November 18, 2020

European Futures Trade Lower, Bitcoin Makes New High

European Futures Trade Lower, Bitcoin Makes New High

European futures continue to trade lower as investors are busy taking some profit off the table. Sector rotation is still the key theme, and there is plenty of evidence that fresh money is coming into Stock ETFs. For most investors, it is about the long-term play now, especially now that the potential vaccine will get the green light. However, the surge in coronavirus cases and lack of any progress on the stimulus package is pushing the markets lower in the short term. 

Boris Johnson has a big plan to shape the UK economy and make it a zero-emission economy in his “green industrial revolution”. Under his new plan, he is investing £12 billion to boost the green energy sector in the UK. Investors understand that it is important to tackle climate change, and if the UK wants to become the leader in green energy and zero-emission, it needs to act fast as the race is on. One of the most sweeping changes under Boris’s plan is to ban diesel and gasoline cars by 2030, and this is literally ten years earlier than previously anticipated. There is no doubt that under the new plan, there is a strong need for skill upgrade and investment, but sceptics doubt the prime minister’s plan. They believe it is far too ambitious, and frankly, the country’s infrastructure is nowhere close enough to be ready for that day.

Amazon’s Plan

Pharmacy and health insurance stocks got badly hit yesterday as Amazon decided to take a slice of the pie by introducing Amazon’s online pharmacy. The move is bold, but it was widely expected as the company has been preparing for this sector for a while. Amazon’s online pharmacy will enable its Prime customers to use their health insurance to buy medications, and if they do not have any insurance, the Prime members will get a discount for their medication. CEO of Amazon, Jeff Bezos, knows that the size of this industry is mammoth; by some estimates, the industry is worth nearly 4 trillion. It is known that many customers are disappointed with the current inefficiencies in the sector. Amazon wants to address this gap and improve the process. More importantly, this will help the company to bring more loyal customers to its platform and keep them there.

Stimulus

The Fed chairman, Jerome Powell, has once again asked the lawmakers to get their act together as the economy badly needs another stimulus package. If there is no stimulus package or if the delay continues like this, it will have a deeper impact on the economy. Finally, Nancy Pelosi and Chuck Schumer have asked Mitch McConnell to resume the stimulus conversation. The hope is that this time around, we will have a more positive outcome, and the US economy will get what it badly needs: a generous stimulus package.

 Coronavirus Update

Pfizer’s vaccine has satisfied the necessary safety criteria, and it is now preparing to acquire authorization for emergency use. Cases are still getting higher in France, and the total number of people who are infected with the coronavirus plague has topped two million. England will soon come out of the lockdown, but the health officials are warning that the UK cannot afford to make the same mistake as the last time. Tough measures need to be in place as the lockdown ends in England.

Bitcoin

Bitcoin price has made another yearly high today and reached another milestone of 18.4K. But the ultimate price level that everyone is eyeing is the all-time high. It is only a matter of time before Bitcoin trashes its all-time high. In fact, it is highly likely that we will touch that price level this week.

For long-term investors, this is not about the all-time high. They certainly have not been holding this asset to reach an all-time high. For them, it is about achieving a new all-time, and that price level is at least 100K.

The idea of 100K, may make one laugh but remember where the Bitcoin price was only six years ago? That is why it is so important to pay attention to price predictions and have faith in them.