On the first day of the new week the financial markets will be relatively calm as many major economies are closed for Easter. The only mildly interesting report to be published today is the ISM non-manufacturing PMI for March in the United States.
LG is making a lot of noise on the stock market today, as the company announced it will withdraw from the smartphone market completely. Though LG is a household name, well-known for making a variety of products, it has not found much success with its smartphones. That sector appears to be dominated domestically by its fellow South-Korean giant Samsung, as well as internationally by Chinese companies such as Huawei, OnePlus, and Xiaomi.
LG plans to dedicate all of its technological know-how to developing more smart homes solutions, artificial intelligence technologies, and delve deeper into the electric vehicle market. The decision to move towards sectors that are in high demand and abandon a losing portion of its business may propel LG share prices higher.
As for the US markets, today all major indices are expected to trade in the green, extending last week’s gains over better-than-expected non-farm payrolls and another ambitious spending plan by President Joe Biden over the holidays.
GameStop is one US company to watch out for. Thanks to this year’s short squeeze, the company’s value has increased by 900%. It now announced that it is looking to sell up to 3.5 million shares in order to gather enough funding to help it transition from retail into an e-commerce business. Its stock dropped 12% after the announcement.
US Treasury bond yields continue to grow thanks to last week’s data. The rise in non-farm payrolls indicates a recovery in the labor market, even though the unemployment rate remains unchanged at 6%.
More businesses are currently reopening in the US thanks to the easing of Covid-19 restrictions and further growth is expected. Investors are now doubtful that the Federal Reserve will be able to keep its promises and remain dovish for as long as it has indicated it wants to be.
Meanwhile, oil prices are trending downward this week as the reality of still limited demand and increasing output from OPEC+ over the next couple of months are sinking in. The Brent crude dropped to $63.95, while the WTI fell to $60.62 per barrel.
