January 31st – Market Summary
as of market close 1/31/18, Today’s change
Coincheck NEM Hack
Hackers steal $530million worth of NEM coins (cryptocurrency) from a major Japanese cryptocurrency exchange last week.
Gives spotlight to security of cryptocurrencies; analysts say “unlikely to be the last such hack”
Investors expect increased regulations toward cryptocurrencies, which has sent bitcoin below $10,000. This is a drop of almost 50% since last week
DJIA worst days since last May (on Monday/Tuesday)
Dropped 363 points (-1.37%)
Deepened global sell-off of equities, with worry that long winning streak has pushed valuations too far
Prior to sell-off in the US, Asia and Europe also had steep falls
Pushed yield on 30Y UST close to 3%, also highest since last May
Federal Reserve’s Policy Statement released
Slightly more hawkish note, delivering upbeat assessment of US economy
Reiterated outlook for gradual rate increases, expected inflation to stabilise around 2% in medium-term.
Investors and analysts confirm expectations of a rate hike in March, followed by 3 more hikes this year.
US Equities pulled back narrowly avoiding a 3-day sell-off
ECB concerned about White House trying to devalue US Dollar
Mnuchin (US Treasury Secretary) and White House has said last week that a weaker US Dollar was good for American trade (increased exports). Immediately following, US Dollar dropped by 1.8% in 2 days
Breaks international economic agreement not to talk down their currencies
Amazon, Berkshire Hatahaway, JPMorgan Chase to partner to cut US Healthcare Costs
Announced Tuesday to form a not-for-profit company that cuts healthcare costs for their more than 500,000 US employees.
Venture will initially focus on technology for “simplified, high-quality and transparent healthcare”
Since announcement of partnership, S&P Healthcare Index dropped 3.56% in 2 days, leading US equity drop.
Health Insurance and Pharmaceuticals also plummeted 3-7%.
Investors believe Amazon will become a major disruptor healthcare industry, just as it has done to the retail industry.
Top Losers of DJIA today was Johnson&Johnson, Merck, and Pfizer, all Pharmaceuticals.