By William Davis


So, guess who’s responsible for this month’s outsized inflow of cash into global stock funds and ETFs? According to information from the industry’s largest discount brokerages, the answer is “individual investors,” particularly those of the younger set. The big discounters are, in fact, reporting an aggressive surge in activity, much of coming from party animals opening brokerage accounts for the first time. And these late-comers aren’t squeezing through the door for fear of missing out the rally in stocks, they’re pouring in to catch a new high on cryptocurrency and cannabis investments. What could possibly go wrong?

“Bitcoin Climbs More Than 90% And Falls More Than 50% In Less Than Two Months”

Executives at Ameritrade – which gives retail clients access to bitcoin futures – say new account openings hit a record last quarter, driven by a 72% rise in new business among millennials. Across the street at E*Trade, crypto and cannabis volumes “have been up big,” with about a 10th of the firm’s daily average revenue trades either blockchain- or pot-related. “It’s all correlated” at Charles Schwab, as the 35-year-old-and-younger crowd – self-assuredly more versed in pot investments than older folks – tries to join in before the speculative festivities run out of munchies.

“Canadian Exchange May Delist Cannabis-Related Businesses if They Fail to Comply with U.S. Federal Law”

Meanwhile, for all the Kids in the Hall there’s a new-age brokerage platform called Robinhood that will open trading in virtual currencies next month. The decision by the commission-free mobile stock-trading app – which boasts it has attracted millions of partygoers in just two years – puts the host in position to grab market share in the rapidly growing crypto shindig.

“Cryptocurrency Worth $530 Million Missing from Japanese Exchange”

Some pundits have suggested that this influx of younger, first-time investors indicates the end of the nine-year bull market run. We understand that. Others say the strong trading activity indicates the market rally is entering a “melt-up” stage that is bringing in once-skeptical investors. We’re not entirely sure what that means. What we do know is that institutional investors – and companies themselves – have been steady buyers of U.S. shares throughout the long rally, and still are. You don’t need crypto or cannabis to party like it’s 2018.

What the numbers have been saying…

  • 18%

The portion of bitcoin buyers who funded their purchases with a credit card.

What the equity markets have been doing…


INDEX Friday’s Close Two-Week Point Change Year-to-Date Change
DJIA 26,616.71 +813.52 +7.68%
S&P 500 2,872.87 +86.63 +7.45%
NASDAQ 7,505.77 +24.71 +8.73%
Russell 2000 1,607.51 +15.54 +4.69%


What the fixed income markets have been doing…


FIXED INCOME Period Change YTD 12 Months Yield
U.S. Treasuries
-(1.1)% +1.2% 2.7%
U.S. Investment Grade +0.1% -(0.8)% +5.5% 3.4%
U.S. High Yield +0.1% +0.9% +76.9% 5.6%
U.S. Municipals +0.1% -(0.6)% +4.4% 2.5%
Non-U.S. Developed +0.1% 3.2% 13.6% 0.9%


What the pundits have been saying…

“This is rational exuberance. Everybody knows that they can’t earn anything in bonds or in cash at bank, so they’re being rationally exuberant.”

  • Tiho Brkan, Founder of The Atlas Investor

What people have been saying…

“Everyone’s worried about not being worried.”

  • Martin Gilbert, co-CEO of Aberdeen Standard Asset Management

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