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Stocks remain persistently volatile, commodity craziness, nickel’s historic move, bitcoin higher

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Trading US stocks has become massively complicated as the impact from the war in Ukraine continues to drive persistent volatility with commodity prices, which is wreaking havoc on inflation expectations and driving recession fears.  US stocks pared losses as some investors still remain confident with the economic outlook for the rest of the year, but that rebound did not last.  Geopolitical risks and surging commodity prices are crippling everyone’s short-term US stock market outlook and that will keep stocks heavy over the short-term.

Commodity Craziness

Commodity price volatility appears poised to remain elevated as sanctions against Russian energy intensifies, illiquid conditions are discouraging some traders, and supply fears seem poised to worsen.  Commodity prices have been mostly rising as all the headline sensitivity to the evolving situation between Ukraine and Russia continues to drive the argument that most markets that have ties with Russia will remain extremely tight.

Nickel prices skyrockets

The nickel market doubled to over USD 100,000 per metric ton after a major Chinese player that controls the largest nickel producer had a massive short that went horribly bad.  Xiang Guangda closed out a portion of the short position, which means we could still see elevated volatility.

Nickel is a key part used in making electric-vehicle batteries and this short-squeeze will reverberate across the semiconductor chip space.  Too many metals and gases come from Russia, which means it might take a lot longer for supply chains in the semiconductor space to normalize.

Given the heightened volatility, the LME has decided it is not appropriate to announce a trading resumption date for Nickel prices before March 11th.

Bitcoin

Bitcoin is higher on the day as risk appetite showed signs of life after US stocks had the worst rout in a few years.  Bitcoin’s fundamentals are still sound, but many active traders are putting the crypto trade on hold and focusing on a handful of commodity supercycle trades.  Bitcoin is forming a trading range and over the next few weeks it could trade between the USD 35,000 and USD 45,000 trading range.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Ed Moya

Ed Moya

Senior Market Analyst, The Americas at OANDA

With more than 20 years’ trading experience, Ed Moya is a senior market analyst with OANDA, producing up-to-the-minute intermarket analysis, coverage of geopolitical events, central bank policies and market reaction to corporate news. His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies. Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Most recently he worked with TradeTheNews.com, where he provided market analysis on economic data and corporate news. Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business and Sky TV. His views are trusted by the world’s most renowned global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Breitbart, The New York Times and The Wall Street Journal. Ed holds a BA in Economics from Rutgers University.

Ed Moya

Ed Moya

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