Stocks Reaching New Record Highs? Will Bitcoin Finally Break Through?

The stock market is pointing towards a higher opening. We are again at new record highs. Treasuries are higher and oil is relatively flat.

Etheruem (ETH) has been on a tear this weekend, it is currently at $2,004. Bitcoin is recovering from the recent drop below $30k's and is currently at $34k. Crypto is down for the month.

President Biden is again confusing the country by agreeing to an infrastructure deal with bipartisan support on Thursday, just to make a 180 the same day and proclaim he won't sign the bill in its current form. This was because the democratic party leadership wants the bill full of trillions of dollars of social spending. He now came out over the weekend walking back his comments and is now saying that he did not mean to walk back on the agreement reached on the bipartisan bill and that he is supposedly willing to sign it. I think he doesn't know what he is supposed to do, that's pretty obvious. But apparently, the bill is back on track to be signed.

The bill is already $1.2 Trillion and includes fixes and upgrades to roads, bridges, and utilities but the hardliners in the democratic party want to add another $4 Trillion dollars of social spending to that, on top of our close to $30 Trillion dollars in national debt. This is something we should care about.

Crypto

Vladimir Putin announced Russia will be testing its digital Ruble next year, which is a digital currency created by the Russian central bank. This is another bittersweet for Bitcoin (BTC). The announcement adds another nugget of legitimacy to cryptocurrencies as a whole, but it also means that every country will have its own currency, and that currency will likely be the only one used in a controlled state like Russia so it can be traced. The market for Bitcoin is shrinking a bit but that does not mean it should lose its value, it can still be very valuable just in different ways than some previously imagined. But this is all good news for other cryptos because as some countries close themselves off from independent cryptos, other countries are fully embracing them and will continue to expand in infrastructure to add to the long-term value of the crypto market.

My Thoughts,

The indexes are close to record highs and we just recovered from a flash selloff, which shows we are in a robust environment. BUT! We are also starting to see a slowdown in personal spending and people returning to work, yes, we are still on a positive trajectory and unemployment compensation rule changes will send unemployment basically back to pre-pandemic levels soon, but we are also experiencing higher than normal inflation.

We need to be able to justify the current market's valuation with the current economic conditions. If our valuation is higher today than it was before the pandemic, (which it is), then the economy should be that much stronger to support that valuation, in many cases, this is true in some it isn't. Remember, we are at all-time highs, are companies doing the best they have ever done? There is no clear answer to that but I am calling sus. Let's be cautious and have at least a 10% cash position on hand to take advantage of another ill-timed selloff. Some stocks worth looking at in the current environment are Raytheon (RTX) and Wells Fargo (WFC) and other banks.

Thanks for reading,

The Punkrock Capitalist