Archive for Shalini Nagarajan

Bitcoin is soaring because inflation fears are eating at investors – not because of crypto ETFs, JPMorgan says

Bitcoin sign balloon inflating
  • Investors' growing fears about inflation are behind bitcoin's recent surge, JPMorgan said Wednesday.
  • Its analysts aren't convinced ProShares' first bitcoin ETF is the main reason for the token's rise to all-time highs.
  • "The perception of bitcoin as a better inflation hedge than gold is the main reason for the current upswing," they said.
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The perception that bitcoin is a better inflation hedge than gold has been driving the cryptocurrency's latest run higher, not enthusiasm around the launch of the first US bitcoin-linked exchange-traded fund, according to JPMorgan.

Bitcoin hit a record high near $67,000 on Wednesday, a day after the blockbuster launch of the ProShares Bitcoin Strategy ETF (BITO). JPMorgan's strategists recognized that the trading debut had lifted investor sentiment and the price of the coin, but they downplayed its impact.

"While we accept that bitcoin momentum has shifted steeply upwards since the end of September, we are not convinced the anticipation of BITO's launch was the main reason," the analysts wrote in a note Wednesday.

"We believe the perception of bitcoin as a better inflation hedge than gold is the main reason for the current upswing, triggering a shift away from gold ETFs into bitcoin funds since September."

Investors are getting more worried about increased rates of price rises, and that has revived interest in inflation hedges, including the use of bitcoin as a hedge, according to the JPMorgan team led by Nikolaos Panigirtzoglou.

Shortages caused by broken supply chains and an energy crunch have pushed prices up sharply around the world. That inflation can lead to higher interest rates, taking the shine off assets such as high-growth tech stocks. Investors look for places to put their cash that are less exposed to higher prices.

That thinking has led to a shift from gold into bitcoin, the analysts said. That flow - which was "very intense" during the last quarter of 2020 and the beginning of 2021 - has accelerated in recent weeks, they noted.

"Bitcoin's allure as an inflation hedge has been strengthened by the failure of gold to respond in recent weeks to heightened concerns over inflation, behaving more as a real rate proxy rather than inflation hedge," they said.

Further, this shift looks like it should remain intact and support a bullish outlook for bitcoin into the end of the year, they added.

Bulls view the ProShares bitcoin ETF as a new investment vehicle that draws new investment into the market, the team noted. Bears see it as an incremental addition to an already crowded space, which already offers the Grayscale Bitcoin Trust in the US, as well as Canada-listed ETFs accessible to US investors.

JPMorgan doesn't believe the ProShares launch will trigger a new wave of fresh capital to bitcoin, given investors already have several choices linked to the cryptocurrency. Its analysts highlighted the fall-off in interest that followed the launch of the Purpose Bitcoin ETF (BTCC) last February in Canada.

If that is a guide, the "initial hype with BITO could fade after a week," they said.

JPMorgan seems to be reiterating its stance from earlier this month that institutional investors seem to favor bitcoin as a hedge compared to gold.

Bitcoin was last trading at $66,349 on Thursday, and is up 129% so far this year, according to data from CoinDesk. The price of gold has fallen 8% year-to-date and was last trading around $1,785 an ounce.

Read More: BANK OF AMERICA: Buy these 43 crypto-linked stocks as their market values are poised to expand due to their digital-asset exposure

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Jack Dorsey’s cryptic ‘705742’ tweet leaves crypto fans wondering – did Square mine its 1st bitcoin block?

Jack Dorsey
Twitter CEO, Jack Dorsey.
  • Jack Dorsey's '705742' tweet on Tuesday left crypto enthusiasts on Twitter guessing what he meant.
  • "Your first block reward? Block 705742 was mined about 3 hours ago, around the same time the tweet was tweeted," one fan said.
  • Dorsey said last week that Square is looking at building a bitcoin mining system for the masses.
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Twitter and Square CEO Jack Dorsey left a lot of crypto enthusiasts scratching their heads when he posted the terse and enigmatic tweet "705742" on Tuesday.

That was it. No follow-up explanation, no thread laying out the topic. So people dived in to speculate - with most of them guessing it was related to bitcoin in some way.

Dorsey tweet

"#BTC price target?" one Twitter user asked.

"Your first block reward? Block 705742 was mined about 3 hours ago, around the same time the tweet was tweeted," another user said.

On Friday, Dorsey said digital payments company Square is looking into building a simple-to-use bitcoin mining system for individuals and businesses worldwide.

The process of crypto mining generates bitcoins every 10 minutes. For the first four years of bitcoin's existence, 50 bitcoins were issued in that period. Every four years, the amount is cut in half. Only one block - yielding 6.25 bitcoin - is minted every 10 minutes as of October 2021. The halving in 2024 is set to happen on block 840,000.

"Knowing the notoriety and reputation that Jack holds as a successful tech entrepreneur and bitcoin advocate, his tweet could have caused lots of buy pressure before and during that block confirmation," Adrian Kolody, founder of decentralized exchange Domination Finance told Insider.

"It's very typical for highly influential people to influence price action in the crypto market, no matter the market cap," he added.

"At the end of the day, it's just Jack Dorsey making a simple prediction of what block confirmation would breach another (all-time high) for bitcoin."

Bitcoin hit a new all-time high above $66,000 on Wednesday, according to data from CoinDesk, and is up 126% so far this year. The digital asset got a lift from this week's launch of the first US futures-based bitcoin ETF.

As for the suggestion "705742" could be a price target, there are market observers setting their sights high. Cathie Wood of Ark Invest has put a long-term price target of $500,000 on the digital asset.

Dorsey is influential in the crypto industry, and he has tweeted often about Square's bitcoin-related ambitions. In July, he revealed it planned to launch a decentralized finance business focused on the cryptocurrency.

In September, Twitter rolled out a feature that allows anyone using the social media platform to send and receive tips in bitcoin.

Twitter did not respond to Insider's request for comment on Dorsey's tweet.

Read More: The bitcoin futures ETF has made the so-called crypto basis trade that's potentially risk-free even more profitable. Here's how it could also sustain the high yields available on stablecoins.

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The SEC says 900,000 Reddit-fueled traders pumped GameStop shares during the meme stock frenzy – not short-seller covers. Here are 5 takeaways from its report.

People wait to cross the street in front of GameStop at 6th Avenue on March 23, 2021 in New York. GameStop stocks falls more than 10% after the video game store showing strong earnings but lower than expected.
"It was the positive sentiment, not the buying-to-cover, that sustained the weeks-long price appreciation of GameStop stock," the SEC said.
  • Reddit-fueled retail traders, not short-sellers, drove the meme stock frenzy in January, the SEC said in a report released Monday.
  • The 44-page report looked into what led to the January frenzy and the roles Robinhood and payment for order flow played in the saga.
  • But the SEC didn't signal any coming rule changes, and instead laid out issues to consider rather than making recommendations.
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The Securities and Exchange Commission published a long-awaited report on Reddit darling GameStop's retail-trading frenzy on Monday, saying the phenomenon was caused by a rapid rise in investor accounts betting on the stock.

"Whether driven by a desire to squeeze short sellers and thus to profit from the resultant rise in price, or by belief in the fundamentals of GameStop, it was the positive sentiment, not the buying-to-cover, that sustained the weeks-long price appreciation of GameStop stock," the regulator said.

In its 44-page report, the SEC debunked the theory that a "short squeeze" may have sent shares of GameStop and other meme stocks soaring. While many short sellers were forced to cover their short positions, the agency said, there is no evidence that this narrative was a major factor.

GameStop purchases by those covering their short positions were a "small fraction of overall buy volume," and the share price continued to stay high after the direct effects of such covering would have waned, the SEC said.

Here are 5 takeaways from the report:

1. GameStop's rally was driven by 880,000 new investors trading the stock in January

"By January 27, the number of unique accounts trading GME on a given day increased from less than 10,000 at the beginning of the month to nearly 900,000."

2. Hedge funds remained largely unscathed

A handful of hedge funds including Gabe Plotkin's Melvin Capital lost billions of dollars over their bearish bets against GameStop. But the SEC said these firms were not badly affected.

"Staff believes that hedge funds broadly were not significantly affected by investments in GME and other meme stocks. Staff did not observe that any advisers to private funds and registered funds experienced liquidity issues or difficulties with counterparties," the regulator said.

3. Questions on "game-like" trading apps, payment for order flow incentives

The SEC said regulators should consider whether game-like features are encouraging investors to trade more.

"Consideration should be given to whether game-like features and celebratory animations that are likely intended to create positive feedback from trading lead investors to trade more than they would otherwise."

"In addition, payment for order flow and the incentives it creates may cause broker-dealers to find novel ways to increase customer trading, including through the use of digital engagement practices," the regulator said.

The report did note that much of the retail order flow in GameStop was purchased by wholesalers and executed off-exchange.

4. No assurance to retail investors that they won't face trading restrictions in future

Robinhood and some other brokerages restricted trading in meme stocks during the epic rally, causing fury among users over missing out on gains. The investing app said the National Securities Clearing Corporation asked for a $3 billion deposit to cover trading risks on highly-volatile stocks.

"In their customer account agreements, some broker-dealers reserve the right to decline customer orders or cancel trades without prior notice. Such actions could be taken, for example, for legal, compliance, or risk management reasons," the report said.

5. Few clues on change to market-structure rules

The agency didn't provide specific policy recommendations. It did say that the events call for a review of the factors that made brokerages restrict trading, digital engagement practices, dark pools and market makers, and short-selling. Chair Gary Gensler has previously pointed to payment for order flow and "gamification" of trading as coming under the SEC's scrutiny.

"January's events gave us an opportunity to consider how we can further our efforts to make the equity markets as fair, orderly, and efficient as possible. Making markets work for everyday investors gets to the heart of the SEC's mission," Gensler said.

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Bitcoin briefly hits $60,000 for the 1st time since April as crypto ETFs look set for watershed SEC approval

bitcoin cryptocurrency - stock illustration
  • Bitcoin touched $60,000 on Friday as investors awaited approval of a futures ETF tracking its price.
  • The SEC is set to allow trading of the first US bitcoin futures ETF next week, Bloomberg reported.
  • The digital coin hit a 24-hour high of $60,018, taking its year-to-date gains to around 104%.
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Bitcoin briefly topped $60,000 for the first time since April on Friday, as investors celebrated the prospect of the SEC approving the first US bitcoin futures ETF within days.

The digital asset hit a 24-hour high of $60,018, according to data from CoinGecko, nearing its record price of $64,895. That takes bitcoin's year-to-date gains to about 104%.

Market sentiment is on the upturn as the SEC is ready to allow the first US bitcoin futures ETF to start trading next week, according to Bloomberg.

Anticipation has been further fuelled by the regulator approving Volt Equity's ETF last week, according to Will Hamilton, head of trading and research at digital asset management firm TCM Capital.

Volt's ETF specifically tracks companies that have significant exposure to bitcoin, or generate most of their profit from bitcoin-related activities like mining, lending, or manufacturing mining equipment.

"It's a small step, but a very promising one," Hamilton said. "In essence, the SEC has given the nod, from an investor protection point of view, that investing in these heavily crypto-exposed companies is 'ok'."

Separately, a direct update from the SEC seems to have contributed to Friday's moves. The regulator's investor education Twitter account posted a link to a June notice on Thursday, warning about the risks associated with investing in bitcoin.

"Before investing in a fund that holds Bitcoin futures contracts, make sure you carefully weigh the potential risks and benefits," the tweet said. Investors interpreted it as signalling the regulator will approve those types of funds at some point next week.

On Wednesday, Russian President Vladimir Putin said he recognizes cryptocurrencies as a means of payment. And Morgan Stanley CEO James Gorman admitted crypto is more than just a fad.

Further, Coinbase proposed creating a special regulator as a potential solution to the lack of regulatory clarity and enforcement in crypto markets, as it believes digital assets need to be treated differently to stocks.

Crypto traders seem to have brushed off comments from JPMorgan boss Jamie Dimon that bitcoin is "worthless," and Bank of England's deputy governor Jon Cunliffe warning that the coin could trigger a 2008-level meltdown.

"Instead of scaremongering about bitcoin, certain officials should look closer to home," said Paolo Ardoino, chief technology officer at trading platform Bitfinex. "The unsustainable inflationary monetary policies of central banks will inevitably unravel."

Read More: 2 ETF veterans-turned crypto investors break down why they think the SEC should approve a bitcoin ETF that invests in the digital currency itself instead of futures contracts - and share the 3 main pitfalls of a futures-based ETF

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The SEC is ready to allow bitcoin futures ETFs to start trading next week, report says

Three dimensional render of Bitcoin shining inside mine - stock illustration
  • The first US bitcoin futures ETF is likely to start trading next week, Bloomberg reported late Thursday.
  • It reported the SEC is unlikely to block the products, which would be a "watershed moment for crypto," an analyst said.
  • Bitcoin hit a six-month-high above $60,000 on Friday, on hopes a bitcoin futures ETF is within reach.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

The Securities and Exchange Commission is set to allow the first US bitcoin futures exchange-traded fund to start trading next week, Bloomberg reported late Thursday.

The SEC is not likely to block such products from beginning to trade, the news outlet reported, citing people familiar with the matter.

Four proposed bitcoin ETFs are in line for an October decision from the SEC on whether to approve, deny or delay their submissions. The firms involved - ProShares, Valkyrie Investments, Invesco, and VanEck - are among several applicants waiting for word.

ProShares and Invesco's proposals are based on futures contracts and filed under a 1940 law that the chairman of the SEC, Gary Gensler, has said provide "significant investor protection" for mutual funds and ETFs.

While pure bitcoin ETFs have not found favor with Gensler, he has sounded more positive about those based on futures contracts for the digital asset.

The SEC green light would be "a watershed moment for the crypto community, as they have been waiting for this since 2018," Naeem Aslam, chief market analyst at Avatrade, said in a note.

"The reflection of this optimism can also be seen by looking at the bitcoin price, which is only 7% away from its all-time high."

Bitcoin briefly topped $60,000 for the first time since April on Friday, before slipping to around $59,440. Its price has been gaining over recent days in anticipation of ETF approval, with many expecting it could regain April's record high of $64,895 before the end of the year.

Firms waiting for a crypto ETF decision from the SEC include Fidelity, WisdomTree, Wilshire Pheonix, VanEck, First Trust SkyBridge, and Valkyrie, as well as ProShares and Invesco.

Whichever fund secures first approval could gain a significant first-mover advantage, as investors seek exposure to the price of the digital asset in their traditional brokerage and retirement accounts.

Tyler and Cameron Winklevoss were the first to try to create a bitcoin futures ETF, without success, in the US in 2013. This year, crypto ETFs were approved in Canada and Europe.

Anticipation that a bitcoin futures ETF is just around the corner has been brewing, given recent developments.

Cathie Wood's Ark Invest has put its name to an ETF whose SEC application was filed by issuer Alpha Architect on Wednesday. The ARK 21Shares Bitcoin Futures Strategy ETF carries the ticker ARKA, a positive sign of pending regulatory approval, an analyst said.

Some investors are flagging an SEC tweet as another positive signal. The regulator's investor education office on Thursday posted a link to a June notice that warns about crypto funds.

"Before investing in a fund that holds bitcoin futures contracts, make sure you carefully weigh the potential risks and benefits," the tweet said.

The SEC last week gave the go-ahead to Volt Equity's ETF, which tracks stocks with significant exposure to bitcoin - seen as the closest fund to a bitcoin ETF so far.

The SEC didn't immediately respond to Insider's request for comment.

Read More: An ultimate guide to 10 top altcoins, their real-world applications, and why investors are betting their tech is the future of crypto

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Central banks’ digital currencies must not harm their monetary mission – and must complement cash, G7 finance leaders say

G7 leaders in London
G7 foreign ministers.
  • Central banks' digital currencies must support and "do no harm" to their monetary mission, G7 finance leaders said.
  • If issued, CBDCs would coexist with cash and must contribute to a secure financial ecosystem, they said Wednesday.
  • These currencies should meet rigorous standards of privacy and be energy-efficient, they added.
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Central bank digital currencies must support and "do no harm" to a bank's ability to implement their mission for monetary and financial stability, and would complement cash if issued, Group of Seven financial leaders said Wednesday.

"If issued, a CBDC would complement cash and could act as a liquid, safe settlement asset and as an anchor for the payments system," they said in a statement on guidance issued after a meeting in Washington.

Such a move would have to be aligned with rigorous privacy standards, accountability on data protection for users, and transparency on the use and storage of information in order to instill user trust. Under the guidelines, CBDCs would also have to be energy-efficient.

"Any CBDC ecosystem must be secure and resilient to cyber, fraud and other operational risks, must address illicit finance concerns, and be energy efficient," the finance ministers and central bank governors said.

The prospect of digital money from central banks is one of the hottest topics in the financial community. The debate over the implementation of CBDCs has been clouded by disagreements between central banks and assertive backing by cryptocurrency proponents.

Bank of America has said the adoption of CBDCs is "inevitable" because of the diminishing role of physical currency.

The G7 group acknowledged that CBDCs could improve cross-border payments, which often face challenges such as high costs and low speed. But they noted nations have a "shared responsibility to minimize harmful spillovers to the international monetary and financial system."

Their guidance endorsed 13 public policy principles for retail CBDCs, which highlight the need for coexistence with existing means of payment and transparency in their operation.

Leaders also touched on stablecoins - assets pegged to a stable currency such as the US dollar - saying they need to be held to high regulatory standards.

"A stablecoin widely used as a store of value or means of payment would pose significant risks to financial stability without appropriate regulation," they said.

Settlement assets need to have stable value to be adopted widely as payments, the G7 said. But the highly volatile nature of unbacked crypto assets means they are unable to fulfil this function, they added.

No G7 authority has so far taken the decision to issue a CBDC, the group noted, saying they will continue to carefully consider potential policy implications.

China has taken the lead by being the only major economy to release a national rollout of its own CBDC in June.

Read More: How to land a free NFT that could become worth millions: A TikTok influencer explains how to set yourself up to get a drop on some of the biggest projects

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Coinbase wants to strengthen its legal and compliance team as it steps up collaboration with crypto regulators

Coinbase employee Daniel Huynh holds a celebratory bottle of champagne as he photographs outside the Nasdaq MarketSite, in New York's Times Square, Wednesday, April 14, 2021.
  • Coinbase is looking to make new hires, including a dozen new roles for its legal and compliance team.
  • The new listings highlight Coinbase's intent to collaborate with regulators after its recent spat with the SEC.
  • The crypto exchange is preparing to pitch a new regulatory framework to federal agencies due next month.
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Coinbase wants to grow its legal and compliance team, and add several communication roles as the crypto exchange prepares to propose a regulatory framework for cryptocurrencies in the US.

The largest publicly-listed crypto exchange's website shows more than 350 job openings, including a role based out of Washington, DC for someone with "excellent political judgment" and who has experience in managing high-profile political and media crises.

These represent Coinbase's intent to get US regulators on board with its ambitions after the Securities and Exchange Commission threatened to sue the company over its interest-bearing lending product. Plans to launch the product were abandoned last week.

CEO Brian Armstrong lashed out at the regulator by calling its behavior "sketchy" for not providing clear enough reasons for its threat. But the exchange now seems to be in collaboration mode, wanting to advise on how the US can create "sensible regulation."

Among the 24 openings for legal and compliance, Coinbase is looking to hire a "head of APAC compliance" in Singapore, a "head of international compliance" in London, and "global anti-bribery and corruption managers" in the UK and US.

Other roles for general counsel mention responsibilities related to strategic direction on digital currency, blockchain technology, and legal and regulatory issues. All new roles related to security engineering are based out of the US and Canada.

Coinbase's new openings also highlight its intentions to fund new investments and acquisitions as the company recently raised $2 billion via the bond market.

Listed benefits for some roles include free snacks and lunch, and a monthly gym allowance.

Coinbase already added more than 450 new employees in the second quarter this year, taking its total full-time staff headcount to 2,176, according to its latest letter to shareholders.

Read More: Ahead of bitcoin's $3 billion options expiry this Friday, 5 experts told us how much the crypto and other leading altcoins can surge or fall from here: 'if markets bleed, they will bleed as a group.'

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WeWork is set to go public via a SPAC deal in October – 2 years after its disastrous IPO attempt

People walk by the co-working space WeWork in the Williamsburg neighborhood in Brooklyn on March 26, 2019 in New York

WeWork is planning to join the stock market around October 21, more than two years after its IPO attempt ended in disaster.

The shared-workspace company agreed in March to go public via a merger with a special-purpose acquisition company (SPAC) named BowX Acquisition Corp. The two companies announced on Monday that BowX shareholders will meet virtually on October 19 to vote on the deal.

Upon completion of the transaction, WeWork expects to list its shares on the New York Stock Exchange under the "WE" ticker symbol.

The merger values the coworking giant at $9 billion including debt. That's less than a fifth of the private valuation of $47 billion it secured in 2019, following a $2 billion investment from SoftBank.

BowX shares closed 5% higher at about $11 on Monday. They hit a high of $14 in April after the blank-check firm, which counts former NBA star Shaquille O'Neal among its advisors, revealed the WeWork merger.

WeWork first filed for an IPO on August 14, 2019. But the coworking startup quickly faced intense investor and media scrutiny of its finances, its business model, and the controversial behavior of then CEO Adam Neumann.

The backlash eventually spurred WeWork to shelve its listing, and Neumann stepped down from his role on September 24, 2019. Majority shareholder SoftBank, which initially walked away from a deal to purchase $3 billion in stock, reached a settlement to bail out the business in February of this year.

A SPAC is a listed shell company created solely with the purpose of merging with or acquiring a private business to take it public. The vehicle offers a cheaper and speedier alternative to a traditional IPO. However, SPACs have come under fire by regulators who have moved to tighten investor protections against the investment vehicles.

A number of class-action lawsuits by aggrieved shareholders against the likes of Bill Ackman's Pershing Share Tontine Holdings, along with mounting regulatory scrutiny and subpar performance, have raised questions about whether SPACs are a sign of Wall Street excess.

The cooling of the SPAC market is evident from recent data that shows $75 billion was wiped off the value of SPAC deals in just six months.

Read More: A hedge fund manager who returned over 4,000% in Q1 2020 says 'we are in uncharted territory.' He explains his strategy that allows investors to maximize gains during financial storms and 'take on more systematic exposure' the rest of the time.

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Global stocks fall as Chinese property developer Evergrande’s scramble to avoid default rattles investors

  • Global stocks fell Monday, with Dow futures down 500 points, on concerns about the Evergrande fallout ahead of the Fed meeting this week.
  • Evergrande's Hong-Kong listed shares plunged to an 11-year low as fears grew of a default on $300 billion of debt.
  • Oil dropped as the dollar jumped to a three-week high and as US production gradually returned.
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Global stocks slid Monday as worries over the escalating crisis of Chinese property developer Evergrande sent shares in Chinese and Hong Kong property companies to their lowest levels in half a decade.

Investors are also taking positions ahead of the Federal Reserve's meeting this week, which is expected to shed light on the central bank's timing for cuts to its regular bond purchases.

In the US, Dow Jones stock futures were down than 500 points for a more than 1.4% decline, as of 5:20 a.m. ET. Those on the S&P 500 fell 1.2%, and the Nasdaq lost 1%, suggesting a lower start to trading later in the day.

With mainland China markets closed for a holiday, the impact of worries about Evergrande played out in Hong Kong. The Hang Seng Properties index, which tracks a dozen property developers, fell as much as 6.64% to a 52-week low, while the broader Hang Seng index was 3.87% lower. But trading was thin, as Japan and South Korea were also on holiday alongside China.

Evergrande faces a debt crunch of more than $300 billion. Concerns center on the impact on China's financial system if the country's second-largest property developer defaults on its obligations to banks and bondholders, and whether its demise, if not averted by action by Beijing, could trigger contagion.

The company is due to pay $83.5 million interest on September 23 and another $47.5 million interest payment on September 29 on two bond payments. Both bonds would default if the interest is failed to be settled within 30 days of the scheduled payment date. But the payment is unlikely to be made, according to Deutsche Bank strategists.

Evergrande's Hong Kong-listed shares fell as much as 18.9% on Monday to an 11-year low. Ping An Insurance, China's largest insurer by market value and most exposed to the real estate sector, closed 5% lower.

Investors are also bracing for the Fed's monetary policy decision, due at the end of its two-day meeting on Wednesday. It is the main event among 16 central banks, including the UK and Japan, set to hold meetings this week.

Deutsche Bank's US economists expect Fed Chair Jerome Powell to reiterate that a reduction in the pace of asset purchases is appropriate this year, as long as economic progress remains on track. But given the big August jobs miss and other mixed data released after his last comments, investors are watching for specific details on pace and timing.

On Thursday, the US, eurozone, the UK and other countries will get flash readings on purchasing managers indexes for September, watched for signs of improvement on the deterioration shown in July.

European markets opened lower. Official Destatis data on Monday showed German producer prices for August rose 12% on last year, the biggest annual gain in 45 years.

Frankfurt's DAX fell 2.1%, and the Euro Stoxx 50 lost 2.1%. London's FTSE 100 moved 1.4% lower.

Oil futures extended the prior week's losses as the dollar index jumped 0.2% to a three-week high of 93.39. Oil is facing headwinds from a return of US production in the Gulf of Mexico, previously shut by hurricane impacts, according to Carsten Fritsch, commodity analyst at Commerzbank.

Brent crude was down 1.6% to $74.08 a barrel, and West Texas Intermediate slid 1.4% to $70.39 a barrel.

Read More: Goldman Sachs says to buy these 17 stocks that are poised to continue out-growing their peers regardless of shocks to the economy

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US stocks rise on investor confidence in economic outlook, while Chinese property stocks dent Asian equities

Traders work on the floor of the New York Stock Exchange
  • US stocks looked set to open higher after the S&P 500 rose by the most in nearly 3 weeks.
  • The Evergrande debt saga is still weighing on sentiment in Asian markets.
  • "China markets don't have a lot to cheer about today," an analyst said.

US stocks rose on Thursday as investors concentrated on strong regional manufacturing activity that underpinned confidence in the broader economic outlook, while debt problems at China's second-biggest property developer weighed on Asian equities.

Futures on the Dow Jones rose 0.6%, while those on the S&P 500 and Nasdaq rose 0.8% as of 5:10 a.m. ET, suggesting a higher start to trading later in the day.

The NY Empire State Manufacturing Index, a gauge for business conditions for New York manufacturers, massively beat expectations in September, jumping to 34.3 from 18.3 in August. Analysts expected a reading of 18.

"That was enough to flush out the pent-up dip buyer demand out there with markets proclaiming the US recovery was back on track," Jeffrey Halley, a senior market analyst at OANDA, said.

Investors chose to focus on this piece of data, rather than soft US industrial production figures overnight, which missed expetations.

The S&P 500 rose by its most in nearly 3 weeks on Wednesday, rising 0.8%, as cyclical industries and tech stocks took the index back to within 1.3% of its all-time highs, Deutsche Bank strategists said. The Nasdaq closed 0.8%, finishing higher for the first time in six sessions.

US weekly jobs data and monthly retail sales are due later Thursday.

Asian equities fell as sentiment was still centered around the unfolding collapse of Evergrande after the housing authority notified China's major banks that the property developer won't be able to pay interest payments on loans due September 20.

The Shanghai Composite fell 1.3%, Tokyo's Nikkei fell 0.6%, and Hong Kong's Hang Seng fell 1.4%

The Hang Seng Composite Index that tracks properties and construction stocks fell as much as 4.3% at one point. That included big declines for developers like Guangzhou R&F, which plunged 12.2%, and Sunac China, which fell 11.5%.

"Coming after the carnage in gaming stocks this week after the latest government investigation targeted Macau's casinos, China markets don't have a lot to cheer about today," Halley said.

The government in Macau, the only location in China where gambling is legalized, said this week it would begin consultation on a potential overhaul of the industry.

Meanwhile, European stocks traded higher on Wednesday, driven by a 20% jump in Lagardere after French media giant Vivendi said it would buy a stake in the publishing firm.

Paris' CAC 40 rose 1%, making it one of the stand-out performers in the region. London's FTSE 100 gained 0.5% and the Euro Stoxx 50 rose 0.8%.

Oil prices made solid gains after data showed nationwide crude inventories fell more than expected in the latest week, allaying some concern about the demand outlook. Brent crude was last trading 0.2% higher at $75.64 a barrel and West Texas Intermediate rose 0.2% to $72.75 a barrel.

Read More: Top 11 meme stocks this week on Reddit: SmileDirectClub roars higher, Apple buzzes with iPhone announcement, and GameStop tops the charts again

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