Elon Musk, whom we have repeatedly mentioned over the past few weeks, made his way into the headlines once more, though this time not because of cryptocurrencies. Instead, today it became clear that famous investor Michael Burry is betting against Musk’s Tesla, with a substantial sum at that (over half a billion dollars). Tesla shares have been on the downturn lately, along with other tech stocks, despite being one of the most attractive assets in 2020.
As for US stock indices, today we expect to see some growth which is going to undo yesterday’s losses, though sentiment hasn’t settled on optimism completely yet. The earnings season continues with notable names such as Walmart due to report today.
Furthermore, European stock indices such as DAX and FTSE MIB are also doing well. This is likely due to the markets having a bit more confidence in the European economy now that the coronavirus pandemic has calmed in the region and countries are doing well with their vaccination programs.
The world’s strongest currency, the US dollar, is once more slumping today against all of its major counterparts. The USD is weakening due to the lack of demand for safe haven assets, but mostly because the Federal Reserve repeated its earlier statements that a loose monetary policy is necessary to support the economy. The central bank has downplayed the record high inflation readings published recently and is instead more concerned with labor data.
Thanks to the weaker dollar, assets quoted in USD are gaining in value. These include crude oil and other commodities like wheat and soy, which were also supported by interruptions in their supply in the United States.
As for fundamentals, today the United Kingdom published an employment change report, which showed more jobs were created than expected. Recall that the UK has undone most of its coronavirus restrictions and has reopened its economy almost completely.
The highlight of the day is GDP growth rate data from the eurozone, which met the forecasts completely, leaving the euro unchanged for the day.
