Virgin Galactic: SPCE Stock To Space

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Last week was quite critical for financial markets, but investment optimism is high at the start of the new week. U.S. stocks closed mostly higher last Friday, and Asian indices rose to soften in Monday’s session.

The reasons for investor optimism are real: Major global central banks still hold a soft stance and are ready to bolster support if the supreme momentum diminishes. For example, last week, China’s central bank lowered its reserve requirement, a policy loosening to support an economy that has begun to show signs of slow growth.

Christine Lagarde, president of the ECB, said she would announce new rules on monetary stimulus in the next 10 days after the end of the existing emergency measures on Monday morning. She also said the ECB will follow a renewed monetary policy strategy at its next meeting, which predicts a temporary inflation tolerance above 2%. Perhaps, the movements of PBC and ECB show that central banks are holding an easy policy that has returned demand for risky assets.

Contrary to last week’s dynamics, we see both strengthen in stocks and commodities and weaken in the dollar and other defensive currencies. The VIX index returned to 16 after jumping from 15 to 22 at the end of last week. All this confirms the bullish sentiment of the markets.

However, the bulls have an important test. This week marks the start of the corporate earnings season, where record revenue growth is expected.

Notable single markers are Richard Branson’s successful flight over Virgin Galactic. On the eve of the flight, which took place on Sunday, there was a strong rally in SPCE, but prices fell from the highs on Thursday and Friday.

The lack of a rally in SPCE shares would be a critical signal that investors have saturated the shares. The same could apply to the entire market, which has placed very optimistic expectations on the quotes, which will not be easily confirmed.

It would be ironic if the markets entered a broad profit this week on the back of the very optimistic expectations. However, central banks have treated their role as the last line of support for the economy very well.

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