2 Min Market Summary: 21 Feb 2019

• The main takeaway from the FOMC Minutes was that the Fed is going to be patient in raising rates and is likely to stop reducing the assets on its balance sheet later this year. The surprise – or maybe the important revelation – for the market to consider was the implication that the Fed could turn away from a “patient” mindset with raising interest rates if market uncertainty abates.
• Separately, there was little news on the current U.S-China trade talks, but investors did get an update on trade negotiations with the EU. Trump expressed his displeasure with talks, telling reporters that if the U.S. cannot make a deal with EU, the White House will impose auto tariffs.
• U.S. Treasuries were little changed during Wednesday’s session. The 2-yr yield and the 10-yr yield finished flat at 2.50% and 2.65%, respectively. The U.S. Dollar Index was unchanged at 96.55. WTI crude rose 1.2% to $57.15/bbl.

• S&P 500 increased 0.18% on Wednesday, as the minutes from the Fed’s January meeting came in mostly in-line with expectations. Price action, overall, was kept in check with earnings reports driving the notable movers in the stock market.
• The S&P 500 materials (+1.7%), financials (+0.6%), and industrials (+0.5%) sectors outperformed the broader market. Conversely, the real estate (-0.7%), health care (-0.1%), consumer staples (-0.1%), and communication services (-0.1%) sectors finished in the red.
• The minutes, along with the EU trade update, contributed to some volatility that yielded modest losses for the major averages. Investors regrouped, however, lifting the averages back into the green to extend the stock market’s lengthy rally.Semiconductor stocks outperformed, driven in part by an upbeat earnings report from Analog Devices (ADI 106.82, +2.60, +2.5%). Their outperformance helped keep the Philadelphia Semiconductor Index (+0.9%) rally going and provided some support for the information technology sector (unch). On the other hand, CVS Health (CVS 64.22, -5.66, -8.1%) and Southwest Airlines (LUV 54.41, -3.26, -5.7%) disappointed investors with some downside guidance. Specifically, CVS guided earnings for Q1 and fiscal 2019 below estimates, and Southwest Airlines cut its first quarter unit revenue guidance to 3-4% growth, year-over-year, from 4-5% growth.
• The outsized loss from CVS weighed on the health care sector (-0.1%). Airline stocks also underperformed on concern other carriers could follow suit with unit revenue revisions of their own.

BLOCKCHAIN & CRYPTOCURRENCY NEWS

Spain’s Largest Telecom Company Seeks Entrepreneurs in Blockchain, AI

Spain’s largest multinational telecommunications company, Telefónica, has announced an initiative to support entrepreneurs in innovative technologies, such as blockchain and artificial intelligence (AI). The Madrid-based company, also one of the largest telephone operators and mobile network providers in the world has launched its first “Open Innovation” call of this year via its tech incubator subsidiary, Telefónica Open Future. The month-long initiative seeks to support startups and innovative projects ready to “revolutionize traditional ecosystems through new technologies,” such as blockchain, AI, virtual reality and big data. Telefónica Open Future is a global platform that aims to connect public and private institutions focused on innovation and entrepreneurship. The call for entrepreneurs will be open until March 20 and the selected startups will be promoted and supported by the Global Open Future network and Telefónica, underlines the press release.

US: Crypto Advocacy Group Encourages Financial Regulators to Foster Innovation

United States blockchain advocacy group the Chamber of Digital Commerce has encouraged two major financial regulators to foster blockchain innovation. The group has reportedly provided comments to the Commodity Futures Trading Commission (CFTC) and the Consumer Financial Protection Bureau (CFPB) in different proceedings this week. Generally, the Chamber has asked both agencies to permit the introduction of new financial products based on blockchain technologies and to collaborate on efficient approaches that would promote investment and industry growth. In a separate letter to the CFTC, the group expressed support for the Commission’s previously launched initiative, dubbed LabCFTC, which examines fintech innovations. Also, the Chamber endorsed the CFTC’s commitment to learn more about the Ethereum (ETH) network, as well as the possibility to elaborate a framework for the introduction of ETH derivatives.

Binance Launches Decentralized Crypto Exchange Testnet

Major cryptocurrency exchange Binance has launched the testnet of its new decentralized exchange, Binance DEX. Per Binance, the exchange, powered by Binance Chain — a new blockchain and peer-to-peer (p2p) distributed system is already available for customers. Users can create wallets and start exchanging tokens on the Binance DEX testnet. Binance DEX will reportedly support secure decentralized software and hardware wallets. Binance’s Trust Wallet will also be integrated with Binance DEX, along with the Ledger Nano S. According to the press release, more compatible wallets will purportedly be added soon. Binance Coin (BNB) — which is currently an ERC20 token — will be moved to the Binance Chain in order to become a native asset. BNB is currently up over 12 percent over the past 24 hours, trading at $10.80 and ranked 10th largest coin by market cap by press time.