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📑 Research Notes for 2020-12-07
This week, we look at record highs for stocks and bitcoin, as well as record lows for the U.S. Dollar. We also look at the impact of the 200-day moving average on stocks historically.
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Bitcoin hits new record, this time with less talk of a bubble
(New York Times)
Nearly three years after it went on a hair-bending rise and hit a peak of $19,783, the price of a single Bitcoin rose above that for the first time on Monday, according to the data and news provider CoinDesk. The cryptocurrency has soared since March, after sinking below $4,000 at the outset of the coronavirus pandemic.
Stocks climb to fresh records as investors bet on stimulus.
(Wall Street Journal)
The S&P 500, Dow Jones Industrial Average, technology-heavy Nasdaq Composite and Russell 2000 small-cap index closed at new highs on December 4, 2020, the first time since January 2018 that all four indexes closed at records on the same day, according to Dow Jones Market Data.
Dollar index hits its lowest level in more than two years.
The dollar index, which tracks the greenback's value against a basket of currencies, touched its lowest level in over two years. The worsening pandemic and uncertainty over OPEC+ moves shouldn't cloud the "generally positive risk environment, which has seen around $36 billion worth of portfolio flows returning to emerging markets over the last month — largely at the expense of the dollar,” ING strategists said.
How good is the 200-day moving average?
(Crossing Wall Street)
For being such a simple rule, the 200-DMA isn’t bad. When the index has been below its 200-DMA, the market hasn’t gone anywhere. After 92 years, it has lost more than half of its value. For the last 80 years, the S&P 500 has basically been net flat when it’s been below its 200-DMA.
Curated by Joseph Lu, CFA®
Joseph has over a decade of experience as an investment professional, primarily in quantitative analysis and portfolio management roles. He is the founder and managing director of Conscious Capital Advisors and a CFA® Charterholder. The CFA charter is a globally respected, graduate-level investment credential by the CFA Institute, a global association of more than 90,000 investment professionals working in over 133 countries.
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