Dow Jones Winning: Why China’s Stock Market Surging For First Time in 3 Months is Crucial

For the first time in 3 months, the Chinese stock market has recorded a 3 percent increase triggered by the optimistic prospect of a comprehensive trade deal. The Dow Jones is nearing the 26,000 point mark after initiating a strong rally in the past two weeks.

The solid movement of the CSI 300 Index, which replicates the performance of top 300 stocks in the Shanghai and Shenzhen stock exchanges, has shown that investors in Asia highly anticipate the trade talks with the U.S. to see significant progress in the weeks to come.

The CSI 300 Index made robust gains in anticipation of satisfactory trade talks between the US and China. | Source: TradingView

The Dow Jones recorded a 1.3 percent rise on February 17 and is en route to breaking out of the 26,000 point level for the first time since November.

Dow Jones Rally Expected, Analysts Say Trade Deal Fears are Exaggerated

With jobs growth and household balance sheets at record highs, the U.S. is arguably in a better position than China in any given time frame.

The growing number of defaults in China has placed more pressure on the domestic market and the authorities to achieve a deal with the U.S.

A full-scale trade agreement is crucial for both countries in the short-term as it would alleviate significant pressure from the Chinese economy and strengthen the rally of the Dow Jones and the U.S. stock market in general.

The stock market of China and the rest of Asia are recovering in a period during which the outcome of the trade deals remains uncertain.

The Trump administration has publicly expressed its intent to consider a 60-day extension on the March 1 deadline, a move that could destabilize major markets.

However, the Chinese market has rebounded strongly in the last 24 hours, demonstrating the growing confidence of investors in the prospect of the ongoing trade talks.

Baird vice chairman for equities Patric Spencer said that the fear around the result of the trade talks has been overblown. With the newly adopted patient approach by the Federal Reserve, the executive stated that the market is in a decent place to maintain its momentum.

“The market has been worried about the China tariffs but Trump wants a deal and a lot of the fears are generally overblown. The more patient terminology from the Fed has been fairly accommodative for markets so far.”

Recently, as Admisi strategist Marc Ostwald said, investors have begun to focus on the positives over potentially negative factors that could lead the stock market to the downside.

Similarly, Direxion Investments managing director Paul Brigandi said last week that investors in the U.S. market have been trading based on momentum and the strong performance of the Dow Jones.

The Dow Jones Industrial Index has also seen momentum stick since the turn of the year. | Chart via TradingView

As such, if the trade talks with China continue to show progress in certain areas, the near-term rally of the Dow Jones and the rest of the U.S. market could be sustained.

“Momentum is a key component right now. A lot of people are jumping in to get on board,” he said.

Some Difficulties in the Trade Talks

The stalemate in the trade discussions with China seems to derive from the requests of the U.S. on fundamental changes to the structure of the Chinese economy.

The U.S. government has reportedly asked Chinese negotiators implement significant changes in the country’s industrial policies.

Despite the speed bump in the U.S.-China trade talks, the optimism stems from the intent of both countries to move forward with the discussions without imposing additional tariffs or restoring previous tariffs.

Most of the positive movements in the stock market of the U.S. and China are fueled by the certainty of investors that while the trade deal could be pushed beyond the original deadline, the two countries are not in a rush to impose higher tariffs in the short-term.


Source
Author: Joseph Young 
Image Credit: Source: AP Photo/Richard Drew)

How Apple & Google Transformed into a Systemic Risk to the US Stock Market

According to Credit Suisse strategists, the “reversal of fortunes” seen by tech behemoths Apple and Google-parent Alphabet are dragging down the performance of the overall US stock market. The S&P 500 forecast has been “skewed” by companies suddenly transitioning from high growth forecasts to much more modest outlooks.

This Bad Apple Could Roil the S&P 500

An “unusually high” number of big US companies have revised previously-bullish earnings forecasts downwards. These include Alphabet and Apple, as well as Exxon Mobile, GM, Micron, Chevron, and ConocoPhillips. Oil and technology companies are also pushing US stock market growth downward.

The S&P 500, according to Refinitiv, will now only grow by 0.3% in the first quarter of 2019 compared to 23% in all four quarters of 2018. Overall S&P 500 growth for 2019 is now expected to be 4.5%.

Apple, Alphabet, and Others See a Reversal of Fortune in 2019 Impacting the US Stock Market | Source: Credit Suisse

There have only been three other times since 1990 that so many companies have seen such a reversal of growth. Per the chart above, 71 quarters have seen two or fewer top 20 growth contributors move to the worst-performing segment. Thirty-five quarters have seen less than a handful of companies reverse so rapidly, and just three have seen more than seven do so, including the first quarter of 2019.

Cited in CNBC, Patrick Palfrey, a US equities strategist at Credit Suisse, says:

“For the typical company, are they seeing a problem? The answer is not really. You can get a few bad apples distort the underlying trend.”

US Stock Market at Mercy of Mega Companies and Tax Cuts

Palfrey believes other companies on the S&P 500 are growing at between 5% and 6%, adding:

“There is this massive skew for these mega cap companies that had really great years, over the past several years and in 2019, the trends are uninspiring for them.”

Credit Suisse also points to the importance of Trump’s recent tax cuts in skewing stock market growth. The cuts added 7% to 8% to earnings growth in 2018 but are now acting as a headwind, dropping profit growth by 1%. Benefits included last year, like deductions for capital expenditures, are no longer available.

Breaking Down Growth Struggles at Apple and Google

Apple reported profit growth of over 40% in the third-quarter of 2018 and is now expected to see a 12.3% decline. Alphabet’s profits grew 23.9% in the third-quarter of 2018 but are likely to fall 21% in the first quarter of 2019.

S&P 500 (Blue) Apple (Red) Alphabet (Orange) Performance Over the Last Year Source: TradingView

The two have moved from being at the top of the S&P 500 for growth to the bottom 20%. They are joined by Exxon Mobil – dropping from 51% growth to a 14.5% decline – and Chevron, dropping from 148% growth to a 21% decline for the same period.

Apple’s ability to swing the US stock market has never been in doubt. Its shocking sales forecast revision in early January dropped its own share price 10% and sent the Dow Jones Industrial Average plummeting by a whopping 500 points. Apple and Microsoft are still battling to be America’s largest company by market value and are closely followed by Alphabet and Amazon.

These Silicon Valley giants helped propel the US stock market to record highs in 2018, but as the economy moves deeper into 2019, they may prove to be its greatest foil.


Source
Author: Melanie Kramer
Image Credit: Featured Image from AP Photo / dapd, Martin Oeser

Dow Jones Sess Stunning 10% Recovery, But This One Key Factor Could Fuel Even More Growth

Since January 3, within a one-month span, the Dow Jones Industrial Average has recovered from 22,682 points to 25,102 points, by more than 10 percent.

It has been a stunning 30 days for the Dow Jones, which was at risk of entering a bear market after falling by 19 percent from its all-time high.

The short-term recovery of the Dow was mainly attributed to the Federal Reserve rate, which is expected to remain stable in the range of 2.25 percent to 2.5 percent.

But, another key factor may have largely affected the sentiment around the U.S. stock market throughout the past 48 hours.

Jobs, Jobs, Jobs: U.S. Shutdown Has Minimal Impact as Dow Jones Recovers Off of It

A Reuters report revealed that contrary to the expectations of investors, the shutdown of the U.S. government last month had minimal impact on jobs.

Throughout the 34-day period, more than 800,000 federal workers missed two paychecks, which account for around 0.5 percent of the workforce of the U.S.

Although the unemployment rate of the U.S. increased to 4 percent as a result of the shutdown, the Labor Department said it had no “discernible” effect on job growth.

Most major industries recorded a rise in job growth from December to January.

  • Employment in construction rose by 52,000 in January
  • Employment in manufacturing increased by 13,000 in January, following a 20,000 increase in December
  • 8,000 federal workers were hired by the government in January

Job growth rose In industries including healthcare, finance, and transportation as well, eliminating the concerns of investors that the shutdown could slow down the recovery of the U.S. Stock market.

With job growth strengthening and increasing at a gradual pace and the Federal Reserve vowing to remain patient on rate hikes, the stock market is expected to sustain its momentum throughout the short-term.

Another Variable: U.S.-China Trade War, Trump Remains Positive

Earlier this week, the U.S. government filed more than 20 charges against Chinese telecom and electronics giant Huawei, fueling the tension between the U.S. and China.

The South China Morning Post reported that the trade talks had been overshadowed by the Huawei indictments, which analysts foresee could lead to a substantial fine for the Chinese company.

A professor at the National University of Singapore David De Cremer said:

“It is likely that Huawei will receive a very big fine. Such a decision would communicate to allies of the U.S. to join in this battle and push Huawei out of their markets.”

If the indictments lead to an export ban on Huawei, local analysts in China said that it could have a major impact on both Huawei and its partners.

Crucially, it could heavily affect the “Made in China 2025” roadmap set forth by the government of China that may alter the outcome of the trade talks.

Jia Mo, a Shanghai-based analyst, told SCMP:

“Imposing an export ban on Huawei will inevitably have a tremendous impact, whether for Huawei or for its business partners in the US.”

Analysts emphasized that the Huawei case has added another uncertainty to the trade discussions between the U.S. and China.

IDC Asia-Pacific vice president Simon Piff added:

“Whether [the Huawei indictments] are due to security concerns, business concerns or political concerns are now so blurred it is difficult to tell what the outcome would be.”

But, U.S. President Donald Trump has said that the meeting is going well with good intent from both sides despite the Huawei dispute, which could serve as a catalyst for the short-term growth of the U.S. economy.

If the job growth is sustained throughout the first quarter of 2019 and the Federal Reserve maintains its rate in the 2.25 to 2.5 percent range, the U.S. stock market could aim for a full-fledged recovery from its December downturn.


Source
Author: Joseph Young 
Image Credit: Featured Image from Shutterstock

This Pot Stock Just Surged 90% for the Stupidest Reason Ever

More than three dozen cannabis companies applied for the POT symbol on the Canadian Securities Exchange after it became available this week. Potash Corporation relinquished the symbol, and so many Canadian companies wanted it that the CSE ran a first-ever random lottery for the symbol. A small firm in Vancouver, Weekend Unlimited, won the ticker in the lottery.

The company formerly had the ticker YOLO, which stands for “you only live once.” Most sites like TradingView were still showing YOLO as the company’s ticker. In the 24 hours after it officially became POT, it surged 65%.

Pot Stock Almost Doubles after Winning Coveted Ticker Symbol

YOLO/POT (Weekend Unlimited) rose more than 90% in the 24-hour period.

At the time Bloomberg wrote on the subject earlier today, YOLO/POT was on the way up. By press time it had risen more than 90% over the 24-hour period. The stock market is a psychological game. Traders believe in brand recognition. The strategy is likely along these lines: as people come in and invest in the marijuana industry, one of the first symbols they will consider is POT.

In a prepared statement, Weekend Unlimited CEO Paul Chu says:

“Weekend Unlimited is thrilled to add the iconic POT trading symbol to its identity. As a fast-growing multi-state operator, Weekend Unlimited is developing lifestyle brands around recreational and wellness to help define the future of the cannabis industry. The POT sy+++mbol is a tremendous fit with our brand identity. […] The POT lottery served to raise the profile of Canada’s leadership in legal recreational cannabis and we believe it will also serve to raise Weekend Unlimited’s profile.”

“Weekend Unlimited was not on the list of 8 cannabis companies given a “buy” or “speculative buy” rating by Canaccord recently. Perhaps the only pot stock on the list with a memorable symbol is Curafleaf, whose ticker is CURA.

Other stock exchanges have POT symbols, but the CSE might be the only one where it is a cannabis company. The New Zealand exchange, for example, has POT – Port Of Tauranga NPV. According to Bloomberg, there may soon be another YOLO symbol on the New York Stock Exchange, created by AdvisorShares Pure Cannabis ETF.


Source
Author: P.H. Madore 
Image Credit: Featured Image from Shutterstock

Canaccord Says These 8 Pot Stocks Deserve a Look Thanks to the US Farm Bill

Pot stock analysts believe that the CBD industry is about to explode. The reason? The $867 billion Farm Bill, signed into law by US President Donald Trump on December 20, officially excluded all cannabis products with 0.3% or less THC from the Controlled Substances Act. (THC is the psychoactive element in marijuana that gets users “high.”)

CBD has medicinal uses and is already legal in many states, as is its psychoactive component. As a result, farmers anywhere in the United States can freely grow “hemp” for both industrial and medical purposes.

Several Pot Stocks Set to Explode

Charlotte’s Web is one of eight pot stocks that Canaccord thinks could go higher within the near future. | Source: Shutterstock

Canaccord Genuity, a wealth management firm and investment bank with offices all over the world, believes the effects of CBD legalization will be huge. They rated the following stocks as most promising in a note today:

  • Charlotte’s Web Holdings, Inc. (CWEB-CSE)
  • Canopy Growth Corporation (WEED-TSE)
  • Curaleaf Holdings, Inc. (CURA-CSE)
  • Liberty Health Sciences Inc. (LHS-CSE)
  • 1933 Industries, Inc. (TGIF-CSE)
  • DionyMed Brands, Inc. (DYME-CSE)
  • KushCo. Holdings, Inc. (KSHB-OTC)
  • MJardin Group, Inc. (MJAR-CSE)

Of these, only Charlotte’s Web Holdings was given a firm “buy” rating. The others were categorized as “speculative buys.” The CNBC article on the subject lists the buy targets. In the case of CWEB, that price is $21 Canadian. At press time, CWEB was trading at $19.70, down from its 24-hour high of $20.73. If the advice of Canaccord is to be taken, that means there is still ample room to buy CWEB. However, do note that this article is not intended to be financial advice.

CWEB opened around $10 last August. It has now nearly doubled in value. If Canaccord is correct, it could have a lot of room for growth in the near future as American farmers begin harvest CBD.

The first-quarter report from Canaccord has a message from CEO David Davieu regarding the strategization of the firm going forward. Davieu notes that growth stocks may face a challenging environment in the coming quarters. As a hedge, the firm is moving heavily into cryptocurrency and cannabis companies.

“With signs that the economic backdrop could become more challenging for growth stocks, we anticipate that rising commodity prices will drive increased activities in the natural resource sectors, a historic area of strength for our firm. We also anticipate growing interest in non-traditional sectors where Canaccord Genuity has established a strong market position, such as cannabis and digital assets.”

Canaccord Going Heavy on Cannabis and Cryptocurrency

Canada legalized marijuana nationwide last year. Pot stocks from the United States’ neighbor to the north have been booming as a result. For example, CWEB opened in August 2018 around $10, and has in the meantime almost doubled its per-share price.

Canaccord is continuing their expansion into digital assets despite lingering doubts about a Bitcoin ETF. Their doubts were again confirmed earlier this month when a Bitcoin ETF application was summarily withdrawn.

The note acknowledges that the Food and Drug Administration has yet to get fully on board with CBD legalization, but Canaccord this is a temporary situation.

“While the FDA’s stance has added some initial caution by retailers looking to enter the CBD space, we believe this to be transient, and expect many mass market retailers to begin distributing CBD products over the course of 2019.”

Marijuana legalization has revitalized several economies in the United States, most notably Colorado, which saw a $66 million marijuana tax surplus in fiscal year 2015, the first full year of total legalization. More than 60% of Americans now support legalization of marijuana, paving the way for what may amount to a mandate for elected officials in coming years.


Source
Author: P.H. Madore 
Image Credit: Featured Image from Shutterstock. CWEB chart from TradingView.com.

S&P 500 and Stock Markets Worldwide Close Out Worst Year Since 2008

Stock markets worldwide, including Dow Jones, Nasdaq and the S&P 500, have posted disappointing yearly returns, with many indexes being compared to their performance during the financial crisis.

The S&P 500 is down 6.2% for 2018, while the DOW Jones Industrial Average is down 5.6% for 2018. These numbers, compared to the financial crisis, where the indexes posted yearly losses of 38.5% and 33.8% are a new low given the general bull sentiment surrounding markets going into 2018.

While the S&P 500 was up 9% during the first three quarters of 2018, it has marked a new milestone of ending the year in the negative digits at -6.2%. This is the first time the S&P closed negative digits on the yearly after rising for the first three quarters. Similarly, the NASDAQ composite fell 3.9% for 2018.

The main catalyst for this drop is said to be the sell-off that began in October.

There have been widespread concerns of an economic slowdown, along with fears that the Fed is making incorrect decisions with respect to monetary policy.

S&P 500 Down Year Over Year

The S&P 500 was on a great run throughout 2017, opening at around 2240 points and ending the year at 2674 points.

S&P 500 2017 performance

However, 2018 brought with it a lot of volatility, sharp trend reversals along with increased political tensions.

The trade war between US and China has resulted in fluctuating stock markets throughout 2018. However, recent developments indicate that the disputes might soon be resolved, as early as March 2019. This might be a good fundamental catalyst for markets worldwide. A trade agreement being chalked out might come into effect in March 2019.

S&P 500 2018 Performance

Markets in London experienced a similar downturn, with the FTSE 100 index posting a yearly drawdown of 12%. This contrast to the record high of 7859 points that the Index posted earlier this May.

There are several reasons the FTSE dropped severely during 2019. To begin with, trade tensions between US and China have affected stock markets globally. Secondly, the uncertainty surrounding Brexit and concerns regarding US interest rates provoked a selloff within markets in UK.

Asia

Chinese stock markets took the worst hit, with the CSI 300 benchmark dropping nearly 27% at market close on December 27th. The primary cause for this drop is said to be the ongoing trade dispute with the Unites States.

Hong Kong’s HSI Index lost 13.6% this year, its worst since 2011 when it lost 19.97%

Similarly, Japan’s Nikkei 225 Index lost 12.1% during 2018, its worst since the financial crisis.


Source
Author: Alex T
Image Credit

5 Types of Cryptocurrency Entrepreneurs Should Know About

Cryptocurrencies are both investment opportunities and new financial instruments of increasing importance to investors and business owners.

 

You can classify every digital currency in existence as one of these five types of cryptocurrency. These distinctions are of the utmost importance for cryptocurrency investors because they determine what exactly you’re investing in, and who can invest in the first place. From coins to tokens, stablecoins to utility and security tokens, here are the main types of cryptocurrency you need to know about.

Coins vs Tokens

The biggest distinction in cryptocurrency is between coins vs tokens. Every cryptocurrency has to be one or the other. Here’s what differentiates coins from tokens: Coins have their own blockchain. Tokens do not.

Most of the big name cryptocurrencies — Bitcoin (BTC), Ethereum (ETH), and Ripple (XRP) — are coins. The most important thing to remember about coins is that they have their own blockchain, meaning a decentralized, peer-to-peer network that records transactions on a digital ledger.

By contrast, a token does not have its own blockchain. The Ethereum blockchain is the most popular platform for token creation, though you can theoretically create a token on any blockchain. 0x (ZRX), Maker (MKR) and Basic Attention Token (BAT) are examples of ERC-20 tokens, meaning a specific type of Ethereum-based token. In other words, their protocol exists ‘on top of’ the Ethereum blockchain.

Coins function as currency. Tokens represent access to a product or ‘stock.’

Since coins have their own blockchains, it makes sense that they serve as currency, a means of exchange, within that network. This is why Bitcoin is called digital gold and Ripple is lauded for its fast transactions: Bitcoin is a store of value, like gold, and Ripple facilitates cross-border bank transactions. Furthermore, it’s easier to convert USD to a coin, rather than a token. Investing in a token usually requires exchanging USD for a coin first.

The value of a token is a little more complicated. Tokens are typically released in ICO, which stands for Initial Coin Offering. ICOs are like IPOs for cryptocurrency, meaning that they give the investor access to tokenized services or products, or represent a stake in a cryptocurrency company. This is where tokens get a little confusing: Tokens fall under different SEC regulations depending on what they represent. You can separate tokens into two types of cryptocurrency that represent either a utility or a security.

Utility Tokens vs Security Tokens

Understanding the distinction between these two types of cryptocurrency is paramount to investors, cryptocurrency companies and the government. In other words, the SEC has much stricter regulations for security tokens than it does for utility tokens because, as their name suggests, they’re considered to be digital securities.

Most Tokens Are Utility Tokens.

If you can buy or trade a token on a cryptocurrency exchange without being an accredited investor, then it’s a utility token. In broad terms, a utility token gives an investor access to a service or product. This can mean that a token can represent exclusive access, a discounted rate, or early access. When you hear about smart contracts and DApps, you should assume that a utility token is involved.

Basic Attention Token (BAT) is a utility token that has received a lot of press. It’s a means of exchange for digital advertising attention, hence the name. Integrated with the browser Brave, BAT works in three ways:

  1. Users receive BAT for consenting to view ads.
  2. Content creators receive BAT when users view ads on their site.
  3. Advertisers buy ad space with BAT.

BAT represents attention, not stock or currency, making it a utility token. This means that anyone can trade utility tokens on a cryptocurrency exchange.

Security tokens are securities that exist on the blockchain.

Security Tokens are different. Like securities, security tokens represent part-ownership in a tradeable, real-world asset external to the blockchain. And because security tokens are regulated by the SEC like securities, you have to be an accredited investor to participate in STOs, meaning Security Token Offerings.

The SEC decides whether something is a security token using the Howey Test. In simple terms, the Howey Test determines whether a cryptocurrency investment is ‘speculative’, meaning that the investor makes money based on the labor of a third party.

Investing in security tokens is slightly more difficult. Investors must use a security token issuance platform, like Polymath or Swarm, to buy and trade tokenized securities. Unlike Coinbase or Binance, which are cryptocurrency exchanges that allow anyone to create an account, security token issuance platforms require their users to meet specific requirements. This typically means having your accredited investor status confirmed by a KYC provider. The platform will then create a customized profile that specifies how and how much each investor can trade.

Converging Types of Cryptocurrency

Distinctions between types of cryptocurrency can be obscure. Since companies have access to a much smaller investment pool with security tokens, some try to pass off their security tokens for utility tokens. There is also debate over whether tokens can represent currency, like coins, rather than access to a service. To make matters less clear, stablecoins are often technically ‘stabletokens’.

What is a Stablecoin?

Stablecoins are an increasingly popular type of cryptocurrency, especially in a Bitcoin bear market. This is because stablecoins are “pegged” to traditional assets like fiat (meaning government-backed currency like the US Dollar or Euro) or gold.

For example, the theoretical exchange rate between a stablecoin pegged to the USD and the US Dollar itself is 1 to 1. In theory, the company behind a stablecoin has the same exact amount in assets, stored in bank accounts, as they do tokens.

The advantage of stablecoins is that in a bear market, crypto investors can move their money from volatile cryptocurrency to stablecoins, a more ‘stable’ asset class in theory. This is instead of converting it back to USD, which can be a two-step process that incurs transaction fees. When a bull market returns, investors can convert their stablecoin back into other more volatile currencies at little to no cost.

Historically, however, stablecoins have ‘broken their peg’ in both directions. For example, controversial stablecoin Tether (USDT) has been worth less than a dollar, and Gemini Coin (GUSD) has exceeded the value of a dollar. This highlights another feature of stablecoins: Most have “USD” in their name. But keep in mind that not all do. For example, Maker (MKR), another stablecoin, does not.

Stablecoins Are Generally Tokens.

Despite being called stablecoins, stablecoins are usually tokens, meaning that they don’t have their own blockchain. Maker (MKR) exists on the Ethereum blockchain. Tether (USDT) was built on the Bitcoin blockchain. Similarly, both these “tokens” function as “currency,” which is a characteristic of coins, not tokens. As we develop new applications for digital currencies, distinctions between types of cryptocurrency become increasingly blurred, which makes SEC regulation even more uncertain.

Distinctions between types of cryptocurrency matter.

Why should you care whether something is a coin or a token, a utility token or a security token? Though the world of digital currency appears new and unclear, every prospective investor should know the value of the crypto they’re considering and, above all, how current and future SEC regulation will affect it.

Furthermore, the distinction between coins and tokens represents two potential forks in the evolution of cryptocurrency: cryptocurrency as tokenized securities and cryptocurrency as a payment method. Will crypto replace the stock market, the US Dollar or both? As it stands, both revolutionary applications of cryptocurrency are making headway.


Source
Author: Scott McGovern
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The New Way For Investors in the US to Invest in Bitcoin

Following the U.S. Securities and Exchange Commission’s evasion of the Bitcoin ETF question, an alternative is now being offered to US investors. A Bitcoin-based ETN (exchange traded note) listed on Nasdaq Stockholm exchange is being quoted in dollars since Wednesday, under the ticker CXBTF.
LIONBIT
ETNs are close cousins to ETFs (exchange traded funds), but there are some key differences. ETNs are structured products that are issued as senior debt notes, while ETFs represent a stake in an underlying commodity. ETNs are more like bonds in that they are unsecured. ETFs provide investments into a fund that holds the assets it tracks, like stocks, bonds or gold.

The Bitcoin ETN has been trading on the Swedish stock exchange since 2015, but was only offered in euros and kronas, Sweden’s native currency. As it is now quoted in dollars, this is an attempt to market it towards US investors – if investors can convince their brokerage account providers to make the Bitcoin ETN available on their platforms.

“Everyone that’s investing in dollars can now get exposure to these products, whereas before, they were only available in euros or Swedish krona. Given the current climate on the regulatory front in the U.S., this is a big win for Bitcoin,” CEO of CoinShares Holdings, Ryan Radloff, told Bloomberg.

TIP

The product is dubbed Bitcoin Tracker One, and according to Bloomberg, trading it is “similar to buying an American depositary receipt, in that traders will see a foreign-listed asset in US dollars.” Although trades will be done in dollars, everything else will take place in the Swedish market.

Although it is speculated that a Bitcoin ETF would most likely send the price of the cryptocurrency upwards, the ETN announcement is not expected to have the same effect.
Also, as reported, the largest ETN trader in Europe, Amsterdam-based Flow Traders NV, is now making the first move into this market as it aims to profit from high-frequency trading of ETNs based on bitcoin and ethereum.


Here at Dollar Destruction, we endeavour to bring to you the latest, most important news from around the globe. We scan the web looking for the most valuable content and dish it right up for you! The content of this article was provided by the source referenced. Dollar Destruction does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products or other materials on this page. As always, we encourage you to perform your own research!

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Author: Sead Fadilpašić
Image Credit: iStock/ShutterWorx


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Why are global stock markets falling?

Fears of interest rate rises in the US aimed at taming inflation are making markets nervous.

The FTSE 100 has posted its worst one-day performance since last April, as the London index picked up from a Wall Street sell-off at the end of last week. Indices also fell in Europe and Asia. Here we look at some of the issues raised by the sell-off.

Why are stock markets falling?

For several weeks, economists and analysts have warned that inflation levels in major economies could increase this year beyond the 2% to 3% that central banks believe is good for developed countries. Official US figures turned those concerns into a sell-off last Friday, after they showed average wage rises in the US had reached 2.9%. The data increased fears that shop prices would soon rise further, increasing the pressure for high interest rates to calm the economy down. Investors then bolted at the prospect of an era of cheap money – which encourages consumers and companies to spend – coming to an end.

Over the past month, several members of the US central bank, the Federal Reserve, have argued that three 0.25% interest rate rises scheduled for this year could become four or five.

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Is there worse to come?

There is every prospect that the US economic data will continue to strengthen, increasing the potential for higher interest rates. President Donald Trump’s tax reform bill, which gained approval in Congress before Christmas, will inject more than $1tn (£710bn) into the US economy, much of it in the form of corporation tax cuts. Many firms have pledged to give a slice of the cash to their workers. Decades of flat wages should mean that increases expected in 2018 and possibly 2019 are too small to trigger a reaction from the central bank, but investors are betting rates will rise. As a consequence, stock market jitters could continue.

Is it a threat to the global economy?

Many developing world economies have borrowed heavily in dollars and will be stung by the higher cost of servicing their debts. On the other hand, a booming US economy will suck in imports from those nations, boosting the incomes of the developing world. However, the Eurozone looks unlikely to increase interest rates until its recovery is more firmly anchored. That means the euro will continue to rise in value against the dollar, making it harder for European countries to export to the US.

What does it mean for the UK economy?

A falling stock market should not affect the economy immediately. Its main effect should be to limit the availability of shareholder funds for investment, affecting the long-term health of the economy. But there is a strong feedback loop from falling wealth, such as share portfolios, into lower consumer spending. Shoppers measure their financial well-being in terms of their asset-based wealth as much as their income. As a result, a big fall in share prices could damage the economy.


 

Here at Dollar Destruction, we endeavour to bring to you the latest, most important news from around the globe. We scan the web looking for the most valuable content and dish it right up for you! The content of this article was provided by the source referenced. Dollar Destruction does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products or other materials on this page. As always, we encourage you to perform your own research!

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Author Phillip Inman

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Oil, stocks slide on Trump’s new trade salvo

NEW YORK

Crude oil and global equity markets tumbled on Friday after U.S. President Donald Trump upped the ante in a trade dispute with China, reviving investor jitters about the impact a tariff war could have on the world economy.

MSCI’s gauge of worldwide equity markets fell more than 1 percent and stocks on Wall Street skidded more than 2 percent after Trump threatened late on Thursday to add another $100 billion of tariffs on Chinese goods.

China warned it was fully prepared to respond with a “fierce counter strike” of fresh trade measures if the United States follows through on Trump’s latest threat.

The U.S. equity rout picked up during a speech by Federal Reserve Chairman Jerome Powell in Chicago on the U.S. economy. Powell said it was too early to tell if the threatened tariffs would materialise or the effect they might have.

“What Powell is signalling to market participants is that the Fed is not swayed or rattled by equity market volatility at this point. That’s the reason for the additional selling pressure,” said Chad Morganlander, a portfolio manager at Washington Crossing Advisors in Florham Park, New Jersey.

“The Fed has the intestinal fortitude to wait until it creeps into credit conditions and causes financial stress,” he said.

The pan-European FTSEurofirst 300 index, which closed before Powell’s speech, fell 0.4 percent but ended the week 1.15 percent higher.

The STOXX Europe index of companies in 17 European countries fell 0.35 percent, with the trade-exposed auto sector the leading sectorial loser, down 1.7 percent.

Earlier in Asia, Japan’s Nikkei nudged down slightly to regain a measure of calm after an initial knee-jerk reaction to Trump’s latest tariff proposal.

Defensive stocks such as utilities or telecoms were among a handful of European sectors to end the day in higher.

MSCI’s all-country index of stock performance in 47 countries fell 1.2 percent, led lower by Apple, Microsoft, Amazon.com and JPMorgan – the same as on the benchmark S&P 500 index.

On Wall Street, the Dow Jones Industrial Average closed down 572.46 points, or 2.34 percent, to 23,932.76. The S&P 500 lost 58.37 points, or 2.19 percent, to 2,604.47 and the Nasdaq Composite dropped 161.44 points, or 2.28 percent, to 6,915.11.

The market’s decline is due more to its current vulnerable state than the prospect of a trade war, said Jim Paulsen, chief investment strategist at The Leuthold Group in Minneapolis.

“It’s got higher values; financial liquidity is contracting. You came into the year with a little too much optimism. You got rising rates going on, you got rising inflation fears,” he said.

Powell said the U.S. central bank will likely need to keep raising interest rates to keep inflation under control.

A weak U.S. unemployment report, which nonetheless highlighted underlying labour market strength, helped push U.S. Treasury prices higher as the economy created the fewest jobs in six months in March.

Oil prices tumbled, with U.S. crude falling more than 2 percent.
Brent crude futures fell $1.22 to settle at $67.11 a barrel, while U.S. West Texas Intermediate (WTI) crude futures settled down $1.48 at $62.06.

U.S. Treasury and euro zone government bond yields dipped as the trade spat raised the prospect of a full-blown trade war between the world’s two largest economies.

The yield on 10-year German government debt, the euro zone benchmark, dipped 2.7 basis points in late trading to 0.494 percent, erasing much of Thursday’s rise.

Benchmark 10-year notes last rose 15/32 in price to push yields down to 2.7753 percent.
Mike Terwilliger, portfolio manager of Resource Liquid Alternatives for the Resource Credit Income Fund, said nearly every news event seems to register on the market’s Richter scale, though investors have been dealing with some relatively weighty challenges this year.

“The recent decline in Treasuries is largely ‘Tweet related’ versus some fundamental shift in the view of inflation or economic growth,” he said.

The dollar index fell 0.37 percent, with the euro up 0.36 percent to $1.2282. The Japanese yen firmed 0.45 percent at 106.90 per dollar.

U.S. gold futures for June delivery settled up 0.6 percent at $1,336.10 an ounce.


 

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Author Herbert Lash

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