Bitcoin is in its prime
Withstood the bite of the new crown pneumonia, benefited from the support of loose monetary policy, absorbed the nutrition of active fiscal policy, and matched the rhythm of economic recovery, the global financial market has gone through a period of breaking free and dark in the past year. A bumpy road in search of twilight. In the end, whether it is equity assets or risk assets, whether it is gold, silver or oil and steel, they all restarted the upward spiral after undergoing a catastrophic baptism.
At the beginning of the new year in 2020, the Dow and the Nasdaq competed for a strong upward trend in the past year, eagerly trying to reach a new record high. Unexpectedly, after 20 days of consolidation at the high level, they were held down by the ferocious new crown pneumonia, and huge amounts of funds were panicked. Escaping, the Dow Jones experienced an epic plunge of about 3,000 points in one day, and staged a frightening drama of five circuit breakers in the next few days. In the end, both the Dow Jones and the Nasdaq index were smashed to their lowest point in five years. All gains in U.S. stocks during the Trump administration have been wiped out. It is not only the U.S. stock market that suffered from the meltdown, but also the stock markets of 11 countries including Brazil, Canada, and Thailand suffered a tragic "meltdown" within a day, which eventually forced many countries, including the United Kingdom, Italy, and South Korea, to urgently introduce different degrees of restricted sales. empty policy.
Fortunately, before the regulatory agencies of various countries unfreeze the restrictive short-selling, the global stock market has been driven from the low point by the combination of economic recovery and loose monetary policy. The Nikkei 225 reached its highest level in 30 years, and India's Mumbai SENSEX among emerging market countries also became the second country after the United States to set a record high in global stock markets. On the whole, although the stock markets of various countries have fallen more than rose in the past year, the two major markets of the United States and China account for the largest market value of listed companies in the world, which will drive the total market value of the global stock market in 2020 to exceed 100 trillion for the first time in history. Dollar.
Unlike the stock market, which was strongly boosted by the global loose monetary policy, the Federal Reserve's extreme policy of reducing the federal funds rate to 0% and opening unlimited QE has pushed the bond market yields to the floor. The 10-year U.S. Treasury yield The yield once hit a historical low of 0.487%, and the 30-year U.S. Treasury yield also hit a new low of 0.974%. The two products fell below the 1% threshold for the first time in history, and the 10-year U.S. bond yield was still suppressed by the end of 2020 Below 1.00%. Not only that, as the method of base currency interest rates has been copied by many countries, negative yield bonds have sprung up on a large scale around the world in the past year, and the negative range of multi-term bond varieties in Japan, Germany, Switzerland and other countries has continued to move downward Not to mention, the United Kingdom has also joined the camp of negative yields on national debt, and its two-year national bond yield has fallen to the bottom of the negative range. At the same time, China issued five-year euro bonds at negative interest rates for the first time. At the end of 2020, the global market value of negative-yielding bonds rose to US$18.04 trillion, setting a record high.
Of course, the loose monetary policy is also the dollar that has been conquering cities and lands in the past 10 years. Turning head down from the annual high of 103, the U.S. dollar has never been able to recover in the past year, and finally closed down with a long negative line throughout the year. Except for the euro and the Australian dollar, the currencies of developed economies have achieved good annual performance, and most of the other currencies, even the mainstream currencies in the IMF currency basket, have not performed well; in emerging markets, except for the renminbi, more The sovereign currency of China not only failed to see the dawn of appreciation, but also collapsed collectively. Among them, the Brazilian real, Iranian rial and Argentine peso all sank to the bottom of history. The Central Bank of Iraq simply announced that the national currency dinar The one-time depreciation of about 20% against the dollar became the largest currency devaluation in the country's history.
The reason for the above exchange rate phenomenon is that the economic recovery of non-US countries is weaker than that of the United States after the epidemic, and it is difficult to form a support force for their own currencies. Moreover, the inertial quantitative easing adopted by Japan and other countries has also caused considerable damage to their currencies. pressure. In particular, emerging market countries have limited medical infrastructure and financial public resources in the face of the brutal erosion of the epidemic. In addition, they have heavy debts. However, to prevent and control the epidemic and boost the economy, they must increase fiscal expenditures and public taxation. In the case of scarcity, we have to continue to borrow externally, forming a vicious circle in which old debts cannot be repaid and new debts are repaid. Under the pressure of default risks, international capital has fled. The joint suppression of the market's "voting with feet" forces It is difficult for the national currency to escape the doom of the body and bones.
Compared with the stock market, bond market and foreign exchange market, the strange forces active in the commodity market in the past year are even more impressive. Looking at the K-line chart of crude oil futures in the international market, it is easy to find that after the opening of the market in 2020, it has only maintained the position of the previous year for three days. The daily plunge has made investors of crude oil products panic and pale. In the past year, the price of crude oil market has even set a rare historical record of daily drop of 35.78%. The crude oil production reduction agreement launched a public confrontation. Under the threat of both sides' almost irrational production increase rhetoric, the market was frightened by the news, and the price of crude oil suffered multiple critiques.
What the fighters didn't expect was that before the two sides decided the winner, the ensuing new crown pneumonia hit the crude oil price again, pushing the futures price of NYMEX crude oil in New York and Brent crude oil in London to $6.5/barrel respectively and the historical low of US$15.98/barrel; in the spot market, oil prices plummeted 300% in one day, followed by a negative oil price of -US$37.63/barrel, which is rare in the world. Fortunately, the recovery of the global economy brought back the almost desperate international oil price, and then launched a strong daily rebound and upward attack. The price of NYMEX crude oil in New York and the price of Brent crude oil in London both closed at a low level throughout the year. A full sun.
As an important member of commodities, the safe-haven asset gold started at US$1,500/oz at the beginning of 2020, and finally broke through the key price of US$2,000/oz and finally rose to the annual record and the highest record of US$2,069/oz. Keeping up with the price of gold, silver also rose all the way until it reached the highest point in the past seven years. Similarly, although mainstream metals such as copper, aluminum, and zinc initially experienced a considerable correction due to the pressure of the epidemic, the support force transmitted by the global economic recovery eventually pushed copper prices to a new high in nearly eight years, and aluminum , Zinc, etc. have all achieved double-digit increases, and iron ore has hit the highest futures price ever, and has become the commodity with the largest increase in 2020.
If you want to ask which financial product is the most able to bear and withstand the pressure under the crazy ravages of the new crown pneumonia, it must be Bitcoin. Starting from the lowest point of the year, all the way to attack the city, it finally broke through the historical high of 24,000 US dollars at the end of the year. This year, Bitcoin surged by more than 200%, becoming the currency with the most rapid appreciation in the global currency series. Affected by this, encrypted digital currencies, including Ethereum, have experienced astonishing annual increases, and the collective growth of the digital currency camp has also increased the pace of peripheral business capital. Funds and products injected more than $3 billion, the second highest level in history. Behind the soaring bitcoin is the turbulent development and landing of global legal digital currency. According to the data released by the Bank for International Settlements, 80% of the 66 central banks in the world are researching digital currency in the past year, and 10% of the central banks are about to issue their own central bank digital currency.
Although the scale of global capital M&A transactions has shrunk from US$2.9 trillion in 2019 to US$2.3 trillion in 2020, the bright spots of capital alliances in the micro field are still particularly bright. In addition to Nvidia's acquisition of the entire equity of SoftBank's Arm, which resulted in the world's largest semiconductor acquisition in history, ConocoPhillips completed the acquisition of the drilling company Concho Resources, which also achieved the largest shale in 2020 At the same time, Aon Insurance Group, the world's second largest insurance brokerage company, acquired Willis Towers Watson, the third largest in the industry, thus forging the largest merger and acquisition transaction in the global insurance industry so far. In terms of countries, in the global M&A garden built by commercial capital, the United States dominates as in previous years. Nearly half of the top 50 transactions of the year took place in the United States, and accordingly the volume of M&A transactions accounted for the total number of global M&A transactions. The United States is followed by China and Japan, indicating that companies in countries that can effectively manage the epidemic are better able to seize opportunities in global capital mergers and acquisitions.
