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Asian Market Update – Friday: Asian markets edge up ahead of US jobs report

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jobs report

The Big Question: How will markets continue to ignore negative headlines and rally?

Major equity markets in Asia edged up in early trading on Friday, tracking persistent gains in US stocks as markets await a jobs report later today.

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In Japan, the Nikkei 225 tacked on 0.22 percent to 20,674.75 at midday.

In Hong Kong, the Hang Seng moved up 0.36 percent to 28,480.51 in morning trading after market participants returned from a public holiday on Thursday.

In Australia, the S&P/ASX 200 gained 0.84 percent to 5,699.10 at midday.

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Markets on the Chinese mainland and in South Korea remain closed for public holidays.

Friday’s gains in Asian markets followed another day of gains on Wall Street. The S&P 500 posted its first eight-day winning streak in more than four years, while Nasdaq and the Dow also posted big gains.

The wide-spread rally in global markets over the last few days was largely attributed by analysts to a slew of strong economic data released by major economies, including the US and China.

Also, in the US, a highly Wall Street-friendly tax reform plan has gained renewed traction.

In China, economic growth and financial markets are expected to remain steady in the second half of the year ahead of and following a big party meeting in mid-October.

The gains in global markets this week also showed that investors were able to ignore negative headlines, including one of the deadliest shootings in history in Las Vegas.

Today, investors are awaiting a fresh set of data on US jobs for September. Though the US has so far posted strong jobs data, many believe that the September jobs report could take a heavy hit from the two hurricanes that occurred that month.

Main Market Movers – Mid-day Asian Trading Session

Indexes Value at Midday Daily Change
Japan-Nikkei 225 20,674.75 0.22%
Australia-ASX 200 5,699.10 0.84%
Hong Kong – Hang Seng Index 28,480.51 0.36%

Cryptocurrencies

Cryptocurrencies pointed higher with minor gains overnight during the Asian trading session on Friday.

The bitcoin price gained 0.33 percent to $4,315 around midday in Asia. Bitcoin has been consolidating around the $4,300 level since the beginning of the week.

Etherum was nearly unchanged Friday morning, trading at $295 as of midday in Asia. Etherum has shown weak gains in the last few days, trading below $300 since Monday.

The price of litecoin slipped 0.15 percent to $51.66 at midday Friday.

In the news: The central bank in Singapore has taken a new step forward in its effort to incorporate blockchain technology in the financial sector. The Monetary Authority of Singapore revealed new software that would allow for decentralized blockchain settlements in the global interbank market and between central banks. By doing this, Singapore is taking a leading role in finding real-world uses for blockchain technology instead of fighting it, as several other governments do.

Currencies

The Japanese yen lost 0.17 percent against the US dollar at midday Monday to 112.99 per dollar.

The Australian dollar also lost 0.53 percent on the dollar, changing hands at 1.2896 per dollar at midday.

Commodities

WTI Oil was down 0.06 percent to $50.69 per barrel.

Brent Crude was down 0.09 percent to $56.91 per barrel.

Gold lost 0.03 percent to $1,267 an ounce.

Business News across Asia

China-India relations: Bilateral relations between two of Asia’s largest economies have shown signs of renewed tension after news reports emerged that some Chinese citizens have been arrested or detained, while others were denied entry. The Chinese embassy in India has issued at least three warnings for Chinese tourists to India in the past few months.

The bilateral relationship recently improved from a months-long border standoff last month after the two reached peaceful resolution.

Take Away: Rising tension between China and India could hit businesses in both countries and their economies, as well as the huge potential impact of China’s “Belt and Road Initiative” across the region.

Featured image from Flickr.

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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4.3 stars on average, based on 28 rated postsFredrik Vold is an entrepreneur, financial writer, and technical analysis enthusiast. He has been working and traveling in Asia for several years, and is currently based out of Beijing, China. He closely follows stocks, forex and cryptocurrencies, and is always looking for the next great alternative investment opportunity.




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Market Overview

Market Update: Dow Jones Sinks 400 Points as Government Bond Yields Top 3%

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U.S. stocks plunged on Tuesday, with the Dow Jones Industrial Average sinking more than 400 points as rising government bond yields drove investors into risk-off mode.

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Stocks Plunge

The Dow blue-chip index plunged 424.56 points, or 1.7%, to close at 24,024.13. That marked the fifth consecutive decline and the lowest settlement in almost three weeks.

Twenty-four of 30 index members recorded losses, with Caterpillar Inc. (CAT) and 3M Co (MMM) falling more than 6% apiece.

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Caterpillar reported first-quarter earnings that were well above expectations but indicated that economic growth will slow for the remainder of the year.

The broader S&P 500 Index closed down 1.3% at 2,634.56, with nine of 11 sectors reporting declines. Industrials plunged 2.8%; while materials declined 2.6%. Heavy losses were also reported for IT, consumer discretionary and energy stocks.

The technology-heavy Nasdaq Composite Index declined 1.7% to 7,007.35.

A measure of implied volatility known as the CBOE VIX surged more than 10% on Tuesday to settle at 18.02. The so-called “fear index” trades on a scale of 1-100, with readings below 20 usually indicating calmer conditions for Wall Street. Despite its current reading, the VIX has been anything but calm in recent months, having reached a high above 50 in early February.

Interest Rates Rise

A sharp rise in government bond yields has been one of the major catalysts for the recent downturn in the market. The yield on 10-year U.S. Treasury notes climbed above 3% on Tuesday for the first time since early 2014.

Investors have been selling Treasurys throughout April – pushing the yield higher – amid expectations of tighter monetary policy from the Federal Reserve. Policymakers are said to be eyeing at least two more interest rate hikes this year to combat rising inflation.

The pressure from inflation will likely strengthen due to tax cuts and infrastructure spending. The Fed targets consumer price growth at 2% annually and uses a measure called the core PCE index to evaluate inflationary trends. The core PCE index strengthened to 1.6% in March, the biggest gain since February 2017.

Cryptocurrency Rally Accelerates

The cryptocurrency market shifted into high gear on Tuesday, with bitcoin and the broader altcoin universe adding $35 billion. At the time of writing, the cryptocurrency market was worth a combined $433.4 billion, according to CoinMarketCap. That’s the highest level since early March.

Bitcoin’s value continued to rise, but its overall share of the market fell to around 37%. BTC rose more than 6% to $9,463, bringing its total market cap to $160.8 billion.

Ethereum added more than 10% to $705. Ripple XRP gained 7.5% to $0.937. Bitcoin cash also extended its winning streak, rising 5.4% to $1,466.

Double-digit gainers included EOS, which surged more than 37% to $15.85, and Cardano, which added 10.5% to $0.316.

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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4.5 stars on average, based on 348 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: Dollar Pulls Back from 7-Week High as Stocks Rebound

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Global equities are attempting to rally after drifting lower for three sessions, with Asia leading the bounce thanks to rumors regarding possible monetary easing steps in China. The rumors surfaced on the heels of the Yen’s plunge which followed Bank of Japan governor Kuroda’s dovish words. Mr. Kuroda is worried about the stubbornly low inflation rate, and hinted on a delay of the ”normalization” process of the central bank’s monetary policies.

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USD/JPY, 4-Hour Chart Analysis

As a reminder, the BOJ now owns the majority of the stock ETFs in Japan, but we might reach a point where it will own the whole float (why not?), while also technically controlling the whole Japanese government bond “market”. Meanwhile, the Euro also got under pressure lately thanks to the string of negative economic surprises and Mario Draghi’s cautious words regarding growth, and with Thursday’s ECB meeting looming, forex traders could be in for a very active week of trading.

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EUR/USD, 4-Hour Chart Analysis

The Dollar reached a 7-week high against the Euro yesterday, while the Dollar index closed at the highest level since January, and although the Greenback is correcting the recent rally today, it seems that the growing number of Dollar bears might be in for more pain after a likely short-term correction, as Treasury yields continue to rise relentlessly.

US 2-Year Treasury Yield, 4-Hour Chart Analysis

Stocks are having a relatively quiet week so far, but the bearish trend of the recent sessions remains dominant despite today’s bounce, even as volatility is still low, and trade war fears and geopolitical tensions have been easing somewhat lately. We switched to a bearish bias last week, and we maintain that the stocks look vulnerable here, although the short-term overbought readings have been cleared.

S&P 500, 4-Hour Chart Analysis

Bulls still have the hope that the major US indices can resume the recovery and launch a rally towards the all-time highs, but unless we see a quick move above last week’s highs, bears remain in control, and another test of the correction lows is likely.

On a slightly positive note, European equities enjoyed some relative strength in the last couple of days, as they were boosted by the weakness in the Euro, but looking at the broader picture, the Old Continent continues to be among the weakest regions globally since the start of the correction.

Commodities Mixed but Commodity Currencies Still Weak

AUD/USD, 4-Hour Chart Analysis

Interestingly, the Aussie and the Canadian Dollar are still under selling pressure today, despite the risk rally, and that fact strengthens our short-term bearish view on stocks, as they have been reliably leading equities since February.

In the meantime, commodities have been trading in a choppy fashion amid the Dollar rally, as gold has been pushed back below $1330 again, continuing its lengthy consolidation phase, while crude oil slightly retreated from its multi-year high near the $70 per barrel level concerning the WTI contract.

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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4.5 stars on average, based on 231 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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Market Overview

Takes a lot of GUTS – Making Blockchain Mainstream

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Take a guess… What do all of these people have in common?

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They all have Ethereum wallets and don’t even know it.

The new GET protocol is designed to use blockchain as an engine and run seamlessly in the background without the end user ever knowing what powers the application.

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The GUTS ticketing app is the first mainstream application to use GET and the people in the above photo are the first 1000 users. It’s estimated that more than 1 million people in the Netherlands will use it to securely purchase tickets without the fear of scalpers.

Welcome to the future!

@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

  • Global Selloff Pauses for Earnings
  • EOS is now available in eToro!
  • Cryptocurrency Future in India

Please note: All data, figures & graphs are valid as of April 24th. All trading carries risk. Only risk capital you can afford to lose.

Traditional Markets

The global stock rout that we’ve been seeing since early February is seemingly on hold for the time being.

Earnings season is going great, and why wouldn’t it? Donald Trump’s recent tax cuts and economic stimulus seem to be spurring the economy and adding to corporate profitability as designed.

Some economists, like Alice Rivlin of the Brookings Institute, argue that all this stimulus is coming at the wrong point in the economic cycle. Usually, countries try to stimulate the economy when it is doing poorly but when it is doing well they want to tighten things up and save the surplus for a rainy day.

As long as earnings are good, stocks should rise. The question then is what happens when earnings season is over?

The Nasdaq100 has managed to defend its position at the 200 day moving average (blue) and has since rallied a bit but it doesn’t seem like we’re quite out of the woods just yet.

Introducing EOS

eToro is very proud to announce that we have added EOS as the tenth cryptocurrency available on the platform. Of the 2000+ assets that you can trade on the platform this one is one of the most interesting.

If Bitcoin is digital gold and Ethereum is digital oil, EOS has been likened to digital real estate.

The ICO is ongoing and set to last an entire year ending on June 1st, 2018. In the end there will be a total of 1 Billion EOS in the world.

By owning EOS one token you are entitled to one billionth of the computing power of the total network. Unlike other utility tokens, EOS are not burned in the transactions. So owners will be like landlords of their space on the network.

Proponents say that this is the next level for blockchain after Ethereum and is designed to be an operating system for decentralized applications. With it, developers will be able to create apps that utilize blockchain without the end user ever knowing the intricacies of the supporting technology.

The price is up 17% since the asset has been added on the platform and up more than 100% over the last month knocking out Litecoin for the number 5 slot of all cryptocurrencies by market cap.

As with all cryptos, EOS is still in the experimental phase and as such carries a significant degree of risk.

Always diversify your portfolio with many different types of assets and not just cryptocurrencies, please.

Cryptos in India

Lastly, I’d like to thank those users yesterday, especially in India, who quickly replied to clarify a tweet I sent out regarding the RBI’s decision to ban cryptocurrencies.

To be clear, the high court has given the RBI 48 hours to respond to the claim that their new policy is unconstitutional. This happened on Sunday so their response is actually due today.

Unfortunately, this isn’t over just yet and from what it seems the court could take further time to sort this out. We hope for a quick and positive resolution in this high stakes case.

A reminder to ever rely on a single source of information. Always do your own research. 😉

Have an excellent 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

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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4.6 stars on average, based on 70 rated postsSenior Market Analyst at Etoro.com.




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