Goodbye bulls, it’s the bears’ turn this week. Markets fell sharply on Tuesday after President Donald Trump kiboshed the House Democrats’ $2.4 trillion virus relief proposal.
The President announced the decision on Twitter, saying “We made a very generous offer of $1.6 Trillion Dollars and, as usual, she [Nancy Pelosi] is not negotiating in good faith.”
Nancy Pelosi is asking for $2.4 Trillion Dollars to bailout poorly run, high crime, Democrat States, money that is in no way related to COVID-19. We made a very generous offer of $1.6 Trillion Dollars and, as usual, she is not negotiating in good faith. I am rejecting their...
Stocks fell sharply, with the Dow dropping 0.9% and the The Nasdaq dropping 1%.
But in the same breath, Trump pleaded with US Congress to quickly extend $25 billion in new payroll assistance to American passenger airlines who have been furloughing thousands of workers as air travel hasn’t recovered.
US airlines are collectively burning $5 billion of cash a month as passenger traffic remains at 30% of 2019 levels. While waiting for a decision from the government, major airlines will shrink their workforce by at least 25% in October.
Big Tech companies including Amazon, Apple, Alphabet and Facebook who had been enjoying a bumper year, saw share prices fall sharply after the House Judiciary’s Antitrust Subcommittee released a 450-page report describing how the tech giants had abused their power.
If the report’s’ recommendations make it to legislation, it could eventually lead to a breaking up of parts of the companies’ businesses.
“The markets have been optimistic thanks to the unprecedented stimulus from both central banks and governments globally, but there’s uncertainty circling now as governments struggle to suppress COVID”, says a spokesperson from AAX, the world’s first digital asset exchange powered by the London Stock Exchange.
Crypto's bad apples
The crypto markets saw prices fall on Tuesday, with the global market cap down 2.1%, a $7 billion drop. The biggest losers were XRP down 4%, Binance 4.4%, Polkadot 6.4% and Chainlink 6.5%.
The gloomy outlook came after the UK’s financial regulator announced it was banning crypto derivatives trading, effective from next year.
“Significant price volatility, combined with the inherent difficulties of valuing cryptoassets reliably, places retail consumers at a high risk of suffering losses from trading crypto-derivatives. We have evidence of this happening on a significant scale,” said Sheldon Mills, interim executive director of strategy & competition at the FCA.
Europol meanwhile released a report on internet organized crime claiming that cryptocurrencies are playing an important role in cybercrime. “Reliability, irreversibility of transactions and a perceived degree of anonymity have made cryptocurrencies the default payment method for victim-to-criminal payments in ransomware and other extortion crimes, as well as criminal-to-criminal payments on the Darkweb,” the report said.
“If there’s bad activity in crypto, we need to get rid of it,” said Brian Brooks, head of the US regulatory agency that supervises the nation’s banks, wants to resolve outstanding ambiguities about how banks handle crypto.
