Market Update: Stocks back in momentum and P2P in focus

In the past week, a number of events took place that caused the growth of stocks around the world. European indices closed on a higher end, with Wall Street following a similar trend on July 20. And what about the P2P market? Read in this news.

                                                                       Photo by Nicholas Cappello on Unsplash

Bitcoin inched above $24,000 registering positive returns for the third-straight day. For the first time in the previous month, the digital cryptocurrency has now recorded a three-day winning streak. Stronger corporate earnings, an improved global outlook, and higher expectations from the monetary policy are some of the factors that have contributed to the rise in the value of stocks and other assets.

The Stoxx Europe 600 index gained 1.4%, while the S&P 500 rose by 0.6%. In terms of individual stocks, Netflix rose due to better-than-expected earnings. The OTT giant had previously declared in its earning guidance that it would lose 2 million members worldwide. With losing only 1 million subscribers, the company has performed better than earlier expectations. Even Tesla Inc. reported earnings that beat Wall Street estimates. Markets remain cautious as Federal Reserve and ECB policy meetings approach.

Monetary Policy Expectations and Political Instability in Europe

Eurozone inflation hit 8.6% year-on-year in June, with the ECB considering the idea of a 50 basis point hike as opposed to 25 at their next meeting. The Euro rose to almost a two-week high in response to this news, and Euro government bond yields also increased. European companies such as Novartis, Ubisoft, Remy Cointreau, Vinci, Telenor, Assa Abloy, Swedbank and Finnair reported earnings growth, while London-based fintech firm Wise jumped 14% after reporting strong first-quarter revenue growth. 

Political instability lowers expectations for the British markets with the election of the next prime minister underway. Italy is in a similar situation due to the resignation of Prime Minister Mario Draghi. New Italian elections set for September 25.

P2P Lending Forecast

The volume of P2P funding decreased from 511 M euros in May 2022 to 447 M euros in June 2022, i.e. by 13%. The fourth quarter of 2021 saw significant growth in P2P lending, but so far in this year, it has slowed down. With the exception of a slight uptick in May, funding volumes were declining each month. This is significantly different from the same time period the previous year, when the sector was expanding and only slightly declined over the summer. A major positive is that even when stocks and cryptos were free-falling, P2P lending has remained stable. This shows the faith of investors in the P2P market. P2P lending figures for July are expected to be similar, as the sector is experiencing a slowdown in light of political instability in the regions and rising inflation. 

What does the future hold?

Major events like monetary policy meetings, inflation, an unstable political environment, and other similar ones are causing a lot of uncertainty in the markets right now. Recession fears may soon turn out to be true with oil prices already declining due to lower demand expectations. Investors need to remain cautious and invest wisely for the long term keeping in mind their financial goals.

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