The market capitalization of crypto-currencies is up again to 100 billion

The rise in the price of crypto-currencies led by the bitcoin led to an increase in the overall market capitalization of digital currencies, again to $95 billion.
The moods among the crypto-currencies market participants were generally negative for most of July. As the month progressed, however, the support of digital currencies grew.
Crypto-currencies launched this year with a market capitalization of just 17.68 billion dollars. It reached the highest value of 116.28 billion dollars. Apparently, digital currencies are now pointing to their maximum value.
For the first time, the market capitalization of crypto-currencies has passed the psychological limit of $100 billion in mid-June. This was mainly caused by the positive news about the bitcoin and the ethereum.
Interesting is the fact that the share of the bitcoin from the total market capitalization of the crypto-currencies fell from 90% to less than 50%. At the beginning of the year, the bitcoin accounted for 87.33% of the total market capitalization, while that of the eterum was only 3.98%.
The market capitalization of the ripple was only 1.32%. For comparison, to date, the ethereum constitutes 30% of the total market capitalization, while the ripple - 11.1%.
In mid-June, when the bitcoin was traded at $2,500, its market capitalization momentarily reached the lowest value of 37.1% of the total of the digital currencies.
In absolute terms, the market capitalization of the bitcoin was $45.2 billion, that of the ethereum was 20.95 billion, and the ripple's was $7.37 billion. The lightcoin has a market capitalization of 2.3 billion dollars.

Oil with a one-month minimum on Monday

Oil fell to a one-week minimum on Monday after several OPEC energy ministers and off-cartel oil producers met to discuss oil production. Expectations, however, are that we will hardly see any more serious cuts beyond the current ones.
Brent futures, with delivery in September, fell by 18 cents to 47.88 dollars per a barrel. Crude oil prices lost 2.5% on Friday after forecasts for OPEC production growth in July.
US crude oil, with delivery in September, lost 20 cents of its value to a level of 45.57 dollars per a barrel.
Several oil ministers from OPEC will meet with producers outside Russia in St. Petersburg to look at the manufacturing situation.
Saudi Arabian Energy Minister Khalid al-Falih said the meeting would not consider larger production cuts in OPEC but would discuss production constraints on Nigeria and Libya.
Both countries were excluded from manufacturing cuts, recovering from years of crisis.
OPEC and Russia agreed to cut production by 1.8 million barrels per day from the beginning of this year to March 2018. According to Russian Energy Minister Alexander Novak, the deal has helped the market get rid of nearly 350 million barrels of extra production.

The S&P 500 Dilemma

The current situation with the broad US index, which is close to its historically highest levels, is quite complex. On the one hand, we are approaching the traditionally worst month in history for the index, with an average decline of over 5% over the past few years.
On the other hand, in the midst of thin volumes in the summer, it would be very convenient for a more serious "last shake" on the part of big stockbrokers. This is the situation where large market operators manipulate for the last the market, sending the index strongly opposite the expectations of individual investors direction to rob the stops.
In this way, the mass investor, who is most likely short on the index, is forced to close down its short positions, which creates an additional upward momentum for the market. This impulse is being used by large stock traders to sell at higher prices to those who were short before, but are becoming the main reason for the index's rise.
On the other hand, big operators may think the following way. If everyone expects the index to adjust by 10%, it would be better to first see growth before the adjustment.
In that case, when the index is down by 10%, it will not be far beyond its current levels. However, investors will feel much more comfortable buying the index, because they will feel that the correction has passed.
Or, many investors follow Buffett's advice that the best investment for individual investors, and never lost in history, is buying an index fund based on the S&P 500 but with a 10% adjustment.
What could, however, happen to investors buying after a 10% adjustment? Again, they are subject to manipulation by large stockbrokers, and the potential fall in the index will go further, and why not see a test at the psychological level of 2,000 points?

A negative end of the week for Europe

On Friday, all major European indexes ended the day in red.
The German DAX30 closed the day at 12240.06 or with a loss of 1.66%. Infineon Technologies AG (-4.66%), Volkswagen AG (-3.64%) and Continental AG (-3.11%) reported a decline of more than 1%.
The French CAC40 wiped out 1.57% of its value, closing at 5117.66. Valeo SA, Peugeot SA and Schneider Electric SE were the least represented, with decreases of 6.94%, 3.41% and 3.09% respectively.
The British FTSE100 index ended the session negatively, closing at 7452.91, losing 0.47% of its value. Micro Focus International (-2.53%), Smiths Group PLC (-2.49%) and Paddy Power Betfair PLC (-2.14%) were the biggest contributors to the result.
At the end of the session, the major US indices also traded downward, retreating between 0.17% and 0.25% of the record-breaking record of the previous days. General Electric Co.'s weak earnings data had a strong impact by lowering DOW JONES by 50 points to 21563, the S&P 500 by about 2 points to 2470, and NASDAQ COMPOSITE by 5 points to 6384.

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Do low prices of oil bother Saudi Arabia?

Saudi Arabia may not be as worried about low oil prices as most investors would expect.
Saudits play a longer-term game, comment analysts at RBC Capital Markets in a letter to the institution's clients. Key elements of the country's plans to differentiate its dependence on oil prices on international markets include events this year.
Among them are the plans for the national oil company to become public. According to experts, the company's market valuation could amount to about $2 trillion.
According to analysts, his may explain in part the lack of urgency regarding the measures to be taken to normalize the price of oil.
In fact, Saudi Arabia may even be worried about a potential oil price rebound this year, which could re-inflate production, by boosting production by US shale makers.
The low oil price is somewhat good for Saudi Arabia because it puts US manufacturers on the "razor edge," many of which may face bankruptcy if low prices last longer at levels below 50 dollars and especially around 40.
Brent lost more than 15 percent since the beginning of the year, while US crude oil fell by 14.6 percent. Both types of oil rose by more than 3% over the past week. To a great extent, oil prices have been backed by US oil reserves for the past week.

Did the bullish market for the dollar ended?

The US dollar fell sharply against other major currencies in the first half of the year. Investors, however, still have to be careful about declaring the end of the bullish market for green money, some experts say.
US interest rates are still far above those in other developed countries, so many experts recommend investors to prefer bonds outside US in their portfolios.
Consensus forecasts are still for a strong dollar this year, following expectations of further interest rates. And while Janet Yelllen made a step back in her last speech, investors are still expecting a further rise in interest rates this year.
The dollar has risen after Trump's election victory last November, following the expectation that the tax and health reforms planned by the new president will benefit the world's largest economy.
And while healthcare reform is difficult to implement, in the way Trump originally promised, very soon, most likely in August or September, we can expect to see more clarity about tax changes.
The latter may be highly positive for the US dollar and trigger a strong appreciation of the dollar against other major currencies.

The bitcoin skyrocketed

The bitcoin has recorded a significant rise and traded around $2,730 last week.
After the crypto-currency dropped momentarily at levels below $2,000 a week ago, bounced upward, rebounding beyond the psychological boundary. Now, according to GS analysts, the crypto-currency can go for a new test at its peak at $3,000.
In a letter to its customers on Monday, Sheba Jaffari, head of GS's Technical Analysis Department, warns that levels of $1,790-1,856 can play a very strong role.
Two weeks ago, Jaffari warned of a sharp depreciation of the bitcoin. Even then, however, the expert said the decline of the bitcoin would hardly pass the 1857 dollar support limit, but rather, closer to that limit, could be used by investors for purchases.
Since the beginning of the year, the bitcoin has risen by 140%. The crypto-currency reached a historic peak at $3,000 on June 12.

Gold companies will shine again?

Shares of gold mining companies are lagging behind this year. The VanEck Vectors Gold Miners ETF (GDX) rose by nearly 7% since the beginning of the year, while the SPDR Gold Shares (GLD) added nearly 8%.
The rising short-term average in VanEck Vectors Gold Miners, however, shows signs of improvement, according to Tony Welch, a strategist at the Ned Davis Group. And while longer-term trends are still not very encouraging, there may be an improvement in short-term prospects for gold mining companies.
In other words, the gold-producing companies may return to their medium-term averages.
This is most likely to aid the well-known recovery in the price of gold. The noble metal recovered from levels of about $1,200 per ounce to levels of about $1,245.
Low gold prices have contributed to the strong demand for physical gold worldwide, another trend supporting the price of the metal.

The dollar is nearly at two-year low against the euro, following Draghi's comments

The dollar registered its lowest value for two years against the euro on Friday, following Mario Draghi's comments. Draghi said we can see a change in ECB's asset repurchase policy in the autumn.
The dollar index, following the US currency against six major currencies, fell to 94.31 points and was not far from its lowest value since August of 2016 - at a level of 94.09 points. For the week, the index was down by 0.8%.
The euro closed the week at 1.16635.
Draghi announced that there is no specific date scheduled to change the ECB's ultra-stimulus policy on negative interest rates and asset repurchase, but specifies the season when it can happen.
His comments were considered aggressive by market participants, which was also the basis for the appreciation of the single currency.

The situation with OPEC's production limits becomes even more bizarre

Do you remember that the OPEC countries agreed to extend their production restrictions by the end of the first quarter of 2018? And instead of jumping, the price of oil starts with their sharp depreciation...
Apparently, market participants still had concerns that OPEC countries would not be able to meet the accepted restrictions. And they were right. It became clear that in May the cartel actually increased its production.
The situation becomes even more bizarre in June. OPEC production again exceeds production constraints, pointing to the worst coordination between countries over a long period of time.
According to data from the International Energy Agency, world production rose by 720,000 barrels per day in June. Saudi Arabia, the largest producer within OPEC, produced more oil in June, a month earlier.
More oil has also produced by countries that are not officially involved in OPEC, such as Nigeria and Libya.
A total of 21 OPEC members reached an agreement at the end of last year, which aimed to cut production by 1.8 million barrels. The purpose of production cuts was to raise the price of oil. Low raw material prices have largely become a reality as a result of the rising production coming from the United States.
But, there is still good news about oil. MEA forecasts an increase in oil consumption of 1.5 million barrels per day in the second quarter, compared to one million barrels in the first three months of the year.

Does the ECB ends the stimulus in September?

The European Central Bank is likely to signal the end of its asset repurchase program in September. Such action is expected to happen next year, according to a Wall Street Journal financial report.
Part of the market expects the cancellation of the program to be one-off, while others say that this will happen smoothly and gradually, with a reduction in the volume of the assets purchased.
Last month, ECB chief Mario Draghi opened the door for the end of monetary stimulus, saying the eurozone economy is steadily developing.
Formal bankers who recently commented on Reuters have indicated September or October as the most likely time to make such a decision but have "stressed" that it will largely depend on emerging macroeconomic data.

The S&P 500 is the most expensive in history, measured in working hours

The stock market flies too close to the sun and it is possible that "its wings will burn soon". This is what experts from Bank of America Merrill Lynch warn. In fact, the bank believes that this can happen by the end of the year.
The US bank, however, warns of this from the beginning of the year, and as we can see, the indices continue to reach new and new record values.
The bank, however, is innovative about why the S&P 500 is expensive. According to their calculations, the number of working hours needed to buy an index has reached a record high.
And this may be another alarming signal to investors.
The rise in US indices was supported by central bank policy, which is quite likely to turn from a supportive to a negative factor, given the normalization of policies.
According to Michael Harnett, a strategist at BAML, a further rise in risk assets will cause serious problems.

Asian indices rose, Dow with a new record after Yellen

Asian currencies and indices rose after Janet Yellen signaled yesterday that the Fed would not hurry with its policy of further rising interest rates.
The dollar fell for the fourth consecutive day, with the dollar index reaching a 10-month minimum.
Serious increases were recorded by the US indices, such as Dow Jones, at a new historic record of 21 532.14 points. Close to record values are the other two leading US indexes.
South Korean Kospi has risen to a new historic record.

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The Japanese bank is expected to reduce its inflation forecast

Japan's central bank is expected to lower its forecast for inflation, but to refrain from increasing its incentives this month. This would be a step back from the promise of Haruhiko Kuroda, the head of the Japanese central bank, to do what it takes to reach inflation targets.
A potential fall in inflation forecasts in Japan would be another blow to the central bank as well as for the yen. The latter is already experiencing the negative impact of these expectations, with USD/JPY rising to levels above 113.50 yen.
The meeting of the Japanese Central Bank will be held on 19-20 July, which is expected to keep the monetary institution unchanged. But what investors will follow is what the bank will say about the state of the Japanese economy as well as about inflation.
Otherwise, expectations are for the CCB to reduce its inflation forecast for this year, ending March 2018, and for the next year.

Technical problem with quotes appreciated Apple by 348%

False quotes linked to some of the world's largest technology companies plunged investors' screens after the US markets closed on Monday.
Nasdaq stock exchange released astatement, saying that the information providers rather than the stock exchange were responsible for the wrong quotes.
The data was distributed by third parties after the US market closed earlier in the week, in connection with the Independence Day celebration.
The stockbroker has tested its information system, which has led to wrong quotes in vendors such as Google Inc. And Bloomberg LP, the parent company of Bloomberg News.
According to "wrong data," shares of companies such as Amazon.com Inc. and Microsoft was showing a decrease in its prices by more than 50%. At the same time, Apple's shares seemed to have risen by 348%.
For the last time, such a situation happened in 2013, but then stock trading was held for three hours because of wrong quotations.

ETFs are becoming a serious problem for the markets

The Bank of America warned that record-sized funds targeted to index funds could cause a serious problem.
The great popularity of this kind of passive investment schemes may lead to liquidity problems, alarmed by the financial institution.
According to the bank's report, the real stock available for S&P 500 components can be seriously overestimated.
Ultimately, this can lead to more serious fluctuations in stock markets, especially in times of decline, given that a company, a sector or the market as a whole is affected by one or another factor.
Passive index funds have become particularly popular among investors. They are currently managing funds of over $4 trillion, the report said.
The report of the financial institution also advises individual investors to target more under-valued parts of the market, and it is important to overtake index fund managers when it is time for them to rebalance their portfolios.
The other problem that emerges is that when the number of sellers exceeds the number of buyers seriously, the liquidity problem will result in a more severe fall in the indices.

Shares of Tesla - 155 or 464 dollars?

Tesla's shares lost more than 7% last week after Goldman Sachs's US investment bank downgraded its market share.
Tesla has announced that it has delivered 22,000 cars in the second quarter of the year. And while this is about to lead to overtaking deliveries compared to last year's when they were at 76,000, the result turned out to be less than expected.
To a great extent, the reason for the weaker supply was the acute shortage of 100 kWh-batteries, the company said.
The controversial data coming from the company, whose shares rose nearly twice since the beginning of the year, to new record highs in the past month, make analysts radically controversial about the company.
The lowest ratings for Tesla's shares come from Cowen and are at $155 a share, the highest is being at $464 from Berenberg.

Oil collapsed last week

Oil prices dropped severely last week after Russia rejected OPEC's offer to reduce production.
US crude oil lost nearly 3 percent of its value, a similar decrease was also noted with the price of the Brent.
In May, OPEC, along with Russia, decided to continue its production cuts by the first quarter of next year.
A little later, however, it became clear that the OPEC countries did not stick to the agreement reached.
Obviously, Russia's response to the proposal has come precisely as a result of non-compliance with OPEC members' restrictions.
Many market experts comment that the depreciation of oil may recover after its last increase from the last week and again see a test at its lowest levels.