Bitcoin Record, Trump Trial, WHO Covid Investigation – What’s up in Markets

Bitcoin and other crypto assets surge to fresh highs after Elon Musk’s latest intervention, the Senate prepares to try Donald Trump for a second time, a WHO team effectively rules out a lab accident as the source of the Covid-19 pandemic, and oil consolidates above $60. Here’s what you need to know in financial markets on Tuesday, February 9th.

1. Bitcoin tops $48k

The price of Bitcoin rose as high as $48,277, after Tesla’s announcement that it had bought $1.5 billion of the digital asset as a treasury diversification measure encouraged bets on cryptocurrency going mainstream.

By 6:45 AM ET (1145 GMT), Bitcoin was up 18% on the day at $46,488.

The volatility induced by the news arguably doesn’t serve the idea that Bitcoin is a true store of value, in the sense that its price can be changed so much by the whim of a single person, UBS Global Wealth Management chief economist Paul Donovan argued.

Even so, the news has given a broad lift to crypto assets in general, with Ethereum, Litecoin and DogeCoin posting big gains overnight.

2. Trump impeachment trial

The Senate will begin the second impeachment trial of Donald Trump, with little apparent risk of conviction for the ex-President after Republican Senators seemingly chose to keep party discipline. The trial would need the support of some 16 GOP Senators to convict.

Having split initially over the matter of Trump’s agency (or lack of it) in inciting the storming of the Capitol last month, the GOP has rediscovered its unity by rallying behind the procedural argument that the case is unconstitutional.

As such, the main implication for markets is the extent to which the conduct of the trial helps or impedes a bipartisan approach on policy for the next two years.

3. Stocks set to open lower

U.S. stock markets are set to open slightly lower on Tuesday having hit new record highs on Tuesday.

By 6.45 AM ET, Dow Jones futures were down 50 points, or 0.2%, while S&P 500 futures and NASDAQ Futures were down 0.1% each.

It’s a quiet day for data again, but the earnings calendar is heavy, with reports before the opening from Fidelity National Info (NYSE:FIS), S&P Global (NYSE:SPGI) and Du Pont de Nemours, the last of these already coming in ahead of expectations. They’ll be joined by Fox Corp, Willis Towers Watson (NASDAQ:WLTW) and Coty (NYSE:COTY), among others.

After the close, Cisco (NASDAQ:CSCO), Fiserv (NASDAQ:FISV) and Twitter are all due to update.

4. WHO absolves Wuhan lab

A World Health Organization team in China investigating the origins of the Covid-19 virus said it was extremely unlikely that it originated in a laboratory, and is more likely to have come from an animal host.

“Our initial findings suggest that the introduction through an intermediary host species is the most likely pathway and that will require more studies,” Peter Ben Embarek, a food safety scientist at the WHO, told a press conference.

The comments go against the theory that Covid-19 originated in the virological institute at Wuhan, the city where the first major outbreak occurred last year.

The vagueness of the investigation’s results are more likely to please Beijing than Washington and its allies, but the UN-backed investigation had stressed from the outset that it was not its mandate to assign blame.

5. Oil steady; API eyed

Crude Oil prices cooled off moderately after reaching new 13-month highs overnight.

By 6:45 AM ET, Brent futures were down 0.2% at $60.59 a barrel while U.S. crude futures were down 0.1% at $57.92 a barrel.

The structural tightness in the physical market caused by OPEC and other major producers keeping supply shut in has been temporarily made worse by a strike in Libya, which has reduced throughput capacity at its export facilities.

The American Petroleum Institute will release its weekly update on U.S. oil inventories at 4:30 PM ET, as usual.