If the inflation rises and the Federal Reserve tightens its monetary policy, will the US stock market experience a significant decline? We believe that the probability of this happening is relatively low. Historical data shows that the US stock market is mainly determined by a single factor, which is the growth of company performance. During the period of economic and performance recovery, even if the Federal Reserve appropriately tightens its monetary policy, the probability of a large stock market decline is not high.
However, it is worth mentioning that if the Federal Reserve tightens its monetary policy, it will have a significant impact on the stock markets of emerging market countries.

Now everywhere is besieging short sellers, and hedge funds are more cautious about short selling. The short selling positions have surged, causing not only losses but also imbalances in net exposure, and the total exposure of the fund is too large. Therefore, the choice for funds is either to continue to close out short positions, sell off long positions, and reduce total exposure, or to abandon individual stocks and switch to short selling equity index futures. This may be why the futures of the U.S. stocks indexes have been relatively sluggish recently. Whether selling off long stocks or short selling equity index futures, there is pressure on the market.

The adjustment of hedge fund strategies may also be a significant factor. Many hedge funds operate in a long/short model, with almost zero exposure to market risk, and then add multiple levels of leverage. In this model, there is a large amount of long positions and short positions, and the profit comes from the difference between the two. Now, the short side has been heavily squeezed by a large multiple, resulting in heavy losses. Hedge funds must scale back their positions and comprehensively shrink their balance sheets. Therefore, while closing out the short positions, the long positions must also be sold. Since their long positions are stocks that have previously performed well, selling them off across the board will inevitably disrupt the market and cause a decline.

[ARK Daily Tracking] Chasing the Rise! It added nearly 600,000 shares of Tencent and also bought Baidu and JD
ARK's key deals on Wednesday were:
Significantly increase holdings in China Securities! Baidu, JD, and Tencent were all guests
Increased holdings of Tencent Holdings (ADR) by 565,000 shares, spending up to 50 million US dollars;
It added 39,600 shares of Baidu and spent about 10 million US dollars;
It added 83,600 shares of JD and spent about 8 million US dollars;
The holdings of Tesla were slightly reduced by about 10,000 shares, and the holdings of Iridium Communications and Workhorse Group were drastically reduced by two individual shares.
Figure 2 shows the positions of ARK's funds in Tencent Holdings (ADR) in the past 60 days;
Figure 3 shows ARK's fund frequently increasing its Baidu holdings in recent days.

Looking at 2020 as a whole, the overall performance of clean energy stocks was impressive. The Invesco Solar ETF (NYSE: TAN), which tracks a basket of solar stocks, returned 234% last year, while the Invesco WilderHill Clean Energy ETF (NYSE: PBW), which invests more extensively in various alternative energy sources, had a return of 205%. In contrast, the SPDR S&P 500 (NYSE: SPY), which tracks the S&P 500 index, has a return of 18%.
Undoubtedly, the results of the US presidential election contributed to the rise of these clean energy assets. Unlike Trump, who promotes fossil fuels, Biden has proposed a $2 trillion climate plan with the goal of “achieving a carbon-free electricity industry by 2035” — which is more aggressive than California's goal of producing carbon-free energy in 2045.

January 20, 2021, Wednesday
① 09:30 China's one-year loan market quoted interest rate as of January 20
② 15:00 Germany's December PPI monthly rate
③ 15:00 UK's December CPI and retail price index monthly rate
④ 18:00 Eurozone's December CPI annual rate final value and monthly rate
⑤ 21:30 Canada's December CPI monthly rate
⑥ 23:00 Bank of Canada announces interest rate decision
⑦ 23:00 United States' January NAHB Housing Market Index
⑧ Next day 00:30 Inauguration ceremony of the 46th President of the United States
⑨ Next day 01:00 Bank of England Governor Bailey attends forum
⑩ Next day 03:30 New York crude oil February futures complete final trading
⑪ Next day 05:30 United States' API crude oil inventories as of January 15

The underlying logic of Bitcoin's sharp rise is to use the credit system to become a global payment currency like the US dollar. If this logic were established in the future, it wouldn't be surprising that Bitcoin would rise to 1 million US dollars because it was an amount obtained through an algorithm, and this amount is limited to the 5 million that have been lost forever, and the remaining 16 million are left in existence