Stocks falter as China steps up crypto crackdown: markets shroud

(Bloomberg) – Stocks have struggled to tread after China stepped up its broad regulatory crackdown on cryptocurrencies. Bitcoin, Ether, and other digital tokens have plummeted.

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In another blow to investor morale, the world’s second-largest economy said crypto-related transactions would now be considered illicit financial activity. The move hits the heart of a booming market this year, while adding to concerns about increasingly stringent regulations in a variety of industries, from tech to after-school tutoring and ridesharing.

“China is currently facing some systemic fiscal challenges,” said David Tawil, chairman of ProChain Capital. “I expect this to be ‘for real’ and that China will not change course on this position anytime soon, if ever. Nonetheless, if this move was inevitable, better if it happened sooner. , so that the investment community can digest and move on. ”

S&P 500 technology stocks fell, while financials outperformed. The dollar has gone up. The Nasdaq Golden Dragon China Index – which tracks some of the largest Asian companies listed in the United States – fell 3.6%. Crypto-related stocks such as Riot Blockchain Inc. and Marathon Digital Holdings Inc. fell.

Read: Summers says Crypto needs government regulation to be viable

The volatility of US stocks and major developed currencies has hovered at the same pace for more than a year, as risks from China compete with central banks to guide market movements. Traders withdrew $ 28.6 billion from U.S. equity funds in the week to September 22 – the biggest buyout since February 2018, according to a note from Bank of America Corp., which cites data from ‘EPFR Global.

The story continues

Read: Powell says economy adapts to demands of ‘new reality’

The US economy has fulfilled the Federal Reserve’s conditions to start scaling back its asset purchases soon, according to two regional Fed bank chairmen.

“I support starting to cut back on our purchases in November and closing them in the first half of next year,” said Loretta Mester, chairman of the Fed Bank of Cleveland. Separately, her Kansas City counterpart Esther George said “the criteria for further substantial progress have been met”, referring to the central bank’s taper test.

For more market analysis, read our MLIV blog.

Some of the main movements in the markets:

Actions

• The S&P 500 was little changed at 11:51 a.m. New York time

• The Nasdaq 100 fell 0.4%

• The Dow Jones Industrial Average has changed little

• The Stoxx Europe 600 is down 0.9%

• The MSCI World index fell 0.3%

Currencies

• Bloomberg Dollar Spot Index rose 0.3%

• The euro fell 0.2% to $ 1.1714

• Sterling lost 0.3% to $ 1.3678

• The Japanese yen fell 0.4% to 110.72 per dollar

Obligations

• The yield on 10-year treasury bills rose two basis points to 1.45%

• German 10-year rate rose three basis points to -0.23%

• UK 10-year yield rose two basis points to 0.93%

Merchandise

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