(Kitco News) – Cryptocurrencies traded in a holding pattern on Wednesday after the latest Consumer Price Index (CPI) report showed an uptick in inflation in August, with headline prices rising 0.6% month-over-month and 3.7% on an annual basis, largely driven by a spike in energy prices.
Stocks were mixed as investors focused their attention on next week’s Fed meeting, where the central bank will determine if additional interest rate hikes are needed. The CME FedWatch Tool now gives a 97% probability that the Fed will pause its rate hikes next week, up from 92% a day ago.
At the closing bell, the S&P and Nasdaq finished in the green, up 0.12% and 0.29%, respectively, while the Dow recorded a loss of 0.20%.
Data provided by TradingView shows that Bitcoin’s (BTC) price initially climbed higher after the CPI report, hitting a high of $26,416 in the afternoon before pulling back to support above $26,100, which has provided a consistent level of resistance since the middle of August.
“September Bitcoin futures prices [were] higher again in early U.S. trading Wednesday, on a rebound after hitting a six-month low Monday,” according to Kitco senior technical analyst Jim Wyckoff.
Bitcoin futures 1-day chart. Source: Kitco
“The bulls have stabilized prices now, but have much more heavy lifting to do in the near term, to suggest a price uptrend can be started,” Wyckoff said. “The bears still have the overall near-term technical advantage as a price downtrend line remains in place on the daily chart.”
Wednesday’s CPI-inspired Trade Letter from MN Trading noted that “When interest rates are aggressively increased, the overall performance of risk-on assets in the markets tends to be less favorable.”
“We witnessed this trend for an extended period, where we seemed to be stuck in a downward spiral,” MN Trading analyst Daan Foppen said, but “The tide is turning.”
With recent CPI reports showing that inflation has been moderating, Foppen said this has given the Fed “fewer reasons to continue aggressively raising interest rates,” which gives risk-on assets “more room to increase in value once again.”
Delving into the price action for Bitcoin, Foppen said that on high time-frame charts, the weekly candles “appear quite indecisive, and the overall chart looks a bit shaky.”
“Yes, officially, we are still in an uptrend, and that’s certainly something to consider, but I don’t find the overall structure of the weekly timeframe very reassuring,” Foppen said. “We had a sweep to the upside followed by an aggressive move downward. Subsequently, we saw a retracement towards the weekly FVG [fair value gap], where we once again witnessed a strong rejection. Additionally, we have relative equal lows on the downside, and it’s highly likely that the price will move in that direction.”
Scaling down to the daily timeframe, Foppen said, “We can see another reason why an initial move downward is likely in the cards.”
“We have equal lows on the downside of the price. These levels are used to engineer liquidity,” he said. “What we can see, and it’s highly likely to be the case, is that these equal lows have formed above an imbalance on the daily timeframe. So, now the price has two reasons to go down: first, to remove liquidity below the equal lows, and second, to fill the imbalance on the daily timeframe.”
“Capital preservation is one of the most important aspects of trading,” Foppen said. “Especially in these times and current market conditions, it’s crucial not to do anything reckless. Price action is choppy, and we are trading within a narrow range.”
For this reason, he recommends adopting a strategy called “milk the range,” which involves “trading the extremes of the range until it no longer works.”
“This provides stability and prevents you from constantly staring at the charts all day,” he said. “Set alerts at the range high and range low, wait for deviation and reclaim, and trade based on that. This is likely where you’ll find the most success.”
While Foppen is offering traders a potential way to book profits amid sideways trading, Adam Button, chief currency analyst and managing editor at Forexlive.com, warned that “A death cross has formed on the Bitcoin daily chart as the 50-day moving average falls below the 200-day moving average,” and said the last time this happened, “Bitcoin fell from $42,400 down to $15,700 from January to November of 2022 – a 63% decline.”
BTC 1-day chart with 50dma and 100dma. Source: Forexlive
“It’s a popular technical indicator but it’s not infallible,” Button said. “The previous death cross was in June 2021 and it was only followed by a 20% decline and a death cross in 2020 wasn’t followed by any selling at all. This week, a test of $25,000 found buyers but a break could lead to a fall to $20,000 or the January lows near $17,000.”
Mixed performance for the altcoin market
The top 200 altcoins traded mixed, with the winners outnumbering the losers, while most tokens traded within ±3% of Tuesday’s prices.
VeThor Token (VTHO) was the standout token of the day with an increase of 57% after it was unexpectedly added to Coinbase. Other notable gainers include Storj (STORJ), Galxe (GAL), and Metal DAO (MTL), which increased 10.9%, 9.1%, and 8.3%, respectively. Astar (ASTR) was the biggest loser with a decline of 7.6%, followed by a loss of 5.5% for Akash Network (AKT) and Ribbon Finance (RBN).
The overall cryptocurrency market cap now stands at $1.04 trillion, and Bitcoin’s dominance rate is 49.1%.
MONTREAL – Travel company Transat AT Inc. reported a loss in its latest quarter compared with a profit a year earlier as its revenue edged lower.
The parent company of Air Transat says it lost $39.9 million or $1.03 per diluted share in its quarter ended July 31.
The result compared with a profit of $57.3 million or $1.49 per diluted share a year earlier.
Revenue in what was the company’s third quarter totalled $736.2 million, down from $746.3 million in the same quarter last year.
On an adjusted basis, Transat says it lost $1.10 per share in its latest quarter compared with an adjusted profit of $1.10 per share a year earlier.
Transat chief executive Annick Guérard says demand for leisure travel remains healthy, as evidenced by higher traffic, but consumers are increasingly price conscious given the current economic uncertainty.
This report by The Canadian Press was first published Sept. 12, 2024.
Dollarama Inc.’s food aisles may have expanded far beyond sweet treats or piles of gum by the checkout counter in recent years, but its chief executive maintains his company is “not in the grocery business,” even if it’s keeping an eye on the sector.
“It’s just one small part of our store,” Neil Rossy told analysts on a Wednesday call, where he was questioned about the company’s food merchandise and rivals playing in the same space.
“We will keep an eye on all retailers — like all retailers keep an eye on us — to make sure that we’re competitive and we understand what’s out there.”
Over the last decade and as consumers have more recently sought deals, Dollarama’s food merchandise has expanded to include bread and pantry staples like cereal, rice and pasta sold at prices on par or below supermarkets.
However, the competition in the discount segment of the market Dollarama operates in intensified recently when the country’s biggest grocery chain began piloting a new ultra-discount store.
The No Name stores being tested by Loblaw Cos. Ltd. in Windsor, St. Catharines and Brockville, Ont., are billed as 20 per cent cheaper than discount retail competitors including No Frills. The grocery giant is able to offer such cost savings by relying on a smaller store footprint, fewer chilled products and a hearty range of No Name merchandise.
Though Rossy brushed off notions that his company is a supermarket challenger, grocers aren’t off his radar.
“All retailers in Canada are realistic about the fact that everyone is everyone’s competition on any given item or category,” he said.
Rossy declined to reveal how much of the chain’s sales would overlap with Loblaw or the food category, arguing the vast variety of items Dollarama sells is its strength rather than its grocery products alone.
“What makes Dollarama Dollarama is a very wide assortment of different departments that somewhat represent the old five-and-dime local convenience store,” he said.
The breadth of Dollarama’s offerings helped carry the company to a second-quarter profit of $285.9 million, up from $245.8 million in the same quarter last year as its sales rose 7.4 per cent.
The retailer said Wednesday the profit amounted to $1.02 per diluted share for the 13-week period ended July 28, up from 86 cents per diluted share a year earlier.
The period the quarter covers includes the start of summer, when Rossy said the weather was “terrible.”
“The weather got slightly better towards the end of the summer and our sales certainly increased, but not enough to make up for the season’s horrible start,” he said.
Sales totalled $1.56 billion for the quarter, up from $1.46 billion in the same quarter last year.
Comparable store sales, a key metric for retailers, increased 4.7 per cent, while the average transaction was down2.2 per cent and traffic was up seven per cent, RBC analyst Irene Nattel pointed out.
She told investors in a note that the numbers reflect “solid demand as cautious consumers focus on core consumables and everyday essentials.”
Analysts have attributed such behaviour to interest rates that have been slow to drop and high prices of key consumer goods, which are weighing on household budgets.
To cope, many Canadians have spent more time seeking deals, trading down to more affordable brands and forgoing small luxuries they would treat themselves to in better economic times.
“When people feel squeezed, they tend to shy away from discretionary, focus on the basics,” Rossy said. “When people are feeling good about their wallet, they tend to be more lax about the basics and more willing to spend on discretionary.”
The current economic situation has drawn in not just the average Canadian looking to save a buck or two, but also wealthier consumers.
“When the entire economy is feeling slightly squeezed, we get more consumers who might not have to or want to shop at a Dollarama generally or who enjoy shopping at a Dollarama but have the luxury of not having to worry about the price in some other store that they happen to be standing in that has those goods,” Rossy said.
“Well, when times are tougher, they’ll consider the extra five minutes to go to the store next door.”
This report by The Canadian Press was first published Sept. 11, 2024.
TORONTO – The U.S. Consumer Financial Protection Bureau has ordered TD Bank Group to pay US$28 million for repeatedly sharing inaccurate, negative information about its customers to consumer reporting companies.
The agency says TD has to pay US$7.76 million in total to tens of thousands of victims of its illegal actions, along with a US$20 million civil penalty.
It says TD shared information that contained systemic errors about credit card and bank deposit accounts to consumer reporting companies, which can include credit reports as well as screening reports for tenants and employees and other background checks.
CFPB director Rohit Chopra says in a statement that TD threatened the consumer reports of customers with fraudulent information then “barely lifted a finger to fix it,” and that regulators will need to “focus major attention” on TD Bank to change its course.
TD says in a statement it self-identified these issues and proactively worked to improve its practices, and that it is committed to delivering on its responsibilities to its customers.
The bank also faces scrutiny in the U.S. over its anti-money laundering program where it expects to pay more than US$3 billion in monetary penalties to resolve.
This report by The Canadian Press was first published Sept. 11, 2024.
