Stocks and Oil look to recover; Crypto still under pressure

Summary:

• European stocks rise on upbeat political news

• US100 leads the rise across the Atlantic

• Oil bounces as Goldman says “Buy”

• Crypto sell-off sees more miners shut down

The week has begun well for European markets with major stock benchmarks from the Old Continent launched new week significantly higher. FTSE MIB (ITA40) opened around 2.5% higher after the Italian officials showed signs of bowing to EU over budget deficit. Numerous other blue chips benchmarks enjoyed over 1% upward price gaps. On the other hand, steep declines were seen in Russia what can be related to the aggression of the Russian war fleet towards Ukrainian forces near the peninsula of Crimea. All 19 sector subindices from the Euro Stoxx 600 index opened higher on Monday with banks and refiners enjoying the biggest gains.

The best performing US index at the time of writing is the US100, which has rallied up near last Tuesday’s high in recent trade. The high of the day at 6654 could now be seen as potential resistance but if longs can push up above it then there’s scope for further gains into the 6755 region. Price has got back above the Ichimoku cloud on H1 following these gains and this could be seen as a sign that the short term trent has turned higher.  

There’s been a notable bounce in oil markets today with both Oil and Oil.WTI enjoying a strong day of gains. Oil has gained around 2.5% to move back above the $60 handle while Oil.WTI is up over 3% and trade north of $52 once more. There’s been little by the way of any fundamental news to support this recovery thus far, with the latest reports actually providing more negative developments for price. According to a Reuters article which cited a source in the industry, Saudi crude production this month will hit its highest ever level in the region from 11.1-11.3 mbpd. This represents an increase of 0.5 mbpd - or 0.5% of global demand - from the amount seen in October and more than 1 mbpd above the levels seen earlier this year.

An uncontrollable sell-off on the cryptocurrency market continued this week with numerous major coins slumping to their lowest levels in a year. Bitcoin moved below the $4000 threshold for the first time since late September 2017 and Ethereum is trading over 90% below its record high. The continuous decline in valuations causes more and more cryptocurrency mining farms to shut down. According to Mao Shixing, founder of F2pool, as much as 800k Bitcoin miners could have shut down during the past two weeks. Founder of the World’s third largest bitcoin mining pool said that hash rates of seasoned mining machines make it hard for companies to stay profitable at current price levels. In turn the hash rate of the whole Bitcoin network, the aggregated computing power of Bitcoin’s blockchain, dropped to 42 million TH/s (tera hashes per second) from peak of 60 million TH/s seen in late September and early October 2018.