Cryptocurrency and Equity Markets: Weekly Wrap-Up
Good week for US markets amid positive news, while cryptocurrencies showed mixed performance this week.
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Global Equity Markets: Mixed outlook keeps investors confused
Strong earnings reports were supportive of U.S. equities as Amazon saw revenue rise at its highest growth rate in more than six years, while net income doubled. Its stock jumped to a new record high on the news. Other tech leaders such as Microsoft and Intel reported strong earnings, but their stocks backed off following initial breakouts to new record highs. The S&P 500 however ended flat, down by only 0.01% for the week.
Rising interest rates remain a concern globally as U.S. Treasury 10-year yields briefly nudged above 3.0% on Wednesday, a key level watched by many market participants, before ending the week at 2.96%. Meanwhile, inflation pressure remains with the U.S. Labor Department reporting that wages and salaries rose at their fastest pace in 11 years.
U.K’s FTSE was the top performer, up 1.82%, for its fifth consecutive week of gains and highest weekly close since late-January.
The historic summit between North and South Korean leaders eased geopolitical tensions, but there is further progress to be made, and markets will be watching new developments closely. Japan’s Nikkei Index advanced by 1.38% to end at its highest weekly close in 12 weeks.
Chinese stocks are expected to underperform due to the threat of expanding U.S. tariffs on Chinese goods. Trade talks between the two countries continue next week in Beijing. China’s Shanghai Composite was up 0.35% for the week while Hong Kong’s Hang Seng dropped by 0.45%.
India’s BSE 30 Sensex: Equities could soon run out of steam
Since hitting a low of 32,483.03 six weeks ago, the Sensex has been able to rally as much as 7.95% as of last week’s high of 35,065.37. Momentum picked up a month ago as the index broke out of a bullish falling wedge pattern as it is coming off support of the 200-day moving average (brown line).
Last week’s 1.61% gain included the completion of a 61.8% Fibonacci retracement at 34,931.21, and the index remains strong. This would seem to support the idea that the index can keep rising at least to the next potential resistance zone. That price zone, which is identified with a red oval on the enclosed chart, is seen as the bottom of the lower rising trend line and the completion of the 78.5% Fibonacci level, which is at 35,596.51.
U.K.’s FTSE 100: strong but heading into resistance
The FTSE also broke out of a bullish falling wedge a month ago and has been rapidly rising ever since, in addition to closing strong each week. It’s come up 9.32% as of last week’s 7,507.10 high. Last week the FTSE topped its competitors with a 1.82% gain as it reached and exceeded the 61.8% Fibonacci retracement level (7,439.0) and ended the week back above its long-term uptrend line for the first time in 12 weeks. In addition, the FTSE is back above its 200-day moving average (brown line).
At the same time, the index now faces a resistance zone going up to the 78.6% Fibonacci retracement level at 7,594.5. That potential resistance zone is around prior multi-month resistance from 2017 and where two rising trend lines converge.
Cryptocurrencies: Performance mixed as retracements set in
The performance in the eight cryptocurrencies shown in the accompanying