Monday , November 30 2020

The classic 60:40 rule is losing its meaning, the role of bitcoin is getting stronger and stronger



The trillion governments and central banks focused on resolving the economic catastrophe caused by the epidemic have boosted almost all types of assets, and since March, the rising mood is particularly noticeable in the stock market and cryptocurrencies.  Photo: Reuters

The trillion billions of governments and central banks aimed at resolving the economic catastrophe caused by the epidemic have boosted almost all types of assets, and since March, the rising mood is particularly noticeable in the stock market and cryptocurrencies. Photo: Reuters

Even the world’s largest managers are wondering if the classic rules of investing – 60 per cent in shares and 40 per cent in bonds – are still valid.

Jernej Kastelic (NLB)

This year is also special in the financial markets. The Fed and other central banks have acted much more aggressively than in the previous financial crisis. One of the consequences is a record amount of debt securities (more than $ 17 trillion), now the return is negative. That’s why even the world’s largest managers are wondering if the classic rules of investing – 60% in stocks and 40% in bonds – are still valid. The consequences are also in other markets. Given the unprecedented rise in the money supply in the US, some analysts are confident that the dollar will continue to lose and the stock promises a record end to the year. Gold is gaining value for much of this year, but Blackrock, which manages nearly $ 8 trillion in assets, said it will lose its importance in the future because of digital currencies with better features.“said Jernej Kastelic, head of NLB’s financial instruments trading team.

The value of Bitcoin rose 35 percent in November alone to $ 19,000 yesterday.  Photo: Pixabay

The value of Bitcoin rose 35 percent in November alone to $ 19,000 yesterday. Photo: Pixabay

Bitcoin is approaching a record $ 20,000
Cryptocurrencies continue to grow, XRP (ripple) rose 60 percent last week to $ 0.463, and bitcoin has been approaching a record since December 2017, with a value of $ 20 thousand. Yesterday, it was mostly under $ 19,000. The $ 18,000 limit is very important, if it lasts, the new record will be available. An occasional more serious correction is being pushed away. Although the major cryptocurrency has crossed the path of $ 3,600 to $ 18,700 in eight months, sales pressure is relatively low and there are more and more institutional investments on the demand side.

Dow Jones (New York) 29,263 points (weekly change: + 0.7%)
S&P 500 (New York) 3,557 points (-0.8%)
Nasdaq (New York) 11,854 points (+ 0.2%)
DAX30 (Frankfurt) 13,076 points (+ 0.5%)
Nikkei (Tokyo) 25,527 points (+ 0.6%)
SBITOP (Ljubljana) 853 points (+ 2.3%)
10-year Slovenian bonds required return: -0.11%
10-year U.S. bonds required return: + 0.83%
EUR / USD 1,1857 (% +0.2)
EUR / CHF 1.0798 (% +0.0)
bitcoin

USD 18,350 (+15%)

naphtha brent USD 45.09 (+4.6%)
gold

1,870 (-1.1%)

sender (six months) -0.509

Analyst Michael Novogratz, who is often in a tight mood with bitcoin, has warned that more and more bitcoin investors are relocating gold (by the way: bull betting) coverage funds on water prices were near the lowest of the week from 17 to 17 November). He believes that real growth has only just begun. By the end of next year, the value of the bit is expected to be between $ 55,000 and $ 60,000.

This month, due to two reliable vaccines against covid-19, the excitement of investing in gold has diminished, with increasingly pessimistic predictions.  The Macquarie Group financial company believes the cyclical bull market is over and prices are likely to peak.  Photo: Reuters

This month, due to two reliable vaccines against covid-19, the excitement of investing in gold has diminished, with increasingly pessimistic predictions. The Macquarie Group financial company believes the cyclical bull market is over and prices are likely to peak. Photo: Reuters

Gold buyers are primarily committed to inflation
Gold has fallen sharply in the second week in a row, partly because the U.S. still doesn’t expect to soon approve a new package of tax aid. Finance Minister Steven Mnuchin surprisingly stressed that aid to the most vulnerable groups in the spring wave would be suspended on 31 December. The price of gold, usually when the world is in trouble, exceeded $ 2,000 per 31.1 grams per summer and then ran out of power. Outflows from ETFs linked to October are increasing in November. The Covid-19 vaccine removes a great deal of uncertainty, but it remains (due to extraordinary measures taken by governments and central banks) the fear of inflation, which could increase the value of water again in the future.

Similar expectations were already in 2011 that the price of water exceeded $ 1,900 for the first time (due to the collapse of the eurozone at the time) due to all liquidity measures related to the 2008 financial crisis, but then the curve downward and the euro area suffered confusion. Therefore, data on inflation and, of course, the movement of the dollar will be crucial. When the dollar loses, it is almost always positive in water prices.

With news coming into the S&P 500 index calculation this year, Tesla shares rose 20 percent last week and again topped $ 500.  Photo: Reuters

With news coming into the S&P 500 index calculation this year, Tesla shares rose 20 percent last week and again topped $ 500. Photo: Reuters

JPMorgan: In the US, GDP will fall in the first quarter
Oil prices rose sharply by nearly five per cent a week, despite the threat of oversupply, so it rose again above $ 45. Behind this is the hope that the decision to increase production forecast by Opec + will be delayed by at least three months. Wall Street has lost somewhat in the last five trading days after the Dow Jones rose 11 percent and the Nasdaq stock market gained two separate weeks. Learning of the effectiveness of the Modern coronavirus vaccine on Monday raised the Dow Jones and S&P 500 indices to new highs and then went downhill. Infections are growing tremendously around the world, and measures are delaying the economy.

JPMorgan economists are the first to see the US suffer a (one percent) drop in GDP in the first quarter of 2021. For the second quarter of 2021, growth is forecast at 4.5% and 6.5% for the third quarter. The SBITOP index of the Ljubljana Stock Exchange rose 2.2% from Monday to Friday, after NLB shares rose 8.2% again (from over 40 euros) and Krka rose by almost five per cent. In the first nine months, Krka increased its net profit by 22% to 210.14 million euros. Oil yields fell by half during that period (to 40.5 million euros), and the share price fell by half a percentage point on Friday to 314 euros.




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