Summary;
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US indices recover from dip on trade news
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US500 probing key resistance at 2825
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DE30: RWE sees flat or negative earnings growth in 2019
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Basel Committee publishes crypto-related guidelines for banks
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Pound consolidates ahead of another Brexit vote
There’s been a bit of a dip lower in US indices today after reports that Trump and Xi have pushed back their meeting till at least April and in doing so this has dashed any hopes for an imminent solution.The news isn’t a major negative shock in itself but with stock markets on both sides of the Atlantic close to their year-to-date highs it comes at a potentially key time and will test the mettle of bulls who have enjoyed control of the tape in recent months.
This has caused some weakness and seen the US500 once more come up short in an attempt to break key resistance around 2825 this morning. This is now a pretty clear and obvious line in the sand, and how price reacts to it may prove pivotal going forward. The market has recovered from the dip to trade little changed no the European close and with the volatility index being pushed to new lows, there’s little to suggest much fear around at present.
The DE30 has followed a similar pattern, and is back near 11600 at the time of writing. RWE (RWE.DE) also reported 2018 earnings today. The German utility company generated EBITDA of €1.52 billion and net income of €591 million throughout the previous year. For 2019 RWE expects EBITDA in the range of €1.2-1.5 billion and net income in the range of €300-600 million. The guidance can be seen as weak as it hints at earnings stalling or even declining. Nevertheless, the company proposed to pay €0.7 dividend for 2019 and plans to pay €0.8 dividend in 2019.
The cryptocurrency market has launched Thursday’s trading quite flat. Note that a lot of major virtual currencies have been trading faintly in recent days. According to CoinMarketCap, the capitalization of the whole cryptocurrency market stands around the $134.5 handle whereas the market capitalization of altcoins sits a little below the $66 mark on Thursday morning. The Basel Committee on Banking Supervision published yesterday guidelines titled “Statement on crypto-assets” for banks wanting to enter the crypto market. The Committee says that continued growth of crypto-asset trading platforms and financial products connected to crypto-assets could raise concerns related to financial stability and risks faced by banks. Moreover, it underlines that crypto-assets are characterized by, among others, their high degree of volatility and lack of standardisation. As a result, the Basel Committee expects that banks deciding to acquire crypto-asset exposures or similar services should adopt several issues. It mentions that banks should pay attention to due diligence (banks should assess risk related to crypto-assets), governance, risk management, disclosure (banks should disclose crypto-asset exposures) and supervisory dialogue (banks should inform supervisory authorities about their planned and actual crypto-asses exposures).
After attempting to make a break higher last night, there’s been a bit of a pullback in the pound with the Brexit merry-go-round showing little sign of stopping anytime soon. On the face of it the parliamentary vote last night takes no deal off the table, and later on the house of commons will likely vote in favour of an extension of Article 50. The problem that remains for the UK is that while parliament have signalled what they don’t want, with votes against both May’s deal and no-deal, they still haven’t indicated a clear majority for what they do want - apart from more time to decide. The results to tonight’s vote can be expected not long after 7PM GMT.
