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Stocks sell-off in first day of 2021

Gold – Daily Candlesticks
Source: GKFX / MT4 (January 4, 2020)

XAU/USD has broken firmly above the upper trendline of the falling channel it has been in since hitting record highs in August. The gap and breakout could signal the end of the correction and resumption of the longer-term uptrend.
 

TAKEAWAYS


•    Stocks drop sharply in first day of trading in the New Year
•    Oil sells off on first day of OPEC Meeting
•    Gold breaks out in haven bid
•    Bitcoin & Ether cryptocurrencies retrace some of huge weekend rally
•    Betting odds of ‘Blue Wave’ rise before Georgia run-off elections
•    DAY AHEAD: OPEC 2nd day Germany retail sales, ISM Manufacturing PMI
 

GURU WISDOM


“Never depend on a single income, make an investment to create a second source.” Warren Buffett
 

MARKETS


*Daily closing price
↗ EUR/USD    1.2250        (+0.01%)
↘ GBP/USD    1.3576        (-0.77%)
↘ USD/JPY    103.11        (-0.13%)
↘ S&P 500    3700.65    (-1.48%)
↗ Hang Seng    27,472.81    (+0.89%)
↗ Gold        1941.88    (+1.49%)
↘ Oil (Brent)    44.96        (-2.13%)
↘ Bitcoin    19,137        (-2.79%)
 

NEWS

 

Stock sell-off


News around high valuations and the Georgia run-off election in America caused a sudden sell-off on the first day of trading in 2020. The stock market moves in the first days of January are widely-watched because of the investment adage of ‘As goes January so goes the year.”
 

Georgia election


The assumption in markets is that there will be a divided US Congress and that helped fuel some of the post-election day gains. But with voting taking place this week in “run-off” elections in Georgia, betting odds have come in sharply. Bookmakers now see a near even chance that Democrats could win both Senate elections in Georgia, take control of the Senate and create a ‘Blue Wave’ of a Democrat run Presidency, House and Senate.
 

OPEC


A virtual meeting of OPEC+ oil ministers was adjourned without agreement about oil production quotas on Monday and will continue Tuesday. Russia and Saudi Arabia – the de facto leaders of the cartel – are at loggerheads about how quickly to expand output amid the pandemic. Oil prices dropped amid rising risk that oil supplies are not kept tight as demand drops again amid new lockdowns especially in Europe.
 

Ethereum


Cryptocurrencies stabilised, ending lower on Monday after huge weekend volatility. ETH/USD (the token for the Ethereum blockchain network) has steadied around $1000 after notching its highest levels since January 2018. The record high stands at $1433, which was set in December 2017. Trading volumes in Ethereum are picking up amid bets that a high profile investor will soon announce a stake in the run up to launch of Ether futures by the CME next month.
 

DAY AHEAD 


TIME (GMT)        EVENT                    CONSENSUS    PREVIOUS
07:00        EUR    Germany Retail Sales (YoY)(Nov)     3.9 %        8.2 %
07:30        CHF    Consumer Price Index (YoY)(Dec)     -0.7 %        -0.7 %
15:00        USD    ISM Manufacturing PMI(Dec)         56.6        57.5