The major stock market indices didn't move much on Wednesday. Neither did the Federal Reserve, which, in its final Federal Open Market Committee meeting of 2020, left ultra-low benchmark interest rates unchanged.
"The Fed’s statement was largely in line with what they have done in the past: They will continue to buy $80 billion in treasuries and $40 billion in mortgage-backed securities," says Chris Zaccarelli, Chief Investment Officer for Independent Advisor Alliance. "However, they more explicitly tied the continuation of that policy until unemployment is much lower."
"The Fed has made it clear that downside risks to the economy still persist in the coming months despite what financial markets may be signaling," says Charlie Ripley, senior investment strategist for Allianz Investment Management. "On the other hand, they did upgrade their view on the economy down the road."
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Meanwhile, Congress appears to be closing in on a COVID stimulus deal that could include a second round of stimulus checks, but the proposal to send only $600 to $700 to qualifying American taxpayers drew wide criticism and underwhelmed Wall Street.
The Dow Jones Industrial Average waffled between small losses and small gains before finishing down 0.2% to 30,154. The S&P 500 (+0.2% to 3,701) closed just one point shy of its all-time high, but the Nasdaq Composite (+0.5% to 12,658) gained enough to set yet another record.
Other action in the stock market today:
- The small-cap Russell 2000 pulled back 0.4% to 1,952.
- Gold futures finished slightly higher, up 0.2% to $1,859.10 per ounce.
- U.S. crude oil futures also improved, gaining 0.4% to $47.82 per barrel.
A Big Day for Bitcoin, Too
Also climbing the mountain was Bitcoin, which topped its 2017 peak in November and surged above $20,000 Wednesday to set a fresh record high.
The cryptocurrency, like most of the rest of the market, has pitched an incredible recovery from its March lows, which saw Bitcoin prices plumb the $5,000 mark.
"We expect that the market could see significant additional gains in Bitcoin prices over the course of 2021 if U.S. dollar inflationary pressures continue, and as both retail and institutional ownership levels of Bitcoin continue to rise," says Greg King, CEO of digital asset solutions firm Osprey Funds.
Bitcoin remains a wildly volatile asset – albeit one that even conservative investors can harvest if handled with extreme care. And the cryptocurrency, which must be held in a digital wallet, remains elusive for those who prefer investing only in accounts such as 401(k)s and IRAs. But even if you have those limitations, you can still at least get a taste.
These seven stock picks are tying their fortunes to Bitcoin, other cryptocurrencies and the underlying blockchain technology. They might not be "pure" plays, but for those without an appetite for extreme volatility, that might be for the best.
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