By Swissquote Analysts
Tesla Invests $1.5 Billion in Bitcoin
Topic of the day
The US electric car manufacturer Tesla is betting big on the cryptocurrency Bitcoin. As the company of group CEO Elon Musk announced on Monday, Tesla is investing 1.5 billion dollars in the digital currency. The electric carmaker's bitcoin exposure represents about 8 percent of its total cash balance. The value of Bitcoin had risen sharply in recent months - at the beginning of January it climbed to over 40,000 dollars for a time. Tesla's announcement caused the price to rise to over 43,000 dollars within minutes. Musk had already made his stance on the currency clear a few days ago: He wrote #bitcoin succinctly on his Twitter profile. An important reason for the upswing in recent months was the announcement by the payment service Paypal in autumn that it would allow account holders to use the cryptocurrency. Behind digital currency is the idea of a currency that exists independently of states, central banks and monetary policy. Unlike classic currencies, digital means of payment are not controlled by a central authority, nor do bookings have to be confirmed by a central authority.
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The new stock market week in Switzerland got off to a good start. Economic confidence with a view to the further expected large stimulus package in the USA was the driver, as it was on the neighbouring stock exchanges. In line with this, stocks that are considered defensive, such as Swisscom, Nestle or Roche, were also found at the end of the SMI price table, all of which fell slightly. The SMI gained 0.2 per cent to 10,779 points. The day's winners were UBS and Richemont with gains of 1.7 and 1.5 per cent respectively. Novartis shares outperformed rival Roche with a small gain of 0.3 per cent. A slight boost was provided by the fact that Novartis can hope for accelerated approval of the leukaemia drug Asciminib. In the technology segment, takeover and valuation fantasies drove the price of AMS up 3.9 per cent in the second tier. The German-British chip manufacturer Dialog Semiconductor is being taken over by the Japanese Renesas Group, with the offer offering a premium of around 20 per cent on the last share price.
European equity indices gained ground on Monday, buoyed by hopes that the $1.9 trillion stimulus package proposed by US President Joe Biden will be adopted in the coming weeks, as vaccination campaigns continue around the world. The Stoxx Europe 600 index rose by 0.3% to 410.8 points. In Paris, the CAC 40 and the SBF 120 rose by 0.5% and 0.4% respectively. In Frankfurt, the DAX 30 finished close to breakeven, up slightly by 0.02%, while the FTSE 100 in London rose by 0.5%. Suez (-0.5%) is still seeking a negotiated solution with Veolia (-1.5%) after the latter's hostile takeover bid attempt, Suez CEO Bertrand Camus said on Monday. "I remain absolutely open to continuing discussions but this needs to be framed much more strictly," the leader said at a press conference. Veolia on Monday filed its takeover bid for the 70.1% of its rival's capital that it does not own, despite the court's request to suspend this step and the government's strong opposition. STMicroelectronics (+1.8%) and Soitec (+3.3%) climbed in the wake of semiconductor manufacturer Dialog Semiconductor (+16.3% in Frankfurt), which announced Monday that it had reached an agreement with its Japanese competitor Renesas Electronics to be acquired by the latter for around €4.89 billion.
The US stock markets started the week with new records. After an already friendlier start, the indices bobbed along before picking up speed again in late trading and rising to new all-time highs above those seen in early trading. The driver continued to be the expectation that the administration of new President Joe Biden will pass a $1.9 trillion stimulus package. US Treasury Secretary Janet Yellen had also said that the Biden plan could lead to full employment again next year. Hopes that the package would come to fruition were further fueled on Friday by weak labour market data. And this at a time when corporate quarterly reports are mostly showing robust profits. Of the 295 corporate reports published so far this season from the S&P-500, 81 per cent have exceeded expectations. The Dow Jones industrial average closed 0.8 per cent higher at 31,386, virtually at a record high. The S&P-500 and the Nasdaq composite rose by similar amounts. Toy maker Hasbro beat expectations on both profit and sales, but investors apparently took the good news as an opportunity to take profits. The stock lost 4.3 per cent after more than doubling from its March 2020 low. Apple shares closed little changed after reports that there were no talks with South Koreans Kia and Hyundai about a car project. Kia shares in particular had recently benefited from alleged plans to build an Apple car. Shares in Gamestop and AMC Entertainment, which had recently been driven up massively by private investors, remained under heavy pressure. They lost a further 5.9 and 9.5 per cent respectively. Gamestop shares are still at $60 after a yearly high of 483, while AMC is at $6.18, down from $20.36.
After a good start to the week, the majority of the stock markets in East Asia continue to show gains on Tuesday. In Tokyo, the Nikkei index rose by 0.4 per cent to 29,489 points after the strong gain of the previous day. On the Hong Kong stock exchange, the Hang Seng Index advanced by 0.5 per cent. Market participants expect low turnover in the run-up to the Chinese New Year festival at the end of the week. In South Korea, the Kospi was little changed at 3,092 points.
As a sign of the market's growth and inflation expectations, the 30-year US Treasury bond rate is flirting with the 2% mark for the first time since February 2020, when the health crisis began to devastate the economy and the credit market.
IR raises Bayer target to 60 (43) EUR - Buy
Citi raises Sanofi target to EUR 110 (105) - Buy
Berenberg raises ABB target to CHF 25 (20) - Hold
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