Dow Pounds Toward 250 Point Gain, Fidelity Brings out the Bitcoin Bulls

Both Dow futures and the bitcoin price are making strides ahead of the US trading session, with bulls in the stock market and nascent cryptocurrency sector finding much to be optimistic about.

Dow Pounds to Monster Gain

As of 8:31 am ET, Dow Jones Industrial Average futures had gained 223 points or 0.91 percent, implying a monster opening bell rally of 234 points. S&P 500 futures climbed 0.44 percent, and Nasdaq futures responded with a 0.88 percent upside pop.

Dow Jones Industrial Average (blue), S&P 500 (red), and Nasdaq (orange) futures are all trading up ahead of Wednesday’s open.

The US stock market had been a mixed bag for investors on Tuesday. Following a wobbly start, the Dow closed the day in the green with a 51.74 point or 0.21 percent gain. Both the S&P 500 and Nasdaq, on the other hand, slipped into the red. The S&P 500 posted a minor 0.15 percent decline, but the tech-heavy Nasdaq plunged 0.81 percent.

Apple, Boeing Earnings Reports Power Dow’s Pre-Market Advance

Wednesday’s major pre-market rally came the day after Silicon Valley giant Apple delivered its quarterly earnings report. Analysts weren’t exactly impressed with the firm’s results — Apple barely hit revenue estimates and iPhone revenue plunged — but most of this had already been baked in when CEO Tim Cook slashed guidance targets earlier in the month. For shareholders, it seems, no news is good news, and AAPL stock popped in after-market trading

The stock market rally continued ahead of Wednesday’s open, thanks to a blockbuster earnings report from Boeing, whose shares are up nearly 6 percent in pre-market trading.

Earning season has thus far not been the wrench-in-the-recovery that bears had warned it would be. According to FactSet, almost three-fourths of S&P 500 companies who have published their quarterly earnings have beat estimates.

Trump to Congress: Don’t Waste Your Time Negotiating if a Wall’s Not on the Table

Though not likely to influence the direction of the stock market today, a variety of storm clouds remain on the horizon.

One of these is the potential for a second US government shutdown, which would kick in when the three-week continuing resolution runs out on Feb. 15. President Donald Trump continues to demand the border wall funding he failed to achieve during the previous shutdown, which lasted a record 35 days.

Tweeting on Wednesday, he warned Congress that their spending package negotiations and border security proposals are a waste of time if they do not include wall funding, or at the very least what he calls a “physical barrier.”

“If the committee of Republicans and Democrats now meeting on Border Security is not discussing or contemplating a Wall or Physical Barrier,” Trump said, “they are Wasting their time!”

The first government shutdown already cost the US around $11 billion, according to a Congressional Budget Office estimate — almost double the $5.7 billion Trump wanted to spend on the wall.

Rating agency Moody’s warns that a second shutdown would hit the US economy even harder.

“If another shutdown occurs, there could be a more severe impact on the US economy than during the recently ended shutdown,” Moody’s said in a statement, per a Reuters report, forecasting that it would stunt GDP growth and batter corporate earnings.

Fidelity, SWIFT Spark Crypto Market Advance

On the cryptocurrency front, asset outlooks remain bearish, though bitcoin and most other large-cap tokens entered the day on a moderate incline.

Bitcoin Price Outlook Bearish, But Fidelity Brings Hope

The bitcoin price made an intraday recovery following reports that Fidelity would launch its crypto custody service in March.

The bitcoin price enters the day at $3,441, which represents a 24-hour recovery of around 1.38 percent.

That minor turnaround followed reports on Tuesday that major asset manager Fidelity is just weeks away from launching its long-awaited bitcoin custody service, which will allow institutional investors to store their cryptocurrency assets with a trusted name from the mainstream financial sector. Bulls such as Galaxy Digital founder and former Fortress principal Mike Novogratz have long said that developments such as these will help power the next bitcoin bull run, and now they’re finally beginning to arrive.

That said, many technical analysts remain bearish on the short-term direction of the bitcoin price. Most chart-watchers expect the flagship cryptocurrency to at least test its $3,000 support level, and how that support responds to the gravity of bitcoin’s 13-month bear market could determine whether the floor is in or if the bears have more room to run.

Ripple Price Pops on SWIFT Speculation

There was a bit more action in the altcoin markets, as bitcoin’s smaller competitors took advantage of the day’s positive sentiment to recoup a bit of market share from the dominant cryptocurrency.

Ripple (XRP), the second (or third) largest cryptocurrency, outperformed the large-cap cryptocurrency index thanks to some bullish news from mainstream finance, namely that enterprise blockchain consortium R3 signed a partnership with mega-payments network SWIFT.

Despite some past disagreements — and lawsuits — R3 and crypto startup Ripple are closely aligned. Indeed, Ripple CEO Brad Garlinghouse was on stage during the panel discussion where the R3-SWIFT partnership was announced, and SWIFT CEO Gottfried Leibbrandt had some kind words for XRP.

“I think that the big part of Ripple’s value proposition is the cryptocurrency XRP,” he said.

The ripple price surged on speculation that SWIFT could one day adopt XRP.

That was more than enough to shake the ripple bulls out of their slumber, and as of the time of writing XRP had leaped by nearly 7 percent to just under $0.31.

The majority of other large cryptocurrencies rose by 2 percent to 3 percent on the day, carrying the overall crypto market cap to a present value of almost $115 billion.


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Author: Josiah Wilmoth 
Image Credit: Featured Image from Shutterstock. Price Charts from TradingView.

Dow Opens to Minor Monday Gains as US-China Trade Talks Ramp up

The Dow Jones Industrial Average opened to minor gains on Monday morning as the US stock market continued to wait to see whether renewed negotiations between the world’s two largest economies would bring an end to the US-China trade war.

Dow, S&P 500 Teeter as World’s Largest Economies Meet for Trade Talks

As of 9:32 am ET, the Dow had gained 38.27 points or 0.16 percent , while the S&P 500 added 0.08 percent to its impressive Friday run. The Nasdaq, which had been the worst performer in pre-market trading, fought its way back into the green for a 0.27 percent gain.

Dow (blue), S&P 500 (red), and Nasdaq (orange) futures mostly traded sideways ahead of Monday’s opening bell.

Those muted movements marked a severe departure from Friday’s close when all three indices punctuated the week with massive rallies. The Dow rose 746.94 points or 3.29 percent to close at 23,433.16, and the S&P 500 closed at 2,531.94 for a daily gain of 3.43 percent. The Nasdaq managed to surge even further, gaining 4.26 percent ahead of the closing bell.

In what has quickly become the “new reality” for investors, the stock market has been intensely volatile in recent weeks. Now, though, it appears that the Dow and other major indices are waiting for more details on renewed US-China trade talks to determine whether it will build on Friday’s recovery or slip back into the red.

Will US-China Trade Talks Reach a Resolution?

On Monday, Deputy US Trade Representative Jeffrey Gerrish led a delegation to China for two days of trade negotiations. The first day of talks brought an unexpected visit from Chinese Vice Premier Liu He, the country’s top economic policymaker and the direct head of the trade discussions.

The standoff between the two countries has begun to make itself known in the markets, with tech bellwether Apple forced to slash revenue guidance due to poor fundamentals in China, the first major indication that US companies stand to take severe losses if the “tariff truce” expires on March 1 without a new trade agreement.

Some analysts have speculated that a weak stock market could force US President Donald Trump’s hand, but US Trade Representative Robert Lighthizer has reportedly been adamant that he wants to prevent Trump from cutting a deal that includes “empty promises” from the Chinese.

Consequently, it seems like traders are holding their fingers off the trigger until more details from the trade talks emerge. Liu’s appearance at the talks is likely a positive sign, though it’s still not clear from reports how great a role he played in Monday’s discussions.

Top Movers

Toymaker Mattel (MAT) extended its Friday rally, rising 4.9 percent to headline the S&P 500. Micron Technology (MU) and Dollar Tree (DLTR) led the Nasdaq, with the former rising on analyst predictions that MU shares have “bottomed out” and the latter popping in response to reports that activist investment firm Starboard Value wants to shake things up at the discount retailer.

PG&E Corp (PCG) was far and away the worst performer in either the Dow, S&P 500, or Nasdaq following the opening bell, with shares plunging 22 percent on reports that the California utility company faces a minimum of $30 billion in liability for fires in 2017 and 2018, including the Camp Fire — believed to be the deadliest wildfire in California’s history.

Government Shutdown: Week 3 with No End in Sight

The partial shutdown of the US federal government has now entered its third week.

On the domestic front, the markets could soon begin to see the impact of the partial government shutdown, which has now entered its third week with no end in sight.

The Democratic-led House of Representatives and the Trump Administration continue to spar over funding for the president’s proposed border wall, with neither side caving to pressure to strike a deal to fund the nine federal departments that ran out of money on Dec. 22. An estimated 800,000 federal employees have been placed on unpaid furlough or forced to work without pay, leading to mass callouts in the Transportation Security Administration (TSA) and other high-visibility departments.

As of Monday morning, the 16-day shutdown is tied for the third-longest in US history, and the number of federal employees refusing to show up to work will only increase as people grow tired of working without pay or seek temporary employment to help cover their monthly expenses.

US Taxpayers Get Cold Shoulder from IRS amid Shutdown

A prolonged shutdown would have a much wider impact moving into tax season, as the Internal Revenue Service (IRS) is one of the agencies currently operating at limited capacity. While US taxpayers must still submit their annual tax returns and estimated quarterly tax payments, the IRS said that it may delay refund processing if filing season opens with the shutdown still in force.

More than just a frustration for US residents, delayed refund processing could deprive the economy of a regular source of consumer spending since many taxpayers use their annual refund checks to fund or place down payments on vehicles and other large purchases.

Price Charts from TradingView.


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Author: Josiah Wilmoth
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