Kristal Weekly Feed | 28th October 2019

Got only 15 seconds? Here’s what you need to know.

Here’s a succinct summary of major global events that transpired last week.

Positives

• Trade deal progress with China helps US stocks climb
• Bitcoin breaks the 10k barrier in biggest trading day since April

Negatives

• SoftBank stocks see the worst week in last 3 months

Now, for more detail.

Positives

1. Trade deal progress with China helps US stocks climb

What You Should Know

The American stock market saw some positive movement last week as the ‘phase one’ of the US-China trade deal seemed to make progress. The S&P index had a good Friday where it climbed beyond its July highs during midday, but then slipped and closed three points below the July record.

The Dow closed up 153 points, or 0.6%, while the Nasdaq finished the week with a small high of 0.7%.

What You Should Look Out For

This week’s market movements were mostly tied in to corporate earnings. For the S&P, this marks the third straight week of gains, while Nasdaq saw its fourth bull-ish week. Signs of a positive truce between the two economic giants further boosted the indices on Friday. Both the US and China signed a preliminary trade agreement two weeks ago; so, hopefully, there will be good news to look forward to in the coming days.

Are we asking you to give up your cautious ways though? Never!

2. Bitcoin breaks the 10k barrier in biggest trading day since April

What You Should Know

Bitcoin had a crazy ride this last week. First, it tumbled to a low of $7,300 in the middle of last week. Overnight on Friday and Saturday BTCUSD, +2.68% broke the $10,000 barrier for the biggest single-day rise since April 2, before dropping to $9,000.

Though bitcoin prices have done better this year as compared to ‘18, the alternative currency is still way off its July high of $12, 920.

What You Should Look Out For

This is reportedly the third-largest 24-hour price gain in bitcoin’s trading history. Many analysts have pointed out that the movement could have been due to China’s President Xi Jinping commenting that the country should “seize the opportunity” of blockchain technology. According to Coindesk, this could have had a major role to play in the sudden rally.
China was one of the major demand sources for bitcoin back in 2017 before the government banned the alternative currency. The Standing Committee of the 13th National People’s Congress in China, however, passed new laws on October 26th to regulate cryptos which is expected to take effect on Jan. 1, 2020. While it is always good for any technology to have one of the world’s biggest economies backing it publicly, analysts will gain more clarity only when the new laws come into effect next year.

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Negatives

1. SoftBank stocks see the worst week in last 3 months

What You Should Know

The last time SoftBank stocks made news for the wrong reason, it was August and its stocks had plummeted 10%. Last week, SoftBank fell nearly 7%.

Other Asian stocks, too, opened mostly lower on Friday. Japan’s Nikkei (N225) moved up 0.1% early in the trading hours, only to pull back a little and trade down 0.1%. South Korea’s Kospi index (KOSPI) also edged down by about 0.1% but recovered later to trade flat. Hong Kong’s Hang Seng (HSI) index saw a slump of 0.5%, while China’s Shanghai Composite (COMP) fell 0.6% before the close of trading last week.

What You Should Look Out For

Coming back to SoftBank, according to a Bloomberg report the company may be planning to take a writedown of at least $5 billion to its Vision Fund, given that both Uber and WeWork have not done what they promised they would. However, the same has not been confirmed by SoftBank yet.

The Japanese tech conglomerate had announced a massive bailout of The We Company earlier last week, which now adds to the 5 trillion yen ($46 billion) of net debt SoftBank has already accrued on its balance sheet – way more than half of its market capitalization of 9 trillion yen. CEO Marcelo Claure, however, downplayed the WeWork debacle, calling it a “growth challenge”. He also said that WeWork and SoftBank are both committed to delivering profits in the coming days.

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2. In India, 72 stocks fall to hit 52-week lows

What You Should Know

Bharti Airtel, SpiceJet, and Omaxe were among some of the names which saw their stocks plummet on Friday in the Indian stock market. Around 70 stocks fell to hit 52-week lows.

The rupee, however, had a good week where it capped its five-day winning streak to finish 11 paise lower at 71.02 against the US dollar on Thursday. This can be attributed to unabated foreign fund outflows and a weak trend in domestic equity markets.

What You Should Look Out For

Asian markets have generally had a slow last week (see above). Forex traders have also raised concerns of subdued trading in emerging markets due to the Brexit no-show. Traders have also been waiting on global cues from the US-China deal, which (so far) looks to be on track for November.

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