Scores of Saudi Princes have been arrested over the weekend as part of a shock and awe campaign designed and orchestrated by the new Crown Prince Mohammed Bin Salman. This unprecedented shakeup is yet another surprising step in Salman’s plot to push the country toward radically conservative reforms.
Among the arrested is billionaire Al-Waleed bin Talal, who is also famous on the internet as being one of the most popular faces for meme generation. You may have seen this picture before…
All jokes aside, this man is among the top ten biggest philanthropists in the world and has given a total of $3.5 Billion to charity. Of course, it’s easier to dig deep when you have deep pockets. Bin Talal’s estimated net worth now stands at approximately $17 billion.
As can be expected, perceived instability in the Middle East is driving up Crude Oil prices. West Texas Crude has now reached $56 a barrel for the first time since June of 2015.
Market Overview
Trump has promised the American people tax reforms for Christmas. Of course, this is the type of gift that gives more to Trump than to most Americans but it does seem that many will enjoy it.
There isn’t a lot of time to put this deal together in such a quick timeframe though. The Senate needs a total of 60 people to approve the bill for it to become law. Assuming that all 52 Senate Republicans vote ‘aye’ they still need to convince 8 Democrats to switch sides.
Rather than oversee this directly, Donald Trump, today will be out golfing with his good buddy the Prime Minister of Japan, Shinzo Abe. This as the first leg of the President’s massive Asia tour. On second thought, it might be better to leave the Senate to decide amongst themselves. We watch closely as Trump romps around the East and meets with his counterparts there, possibly even with Putin.
The meeting in Japan does seem to be bearing fruit already. Shinzo Abe’s government has already issued a harsh statement against North Korea and will soon be ramping up sanctions against the rogue almost nuclear state. The statement didn’t do much to market prices though and was overshadowed by an announcement from the Bank of Japan this morning.
Bank of Japan Printing Strong
It seems that the BoJ is still worried about inflation and similar to the Fed is wondering when it will come. Unlike the Fed however, Haruhiko Kuroda is willing to continue with Japan’s massive stimulus methods until they are able to squeeze inflation into the economy.
This gung-ho approach to monetary policy sent the Yen to its weakest level against the US Dollar since March. Looking at the USDJPY chart we can see that the range of the past 8 months (blue lines) is now being extended. So far today, we’ve already seen a bit of a reversal back into the range but it’s still unclear if the breakout will resume or if it will reverse back to the average prices (yellow line = 100 day moving average).
Volatility is Dead
Meanwhile, market volatility has again fallen to all-time record lows. Following the slightly disappointing jobs numbers from the USA on Friday the VIX volatility index managed to close at it’s lowest point since the index was created in the early 1990s.
This is certainly a defining sign of the new market conditions we live in. A market flush with cash and zero volatility.
Crypto Zeros
Celebrations rang out across the eToro network over the past few days as Bitcoin continues to break high after record high. The current ATH now stands at $7,574 a coin and we’re seeting a bit of a pullback this morning.
In a single week from October the 29th to November 5th, the price has moved a record $1,919 per coin. To think that it was trading at $1,000 at the start of the year. A pullback at this point would not be surprising. Even if long term projections have it reaching the moon by 2020.
The bigger milestone is that of the entire crypto market. The total value of all cryptocurrencies currently in circultion is now sitting at a record $200 Billion!
Not a bad year but still, hardly unexpected. For those who belive firmly that blockchain technology will soon replace finance as we know it and even take over many parts of the internet in the next few years, this market is still largely undervalued.
Let’s have an amazing week ahead!
