While reading Forbes this week, we came across an interesting article on Bitcoin and millennials. According to Wikipedia, millennials were born in the late 1980’s or early 1990’s and began adulthood after the turn of the century. They are sometimes known as Generation Y. Readers of this column know that we discuss Bitcoin when something unusual happens. Bitcoin per USD hit an all-time high around $7800 and quickly dropped to a low of $5600 days later. The drop has been attributed to the canceled update know as SegWit2x. The change to the protocol would have doubled Bitcoin’s block size to two megabytes. As of this writing, the digital coin is trading at $6160.
The Forbes article gave seven statistics that show the willingness of male millennials to accept Bitcoin over stocks, bonds, and cash in big banks.
For example, more than 1 in 4 millennials prefer Bitcoin to stocks: 27% of whom said they would prefer to own $1,000 of Bitcoin over $1,000 in stocks. The number was even higher for male millennials—38% of whom said they prefer Bitcoin. — Forbes.com
A number of digital coins (Bitcoin, Etherium, LiteCoin, etc.) have been outperforming stocks and bonds. The need for instant gratification is certainly one of the reason there is so much love for bitcoin. Investors often glowingly talk about any stock or asset that has recently risen in price. There are certainly other reasons. Proponents believe the blockchain is more secure and more trustworthy than a ledger that is owned by one institution. But it may also be true that millennials know something the rest of us don’t.
Skeptics of the digital coins range from Warren Buffett to the CEO of JP Morgan Chase Jamie Dimon have warned that the unregulated asset is a bubble in danger of bursting. BTC has increased 7x this year.
What to Watch for this Week
From Schwab.com’s Liz Ann Sonders “Third-quarter earnings season is largely complete and can be characterized as a positive one—with strong “beat rates” for both top and bottom-line results; while economic data continues to indicate solid growth. The new Federal Reserve chair nominee, Jerome Powell, is seen as quite acceptable to the market, while the House tax reform bill did little to move stocks.”
My mindset this week is cautiously bullish, many stories that I reviewed this weekend point to an un-stop-a-bull market, but there are geopolitical events and unknown that could give the bears a reason to show up in force. Some traders are wisely saying always be hedged.
We have a normal calendar this week. Retail sales and industrial production are always important to monitor.
Retail Sales
- Retail sales increased 1.6% in September, as expected, with increases in gasoline station (+5.8%), auto (+3.6%), and building material (+2.1%) sales all getting a hurricane-related boost and leading the way.
- Excluding transportation, auto sales increased 1.0% on the heels of a revised 0.5% increase (from +0.2%) in August.
Industrial Production
- Industrial production increased 0.3% in September on the heels of an upwardly revised 0.7% decline (from -0.9%) for August.
- The capacity utilization rate increased to 76.0% from a revised 75.8% (from 76.1%) for August.
Global Spotlight
- China Moves Forward. Chinese officials outlined the direction of fiscal reform last week, a centerpiece to the country’s economic restructuring and resource allocation after October’s landmark Party Congress.
- Canada Deals the TPP a Blow. Canada seems to have thrown, at least temporarily, a wrench in the works of the Trans-Pacific Partnership (TPP).
- In Venezuela, All Signs Point to Default. Venezuela’s government narrowly made $1.1 billion in debt payments on Nov. 9, but future payments are in doubt.
- Saudi Arabia Cracks the Whip. On Nov. 4, Saudi Arabia began a campaign against corruption that has led to the detention of dozens of former ministers and 11 Saudi princes of varying importance.
- EU Cohesion in Question. Representatives from European Union governments will meet Nov. 15 to discuss the future of the bloc’s cohesion policy, including structural funds.
- Rounding Out Trump’s Asia Tour. U.S. President Donald Trump’s tour of the Asia-Pacific wraps up Nov. 14 with the Association of Southeast Asian Nations (ASEAN) and East Asia summits in the Philippines.
Economic Calendar
Here is a list of the U.S. economic events happening this week.
Last Weeks Numbers
Review Last weeks numbers here.
