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Make it or Break it

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Hi Everyone,

In the United States at the moment, there are nearly 39 million people on food stamps. We already know that government workers are not getting paid during the shutdown but what now seems unclear is how the shutdown affects the poor.

For those of you who are not familiar with food stamps, this is the US government’s welfare program that provides food to poor people by giving them coupons that they can take to the store.

The thing is, the system is quite complex and varies for different states and different retailers. A few stores have already been forced to stop accepting food stamps due to the shutdown and some states have given their citizens an advanced payment.

For now, it seems that only a small number of people have actually been affected but with some analysts predicting that the shutdown could last for several more months, the future seems incredibly uncertain and information is hard to come by. So it’s worth keeping an eye on this development as it could potentially affect several areas of the US economy and the broader market.

@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

  • Shutdown: Day 28 | Days to Brexit: 70
  • 10 Year Challenge
  • Russia’s Real Crypto Plans

Please note: All data, figures & graphs are valid as of January 18th. All trading carries risk. Only risk capital you can afford to lose.

Traditional Markets

The markets were relieved yesterday by the news that…

This is a good indication that US-China trade talks are going well and seeing any sort of concessions from the White House, or even the indication that there may be concessions, is cause for celebration among investors.

The positive sentiment has carried through the Asian session and well into European trading.

Risk On

With the rise in stocks, we’re seeing some of the hallmarks that show investors are looking to take on more risk today.

Gold has managed to pull back from the $1,300 resistance level and oil is testing new highs, despite an IEA report that expects over-production to continue.

Perhaps the biggest indication of risk on sentiment today is coming from the USDJPY, which has now stepped over the 109 level as traders sell the Yen for the Greenback.

Next weekend is likely to start with a bang!

Just a few hours after markets open and before most western investors have opened their eyes, China will report some critical GDP growth data. As the China slowdown has become a prevalent theme in the markets recently this single data point can be a make it or break it moment.

Russia’s Real Crypto Plans

Last week, in one of our daily market updates (titled: Digital Reserves), we discussed a rumor that was circulating in the crypto community that the Central Bank of Russia may be planning to add bitcoin to its national reserves.

Well, it turns out Elina Sidorenko, the chairperson for the government committee for overseeing cryptocurrencies, has now clarified that while Russia might want to do this, it could be another 30 years before this becomes a reality.

As we correctly noted in the daily update at the time, the major setback here is that there is currently no legal framework for doing this. However, from what I understand, the idea of setting up a national CryptoRuble is being discussed among government officials and could very well happen within the next couple of years.

In any case, we do know that the government of Russia is watching the crypto space quite closely. Dimitry Medvedev was quoted just yesterday as saying that the bear market doesn’t spell the end of crypto.

Spoken like a true crypto advocate!!

Have an amazing weekend.

This content is provided for information and educational purposes only and should not be considered to be investment advice or recommendation.

Past performance is not an indication of future results. All trading involves risk; only risk capital you are prepared to lose.

The outlook presented is a personal opinion of the analyst and does not represent an official position of eToro.

eToro is a multi-asset platform which offers both investing in stocks and cryptocurrencies, as well as trading CFD assets.

Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 65% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

Cryptocurrencies can widely fluctuate in prices and are not appropriate for all investors. Trading cryptocurrencies is not supervised by any EU regulatory framework.

Best regards,
Mati Greenspan
Senior Market Analyst

Connect with me on….

eToro: @MatiGreenspan Twitter: @MatiGreenspan LinkedInMatiGreenspan |Facebook:MatiGreen

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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Market Overview

U.S. Stocks Post Biggest Drop in Two Weeks as Business Investment Spells Trouble for the Economy

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The U.S. stock market declined on Thursday, snapping a three-day winning streak and heading for its worst loss in two weeks after the latest report on durable goods revealed a sharp slowdown in business investment. Crypto markets corrected lower as trade volumes continued to unwind from their yearly peak.

Stocks Retreat

All of Wall Street’s benchmark indexes headed for losses, with the Dow Jones Industrial Average falling 103.81 points, or 0.4%, to close at 25,850.63. The broad S&P 500 Index fell 0.4% to 2,774.88, with seven of 11 primary industries reporting losses. The technology-focused Nasdaq Composite Index closed down 0.4% at 7,459.71.

Disappointing quarterly results weighed on the major indexes after Domino’s Pizza Inc. (DPZ) reported earnings and revenue that disappointed investors. Hormel Foods Corporation (HRL) also missed analysts’ expectations.

S&P 500 companies have mostly beaten quarterly earnings estimates, but that could soon change, according to FactSet. The research firm anticipates a sharp downturn in profitability for Q1 2019 based on January EPS estimates. More on that story can be found here.

Economic Data Mostly Positive, with One Big Caveat

U.S. economic indicators were largely positive on Thursday, with one very big caveat: a gauge of business investment fell for the fourth time in five months.

The Commerce Department reported on Thursday that durable goods orders – a proxy for manufacturing demand – rose at a seasonally adjusted 1.2% in December. When removing the volatile transportation category, orders rose at a much slower 0.1% pace. A closer look at the report revealed that new orders for nondefense capital goods, a bellwether for business investment, fell 0.7% in December. Clearly, American businesses are feeling the effects of global economic uncertainty.

Most of the other major releases Thursday were positive. Initial jobless claims fell by 23,000 to a seasonally adjusted 216,000 in the latest week, the Labor Department said.

A measure of U.S. private-sector business known as the Composite purchasing managers’ index (PMI) improved to eight-month highs in February. Markit’s PMI gauge climbed to 55.8 from 54.4 in January. All of the monthly gains were attributed to the services sector, which accounts for the vast majority of economic output.

Cryptocurrencies See Minor Pullback

The major cryptocurrencies posted modest declines on Thursday, as the total market cap fell by around $3 billion. Daily exchange trading has also fallen by roughly $10 billion from its peak on Tuesday. As far as we can tell, the daily turnover printed on Tuesday was the highest in at least ten months.

Crypto Update: Litecoin Leads Pullback in Majors

Litecoin (LTC) led the pivot lower among the majors, falling 4% to $49.12. The LTC price peaked at four-month highs earlier this week.

Bitcoin cash (BCH) posted a drop of 2.9% to $142.72. XRP`s price broke below 32 cents after falling 2.4%. Ethereum (ETH) edged down 1.2% to $145.83.

Losses for Bitcoin (BTC) were capped at 1% during the day. It was last down 0.9% at %3,948.36, according to aggregate data from CoinMarketCap.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.7 stars on average, based on 773 rated postsChief Editor to Hacked.com and Contributor to CCN.com, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi




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Market Overview

U.S. Stocks Rise as Fed Confirms Dovish Pivot

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U.S. stocks extended their gains Wednesday after the Federal Reserve offered further reassurance that it will hold off on raising interest rates for the time being. Cryptocurrencies reported a mixture of modest gains and losses as volumes backed off from their yearly highs.

Stocks Extend Rally

The Dow Jones Industrial Average climbed 63.12 points, or 0.2%, to close at 25,954,44. The blue-chip index has risen in five of the past six sessions and looks poised to reach 26,000 this week.

The broad S&P 500 Index finished up 0.2% to 2,784.70. Materials stocks led six of 11 primary sectors higher, with most of the gains concentrated in primary industry.

Meanwhile, the Nasdaq Composite Index pared gains to finish flat at 7,489.07.

Stocks are in the midst of an eight-week rally, but the following chart spells trouble for the S&P 500 Index.

Fed Puts on the Brakes

The Federal Reserve on Wednesday provided more details as to why it decided to be patient with normalizing monetary policy. In the official transcript of last month’s meeting, Federal Open Market Committee (FOMC) members cited stock market volatility and weaker global economic growth as the main obstacles standing in the way of policy normalization.

According to the minutes, there were a “variety of considerations that supported a patient approach.” Additionally, “a patient posture would allow time for a clearer picture of the international trade policy situation and the state of the global economy to emerge and, in particular, could allow policymakers to reach a firmer judgment about the extent and persistence of the economic slowdown in Europe and China.”

The Fed’s dovish pivot last month allowed the stock market to extend a bullish revival that began just after Christmas. Central bankers will hold their next policy meeting next month. The March interest rate statement will be accompanied by a revised summary of economic projections covering GDP, unemployment and inflation.

Crypto Markets Flatline

The combined value of all cryptocurrencies hovered north of $135 billion on Wednesday, where it was little changed compared with the previous day. Markets succumbed to a fresh wave of selling overnight, as bitcoin and the major altocins reported modest declines. By the early morning, most of the losses had disappeared.

Trading volumes dipped below $30 billion but were well off the highs from Tuesday. An influx of capital into the crypto ecosystem could make for volatile trading conditions in the near term.

Bitcoin was last seen trading at $3,983.49, according to CoinMarketCap, an aggregate data provider. The bitcoin price is trading hands well north of $4,000 on Bitfinex.

Ethereum’s price was little changed at $147.83. XRP edged down 1.7% to $0.30275. EOS extended its rally, climbing 5.3% to $3.84. Read more: Litecoin, EOS, Binance Coin, Maker: Altcoins Leading the Charge.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.7 stars on average, based on 773 rated postsChief Editor to Hacked.com and Contributor to CCN.com, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi




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Market Overview

USA is Ready to Invest in Crypto

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Hi Everyone,

In our ongoing effort to bring crypto to the general public, we’ve done yet another survey, this time focusing on online traders in the USA.

The results are clear as day, the United States is more than ready to invest in crypto.

Definitely make sure to read the full report with all the jaw-dropping stats and the methodology of the poll. This is extremely encouraging.

@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

  • US-China trade deadline: 9 days | Days to Brexit: 37
  • Unsustainable Trajectory
  • Crypto Rally Stalls

Please note: All data, figures & graphs are valid as of February 20th. All trading carries risk. Only risk capital you can afford to lose.

Traditional Markets

Everyone will stop what they’re doing at 2:00 PM New York time today to take in the FOMC‘s meeting minutes. During their last meeting, the Fed did a complete 180 on policy, which many have pointed to as a complete capitulation to the market’s desires. So, when they release the minutes of that meeting it will be extremely interesting to hear what they have to say.

It’s becoming increasingly clear that there will not likely be any final deal between the US and China by March 1st. It’s also becoming increasingly clear that this deadline was never very significant in the first place. Trump has indicated that he’s willing to let the deadline slide if significant progress is being made, and many feel that it is, however, until we get final confirmation of that it will remain in our countdown above. It wouldn’t be the first time Trump changed his mind at the last moment.

As well, I’ve decided to leave the Brexit countdown timer set for March 29th, the day Article 50 kicks in, rather than the new self-imposed deadline that Parliament put on their Prime Minister.

Markets are now returning to their normal levels of volatility.

Trajectory Unsustainable

After crashing in January and making a huge comeback in January, financial markets are now remarkably average.

The 200-day moving average (blue line) shows us the average price of the last 200 days and is one of the most widely watched indicators among technical analysts. Here we can see that the Nasdaq 100 is now at this level.

Many analysts were quick to point out that if we ignore 2018 and look only at the stock market performance from January 1st, we’re actually seeing stellar results.

Some pundits even take this a step further. Here’s a graph posted by @StockCats who pointed out that the current trajectory of the markets does look a bit unsustainable.

Crypto Rally Stalled – Where to Next?

Let’s face it, these last few days have been amazing. However, even within this longest crypto bear market of all time, there have been rallies before that ended up fizzling out. So, even though it’s possible we go to the moon from here, it certainly pays to be cautious.

One thing that’s interesting to me is the different spins that some of the mainstream media are putting on this. The Independent is saying that it’s because of the Galaxy S10 Crypto Wallet…

…while Bloomberg is saying that…

Forbes, on the other hand, seemed to focus on the altcoin markets.

For me, it’s pretty clear that this whole thing began due to a shortage in Ethereum creation. As I explained in an interview with BlockTV yesterday, the creation of new Ether tokens has been severely limited lately. Especially for those of you who are less inclined to look at graphs and charts, feel free to watch the recording here.

For hose of you who do like charts, check this out. This supply shortage while demand remained consistent caused Ethereum’s price to rise dramatically and the rest of the cryptos followed. By today, we’re going on sheer momentum. After months of depressed prices, it’s about time we had a real rally in this market.

As I’m writing, it does seem that we may be getting a continuation of the rally but it’s still too early to tell. Let’s see where the day brings us.

Wishing you an excellent day. As always, please continue sending in your valuable feedbacks, questions, comments, and insights. It is always useful and always appreciated.

Best regards,

Mati Greenspan
Senior Market Analyst

Connect with me on….

eToro: @MatiGreenspan Twitter: @MatiGreenspan LinkedInMatiGreenspan |Facebook:MatiGreen

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 152 rated postsSenior Market Analyst at Etoro.com.




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