Market Summary #5

Big Tech Suspends Donald Trump’s Accounts

Twitter and Facebook have suspended the President of the USA from posting on their social media platforms. Apple, Google and Amazon have removed Parler, a popular social messaging app among Trump supporters, from their app stores and web hosting services and Shopify removed retail websites associated with Trump. The decision was made based on fears that the President’s messages would incite violence and riots after protesters stormed Capitol Hill.

UK Imposes a National Lockdown

Boris Johnson announced on the 6th of January a new national lockdown due to concerns about the U.K’s health system becoming ‘overwhelmed’ in less than a month. It is the 3rd lockdown since the start of the pandemic in March 2020 and is expected to last at least until the middle of Febuary. Johnson said that if things go to plan, the top 4 priority groups should get the first dose of vaccination by the middle of Febuary.

Morgan Stanley increases its participation in MicroStrategy

Morgan Stanley’s investment management department increased its stake in the Bitcoin vehicle ‘MicroStrategy Inc.’ to more than 10% at the end of last year. At the end of December, the banking unit owned 792,627 shares of MicroStrategy, holding a 10.9% stake worth approximately $420 million at the day’s closing price. They’ve increased their position by 455%, adding almost 650,000 shares since Q3 2020. As of December 21, 2020, MicroStrategy holds an aggregate of approximately 70,470 bitcoins.

Biden demands new aid to fight COVID-19 crisis

President-elect Joe Biden called for trillions of dollars in immediate fiscal support, including increased direct payments, stemming from the rise in coronavirus cases. President Donald Trump signed a $900 billion relief bill last month, which included supplemental unemployment benefits extended to mid-March; “Last month’s aid bill was just a “down payment” on what is needed, if we don’t act now, things are going to get much worse and harder to get out of a hole later”, Biden noted.

Gold drops as Traders Weigh Dollar Rise Against Stimulus

Bullion faces increased pricing pressure as the dollar headed for a third straight gain and Treasury yields rose. After posting its biggest annual gain in a decade, bullion has endured a turbulent start to 2021. According to an analyst at Commerzbank AG, “The increase in long-term yields is also likely to prove temporary”.  “Real interest rates are still negative in the U.S. because of the increased inflation expectations, and this is likely to remain the case for the foreseeable future. We therefore expect the gold price to begin climbing again before long.”

European earnings seen down 26% in fourth quarter

European companies are expected to report a 26.3% drop in fourth quarter earnings, according to Refinitiv I/B/E/S data, as new lockdown measures to fight a second COVID-19 wave slow down the region’s economic recovery. The estimates, which relate to companies listed on the STOXX 600 equity benchmark, come ahead of a clear improvement predicted for the first two quarters of 2021 when earnings are set to rise 40.4% and 75.1%, respectively.

Bitcoin hits fresh record high near $42,000, climbing 40% so far this year

The world’s most valuable cryptocurrency traded as high as $41,973. It’s since fallen back below the $41,000 mark. Bitcoin has extended its 2020 rally, which saw it skyrocket over 300%, into the new year.. Strategists at JPMorgan recently said that bitcoin could hit $146,000 in the long term, as it competes with gold as an “alternative” currency.

Elon Musk has become the world’s richest person, as Tesla’s stock rallies

An increase in Tesla’s share price pushed Musk past Jeff Bezos, the founder of Amazon, to richest man in the world. Musk’s net worth was $195 billion by the end of trading on January 7th, $10 billion more than that of Bezos’s.  Musk’s wealth has increased by more than $150 billion over the past 12 months, thanks to a rally in Tesla’s share price, which surged 743% in 2020.

Lourenço Cardoso, BSc in Finance

Andrés Damián Cerda, BSc in Economics

Sanam Samadani, MSc in Monetary and Financial Economics

Julieta Vega, BSc in Economics


Published by lisboninvestmentsociety


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