Asian markets got off on poor footing Thursday, as the overnight selloff in technology shares on Wall Street continued into the Asian session. Chipmakers were hit especially hard, and Chinese markets continued to suffer from their own domestic problems as well, which led to the Hang Seng in Hong Kong putting in the worst performance of the day. The technology heavy Kospi in South Korea didn’t fare much better though, falling nearly as much as the Hong Kong market. Australia’s S&P/ASAX 200 fell as well, dragged down by losses from the big four banks after Australia’s financial industry saw the beginning of a judicial inquiry into bank misconduct. One bright spot was Japan’s Nikkei, which reversed early losses in an afternoon rally that took the index into positive territory on the back of a weaker Yen.
European markets got off to a good start on the back of rising bank stocks, but quickly turned choppy as losses from the oil & gas sector weighed. By the end of the day markets across the region were broadly lower, as a firming Euro served to put additional pressure on equities. Both the Stoxx Europe 600, the broadest measure of European equities, and the German DAX were 0.3% lower, while the CAC 40 in France lost 0.5%, and Spain’s Ibex 35 gave back some gains from the previous two sessions as it fell 0.6%. The worst performance in the region came from the FTSE however, with the U.K. benchmark index falling sharply for a second session as the Pound continues gaining on the U.S. dollar due to signs that the Brexit negotiations are improving.
U.S. markets started the day strongly and continued to gain throughout the day, with both the S&P 500 and Dow ending at new record highs. The Dow also topped the 24,000 level for the first time in history, and took just 30 trading days to traverse the 1,000 point milestone. It’s the third fastest ever for the Dow to travel from one 1,000 point milestone to the next, but of course this becomes easier on a percentage basis the higher the Dow climbs. The Nasdaq managed to reclaim some of the sharp losses from the previous session, although it wasn’t able to retrace the entire move. All eleven of the S&P sectors ended the day in positive territory, with the energy sector outperforming after it was learned that OPEC was planning to extend their production cuts beyond March. The industrial and financial sectors performed well also, with investors hoping for the passage of President Trump’s tax reform bill in the Senate as early as Thursday evening.
Today’s Assets
Cryptocurrencies
Cryptocurrencies – It was a bad day for cryptocurrency holders as almost every coin ended the day in the red, although many finished well off their session lows. Bitcoin fell as far as $9,200 mid-afternoon, but recovered and was back above $10,000 by the end of the session. It was struggling to remain above that key psychological level, and lost 2.6% for the day. Almost all the other major coins had losses ranging from 2.5% to 4%, but that was far better than the double digit percentage losses they had suffered early in the day. The standout was DASH, which avoid much of the dip and finished the day with a 8.3% gain.
Despite the USD strengthening in response to an increased belief that the Fed will be raising interest rates more aggressively in 2018, and rising U.S. Treasury yields, the Pound continued on its sharp upward trajectory on Thursday. This pair added 120 pips, closing comfortably above the 1.3500 level and on course to test the 1.3600 level for resistance before markets close for the weekend. Considering that it is a weekend coming it isn’t likely today will see the pair able to break that resistance, so if it does reach the 1.3600 level a pullback is most likely.