NOTABLE MOVES
- There were no notable prints on Monday. Treasuries advanced amid the market sell-off, extending the recent decline in yields. The 2-yr yield lost three basis points to 2.77%, and the 10-yr yield lost two basis points to 3.06% , 19 basis points lower from its November high. Overseas, the Asia-Pacific Communications Summit concluded on Sunday without the release of a joint communique due to the ongoing trade disagreement between United States and China. Elsewhere, Chairman of Renault-Nissan-Mitsubishi Carlos Ghosn was arrested in Japan for alleged financial violations. The U.S. Dollar Index declined -0.3% to 96.21. USDJPY down -0.24%, $112.45.
- Euro up 0.35%, $1.1454. Sterling’s risk-off in early London trading was fuelled by headlines indicating that the amount of no-confidence letters submitted were up to 40, but there was no confirmation on those beyond the 26 public backers. UK PM May warned Tories that a no-confidence vote on her will equal a no-deal Brexit. May said that removing her from her post would lead to a delay in Brexit, making talks more difficult. Sterling recovered to finish up 0.16%, $1.2856.
- S&P 500 down -1.66%, 2,690.73. Nasdaq down -3.26%, 6,642.92. Nikkei up 0.65%, 21,821.16.
- The S&P information technology sector (-3.8%) was the main problem on Monday. It has been prone to liquidation efforts that have aimed to reduce exposure to a crowded sector running into concerns about a cyclical slowdown, valuations, and increased regulatory scrutiny. The tech group underperforms the 11 S&P sectors in November with a monthly loss of -5.5%.
- Apple (AAPL 185.86, -7.67, -4.0%) shares took a hit after a Wall Street Journal report indicated the company cut its production orders for all three new iPhones it launched in September. Regarding the iPhone XR, Apple reportedly slashed its production plan by up to a third of the approximately 70 million units it had asked some suppliers to produce between September and February. Apple stock has been under pressure since providing a disappointing outlook for the holiday quarter on November 1. Negative sentiment surrounding Apple trickled down to its suppliers and chip stocks in general. Suppliers Qorvo (QRVO 63.15, -3.17, -4.8%), Lumentum (LITE 39.44, -3.08, -5.0%), and Skyworks Solutions (SWKS 70.76, -2.19, -3.0%), all of which that cut their guidance this month over presumed weakened demand for iPhones, greatly underperformed.
- Similarly, the Philadelphia Semiconductor Index posted a loss of 3.9%, in which NVIDIA (NVDA 144.70, -19.73) extended its post-earnings decline with a steep loss of -12.0%. Facebook (FB 131.55, -7.98, -5.7%), Netflix (NFLX 270.60, -15.61, -5.5%), Alphabet (GOOG 1020.00, -41.49, -3.9%), and Amazon (AMZN 1512.29, -81.12, -5.1%) also suffered notable losses, helping pull the communication services (-2.6%) and consumer discretionary (-2.7%) sectors lower. Facebook shares continued to struggle amid on-going negative publicity surrounding the social network. Zuckerberg was reportedly not happy with COO Sheryl Sandberg for the reaction to the Cambridge Analytical scandal, according to a WSJ report. Also in the report, Zuckerberg’s newly-adopted, aggressive leadership style has not fared well with key executives, some of whom have resigned. In other news, CNBC reported that China regulators approved Dow component Walt Disney’s (DIS 115.42, -0.77, -0.7%) acquisition of 21st Century Fox (FOXA 48.91, +0.75, +1.6%) on Monday. China’s unconditional approval joins conditional agreements already made from the U.S. and EU, though the deal still needs regulatory consent from several more countries.
BLOCKCHAIN & CRYPTOCURRENCY NEWS
Korea’s largest power provider KEPCO will use blockchain and other innovative energy solutions to develop its next-generation micro grid (MG). KEPCO’s new “Open MG” will use blockchain and other technologies to improve energy infrastructure, particularly for the local hydrogen economy. It will focus on decentralization, decarbonization and digitalization. KEPCO’s Open MG will draw on an “additional fuel cell” as a power source in order to increase energy self-reliance and efficiency, and without the emission of greenhouse gases. Using international standard technology, the MG is expected to be more interoperable, thereby preventing “system bottleneck” and fragmentation in the industry. Allegedly, KEPCO intends to develop the Open MG at full-scale and create the “first” mega-wattage (MW)-scale micro grid in Korea.
Bitcoin dropped below $5,000, more precisely, fell to $4,981 for the first time in over 13 months on Monday. That’s the lowest figure since Oct. 12, 2017, and as of press time, the price has recovered somewhat to $5,048 – still signifying a decline of more than 9 percent. Many cryptocurrencies are faring worse than BTC, including the likes of ether (ETH), litecoin (LTC) and EOS, all of which are posting 24-hour losses above 10 percent. ETH fell to $155 earlier today, the lowest level since July 16, 2017, as per CoinMarketCap. Meanwhile, XRP, the second-largest cryptocurrency as per market capitalization, is reporting a 6.5 percent drop. According to data from OnChainFX, some of the biggest losses of the day include Aragon, LBRY Credits and ZClassic, all of which have seen price declines in excess of 20 percent in the past day. The bearish weekly close has likely set the tone for a drop below $5,000. In the short-run, however, BTC may defend that psychological support level, courtesy of the oversold conditions on the daily chart.
Major NGO, the Russian Authors’ Society (RAO) will launch a blockchain-based financial platform for intellectual property-secured loans. The project is at its final stages of development and is set to be launched in the first quarter of 2019. The platform intends to bring together potential intellectual property rightsholders and investors that are ready to provide loan funds. RAO’s general director Alexander Sukhotin noted that the upcoming blockchain-enabled platform will not be limited by type of intellectual property, but will include patents, musical works, and visual art. At the current stage, the company is looking for experts that to evaluate various forms of ownership.