Good morning and welcome to the stock market today! Buckle your seatbelts and get ready for what could be another hectic trading week. As talk of Treasury yields and Covid-19 cases and digital art swirls, what do you need to know? And most importantly, what will the stock market do today?
To start, take a look at the top movers. The story is a bit all over the place. GameStop (NYSE:GME) is climbing on turnaround hopes, while investors eye soon-to-IPO Roblox. Chinese EV names like Xpeng (NYSE:XPEV) are trying to find their footing.
So what else will the stock market do today? Dive in with InvestorPlace to understand these top stories.
What Will the Stock Market Do Today? Check Oil Prices.
Exactly a year ago today, Saudi Arabia initiated an oil price war with Russia that ultimately decimated crude oil prices.
Now, the country is once again in the spotlight over noteworthy swings in oil prices. On Sunday, the global benchmark Brent crude spiked 2.5%, touching a high above $71. This came after Houthi rebels from Yemen attacked an Aramco oil facility in eastern Saudi Arabia. Saudi officials have confirmed the attack and said that ballistic missiles and drones hit the oil facilities in Ras Tanura. The attacks did not result in any casualties or loss of property, according to those officials.
What does this mean for investors? Will we see a long-term spike in oil prices?
There are two answers to this question. The first is that oil prices are already climbing, and many experts see continued growth in coming months. As the Covid-19 vaccine rollout ramps up, the reopening narrative seems brighter. For oil prices, this means a surge in manufacturing activity and travel demand. When it is safe to travel, experts predict consumers will start driving and flying again, supporting higher prices. Plus, OPEC recently agreed to maintain production cuts through April.
The second answer is that the attack alone may not have any meaningful impact on oil prices. Unlike a September 2019 attack by the Houthis on an Aramco facility, officials say this one did not cause any real property damage. In September 2019, the concern was that 5% of global output was knocked off the grid. This meaningfully changed the supply-demand equation. What happened on Sunday, as David Fickling wrote for Bloomberg, is completely different.
Regardless, expect renewed attention on oil prices today. At the time of writing, Brent was down slightly to $69.13.
Interest Rates, Inflation and Stimulus Checks, Oh My!
Here we go again.
Right now, the yield on the 10-year U.S. Treasury note is holding steady just below 1.6%. Congress passed the $1.9 trillion stimulus bill. Dr. Anthony Fauci says another spike in Covid-19 cases could be coming in just a few weeks.
But the major indices have fought hard this morning to end up in the green. How? And where did this new bullish sentiment come from?
It appears that we are seeing a shift in the narrative. Investors are recognizing that inflation, interest rates and the 10-year yields are on the move. However, the reasons behind those moves could also suggest that good things are coming in the stock market.
One beacon of such optimism is billionaire investor David Tepper. Although he acknowledged where investor fears were coming from, he thinks we are at the bottom. Swings in rates he sees as calming down in the short term, and he sees stability coming to the bond market. Specifically, he thinks it is likely that Japan will start buying U.S. government bonds again because of the higher yields. This means that investors should be turning back to stocks. Where is he looking? Tech stocks like Amazon (NASDAQ:AMZN) and Apple (NASDAQ:AAPL).
Tepper is not alone. Goldman Sachs analysts are highlighting major equity inflows, and other analysts are highlighting the correlation between higher rates and higher stock prices. The $1.9 trillion stimulus plan could lead even more American households to the stock market. And central bank help is not out of the question — the European Central Bank will meet this week.
I Just Want to Delete My Twitter
Most days, the thought of being more offline has me a few clicks away from deleting my Twitter account.
Some folks apparently want to be more invested… by as much as $2.5 million.
It appears that Twitter (NYSE:TWTR) CEO Jack Dorsey is blending his social media platform with the world of non-fungible tokens, or NFTs. On Friday afternoon he tweeted a link to the Valuables platform, where his March 2006 tweet was available as an NFT and up for bidding. At the time of this writing, the highest bid was $2.5 million.
just setting up my twttr
— jack (@jack) March 21, 2006
What does this mean for investors? At the surface level, it means that if you have cash to spare and want to buy a unique piece of Twitter history, you have a chance! Beyond that though, it speaks to the continuing revolution in NFTs. As the digital asset class moves further into the mainstream, we will continue to see this explosion in NFT opportunities.
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.