Welcome to another edition of Qume Market Mondays!
Here are some of the important weekly market moves:
· Bitcoin is down -1.2% from last week
· Ether is down -0.02% from last week
· Comp closed at a weekly loss of -17.31%
· S&P 500 closed at weekly gain of 2.5%
· FTSE 100 closed at weekly loss of -0.3%
· Hang Seng Index is up 6.84% from last week
· Nikkei 225 closed at a weekly gain of 1.2%
· Yield on 10-Year treasuries is up 7.5% from last week
While the traditional financial markets have been quite volatile, Bitcoin has been surprisingly quiet. 10-day realized volatility has been falling consistently since June and is now at its lowest since April, and the price has been pretty much stagnant since last week.
However, Bitcoin and S&P 500 one month correlation just hit a record high of 66.2% and we expect bitcoin to recover a bit this week to find support at around $9,200 price levels.
In the aftermath of the border clash in Ladakh, India has moved to ban 59 Apps from various Chinese companies which include the popular social media app TikTok. This is a huge blow to Chinese digital companies as India was the biggest market for many of these apps.
Also, China has been devastated by the ongoing pandemic and with the IMF estimates of China’s growth at around 1.2% this year and their export markets taking the worst hit in a long time, this conflict will be highly damaging to China in this recessionary environment.
The biggest news from the Indian markets this week has been about Reliance Jio, a subsidiary of Jio Platforms, which has raised 18.95 billion rupees from Intel. Intel now has a 0.39% stake in the company and Facebook has around 10%. This is in addition to the slew of investments in Jio since April with the total now standing at more than $15bn.
No more V-shaped economic recovery
Just a few weeks ago, the world markets were recovering and at an astonishing rate. But since then, markets worldwide have ended up weekly losses and crypto markets have been stagnant. Last week was no exception. The economic activity index seems to have slowed down in the recovery phase in the USA.
The US trade deficit is at its widest gap since 2018, mounting up to around $55 billion adjusted seasonally.
FTSE 100, Hang Seng Index are all showing similar trends.
This isn’t necessarily bad news. Nobody wanted markets on steroids riding on speculation alone. As close as the markets are to economic reality, lesser the chances of a big market crash.
Other data sourced from www.skew.com
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