Stocks rally on trade deal talk; Pound recovers from 3-week low

Summary:

• Equities rally on hopes of US-China trade deal

• US indices back near 2019 highs

• Pound slides as May address MPs on Brexit

• Ripple lures tech talents offering large bonuses

• Top charts for this week

It’s been a good day for the stock markets, which began in Tokyo with the Nikkei jumping 2.6% after investors in Japan returned from a long weekend. This move on improving sentiment followed through to the European session with the Eurostoxx rising by around a percent and over in the US, the S&P500 has made a new year-to-date high in the past half an hour. The cause of the gains is likely due some market chatter doing the rounds that the US will extend the deadline for a trade deal with China beyond March 1st and as a reminder, If a deal is not agreed, or the deadline is not extended then US has said that it will raise its tariffs on $200B of Chinese goods from 10% to 25% - so any extension would be seen as good news   

With the US500 back up near its 2019 highs, the market is around 18% higher than the low of 2318 seen over Christmas. This V-shaped recovery has no doubt been strong but while shorter term trend identifiers have turned positive, price remains below the 200 day SMA. This metric is currently at 2746 and any reversals in the region could be seen to provide attractive shorting opportunities, but a clean move above the 200 day SMA would open up the possibility of another leg higher towards 2824.

The Brexit saga continues to wrangles on with Theresa May updating parliament and promising a meaningful vote after more talks with the EU, with the PM saying she needs some time to get the changes she believes that MPs want. The cynics will believe this is simply a ploy to run down the clock further and back the House of Commons into a corner ahead of the Article 50 deadline at the end of March, which would ultimately leave MPs with a straight choice between her deal and no deal - and stuck between a rock and hard place, I think there’s a good chance they’d plump for her deal. The pound earlier fell down into the low 1.28s against the US dollar, which was it’s lowest level in over 3 weeks, but to be honest this depreciation is more a function of strength in the buck, rather than weakness in the pound and we’ve since seen a bit of a bounce off the lows to trade back to little changed on the whole.

Ripple, a fintech startup being headquartered in Silicon Valley, wrote on its LinkedIn account that it was looking to hire more than a dozen engineers and technical experts, including a new head of engineering for its xCurrent project (the company’s software solution enabling banks to instantly settle cross-border payments with end-to-end tracking). Bonuses offered by the company to new employees are the most striking point here. According to two prospective recruits, those bonuses are ranging from $1 million to $6 billion. These amount are to be paid in tokens. Job offerings for these posts were published on the company’s website in late 2018, but the firm declined to confirm or deny whether such bonuses are still being offered this year. According to a Ripple representative the company employs roughly 90 engineers and tech experts and it has plans to hire “aggressively” so as to expand its software. The company also reported that as many as 100 new employees were hired across the company last year.

Our latest installment of the top charts this week focuses on the US30, USDPLN and Gold and can be viewed in more detail here.