Raphael Stevens

More stories

  • 163 Shares129 Views

    in Business

    When the bull market in stocks will end, according to S&P 500 history

    In this article.RUT.IXIC.DJI.SPXBull markets don’t die of old age, as investors have been often reminded during this most recent one, but how long on average do they live?Investors who consult the historical S&P 500 chart will find a technical answer to this question. Market history says anywhere from four to 11 years, and big first-year gains have been followed by longer bull market periods. That could be read as good news for investors inclined to take a technical view of stock momentum: the bull run in the U.S. large cap stock index that began after the sudden Covid collapse of March 2020 posted the biggest first-year gain for the S&P 500 since 1945, according to CFRA Research data.Stock futures dipped in trading to start the week after Friday’s Dow Jones Industrial Average and S&P 500 new records. Investors have been worried and will continue to fear a pullback, and that is clear from the Wall Street research notes and institutional investor commentary — whether “the big drop” is coming in May or June, watch that VIX and keep adding the hedges. When it comes to fears about a broader correction, the truth is that the corrections (plural) already happened.A trader takes a break on Wall Street outside the New York Stock Exchange.Brendan McDermid | ReutersSeveral areas of the market have experienced declines of 10% or more at some point in 2021. In February and March, the big technology and growth names that had led the market for so long corrected 15%. Then energy stocks, after bouncing back hugely after their Covid bottom, experienced a 13% declined in just two weeks’ time in 2021. The Russell 2000 small-cap rally, which was torrid after the November 2020 election, also fell 10% in a matter of two weeks.”Pretty much, the entire stock market saw a 10% correction, but at different points,” according to a Fundstrat Global Advisors note from around the one-year anniversary of the Covid bottom in late March. Fundstrat thinks these “rolling corrections” diminished the odds of a broader index correction. But that has not stopped investors from worrying about the hit still to come to stock portfolios, whether the culprit is the inflation bogeyman, a hedge fund failure signalling worse yet, or just a market that keeps uncovering the isolated but unnerving headlines that indicate a “bubble” through being about crypto or a New Jersey deli that reached a $100 million market capitalization without almost anyone realizing it.Reading the chart of a record-speed bull marketThe market has gone up a lot, in record time. Since the low on March 23, 2020, the S&P 500 has surged more than 90%; the Dow Jones Industrial Average just under 88%; and the Nasdaq near-112%. That’s the highest first-year bull market gains since 1945 and outpaced the average of 37.5% for all prior bull markets.The speed of this bull market makes sense when one looks at how quickly the bear market of 2020 occurred: 33 days from peak to trough, according to CFRA. “The fastest on record,” according to Sam Stovall, CFRA’s chief investment strategist. And then the market recovered everything it had lost in fewer than five months, the third-shortest period in market history to recoup such a massive level of losses. The history of the past 12 bull markets shows that those that bounced back from bear markets fastest also lasted the longest, on average. Only four of the past 12 bull markets did not make it to 1,000 days. The remaining bulls lasted from four years (October 1957) to nearly 11 years (March 2009).A simple explanation: bull markets that return quicker are an indication that investors had less uncertainty, and more conviction in an economic and earnings recovery.”The timidity with which investors are willing to get back in that implies how long the bull market can last,” Stovall said. In this case, it’s the lack of timidity, and what already occurred this year is emblematic of bull markets. You can call it “rolling corrections” or as Stovall does, “subsurface rotations rather than an overall retreat.” April earnings are so far coming in strong and Wall Street is climbing the wall of worry. Stovall thinks that tailwind can still get better and provide more momentum. “Investors in general think current estimates understate what is likely to happen in 2021 and we should we get a second half surge of economic growth.”Caveats to the Covid stock recovery storyA caveat to this bull market, and as a result any reading of the historical chart of the S&P 500 as a reason to remain bullish, is its origin. As former Fed chairman Ben Bernanke said last spring, Covid was more like a bad “snowstorm” than any market and economic downturn that had occurred before, including the Great Depression. But to technical market analysts, it really doesn’t matter what causes the reset in prices and valuation when identifying the end of one bull market and the start of a new one.Yes, this time was different. The break in the former bull market was a “conscious choice,” i.e., shutting down the economy. But all bull and bear markets are “man-made” on one way or another, and for Stovall, the charts say a “bear market” is a bear market is a bear market. The bear market of 2020 was a cyclical bear market rather than a secular bear market, or even a “mega meltdown one.” His preferred way to describe it? Not a snowstorm either, but just “garden variety” bear.Zoom In IconArrows pointing outwardsBull markets can last years before they die, but over rolling 10-year periods going back a century, about 6% compound annual growth from the S&P 500 is the norm.Secular forces are coming for investors, namely the crossroads in interest rates. That does concern Stovall. “I think investors have to contend with the secular change in the bond bull market and the downward trending yield environment since 1980. We have gone 40 years in a secular bull market for interest rates and now we are making that turn.”It is the K or V shape that the bond market takes which is now more concerning than all the debate in the past year about a K or V-shaped U.S. economic recovery. It doesn’t mean there will be a V-shaped recovery in rates, “but certainly the best is behind us in terms of low yields,” Stovall said. For investors who want to draw more pessimistic bull market parallels from the past, Stovall points to two of most recent bull markets that did not make it to 1,000 days: 1966 and 1970. The 1966 market was the tail end of the “data processing bubble” — yes, the 1960s had the first tech bubble. And 1970 was when inflation finally started to take hold of the economy and investor sentiment. “My worry would be overstimulating of the U.S. economy leading to sharper than anticipated rise in inflationary expectations and interest rates,” Stovall said.Which is exactly what had investors are worried about already, and were throughout early 2021 before the market tore past those fears. There are technical reasons to worry in the short-term. The S&P 500 already is up double digits on a percentage basis this year, more stocks than ever are trading above their 200-day moving average, and it is expensive relative to its own history, and overseas stocks (which the index has been expensive relative to for years already), as well as small-caps based on the earnings growth projections.Stovall’s view is that it is OK to think the best of this bull market is behind us, and prepare for periods of “stock market digestion,” but that does not mean the good times are ending, especially if recent GDP projections for this year turn out to be accurate. “It doesn’t mean we are headed for a 1929-like crash, but investors should expect more normal returns going forward,” he said.On average, the history of the S&P 500 shows that the first-year return of a bull market is 38% and the second year less than 12%. More important in Stovall’s view is the 6% compound annual growth rate that the S&P 500 has turned in on a rolling 10-year basis going back 100 years.”The implication is things will be coming down. An ease of gains rather than erase of returns,” he says.One hundred years of market history says that, at least, is a safe if somewhat sobering bet. More

  • 163 Shares169 Views

    in Finance

    Stocks are booming higher, but traders are having a harder time making money

    Traders on the New York Stock Exchange.Source: NYSEThis is a very powerful rally. The combination of surprisingly strong economic reports and even more surprisingly strong earnings reports is pushing broad swaths of the U.S. stock market to new highs.Even the technicians are impressed.”The vast majority of NYSE stocks are in intermediate-term uptrends, independent of short-term pullbacks and volatility,” Michael N. Kahn of Lowry Research, the oldest technical analysis service in the U.S., wrote in a note to clients.Of course, the market hit new highs in January and February, but this, time it’s different. Previous new highs in January and February were greeted with some hand-wringing: it was mostly big-cap tech stocks that were forcing the markets higher.Not this time.The rally has broadened out, big-time. Far more stocks are advancing than declining. Nearly one-fourth of the stocks in the S&P 500 and the NYSE Composite Index are at new highs. Recently, laggard groups like utilities, health care, and REITs have been outperforming prior leaders like technology and industrials.Value is at a new high. Growth is at a new high. Big caps are at new highs, midcaps are at new highs. The small-cap Russell 2000 is lagging slightly, 4% off its high, but no one seems to be complaining too much.The good news is that a major breadth advance is bullish for the markets.The bad news is — well, traders aren’t sure what the bad news is, or whether the old rules even apply.Everything is going upOne feature of the market this year is that if one sector lags (like technology) other sectors come along (like energy, banks, or industrials) that continue the rally, so the S&P stays on mostly an upward trajectory.But now, everything is going up.”The net of it all is that against the drop-dead good technical numbers, it has been hard to lose money, at least a lot, but not all that easy to make money,” Frank Gretz from Wellington Shields said in a note to clients, noting that when everything is up, it’s hard to make money as a trader rotating in and out of stocks: “Now the only thing running consistently is the S&P 500.”That sounds like an odd problem to have: we’re running out of places to rotate into. But for active traders, it’s a serious issue.”There’s no Covid discount anymore,” Peter Tchir, head of macro strategy at Academy Securities, told me. “There’s no obvious sector where it looks like the rest of the market has ignored the space. I’m not sure if we should just be 50% in cash and just figure out what gets mispriced in the next week or two.”Earnings will be the big testThe market is now facing a very large group of stocks — not just technology names — that are rising fast and that have expectations that earnings are going to be rising fast. And that may be where the resistance starts.”Most companies are not reacting well to earnings,” Alec Young, chief investment officer at Tactical Alpha, told me, noting that bank stocks barely budged last week despite reporting profits well above expectations. “Stocks are running well going into earnings. What’s not clear to me is whether they can maintain momentum once the earnings have been reported.”The Fed problem is going to returnThen there’s the Fed problem — with economic growth well above expectations, it’s only a matter of time before the Fed becomes an issue, as it was in February.”Investors want it both ways — they want strong growth but they don’t want the Fed to taper [buying bonds],” Young said. “The Fed is not going to sit on their hands with this kind of growth, they’re going to have to at least taper” sometime later this year, Young said.Tchir agrees, noting that prices have moved so fast it’s likely something is going to give.”We have priced in great economic growth, moderate inflation, and a belief that yields are under control,” Peter Tchir said, noting that recent reports that the Japanese have been buying U.S. bonds have helped drive down bond yields. “If one of those legs give way, we are going to have a pullback.” More

  • 188 Shares129 Views

    in Business

    United adds summer flights to Iceland, Greece and Croatia in hopes vaccinations spur travel rebound

    In this articleUALA Boeing 787 Dreamliner operated by United Airlines takes off at Los Angeles International Airport (LAX) on January 9, 2013 in Los Angeles, California.David McNew | Getty ImagesUnited Airlines on Monday said it is adding flights to Iceland, Croatia and Greece for the summer in hopes that relaxed entry requirements will spur demand for popular tourist destinations.Most of continental Europe remains off-limits for most U.S. citizens, and airline executives last week were pessimistic that would change in time for summer vacations.But United is picking a few European destinations that have already loosened travel restrictions or are expected to in the coming weeks.”It’s been creating a pop in searches,” said Patrick Quayle, United’s vice president of international network and alliances.The carrier is adding a Chicago-Reykjavik flight from July 1 through Oct. 3 after Iceland last month announced it would allow tourists from outside Europe to visit, without a quarantine, if they can show proof of a Covid-19 vaccine.After that announcement, Delta Air Lines said it would resume Iceland service from New York City and Minneapolis, and would add a flight to Boston. United had previously announced service from Newark to Iceland that will run from June 3 through Oct. 29.United will also add service from Newark to Dubrovnik, Croatia three times a week from July 8 through Oct. 3. That country allows in visitors who can show proof of a negative Covid-19 test or proof of vaccination.Greece last month said it would open its borders in mid-May to vaccinated tourists or those who show a recent negative Covid test result, through Reuters reported last week that shift could happen as early as this week. United said it plans to add a Washington Dulles-to-Athens flight that will operate July 1 through Oct. 3, in addition to its Newark-Athens service, which it expects to resume on June. 3.International service is still down though more people are getting vaccinated and some travel restrictions have been lifted.In May, international flights will account for 40% of United’s total capacity, down from 45% during the same month of 2019. Domestic leisure demand has recovered to near pre-pandemic levels, executives said recently. American Airlines and Delta say they’ll put big planes — normally used for long-haul international flights — on popular domestic routes this summer.One bright spot internationally for United has been northern Latin America, like Mexico, Central America and the Caribbean, said Quayle. He said doesn’t expect the rest of Europe to open immediately, though United is resuming service from Newark to Milan and Rome and from Chicago to Munich and Amsterdam next month.”I’m most optimistic about the U.K. and the U.S. creating an air bridge between the two countries,” he said. More

  • 188 Shares179 Views

    in Finance

    Stocks making the biggest moves in the premarket: Peloton, GameStop, Herman Miller, Knoll & more

    Take a look at some of the biggest movers in the premarket:Peloton (PTON) – Peloton is calling a new advisory from the Consumer Product Safety Commission “inaccurate and misleading,” saying its treadmills are safe when safety recommendations are followed. The CPSC said that consumers with young children or pets should stop using the treadmills after its investigation of the death of a child turned up dozens of instances of injuries. The stock tumbled 6.7% in premarket trading.Coca-Cola (KO) – Coca-Cola reported quarterly profit of 55 cents per share, beating estimates by 5 cents a share. Revenue also came in above Wall Street forecasts and operating margins improved from a year earlier. The beat came despite continued pressure in sales away from the home due to the pandemic.GameStop (GME) – GameStop CEO George Sherman will step down effective July 31, or earlier if a successor is found before then. The company said in a Securities and Exchange Commission filing that it has been evaluating executive leadership to make sure it is suitable for a changing business landscape. Separately, Keith Gill, the man known as “Roaring Kitty,” exercised options to buy 50,000 more shares of the video game retailer at a strike price of $12 per share, according to a Bloomberg report. Gill now holds 200,000 GameStop shares. GameStop jumped 8.6% in premarket trading.Harley-Davidson (HOG) – The motorcycle maker earned $1.68 per share for its latest quarter, well above the consensus estimate of 88 cents a share. Revenue was essentially in line with forecasts. Harley also raised full-year guidance for motorcycle revenue and profit margins, saying actions it has taken to reshape its business have produced positive results. Separately, Harley said it would appeal a European Union ruling that could subject it to a massive tariff increase for European sales. Shares gained 8.4% in premarket action.Herman Miller (MLHR) – Shares of the office furniture maker tumbled 12% in premarket action after it announced a deal to buy furniture and accessories company Knoll (KNL) for $1.8 billion in cash and stock. The deal is worth $25.06 per share, compared to Knoll’s Friday closing price of $17.23, and Knoll’s shares surged more than 28% in the premarket.M&T Bank (MTB) – The bank earned $3.41 per share for its latest quarter, compared to a consensus estimate of $3 a share. Revenue also topped estimates. The bank noted improvements in its residential mortgage banking and trust businesses, among other factors, and the stock rose 1.4% in premarket trading.Coinbase (COIN) – Coinbase was down 2% in the premarket, with two notable transactions involving the stock in the news. Cathie Wood’s ARK funds bought more shares on Friday, according to her firm’s daily trade summary, while regulatory filings show that Coinbase CEO Brian Armstrong sold about $292 million in shares on Coinbase’s first day of trading.Church & Dwight (CHD) – The consumer products maker’s stock fell 1.9% premarket after Morgan Stanley downgraded it to “underweight” from “equal-weight,” with increasing commodity costs a key factor that could pressure profits.Tribune Publishing (TPCO) – Swiss billionaire Hansjorg Wyss has dropped out of a bid for Tribune, according to The Wall Street Journal. That leaves Choice Hotels Chairman Stewart Bainum searching for a new partner in his bid for the newspaper publisher, as he tries to outbid hedge fund Alden Capital for Tribune.Tesla (TSLA) – Police officials in Texas probing the deadly crash of a Tesla vehicle say they are nearly certain that no one was behind the wheel at the time. It is still uncertain whether the car’s “Autopilot” system was engaged when the accident occurred on Saturday. Tesla fell 1.9% in the premarket.First Solar (FSLR) – The solar power company rose 3.1% in premarket trade after it was upgraded to “buy” from “neutral” at Citi. The firm points to “multiple positive catalysts,” including a potential 10-year extension of the federal solar tax credit. More

  • 138 Shares129 Views

    in Business

    Coca-Cola beats on earnings, says demand in March hit pre-pandemic levels

    In this articleKOCoca-Cola on Monday reported that quarterly demand was unchanged from a year earlier as North America and Western Europe take longer to bounce back from the coronavirus pandemic.However, global unit case volume in March returned to 2019 levels.”We are encouraged by improvements in our business, especially in markets where vaccine availability is increasing and economies are opening up, and we remain confident in our full year guidance,” CEO James Quincey said in a statement.Shares of the company rose less than 1% in premarket trading.Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:Adjusted earnings per share: 55 cents vs. 50 cents expectedRevenue: $9.02 billion vs. $8.6 billion expectedThe beverage giant reported fiscal first-quarter net income of $2.25 billion, or 52 cents per share, down from $2.78 billion, or 64 cents per share, a year earlier.Excluding items, Coke earned 55 cents per share, topping the 50 cents per share expected by analysts surveyed by Refinitiv.Net sales rose 5% to $9.02 billion, beating expectations of $8.6 billion. Organic revenues grew 6%, while unit case volume was flat from a year earlier. Coke said demand improved every month of the quarter, driven by markets like China where uncertainty tied to the virus has fallen. The company’s sparkling soft drinks segment, which includes its namesake soda, saw volume growth of 4% in the quarter. While the North American fountain business is still under pressure, growth in India, China and Latin America offset those declines. Higher demand in China and India also helped its nutrition, juice, dairy and plant-based beverage segment, which posted 3% volume growth.Coke’s hydration, sports, coffee and tea segment was the hardest hit, with its volume shrinking 11%. The coffee business declined 21% due to the virus impact on Costa cafes. The hydration category, which includes Dasani and Smartwater, reported volume declines of 12% as fewer consumers worldwide bought single-use water bottles. Demand for Coke’s tea products fell 6%, while sports drinks like Powerade saw volume decline just 1%.The company reiterated its full-year forecast of organic revenue growth in the high single digits and adjusted earnings growth in a range of high single digits to low double digits.In a separate filing, Coke announced plans for a public listing of Coca-Cola Beverages Africa. The company will sell a portion of its holdings in the initial public offering, which is expected within 18 months. Shares will be listed in Amsterdam and Johannesburg. More

  • 125 Shares179 Views

    in Finance

    Goldman Sachs invests $69 million in British digital bank Starling

    Anne Boden, CEO of Starling Bank, speaking at Web Summit 2019 in Lisbon, Portugal.Harry Murphy | Sportsfile for Web Summit via Getty ImagesLONDON — British digital bank Starling has raised £50 million ($69 million) in funding from Goldman Sachs’ growth equity investment arm.The fresh cash comes on top of a £272 million investment round Starling announced last month that valued the online lender at £1.1 billion. The deal with Goldman is still subject to regulatory approval.”Securing the support of another global financial heavyweight demonstrates the strength of demand from investors and represents yet another vote of confidence in Starling,” said Starling CEO and founder Anne Boden.Starling is one of the U.K.’s biggest neobanks, a term used to describe the wave of fintech start-ups founded in the last decade with the aim of taking on the incumbent banks with branchless banking. It has more than £6 billion in deposits — up from £1 billion just over a year ago.Starling has looked to differentiate from rivals like Revolut and Monzo with a focus on small business banking. Of its 2 million total users, around 350,000 are business clients. Starling says it now holds a 6% share of Britain’s SME banking market.Another thing that Starling says separates it from its competitors is that it’s managed to turn a profit. Neobanks have been lossmaking for years and now are under heightened pressure to prove their businesses can make money.Goldman’s investment in the company comes after reports that JPMorgan and Barclays had shown an interest in buying Starling, though Starling has denied this. Big banks are increasingly looking to partnerships with tech firms — both big and small — to remain relevant at a time when smartphone banking is commonplace.Goldman launched its own competing digital bank called Marcus in the U.K. in 2018. The bank temporarily paused applications for its easy-access savings account in Britain last year due to a surge in deposits during the country’s initial Covid lockdown. It’s since reopened applications to U.K. savers.And Goldman isn’t the only U.S. banking giant taking on the U.K. market — JPMorgan is launching a digital banking brand of its own for British customers.”Starling is one of the leading and most innovative digital banks in the U.K., with an ambitious technology-first leadership team and addressing a deep market opportunity,” said Goldman Sachs Managing Director James Hayward. “We are delighted to be supporting their growth with this investment and believe the company has sustainable long-term earnings potential.Starling plans to use the fresh cash to expand its services in Europe and potentially make a merger or acquisition. The company last year restarted talks to secure a banking license in Ireland after initially putting them on hold due to the coronavirus pandemic. More

  • 163 Shares189 Views

    in Business

    A look inside the most expensive home for sale in Bal Harbor, Florida

    The most expensive single-family home for sale in the exclusive Bal Harbor Village section of Miami Beach, Florida, is called Villa Magnolia, and it has an asking price of $35 million.The view from above Bal Harbor’s most expensive residential listing.Lifestyle Production Group / The Jills Zeder GroupThe two-story residence at 182 Bal Bay Drive includes eight bedrooms, 11 baths and more than 12,800 square feet of living space, according to listing agent Jill Hertzberg of The Jills Zeder Group.Hertzberg told CNBC there are several reasons the property should command the top price tag in the area, “the main one being location, location, location.”Villa Magnolia’s mansion gate and brick driveway.Lifestyle Production Group / The Jills Zeder GroupThe estate was built on the northern tip of Miami Beach, inside a-gated community nestled between the Atlantic Ocean and the Biscayne Bay. The exclusive neighborhood includes its own police force and a marina. Villa Magnolia’s living room.Photo: Luis TraviesoVilla Magnolia’s asking price puts the home’s price per square foot north of $2,900. For comparison, in the fourth quarter of 2020, the average single-family home in the Miami Beach-Barrier Island area sold for about $3.79 million with an average price per square foot of $1,047, according to the Elliman Report’s luxury real estate data. That places Villa Magnolia at the very top of the market with a price per square foot that’s 277% above average.Villa Magnolia’s vaulted ceilings and column-filled halls.Photo: Luis TraviesoHertzberg described Villa Magnolia as “a modern neoclassical-style home.” It features classical elements such as columns, coffered ceilings and hand-crafted stone throughout.Villa Magnolia’s water frontage spans 221 ft.Lifestyle Production Group / The Jills Zeder GroupOne of the home’s biggest selling points, according to Hertzberg, is its 221 feet of water frontage in its backyard.There you’ll also find a one-story waterfall. The press of a button sends water cascading from an infinity pool on a second-floor terrace into the main pool overlooking Miami’s Biscayne Bay.182 Bal Bay, Bal Harbour, FLImage source: Luis TraviesoIts waterfront includes 100 feet of dockage clad in white stone. Inside, the home is equally impressive. Here is a look:Dining room with Fendi designed furnishings.Photo: Luis TraviesoThe home is being sold fully furnished and much of its furniture was designed by Fendi. The Italian-made dining table, pictured here, seats 16.Hanging at the head of the table is an image of Marilyn Monroe that can be set in motion by remote control to reveal a flat-panel TV.  Owner’s suitePhoto: Luis TraviesoThe owner’s suite has a king-sized bed with headboard and trim upholstered in white crocodile skin.Off the owner’s suite is a terrace and infinity pool.Photo: Luis TraviesoOff the owner’s bedroom is a terrace and infinity pool.The stunning closet has floor-to-ceiling mirrors.Photo: Luis TraviesoThe “her’s closet” has floor-to-ceiling mirrors and includes its own terrace.The “his” bath features a floating onyx vanity.Photo: Luis TraviesoThe “his bath” features a floating onyx vanity illuminated by lighting embedded beneath the stone.  Villa Magnolia has a cinema with walls lined in black alpaca fleece.Photo: Luis TraviesoThe cinema room walls are lined with black alpaca fleece. Surround-sound speakers are built into its walls and hidden behind custom-framed movie posters.Villa Magnolia’s kitchen includes a 750-gallon saltwater fish tank.Photo: Luis TraviesoAnd while Villa Magnolia is the most expensive mansion for sale in Bal Harbor, it is not the most expensive property for sale in the village.”A 1.8-acre waterfront parcel at 200 Bal Bay Drive was recently listed for $65 million,” Hertzberg said.The $65 million lot of land at 200 Bal Bay Drive does not include a home.Lifestyle Production Group / Douglas EllimanThe waterfront lot, listed by Douglas Elliman, is 80,000 square feet and does not include a home. It’s located on the same street as Villa Magnolia and is just down the road from the most expensive home ever sold in the community at 224 Bal Bay. That property fetched $24 million in 2019.The pool and waterfront view at 224 Bal Bay Drive.Photo: Lifestyle Production GroupBy comparison, Villa Magnolia has more square footage, a larger lot, double the water frontage, plus it’s being offered turn-key with all the designer furnishings, Herzberg said.182 Bal Bay Drive, Bal HarborLifestyle Production Group / The Jills Zeder GroupAlthough Covid-19 prevented in-person showings of Villa Magnolia for about a month, there has been a dramatic increase in demand through the pandemic and it led to a record-breaking year, Hertzberg said.”In 2020, our team, the Jills Zeder Group, exceeded $1 billion in sales,” she said. More

  • 138 Shares149 Views

    in Finance

    UK to explore issuing its own digital currency amid bitcoin boom

    Fifty and twenty pounds bank notes and a bitcoin logo are seen in this photo illustration.Omar Marques | SOPA Images | LightRocket via Getty ImagesLONDON — Britain is the latest country to join a global race toward central bank digital currencies.”We’re launching a new taskforce between the Treasury and the Bank of England to coordinate exploratory work on a potential central bank digital currency,” U.K. Finance Minister Rishi Sunak said at a fintech industry conference on Monday.In a separate statement, the Bank of England said such a currency would be a “new form of digital money issued by the Bank of England and for use by households and businesses” that exists alongside cash and bank deposits rather than replacing them.The U.K. government hasn’t yet decided whether to introduce a digital version of the British pound, but said it would explore the “objectives, use cases, opportunities and risks” involved if it were to proceed. The Bank of England will also set up a unit within the institution dedicated to exploring a central bank digital currency.It comes as several central banks race to figure out their own strategies for central bank digital currencies, or CBDCs. The rise of bitcoin and other cryptocurrencies has given new impetus to such initiatives, as well as the broader trend of declining cash usage.Bitcoin surged to a record high of $64,829 last week ahead of the highly-anticipated debut from cryptocurrency exchange Coinbase. But the world’s most popular digital coin sank sharply over the weekend due to fears around regulation.A spike in the value of meme-inspired token dogecoin, meanwhile, has led to concerns of a potential bubble in the cryptocurrency market. As of Monday, bitcoin was trading at about $56,740, up 3% in the last 24 hours.Another factor driving central banks’ work on CBDCs is private stablecoin projects such as the Facebook-backed Diem Association and a controversial token known as tether. Such currencies attempt to peg their market value to some external reference, such as the U.S. dollar, to avoid volatile price swings that are common in most cryptocurrencies.China appears to be charging ahead of other major countries on CBDCs. The People’s Bank of China has been carrying out a number of tests with the digital currency in major cities and a top official said Sunday that the central bank could trial the digital yuan with foreign visitors at the 2022 Beijing Winter Olympics. More