Global Overview
The Blessing of Inflation?
With a rapid vaccine, roll-out and incoming stimulus Investors are expecting swift economic growth, as they also fear that inflation will strike capital markets. The yield on 10-year Treasury is up to 1.36% with a big leap from 0.9% at the beginning of 2021. As investors are aiming to hedge against incoming inflation, equity markets have been plummeting for the past few days.
Traditionally inflation indicators are associated with a rapidly growing jobmarket, although currently, the job market has been stagnant for some time.However, the situation is bound to change with the introduction of the new reliefpackage.
Relief at Last
Democrats are aiming to enter into the final stages of passing the $1.9 Trillion stimulus package without support from the Republican party. The House Budget Committee has approved the relief package, one of the last steps in the reconciliation process. The bill will be sent to the full House for approval within next week. Republicans are largely opposed to the reconciliation process as it overtakes then in the decision-making process.
Capital Markets
Equities
| PX Last | 1 Week | YTD | |
|---|---|---|---|
| United States | |||
| S&P | 3 811.15 | -2.45% | 2.12% |
| NASDAQ | 13 192.34 | -4.92% | 2.50% |
| Europe | |||
| Euro Stoxx 50 | 3 636.44 | -2.07% | 1.82% |
| FTSE 100 | 6 483.43 | -2.12% | -1.1% |
| DAX | 13 786.29 | -1.48% | 0.49% |
Fixed Income
| 10 Year | Week* | YTD* |
|---|---|---|
| United States | 2.90% | 53.85% |
| United Kingdom | 20.81% | 334.42% |
| Germany | 22.98% | 54.32% |
| Switzerland | 20.45% | 57.71% |
| *Change in sovereign debt Yield | ||
Tech Stock Selloff
As the world entered into a pandemic, travel and entertainment were amongst the hardest-hit sectors. However, with rapid and successful vaccine rollout, investors predict rapid reversal. Cruise companies shares jumped this week with Royal Caribbean, Carnival and Norwegian Cruise Line leading the way.
Another sudden stock surge was experienced by AMC Entertainment, as New York City is bound to reopen theatres on March 5 at 25% capacity.
Private Equity & Venture Capital
Coinbase Going Public
Cryptocurrency exchange Coinbase is valued at over $100 Billion by a recent market share sell among its investors prior to the company’s direct listing. The IPO could become the largest tech listing since Facebook. As Coinbase is set to be the first publicly listed US-based crypto exchange, it adds legitimacy to the digital currencies market.
Another large listing is expected from Stripe, as the company is valued at $115 billion in the secondary market. The e-commerce company has seen a boom last year amid a pandemic-fueled surge in customers.
The Ace of Spades
Famous rapper and businessman, Jay-z, has sold a 50% stake in his champagne brand, Armand de Brignac. As the company’s value was estimated at $630 million, the buyer, luxury house LVMH, has acquired a stake at around $300 million. LVMH is planning to develop the company’s international distribution network and build up an even stronger brand.
Commodities & Digital Assets
| PX Last | 1 Week | YTD | |
|---|---|---|---|
| Brent Crude | 65.97 | 4.86% | 28.50% |
| Gold | 1 734.03 | -2.81% | -8.46% |
| XBT/USD | 45 630 | -19.29% | 57.87% |
First Bitcoin ETF
Toronto Stock Exchange has debuted with the first ever Bitcoin ETF in North America. The ETF has raised CAD421 million, as substantial assets under management for Canadian markets. As the ETF quickly became the most traded exchange-traded fund on the Toronto Stock Exchange, it is projected it might become the largest ETF in Canada.
The world’s first Bitcoin ETF was launched by Purpose Investments and is backed by physically settled Bitcoin. Fund’s management fee is set at 1% per annum.
