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Market Overview

Wall Street’s Double-Digit Earnings Set to Continue Despite Political Impasse

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U.S. stocks rose to fresh highs on Monday, with the Dow Jones Industrial Average notching its ninth consecutive record close on the back of double-digit earnings from Wall Street companies.

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Record-Setting Rally Continues

The 30-company Dow Jones index climbed 25.61 points, or 0.1%, to 22,118.42 on Monday. The blue-chip index has risen in each of the last ten sessions.

The broader S&P 500 Index also participated in the record-setting rally, climbing 4.08 points, or 0.2%, to 2,480.91. Seven of 11 sectors finished in positive territory, with consumer staples and technology leading the gains.

A strong tech sector lifted the Nasdaq Composite Index to higher ground. It rose 32.21 points, or 0.5%, to 6,383.77.

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U.S. equity futures were slightly lower in overnight trading, as were futures on the Euro Stoxx 50, FTSE 100 and DAX 30.

Wall Street’s Double-Digit Earnings

With the bulk of S&P 500 companies having reported their earnings for the past quarter, the results have been much better than expected. According to FactSet, blended earnings are up 10.1% year-over-year. That is based on 84% of companies having reported so far. That puts S&P 500 companies on track for their highest year-over-year growth since 2011.

At this time last year, Wall Street was mired in a so-called earnings recession that would stretch for five consecutive quarters. The recession came to an abrupt end in Q3 2016, when blended earnings unexpectedly rose.

Trump’s Approval Rating Sinks at 200-Day Mark

Strong quarterly results have shielded equities from the political turmoil that has engulfed the Trump Administration since inauguration. According to a CNN poll conducted by SSRS, 56% of Americans now disapprove of their president’s performance.

Although CNN has come under scrutiny for its apparent bias against the president, optimism in the Trump Administration has gradually faded amid Republican infighting and a perceived lack of progress on various legislative fronts. That disappointment hasn’t been reflected in equity prices, which have relied on the ‘Trump bump’ since election day.

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Market Overview

Asian Market Update – Friday: Ethereum on the move; Asian markets were mixed in muted trade

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Ethereum

The Big Question: What’s going in the Chinese stock market?

Main cryptocurrencies say minor losses in early trading on Friday, but quickly regained ground and turned losses into gains.

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Ethereum had a big day yesterday, surging by more than 10 percent at the most before selling off again. Ethereum ended the day up about 6 percent to $406, breaking through the resistance level at $400. As of Friday morning, ethereum has gained nearly $60 since Monday.

Ethereum has also broken out of the long-term triangle pattern we have seen on the daily chart, indicating that there may be further upside in ethereum.

Meanwhile, bitcoin added 0.83 percent to $8,098 before midday in Asia on Friday. The cryptocurrency took a dive earlier in the morning, falling from $8,185 to near the $8,000 level before surging back. Overall, it has been a steady week for bitcoin, remaining above the $8,000 line since Monday.

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Litecoin’s price gained 1.39 percent to $74.32 around midday, erasing part of a $3 loss seen early in the morning. Litecoin broke through the $70 line on Wednesday and has remained above that level since.

In the news, Uport, an ID platform on ehtereum blockchain, has opened digital ID registration on its platform for citizens of Zug, Switzerland, which would allow access to e-services such as online voting. The move marks a significant step in the adoption of blockchain technology in government services.

Also, Dan Bilzerian, a social media celebrity and professional poker player, apparently made a ton of money after purchasing a “shitload” of bitcoin at $2,300 in May. Quote of the day:

“It’s like sweating like I made a bet on the Super Bowl or something,” – Dan Bilzerian talking about watching bitcoin prices going up.

But Bilzerian might still be in a position to gain much more, if Max Keiser, a reporter on Russia’s RT news, said bitcoin will reach $100,000 and that bitcoin cash is just a knockoff of bitcoin.

Main Market Movers – Mid-day Asian Trading Session

Indexes Value at Midday Daily Change
Japan- Nikkei 225 22,446 -0.34%
China-Shanghai Composite Index 3,346 -0.18%
Hong Kong –Hang Seng 29,877 0.57%
South Korea-KOSPI 2,537 0.02%
Australia-ASX 200 5,967 -0.31%
S&P 500 E-Mini Futures 2,596 -0.04%

 

Most major Asian equity markets were in a mixed mode on Friday morning, with small losses seen in Japan, the Chinese mainland and Australia, and minor gains in Hong Kong.

In Japan, the Nikkei 225 was down 0.34 percent to 22,446 at midday on Friday.

On the Chinese mainland, the Shanghai Composite Index was off 0.18 percent to about 3,346 before midday. In Hong Kong, the Hang Seng Index climbed 0.57 percent to around 29,877 before midday.

The Shanghai Composite saw the largest single day loss this year on Thursday, after closing 2.29 percent lower. The drop is still relatively small compared to some seen last year, but nonetheless indicates that mainland investors are getting increasingly worried about growth Chinese growth.

Stocks in Shenzhen in South China also saw big losses on Thursday. Analysts attribute the drop to a combination of things, including the tightening of regulation on the country’s burgeoning online lenders.

In South Korea, the Kospi added 0.2 percent to around 2,537 shortly before midday.

Down under, the ASX 200 was down 0.31 percent to 5,967.

The S&P 500 E-Mini Futures was down 0.04 percent to 2,596 at midday.

In other news, nuclear tensions on the Korea Peninsula are back in focus after North Korea said that the US decision to list the country on a state sponsor of terrorism was a “declaration of war.”

Currencies

The Japanese yen depreciated 0.12 percent the US dollar at midday Friday to 111.33 per dollar.

The Chinese yuan lost 0.13 percent against the US dollar at 6.5868 per dollar.

The Australian dollar lost 0.04 percent on the dollar, changing hands at 1.3116 per dollar at midday.

Commodities

WTI Oil was down 0.17 percent to $58.42 per barrel.

Brent Crude lost 0.09 percent to $63.33 per barrel.

Gold was up 0.12 percent to $1,292 an ounce.

Business News across Asia

In China, experts are urging the government to prepare for any measures from the US to target Chinese trade. Chinese authorities fear that the Trump administration could pressure China on trade by citing reasons such as insufficient protection of intellectual property rights and a non-free market.

Take away: China-US relations have been overall positive since Trump took office and further improved after meetings of the two leaders, but things remain fragile. 

In Australia, the government has published the first foreign policy white paper in a decade. The most important theme: Australia is looking to the US to take a bigger role in the Asia Pacific to counter China’s rise.

Take away: Though there is nothing new in the paper about its foreign policy, it still angers some in China. China-Australian relations are still extremely important for the Australian mining and farming industry.

Featured image from Pixabay.

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Market Overview

Why We’re Not Drowning in Cash?

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Investors have a lot to be thankful for this year. Both the traditional markets and alternative markets are outpacing all expectations and those of us lucky enough to be involved should take a moment to reflect.

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Many markets will be closed this evening as Wall Street takes a much needed night off. Check out the Market Hours Page for the specific assets that you’re trading on.

For you cryptotraders, I’ll save you a click. There will be no downtime. Crypto is traded 24/7!

@MatiGreenspan
eToro, Senior Market Analyst

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Please note: All data, figures & graphs are valid as of November 23rd. All trading carries risk. Only risk capital you can afford to lose.

Market Overview

The people in charge of the money flows, released their thoughts on the economy and stock markets yesterday. As we know, the US Federal Reserve Bank has had more influence on the economy than any single institution or person over the past decade. The FOMC minutes from their meeting on November 1st did contain a few surprises.

It seems that the Fed Head Janet Yellen has completely changed the language she’s using about inflation. The word she was using before was “transitory”, meaning that the Fed feels this low inflation period will pass shortly. A word that she used more recently is “guess,” stating that we ‘think’ that inflation will rise. Now it seems they’re just not certain so they’re going to ignore it.

Let’s back up…

The Federal Reserve, along with the other central banks of the world have been pumping the global economy with cash injections known as Quantitative Easing (QE). Currently, the total amount of QE from the top five countries is about $19.5 Trillion. Not a small amount of change.

but it doesn’t stop there…

In our economy, only a small portion of money is created by the central banks. In fact, every Dollar that is held at the Fed is then lent out to other banks within the country who in turn lend each and every dollar to many different clients. This is called fractional banking and what it means is that a bank only needs to own a fraction of the money that it lends out.

Like any other asset, prices of currencies are usually determined by supply and demand. However, with the amount of QE that’s been poured into the system it’s a real mystery that we haven’t seen hyperinflation on a massive scale.

Why are we not drowning in cash???

This question is now being pondered by virtually all economists in the world at the moment and nobody seems to have any good answers.

One of the biggest effects that we can see are global stock prices that tend to benefit from all this cash floating around the system.

The question of hyperinflation or lack thereof is a hot topic in the financial world and no doubt will be discussed by some over turkey and cranberry sauce this evening. For some of the more normal people, the much bigger topic of discussion will be about cryptocurrencies and how we can replace all of the above with a much better system.

Crypto Market Tops $250 Billion

There have already been several articles published about how to speak about Bitcoin at your Thanksgiving dinner. Some of them are pretty good too. But I’m sure most of my readers are already somewhat familiar with this world and what we’re trying to accomplish with it so I’ll just dive right into the price movements for you.

It’s now been two weeks since the Segwit2x hard fork was called off (orange circle) and the action has been intense. It seems that every day one crypto or another is seeing monstrous gains. Here I’ve put together all the cryptos that are traded at eToro in one chart.

Bitcoin itself is up 10% in two weeks, which is amazing if you think about it but somehow just doesn’t seem impressive at all given some of the other advances.

The best performer by far has been Bitcoin Cash (Green). I actually had to cut off the top of the spike on the chart above just so we could see the moves more clearly. Some believe that Bitcash’s bigger blocks and new ‘difficulty adjusting mining formula’ make it an excellent alternative to Bitcoin. However, the crypto markets are all about consensus. And lately, especially since B2X coin never happened, this new bitcoin is gaining traction.

As of this writing, Bitcash is up 36% in the last 24 hours and 148% in the last two weeks. Beware the volatility though!!

The second best performer has been Dash, which we discussed in yesterday’s update and though Ripple saw a big spike (purple circle) on the announcement that they will be partnering with American Express, they’re two-week performance is now mostly inline with the rest of them.

Trying to guess which crypto is going to perform the best is a lot like playing roulette. The odds that you’re going to guess the exact right one are pretty slim. However, this is not a zero-sum game. So spreading your bets out and diversifying into many different contenders is probably the best strategy.

New Milestone

The total value of all digital assets in the world has now passed $250 Billion, up 25% in the past two weeks and 1471% since the beginning of the year.

My best guess is that many cryptotraders looking at their portfolio right now might see the ‘lagging’ performance of bitcoin and try to reallocate some of their BTC into higher risk tokens to try and chase those bigger returns. However, this doesn’t necessarily mean that bitcoin will go down.

Bitcoin is a gateway cryptocurrency. Most newcomers in the market and there are a lot of newcomers, first get into bitcoin before trying out some of the others and it still represents the biggest holding of most crypto-investors.

Let’s have an amazing day ahead!

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.

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Market Overview

Asian Market Update – Thursday: Quiet morning for cryptocurrencies & Asian stocks

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Quiet morning

“There is a time to go long. There is a time to go short. And there is a time to go fishing.”

– Jesse Livermore, legendary stock trader

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Prices of main cryptocurrencies were in a muted mode during the Asian trading session on Thursday, as bitcoin, ethereum and litecoin prices were all down slightly.

Bitcoin was down 0.12 percent to about $8,240 before midday in Asia. The price of bitcoin has now been stable around the $8,200 level since Wednesday afternoon, with more and more people now saying openly that we may see bitcoin reach the $10,000 level this year.

Ethereum gained 0.28 percent to about $380 before midday. Ethereum saw a big surge overnight, rising from about $363 last night to about $381 earlier this morning.

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Litecoin price was down 0.28 percent to about $72 at midday.

In the news, JP Morgan is considering helping clients with trading bitcoin futures contracts once they launch on US derivatives exchange CME next month. JP Morgan CEO has made negative comments about bitcoin, which he said is a “fraud.”

Also on the move in the crypto world is Dash, which set a new all-time high of near $600 on Wednesday. The coin has been in a strong rally in the past week and a half.

Main Market Movers – Mid-day Asian Trading Session

Indexes Value at Midday Daily Change
Japan- Nikkei 225 22,523 0.48%
China-Shanghai Composite Index 3,413 -0.50%
Hong Kong –Hang Seng 30,081 0.27%
South Korea – KOSPI 2,539 -0.05%
Australia-ASX 200 5,983 -0.04%
S&P 500 E-Mini Futures 2,594 0.02%

Asian equity indexes were mixed on Thursday morning, with small gains seen in Tokyo and Hong Kong and minor losses in Shanghai and Sydney, tracking a mixed mode on Wall Street overnight.

In Japan, the Nikkei was up 0.48 percent to 22.523 before midday.

In China, the Shanghai Composite Index was down 0.5 percent to about 3,413 before midday. In Hong Kong, the Hang Seng Index was 0.27 percent higher at around 30,081.

In South Korea, the Kospi fell 0.05 percent to 2,539 before midday.

Down Under, the ASX 200 was down 0.04 percent to 5,983 before midday.

The S&P 500 E-Mini Futures was up 0.02 percent to 2,594.

The overall subdued performance of Asian stocks followed similar mixed closing on Wall Street as investors there digested the latest minutes from the Fed and as markets are heading to a Thanksgiving weekend.

In the US, market expectations are high for a December rate hike by the Fed (some say it’s a 100 percent certainty). The Fed’s latest minutes showed that policymakers remain positive about the economy and earlier policies such as the rate hike in December.

In China, a top-down crackdown on online lending firms is underway. Chinese regulators are reportedly holding meetings with local governments and ordering them not to issue new licenses to online lending firms.

Currencies

The Japanese yen lost 0.15 percent the US dollar at midday Thursday to 111.37 per dollar.

The Chinese yuan firmed 0.26 percent against the US dollar at 6.5911 per dollar.

The Australian dollar also lost 0.15 percent on the dollar, changing hands at 1.3140 per dollar at midday.

Commodities

WTI Oil was down 0.33 percent to $57.83 per barrel.

Brent Crude lost 0.33 percent to $63.08 per barrel.

Gold was down 0.11 percent to $1,289 an ounce.

Business News across Asia

In China, local police in South China’s Guangdong Province dismantled an underground banking scheme involving more than 20 billion yuan ($3 billion), according to Xinhua. Seven people were detained in relation to the case.

Take Away: Schemes such as this remain pervasive in China and authorities are up their ante in the fight against these crimes to fight financial risks, taking orders from the top of the government.

In Japan, a new scandal about companies cheating regulatory requirements is emerging. A Mitsubishi Materials unit has reportedly falsified data on a material that is used in a wide range of products, including aircrafts.

Take Away: This is only the latest example of the Japanese firms faking data on key products. Previously we have seen the same behavior from Nissan, Subaru, Kobe Steel and others. It is definitely not good for the Japanese manufacturing and exports sector in the long run.

Featured image from Pixabay.

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