Year: 2024

© Reuters

Investing.com — Bitcoin rose sharply to a 21-month high on Tuesday on increased speculation that the U.S. Securities and Exchange Commission was close to approving a spot exchange traded fund for the world’s largest cryptocurrency.

By 06:43 ET (11:43 GMT), Bitcoin rose 6% to $45,168.6, reaching its highest level since early-April 2022. But trading volumes remained slim on account of the New Year holidays. 

Bitcoin’s gains came as an extension of a stellar recovery in 2023, where the token surged more than 100% in value after starting the year at around $17,000. 

The cryptocurrency’s recent gains were driven chiefly by speculation over the approval of a U.S. ETF that directly tracks the token’s prices. The SEC has a January 10 deadline to approve or reject a spot ETF application from Ark and 21 Shares, according to a Reuters report. The ruling could set the precedent for ETF applications from several other fund managers for a similar product.

The Reuters report also said that the SEC will notify other applicants by as soon as this week on whether they have been cleared to launch their products by Jan 10. 

BlackRock Inc (NYSE:BLK)- the world’s largest asset manager- has also applied for a spot bitcoin ETF. 

The SEC has repeatedly rejected applications for a spot bitcoin ETF over the past two years, citing concerns that the token’s decentralized and volatile nature will prevent fund managers from protecting investors against market manipulation. Currently, all U.S.-traded bitcoin ETFs track the futures of the token, which are traded on the Chicago Mercantile Exchange. 

Grayscale, which currently operates the GBTC (OTC:GBTC) ETF, has an application to convert the product into a spot ETF. The firm had marked a legal victory against the SEC over its repeated rejection of a spot ETF, which saw the regulator reconsider Grayscale’s application. 

Proponents of the cryptocurrency argue that the approval of a spot ETF will spur a deluge of capital inflows for bitcoin, given that the product allows traders to invest in the token without directly holding cryptocurrency. 

But analysts have cautioned that the approval may not trigger as large a bull run as expected, especially given that the crypto industry is still grappling with a massive loss of faith over the past two years.

A series of high-profile bankruptcies, coupled with a regulatory crackdown against the world’s biggest crypto firms largely dented retail interest in crypto. This saw bitcoin slump to as low as $15,000 by late-2022. 

While hopes for an ETF approval drove a strong recovery for the token through 2023, trading volumes remained at a fraction of those seen during the 2021 bull run. High interest rates also limited the amount of capital flowing into crypto.

Ambar Warrick contributed to this report.

© Reuters. U.S. Dollar and Euro banknotes are seen in this illustration taken July 17, 2022. REUTERS/Dado Ruvic/Illustration/File Photo

By Alun John

LONDON (Reuters) -The dollar rose on the first trading day of the year, supported by higher U.S. yields as attention turned to U.S. jobs data and European inflation numbers this week which may provide clues on central banks’ next moves.

The dollar index, which measures the U.S. currency against six counterparts, was last up 0.67% at 102.05, on track for its biggest daily percentage gain since October.

It fell 2% in 2023, snapping two years of gains due to investor expectations that the U.S. Federal Reserve will cut rates significantly this year while the economy remains resilient.

On the other side of the dollar’s ascent was the euro which dipped 0.74% as traders digested data showing euro zone factory activity contracted in December for an 18th straight month and sterling, off 0.64% at $1.2657.

The dollar also climbed against the Japanese yen, rising 0.96% to 142.16 yen.

Underpinning the dollar’s gains was a move higher in U.S. yields. The benchmark 10-year yield was last up 10 basis points at 3.963%. That would be its biggest daily increase in over three weeks, and comes after a 100 basis point drop in November and December.

Investors have a fairly busy week ahead with a slew of economic data including European inflation data and U.S. data on job openings and non-farm payrolls, which will help shape market expectations regarding monetary policy moves from the Fed and European Central Bank.

“Primary corporate issuance ($60 bn estimated in the US alone) could support this mean reversion in yields. Then FOMC minutes and payrolls will set the tone, and fine tune expectations for Jan and March FOMC meetings,” said Kenneth Broux senior strategist FX and rates at Societe Generale (OTC:SCGLY).

Minutes from the most recent meeting of the Fed’s rate setting Federal Open Market Committee in December are scheduled for release on Wednesday and will provide further insight into the central bankers’ thinking.

Markets are now pricing in an 82% chance of interest rate cuts from the Fed to start from March, according to CME FedWatch tool, with over 150 basis points (bps) of easing anticipated this year.

Traders were also processing higher oil prices, with Brent up over 2%, on fears of potential disruption to Middle East supply after the latest attack on a container ship in the Red Sea. [O/R]

That, however, could not help currencies of oil exporting hold off the stronger greenback. The dollar climbed 0.4% on the Norwegian crown and 0.2% on the Canadian dollar while the Australian dollar dipped 0.33%.

The euro did dip around 0.4% on both the Aussie and the Loonie however.

The crypto world started the year with a bang, with bitcoin touching a 21-month peak of $45,532 on rising expectations that the U.S. Securities and Exchange Commission will soon approve exchange-traded spot bitcoin funds.

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© Reuters. Fire burns following an earthquake at a residential area in Wajima, Ishikawa prefecture, Japan January 1, 2024, in this photo released by Kyodo. Mandatory credit Kyodo via REUTERS
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By Kiyoshi Takenaka, Sakura Murakami and Kantaro Komiya

WAJIMA, Japan (Reuters) -A powerful earthquake that hit Japan on New Year’s Day killed at least 48 people, with rescue teams struggling in freezing temperatures on Tuesday to reach isolated areas where many people are feared trapped under toppled buildings.

In Suzu, a coastal town of just over 5,000 households near the quake’s epicentre, 90% of houses may have been destroyed, according to its mayor Masuhiro Izumiya.

“The situation is catastrophic,” he said.

The quake with a preliminary magnitude of 7.6 struck on Monday afternoon, prompting people in western coastal areas to flee to higher ground as tsunami waves swept cars and houses into the water.

Around 200 tremors have been detected since the quake first hit on Monday, according to the Japan Meteorological Agency, which warned more strong shocks could hit in the coming days.

A Coast Guard aircraft en route to deliver aid to the quake-hit region collided with a commercial airplane in Tokyo’s Haneda airport on Tuesday, killing five Coast Guard crew while all 379 on board the Japan Airlines flight miraculously escaped a fire.

Prime Minister Fumio Kishida said the extent of the quake damage was becoming “increasingly clear” more than 24 hours after the quake struck on the Noto peninsula in Ishikawa prefecture.

“The government has deployed emergency rescue teams from the Self-Defence Forces, police and fire departments to the area and is doing its utmost to save lives and rescue victims and survivors, but we have received reports that there are still many people waiting to be rescued under collapsed buildings.”

Kishida said some 3,000 rescuers were finding it difficult to reach the northern tip of the peninsula where helicopter surveys had discovered many fires and widespread damage to buildings and infrastructure. There are around 120 cases of people awaiting rescue, his government spokesperson said.

Situated on the “Ring of Fire” arc of volcanoes and oceanic trenches that partly encircles the Pacific Basin, Japan accounts for about 20% of the world’s earthquakes of magnitude 6 or greater, and each year experiences up to 2,000 quakes that can be felt.

Many rail services and flights into the area have been suspended. More than 500 people were stranded at Noto’s airport which closed due to cracks in its runway and access road and damage to its terminal building.

Authorities have confirmed 48 deaths, all in Ishikawa prefecture, making it Japan’s deadliest earthquake since 2016.

Many of those killed are in Suzu and Wajima, another city on the remote northern tip of the Noto peninsula.

Scores more have been injured and authorities were battling blazes in several cities on Tuesday and hauling people from collapsed buildings.

“I’ve never experienced a quake that powerful,” said Wajima resident Shoichi Kobayashi, 71, who was at home having a celebratory New Year’s meal with his wife and son when the quake struck, sending furniture flying across the dining room.

“Even the aftershocks made it difficult to stand up straight,” he said, adding his family were sleeping in their car because they could not return to their badly damaged home.

WRECKED HOMES

Fujiko Ueno, a 73-year-old resident of Nanao city in Ishikawa, said nearly 20 people were in her house for a New Year celebration when the quake struck, splintering the walls which came crashing down on a parked car.

Miraculously, no one was hurt.

“It all happened in the blink of an eye,” she said, standing next to the crushed car on a road littered with debris and mud that oozed out from cracks in the surface.

Several world leaders sent condolence messages with President Joe Biden saying in a statement the United States was ready to provide any necessary help to Japan.

The Japanese government ordered about 100,000 people to evacuate their homes on Monday night, sending them to sports halls and school gymnasiums, commonly used as evacuation centres in emergencies.

Almost half of those evacuated had returned to their homes on Tuesday after authorities lifted tsunami warnings.

But around 33,000 households remained without power in Ishikawa prefecture after a night when temperatures dropped below freezing. Nearly 20,000 homes have no water supply.

NUCLEAR PLANTS

The quake also comes at a sensitive time for Japan’s nuclear industry, which has faced fierce opposition from locals since a 2011 earthquake and tsunami triggered nuclear meltdowns in Fukushima on the eastern coast. Whole towns were devastated and nearly 20,000 people killed.

Japan last week lifted an operational ban imposed on the world’s biggest nuclear plant, Kashiwazaki-Kariwa, which has been offline since the 2011 tsunami.

The Nuclear Regulation Authority said no irregularities were found at nuclear plants along the Sea of Japan, including five active reactors at Kansai Electric Power’s Ohi and Takahama plants in Fukui Prefecture.

Hokuriku Electric’s Shika plant, the closest to the epicentre, has also been idle since 2011. The company said there had been power outages and oil leaks following Monday’s jolt but no radiation leakage.

The company had previously said it hoped to restart the reactor in 2026.

Toshiba (OTC:TOSYY) said its local subsidiary Kaga Toshiba Electronics has stopped semiconductor production at its plant in Ishikawa to gauge the quake’s impact on its facilities.

Chip equipment maker Kokusai Electric said it had found damage at its factory in Toyama and was investigating further ahead of the planned resumption of operations on Thursday.

© Reuters Wedbush’s Ives says Nasdaq could rally to 20k in 2024

As 2024 unfolds, Wedbush anticipates a transformative “Year of AI” poised to elevate tech stocks.

Highlighting the pivotal role played by Jensen Huang of Nvidia (NASDAQ:NVDA) and Microsoft/OpenAI in igniting an AI revolution reminiscent of the Internet’s inception in 1995, the stage is set for substantial growth, according to analysts at Wedbush.

Microsoft (NASDAQ:MSFT) emerges as a frontrunner in the AI arms race, leveraging Azure and the promising Microsoft Co-Pilot for significant monetization opportunities. Meanwhile, Google (NASDAQ:GOOGL) is gaining prominence as a major Generative AI player, earning recognition from Chief Information Officers for advancements in its core technology platform.

“Both Microsoft and Google appear to be in the AI driver’s seat which we think will be a battle over the next decade as we expect other technology companies such as Amazon, Meta, Nvidia, Apple, and other tech stalwarts along with smaller players in the industry to collectively spend billions in this AI arms race over the coming years,” analysts said.

Overall, the key driver remains the burgeoning global demand for AI applications, a trend substantiated by Wedbush’s enterprise survey findings.

“Use cases lead to the pot of gold at the end of the rainbow.50%+ of all enterprises we have recently surveyed see 20+ use cases for Generative AI and 80%+ of all enterprises see 10+ use cases including data analysis, marketing content creation, document editing/summarization, and many more,” analysts added.

Analysts also see potential for “a tidal wave of M&A in the software and chip sectors in our view by both financial and strategic players.”

Wedbush’s bull case for the tech sector assumes 25% gains in 2024, which translates into Nasdaq rallying to hit $20,000.

“The Street is still significantly under estimating how quickly this AI monetization cycle is playing out among enterprises in the field,” analysts concluded.