Oil with third consecutive day drop

Oil prices dropped for a third consecutive day today as oil stock data showed higher than expected growth. In addition, sell-offs on commodities, stocks, and bonds further contributed negatively to oil trade.
The Brent lost $0.69 of its value, or 1 percent to $68.83 a barrel, dropping to its lowest level in a week.
US crude oil fell by 67 cents, or 1 percent to 63.83 dollars a barrel. On Tuesday, the raw material lost 1.6 percent, ending at $64.50 a barrel. Oil recorded almost two weeks minimum.
Despite the decline, however, US crude and Brent are still on track to register a fifth consecutive monthly growth.
The data showed a 3.2 million barrel in US oil stocks last week.
Previously, it became clear that energy companies have added 12 new field deposits over the past week or their biggest increase since March.

Inflation in the eurozone slows down

Inflation in the eurozone slowed down in the first month of the year, which reduced the expectations of a large part of the market for a more recent normalization of interest rate policy by the ECB.
The consumer price index rose 1.3% in the first month of the year, down from 1.4% a month earlier. This was the lowest level of inflation since July 2017, according to preliminary data from the euro area.
Inflation in the eurozone continues to be at levels below the target of the European Central Bank of 2%, which could be a serious challenge to Draghi's plans for normalizing interest rates and ending incentives soon.
Despite data, the euro continued to trade against the dollar at extremely high levels above 1.2450.
In fact, the euro is not strong, but the dollar is weak. Besides, shortly before the Fed's interest rate decision today. Analysts expect the reserve to keep interest rates unchanged, and their next increase to be left to the new Fed leader, Jerome Powell, who will replace Yellen next month.
A major role for low inflation in the eurozone for a month is energy prices. They rose in the first month of the year by 2.1%, following an increase of 2.9% in December.
A more robust rise of 1.9% was seen in food and tobacco products, which grew by more than 2% last month.

T. Lee: 2018 may be the year of the bitcoin rotation

If you have missed the rally in bitcoin and other cryptocurrencies, maybe this year is good to target smaller cryptocurrencies like stellar and neo, according to strategist Tom Lee.
Tom Lee, was one of the most bullish analysts in the past year, predicting a $22,000 rallying price when the bitcoin traded at just $4,000.
Now, however, Lee thinks the other cryptocurrencies will increase their value much faster than the bitcoin this year, at a time that Lee calls the "Great Crypto Rotation."
"The rotation we are talking about will be on the smaller altcoins and the tokens of the big platforms," ​​Lee said.
Lee, however, does not believe that the upside potential of the bitcoin is exhausted. According to him, the most popular cryptocurrency, still has the potential to rise to $25,000 by the end of the year.
"We think the year 2018 will be the year of rotation," explains the expert in front of the CNBC financial magazine.
Lee is the founder and head of Fundstrat Global Advisors, as well as one of the earliest Wall Street investors in cryptocurrencies.
As smaller cryptocurrencies, Lee targets those with a market capitalization of less than $3 billion.
The bitcoin, though the most popular among the cryptocurrencies, suffered a heavy drop in the last month and a half. After reaching a record high of $19,500 in December, the cryptocurrency lost nearly half of its value, dropping momentarily below $10,000. Currently, the bitcoin is traded at levels of about $11,000 per coin.

R. Schiller: The situation is very similar to that of 1928

US indices are historically the highest. The growth rate, however, exceeds the growth of companies' profits, sending leading financial ratios like SARP at alarmingly high levels. This alerts the creator of the ratio - Nobel laureate Robert Schiller, from Davos.
He shared his worries about the market before Yahoo! Finance in Davos.
"In a sense, the market is now very similar to the one in 1920 - I would say 1928," Schiller said.
Then, the US indexes were rising seriously until they failed remarkably in 1929.
Calvin Coolidge was the president. And pro-business oriented," Schiller noted. "Everything looked good. Anti-regulation. Same story. This is part of the story," added the Professor of Economics.
Today, the United States has again a pro-business president, in the face of Donald Trump, who has been pushing for deregulation, similar to what happened in 1928. And in the same year, there are a lot of people who warn about the overpriced market.
"Then there were a lot of people who warned that the market was overstated. And people were beginning to wonder when there would be a correction? And, ultimately, a correction happened," Schiller recalls.
Schiller, of course, did not suggest that the market would collapse next year. According to Schiller, however, part of the reasons people buy shares is that "it makes them feel better for one or another reason."
"Young people today have to plan the next 50, 70 years. So what would they do now? This gives emotional decoration to all their decisions. It seems more and more acceptable to invest in stocks, even if they look expensive. Especially technological ones," concluded Schiller.

What is the reason for the dollar's depreciation?

In the shadow of the meteoric growth of US indices this year, the dollar declines faster and more than many analysts have predicted.
The dollar lost nearly 10 percent in the past year, which was its worst performance compared to other major currencies since 2003. Instead of changing its trend, however, in a state of growth in the US economy and a rise in interest rates, the dollar continued to decline in the new year 2018.
The decline in the dollar happened not only at a time of new record growth in US indices, but also in an environment of rising interest rates on 10-year bonds to their highest level in three years.
At the same time, interest on short-term loans rose to its highest levels since 2008. All of this should support a strong dollar. Instead, however, we are witnessing a continuing decline for "green money".
According to some experts, the tax incentives are the reason for this. While they are extremely good for stock markets, the rise in the US deficit increases interest rates on government bonds, and leads to the sale of debt securities.
The repatriation of capital by US companies, back to the United States, has triggered a depreciation of the dollar.
The rise in the US deficit has led the country to finance it with loans from other nations. This reduces the value of the dollar.

GS: Stopping the US government will take 0.2% of the GDP growth

The US investment bank Goldman Sachs predicts that the US government's shutdown will reduce GDP growth by 0.2% in the first quarter, but will soon be lived thru.
The negative effect is expected to be offset in the second quarter of the year if it is assumed that the government's shutdown will be restored by then.
According to the bank, the impact of this event on the financial markets will be "minimal".
Such government stopovers will have a lesser impact on the US economy, GS predicted.
Now that the federal government has failed to negotiate a new increase in the debt ceiling, the GDP of the world's largest economy is expected to fall by 0.2 percentage points for each week in which this event is in place, GS said.
The bank, however, is clearly not worried that this will last too long, or that the damage to the economy will be excessive, predicting a minimal impact on growth for the whole year.

The Kuroda effect returned to the Japanese market

The Kuroda effect returned to the Japanese stock exchange. On Tuesday, Japanese stocks rose to levels unheard of for nearly 27 years, and the Japanese bank was to be thanked for this.
The bank has indicated a lack of change in monetary policy by saying that the level of inflation and expectations for growth in consumer prices remain unchanged.
Japanese central bank chief Haruhiko Kuroda also sent a message on speculation that the Japanese central bank may lose its desire for incentives: Not so fast. He said the Japanese central bank was not in a position to even consider the outcome of the stimulus.
The Central Bank believes that it is imperative to continue with its current powerful incentives for the benefit of the economy, according to Kuroda.
Japan's Nikkei 225 rose by more than 24,000 points for the first time since 1991, while the wide Thorix crossed the 1,900-point limit. Local indices recorded an euphoric start of the New Year, analysts welcoming the prospects for an accelerated growth in the Japanese economy and robust corporate profits.
Expectations for growth in the Japanese economy were revised upwards to an increase of between 1.3 and 1.5%, against previous expectations for growth of between 1.2 and 1.4% in October.
The increase is in line with the growth of US indices and the beginning of the economic forum in Davos.

K. Barata: The bitcoin can end the year at $55,530

Buy the fall of bitcoin. This is the message from the database specialist, Kossel L Lopez Barrata, according to which the digital currency will rise to $55,530 by the end of this year. This is the conclusion of Barata's new study.
According to the same survey, there is a probability of only 10% for the cost of the bitcoin to remain at its current level by the end of the year.
Using the Monte Carlo model, the Barrata makes a model of the future for the price of the bitcoin, based on its historical cost.
Of course, Barata's forecast comes with some insurance.
According to the expert, it is important to know that this forecast should not be taken for granted and it is much better to use it in a way to increase investor confidence.
There is 80% chance that the bitcoin will end the year between 13 200 and 271 277 dollars.
Bitcoin has risen by more than 1% over the past 24 hours, rising again at levels of over 11,000 dollars per coin. The crypto currency, however, must rise above $12,800, where the 50-day SMA is located to talk about the end of the dangers of downward movement, according to technical analysts.

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Morgan Stanley: International trade will support the dollar

Many foreign exchange strategists are calling for a further weakness of the US dollar because of expectations of good growth in the global economy and signs that the world's leading central banks are increasingly confident in normalizing their monetary policies and raising interest rates.
Still, greenback has its own supporters. One of the last comes in the face of analysts from the investment bank Morgan Stanley.
The bank expects some force for the dollar to come in the direction of international trade.
International trade is expected to be the topic of this year, beyond interest rates, which will continue to actively engage investor moods.
Fed's rhetoric has changed since Donald Trump became president by making a protectionist turn.
The expectation is that the new reserve manager nominated by Trump will continue to pursue a weak dollar policy to help and stimulate the US economy.
Other currencies that are more prone to downward pressure include those who are dependable on a potential change in their countries' trade relations, such as the Canadian dollar and the British pound, Morgan Stanley said.

UBS raised the number of expected US interest rates hikes

The Swiss UBS updated its expectations regarding the number of Fed interest rises this year. Now the bank expects three rises in interest rates in 2018 in the world's largest economy. So far, they have forecasted only two increases.
In fact, most of market participants predict two increases in Fed interest rates this year.
According to UBS, however, there is less concern about the state of the US and the world economy, which will make the Fed much more aggressive in normalizing monetary policy and raising rates.
The rise in the price of oil and other major commodities is a major factor that UBS says will initiate an increase in inflation earlier this year. Oil is traded at around $65 a barrel currently.
However, according to experts, the number of Fed interest increases will largely depend on the decisions of other leading central banks around the world.
If the ECB and the Japanese Central Bank become more aggressive in their speeches and politics, it can also help for a more aggressive policy by the US reserve.
However, according to Charles Evans, the Fed leader in Chicago, the monetary policy committee should wait until the middle of this year before considering a new rate hike. Evans voted against the latest interest rate hike that happened in December.

Oil with correction risk after 13% growth

Oil prices returned earlier yesterday after analysts warned of a potential correction after a 13% increase in oil in the last month.
Despite the downturn, overall oil remained relatively stable in an environment of limited supply and strong global demand.
The Brent dropped below the $70 psychological limit and was trading early this morning at $69.30 a barrel.
On Monday, the raw material reached its highest value since December 2014, registering a level of 70.37 dollars a barrel.
Investors and analysts are now seriously debating whether the price of oil is high and reasonable. There is an increasing opinion that oil is overpriced and its 13% price would lead to a more serious correction.
US crude oil finished with a minimum decline of 5 cents to a level of 63.68 dollars a barrel. The oil also registered its highest value since December 2014, at $64.89 a barrel.
The oil price also includes a substantial geopolitical risk premium. However, if we see a reduction in tensions in the coming weeks, this may be another factor contributing to the start of a correction for oil.
In addition, US producers continue to increase their production in an environment of high oil prices. US production is expected to pass the psychological limit of 10 million barrels a day, with only Russia and Saudi Arabia acheiving such production.

Gold has recovered from its weekly minimum

Gold rose yesterday after it had reached its lowest value for nearly a week ago. The rise of the precious metal followed the drop of the dollar against other major currencies. Still, gold is headed to its first weekly decline in six weeks.
The spot price of gold added 0.1% to its value to a level of $1,328 per ounce. Earlier in the day, the metal reached the lowest value of $1,323.7 per ounce.
Gold futures with delivery in February declined by 0.8%, marking their worst performance since December 7, following the appreciation of the dollar at its three-year low.
For other precious metals, silver was traded at levels of $17.05 per ounce, while palladium lost 0.6 percent of its value to $1,108 an ounce.
Platinum added 0.3% to $1,000 per ounce.

Euro's jumping too high

There are risks of excessive euro appreciation, not due to a solid foundation. European regulators are in no hurry to change their stimulus policy.
They are worried about the sudden movements of the euro that do not correspondent to economic grounds. According to market observers, however, the ECB aim at one thing - to put pressure on the euro to fall.
The ECB does not approve of the appreciation of the euro, which makes European goods relatively more expensive on international markets and reduces their competitiveness.
The attempts of ECB heads to put pressure on euro over the past year was meaningless, as the single currency continued to rise, and the market accepted the motto "speaking is cheap."
The ECB faces new uncertainties about inflation expectations and rising oil prices. At the same time, strong economic growth is threatened by the appreciation of the euro.
The euro appreciated by 1.9% against the dollar since the beginning of the year and traded near its highest levels in three years. It fell 0.2% yesterday to levels of 1.2230.

GS: Correction but not end of the bullish market

The growth of stock markets, which leads them to new historical records, creates a risk of correction, but not for the end of the bullish market. At least such is the opinion of experts from Goldman Sachs Group Inc.
US indexes rose to new records, driven by optimism among investors, that tax reforms taken by the Trump administration will drive US companies' profits to their best growth for many years.
The GS reminded that MSCI World Index and MSCI Emerging Market Index are in their longest winning series, with no adjustment of 5 and 10%. Despite the danger of corrections, with a similar magnitude, however, we are unlikely to witness a bearish market.
For the bearish market, investors receive a top-level adjustment of more than 10%. The traditional bearish market, however, includes a decline of more than 15% of the peaks. In other words, according to analysts of the US Investment Bank, at this stage there are no symptoms of a drop of more than 10%.
The Fed and the rise in interest rates on the reserve are cited as the most likely cause of a potential correction of US indices.
In addition, almost all of the world's leading stock indices are in overpriced territory. In practice, almost no major index is in over-sold territory.
The GS are far more pessimistic in their ratings with respect to bonds. According to bank experts, bond markets are far more threatened by the potential policy of raising interest rates from the reserve.

Which are the most overbought markets?

Global stock markets experienced a great 2017th year. Growth, however, makes most of them look overpriced. In fact, according to Bespoke magazine statistics, only two markets are out of the super-territory.
Based on the study of 35 index funds based on the markets of individual countries and based on a significant excess of 50-day averages, only the markets of Sweden and Taiwan are not over-purchased. Neither country is over-sold.
Of course, the magazine recalls that being overbought, does not necessarily mean that it is a negative signal and is about to fall. This rather points to risky prospects and profitability prospects in the relevant markets.
Among the most overbought markets are the markets of Poland, Germany, Italy, Spain and the Netherlands.
The past year was exclusive to stock markets. The MSCI All-Country World Index rose in each of the months of the past year, which was the first time in history.
These growths contributed to an increase in market estimates to excessive levels.

Gold with a four-month high, after the appreciation of the euro

The price of gold rose to a new nearly four-month high after a more aggressive tone from the ECB sent the euro up strongly against the US dollar.
The stronger euro and, hence, the weakness of the US dollar, triggered increases in gold and other precious metals. Gold traded at levels above $1,320 on Thursday, and platinum rose to levels above $980.
The only loser in the situation was silver, which fell to levels below $17 an ounce. In fact, this change makes the ratio of gold to silver rising to 78 or well above the average in the historical sense.
The spot price of gold rose 0.3 percent to $1,321 per ounce after reaching a peak of $1,326.56 per ounce or its highest level since September 15.
Gold rose by more than 80 dollars from its bottom in mid-December, helped by the promising dollar. However, according to analysts from Saxo Bank, the price of the precious metal will face significant difficulties ahead of its potential further appreciation.

A parody crypto currency reached $2 billion market capitalisation

Dogecoin, a parody crypto currency named after a popular Internet meme, reached capitalization of over $2 billion on Sunday.
Behind the rise of this crypto currency, it was basically the notion that it was cheap compared to the bitcoin, says Dave Chapman from Octagon Strategy.
One of the founders of the crypto currency, told the media that the rise in the tokens makes him worry to some extent by a over reaction on the market.
The new crypto currency reached the next psychological boundary after it reached for the first time a market capitalization of $1 billion on Christmas. The digital currency is traded at a level of 0.018773 dollars, giving it a market capitalization of 2.12 billion dollars.
This is nearly 69% more than its market capitalization on Friday of last week during the Asian trade.
Just last month, the digital currency appreciated by 400%, momentarily reaching the highest value of 0.0107 at the end of last month.
To date, there are a total of 43 crypto currencies with a market capitalization of over $1 billion. The largest crypto currency is still the bitcoin, with a total of $264 billion.
The Dogecoin was created in 2013 with the idea of ​​allowing Internet users to easily and cheaply transfer funds from user to user.
There are several ways to get this crypto currency. Buying from stock exchanges, mining and even getting it as a tip.

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The dollar with the fifth consecutive daily decline

The dollar fell on the first full day of the new year 2018. The US dollar index hit its fifth consecutive day-to-day drop, reaching nearly a three-month minimum. Traders are trying to predict what the Fed's interest rate policy will be in the new year.
Given that they sent the dollar down, investors are clearly not convinced that we will see three US interest rates hikes this year. Such an opinion can certainly be said to be the bond markets as well.
The dollar index lost 0.3 percent to 91.836 points or its lowest value since September. The index lost 9.9% of its value in the past year, experiencing its worst year since 2003.
The euro rose to 1.2060, versus 1,2006 late on Monday. Thus, the single currency is traded at levels unseen since September last year.

Oil with the highest value since June 2015

Oil has reached its highest level since mid-2015 yesterday, but has since retreated from its value after a recovery in Libya's lead pipeline supplies and data for a rise in US production to the highest value for four decades.
This was the first time since January of 2014, when both major types of oil - Brent and Crude, opened the year at levels above $60 a barrel. Aid for rising oil prices has sparked political tensions in Iran and the agreement between OPEC and Russia to restrict the production of raw materials.
US crude oil ended yesterday with a fall of 5 cents to 60.37 dollars a barrel or its highest level since June 2015.
The Brent lost 30 cents of its value, or close lower by 0.5 percent to a level of $67.29 a barrel. This was the highest level since May 2015.

GS: Cryptocurrencies and loans will overshadow US growth (2)

Goldman is not the only financial institution that warns of "red flags" in cryptocurrencies. JPMorgan Chase & Co. executive Director, Jamie Diamond, has already described the bitcoin as a "scam". He said the bitcoin is a "highly speculative asset".
The bitcoin was determined by Japanese central bank chief Haruhiko Kuroda as a speculative tool.
Positive impacts are expected to be in the direction of initial housing, which will continue to have a good impact on the labor market.
The growth in pay for US workers is expected to accelerate and lead to an increase in inflation. The latter is expected to rise from its current levels to 1.5% and to reach 2% target from the Fed.
Markets are expected to start betting for more rapid interest rates next year, GS said. At the moment, two interest rates are pledged, but over time, market participants can expect to see three. And the Fed can surprise them with even more aggressive actions.

GS: Cryptocurrencies and loans will overshadow US growth (1)

Financial imbalances, including those in cryptocurrencies and credit markets, are expected to overshadow the growth of the world's leading economy, Goldman Sachs Group Inc. analysts said.
The bank is also expecting four Fed interest rises in the next year and an acceleration in the US economy to 2.6%. The unemployment rate in the world's largest economy is expected to drop to 3.5%.
However, the financial institution does not expect everything to go smoothly. According to them, estimates of some assets, especially loans, have reached a high level, historically. And as long as we do not see credit rises to levels that would disturb the Fed, there are signs of speculative behavior in credit instruments as well as the cryptocurrencies boom.