MarketWatch – The ‘most dangerous threat of 2018’ and why we need to ‘slay the beast’

Critical information for the U.S. trading day


The bull market (arguably) turned a ripe nine years old in style on Friday, when a strong jobs report slapped an exclamation point on a chaotic week that saw a 3.5% surge on the S&P 500 SPX, +0.19%  .

And now stocks are taking a stab at making it to 10.

While equity investors savor — and build on — their recent batch of gains, crypto enthusiasts are still trying to steady the ship. Reports of hacking and fear of regulation by the SEC have weighed heavily on virtual currencies of late.

It’s a new week, however, and, on Monday, cryptocurrencies are following stocks into the green — which is more common these days than it used to be, according to our chart of the day (see below).

But that equity-crypto correlation is about to be completely blown up, if Jason Bloomberg, president of industry analyst firm Intellyx, has it right.

In our call of the day, he expands on what he believes is the most dangerous threat we face in 2018: illicit cryptomining, also known as “cryptojacking”. That’s when hackers sneak crypto mining software onto corporate networks, PCs and other devices.

“The implications of illicit cryptomining are profoundly frightening,” Bloomberg wrote in a piece for Forbes. “Because this type of cyberattack is ‘relatively’ benign — for certain definitions of ‘relatively’ — it’s positioned to run amuck, taking over computers, networks, data centers and cloud environments around the world.”

Check out: Egypt’s government secretly hijacks citizens’ computers to mine crypto

And see: Hackers steal computing power to mine cryptos — and they just hit Tesla

He says there are many different criminal pursuits that can leverage mining — tax evasion, money laundering and funding terrorism, for instance — but it is illicit mining is “the most nefarious of all criminal motivations.”

He says we need “to slay the beast” if we want to keep “this insidious infection” from wreaking havoc because prevention and mitigation technologies will never work. The solution: Bloomberg says cryptos should be made illegal.

Yes, illegal. Gone.

This hot take, which drew plenty of attention, struck a chord in Reddit’s 622K-member crypto community, where it was slammed as pure “FUD.” It also led to this response on Medium: “Jason Bloomberg is totally clueless. Here’s why.”

Key market gauges

Futures on the Dow  YMM8, +0.21%  and S&P 500 ESM8, +0.34%  are both up in a big way. Gold GCM8, -0.41% understandably, is caught in a risk-on funk, with some pullback going on. Asian markets ADOW, +1.49%  closed with solid gains, while Europe SXXP, +0.24%  is looking rather perky, as well. Bitcoin BTCUSD, -0.90% which lost 18% last week, and other prominent cryptos are joining in the fun with some gains.

Read Market Snapshot for more

The chart

Is bitcoin the new barometer for equity investors?

According to the Wall Street Journal, a number of traders seem to think so. If bitcoin falls first, equities soon follow. That’s the pattern.

“We’ve begun to watch bitcoin more closely as a sign of speculative enthusiasm,” Doug Ramsey, chief investment officer of the Leuthold Group told WSJ.

As you can see from this chart, the correlation between bitcoin and the S&P last month spiked to its highest levels since DataTrek Research first started tracking the relationship at the beginning of 2016:

It’s not much of a stretch to think bitcoin and its ilk would be among the first to fall when things go south. The highest-returning asset tends to be the first to get smoked when risk-off takes over.

The buzz
Walt Disney Co./Courtesy Everett Collection

Marvel’s “Black Panther” just keeps crushing it at the box office for DisneyDIS, +0.92%  , surpassing the $1 billion mark on its 26th day of release. The film has grossed over $562 million in the U.S. and is already the seventh-highest release of all time. It is also set to surpass “The Dark Knight,” becoming the No. 2 superhero release of all time.

Shares of Oclaro OCLR, +26.56%  are soaring after the optical components maker struck a $1.8 billion deal to be bought by Lumentum LITE, +6.05%  . In other deal news, Clorox CLX, -0.14%  will acquire Nutranext, a privately held health and wellness company.

Tesla confirmed that it suspended production of Model 3 cars for a week during February, in a planned move at the Fremont, Calif. plant. Tesla told Bloomberg it used the downtime to “improve automation” and “address bottlenecks.” This news hits as Tesla deals with pressure to increase production of its new electric sedans.

Shares of Broadcom AVGO, +2.64%  were moving higher, after the Singapore-based semiconductor company said it expects to complete the redomicilation to the U.S. by April 3.

Unfortunately for Donald Trump, it doesn’t look like the Stormy Daniels saga will be going away any time soon, despite his team’s best efforts. Trump’s lawyers are reportedly mulling legal action to keep us from seeing the pornstar’s interview with Anderson Cooper on “60 Minutes” next weekend.

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