August 22, 2018
Asian markets show a mixed tone as U.S. politicians become the focus of attention
Asian markets were mixed on Wednesday, August 22, as investors reacted to political developments in the United States. Donald Trump's former personal attorney, Michael Cohen, pleaded guilty in federal court to eight counts of tax fraud, illegal campaign contributions, making false statements to a financial institution and illegal corporate contributions. He could face over five years in prison.
Two of the charges Cohen testified on are reportedly directly related to Trump. He admitted that he made payments to favour the election of an unidentified candidate, who appears to be the president. Those payments, Cohen said, were made to influence the outcome of the election.
Australia's ASX 200 fell, with sectors such as utilities and the financial sub-index being the worst. In Japan the Nikkei 225 rose, while the South Korean Kospi did the same. China's markets moved into negative territory.
The S&P 500 reached its all-time high on Tuesday and reached its longest ever bullish market record. Investors bet that the strengthening of the economy and booming corporate profits will continue, despite the recent trade battles.
The Dollar fell during Wednesday's Asian trading session. Trump's comments on monetary policy continued to affect the currency. Investors are now eagerly awaiting the China-U.S. trade talks and the release of the Federal Reserve Minutes.
On Wednesday, oil prices rose, supported by a drop in U.S. crude oil inventories and as a possible Iranian oil deficit, starting in November, adds to the bullish tone.
Gold prices rose to their highest level in the past week during Wednesday's Asian trading session. It does so after Trump attacked the Federal Reserve for interest rate hikes.
European markets are expected to open mixed on Wednesday.
The S&P 500 has risen more than 300 percent
Future U.S. stock markets pointed to modest gains at Tuesday's opening.
U.S. stocks traded higher on Tuesday, August 21, with the current bullish market on its way to becoming the longest in history. The bullish market turns 3,453 days on Wednesday.
The S&P 500 has risen more than 300 percent since it hit bottom in its financial crisis. No one believed in this bull market and they still don't...
Second improvement of the week thanks to Trump and Moody's. Bullish session in Europe on Tuesday 21 August, which joins that of Monday. European indices are moving away from the month's lows and following in the footsteps of those generated in the United States.
Although Trump had no hope that the new talks between China and the United States would be successful, European markets have not been affected. In addition, the US president has once again messed with the monetary policy of the Federal Reserve, criticising the interest rate hikes.
The rating agency Moody's has put on hold the review of Italy's credit rating. They hope to be clearer about the country's fiscal and spending path. For now, the markets are breathing.
Trump makes the optimism go away again
On Monday, markets responded well to the news that the U.S. and China continue to have meetings to reach an agreement and avoid a trade war.
But Trump says Tuesday that he doesn't have much hope of making much progress at those meetings.
The meeting between low-level officials from the two countries begins on Wednesday. On the same day, the Fed's minutes will be published. Both events will cause the markets to react.
To top it off, Trump again says he disagrees with the Federal Reserve's interest rate hikes.
The central bank meeting in Jackson Hole will take place shortly and many expect Powell to make some kind of announcement: on the prospects for the economy, the trade war or on the acceleration of rate hikes.
On the other hand, while the United States is showing signs of an expanding economy, Europe is experiencing the opposite. Peripheral countries, such as Spain or Italy, are involved in a great deal of political uncertainty that has a negative effect on their economies.
As an example, Spain relied on exports to overcome the crisis. These exports were heavily dependent on car production, which is now in the midst of a sales crisis.
In addition, we will see how currencies are evolving. The Dollar is damaged by Trump's comments, which in turn will strengthen the Yen and Euro. This is not favourable for exporting companies.
China continues to take steps to shore up its economy
The Central Bank says that they will improve the coordination of monetary policies and that they will alleviate the financial problems of companies.
They intend to make policies flexible and effective.
As a new thing, they say they are asking local authorities not to give subsidies on steel imports and exports to companies that violate World Trade Organization rules.
They also say that local authorities should not create policies that support the illegal expansion of steel capacity.
China's biggest risk may be its housing market, not so much the trade war
The Chinese housing market remains a challenge for the authorities, who are trying to maintain stable economic growth in the face of trade tensions with the United States.
In fact, real estate is the country's biggest risk in the next 12 months. A much greater risk than the trade war, according to Larry Hu, chief economist of Greater China at Macquarie.
They are particularly alert to whether the real estate market, in smaller cities, will see a drop in prices, or the construction of new homes, after the recent increases.
Nvidia and the Kryptocoins Mining
With regard to graphics cards, the Company is beginning to recognize that, in the future, it does not see much impact and support from the cryptomarket.
Given the puncture Bitcoin has had, mining is not at its peak of popularity. The current demand for graphics cards is shrinking.
However, many believe that other areas of the Company's business will soon take over, because the latest figures presented show promising growth.
[image] The exchange rate is always given for a currency pair. A currency by itself is worthless if it is not compared to another currency or other reference, such as gold. Therefore, whether in a flexible exchange rate or fixed exchange rate...
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