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Asian Market Update – Tuesday: Ethereum on the rise as bitcoin consolidates; Asian stocks up on US tax reform

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Rise

The Big Question: Are we about to witness another huge run in ethereum?

Prices of ethereum and litecoin continued on a solid upswing Tuesday morning in Asia, while bitcoin pointed slightly lower.

Ethereum saw the biggest gain among the three main coins at midday, adding more than 6 percent to a fresh all-time high of $834. Ethereum has been gaining for four straight days starting Saturday, adding about 20 percent to the price since then.

Litecoin tracked closely ethereum’s solid gains on Tuesday morning. At midday, the cryptocurrency moved up 3.70 percent to $372, after losing about 2.85 percent earlier in the morning. Litecoin has also see a winning streak since Friday, gaining about 32 percent since then.

Things are a bit quieter for Bitcoin. The cryptocurrency’ price was down a slight 0.6 percent to $18,920 at midday on Tuesday. Bitcoin has been trading lower since Sunday, despite the recent futures debut on the CME Group’s exchange.

Japan’s Finance Minister is not a big fan of bitcoin or even cryptocurrencies in general. The minister said on Tuesday that bitcoin is not a proven and credible currency, and he would watch developments of bitcoin closely.

Main Market Movers – Midday Asian Trading Session

Indexes Value at Midday Daily Change
Japan- Nikkei 225 22,916 0.07%
China-Shanghai Composite Index 3,285 0.53%
Hong Kong –Hang Seng 29,300 0.86%
South Korea-KOSPI 2,481 -0.01%
Australia-ASX 200 6,079 0.68%
S&P 500 E-Mini Futures 2,695 -0.01%

Major Asian equities continued on a positive trend on Tuesday morning, with markets in Japan, the Chinese mainland, Hong Kong and Australia all pointing higher, as investors’ optimism for a US tax code overhaul grew substantially.

Equities in Hong Kong led the way on Tuesday morning. As of midday, the Hang Seng Index was up 0.86 percent to 29,300. The Hang Seng gained about 0.45 percent on yesterday.

Aussie stocks also posted relatively big gains on Tuesday morning. The ASX 200 gained 0.68 percent to 6,079 at midday, following a 0.71 percent increase on Monday.

On the Chinese mainland, the Shanghai Composite Index edged up 0.53 percent at midday on Tuesday to 3,285. Investors in China are also waiting for policy directions from a key meeting set to conclude on Wednesday – the Central Economic Work Conference – that will set the directions for 2018. Financial regulations are widely expected to be strengthened next year.

Equities in Tokyo also pointed higher Tuesday, though only slightly. The Nikkei 225 Index edged up 0.07 percent to 22,916 at midday, erasing a loss of 0.03 percent in earlier trading.

In South Korea, the Kospi was down 0.01 percent to 2,481 at midday.

The S&P 500 E-Mini Futures was also down 0.01 percent to 2,695.

The biggest market mover appears to be growing optimism for a comprehensive tax code overhaul in the US. US media are reporting that Republican lawmakers are all but certain to pass the legislation sometime this week and send it to the White House to be signed before Christmas.

Currencies

The Japanese yen was down 0.07 percent against the US dollar at midday Tuesday, changing hands at 112.62 per dollar.

The Chinese yuan depreciated 0.01 percent against the US dollar to 6.6153 per dollar.

The Australian dollar was also down 0.08 percent on the dollar, changing hands at 1.3054 per dollar after midday in Australian trading.

Commodities

WTI Oil was down 0.05 percent to $57.30 per barrel at midday on Tuesday.

Brent Crude was flat at $63.43 per barrel.

Gold was down 0.01 percent to $1,261 an ounce.

News across Asia

In China, local governments are planning to phase out heavy subsidies for research and development of new energy vehicles as the segment continues to grow very fast, but problems such as subsidies cheating and possible overcapacity plagues the industry. However, recent official statements suggest that the government will phase out the support gradually and will keep subsidies for more advanced technologies for new energy cars.

Take away: This could slow down what has been described as a promising sector that has attracted billions of dollars in investments from foreign and domestic auto companies.

In Japan, the Japanese government has adjusted up its GDP growth forecast for the fiscal years of 2017 and 2018 to 1.9 percent and 1.8 percent, respectively – a significant increase. The government also estimated that consumer inflation will rise 0.7 percent this fiscal year and 1.1 percent in 2018, way below the BOJ’s 2 percent target.

Take away: Though the worlds third-largest economy has been improving, constantly missing consumer inflation targets would complicate the continuation of BOJs ultra-easy monetary policies. 

Featured image from Pixabay.

Disclaimer: The author owns bitcoin, ethereum and litecoin. He holds investment positions in the coins, but does not engage in short-term trading.

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 37 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: U.S. Stocks Rise as Investors Shrug Off Tariff War; XRP Leads Crypto Market Recovery  

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U.S. stocks rebounded sharply on Tuesday, with investors seemingly looking past a worsening trade spat between China and the United States. In cryptocurrencies, XRP surged more than 16% in anticipation of a major commercialization effort by Ripple, Inc.

Stocks Recover Lost Ground

All of Wall Street’s major indexes put up firm gains on Tuesday. The large-cap S&P 500 Index rose 0.5% to 2,904.31, with most major sectors finishing higher. The Dow Jones Industrial Average rose 184.84 points, or 0.7%, to 26,246.96. The technology-driven Nasdaq Composite Index jumped 0.8% to 7,956.11.

On a sectoral basis, consumer discretionary shares were the strongest performers Tuesday, gaining 1.3% as a whole. The S&P 500’s information technology component finished 0.9% higher. Healthcare, energy and industrials also put up firm gains.

The CBOE Volatility Index, also known as the VIX, fell 6.5% to 12.79. The so-called “fear index” surged more than 12% at the start of the week, snapping a five-day losing skid.

Trade-War Escalates

In response to new tariff measures by the Trump administration, China on Tuesday announced it will tax $60 billion in American-made goods. More than 5,000 U.S.-made goods will be targeted in the new round of levies, including meat, alcoholic beverages, automotive parts, clothes and machinery. Levies placed on American products range between 5% and 10%, according to China’s state council.

Hours prior, President Trump said he will impose 10% tariffs on $200 billion in Chinese imports, the most comprehensive measures taken in the yearlong trade spat. The new round of levies will take effect as early as next week.

With respect to China’s countermeasures, Trump issued the following tweet Tuesday morning: “There will be great and fast economic retaliation if our farmers, ranchers and/or industrial workers are targeted!”

Both sides were aiming to return to the negotiating table later this month but those plans appear to have faded. Given China’s massive surplus with the U.S., it is already running out of products to penalize.

XRP Leads Cryptocurrency Rebound

The cryptocurrency market made incremental gains back toward $200 billion on Tuesday after Ripple announced new commercialization efforts for its technology. As a result, XRP surged more than 17% to $0.319, the highest in almost two weeks.

Ethereum exhibited unusual trading activity as prices rose sharply and suddenly over the span of an hour. The second-largest cryptocurrency by market capitalization reached a session high of $222, more than offsetting the previous day’s drop. ETH was last seen trading at $210 for a gain of more than 7%.

Bitcoin also clawed back most of its recent slide, signaling renewed stability in the market.  BTC rose 0.7% to $6,347, based on latest available data.

The total crypto market cap briefly climbed above $200 billion. At the time of writing, the market was valued at $198.7 billion, according to 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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4.6 stars on average, based on 603 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: Sell The Rumor, Buy The News?

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After a long period of uncertainty, the US finally decided to commence with the second round of tariffs directed at China, slapping a 10% levy on $200 billion worth of goods, and threatening with tariffs on another $267 billion of goods in case of a Chinese retaliation. The tariffs will increase to 25% in 2019, but for now, the Chinese response was measured, with only an announcement coming from the Chinese ministry of commerce, saying that the country has no choice but to retaliate.

Shanghai Composite, 4-Hour Chart Analysis

While stock futures fell initially following the after-hours announcement by Donald Trump, today equities are slightly higher across the board, with even the Shanghai Composite staging a rally off its fresh bear market low. The new tariffs were widely expected by the market, so the “buy-the-news” response is understandable, but for a sustained rally in Chinese assets, a resumption of the trade talks between the two largest economies would likely be needed.

DAX 30 Index, 4-Hour Chart Analysis

The main European indices are little changed with the DAX still hovering around the 12,000 level and the EuroStoxx 50 being stuck ear 3350. Both benchmarks hit three-week highs in early trading, but the rally on the Old Continent is still lacking real momentum, especially given the distance to the bull market highs.

EEM (Emerging Markets ETF), 4-Hour Chart Analysis

Emerging markets are still very weak with the recent bounce being barely visible on the charts, and the segment is still stuck in a strong downtrend, with especially the most vulnerable countries weighing heavily. Emerging market currencies are mixed today, with the Turkish Lira completely erasing its rate hike gains, but with the Brazilian Real, the Chinese Yuan, and the Argentinean Peso being relatively stable after the US trade announcement.

S&P 500 Index Futures, 4-Hour Chart Analysis

Stocks are set to open slightly in the green on Wall Street, with the major indices still being within striking distance of their all-time highs, and with only the Nasdaq pulling back meaningfully recently. The S&P 500 is just a tad below its record high, and with the MACD indicator back in neutral territory, a move to new highs could still be just around the corner.

Dollar Stable as Oil Jumps Amid Syria Escalation

Interestingly forex markets remained stable despite the trade war escalation, with the Dollar drifting slightly lower compared to its major peers, and losing a bit more ground against the main China-related currencies. Commodities are also higher today, with especially the China-linked copper and crude oil being in the green and gold trading virtually unchanged.

WTI Crude Oil Futures, 4-Hour Chart Analysis

While the scope of the Syrian conflict shrank in recent months, the tensions around the last rebel stronghold Idlib are rising. Russia and Turkey (which back opposing forces) surprisingly announced the formation of a demilitarized zone around the city to avoid a siege and a likely bloodbath, but overnight, a Russian recon plane was downed, which could lead to a reescalation in the country.

Russia is blaming Israeli forces for the casualty, and an open conflict between the two countries would be increase risks in the region, and possibly drive oil prices higher. The Brent Oil contract has been already outperforming the WTI one thanks to the sanctions against Iran, and today Saudi officials stated that the Kingdom is comfortable with the $80 per barrel Brent price, further widening the divergence between the two contracts.

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 348 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 Update: U.S. Stocks Fall as Trump Set to Unveil New China Tariffs; Crypto Selloff Resumes

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U.S. stocks declined on Monday as investors once again weighed the prospects of an all-out trade war between the United States and China. On the cryptocurrency front, Ethereum led a broad decline in afternoon trading.

Stocks Fall

All of Wall Street’s major indexes headed for losses on Monday. The technology-heavy Nasdaq Composite Index was the hardest hit, falling 1.4% to 7,895.79. The large-cap S&P 500 Index fell 0.6% to 2,888.80, with losses mainly concentrated in information technology and consumer discretionary shares. Dow industrials closed down 92.55 points, or 0.4%, to 26,062.12.

The CBOE Volatility Index, commonly known as the VIX, spiked 12.8% to 13.62. The so-called “fear index” had declined in each of the past five sessions. Prior to that, it reached two-month highs as stocks declined following Labor Day.

U.S.-China Trade War

The White House is preparing to unveil a new round of tariffs on China targeting $200 billion in goods, marking the most dramatic escalation in the year-long trade war. According to the Financial Times, Washington’s trade haws are urging President Trump not to back down on tariffs, which are believed to run as high as 25% for certain goods. U.S. officials had previously said they are likely to impose a 10% tariff rate on 40% of Chinese imports.

The Trump administration is escalating its trade war against China amid reports that Beijing was looking to take a more assertive stance on tariffs. That said, China’s Foreign Ministry has once again reiterated that a trade war isn’t in anyone’s interest.

“We have always maintained that the only correct means to resolve the trade dispute is through dialogue and consultation on an equal basis with mutual trust and respect,” ministry spokesman Geng Shuang recent said, as quoted by CNBC.

The new round of tariffs will be announced mere days after both countries signaled their readiness to return to the negotiating table.

Cryptos Decline

The cryptocurrency market was back on the defensive Monday, with Ethereum leading a broad downtrend that included tokens, altcoins and bitcoin. The combined market capitalization of all coins fell to a low of around $193 billion, according to CoinMarketCap.

Ether’s price pivoted lower after regaining more than 30% of lost value. The second-largest cryptocurrency plunged10.5% to $197.50. Among the top-ten ERC-20 tokens by market cap, nine reported losses.

Bitcoin also pulled back sharply after failing to make new highs. BTC was down 3% to $6,311 despite relatively strong technical indicators that pointed to short-term upside.

There was no immediate catalyst for the sudden reversal, a sign that bearish sentiment continues to dictate market trends. In terms of news, Ripple has confirmed that one of Japan’s largest financial institutions will soon launch a payment app using the company’s xCurrent technology. Meanwhile, security issuer XBT has announced plans to launch a new product designed to give investors access to a basket of cryptoassets.

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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2 votes, average: 4.50 out of 52 votes, average: 4.50 out of 52 votes, average: 4.50 out of 52 votes, average: 4.50 out of 52 votes, average: 4.50 out of 5 (2 votes, average: 4.50 out of 5)
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4.6 stars on average, based on 603 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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