It is like the
thirteenth stroke of a crazy clock, which not only is itself discredited but
casts a shade of doubt over all previous assertions.
A. P. Herbert. "Is
It a Free Country?"
The special one came
to Davos, he saw, and far from behaving like a conquering lion, became a pussy
cat. He apologised. He said America first, needed friends, and was really
America and everyone first. He claimed credit for the stock market mania
sweeping the planet, though not the cryptocurrency mania also sweeping planet
Earth.
He called for a
strong dollar, even as his placemen were out weakening it. He did his hardest
to be all things to all men. Apart from a few throw away lines to his core
support in flyover America, “The Donald” delivered a Clintonesque message. The Chameleon
President had adapted to the Davos environment.
The assembled Lords
of the Universe politely pretended to be impressed, though the jury is still
out on whether they were taken in. Davos
2018 over, all jetted off to start working on the big fix.
Below, stock market
mania liked what it selectively heard.
S&P 500 Surges for a Fourth Week
By Elena Popina and Sarah Ponczek
26 January 2018, 22:23 GMT
Waiting for an entry point in the stock market just isn’t working. The latest
proof: amid the best start to a year ever measured in global equities, the
S&P 500 has now spent longer trading within 5 percent of its all time high
than ever before.Add it to the list of superlatives piling up in a market that has now done in a month what Wall Street thought would take a year. Rising 2.2 percent over the last five days, the benchmark sits at 2,872.87 -- higher than the average target of strategists tracked by Bloomberg as recently as December.
Twenty-six days in and equities have yet to notch a down week. They’ve risen more than 7 percent and posted more up sessions -- 14 -- than any January since 1989. At these levels, stocks are nearing the most overbought point ever, making it hard for even the most bullish analysts to keep up.
For the week, the S&P 500 rose 63 points. The Dow Jones Industrial Average added 545 to 26,616.71. The Nasdaq Composite Index climbed 2.3 percent to 7,505.77, bringing its year-to-date advance to 8.7 percent. The MSCI All-Country World Index increased 2.1 percent to 550.32, extending its 2018 gain to 7.3 percent to leave it on track for its largest January rally ever.
For money managers, finding a reason to sell is getting harder, especially when a strategy that simply buys shares that are already rising the fastest is doing better than any time in eight years.
“The herd is running into the market at the moment, and that’s giving the market some additional legs,” said Matt Schreiber, president and chief investment strategist at WBI Investments. “People are in tune with the fact risk could be around the corner. But at the same time, too, they’re still moving money into equities.”
The S&P 500 rose 2.2 percent in the five days through Friday. After 18 trading sessions, the gauge now sits 1.2 percent above the 2,838 year-end average estimate made by 17 Wall Street analysts at the end of 2017.
One indicator after another shows the rally’s strength. The S&P 500 has traded within 5 percent of its record high for 399 days, data by Charlie Bilello, director of research at Pension Partners LLC, show. On Monday the streak broke the previous record of 394 days of the S&P 500 trading within 5 percent of an-all time high, which happened between December 1994 and July 1996.
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January 26, 2018 / 4:09 PM / Updated 15 hours ago
Breakingviews - Trump reworks "America First" for the global elite
DAVOS,
Switzerland (Reuters Breakingviews) - Donald Trump surprised Davos. After a
week of anticipation and a parade of world leaders at the World Economic Forum,
the U.S. president laid out in unexpectedly statesmanlike fashion the most
succinct and persuasive version yet of his “America First” ideas. Though the
substance was familiar – that America is no longer keen to underwrite an
economic order without reciprocity from other countries – its sober and
inclusive tone was new.
True,
Trump’s speech consisted largely of a sales pitch. Other speakers, including
Prime Ministers Narendra Modi of India and Theresa May of the UK, also touted
the merits of investing in their respective countries. But absent from Trump’s scripted
performance were any references to issues like climate change or gender
equality, which peppered other addresses at the summit.
And no-one
takes a victory lap like Trump. He boasted about reaching 84 new stock-market
highs since taking office a year ago, when he referred in his inaugural address
to “American carnage”. The president has a good scorecard to flash. GDP grew at
an annual rate above 3 percent in the second and third quarters of 2017, though
it came in at 2.6 percent in the fourth by the first estimate, below
expectations. Unemployment has fallen to 4.1 percent and American companies
will now pay 14 percentage points less in corporate tax then they did before.
What was new
in Trump’s Davos appearance aside from the style was the framing of his
administration’s approach to trade and the like. Rather than bashing the
Chinese for stealing American jobs, he stuck to larger principles of fairness.
The United States “will no longer turn a blind eye to unfair economic practices
including massive intellectual-property theft, industrial subsidies, and
pervasive state-led economic planning,” he said. It’s a rational argument – and
hints at something like leadership.
Many
gathered in Switzerland anticipated an uncouth performance from the former reality-TV
star. They were expecting to laugh. Equally, many of them acknowledged the
economic and financial benefits that accompanied his first year in the Oval
Office. Trump knows how to play to an audience, and he avoided any ugliness
about immigration and such things. This more measured version of Trumpism was
designed for the global elite. Even so, it may help Davos Man and Woman feel
less embarrassed about embracing some of its attributes.
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But despite the
superficial brotherly love and goodwill to all men, tensions remained with the
USA at Davos. Has Donald Trump’s America really embarked on a beggar thy
neighbour currency devaluation war? Is it time to be out of deliberately devaluing
dollars and into virtually everything else?
ECB Officials Follow Draghi in Reminding U.S. of Currency Pact
By Mark Deen and Carolynn Look
26 January 2018, 09:17 GMT Updated
on 26 January 2018, 11:42 GMT
European Central Bank
officials Francois Villeroy de Galhau and Benoit Coeure joined a chorus of
policy makers defending a global pledge to refrain from currency devaluations.
Responding to a debate at the
World Economic Forum in Davos, where Treasury Secretary Steve Mnuchin stated
that a weak dollar was good for U.S. trade, Villeroy argued in a Bloomberg
Television interview that the commitment is founded on confidence, pointing to
a statement issued by members of the International Monetary Fund in October.
“What we all said, including
the new U.S. administration, was that we will not target our exchange rates for
competitive purposes,” the Bank of France governor told Francine Lacqua. “This
sentence is very important. It remains the rule of the game. It’s a rule of
mutual trust.”
Coeure, who sits on the ECB’s
Executive Board, echoed those remarks by pointing out that volatility created
by different statesmen is “not helpful.”
“We live in a world where
exchange rates are not to be targeted for competitive purposes and that’s what
the G-20 has agreed and let’s just stick to this,” he said.
The comments are the latest in
a debate that this week drew in both IMF Managing Director Christine Lagarde
and ECB President Mario Draghi. He said on Thursday that although the recent
strengthening of the euro partially stemmed from improving economic
fundamentals, he was concerned about currency moves caused by public
statements.
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Bankers, Policy Makers at Davos Revel in ‘Sweet Spot’ Economy
By Enda Curran, Alessandro Speciale, and Simon Kennedy
Updated on 27 January 2018, 00:01 GMT
The global elites have rediscovered their animal spirits.As the World Economic Forum drew to a close in the Swiss ski resort, the overarching mood of the executives, policy makers and investors was that their economies are in fine shape and that stock markets have every reason to extend their run.
"Let’s celebrate what could go right for the moment because we are in a sweet spot," International Monetary Fund Managing Director Christine Lagarde said on the closing panel discussion.
The Standard & Poor’s 500 Index has gained about a quarter since the start of 2017 and the IMF is forecasting the strongest worldwide economic growth this year since a brief post-recession bounce in 2011. Some 57 percent of executives polled by PricewaterhouseCoopers LLP saw the economy improving in 2018, about double the number of a year ago. The rise of cryptocurrencies was evident in the Swiss town both in conference sessions and on the promenade where companies rent shopfronts to promote their wares.
“The greatest worry I’ve heard over the past days in Davos is that there is not enough worry,” Mary Callahan Erdoes, JPMorgan Chase & Co. asset-management unit CEO, said on the panel. “It’s O.K. to not be worried, to celebrate how we got here.”
‘This is Fantastic’
Erdoes thanked the policy makers on the stage for working “tirelessly” and “giving all of these government jobs such fabulous prestige and something that I know all of us now perhaps aspire to do.”“Wow,” said Bank of England Governor Mark Carney. “This is fantastic.”
Such sentiment led delegates to declare that it was the most upbeat Davos gathering since before the financial crisis. Yet the giddiness also gave some investors pause as they warned against turning too exuberant.
“I do feel it’s a little bit like 2006,” Barclays Plc Chief Executive Officer Jes Staley said earlier in the week.
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We close for the week
with cryptocurrency news. Is any cryptocurrency exchange safe?
Coincheck Says It Lost Crypto Coins Valued at About $400 Million
By Yuji Nakamura, Andrea Tan, and Yuki Hagiwara
Updated on 27 January 2018, 05:49 GMT
The
disclosure that one of Japan’s biggest cryptocurrency exchanges lost about $400
million in NEM tokens is spooking investors in a country still wary of such
venues four years after the collapse of Mt. Gox.
After hours
of speculation Friday night, Coincheck Inc. said the coins were sent
“illicitly” outside the venue. Co-founder Yusuke Otsuka said the company
didn’t know how the 500 million tokens went missing, and the firm is working to
ensure the safety of all client assets. Coincheck said earlier it had suspended
all withdrawals, halted trading in all tokens except Bitcoin, and stopped
deposits into NEM coins.
“We know
where the funds were sent,” Otsuka said during a late-night press conference at
the Tokyo Stock Exchange. “We are tracing them and if we’re able to continue
tracking, it may be possible to recover them. But it is something we are
investigating at the moment."
The
disappearance likely ranks among the biggest losses or thefts of investor
assets since the advent of digital currencies with the launch of Bitcoin in
2009. Japan’s Financial Services Agency said in a statement it is “looking into
the facts surrounding Coincheck.”
NEM, the
10th-largest cryptocurrency by market value, fell 11 percent over a 24-hour
period, to 87 cents, as of 2:30 p.m. Tokyo time Saturday, according to
Coinmarketcap.com. Bitcoin dropped 3.4 percent and Ripple retreated 9.9 percent
on Friday, according to prices available on Bloomberg.
“Caveat
emptor,” said Yvonne Zhang, who had spoken on a panel on the future of cryptocurrencies
at an Association of Futures Markets conference in Bangkok on Friday. “The
‘investors’ that did not do due diligence and take time to understand what
they’re trading in, both venue and subject matter, face unhedgable risks. If
they continue to ‘trade’ the same way knowing the murky nature of this market,
they’re gambling.”
“I’m
shocked,” Takeshi Fujimaki, an opposition Japan Innovation Party politician who
once served briefly as an adviser to George Soros, tweeted on Saturday. He
wrote that he has an investment of more than 10 million yen worth of Bitcoin in
Coincheck.
In Japan,
one of the world’s biggest markets for cryptocurrencies, policy makers have
introduced a licensing system to increase oversight of local venues, seeking to
avoid a repeat of the Mt. Gox exchange collapse that roiled cryptocurrency
markets worldwide in 2014. At that time, the theft of Bitcoin was estimated at
about $450 million, though the figure was revised down later.
More
BlackRock's Larry Fink Calls Cryptocurrencies 'An Index of Money Laundering'
By Claire
Zillman January 25, 2018
This year, cryptocurrencies like Bitcoin are having their biggest Davos
moment yet, as references to the cryptocurrency and its peers pop up on
panel discussions, in comments by world leaders, and along the Swiss town’s
famous promenade, where storefronts transform into flashy corporate ads for one
week every January. (Crypto
HQ, anyone?)There is no doubt that cryptocurrencies, which have experienced dramatic fluctuations in recent weeks, are on the minds of heads of states and corporate executives who attend the World Economic Forum’s annual meeting.
BlackRock chairman and CEO Larry Fink made that clear as he issued an especially bold statement on the assets during a panel about the future of global finance on Thursday.
When asked if he’s ready to start investing in cryptocurrencies, he called them, “more of an index of money laundering than anything more than that.”
At the same time, he acknowledged that “it is a real technology.”
“It’s going to transform how we do our business,” he said. “We should not turn our backs to it; we should embrace it and work toward a global solution because if we don’t work toward a global solution it will create systemic risk.”
His comments piggybacked on remarks by U.S. Treasury Secretary Steve Mnuchin, who said the United States is most concerned with keeping the assets from being used for illicit activities.
“[I]n
the United States, our regulation [says that] if you’re a Bitcoin wallet,
you’re subject to the same regulation as a bank,” he said. “We want to make
sure that the rest of the world…has the same regulations. We encourage fintech,
we encourage innovation, but we want to make sure that all of our financial
markets are safe.”
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It cannot be too
clearly understood that this is not a free country, and it will be an
evil day for the legal profession when it is.
A. P. Herbert. "Is It a Free Country?"
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