Market Watch I 8th July 2019 I Kristal Weekly Feed
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Kristal Weekly Feed | 8th July 2019

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Got only 15 seconds? Here’s a succinct summary of major global events that transpired last week.

Positives

  • S&P 500 rallies post trade-war truce
  • China’s industrial profits gained in May
  • Bitcoins face minor losses; but still stay in bull market zone

Negatives

  • No immediate rate cut from the Fed sends Dow dipping
  • Indian stock market pulls a face after Budget announcements

Now, for more detail.

 

Positives 

1. S&P 500 rallies post trade-war truce

What You Should Know

The independence-week celebrations brought another reason for joy to the U.S. stock market as it closed on a high. The S&P gained 1.7% to finish the week at 2990.41, the Dow rose 322.116 points, and the NASDAQ composite climbed 1.9%.

What You Should Lookout For 

We have been in similar territory before where news of a truce has pushed stocks up a little; before another spiral into the deep. While this was good news for traders ahead of the 4th July weekend, this does not signal the end of the volatility that has marked this year.

Suggested Reading:

The S&P 500 Soared Last Week Because A Trade Truce Conquers All

 

2. China’s industrial profits gained in May

What You Should Know

Bitcoins have seen a huge resurgence this year, and hovered just under the $11,500 mark at the close of day on 6th July. Looking at the weekly trend, the coin is down by about 7.6%, treading below its last high of $13,020 at the end of June.

What You Should Lookout For 

Many factors contributed to China’s slow growth in April; the trade war and consequent drop in global trade being the primary reason. However, the trend has been continuing since mid-2018, forcing the People’s Bank of China to slash bank reserve ratios six times in the past year. While steel demand has increased, the continued crackdown on smokestack industries to reduce smog may still be a dampener in production.

Suggested Reading:

China’s industrial profits up 1.1% in May as sales quicken

 

3. Bitcoins face minor losses; but still stay in bull market zone

What You Should Know

Bucking a month-long trend of decline, China’s industrial sector posted profits of 1.1% in May. Following a 3.7% fall in April, the Chinese industries made up for lost time with 565.6 billion yuan (64.78 billion pounds) in earnings.

What You Should Lookout For 

Many believe that the ‘high’ for Bitcoin, and cryptocurrencies in general, is yet to be reached. As investors look at alternative trades, cryptos may become the next big thing. But, we have seen them fall before in 2017 – and the same rules will apply even now. It is always prudent to be wary and double-check your custodian before investing in alternative currency.

Suggested Reading:

Where Will Bitcoin’s Price Go Next?

 

Negatives 

1. No immediate rate cut from the Fed sends Dow dipping

What You Should Know

The latest U.S. payroll report has dampened the chances of a Fed rate cut, and the stock and bond market – and the dollar – has responded with a frown. Post the July 4th holiday, the Dow fell 44 points or 0.16%, to close at 26,922.12. The S&P 500 dipped 5.41 points, or 0.18%, to close the week at 2990.41, and the NASDAQ Composite fell by 8.44 points, or 0.10%, to 8161.79.

What You Should Lookout For 

Chances of a deep Fed cut have been reduced to 5.4% on the fed-fund-futures market. The positive employment news gives the Fed some breathing space, but the markets may continue to sulk if the rate cut they were hoping for is not sent their way.

Suggested Reading:

The Dow Falls 44 Points Because Jobs Weren’t Bad Enough to Be Good News

 

2. Indian stock market pulls a face after Budget announcements

What You Should Know

Echoing its American counterpart, the Indian stock market too fell by 1% (for both NIFTY and SENSEX) to end the week in bearish territory. At the closing bell, Sensex fell over 394 points to 39,513, while Nifty50 fell 135 points to 11,811 level.

What You Should Lookout For 

While Finance Minister’s Nirmala Sitharaman’s maiden budget is generally being considered as holistic and long-term, the news to increase public shareholding in companies from 25% to 35% has got the stock market in a tizzy. This would be the biggest wealth-transferring move of its kind, and the markets are worried about a supply overhang. The move may also hamper large-cap companies with a higher promoter shareholding; and increases the likelihood of a larger correction in large-cap companies as compared with the broader market.

Suggested Reading:

In one stroke, FM put stock market on a downward journey, and how!