Monday, November 11, 2024

Markets Daily: Bitcoin soars to $82,000

Stocks extend a post-election rally and Bitcoin soars past $82,000 for the first time. US bond markets are closed for Veteran's Day. The Kre

Five things you need to know

  • Stocks extend a post-election rally and Bitcoin soars past $82,000 for the first time. US bond markets are closed for Veteran's Day. 
  • The Kremlin denied a report that President Vladimir Putin held a phone talk with US President-elect Donald Trump. The Washington Post earlier reported that Putin and Trump spoke on Thursday and discussed the goal of peace in Europe. 
  • China's trade surplus is on track to hit a record of almost $1 trillion, aggravating an imbalance in global commerce that's provoked the ire of policymakers. 
  • The Bank of Japan discussed the need for caution on raising its benchmark rate and offered no clear hint of a move next month. The yen weakened.
  • Hedge funds shorting Tesla between election day and Friday's close took an on-paper loss of at least $5.2 billion. 

Crypto fever

A crypto buying spree is underway as traders bet that Trump will usher in a new era of digital asset investing.

Bitcoin jumped as much as 6.1% on Sunday and extended gains to hit an unprecedented $82,387.53 on Monday. Smaller tokens rallied even more. Shiba Inu-themed digital token Dogecoin, a meme-crowd darling promoted by Elon Musk, has soared 40% since Friday. 

It's the latest part of a red-hot resurgence in crypto after the election. Trump vowed on the campaign trail to put the US at the center of the digital-asset industry, including creating a strategic Bitcoin stockpile and appointing regulators enamored with digital assets. He also pledged to fire Securities & Exchange Commission Chair Gary Gensler, who repeatedly labeled the sector as rife with fraud and misconduct. 

"A rising tide lifts all boats and the boom in Bitcoin rippled on to the alts relatively quickly," said Caroline Bowler, chief executive officer of digital-asset exchange BTC Markets Pty. "The sector in its entirety is expected to be a net beneficiary of Trump's administration."

BlackRock's $35 billion iShares Bitcoin Trust posted a record daily net inflow of almost $1.4 billion on Thursday. The fund has now surpassed the $33 billion iShares Gold Trust in total assets as investors flock to what some consider to be "digital gold."

While there are still a lot of unanswered questions about Trump's crypto policy — like the speed of any regulatory change or whether a strategic stockpile is a realistic possibility — for the time being there seems to be little that can dent the market's newfound enthusiasm. 

"We believe a significant portion of the institutional market de-risked in the lead-up to the election and is now re-entering post Trump's win, creating material buying pressure — this is likely to be ongoing for some time yet," said Richard Galvin, founder of crypto-focused investment firm DACM. Sidhartha Shukla and Ryan Weeks

For more Bloomberg crypto coverage: 

The week ahead 

US inflation data, due Wednesday, is the key economic report of the week. 

Overall CPI probably increased 0.2% for a fourth month, while the year-over-year measure is projected to have accelerated for the first time since March. Those readings could underscore concern that inflation hasn't been quelled, especially as Trump's promises to cut taxes and throw up large tariffs threaten to rekindle inflation. 

"We need to finish the job," Federal Reserve Bank of Minneapolis President Neel Kashkari said Sunday on CBS's Face the Nation. "We want to have confidence that inflation is going to go all the way back down to our 2% target."

Retail sales numbers will be released on Friday, while Fed Chair Jerome Powell, Governor Christopher Waller and New York Fed President John Williams are all scheduled to speak during the week.

China publishes a range of economic reports toward the end of the week and the UK gives a snapshot on its growth on Friday.

Meanwhile, US earnings reports will slow to a trickle this week, with just nine S&P 500 firms scheduled to release results. Home Depot will give investors a key read into the state of the consumer.

Disney, Cisco, Shopify and Spotify will highlight a smattering of tech earnings following a lackluster showing from the Magnificent 7. US-listed Chinese technology stocks will be the other key area to watch. Alibaba and JD.com also report. Check out the full economics week ahead

On the move 

Tesla is one of the big winners as the rally from the US election stretches into another day.

Shares of the electric-car company gain 7% in early trading, extending last week's almost 30% advance. That's taken the company's market value back above the $1 trillion mark— putting it among just seven companies in the S&P 500 with that status.

The jump in Bitcoin and other tokens is also boosting crypto stocks — Coinbase, Robinhood and MicroStrategy are up more than 10%. Meanwhile, Trump Media & Technology gains 5.4%. —Subrat Patnaik

Word from Wall Street

"I'm not confident that we know what the future of AI is because there are almost no applications people are paying for."
Terry Smith
Founder of Fundsmith, a UK-based asset manager
Read the full interview on why he's shunned Nvidia shares even though it's hurting portfolio performance.

What else we're reading

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