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Baca lebih lanjut mengenai RADEX MARKETS

Market watch: 22nd July 2024 BARU

US electoral politics are once again setting up to be a major driving force behind market movements this week as presidential candidate Joe Biden drops out of the race. Only Asian markets have had a chance to react to the news and so far, the response has been a subdued one. Very little worth mentioning on the economic calendar today and tomorrow, all the more reason to keep an eye on the subsequent democratic nominee. Several figures have stepped forward to endorse VP Harris although no official selection has yet been made.

Drama last Friday as a software update from cybersecurity firm Crowdstrike caused a worldwide IT outage on Windows machines. The infamous blue screen of death affected everything from banks to airlines and everything in between, leaving many businesses with no other option than to shut down for the day. Crowdstrike Holdings (CRWD) fell 11% on Friday, as did all major US indices. The Dow Jones led the way, losing 0.93% by the closing bell. The Nasdaq Composite and S&P 500 were not far behind, falling 0.81% and 0.71% respectively. Microsoft (MSFT) fared relatively well in the grand scheme of things, only losing 0.74%.

After setting a new record breaking close last Tuesday, Gold has since undergone a significant correction. The precious metal fell 1.8% on Friday alone, closing the week at $2,400 an ounce. Gold rose around $10 in early trading this morning in Asia, but likely awaits the European and American opens before committing to a more defined trajectory.

July 22, 2024

Market watch: 19th July 2024 BARU

Semiconductor manufacturers were hit with a harsh dose of reality this week as the threat of export restrictions sent share prices plummeting. Tech stocks in general have experienced a stellar year so far but much of that momentum is beginning to fade in light of a widespread rotation out of the technology sector. Many investors are in the process of rebalancing their portfolios ahead of expected interest rate cuts later in the year, shifting focus back into stocks most likely to benefit from such a transition.

Fundamentals took a significant turn for the worse on Wednesday however after rumours started to emerge about potential export curbs to China. Former president Donald Trump also affected markets following comments relating to Taiwan’s defence status. Nvidia (NVDA), Advanced Micro Devices (AMD), Taiwan Semiconductor Manufacturing Company (TSM) and ASML all suffered heavy losses on Wednesday. The prospect of greater protectionism in the technology sector, coupled with a more general repatriation of manufacturing back to US soil will no doubt weigh heavily on investor sentiment moving forward.

The Nasdaq Composite fell heavily over the last couple of sessions, as did the S&P 500. The Dow Jones reached yet another record high on Wednesday, only to completely retrace the move on Thursday, closing 1.3% lower.

All the commotion resulted in a certain amount of volatility in currencies over the last two days, with the Dollar initially losing ground on Wednesday, only to regain it the following session. Japanese authorities continued to mount a defence of their currency this week, managing to push USDJPY back down to 156 Yen before pulling back yesterday.
July 19, 2024

Crypto basics: Transactions BARU

A bank transfer can be a time consuming operation, particularly on the back-end. The process requires banks to communicate with one another using banking infrastructure that was designed decades ago, and involves a lot of back and forth before the transfer reaches final settlement. These banks are often totally distinct from each other, sometimes located in different countries. Although a purely electronic movement of funds, it is a movement nonetheless, with money leaving the sending account and entering the recipient account.

Crypto transactions can be viewed in another way. Let us imagine instead a network incorporating every single account from every single bank on the planet, forming an all-encompassing ledger that tracks every transaction ever made. A crypto transaction is not so much a movement of funds, but a modification of the entire network, updating it to a newer state.

 A crypto transaction can be fully summarised by a transaction ID:

  1. 0xefa7ccd7798b6893a3643c1b52dce8ec41f2eb0104db596227bd7e32d56edcdf

The above can be looked up, and the entire world can know the sender, the recipient, the amount, and a slew of other data.

Initiating a bank transfer requires entering information relating to the recipient’s account, including items such as an account number, bank code, branch code, bank address, etc. What about a crypto transaction? How do things work on a practical level?

In order to perform a transaction, the user needs three things:

  1.   1. A wallet under their control

This first item is fairly straightforward. The user needs to be in possession of some cryptocurrency, contained within a crypto wallet. There are two situations here.

The first situation is that the user operates a wallet to which they own the private key. This allows them to send crypto using the wallet software of their choice and requires signing the transaction. Signing a transaction is a cryptographically secure process that ensures that the funds cannot be moved without the user’s key.

The second situation is that the user is using a wallet under a third party, for example a Coinbase or Binance account. Here, the wallet is not under the user’s direct control. The specifics of initiating a transaction depend on the platform they are using, but typically require a one-time authentication code instead of the private key.

  1.   2. A sufficient balance (including for the transaction fee)

The second item is where things start to get a little more complex. The user obviously needs enough money in their wallet to cover the amount they wish to send, but they also need enough to cover the transaction fee. The transaction fee can vary greatly from one transaction to the next, even when using the same cryptocurrency. This is because fees are dependent on network congestion. The more people using the network, the busier it becomes, meaning people are willing to pay more to get their transactions finalised. On the Ethereum blockchain, transaction costs are known as gas fees, a naming convention that has since spread to other cryptocurrencies as well.

When sending funds from a third-party account, such as Coinbase or other platforms, the user will not typically have a say in choosing the transaction fee they are willing to pay. The rate is set by the platform and is included in a more general processing fee. However, if the user is sending funds from their own wallet, then they have the freedom to set whatever gas fee they please. Gas fees can be checked beforehand on various websites in order to estimate the cost of completing a transaction. The user may opt for a lower or higher fee depending on how urgent their transaction is.

  1.   3. A destination wallet address

The third and final item is the one that can really cause problems. Unlike the case of a wire transfer, there are very few safeguards in place when making a crypto transaction. Self-custody is one of the defining aspects of the crypto industry. There is no one in the background to check all the details, no one to reverse the transaction if the information is incorrect. Once the funds have been sent, they are gone forever. Crypto transactions are completely irreversible. All this to say the user better get the address right.

This presents a problem, because crypto addresses are almost comically obtuse. Using the transaction ID above, we get the following address for the sender:

0x974CaA59e49682CdA0AD2bbe82983419A2ECC400

One wrong letter, one wrong number, one missing character and the funds are irretrievably lost.

In some ways, sending crypto from one user to another is much simpler than doing so between bank accounts. In others, it is much more complicated. Those new to the crypto sphere would do well to stick to some general good practices. Copy-paste the recipient’s address instead of typing it out; use QR codes whenever possible; start with a small test transaction first; check the destination address on a block explorer.

That last point is worth developing. Acquainting oneself with blockchain explorers is crucial to becoming a savvier crypto user. Returning once more to the transaction above, a block explorer unveils a lot of information:

Tx:                        0xefa7ccd7798b6893a3643c1b52dce8ec41f2eb0104db596227bd7e32d56edcdf

Date:                    2024-07-18 05:36:59 (GMT+1)

Block:                  20331065 (confirmations: 159)

From:                   0x974CaA59e49682CdA0AD2bbe82983419A2ECC400

To:                        0xfaCe3ba8E7064d6a2E8216601D305020926DF924

Gas Limit:           1,050,000

Gas Used:          46,097

Gas Price:           0.000000004935933289  ETH (4.936 Gwei)

Tx Cost:              0.000227531716823033  ETH ($ 0.78)

The transaction ID, or hash, is not merely a unique identifier. It is generated by hashing transaction data and therefore encodes the information relevant to the transaction within it. The above is only a fraction of the information available.

A block explorer will reveal all the transactions of the wallets above, all the transactions of the wallets they have ever interacted with, and so on. As we mentioned at the start of this article, a cryptocurrency is not simply a unit of transaction but instead an entire network. Blockchain explorers are therefore analogous to browsers, and they excel as such.

One may notice that both the addresses above begin with “0x”. This identifies them as Ethereum addresses. Bitcoin addresses always start with “1”, “3” or “bc1”. Other blockchains have their own standards. Becoming familiar with the different prefixes will undoubtedly help users navigate the crypto landscape. There are ongoing attempts to simplify the process of transacting cryptocurrencies, particularly with regards to addresses and making them more human-readable. Even should such tools become commonplace, being able to interact with the underlying technology in a more fundamental way is a noble goal that should be encouraged.

The double-edged sword of cryptocurrencies is that when people have full autonomy over their assets, they become solely responsible for them. One acquires more freedom, but more accountability along with it. To quote Spider-Man: with great power comes great responsibility.

Double-check that address.


July 19, 2024

Market watch: 17th July 2024 BARU

A wave of optimism swept through financial markets yesterday. Gold surged to a new record high on Tuesday, gaining 1.9% to close the session at $2,468 an ounce. The Dow Jones Industrial Average was evidently reading from the same script, climbing 1.85% up to 40,954 points, leaving its previous all time high in the dust. The S&P 500 also set a fresh high yesterday, albeit a less explosive one, finishing the session 0.64% in the black. The Nasdaq Comp gained slightly on the day but was unable break new ground. The diverging movements in US indices complement the narrative of a rotation out of the heavy tech majors and back into value-driven stocks that missed out on much of the action in the last six months.

Comments from Jerome Powell on Monday contributed significantly to the upward momentum. The Federal Reserve Chairman acknowledged that inflation is indeed on the right path towards the Fed’s 2% target, adopting a more dovish stance that all but cements a September rate cut in the eyes of many.

One could be forgiven for expecting the Dollar to lose ground in light of the evolving monetary expectations, but the events of last weekend add another dimension to proceedings. The failed assassination attempt of Donald Trump has bolstered his position in the presidential race, increasing his chances of victory in the November election. A second term for the former president is widely seen as bullish for the Dollar, leaving the currency in a volatile middle-ground.

The rising tide also lifted crypto prices over the past few days, with Bitcoin rising back above $65,000 after climbing 6.5% on Monday alone. A second Trump presidency is likewise viewed as bullish for cryptocurrencies, with expectations of friendlier crypto regulations should he be sworn in for another term.

July 17, 2024

Market watch: 15th July 2024

Last week’s CPI data print divulged a shift in the American economic landscape. The publication revealed lower than expected inflation figures across the board, and even a reduction in month-on-month prices in June. The results were surprising enough that it took markets a couple of sessions to digest them in full. The Dollar made another firm step downwards on Friday, the DXY losing another 0.4% to close the week just above 104. Pressure on the Greenback helped Cable push close to $1.30 by Friday’s close, a level not seen since this time last year.

For once, weakness in the Dollar did not translate to gains in precious metals. Gold dipped lower during Friday’s session before almost climbing back up into the black later in the day, finally closing at $2,410 an ounce.

US indices had a very encouraging end to the week, particularly the Dow Jones Industrial Average, which reached fresh intraday highs on Friday before settling at 40,000.90 points – a hair’s breadth below its record high daily close in May. The S&P 500 and Nasdaq Comp also put in respectable performances, although their efforts were not enough to undo the damage done over Thursday’s sell-off. If an interest rate cut is indeed on the menu, then the pivot out of major hype stocks and back into the rank and file of US markets is to be expected.

Chinese data publications dominated the economic calendar today, with most notably a surprise miss in the Q2 GDP growth, coming in at 4.7% versus expectations of 5.1%. Later this evening, Federal reserve Chairman Jerome Powell is set to speak yet again, this time at the Economic Club in Washington. North American data occupy much of the stage on Tuesday, with Canadian CPI figures and US retail sales. Inflation numbers courtesy of the UK and the Eurozone on Wednesday, followed by an array of unemployment metrics on Thursday, as well as the ECB interest rate decision. Friday finishes off the week with Japanese inflation figures, followed by UK and Canadian retail sales.

Economic news aside, given the shocking events in Pennsylvania on Saturday, it is fair to say that electoral politics will be the dominant driver of market movements this week. The assassination attempt of presidential candidate Donald Trump is a self-evidently momentous event, one that will take time for markets to fully absorb. It is still too early to adequately gauge trader sentiment, but the obvious implications as to the outcome of the 2024 US election will occupy the minds of many.

July 15, 2024

Market watch: 12th July 2024

The peaceful trading conditions that had characterised the first half of the week were brutally swept aside yesterday after a surprise CPI print from the US Bureau of Labour Statistics. According to the report, prices experienced their first decline in almost two years. The month-on-month figure fell to negative 0.1% in June, with the year-on-year falling to 3%. Both headline and core inflation rates fell below expectations.

Currencies were the first to react. The Dollar Currency Index immediately fell through the trapdoor, going on to lose half a percent on the day. Interestingly, the selloff in the greenback coincided with massive Yen buying, prompting speculation that Japanese authorities have finally stepped in to defend their currency. USDJPY plummeted an impressive 1.7% yesterday and the pair continued to probe lower in early trading in the Asian session this morning.

Gold took the news well, gaining 1.9% to close at $2,415 an ounce, the first time it has closed above $2,400 since the end of May and not far off a new record high.

The reaction in stocks was a bit more nuanced. Although on the face of it the prospect of lower interest rates is bullish for equities, the S&P 500 and Nasdaq Composite both experienced heavy selling pressure to close 0.88% and 1.95% in the red. The reasoning being the savvier investors appear to be rotating out of the major tech stocks that were almost solely responsible for the recent record-shattering rallies and diversifying into the smaller stocks that have so far remained on the sidelines. Indices have become very top-heavy in recent years, with a handful of outliers dragging up the average. Worth keeping an eye on where the smart money is headed.

July 12, 2024
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