Weekly Analyst Update — February 15th

Wall Street reaches another record

• US markets finished higher on Friday, with all three major indices climbing to new records
• Strong corporate earnings, continued acceleration of the Covid-19 vaccine rollout, and reassurance from Federal Reserve chairman Jerome Powell combined to push US stocks to new heights.
• However, a debate has arisen in the US as to whether Biden’s $ 1.9 trillion plan, coupled with the vaccination campaign, is not likely to cause inflation to overheat.

China-US tension fears resurface

• Fears of tensions between the United States and China are coming back.
• The day after his first telephone conversation with his Chinese counterpart Xi Jinping, Joe Biden told senators from both parties invited to the White House that China is on the verge of surpassing the United States in terms of investments in infrastructure. “If we do nothing, they will eat our meal,” he warned them.

Bitcoin nears $50,000

• The world’s largest crypto reached as high as $49,500 over the weekend.
• Some of the recent gains are attributed to news from last week, that Tesla is buying $1.5 billion worth of Bitcoin.
• In addition, Mastercard plans to support digital currency transactions on its network this year. Whether this includes Bitcoin remains to be seen.
• Bitcoin’s liquid supply is continuing to decrease as investors increasingly acquire and HODL the asset for the long term.
• According to Glassnode, around 78% of issued Bitcoin are currently either lost or being held by investors.
• Bloomberg News reported over the weekend that Counterpoint Global, a $150 billion arm of Morgan Stanley Investment Management, is considering buying cryptocurrencies for its investors.

Oil hits $60

• The black gold continued to climb last week, reaching above $60 for the first time since January 2020.
• Prices were driven by hopes of a recovery in global oil demand and a further reduction in producer supply.
• According to initial estimates from various Agencies, OPEC production in January was well below the increase decided upon by OPEC + during the meeting on January 5th, a fact which also contributed to the rise in oil prices.

The Week Ahead

• Wall Street closed due to President’s Day (Today)
• China markets closed due to the Spring Festival (Today until Wednesday)

Written by a team of experienced financial analysts at eToro.

This content is for information and educational purposes only and should not be considered investment advice or an investment recommendation. Past performance is not an indication of future results.