(Kitco News) The crypto space was a sea of red Monday as the prices plunged, with Bitcoin and Ethereum down nearly 10% on the day.
Investors abandoned risk-on assets in droves as stocks saw another steep drop that sent the S&P 500 below the 4,000 level for the first time in more than one year. The Dow was also down 1.9%, and the Nasdaq dropped 4.2% on the day.
Leading the selloff was the bond market, with the U.S. 10-year Treasury yields surging above 3% and reaching the highest level since late 2018.
Sentiment in the marketplace has been shifting quickly as recession fears grow due to the Federal Reserve’s expected 50-basis-point rate hikes in June and July.
“The overwhelming focus continues to be on inflation, rising interest rates, and the war in Ukraine,” said Brian Price, head of Investment Management at Commonwealth Financial Network. “The combining factors of tight supply chains resulting from China’s zero Covid policy, and rising oil and food prices due to the war in Ukraine, are causing inflationary fears that are triggering a move out of risk assets.”
A potential bottom for the S&P 500 could be between 3,850 to 4,000, according to John Lynch, chief investment officer at Comerica Wealth Management. “Without recession in 2022, which is our base case, stocks can resume higher as equity investors discount cyclical recovery in an environment where monetary policy is no longer shepherding expensive growth and technology names at a multiple of sales,” Lynch noted Monday.
The risk-off sentiment has dragged most of the crypto space down, with massive price drops in Bitcoin, Ethereum, Binance Coin (BNB), Ripple (XRP), Solana, and Cardano.
Bitcoin continued to fall closer to its critical support at around $30,000, last trading at the lowest level since July 2021 — $31,392, down 9.2% on the day.
“There’s support at $30,000, but we think it breaks. Risk to $12,000 thereafter,” said 22V Research senior managing director John Roque. “Purely from a sentiment perspective, we think there’s a lot of similarity between the holders of Bitcoin and ARKK as both are fully committed to their causes. On the way up, such enthusiastic sentiment worked as an asset, now it’s a huge liability.”
Ethereum, the world’s second-largest cryptocurrency by market cap, was at $2,306, down 9.8% on the day. BNB was at $311.84, down 13% on the day; XRP was at $0.51, down 12%; Solana last traded at $67.09, down 12% on the day; and Cardano was at $0.65, down 14.6% on the day.
A turnaround in risk sentiment could come to fruition if the highly-anticipated U.S. inflation numbers from April surprise with a slower pace this Wednesday.
“One may argue that sentiment has gotten too bearish as outflows from equity funds have really picked up as of late. Any positive developments on the geopolitical front, or a weaker than expected CPI report later this week, could help turn the tide and see investors embrace risk assets once again,” Price added.
The crypto space has been mirroring the performance of U.S. equities due to its increased levels of institutional involvement, which means that Bitcoin is treated more like a tech stock and traded frequently based on risk sentiment.
“As institutional holding of #Bitcoin #XBT have increased then like other assets such as stocks, it’s become more and more sensitive to broad financial conditions. Hence, in the last Fed tightening cycle, it declined 82%. Is history repeating?” tweeted Macro Intelligence 2 Partners co-founder Julian Brigden.
As institutional holding of #Bitcoin#XBT have increased then like other assets such as stocks, it’s become more and more sensitive to broad financial conditions. Hence, in the last Fed tightening cycle it declined 82%. Is history repeating? pic.twitter.com/MEChKKzu2a
HALIFAX – Ottawa is negotiating a $500-million bailout for Nova Scotia’s privately owned electric utility, saying the money will be used to prevent a big spike in electricity rates.
Federal Natural Resources Minister Jonathan Wilkinson made the announcement today in Halifax, saying Nova Scotia Power Inc. needs the money to cover higher costs resulting from the delayed delivery of electricity from the Muskrat Falls hydroelectric plant in Labrador.
Wilkinson says that without the money, the subsidiary of Emera Inc. would have had to increase rates by 19 per cent over “the short term.”
Nova Scotia Power CEO Peter Gregg says the deal, once approved by the province’s energy regulator, will keep rate increases limited “to be around the rate of inflation,” as costs are spread over a number of years.
The utility helped pay for construction of an underwater transmission link between Newfoundland and Nova Scotia, but the Muskrat Falls project has not been consistent in delivering electricity over the past five years.
Those delays forced Nova Scotia Power to spend more on generating its own electricity.
This report by The Canadian Press was first published Sept. 16, 2024.
TORONTO – Roots Corp. may have built its brand on all things comfy and cosy, but its CEO says activewear is now “really becoming a core part” of the brand.
The category, which at Roots spans leggings, tracksuits, sports bras and bike shorts, has seen such sustained double-digit growth that Meghan Roach plans to make it a key part of the business’ future.
“It’s an area … you will see us continue to expand upon,” she told analysts on a Friday call.
The Toronto-based retailer’s push into activewear has taken shape over many years and included several turns as the official designer and supplier of Team Canada’s Olympic uniform.
But consumers have had plenty of choice when it comes to workout gear and other apparel suited to their sporting needs. On top of the slew of athletic brands like Nike and Adidas, shoppers have also gravitated toward Lululemon Athletica Inc., Alo and Vuori, ramping up competition in the activewear category.
Roach feels Roots’ toehold in the category stems from the fit, feel and following its merchandise has cultivated.
“Our product really resonates with (shoppers) because you can wear it through multiple different use cases and occasions,” she said.
“We’ve been seeing customers come back again and again for some of these core products in our activewear collection.”
Her remarks came the same day as Roots revealed it lost $5.2 million in its latest quarter compared with a loss of $5.3 million in the same quarter last year.
The company said the second-quarter loss amounted to 13 cents per diluted share for the quarter ended Aug. 3, the same as a year earlier.
In presenting the results, Roach reminded analysts that the first half of the year is usually “seasonally small,” representing just 30 per cent of the company’s annual sales.
Sales for the second quarter totalled $47.7 million, down from $49.4 million in the same quarter last year.
The move lower came as direct-to-consumer sales amounted to $36.4 million, down from $37.1 million a year earlier, as comparable sales edged down 0.2 per cent.
The numbers reflect the fact that Roots continued to grapple with inventory challenges in the company’s Cooper fleece line that first cropped up in its previous quarter.
Roots recently began to use artificial intelligence to assist with daily inventory replenishments and said more tools helping with allocation will go live in the next quarter.
Beyond that time period, the company intends to keep exploring AI and renovate more of its stores.
It will also re-evaluate its design ranks.
Roots announced Friday that chief product officer Karuna Scheinfeld has stepped down.
Rather than fill the role, the company plans to hire senior level design talent with international experience in the outdoor and activewear sectors who will take on tasks previously done by the chief product officer.
This report by The Canadian Press was first published Sept. 13, 2024.
VANCOUVER – Mediated talks between the union representing HandyDART workers in Metro Vancouver and its employer, Transdev, are set to resume today as a strike that has stopped most services drags into a second week.
No timeline has been set for the length of the negotiations, but Joe McCann, president of the Amalgamated Transit Union Local 1724, says they are willing to stay there as long as it takes, even if talks drag on all night.
About 600 employees of the door-to-door transit service for people unable to navigate the conventional transit system have been on strike since last Tuesday, pausing service for all but essential medical trips.
Hundreds of drivers rallied outside TransLink’s head office earlier this week, calling for the transportation provider to intervene in the dispute with Transdev, which was contracted to oversee HandyDART service.
Transdev said earlier this week that it will provide a reply to the union’s latest proposal on Thursday.
A statement from the company said it “strongly believes” that their employees deserve fair wages, and that a fair contract “must balance the needs of their employees, clients and taxpayers.”
This report by The Canadian Press was first published Sept. 12, 2024.
