Good morning and welcome to the stock market today! Just a few trading hours separate us from the weekend, but there is a lot for investors to watch. So what will the stock market do today? And what else do you need to know? Dive in with InvestorPlace below.
To start, the major indices are all in the red as we kick off Friday trading. It seems concerns from Thursday afternoon are spilling over, with the yield on the 10-year U.S. Treasury note coming in at 1.744%.
So what else will the stock market do today? Take a look at these top three stories.
What Will the Stock Market Do Today? Watch Oil.
Yesterday, chatter on Wall Street focused on tech stocks. Investors flip-flopped in their interpretations of what the Federal Reserve had to say, and yields on the 10-year U.S. Treasury note spiked to more than a one-year high. Unsurprisingly, tech stocks stumbled, with big names like Microsoft (NASDAQ:MSFT) and Apple (NASDAQ:AAPL) ending the day in the red.
However, crude oil was another noteworthy victim. Prices plunged 7% yesterday, closing down for the fifth consecutive day.
As Tsvetana Paraskova wrote for OilPrice.com, there were two other drivers of the bearish move.
The first is that U.S Energy Information Administration inventory report showed a crude oil inventory build of 2.4 million barrels over the past week. It also highlighted that commercial crude oil inventories in the U.S. rose above 500 million barrels for the first time this year. Largely a result of the Texas weather crisis, industry analysts have been growing concerned with the rising inventories.
Additionally, Covid-19 vaccine news out of Europe has been hard on oil prices. As Paraskova wrote, with countries suspending AstraZeneca (NASDAQ:AZN) shots due to blood clot reports, the reopening timeline is in jeopardy. Because experts are predicting a robust reopening will spike manufacturing activity, travel and so much more, oil prices rest on the narrative. If delayed vaccinations slows things down, we could see more bearish moves. Investors should note that as of now, regulators in the European Union have urged countries to move forward with the AstraZeneca rollout, declaring that the vaccine is in fact safe.
Timber, Boats, Plastics, Oh My!
First we saw panic-buying create disruptions in supply chains for Clorox (NYSE:CLX) products, toilet paper and even Peloton (NASDAQ:PTON) bikes.
Now, more than a year into the Covid-19 pandemic, supply chain disruptions are slamming a variety of industries. Perhaps the most notable is the chip shortage, which has continued to impact automakers from Ford (NYSE:F) to Volkswagen (OTCMKTS:VWAGY) to Nio (NYSE:NIO). Without necessary semiconductors, automakers and consumer electronics businesses have halted production at factories and warned consumers about delays.
However, as the team at Morning Brew highlighted, this is far from the only shortage at hand.
A winter weather emergency in Texas brought chemicals plants offline, creating far-reaching disruptions in the realm of petrochemicals. The result is a shortage that is impacting production at automakers like Toyota (NYSE:TM) and Honda (NYSE:HMC). Rippling down, other impacts in the chemicals business have created plastic shortages. Without plastic, companies that make smartphones and medical equipment are struggling. Unrelated to the Texas storm, a demand for lumber by homebuilders as part of a boom in the residential real estate market has caused prices to jump 180%.
Want one more? Wealthier consumers are struggling to buy the boats they want. Manufacturers do not have the needed inventory on hand, and are still ramping up to produce enough boats.
The Amazon of NFTs
Investor interest in non-fungible tokens (NFTs) does not appear to be easing.
This week, we saw a frenzy of buying interest in so-called NFT stocks, mostly penny stocks with loose or speculative ties to the crypto assets. Takung Art (NYSEMKT:TKAT), one such equity, has an online art platform that offers shared ownership. It feels that we are in the early stages of another market rush, and investors want to find opportunities to profit now.
So where are we going with NFTs? Perhaps we are about to see an Amazon (NASDAQ:AMZN) emerge in the space. Andreessen Horowitz is leading a $23 million Series A funding round for OpenSea, one of the largest marketplaces for digital collectibles. Other investors include Mark Cuban, Ron Conway and Tim Ferriss.
According to Andreessen Horowitz, OpenSea acts like an Amazon or an eBay (NASDAQ:EBAY) for the digital collectibles market. This is because it helps organize NFTs, and allows investors to search for them on its marketplace. It also brings multiple platforms together and streamlines transactions.
As we continue to see NFTs take off with celebrity backing and expanded use cases, OpenSea could become a household name. Keep a close eye on this story, and on where interest in NFTs moves.
On the date of publication, Sarah Smith did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Sarah Smith is a Web Content Producer with InvestorPlace.com.
