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Market Wrap: Bitcoin Futures go Live! Banks Bet Big on Swiss Stocks

by | 11 Dec, 2017

Monday’s Market Wrap

The Windy City is The New Frontier of Crypto Trading

The Chicago Board Options Exchange has become the first institution in the world to offer Bitcoin futures trading. The exchange, which is one of the largest options marketplaces globally, saw over 800 contracts traded within the first 2 hours of XBT futures going live yesterday. Trade volumes could have been higher, but the CBOE website crashed due to heavy traffic.

Futures contracts are financial instruments which give traders the ability to speculate over whether prices will rise or fall, without fully exposing themselves to the market -(holding cryptocurrency in this case).

The price of a single Bitcoin against the Dollar quickly rose above $16,000, indicating that institutional money was pouring into the market. The price currently sits just below $17,000 at the time of writing.

Bitcoin futures are the latest evolution in the cryptocurrency market, and the CBOE will soon be followed by CME Group, who are set to launch their own Bitcoin derivatives for traders on December 17th. Both of the institutions are seeking to take advantage of the rising interest in cryptocurrencies, by offering institutional investors (banks, hedge funds and others) the chance to trade in a more regulated marketplace.

For more on its move into the mainstream and a background on the evolution of the crypto, click here.

Swiss Markets in Focus

Big Banks are Betting Big on Switzerland’s Stocks

Swiss bluechip stocks have enjoyed a bumper year (see the Invstr chart), outperforming many other key indices in Europe.

It seems that major banks are now taking notice, with Morgan Stanley and UBS signalling that investors may be missing out on great returns by not adding Swiss equities to their portfolio.

Citing Switzerland’s improving economy as one of many factors for the bullish predictions, Morgan Stanley said that consensus earnings estimates for Swiss businesses in 2018 and 19 are “rising nicely”, while the Swiss Franc appears poised to slide further against the Euro, making equities there a more appealing buy for foreign investors.

There is also the added bonus that Swiss stocks are usually considered defensive, which means that these are the kinds of equities which are more stable regardless of volatility in the global market.

UBS are optimistic on one sector in particular. UBS lead strategist Karen Olney said, “We like pharmaceuticals (versus other international defensives), and they feature in Switzerland.” Roche and Novartis are 2 such stocks that feature in the SMI 20. The latter has already made great progress this year. It should be noted however that UBS is a Swiss bank, thus may be slightly biased.

Asia Close – Europe Open – Central Banks in Focus

BoE Governor Mark Carney

While the cryptocurrency market stole the spotlight this morning, global equity indices quietly rose higher.

After Friday’s strong U.S. employment data and Chinese trade figures cemented optimism on the outlook for the world economy, Asian markets closed higher today. India’s NIFTY50 added some much needed gains after a poor week of trading from December 5th.

In Europe the FTSE100 overtook its peers on the continent, as the Pound remained under pressure. The index traded at near 2-week highs while bank stocks were easily the biggest risers. In the US, Wall Street is also banking on financial shares moving higher next year, thanks to the Fed’s rate hikes and tax cuts from President Trump.

Central Bank Decisions in Focus This Week
Currency and bond markets are cautious ahead of a big week of policy meetings for central banks. The Federal Reserve is expected to raise interest rates to 1.5%, with traders looking for further comments on Wednesday about its future policy plans under its new head (Jerome Powell).

On Thursday its a double whammy, with the Bank of England and the European Central Bank announcing their plans for the UK and Eurozone. No change in rates is expected to be announced by Mark Carney of the BoE (pictured), but more bullish words on the future outlook could send the Pound higher. Likewise for the Euro, the ECB is likely to keep policy the same, but hints at a change of policy in the near-term may make the price of the Euro more volatile on the day.

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Risk Disclosure:
Invstr is a technology platform, not a registered broker-dealer or investment adviser. Invstr does not offer its own recommendations of any security or provide its own research to any user regarding any security transaction or order.
Please note, investing involves risk and investments may lose value. Past performance does not guarantee future results.
Brokerage services are provided by the following:
US-traded securities, including fractional trading, are provided to Invstr users by DriveWealth LLC, a regulated member of FINRA/SIPC. DriveWealth may not establish investment accounts to residents of certain jurisdictions. For more information, including disclaimers, risk and transaction fees click here.
India account traded securities are provided by SIC Stocks & Services PVT Ltd. SIC does not make any personal recommendations to buy, sell or otherwise deal in investments. Investors make their own investment decisions. The services and securities provided by SIC may not be suitable for all customers and, if you have any doubts, you should seek advice from an independent financial adviser. For more information and disclaimers, click here.

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ALL RIGHTS RESERVED © INVSTR LTD. 2018

Risk Disclosure:
Invstr is a technology platform, not a registered broker-dealer or investment adviser. Invstr does not offer its own recommendations of any security or provide its own research to any user regarding any security transaction or order.
Please note, investing involves risk and investments may lose value. Past performance does not guarantee future results.
Brokerage services are provided by the following:
US-traded securities, including fractional trading, are provided to Invstr users by DriveWealth LLC, a regulated member of FINRA/SIPC. DriveWealth may not establish investment accounts to residents of certain jurisdictions. For more information, including disclaimers, risk and transaction fees click here.
India account traded securities are provided by SIC Stocks & Services PVT Ltd. SIC does not make any personal recommendations to buy, sell or otherwise deal in investments. Investors make their own investment decisions. The services and securities provided by SIC may not be suitable for all customers and, if you have any doubts, you should seek advice from an independent financial adviser. For more information and disclaimers, click here.

 

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