YTD highs for US stocks; GE soars
European stocks benefit from trade developments
Oil swoons as Trump calls for lower prices
Pound remains supported as key Brexit vote delayed
CME’s Bitcoin futures volume hits new record
News over the weekend that the US will delay increasing tariffs on $200B of Chinese imports has provided more fuel to the rally seen in US stocks, with all 4 benchmarks on xStation hitting their highest level of the year this afternoon. As is often the case, the US100 is the best performing and higher by 0.84% at the time of writing. Looking at individual shares in the US, General Electric (GE) is enjoying a strong push higher after the firm announced a deal to sell its biopharma business. Danaher Group are reportedly paying $21 billion for the business and will also assume certain pension liabilities. Wall Street analysts covering GE said the deal should help alleviate much of the liquidity concerns around the company and the market reaction has been clearly positive with the stock jumping over 10% on the open.
European benchmarks also enjoyed a bright start, but they’ve failed to really capitalise on the upbeat sentiment with the markets paring their gains somewhat as the day wore on. While Christian Sewing, CEO of the Deutsche Bank (DBK.DE), is trying his best to restructure lender and bring him back to its prime, it is hard to see progress so far, at least when it comes to the trading division. Just recently Bloomberg released a report on the market share of particular banks in the global fixed-income and equity trading. The German bank did poorly in both. Its market share in fixed-income trading fell 0.6 percentage points to 8.4% in 2018. However, the lender manage to retain its 4th position in this field. Things look worse when it comes to stocks trading. Share of Deutsche Bank in global equity trading dropped 0.7 percentage points causing the lender to drop out of the top 10. Once again the US investment banks dominated holding top spots in both categories (JPMorgan in fixed-income and Morgan Stanley in equities).
There’s been a wave of selling seen in the energy complex this lunchtime after a tweet from Donald Trump caused traders to scramble to short Oil futures. The US president took to Twitter to voice his displeasure that Oil prices were getting too high, with Brent crude (Oil on xStation) hitting its highest level in over 3 months on Friday. The message called on OPEC to “relax and take it easy” in what is quite clearly a reference to their supply cuts that have been in place since the start of the year.
Once more Theresa May has pushed back a “meaningful vote” on her Brexit deal, with the new date of 12th March just 17 days before the UK are scheduled to leave the EU. The delay has received criticism from the leader of the opposition with Jeremy Corbyn accusing the PM of “recklessly running down the clock” and it does appear to increasingly look like May’s strategy is just that, in trying to force MPs to choose between her deal and no deal. The pound remains close to its highest level of the month against the US dollar, and trades back near the $1.31 handle.
The cryptocurrency market has begun the this week unsuccessfully experiencing large falls yesterday. As a result, Bitcoin is trading below the last Monday’s closing price. Other major cryptos also are moving significantly lower. According to CoinMarketCap, the capitalization of the crypto market stands around the $129 billion handle whereas the largest virtual currency Bitcoin accounts for roughly 52.3% of this value. The Chicago Mercantile Exchange, which is the major US derivative exchange, announced on Twitter that its Bitcoin-based futures volume hit a new record on February 19. The Exchange wrote that over 18 thousand of contracts were traded that day. To compare, the second largest volume in February (until last Tuesday) was around 10 thousand of contracts. However, most of trading days ended with volumes no exceeding 5 thousand of contracts. The new record seems to be quite interesting as it may indicate that Bitcoin could still gather a lot of investors’ attention.