Weekly Review: Investors Focus Brexit, Apple, and Cryptocurrencies Decline
November 16, 2018 2:41 pm
This week, volatility in equities continued. This was accelerated by news that Apple’s suppliers had started to lower guidance. The first company to do that was Lumentum, which supplies Apple with facial identification technologies. It was followed by Qorvo, which provides network products to the company. This was a major news in the financial market because of the role Apple plays in the industry. It is the biggest company in the world by market cap. This week, it dropped to a bear market, eroding the gains made previously. It also wiped away the trillion-dollar valuation. Investors are concerned about the company and what it means for consumer spending.
As Apple dropped, so did the Nasdaq index. This is the biggest technology-focused indicator. Apart from Apple, other companies in the Nasdaq dropped as well. They were led by Nvidia, which dropped by more than 16% after the company lowered its guidance. It attributed the declining revenues to the cryptocurrency industry that is slowing. Facebook was another casualty in the sector. Yesterday, New York Times wrote a detailed look at Facebook and the role it has played in disinformation. The article also blamed Mark Zuckerberg and Sheryl Sandberg for the company’s problem.
Another big news for the week was on Brexit. On Wednesday, Theresa May announced that her government had reached a new deal with the European Union. This deal was a breakthrough in negotiations that took months. The joy was short-lived as the officials in her government started resigning. They were led by Dominic Raab, who was the Brexit minister. He was appointed to the role in summer after the previous minister resigned. The resignation led the sterling to have the sharpest decline since Brexit. In days ahead, there is a likelihood that the sterling will be volatile. There is also a possibility that the plan by May will not be passed by parliament.
This week, Fed chair, Jerome Powell participated in a conference with the Dallas Fed chairman, Robert Kaplan. The biggest news from the event was the fact that the Fed was considering ending forward guidance. After the crisis, the Fed under Ben Bernanke adopted a new policy of forward guidance. This guidance helped investors to prepare for the Fed decisions well. For example, as a result of it, investors know that the Fed will hike rates in December. An end of forward guidance will increase volatility during the Fed meetings. The Fed also announced a new plan to improve transparency according to how it views inflation and employment numbers.
It was a bad week for cryptocurrencies. On Wednesday night, the price of cryptocurrencies dropped sharply. The market value of the 100 biggest cryptocurrencies tracked by Coin Market Cap fell from $220 billion to $185 billion. The decline was attributed to the new forking of Bitcoin Cash. When forking happens, a new currency is created from thin year by the tweaking of the software. A good example of forking is what happened when Bitcoin’s software was tweaked to produce Bitcoin Cash. The decline happened as investors sold their currencies as they waited to buy the new currency.
This week, volatility in equities continued. This was accelerated by news that Apple’s suppliers had started to lower guidance. The first company to do that was Lumentum, which supplies Apple with facial identification technologies. It was followed by Qorvo, which provides network products to the company. This was a major news in the financial market because of the role Apple plays in the industry. It is the biggest company in the world by market cap. This week, it dropped to a bear market, eroding the gains made previously. It also wiped away the trillion-dollar valuation. Investors are concerned about the company and what it means for consumer spending.
As Apple dropped, so did the Nasdaq index. This is the biggest technology-focused indicator. Apart from Apple, other companies in the Nasdaq dropped as well. They were led by Nvidia, which dropped by more than 16% after the company lowered its guidance. It attributed the declining revenues to the cryptocurrency industry that is slowing. Facebook was another casualty in the sector. Yesterday, New York Times wrote a detailed look at Facebook and the role it has played in disinformation. The article also blamed Mark Zuckerberg and Sheryl Sandberg for the company’s problem.
Another big news for the week was on Brexit. On Wednesday, Theresa May announced that her government had reached a new deal with the European Union. This deal was a breakthrough in negotiations that took months. The joy was short-lived as the officials in her government started resigning. They were led by Dominic Raab, who was the Brexit minister. He was appointed to the role in summer after the previous minister resigned. The resignation led the sterling to have the sharpest decline since Brexit. In days ahead, there is a likelihood that the sterling will be volatile. There is also a possibility that the plan by May will not be passed by parliament.
This week, Fed chair, Jerome Powell participated in a conference with the Dallas Fed chairman, Robert Kaplan. The biggest news from the event was the fact that the Fed was considering ending forward guidance. After the crisis, the Fed under Ben Bernanke adopted a new policy of forward guidance. This guidance helped investors to prepare for the Fed decisions well. For example, as a result of it, investors know that the Fed will hike rates in December. An end of forward guidance will increase volatility during the Fed meetings. The Fed also announced a new plan to improve transparency according to how it views inflation and employment numbers.
It was a bad week for cryptocurrencies. On Wednesday night, the price of cryptocurrencies dropped sharply. The market value of the 100 biggest cryptocurrencies tracked by Coin Market Cap fell from $220 billion to $185 billion. The decline was attributed to the new forking of Bitcoin Cash. When forking happens, a new currency is created from thin year by the tweaking of the software. A good example of forking is what happened when Bitcoin’s software was tweaked to produce Bitcoin Cash. The decline happened as investors sold their currencies as they waited to buy the new currency.
The post Weekly Review: Investors Focus Brexit, Apple, and Cryptocurrencies Decline appeared first on Forex.Info.
Related Posts: