Robinhood IPO, Non-Farm Payrolls & OPEC+ – FinTwit Trends to Watch

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Robinhood (HOOD) Registration statement filed for Initial Public Offering

Robinhood has made headline news as it pushes forward with its announcement in March to go public which could take place in late Q2. According to analysts, the company could be worth as much as $40 billion. Robinhood Markets, Inc. is a financial services company who is well known for presenting commission-less trades on equities and ETFs. This attracted a new breed of investor focusing on the younger population particularly during the COVID-19 pandemic.

Extract from Registration Statement:

Source: U.S. Securities and Exchange Commission (SEC)

Although the company has been battling litigation and increased scrutiny from regulators after the ‘meme stock’ frenzy, Robinhood continues to grow active users while banks maintain large revolving credit with the financial services provider. The company plans to list on the NASDAQ but will its reputational damage caused by the meme stock occurrence hinder the IPO process and outcome?

Dollar Comes Off After Strong Non-Farm Payroll (NFP) data

The dollar fell on the back of better than expected NFP data which may sound contradictory however, the unemployment rate did rise to 5.9% from 5.8%. Another contributing factor could have been that markets already priced in a strong rebound in jobs data which was evident this week by the surging dollar. What this means is that any opposing minimal deviation from expectation would likely have a negative impact on the greenback which was the case today. The chart below shows this as we see the dollar weakening against a basket of currencies as measured by the dollar index (DXY):

NFP vs U.S. Unemployment vs Dollar Index (DXY)

non-farm payroll vs U.S. unemployment

Chart prepared by Warren Venketas, Refinitiv

Labor market data was much anticipated this week after several Federal Reserve representatives redirected market participants to focus on NFP figures as stronger jobs data could heavily influence their future decisions (rates changes).

Oil prices stifled after OPEC+ prolongs supply talks

After breaching the $75 per barrel level, brent crude prices pulled back slightly but still holding above the aforementioned support handle. OPEC+ discussions that took place yesterday and today – around raising output were curtailed by the United Arab Emirates (UAE) which could lead to some friction going forward between other member countries and the UAE. Because no agreement has been made, previous tighter restrictions will remain in place which could continue the exponential rise in the price of crude oil. A less likely but significant outcome could be the scrapping of the deal by member states while proceeding to decide on individual output levels which could seriously hamper oil prices.

On a positive note, the UAE is not resisting increases in output but rather would like to be included in the output hike along with nations like Russia etc.

Brent Crude daily chart:

daily brent crude chart

Chart prepared by Warren Venketas, IG

— Written by Warren Venketas for DailyFX.com

Contact and follow Warren on Twitter: @WVenketas

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