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Market Update: Trade-War Risk Weighs on Stocks as Cryptos Plunge

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U.S. stocks traded mixed on Thursday, as the indexes failed to hold a strong early-morning rally amid ever-present economic risks. Cryptocurrencies were hit with a fresh selloff bringing the total market cap to new five-week lows.

Stocks Remain Under Pressure

After a strong open, the S&P 500 Index was down 0.1% by the close to finish at 2,747.33, with most major sectors languishing. Consumer staples and materials were the biggest losers, falling at least 0.6%. Shares of energy companies also finished in the red.

Tumbling tech shares weighed on the Nasdaq Composite Index, which fell 0.2% to 7,481.74.

The Dow Jones Industrial Average held on to gains but finished well off session highs. The blue-chip average closed up 115.54 points, or 0.5%, at 24,873.66. It was up by nearly 300 points earlier in the day.

The CBOE VIX, also known as the VIX, pointed to fairly calm conditions on Wall Street. The so-called “fear index” edged down to close at 16.49 on a scale of 1-100. A VIX reading below 20 usually corresponds to favorable conditions for the S&P 500.

Equities have been pressured all week by the prospect of a trade war instigated by the Trump administration. Last week, President Trump signed an order to tax steel and aluminum imports at a rate of 25% and 10%, respectively. Canada and Mexico were formally excluded from the tariff policy as part of the ongoing negotiations to revamp NAFTA.

Also troubling investors on Thursday was a report by The New York Times special counsel Robert Mueller had subpoenaed President Trump’s businesses “in recent weeks.”

On the data front, U.S. initial jobless claims fell by 4,000 last week to a seasonally adjusted 226,000, the Labor Department reported Thursday.

The New York Fed’s Empire State Manufacturing Index also jumped more than expected, boosting optimism about the domestic economy.

Crypto Selloff Intensifies

Cryptocurrencies extended their slide on Thursday, with the total market capitalization falling to a low of $309 billion. That was the lowest since early February when prices were recovering from a nearly 70% correction.

The market later stabilized around $327 billion, down $10 billion over the previous 24 hours.

The recent slide was instigated last week by reports of a sophisticated phishing attack on Binance, one of the world’s largest cryptocurrency exchanges. Although no funds were compromised, the exchange has announced a bounty program to help stave off future attacks.

A foiled hack attempt wasn’t enough to stabilize the market after the U.S. Securities and Exchange Commission (SEC) warned exchanges they need to register with the agency if they intend to provide access to security tokens.

The third leg of the recent correction came Wednesday after Google said it was banning all cryptocurrency-related advertising.

Amid all the bad news, Lightning Labs announced Thursday it had launched the beta version of Lightning Network Daemon, an important milestone in bringing scalability and cost efficiency to bitcoin payments.

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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4.7 stars on average, based on 773 rated postsChief Editor to Hacked.com and Contributor to CCN.com, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi




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Market Overview

USA is Ready to Invest in Crypto

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Hi Everyone,

In our ongoing effort to bring crypto to the general public, we’ve done yet another survey, this time focusing on online traders in the USA.

The results are clear as day, the United States is more than ready to invest in crypto.

Definitely make sure to read the full report with all the jaw-dropping stats and the methodology of the poll. This is extremely encouraging.

@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

  • US-China trade deadline: 9 days | Days to Brexit: 37
  • Unsustainable Trajectory
  • Crypto Rally Stalls

Please note: All data, figures & graphs are valid as of February 20th. All trading carries risk. Only risk capital you can afford to lose.

Traditional Markets

Everyone will stop what they’re doing at 2:00 PM New York time today to take in the FOMC‘s meeting minutes. During their last meeting, the Fed did a complete 180 on policy, which many have pointed to as a complete capitulation to the market’s desires. So, when they release the minutes of that meeting it will be extremely interesting to hear what they have to say.

It’s becoming increasingly clear that there will not likely be any final deal between the US and China by March 1st. It’s also becoming increasingly clear that this deadline was never very significant in the first place. Trump has indicated that he’s willing to let the deadline slide if significant progress is being made, and many feel that it is, however, until we get final confirmation of that it will remain in our countdown above. It wouldn’t be the first time Trump changed his mind at the last moment.

As well, I’ve decided to leave the Brexit countdown timer set for March 29th, the day Article 50 kicks in, rather than the new self-imposed deadline that Parliament put on their Prime Minister.

Markets are now returning to their normal levels of volatility.

Trajectory Unsustainable

After crashing in January and making a huge comeback in January, financial markets are now remarkably average.

The 200-day moving average (blue line) shows us the average price of the last 200 days and is one of the most widely watched indicators among technical analysts. Here we can see that the Nasdaq 100 is now at this level.

Many analysts were quick to point out that if we ignore 2018 and look only at the stock market performance from January 1st, we’re actually seeing stellar results.

Some pundits even take this a step further. Here’s a graph posted by @StockCats who pointed out that the current trajectory of the markets does look a bit unsustainable.

Crypto Rally Stalled – Where to Next?

Let’s face it, these last few days have been amazing. However, even within this longest crypto bear market of all time, there have been rallies before that ended up fizzling out. So, even though it’s possible we go to the moon from here, it certainly pays to be cautious.

One thing that’s interesting to me is the different spins that some of the mainstream media are putting on this. The Independent is saying that it’s because of the Galaxy S10 Crypto Wallet…

…while Bloomberg is saying that…

Forbes, on the other hand, seemed to focus on the altcoin markets.

For me, it’s pretty clear that this whole thing began due to a shortage in Ethereum creation. As I explained in an interview with BlockTV yesterday, the creation of new Ether tokens has been severely limited lately. Especially for those of you who are less inclined to look at graphs and charts, feel free to watch the recording here.

For hose of you who do like charts, check this out. This supply shortage while demand remained consistent caused Ethereum’s price to rise dramatically and the rest of the cryptos followed. By today, we’re going on sheer momentum. After months of depressed prices, it’s about time we had a real rally in this market.

As I’m writing, it does seem that we may be getting a continuation of the rally but it’s still too early to tell. Let’s see where the day brings us.

Wishing you an excellent day. As always, please continue sending in your valuable feedbacks, questions, comments, and insights. It is always useful and always appreciated.

Best regards,

Mati Greenspan
Senior Market Analyst

Connect with me on….

eToro: @MatiGreenspan Twitter: @MatiGreenspan LinkedInMatiGreenspan |Facebook:MatiGreen

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 152 rated postsSenior Market Analyst at Etoro.com.




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Market Overview

Walmart Earnings Propel Stocks Higher; Crypto Market Cap Hits $135 Billion

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U.S. stocks extended their rally on Tuesday, as a positive earnings surprise from Walmart Stores Inc. (WMT) propelled the major indexes higher. Cryptocurrencies maintained their upward edge with EOS, Stellar and Binance Coin leading the gainers.

Relief Rally Continues

The major indexes overcame a tepid start to finish sharply higher on Tuesday. The broad S&P 500 Index rose 0.2% to 2,779.76, its seventh gain in the past eight sessions. Eight of 11 primary sectors finished in positive territory, led by materials. Consumer stocks also outperformed.

The Dow Jones Industrial Average gave up most of its gains to finish only moderately higher. The index closed at 25,891.32, having gained 8.07 points, or 0.03%.

Shares of Walmart Stores rose 2.2% after the retail giant reported better than expected quarterly results. For its fiscal fourth quarter, the Bentonville, Arkansas-based company reported per-share earnings of $1.41 on sales of $133.79 billion. Both figures topped analysts’ median estimate.

Steady performances for information technology and communication stocks lifted the Nasdaq Composite Index to higher ground. The tech-heavy benchmark climbed 0.2% to 7,486.77.

The Dow extended its winning streak to eight weeks on Friday. Read more: Stocks Surge on U.S.-China Trade Optimism; Dow Notches Eighth Consecutive Weekly Gain.

U.S.-China Trade Talks Resume

China’s trade envoy has arrived in Washington to resume high-stakes negotiations with the Trump administration this week. Both the U.S. and China are upping the ante ahead of a self-imposed trade-deal deadline on Mar. 1. President Trump says he may let the deadline “slide” if both sides make progress toward a new deal.

The latest round of talks between the U.S. and China wrapped up on Friday in Beijing. The White House said the two-day meeting was “detailed and intensive.”

“Both sides will continue working on all outstanding issues in advance of the March 1, 2019, deadline for an increase in the 10 percent tariff on certain imported Chinese goods,” the White House said Friday in a statement.

Return of the Crypto Bulls?

Crypto markets flashed green on Tuesday, as bitcoin clawed back above $4,000 for the first time since early January. The largest cryptocurrency by market cap and trading volume reached a session high of $4,083.50 on Bitfinex. To negate the downtrend, bitcoin’s price must cross above $4,200.

In terms of percentage gains, Binance Coin was the best-performing major on Tuesday. It rose 12.7% to $10.88, where it held firm to tenth spot on the market-cap index.

EOS climbed 5.5% to $3.66. Stellar Lumens advanced 12.7% to reach $0.0912.

At the time of writing, the total market capitalization of all cryptocurrencies is $135.5 billion. Trade volumes have surged to $33.9 billion, with all major exchanges reporting a significant increase in turnover since Sunday.

Read more: Crypto Markets are Up $16 Billion Since Sunday; What’s Behind the Rally?

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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4.7 stars on average, based on 773 rated postsChief Editor to Hacked.com and Contributor to CCN.com, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi




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Analysis

3 Things You Need to Know About the Market Today: New High in Gold, Dow 26,000?, Euro Weakness

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1, Gold Jumps to 9-Month High, $1360 in Sight

Gold Futures, 4-Hour Chart Analysis

We have been following the resurrection of gold in the past few months, and since fundamentals just got better for the precious metal, the current technical strength is great news for long-term investors. Today, gold quietly reached a new 9-month high, despite the still ongoing risk rally and the relative strength of the US Dollar.

The metal topped the $1330 level, and with the next major resistance level being found near $1360, a quick surge to the vicinity is in the cards in the coming days. We continue to advise holding gold for the long run, and for now, the short-term technicals also remain bullish. Should the risk rally finally roll over, the uptrend could even accelerate, with longer-term targets being found near $1400 and $1550.

2, US Stocks Drift Lower After Long Weekend as Trade Talks Resume

Dow 30 Futures, 4-Hour Chart Analysis

US stocks are having a quiet start for the day, with the major indices drifting slightly lower following the long weekend. The US economic calendar is empty today, and all eyes will be on the trade talks with China which are set to resume today in Washington in the wake of the unexpected extension of last week’s round of negotiations in Beijing.

The Dow, which approached the 26,000 level last week during the Friday surge to new 9-week highs, is lower today, in-line with the market-wide trends. The mega-cap index could get a lift in early trading thanks to the better-than-expected quarterly report by Walmart (WMT). The firm’s holiday-quarter sales topped estimates, despite the reports regarding the widening growth-gap between online and brick-and-mortar stores, and in light of the positive guidance by the company, the pre-market surge in the stock is no surprise.

With the week’s main economic releases coming in the second half of the period, today we could be in for another choppy session on Wall Street. That said, the momentum of the recovery-rally continues to be suspicious, and especially given the weakness in the Nasdaq, investors should pay close attention to the Volatility Index (VIX), market internals and other under-the-hood indicators for signs of negative divergences.

3, Euro Under Pressure Again, Despite Sentiment Beat

EUR/USD, 4-Hour Chart Analysis

While the Dollar’s break-out to new multi-year highs still didn’t happen last week, technicals continue to agree that the long-term uptrend in the reserve currency will continue. The Euro, on the other hand, is still showing signs of broad weaknes, drifing lower against the Dollar and the Pound today, despite the better-than-expected German Zew Economic Sentiment report.

The indicator is still deep in negative territory, and together with the recent weakness in the Eurozone PMIs and industrial production, recessionary fears seem to be legit in Europe.

We will have a new batch of PMIs coming out tomorrow, and together with the Fed minutes a huge day could be ahead for forex markets and especially for the EUR/USD pair. The 1.12 level could be tested in the case of another negative surprise in the PMIs, while the Fed minutes will be under scrutiny even more than usual following the sharp dovish shift by the Central Bank.

ChartBook

Major Stock Indices

S&P 500 Futures, 4-Hour Chart Analysis

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VIX (US Volatility Index), 4-Hour Chart Analysis

DAX 30 Index CFD, 4-Hour Chart Analysis

FTSE 100 Index CFD, 4-Hour Chart Analysis

EuroStoxx50 Index CFD, 4-Hour Chart Analysis

Nikkei 225 Futures, 4-Hour Chart Analysis

Shanghai Composite Index CFD, 4-Hour Chart Analysis

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

Forex

USD/JPY, 4-Hour Chart Analysis

GBP/USD, 4-Hour Chart Analysis

EUR/GBP, 4-Hour Chart Analysis

AUD/USD, 4-Hour Chart Analysis

Commodities

WTI Crude Oil, 4-Hour Chart Analysis

Copper Futures, 4-Hour Chart Analysis

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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4.7 stars on average, based on 467 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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Hacked.com and its team members have pledged to reject any form of advertisement or sponsorships from 3rd parties. We will always be neutral and we strive towards a fully unbiased view on all topics. Whenever an author has a conflicting interest, that should be clearly stated in the post itself with a disclaimer. If you suspect that one of our team members are biased, please notify me immediately at jonas.borchgrevink(at)hacked.com.

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