Run Bank Run

As we know, a number of French cities have been the scene of protest recently. The protesters, distinguished by their yellow vests, have been increasingly creative in their tactics and now seem to have a new plan. 

The idea is that if enough people withdraw all their money from the bank at the same time they might be able to force a liquidity crunch requiring government intervention, possibly crashing the Euro, and send a unified message to authorities.

While I’m no fan of the fractional reserve banking system, I’m not sure that trying to topple economy is a very productive course of action.

In any case, there probably isn’t anything to worry about here as it would take several millionaires getting onboard to have the desired effect and that just doesn’t seem very likely.

@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

Friendly Fed

Shutdown: Day 20

Crypto Drop

Please note: All data, figures & graphs are valid as of January 10th. All trading carries risk. Only risk capital you can afford to lose.

Traditional Markets

Stocks in the USA struggled to close in the green yesterday and by the end of the Asian session this morning it seems pretty clear that the monster rally we’ve been seeing in the markets this year is losing steam. Overall, the markets do seem to be at an inflection point right now.

Some analysts are citing the fact that the US-China talks ended without resolution as a contributing factor, but I’m not so sure. What’s really strange to me is the market almost completely ignoring recent signals from the Fed that it is willing to be more supportive.

Fed Chair Jerome Powell will be taking questions at an event this evening and we hope he’ll be able to clarify the Fed’s stance. At the moment, pundits are having a bit of trouble predicting what the largest player in the financial markets will do next.

A supportive Fed could really help the markets out right now. So could an agreement to reopen the US government, but let’s not get greedy.

Suspicious Rally

The recent rally has been suspicious because, despite rising prices, stocks are still extremely volatile. Gold continues to surge forward and is again giving a serious test of $1,300. Should the market turmoil continue and the US Dollar continues to weaken, it could very well blast right through that barrier.

Crypto Drop

Many have been asking about the sudden drop in the crypto markets this morning. In my view, there doesn’t seem to be any real reason for this drop, neither technical nor fundamental.

The one interesting thing about this movement is that it seems to be an exact reversal of the surge that happened on Sunday afternoon. At this point, the gains made since the start of the year have now been reversed and we’re back to a neutral 2019.

Wishing you an excellent day ahead!

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