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Market Overview

Asian Market Update – Tuesday: Crypto Gains; Asian Stocks Muted

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Bitcoin vs. bitcoin cash

The Big Question: Is the war between bitcoin and bitcoin cash over?

Cryptocurrency prices pointed higher during Asian trading on Tuesday, led by a nearly 3 percent gain in bitcoin.

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Bitcoin was up 2.49 percent to about $6,687 before midday in Asia. That’s about $600 dollar higher than at the same time, erasing losses from Saturday and Sunday. Still, bitcoin has now remained under $7,000 for the fifth consecutive day.

Meanwhile, bitcoin cash, bitcoin’s chief rival, lost more than 10 percent on Tuesday morning, falling from $1,433 to $1,208 just before midday.

The price of ethereum gained 2.04 percent to about $322 before midday. Ethereum has remained above $300 since Saturday, keeping the long-term uptrend in price intact.

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Litecoin added 0.82 percent to about $61 at midday.

Main Market Movers – Mid-day Asian Trading Session

Indexes Value at Midday Daily Change
Japan- Nikkei 225 22,441 0.27%
China-Shanghai Composite Index 3,438 -0.28%
Hong Kong –Hang Seng 29,197 0.05%
South Korea – KOSPI 2,523 -0.25%
Australia-ASX 200 5,971 -0.84%
S&P 500 E-Mini Futures 2,579 -0.10%

 

Asian equity indexes were in a largely muted mode on Tuesday morning, following a global sell-off in equities and worse-than-expected economic data.

The Nikkei added 0.27 percent to 22.441 before midday.

In China, the Shanghai Composite Index was down 0.28 percent to about 3,438 before midday. In Hong Kong, the Hang Seng Index was up 0.05 percent to around 29,197.

In South Korea, the Kospi fell 0.25 percent to 2,523 before midday.

Down Under, the ASX 200 was down 0.84 percent to 5,971 before midday.

The S&P 500 E-Mini Futures was down 0.1 percent to 2,579.

Fresh data out of Beijing showed that industrial output, fixed-asset investment and retails sales cooled in October in the world’s second-largest economy. Industrial output rose 6.2 percent, below a 6.3 percent growth forecast from Reuters; fixed-asset investment grew 7.3 percent, below the forecasted 7.4 percent growth; and retail sales grew by 10 percent, slower than an expected 10.4 percent rise.

Investors are also waiting for signs of any movement on the US tax reform, after Republican senators introduced a tax plan that differed in several areas from the version put forward by their House counterparts.

Currencies

The Japanese yen gained 0.01 percent the US dollar at midday Monday to 113.60 per dollar.

The Chinese yuan lost 0.04 percent against the US dollar, trading at 6.6412 per dollar.

The Australian dollar also gained 0.08 percent on the dollar, changing hands at 1.3105 per dollar after midday in Australian trading.

Commodities

WTI Oil was down 0.18 percent to $56.61 per barrel.

Brent Crude lost 0.27 percent to $62.94 per barrel.

Gold was down 0.1 percent to $1,276 an ounce.

Business News across Asia

In China, the Ministry of Commerce expressed “strong dissatisfaction” on a US decision to rule that hardwood plywood from China was subsidized and dumped in the US and impose anti-dumping duty on the imports.

In Vietnam, visiting Chinese President Xi Jinping and his Vietnamese counterpart agreed that the two countries will further deepen ties in areas such as the economy, trade and security, while “managing maritime disputes.”

Take Away: The move is a big development considering that China and Vietnam were the main rivals in the South China Sea disputes. If the two parties follow through with the agreement, tensions could be reduced in the area and trade flourish as a result.

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Cryptocurrencies

Robbing from the Poor to Feed the Rich

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As we see the astonishing rate of bitcoin adoption accelerate throughout the globe, one of the key things to watch are region specific updates.

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Japan is already well on their way to full integration but several small countries have already outlawed it outright. In my opinion, the key region to watch right now is India.

It’s been one year since Prime Minister Modi took the drastic step to basically outlaw cash and the citizens are still struggling to adjust. So far they’re mainly relying on credit cards but some are still using old bank notes on the black market.

So this headline is particularly interesting at the moment.

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Of course, the government doesn’t necessarily have to respond to the court’s wishes with any real action but it’s comforting to know that they’re pushing it forward.

The price of bitcoin climbed to a new all time high of $7,965 following this announcement before pulling back slightly this morning.

@MatiGreenspan
eToro, Senior Market Analyst

 

Please note: All data, figures & graphs are valid as of November 17th. All trading carries risk. Only risk capital you’re prepared to lose.

Market Overview

All stocks are green this morning. Wall Street gave an appropriate salute to Washington DC and the stocks went higher.

Republicans were easily able to get their new tax bill through the House of Representatives and now face a tough battle when the bill reaches the Senate. House Republicans have now proved that they’re willing to sell their souls for a win. This bill, on the face of it will have the effect of depriving 4 million of the poorest Americans of their healthcare in order to drastically reduce taxes on the wealthy.

This is the definition of robbing from the poor to feed the rich.

Of course, many souls on Wall Street are already involved in a long-term lease with the Devil. We can see here that the S&P500 was able to erase five days of losses in about five hours.

Ripple + American Express

Ripple caused waves yesterday as two major financial firms announced that they will now start using their service. American Express and Santandar Bank will use the Ripple blockchain to open a blockchain payments wormhole between the US and the UK.

The price of Ripple’s XRP tokens spiked on the announcement. However, the excitement wore off pretty quickly when it became clear that the new payments channel will likely not use XRP in the initial stages.

Here we can see the initial spike from a stable rate of 20.5 cents per token to as high as 27.1 cents per token in just under an hour.

Still, the fact that these two very large financial institutions are partnering with this particular startup is astonishing and should be seen as a positive step both for the Ripple network and the entire crypto community.

Astonishing growth continued…

Over the past 24 hours, including a slight pullback, the value of all crypto-assets has risen by an additional $5 Billion. Over the past month, the total market cap figure has gone from $173 Billion to $225 Billion this morning for a total industry growth of 30%.

The weekends have proven to be particularly volatile in the crypto-markets so I’d like to wish you an astounding weekend 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.

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Market Overview

Asian Market Update – Friday: Bitcoin Makes New High, Asian Stocks Jump

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Stocks jump

The Big Question: Is the war between bitcoin and bcash over?

Bitcoin once again reached a new all-time high on Friday, briefly crossing the $8,000 mark in early trading. As of midday in Hong Kong, the price of bitcoin was $7,940, up 1 percent for the day after strong gains of around 8 percent yesterday.

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The recent gains in the bitcoin price came after news that Hong Kong based exchange BitMEX has stated it will sell all “airdropped” bitcoin cash, or bcash, that was distributed to clients and instead exchange it into bitcoin. The exchange said they do not agree with the way bitcoin cash was forked, and therefore will not support the cryptocurrency going forward. Bitcoin cash dropped more than 20 percent yesterday, although it regained some ground in early trading on Friday.

Litecoin on Friday morning traded down following strong performance yesterday with a gain of more than 10 percent. Litecoin closed around the $70 mark yesterday and is trading at $68.70 as of midday in Asia Friday.

Ethereum, meanwhile, seems to consolidate just north of the $330 level that was reached on Tuesday. If the level holds, we might be looking at another run-up to test the resistance around the $340 level and beyond.

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Main Market Movers – Mid-day Asian Trading Session

Indexes Value at Midday Daily Change
Japan- Nikkei 225 22,403 0.23%
China-Shanghai Composite Index 3,380 -0.55%
Hong Kong –Hang Seng 29,250 0.80%
South Korea-KOSPI 2,538 0.13%
Australia-ASX 200 5,965 0.37%
S&P 500 E-Mini Futures 2,582 -0.10%

 

With the exception of China, Asian stocks traded on a positive note Friday morning with gains ranging from 0.1 to 1 percent. The good mood came as a result of positive news that the US tax reform is one step closer to being passed into law, as well as strong earnings reports from US companies Wal-Mart and Cisco.

In Japan, the Nikkei 225 reacted by trading up a slight 0.23 percent to 22,403 shortly after midday in Tokyo trading.

The Shanghai Composite was the only loser among the major Asian indexes Friday, trading down by 0.55 percent to 3,380 as of midday in Shanghai. In Hong Kong, the Hang Seng Index gained 0.8 percent to around 29,250 at the same time.

In South Korea, the Kospi gained 0.13 percent to 2,538 shortly after midday.

Down under in Australia, the ASX 200 traded up 0.37 percent to 5,965.

The S&P 500 E-Mini Futures was down by a slight 0.10 percent to 2,582 at midday, after a strong day on Wall Street yesterday.

Currencies

The Japanese yen gained 0.41 percent on the US dollar at midday Friday to 112.59 per dollar.

The Chinese yuan was unchanged against the US dollar at 6.6275 per dollar. On the daily chart, the CNYUSD has been trading in a triangle pattern since early October, and a break-out in price either up or down from this level can be expected in the next few days.

The Australian dollar lost 0.24 percent on the dollar, changing hands at 1.3208 per US dollar after midday in Australia.

Commodities

WTI Oil was up 0.07 percent to $55.32 per barrel.

Brent Crude was down 0.3 percent to $61.16 per barrel.

Gold was up 0.34 percent to $1,282 an ounce.

Business News across Asia

In China, e-commerce giant JD.com is setting up a new system to improve traceability of its products using blockchain technology. JD.com is the second-largest e-commerce platform in China after Alibaba-owned Taobao.com. The new system is supposed to enable consumers to trace where the materials for each product was sourced from, according to a report from China Daily.

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Market Overview

The Bulls are Back, but for How Much Longer?

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U.S. stocks bounced back strongly on Thursday, as upbeat corporate results drove gains on Wall Street after a disappointing previous session. Although volatility pulled back sharply on Thursday, the general trajectory appears to be higher, leaving some analysts concerned about the bull market’s sustainability the rest of the year.

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Stocks Bounce Back

All of Wall Street’s major indexes put up solid gains in New York, with the large-cap S&P 500 Index adding 0.8% to 2,585.64. Nine of 11 sectors contributed to the positive result, with telecommunications services adding 1.8%. Shares of consumer staples rose 1.6%, while technology-as-a-sector added 1.3%.

The only decliners on Thursday were energy and utilities, which shed 0.6% and 0.4%, respectively.

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The Dow Jones Industrial Average also put up sharp gains, adding 187.08 points, or 0.8%, to 23,458.36. Twenty-three of the Dow’s 30 index members finished higher.

A strong showing in the technology sector drove massive gains in the Nasdaq Composite. The tech-laden average climbed 1.3% to close at 6,793.29.

Upbeat Earnings

Quarterly results from Dow blue-chips Wal-Mart (WMT) and Cisco (CSCO) were the main catalysts for the gains on Thursday.

Wal-Mart exploded on both the top and bottom lines thanks to surging online sales. The retailer earned an adjusted $1 a share on $123.18 billion in revenue. The company reported that U.S. comparable-store sales rose 2.7% year-over-year, the thirteenth consecutive quarter with positive results.

Global tech firm Cisco also beat analysts’ expectations, finally ending an eight-quarter streak of revenue declines. The company reported $12.136 billion in revenue for the first quarter of 2018. Adjusted per-share earnings came in at 61 cents. Cisco also estimated that second quarter revenues would grow between 1% and 3%.

Earnings season is winding down, with the majority of companies posting better than expected results. As of Nov. 10, the blended earnings growth rate for the S&P 500 was 6.1%, according to financial research firm FactSet.

Bull Market Showing Signs of Fatigue

Stocks may have come back strong on Thursday, but the underlying trend shows the bull market is showing signs of fatigue. Record highs have been harder to come by and much smaller in terms of growth than at other periods during the year. Many leading measures also indicate that sectors such as technology are overvalued, and have been for some time.

One of the most convincing signs that the bulls are slowing their advance is the behavior of the CBOE VIX. Known as the “fear index,” the VIX measures investor sentiment over the next 30 days. When the VIX rises, it usually means stocks are on the decline. On the flip side, a fall in the VIX is generally associated with rising stock prices.

Volatility has been creeping higher for the past two weeks, and on Wednesday, reached the highest level since the summer. The fear index declined more than 10% on Thursday as stocks resumed their uptrend.

The VIX has been undervalued for quite some time. Normally trading at or around 20, the volatility index has spent most of the year between 10-15, including multiple stints in the single digits.

Although we are in the best six months of the year for equities, the next few months could prove more difficult than we’ve grown accustomed to for most of 2017. The equity market’s outlook is complicated by a myriad of factors, including President Trump’s proposed tax reform.

Earlier this week, Republican Senator Ron Johnson announced his opposition the tax plan put forward by the Senate. As it currently stands, there’s a pretty good chance corporate tax reform will take years to materialize.

Disclaimer: The writer owns U.S. stocks, cryptocurrencies and other financial assets. 

Featured image courtesy of Shutterstock. 

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