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Market Overview

To the Moon!!

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The Cryptocurrency world is full of clashes and rivalries but none is quite as prominent as the fight between Ripple Labs and Stellar Lumens.

Both were founded in the city of San Francisco by the same man who founded the infamous Mt. Gox exchange, Mr. Jed McCaleb.

After several ideological disputes with Ripple, Jed left to start Stellar. There’s a great in-depth article on observer.com that tells the entire tale.

Steller has been praised by the crypto-community for being less corporate and more decentralized than her older sister. The economics also work a bit different. Ripple has a fixed supply of 100 Billion tokens, most of which are held by the owners of Ripple, including Jed.

Stellar has a slightly more complex system that includes a built-in inflation metric and has regular auctions and giveaways

When it comes down to it, the success of both projects will depend largely on their adoption by bigger financial firms. Stellar is gaining momentum in this regard and as of October is involved in a deal with IBM to improve the global payments system.

As an investor, we can’t really know exactly how the future will play out, which is why it pays to diversify your portfolio, not only with different cryptocurrencies but with all types of assets for long-term growth.

eToro is very proud to add Stellar Lumens as the 8th cryptocurrency on the world’s number one social trading network.

To the moon!!

@MatiGreenspan

eToro, Senior Market Analyst

Today’s Highlights

Some Stocks Perspective

Inflation Print Today

Bitcoin’s Integration

Please note: All data, figures & graphs are valid as of February 14th. All trading carries risk. Only risk capital you can afford to lose.

The Big Number

Stock markets are looking rather flat this morning as we await some big news this afternoon.

Precisely one hour before the opening bell on Wall Street the US government will announce the inflation figures for the month of January. This specific print represents an excellent opportunity for those who like to trade the news and here’s why…

Over the last two weeks, the global stock markets have been selling off big time. Many analysts claim that we should have expected this as a “technical correction” because over the entire course of 2017 the markets have been going in a single direction.

These three charts show the Dow Jones, the China 50, and the Dax 30 over the last year and a half.

Indeed, things have been a bit one-sided for a lot longer than that. Over the past decade, the central banks of the world have been overcompensating for the 2008 financial crisis by injecting more and more money into the economy and further supporting it by artificially keeping the interest rates at record low levels.

The poor stock markets have been eating this cheap money without question like veal being prepared for slaughter.

Here’s a chart of the Dow Jones showing the dip through the financial crisis. Notice the large leap up in price and volumes over the last year.

What does this have to do with inflation?

Oh right, excuse my rambling.

Many analysts believe that the pullback over the last two weeks is being caused by expectations that the Federal Reserve is about to tighten up their monetary policy.

Since low interest rates are a key driver of the upward momentum, many feel that if the rates start to go up, the markets will need to come down.

…and the key thing that the Fed is watching when deciding on those rates is the inflation data.

If inflation starts to go up faster than expected the main tool that the Fed has to slow it down is to raise the interest rates.

Analysts are forecasting January’s CPI inflation number to be 0.3% and the Core CPI to be 0.2%.

Of course, if we see any numbers bigger than that it could startle investors and might drive up the US Dollar, which would benefit from larger interest rates.

What about Crypto?

During the announcement, I will personally be watching the crypto-markets for any potential reaction.

In this chart, we can see that there has been a rather tight correlation between Bitcoin and the Dow Jones over the last month.

Of course, we know that both have been rising uncontrollably over the entire course of 2017. However, Bitcoin has already seen a very serious pullback of 71% while the Dow’s recent low was only 13% from the peak.

In my view, the crypto pullback has already shaken out a large part of the speculation money and what we have now are more of the hard core holders, most of whom probably wouldn’t sell even if we see $1000 again.

Whereas the stock market is still chalk full of speculation money, most of which has been focused on short term gains for far too long.

Any reaction to the CPI print in the crypto markets would be a clear sign that liquidity in this new market is rising and that old-school investors are starting to get onboard.

In any case, it will be interesting to see what happens. Let’s have a great day ahead!

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

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

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

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

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 122 rated postsSenior Market Analyst at Etoro.com.




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Market Overview

Turkish Coffee Hangover

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Hi Everyone,

Hope you’re having a fine day. Thanks again to everyone sending me their thoughts, opinions and articles. It’s really amazing.

One thing that several people have asked me to comment on already is this story. So here goes.

Indeed, this is an exciting step towards the integration of blockchain technology into traditional finance. It’s nice to see such a reputable institution such as the World Bank using a private Ethereum network to monitor their new bond. However, we’re really just scratching the surface with this one.

In the realm of programmable money, the practical applications of this new tech are limited only to our imagination. So, to use it to manage bonds is nice but it somehow feels like we’re not living up to the full potential with this one.

As one pundit put it… this is almost like when the world celebrated the internet’s groundbreaking ability allowing people to order DVD’s from the comfort of their living room.

@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

  • Turkish Coffee Hangover
  • Dollar is Strong
  • Crypto Support

Please note: All data, figures & graphs are valid as of August 15th. All trading carries risk. Only risk capital you can afford to lose.

Traditional Markets

The excessive energy that the financial markets received from the “emerging markets currency sell-off” seems to have faded by now. Indeed, the entire debacle felt kind of like a strange rush of exuberance similar to the experience of drinking some very strong coffee. What we’re left with is contained fatigue.

Volatility has now returned to normal and the Lira seems to be in retracement. This despite the fact that neither Trump nor Erdogan seem ready to give any ground. In fact, the Turkish president announced a boycott of American technology yesterday and specifically targeted the iPhone, advocating Samsung instead.

AAPL was notably unaffected.

One thing that might be worth watching is the EEM Emerging Markets ETF that lost significant ground over the last few days and is now testing the lows.

Looking at the stocks today, things do seem to be in the red again. Let’s see how things progress. Precious metals are also down so be careful out there.

Take a look at Copper for example, which is down more than 1000 pips in the last 48 hours.

Dollar is King

As we discussed in yesterday’s update, all these progressions seem to be a direct reaction to the strength in the US Dollar.

A tightening labor market mixed with creeping inflation is causing the Federal Reserve to take aggressive action.

The Dollar’s strength against other major currencies can be seen quite clearly since the start of the month.

As well, the Dollar Index seems to have experienced some sort of breakout in the last few days.

Crypto Support

The crypto market is rebounding today after yesterday’s sizable sell-off. This relief rally has many alternative investors breathing easier, as we have green across the board.

The range we’ve been watching on bitcoin has been holding rather well. Since the beginning of the year, we’ve seen buyers stepping in about halfway through the $5K handle (yellow line), which is approximately what analysts estimate is the cost to mine bitcoin.

On the upper side, resistance is being maintained by the 200-day moving average (blue line). While the stable range should be seen as a positive sign, a breakout in either direction is always a possibility.

Let’s have an awesome day ahead!

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

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

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

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 | LinkedIn: MatiGreenspan | Facebook:MatiGreenspan

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 122 rated postsSenior Market Analyst at Etoro.com.




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Market Overview

Market Update: U.S. Stocks Rebound as Turkish Lira Rebounds; Cryptocurrencies Plumb 2018 Lows

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U.S. stocks rebounded on Tuesday, as the threat of contagion from Turkey’s Lira crisis showed signs of fading. Meanwhile, the downward spiral in cryptocurrencies intensified amid signs of a large-scale ICO cash-out.

Stocks Return to Strength

All of Wall Street’s major indexes returned to positive territory, with the Dow Jones Industrial Average rising 112.42 points, or 0.5%, to 25,300.12. The broader S&P 500 Index gained 0.6% to 2,839.96, with all 11 primary sectors finishing in positive territory. The technology-focused Nasdaq Composite Index returned 0.7% to finish at 7,870.90.

Gains were evenly distributed across multiple sectors, with consumer discretioanry, financials and industrials shares leading the rally.

The CBOE VIX, also known as the fear index, pulled back sharply from five-week highs as risk-off conditions cooled. VIX closed down 10% at 13.31, on a scale of 1-100 where 20 represents the historic average.

Chinese Growth Figures Miss the Mark

Signs of a sputtering Chinese economy emerged last month with key industrial and consumption metrics missing their mark.

Industrial production and fixed-asset investment grew at their slowest pace in nearly two decades, the National Bureau of Statistics reported Tuesday.

Industrial production rose 6% year-over-year in July, unchanged from the previous month. Fixed-asset investment growth slowed to 5.5% annually from 6% a month earlier. Meanwhile, retail sales grew 8.8% annually in July compared with 9% in June.

China’s cooling economy comes as policymakers look to counter America’s protectionist policies, which have resulted in a tit-for-tat trade war between the world’s two largest superpowers. However, China’s massive trade surplus with the U.S., combined with its reliance on smoke-stack industries, suggest that Beijing can’t counter Washington’s escalating expansive levies.

Last month, U.S. President Donald Trump announced plans to administer levies on an additional $200 billion in Chinese goods. Earlier in the month, the administration implemented tariffs on $50 billion worth of Chinese goods.

Cryptocurrency Downtrend Intensifies

Ethereum was at the center of another crypto crash Tuesday, as the total market capitalization fell to $193 billion, the lowest point of the year. The ether price shed more than 10% to plumb new 14-month lows.

As Hacked reported earlier, ICO burnout appears to be largely responsible for the protracted selloff, leaving bitcoin with a 54.5% share of the total market. The largest digital currency by market capitalization came to within $100 of its yearly low, which would have likely sparked a deeper correction in the broader market.

At one point during the day, 78 of the top-80 altcoins had reported double-digit percentage losses. With the exception of a few obscure names, no major cryptocurrency in the top-100 was spared the losses.

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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4.6 stars on average, based on 546 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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Analysis

Pre-Market: Stocks Rebound as Turkish Tensions Ease

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While nothing has been fixed in Turkey overnight with the vague plans announced to fight inflation by the finance minister, global markets rebounded after yesterday’s panicky conditions.US stocks undoubtedly led the way higher yet again, as the Lira, which made it to the mainstream media in the last few days, is up by more than 7%, with the USDT/TRY pair pulling back to 6.50 from a high above 7, and risk-on assets are higher globally, with especially equities staging a rally.

USD/TRY, Daily Chart Analysis

The other emerging market currencies that sold off are also correcting, with the Argentinean Peso, Brazilian Real, and the Russian Ruble all being off their lows. Despite the positive signs today, the underlying trend is still bearish in the FX segment, and the Dollar’s strength doesn’t seem to abate, with short-term Treasury yields also looking stable.

DAX Index, Daily Chart Analysis

While the major European indices are slightly in the green, headed to the closing bell, European banks that are exposed to Turkey are not showing much enthusiasm, and we expect risk-off sentiment to return in the coming days, until meaningful action is taken by the Turkish authorities.

Emerging market currencies are definitely feeling the contagion effects, with the Argentinean Peso, the Brazilian Real, and the Russian Ruble all being down big time in the last few days. So far, the Turkish leadership failed to calm the market, rather they fueled the fire with the aggressive rhetoric, and the seeming ignorance of the basic macro-economic rules.

In economic news, China was all the rage today, and the country that has been targeted by Trump’s tariffs is feeling the pain. It would be foolish to think that the trade war alone is to be blamed for the weaker than expected indicators across the board, but the skirmish between the two mega-powers definitely triggered a slowdown in the credit fueled economy.

Shanghai Composite, Daily Chart Analysis

Industrial production, retail sales, and investments all came in well below the consensus estimates, and with the Shanghai Composite already being in a bear market, and the Chinese Yuan hovering near its 13-month low against the Greenback, all looks set for a harsh awakening in China.

US Still the Island of Caolm

In the US all eyes are on tomorrow’s retail sales report, while today only two less important economic releases came out. The NFIB small business indicator was higher than expected and import prices were unchanged as the Dollar’s rise likely evened out the first effects of the new tariffs.

Nasdaq, 4-Hour Chart Analysis

The Nasdaq rebounded strongly overnight, leading the major indices higher again, and with that it got very close to its all-time high, outperforming the rest of the world by a mile. With powerhouses Apple and Amazon still pushing to new highs, even as more balanced portfolios are left behind, the tech index could set a new record as soon as today, should the otherwise shaky risk-on shift hold.

Copper Futures, 4-Hour Chart Analysis

Commodities are mixed so far today, as copper fell below $2.70 again, as it got hit hard after the Chinese data dump, while oil continued to rally, climbing back above $68 per barrel, with regards to the WTI contract.

Gold also bounced back above $1200, despite the Dollar’s rally against its major peers, and we have to wait and see if the spike below $1200 finally marked the lengthy downtrend in the precious metal.

Featured image from 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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4.6 stars on average, based on 317 rated postsTrader and financial analyst, with 10 years of experience in the field. An expert in technical analysis and risk management, but also an avid practitioner of value investment and passive strategies, with a passion towards anything that is connected to the market.




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