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TSX dips over falling oil prices, loonie down

The TSX Composite Index was down on Friday September 17 due to falling oil prices resulting in a decline in the energy sector by 1 95 Additionally…

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This article was originally published by Kalkine Media - Canada

The TSX Composite Index was down on Friday, September 17, due to falling oil prices resulting in a decline in the energy sector by 1.95%. Additionally, the base metal sector which includes precious metals declined by 2.79% owing to a fall in gold and copper prices.  

The hovering uncertainty regarding next week’s federal election was also shaping market sentiments. The broader TSX Composite Index lost 111.74 points or was down by 0.54% and settled at 20,490.36

One-year price chart (as on September 17). Analysis by Kalkine Group

Active volume

Bombardier Inc. was the most actively traded stock where 84.54 million exchanged hands, followed by Inter PipeLine ltd. where 32.46 million exchanged hands, and Birchcliff Energy Ltd. with 19.54 million shares exchanging hands.

Movers and laggards

Wall Street update

During Friday’s trading, equities took a significant turn to the south, with all the major averages falling into negative territory. Traders were anticipating the Federal Reserve’s highly anticipated monetary policy meeting next week, which seemed to have caused losses on Wall Street.

The Dow Jones Industrial Average dropped 166.44 points or 0.5% to 34,584.88, the S&P 500 dropped 40.76 points or 0.9% to 4,432.99, and Nasdaq dropped 137.96 points or 0.9% to 15,043.97.

Commodity update

Gold traded at US$ 1,751.40, down 0.30%. Brent oil stood at US$ 75.34/bbl down 0.44%, while Crude oil also traded lower at US$ 71.97/bbl down by 0.88%. 

Currency news

The Canadian Dollar slid against the U.S. Dollar on Friday, while USD/CAD closed at 1.2766, up 0.67%. The U.S. Dollar gained some ground against the basket of major currencies for the second session in a row on September 17, and closed at 93.19, up 0.28%.

Money market:

The U.S. 10-year bond yield traded higher on September 17, and ended in the green at 1.363, up 2.04%. The Canada 10-year bond yield also surged on Friday’s trade and closed at 1.282, growing 3.72%.










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Precious Metals

Why Governments Hate Cryptocurrency

Why Governments Hate Cryptocurrency

Authored by Gregory Zerzan via RealClearPolitics.com,

Recently the Chinese government declared cryptocurrency…

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Why Governments Hate Cryptocurrency

Authored by Gregory Zerzan via RealClearPolitics.com,

Recently the Chinese government declared cryptocurrency illegal. In Washington, policymakers have questioned its legality and legitimacy.  Sen. Elizabeth Warren went so far as to call cryptocurrencies “a fourth-rate alternative to real currency.” As of this writing, the president is purportedly working on an executive order to crack down on crypto.

But why? To answer, it’s best to begin with a question. How many dollars do you have? Before you go digging through your pockets, let me save you the trouble. 

The answer is zero.  You have no dollars.

The green slips of paper (actually, cotton and linen) commonly referred to as “dollars” are in reality Federal Reserve notes. A “note” is a type of negotiable instrument that carries the promise that its owner (the holder) will be able to redeem it for whatever the person that created it (the issuer) has pledged.

Federal Reserve notes are not dollars; they are a promise to pay their holder however many dollars are denoted on the bill.

At least this is how it was supposed to work when the Federal Reserve Act became law in 1913.  At that time, Congress created a central bank for the purpose of ensuring a stable money supply. Congress empowered it to issue promissory notes which could, by law, be “redeemed in gold on demand at the Treasury Department of the United States.”

There was nothing remarkable about this. Going back to the Coinage Act of 1792, the dollar was defined as a specific quantity of precious metal —originally silver, which in 1890 was changed exclusively to gold.

But in 1933 President Roosevelt issued an executive order requiring U.S. citizens to turn over “all gold coin, gold bullion and gold certificates” to the Federal Reserve and its member banks.  Shortly thereafter Congress passed legislation forbidding the Treasury from redeeming notes in gold.  Because private ownership of gold was now illegal, the link between gold and Federal Reserve notes was mostly theoretical.

Although the 1944 Bretton-Woods accord restored the ability of foreign governments to convert their notes into gold, President Nixon halted that practice in 1971.  Thus ended any connection between the dollar and the precious metal.

Currently, Federal Reserve notes can be redeemed for “lawful money.”  A different provision of federal law states that “United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes, and dues.”

Which means that if one goes to the U.S. Treasury to redeem Federal Reserve notes, one will receive an equal amount in Federal Reserve notes and maybe some coins.  Although the Treasury Department has legal authority to mint dollar coins, these are defined by their size and require no precious metal whatsoever.  No dollar coins meant for general circulation have been minted for a decade, and now the “dollar” exists largely as a hypothetical unit of account.

This evolution of the dollar from a specific quantity of precious metal to an accounting unit largely occurred without public debate.  The transition means that America’s national currency, which was formerly based on scarcity (the limited supply of gold and silver), is now based solely on the willingness of people to use it as a means of exchange.  This makes the dollar a fiat currency.

Fiat currencies are useful. Among other things, they allow central banks to engage in “quantitative easing” by borrowing (through the issuance of notes) something that doesn’t really exist and therefore never has to be repaid (dollars, in the case of the Federal Reserve).

America is hardly unique in this regard; most advanced national economies have fiat currencies.  While the phenomena is widespread it is also a fairly recent development. 

And therein lies the reason many in Washington (as well as governments in other countries) don’t like crypto.  The most widely used cryptocurrency, bitcoin, is limited to 21 million tokens.  Other digital tokens, like Ether, have mechanisms that provide a set (or at least predictable) inflation rate. By returning to a scarcity-based monetary system, crypto has the potential to gain user confidence at the expense of fiat currency. Stablecoin, like Facebook’s proposed DIEM, terrifies central bankers most of all. 

Stablecoin is cryptocurrency backed by real assets.  These assets can be dollars, gold, oil, or anything else.  Stablecoin offers holders a coin redeemable for something that is potentially limited in quantity, effectively restoring the precious-metal standard that used to underlie government-issued money. 

This restoration of the connection between currency and scarce or tangible assets creates competition for government notes that can be printed without limit.  Plus, cryptocurrency can be used over the Internet without the intermediation of banks, which generally have a monopoly on transactions in government money.  This makes it more difficult for authorities to track.

Cryptocurrencies and decentralized finance pose a threat to the confidence-based monetary system underpinning the modern world.  Governments have three principal ways to respond: tolerate cryptocurrency by trying to fit it into existing regulatory schemes; develop government-backed alternatives (which many central banks are actively considering); or make cryptocurrency prohibitively expensive to use, or outright illegal.

China has made its choice. In the United States policymakers are currently considering which approach to take.  Whatever they decide will have important consequences. Hopefully, this time the debate will see greater public involvement than did the transition from a dollar based on gold, to one based on nothing.

Tyler Durden
Thu, 10/21/2021 – 13:25







Author: Tyler Durden

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A Breakout Is Brewing for General Electric Right Now

General Electric (NYSE:GE) has been a pretty quiet stock, particularly since its 1-for-8 reverse stock split. To be honest, I’m surprised management…

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General Electric (NYSE:GE) has been a pretty quiet stock, particularly since its 1-for-8 reverse stock split. To be honest, I’m surprised management opted to split GE stock in the first place. 

Source: Sundry Photography / Shutterstock.com

With a low stock price, investors and funds could accumulate huge swaths of the shares. While that shouldn’t matter to investors, for some reason it seems to play a role. In any regard, a different split ratio would have also seemed to make more sense. 

For instance, a 1-for-6 split would have landed the stock near $80. That would have allowed investors to bid it up to $100, a psychologically important level. Not that GE stock can’t move higher from here. Still, it was an interesting decision. 

That said, despite all the share-price shenanigans, the stock is on the cusp of a potential breakout. But let’s look at the chart before diving into the fundamentals. Here’s what you should know about General Electric moving forward.

Trading GE Stock

Daily chart of GE stock
Click to Enlarge
Source: Chart courtesy of TrendSpider

GE stock sprinted higher in late February, topped out in March, then went on a high-volume plunge. All in all, we saw the stock hit $115 then drop down to $95. Interestingly, $95 has now become support while $115 has become resistance. 

But over time, the range has gotten even tighter. The $95 to $98 area continues to act as support. So does the 50-week and 200-day moving averages. However, the $107.50 level and the 61.8% retracement have been acting as resistance over the last few months. 

So, we have the stock trending higher, but resistance sitting firm near $107.50. That’s putting GE stock in an ascending triangle pattern. That’s defined by an uptrend paired with a static level of resistance.

What bulls are looking for is a breakout over the $107.50 area, opening the door up to $115. If shares are able to clear the $115 resistance area, it will open the door to the $125 to $128 area. Near the high end of that range, the 161.8% extension comes into play. 

On the downside, watch for a break below the 200-day moving average. To lose this moving average would put GE below all of its major daily moving averages. That will put the 50-week moving average on the table, followed by the $95 to $98 area.

For now, the momentum sits with the bulls. However, they need to get this stock up and over $107.50.

Breaking Down General Electric

Let’s give a hand to CEO Larry Culp, who inherited a complete disaster. Not that GE is completely fixed. But it has come a long way in the last 18 months or so. The company was hit by a brutal double whammy. 

The economic fallout from the novel coronavirus didn’t do GE stock any favors. But the fallout from the Boeing (NYSE:BA) 737 MAX situation made things even worse. General Electric is an engine supplier for Boeing and GE’s aviation unit is one of its largest businesses. 

Now though, despite plenty of skepticism, General Electric’s free cash flow (FCF) situation continues to improve. Last quarter, GE reported solid results across the board. However, the biggest takeaway was (or should have been) that management increased its 2021 outlook for FCF. Management now expects FCF of $3.5 billion to $5 billion, up from a prior range of $2.5 billion to $4.5 billion. 

What’s more, three of GE’s four major businesses — Aviation, Healthcare, Renewable Energy and Power — generated a profit in the quarter. The one that didn’t? Renewable Energy, which still saw a 61% year-over-year (YOY) improvement in its losses. 

With the next quarterly earnings due on Oct. 26, bulls are now anxious to see two things: if GE can 1) deliver a top- and bottom-line beat and 2) give investors a more optimistic view of the business. Perhaps the latter will be positive talk about momentum in its Aviation unit, or that FCF is coming in at the high end of the range. 

In any regard, this kind of positive development could be just the catalyst the stock needs.

Bottom Line on GE Stock

So, the chart is set for a breakout. Now GE stock just needs a catalyst. Will management deliver with better-than-expected results? Or come with something else?

We’ll find out by the end of the month. However, the situation here doesn’t hinge on a quarter-by-quarter basis.

The truth is General Electric still has plenty of issues. But it’s also true that the situation continues to improve under Culp’s leadership. Meanwhile, the charts keep setting up in a bullish manner. 

On the date of publication, Bret Kenwell did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell.

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Author: Bret Kenwell

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Bitcoin flash crashes on Binance US; market pulls back a bit; ‘supercycle’ predicted

Bitcoin and the crypto market have pulled back today. In fact, very briefly, exclusively on the Binance US exchange, BTC … Read More
The post Bitcoin…

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Bitcoin and the crypto market have pulled back today. In fact, very briefly, exclusively on the Binance US exchange, BTC did way more than that – “flash crashing” by a knuckle-whitening, pencil-snapping 87 per cent.

It was only a “one-minute candle”, but what a sickening 60 seconds that was for any traders adversely affected, or anyone watching and not quite comprehending what the absolute eff was going on.

BTC fell from about US$65,500 right down to US$8,200 on the exchange, with some calling it a “scam wick”. It’s certainly not the first time this sort of thing has happened, and likely won’t be the last.

The popular (on Twitter) trader Crypto Chase sarcastically congratulated Binance US for its thin order books, which looks to be at least one cause for the short-lived, localised mega dump.

“Good thing Americans are forced on to these dogshit exchanges where they can get completely scammed on unreasonably thin books,” wrote Chase, who said it simply shouldn’t be something that happens. “It’s not fair that some get stopped out and some stay in, some get fills and some don’t.”

And, as Cointelegraph notes, “the debacle was tinged with irony”, with Binance CEO Changpeng Zhao (aka CZ) tweeting beforehand about likely volatility incoming over the next few months.

Another full-time crypto analyst, Dutch trader Michaël van de Poppe explains the flash crash all pretty clearly in his latest YouTube video, posted a short time ago.

He said that when someone with a big-sized stack jumps on an exchange with thin order books and starts market selling, it goes through the entire order book, resulting in a big and fast downwards wick, “which is often quickly recovered as people have positions and orders in place… bringing things back to equilibrium”.

Day trading, eh? Not for the faint-hearted… or for anyone who doesn’t know what the hell they’re doing.

 

How’s the Bitcoin price now, then?

At the time of writing, it’s possible some sections of the market, newer entrants most likely, are shaken by the event, with Bitcoin (BTC) dropping 4.78 per cent in the past 24 hours. A few hours ago, it was trading up around US$66K, but it’s currently changing hands for about US$63,590.

But, no need for panic (not financial or psychological advice) – this is just another regulation day in crypto. (Probably.)

At press time, the overall crypto market cap valuation has retraced by about two per cent, and is sitting back under US$2.7 trillion, at about US$2.69 trillion, give or take a few hundred million.

 

B… but wait, aren’t we meant to be in a supercycle?

Supercycle? What’s that? Something from the movie Tron? In this instance, it refers to a sustained period of market positivity and growth in an asset or asset class, often driven by strong, genuine demand.

Some even reckon Bitcoin and crypto are heading into one, although many market participants (in fact, likely most) are sceptical of such an idea.

It’d be understandable to be wary of such hopium, given the crypto market’s bull-and-bear market history. Crypto is known for long, brutal, desperately chilly crypto winters in between insanely euphoric months or weeks of bull-market pumps.

But, if it’s hopium you want, it’s very easy to find someone to give you a fix. We at least had a bit of a scout around for a credible source, though, and got a nice hit from this tweet posted by Bloomberg’s senior commodity strategist, Mike McGlone.

(Note, it was posted earlier today, well before the flash-crash event possibly helped cause a market dip.)

McGlone is clearly bullish on Bitcoin, also describing it the other day as an “asset-eating Pac Man” amid the launch of the BITO Bitcoin futures-based exchange-traded fund on the New York Stock Exchange.

This ETF has been extremely successful so far, and there are at least a couple more SEC-approved US Bitcoin ETFs on the way, too.

 

 

 

The post Bitcoin flash crashes on Binance US; market pulls back a bit; ‘supercycle’ predicted appeared first on Stockhead.



Author: Rob Badman

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