Connect with us

Stock Markets

Bitcoin set for record losing streak as ‘stablecoin’ collapse crushes crypto

Published

on


© Reuters. FILE PHOTO: Representations of the Ripple, Bitcoin, Etherum and Litecoin virtual currencies are seen on a PC motherboard in this illustration picture, February 14, 2018. REUTERS/Dado Ruvic/Illustration

SINGAPORE/HONG KONG (Reuters) -Cryptocurrencies nursed large losses on Friday, with bitcoin trading near $30,000 and set for a record losing streak as the collapse of TerraUSD, a so-called stablecoin, rippled through markets.

Crypto assets have also been swept up in broad selling of risky investments on worries about high inflation and rising interest rates. Sentiment is particularly fragile, as tokens supposed to be pegged to the dollar have faltered.

Bitcoin, the largest cryptocurrency by total market value, managed to bounce in the Asia session and traded at $30,300 at 0623 GMT, up 5%. It has staged something of a recovery from a 16-month low of around $25,400 reached on Thursday.

But it remains far below week-ago levels of around $40,000 and, unless there is a rebound in weekend trade, is headed for a record seventh consecutive weekly loss.

“I don’t think the worst is over,” said Scottie Siu, investment director of Axion Global Asset Management, a Hong Kong based firm that runs a crypto index fund.

“I think there is more downside in the coming days. I think what we need to see is the open interest collapse a lot more, so the speculators are really out of it, and that’s when I think the market will stabilize.”

TerraUSD (USDT) broke its 1:1 peg to the dollar this week, as its mechanism for remaining stable, using another digital token, failed under selling pressure. It last traded near 10 cents.

Tether, the biggest stablecoin and one whose developers say is backed by dollar assets, has also come under pressure and fell to 95 cents on Thursday, according to CoinMarketCap data, but was back at one dollar on Friday.

UNSTABLE

Selling has roughly halved the global market value of cryptocurrencies since November, but the drawdown has turned to panic in recent sessions with the squeeze on stablecoins.

These are tokens pegged to the value of traditional assets, often the U.S. dollar, and are the main medium for moving money between cryptocurrencies or to convert balances to fiat cash.

“Over half of all bitcoin and ether traded on exchanges are versus a stablecoin, with USDT or Tether taking the largest share,” analysts at Morgan Stanley (NYSE:MS) said in a research note.

“For these types of stablecoins, the market needs to trust that the issuer holds sufficient liquid assets they would be able to sell in times of market stress.”

Tether’s operating company says it has the necessary assets in Treasuries, cash, corporate bonds and other money-market products.

But Tether is likely to face further tests if traders keep selling, and analysts are concerned that stress could spill over into money markets if pressure forces more and more liquidation.

Ether, the second-largest cryptocurrency by market capitalisation, steadied near $2,000 on Friday after a drop as low as $1,700 on Thursday. Bitcoin and ether are about 60% below record peaks reached in November.

Crypto-related stocks have also copped a pounding, with shares in broker Coinbase (NASDAQ:COIN) steadying overnight but still down by half in little more than a week.

In Asia, Hong Kong-listed Huobi Technology and BC Technology Group, which operate trading platforms and other crypto services, eyed weekly drops of more than 17%.

Amid the turmoil, Nomura on Friday said it had begun offering bitcoin derivatives to clients, the latest move by a traditional financial institution into the asset class.

Stock Markets

Wall Street ends lower as Tesla falls, while energy rallies

Published

on


© Reuters. Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., May 12, 2022. REUTERS/Brendan McDermid/File Photo

By Amruta Khandekar and Noel Randewich

(Reuters) – Wall Street ended lower on Monday, with energy stocks rallying and Tesla (NASDAQ:TSLA) and other growth stocks losing ground after downbeat Chinese economic data added to worries about a global slowdown and rising interest rates.

China’s economic activity cooled sharply in April as widening COVID-19 lockdowns took a heavy toll on consumption, industrial production and employment, adding to fears the economy could shrink in the second quarter.

However, energy stocks got a lift from optimism that China would see significant demand recovery after positive signs that coronavirus pandemic was receding in the hardest-hit areas.

The S&P 500 energy index rallied to a 2014 intra-day high, and it was the strongest performer among 11 sector indexes.

Investors questioned whether a strong day on Wall Street last Friday might signal the end of a recent sell-off that has left the S&P 500 down about 16% from its record high close in January.

“After the big rally on Friday, people are looking around and asking whether it feels sustainable,” said Ross Mayfield, an investment strategist at Baird in Louisville, Kentucky. “Does it feel like the momentum thrust you would see coming off of a low, or is there still more of a capitulation to be worked out?”

Many of Wall Street’s megacap growth stocks were lower, with Amazon (NASDAQ:AMZN) and Google-owner Alphabet (NASDAQ:GOOGL) losing ground and weighing on the S&P 500 and Nasdaq.

Twitter (NYSE:TWTR) extended losses after Bloomberg reported that Elon Musk said a deal to buy the social media company at a lower price than his previously agreed $44 billion was “not out of the question.”

Tesla, which Musk leads, also fell.

The S&P 500 healthcare sector index rose, lifted by a jump in Eli Lilly & Co (NYSE:LLY) after the drugmaker won U.S. approval for tirzepatide, to treat adults with type 2 diabetes.

Investors have been worried that aggressive interest rate hikes by the U.S. Federal Reserve to combat decades-high inflation could tip the economy into a recession, with the conflict in Ukraine, supply chain snarls and the pandemic-related lockdowns in China exacerbating the economic troubles.

Data on Monday showed factory activity in New York state slumped in May for the third time this year amid a collapse in new orders and shipments.

Traders are now pricing a near 86% chance of a 50-basis-point hike by the Fed in June.

According to preliminary data, the S&P 500 lost 15.24 points, or 0.38%, to end at 4,008.65 points, while the Nasdaq Composite lost 140.81 points, or 1.19%, to 11,664.19. The Dow Jones Industrial Average rose 39.07 points, or 0.12%, to 32,235.73.

Investors are focused on retail sales data due on Tuesday, following worrying inflation and consumer sentiment data last week.

Retailers including Walmart (NYSE:WMT) Inc, Home Depot (NYSE:HD) and Target Corp (NYSE:TGT) are due to report their quarterly results this week.

Spirit Airlines (NYSE:SAVE) rallied after JetBlue Airways (NASDAQ:JBLU) launched a hostile takeover bid for the discount carrier. JetBlue shares slipped, while shares of rival bidder Frontier Group gained.

Continue Reading

Stock Markets

Take-Two Earnings Miss, Revenue Beats In Q4

Published

on


© Reuters. Take-Two Earnings Miss, Revenue Beats In Q4

Investing.com – Take-Two (NASDAQ:TTWO) reported on Monday fourth quarter earnings that missed analysts’ forecasts and revenue that topped expectations.

Take-Two announced earnings per share of $0.95 on revenue of $930M. Analysts polled by Investing.com anticipated EPS of $1.01 on revenue of $883.34M.

Take-Two shares are down 38.04% from the beginning of the year, still down 43.77% from its 52 week high of $195.82 set on November 5, 2021. They are under-performing the S&P 500 which is down 15.86% from the start of the year.

Take-Two shares gained 1.92% in after-hours trade following the report.

Take-Two follows other major Communication Services sector earnings this month

Take-Two’s report follows an earnings missed by Alphabet C on April 26, who reported EPS of $24.62 on revenue of $68.01B, compared to forecasts EPS of $25.59 on revenue of $68.06B.

Meta Platforms had beat expectations on April 27 with first quarter EPS of $2.72 on revenue of $27.91B, compared to forecast for EPS of $2.56 on revenue of $28.28B.

Stay up-to-date on all of the upcoming earnings reports by visiting Investing.com’s earnings calendar

Continue Reading

Stock Markets

Explainer-What happened with Abbott baby formula that worsened a U.S. shortage?

Published

on


© Reuters. FILE PHOTO: Abbott Laboratories logo is displayed on a screen at the New York Stock Exchange (NYSE) in New York City, U.S., October 18, 2021. REUTERS/Brendan McDermid/File Photo

(Reuters) – Abbott Laboratories (NYSE:ABT), the biggest U.S. supplier of powder infant formula including Similac, initiated a recall and closed its Sturgis, Michigan, manufacturing plant earlier this year after reports of serious bacterial infections in four infants.

The recall and shutdown has worsened a baby formula shortage among multiple manufacturers that began with pandemic supply chain issues.

Here are some details about what has happened:

WHEN DID THE PLANT CLOSE?

Production at an Abbott plant in Sturgis, Michigan, has been halted since February as the company works to rectify issues raised https://www.fda.gov/media/157073/download by federal inspectors.

WHY DID ABBOTT INITIATE A RECALL AND PLANT SHUTDOWN?

Consumers reported four infants who were sick, including three with Cronobacter sakazakii infections and one with Salmonella newport, and had been fed formula products made at the Sturgis plant. A fourth infant with cronobacter sakazakii was later added to the investigation by the U.S. Centers for Disease and Control Prevention.

Cronobacter sakazakii can cause life threatening sepsis infections or meningitis and may have contributed to the death of two of the infants, the U.S. Food & Drug Administration has said https://www.fda.gov/food/outbreaks-foodborne-illness/fda-investigation-cronobacter-infections-powdered-infant-formula-february-2022. It continues to investigate the four Cronobacter cases.

WHAT WAS RECALLED?

The recall began in mid-February with dozens of types of Similac, Alimentum and EleCare powdered formulas. A specialty liquid formula called Similac PM 60/40 was added to the recall at the end of February.

DID THE FDA OR CDC FIND A LINK?

Abbott says https://www.abbott.com/corpnewsroom/nutrition-health-and-wellness/abbott-update-on-powder-formula-recall.html there is no evidence to link its formulas to these illnesses. The FDA and the CDC have not disclosed any information that connects the illnesses and the plant.

The U.S. Food & Drug Administration and Abbott tested environmental and product samples at the plant. They found five environmental samples containing Cronobacter sakazakii which Abbott says were in non-product contact areas of the plant. The product samples tested negative.

The CDC analyzed clinical samples from two of the infants and did not find a genetic match to the environmental strains found at the plant. It also said the bacteria from the patient samples were not closely related to one another.

WHEN WILL THE ABBOTT PLANT RESUME PRODUCTION?

Two experts Reuters spoke to expect the plant to resume production within two weeks. Peter Pitts, a former FDA head and President of the non-profit Center for Medicine in the Public Interest, said the issues were not mechanical and that Abbott and the FDA have been working to restart the plant for months.

Abbott has said it can open two weeks after it gets the go-ahead from the FDA. FDA Commissioner Robert Califf told NBC News on Monday it was “quite likely” there could be movement soon to reopen the facility.

Abbott has imported millions of cans of infant formulas from its Ireland facility to help with the U.S. shortage. The recall affected formula shipped to other countries, including Israel.

HOW LONG WILL IT TAKE FOR THE SHORTAGE TO SUBSIDE?

The shortages may last another two to four months even as lawmakers and the White House try to increase supplies. Abbott has said it will take six to eight weeks to get formula on shelves after the facility restarts.

U.S. food safety lawyer Bill Marler said even if the products are back in the market in the next two weeks there’s still going to be a shortage for 30-60 days. “That’s going to be difficult.”

WHAT CAUSED THE SHORTAGE?

The shortage began in 2020 as consumers stockpiled due to COVID-19 lockdowns. Formula makers ramped up production but then cut back in 2021 as demand slowed. Global shipping logjams have also prevented retailers from promptly restocking shelves.

Continue Reading

News

World10 mins ago

New York congressional map deals blow to Democrats’ midterm hopes

© Reuters. FILE PHOTO: A “Vote” sign is pictured on election day in the Manhattan borough of New York City,...

Coronavirus10 mins ago

FDA declines to authorize common antidepressant as COVID treatment

© Reuters. FILE PHOTO: Signage is seen outside of the Food and Drug Administration (FDA) headquarters in White Oak, Maryland,...

Stock Markets10 mins ago

Wall Street ends lower as Tesla falls, while energy rallies

© Reuters. Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., May...

Coronavirus10 mins ago

Coronavirus may be linked to cases of severe hepatitis in children

© Reuters. A firefighter from the Marins-Pompiers of Marseille (Marseille Naval Fire Battalion) administers a nasal swab to a child...

Stock Markets10 mins ago

Take-Two Earnings Miss, Revenue Beats In Q4

© Reuters. Take-Two Earnings Miss, Revenue Beats In Q4 Investing.com – Take-Two (NASDAQ:TTWO) reported on Monday fourth quarter earnings that...

World11 mins ago

Biden approves redeployment of under 500 ground troops to Somalia

© Reuters. U.S. President Joe Biden delivers remarks at the annual National Peace Officers’ Memorial Service at the U.S. Capitol...

World38 mins ago

Factbox-Buffalo shooting victims included deacon, retired cop, grocery worker

© Reuters. Roberta Drury, who was among those who lost their lives in the TOPS supermarket shooting in Buffalo, New...

Stock Markets38 mins ago

Explainer-What happened with Abbott baby formula that worsened a U.S. shortage?

© Reuters. FILE PHOTO: Abbott Laboratories logo is displayed on a screen at the New York Stock Exchange (NYSE) in...

Cryptocurrency40 mins ago

Top 5 cryptocurrencies to watch this week: BTC, MANA, MKR, ZEC, KCS

Top 5 cryptocurrencies to watch this week: BTC, MANA, MKR, ZEC, KCS Bitcoin (BTC) has been relatively calm during the...

Politics40 mins ago

U.S. Supreme Court backs Ted Cruz, dumps campaign finance curb

© Reuters. FILE PHOTO: Sen. Ted Cruz (R-TX) speaks during a hearing of the Senate Foreign Relations to examine U.S.-Russia...

Stock Markets40 mins ago

Musk Says Twitter Deal at Lower Price ‘Not Out of the Question’

© Reuters By Yasin Ebrahim  Investing.com — Elon Musk said Monday that a cut-price deal for Twitter wouldn’t be “out...

Sports & General40 mins ago

Amber Heard says she feared she would not survive Johnny Depp marriage

3/3 © Reuters. FILE PHOTO: Actor Johnny Depp reacts as he leaves for a recess during a defamation trial against...

Economy40 mins ago

Dollar slips from 2-decade highs; yuan falls on weak China data

© Reuters. FILE PHOTO: U.S. dollar banknotes are displayed in this illustration taken, February 14, 2022. REUTERS/Dado Ruvic By Sinéad...

Economy40 mins ago

Taliban dissolve Afghanistan’s Human Rights Commission, other key bodies

© Reuters. FILE PHOTO: An Afghan woman walks on a street in Kabul, Afghanistan, May 9, 2022. REUTERS/Ali Khara/File Photo...

Cryptocurrency40 mins ago

Crypto capital gains one of four key areas for Australian Tax Office

Crypto capital gains one of four key areas for Australian Tax Office The Australian Taxation Office (ATO) has outlined crypto...

Economy40 mins ago

U.S. SEC chair says much to be done to protect crypto investors

2/2 © Reuters. FILE PHOTO: Representations of virtual cryptocurrencies are placed on U.S. dollar banknotes in this illustration taken November...

Stock Markets41 mins ago

Jupiter, Yarbrough among investors who sold Coinbase before big fall

© Reuters. FILE PHOTO: People watch as the logo for Coinbase Global Inc, the biggest U.S. cryptocurrency exchange, is displayed...

Stock Markets1 hour ago

Yellen reaches no breakthrough in Poland tax talks, says more work needed

© Reuters. Treasury Secretary Janet Yellen testifies during the Senate Banking, Housing, and Urban Affairs Committee hearing titled “The Financial...

Stock Markets1 hour ago

Starbucks to Cover Worker Travel Expenses for Medical Treatment

© Reuters. By Liz Moyer Investing.com — Starbucks Corporation (NASDAQ:SBUX) shares are down 3.5% in Monday trading after the coffee...

Cryptocurrency1 hour ago

Celsius Network’s crypto mining subsidiary SEC filing suggests plans for IPO

Celsius Network’s crypto mining subsidiary SEC filing suggests plans for IPO Celsius Mining, the mining subsidiary of crypto lending platform...

Commodities1 hour ago

U.S. Strategic Petroleum Reserve drops to lowest level since 1987

© Reuters. FILE PHOTO: A maze of crude oil pipes and valves is pictured during a tour by the Department...

World1 hour ago

Indigenous Canadians make a painful plea on eve of British royal visit

2/2 © Reuters. FILE PHOTO: Britain’s Prince Charles and Camilla, Duchess of Cornwall visit Canada House in London, Britain May...

Commodities1 hour ago

Oil Climbs Another 3% as OPEC Paws Away Any Meaningful Output Hikes

© Reuters. By Barani Krishnan Investing.com — Shut out the noise, stick to the script and let consumers’ problems be...

World1 hour ago

Mariupol steelworks defenders appear to signal end of siege

2/2 © Reuters. FILE PHOTO: A local resident rides a bicycle past a charred armoured vehicle during Ukraine-Russia conflict in...

World1 hour ago

Sweden’s plans for NATO membership hit snag as Turkey says no

© Reuters. FILE PHOTO: Swedish Defence Minister Peter Hultqvist speaks during a news conference at the military base in Adazi,...

World2 hours ago

Former top Republican lawmaker in Colorado received leak of voting data

© Reuters. FILE PHOTO: Elbert County Clerk, Dallas Schroeder, is seen inside his office in Elbert County, Colorado, U.S., August...

World2 hours ago

EU ministers fail to persuade Hungary to sign up to Russian oil embargo

© Reuters. FILE PHOTO: Lithuanian Foreign Minister Gabrielius Landsbergis listens during a news conference in Vilnius, Lithuania March 18, 2022....

Cryptocurrency2 hours ago

Bitcoin is not the future of payments, SBF lampoons the flagship crypto

© Reuters. Bitcoin is not the future of payments, SBF lampoons the flagship crypto In the past, Bitcoin has been...

Stock Markets2 hours ago

Eni to open bank accounts to pay for Russian gas after EU clarification – sources

© Reuters. FILE PHOTO: Eni’s logo is seen in front of its headquarters in San Donato Milanese, near Milan, Italy,...

Cryptocurrency2 hours ago

Analysts flag Bitcoin price levels to watch after LFG sells 80K BTC

Analysts flag Bitcoin price levels to watch after LFG sells 80K BTC Bitcoin (BTC) needs to hold current levels and...

Trending