Weekly Review: Optimism Rises After US and EU reach a Truce
July 27, 2018 12:41 pm
This week, cryptocurrencies were among the biggest winners. The price of Bitcoin extended the gains started a week ago after Blackrock announced its planned entry into the industry. This news is big because of the size of Blackrock, which has more than $6 trillion in assets under management. If the company makes a small purchase of the Bitcoins, it will be a game changer as other asset managers are likely to follow. The other big news was that the SEC was about to accept Bitcoin ETFs. On Thursday however, the SEC announced that it won’t allow these products because of the underlying risks.
The meeting between the US and EU was also a major issue this week. This is because the meeting was intended to help the two economic giants sort out their differences on trade. Already, the US has already placed tariffs on European steel and aluminium. The EU has also retaliated against those tariffs. The contention was that the US was threatening to impose tariffs on European cars, which form an important part of the EU economy. This would have led to the biggest trade conflict between the two regions. After the meeting, the two leaders announced that they would pause the tariffs as the teams discussed about the way forward. The EU announced that it would increase the purchases of American natural gas and soybeans.
Another big story this week was the ECB meeting. This was the only Central Bank meeting this week. The meeting did not have major news because the ECB retained rates and guidance unchanged. This news led the euro to fall sharply against the major peers. Investors expected the ECB to be more clearer. For example, when they talk about interest rates in summer, they expect the ECB to give an exact month.
Yesterday, the US announced that it would impose huge sanctions on Turkey, a leading country in Europe and the Middle East. The threat of tariffs was announced by the US president and is based on the arrest of an American pastor. This leaves the relations between the two countries at depressed levels. An escalation or heavy tariffs would lead to higher oil prices since Turkey is a major oil exporter. It would also worsen the economy of a country that is already suffering. The Turkish Lira has fallen to the lowest levels in history in the past few months.
The earning season continued this week. On Monday, Google’s parent company Alphabet released better than expected results. This led the stock to rise, especially after the large fine that was imposed a week ago by the EU. On Wednesday, Facebook released its results. The earnings per share beat estimates while the revenues missed. These revenues were 42% higher than last year’s numbers. The stock declined after the company lowered its guidance, wiping away more than $130 million of value. General Motors and GM’s earnings were higher than the expectations but their stocks declined because of increased costs.
This week, cryptocurrencies were among the biggest winners. The price of Bitcoin extended the gains started a week ago after Blackrock announced its planned entry into the industry. This news is big because of the size of Blackrock, which has more than $6 trillion in assets under management. If the company makes a small purchase of the Bitcoins, it will be a game changer as other asset managers are likely to follow. The other big news was that the SEC was about to accept Bitcoin ETFs. On Thursday however, the SEC announced that it won’t allow these products because of the underlying risks.
The meeting between the US and EU was also a major issue this week. This is because the meeting was intended to help the two economic giants sort out their differences on trade. Already, the US has already placed tariffs on European steel and aluminium. The EU has also retaliated against those tariffs. The contention was that the US was threatening to impose tariffs on European cars, which form an important part of the EU economy. This would have led to the biggest trade conflict between the two regions. After the meeting, the two leaders announced that they would pause the tariffs as the teams discussed about the way forward. The EU announced that it would increase the purchases of American natural gas and soybeans.
Another big story this week was the ECB meeting. This was the only Central Bank meeting this week. The meeting did not have major news because the ECB retained rates and guidance unchanged. This news led the euro to fall sharply against the major peers. Investors expected the ECB to be more clearer. For example, when they talk about interest rates in summer, they expect the ECB to give an exact month.
Yesterday, the US announced that it would impose huge sanctions on Turkey, a leading country in Europe and the Middle East. The threat of tariffs was announced by the US president and is based on the arrest of an American pastor. This leaves the relations between the two countries at depressed levels. An escalation or heavy tariffs would lead to higher oil prices since Turkey is a major oil exporter. It would also worsen the economy of a country that is already suffering. The Turkish Lira has fallen to the lowest levels in history in the past few months.
The earning season continued this week. On Monday, Google’s parent company Alphabet released better than expected results. This led the stock to rise, especially after the large fine that was imposed a week ago by the EU. On Wednesday, Facebook released its results. The earnings per share beat estimates while the revenues missed. These revenues were 42% higher than last year’s numbers. The stock declined after the company lowered its guidance, wiping away more than $130 million of value. General Motors and GM’s earnings were higher than the expectations but their stocks declined because of increased costs.
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