The Dow Jones declined more in one day today than in its entire history. At one point being down over 1,600 points, eventually finishing around 1,100 points in the red.
After a slow sell off at the back end of last week we saw a steady and calm open to the market. Then in the afternoon it appears that panic started to set in. There is some corporate concern regarding wage growth and some uncertainty about the Fed stance but nothing concrete to really explain the move.
From a macro perspective it’s a healthy pullback - but we are still slightly concerned that the machines don’t work very well in certain situations. Looks like there were a cascade of stop orders hit which couldn’t support price - no fat fingers reported.
I know we probably sound like a broken record right now. But sometimes people don’t see what is just within their grasp and need that extra guidance. We will say it one more time....the Cryptocurrency market will be absolutely HUGE and is the future of how we as a people will conduct personal and business transactions.
Have you ever watched Dragons Den or (in the US) Shark tank? Some hopeful inventor or businessman goes in there in front of 5 powerful executives hoping to persuade them to fund their business and create a rich future. You know what is one of the most common questions they ask? “How Big is the market for a product like yours?”
Well whatever answer you have heard pales in comparison to the potential of crypto. Go and take a look at how big the FX market is right now - and pretend that amount is worth £1. The crypto market will eventually be like comparing that £1 to £1million.
The point is - because the potential is huge and it’s all relatively new the profit margins will be massive compared to FX or Stocks.
Oh and by the way Bitcoin has increased in price by $3,500 in the last 2 days. The actual price itself was at $3,500 Just over 2 months ago. And it’s moving by that amount on a daily basis now!!!!. You will probably never see a potential like this in your lifetime - as crypto will be the way we operate for the rest of our lifetimes.
Reply to this via mail (firstname.lastname@example.org) with “yes” to get further crucial information before the FailSafeCrypto Portfolio goes live in January.
On friday Bitcoin dropped by over USD 1,000 to stop out our position. We eventually took 1,800 pips profit after the bubble burst somewhat and the all time high on Wednesday saw a subsequent pull-back. This is because a lot of traders moved across to Bitcoin Cash. It's a good job that we are long in that as well!! So currently we are seeing over 13% profit in a few days. The cryptocurrencies are proving to be a very good source for opportunities for the moment and there will be even more - as a few of the other 'crypto's' are going to be listed - as well as the futures and options market coming into play.
Look out for the live trades email later.
We will be updating our stop loss tonight on Japan 🇯🇵 which will guarantee a new record profit (which incidentally was also on Japan in Jan 2016 for +1,630 points). Great news!! 🎉🎉
More profit expected as we enter the period of the year where we look forward to the ‘Santa Rally’.
Stocks and Shares have been quiet. Mainly holding and letting the profits build. We had a new trade today and there are a few more lining up to get going for Q1 2017.
Along with Italy going strong as our biggest ever Equity Indices trade we now have Fenner which has gone from strength to strength. Is now at 11% profit and closing in on our record...Kainos at 16%.
We only started at the beginning of 2016 officially. But our extensive back testing showed up some stocks that went on to make 200%+ when going ex div or after a promotion pricing. So it's well worth hanging onto these.
Italy's largest lender, UniCredit, is set to announce next week the country's biggest bank share issue, worth up to 13 billion euros (£11 billion), in what would be a major test of confidence in Italy's wider banking system, sources said.
If successful, the fundraising would be a shot in the arm for a sector overburdened by bad loans, buffeted by political uncertainty and dogged by the risk its third-largest lender, Monte dei Paschi di Siena BMPS.MI, could be nationalised.
UniCredit, which operates in 17 countries and is the only Italian bank whose health is deemed important to the stability of the global financial system, needs to strengthen its balance sheet to meet tough new regulations designed for such lenders.
"It's a massive amount and the mere fact they're thinking of it means they must be confident of pulling it off," said Roberto Lottici, a fund manager at Ifigest.
Chief Executive Jean-Pierre Mustier, drafted in this year to boost capital and profits at Italy's biggest bank, is set to present his strategic review on Tuesday.
Sources familiar with UniCredit's thinking said he could announce the cash call for early next year.
Mustier would face a harsh investment climate: Prime Minister Matteo Renzi quit this week after a heavy referendum defeat, raising the prospect of early elections, and Monte dei Paschi may need a state bailout after investors balked at funding the bank's own 5 billion euro rescue plan.
Other, smaller banks are also lining up for cash.
On Wednesday, credit rating agency Moody's cut its outlook on Italy, saying prospects for much-needed economic reform had shrunk after Renzi's departure.
"There is a monstrous hangover on Italian banks looking to raise capital, including UniCredit," said Anthilia Capital Partners Chief Investment Officer Andrea Cuturi.
But Mustier has said Renzi's resignation and the threat of early elections next year will not change his thinking.
"The event overnight will not change our strategy and we plan for the long term," he told Bloomberg TV on Monday, after Renzi announced the night before that he would quit to take responsibility for the defeat of his constitutional reform plan.
Some investors are concerned a popular anti-euro party, the Five Star Movement, could come to power at the next general election, which is widely expected to be held in the spring.
Mustier, a former Societe Generale SOGN.PA executive, was appointed to run UniCredit in July. The bank has been selling assets and has said a share sale is an option.
"Mustier has got 13 billion euros pencilled in but hasn't made a final decision yet," a source close to the matter said.
Two other sources confirmed the amount, saying the CEO wanted to fix the bank's capital concerns once and for all. But another source said Mustier might stop at 10 billion euros.
UniCredit, with a market value of 15 billion euros, has lost more than half its value this year, weighed down by concerns over profitability, bad loans and a weaker balance sheet compared with major European rivals.
In June, a source said Mustier, hired for his experience in managing complex operations at a big bank, was looking to raise core capital - a key measure of financial strength - to 12.5 percent. At the end of September, the bank's fully-loaded CET 1 ratio was 10.82 percent.
UniCredit, which has Europe's biggest bad loan portfolio, is also expected to reveal plans to dispose of as much as 20 billion euros worth of non-performing loans, sources have said.
"The bank could present its plan for clearing out the bad loan book, perhaps indicating who it's talking to," a person familiar with the matter said.
Mustier has begun selling assets and slimming down the bank, making it easier to manage.
It is in exclusive talks with France's Amundi AMUN.PA to sell its asset manager Pioneer in a deal that could raise around 3.5 billion euros. On Thursday, it announced deals to exit Polish unit Pekao, raising more than 2.5 billion euros.
More disposals could be on the way.
"We can't rule out another share placement in FinecoBank FBK.MI," said a banker who has recently worked on deals with UniCredit. The lender sold 20 percent of its online broker unit in October for around 550 million euros.
The banker said a successful UniCredit cash call could be a prelude to a tie-up with France's Societe Generale.
Any deal would be structured as a merger of equals meaning UniCredit needed to bump up its valuation. "It's too early now but there are good chances this will be the first pan-European bank merger," the banker said.
Rumours about a possible merger between the French and Italian banks have circulated for years but re-emerged after Mustier's appointment. Both banks have declined to comment.
The S&P 500, Dow Jones Industrial Average and Nasdaq Composite climbed to a trifecta of records Monday as stocks extended their postelection rally.
Investors have piled into banks, health-care stocks and industrials on bets that President-elect Donald Trump would loosen regulation and boost infrastructure spending. At the same time, they have pulled back from Treasurys and their stock-market proxies, which are less attractive to investors when interest rates rise.
On Monday, stocks rose broadly, led by gains in energy shares as U.S. oil prices reached their highest levels in three weeks.
“The market’s been ripping since the election,” said Bill Costello, portfolio manager at Westwood Holdings Group. Hopes that the Trump administration would usher in a pro-business, pro-growth environment are driving stocks higher yet, Mr. Costello added.
The Dow industrials rose 88.76 points, or 0.5%, to 18956.69, above its Nov. 15 closing record of 18923.06. The S&P 500 rose 16.28 points, or 0.7%, to 2198.18, closing above its Aug. 15 record of 2190.15. The Nasdaq Composite added 47.35 points, or 0.9%, to 5368.86, passing its record of 5339.52 reached on Sept. 22.
The last time the three major indexes closed at records on the same day was Aug. 15.
Some investors cautioned that the stock market’s postelection gains have been built on assumptions that policies favorable to certain industries will be implemented in the coming year.
“Based on market fundamentals, it’s not justified,” said Michael Cuggino, president and portfolio manager of the Permanent Portfolio Family of Funds, who called corporate-revenue growth in the previous quarter “lackluster.”
While many investors are optimistic, “we don’t have anything concrete so far,” Mr. Cuggino added.
And stocks are more expensive now than they were three weeks ago, he said.
The S&P 500 was trading at 20.1 times its past 12 months of earnings Friday, compared with 19.5 times on Election Day and its 10-year average of 15.7, according to the WSJ Market Data Group.
The shares of financial companies have led much of the charge that sent major U.S. indexes to fresh records on Monday.
Investors have been betting that a Trump presidency would usher in an era of looser financial regulations and higher interest rates. Both would benefit banks, whose net-interest margins—a key measure of lending profitability—rise with rates.
Shares of financial companies accounted for 54% of the S&P 500’s gains from Election Day through Monday, according to S&P Dow Jones Indices. Five stocks—those of Wells Fargo, Bank of America, J.P. Morgan Chase, Berkshire Hathaway and Citigroup —accounted for more than a quarter of the broad index’s gains through that period.
The group’s surge is a stark turnaround from the first half of this year, when the sector lagged behind the broader market as investors worried about sluggish U.S. economic growth and ultralow interest rates.
Financial shares rose 0.3% in the S&P 500 on Monday, with Affiliated Managers Group, Charles Schwab and Bank of America posting the biggest percentage gains.
A rise in industrials shares helped the Dow reach records before the other indexes. The blue-chip index has added 3.4% since Nov. 8—compared with the S&P 500’s 2.7% gain—and closed at its fourth consecutive record on Nov. 15.
Caterpillar, which rose 56 cents, or 0.6%, to $92.90 on Monday, has added 9.7% since Election Day.
Expectations of higher growth, inflation and interest rates have at the same time hurt the appeal of U.S. government debt, sending yields higher. Inflation chips away bonds’ fixed returns over time.
“Our bond guys said the implementation of Trump’s platform will result in stronger economic growth, stronger inflation, and the Fed will tighten rates,” said Phil Orlando, chief equity market strategist at Federated Investors.
“When we saw that, we immediately increased our equity allocation and took it out of Treasurys,” he said, favoring economically sensitive U.S. stocks such as financials and industrials instead.
The yield on the 10-year Treasury note declined to 2.335% Monday from 2.337% Friday, but is up from 1.867% on Election Day. Bond yields fall when prices rise.
We have just closed our 16th winning trade in a row, smashing our previous record of 8! We also have 4 of our 5 open trades in serious profit. Hopefully we can get to 20 before taking a loss! 🙏
Markets were plunged into turmoil after Donald Trump's US election win.
The FTSE 100 had a rollercoaster ride as it opened 145 points, or 2% lower, wiping £37bn off the value of top UK-listed companies.
But it quickly recovered most of the losses to stand about 50 points lower.
The market opening coincided with Mr Trump's acceptance speech in which he eschewed some of the more confrontational rhetoric deployed during the campaign.
Instead he put the emphasis on reuniting a divided America, putting millions back into work through large scale infrastructure projects, and dealing fairly with other countries.
Futures trading ahead of the London opening had been pointing to steep losses.
Asian markets sank overnight with Japan's Nikkei 5% lower and Hong Kong's Hang Seng off by 2%.
In Europe, Germany's Dax and France's Cac 40 fell about 2%, as did Spain's Ibex. In Italy, the MIB was off nearly 3%.
The US dollar also sank while the Mexican peso plummeted by as much as 13% to a record low.
Investments seen as safe havens such as government bonds and gold, as well as the Japanese yen and Swiss franc, turned higher as the tide turned in Mr Trump's favour, against initial expectations.
Jasper Lawler, market analyst at CMC Markets UK, said: "Markets are freaking out.
"President Trump said his election would be bigger than Brexit - and as far as financial markets are concerned, that is already true.
"Since the US is the world's largest economy and the US dollar is the world's reserve currency, it still holds true that when the US sneezes, the rest of the world catches a cold."
Sterling was up by a cent against the US dollar overnight at $1.25 though it later slipped back to about $1.24.
In Tokyo, the Japanese government and central bank were preparing to meet for crisis talks.
Markets had been expecting a victory for Hillary Clinton and many investors fear a Trump White House would up-end the global political order.
Stocks have seen a rollercoaster ride over the last week with sharp falls as Mrs Clinton came under pressure over an FBI investigation followed by rallies when the ending of the probe had appeared to tip the scales in her favour.
Election day saw tentative gains as investors waited anxiously on the result but as voting projections swung in Mr Trump's favour trading turned volatile.
Investors fear the Republican's protectionist stance will lead into a trade confrontation with China while he is also expected to renegotiated the long-standing NAFTA free trade agreement with Mexico and Canada.
Plans for transatlantic and trans-Pacific trade deals now look dead, said Paul Ashworth, chief US economist at Capital Economics.
Meanwhile a series of unfunded tax cut plans would send Federal debt levels soaring, he added.
Kathleen Brooks, research director at City Index, said: "Markets are in all-out panic mode."
She said investors were facing a "triple whammy" with the Republicans projected to take control of the US Senate and House of Representatives as well as the White House.
"A Republican Congress could deliver some of the more extreme policies that Trump has touted during his campaign, such as import tariffs and a ban on certain immigrant groups.
"This is a major concern for the markets, as it could completely change not just US politics, but also the global economic norm," Ms Brooks said.
Meanwhile, the prospect of a US interest rate rise in December looked likely to fade in the event of a sharp and prolonged stock market downturn, she added.
Copper surged to a 15-month high on Wednesday and pulled other metals up too on technical buying and as investors speculated that a Donald Trump presidency could herald a significant fiscal stimulus and boost demand for metals.
In his victory speech, Trump said he would embark on a project to rebuild American infrastructure and would double U.S. economic growth.
"The Republicans have control of both houses of Congress and that means there is a possibility that those kind of programmes could become reality," ICBC Standard Bank analyst Tom Kendall said.
Three-month copper on the London Metal Exchange CMCU3 rose as much as 3.5 percent to its highest since July 22, 2015 at $5,443 a tonne. It closed 3.4 percent higher at $5,411 in official rings, its biggest daily increase since March.
Estimates of speculative interest suggested that LME copper positioning had reached the biggest long position since February 2011, according to broker Marex Spectron. "Over the last few days, there has been in the market a short-term CTA-type buying momentum and investors are now looking at the next level at around $5,445," ICBC Standard's Kendall said.
Copper has increased about 10 percent over the past week. "The technical picture for copper had already started to improve, signalling a switch towards a bull market, driven by speculative positioning," UBS WM analyst Giovanni Staunovo said.