Weekly Financial Wrap-Up: Stimulus, NFTs, Crypto Currencies

The last few days have seen a lot of events unfolding. Here are some of what we think are the most significant current events which have (or may) impact markets worldwide.

$1.9tn stimulus package passed by the House of Representatives is signed into law by President Biden. This will provide eligible Americans with a direct payment of $1,400 and extend emergency unemployment benefits, among other measures, to tackle the impact of the Covid 19 pandemic on the US economy and boost growth. 

Wall Street experiences record highs driven by technology rally. Investors’ confidence and speculation on future performance of tech companies is accompanied by a stable 10-year treasury yield at about 1.52 per cent. The latter had peaked earlier in the month, reaching 1.62 per cent.

February sees a record in exchange traded funds inflows ($139.5b) in response to high recovery expectations for 2021. In this manner, investors have poured cash into equities boosting the soar in equity prices.

The UK delays imposing customs checks (Safety and Security SPS) providing relief for UK businesses. British ports stated they are not currently ready for the checks, which have been postponed by six months to January 2022. 

The market for NFTs (Non-fungible tokens) continues to flourish, with a digital artwork by Beeple marking the highest price paid for a digital asset, having been sold at Christie’s for nearly $70 million. NFTs, which are not intended to serve as a means of exchange, have seen a surge in their demand and popularity. 

European bonds and stocks rally in response to the ECB’s commitment to increase asset purchases, which are expected to rise from 12bn a week to 20bn a week. This measure comes as a response to increasing long-term borrowing costs. 

As more companies and investors turn to crypto currencies, Bitcoin surpasses $1tn in market cap for the second time. Bitcoin has increased by more than 80% from the beginning of the year and continues to show promising signs. 

Optimistic recovery expectations for the US economy in the coming year, aided by the newly enacted Biden stimulus package soars fears of inflation among investors.