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Market Overview

Oil Prices Notch Two-Year Highs as Dollar Gains Ahead of FOMC Speeches

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Oil prices climbed to more than two-year highs on Monday after major producers said output cuts were draining the supply glut. The oil market is having a stellar month, continuing a rally fueled by stronger demand and expectations of bigger output cuts.

Brent Tops $59.00 a Barrel

ICE Brent futures for November delivery reached a session high of $59.25 a barrel Monday. Prices settled on a gain of $2.16, or 3.8%, at $59.02 a barrel. That’s the highest settlement since July 2015.

U.S. West Texas Intermediate (WTI) futures notched five-month highs in New York. The November contract rose $1.57, or 3.1%, to $52.12 a barrel.

Crude prices have gained more than 10% over the past month on brighter demand prospects and expectations that global producers will extend an agreement to curb output.

U.S. Shale Boom

The resurgence of U.S. shale production has played a leading role in delaying the market rebalancing. Rising prices have encouraged shale producers to boost explorations plans and to pump more.

According to Baker Hughes Inc., the active U.S. rig count has jumped 85% from a year ago. The active rig count fell by one last week to a total of 935. Active oil rigs fell by five to 744.

Total active rig counts bottomed at 404 during the height of the oil-price collapse in 2016. Activity has gradually increased as efficient shale producers capitalized on steady price gains.

U.S. Dollar Gains Half a Percent

The U.S. dollar posted rare gains against a basket of rival currencies after New York Fed President William Dudley said interest rates are on track to rise gradually.

In a speech at Onondaga Community College, Dudley said said “inflation will rise and stabilize” around the Fed’s 2% target in the medium term.

Last week, the Federal Open Market Committee (FOMC) voted to keep rates on hold, but said another round of tightening was likely before year’s end.

The U.S. dollar index (DXY) climbed 0.5% to 92.65, its highest settlement in three weeks.

A stronger dollar normally acts as a disincentive to purchase commodity contracts that are themselves priced in the currency. However, that wasn’t the case for gold or energy commodities on Monday.

After a disastrous two-week stretch, December gold futures rebounded sharply on Monday to $1,314.40 a troy ounce.

Economic Data

An upbeat Texas manufacturing survey on Monday sets the bar high for this week’s U.S. data releases. On Tuesday, the Commerce Department will report on August new home sales. The Richmond Fed will also unveil the regional manufacturing index for September.

August durable goods orders will make headlines on Wednesday, giving way to revised second quarter GDP on Thursday.

The highly anticipated personal incomes and outlays report will be released Friday morning. The monthly data series includes the latest estimate of core PCE inflation, which is the Fed’s preferred measure of price growth.

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 696 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

U.S. Stocks Drift amid China Trade Talks; $133 Million ICO Shuts Down Over Regulation

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U.S. stocks traded mixed on Thursday, as investors carefully monitored ongoing trade negotiations with China following a string of positive developments in recent weeks. Basis, an up-and-coming stablecoin project, has confirmed it will close operations and refund investor accounts over regulatory bottlenecks with the Securities and Exchange Commission.

Rally Loses Steam

After a strong midweek performance, Wall Street’s major indexes struggled to regain momentum on Thursday. The Dow Jones Industrial Average pared much of its 200-point gains. It eventually settled at 24,596.30, having gained 69.03 points, or 0.3%.

The broader S&P 500 Index pared losses to finish flat at 2,6050.53. Five of 11 primary sectors recorded losses, led by materials and financials. On the opposite side of the ledger, defensive plays tied to utilities and consumers outperformed the market.

The technology-focused Nasdaq Composite Index declined 0.4% to finish at 7,070.33.

Trade Talks Take Positive Turn

Progress on a comprehensive trade agreement between the U.S. and China appears to be headed in the right direction after Reuters reported that Chinese state-owned enterprises were loading up on American-made agricultural products. In a report published Wednesday, Reuters said that government-backed companies held 500,000 tons of U.S. soybeans.

Earlier in the week, Hacked confirmed that China was shifting course on an industrial blueprint that prioritized domestic companies over foreign competition. The Made in China 2025 plan will likely get a makeover in the near future to allow greater competition in the domestic market. This means potentially greater access by U.S. companies to vital Chinese industries.

China and the U.S. are in the midst of a 90-day truce, which came out of a face-to-face meeting between leaders of both countries in Buenos Aires earlier this month. China has already lowered tariffs on U.S. autos to 15% from 40% while President Trump has delayed a tariff hike on $200 billion worth of Chinese goods initially scheduled for Jan.1.

Basis Stablecoin Shuts Down

One of the biggest stablecoin projects to come out of the ICO boom confirmed it was closing down Thursday, citing regulatory concerns in the United States. Basis, which raised $133 million via initial coin offering, will begin the process of refunding investors in the coming days.

Nader Al-Naji, CEO of the company behind Basis, Intangible Labs, told Forbes that there was no way his project could avoid security classification – a label many in the industry consider undesirable.

“We met with the SEC to clarify a lot of our thinking,” Al Naji said. “The SEC generally avoids saying that something will definitely be one way or the other. But from that meeting we got the impression that we would not be able to avoid securities classification.”

The U.S. Securities and Exchange Commission has warned cryptocurrency startups that their token offerings are subject to federal oversight and that regulators make no distinction between “utility” assets and securities. The only notable exceptions are bitcoin and Etheruem, which the SEC deems to be “sufficiently decentralized” to be considered securities.

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 696 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

The Future of Crypto

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Hi Everyone,

When the crypto bull market was still in session, the next big thing for Wall Street was set to be Ethereum futures. Now it seems they’re back on the menu.

Futures contracts were originally invented so that farmers and merchants could hedge costs before engaging in a specific venture.

For example, imagine you want to drill oil and you more or less know your production costs but don’t want to take the risk that the price will drop by the time you’ve got the barrels ready for selling. You simply buy a futures contract for oil before embarking on the venture in order to lock in your profits in advance.

As the world goes further towards the tokenization of financial assets, the service of locking in future prices for Bitcoin and Ethereum could become essential for entrepreneurs. So, the CFTC in the United States is now asking the community for help to understand the industry’s needs so that they may accommodate them.

For those of you reading who are familiar with the ins and outs, please feel free to submit your comments to them using this link: https://www.cftc.gov/PressRoom/PressReleases/7855-18

@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

  • Stock Rally in Suspect
  • Draghi Day
  • Have we finally found bottom?

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

Traditional Markets

Yesterday’s global stock rally seems to be stalling today. Indices are in the green today but the excitement may be fading. With all the recent comments from economists about how the cycle might soon come to an end or that we could be heading for another crisis, it’s difficult for traders to fully buy into any upward momentum at this time.

Crude oil is also testing the lows at the moment, and if does manage to break below $50 a barrel it could be potentially destabilizing.

European Central Bank Event

By the time you get this, the European Central Bank will probably have concluded their press conference already.

At the moment, expectations are that they will continue to wind down the quantitative easing program or possibly end it all together. Even though interest rates are not expected to rise for another year or more, it seems apparent that the ECB is following in the footsteps of the US Federal Reserve in tightening up monetary policy.

Money has been flowing freely into global markets over the last decade and it’s going to be very interesting to see what happens when that money begins to be tightened once more.

Crypto Floor Possible?

With all the progress in the crypto industry lately, it’s extremely difficult to understand why prices have fallen over the last month.

Here we can see the massive slide down in bitcoin that’s been happening since November 14th. From its all-time high to the new low from last Friday bitcoin has fallen a total of 84%, which is more or less in line with the level of retracements that the asset has seen in previous cycles.

As we have previously discussed when bitcoin broke below the psychological level of $5,000, the current area of support is between $3,000 and $3,500. So we are very much in this area right now.

A breach to the downside could certainly cause further selling and a lower low. However, a strong push upward from these levels could actually serve to shift sentiment and change the trend.

With the high number of short sellers across various exchanges right now, even a small push up could potentially affect a short squeeze in the market. Imagine such a squeeze on the level that would bring us firmly above $5,000. Such a move would very likely be interpreted in hindsight as the capitulation that everyone has been waiting for.

Guess we’ll need to wait and see how it plays out.

Have a lovely 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:MatiGreenspa

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 138 rated postsSenior Market Analyst at Etoro.com.




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Market Overview

U.S. Stocks Rise on China’s Evolving Industrial Blueprint; Cryptos See Modest Progress following Heavy Selling

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U.S. stocks rebounded sharply on Wednesday as investors shifted from apprehension to optimism on China trade negotiations. Cryptocurrencies stemmed early-week volatility but failed to muster much of a rally as trade volumes dropped.

Relief Rally

Wall Street’s major indexes recovered sharply midweek, shifting the balance back in favor of the bulls for the time being. The large-cap S&P 500 Index climbed 0.5% to 2,651.07, with sectors ranging from information technology to consumer discretionary posting large gains. Five of 11 primary sectors reported gains in excess of 1%. Real estate and utilities were the only laggards on the day.

The Dow Jones Industrial Average jumped 157.03 points, or 0.6%, to 24,527.27. The blue-chip index was up 450 points earlier in the session.

Meanwhile, the technology-focused Nasdaq Composite Index closed up 1% at 7,098.31.

China in the Spotlight

Investors got the go-ahead to bid up stocks amid reports that China was seeking to replace industrial policy that favored domestic companies across a range of vital industries. The new plan will reportedly open the door to foreign companies looking to set up shop in the world’s second-largest economy. As Hacked reported on Tuesday, the policy in question is called the Made in China 2025 plan.

The Wall Street Journal reported Wednesday that the blueprint was already being re-drawn in an effort to appease the Trump administration amid ongoing trade negotiations. Earlier this week, China agreed to reduce tariffs on U.S. automobiles to 15% from 40%.

Efforts to renegotiate free trade agreements comes in the wake of a face-to-face meeting between presidents Trump and Xi earlier this month. Both leaders held productive talks on the sidelines of the G20 summit in Buenos Aires, Argentina. This included a three-month truce not to escalate the trade war.

Cryptos Get Some Relief

Cryptocurrencies saw modest upside on Wednesday, as the majors recovered slightly from their most recent beating that nearly drove values to new yearly lows.

Bitcoin, XRP and Ethereum all recorded gains in excess of 2%, helping engineer a broad-based recovery in the market. Bitcoin was back above $3,500, while XRP returned above the vital 30-cent mark. Looking further down the market rankings, EOS jumped 8% to overtake bitcoin cash for sixth spot on the list. The digital currency was last seen trading just above $2.00.

Most coins ranked in the top-20 traded higher on Wednesday. The combined market cap rose to $111 billion as a result. However, trade volumes fell by nearly $800 million to $12.2 billion, with BitMEX seeing a drop off in activity compared with the heavy selling pressure observed earlier in the week. BitMEX has emerged as a popular venue for shorting bitcoin, which has wreaked all sorts of havoc on the leading digital currency and the market as a whole.

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 696 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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