All articles tagged with #risk appetite
Bitcoin surpasses $113,000 amid positive US-China trade developments, boosting risk appetite across global markets, with equities and cryptocurrencies rallying as trade tensions ease and geopolitical concerns diminish.
Despite a recent dip, Wall Street's bullish momentum continues into September driven by expectations of Fed rate cuts, strong consumer resilience, and AI enthusiasm, with low volatility and increased institutional re-risking indicating confidence, though some investors remain cautious about overvaluation and market concentration.
Wall Street's bullish momentum continues into September despite minor dips, driven by expectations of Federal Reserve rate cuts, strong US consumer data, and ongoing AI enthusiasm, with broad risk appetite across markets remaining resilient amid some geopolitical and economic concerns.
The stock market is experiencing gains with the S&P 500 approaching a record high, driven by risk-on sentiment following a trade deal between the US and EU that reduces tariff concerns. The Nasdaq and certain sectors like energy, consumer discretionary, and tech are leading, while market breadth remains weak with only a few stocks advancing. Investors are optimistic ahead of upcoming earnings and economic data.
Global liquidity has turned negative again, leading to a shift in risk appetite from cryptocurrencies like Bitcoin to traditional stocks, which may impact Bitcoin's performance and its correlation with the stock market. The decline in liquidity suggests stricter monetary policies and could weaken demand for risk-on assets, with Bitcoin showing signs of weakening relative to stocks. The future movement of Bitcoin depends on macroeconomic factors and whether it can reclaim key resistance levels.
Investors are displaying a heightened risk appetite as Trump Media (DJT) begins trading at a $9 billion valuation despite financial losses, while Krispy Kreme (DNUT) surges nearly 40% due to a partnership with McDonald's (MCD), sparking discussions about meme stocks on Wall Street. Analysts note a strong market sentiment driven by factors such as meme stock resurgence, risk appetite, and economic growth, with some expressing concerns about potential market derailment related to upcoming elections.
Investors are anxiously awaiting a key measure of inflation and the Federal Reserve's interest-rate decision this week, which are expected to have a significant impact on the stock market and economy in 2024. Speculation that the Fed will start cutting rates by mid-year has led to a drop in Treasury yields and a renewed interest in riskier investments. The S&P 500 has seen a significant increase in value since late October, with traders flocking to areas of the market that benefit from lower borrowing costs, such as small caps.
The EUR/USD reached mid-term highs last week before experiencing a selloff due to reduced trading volume during the U.S. Thanksgiving holiday. However, the currency pair's ability to climb higher during light trading suggests that behavioral sentiment believes it had been oversold. As trading volume returns to normal this week, speculators will be watching for momentum and the impact of speeches by U.S. Fed officials. While reversals lower are possible, if risk appetite and equity indices remain strong, the EUR/USD could continue to rise. Day traders should use risk management and conservative leverage, with a speculative price range of 1.08290 to 1.10470.
Gold and silver prices are lower due to gains in the US dollar index and losses in crude oil, as well as improved risk appetite in the market. The US stock indexes are higher, while the yield on the US Treasury 10-year note is at 4.428%. The minutes from the last Federal Reserve meeting noted the risk of higher-than-expected inflation and weaker-than-expected US economic growth, suggesting that the Fed will continue to pause on rate hikes. Technically, gold and silver futures have near-term advantages for the bulls.
Gold prices edged lower as risk appetite increased and investors awaited further guidance on the Federal Reserve's monetary policy. The recent speech by Fed Chair Jerome Powell, combined with weaker-than-expected U.S. jobs data, has raised expectations that the Fed will halt its current rate-hiking cycle, boosting investors' risk appetite. This has led to a diversion of flows from gold to other assets, resulting in a slight drop in bullion prices. Traders are now pricing in a high likelihood of the Fed keeping rates unchanged in December and potentially easing policy as early as June. Additionally, a rise in benchmark Treasury yields and a rally in world shares have further diminished gold's appeal.
Gold and silver prices hit multi-week lows due to a bearish trifecta of rising U.S. Treasury yields, lower crude oil prices, and a solidly up U.S. dollar index. Trader and investor risk appetite has also increased, which is negative for the safe-haven metals. The U.S. debt-limit extension talks are reportedly going better, bringing optimism to the markets. However, potential negatives are still lingering, including a still-hawkish Federal Reserve, recession concerns, and U.S. and European banking jitters.
Bitcoin's price has been trading within a narrow range for the past 17 days, causing the 40-day volatility metric to drop below 40%. While macroeconomic conditions remain the main driver for risk markets' price fluctuations, Bitcoin futures and options data suggest that $28,000 is unlikely to become the new resistance. However, investors have lost interest in risk assets and concentrated their bets on fixed-income trades due to inflation risks, an economic downturn, and a weakening US dollar. Bitcoin futures display weak demand from longs, and the Bitcoin options risk metric stood neutral, suggesting that pro traders are less confident and favoring sideways trading.
Gold and silver prices are down in midday U.S. trading due to less risk aversion in the marketplace, prompting profit-taking and weak long liquidation from futures traders. Global stock markets were mostly higher overnight, and U.S. stock indexes are mixed at midday. Geopolitics is moving closer to the front burner of the marketplace as Russia threatens to station tactical nuclear weapons in Belarus, North Korea test-fires more ballistic missiles, and the U.S. retaliates with air strikes in Syria. It's a busy week for U.S. economic data, including Friday's much-anticipated personal consumption and expenditures data that will provide fresh clues on whether the U.S. economy is headed toward recession.