NOTABLE MOVES
- U.S. Flash Manufacturing PMI at 55.9 vs expected 55.4. Flash Services PMI at 54.7 vs expected 54.1. Fed indicated in its Fed Beige Book for September that manufacturing prices continued to rise, attributed to tariffs. The Fed-sensitive 2-yr yield closed two basis points lower at 2.86%, and the benchmark 10-yr yield closed four basis points lower at 3.12%. USDJPY down -0.39%, $112.00.
- German Flash Manufacturing PMI at 52.3 vs expected 53.4. German Flash Services PMI at 53.6 vs expected 55.5. E.U. Flash Manufacturing PMI at 52.1 vs expected 53.0. Flash Services PMI at 53.3 vs expected 54.5. Euro dropped -0.63%, $1.1399. In Brexit, PM May had cabinet meetings on Wednesday and the fear is not only for no-deal, but a revolt within her party and cabinet. Sterling fell -0.76%, $1.2884.
- BoC raises interest rate to 1.75%. The BoC also pointed out that since the economy is now running close to its potential, it no longer needs policy stimulus and hence the overnight rate will need to rise to neutral in order to achieve the inflation target. Senior Deputy Governor Wilkins reiterated that the Bank estimates neutral to be in a 2.5 to 3.5% range. Risks to the global economic outlook related to the U.S.– China trade tensions were also discussed. But Governor Poloz pointed out that related risks to the economy are not all to the downside because there could also be a negotiated de-escalation of those tensions. The BoC’s statement was more hawkish than the one it published last September. The central bank not only raised interest rates (expected), but it also dropped its reference to “gradual” rate hikes. USDCAD traded to a low of 1.2971 in the aftermath and recovered to close -0.28% lower, $1.3048.
- Stocks initially opened flat, but soon began ticking lower before doing a nose dive in the late afternoon. AT&T (T 30.36, -2.66, -8.1%) and Texas Instruments (TXN 92.01, -8.24, -8.2%) weighed on their respective communication services and information technology sectors with disappointing earnings reports on Wednesday. Telecom giant AT&T missed earnings expectations, citing its recent acquisitions and accounting changes. Likewise, chipmaker Texas Instruments reported below-consensus revenue and issued a Q4 earnings warning, acknowledging that demand has slowed for its products across most markets. STMicroelectronics (STM 13.69, -2.18) also fell, losing -13.7%, after lowering its guidance, and the Philadelphia Semiconductor Index dropped -6.6%. Dow component Boeing (BA 354.65, +4.60, +1.3%) reported better-than-expected top and bottom lines and raised its earnings guidance.
- Tesla’s shares jumped by more than 12% (After Market Close), with the company reporting a surprise profit for the third quarter. Tesla gave investors hope that its production rates will improve, saying that the number of labor hours to build the Model 3 fell. Musk told analysts on a call it was an “incredibly historic quarter” for the young car company. It was welcome news for investors following an otherwise a tumultuous few months. The electric carmaker reported adjusted EPS of $2.90, well above consensus estimates for a loss of 7 cents per share. Revenue came in at $6.82 billion, soundly ahead of a $6.1 billion consensus.
- Microsoft rises on earnings beat, but Azure growth slows. Shares in the tech giant rose 4.3% in after market hours after the company reported better-than-expected earnings for its fiscal first quarter. They reported earnings of $1.14 per share, topping analysts’ expectations of 96 cents per share. The company also reported revenue of $29.08 billion versus Wall Street’s expectation of revenue of $27.90 billion.
CRYPTOCURRENCY UPDATES
Nasdaq Wins Blockchain Patent for Smart Contract-Based Information Release System
Yesterday, Nasdaq, the worlds second largest stock exchange by the market cup, revealed a new blockchain patent award. Blockchain technology, or more specifically smart contracts, could be used to automate and ensure the security of the information release process. Each modification and/or approval of the document is recorded as a separate transaction on the blockchain where each of the submitter, editor, approver, and recipients interact with the blockchain with corresponding unique digital identifiers — such as private keys. Several months ago, Nasdaq has tested a blockchain proof-of-concept system for securities collateral, and has also filed for other patents linked to the technology. Last month, Nasdaq executives said they were looking at adding cryptocurrency data to its market analytics tool after users showed what it called “abundant” interest.
Crypto Exchange Bitfinex Denies Allegedly ‘Fake’ Tether Volumes Listed on CoinMarketCap
Major crypto exchange Bitfinex was recently accused of publishing trading volume data from “a market that doesn’t exist.” The article had argued that since the exchange does not provide a USDT/USD trading pair, this was an intentional strategy to make it appear as though a large volume of such trades were occuring on the exchange. In fact, Bifinex users are only able to deposit and withdraw both Tether and U.S. dollars through their accounts, rather than execute such trades. Bitfinex has recently been prompted to deny rumors that it was “insolvent” or facing banking issues in response to reports that its banking partner, Puerto Rico’s Noble Bank International, was seeking a buyer and had lost both Bitfinex and affiliated firm Tether as clients. The following week, the platform temporarily suspended all fiat wire deposits without providing a specific reason, although it had acknowledged in its prior statement that “complications continue to exist” for Bitfinex “in the domain of fiat transactions.”
Chinese E-commerce Giant Alibaba Wins Preliminary Injunction Against Alibabacoin
Chinese e-commerce giant Alibaba has won a preliminary injunction against Dubai-based Alibabacoin Foundation in a lawsuit over the misleading use of Alibaba in their name. The court’s decision implies that the Alibabacoin Foundation will no longer be able to promote or sell its cryptocurrency in the country until larger action on this case is decided. In mid-October, the Alibabacoin Foundation reportedly offered for Alibaba to purchase their startup. According to the Alibabacoin Foundation’s website, the company wants to build a fund security system improved by a secret technique for implementing a blockchain algorithm into a facial recognition hashing process. According to CoinMarketcCap, Alibabacoin is ranked 1691th in global cryptocurrency rankings, and has seen a decline in price this week dropping from $1.6 per coin to $0.37 as of press time.