Bitcoin has broken records by soaring through its previous all-time high, up more than 15% in the past 24 hours.
At the time of writing, bitcoin is trading around $22,838 – well above any previous high achieved by the cryptoasset. In its wake other peers such as ethereum are also soaring. ETH has hit a 2020 high of $652.76, up nearly 10% in the past 24 hours.
Bitcoin is now the 13th-largest asset by market cap according to AssetDash and has a market cap of around $403 billion thanks to the latest price surge, making it nearly as valuable as US retail giant Walmart.
Fed commits to open-ended stimulus
On Wednesday, Federal Reserve officials confirmed that the central bank will continue to buy up at least $120bn of government and mortgage bonds monthly until the US economy makes “substantial” progress. Bond buying by the Fed has an indirect influence on stock prices, as it pushes up bond prices and suppresses bond yields, which drives investors towards equities. The vast majority of Fed officials still currently expect that interest rates will be kept at their near-zero level for three years. “It’s not going to be easy to have inflation move up,” Federal Reserve chairman Jerome Powell said.
In corporate news, Google and Facebook found themselves in the firing line once again, as a group of 10 states sued Google on Wednesday. The suit accuses the search engine giant of roping in Facebook to help it rig online ad auctions to maintain a monopoly.
Consumer stocks gain despite retail sales data
US stock indices were mixed on Wednesday after the Federal Reserve news, with the S&P 500 up by 0.2%, while the Dow Jones Industrial Average fell 0.2%. The Nasdaq Composite enjoyed a more positive day, adding 0.5%, helped higher by names including Biomarin Pharmaceutical, PayPal and eBay, which gained 5%, 3.9% and 3% respectively. In the S&P 500, DISH Network was the day’s biggest loser, tumbling by more than 11% after announcing the issuance of $2bn in convertible bonds.
Sectors wise, five of the S&P’s 11 sectors were in the green on Thursday, with consumer discretionary the only sector to climb by more than 1%. Consumer stocks posted gains despite data showing that US retail sales fell for the first time in seven months in November. Restaurants, vehicle dealerships and department stores all faced sales declines in November, as Covid-19 cases surged once more across the US.
S&P 500: 0.2% Wednesday, 14.6% YTD
Dow Jones Industrial Average: -0.2% Wednesday, 5.7% YTD
Nasdaq Composite: 0.5% Wednesday, 41.1% YTD
London-listed stocks jump after EU leader says there is ‘path’ to trade deal
London-listed stocks jumped on Wednesday after European Commission president Ursula von der Leyen said that there is now a “path” to a Brexit trade deal being reached by the end of the month. According to Oddschecker, the odds on the UK and EU signing a trade deal in 2020 are now 3/13, with the odds on the UK and EU extending the transition period beyond January 1st sitting at 2/13.
The FTSE 100 closed the day 0.9% higher, led by housebuilder Barratt Developments ( 4.6%), asset manager M&G ( 4.3%), and JD Sports Fashion ( 3.7%).
The FTSE 250 was up by 1.2%, led by a 12.3% gain for Dixons Carphone. In an earnings announcement, the electronics retailer said that its online sales more than doubled in the first half of 2020, helping to offset the damage done by store closures. Dixons Carphone stock is now up by more than 30% in the past three months, tempering its year-to-date losses.
FTSE 100: 0.9% Wednesday, -12.9% YTD
FTSE 250: 1.2% Wednesday, -8.2% YTD
What to watch
Accenture: Technology consulting giant Accenture has gained 17.5% in 2020, taking its market cap past the $150bn mark, despite a muted environment for corporate IT spending, which makes up a substantial portion of the firm’s business. The firm delivers its latest set of quarterly earnings today, months after announcing its “Cloud First” project to integrate the company’s cloud expertise and services into a single brand. Accenture plans to invest $3bn as part of the scheme, which will likely be a point of focus on the company’s earnings call. Currently, Wall Street analysts are split between buy and hold ratings on the stock.
Fedex: Delivery firm Fedex has nearly doubled its share price in 2020, as the surge in online commerce due to the Covid-19 pandemic has driven huge demand for shipping and returns. The company delivers its latest set of quarterly earnings after the market close today, following a massive earnings beat when it last presented results back in September. Fedex’s involvement in Covid-19 vaccine delivery will be a likely point of focus on the earnings call, as will how its network is holding up in the face of holiday shipping demand. Wall Street analysts expect an earnings per share figure of around $4.
Initial weekly jobless claims: Another set of initial weekly jobless claims figures will be released on Thursday, after a jump from 716,000 to 853,000 the previous week. Continuing increases in jobless claim figures would support the idea that the US economic recovery is stalling.
Bank of England rate decision: The Bank of England will hold their latest Monetary Policy Committee meeting today at 12:00 PM GMT and whilst no significant changes are expected, they may allude to potential action in the event of a no deal Brexit should it be required. However, at this stage tools are somewhat limited given rates are already at 0.1%
All data, figures & charts are valid as of 17/12/2020.
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