Wall Street soars yet again; Bitcoin crashes below $10,000

Wall Street shot past a fresh set of a milestones on Wednesday as irrepressible investor appetite returned US stocks to their steady stream of record finishes.
 
Across the Atlantic, however, European equities churned lower as market players took their cue from downbeat sentiment in Asia.
 
Virtual currency bitcoin dived, falling below $10,000 for the first time in six weeks in what one analyst called a “cryptocalypse” as several digital currencies took a hammering. But bitcoin pared some of its losses in late US trading, to move back above $11,000.
 
In New York, all three major indices set records, with the blue-chip Dow Jones Industrial Average ending above 26,000 points for the first time, just eight trading sessions after breaking through the 25,000-point barrier.
 
Maris Ogg of Tower Bridge Associates told AFP the sustained New York rally was boosted by a “confluence of good news,” including strong company earnings, slashed corporate tax rates, higher worker compensation and new investment.
 
“This is a boost for productivity,” and gave market players greater confidence, she said.
 
Aviation giant Boeing led the Dow higher on plans for a joint venture while rising oil prices helped lift energy stocks.
 
But in London, stocks fell “as traders opt to lock in profits following the latest rally,” noted Russ Mould, investment director at online stockbroker AJ Bell.
 
Adding to the gloom, disappointing earnings eclipsed takeover activity in the British capital. 
 
Publisher and conference organiser Informa revealed it was in talks to buy rival UBM to create a giant worth more than £9.0 billion ($12.4 billion, 10.1 billion euros).
 
The deal is aimed at accelerating growth and slashing costs, the companies said in a statement. But investors were unconvinced, sending Informa shares tumbling. 
 
The FTSE 100 was also punished as poor results from luxury fashion giant Burberry and publisher Pearson sent the two companies’ share prices diving.
 
Tough times for bitcoin
 
Bitcoin fell below $10,000 for the first time since early December, following on Tuesday’s 15 percent slump.
 
The leading cryptocurrency is down from record highs approaching $20,000 in the week before Christmas, having rocketed 25-fold over the year before being hit by concerns about a bubble and worries about crackdowns on trading in it.
 
“It’s been a Cryptocalypse overnight with BTC (bitcoin) and other virtual currencies coming under heavy selling pressure,” said Greg McKenna, chief market strategist at AxiTrader.
 
But Shane Chanel, equities and derivatives adviser at ASR Wealth Advisers, sounded a slightly positive note: “Not all hope is lost. The cryptocurrency market is privy to these wild swings and seasoned veterans in this space have seen this happen many times previously.”
 
In Asia, most markets fell into the red with energy firms rocked by lower oil prices earlier in the week. 
 
But Hong Kong stocks hit an all-time high to break a record that had been in place for more than 10 years.

$260 billion ‘cryptocalypse’ as cryptos plunge 30 per cent

THE cryptocurrency market has lost $US206 billion overnight in what traders are describing as a “cryptocalypse”, with bitcoin heading back towards its $US10,000 milestone first reached last November.

But it was smaller currencies including ripple, ethereum and bitcoin cash that were the hardest hit in the latest sell-off, which was sparked by fresh fears of a crackdown on virtual currencies by governments in South Korea and China.

At the time of writing, ripple was down nearly 50 per cent on the previous day, ethereum had lost nearly 34 per cent of its value, bitcoin cash was down nearly 37 per cent and bitcoin was down 27 per cent to just under $US10,200.

The market capitalisation of more than 1300 cryptocurrencies has dropped by around 30 per cent over the past 24 hours, down from $US702 billion to $US496 billion, according to Coinmarketcap.

“It’s been a cryptocalypse overnight with bitcoin and other virtual currencies coming under heavy selling pressure as the regulatory scrutiny intensifies not only in China and South Korea but across the globe,” Greg McKenna, chief market strategist at AxiTrader, said in a note on Wednesday. “The debate over zero or $US100,000 for bitcoin this year continues, however.”

Mr McKenna added that while retail investors had chased bitcoin out of fear of missing out, most institutional investors — with the exception of dedicated bitcoin funds and traders — would avoid the currency “because of fear of embarrassment and job loss”. “FEJL is as powerful a motivator as FOMO,” he said.

Shane Chanel, equities and derivatives adviser at ASR Wealth, said “not all hope” was lost, pointing out that every previous wild swing had been followed “by a rally more powerful than the last”.

He added that “every year over the last three years, the cryptocurrency market has witnessed strong corrections 22 to 23 days prior to Chinese Lunar New Year”.

It came amid reports China’s government was preparing to ramp up its crackdown on virtual currencies by blocking access to wallet services and exchange websites, according to Bloomberg.

China had already banned domestic exchanges and “initial coin offerings”, and earlier this month signalled its intention to crack down on bitcoin mining companies in order “guide” them towards an “orderly exit” from the country.

Meanwhile, South Korea’s finance minister said a crackdown on cryptocurrencies was still a possibility, describing the current frenzy as “irrational”.

Kim Dong-yeon said in an interview with local radio station TBS that banning trading in digital currencies was “a live option” subject to a thorough government review, the Associated Press reported.

“There are no disagreements over regulating speculation [such as using real-name accounts and levying taxes on cryptocurrency trading],” Mr Kim said, adding that shutting down digital currency exchanges was “a live option but government ministries need to very seriously review it”.

Last week, an announcement by South Korea’s justice minister that the country was preparing legislation to ban cryptocurrency trading sent shockwaves through the market.

A spokesman for the presidential office later issued a clarification. “Justice Minister Park’s comments related to the shutdown of cryptocurrency exchanges is one of the measures prepared by the Ministry of Justice, but it’s not a measure that has been finalised,” the statement said.

The news has caused outrage in South Korea, one of the world’s biggest cryptocurrency markets, with a petition opposing the crackdown attracting more than 200,000 signatures and a fresh poll showing President Moon Jae-in’s approval rating falling.

Reports have suggested up to three million South Koreans may have invested in cryptocurrencies, and the country is believed to account for one-quarter of the global market by transaction volume.

According to industry website CryptoCompare, more than 10 per cent of ethereum is traded in South Korean won, second only to US dollars which account for around 32 per cent. Nearly 14 per cent of ripple and 5 per cent of bitcoin is traded in won.

On bitcoin message boards, the mood was grim. “Gentlemen, it has been a privilege playing with you tonight,” wrote one Reddit user, attaching a video overlaying falling market graphs with the ending scene from the film Titanic.

“Survivors of the Titanic got compensated about $22,000 in today’s USD,” replied one user. “Guess that’s my new BTC sell point.”

Asian markets retreat as new year surge fades, dollar struggles

Asian markets saw further losses on Thursday, with Tokyo hit by a weaker dollar and Hong Kong coming off a 12-day surge, as the rally that greeted 2018 gives way to profit-taking.

US traders sent all three of New York’s main indexes falling for the first time this year as they were spooked by a report saying Canadian officials increasingly expect Donald Trump to call time on the decades-old NAFTA free-trade pact.

That came after Bloomberg News said Chinese authorities reviewing foreign-exchange holdings have recommended slowing or halting purchases of US Treasuries.

Beijing is the biggest holder of US debt and the move was seen by some as a veiled threat to Trump following his tough talk on global trade and, in particular, what he sees as China’s unfair practices.

But Stephen Innes, head of Asia-Pacific trading at OANDA, said: “While it’s entirely possible that China could take measure to rebalance their reserve, as they have done in the past, the markets quickly dismissed the headline as little more than political sabre-rattling and then correctly determined it’s highly improbable China will stop buying US Treasuries.”

While most agree with that summary, the dollar sank against the yen and continued to struggle in Asia.

The greenback touched a low of 111.27 yen on Wednesday before edging back slightly and in Tokyo Thursday it was up only marginally.

The yen was already making inroads against the dollar after the Bank of Japan on Tuesday said it would cut back on its purchasing of bonds as part of its huge stimulus programme.

– More BoJ tapering? –

Innes added that although the greenback had bounced back against most of its other major peers, it is still down against the yen, “suggesting the market remains on guard against a quicker pace of BoJ tapering”.

The stronger yen hurt Tokyo-listed exporters, sending the Nikkei index 0.3 percent down by the break.

Hong Kong was 0.1 percent lower after an outstanding 12-day unbeaten run, while Shanghai shed 0.1 percent after nine days of gains.

Sydney lost 0.5 percent, Seoul slipped 0.3 percent and Singapore eased 0.2 percent. Wellington tumbled more than one percent while Taipei and Manila were well down.

Oil prices were flat but remain at near three-year highs after a recent run-up helped by falling US stockpiles and unrest in key producer Iran.

Shane Chanel, equities and derivatives adviser at ASR Wealth Advisers, said: “The passing of the US tax bill has provided the market with an assumption of stronger demand growth over the medium to long-term. We may continue to have a gentle push forward followed by a period of consolidation.”

Asian markets retreat as new year surge fades, dollar struggles

Asian markets saw further losses on Thursday, with Tokyo hit by a weaker dollar and Hong Kong coming off a 12-day surge, as the rally that greeted 2018 gives way to profit-taking.

US traders sent all three of New York’s main indexes falling for the first time this year as they were spooked by a report saying Canadian officials increasingly expect Donald Trump to call time on the decades-old NAFTA free-trade pact.

That came after Bloomberg News said Chinese authorities reviewing foreign-exchange holdings have recommended slowing or halting purchases of US Treasuries.

Beijing is the biggest holder of US debt and the move was seen by some as a veiled threat to Trump following his tough talk on global trade and, in particular, what he sees as China’s unfair practices.

But Stephen Innes, head of Asia-Pacific trading at OANDA, said: “While it’s entirely possible that China could take measure to rebalance their reserve, as they have done in the past, the markets quickly dismissed the headline as little more than political sabre-rattling and then correctly determined it’s highly improbable China will stop buying US Treasuries.”

While most agree with that summary, the dollar sank against the yen and continued to struggle in Asia.

The greenback touched a low of 111.27 yen on Wednesday before edging back slightly and in Tokyo Thursday it was up only marginally.

The yen was already making inroads against the dollar after the Bank of Japan on Tuesday said it would cut back on its purchasing of bonds as part of its huge stimulus programme.

– More BoJ tapering? –

Innes added that although the greenback had bounced back against most of its other major peers, it is still down against the yen, “suggesting the market remains on guard against a quicker pace of BoJ tapering”.

The stronger yen hurt Tokyo-listed exporters, sending the Nikkei index 0.3 percent down by the break.

Hong Kong was 0.1 percent lower after an outstanding 12-day unbeaten run, while Shanghai shed 0.1 percent after nine days of gains.

Sydney lost 0.5 percent, Seoul slipped 0.3 percent and Singapore eased 0.2 percent. Wellington tumbled more than one percent while Taipei and Manila were well down.

Oil prices were flat but remain at near three-year highs after a recent run-up helped by falling US stockpiles and unrest in key producer Iran.

Shane Chanel, equities and derivatives adviser at ASR Wealth Advisers, said: “The passing of the US tax bill has provided the market with an assumption of stronger demand growth over the medium to long-term. We may continue to have a gentle push forward followed by a period of consolidation.”