Review

The Dow Jones and broader stock market rallied on earnings news ahead of the Fed meeting, then added to the gains as Fed chief Jerome Powell spoke. The Dow Jones closed up 0.6%, the S&P 500 +1.2% and the Nasdaq composite +1.35%. According to him, the path of the U.S. economy is going to “depend significantly on the course of the virus”. The measures taken to keep it in check are critical, Powell said.

But some analysts insist that the markets will start to have "severe problems" if Congress can't reach a deal on a new coronavirus relief package by the middle of next week. The rollback of the states’ reopening plans is worrisome for unemployment, and we'll be looking very closely today at the continuing unemployment claims report.

 

Trends

Eastman Kodak said yesterday it signed a letter of interest for almost $800 million loan from the U.S. International Development Finance Corporation. The company will use the money to ramp up the development of Kodak Pharmaceuticals, a division tasked with addressing a national shortage of critical pharmaceutical components, including for the ongoing COVID-19 vaccine trials.

Shares of Eastman Kodak surged 143 percent yesterday to trade at $19.29, after touching a new 52-week high of $21.32 earlier. The number of Robinhood investors holding Kodak stock grew nearly eightfold from Tuesday morning to Wednesday afternoon amid the company's extraordinary rally.

“COVID-19 vaccine” is a magic word combination for markets. Almost any company can reasonably expect to capitalize on reporting anything to do with this kind of infection studies or applications. We expect more low-key market participants to use this magic tool for jumping from nowhere into their moments of glory.

 

Instrument

Bitcoin crossed the $11,000 level and traded near its highest level in nearly a year on Tuesday amid US dollar weakness and a broad shift to alternative assets. The token leaped as high as $11,198.32 before paring gains and trading below $11,000 later in the day. The bounce cleared a major psychological level that has been there for a long time.

Bitcoin's rally comes amid a similar upswing for gold prices. The precious metal reached a record high on Monday as investors bet on heightened inflation expectations.

Let us remind our notion, that although cryptocurrencies generally speaking failed to demonstrate gold-like safe haven qualities during stock market swings, they are absolute beneficiaries of the U.S. dollar weakness, so it is pretty safe to bet on continuation of Bitcoin growth for as long as cyclical dollar downturn continues.

This material is for informational purposes only and should not be construed as investment advice, nor should it be considered information sufficient upon which to base an investment decision. There are risks associated with trading and investing, including but not limited to the use of leverage, which may accelerate the velocity of potential losses. Before deciding to trade any such leveraged products you should carefully consider your investment objectives, level of experience, and risk appetite. Financial markets are subject to rapid price fluctuations due to adverse political, social and economic developments. Financial transactions may not be suitable for all investors, depending on their financial sophistication and investment objectives. You should seek the services of an appropriate professional in connection with such matters. The information contained herein has been obtained from sources believed to be reliable, but is not necessarily complete in its accuracy and cannot be guaranteed.

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