Weekly Update 8 Sep 2017
Currencies and commodities were mixed, while bonds, and stocks, and digital tokens were all lower this week. In a major reversal, the largest losses were in digital tokens, as Ethereum fell 23.4% and Bitcoin dropped 14.5%. The biggest gains were in silver and cotton, which added 2.1% and 1.8% respectively.
The Canadian Dollar was the best performing national currency, rising 0.6%. The US Dollar fell the most, dropping 1.9%. Bonds were down, with the 20+ year TLT falling 0.2%, while the 1-3 year SHY dropped 1.8%.
Bitcoin set a new all-time high of 116.6 grams at the end of last week, but was hit hard by the Chinese ban on ICOs over the weekend, falling to 100.8 grams on Monday. It rallied into Wednesday, closing at 107.66 grams, then sold off to end the week at 99.8 grams, down 14.5%. Ethereum followed a similar pattern, ending last week at 9.2 grams, falling to 7.0 grams on Monday, recovering to 7.9 grams on Wednesday, and finally selling off to close the week at 7.1 grams, down 23.4%.
Ethereum was hit harder than Bitcoin in part because its blockchain supports the smart contracts used by many of the new tokens covered by the Chinese central bank ban. Once the dust settles, I expect both of these tokens to exceed their old highs; I see this sell-off as an excellent buying opportunity.
Stocks were down, but gold stocks fell less than the major indexes, dropping 0.3%. The Dow Jones Industrials dropped the most, falling 2.8%. The Euro STOXX were off 0.7%.
Silver was the strongest of the commodities, rising 2.1%. Copper fell the most, dropping 4.3%. Crude oil was also weak, falling 1.5%. Palladium was down 2.3% while platinum was off just 0.4%.