US stock market crashes as investors worry about Delta variant spread

While the Delta variant of coronavirus is marching around the world and inflation is rising, hopes for the development and growth of the global economy are dashing quickly. Stock indices, oil prices, and US government bonds yields have already fallen.

A similar scenario played out at the very beginning of the outbreak of the coronavirus. Investors rushed to sell shares of companies that incurred losses on the introduction of quarantine restrictions. At the same time, they started purchasing government bonds and shares of companies that could benefit from transitioning staff to work remotely.

Meanwhile, oil prices went down after the oil exporting countries agreed to increase production.

All major stocks plunged: the Dow Jones Industrial Average lost 2.1%, the S&P 500 tumbled by 1.6%, and the NASDAQ Composite dropped by 1.1%. American Airlines Group and United Airlines stocks plummeted by 4-6%, while Marathon Oil and Diamondback Energy lost 5%. The yield on the benchmark 10-year Treasury note posted its biggest decline since mid-February, 1.18%. Brent futures contracts plunged by 6.8%.

Candice Bangsund from Fiera Capital reckons that the new variant of coronavirus would postpone economic growth, which in turn may provide investors with an opportunity to buy shares of oil and gas companies, as well as manufacturing and financial firms, at a lower price

Economic recovery concerns caused turbulence in markets not only in the US but also worldwide. Thus, the STOXX Europe 600 sagged 2,3% along with tourism and commodity stocks. As for the Asian market, the Hang Seng Index dropped by 1.8% amid a plunge in Alibaba and Tencent stocks, and the Nikkei 225 declined by 1.3%. Indonesia and Australia reported on a surge in cases of the Delta variant.

Market experts suggest that the fast spread of COVID-19 and low vaccination rates in Asia are weighing on investors' sentiment, urging them to shift their investments from Asia to markets in countries with higher vaccination rates.

American stock indices rose by 1.5-1.6%

Statistics released on Tuesday indicated a significantly larger-than-expected growth in the number of new buildings in the United States in the past month.

The number of homes that began construction in the United States in June increased by 6.3% from the previous month to 1.643 million at an annual rate, the country's Department of Commerce said. This is the highest figure for the last three months. Analysts' median forecast was for a 1.2% increase in the last month, according to surveys by Trading Economics and MarketWatch.

The Dow Jones Industrial Average by the close of trading rose by 549.95 points (1.62%) and amounted to 34511.99 points.

Standard & Poor's 500 gained 64.57 points (1.52%), rising to 4323.06 points.

The Nasdaq Composite rose 223.89 points (1.57%) to 14498.88 points.

A number of shares, which dropped significantly on Monday, rose steadily on Tuesday. United Airlines Holdings Inc. increased by 6.6%, Delta Air Lines Inc. rose 5.5%, American Airlines Group Inc. increased by 8.4%.

Royal Caribbean Group shares rose 7.7%, capitalization of Carnival Corp. increased by 7.5%.

On Tuesday, shares of major American banks also rose in price: JPMorgan Chase & Co. added 1.9%, Bank of America Corp. - 2.1%.

Halliburton Co. increased by 3.7%. The American oilfield services company returned to profitable levels in the second quarter, its size per share exceeded its forecast.

International Business Machines (IBM) shares rose 1.5%. The company increased its revenue in the second quarter of 2021 by 3% compared to the same period a year earlier. Revenue growth was recorded for the second quarter in a row, which encouraged investors, as the figure was falling in the previous four quarters. Over the past 34 quarters to the beginning of this year, IBM recorded a decline in revenue in annual terms 30 times, writes MarketWatch.

Nasdaq Inc. added 2.1% in price. The exchange plans to create a separate segment for its private equity market in partnership with a group of American banks, including Goldman Sachs Group Inc. and Morgan Stanley, writes The Wall Street Journal.

Comcast Corp. have risen in price by 0.8%. CEO Brian Roberts and Chairman of ViacomCBS Inc. Shari Redstone discussed the possibility of partnerships in the field of streaming in international markets, writes The Wall Street Journal, citing knowledgeable sources. ViacomCBS rose 2.3%.

Gold is stalling, but it is saving up strength for a breakthrough

In recent days, the mood of the yellow asset has been very changeable. Gold fell on Monday, rose slightly on Tuesday, collapsed to a 2-week low on Wednesday, and again found the strength to get up on Thursday.

The decline in gold in the middle of the working week was significant. Against the background of the strengthened dollar and the growing yield of 10-year US bonds on Wednesday, the quotes dived to the lowest level since July 8, and barely managed to stay above the psychological mark of $1,800.

However, everything changed yesterday. The dollar was unable to maintain some of its positions. The opposite dynamics was also demonstrated by the bond yield. The indicator moved down after the release of data on the US labor market.

The published statistics turned out to be worse than forecasts. During the week, the number of applications for unemployment benefits in the United States increased by 51 thousand and reached the maximum value since May of 419 thousand. Meanwhile, analysts expected the indicator to decrease to 350 thousand.

Weak data on the labor market indicate that the Fed will refrain from curtailing incentives and raising interest rates in the near future. This is a wake-up call for the dollar, but a good signal for gold.

Having received support, the yellow asset closed at $1,805.40 on the New York COMEX Exchange yesterday. The difference from the previous trades was $2, or 0.1%.

Other popular metals have also grown synchronously with gold. Silver rose 0.5%, rising to $25.38. Copper added 1.5% and traded at $4.34. Platinum jumped 1.4%, reaching $1,090.60. The cost of palladium gained 1.9% and amounted to $2,704. 60.

Analysts note that the general optimism in the markets contributed to the upward movement of metals, while for gold, on the contrary, it is a deterrent factor. For this reason, the asset has been stalling in a very narrow price range for a long time.

This week, the boundaries of the corridor have narrowed even more. Now, gold is swinging sluggishly between the marks of $1,795 and $1,805. Asset prices show extremely low volatility. However, according to experts, this is a positive sign.

ActivTrades analyst Carlo Alberto De Casa says that the current consolidation gives gold an excellent opportunity to recover in the coming days, but on the condition that the US currency does not strengthen.

Meanwhile, this morning, the metal quotes remain apathetic and remain stable. Prices that have not shown a single dynamics since the beginning of the week, and under its curtain can not decide on the direction of movement.

At the time of preparation of the material, the value of the yellow asset has decreased insignificantly – by 0.05%. At the same time, bullion remained above the key level, falling to the level of $1,804.5.

Analysts are confident that next week, the apathy should be replaced by more intense traffic. The meeting of the US Federal Reserve, which is scheduled for July 27-28, will be able to stir up the quotes. Investors are waiting for new comments from the regulator on its monetary policy. Each meeting of the Federal Reserve has an impact on the dollar exchange rate, which is reflected in the value of the precious metal.

July 26. China was suspected of wanting to completely ban bitcoin

Bobby Lee, one of the first crypto billionaires in China and the founder of the BTC China crypto exchange, says that he does not rule out the possibility of the Chinese authorities introducing a complete ban on the storage of bitcoin and other cryptocurrencies.

In his interview, Lee noted that the Chinese authorities have declared war on bitcoin due to their unwillingness to deal with an unregulated financial instrument. Lee also advised miners to sell their hardware before it dropped dramatically.

At the same time, the entrepreneur is still optimistic about the future of bitcoin. Lee believes that the rate of the most popular cryptocurrency in the current year can grow to $250 thousand, and by 2025 – to one million dollars. The billionaire stressed that Bitcoin's success has never depended on China or any other country.

Recall that in mid-July, the bitcoin rate fell below $30 thousand. A similar dynamic was associated with news from China, which banned large financial institutions in the country from conducting operations with cryptocurrency. However, then the cryptocurrency rate recovered and approached $40 thousand amid growing interest in the asset from Elon Musk, Katie Wood and Amazon.

July 27. Chinese stocks are hitting the worst crash since 2008

According to the results of the last two trading sessions, shares of Chinese companies listed in the United States have experienced their strongest decline since 2008. In particular, the Nasdaq Golden Dragon China Index, which tracks quotations of 98 organizations from China, fell by almost 15% in two days.

A panic sell-off has swept the stock market amid wider regulatory crackdown on tech companies and China's IT sector. Moreover, on Monday, the authorities announced a reform in the field of out-of-school education and the introduction of new requirements for food delivery services.

Hong Kong's Hang Seng Index fell 4.42% to 25.060, while its tech index fell 6.7% to its lowest level in more than a year. The iShares MSCI China A ETF fell 4.0% and the Shanghai Shenzhen CSI 300 fell 3.5% to its lowest level since October.

In addition, the Chinese application WeChat temporarily stopped user registrations, and the company that owns the service, Tencent, lost more than $ 100 billion in market value in two days.

July 28. ME shares rise amid recovery in Chinese exchanges

Emerging market equities rallied Wednesday after declining 5% in the previous three sessions. The reason for the strengthening was the completion of sales in the Chinese stock markets. Now the focus of market participants' attention is the results of the meeting of the US Federal Reserve System, at which, possibly, signals about the curtailment of incentives will sound.

The MSCI Emerging Markets Index climbed 0.5%. Exchanges in Turkey and Eastern Europe rose 0.4-0.6%. Additional support for emerging market currencies was brought by the general weakness of the US dollar and a narrow range of its fluctuations ahead of an important meeting of the regulator.

In particular, the Chinese yuan rose for the first time in five sessions, to 6,512.

The Turkish lira rose to 8.5665. The Hungarian forint retreated from three-month lows after the central bank raised rates by 30 basis points to 1.2%, stronger than expected. The South African rand rose to 14.8203.

July 29. Data on US inventories supported oil prices

On Thursday, oil prices began to rise, supported by data on declining US energy inventories. The current price of Brent oil is $74.65 per barrel, WTI oil is $73.27 per barrel.

According to data from the US Department of Energy, oil reserves in the United States fell by 4.1 million barrels last week – to the lowest level since January 2020. At the same time, gasoline stocks decreased by 2.3 million barrels, distillates – by 3.1 million barrels. Reserves in Cushing, where oil traded on the Nymex is stored, decreased by 1.3 million barrels over the week.

Analysts predicted a decrease in hydrocarbon reserves by 2.5 million barrels, gasoline – by 1.3 million barrels, distillates – by 1.6 million barrels. Experts note that the decline in oil, gasoline and distillate stocks in the United States suggests that energy demand in the country remains high, despite the renewed increase in the incidence of Covid.

At the same time, it is expected that global oil reserves will continue to decline throughout the remainder of this year against the backdrop of economic recovery in countries that are major energy consumers.

July 30. US stock indices decline on macroeconomic statistics

Major US stock indexes are falling on Friday after the publication of statistics on GDP and personal income.

In particular, the Dow Jones Industrial Average fell 0.26% to 34.981 points, the NASDAQ high-tech index fell 0.92% to 14.645,9 points, and the S&P 500 broad market index fell 0.50% to 4.397,6 points.

Market participants analyze US macroeconomic data. A day before the country's Ministry of Commerce published statistics on GDP, which came out worse than analysts' expectations. In the second quarter, the US economy grew 6.5% year-over-year, while analysts had forecast 8.5% growth.

Today, the US Department of Commerce published data according to which incomes of the country's population in June increased by 0.1% versus May, although experts had expected a decline of 0.3%. Consumer expenses in the reporting period increased by 1% against the forecast of growth by 0.7%.

Additional interest today is caused by statistics on consumer sentiment from the University of Michigan: according to the final estimate, the index fell to 81.2 points from the June level of 85.5 points. Analysts had expected the indicator to remain at the level of the initial estimate, which showed a decline to 80.8 points.

August 02. Cryptocurrency market in the first week of August

At the end of the last week of July, almost all cryptocurrencies completed trading in positive territory. Bitcoin managed to overcome the $40K level, rising to $41,100. Ethereum strengthened to $2,580 and XPR rose to 75 cents. The total cryptocurrency market capitalization has increased to $1.65 trillion.

As for mining, as a result of another recalculation, the difficulty of bitcoin mining increased by 6.03% and the indicator reached 14.5 trillion hashes. This was the first increase in difficulty since May 13, when the indicator peaked at $25.05 trillion.

As you know, the difficulty correlates with the bitcoin hash rate, which began to fall in May, after problems with the power supply of miners in the Chinese province of Sichuan. The Chinese authorities launched a crackdown on the crypto industry in the country, which also led to a reduction in the computing power of bitcoin. However, in July, the hash rate began to recover, after the return of the miners' equipment to the network, who moved the business from China to other jurisdictions.

Cryptocurrency rate dynamics

According to a report by Crypto.com, the number of cryptocurrency users worldwide more than doubled in the first half of 2021, reaching 221 million in July. Analysts believe that the main driver was the bitcoin rally, the growth of which was supported by the comments of such large companies as PayPal, MicroStrategy, Visa and Mastercard about the acquisition or plans to support the cryptocurrency.

However, in May, there were some events that turned the trend - in particular, Elon Musk's criticism of bitcoin led to a decrease in both the currency rate and the number of network users. At the same time, the indicators of altcoins increased (the number of owners of Dogecoin and Shibaswap increased by about 50%).

Ban in China

The People's Bank of China continues to try to fight the cryptocurrency industry in its country. The regulator believes that it is necessary to curb the trading rush around digital asset trading, and intends to continue to monitor financial platforms.

Recall that the Chinese authorities launched a fight against cryptocurrency trading back in 2017. Since then, large financial institutions in the country have periodically taken measures to contain the cryptocurrency rush.

August 3. IMF has allocated a record amount for economic recovery

The International Monetary Fund (IMF) will allocate SDR 456 billion (the unit of calculation of the fund itself, approximately $650 billion) from its reserves. The head of the organization, Kristalina Georgieva, said that this is a record amount of the fund's distribution in its history.

Georgieva stressed that the decision to inject the largest amount of funds into the world economy is historic.

It is noted that the funds will be transferred to the member countries of the fund in proportion to quotas. Of the $650 billion, a portion of $275 billion will go to developing countries and emerging markets. The IMF is confident that the disbursement will help meet the long-term global need for reserves, build confidence and strengthen the resilience of the global economy.

Recall, according to the July forecast of the IMF, the world economy this year will grow by 6%, next year – by 4.9%. For developing countries, the forecast was lowered by 0.4 percentage points – to 6.3%.

August 05. US stock market demonstrates growth

On Thursday, futures for US stock indices are growing moderately in anticipation of internal statistics, which may indicate the state of the world's largest economy.

So, the futures on the Dow Jones Industrial Average (DJIA) grew by 0.22% – up to 34,792 points, on the NASDAQ high-tech index – up to 15112.25 points, on the S&P 500 broad market index – up to 4407.25 points.

Markets today await fresh statistics from the US on the labor market and foreign trade. In particular, the Ministry of Labor is to publish data on the number of initial applications for unemployment benefits in the country over the past week. Analysts predict a decrease in the indicator to 384 thousand from 400 thousand a week earlier.

In addition, the Ministry of Trade will present data on the state of the trade balance in the country. According to experts' forecasts, the trade deficit increased in June to $ 73.9 billion from $ 71.2 billion a month earlier.

In general, experts are optimistic about the stock market prospects, including against the backdrop of strong financial performance of large American companies. Analysts expect that the stock markets may continue to grow next year, which will be 5-10%.

August 4. Retail sales in the eurozone in June increased by 1.5% compared to May

Eurozone retail sales rose 1.5% in June from a revised figure in May, according to a press release from the European statistical agency Eurostat. Analysts predicted an increase of 1.7%. May's estimate was revised downward: Eurostat now estimates growth at 4.1% instead of 4.6%.

On an annualized basis, retail sales in the euro area rose 5%. Analysts had expected an increase of 4.5%. The May figure was also revised to 8.6% from 9%.

In all EU countries, retail sales increased by 1.2% compared to May, and on an annualized basis – by 5.3%.

The countries with the strongest growth in retail sales are Bulgaria (+ 22.7%), Lithuania (+ 15.3%) and Slovenia (+ 12.8%). In Luxembourg, a decline of 3.2% was recorded.

August 06. American stock indices rose 0.6-0.8%

The number of Americans applying for unemployment benefits for the first time last week fell by 14 thousand, that is, to 385 thousand people, according to a report from the US Department of Labor. This is the minimum level for the month. Analysts on average expected a decline to 384 thousand.

Meanwhile, the US trade deficit in June 2021 was $ 75.7 billion, up from a revised $ 71 billion in May, according to the country's Commerce Department. Experts on average expected the US foreign trade deficit to increase to $ 73.9 billion in June from the previously announced $ 71.2 billion in May.

Traders continue to closely monitor the worldwide spread of the new COVID-19 delta strain in an attempt to assess the potential impact on the global economy. The number of registered infections with the coronavirus COVID-19 in the world as of Thursday morning was 200 million 239 thousand 381, the American Johns Hopkins University reported. Since the beginning of the spread of the virus, the number of victims of diseases related to COVID-19 has reached 4 million 256 thousand 797 people.

Also in the spotlight are the statistics on the labor market, the publication of which is expected on Friday. Experts suggest that they will be key for the Federal Reserve System (FRS) against the background of the fact that the regulator is considering the possibility of tightening monetary policy.

According to investment strategist Edward Jones Angelo Kurkafas, this will be a big event this week, as it will directly affect the Fed's actions. Tomorrow's data and September's are critically important for the representatives of the regulator's management before deciding on the curtailment of stimulus measures and when and at what pace to implement it.

By the close of trading, the Dow Jones Industrial Average rose by 271.58 points (0.78%) and amounted to 35,064.25 points.

Standard & Poor's 500 gained 26.44 points (0.60%), rising to 4429.10 points. The indicator has renewed its all-time high.

The Nasdaq Composite rose by 114.58 points (0.78%) and amounted to 14895.12 points.

Uber Technologies shares rose 3%. The American taxi-ordering and food delivery company hit profitable levels in the second quarter of 2021 thanks to an unrealized revenue of about $ 1.9 billion from a revaluation of its stake in Didi Global Inc. and Aurora Innovation Inc.

Occidental Petroleum Corp. share price rose by 2%. The American shale producer cut its net loss in the second quarter of 2021 by 3.5 times compared to the previous quarter amid rising oil and gas prices.

Electronic Arts Inc. fell in price by 2.2%. One of the leading PC game manufacturers in the world reduced its net profit in the first financial quarter by 44%, but increased its revenue.

Etsy Inc. decreased by 9.7%, although the US online trading platform increased net income and revenue in the second quarter stronger than expected.

Moderna Inc. declined 0.7%, despite the fact that the American biotech company reached profitable levels in the second quarter of 2021. At the same time, profit significantly exceeded expectations on the background of the sale of 199 million doses of the coronavirus vaccine developed by the company.

August 9. Gold price reaches lowest since March

At the beginning of a new trading week, the price of gold fell to its lowest level since the end of March, reaching $1.677.90 an ounce. The precious metal was put under pressure from strong statistics on the US labor market, which heightened fears of the Fed curtailing stimulus measures. In the middle of the day, the asset managed to recover somewhat: the current quotation is $ 1.745 per ounce.

Last Friday, the US Department of Labor presented statistics on the labor market in the country, which turned out to be better than forecasted. In particular, unemployment in the country in July fell to 5.4% from the June level of 5.9%. Analysts had expected unemployment to fall to 5.7%.

The number of people employed in non-agricultural sectors of the economy increased by 943 thousand instead of the expected 870 thousand.

The pressure of these data on gold is explained by the fact that strong statistics on the labor market, indicating the recovery of the American economy, may prompt the Fed to limit support measures, which will provide strong support for the dollar. And the strengthening of the greenback will inevitably restrain the demand for gold, which will become less available when purchased in another currency.

August 10. Bitcoin Price Prediction: $100,000 In Near Future

The first cryptocurrency is about to break the record again. It is expected to rise to $ 50,000. At the same time, the value of $100,000 is not the limit for bitcoin, experts believe.

In the last month of summer, the outlook for the digital asset market is positive. Many marketeers expect the uptrend from the BTC to continue, given the fact that it periodically demonstrated growth during the summer. The positive trend of the last few days indicates the bullish mood on the crypto market. Traders and investors expect BTC to return to the $ 50,000 level, which kicked off a massive Bitcoin sell-off in May this year.

According to technical analysis, the leading digital asset received a bullish momentum at the support level near the 200-day moving average. This happened following the resistance level breakout of flat near $ 40,000. On Tuesday morning, Bitcoin was trading at $45,701, giving hope for further growth.

According to analysts, over the past month, cryptocurrency has risen in price by 33%. And this is only the start. According to experts, the successful implementation of the London hard fork on the Ethereum network became the driver of the Bitcoin's growth. This helped Ethereum to rise, giving Bitcoin a chance for similar growth.

At the moment, the crypto market is far from euphoric, but it is on a positive wave. According to Fairlead Strategies experts, the leading digital asset has successfully overcome three resistance levels and is ready to move on. Over the past three weeks, the rise in price of bitcoin occurred at a gigantic pace. If this rate is maintained, it will be able to rise to $ 51,000, Fairlead Strategies emphasize. Currency strategists for Bloomberg Intelligence proceeded further with their forecasts. According to Mike McGlone, the capabilities of the first cryptocurrency are truly limitless. A Bloomberg Intelligence analyst claims that BTC will reach $100,000 in the near future.

Only negative economic factors can interrupt the success of the first cryptocurrency, experts say. They are mainly related to the current monetary strategy of the Federal Reserve and the tough policy of the American authorities. It should be noted that the White House has set a course for strengthening economic and political control. Cryptocurrencies also fell into the scope of its activity. The main tasks of the American authorities are to increase taxes on digital assets and abandon anonymity in the cryptosphere.

However, positive initiatives can lead to negative consequences, experts warn. On the one hand, risks for investors are reduced and the transparency of cryptocurrency transactions increases, and on the other hand, there is an opportunity for various frauds and a number of initiatives that can redound on holders of digital currencies. This particularly applies to the increase in taxes to financially support the American economy, which is showing long-awaited signs of recovery and rebound.

August 11. The fall in oil prices has slowed down

World oil prices on Wednesday show a slowdown in the decline after the release of statistics on crude oil inventories in the United States.

The current Brent oil price is $70 per barrel. A few hours earlier, the price of «black gold» dropped to $69.30 per barrel. WTI futures fell to $ 66.97, later recovering to $67.90 a barrel.

The quotes were supported by data from the US Department of Energy, according to which stocks of raw materials in the country fell by 0.4 million barrels to 438.8 million. However, these figures turned out to be worse than the forecast for a decline of 1.27 million. US gasoline inventories fell by 1.4 million barrels, to 227.5 million.

At the same time, the asset is still under pressure. The media reported that the United States is calling on OPEC + to increase oil production to curb the rise in gasoline prices. However, the organization has not yet considered this issue, not excluding, however, discussion in the future.

August 12. Macroeconomic indicators of Great Britain

Today was quite rich in macroeconomic publications from the UK.

According to a report by the UK's National Statistical Office (ONS), the country's GDP growth rate increased by 1% in June 2021, compared to 0.6% growth in the previous month (revised from 0.8%). Analysts had forecast a 0.8% rise in the indicator.

UK GDP in the second quarter of 2021 increased by 4.8% qoq after falling by 1.6% in the first quarter (revised from -1.5%). The statistics were in line with analysts' forecasts.

In addition, the department provided data on industrial production in Britain. Industrial production in June fell 0.7% month-on-month after rising 0.6% in May (revised from 0.8%). Analysts predicted a growth of 0.3%. In annual terms, the indicator in June increased by 8.3%.

Construction output fell 1.3% in June from the previous month, after falling 0.7% in May (revised from -0.8%). Analysts had forecast an increase in June by 1.1%. In annual terms, the value of the indicator increased by 30%.

The UK trade deficit was £ 12bn in June, compared with a £ 9.6bn deficit in May (revised from £ 8.5bn). Analysts had forecast a June trade deficit of £ 9.1 billion.

August 13. German Ministry of Economy: The jump in inflation is temporary

The German authorities expect that the recent acceleration in inflation in the country will be temporary, as it is largely due to special factors that will disappear early next year.

According to the country's Federal Bureau of Statistics (Destatis), annual consumer price inflation in Germany has accelerated more than expected and peaked since 1993. The figure, according to final estimates, rose to 3.8% in July from 2.3% in June.

The main reason for the jump in inflation was the base effect from a temporary reduction in VAT rates in the second half of 2020. Moreover, the department expects that inflation will slow down significantly after this effect disappears. «There are now no signs of a wage-price spiral that could lead to persistent high inflation,» the Economy Ministry said.

The ministry also noted that the service sector benefits from the easing of coronavirus restrictions, while the manufacturing sector is struggling with supply chain bottlenecks.

August 16. US stock exchanges decline amid risk aversion

US stock exchanges are declining on Monday amid a deterioration in risk appetite after the release of morning macro statistics from China, which did not meet expectations.

In particular, industrial production in the country in July grew weaker than expected – by only 6.4% y/y instead of the expected 7.8%, and retail sales increased by only 8.5%, although analysts had predicted an increase of 11.5%. Asian stock indexes immediately showed a decline, as well as European stock exchanges.

Analysts note that economic data from China «spoiled the mood» in the markets, and weaker retail sales and industrial production raised questions about whether it is realistic to maintain the momentum of the economic recovery.

American stock exchanges are also in the red zone. The Dow Jones Industrial Index (DJIA) fell to 35,414.53, the NASDAQ index of high-tech companies – to 14,652. 01, the S&P 500 broad market index – fell to 4,448. 57 points.

Tomorrow, the macrostatistics block is expected to be released directly in the United States. Data on industrial production and retail sales in July will be announced. Forecasts suggest an increase in industrial production by 0.5% m/m and a decrease in retail sales by 0.2%.

August 17. Oil prices are rising, despite weak demand in Asia

The price of oil is growing moderately on Tuesday, recovering from yesterday's fall to the level of $68.27 per barrel. The current Brent quote is $69.80. WTI crude oil has recovered to $67.30 per barrel.

At the last session, the pressure on the «black gold» was exerted by data from China, according to which, the daily volume of oil refining in China, the largest importer, fell to the lowest since May 2020 in July. This was due to a reduction in production by independent factories due to tighter quotas, high inventories and lower profits.

Growth in industrial production and retail sales in China also slowed sharply in July and turned out to be weaker than expected, as new coronavirus outbreaks and floods reduced business activity.

What else is going on in the oil market:

US shale oil production in September is expected to grow to 8.1 million barrels per day, the highest since April 2020.

Last week, the US called on OPEC to increase supplies to contain the rise in gasoline prices, which they consider a threat to the global economic recovery. However, neither the organization itself nor its partners recognized the need to increase oil supplies to the market beyond the planned one.

August 18. China intends to tighten regulation of excessively high incomes

The Chinese authorities intend to tighten control over «excessively high incomes» and to encourage those companies that will share their wealth with the public. At the same time, the ruling party called «common prosperity» its top priority.

This became known from the results of the meeting of the Central Commission on Financial and Economic Affairs of the Chinese Communist Party. Securing «common prosperity» has become a major topic of political debate in the country in recent months. This term is usually understood to mean moderate wealth for all, not just some. In particular, the government will force the wealthy Chinese to pay more taxes, which will help to resolve the resulting inequality in income.

Recall that China's largest entrepreneurs have begun to feel pressure from the authorities since the $34.4 billion IPO of Jack Ma's Ant Group was canceled last year, which would have been the largest in history.

A little later, the Chinese taxi aggregator Didi held an IPO on the New York Stock Exchange, ignoring the ban of the authorities. Then Didi raised more than $4.4 billion. However, this did not pass without consequences, and two days after the IPO, the local regulator launched an investigation into Didi, demanding that it stop registering new users, and later demanded that the service be removed from the app stores.

In early July, the State Council of China announced a review of the rules for IPOs of Chinese companies abroad and increased supervision of those companies that have already conducted a listing. To regulate placements abroad, Beijing has already begun to develop changes in legislation that will close the loophole to circumvent restrictions on attracting foreign investment. Such news led to the fact that many large investment funds sold securities of Chinese companies that are listed in the United States.

August 19. Analysts predict the growth of Ethereum 10 thousand times

Analysts expect that after the upgrade of Ethereum to protocol 2.0, the altcoin price will rise from the current $3 thousand to $20-40 thousand.

In January 2021, experts already predicted that the cost of the cryptocurrency could exceed $10 thousand. In their opinion, the Ethereum update will allow the blockchain to approach such payment systems as Mastercard and Visa in terms of transaction volume.

Moreover, protocol 2.0 will allow the original blockchain to scale and make it more user-friendly. The main feature of the update will be the network's transition to Proof-of-Stake (PoS) consensus – it will replace the Proof-of-Work (PoW) consensus on which the blockchain is currently running.

The main difference between PoS and PoW is that in order to maintain the operation of the PoS network, miners who generate computing power are not needed. The efficiency of the blockchain is provided by the holders of digital coins, who receive a reward for this.

On August 5, the London update already took place on the Ethereum network, which completely changed the mechanism for calculating transaction fees. Now part of the commission that miners previously received as a reward is burned.

Experts also note that Ethereum will be able to surpass Bitcoin in capitalization only if the main cryptocurrency remains at $50 thousand, while ether will rise in price to $10 thousand.

August 23. Oil rises in price after seven days of falling

At the beginning of the new trading week, oil prices began to rise after several days of decline. The current price of Brent is $67.35 per barrel, WTI has risen in price to $64.70. The decline in quotations continued for seven consecutive sessions, which is the longest such period since February 2018.

The market was supported today by news that the Chinese authorities were able to contain a new wave of the spread of Covid-19: on August 23, not a single new case of coronavirus infection was detected in the country. However, the new Delta virus strain continues to pose a threat to many other countries, as well as to global oil demand.

An additional factor in the growth of oil prices, analysts say, the purchase of assets at low prices and the positive dynamics of other asset classes.

The focus of the markets this week is the annual economic symposium in Jackson Hole and the speech of the chairman of the Federal Reserve System (FRS) Jerome Powell. Investors are interested in the question of when the American regulator intends to start curtailing the asset repurchase program. In addition, traders are looking forward to the next meeting of representatives of the OPEC + countries, scheduled for September 1.

August 24. Oil accelerates growth amid favorable demand forecasts

On Tuesday, oil prices continued to rise thanks to upbeat demand forecasts. During the day, Brent quotes rose to $70 per barrel. The price of WTI crude oil rose to $67.25 per barrel.

Demand forecasts are improving amid the suspension of production at one of the drilling rigs in Mexico and full US approval of the coronavirus vaccine developed by Pfizer and BioNTech.

On Sunday, a fire broke out on an oil platform off the coast of Mexico, as a result of which production was suspended in the amount of 421 thousand barrels per day, or about a quarter of the country's total production.

Additional support for the «black gold» is provided by the approval of the US Food and Drug Administration (FDA) for the use of the coronavirus vaccine for people over 16 years of age. Authorities hope the news will further boost vaccination adoption.

This week, oil market participants are awaiting data on fuel reserves in the United States. Analysts predict a decrease in oil and gasoline reserves, as well as an increase in distillate stocks.

August 26. Gold drops in anticipation of Jackson Hole symposium

Gold prices continued to decline for the third day in a row on the back of a strengthening dollar and rising US Treasury yields. The dollar index rose 0.1%, putting pressure on gold, while the yield on the 10-year US Treasury bonds held near a two-week high.

Investors are also awaiting tomorrow's symposium in Jackson Hole and possible signals about the curtailment of incentives during the speech of the head of the Fed, Jerome Powell.

The current price of gold is $1,787 per ounce, palladium has fallen in price to $2,400 per ounce, silver has dropped to $23.67. The platinum price dropped to $987.65.

J. Powell will speak at the Fed's annual economic symposium on Friday. Market participants hope to receive more detailed information about the regulator's plans to roll back economic support measures. Many people do not realize this is possible, as the spread of the delta strain of coronavirus continues to cause concern.

August 27. Oil continues to rise as a storm approaches the Gulf of Mexico

At the end of the week, oil prices continue to rise amid an approaching storm in the Gulf of Mexico. Investors fear that major supply disruptions could reignite in the market as energy companies cut production in the Gulf ahead of the weekend.

As a result, Brent quotes rose to $71.50 per barrel on Friday, while WTI rose to $69 per barrel.

Additional support for the oil market is provided by the expectation that OPEC + may resist the increase in production, given that the new strain of the delta coronavirus has affected oil demand.

An important factor for the further dynamics of oil will be the results of today's speech by the head of the US Federal Reserve in Jackson Hole, since they will have a strong impact on the dollar rate. Market participants expect Jerome Powell to give signals regarding plans to cut the bond buying program in the 4th quarter.