NOTABLE MOVES
As of Fri, Dec 14, 08:00 GMT (UTC +08:00)
USDJPY, -0.22%, $113.39.
EURUSD, -0.48%, $1.1309.
GBPUSD, -0.58%, $1.2584.
USDCAD, +0.24%, $1.3384.
AUDUSD, -0.69%, $0.7177.
S&P500, -1.91%, 2,599.95
Nasdaq, -2.26%, 6,910.66
Nikkei Futures, -2.52%, 21,300.0
CURRENCY MARKET WRAP
- U.S. Core Retail Sales m/m inline at 0.2%. Retail Sales m/m at 0.2% vs expected 0.1%. Investors sought safety in U.S. Treasuries, pushing yields lower across the curve. The 2-yr yield lost three basis points to 2.73%, and the 10-yr yield lost two basis points to 2.89%. Also, the U.S. Dollar Index rose 0.4% to 97.45, nearing a yearly high.
- German Flash Manufacturing PMI at 51.5 vs expected 51.8. German Flash Services PMI at 52.5 vs expected 53.4. E.U. Flash Manufacturing PMI at 51.4 vs expected 51.9. Flash Services PMI at 51.4 vs expected 53.4.
- Chinese Fixed Asset Investment y/y inline at 5.9%. Industrial Production y/y at 5.4% vs expected 5.9%. Retail Sales at 8.1% vs expected 8.8%. The selling in risk assets started after China reported underwhelming results.
STOCK MARKET WRAP
- The selling started overseas when China, the second-largest economy in the world, reported some weaker-than-expected industrial production and retail sales data. In addition, some weaker-than-expected preliminary manufacturing PMI readings out of the eurozonehelped feed into concerns over economic growth and corporate earnings prospects. A solid November Retail Sales report out of the U.S. didn’t change the selling bias either. Instead, the good news on that front was drowned out by the concern that weakness abroad will eventually lead to a slower pace of growth in the U.S.
- Selling picked up after the close of the European markets (11:30 a.m. ET) and would continue in an orderly manner throughout the day, culminating in the S&P 500 closing just below 2600.Johnson & Johnson (JNJ 132.80, -14.84) dropped -10.0% after a Reuters report alleged that JNJ “knew for decades that asbestos lurked in its baby Powder.” The company’s litigation counsel rejected the report as “false and misleading.” Within tech, Apple (AAPL 165.48, -5.47, -3.2%) fell after an influential analyst from TF International Securities cut his first quarter 2019 iPhone shipment estimate by 20%, according to CNBC; Adobe Systems (ADBE 230.00, -18.08, -7.3%) fell after failing to overly impress investors with its fiscal fourth quarter results and outlook; and Cisco (CSCO 45.82, -1.65, -3.5%) fell after being downgraded to ‘Neutral’ from ‘Buy’ at Nomura. In other corporate news, Costco (COST 207.06, -19.45) fell -8.6% after reporting its fiscal Q1 results, which included revenues that were slightly below consensus. Margin weakness, attributed to higher merchandising costs, also weighed on the stock.
- There were some conciliatory headline developments last week on the trade dispute between the U.S. and China. In particular, high-ranking U.S. and Chinese officials resumed trade discussions over the phone; and China is reportedly looking to tweak its “Made in China 2025” policy to allow more access and fairer competition for foreign companies. Separately, China confirmed it will temporarily reduce its U.S auto import tariffs by 25% (to 15% from 40%) between January 1 and March 31, as both sides continue to work on a deal, and Trump told Reuters he would get involved in the Department of Justice case against Huawei CFO Meng Wanzhou, who was granted bail Tuesday, if it would serve national security interests and help advance trade negotiations with China.
Blockchain Payments’ Mass Adoption Is 3-5 Years Away, Says BitPay CEO
The CEO of crypto merchant platform BitPay Stephen Pair stated that speculation on future adoption drives Bitcoin’s (BTC) price more than “actual utility.” “A very big component of the [Bitcoin’s] price is certainly speculation. It’s investors that are speculating on the future usage and adoption of this technology. I’m sure a small component of that price is the actual utility.” When asked about a Bitcoin ETF’s potential to stimulate a price rally, Pair argued that “not just ETF adoption or ETF launches” could be catalysts for price movement, but that “adoption will push the prices higher.” According to Hester Peirce, a commissioner for the United States Securities and Exchange Commission (SEC), the approval of a Bitcoin ETF is not necessarily close at hand. Peirce said that an approval “could be 20 years from now” or “tomorrow,” urging the crypto community to not “ hold [its] breath.”
Blockchain Incubator Binance Labs Releases First ‘Batch’ of Blockchain Projects
Binance Labs, the venture wing of the largest cryptocurrency exchange Binance, has released its first “batch” of blockchain projects from its Incubation Program. Binance Labs selected only eight projects, out of the more than 500 applicants, each of which received $500,000 in seed funding and access to necessary resources and mentors. Over the course of the 10-week program, seven projects have shipped working products and signed on users, while three of those teams have paying customers. Among others, the eight projects selected by Binance Labs include hardware wallet SafePal, fictionless logins for decentralized apps (DApps) Torus, Internet security project Nym, and market prediction startup Deaux. Binance Labs is an initiative that seeks to help early-stage blockchain and digital assets projects and entrepreneurs through direct investments and technical assistance. The Binance Labs Incubation Program is an onsite program that was launched in August 2018.
Ethereum-Based Chat Platform Lays Off 25% of Staff Due to Crypto Market Decline
Ethereum (ETH)-based chat platform Status is laying off 25 percent of its staff due to the recent cryptocurrency market decline. According to Status, 25 percent of its staff is “non-essential” to the company’s long-term growth projects, and are therefore being laid off. Remaining employees have been asked to take a paycut and will purportedly be given a sum of Status’ native virtual currency SNT “to help offset the cut and align with the network’s success.” In order to set up a “runway measured in years,” Status is going to tap into its remaining fiat money and “large” ETH holdings. The startup has also asked remaining employees to actively contribute to the development of its two priority projects, which are to “deliver on white paper promises” and get the app to a “usable state.”