2 min Market Summary: 29 Nov 2018

NOTABLE MOVES  

USDJPY, +0.18%, $113.80.
EURUSD, -0.27%, $1.1297.
GBPUSD, -0.72%, $1.2742.
USDCAD, +0.35%, $1.3298.

S&P500, +0.33%, 2,682.17
Nasdaq, +0.01%, 7,082.70
Nikkei, +0.64%, 21,952.40

CURRENCY MARKET WRAP  

  • U.S. Prelim GDP q/q at 3.5% vs expected 3.6%. Fed Chair Powell said he sees current interest rates “just below” neutral. That proved to be a rally point because the language Powell used early last month indicated a view that the fed funds rate was “a long way from neutral.” Powell added that there is no preset policy path, and the Fed will be data-dependent in its decision making, which pleased investors. By highlighting risks, though, that included previous rate increases, trade disputes, and Brexit/EU political uncertainty, the market chose to read between the lines that the Fed chair isn’t wedded to three rate hikes in 2019. Powell’s perceived dovish remarks sent bond yields and the dollar lower. The U.S. Dollar Index dropped -0.6% to 96.84, trading offered against the G7. The 2-yr yield fell three basis points to 2.80%, and the 10-yr yield slipped one basis point to 3.04%.
  • Regarding trade disputes, investors remain hopeful that some kind of agreement can be struck between the U.S. and China to forestall further protectionist trade measures. There is a burgeoning belief that Trump might aim to keep a floor of support under the stock market by striking a more conciliatory tone in his Saturday meeting with China Xi Jinping. Nevertheless, it remains a speculative trade given Trump’s tough-minded tariff position.
  • In Brexit, Sterling was bid during mid-European session following headlines that UK FinMin Hammond indicated that if the Parliament blocks May’s plan, a Norway-style deal will be considered. The movement seemed counter intuitive, rather than reflecting the market’s hope for a solution than an actual end to the Brexit drama. He also cited that a no-deal Brexit could still happen and could mean the economy will be 7.7% smaller in 15 years time than if the UK stays in the EU. PM May’s spokesperson responded by saying that the economy would continue to grow in all Brexit scenarios, as all of them are being prepared by the UK government.

STOCK MARKET WRAP  

  • The S&P 500 confidently extended weekly gains by 2.3% on Wednesday after Fed Chair Powell said he sees current interest rates “just below” neutral. That proved to be a rally point because the language Powell used early last month indicated a view that the fed funds rate was “a long way from neutral.”
  • The tech sector welcomed a solid showing from heavyweights Apple (AAPL 180.94, +6.70), Microsoft (MSFT 111.12, +3.98), Visa (V 141.38, +5.47), and MasterCard (MA 202.28, +9.30), which rose between 3.7% and 4.8%. Amazon (AMZN 1677.75, +96.33) and UnitedHealth (UNH 280.95, +9.80) jumped 6.1% and 3.6%, respectively, with the latter rising to a record close. In earnings, Salesforce (CRM 140.64, +13.10) and Burlington Stores (BURL 167.56, +19.00) jumped 10.3% and 12.8%, respectively, after releasing upbeat reports. On the other hand, Tiffany & Co (TIF 92.54, -12.41) fell -11.8% after the company missed revenue expectations due to weaker spending among Chinese tourists.

BLOCKCHAIN & CRYPTOCURRENCY NEWS  

UAE Presents Blockchain and AI Initiatives Following Annual Government Meeting

At the meeting hosted by the governmental AI and Blockchain Joint Working Group, participants addressed strategies to attract foreign investment and create necessary technological infrastructure, as well as potential challenges related to blockchain and AI adoption. The meeting announced the launch of the AI and Blockchain Guide Initiative, which aims to develop a standardized definition of the technologies on the federal level, as well as introduce the concepts of AI and its deployment to relevant entities. The National Programme for AI and Blockchain Capacity Building which was also launched at the meeting will provide university courses and scholarships in AI and blockchain technology under the purview of the Ministry of Education and offer special professional training courses across all professional levels and integrate artificial intelligence in the different stages of education.

Amazon Has Launched a New Service for Building Blockchains

Tech giant Amazon is launching a blockchain service to help clients develop blockchain networks without incurring the costs of creating their own platform. The new platform is another aspect of Amazon Web Services, Amazon’s cloud computing subsidiary which powers a large number of websites and services, including platforms like Netflix. The blockchain platform can store data on another database product in the way that managed Blockchain can replicate an immutable copy of a blockchain network activity into Amazon Quantum Ledger Database (QLDB), a fully managed ledger database which allows to easily analyze the network activity outside the network and gain insights into trends. The QLDB can be used in conjunction with Amazon’s blockchain product to “maintain a complete and verifiable history of data changes” although it is not a blockchain platform. The service is currently in preview, and If approved, they will be able to create a blockchain network, at which point they can either invite other Amazon Web Services members or “create more members in your account to simulate a multi-member network.”

SEC Chair Explains Key Upgrades Needed for Bitcoin ETF Approval

At the Consensus Invest conference on Tuesday, SEC Chairman Jay Clayton has outlined the key changes in cryptocurrency markets he needs to see before he is comfortable with a bitcoin ETF. The first issue Clayton noted was the lack of market surveillance at crypto exchanges. Market surveillance involves the use of systems that “monitor, prevent and investigate abusive and manipulative activity on the exchanges.” Stock exchanges such as the New York Stock Exchange and the Nasdaq already have these monitoring tools in place. However, “Those kinds of safeguards do not exist currently in all of the exchange venues where digital currencies trade. Clayton is also concerned with how safely crypto assets are stored, emphasizing that investors could be exposed to a risk of theft in ETFs’ underlying assets.

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