News

21.02.2024 – All eyes on Wall Street are on Nvidia. The share is one of the Magnificent Seven that has contributed significantly to the bull run on the Nasdaq. If the exorbitantly high expectations are not met, the stock and the entire high-tech market are threatened by a price avalanche.

Top or bottom – we will know more after the close of trading today, Wednesday. The share has recently crumbled. In any case, the daily chart does not look good for the bulls – but perhaps this is a bear trap.

Source: Bernstein Bank GmbH

So will the chip manufacturer, which is benefiting from the boom in artificial intelligence, continue to correct? The financial blog “Newsquawk” reported that the consensus on Wall Street is that Nvidia will have to massively exceed expectations in order to maintain momentum – “or we are likely to see another post-earnings period of consolidation akin to what has been seen in recent quarters – the price action Tuesday reflects some front-running of those concerns.”

Mega-high expectations
According to “Finanzen.net”, 37 analysts expect an average profit of USD 4.59 per share for the latest quarter. This compares to 88 cents a year earlier. A further 38 analysts expect turnover of USD 20.4 billion for the past quarter. This would be an increase of around 237 per cent compared to the same period last year.
Looking at the past financial year, 42 analysts see earnings of 12.39 dollars per share. According to “Finanzen.net”, this compares to USD 1.76 in the previous financial year. Furthermore, 47 analysts see an average turnover of 59.26 billion, compared to 26.97 billion dollars in the previous year.
So these are the benchmarks. And of course the outlook in the analyst call. If Nvidia touches or even breaks just one of these bars, things will get exciting on the stock market. Palo Alto has just sent out a warning in this direction: The cybersecurity company cut its revenue forecast and warned of a fatigue in IT security spending. As a result, the share easily lost a fifth of its value.

Overcrowding and a possible turning point
The problem with the whole thing is that many people are still long Nvidia. Who should still buy? At the very least, profit-taking is quite possible. With this in mind, several Goldman Sachs traders have recently spoken out. Goldman trader Bobby Molavi said that two years ago, the energy sector in the S&P 500 was five times heavier than Nvidia. Today, Nvidia is valued higher than all energy stocks combined.
The flow analysts, who keep an eye on money flows, also said: “Everyone’s in the pool”. And further: Wall Street has ignored the hot consumer prices, the long duration of the lockdown, the increasing geopolitical risks and the rising yields. We add: The upcoming Federal Reserve minutes could also provide a trigger for an exit.
Nvidia’s figures could therefore mark the turning point on the markets, said investment strategist Charles-Henry Monchau from the Geneva-based private bank Syz in an interview with Bloomberg TV. This is because the direction of the stock markets depends heavily on the performance of some tech heavyweights such as Nvidia. So we are curious to see what will happen. Whether long or short – Bernstein Bank wishes you successful trades and investments!

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The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice. CFDs are complex instruments and are associated with the high risk of losing money quickly because of the leverage effect. 68% of retail investor accounts lose money trading CFD with this provider. You should consider whether you understand how CFD work and whether you can afford to take the high risk of losing your money.7

19.02.2024 –  It can happen that fast: After a strong rally, cocoa has corrected just as sharply. We shed light on the background. This much in advance: large speculative addresses were at work here.

The “bullish beast” has been hunted down: After a massive rise, the cocoa bull market has collapsed. Here is the daily chart. A little more chart analysis: the consolidation and then the breakthrough in the descending triangle can be seen very clearly.

Source: Bernstein Bank GmbH

This is a typical example of what happens when big names storm a narrow market. Even the slightest change in sentiment is then the signal for a brutal sell-off.

Stampede of the chocolate bulls
At the weekend, the Financial Times reported: “Hedge fund stampede into cocoa futures fuels record price jump”. It went on to say: “Speculative traders have amassed an $8.7bn bet on further gains, the largest ever.” Since the end of last year, massive amounts of funds have poured into the market. We add: This movement can be seen very nicely at the top of the rising chart. According to the Commodity Futures Trading Commission, the inflow of around 9 billion dollars in contracts in London and New York was the largest ever recorded. And so cocoa reached a new price peak, which was around twice as high as a year ago.

Weather and hedge funds
Hedge funds had fuelled the weather-related rally, the FT continued. The paper quoted Martijn Bron, who was the global head of cocoa and chocolate trading for chocolate giant Cargill until 2022: the funds had the “biggest risk exposure to cocoa that they’ve ever had”. He continued: “Hedge funds are not the cause of the rise, but in a lower liquidity market environment, they can amplify fundamentally justified market moves to extreme levels.”
Justin Grandison, Director of Cocoa Brokerage at ABN AMRO Bank, also stated “an influx of money into soft commodities” in an interview with the FT. Some of these funds have returned to the market after six to eight years. Many of them rely heavily on algorithms to analyse market trends. We think so: Computers have thus reinforced the trend. “Various speculative traders that have not been trading cocoa for a long time have now jumped in,” added Harold de Boer, Managing Director at Transtrend, a quantitatively orientated hedge fund in Rotterdam.

Demand concerns
And then the mountain started to slide: According to “Barchart.com”, worries that high prices will stifle global demand have recently become more widespread on the trading floor. This has led to a wave of long liquidations in overbought territory. In other words, some bulls have cut their initial losses, triggering a chain reaction. At the same time, we are wondering whether some big names have pushed the price over the cliff with short positions and targeted selling.
Our conclusion: We are curious to see whether this was just a brief correction in which some bulls were killed. After all, the fundamentals have not changed – the growing world population loves chocolate, the Sahara wind Harmattan and various diseases are jeopardising supply. But perhaps the slide of the mountain is not over yet. Bernstein Bank wishes you successful trades and investments!

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The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice. CFDs are complex instruments and are associated with the high risk of losing money quickly because of the leverage effect. 68% of retail investor accounts lose money trading CFD with this provider. You should consider whether you understand how CFD work and whether you can afford to take the high risk of losing your money.7

16.02.2024 – Forex traders in the yen still need a lot of patience: everything is crying out for a “yen intervention”. This is because the Bank of Japan is as hesitant as ever in its turnaround from the zero interest rate policy. As a result, the yen is weakening. However, apart from verbal signals in favour of intervention, so far everything remains the same in the Nippon.

Loosely based on Samuel Beckett’s play “Waiting for Godot”, Japan is a symbol of irresponsibility and endless waiting. Every action is extremely dangerous for colourless officials, every step could have fatal consequences. Doing nothing has consequences: The yen is weakening, pictured in the daily chart. But now there is once again a strong smell of intervention, as the Japanese lira is stuck above the magic mark of 150. So far, the market has not been deterred by words.

Source: Bernstein Bank GmbH

We remember: In September 2022 and the following October, the Bank of Japan intervened with massive yen purchases when the domestic currency reached the 145 and 150 marks. This was the first intervention since 1998 – the central bank burnt the equivalent of 60 billion dollars in the process.

Sound and smoke
This Friday, Governor Kazuo Ueda spoke out. He warned that the central bank was investigating whether it would maintain its easing programme, including the negative interest rate. He was reacting to the news from the previous day that the Japanese economy had slipped into recession. Ueada explained that the main factor in changing the interest rate course would be the development of wages.
Earlier on Wednesday, the yen exceeded the 150 mark for the first time since November. The reason for this was the hotter than expected US inflation data, which buried hopes of an imminent interest rate cut in the US for the time being and strengthened the greenback.

Talk is cheap
The bureaucrats in Nippon then immediately spoke up and intervened verbally – after all, it costs nothing. Masato Kanda, the deputy finance minister responsible for international affairs, explained that some of the recent rapid movements in the forex market were in line with the fundamentals, but that others were undesirable. The authorities are ready to react – 24 hours a day, 365 days a year. Finance Minister Shunichi Suzuki has also just reiterated to parliament his determination to intervene in the event of excessive forex fluctuations. We think: This is the usual showboating and puffing up of people who don’t dare to do anything. But we could be wrong.

Gap between the stock market and consumers
Meanwhile, the yield on ten-year Japanese bonds rose to 0.76 per cent – the highest level since mid-December. The Japan Times commented that investors increasingly believe that the Bank of Japan will raise interest rates after all.
It should also be noted that the Nikkei index is now close to its all-time high on the stock market. Export-oriented stocks in particular are benefiting from the continuing weakness of the yen, while consumer stocks and the domestic market are coming under pressure from the rise in import prices. In other words: stock market players and export companies are rejoicing, while consumers and importers are suffering. Not a good outlook for politicians.

Our conclusion: We are curious to see how long the simulation of determination in Tokyo can last. The yen has lost almost a quarter of its value over the past two years, making it the weakest of the major currencies. Forex traders are certainly on the lookout. “Concerns are growing about verbal intervention from the Japanese authorities and market players would need to assess the intensity of the warning from here,” said Keiichi Iguchi, Senior Strategist at Resona Holdings. “Some nervousness will prevail among investors due to intervention concerns.”
We are therefore curious to see whether the Bank of Japan will intervene financially or change course in the near future – and wish you successful trades and investments!

______________________________________________________________________________________________________________The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice. CFDs are complex instruments and are associated with the high risk of losing money quickly because of the leverage effect. 68% of retail investor accounts lose money trading CFD with this provider. You should consider whether you understand how CFD work and whether you can afford to take the high risk of losing your money.7

15.02.2024 – Some firecrackers just take longer: the Bitcoin price has finally ignited with a bang following the authorisation of spot-based index funds. We explain why the fuse had to smoulder for so long.

The bulls are rejoicing: Bitcoin’s total market cap has just exceeded the USD 1 trillion mark again – for the first time since November 2021, as the financial blog “ZeroHedge” stated. And for the first time since the end of 2021, BTCUSD climbed above 52,000 dollars. In the picture the daily chart.

Source: Bernstein Bank GmbH

As a result, Bitcoin has caught up with the market capitalisation of Tesla, Taiwan Semiconductor, Eli Lilly and Berkshire Hathaway and moved into the list of the ten most valuable assets in the world, ZeroHedge went on to explain. But why all this only now? After all, the US Securities and Exchange Commission had already fired the starting gun for the approval of spot-based index funds on 11 January. Specifically, the United States Securities and Exchange Commission (SEC) gave the thumbs up to eleven ETFs.

Sector rotation
CoinTelegraph provides the answer to the riddle. According to it, there was a gigantic rotation within the financial sector. All in all, BlackRock and Fidelity in particular registered massive inflows – both now have more than 1 billion dollars in assets under management. However, a lot of money flowed out of the Grayscale Bitcoin Trust (GBTC) – according to “CoinTelegraph”, more than 1 billion dollars were lost in just a few days. The website did not give a reason for this mistrust.
In the meantime, the industry is increasingly using e-currencies for portfolio diversification in order to reduce risks and increase returns in the fight against inflation. All in all, the ETFs – ex Grayscale – have collected more than 11 billion dollars in assets.

Out of gold
And there is apparently another interesting development for the BTC bulls. According to ZeroHedge, gold ETFs had to cope with an outflow of USD 858 million last week alone. This year, the loss has already totalled 3.2 billion dollars. The inflows into BTC funds can therefore be partly explained by the departure from the precious metal.

Hoping for the halving
The bulls are now looking ahead to the upcoming halving. Citing a Grayscale analysis, CoinTelegraph reports that the current mining rate is 6.25 Bitcoin per block, which equates to an annual value of 14 billion dollars. This is enough to maintain the price of 43,000 dollars used for the analysis. In other words: after the halving, only 3.125 Bitcoin would be mined – and thus only 7 billion dollars in purchases per year would be needed to support the price. We look forward to seeing how things develop – and wish you successful trades and investments!

____________________________________________________________________________________________________________________________The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice. CFDs are complex instruments and are associated with the high risk of losing money quickly because of the leverage effect. 68% of retail investor accounts lose money trading CFD with this provider. You should consider whether you understand how CFD work and whether you can afford to take the high risk of losing your money.7

07.02.2024 –  Sometimes it simply pays to be patient: we have been following events in Turkey for months. We have always criticised the economic and monetary policy there and sometimes called for a zero target for the lira. Because the crazy monetary policy capers in this country simply change little or nothing. Now a new farce has started with the new change at the head of the central bank.

Making money can sometimes be so easy: buy a put on the Turkish lira, sit back, eat popcorn and enjoy the show. Here is the weekly chart of USDTRY.

Source: Bernstein Bank GmbH

Around three decades ago, the lira was almost one-to-one with the dollar. But our chart doesn’t go back that far. Back then, Turkey was a reliable ally of the West and the values of Kemal Atatürk still counted. In the meantime, we see Islamism, rapprochement with Russia and Iran, war in Syria, threats against neighbouring Greece and Cyprus over gas reserves in the Mediterranean and the ongoing civil war against the Kurds. The armament is financed by firing up the digital printing press. International investors are shunning the state.

Yet another change
And these are the latest developments: Last Friday, the head of the central bank, Hafize Gaye Erkan, resigned unexpectedly after just eight months due to accusations of nepotism. The 44-year-old was seen as a hope for lira bulls, as she had raised the key interest rate from 8.5 per cent to 45.0 per cent. With an inflation rate of 65 per cent, this is still too low. But at least she stood up to her president – he is the only person in the world who believes that low interest rates strengthen a currency.
The daily newspaper “Sözcü”, which is critical of the government, had reported that Erkan’s father had illegally interfered in personnel decisions. According to further press reports, the father was provided with an office, a company car and bodyguards by the central bank. Erkan had also incurred the wrath of the Sultan. In January, she told the newspaper “Hürriyet” that she had moved back in with her parents because she had been unable to find an affordable flat in Istanbul due to the high rents.

Waiting for the turnaround
The previous deputy Fatih Karahan has now been appointed director. This could give hope, as the financial expert has already worked at the Federal Reserve Bank in New York. The new man immediately declared: “We are endeavouring to support the process of declining inflation by restoring budgetary discipline and at the same time implementing structural reforms.” Sounds good. But we are sceptical that it will last long.
Our conclusion: We still see little hope for the lira. And assume a currency reform or the introduction of the dollar or euro as the national currency. Unless the new head of the central bank prevails against his president, which seems illusory. The lira still has plenty of room to fall and could reach 100, just like the Russian rouble. Interim attacks by the central bank against shorties by radically raising the interest rate for overnight lending or through lira purchases are otherwise always possible. We will continue to keep an eye on events for you and wish you successful trades and investments!

__________________________________________________________________________________________________________________________________________________The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice. CFDs are complex instruments and are associated with the high risk of losing money quickly because of the leverage effect. 68% of retail investor accounts lose money trading CFD with this provider. You should consider whether you understand how CFD work and whether you can afford to take the high risk of losing your money.7

02.02.2024 – The bull run in cocoa is slowly becoming scary: the chart looks like a launch pad. There is already talk of a “parabolic rally” – which means that the upward trend could become even steeper. The current fuel for the price rocket is rising from the Sahara.

Cocoa is unstoppable. We hope you entered on the long side weeks ago after our intensive reporting. Here is the daily chart. Of course, nothing lasts forever. But the latest news should also please the bulls.

Source: Bernstein Bank GmbH

The news site “Barchart.com” has just reported a 46-year high for the nearby futures contracts in New York – and even an all-time high in London. It was also the site that spoke of a “parabolic rally”.

Hot trade winds
The current reason for the buying panic is therefore the “Harmattan”. Here is the background from spektrum.de: “Harmattan, dry, hot wind blowing predominantly from the north-east in the Sahara and the southern peripheral areas. This wind, often laden with red sand from the desert, blows from the northern horse latitudes towards the equator and thus represents part of the trade wind.”
For cocoa, this means that the harvest could be in danger. Barchart.com stated that the hot wind is currently more extreme than average, drying out the plantations and reducing the mid-crop in April. This is further reducing global supply.

Tighter supply
At the beginning of the week, Côte d’Ivoire also reported the delivery of around 1.0 million tonnes of cocoa from farmers to the ports for the period from 1 October to 28 January – a drop of 36 per cent compared to the previous year in this period. In the previous week, the Ivorian regulatory authority Le Conseil Cafe-Cacao had also stopped forward sales for the 2024/25 season. The authority first wanted to gain a precise overview of the supply situation in the world’s largest cocoa producer.
The conclusion from all of this is that it is possible that Ivorian smallholders are increasingly smuggling goods across the border because they can achieve higher prices there – and thus distort the figures from Côte d’Ivoire. However, it would take a few supply surprises to break the current trend. This is because the hot Sahara wind is an additional factor in the supply shortage, alongside the viral disease CSSD (Swollen Shoot Disease) and the fungal disease Black Pod Disease. As the global population continues to grow unchecked, demand is also increasing. We will continue to keep an eye on the market situation for you and wish you successful trades and investments!

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The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice. CFDs are complex instruments and are associated with the high risk of losing money quickly because of the leverage effect. 68% of retail investor accounts lose money trading CFD with this provider. You should consider whether you understand how CFD work and whether you can afford to take the high risk of losing your money.7

29.01.2024 – January has gone well for the bulls so far. However, there has been a slight lack of market breadth – both in the USA and in Germany. This in turn could make the stock market susceptible to setbacks in the week of the Federal Reserve. Or, alternatively, the bulls will then also grab hold of the laggards.

The blog “The Market Ear” (TME) – an offshoot of our favourite “ZeroHedge” – has broken things down in detail. Only 13 stocks have pulled the entire SPX higher so far. Here the S&P 500 in the daily chart.

Source: Bernstein Bank GmbH

And the gains of the top 5 alone would have contributed 70 per cent to the gain of the entire index. These mega caps are: Nvidia, Microsoft, Meta Platforms, Alphabet and Amazon. We add: So why not buy these high-flyers now? Because then disappointments in earnings, management misselling or any other scandals would carry a lot of weight – an index spreads the risk.

Bulls everywhere
TME also stated that the number of upward earnings surprises had risen sharply. And the market is so bullish that even the 20 per cent of shares with disappointments are hardly being punished.
And then TME provides a particularly nice factlet on number crunching: since 1953, the S&P 500 has closed the rest of the year with gains in 84 per cent of all cases when it ended January with a gain of at least 2 per cent. The median was a whopping 13.5 per cent. So let’s wait and see the performance at the end of the month.

DAX leader
Germany also had a strong quintet to offer, TME continued. An index consisting only of SAP, Siemens, Allianz, Munich Re and Deutsche Telekom would have beaten the DAX by 90 percentage points over a ten-year period.

The week of the Fed
We are curious to see whether the market breadth will increase shortly – the Federal Reserve will speak on Wednesday. A commitment to lower interest rates sooner rather than later could fuel the bull market and, starting from Wall Street, also boost share prices in Frankfurt. Investor Peter Tchir from Academy Securities issued a warning to investors in advance: Wednesday’s press conference, which will take place between 2.30 and 3.00 pm Eastern Time, will be the only important event. This is because Fed Chairman Jerome Powell has taught the market that what he says before the Fed meeting is not what he says at the press conference.

We add: It also appears that the press release is often written by other Fed decision makers. And that Powell has his own view of things, which swirls around the market as soon as he steps up to the mic. So stay alert and keep an eye on the real-time news! We will of course be looking at the Federal Reserve in more detail this week. The Bernstein Bank wishes you successful trades and investments!

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The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice. CFDs are complex instruments and are associated with the high risk of losing money quickly because of the leverage effect. 68% of retail investor accounts lose money trading CFD with this provider. You should consider whether you understand how CFD work and whether you can afford to take the high risk of losing your money.7

26.01.2024 –  The dust has settled on Bitcoin, the hysteria following the major event has faded. And lo and behold: the authorisation for spot ETFs was, at least in the short term, an event blown up by big names and used to sell the news. The case is a lesson for everyone not to be driven by pushers. And how prices can be manipulated.

Dreariness instead of a rally: since 10 January and the approval of exchange-traded funds that are allowed to buy tokens on the spot market, BTC bulls have been disillusioned. The picture shows the daily chart. We had warned of a possible sell the news.

Source: Bernstein Bank GmbH

The new funds are certainly a success: the Bitcoin ETF from asset manager BlackRock is said to have already attracted one billion dollars, while Fidelity’s fund has received around 880 million dollars.

Sell the news
History is repeating itself, as Wirtschaftswoche recently noted: After the approval of futures ETFs on 19 October 2021, things initially went up. But one month after approval, the price had corrected by around 25 per cent.
What a lot of price forecasts there were. Let’s take a quick look back at those who beat their drums the loudest. Although it’s not all evening yet, there is a suspicion that it was precisely these pushers who sold their tokens to excited newcomers.

100,000 to 1,000,000
Adam Back, for example, head of the blockchain company Blockstream, had set a target price of 100,000 dollars – even before the index funds were launched.
The analysts at CryptoQuant have predicted that BTC will exceed the USD 160,000 mark. They also pointed to the upcoming halving and a boost for the stock markets in the wake of future interest rate cuts by the Federal Reserve. In other words, more risk appetite should also boost e-currencies.
Furthermore, Ash Crypto, a trader active on social media, predicted a price of USD 500,000 if the spot ETFs were approved.
Samson Mow, CEO of Jan3, a provider of digital infrastructure, even predicted a possible price of 1 million dollars. This is because the increased demand from institutional investors is offset by a relatively small supply of tokens.
So far, these mega-bulls have been so wrong. But what is not, can still be. Incidentally, BTC has recently been supported by the stock market crisis in the People’s Republic of China. According to Reuters, many Chinese have diverted capital into e-currencies out of fear of a crash. The question is what will happen if Chinese equities stage a sustained rally because Beijing is supporting the financial market. We are therefore curious to see what will happen with cryptos – we will keep you up to date.

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The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice. CFDs are complex instruments and are associated with the high risk of losing money quickly because of the leverage effect. 68% of retail investor accounts lose money trading CFD with this provider. You should consider whether you understand how CFD work and whether you can afford to take the high risk of losing your money.7

24.01.2024 – Once again, coffee is making a name for itself. Stocks are low. Although Brazil is exporting more again, dry weather is currently a bullish factor here. In addition, exports from Vietnam are falling due to the attacks by the Houthi rebels in the Horn of Africa.

Is Arabica resuming its upward trend? It almost looks like it, here is the daily chart.

Source: Bernstein Bank GmbH

Prices rose sharply at the start of the week. This is because the weather service Somar Meteorologia reported rainfall of only 89 per cent of the average for the important Brazilian growing region of Minas Gerais. Minas Gerais produces around a third of the country’s Arabica plants.

ICE reports low stocks
In addition, the Intercontinental Exchange in the US state of Georgia reported Arabica stocks of around 254,000 bags – which is only moderately above the 24-year low of 224,000 bags at the end of November. Robusta stocks fell to a new record low of 2,932 lots, with one of these lots equating to 10 metric tonnes.
This could consolidate the medium-term trend to the north. Just last week, the Brazilian producers’ association Conab had forecast an increase in coffee production of 5.4 per cent to 58 million bags for 2024.

Vietnam produces less
However, the market is currently lacking output from Vietnam, which is a major Robusta producer. When Robusta is lacking, roasters switch to Arabica. Vietnam is feeling the effects of the Huthi rebels’ attacks on international shipping. Around a fortnight ago, the Vietnamese customs authority reported that exports for 2023 are likely to fall by 8.7 per cent year-on-year to 1.6 million tonnes. The Ministry of Agriculture had already warned in November that the harvest in the 2023/24 season could fall by 10 per cent to around 1.66 million tonnes due to drought – this would be the lowest level in four years.
The bottom line: We are currently observing a turn in market sentiment for coffee. Which will please traders with the right instinct. Whether long or short – Bernstein Bank wishes you successful trades and investments!

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The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice. CFDs are complex instruments and are associated with the high risk of losing money quickly because of the leverage effect. 68% of retail investor accounts lose money trading CFD with this provider. You should consider whether you understand how CFD work and whether you can afford to take the high risk of losing your money.7

23.01.2024 –  New records on Wall Street: the Dow Jones and S&P 500 have now also reached their all-time highs. The magic word is resilience – the resilience of the economy.

The bulls are on the loose: the S&P 500 is incessantly pushing ahead. The picture shows the daily chart.

Source: Bernstein Bank GmbH

Tech stocks in particular provided momentum on the trading floor. Following its recent record high, Meta is heading for a market capitalisation of around USD 1 trillion. Together with Nvidia, Microsoft, Apple, Alphabet and Amazon, Meta would then be part of the exclusive club of giga-techs that reach this market capitalisation. The parent company of Facebook could crack this mark by the time of its financial figures, which are expected at the beginning of February. Meta announced a particularly advanced form of artificial intelligence last week. Just for the sake of completeness: the Nasdaq 100 also set another record yesterday.

Hoping for strong figures

At the start of the week, optimism spread about the state of the American economy and the global economy – most analysts are expecting a strong reporting season. This week, Netflix, Tesla and Intel are among those reporting. So far, the incoming balance sheets have been positive – around 11 per cent of the companies in the S&P 500 had presented their figures for the fourth quarter by yesterday; according to Bloomberg, 85 per cent of these exceeded expectations.

In addition, a fall in the yield on US government bonds supported the buying mood. The market continues to expect interest rates to fall again soon: For the Federal Reserve meeting at the end of January, only 3 per cent believe in a rate cut of 25 basis points, according to Barchart.com, but this figure is 42 per cent for the end of March.

The crises have not gone away

The market is currently showing astonishing resilience in the face of crises that have by no means disappeared. The crash on the Chinese stock market is a warning signal – according to press reports, Beijing wants to support the market with an aid package worth the equivalent of 278 billion dollars. Shares in China have made their weakest start to the year since 2016.

The Middle East war is not over either – on the contrary, it could spread to Lebanon, which is being held hostage by Hezbollah. The Ukraine invasion should not be forgotten either. Plus a possible invasion of Taiwan by China. The kink in the chart above after 7 October – the Hamas attack on Israel – shows how quickly political crises can turn sentiment. With this in mind: ride the wave, but always keep an eye on the real-time news. Whether long or short – Bernstein Bank wishes you successful trades and investments!

__________________________________________________________________________________________________________________

The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice. CFDs are complex instruments and are associated with the high risk of losing money quickly because of the leverage effect. 68% of retail investor accounts lose money trading CFD with this provider. You should consider whether you understand how CFD work and whether you can afford to take the high risk of losing your money.7