A recap of the past week in 3 short headlines.
1. Shaky But Steady Week
With the one-year anniversary of the pandemic coming up, the market has never been so strong. Even with Treasury yields causing investors to revisit their relationship with higher growth stocks, it presently looks as if they are staying together and making it work. This week, the Dow and S&P notched slight losses, while the Nasdaq edged out a slight gain in a recovery week with stocks. The VIX, aka Wall Street’s “fear gauge”, closed at 19.2, its lowest number since the beginning of COVID. The lower the VIX, the less uncertain and volatile investors feel about the future. This aligns with the steadiness of the market is still steady.
With the vaccine rollout, the economy is opening itself up to a new beginning after getting over a large amount of COVID cases. In the coming months, the economy will likely be fully open as unemployment declines, vaccinations increase, and consumer confidence rises. Additionally, with Biden acting like Oprah with those stimulus checks — everyone gets one — people are starting to believe in a strong economic recovery.
2. COVID-19 Update
As schools across the country reopen, many parents of older children need to remember that the Pfizer vaccine is safe for children 16 and up (10th grade and higher). As they get vaccinated, older teens create a healthier community and an easier transition to in-person schooling.
Though vaccines are mostly safe, the AstraZeneca vaccine, in particular, has drummed up controversy. After being administered with this protectant, many people have experienced blood clots. Despite these occurrences, the EU has stated the pros of taking the vaccine severely outweigh the potential problems.
Back in the US, for the fourth week in a row, there have been fewer deaths, hospitalizations, and infections while the total number of vaccines administered has steadily increased. While everything seems like life will return to normal soon, spring break is jstiust around the corner for many students, and many officials at the CDC and concerned new “super spreader” events might occur. Already in Miami Beach, police had to break up college students breaking a curfew and partying in a large group.
3. Dude Just Turn It Into An NFT
NFTs are the latest trend that has people like Rob Gronkowski and Jack Dorsey interested. Like Elon Musk’s tweets, many people know of NFTs but don’t know why they are so popular or why some are valued for millions of dollars. NFTs are non-fungible tokens, meaning each one has a different value on a case-by-case basis. NFTs use the blockchain — the technology behind Bitcoin and other cryptocurrencies — to assign a stamp of ownership to a certain video, image, or digital asset. But why would someone pay 6, 7, or even 8 figures for a copy of a photo or video they could copy online? It all comes down to artificial scarcity.
If you live on Earth, you’ve definitely heard of Kanye West and his infamous sneaker brand Yeezy. These shoes resold at a price upwards of $500, but they only cost $20 to make, so where does their value come from? The demand for these sneakers surpassed the supply, as Kanye only made a limited number of them, so their price soared. In essence, due to their limited supply, the prices of NFTs increases with their cultural popularity/demand.
Something like a tweet can essentially have a stamp of ownership guaranteed by the blockchain, and that ownership can exchange hands — much like a stock, cryptocurrency, or tangible piece of artwork. And just like art or Yeezys, an NFT’s price is based on how much people want it, i.e. how much demand there is. The key to understand is that the verified ownership of the digital asset — art, video, image, etc. — is what entices investors. We’ll see whether NFTs stay relevant, but right now, members of the crypto community are giving it lots of momentum.