It’s Actually Quite Simple

Traditional Markets

The US markets were performing fairly well yesterday until about an hour before the closing bell when President Donald Trump sent this tweet…

Most were already expecting this to happen, so it’s not clear why the markets took the news so poorly. In this graph, you can see the exact minute of the tweet circled in purple.

The wide expectation is that the USA will pull out of Obama’s Iran deal today. All eyes will be watching Crude Oil at the time of the announcement.

Oil has been rallying strongly since the beginning of the year and most recently has been toying with the level of $70 a barrel, largely on the expectation that Trump will pull out of the deal. So, on the off-chance that he does decide to try and salvage the deal, we could see oil plummeting quite quickly.

However, as the announcement was indeed expected for some time, it’s entirely possible that the news is already priced into the market. If this is the case, we may end up seeing the old adage of “buy the rumor, sell the news” play out once the market excitement dies down.

MasterCard is Missing Bitcoin

Ok, I know this is old news but still worth noting. On a call last week, MasterCard’s CEO stated that cross-border volumes were 2% lower than they were in the previous quarter due to fewer transactions buying bitcoin.

We all know that Q4 of 2017 was a very popular time to buy cryptocurrencies and it seems that the decrease of crypto transactions in Q1 of 2018 notably dented the credit card giant’s profits.

The company is doing fine, of course. Their profits did rise pretty sharply anyway and their stock is now sitting at an all-time high.

However, the drop in MC’s bitcoin profits is not necessarily the result of weaker sentiment. It should be mentioned that several large banks have banned their customers from buying bitcoin with credit cards as of early February.

It seems these banks have cut off their nose to spite their face. People who have a desire or a need to use cryptocurrencies will certainly do so. By not facilitating their transactions you are not only doing a disservice to your customers, you are also missing out on those transactions.