5 Things Investors Should Know Right Now

Uncertainty may be the theme of this week’s news round up, from the Federal Reserve’s potential new Chairman and his intentions for interest rates to the unpredictable future of Bitcoin that’s driving investors away from equities. So let’s jump in; here are five things moving the markets that you should know about this week:

Replacing Yellen

With Janet Yellen’s tenure as Chairman of the Federal Reserve coming to an end, the Senate Banking Committee has been working to secure her replacement. The top contender for the job is Jerome Powell, a member of the Federal Reserve Board of Governors since 2012. Yellen has served since February of 2014, after being appointed by President Obama. Fed Chairs, as they’re called, serve just four year terms.

The Fate of Interest Rates

Powell recommended today during his Senate Banking Committee hearing that it’s time to “normalize interest rates,” meaning that he views the economy as relatively healthy and ready for a rise in rates. For investors higher interest rates can mean lower investment spending (by banks, institutions, and individual investors), while for consumers higher rates mean that money becomes more expensive; monthly loan payments can increase if not locked into a set interest rate term.

Spotlight on Crypto

With Bitcoin having just surged past USD $9,000, the news is now when – not if – it’ll reach $10,000. The original cryptocurrency is just shy of the major mark, wavering around $9,950 at the time of this writing. Part of the reason that Bitcoin has surged so tremendously recently is the influx of  institutional money that has been flowing into crypto recently. Combined with the massive increase in new investor Coinbase accounts, the continued creation of crypto-focused hedge funds and investment vehicles proves there’s some serious fomo going on.

Hot Then Not?

Wall Street darling Nvidia may be on the demise. Nvidia became insurmountably popular with their graphics chipsets on the speculation that increased cryptocurrency mining would lead to increased sales. Nvidia manufactures the types of chipsets that are used in mining hardware, or rigs as they’re commonly known, as part of a GPU – graphics processing unit. In order to generate cryptocurrency it must be mined, the same action that adds transactions, and thus blocks, to a blockchain. To mine crypto, miners can use GPUs to run cryptographic hash algorithms in order to solve a mathematical problem to generate the key needed to establish the next block. Say that ten times fast.

Dow Closed 250 Points Up

The impending tax bill is certainly good for some (don’t worry, we’re not dipping into politics here). The excitement around tax cuts and other business-friendly initiatives has the market in a tizzy; the S&P 500 and Nasdaq Composite also rallied, trading in “record territory.”

We hope our little cheat sheet keeps you in good stead through the week, our bet says you’re the most informed at the water cooler, or in your investment club.