Bitcoin above $53k after stimulus, TSLA slumps, and AMC stock higher on upgrade
By John Shepard
10:14, 9 March 2021
Bitcoin (BTC) has powered back above the $53,000 level after the US Senate signed off on a $1.9trn stimulus package. The deal goes back to House lawmakers and could see funds flooding into the US economy again.
Deutsche sees stimulus flows into markets
A recent study from Deutsche Bank has shown that much of the cash from US stimulus checks will likely find its way into stocks and crypto markets.
Data from a survey of 430 retail investors showed that half of 25- to 34-year-olds will spend 50 per cent of their stimulus, leading the German bank to state that “a large amount of the upcoming US stimulus checks will probably find their way into equities.”
Also, 18- to 24-year-olds said they would allocate 40 per cent of any stimulus checks on stocks, while 35- to 54-year-olds aimed to use 37 per cent of their checks on equity investments. The over-55s are only set to put 16 per cent into the market.
The survey makes a mockery of the “covid relief” bill when most of the funds are going directly to the financial markets. Deutsche didn’t mention crypto markets, but Bitcoin’s rally in the second half of 2020 was driven by the same retail wave that powered stocks higher. Another round of stimulus checks looks set to boost valuations again.
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Tesla continues to fall while AMC skyrockets
Tesla (TSLA) will likely see a big boost from the stimulus money as the darling of the retail investors continues to fall. TSLA closed at $563 on Monday as the stock makes a swift pullback from the January highs at $900.
Tesla’s rival EV makers are also plunging, with Nio (NIO) off 40 per cent over the past month and Nikola (NKLA) down 38 per cent. A reason for the problems in electric vehicles is a global chip shortage that has impacted supply chains. Tesla briefly shut its Fremont factory due to a “parts shortage”.
In the meantime, AMC Entertainment (AMC) stock was higher after a Wedbush analyst doubled his price target ahead of the company’s latest earnings. The share price closed at $9.29, up 15.4 per cent after Wedbush analyst Michael Pachter upgraded his price target on the stock. Pachter said he approved of AMC’s steps to reopening, which included high-quality air filtration systems, enhanced cleaning protocols and reducing seating.
AMC will release its latest earnings report after the close on Wednesday.
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