Bitcoin breaks through 18,000 closing in on alltime high
Bitcoin hit $18,488 during early hours trading this morning before pulling back slightly.
The cryptoasset is now trading around $17,800 at the time of writing. It last reached such lofty levels in December 2017. Bitcoin’s market cap has also hit an all-time high of over $330 billion – higher than the previous record of $329.3 billion set on 16 December 2017, according to CoinGecko.
Bitcoin’s market cap is now higher despite the cryptoasset being worth slightly less because there are more bitcoins in the system than there were in 2017. The supply has expanded by roughly 10.75% since its last record.
Investors take profits after Tesla S&P 500 entry news
Tesla stock opened 13% higher on Tuesday after news broke on Monday evening that the $400bn market cap firm will be included in the S&P 500 from next week. Some investors seized the chance to take profits, as the electric car-maker’s share price was only 8% higher by the end of the session. Tesla will be by far the biggest firm to enter the S&P 500, and at its current market cap will be among the top 10 largest companies in the index. When Tesla joins the S&P 500 on Monday, it will spark a huge raft of buying by passive funds tracking the index. Reuters estimates that index funds will need to sell around $51bn of shares in other companies and use that money to buy Tesla stock, which will account for around 1% of the index. Active funds that are benchmarked against the S&P 500 will also need to decide if they require exposure too.
Elsewhere, Amazon announced on Tuesday that it is entering the pharmacy business. It will offer customers in the US to fill prescriptions online for home delivery, with Amazon Prime members getting free delivery.
Amazon pharmacy move sinks Walgreens
All three major US stock indices fell back on Tuesday, with the Dow Jones Industrial Average sinking 0.6% after gaining nearly 3% between last Thursday’s close and Monday’s close. By far the biggest weight on the index was pharmacy retailer Walgreens Boots Alliance, which lost close to 10% after Amazon announced its own pharmacy business. Walgreens is now facing down a formidable competitor at a time when consumers have already been driven online by the pandemic. The share price movement follows a pattern seen when Amazon has moved into other businesses. Supermarket giant Kroger lost a quarter of its value when Amazon announced it was buying Whole Foods and moving into the grocery market back in 2017. Since that low company’s stock is up by around 40%, albeit with a rollercoaster ride for investors along the way.
S&P 500: -0.5% Tuesday, 11.7% YTD
Dow Jones Industrial Average: -0.6% Tuesday, 4.4% YTD
Nasdaq Composite: -0.2% Tuesday, 32.6% YTD
EasyJet delivers first full-year loss in 25 years
Matching their US counterparts, London-listed stocks fell on Tuesday, with the FTSE 100 down by 0.9% and the FTSE 250 down 0.5%. Notably, EasyJet delivered its first full-year loss in its 25-year history, with losses hitting GBP1.3bn in total. The firm said that bookings have been boosted by positive Covid-19 vaccine news, but will only be running around 20% of its planned winter schedule following a new wave of pandemic restrictions in the UK and abroad.
At the bottom of the FTSE 100 on Tuesday, eight names fell by more than 3%, including miner Antofagasta, Vodafone Group and HSBC. At the top of the index, Imperial Brands enjoyed a 7.3% gain after declaring its dividend and reporting that pandemic lockdowns had boosted tobacco sales, leading the company to raise its profit guidance. Housebuilders also enjoyed a positive day, with Taylor Wimpey and Barratt Developments gaining 5.8% and 3.2% respectively.
FTSE 100: -0.9% Tuesday, -15.6% YTD
FTSE 250: -0.5% Tuesday, -10.8% YTD
What to watch
Nvidia: GPU (graphics processing unit) maker Nvidia’s stock has been a high flyer in 2020, adding 128% year-to-date, as it has benefited from companies needing to spend on data centers and consumers stuck at home turning to video games. Today after the market close, the company will deliver its Q3 results, where investors will be watching for the impact of its acquisition of Mellanox Technologies, which makes equipment for data centers. That deal closed in April and is a potentially substantial growth area. Last quarter, Nvidia’s data center unit delivered huge growth, as did gaming, while its professional visualization and automotive segments struggled. Currently, 31 Wall Street analysts rate the stock as a buy or overweight, five as a hold and three as a sell.
Lowes: Following key DIY supplies rival Home Depot’s earnings this week, Lowes will deliver its own Q3 update on Wednesday morning. For its part, Home Depot reported a substantial year-over-year revenue gain and beat earnings expectations, but its shares fell by around 3% as a successful vaccine weighed on investors’ minds. DIY suppliers have been enjoying an elevated level of demand due to consumers being stuck at home and taking on projects, but a vaccine could mean an end to that is coming. Analysts are expecting a Q3 earnings per share figure of $1.98 for Lowes.
Target: As a seller of essential goods, Target was able to stay open throughout the pandemic in the US, and also has a strong e-commerce presence. Target’s share price is up by 27% year-to-date as a result, and 47% over the past 12 months. That e-commerce strategy will be a key point of focus when Target reports its latest set of quarterly earnings on Wednesday, in particular the take up of the various new delivery formats it has begun offering. The firm delivered a substantial earnings beat last quarter, and analysts expectations for its Q3 have ticked up in recent months.
All data, figures & charts are valid as of 18/11/2020. All trading carries risk. Only risk capital you can afford to lose