impact oil prices.
Bitcoin Remains Stagnant
- Another week of low Bitcoin volatility, and more evidence that we are in a period of sustained holding.
- Glassnode reported this week that 61% of BTC hasn’t moved in over a year — a new all-time high for this metric.
- The last time this metric exceeded 60% was in early 2016, just before the price increase that led to the great bull run of 2017.
Big Tech and Electric Cars on the Rise
- On Monday, Elon Musk sent an email to the employees saying the company could break even in Q2. Tesla rallied by almost 20% in four sessions, hitting yet another all-time high to become the world’s most valuable automotive company.
- According to TheMotleyFool.com, Tesla is one of the most traded stocks among traders around 25–34 years of age.
- Chinese electric carmaker Nio is also doing great, climbing 18% on Thursday after reporting an increase in sales.
The Week Ahead
- Earnings season starts, but will only go into gear the following week with big bank earnings.
- US Non-Manufacturing PMI release (Monday).
Written by a team of experienced financial analysts at eToro.
This content is for information and educational purposes only and should not be considered investment advice or an investment recommendation. Past performance is not an indication of future results.