AI investment worries continue to worry investors
US equities were on the back foot yesterday, with S&P 500 retreating notably. Market worries for the extent of investments in AI by tech companies are extensive, especially for Mega Cap companies.
The issue tends to enhance a risk off approach by market participants weighing on US equities and further intensification of the market worries could lead to further losses in US equities.
Xlence Research Team opinion
US equities with special focus being on the tech sector could continue to lose ground should market worries intensify and especially should January’s US CPI rates accelerate.
Oil prices fall as oil demand seems to be easing
Oil prices tumbled yesterday as market worries for the demand side of the international oil market resurfaced. On the one hand, reports about China in 2025, producing the first time more energy from renewable than conventional sources, highlighted the turn of China’s energy policy.
Given that the China is a top oil consumer, the market’s worries for a possible easing of demand are understandable. Also reports noting that the International Energy Agency expects an easing of the growth of oil demand in the current year also substantially weighed on oil prices. Last but not least, the tensions in the relationships between the US and Iran seem to be easing, which is also a bearish element for oil prices.
Xlence Research Team opinion
All things being equal, the bearish tendencies for the oil market are expected to continue, however as a small word of warning oil bears seem to hesitate.
Markets about to be rattled as US January CPI rates are to be released
After the release of the US employment report for January, we highlight as Xlence research team, the release of the US CPI rates for January as the next possible game changer.
The CPI rates are currently expected by analysts to slow down a bit and should the rates slow down beyond market expectations, we may see the USD retreating against its counterparts. On the other hand, a possible acceleration of the rates could take the markets by surprise and provide asymmetric support for the greenback.
Xlence Research Team opinion
In the FX market the weakening of the USD seems to gave been halted and the greenback is looking for direction. Should the market’s expectations for the Fed to cut rates ease further, we may see the USD gaining.
Bitcoin’s bearish tendencies renewed
Bitcoin’s price continued to drop yesterday for a third day in a row and shows some signs of stabilisation in today’s Asian session European sessions.
Please note that the drop of the crypto’s price was accompanied also be a drop to record low levels of CMC’s Crypto Fear and Greed Index.
Xlence Research Team opinion
Overall the bearish sentiment seems to remain present in the crypto market and could drive Bitcoin’s price even lower, despite a possible correction yet temporary higher.
Disclaimer: This information is not considered investment advice or an investment recommendation, but instead a marketing communication.
