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Financials Fight Back (Crypto is after their lunch)

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Hooray! The world has a new iPhone. Or at least it will in November. Just like all previous models, Apple claims that this is the most technologically advanced smartphone that they’ve ever created. Well, that makes sense. Who would spend time and money putting out something that is less technologically advanced?

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One way that this phone will be more impressive than their previous models is the price. At $999 per unit (£999 in the UK), this will be the most expensive iPhone ever.

Call me a chump but I’ll probably still be buying one along with a few shares in the world’s most expensive and most impressive tech company.

@MatiGreenspan
eToro, Senior Market Analyst

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Please note: All data, figures & graphs are valid as of September 13th. All trading carries risk. Only risk capital you can afford to lose.

Market Overview

Stocks in the United States pushed higher yesterday led proudly by the financial sector. Financial stocks across the globe have gained close to 2% in the last 24 hours.

The reason for the move is somewhat unclear. Damage from Hurricanes Harvey and Irma are sure to cost the insurance companies big bucks and according to Jamie Dimon, the CEO of JP Morgan, revenues from trading across the banking sector are expected to drop sharply.

Though Jamie didn’t directly blame Bitcoin for the drop in revenues he did have some harsh words about the world’s favorite cryptocurrency as part of the same speech. He called it a fraud and said that it’s only useful for drug dealers, murderers, or citizens of Venezuela and North Korea.

This attack on Bitcoin from Dimon is somewhat strange given the level that JP Morgan has embraced and invested in blockchain technology. Not only are they heavily involved in the Hyperledger project, they have also started to develop their own Ethereum like blockchain called Quorum.

He later clarified the statements and you can watch it in this interview with CNBC.

It’s almost as if Dimon was intentionally trying to jawbone the digital currency. He waited for the right time to attack and gave it all he got. Nevermind that some of the things he said don’t even make sense, in the follow up statement he even went so far as to throw his own daughter under the bus.

His comments stung the crypto community and prices immediately began to fall. Bitcoin itself bore the brunt of the attack falling close to $200 within the first hour after the statement and eventually crossing below $4000 a coin for the first time since August 22nd.

The effect wasn’t limited to Bitcoin though. The entire crypto market lost approximately $10 Billion in value before a recovery this morning.

The crypto market is particularly fragile at the moment as we await further clarification from the People’s Bank of China and whether they are about to slam the ban hammer down on cryptocurrency exchanges.

In the meantime, long term traders in eToro have not given up their positions and continue to hodl, while the big money is still waiting on the side looking for a bit of a better entry point.

Still, no matter how many crypto critics there are out there, not very many are willing to sell short. As Dimon says, the price could reach $100,000 per coin even though it’s not backed by any government.

Let’s have an awesome day!

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.

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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Market Overview

Market Update: Stocks Rise on Tech Earnings; Cryptocurrencies Stabilize Following Correction

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U.S. stocks surged on Thursday after a string of tech earnings blew past expectations and economic data renewed confidence in the domestic recovery.

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Stocks Surge

Thursday was a strong session for all of Wall Street’s major indexes. The Dow Jones Industrial Average rose 238.51 points, or 1%, to 24,322.34. Twenty-five of 30 index members contributed to the gains.

The broader S&P 500 Index rose 1% to 2,666.94, with nine of 11 sectors advancing.

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Technology shares rose more than 2% after Facebook (FB) reported a 63% increase in profits during the first quarter. Advanced Micro Devices (AMD) also surged after reporting stronger than expected earnings.

A strong tech sector lifted the Nasdaq Composite Index sharply higher on Thursday. The tech-driven gauge added 1.6% to finish at 7,118.68.

In economic data, U.S. jobless claims plunged last week to their lowest levels in 48 years, a strong sign that the domestic labor market was on solid footing.

The number of Americans filing for first-time unemployment benefits dropped 24,000 to a seasonally adjusted 209,000 in the week ended Apr. 21, the Department of Labor said. Analysts in a median estimate called for a slight drop to 230,000.

U.S. Dollar Rallies

Strong economic data helped the U.S. dollar extend its bullish breakout to more than three-month highs. The dollar index (DXY), which is evaluated against a basket of six rival currencies, rose 0.4% to 91.59.

A stronger dollar capped a moderate recovery in the euro, which faced renewed pressure after the head of the European Central Bank struck a dovish tone on Thursday.

The dollar rose to fresh three-month highs against the euro after the European Central Bank acknowledged a “moderation” in economic growth following its policy meeting on Thursday. Officials voted to keep interest rates on hold and said they would seek more clarity before outlining their next move.

EUR/USD bottomed at 1.2108 on Thursday, its lowest since mid-January.

The greenback jumped more than 1% this week as investors tracked a significant rise in interest rates. On Monday, the U.S. 10-year Treasury yield rose to 3% for the first time since early 2014.

Cryptocurrencies Stabilize

The cryptocurrency market stabilized on Thursday after profit-taking disrupted a multi-week rally in the digital asset class.

The combined value of all coins reached a high of $407.6 billion on Thursday, according to CoinMarketCap. The market would subsequently fall to $380.5 billion before recovering around $406 billion.

With the exception of bitcoin and NEO, all cryptocurrencies in the top-ten reported gains. Stellar Lumens was the biggest percentage gainer, climbing 8.5% to $0.38. Meanwhile, Ethereum, Ripple XRP and bitcoin cash were up only slightly.

Bitcoin was back to trading above $9,000 on Thursday. At the time of writing, the cryptocurrency was valued at around $9,074 a coin.

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 354 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

Euro hits 3-Month Low Despite Hawkish Draghi

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All eyes were on the European Central Bank and Mario Draghi today, as the recent string of disappointing economic data put pressure on the Euro. Investors started questioning that the ECB will follow through with its monetary tightening plans. As far as the actual momentary policies are concerned, the central bank left everything unchanged today, while the head of the bank signaled that he is confident about growth in the Euro-zone, sparking initial buying in the common currency.

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EUR/USD, 4-Hour Chart Analysis

Despite the hawkish words of “Super Mario” the Euro took a sharp turn lower right at the US open, and the EUR/USD dipped below 1.2150, hitting the lowest level since January. From a technical standpoint, the most traded pair is at a very important juncture, and should the break below support hold, a quick move below $1.20 is likely.

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S&P 500 Futures, 4-Hour Chart Analysis

Stocks are higher for the second day in a row after the strong bearish move in Tuesday, with the NASDAQ leading the way higher, led by Facebook, as the recently troubled social media giant is staging a strong bounce following yesterday’s positive quarterly earnings report. Despite the rally, the charts still suggest that there are more troubles ahead for bulls, with the short-term downtrend clearly being intact in the major indices.

Facebook (FB), 4-Hour Chart Analysis

US Treasury yields which have been in the focus in the last days are slightly lower today, especially regarding the longer end of the curve, as core durable goods orders came in much lower than expected, even as the less reliable headline number beat the consensus estimate. While it’s unlikely that the rising trend in yields will be broken, a correction is in the cards after the strong move higher in rates.

Dollar Rally Dominates Forex Markets

USD/JPY, 4-Hour Chart Analysis

Should Treasury yields pull back substantially from their highs that could mean that a correction the Dollar rally is also ahead, as the Greenback looks stretched from a short-term standpoint too. The Dollar’s strength also weighs on commodities, with gold dropping below $1320 and WTI crude oil falling back below $68 per barrel.

Commodity currencies are still under pressure too, while European and Asian stocks are benefiting from the USD rally, which will remain in the center of attention this 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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4.5 stars on average, based on 234 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

Decentralize

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There’s a fine line between celebrity and politician as we’ve seen clearly with the election of reality TV star Donald Trump.

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Now it seems that famous rapper Kanye West is taking a more proactive stance on politics and has recently had several very public interactions with President Trump on Twitter.

But it’s not just politics. Kanye’s Twitter account has a total of 220 tweets yet it seems that most of them have been posted in the last 48 hours. One of those tweets was a single word. A buzzword in the crypto-community that had a lot of blockchain enthusiasts excited.

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Not that Bitcoin needs the Yeezy’s endorsement but I don’t think it hurts.

@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

  • Draghi Day
  • DB Big Miss
  • Ether Chain Split?

Please note: All data, figures & graphs are valid as of April 26th. All trading carries risk. Only risk capital you can afford to lose.

Traditional Markets

Stock markets are rather quiet today as we await the announcement from Mario Draghi and the European Central Bank (ECB).

The ECB is currently injecting about €30 Billion of stimulus into the economy each month. Though this is far less than they were doing at the peak of global QE a few years ago the feeling is that they’ll need to reduce it further going forward.

The issue is that despite the massive amount of stimulus the Eurozone has been showing signs of weakness.

Of course, it would be very difficult for any central banker to admit that their respective economies are slowing down. So even though nobody expects any concrete changes to the ECB’s monetary policy, investors today will be watching like vultures.

Here we can see that the Euro has been gaining strength against the USD ever since the French elections in April. After running into some resistance at 1.25 it now seems that this strong trend is under question.

Earnings Continue

Yesterday’s announcements on Wall Street weren’t too bad. Facebook managed to defy the calls of #DeleteFacebook and has even managed to gain new users, and even Twitter managed to put up a profitable quarter for the second time in history.

Over to Europe, things are not looking so hot in the financial sector. Barclays faced a quarterly loss of £764 million but the big news rocking the markets today is that Deutsche Bank, which was expected to announce a Q1 profit of €376 Million, disappointed investors with profits of only €120 Million.

Even though this is a massive miss, it might not be as bad as some think. You’ll recall that DB recently switched CEOs right at the beginning of Q2, so there is a clear scapegoat here.

The new CEO Christian Sewing seems to be treating the below-expected earnings as an opportunity rather than a setback and has announced some massive reforms that he feels can improve the bank’s profitability.

At the moment, DB has more than 100,000 employees in 70 countries. From today, many of those outside of Germany will expect to receive notice as DB consolidates its business to try and focus on its core market.

Sewing was brought in to be the gunman when Crayn simply couldn’t pull the trigger. Now it seems that a lot of people are about to get fired.

Will Ethereum Split?

Though the DNS hack yesterday was shocking the damage was rather contained. Ethereum enthusiasts have a much bigger concern on their minds at the moment, the aftermath of the last major Ether hack.

We discussed the Parity hack that froze about 514,000 ETH in a previous market update titled Security & Stability (dated November 8th, 2017). Now the owners of those tokens are doing whatever they can to try and get them back.

Ethereum Improvement Proposal EIP-999 proposes that the upcoming hard fork that is planned to move Ethereum to the Casper protocol will also be used to release the frozen tokens from the Parity hack.

After a week-long vicious vote, the results are in and it seems Parity is out.

In the wake of this narrow yet clear vote not to go ahead with EIP-999 it seems that some of the top developers plan to go forward anyway.

True to character, Vitalik Buterin has been notably silent on this issue. He generally prefers to allow the community to come to some sort of decentralized resolution without the aid of his authority.

Mind you, even if we do see a chain split it might not have a negative effect on the price of Ethereum. There is a distinct possibility that we could see a new coin created that is different from the original like we did with Ethereum Classic and Bitcoin Cash, both of which seem to have generated wealth for token holders.

Let’s have an amazing 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 72 rated postsSenior Market Analyst at Etoro.com.




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