Markets Weekly Recap
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- New all-time highs for the S&P500, Dow Jones, and Bitcoin
- As the US economy moves to full reopening, consumers start to spend more
The past week brought a slew of events ranging everywhere from stocks, to broad indexes, to cryptocurrencies. The S&P500 continued to climb to higher grounds throughout the week and notched a new all-time high. The Dow Jones Industrial Average index also jumped to a record this week, driven by growth stocks poised to gain from the reopening of the economy. The blue-chip index was also boosted by the strong performance of bank stocks, particularly Goldman Sachs.
Goldman Sachs Group, a large US investment bank, along with a number of other US lenders, published their earnings reports for the first quarter. Goldman Sachs, JPMorgan, Wells Fargo, Bank of America, all reported strong financial results for the first trimester of this year, powered by increased consumer confidence and a quicker-than-expected economic recovery.
Meanwhile, the Federal Reserve Chairman spoke at an online event held by the Economic Club of Washington. In his speech, he reiterated the Fed’s commitment to supporting the economy, but also noted that the central bank is planning to raise interest rates near the end of 2022. Before doing that, however, the Fed should see its goals met, which include stable prices with inflation floating around 2% and maximum employment. In addition, Fed Chair Powell mentioned the Federal Reserve will start unwinding its monetary support well before raising interest rates
Coinbase: Crypto Inches Closer to the Public Markets
On the cryptocurrency front, bitcoin made a new all-time high this week. Prompted by increased retail demand, bitcoin reached as high as $64,850. The rally in the world’s biggest digital asset came before the direct listing of Coinbase, a US cryptocurrency exchange. The listing, which took place on Wednesday, pushed the crypto company to a valuation near $100bn. The move served as the first introduction of a major crypto company to the public markets.
Economic data throughout the week added confidence that the economic recovery remains charged and powerful. Even though the consumer price index revealed that inflation is picking up, the Federal Reserve said prices are expected to climb higher as the year progresses. On Thursday, retail sales, a measure of purchases at stores, restaurants, and online showed US shoppers boosted retail spending by almost 10% in March. The increase in spending follows the distribution of federal stimulus funds and the gradual reopening of the economy.
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