US stocks mixed as Fed minutes show policies will remain unchanged

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Traders work on the floor of the New York Stock Exchange (NYSE) on March 16, 2020 in New York City

  • US stocks were mixed on Wednesday after Federal Reserve officials agreed to keep policies in place.
  • While most officials saw developments, they wanted some time to be more convinced of progress.
  • The stimulus package of President Biden forced the Fed to lift its growth and inflation forecast in March.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell

US stocks were mixed Wednesday after Federal Reserve officials agreed to keep policies in place – sticking to near-zero interest rates and monthly bond purchases – during the last meeting of the Federal Open Market Committee in March, even as the economy showed clear signs of a rebound.

Officials, according to the minutes released Wednesday afternoon, indicated that policies will not change simply on forecasts alone. While most of the 18 officials saw developments, they wanted some time to be more convinced of progress, such as stronger employment.

“While generally acknowledging that the medium-term outlook for real GDP growth and employment had improved, participants continued to see the uncertainty surrounding that outlook as elevated,” the minutes said.

The landmark $1.9 trillion stimulus package from President Joe Biden in early March has forced Fed officials to lift their growth and inflation forecast before the meeting.

“The big message from the Fed minutes is that the central bank is as unconcerned in private about inflation as it is in public,” Brad McMillan, chief investment officer for Commonwealth Financial Network, told Insider. “There appears to be no hidden interest in higher rates, suggesting that rates will indeed remain low until unemployment drops down to pre-pandemic levels.”

The US economy has rebounded faster than what most have expected due in large part to President Joe Biden’s landmark $1.9 trillion stimulus package paired with steady vaccine rollout throughout the country, which has helped the labor, manufacturing, and travel sectors recover. The President on Tuesday moved up the timeline for all American adults to be eligible for a COVID-19 vaccine to April 19 from May 1.

The 10-year Treasury yield has held steady at 1.67% after climbing to the highest levels in over a year in March.

“The fact that the bond yields barely changed last week despite a raft of strong economic numbers … indicates that market has already gone a long way to pricing in the economic rebound,” Kathy Jones, Charles Schwab chief fixed income strategist, said in a note. “Also, it is hard to see U.S. yields surge from here since they are so far above those in many other developed markets in both real and nominal terms. With the current wide yield spread, foreign investors should find U.S. yields attractive.”

Mike Owens, sales trader at Saxo Markets, also said the Fed minutes might give better insight on how members envision the economic recovery and when they expect to hike rates.

“If 5-year US Treasury yields break above 1%, they might provoke a squeeze that could send 10-year yields on a fast track to 2%,” he said.

US shares closed lower Tuesday, with the Dow Jones Industrial Average and S&P 500 retreating from record highs reached the previous session. New sell-offs linked to the Archegos Management Capital crisis added to unease in markets even after US data revealed the economic rebound is on track.

Here’s where US indexes stood after the 4:00 p.m. ET close on Wednesday:

Mobile-gaming company AppLovin is targeting a $30 billion valuation for its US initial public offering, with plans to raise as much as $2.13 billion, Reuters first reported. AppLovin, backed by private equity firm KKR, is looking to sell 25 million shares between $75 to $85 each.

The Singapore-based ride-hailing and delivery giant Grab is reportedly set to list in the US via a SPAC merger with Altimeter Growth Corp. The deal values the combined entity at $35 billion, according to The Financial Times.

Oil prices climbed on optimistic economic data.

West Texas Intermediate crude rose by 0.39% to $59.56 per barrel. Brent crude, oil’s international benchmark, was also up 0.38% to $62.98 per barrel. Oil prices dropped earlier in the week when the Organization of the Petroleum Exporting Countries, or OPEC, said that it will add about two million barrels of oil each day to the market from May to July, easing production cuts.

Bitcoin slipped 4.19% to $55,757.76 as the rally stalls. Sellers outweighed buyers of bitcoin, and the selling spilled over to other cryptocurrencies. Last week, bitcoin flirted with the $60,000-level.

Investor participation in the world’s most popular cryptocurrency soared in the first quarter of 2021 with most of the growth coming from retail investors, according to research from CoinDesk.

Coinbase revenue soared more than 800% year-on-year in the first quarter of this year, the company revealed on Tuesday. This led DA Davidson to reiterate its Buy rating on the company and increase its price target by 125% to $440. Its previous price target for Coinbase was set at $195. Coinbase is set to directly list on the Nasdaq exchange on April 14.

Gold rose to 0.47% to $1,736.50 per ounce.

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US stocks trade lower as markets await details on massive infrastructure plan

Traders and financial professionals work ahead of the closing bell on the floor of the New York Stock Exchange (NYSE) from Getty Images

US stocks closed lower on Tuesday as investors awaited details onBiden’s planned infrastructure spending package. The Washington Post reports that the first part of President Joe Biden’s infrastructure package will come in at $2.25 trillion, and contain funding for initiatives including broadband, highways, and housing. Biden will announce details on the first part of the package on Wednesday.

The 10-year Treasury yield surpassed 1.7% on Tuesday, hitting a new 14-month high as investors price in expectations of higher inflation and a stronger US economy amid Biden’s new multi-trillion spending plan and the COVID-19 vaccine rollout.

The US Consumer Confidence index soared to 109.7 in March from 90.4, far above the consensus, 96.0. It’s the largest one month gain since 2003, according to Pantheon’s Ian Shephardson.

“The index is still short of its pre-Covid trend, about 130, but it is no longer massively adrift. A combination of the latest stimulus payments and the much better Covid picture likely explains the surge in confidence,” said the chief economist.

Here’s where US indexes stood after the 4:00 p.m. ET close on Tuesday:

Wells Fargo jumped as much as 4% on Tuesday after it said it suffered no losses related to its exposure to Billy Hwang’s Archegos Capital. Though Japanese firm Nomura Holdings said it could suffer a possible loss of around $2 billion, while Credit Suisse Group, which has declined to provide a numerical impact, could see around $3 billion-$4 billion in the fallout, according to reports. JPMorgan estimated today that banks could face up to $10 billion in losses stemming from the liquidation of Archegos.

Gold prices dropped below $1,700 for the first time in three weeks, under pressure as long-dated Treasury yields and the US dollar rose on expectations that President Joe Biden’s infrastructure plan will cost multiple trillions of dollars.

The precious metal dropped 1.8% to $1,683.50 per ounce.

West Texas Intermediate crude fell by 1.97%, to $60.34 per barrel. Brent crude, oil’s international benchmark, was down 1.66% to $63.90 per barrel.

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US stocks dip as yields rise on Biden’s spending plan and pace of economic recovery

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US stocks were slightly lower at the open on Tuesday and bond yields rose as investors awaited President Joe Biden’s spending plan and continued to assess the fallout from the Archegos Capital Management implosion.

The 10-year Treasury yield continued its march higher, rising by 5 basis points, to 1.77%, its highest in 14 months, since the start of the pandemic just over a year ago.

“We believe the recent rise in nominal government bond yields, led by real yields, is justified and reflects markets awakening to positive developments on the faster-than-expected activity restart combined with historically large fiscal stimulus – all helped by a ramp-up in vaccinations in the U.S.,” a team of strategists from the BlackRock Investment Institute said.

Biden is expected to deliver a speech on infrastructure spending on Wednesday. The plan could include as much as $4 trillion in new outgoings and more than $3 trillion in tax hikes, sources told The Washington Post.

Here’s where US indexes stood after the 9:30 a.m. ET open on Tuesday:

Bitcoin rose above $59,000 as PayPal announced it would allow US consumers to use their cryptocurrency holdings to pay at millions of its online merchants. Bitcoin has added nearly $8,000 to its price in the past week.

West Texas Intermediate crude fell by 1.6%, to $60.55 per barrel. Brent crude, oil’s international benchmark, was down 1.35% to $64.11 per barrel.

Gold dropped 1.5%, to $1,687.40 per ounce.

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Tech stocks rebound as Treasury yields stabilize amid inflation fears

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  • Tech stocks staged a rebound on Friday amid stabilizing Treasury yields after a sharp sell-off the previous day.
  • On Friday morning an announcement from the Federal Reserve regarding bank capital rules sent the 10-year yield higher and banks stocks lower.
  • Yields rose this week as investors grew concerned that the stimulus will cause a rise in inflation.
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Tech stocks rebounded Friday after a sharp-sell off the previous day as Treasury yields stabilized.

Earlier on Friday, the Fed announced that its temporary pandemic-era rule that relaxed bank capital requirements will not be extended after March 31. That offset the positive effect of stabilizing bond yields, which then spiked on the news.

Bond yields have risen as investors grow concerned that the $1.9 trillion fiscal stimulus will cause a rise in inflation, leading the Federal Reserve to change policy and raise rates sooner than expected.

But some on Wall Street aren’t concerned about the 10-year rising for much longer. JPMorgan’s Marko Kolanovic expects yields to stabilize, pushing tech stocks higher and helping the S&P 500 finish the year at 4,400, a 12% gain from current levels.

Here’s where US indexes stood after the 4 p.m. close on Friday:

The Fed’s decision to let the bank capital requirement rule expire sent bank stocks lower on Friday. Shares of JPMorgan Chase, Bank of America, Wells Fargo, and Citigroup all ended in the red.

Shares of Visa slipped as much as 6% on Friday after a report said the Department of Justice is investigating the firm’s debit-card practices. Visa is under investigation for “anticompetitive practices” in the debit-card market, reported the Wall Street Journal, citing unnamed sources.

Oil prices rose after tumbling 7% on Thursday. West Texas Intermediate crude rose as much as 2.9%, to $61.72 per barrel. Brent crude, oil’s international benchmark, rose 2.6%, to $64.95 per barrel, at intraday highs.

Gold jumped as much as 0.5%, to $1,745.47 per ounce.

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Tech stocks crumble as renewed inflation fears send 10-year yield to new cycle highs

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A decline in US stocks on Thursday was led by the Nasdaq 100, which fell nearly 2% following a surge in interest rates.

The 10-year US Treasury yield hit 1.75% on Thursday, representing a new cycle-high for the treasury note. Yields haven’t been that high since January 2020, just two months before the COVID-19 pandemic led to widespread lockdowns across the globe.

Investors’ inflation fears weren’t quelled by Fed Chairman Jerome Powell’s speech on Wednesday, as he committed to his resolve in maintaining ultra-low interest rates, as he sees current inflation concerns as transitory.

Here’s where US indexes stood at the 9:30 a.m. ET open on Thursday:

Weekly jobless claims moved higher on Thursday to 770,000, which was higher than economist estimates of 700,000 and also above last week’s revised number of 725,000.

AMC Entertainment jumped nearly 5% after the company said 98% of its movie theater locations would be open by this Friday.

Bitcoin moved higher on Thursday and flirted with the $60,000 level as Fed Chairman Jerome Powell’s commitment to continue supporting the economy with easy monetary policy fueled inflation concerns, which some investors say bitcoin is a hedge against.

Penny stock trading volume has soared 2,000% in the past year as a surge in retail investors has led to speculative investing in risky trading vehicles.

Oil prices were lower. West Texas Intermediate crude fell as much as 1.9%, to $63.34 per barrel. Brent crude, oil’s international benchmark, dropped by 1.8%, to $66.70 per barrel, at intraday lows.

Gold fell as much as 0.35%, to $1,720.90 per ounce.

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Dow, S&P 500 close at record highs as stimulus-fueled optimism continues

Trader NYSE
Traders work on the floor at the opening bell of the Dow Industrial Average at the New York Stock Exchange on March 18, 2020 in New York.

  • US stocks gained at the close with the Dow reaching a record closing high as investors cheered the passage of the stimulus bill.
  • One strategist says retail investors could buy a record $3 billion of US stocks when they receive stimulus checks.
  • Airline stocks gained after the TSA revealed air travel spiked to its highest level in nearly a year.
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US stocks gained at the close with the Dow reaching a record closing high as investors remained optimistic on economic growth following President Biden signing the $1.9 trillion stimulus program into law last week.

Retail investors could buy a record $3 billion of US equities in a single day when they receive their $1,400 stimulus checks from the US government, according to Viraj Patel, global macro strategist at Vanda Research. That could happen as soon as Wednesday or Thursday, when most Americans will start seeing $1,400 deposited into their bank accounts.

Here’s where US indexes stood after the 4:00 p.m. close on Monday:

Shares of major airline companies including American Airlines, United, Delta, and Southwest rose on Monday on optimism of a travel rebound in sight after the Transportation Security Administration revealed that air travel spiked to its highest level in nearly a year.

AMC shares rocketed up 29% extending this year’s stunning run higher as the movie chain will begin reopening theaters in California.

Penn National Gaming jumped to an all time-high of $142 a share on Monday as investors cheered its inclusion in the S&P 500 next week. The Barstool Sports stakeholder has gained almost 3,000% over the last year.

Short-sellers have tripled bearish bets against SPACs to $2.7 billion, from $724 million at the start of the 2021, according to data from S3 Partners amid fears the blank-chec frenzy has gone too far.

Bitcoin pulled back to around $56,500 on Monday after it rose above $61,000 over the weekend. A report said India could fine anyone in the country for even holding such digital assets.

Oil prices fell. West Texas Intermediate crude fell 0.38%, to $65.36 per barrel. Brent crude, oil’s international benchmark, declined by 0.5%, to $68.88 per barrel.

Gold jumped 0.6%, to $1,730.30 per ounce.

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Tech stocks slide as Senate’s stimulus approval boosts Treasury yields

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  • US equities fluctuated on Monday as the Senate’s approval of a $1.9 trillion stimulus package revived the value rotation.
  • Investors ditched tech stocks and Treasurys for value names and cyclicals in hopes for a swift economic rebound.
  • Oil erased early gains and slid after a Saudi Arabian crude terminal was attacked in a Sunday drone strike.
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US stocks wavered on Monday as the Senate’s approval of a massive new relief package revived the value rotation.

Senators voted along party lines on Saturday to push a $1.9 trillion stimulus plan closer to President Joe Biden’s desk. The package is expected to receive a final House vote on Tuesday, giving Democrats time to enact a supplement to federal unemployment benefits before the current boost expires on March 14. The package also includes $1,400 direct payments, aid for state and local governments, and funding for vaccine distribution.

The package is widely expected to accelerate economic growth and lift inflation. The bill’s Senate vote renewed investors’ moves out of growth stocks and Treasurys and into riskier sectors more likely to benefit from broad reopening. Rising yields cut into tech stocks’ appeal on Monday and cyclical stocks gained.

Here’s where US indexes stood shortly after the 9:30 a.m. ET market open on Monday:

The choppy session followed a broad market upswing to close out last week. Stocks rose on Friday as stronger-than-expected February payroll additions led investors to buy the dip in tech stocks. Government data also showed the unemployment rate falling to 6.2%, though other gauges of labor-market health remain at worrying highs.

Tesla tumbled for a fifth straight session as valuation concerns placed new pressure on pricey stocks. Index giants Apple, Microsoft, and Alphabet also declined.

General Electric gained after The Wall Street Journal reported the company is nearing a deal to merge its jet-leasing arm with AerCap Holdings. The agreement, should it go through, would combine the world’s two largest aircraft financiers.

Bitcoin traded just below $51,000, hovering in an increasingly narrow trading range as investors look for the next driver to boost cryptocurrencies. The token has failed to hold the $52,000 support level since falling from record highs in late February.

Treasurys broadly tumbled, bringing the 10-year yield to an intraday high of 1.613%. The US dollar strengthened against a basket of Group-of-20 currencies.

Spot gold fell as much as 0.93%, to $1,684.72 per ounce, at intraday lows. The precious metal hadn’t traded below the $1,700 support level since June.

Oil prices erased early gains and dipped after a Saudi Arabian crude terminal was attacked by a drone on Sunday. West Texas Intermediate crude sank as much as 1%, to $65.43 per barrel. Brent crude, oil’s international benchmark, fell 0.97%, to $68.69 per barrel, at intraday lows.

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Dow falls 561 points, tech stocks plunge as spiking bond yields rattle investor nerves

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Tech stocks led a plunge in US stocks as the 10-year Treasury yield spiked to its highest point in a year. 

The 10-year yield hit a high above 1.6%, punching above 1.5% for the first time since February 21, 2020. The move came just a day after it pushed past 1.40%.

“Thursday’s stock market declines are largely driven by the 10-year Treasury yield breaching the crucial 1.5% level. Higher Treasury yields call for lower stock market valuations. Rising bond yields make stocks look less attractive. If an investor can score a higher yield in the bond market, they may move money out of stocks and into bonds,” said James McDonald, Hercules Investments CEO. 

“In addition to making stocks look less attractive, rising bond yields are also a drag on businesses and the economy. Rising bond yields generally result in higher borrowing costs,” he added.

Better-than-expected jobless claims Thursday morning played into the narrative that the US economy is on pace for strong economic growth this year, further fueling expectations for an increase in inflation. 

Here’s where US indexes stood after the 4:00 p.m. ET close on Thursday:

GameStop, AMC, BlackBerry, and Nokia climbed higher on Thursday as Reddit traders returned to their favorite nostalgia-trade stocks. The GameStop surge could be in part to blame for this week’s stock market sell-off as hedge funds scramble to reduce leverage, according to Fundstrat’s Tom Lee. 

Best Buy stock slumped over 10% on Thursday, hurt by fourth-quarter revenue that fell short of Wall Street’s target and the electronic retailer’s outlook for a potential decline in same-store sales in the current quarter.

Shares of Tesla slipped as much as 4% on Thursday as a report said the EV maker will idle the Model 3 line at its Fremont, California factory for two weeks. Staff on the Model 3 line in Fremont were told production would be shut down until March 7 without an explanation, according to unnamed Bloomberg sources.

Bitcoin hovered around $49,000. Ark Invest founder Cathie Wood said she could see the cryptocurrency’s market cap swelling into the trillions during a panel Thursday.

Oil prices were mixed. West Texas Intermediate crude rose 0.2%, to $63.34 per barrel. Brent crude, oil’s international benchmark, fell by 0.31%, to $66.83 per barrel.

Gold fell around 1.5%, to $1,769.90 per ounce. 

 

 

 

 

 

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Tech stocks tumble as investors balk at lofty valuations

Traders work on the floor of the New York Stock Exchange (NYSE) on November 20, 2019 in New York City
Traders work on the floor of the New York Stock Exchange (NYSE) on November 20, 2019 in New York City


US stocks were mixed on Monday with tech stocks pulling back over valuation concerns while investors weighed what rising yields could mean for inflation.

Fundstrat’s Thomas Lee says the case for cyclical stocks within energy, industrials, consumer discretionary, materials, and financials is strengthening as coronavirus cases fall and the US economy begins to re-open.

US lawmakers will debate on President Joe Biden’s proposed $1.9 trillion American Rescue Plan act this week. Also, Federal Reserve chairman Jerome Powell will deliver testimony to the Senate Banking and House Financial Services Committees

Here’s where US indexes stood at the 4 p.m. ET close on Monday:

Shares of Churchill Capital IV spiked as much as 19% on Monday after a Bloomberg report said a merger with the electric-vehicle maker Lucid Motors could come as soon as Tuesday. The report follows weeks of rumors that special-purpose acquisition company Churchill would merge with Lucid. 

Famed Reddit trader Keith Gill has increased his stake in GameStop, according to a screenshot he posted to Reddit on Friday. Gill, who goes by Roaring Kitty on YouTube and Twitter and DeepF—ingValue on Reddit, now owns 100,000 shares of the video-game retailer, representing a double of his previous common share stake of 50,000 shares. 

General Electric gained as much as 5.6% on Monday but Goldman Sachs predicts the stock could jump roughly 20% to $15 per share. Analysts from the firm sat down with GE executives on Friday to discuss the company’s operations and financials. The analysts came away “encouraged” by free cash flow and power business momentum at the company.

Bitcoin tumbled as much as 17% on Monday after hitting a record above $58,000 over the weekend, though Bitfinex CTO Paolo Ardoino says daily price movements are “more of a sideshow.”

“Today’s price movement may galvanize bitcoin’s many critics, including those who recently dismissed the leading cryptocurrency as an economic sideshow. Such criticism misses the point and the profound impact it is starting to have. For many of the battle-tested exchanges that have weathered the market fluctuations, volatility isn’t new and is to be expected in such a young market. For many in the industry, development and deployment is priority,” Ardoino said on Monday.

Oil prices spiked. West Texas Intermediate crude rose as much as 4.14%, to $61.69 per barrel. Brent crude, oil’s international benchmark, jumped 3.7%, to $65.24 per barrel.

Gold rose 1.75% to $1,808.60 per ounce, at intraday highs.

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US stocks dip as market rally pauses near record highs

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Traders on the floor react before the opening bell on the New York Stock Exchange on March 9, 2020 in New York.

  • US stocks edged lower from all-time highs on Friday as investors mulled how much further the market could climb.
  • Optimism around vaccinations and new stimulus has run up against concerns of unsustainable valuations.
  • Bitcoin traded around $47,500 after notching a record high late Thursday. Adoption from BNY Mellon, Mastercard and Tesla sent prices soaring through the week.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

US equities fell slightly on Friday as bullish investors stopped to take stock of the market’s record-setting rally.

The S&P 500 climbed to an all-time high on Thursday as stimulus hopes and declining jobless claims bolstered bullish sentiments. Momentum has since stalled as investors weigh whether stocks have room to move higher. While Democrats continue to push for a $1.9 trillion relief package, stretched valuations and lasting pain in the labor market stand to curb further gains.

Here’s where US indexes stood shortly after the 9:30 a.m. ET open on Friday:

Read more: A crypto CEO breaks down why Tesla adding bitcoin to its balance sheet will create a ‘domino effect’ that lifts the cryptocurrency to $100,000 by the end of 2021 – and says Dogecoin is destined for a GameStop-style plunge

Separately, the emergence of new COVID-19 strains threatens optimism around an improving pace of vaccination. The US administered 1.62 million doses per day on average last week, bringing the nationwide total to 48 million vaccinations. President Joe Biden announced Thursday the drive will accelerate further still, with the US completing orders for 100 million additional doses from Pfizer and Moderna.

Yet public health experts have warned the shots are less effective against new, rapidly spreading strains of COVID-19. Investors are sure to monitor whether the UK and South African virus variants will cut into efforts to reach herd immunity.

Coronavirus case counts suggest the strains aren’t yet throwing the US into another wave of infections. The country reported 103,024 new cases on Thursday, down significantly from levels seen just one month ago. Hospitalizations declined further to 74,225, according to The COVID Tracking Project.

Earnings season continued. Disney gained after reporting earnings and revenue above Wall Street’s expectations. Subscribers for its Disney Plus streaming service neared 95 million even as a free-trial deal with Verizon customers ended, the company said.

Read more: Wall Street veteran Peter Kraus breaks down why investors should expect about a 10% to 15% market correction ahead – and shares his thoughts on the GameStop drama, SPAC mania, and bitcoin craze.

Bumble gained again after soaring 64% in its Thursday trading debut. The dating app raised $2.2 billion on Wednesday offering 50 million shares for $43 each. The post-IPO pop suggests demand for new offerings will remain strong in 2021.

Bitcoin stabilized around $47,500 after falling from a record-high of 48,925.53 Thursday night. Backing from industry giants including Tesla and BNY Mellon has reinvigorated the cryptocurrency and lifted prices throughout the week.

Spot gold edged as much as 0.81% lower, to $1,810.67 per ounce. The US dollar strengthened against a basket of Group-of-20 currency peers and Treasury yields climbed.

Oil prices fell. West Texas Intermediate crude dropped as much as 1.4%, to $57.41 per barrel. Brent crude, oil’s international benchmark, was down 1.3%, to $60.34 per barrel, at intraday lows before paring most losses.

Read more: JP Morgan says 2021 is a ‘stockpickers’ paradise with big money-making opportunities’ – Here’s the firm’s 22 ‘highest conviction’ small-cap investment ideas

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