Dollar off three-week low amid caution over Sino-U.S. trade talks
The dollar held above a three-week low on Thursday as investors remained cautious amid uncertainty over the progress in U.S.-China trade talks, while sterling rallied on bets that the chance of a no-deal Brexit was shrinking.
Monthly gauges of factory activity in both China and Japan came in weaker than expected on Thursday, offering fresh evidence that the seven-month U.S.-Sino trade dispute was taking a toll on economic growth around the world.
The dollar mostly held onto gains booked during the previous session after U.S. Trade Representative Robert Lighthizer told a Congressional hearing it was too early to predict an outcome in U.S.-China trade negotiations.
The greenback had also found support on a flare-up in tensions between Pakistan and India, sending investors out of riskier markets and into safer assets.
“Investors are probably putting on the safe trade, which is being long dollars. On one hand, it’s not very exciting but on the other hand, investors do need to produce yield,” said Bart Wakabayashi, Tokyo branch manager at State Street Bank.
“It’s probably not performing the way that they need it to do,” he said. “We’ve probably seen some interest in emerging markets selectively (to get yield).”
The dollar index against a basket of six major rivals last traded a shade lower at 96.085.
It had edged up nearly 0.2 percent for the first time in four days overnight, after brushing a three-week low of 95.883 earlier in that session.
AUD/USD jumps 25 pips on upbeat Aussie Capex figure
- The bid tone around the AUD strengthened after the Q4 Aussie private CAPEX printed above estimates
- The first estimate for 2019-20 CAPEX came in at A$92.144m, signaling neutral conditions for investments this year. That could cap gains in the AUD
The AUD is pushing higher across the board in response to an above-forecast Aussie private capital expenditure (CAPEX) figure for the fourth quarter.
The Australian Bureau Of Statistics (ABS) released at 0030 GMT today showed the private CAPEX jumped 2 percent in December quarter, convincingly beating the forecast of 0.5 percent growth. CAPEX had dropped 0.5 percent in the three months to September 2018.
Further, the fifth estimate of for 2018-19 came in at A$118,361m – 3.6% higher than the fifth estimate for 2017-18 and 4.0% higher than the fourth estimate for 2018-19.
More importantly, the first estimate for 2019-20 printed at A$92.144m – 11 percent higher than the first estimate for 2018-2019.
While a big beat on the fourth quarter figure could lift the GDP, due for release next week, the first estimate of $92.144m is somewhat a “neutral” result for investment in the coming year, according to Westpac.
So, AUD/USD may have a tough time scaling the crucial resistance of 0.72. The currency pair jumped 24 pips to 0.7166 immediately post-CAPEX release and is currently trading at 0.7153.
Stock Market News
That’s all folks: European shares to stall for the rest of 2019: Reuters poll
European shares are running out of steam and are expected to end 2019 roughly at their current level, a Reuters poll showed, as continuous political risks and slowing growth keep a tight lid on their upward potential.
Europe’s main indexes are up about 10 percent so far this year, having kept pace with a rebound which has lifted global markets since the start of January.
According to the survey of over 30 brokers, fund managers and analysts taken Feb. 12-25, the pan-European STOXX 600 benchmark index is seen ending the year at 371 points, which was almost the level it closed at on Tuesday.
The latest forecasts are in line with a previous November poll, which forecast the STOXX 600 climbing to 373 points by end-2019.
Expectations were less optimistic for the euro zone blue-chip index which was seen losing about 40 points and closing 2019 at 3,250 points. Germany’s DAX was expected to retreat about 120 points to 11,420 points.
Much of the rationale behind cautious expectations for European stocks is tepid growth after investment banks and international institutions cut their 2019 forecasts for the region.
The continent’s economic powerhouse, Germany, is on the verge of a recession and should only grow 1.1 percent this year according to the European Commission.
Fading growth has cast a shadow on hopes the European Central Bank could start raising interest rates and resurgent corporate profits could kickstart stock markets.
At the moment, European companies listed on the STOXX 600 are expected to report 2.6 percent year-on-year earnings growth for the fourth quarter of 2018, according to I/B/E/S Refinitiv.
This contrasts sharply with the optimism of last autumn when profit growth expectations for Q4 were as high as 13 percent in early November.
“After a couple of years of rare economic momentum and relative political calm, domestic Europe has reverted toward its norm of underwhelming nominal growth and political uncertainty,” said Giles Rothbarth, portfolio manager in BlackRock’s European equity team.
While other investors argue a U.S.-China trade deal could lift European markets, others fear Europe could be the fall guy in any breakthrough which would allow Donald Trump to turn his attention to German cars and French luxury wines.
U.S. stocks mixed at close of trade; Dow Jones Industrial Average down 0.28%
U.S. stocks were mixed after the close on Wednesday, as gains in the Oil & Gas, Industrials and Financials sectors led shares higher while losses in the Healthcare, Consumer Services and Telecoms sectors led shares lower.
At the close in NYSE, the Dow Jones Industrial Average lost 0.28%, while the S&P 500 index declined 0.05%, and the NASDAQ Composite index gained 0.07%.
The best performers of the session on the Dow Jones Industrial Average were Boeing Co (NYSE:BA), which rose 2.03% or 8.67 points to trade at 435.44 at the close. Meanwhile, Caterpillar Inc (NYSE:CAT) added 1.16% or 1.60 points to end at 139.58 and Exxon Mobil Corp (NYSE:XOM) was up 1.03% or 0.81 points to 79.47 in late trade.
The worst performers of the session were UnitedHealth Group Incorporated (NYSE:UNH), which fell 4.91% or 12.90 points to trade at 250.08 at the close. Home Depot Inc (NYSE:HD) declined 2.46% or 4.63 points to end at 183.67 and DowDuPont Inc (NYSE:DWDP) was down 1.41% or 0.78 points to 54.72.
The top performers on the S&P 500 were Best Buy Co Inc (NYSE:BBY) which rose 14.11% to 68.82, Chesapeake Energy Corporation (NYSE:CHK) which was up 10.27% to settle at 2.900 and Campbell Soup Company (NYSE:CPB) which gained 10.03% to close at 36.21.
The worst performers were Mylan NV (NASDAQ:MYL) which was down 15.06% to 26.01 in late trade, UnitedHealth Group Incorporated (NYSE:UNH) which lost 4.91% to settle at 250.08 and Western Digital Corporation (NASDAQ:WDC) which was down 4.77% to 48.54 at the close.
The top performers on the NASDAQ Composite were Aceto Corporation (NASDAQ:ACET) which rose 83.78% to 0.26, Midatech Pharma PLC (NASDAQ:MTP) which was up 54.78% to settle at 0.790 and BroadVision Inc (NASDAQ:BVSN) which gained 40.50% to close at 1.70.
The worst performers were Synergy Pharmaceuticals Inc (NASDAQ:SGYP) which was down 65.41% to 0.070 in late trade, Weight Watchers International Inc (NASDAQ:WTW) which lost 34.49% to settle at 19.37 and Silver Run Acquisition Corporation II (NASDAQ:AMR) which was down 32.47% to 0.23 at the close.
Rising stocks outnumbered declining ones on the New York Stock Exchange by 1520 to 1450 and 136 ended unchanged; on the Nasdaq Stock Exchange, 1421 rose and 1194 declined, while 103 ended unchanged.
Shares in Mylan NV (NASDAQ:MYL) fell to 5-year lows; falling 15.06% or 4.61 to 26.01. Shares in Boeing Co (NYSE:BA) rose to all time highs; rising 2.03% or 8.67 to 435.44. Shares in Synergy Pharmaceuticals Inc (NASDAQ:SGYP) fell to all time lows; losing 65.41% or 0.131 to 0.070. Shares in Weight Watchers International Inc (NASDAQ:WTW) fell to 52-week lows; down 34.49% or 10.20 to 19.37. Shares in Silver Run Acquisition Corporation II (NASDAQ:AMR) fell to all time lows; losing 32.47% or 0.11 to 0.23.
Traders Say Data Point Toward Proper Bitcoin Bottom, Even Billionaires
Having peaked at around $20,000 towards the end of 2017, Bitcoin, the world’s largest cryptocurrency in terms of market capitalization, has lost around 75 percent of its value.
At the time of this writing, Bitcoin is trading at $3,871 according to data from CoinMarketCap. It’s also important to note that the cryptocurrency has entered its longest downturn period since its inception.
It does seem, however, that the tides might be turning.
Is Bitcoin Sentiment Turning Bullish?
Over-the-counter trading on popular Bitcoin peer-to-peer trading platform LocalBitcoin is seeing massive increases. Just a week ago, the platform saw its largest USD trading volume, with over $31.5 million worth of Bitcoin switching hands through it.
What is more, a nationwide survey which was conducted among 1,000 online traders from the US and was held by eToro, showed that 43 percent of millennial online traders actually have more trust in cryptocurrency exchanges compared to the traditional US stock market. Moreover, 59 percent of all respondents who don’t trade cryptocurrencies claimed that they would invest in it if it was offered by a trusted financial institution.
Commenting on the matter was the managing director at eToro for the US market, Guy Hirsch, who said:
We’re seeing the beginning of a generational shift in trust from traditional stock exchanges to crypto exchanges. […] Younger investors’ experience with the stock market has seen a great deal of loss of trust, with the fall of Lehman Brothers because of irresponsible practices followed by the worst recession since the Great Depression.
It also seems that technical data is revealing the potential formation of a new bull run which could take place this year, as Bitcoin’s 50-week moving average is dropping below the 100-week moving average for the very first time since April in 2015.
Bullish Calls on Bitcoin’s Price
While there have always been quite a lot of prominent figures speaking positively of Bitcoin, it looks like high-ranked executives and well-known individuals from traditional sectors are also turning bullish.
Recently, the Vice President of Blockchain and Digital Currencies at IBM, Jesse Lund, said that he thinks bitcoin will hit $5,000 by the end of this year. He also outlined that he can see Bitcoin eventually worth over $1 million. He also explained that this is a number he likes because it would suggest that one satoshi will hit parity with the U.S. penny.
Additionally, Twitter’s CEO Jack Dorsey, also CEO at Square, recently praised Bitcoin’s scaling solution – the Lightning Network and said that it is only a matter of time before it gets integrated into Square’s CashApp.
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