Always thought it would be Obama who would try and remove the two-term limit to keep himself in power.
In fact, it was Xi. Over the weekend and just as the Lunar New Year buzz is winding down, China’s Communist Party has announced that they intend to change the constitution in order to remove the presidential term limits.
This move, which seems likely to pass, will allow current president Xi Jinping to rule the country indefinitely.
Long Live the King.
eToro, Senior Market Analyst
- Dollar Dropping
- Draghi Today
- Crypto Pressure
Please note: All data, figures & graphs are valid as of February 26th. All trading carries risk. Only risk capital you’re prepared to lose.
The stocks markets are working hard to recover the ground lost in the rout at the beginning of the month. However, it’s still not clear that the rout is over.
A recent analysis from Goldman states that if the 10 Year Bond Yield hits 4.5% we could be in for a 25% drop in the stocks. Some analysts are extremely skeptical that the yields could ever get that high, especially since we saw them drop sharply on Friday.
Of course, my readers have no doubt seen several charts already that show bond yields are actually near multi-decade lows.
Here’s a refresher…
Given the long-term moves, a yield of 4.5% doesn’t seem too unrealistic, especially since the Fed is widely expected to get aggressive on rate hikes.
Perhaps that might change this afternoon when Mario Draghi steps up to testify at 15:00 in Brussels.
No doubt the European Central Bank is sweating at the moment with the EURUSD at a three year high. They’d like to bring it down but their options are limited. They’re still flooding the economy with injections of €30 Billion per month and if they try to slow that down the Euro could strengthen even further.
The only real tool they have now is words, so let’s see what Draghi has to say.
Of course, nobody is trying to actively push the crypto-currencies down. There’s no central bank or associated country that feels the need to manipulate exchange prices.
However, because the infrastructure is still under construction, we do get some pretty wild swings.
I can say with fair certainty that Bitcoin’s last leg down was directly caused by Japan and South Korea. While Western exchanges are showing a drop of 2% or less, the cryptotrading nations are down 8% and 4% respectively.
Japan specifically has been totally dominating this market and even the run-up from February 6th to the 17th was primarily caused by Japanese buyers.
Let’s now zoom out on the timeframe and focus on Bitcoin. Here we can see that the king of cryptos is acting quite normally.
The recent rally took us from 6k to 12k in two weeks. As it wasn’t strong enough to break above 12k, we’re now seeing a retracement back into the pennant formation. So even if we see 7k again, we’ll still be holding this nice shape.
This content is provided for information and educational purposes only and should not be considered to be investment advice or recommendation. The outlook presented is a personal opinion of the analyst and does not represent an official position of eToro. Past performance is not an indication of future results. All trading involves risk; only risk capital you are prepared to lose. Cryptocurrencies can widely fluctuate in prices and are not appropriate for all investors. Trading cryptocurrencies is not supervised by any EU regulatory framework.
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