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Asian Market Update – Wednesday: Asian Stocks Trade Higher as China Announces New Leadership, ECB Meeting

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Politburo standing committee

The Big Question: What can markets expect from the new Chinese leadership?

Most Asian stock indexes were pointing higher during the Asian trading session on Wednesday, as they followed the announcement of the new Chinese leadership line-up in Beijing and a meeting of the European Central Bank scheduled for Thursday.

In China, the Shanghai Composite Index was up 0.13 percent to about 3,392 before midday. In Hong Kong, the Hang Seng Index was up 0.68 percent to around 28,345.

In Japan, the Nikkei 225 added 0.12 percent at around 21,830. The benchmark is now shooting for a 17 day long winning streak, though gains getting smaller.

In South Korea, the Kospi moved up 0.07 percent to around 2,492 shortly before midday.

Down Under, the ASX 200 was up 0.12 percent to around 5,904. Fresh data showed that Australia’s third-quarter consumer prices were surprisingly soft, making it the seventh straight quarter that inflation has undershot the country’s central bank target, reinforcing the case for keeping rates low.

Media attention in Asia is focused on the recent announcement of new members of China’s Politburo Standing Committee, the most powerful group of leaders in the country. The new leadership was presented at a press conference in Beijing around noon local time, after emerging from closed-door elections at the end of the weeklong 19th Party Congress that ended yesterday.

Chinese President Xi Jinping and Premier Li Keqiang were both re-elected for another five-year term in the Standing Committee.

Markets are also paying attention to a meeting of the ECB scheduled for Thursday, looking for cues on monetary policy changes. Analysts, however, say the ECB is expected to be very cautious in their statement, with few clear signs of future direction expected.

Main Market Movers – Mid-day Asian Trading Session

Indexes Value at Midday Daily Change
Japan- Nikkei 225 21,830 0.12%
China-Shanghai Composite Index 3,392 0.13%
South Korea-KOSPI 2,492 0.07%
Hong Kong –Hang Seng 28,345 0.68%
Australia-ASX 200 5,904 0.12%

Cryptocurrencies

Prices of the main cryptocurrencies were pointing lower overnight during Asia’s morning trading session on Wednesday.

At midday in Asia, bitcoin was down 1.28 percent to $5,452. Bitcoin has now been stuck in a downtrend for a fourth straight day, falling back from its all-time-high of almost $6,200.

Ethereum also lost 1.87 percent to about $291 before midday. Wednesday morning’s loss nearly erased a major gain seen yesterday, when the virtual currency surged more than 5 percent.

Litecoin was down 1.8 percent to about $54 as of midday in the Asian trading session.

In the News: Central banks appear to have mixed feelings about cryptocurrencies. A Taiwanese central bank official said on Wednesday that anti-money laundering laws should regulate bitcoin trading. On the other hand, Singapore’s central bank chief said his country won’t regulate bitcoin.

Currencies

The Japanese yen gained 0.03 percent against the US dollar at midday Wednesday to 113.86 per dollar.

The Chinese yuan lost 0.11 percent against the US dollar to 6.6408 per dollar.

The Australian dollar also lost 0.62 percent on the dollar, changing hands at 1.2940 per dollar at midday.

Commodities

WTI Oil was down 0.17 percent to $52.41 per barrel.

Brent Crude lost 0.26 percent to $58.36 per barrel.

Gold was down 0.10 percent to $1,274.44 an ounce.

Business News across Asia

In China, US electric carmaker Tesla has confirmed that it will open a factory in Shanghai. Reports said that the factory would be wholly owned by Tesla, making the company the first foreign car company to have a wholly owned operation in China.

Take Away: Chinese regulations require foreign carmakers to partner up with local companies in order to set up an operation in the country. If the Tesla plan goes ahead, it could set a positive precedent for more to follow.

In Japan, Prime Minister Shinzo Abe’s ruling party may have won a majority in parliamentary elections, but half the people said they don’t want him to be the prime minister, a newspaper survey showed. Separately, the Japanese government is reportedly mulling measures to expand tax incentives for companies to boost wages.

Take Away: Though there is little doubt that Abe will remain as prime minister, the opposition appears to be stronger, which could weigh on Abe’s power to push for his policy initiatives in his new term.

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

The King is a Fink

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Hi Everyone,

It’s true, I’ve always enjoyed reading the paper. When I was younger I used to track the price of gold daily in my grandfather’s copy of the Wall Street Journal. Before that though, I was drawn to the funnies.

The Wizard of ID is a classic. For those of you who aren’t familiar, it’s about a tyrannous but stout dictator, who hated it when people would call him a “fink,” even though the term has many meanings.

Speaking on Bloomberg yesterday, Blackrock’s CEO Larry Fink weighed in on many important issues including the ongoing trade wars as well as shooting down recent rumors that Blackrock is about to get into crypto.

The full video can be found here:

With $6.28 trillion under management, Blackrock is one of the largest financial institutions in the world and Fink is definitely the king. So it pays to listen to what he sees from this unique point of view.

@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

  • Trumputin Turning Heads
  • Earnings Season (New Tool)
  • 75 Lambo Traffic Jam (New Research Paper on ADA)

Please note: All data, figures & graphs are valid as of July 17th. All trading carries risk. Only risk capital you can afford to lose.

Traditional Markets

Shock and awe were witnessed on the global main stage yesterday at the Helsinki Imperial Palace, where President Vladimir Putin and Donald Trump made jaws drop by aligning themselves on more than a half dozen hot button issues.

Picking up the most headlines was this statement, where Trump seemed to side with Putin over his own Intelligence Agency. Yet, despite the calls of “treasonous trump” from both Democrats and Republicans, the best the American people can hope for are some fair and compelling conclusions from special investigator Robert Mueller.

Meanwhile, stock markets are firmly in the red in Asia and Europe this morning as talk of a trade war and Fed tightening overshadow bullish investor sentiment.

Later today, about 30 minutes after the opening bell on Wall Street, we’ll get a special spectacle. Fed Chair Jerome Powell will be in front of the US Senate Banking Committee, in addition to his prepared statement, there’ll also be a Q&A session. Should be fun to watch.

Earnings Season Underway (New Tool)

For those of you holding individual stocks, which I hope is most of you, earnings reports are important. Yesterday, some sour earnings sent Netflix down by nearly 15% after hours.

In order to help you keep better track of these opportunities, we’ve put together a nifty tool to help you keep track of which companies are about to publish their results.

Please bookmark this page: https://www.etoro.com/investing/earnings-reports/

Simply scroll down to see the schedule, as well as the forecasted EPS. If you’re interested in a specific stock, you can click the “+” button to add it directly to your watchlist. As well, you can search directly for upcoming announcements by company or by a future date.

Ether Spammer

Five million green teas, 75 Lambos, 25 Coinbase seed rounds, or 0.9% of the Telegram ICO.

According to Vitalik Buterin, that’s what it’s costing someone to spam the Ethereum network. On Sunday, the Ethereum network was clogged pretty much the entire day reaching a peak of 62,715 unconfirmed transactions at one point.

The miners were able to get that number down to under 10,000 this morning but the two nasty spikes last night along with Vitalik’s tweet indicate that some malicious player may be intentionally creating activity on the network in order to slow it down.

While Ethereum is by far the most popular platform for dApps at the moment, it’s clear that if they don’t scale quickly it may not stay that way forever.

New Research Paper (ADA)

Several blockchain 3.0 competitors are already under construction and after looking at all the top contenders, we’ve found that one of the most promising ones is Cardano.

For your convenience, we’ve put together the following research paper in order to assist you to make the best possible investment decisions when considering this unique and exciting token for your portfolio.

Please find the new research paper at: eToro.tw/Research-ADA

As with all emerging technologies investing in this project may be risky. Because the network is still in its infancy, we really have no way of pinpointing exactly what each ADA token should be worth and so should only be used as a small part of a well-diversified portfolio.

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 114 rated postsSenior Market Analyst at Etoro.com.




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Market Overview

Market Update: U.S. Stocks Under Pressure Following Trump-Putin Summit as Oil Prices Hit Three-Month Low

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U.S. stocks finished mixed to lower on Monday, with sectors tied to commodities shouldering the majority of the losses following a major rout in oil prices.

Stocks Mostly Lower

The large-cap S&P 500 Index fell 0.1% to close at 2,798.43, with eight of 11 primary sectors finishing in the red.

Energy stocks were the worst performers, falling 1.2% as a cluster, as oil prices plunged to their lowest levels in three months. Materials and industrials followed suit.

Declining technology shares bumped the Nasdaq Composite Index from all-time highs. The index closed down 0.3% at 7,805.72.

Dow industrials bucked the downtrend, gaining 44.95 points, or 0.2%, to 25,064.36.

The CBOE Volatility Index, also known as the VIX, jumped more than 5% on Monday to close at 12.83. The so-called “fear index” briefly traded at six-month lows on Friday.

Trump-Putin Summit a “Good Start”

U.S. President Donald Trump says his meeting with Russian counterpart Vladimir Putin in Helsinki was a “good start” in normalizing strained relations between the two superpowers.

Prior to the meeting, President Trump blamed previous administrations for the worsening relationship between both countries. Trump doubled-down on that message in a joint session following the meeting.

“I hold both countries responsible. I think that the United States has been foolish. I think that we’ve all been foolish. We should have had this dialogue a long time ago, a long time, frankly, before I got to office,” Trump said.

Although it’s not entirely clear what the two leaders talked about, various news sources have confirmed that talks went into a working lunch after two hours of closed-door talks. U.S. National Security Adviser John Bolton confirmed that the meeting had no set agenda.

Many within the Washington camp wanted the meeting to be cancelled after 12 Russian military agents were charged with hacking the presidential campaign of Hillary Clinton.

Cryptocurrency Market Recovers

Bitcoin and other crypto-assets swung back into positive territory Monday amid reports that BlackRock, one of the world’s largest asset managers, has assembled a working group to explore digital currency adoption.

Cryptocurrencies added $15 billion in market capitalization over 24 hours, with the bulk of the gains occurring shortly after the BlackRock report hit the airwaves. The total market peaked near $271 billion, according to CoinMarketCap, as trade volumes spiked 34% to $13.8 billion.

The bitcoin price reached a high near $6,690 as trade volumes topped $4.9 billion. The largest cryptocurrency by market capitalization is closing in on last weekend’s swing high near $6,900. Prices have failed to breakout of the $7,000 ceiling in well over a month.

In terms of percentage growth, bitcoin cash was the best performer in the top-ten, rising 9.5% to $795.

Ethereum prices jumped 5.6% to $477 while EOS gained 8% to $8.02.

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 498 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

US Opens New Front in Trade War as Oil Plunges

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Financial markets are relatively calm today, with most of the major stock benchmarks being virtually unchanged after the weekend. The energy segment is experiencing the most activity as the volatile correction in crude oil prices continues. Besides that, the Euro’s relative strength is notable, but summer trading conditions remain dominant across the board, with low volumes and choppy intraday price action in most of the asset classes.

Shanghai Composite, 4-Hour Chart Analysis

There seems to be no stopping in the global escalation of trade tensions, as amid the Helsinki meeting between Trump and Putin, the US launched an official probe concerning the retaliatory tariffs of its largest trade partners. The move could deepen the standoff not just between the US and China, but the EU and its other allies as well, and global growth is already weakening, so with further trade troubles growth could grind to a halt.

S&P 500 Futures, 4-Hour Chart Analysis

While global stocks are still well off their highs, and Chinese equities remain in bear market territory, the main US indices are holding on to their recent gains, with the Nasdaq being the by far the strongest benchmark globally. The slightly weaker S&P 500 is also trading at a 4-month high despite trade war fears, and as the first earnings reports of the second quarter were slightly better than expected, with Bank of America beating today before the bell, bulls are still in control on Wall Street.

As for economic news, the much awaited US Retail Sales report delivered a small positive surprise, and last month’s figures were also revised higher. The report helped risk assets during the US session, even as the disappointing Chinese Industrial Production number weighed on investors sentiment earlier on.

Dollar Index, 4-Hour Chart Analysis

Despite the bullish numbers, the Dollar lost a bit of ground against its major peers, although forex markets were less active today than recently and the most traded pairs traded in relatively tight ranges after Friday’s hectic session.

Oil Back Below $70 per Barrel as Commodities Remain Weak

WTI Crude Oil, 4-Hour Chart Analysis

Crude oil prices are sharply lower yet again, with the WTI contract leading the way lower as tight short-term supply conditions got better in Canada, and the general weakness in the global commodity segment infected the market oil. The IMF’s report on weakening global growth, and the chatter about the release of some of the global strategic oil reserves also weighed on oil, and the WTI contract is now at $68 per barrel after trading as high as $75 just one week ago.

Copper, 4-Hour Chart Analysis

Elsewhere in the commodity space, it has been a quiet Monday session, with gold drifting slightly lower after a weak rally in early trading, as selling pressure is still apparent among precious metals. Copper, which also has been suffering in recent weeks as Chinese assets got slammed lower, is still consolidating above the strong long-term support zone that we pointed out last week.

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 293 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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