Don’t Look at the Dow

Hey, it’s the Friday afternoon before Super Bowl LII (that’s 52 in Roman numerals to you), don’t look at your Dow Jones ticker or your Bloomberg Terminal. Really, it will just ruin your weekend.

This was the worst week of trading since February 2016, with the Dow having plunged 650+ points for the week.

Ready for some uplifting and silly Super Bowl ads yet?

Why the sudden drop?

Earlier in the day, all looked rosy. The jobs report was pretty good, and even showed that average hourly earnings rose 2.9 percent YOY, some of the fastest growth seen in years.

But the interest rates have started an upturn, and the yield on the 10-year Treasury note rose to more than 2.8 percent, the highest level it has witnessed in four years.

You sure you’re not ready for some Super Bowl ads?

The markets be simply be responding to the idea that the era of “easy money” is finally coming to an end.

Now, I’ll quote from one of my favorite, classic Budweiser ads.

“Wazzzzzuppppppppp!!!????”

Today, not the stock market!

Long on the Blockchain

Bloomberg is reporting that the cryptocurrency market is headed south. Like beyond-the-boarder, deep into Mexico south.

The peak for Bitcoin was $19,511 on December 18th, soon after the introduction of regulated futures contacts in the U.S. 

But now, reports Bloomberg, Bitcoin has seen more than half its value wiped out after “waves of negative news,” including escalating regulatory threats from around the world (including in India, South Korea, China, and the U.S.), along with a record $500 million heist at Japanese exchange Coincheck Inc.

Nothing like a virtual coin bank heist in Tokyo to bring down a bull Bitcoin market! Quick, was George Clooney or Matt Damon anywhere in the vicinity??

Bitcoin was trading as low as $7,643, and overall down 21 percent on the week (and is bringing down other virtual coins, including Ripple, Ether, and Litecoin, all of which tumbled 28 percent).

Turbo’s Take: One, I wish I’d held on to those 7 Bitcoins I’d had in Coinbase and which I sold a year ago this month. I’d take $7K per coin. Two, this is all missing the larger plot — it’s not about Bitcoin, or even virtual currency — it’s about the underlying technology that powers these systems, the blockchain (see IBM’s blockchain overview here). It’s about the power to increase transparency and decrease friction in markets and transactions of all types. So, if you want to go short on Bitcoin, be my guest. But I would recommend you go long — very long — on the blockchain.

Open Sesame

Lest my blog become too Western-centric, it’s time to return to the China Internet watch, this time for Alibaba’s earnings.

Please remember, Jack Ma’s empire is vast and ever-expanding, with businesses that include two of the world’s largest and most popular online retail marketplaces, Taobao and Tmall, an affiliation with Ant Financial, its new Digital Media and Entertainment Group, and Alibaba.com and Alipay (among others).

Earlier today, Alibaba Group Holding Ltd. indicated its third-quarter revenue jumped 56 percent, beating expectations, according to a report from Reuters.

The group also raised its full year forecast, and announced its 33 percent stake in Ant Financial. 

As Reuters reports, Alibaba is looking for new areas such as cloud computing, payments, and offline retail to maintain its rapid growth rates that make it one of the world’s most valuable companies, with a current market cap of $523 billion.

Alibaba’s cloud business was reported to have crossed 1 million customers globally in the quarter ended last September.

In other words, Alibaba is huuugggeee, and getting huger all the time.