Weekly Update 1 Sep-2017

Commodities were mixed, and digital tokens were very strong, but bonds, currencies, and major stock indexes were all lower this week. The largest gains were in digital tokens, as Ethereum rose 16.1% and Bitcoin gained 9.3%. Gold stocks were also strong, adding 3.1% for the week. The biggest losses were in coffee and crude oil, which dropped 4.4% and 3.8% respectively.

The Chinese Yuan was the best performing national currency, only falling 1.1%. The Japanese Yen fell the most, dropping 3.2%. Bonds were down, with the 20+ year TLT falling 3.1%, while the 1-3 year SHY and USD cash (notes of zero maturity) dropped 2.7% apiece.

Bitcoin rose each day to close the week at 116.6 grams, up 9.3%, and setting a new all-time high. Ethereum followed a similar pattern, ending up 16.1% at 9.2 grams, just 6.3% below its all-time high.

Over the weekend, however, an earthquake hit the cryptocurrency world as the Chinese central bank announced a ban on ICOs (Initial Coin Offerings). This has sent many digital currencies tumbling, especially Ethereum, upon which many of the new tokens are built. On Monday the 4th, Ether was trading just below 7 grams, down 24% from Friday's close. Bitcoin was less affected, dropping about 14% over the weekend. With the US SEC proposing to regulate many tokens as securities, and China imposing an outright ban, many blockchain companies are looking to relocate to Switzerland or the UK, where regulators are taking a more crypto-friendly stance.

Gold stocks outpaced the major indexes, gaining 3.1%. All of the big indexes fell, led by the Euro STOXX, which dropped 2.8%. The S&P 500 fell the least, down 1.3%.

Cotton was the strongest of the commodities, rising 2.7%. Coffee fell the most, dropping 4.4%. Crude oil was also weak, falling 3.8%. Platinum and silver were little changed, off 0.3% and up 0.1% respectively.