Another Sign of Mania in Cannabis Stocks: DealBook’s Closing Bell

By September 25, 2018 Bitcoin Business
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The mania around cannabis stocks this year has a similar feel to the one around Bitcoin in 2017. Shares of New Age Beverages, Alkaline Water and IntelGenx Technologies have all soared in recent weeks, Bloomberg reports. What do the three companies have in common? Not much, other than their plans to tap “the emerging legal cannabis market.” If that sounds familiar, it may be because something similar happened with Bitcoin at the end of last year. “Companies previously focused on making fitness apparel, cigars and beverages, among other things, have rebranded themselves as virtual currency or blockchain companies of one sort or another. And investors have cheered them on, pushing their stock prices up,” Nathaniel Popper wrote then in The New York Times.

Square is on quite a run. The payment company’s stock jumped 10 percent to a record high Tuesday after the company said it was rolling out a mobile app to help businesses manage their payroll. Shares of Square are up 960 percent since its initial public offering at the end in 2015. The company, founded by Jack Dorsey, has a market value nearly double that of Twitter, the other company Mr. Dorsey runs.

Markets risk ignoring the yield curve at their own peril, warned Beth Ann Bovino, S & P Global’s chief economist for the United States. The yield curve is essentially the difference between interest rates on short-term United States government bonds and long-term government bonds. Every time since 1960 that it has inverted — when long-term rates are lower than short-term rates — a recession has soon followed. For much of 2018, the spread has hovered around its narrowest level in more than a decade, and many believe it is likely to invert next year. But a debate has raged about whether the yield curve has lost its predictive power. “As has happened in the past when the yield curve nears inversion territory, people are questioning whether the historically robust indicator has now lost its edge,” Ms. Bovino wrote. “However, we still have a certain respect for the historical performance of the yield-curve indicator, and we hope that the Fed doesn’t test inversion too far.”

The escalating trade war has not cooled investor demand for Chinese securities. Foreign ownership of Chinese stocks and bonds has grown 64 percent over the past year, according to Z-Ben Advisors. Access to China’s markets and its economy has been a key issue in the country’s trade dispute with the United States. America and the European Union have often criticized the limits that China has put on investments from abroad. In recent months, however, the country has begun to ease such rules.

The mania around cannabis stocks this […]

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