The Week in Review
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- Global markets keep steady near all-time highs
- Executives questioned about the GameStop trading drama
A volatile and eventful week is behind us as investors continued to uplift the global markets. European and US shares remained near their record levels throughout the week while Asian trading joined on Thursday, as a result of the Lunar new year holiday at the beginning of the week.
This week the markets witnessed Donald Trump’s acquittal, which created space for President Biden to heap pressure on Congress to gain enough support for the enactment of his proposed rescue package worth $1.9tn. Treasury Secretary Janet Yellen supported the stimulus bill in an interview on Thursday. She stated that the package is urgently needed for the US economy to get out of the slump caused by the pandemic. In light of these events, the market expects the stimulus to be enacted as soon as the second week of March.
In Europe, the markets traded fairly flat during the week as the euro advanced against the US dollar. Mario Draghi, the former European Central Bank President, was officially sworn in as Italy’s new Prime Minister. He is now faced with the tough task to revitalize the Italian economy by drafting a plan that will ensure the adoption of the €200mn provided by the European Recovery fund.
Bitcoin Reaches New Heights
The UK met its target to administer the vaccine to 15 million people by Feb 15. Prime Minister Boris Johnson praised the efforts and called them an “extraordinary feat”. On Friday, the UK posted better-than-expected economic data that sent the value of the sterling over 1.40 against the US dollar.
On the cryptocurrency front, the market remains hotter than ever as it surpassed the $1.6tn milestone in valuation. Bitcoin reached a new all-time high, eclipsing the $52,000 mark. Similarly, Ethereum broke above $1,950, also making a historical top.
In other news, on Thursday lawmakers grilled executives on GameStop’s wild ride. Citadel CEO Ken Griffin, Robinhood CEO Vlad Tenev, Melvin Capital CEO Gabriel Plotkin, Reddit CEO Steve Huffman, and Keith Gill, a retail investor, were questioned on the GameStop dizzying rally in January. The hearing didn’t provide answers as to what took place during the last weeks of January when GameStop stock’s volatility was so high. During the virtual hearing, the focus was on Robinhood CEO as members of Congress zeroed in on the company’s decision to restrict the buying of shares of the video game retailer. In his defense, Vlad Tenev said that at the height of the GameStop trading drama, Robinhood did not have enough capital to meet the soaring demand for the app. It is uncertain if policymakers will come out with prescriptive regulations that will cover all brokers. However, this is highly unlikely as the focus of the discussion was this particular brokerage and the single event that took place near the end of January.
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