Published - Mar 21, 2022 @ 11:46 AM (EET)
Investors will be looking to see whether stocks are set for a sustained recovery or if more turbulence awaits now that the long-awaited rate hike from the Federal Reserve is out of the way. Here's what to watch in this week's upcoming markets:
1. Energy solutions
As member states are divided between the most effective emergency options to curb soaring power and gas prices, leaders of the EU may hold off on endorsing intervention in the bloc's wholesale energy market, heightened by the Ukraine invasion of Russia.
At a summit this week in Brussels, the EU heads of government may instead agree on immediate actions to replenish depleted natural gas storage and urgent measures to help retail consumers manage the burdening rise of energy bills.
2. An upswing in U.S. stocks
Last week, U.S. stocks bounced back after the Fed delivered its first rate hike since 2018, signaling encouraging assessment of the U.S. economy, with The Dow, S&P500, and Nasdaq climbing 5.5%, 6.2%, and 8.2%, respectively.
Investors will now be keeping a close eye on whether the Fed will be able to fight soaring inflation without the U.S. facing economic recession, while sky-high commodity prices and few signs to an end to the Ukrainian war continue to cloud a positive outlook.
3. Ukraine Developments
On Wednesday, U.S. President Joe Biden will join a NATO meeting and an EU summit in Brussels as it aims to cement new-found relations with European allies.
Moreover, the Biden administration will brief banks, energy companies, and other firms Monday on the impact of Russia's invasion of Ukraine and ensuing sanctions. The meeting comes after the White House publicly called on energy suppliers to step up production amid a jump in prices while criticizing executives who said they are prioritizing investor returns over additional output.
4. Bitcoin mining
Energy companies are starting to witness opportunities from assisting Bitcoin miners in raising its margins, seeing that direct access to power could be a profitable space if it was to start mining bitcoin itself.
Currently, companies like Beowulf Mining Plc are projected to have 800 megawatts of mining capacity and 10% of the Bitcoin network's current computing power by 2025, while only a handful of energy groups are to discover Bitcoin mining from clients before building out their own facilites.
With the recent slide in Bitcoin prices, companies have been shoring up balance sheets and turning to debt and equity capital markets to raise money to become early adopters of the crypto market.
5. The Stock of the week
AbbVie Inc. (NYSE:ABBV), a research-based biopharmaceutical company that develops immunology treatments, gained nearly 7% last week following its additional FDA approval for Rinvoq, a treatment of ulcerative colitis.
The stock's outperformance is set to continue as the company earlier this year, said that it expects its top two products (Rinvoq and Skyrizi) to generate a combined annual revenue of $15 billion by 2025.
Over the next four quarters, the stock is valued at 11.2x expected earnings while carrying a Smart Score of 9/10 on TipRanks.
