- U.S. Total outstanding consumer credit increased by $11.0 billion in September after increasing an upwardly revised $22.8 billion (from $20.1 billion) in August. The report reflects a deceleration in credit expansion that could contribute to concerns about the U.S. economy hitting/nearing peak growth. U.S. Treasuries finished roughly flat with the 10-yr yield unchanged at 3.21%. Japanese Average Cash Earnings y/y at 1.1% vs expected 1.2%. The G7 currencies had a subdued showing in light of the midterm elections. USDJPY up 0.11%, $113.57.
- German Industrial Production m/m at 0.2% vs expected 0.0%. Euro up 0.05%, $1.1433. Brexit-related headlines kept coming, but the Irish border issue remains unsolved. Sterling up 0.22%, $1.3127.
- Canadian Ivey PMI at 61.8 vs expected 50.9. WTI crude lost 0.9% to settle at $61.65/bbl, extending its recent decline to nearly 20.0% from its four-year high last month. The Energy Information Administration reported a weekly crude inventory build of 5.8 million barrels last week, marking the seventh consecutive week of stockpile builds. USDCAD down -0.05%, $1.3117.
- RBNZ kept the official cash rate at 1.75% (expected). The central bank expects to keep it at this level into 2020. “No. We are not taking a rate cut off the table,” Orr cited. “I think it would be pointless to do that, to remove an option. What we are saying is we are very data dependent, data-driven around how our projections unfold. The risks to the downside remain,” he said. Despite Orr’s comments, the market is now sees a 54% chance of a rate hike in March 2020 versus 28% prior to today’s statement. N.Z Inflation Expectations q/q at 2.0%. The FX market did not react much to RBNZ as Kiwi was already up 0.62% on the day, at 0.6780 (mainly due to yesterday’s strong employment numbers)
- S&P 500 up 2.12%, 2,813.89. Nasdaq up 3.07%, 7,203.13. Nikkei down -0.28%, 22,085.80.
- Wednesday’s stock market advance follows the conclusion of U.S. congressional midterm elections that produced a split Congress. The prevailing assumption in the market was that a newly divided Congress would preserve market-friendly policies, namely the tax cut and deregulation efforts. Trump also mentioned on Wednesday bipartisan efforts to work with the Democrats in the House on infrastructure, trade, and lowering drug costs. Health care companies rose with the belief that a split Congress would also make it unlikely that it will fully repeal the Affordable Care Act. On a related note, heavily-weighted health care component Humana (HUM 353.98, +22.17) jumped 6.7% after it reported above-consensus earnings and raised its guidance. Apple (AAPL 209.95, +6.18, +3.0%), Microsoft (MSFT 111.96, +4.24, +3.9%), Visa (V 144.78, +3.99, +2.8%), and MasterCard (MA 208.24, +9.09, +4.6%) all provided the sector a much-needed lift.
- Within the consumer discretionary group, Amazon (AMZN 1755.49, +112.68) carried the sector with an impressive gain of 6.9%. Amazon announced Wednesday it has launched Amazon Music for Mexico. Additionally, Amazon announced Alexa’s launch for Mexico. Beginning in mid-November when Echo devices ship, customers will be introduced to new voice features in Spanish with Alexa.
- Of note, pot stocks surged after Attorney General Jeff Sessions resigned his post effective immediately per Trump’s request. Sessions was an influential critic of legalizing marijuana and served as roadblock to advance the national conversation. Well-known cannabis companies Tilray (TLRY 139.60, +32.74) and Canopy Growth (CGC 46.07, +3.48) rose 30.6% and 8.2%, respectively. Cannabis stocks were already on the rise after several more states voted to legalize recreational or medical marijuana. Michigan became the 10th state to legalize its recreational use, and Utah and Missouri passed initiatives to join 31 other states that already legalize its medical use.
Trading Platform eToro Unveils Blockchain Solution to Tackle Economic Disparity
Trading platform eToro has recently unveiled blockchain-driven social project GoodDollar to tackle global wealth inequality. GoodDollar had been presented at Web Summit held this week in Lisbon, Portugal. According to the release, eToro has invested $1 million of its funds to the project and is seeking for more partners to join the initiative. The project’s main goal is to provide economic tools for people who are unbanked or disenfranchised, creating non-speculative cryptocurrency that aims to find ways to reduce wealth inequality on a global scale. The decentralized solution will establish a direct ownership connection between identity and the currency, thus helping to get funds directly without the interference of middlemen. Trading platform eToro is also launching its own cryptocurrency wallet that will at first provide support for Bitcoin (BTC), Bitcoin Cash (BCH), Ethereum (ETH), and Litecoin (LTC).
Blockchain Firm Upgrades App in Quest to Reduce Fatal Air Accidents
A fledgling blockchain-based company Areon, which aims to improve flight safety will launch an upgraded version of its app for pilots software that has been designed to replace the old-fashioned paper logbooks currently used by aviation enthusiasts and professionals. Aeron estimates that 57 percent of aviation accidents can be attributed to human factors and says it is possible for pilots to manipulate records and exaggerate their experience, while airlines may underreport flight hours to save on maintenance costs. In March, Aeron launched the first iteration of its mobile app for pilots on Apple’s App Store and Google Play – enabling them to record their flight hours on blockchain instead of paper and earn the full confidence of prospective employers and aviation authorities. This month, new features are being added so the pilots can create and submit flight plans – detailing the intended route and other flight details, bringing convenience to the pilots of small aircraft and flight school students. Aeron also introduced a new platform called CryptoBonusMiles (CBM), which will enable frequent flyers to collect bonus miles in a single unified wallet and receive crypto rewards whenever they hop on a plane, in addition to the perks they receive from conventional loyalty programs offered by major airlines.
US Election Sees Crypto-Friendly Politicians Win Governor Races
The U.S. 2018 midterm elections saw crypto-friendly lawmakers securing governorships in three states, while maintaining two others. Mark Gordon won his election in Wyoming, already an increasingly blockchain-friendly state, while Gina Raimondo and Greg Abbott won re-election in Rhode Island and Texas, respectively. Polis, in particular, was a member of the Congressional Blockchain Caucus in the U.S. House of Representatives and has vocally called for the U.S. to take a leadership role in integrating and regulating the space. His platform even included a number of initiatives he intends to push for revolving around the technology, including improving digital voter protection and using blockchain to digitize government records and make them more transparent. Former California Lieutenant Governor and now Governor-elect Gavin Newsom is also in favor of formally allowing data stored on a blockchain to be admissible in court. Texas Governor Abbott, who secure re-election on Tuesday, previously accepted bitcoin donations as well.