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Market Update: U.S. Stocks Rattled by Trade-War Rhetoric; Cryptocurrencies Stabilize After Brief Dip

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U.S. stocks turned lower Thursday, with the S&P 500 Index easing off five-month highs as trade tensions and mixed corporate results weighed on investors’ sentiment.

Wall Street Sees Red

The benchmark averages were down across the board, with the large-cap S&P 500 Index edging down 0.4% to 2,804.49. Financials shares were the biggest laggards, falling more 1.4% as a cluster. Materials stocks were also down sharply. In total, eight of 11 primary sectors tracked by the S&P 500 finished in negative territory.

Dow industrials finished down 134.79 points, or 0.5%, to 25,064.50. The Travelers Cos Inc. (TRV) and American Express Co (AMX) were the worst performers, falling 3.7% and 2.7%, respectively.

The technology-driven Nasdaq Composite Index fell 0.4% to close at 7,825.40.

The CBOE VIX, also known as the fear index, rebounded from six-month lows, though the underlying picture continued to show complacency in U.S. stocks. The VIX rose more than 6% on Thursday to close at 12.90. Readings below 20 are generally associated with periods of calm on Wall Street.

On the earnings front, shares of eBay Inc. (EBAY) fell after the company offered disappointing guidance in its quarterly report released late Wednesday. Dow blue-chip American Express Co (AXP) posted per-share earnings that were higher than expected, but revenues fell short.

Trade Tensions Weigh

The market downshifted one day after U.S. President Donald Trump reiterated his vow to tax European automakers. Trump threatened “tremendous distribution” against Washington’s allies unless “something fair” could be negotiated.

Earlier this month, levies on $34 billion in Chinese goods came into force as part of an original plan to tax up to $50 billion in imports. The U.S. president has also threatened to implement levies on an additional $200 billion in Chinese imports – a move that Beijing would not be able to match dollar-for-dollar.

Resistance to the president’s tariff policy is growing within Congress, with a bipartisan group of 149 House members urging Trump to abandon his protectionist stance.

Crypto Market Recovers After Dip

The cryptocurrency market remained on track for its second weekly advance in three as bitcoin recovered from an intraday slide and altcoins came off session lows.

After reaching a high of $299.8 billion Wednesday, the cryptocurrency market saw its total capitalization fall to $287.9 billion. Still, trade volumes were $17 billion, which is considered robust in comparison to the last three months.

Bitcoin, the largest crypto asset by market cap and trading volume, was little changed compared with 24 hours ago. BTC values are currently hovering north of $7,450.

Stellar XLM defied the market downtrend to report minor gains on Thursday. In doing so, Lumens overtook Litecoin for sixth spot in the crytpo market cap rankings. At the time of writing, Lumens were trading around $0.31.

EOS was among the worst performers in the top-ten, falling 4.5% to $8.31. IOTA was also down more than 4% to $1.05.

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 736 rated postsSam Bourgi is Chief Editor to Hacked.com, where he leads content development for one of the world's foremost cryptocurrency resources. Over the past eight years Sam has authored more than 10,000 articles and over 40 whitepapers in the fields of labor market economics, emerging technologies, cryptocurrency and traditional finance. Sam's work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Contact: sam@hacked.com Twitter: @hsbourgi




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Market Overview

Moment of Truth

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Hi Everyone,

What can I say? The adoption of crypto by large scale financial institutions is taking longer than expected but is still on track.

The bear market certainly caused some to hesitate but today we have confirmation that things are moving forward as planned.

The Wall Street backed service Bakkt, which plans to allow clients to store and spend crypto in a user-friendly and secure way, has clearly demonstrated that they are going ahead despite delays caused by the partial US government shutdown.

In this blog post yesterday, Bakkt CEO Kelly Loeffler announced their first strategic acquisition. The Chicago based company they’re buying is Rosenthal Collins Group, which boasts more than 100 years experience in the financial services industry. The deal, which is set to be finalized next month, will see RCG’s team completely integrated into the young crypto company.

Meanwhile, in Switzerland, a country that is way ahead of the curve on crypto adoption, a major financial institution known as Vontobel has announced their own crypto custodial service and digital asset vault, which is available for their clients now.

My friends, institutional adoption of cryptoassets is finally upon us.

@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

  • Shutdown: Day 25
  • Brexit Vote Day
  • Ethereum Upgrade Tonight

Please note: All data, figures & graphs are valid as of January 15th. All trading carries risk. Only risk capital you can afford to lose.

Traditional Markets

Stocks are up today on the news that China will be following in Trump’s footsteps and stimulating their economy with massive tax cuts.

As economic conditions tighten around the world, one of the only solutions left for many countries to encourage spending is to cut taxes.

Of course, the long term effect of these type of actions is usually to increase the national deficit as the world’s largest economies sink further into staggering debt. But that doesn’t necessarily need to be an issue as long as they keep making their payments on the debt.

The rally seems to be holding into the European session and even the safe havens like Gold, Swiss Francs, and the Yen are pulling back.

Today is the 25th day of the partial US government shutdown with no end in sight. We’ll also hear from Mario Draghi at 16:00 in France. Let’s hope for some strong earnings reports from the financial sector today and tomorrow.

Brexit Vote

Bigger than all of that though, at least in the UK, is the critical vote on Theresa May’s Brexit plan, which is scheduled to take place around 19:00 London time.

Consensus seems to be that the vote will not carry and some are even predicting the worst upset for a Prime Minister in British History, which does seem a bit exaggerated to me.

Due to the potential impact on the markets many brokers, including eToro, have limited the maximum allowed leverage going into the event on all UK stocks and most major currency pairs. For details of how trading will be affected, please check out @eToroTeam page for updates.

Something tells me though, that this may not be as big as people are preparing for. First, the fact that brokers are limiting leverage in itself should reduce volatility. Second, if the announcement is already set to upset then there shouldn’t be much surprise to the markets. You never know though.

Upgrade Time for ETH

At block #7080000, which should happen sometime tomorrow night, the Ethereum network will undergo a hard fork.

Hard forks might seem difficult to understand because we’re so used to centralized computing, but in a decentralized world, the only way to make a major upgrade is to fork it.

For example, when Microsoft wants to upgrade from Windows 9 to Windows 10, they have their dev team write the code, and then users upgrade one by one in their own time. In decentralized computing, the entire network needs to upgrade together.

A hard fork is like a copy-paste action, where a new blockchain is born and if all goes well, the old one dies.

Sometimes, when there is a disagreement among the community about the upgrade, some members will choose to keep the old version of the blockchain alive and we see a split. The most famous cases of this was when Bitcoin Cash split off of Bitcoin on August 1st 2017 and when Ethereum split with Ethereum Classic back in 2016.

However, the Constantinople upgrade has already received widespread backing from the entire community and so we hope everything goes smoothly. It’s important to note that there is no action required by the end users. If you are holding ETH on eToro or any wallet or exchange, the upgrade should be done for you automatically.

By this time on Thursday, we should have a brand new Ethereum, which is faster, cheaper, and has 33% less inflation.

Let’s have an excellent day.

This content is provided for information and educational purposes only and should not be considered to be investment advice or recommendation.

Past performance is not an indication of future results. All trading involves risk; only risk capital you are prepared to lose.

The outlook presented is a personal opinion of the analyst and does not represent an official position of eToro.

eToro is a multi-asset platform which offers both investing in stocks and cryptocurrencies, as well as trading CFD assets.

Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 65% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

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 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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4.7 stars on average, based on 142 rated postsSenior Market Analyst at Etoro.com.




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Market Overview

U.S. Stocks Tumble on Weak China Data; Cryptocurrencies Make a Sudden Move Higher

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U.S. stocks declined on Monday, with the major indexes struggling to overcome a volatile start after dismal Chinese data cast a dark shadow over global economic growth. Cryptocurrencies erased their weekend losses after bitcoin made a sudden move higher midday.

Stocks Stumble

Wall Street’s major averages settled lower by Monday’s close after spending the entire session in the red. The Dow Jones Industrial Average managed to pare its losses down to 86.11 points, or 0.4%, to close at 23,909.84. The large-cap S&P 500 Index fell 0.5% to 2,582.41. It was down as much as 1% in the early morning. The technology-heavy Nasdaq Composite Index closed down 0.9% at 6,905.91.

Earnings season began in earnest on Monday after Citigroup Inc. (C) reported better than expected quarterly profits. The big U.S. bank made $1.61 in per-share earnings on revenue of $17.12 billion. Despite beating per-share earnings by six cents, sales missed analysts’ target of $17.48.

China’s Economy Suffers Another Blow

China’s economic perils intensified last month, as exports plunged at the fastest rate in two years. Overseas shipments declined 4% annually in December, confounding expectations of a 3% gain, the General Administration of Customs reported Monday. Imports plunged 7.6% year-over-year compared with forecasts calling for 5% growth.

Beijing’s trade surplus with the United States reached its highest level in over a decade, a possible indication that trade-war fears have been overblown. China’s 2018 surplus with the U.S. jumped 17% from a year earlier to reach $323.32 billion, official data showed.

President Donald Trump told reporters on Monday that his administration is very likely to reach a new trade agreement with China. The optimism extends from last week’s bilateral talks, which went on for a day longer than planned. Both sides made important progress on the purchase of U.S. energy commodities as well as increased access to Chinese markets.

“We’re doing very well with China,” Trump told reporters Monday, according to Reuters. “I think that we are going to be able to do a deal with China.”

Cryptos Bounce

A weekend of heavy selling in the cryptocurrency market came to an abrupt end on Monday, as bitcoin and its altcoin peers pivoted sharply higher midday. Between Sunday and Monday, the cryptocurrency market capitalization rose $8 billion peak-to-trough. It was last valued at $23.9 billion, according to CoinMarketCap.

Bitcoin once again bounced off the $3,500 price floor to retake $3,700. The move higher may have staved off a more severe drop in the short term. The bears have been eyeing a sustained drop below $3,550, a long-term inflection point for the bitcoin price. At last check, bitcoin was up 4.3% at $3,709.36.

News Flash: Crypto Markets Swing Higher as Bitcoin Climbs Above $3,700

As one would expect during a bear market, altcoins and tokens quickly followed in bitcoin’s footsteps Monday afternoon. With the exception of dollar-backed stablecoins, all major cryptocurrencies reported gains. Ethereum jumped 10.3% to $128.65, where it was just shy of XRP in terms of overall market cap. The XRP price rose 4.9% to $0.3334.

Other big gainers included EOS, which rose 9.5% to $2.47, and Tron, which added 15.9% to $0.2468.

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 736 rated postsSam Bourgi is Chief Editor to Hacked.com, where he leads content development for one of the world's foremost cryptocurrency resources. Over the past eight years Sam has authored more than 10,000 articles and over 40 whitepapers in the fields of labor market economics, emerging technologies, cryptocurrency and traditional finance. Sam's work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Contact: sam@hacked.com Twitter: @hsbourgi




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Market Overview

Beyond Prices

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Hi Everyone,

As an investor, it seems that the last thing you want to look at is price, especially lately.

A savvy investor in an emerging industry will want to get a good picture of the overall landscape and one of the best ways to see this is in the job sector.

Job growth and average salaries are often seen as a leading economic indicator, which is why the NFP jobs report in the United States is one of the most scrutinized pieces of data that moves the markets every month.

So, if you want to get a good idea of how the crypto industry has grown throughout 2018, look no further than jobs data. At least according to this data point, we can see that jobs in blockchain development are in high demand.

@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

  • China Slowdown
  • Shutdown: Day 24
  • Bitcoin Support and Network

Please note: All data, figures & graphs are valid as of January 14th. All trading carries risk. Only risk capital you can afford to lose.

Traditional Markets

The week has started off on the wrong foot for global stock markets. Some sour trade data from China has investors worried that the narrative of a China slowdown or “hard landing” is starting to seem real.

Export growth from the number one producer of goods in the world has seen its sharpest drop in two years.

The market is already cringing with anticipation for the upcoming GDP figure announcement on January 21st.

Where’s the Safe Play?

A new political upheaval in Greece has barely grazed investors conscious this morning. With the US Government shutdown entering day 24 and the data out of China there scant little time for that.

The bright light at the end of the tunnel is coming in the form of earnings season, which kicks off this week. Let us pray they don’t disappoint.

One thing that is clear is that there is an overwhelming demand for safe havens. We can see it in the price of gold, which is still giving an extensive test to the $1,300 level.

The next clue comes from the currency markets, where the Japanese Yen and the Swiss Franc are leading today.

The final nail in the coffin is the bond markets, where we can see the yields dropping as investors turn to this traditional market for safekeeping of their assets. To think the 10 year US treasury bond was threatening a wide move higher in November and now it’s sliding into oblivion.

Crypto Safety

In line with what we’re seeing above, the risk assets are on the ropes and bitcoin is no exception. Just as the stock markets have reached a point of inflection the crypto markets are now giving a heavy test of their support levels.

Those that have recently called the bottom may not be wrong though. The critical support level for bitcoin is at $3,000, so we’re still about $500 above that at the moment.

Moving beyond the price, we can see that activity on Bitcoin’s blockchain is heating up rapidly. Here we can see the transaction rate hitting its highest level in almost a year.

Of course, more transactions on the blockchain is neither bullish nor bearish. The comforting thing is that last time the transaction rate was this high, we saw a distinct clog in the network.

Last January, the Bitcoin blockchain was so congested that transaction times were significantly slower and the cost to send bitcoin was through the roof.

During the bear market, however, developers have had more time to upgrade their systems. Specifically, we now see the adoption of SegWit, which reduces the size of transactions on the blockchain, is now about 40%.

In short, I don’t know when the next bull run will happen but I am fairly confident that the network is fully set up to handle the load.

This content is provided for information and educational purposes only and should not be considered to be investment advice or recommendation.

Past performance is not an indication of future results. All trading involves risk; only risk capital you are prepared to lose.

The outlook presented is a personal opinion of the analyst and does not represent an official position of eToro.

eToro is a multi-asset platform which offers both investing in stocks and cryptocurrencies, as well as trading CFD assets.

Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 65% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

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 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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4.7 stars on average, based on 142 rated postsSenior Market Analyst at Etoro.com.




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