Novum Alpha — Daily Analysis 14 December 2020

In brief (TL:DR)

  • U.S. stocks ended the week a mixed bag with the S&P 500 (-0.13%) and tech-centric Nasdaq Composite (-0.23%) down slightly, while the blue-chip Dow Jones Industrial Average (+0.16%) was up marginally.
  • U.S. stocks look set to rise this week on the possibility of fresh stimulus out of Congress.
  • Asian stocks kicked off the week mostly higher on the prospect that stimulus from Washington might provide an early Christmas
  • U.S. 10-year Treasury yields rose one basis point to 0.910% at the end of last week but look set to rise further on the back of stimulus and increased risk appetite (yields fall when bond prices rise).
  • The dollar slipped in Asian trading as investors rotated into emerging market currencies and risk assets.
  • Oil rose slightly with January 2021 contracts for WTI Crude Oil (Nymex) (+0.15%) at US$46.64 from US$46.57 as sentiment on stimulus improved.
  • February 2021 contracts for Gold (Comex) (-0.29%) fell slightly to US$1,838.30 from US$1,843.60 with gold expected to see further weakness this week.
  • Bitcoin (+1.41%) reversed losses to rise to US$19,019 as flows into exchanges slowed (inflows typically suggest that investors are looking to sell Bitcoin in anticipation of price falls).

In today’s issue…

  1. What does Tesla have in common with Bitcoin?
  2. IPO Fever an Unexpected Side Effect of the Coronavirus
  3. Invested in Bitcoin? No Need to Keep it a Secret Anymore

Market Overview

  • Both Tesla (-2.72%) and Bitcoin have prices more reflective of investment narratives than balance sheets
  • Being an unconstrained asset, Bitcoin is unbounded and unburdened by profitability, whereas Tesla will ultimately be scrutinized on that level
  • Captive retail investors kept home by pandemic lockdowns have provided ready fuel for rocket IPOs
  • Whether such IPO fervor is sustainable is anyone’s guess especially when valuations are near dotcom bubble levels and spreading to companies which are still affected by the pandemic, like Airbnb (-3.77%)
  • Wall Street and other high profile investors are embracing Bitcoin and cryptocurrencies in a more open way
  • Stigma previously attached to investing in digital assets has all but disappeared

What can Digital Assets do for you?



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Phuong Nguyen

Phuong Nguyen

Business Development of Novum Alpha, a leading quantitative cryptocurrency trading firm that specializes in Managed Account and DeFi products