Market Summary
Asian markets ended mixed on Friday after a choppy session that saw markets across the region flipping between gains and losses, with investors shrugging off the overnight gains and new records on Wall Street. Instead investors seemed disappointed in the failure of the U.S. Senate to vote on the tax reform bill, as they were hoping for a resolution to that important issue before the weekend. Mainland Chinese shares spent the early session depressed, but small cap stocks took the lead and led the market higher, with the Shanghai Composite coming off its lows to finish slightly higher. Hong Kong’s Hang Seng wasn’t able to pull off such a recovery however, mostly due to continued weakness from Tencent, and underperformed the Asian region. Japan’s Nikkei was the best performer of the day, whipsawing from large opening gains into negative territory early, but then stabilizing and ending the day moderately higher. Australia’s S&P/ASX 200 also finished with moderate gains, finding support from oil stocks and the banking sector. Rounding things out, the Kospi in South Korea ended slightly lower as tech shares remained under pressure.
European markets fell at the open in reaction to the lack of a U.S. tax reform bill vote from the Senate. Losses accelerated in the afternoon when investors learned the former U.S. national security advisor Michael Flynn had admitted lying to the FBI in regards to the Russian investigation, and that he would be cooperating fully with them from here on out. The news caused concerns that Mr. Flynn could testify about President Trump, and it reignited potential impeachment chatter. The DAX in Germany, the CAC 40 in France, and the IBEX 35 in Spain all ended the session down more than 1%. London’s FTSE ended the day 0.36% lower as well in response to the potential political turmoil in the U.S. and the lack of a tax reform bill.
U.S. markets were modestly higher early in the day, but fell sharply in response to the Flynn affair. However, they quickly rebounded, reversing the losses and nearly recovering to unchanged levels by the close. Overall it was still a strong week on Wall Street, especially for the Dow Industrials, which had its best weekly gain in nearly a year, rising 2.9% for the week.
Today’s Assets
Bitcoin
After dipping under the $10,000 level on Friday, Bitcoin regained some of its luster late Friday as it regained the psychologically important $10k level. It continued rising over night, spending Saturday trading back and forth over the $11,000 level as it struggled to break through any resistance there. Finally around noon Sunday (GMT) it popped higher and looked as if it would be testing the $12,000 level during an exciting Sunday evening session. It’s also worth noting that as of Sunday the market cap of Bitcoin is closing in on another milestone of $200 billion.
After rising solidly for three consecutive sessions, this pair plummeted on Friday in reaction to the emerging political turmoil in the U.S. The move lower traced nearly 150 pips, but there was a recovery after the initial knee-jerk reaction from traders, allowing the pair to recoup about half its fall, and move slightly above the 112.00 level by the close. With no additional negative news about the probe into possible Russian interference in U.S. elections out over the weekend we should see the pair able to continue its recovery when markets open early during the Asian session Monday.