October 18th, 2021 Market Snapshot: Wealth Concentration, Bitcoin ETF, and Investor Sentiment
10/15/2021 Market overview of the general economy, cryptos, and stocks by Peter Yuan Lu
Economy
There is relatively little going on in the markets today. The DOW is on track to be the best month since March and the S&P is 1.5% away from its all time high. We are seeing a greater sentiment towards the recovery.
Democrats are acknowledging that Biden’s “Build Back Better” plan will have to shrink from its original 3.5 Trillion to get through congress. It would extend the monthly direct payments to families with children that started in July and it would give two years of tuition-free community college, greater government tuition grants for lower-income college students, and invest in HBCUs.
As energy prices are soaring higher than ever, homes that use natural gas will pay more than 30% more this winter. By the nature of supply and demand the white house will likely call for Saudi Arabia to dramatically increase supply to push up prices.
The top 1% of Earners now hold more wealth than all of the middle class. Throughout the pandemic we saw the slow erosion of middle classes as inflation bombarded them while the super rich capitalized on strategic investments, hedging inflation.
Cryptos
The new bitcoin ETF has shown strong backing by legacy finance on the Chicago Mercantile Exchange (CME). The dollar value of open interest (OI), or the number of futures contracts traded but not liquidated with an offsetting position, stood at $3.64 billion on Friday, marking a more than two-fold rise for the month, according to data provided by bybit. The previous lifetime high of $3.26 billion was recorded during the bull market frenzy in February.
Most investors, on the other hand, are more likely to continue to obtain BTC exposure through spot or derivatives, or through any of the several listed securities or foreign funds that provide spot BTC exposure,” says the report.
China’s ban on crypto falls into greater scrutiny as it seems that they are almost regressing.
Bitcoin has surpassed the $62,000 mark and is hovering between that point and $60,000.
Stocks
The Panglossian optimism surrounding the recovery of the U.S. economy has faded as the growth momentum of the United States has slowed considerably over the past couple of months. Business and consumer confidence has waned, job growth has underwhelmed, energy prices have spiked and supply bottlenecks are everywhere. That, in turn, has given rise to growing concern about inflationary pressure.
The Bond market is also not sending a clear message about investors right now as the fed is buying and because the markets are still in a volatile limbo. There is simply too much noise right now.
Banks kicked off earnings season in style, and now it’s up to companies like Netflix, Tesla, Snap, IBM, J&J, and AT&T to keep the party going this week.
Everything collapsed for WeWork when it attempted to go public two years ago. It’ll try again this week in a SPAC deal that values it at $7.9 billion.
