WEEKLY BUSINESS ROUNDUP
Global Business Week: U.S Economic growth vs. Stock returns
The state of Financial markets & Economies, Weekly Charts, Business Trends & Statistics
September was the slowest month for U.S job growth this year, with just 194,000 jobs added compared to consensus estimates for a half-million. Investors are weighing how the Federal Reserve will react to the news, that’s why Friday ended flat to lower to end the week. But this wasn’t after a wild week of trading. The S&P 500 swung at least 1% for three out of five trading days this week. And at the Friday finish line, it was the best in six weeks for the S&P 500. All three major indices ended the week in the green.
Earnings season kicks off in earnest next week. Bank stocks will be a highlight after seeing big stock gains this year. Bank of America’s stock price, for example, is up 50.8% year-to-date. Energy stocks pushed higher as crude oil prices topped $80 a barrel for the first time since 2014. The Federal Reserve has suggested it may begin removing its bond-buying stimulus program in November as the economy improves and the disappointing jobs data may complicate the decision. The yield on the 10-year Treasury note rose above 1.6% for the first time since June.
The first full week of October produced modest gains for the US Dollar (via the DXY Index) after good data releases earlier in the week were undermined by a disappointing September US NFP report on Friday. The DXY Index gained a mere +0.04%, led by a stronger USD/JPY that gained +1.03%. A weaker EUR/USD, which fell by -0.19%, was offset by a stronger GBP/USD, which added +0.50%. Nevertheless, bond and rates markets are now discounting their most aggressive hawkish expectations of the Federal Reserve since the start of the coronavirus pandemic. DXY closed @ 94.10.
Led by Bitcoin, cryptocurrencies continued to trade firmly in the bullish zone. They were further buoyed by U.S’s decision not to ban cryptocurrencies like China — SEC Chairman Gary Gensler said at a House hearing on Tuesday, that the agency will focus on ensuring that the industry is fairly regulated. Bitcoin broke above $50K and even touched $56K just a week after the digital token bounced off $41K. Ethereum has rebounded as well and is trading just shy of $3,600 at the time of writing.
In 2020, the stock market and the economy had a very public break up. The Wall Street vs Main Street divide — the gap between America’s financial markets and the economy was growing. Today’s infographic from New York Life Investments shows how U.S. economic growth and stock market performance compare over the last four decades, to see how closely the two relate.
And finally, before moving on to some other statistics, here are the weekly & YTD numbers from various markets and different assets (Figure 1).
Venture Funding Record
In CB Insights State Of Venture Q3’21 Report, they dig into global investment trends to spotlight takeaways. New records were set in a huge quarter for global & US funding, exits, valuations, and more. Another global funding record, up 105% year-over-year (Figure 2).
Crypto Trading Volumes Rise
In September, Top-Tier spot crypto volumes increased 6.2% to $2.5 trillion and Lower-Tier spot volumes increased 7.7% to $246 billion (Figure 3). Top-Tier exchanges now represent 91.2% of total spot volume.
GenX Wealth Boom
Generation X in the United States has experienced a wealth boom during the pandemic (Figure 4). Household wealth distribution is shifting from older generations to those reaching their peak earning years.
Fintech 250
The financial services industry continues to attract tech companies that transform how people and businesses spend, save, borrow, invest, and more. From capital markets to insurance and digital banking to wealth management, the Fintech 250 are among the most promising of these companies globally (Figure 5). CB Insights has unveiled the fourth annual Fintech 250 — a list of 250 of the top private fintech companies using technology to transform financial services. The 2021 Fintech 250 cohort has raised approximately $73.8B in aggregate funding across nearly 1,200 deals since 2016 and includes startups at different investment stages of development, from early-stage companies to well-funded unicorns.
Top 10 Smart Contract Platforms
First, there was the battle for DeFi liquidity, then came an NFT mania — are we now in the midst of a Cambrian explosion of smart contract platforms? The price appreciation of Solana, Cardano, Polkadot, Terra, and Avalanche, combined with the excitement surrounding the launch of layer 2 (L2) Ethereum scaling solutions like Arbitrum supports this viewpoint. However, as Ryan Watkins points out in his recent article about these ‘smart contract wars’, price action is not everything. The actual activity (represented below by Total Value Locked) in these platforms is a far cry from the staggering valuations compared to EVM sidechains like Polygon, which is trading at a fraction of its newfound competitors (Figure 6).
7 Essentials of ESG
From consumers to policy makers, many economic actors are backing sustainability — and creating a powerful portfolio opportunity for investors. The use of environmental, social, and governance factors (altogether known as ESG) is increasingly informing investment decisions. But although ESG investing has grown in prominence in a few short years, there’s a disconnect: 69% of retail investors are interested in ESG, yet, only 10% actually invest in products that incorporate ESG factors. To properly capitalize on this trend, it’s important to first fully understand it. According to J.P. Morgan Asset Management, here are seven essentials (Figure 7) that can help investors understand the growing importance of ESG investing.
Tesla Delivery Record
Numbers recently released by Tesla show that the company is in fact ramping up its output massively. Having shot for the moon with its goal to deliver 500,000 vehicles in 2020, Tesla nearly stuck the landing, missing its target by just 450 cars. This year, the electric car maker will surpass that milestone by far, with deliveries in the first nine months of 2021 already exceeding 627,000 (Figure 8). Having delivered more than 200,000 cars for the first time in the quarter ending June 30, Q3 deliveries were even more substantial at more than 240,000 vehicles shipped.
Market Humor: Energy Rally Fuels Inflation Fears As Stocks Kick Off October With Losses
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