Opium for China, Markets Rebuild Focus, SEC and Crypto

We've already written that the results of the last week are ideal for the growth of the US stock market. But he's not really growing. There is a feeling that the focus of the markets is shifting from expectations of a quick economic recovery to a new wave of the pandemic. It's just that while everything was happening somewhere in India or the UK, in the USA, with almost 70% of vaccinated people, it seemed that this did not concern them. But now, when the number of diseases per day in the United States has exceeded 100K per day (the current local peak reached on July 30) after 14K-15K, which were registered just a month before (June 22-23), investors are clearly pondering.

And although it is incorrect to compare the potential damage from the current wave with what was a year ago, the general logic of the development of events is less obvious. And some states have already begun to take the first steps in this direction - we mean the restoration of the mask mandate.

Moreover, sad news continues to come from China. They are bleak, primarily for the Chinese stock market, but what is happening today in the Chinese stock market may happen tomorrow in the US stock market. So, China continues to hit the tech lines. This time it went to game developers. A devastating article was published in the state publication, in which computer games were equated with intoxicating the brain with opium (the analogy was clearly not chosen by chance, given how painfully humiliating the opium wars were for China).

Today is interesting primarily by the data on the US labor market from ADP, as well as by the indexes of business activity in the US. Given that the markets are now very concerned about the recovery of the US economy, the data will be of increased importance.

For the cryptocurrency market, meanwhile, there are fewer reasons for growth. Yesterday, the head of the SEC (US Securities and Exchange Commission) Gary Gensler called on Congress to give the US Comptroller more authority to monitor the cryptocurrency market more closely. Actually, everything went to this. While the cryptocurrency market was a dwarf, regulators tried to ignore it and allowed anything. But those days are over. Considering that cryptocurrencies as a means of payment are primarily of interest to the shadow sector of the economy, the news that regulators are going to deal with them is extremely negative for the market as a whole, since it threatens one of the few arguments in favor of the existence of cryptocurrencies as such (meaning the function of the means payment).