Market Morning: Swiss Bans Stocks from EU, Bitcoin Breaks Below $10K, USTR Wants More Tariffs

Market Morning: Swiss Bans Stocks from EU, Bitcoin Breaks Below $10K, USTR Wants More Tariffs

Switzerland Bans Trading of Swiss Stocks in EU

Switzerland is having a row with the European Union, so it decided to ban trading of its stocks on EU exchanges. These include Novartis (NASDAQ:NVS), Nestle (OTCMKTS:NSRGF), and Roche (OTCMKTS:RHHBY) among others. Europe said it would no longer recognize Swiss stock markets as having the same status as those of EU members, so Switzerland ordered the EU exchanges to stop trading Swiss stocks in retribution. CNN is extrapolating that this disagreement has implications for Brexit, but that’s a stretch, given that trading must continue if the European economy is to maintain any semblance of integration and the politicians that get into these sorts of fights want to keep their tax revenues flowing. Sooner or later, probably sooner, new agreements will have to be sketched out by necessity and trading continued. Otherwise, investors will find other ways to buy and sell securities and the political class will be blamed for any losses.

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Bitcoin Continues To Collapse

Bitcoin (BTC-USD) may not be storing value very well, but it sure is providing a lot of opportunities for short term traders to both make and lose a lot of money.  Daily trading volume continues to trend to new record highs, hitting a record $44 billion a day this month as the cryptocurrency appeared to have topped out for a second time since 2017, this time at around $13,775. So far we are down 28.3% in six days, matching the pace of the crash following the high of $20,001.50 reached on December 17, 2017. Six days later back then, Bitcoin had fallen below $12,800 but recovered somewhat until mid January when it began another fall to $9,600. The decline in Bitcoin is leading the decline in other cryptocurrencies, with Bitcoin Cash (BCH-USD) and Ethereum (ETH-USD) down less than half of Bitcoin’s decline over the last 24 hours.

The downward momentum could be feeding on itself while attracting short sellers into the futures markets, meaning a short term bounce may be due, as it was during the last sharp decline at around this time following the last top. This, in turn, could further encourage more short term traders into the market, pushing daily trading volume even higher. As Bitcoin trading volume hits new records, more are using Bitcoin trading software to spot sentiment changes in order to capitalize on price changes. CEO of CryptoMiner Solutions had this to say of the current volatility, “’Buy the fear, sell the greed’ is the name of the trading game. Our auto trading software reflects this daily.” Easier said than done, though successful traders do add to overall price stability by buying low and selling high.

USTR Wants More Tariffs on European, Olives, Cheese, Whiskey, because Airplanes

If you like to eat pizza with olives from Europe while drinking whiskey and not paying any tariffs, then you’re in for some bad news. The US Trade Representative’s office has released a list of products, including all of the above, that could be hit with taxes in addition to the $21 billion in taxes that were already announced in April. The fight has to do with subsidies for Boeing (NYSE:BA), an American company, and Airbus (OTCMKTS:EADSY), a Dutch company, who both get subsidies from their respective governments, paid for buy their respective taxpayers. So, in order to “level the playing field” each government is threatening to burden their taxpayers even more with more taxes on totally unrelated foods and alcoholic drinks and fruits grown and produced by companies that have absolutely nothing to do with airplanes whatsoever. Talk about getting caught in a crossfire.

Speaking of Boeing, 737 Grounding Keeps Dragging On

Southwest Airlines (NYSE:LUV) has thrown a monkey wrench in the engines of all 737s still grounded, though not literally, as it announced that it will remove all its 737s from its fleet until after October 1 at the earliest. Boeing had earlier estimated that the 737 fleet would be back in the air by September, so Boeing fell 2% on the news yesterday. Defending the move, Southwest CEO Gary Kelly told Fox, “Being proactive like this helps us reduce the last-minute cancellations and allows us to rebook our Customers well in advance, so that’s important that we continue to stay ahead of this.” Southwest has already removed 150 daily flights from its schedule.

Hong Kongers Break Down Legislature Doors

On the 12th anniversary of the handover of Hong Kong to Chinese rule, Hong Kong residents chose to celebrate by bashing in the doors of the legislature and defacing the portraits of politicians who make laws there on behalf of the Communist Party of China. A Union Jack colonial flag, the flag of Hong Kong before it was handed over to China, was draped over the desk of the legislature’s president, and slogans were spray-painted across the building. Hong Kong stocks remain resilient, perhaps rooting for the protesters to keep China’s authorities at bay and maintain whatever is left of liberty on the island. Interestingly, the Hong Kong dollar, pegged to the US dollar, is up half a percent against the US dollar since June 10, a big move for a pegged currency.