2021 commenced with events that will mark history. The U.S. Capitol was assaulted by protestors possibly fueled by President Trump’s speech, Biden was ratified as the President-elect, and the Democrats gained control of the Senate. Additionally, President Trump has become the first president in history to be impeached twice. Alongside these events, the S&P 500 Index finished the first week of 2021 on a positive note with a 1.8% return. Investors’ positive sentiment seems likely due to the potential for additional stimulus from the new administration.
To recap my previous post, with Tesla’s addition to the S&P 500 Index the company’s stock has continued rising. Tesla closed last Friday at an all-time-high price of $880.02 which was enough to propel CEO, Elon Musk, to surpass Jeff Bezos and become the wealthiest individual in the world.
Tesla Inc (TSLA) 12 months chart
According to the Bloomberg’s Billionaires Index (Rich), Elon Musk’s net worth is over $200B as of today.
2020 ended with some large developing trends in the markets that remain here in 2021. The US Dollar remains weak and agricultural commodities continue to rise sharply. With a weakening dollar, there are several currencies, led by the New Zealand Dollar “Kiwi,” that have been in an uptrend for a few months now.
New Zealand dollar/USD (NV) 12 months chart
With the potential for inflation to heat up in the coming months, the opportunity exists for commodities to enter a sustained bull market having been in a downtrend since 2008. Commodity prices have been rising since a low point in April last year and do not seem to be slowing down.
S&P GSCI Total Return Index (SPGSCITR Index) 2008-2021 daily chart
In the weeks ahead investor attention will likely remain on fiscal stimulus as President-elect Joe Biden seeks a $1.9 Trillion Relief Bill. Recent weak jobs data has increased the urgency to support a slowing recovery.