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Bitcoin suffers its worst month on record, Alibaba buys into Ant Financial and Indian groceries, and the rout in Treasuries picks up steam. Here are some of the things people in markets are talking about.
Alibaba Fails to Impress
Alibaba Group Holding Ltd. announced it would buy 33 percent of Ant Financial, helping clear the way for an initial public offering of the Chinese payments giant. The owner of Alipay has had a string of recent setbacks, with its U.S. expansion thwarted by the collapse of a deal for MoneyGram International Inc. Alibaba is also leading a $300 million investment into India’s biggest online grocer, Bigbasket, signaling that the region’s segment is heating up. Shares fell after the online giant reported that its gross margin had slipped and its gain in monthly active users was below 20 percent for the first time ever. Meanwhile, the company’s latest financials also reveal that it now spends more on marketing than technology.
India’s Election-Year Budget
Indian Prime Minister Narendra Modi delivered the election-year budget many expected Thursday. With national polls looming next year — and possibly as early as late 2018 — the budget is designed to help distressed farmers and rural areas, as well as companies with exposure to agriculture, while boosting growth, jobs and private investment. Bond investors might just be the biggest losers. The debt market, already rattled by a slippage in this year’s deficit reduction plan, learned there wouldn’t be much belt-tightening over the next 12 months either.
Bitcoin Tumbles to 2018 Low
Bitcoin slumped to its low for 2018, tumbling as far as $8,449 amid mounting concerns of increased regulation and the viability of the biggest cryptocurrency. The virtual currency has lost more than half its value since Dec. 18, when it peaked at $19,511. Its January slide erased $44.2 billion from the $200 billion in market value generated in all of last year, the biggest one-month loss in dollar terms in the short history of digital assets. Most virtual coins lost value in January, as U.S. regulators ramped up scrutiny of one of the world’s largest digital currency exchanges. China also cracked down on cryptocurrencies earlier in the month.
Australian and Hong Kong shares are set to open lower after U.S. stocks and Treasuries fell in tandem Thursday ahead of a slew of technology earnings. The threat of higher rates from the Federal Reserve continued to rattle markets coming off a historic January. The Nasdaq 100 Index bore the brunt of the selling as the tech-heavy gauge headed for its worst week since June. The 10-year Treasury yield approached 2.8 percent while the 30-year broke 3 percent amid a dearth of buyers. The dollar retreated, with only the Aussie and yen weaker among G-10 currencies. Oil shook off some of the pessimism that struck the market in the past few days to post its best gain in a week.
It’s a light day for data out of Asia, with the Bank of Japan’s monetary base for January, Thailand’s foreign reserves and Australian fourth-quarter producer prices headlining the calendar. Traders will keep an eye on the BOJ’s 5-10 year and 10-25 year bond purchases as Japanese yields rise towards 0.11%, the level at which the BOJ offered to buy unlimited amounts of bonds to cap yields. Japan’s earnings season rolls on, with Sony, Honda and Mitsubishi UFJ among the results due today. The tumbling dollar has wrecked analysts’ predictions for China’s yuan, spurring a rush of raised forecasts, along with concerns about the speed of the move. Australian bonds will also be of interest, after the rise in 10-year Treasury yields brought them within two basis points of matching similar-maturity Australian securities for the first time in almost two decades.
What we’ve been reading
This is what caught our eye over the last 24 hours.
- More than 30 North Koreans arrive in the South ahead of the Winter Olympics.
- iPhone sales have fallen short of estimates, Apple reports.
- Trump approves the release of a Republican memo accusing the FBI of abusing its powers.
- Goldman is the most bullish it’s been on commodities in a decade.
- A Malaysian billionaire wants Asian gamblers to visit the place that inspired “Dirty Dancing.”
- This Chinese electric-vehicle battery company plans to overtake Tesla.
- Elon Musk has sold $10 million worth of flamethrowers in just four days.
— With assistance by Eric Lam, Matt Turner, Jeremy Herron, Lulu Yilun Chen, Iain Marlow, and Jennifer Jacobs