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Market Overview

When Pigs Fly

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We are at a turning point in history. A new technology is set to revolutionize the way we think, the way we eat and quite probably revolutionize many other aspects of our daily lives, and no. I’m not talking about crypto.

A recent breakthrough in DNA editing called CRISPR-Cas9 has advanced the field of biological technology by leaps and bounds. It is now technically possible to do nearly anything imaginable with our cells and to create new variations of animals and human beings.

Think about a pig with wings that can fly or a human being with a brain more powerful than the world’s biggest supercomputer. Spiderman, Aquaman, Ninja Turtles are all within our grasp.

Of course, regulators and ethics boards are likely to curb those particular advancements for the time being but the technology is now in place.

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Without going into too much technical detail, CRISPR basically functions like a word processor for DNA editing. Before, scientists had to splice things in the exact right spot in a very tedious fashion. With CRISPR, they can simply copy paste information within the Genome, or find all instances of ‘X’ in a specific dataset and replace them with ‘anything’.

In eToro, we have been watching this technology for quite some time and the fruits of that are now available on the social investment platform. The @CRISPR-Tech copyfund brings together some of the stocks of the most promising companies who are using this new technology. The results so far have been quite impressive.

@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

Global Debt = $233 Trillion

Stellar Stocks

Bitcoin’s Bullish Signs

Please note: All data, figures & graphs are valid as of January 8th. All trading carries risk. Only risk capital you’re prepared to lose.

Global Outlook

According to the Institute of International Finance, the amount of debt in the world has now reached a total of $233 Trillion in Q3 of 2017 with the debt levels of many countries currently at an all time high.

This means that with 7.6 Billion people in the world the average debt per person is more than $30,000. This is particularly worrying when we compare it to the global average annual salary, which is now around $11,300.

Technically speaking if everybody stopped spending money, no food or rent or anything else, for three years, we could finally live in a debt free world.

One comforting fact is that it seems economic growth is actually accelerating faster than debt and the global debt to GDP ratio has indeed declined since 2016.

Steller Stocks

The stock markets have just put up their best week of the year. 😉

Actually, the first week of 2018 was the best start of a year for the Dow Jones and the Nasdaq since 2006.

I read a report recently that said 22% of people buying cryptocurrencies are using borrowed money. Though they admit that the sample size was very small what they were trying to hint at was that many people still haven’t paid off their credit card debt since buying into crypto.

Well, I can believe that statistic but it’s not worrying at this point. Many of those people have likely doubled or tripled their investment so are pretty likely to pay it back eventually.

What I’d like to know is what percentage of money that’s currently in the traditional stock and bond markets is actually borrowed money. Given the level of global debt that we mentioned above and given that global interest rates have been near zero for the past decade. How many firms on Wall Street are borrowing money cheaply to put it in the market?

I’m asking seriously here, if anybody has any leads to figures this out I’d love to know.

Bitcoin’s signs

Very happy to report that Ethereum has reclaimed her rightful place in the crypto market. Though we said we don’t place too much emphasis on the ‘market cap’ metric, it’s good to see Ethereum beating back Ripple and again at number two according to coinmarketcap.com

A better metric to inspect is probably the overall volumes, where ETH is now showing three times the size of XRP. And the overall amount of transactions per blockchain, which ETH has reclaimed now as well.

Despite the fact that the bitcoin blockchain is still backed up with 168,000 pending transactions at the moment. The price is indeed showing some bullish signs when it comes to technical analysis.

In the graph below we can see how the price has risen above its long-term trend line (yellow) to create a new rising trend line (blue) on the short term.

Will be interesting to see how it performs throughout this week.

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.

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

Let’s Break the Internet

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Hi Everyone,

Cardano is by far the most philosophical of all the blockchains in the crypto-space. Its protocol has been described as more of a batch of computer science principles, than a product with a roadmap.

Like Ethereum, NEO, and EOS, Cardano is a platform for creating decentralized applications. It has some really smart people backing its development too, which is one of the reasons this brand new product was able to find it’s way into the top 10 cryptos by market cap.

As such, eToro has now opened up real-time trading on Cardano’s ADA token. After reaching a high of $0.96 at the peak in January, the tokens are now trading just under $0.17.

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To add ADA to your investment profile, please click here: https://www.etoro.com/markets/ada

Remember, cryptocurrencies are very risky so please trade responsibly and diversify yourself with other markets as well.

@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

  • Trade War Continues
  • Sudden Dollar Surge
  • The BS Report on Cryptocurrencies

Please note: All data, figures & graphs are valid as of June 18th. All trading carries risk. Only risk capital you can afford to lose.

Traditional Markets

Want to wish a very happy Dragon Boat Festival to all our clients and colleagues in China.

On Friday, the USA and China added to market tensions with additional tit-for-tat trade tariffs. President Trump struck first by announcing $50 billion worth of new tariff’s on imports from China.

The response from China was swift, immediately matching the US measure-for-measure. The response came within just a couple of hours as the Chinese finance ministry barely allowed the news of the initial tariff’s to penetrate before announcing their retaliation.

Thus, the Chinese counter-measures dominated the news cycle, which will no doubt be viewed as a successful show of strength. In fact, the original Email that came to my inbox from the Financial Times with the headline…

…actually now leads to an article about the retaliatory tariffs.

The Chinese playbook has become quite clear in this case. Perhaps too clear.

An escalation of $50 billion on either side isn’t much, but the speed and scale of the Chinese response may have just tipped Beijing’s hand.

In any case, the measures didn’t seem to have had much effect on the stock markets. In this short-term graph of the Dow Jones, we can see that stocks were already on their way down before the 3.5 hour spat (purple circle).

If we zoom out to the long-term graph, we can see how insignificant the latest progression has actually been. Same purple circle.

As far as markets are concerned, the entire trade war saga is rather like the turbulence on an airplane. It might scare off a few of the newbies but for any seasoned flyer, it’s just time to sip a drink and go back to sleep.

They will, of course, wake up rather suddenly, only if captain Trump decides to do any drastic evasive maneuvers.

What Happened to Gold?

Though the stock markets were rather unaffected by the new trade war progressions, the news may have had some effect on the commodities.

Here we can see gold and crude oil reacting to the updates and plunging rather noticeably from the initial announcement and until well after China’s retaliation.

Oil is also reacting to updates from OPEC and Russia who are supposed to meet this Friday. The expected results of that meeting seemed to be rather clear at the end of last week but this morning there’s a bit of contention as several OPEC members are now opposing the idea of increasing production.

Gold on the other hand, is really confusing. Increased geopolitical uncertainty usually makes gold go up, so it’s kind of strange to see the opposite reaction from Friday’s news.

So if anyone can help me understand why it went down, I’d sure appreciate it.

The Crypto BS Report

Last week we spoke about the incredible update from the SEC where they finally clarified that Ethereum is in fact not considered a security. Though some in the community pointed out that there’s still a lot of uncertainty in the space, with the exception of Bitcoin maximalists, most people seem very happy about the recent update.

This morning there’s a fresh report out, this time from the Bank of International Settlements (BIS). This institution has never been very crypto-friendly and thought the report does highlight some of the positive qualities of cryptocurrencies, the key takeaways seem rather negative.

It pays to point out in this case that the BIS is a key player in the fiat ecosystem and as we saw with Jamie Dimon, Warren Buffet, and Bill Gates would have the most to lose should Bitcoin gain more prominence.

Their concerns over the consumption of electricity used by Bitcoin have been long ago debunked, while the claim that blockchain technology could overload and “bring the internet to a halt” feels sensationalist.

The analysis used to support this hypothesis assumes exponential growth in usage and zero infrastructure growth. It would be like saying in the 90’s that if all data were transferred over the internet, it would not be able to handle the traffic.

Of course, we know that by the time Kim Kardashian published her famous pics on PaperMag, there was more than enough bandwidth to handle all the likes and shares.

Not only is the infrastructure of blockchain technology now being built at a rapid pace, but the groundwork for the next level of innovation is already well underway as…

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.

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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4.7 stars on average, based on 101 rated postsSenior Market Analyst at Etoro.com.




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Market Overview

Market Update: Stocks Slide as U.S.-China Trade War Risks Reemerge

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U.S. stocks declined Friday, with the Dow briefly falling more than 200 points after the Trump administration moved ahead with planned duties on Chinese goods, reigniting fears of a global trade war.

Stock-Rally Falters

Risks of an all-out trade war dragged equity prices lower, with all of Wall Street’s major indexes posting declines. The Dow Jones Industrial Average fell 84.83 points, or 0.3%, to 25,090.48 with the likes of Caterpillar Inc. (CAT), and Chevron Corp (CVX) leading the declines.

The broader S&P 500 Index fell 0.1% to 2,779.42, with the majority of its primary sectors booking losses. Industries tied to primary goods were among the biggest decliners.

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The Nasdaq Composite Index fell from record levels, declining 0.2% to 7,746.38.

Implied volatility, as measured by the CBOE VIX, rose briefly on Friday before reversing gaind later in the session. The VIX fear index settled below 12 on a scale of 1-100 where 20 represents the historic average.

Trump Announces Tariffs

The Trump administration is moving forward with a plan to tax up to $50 billion in Chinese goods, sending a strong signal to Beijing that it will no longer tolerate theft of intellectual property.

A charge of 25% will be applied to Chinese goods that “contain industrially significant technologies,” President Trump announced Friday. The measures come “in light of China’s theft of intellectual property and its other unfair trade practices.”

Beijing responded swiftly by announcing it will implement import duties on the same scale as Washington. Neither country commented on the products that will be impacted.

China’s response was expected by President Trump, who said he would impose more tariffs if Beijing retaliates. Currently, the U.S. purchases far more from China than the other way around, which gives Washington some leeway in its tariff policy.

Investors are generally averse to any sign of protectionism in global markets, but this hasn’t stopped the Trump administration from recalling several of its current trade regimes in an effort to trim Washington’s deficit. Last  month, President Trump confirmed that Canada, Mexico and the European Union would be subject to import duties on steel and aluminum products.

Cryptocurrencies Stabilize After Tumultuous Week

The global cryptocurrency market stabilized Friday, as bitcoin rebounded from oversold levels and altcoins led by EOS reported gains.

All cryptocurrencies in circulation are collectively valued at $282.5 billion, according to CoinMarketCap. The market bottomed near $264 billion on Wednesday.

A top U.S. regulator delivered good news for cryptocurrency traders when he declared Ethereum not to be a security. Speaking at the Yahoo All Markets Summit event in San Francisco Thursday, SEC director William Hinman said Ethereum is too decentralized to be a security, which means it is in the same category as bitcoin.

The SEC has yet to issue a formal decree on Ethereum and it is not entirely clear whether a federal judge will agree with Hinman’s assertion. Advocates for Ethereum have rejoiced nevertheless given the ongoing debate over ether’s possible security status.

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 453 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

Stocks Pull Back as Euro Rebounds after Carnage

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Stocks are broadly lower today after yesterday’s mixed session, as European equities, which performed much better following the ECB’s meeting, also turned lower, following the major US indices. The losses are limited, as volatility remained relatively low, despite the week’s central bank bonanza that caused turmoil across asset classes.

NASDAQ, 4-Hour Chart Analysis

The NASDAQ is still the strongest among the main benchmarks, while the Dow is the weakest, dragged lower by the weakness in financials and the energy segment. Small caps are still outperforming the broader indices together with tech stocks, and Trump’s new tariffs targeted at China boosted the segment yet again today.

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EUR/USD, 4-Hour Chart Analysis

The EUR/USD forex pair has been in the center of attention in the last couple of days as expected, while currencies turned volatile across the board in the aftermath of the Fed’s and the ECB’s monetary meetings. The Dollar index surged higher, boosted by the weakness of the common currency and after a brief positive period that weighed somewhat on stocks and other risk assets.

Economic releases were mixed today after a strong weak, at least in the US, as the Empire State Index and the UOM Consumer Sentiment Index were better than expected while Industrial Production slightly missed the consensus estimate. The Eurozone CPI was in line with expectations, while Canadian Manufacturing Production missed by a mile, putting further pressure on the already weak Canadian Dollar.

Commodities Smacked Lower amid Risk-Off Shift

Currencies were by far the most active assets, as we expected after the dovish surprise by the ECB yesterday, with the Dollar’s strength affecting the majors and the recently weak emerging market currencies as well.

USD/TRY, 4-Hour Chart Analysis

The initial bullish reaction in commodities and emerging currencies quickly faded, as the fragility of the most vulnerable countries continues to pose contagion risk, and although the Brazilian Real and the Turkish Lira are both above their recent lows, the charts still look dangerous.

WTI Crude Oil, 4-Hour Chart Analysis

The Dollar’s strength put an end to oil’s bounce, as the WTI contract fell back below the $65 per barrel level, while gold is also testing its lows from May. Oil looks bearish before next week’s OPEC meeting, but the outcome of the event is as hard to predict as ever, especially given the recent volatility in the price of the Black Gold.

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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4.6 stars on average, based on 276 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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