US stocks continue lower; UK PM May pulls MV3

Summary:

  • US500 drops below 2800 with Financials weighing

  • Should markets fear a global recession?

  • DE30: Software problems see Lufthansa shares fall

  • UK PM May says no meaningful vote tomorrow

  • China’s CCID publishes latest crypto ranking

 

A negative Asian session saw US futures take out Friday’s low and in doing so the S&P500 traded back down below 2800 to hit its lowest level in a fortnight. On Sunday night’s open there was actually a gap higher seen after the Mueller probe concluded that Donald Trump and his presidential campaign did not collude with Russia in an attempt to influence the 2016 election result. Looking at individual sectors financials have been a laggard of late, and they reacted especially badly to the dovish Fed. The XLF.US has fallen fairly sharply in recent trade and the financial ETF has opened up a notable divergence with the broader S&P500

 

The main concern that is putting pressure on stocks is a slowdown in global activity with Friday’s data from Germany seen by some as an alarm bell. The German manufacturing PMI sunk below 45 points in March and it was just the 5th time in nearly 20 years of history of that indicator. In this analysis we check what it meant for DE30 in the past and paint this report in a present context.

 

Staying with the EU’s largest economy Deutsche Lufthansa (LHA.DE) is one of the worst performing DAX members today. Reports surfaced that the German carrier is experiencing some software problems. As a result, Lufthansa may be forced to cancel 22 flights on Monday and more in the following days in case problems turn out to be more severe.

 

Theresa May has confirmed that a third meaningful vote on her Brexit deal will not take place tomorrow, with the PM admitting that she lacks the support for it to succeed. This doesn’t come as a big surprise really, with several reports confirming that the DUP aren’t onside and now attention turns to this evening’s vote on an amendment that if passed would see parliament wrest control of the process. The government will oppose the Letwin amendment, but whether Tory MPs follow this is yet to be seen. The vote is expected to be too close to call, and while MPs putting aside party politics in the pursuit of progress would be warmly welcomed it is unlikely to provide the panacea that proponents hope.

 

Major cryptocurrencies have not experienced any surprising changes in recent days. In general, March seems to be quite a lazy month for the crypto market in comparison to some previous months. According to CoinMarketCap, the capitalization of the whole crypto market stays in the vicinity of the $140 billion handle while the largest digital currency Bitcoin accounts for roughly 50.6% on Monday morning. The Center for Information and Industry Development (CCID), which is a center operating under the Chinsese Ministry of Industry and Information Technology, published its latest cryptocurrency ranking called the CCID’s Global Public Blockchain Technology Assessment Index, as CCN said. This edition is the 11th release of the Chinese crypto ranking. The first place is occupied by EOS followed by TRON. The podium of this ranking is closed by Ethereum. What’s interesting, the largest cryptocurrency Bitcoin is downgraded to the 15th place - it means that Bitcoin dropped by two places in comparison to the previous month. Moreover, Ripple occupies the 18th place in the Chinese crypto ranking.

 

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