As the financial markets are rapidly recovering lost ground, the market analysts at CMTrading have compiled a list of the asset classes you should consider incorporating in your trading portfolio for the second half of 2021.
1. Oil: prices surge amid hopes of demand growth
While the Covid-19 pandemic is still raging, the vaccines have shown the masses that an end could be in sight sooner rather than later.
Apparently, most countries are anticipated to lift travel restrictions for vaccinated individuals thereby further boosting oil demand.
Of course, the markets have already priced in the potential recovery and West Texas Intermediate, the U.S. oil benchmark is currently changing hands at monthly highs above $65 per barrel – an 8% increase compared to April’s close and a 37% gain year-to-date.
The earnings season is also underway and the latest company to report its financials for this year’s first quarter is Saudi Aramco.
The oil giant’s profits have soared upward of $21,7 billion, which is far cry from last year’s $16,8 billion.
The oil uptrend is set to continue well into the second half of 2021 as the softer dollar translates to more competitive oil prices and therefore higher demand.
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2. Tech stocks and U.S. indices
April was a busy month for the stock market due to the earnings season, where tech titans such as Facebook, Apple, Alphabet (Google), Amazon, and Microsoft dominated the headlines with much better-than-expected Q1 earnings reports.
Alphabet, the parent company of Google and YouTube has reported that its revenues exceeded the $55 billion mark, which translates to a year-over-year increase of 34%.
Looking at Amazon’s earnings, it appears that revenues have increased to a staggering $108 billion, smashing analysts’ estimates of $104 billion.
Apple’s second quarter financials were reported in April as well, which reached a record $89 billion – up 54% compared to the same period in 2020.
In fact, according to FactSet’s Earnings Insight, the S&P 500 is reporting the highest year-over-year growth in Q1 earnings since 2010 and analysts expect double-digit earnings growth for the remaining three quarters of 2021.
“With these strong corporate figures and blowout performances, we can expect the positive growth in the stock market to continue as we approach the light at the end of this pandemic tunnel.” says Daniel Kibel, founder of CMTrading.
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3. Crypto: the rise of Ether (Ethereum)
Despite Bitcoin’s recent fall from grace, the cryptocurrency realm is still hot, although perhaps too hot for the more cautious investors among us.
That being said, as Bitcoin (BTCUSD) slipped from $60,000 to $54,000 we have witnessed the rise of Ether, the second-largest cryptocurrency after Bitcoin, with a market cap of $350 billion.
Ether is the cryptocurrency that runs on the Ethereum network, which offers unique advantages over Bitcoin’s blockchain as the first can also host applications and smart contracts.
Ether (ETHUSD) is currently trading near $3,300 after rising by more than 70% since the beginning of April.
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