The Nasdaq 100 closed at a new high today, for two main reasons. First, the Federal Reserve is maintaining its accommodative monetary policy by continuing to buy securities and injecting liquidity into the market. It stated that it will continue to do so until it sees inflation rise above 2.5%. They have named it “reflation.”
Second, Congress may finally be getting its ass in gear and passing a stimulus package. We have heard this like three times before. And each time it falls through the markets fall again. If you follow the markets you will notice that it wasn’t a huge advance and that the other indexes didn’t really participate. That tells me that there is still a lot of doubt out there about stimulus and several other topics, namely the pandemic.
There will some new unemployment numbers released tomorrow. The resurge of Covid-19 has been having a pretty severe impact on these numbers, so don’t be surprised if they are higher than expected.
On another positive note, Bitcoin powered through the 20,000 mark for the first time today, and as of this writing it stands at 21,330. I don’t expect Bitcoin to keep going straight up, but I believe it has a very bright future. One fund manager I saw today on Bloomberg TV said his fundamental analysis points to a Bitcoin price of 400,000. He didn’t give a timeframe, but even if it is ten years that would still outpace any of the major stock indexes by a wide margin. Disclaimer: I have some money invested in Bitcoin.