XAU/USD: Gold Retreats from All-Time High of $2,222 as Shifting Moods Slingshot US Dollar
Precious metal dropped more than $50 on Thursday and remained under pressure early Friday. Dollar rebounded. Key Points: Gold slides over $50 from record high. Dollar sweeps across forex dealmaking. Fed vows to maintain rate cut outlook. Gold prices XAUUSD fell off a cliff Thursday after the US dollar abruptly woke up and chose violence following a post-Fed decline. The greenback roared across the board, ravaging forex dealmaking and pressuring the good old precious metal by erasing more than $50 of its price tag. The yellow commodity went from its fresh record high of $2,222 to $2,166 per troy ounce in the span of Thursday’s regular trading. Early on Friday, gold bugs were still nursing the heavy losses with the metal’s price floating at unchanged levels. With no major news on deck, markets were looking quiet. Quick catch-up: the Federal Reserve on Wednesday left interest rates unchanged. But, more importantly, Fed boss Jay Powell reaffirmed the central bank’s outlook to cut borrowing costs three times in 2024. The news sent the dollar reeling before buck bulls got back into the driver’s seat.
AAPL: Apple Stock Wipes Out Over $100 Billion in Value After US Files iPhone Monopoly Lawsuit
Justice Department finally goes after the tech giant after years of playing hide and seek. Key Points: Apple shares fell 4% after the US filed a lawsuit. The case calls out Apple’s alleged monopoly. If the suit is successful, Apple could break up. Apple stock AAPL fell roughly 4% on Thursday after the US Justice Department slammed the tech giant over alleged illegal monopoly in the mobile phone market. Attorneys general from 16 states have joined forces to crack down on the dominant position of the iPhone, saying Apple violated federal law by limiting competition and swaying whole industries to rely on its device. The lawsuit comes after years of regulatory pressure over Apple’s handful of products which allegedly have been preventing users from getting exposure to competing devices. The 88-page filing goes on to say that Apple has created an uneven playing field by holding a firm grip over the user experience on the iPhone and has thus “reinforced the moat around its smartphone monopoly.” It added that the company has resorted to “higher prices and less innovation.” In response, Apple issued a statement defending its business and device suite. “This lawsuit threatens who we are and the principles that set Apple products apart in fiercely competitive markets,” the troubled tech mainstay said. “If successful, it would hinder our ability to create the kind of technology people expect from Apple—where hardware, software, and services intersect.” Apple controls more than 70% of the premium mobile phone market in the US. If the court rules in favor of the Justice Department, Apple could be forced to break up.
EUR/USD: Euro Gains to $1.0940 After Sustained Rate-Cut Outlook Knocks Dollar’s Value
Fed boss Jay Powell moved to assuage market fears over rate-cut timeline, saying borrowing costs will get trimmed three times this year. Key Points: Euro adds 1% to eclipse $1.0940. Fed projects three rate cuts in 2024. Jay Powell is set to speak again Friday. The EURUSD pair advanced roughly 1% after the Federal Reserve’s two-day meeting wrapped up with a press conference by the man who moves markets. Jay Powell—chief of the US central bank—said that three interest rate cuts are coming this year, maintaining the Fed’s outlook. The news sent the dollar lower across the board with the euro topping $1.0940 from a Thursday low of $1.0850. While Jay Powell did say inflation had been stickier than expected, he went on to reiterate that recent economic reports “haven’t really changed the overall story, which is that of inflation moving down gradually on a sometimes-bumpy road toward 2%.” Now, investors are projecting another rate hold when Fed officials meet again on April 30-May 1 and pinned their hopes on a rate cut coming in June. Against that backdrop, the dollar pulled back from its dominant position in forex. The USDJPY fell about 100 pips to float toward the ¥151.00 level. The GBPUSD was last seen out and about near the $1.28 handle. Jay Powell is set to speak again on Friday, delivering the opening remarks for the Fed Listens event, focusing on current economic conditions.
BTC/USD: Bitcoin Powers Up by 12% to $68K After Jay Powell Upholds Rate-Cut Timeline
OG crypto leaped to erase a chunk of its recent losses while gold and all three major US stock indexes closed at record highs. Bitcoin tops $68,000 after Powell's speech. US stock indexes close at record highs. Three rate cuts are coming in 2024. Bitcoin prices skyrocketed late Wednesday and marched higher early Thursday fueled by traders unleashing their long bets. The newfound bravado swept crypto markets largely thanks to the Federal Reserve’s press conference following the March interest rate decision. The central bank kept borrowing costs flat at a 23-year high of 5.25% to 5.50%. Jay Powell, Fed chief, appeared to give his remarks on the US economy and the path forward. In his speech, he reassured investors that three rate cuts were still on the 2024 agenda. The news stirred up the dealmaking scene across the board. All three major US indexes—S&P 500, Dow Jones, Nasdaq Composite—closed at record highs. Gold hit a new all-time record of $2,222 per troy ounce. Bitcoin added 12% to climb above $68,000 in early trading today before coming back under the threshold. The orange coin has been floating under its record high of $73,000 hit last week before a string of inflation data knocked traders’ enthusiasm for buying at the top. Overall, optimism is so-so back with the total crypto market value surpassing $2.5 trillion today.
GBP/USD: Sterling Tumbles 2% to $1.2580 After Bank of England Keeps Rates Steady
US dollar blew past rivals Thursday, a day after the Fed maintained interest rates unchanged and reaffirmed guidance for three rate cuts. Key Points: Bank of England keeps rates steady. UK sterling drops on rate-cut outlook. GBPUSD slips to $1.2580. The GBPUSD pair nosedived on Thursday and early Friday after the Bank of England held UK interest rates steady at 5.25%. The UK central bank followed up by saying it planned to start cutting borrowing costs but needed more data before dialing back the benchmark rate from its 16-year high. A day earlier, the US Federal Reserve telegraphed a similar message saying three rate cuts are planned for 2024. The sterling didn’t take the news well and slipped more than 220 pips, or roughly 2%, to $1.2580 early Friday, down from $1.2800 a day before. Zoomed out, however, the UK currency is putting on an impressive performance with its valuation up about 5% against the dollar since October. Governor Andrew Bailey praised the progress and noted that the economy is “moving in the right direction” as far as inflation is concerned. For February, Britain’s consumer price index showed inflation moved 3.4% from a year ago, sliding below estimates for a 3.6% rise.
EUR/USD: Euro Tumbles 0.8% to $1.0870 After Report Stokes Fears Inflation Could Ramp Up
US dollar marched higher, boosted by a string of data showing price pressures might be more stubborn than previously thought. EURUSD rebounds from $1.0870. PPI data sparks inflation worries. Dollar posts wide gains in FX deals. The EURUSD pair slipped 0.8%, or about 80 pips, on Thursday and remained under pressure early Friday. Traders headed for the exits after another hot price report stoked speculation that heating inflation could knock the Federal Reserve’s rate-cut timeline. The producer price index, or PPI, arrived at 0.6% in February, eclipsing analyst estimates for a 0.3% rise. The index, tracking inflation’s trajectory at the wholesale level, jumped to a 12-month rate of 1.6%. Higher producer prices added to a string of inflation data, joining February’s consumer price readout of 3.2%. Prospects of inflation staying higher for longer boosted the dollar’s valuation across the board. The EURUSD dropped to levels near $1.0870 before rebounding about 20 pips to the upside in the first Friday deals. The USDJPY floated near ¥148.50 as traders anticipated the Bank of Japan’s rate-setting conference next week.
TSLA: Tesla Slammed by Wells Fargo Analyst Who Predicts Bear Case of $44 a Share
EV maker lost 4.5% on Wednesday after Wells Fargo wrote it off as “a growth company with no growth.” Key Points: Tesla stock tumbles 4.5% after report. Wells Fargo sees 75% decline in shares. Musk is looking to wrap a painful quarter. Tesla stock TSLA dropped 4.5% on Wednesday after Wells Fargo published a highly criticizing report that called for a bear case of $44 a share, or about 75% below current market prices of $169 a pop. The dire price target, according to the note released, could materialize in the next 12 months. Shares of the EV maker are down 31% on the year. Tesla is a “growth company with no growth,” wrote Wells Fargo analyst Colin Langan, citing the company’s 3% sales growth in the second half of 2023 from the first half. Tesla’s languishing performance has threatened to cast it out of the super-elite Magnificent Seven club. The year is not kicking off on a positive note for CEO Elon Musk. The billionaire lost the world’s richest title to Jeff Bezos couple of weeks ago. Moreover, Musk is the world’s biggest loser by net worth washed out as he’s staring at a drawdown of $44 billion since the start of 2024.
ADBE: Adobe Stock Crashes 12% on Weak Guidance, Net Income Slashed in Half to $620M
Software maker paid $1 billion to design platform Figma as the two didn’t make it to the final line with their acquisition plans. Key Points: Adobe shares nosedive 12% to $503. Weak guidance threw investors off. Stock is down 1.6% on the year. Adobe stock ADBE lost 12% in after-hours trading Thursday following the company’s quarterly update. The software maker posted a 50% drop in net income to $620 million from $1.25 billion in the year-ago quarter. During the three months through February, Adobe scrapped the $20-billion acquisition of design tools startup Figma, paying $1 billion in termination fees. Despite the big-ticket penalty, Adobe posted solid earnings figures. Revenue for the quarter landed at $5.18 billion, up 11%, and enough to beat consensus calls of $5.14 billion. Earnings per share landed at $4.48 adjusted against $4.38 expected. “We’ve done an incredible job harnessing the power of generative AI to deliver groundbreaking innovation across our product portfolio,” CEO Shantanu Narayen said in a statement. What threw investors off was Adobe’s forward-looking guidance. The company projected revenue for the May quarter to land between $5.25 billion and $5.3 billion, below Wall Street’s $5.31 billion expected. Profits on an adjusted basis are projected to be between $4.35 and $4.40 a share, meeting analysts’ consensus calls for $4.38. Ahead of Friday’s opening bell, Adobe shares are down 1.6% on the year but up 70% in the past 12 months.
BTC/USD: Bitcoin Extends Record-Breaking Rally Beyond $73,000, Eyes $1.5T in Value
OG crypto is showing no signs of stopping on the way to $1.5 trillion in market cap with prices tripling in a year. Key Points: Bitcoin sets new record high of $73,800. Markets cheer four record closing highs. BTC is $60B away from $1.5T in value. Bitcoin prices BTCUSD kept marching higher early Thursday punching through yet another milestone. The orange token claimed $73,000 a piece and spiked to a fresh record high of $73,800 before coming down a bit. Markets have enjoyed a whopping 65% gain on the year so far. And lots of records too. On March 5, Bitcoin topped its 2021 record of $69,000. Riding the “No Days Off” mentality, the crypto has notched four record closing highs since then as digital-asset enthusiasts are not scared to buy at the top and keep the momentum going. The continued upside has been supported by the flurry of good news in the Bitcoin ecosystem. Even before the SEC gave the go ahead to the first spot Bitcoin ETFs, the token was already in full flow. Traders ramped up the long bets after the new investment vehicles started soaking up billions. Now, Bitcoin is closing in on $1.5 trillion in market value.
SPX: S&P 500 Logs 0.3% Loss as Investors Flee from Risk Assets Amid Rising Inflation
Producer prices advanced more than expected, casting a shadow over the Fed’s rate-cut path. Key Points: S&P 500 moves 0.5% away from record. Producer prices leap 0.6% in February. Futures float under the flatline Friday. The S&P 500 (SPX) fell 0.3% on Thursday after another hot price report added to pressures that inflation may not be walking away. Producer prices, a gauge of inflation for the wholesale industry, jumped 0.6% in February. The figure was double the estimates from economists and bumped the 12-month rate to 1.6%, hitting a high last seen in September 2023. The surprise leap posted a threat to investors who retreated across the board in fear that risk assets, such as stocks, could get knocked by a potential delay in the Fed’s rate path. The Federal Reserve has previously said they need more data before dialing back interest rates from their 23-year high. Fed Chair Jay Powell and his central banking squad are meeting next week. Against that backdrop, the S&P 500 is now down 0.5% from its record close just three days ago. The Dow Jones Industrial Average tumbled 0.4% in Thursday’s trading and the tech-heavy Nasdaq Composite erased 0.3%. Futures on Friday were floating in the red as market participants were waking up to a day with no big news on deck, meaning it’s time to pull up the charts for some hot technical analysis.
SEC Hands in Secret Filing in Binance Case
In a tweet, Santiment, an on-chain analytics firm, points to a historical tendency that could benefit patient crypto traders. The crypto market is currently engaged in lackluster trading action due to a drop in cryptocurrency trading activity. The total monthly volume of spot and derivatives trading fell 11.5% to $2.09 trillion in August, the second-lowest since October 2020, indicating dwindling investor appetite. ???? With #crypto markets continuing its unpredictability, we have seen a big uptick in #bearish takes by the crowd here in September. Historically, this is a good thing for patient traders. Probability of price bounces rise after #FUD becomes the majority.
Ripple Continues Its Acquisitive Streak With Deal To Acquire Crypto Infrastructure Startup Fortress Trust
Ripple Expands Licensing Arsenal Through Fortress Trust Purchase San Francisco-based blockchain payments firm Ripple has broadened its portfolio of regulatory licenses in the United States with the acquisition of Fortress Trust. Fortress Trust — a subsidiary of Fortress Blockchain Technologies with a Nevada Trust License — provides regulatory and technology infrastructure for blockchain companies. The acquisition adds to the over 30 licenses Ripple holds across the US as a money transmitter and a New York BitLicense.
Coinbase Steels Itself After US Court Kicks Out Class Action Lawsuit Against Uniswap
A US District Court in New York has thrown out a class action lawsuit instituted against decentralized virtual currency exchange Uniswap on the grounds that the plaintiffs failed to submit evidence that it had broken securities rules. In April 2022, a group of disgruntled investors alleged that Uniswap operated as an unregistered broker, listing unregistered securities that led to losses for the platform’s users. The plaintiffs pointed to the listing of failed projects, including EthereumMAX (EMAX), Alphawolf Finance (AWF), and Bezoge (BEZOGE), as proof of Uniswap’s wrongdoing.
Ripple’s XRP Primed For Ballistic Rally Amid Adoption By Banks in Indonesia, Philippines, Vietnam
International remittance service provider SBI Remit, part of the SBI Group, has made an exciting announcement regarding its South East Asia operations. According to a blog post, SBI Remit is increasing its reach in the region with the help of Ripple. Both companies, who have been in a long-term partnership, continue their work in building global rails for the future financial system.
USD/JPY: Dollar Resumes Upward Trend Against Yen, Hits 10-Month High at ¥147.90
It’s easy for the dollar to press higher when the Japanese yen is under pressure by the Bank of Japan’s loose monetary policy. The USDJPY pair rallied early on Wednesday as forex traders found little resistance in the Japanese yen. The greenback soared to a ten-month high of ¥147.90, marking a spectacular rebound from its mid-July lows of ¥137.30, and realizing a monster gain of nearly 8%. To all that caught the upside swing - congrats you market mavens. To the rational minds that still believe in fundamentals - when is the drop coming? That would be when the Bank of Japan finally breaks out of its ultra-loose monetary policy, on the one hand. On the other hand, the US dollar would need to start showing some cracks. For that to happen, the state of the US economy needs to be a little less attractive to the crowds. Presently, a cooling labor market and the prospects of a rate-hike slowdown are not enough to drive the buck lower.
GBP/USD: Sterling Slides Below $1.25 in Broad Dollar Push, Hits 3-Month Low
The greenback is on the offensive again as markets are weighing prospects of another rate hike at the Fed’s September meeting. The GBPUSD pair is down for a third day in a row Thursday as forex bros are anticipating another interest rate bump out of the Federal Reserve later this month. The British pound dropped to a three-month low near $1.2450 while the dollar was busy stripping valuations across the board. The EURUSD is barely holding above the $1.07 mark as the mighty buck is approaching a double bottom near $1.0650. The USDJPY is also in line with the dollar’s strength as the pair is rocketing to levels near ¥148.00, posing increased challenges for the Bank of Japan and its rock-solid loose-monetary policy. The Fed is gathering on 19-20 September for its regular monetary policy meeting. And given that last month’s jobs report indicated a cooling economy, but not exactly, some market participants are expecting an interest rate increase. In such a scenario, the dollar is likely to pull ahead.
EUR/USD: Euro Dips Under $1.07 as Strong US Economy Buoys Dollar Higher
An eighth straight week of losses is staring at the European currency as traders flee to the dollar for continued gains. The EURUSD pair was moving sideways early Friday but recent performance has positioned the euro as one of the biggest decliners on the forex board for the past couple of months. The European currency has erased about 5% of its valuation against the buck since mid-July, sliding from $1.1270 to $1.0680. The exchange rate briefly dipped below $1.07 yesterday and floated above that handle in the European session on Friday. Mounting losses have been the norm for euro bagholders as the European Central Bank is flashing mixed signals over its ability to control inflation and avoid recession by raising interest rates. And while economies in the old continent battle with a grinding downturn, the US jobless claims report on Thursday surprised with a drop, indicating a robust labor market. The ECB meets next Thursday for the fate of interest rates, and the Federal Reserve gathers Sept. 19-20 for its rate decision.
TSLA: Tesla Stock Lights Up S&P 500’s Leaderboard with 5% Gain on Bright News
Tesla took the number one spot in the S&P 500’s best performers on Tuesday. The EV maker said its Shanghai base did great in August. Tesla stock TSLA added 4.7% to its valuation Tuesday after bright news arrived from the Far East. The EV maker’s manufacturing plant in Shanghai rebounded in August with an impressive 84,159 cars shipped to clients. The figure was up from just over 64,000 in the month prior, and higher than the 76,695 delivered in the year-ago August. The Elon Musk-led carmaker is doing numbers this year. Thanks to an increased production capacity, more than 625,000 units have rolled off assembly lines in China, compared with about 400,000 over the same timeframe in 2022. The bump in the numbers is likely to help the company meet Wall Street’s 2023 target of 1.8 million cars manufactured.
IXIC: Nasdaq Falls 1.1% in Third Straight Down Session as New Rate Hike Talks Weigh
Tech stocks got battered the most as higher rates for longer dent the prospects for forward-looking profits. S&P 500 and Dow also fell. The Nasdaq Composite IXIC declined on Wednesday, logging its third consecutive day in the red. The tech-heavy index dropped 1.1%, leading the pack, followed by a 0.7% drop in the S&P 500 and a 0.6% slide in the Dow Jones Industrial Average. In other words, September is so far living up to expectations. Fresh remarks from Fed official Susan Collins weighed on markets after the central banker hinted that the Fed may need to hold rates higher for longer if they want to stamp out stubborn inflation. Oddly, the latest jobs report of 187,000 new hires in August neither confirms, nor denies that rationale. Rates that stay higher for longer are generally bad for tech stocks. Tech companies usually run relatively high borrowing balances to fuel growth. When rates rise, they need to pay a higher amount to service debt. And that’s when top line, revenue, and bottom line, profit, get hurt.
XAU/USD: Gold Heads for Losing Week as Prices Fall to $1,920 Per Ounce
The precious metal got hit by a dominant dollar, boosted by signs that the US economy remains resilient, despite multiple interest rate hikes. Gold prices are looking to close the week lower by roughly 1% as the stronger US dollar has once again enforced its dominance on the commodity. Prices for XAUUSD moved from a weekly open of about $1,940 to current levels near $1,920 to $1,925 per troy ounce. The gloomy performance in the shining metal comes on the heels of the latest news from the US. The American economy saw less people filing for unemployment benefits last week, the jobless claims report showed Thursday. In other words, the labor market is still tight. On the other end of the spectrum, the US dollar is flexing on its way to close an eighth winning week, its longest streak in nine years. Since mid-July, the dollar index DXY , which measures the relative strength of the greenback against six major currencies, has added roughly 5.5% to trade near 105.00 from a low of 99.60.