HOOD Stock Hinges on PPI Data: Will Inflation Send HOOD Soaring?
Robinhood Markets (HOOD) stock finished Thursday’s trading session at $114.89 as investors waited on the latest U.S. inflation data ahead of the release of the Producer Price Index (PPI) data, which will be released at 8:30 a.m. Eastern Time.
The PPI will also dictate the sentiment around risk assets and the impact it will have on the Federal Reserve’s policy. Meanwhile, the crypto market fell about 2% in the last 24 hours while total market cap fell to $2.66 trillion. Bitcoin fell to around $78,000, Ethereum fell to about $2,475 and XRP fell to around $1.38.
PPI Inflation Expected to Rise to 5.3%: Will the Unlikely Occur?
Economists expect U.S. producer inflation to reach roughly 5.3% compared to the previously reported 4.7% data cited in the market. This could be a short-term catalyst for equities and other risk assets.
An above expectation PPI reading could drive inflation concerns, negatively impact equities, and prompt a sell-off, should traders fear a less dovish Fed. Meanwhile, below expectations reading could prompt a bull market should the reading improve the outlook on Fed policy.
HOOD investors should be particularly interested in the reading as Robinhood’s business is correlated to trading and the crypto market. An expand risk sentiment environment could be a positive catalyst, while renewed macro concerns could heighten a sell off environment.
Crypto Market Weakness Adds Pressure to HOOD Stock
The decline in Crypto prices continues to bode ill for the market even as inflation data is released. The total crypto market cap was near $2.66 trillion, a fall of about 2%, and one Bitcoin traded at around $78,000. Ethereum traded just below $2,475 and XRP at around $1.38.
Because Robinhood makes crypto and equities trading, the movement of the crypto market directly impacts user expectations for HOOD. Increased regulation for U.S digital assets will likely impact the company and the entire crypto sector in a positive way.
Coinbase CEO on Regulatory Outlook for Crypto
Brian Armstrong has claimed that regulation for Crypto is heading in a more specific direction in the U.S. That makes the consideration for the CLARITY Act potentially even more important as the digital asset market is scheduled for a hearing on the 15th of September.
Armstrong feels the work being done for regulation will continue to be done even if there is no new legislation. This has the potential to change sentiment associated with companies, in particular Robinhood, that interact with the Crypto market.
HOOD Stock Prediction: Critical Levels
After dropping 1.76% yesterday, the price of HOOD stock closed at $115.28. The stock price is trading at $114.89, after a minimal decrease of 0.34% in the pre-market session.
The $114 level has now become an important support level that is likely to see a lot of pulling in of demand. Breaking resistance at $115 will also be a positive development and breakout trading at $117 will also be very positive on the stock.
HOOD is currently at risk of reaching $112.45 if it breaks $114. Potential sell offs could test the $110 support.
HOOD Stock Analysis
Currently, the market thy’s biggest factor on whether HOOD continues the downtrend or recovers some ground is the upcoming PPI report. SLighlty lower than expected inflation could lead to a rally in risk on assets and bring HOOD back to test $115 and even reach $117.
On the other hand, higher than expected PPI could lead to even greater sell pressure and drive the stock down to $112.45 and potentially below to $110. Traders will have to wait and see how inflations effects the stock market and crypto market sentiment as a whole to make the next big price prediction on HOOD.
