As predicted the market opened lower this morning, with the S&P/ASX200 dropping 65.60 points or 0.89% to 7,318.60.
What we haven’t seen yet is any signs of a recovery.
This could be due to the fall in iron ore price and bad retail data.
Singapore iron ore futures fell as much as 7.1% to $110.60 a tonne in early trading, this is contrary to the bounce back yesterday, which saw iron ore bounce 35% to an almost two-week high of $US121.50.
Fortescue fell 5.4% to $14.90, Rio Tinto fell 2.2% to $97.95 and BHP fell 1.9% to $37.00.
The pullback comes on the back of more than 80 of China's steel mills suspending production for maintenance this month.
In terms of retail, August retail sales fell 1.7%. This was better than the 2.5% drop fall expected by economists, but still a blow.
“Retail turnover continues to be negatively impacted by lockdown restrictions, with each of the eastern mainland states experiencing falls in line with their respective level of restrictions," said ABS director Ben James.
"In direct contrast, states with no lockdowns performed well with Western Australia and South Australia enjoying strong rises as physical stores were open for trade.”
The largest falls were in clothing, footwear and personal accessory retailing down 15.7%, cafes, restaurants and takeaway food services down 7%, department stores down 10.2% and household goods retailing down 2.3%.
The bottom-performing stocks in the ASX 200 are Megaport Limited down 6.45% and Pro Medicus Limited down 5.38%.
Over the last five days, the index has gained 0.62% and is currently 4.12% from its 52-week high.
Another look at crypto crisis
As we reported this morning. China has banned all crypto trading in the country.
Markets reacted badly with big falls in Bitcoin and other altcoins.
Bitcoin was already trending down early last week, hitting a low of £40,500 by Wednesday morning. It recovered steadily until the news from China knocked it down more than 8% on Friday. The price then stabilised before a jump on Sunday and returned to over £44,100 this morning.
Ethereum had also hit a weekly low on Wednesday, touching £2,700 before climbing back up to over £3,100. Following its own fall of over 9% on Friday, ETH then stabilised along with BTC over the weekend and was trading again at over £3,100 this morning after strong gains on Sunday.
Even the Evergrande debt crisis is having an effect.
Evergrande causes rollercoaster week for crypto markets
eToro analyst and crypto expert Simon Peters says, “The news has been heavily focused on events in China in the past week, with crypto not immune from the permutations.
“Early in the week, news began to emerge of the Evergrande crisis which sent contagion spiralling through all markets. Cryptoassets felt the effects as the broad-base selloff took hold on Monday.
“Evergrande has massive debt exposure – over $300 billion – and has failed to make payments on time to its creditors. The implications for wider crypto markets are not direct, but with debt fears looming, cryptoassets such as Tether could be affected.
“Stablecoins like Tether are pegged to fiat currencies such as the US Dollar. But to maintain the peg they require holdings to match the value of the cryptoasset. Many can’t hold large amounts of cash and instead use commercial paper – a form of short-term debt – to account for the value.
“The issue here is that, with Evergrande creating 2008-style contagion risk for debt markets, stablecoins could run into trouble were the commercial paper they hold to lose value.
“Unfortunately, as such a crisis is unprecedented, it remains to be seen what will happen next.
There have been some positive stories in the crypto space.
Twitter launches crypto features
Twitter has launched a series of crypto-related features on its platform.
“Users will now be able to tip popular tweeters in bitcoin through Strike, a third-party payments app built on the Bitcoin Lightning Network. iOS-based Twitter users will now be able to access the Tips feature while the platform says it will roll out Android functionality soon,” Peters said.
“The company is also looking to make non-fungible tokens (NFTs) more prominent on the platform, giving creators more tools and moderation functions. Twitter says it is exploring NFT authentication which would let users connect their crypto wallets directly to their social media accounts in order to display their owned artwork on their profiles.”
Sorare secures bumper $680 million SoftBank funding
“NFT marketplace Sorare announced on Wednesday that it has secured a mega $680 million funding round led by high-profile Japanese tech investment house SoftBank.
“Sorare is a marketplace for non-fungible tokens (NFTs). The platform is now valued around $4.3 billion after the Series B funding round. SoftBank led a previous round of investment in July, injecting $532 million. The firm plans to use the fresh cash injection to expand its sports NFT offering.
“The firm will expand its football portfolio of NFTs by seeking partnerships with football leagues and associations. It has already secured deals with French heavyweight team Paris Saint-Germain, English Premier League champions Liverpool and the Spanish-based La Liga league.
“Sorare is also looking at diversifying its NFT offering, exploring sports beyond football. Issues have arisen among other sports, however, as major leagues such as the NFL in the US specifically proscribe players and clubs from creating or selling NFTs.”
Western Bulldogs extends Coinspot relationship
Closer to home, beaten AFL grand finalists the Western Bulldogs has announced a two-year partnership extension with Australia’s largest cryptocurrency exchange, CoinSpot.
CoinSpot founder Russell Wilson said: “We’re extremely happy to extend our partnership with the Western Bulldogs and especially to add the AFLW team for the upcoming seasons. To be the first sponsor across major assets to support both the AFL and AFLW Western Bulldogs teams is a fantastic outcome,” concludes Wilson.
Established in 2013, CoinSpot is an Australian cryptocurrency exchange and is the country’s most popular platform to buy and trade Bitcoin and over 300 other cryptocurrencies.
On the small cap front
Li-s Energy Limited is up 181.18%, Dalaroo Metals Ltd is up 47.5% and Red Dirt Metals Limited is up 43.6% at time of writing.
Others of note include:
- AKM +3.75%
- CV1 +2.78%
- CE1 +3.75%
- CXU +6.45%
- CVS +11.11%
- CPH +2.27%
- ELT +2.27%
- EMP +6.38%
- EMD +2.27%
- FAR +3.14%
- GMR +8.33%
- HHR +4.35%
- HAV +2.70%
- INF +4%
- KZA +3.23%
- KIN +4.76%
- KKO +2.04%
- KSN +2.5%
- KNM +15.38%
- LCD +2.33%
- LIN +3.7%
- MVL +2.9%
- MXR +2.25%
- MGV +3.7%
- OKR +3.85%
- PAM +3.3%
- PNR +2.38%
- PAR +6.93%
- PAB +4.55%
- PEC +4.17%
- PXX +2.63%
- QML +4.48%
- QPM +5.66%
- SKF +4.76%
- TBN +6.67%
- TIE +2.78%
- TSC +20%
- VRC +3.03%
- WAK +2.33%
- WSR +2.86%
- YRL +2.04%