On Week 46, stock markets experienced declines, reversing earlier optimism as Powell indicated that strong economic growth permits a cautious approach to interest rate cuts. Core inflation remained steady, while small business optimism rose in October, buoyed by reduced uncertainty following the recent election. Nevertheless, challenges such as low sales, job vacancies, and persistent inflation remain.
The dollar index surged to a multi-month high, while gold prices fell to a one-month low as investors shifted towards riskier assets following Trump’s election victory. Oil prices sharply declined due to disappointing stimulus measures from China and growing concerns about weaker global demand. India’s annual inflation rate spiked, further complicating the economic landscape. Additionally, the Mexican peso weakened to a two-year low amid fears of potential protectionist policies under the new Trump administration.
In the cryptocurrency space, BTC climbed to $91K, continuing to rise independently of other markets, while ETH lagged behind at $3K.
Monday
On Monday, stocks rallied with all major indexes reaching new ATHs, driven by optimism surrounding Trump’s re-election and the GOP gaining a majority in both the Senate and the House. Tech stocks, particularly Tesla and crypto-related companies, led the gains. Investors are now looking toward the comments from Fed officials and the upcoming earnings reports. The dollar is at a six-week high, while gold dropped to a one-month low as investors rush into riskier assets. Oil fell sharply, fluctuating between concerns over supply cuts from the Middle East and the weakness in demand from the Chinese economy, compounded by the anticipated “drill, baby, drill” policy. At the same time, the Chinese economy showed new signs of inherent weakness, with new loans issued by banks falling to a 15-year low. BTC and ETH continued their best run since 2021. BTC is leading the charge, nearing $88K, while ETH follows, reaching $3.4K. The rest of the crypto market is experiencing unprecedented exuberance not seen in the past four years, with some leading tokens such as Cardano nearly doubling in price within a few days as more and more latecomer traders rush into crypto.
Crypto
BTC surged to $88K, and prediction markets now estimate a 52% chance of it reaching $100K by the end of 2024. This optimism is fueled by Trump’s election victory and institutional demand. BTC’s market cap has exceeded $1.7 trillion and is about to flip the entire silver market.
World Markets
Mexico’s industrial production declined for the second consecutive month in September, driven by weaknesses in mining and construction sectors. While manufacturing output increased, overall industrial activity remained sluggish due to factors like tighter monetary policy, political uncertainty, and a weaker peso. Meanwhile, Mexican consumer confidence reached a record high in October, with optimism about financial situations and the country’s economic outlook.
China’s new yuan loans in October fell to a 15-year low of CNY 500 billion, missing market expectations. Total social financing also came in below forecasts, reflecting weak demand for credit and sluggish economic activity.
Currencies
The dollar index rose to a six-week high on Monday, driven by expectations of Trump’s pro-business policies. The Mexican peso weakened to a two-year low amid concerns about protectionist policies under the Trump administration.
Commodities
Gold prices fell to a one-month low as investors shifted towards riskier assets. Oil prices fell sharply due to disappointing stimulus measures from China and concerns about weaker global demand. Natural gas prices surged over 10% as Hurricane Rafael disrupted production in the Gulf of Mexico.
Tuesday
On Tuesday, equities declined despite consumer confidence surging to a three-year high, pausing after the post-election rally. Technology and communication services sectors outperformed, while materials, healthcare, and real estate lagged. Gold and oil rebounded as EU economic sentiment dropped, and Indian inflation continued to rise. BTC ($87K) and ETH ($3.2K) paused as some traders took profits off the table.
Crypto
On November 12, BTC’s surge raised El Salvador’s holdings to over $500M and Bhutan’s to over $1B. Bhutan’s BTC assets now represent more than one-third of its GDP, while El Salvador’s account for 1.5%.
World Markets
The ZEW Indicator of Economic Sentiment for the Euro Area dropped to 12.5, below expectations. India’s annual inflation rate surged to 6.21%, with food prices driving the increase.
Currencies
The Brazilian real weakened to a three-and-a-half-year low due to fiscal policy concerns and rising inflation expectations. A stronger US dollar also pressured the real.
Wednesday
On Wednesday, equities closed mixed. The Dow saw modest gains, while the S&P and Nasdaq declined. The consumer discretionary, energy, and real estate sectors outperformed, while technology and healthcare lagged. Investors digested inflation data, indicating ongoing inflationary pressures. BTC ($90K) continued pushing toward $100K, while ETH retreated to $3.1K.
Crypto
BTC’s continued rally has ignited optimism, with prediction markets favoring a year-end target of $100K.
World Markets
EU stocks hit a 13-week low amid a looming economic downturn. Brazil’s real dropped further on fiscal concerns and inflation.
Currencies
The dollar index strengthened further, driven by expectations of hawkish Fed policies.
Thursday
On Thursday, equities fell as mixed economic data and Powell’s comments about cautious rate cuts weighed on sentiment. The PPI report showed persistent inflationary pressures. BTC ($88K) and ETH ($3.1K) entered correction territory due to profit-taking.
Crypto
Solana’s network activity surged due to increased meme coin trading and DEX bot activity, leading to higher fees and bullish sentiment.
World Markets
Eurozone GDP grew by 0.9% in Q3, while industrial production fell by 2.8% YoY in September, reflecting weak demand and supply chain disruptions.
Friday
On Friday, equities plummeted, reversing earlier optimism. Retail sales rose, but industrial production continued to fall. BTC ($91K) ignored broader markets and continued its rise, while ETH remained at $3K.
Crypto
Franklin Templeton launched its first tokenized money market fund on Ethereum, holding $429.74M in assets.
World Markets
China’s foreign direct investment declined by 29.8% YoY in October, reflecting challenging global economic conditions.
Currencies
The dollar index slipped slightly but remained near a two-year high, supported by robust retail sales and manufacturing data.
Commodities
Crude oil prices fell 2.4%, pressured by weak Chinese demand. Gold prices fell to a one-month low due to diminished hopes for dovish Fed policy.
On Week 47, key economic indicators will be released, including building permits, jobless claims, and the Philadelphia Fed Manufacturing Index. The Eurozone will release core inflation and consumer confidence data, alongside a speech from ECB President Lagarde.
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SVET Markets Weekly Update (October 28 — November 1, 2024)
On Week 44, stocks closed lower as traders were cautious ahead of the elections and the Fed decision. Job openings fell to a 28-month low, and manufacturing indicators showed a sharp contraction in business activity. The dollar index surged, hovering near a three-month high. Gold prices rose, fueled by expectations of a potential Fed rate cut and economic uncertainty. Europe’s unemployment rate is at a historical low, with production continuing to slide and inflation picking up. BTC corrected sharply to just below $70K as some traders locked in profits ahead of the elections. ETH remained largely unchanged above $2.5K amid a lack of investor interest.
Monday
On Monday, stocks closed higher while investors await job openings and labor turnover data. Apple, Amazon, Meta, Microsoft, and Alphabet are set to report earnings. Gold is up due to geopolitical factors. Japan’s unemployment rate dropped to a two-year low. BTC surged above $70K, driven by strong inflows into BTC ETFs and expectations of a Trump victory. ETH, still at $2.6K, is drastically underperforming.
Details
Texas manufacturing improved in October, with production, capacity utilization, and shipments rising. However, new orders weakened, and labor market conditions softened. Price and wage pressures persisted.
Crypto
Microsoft shareholders will vote on December 10th to consider adding BTC to their investments. Despite the proposal, Microsoft’s board recommends voting against it. This comes as major shareholders like Blackrock embrace crypto, while Vanguard remains cautious.
World Markets
Japan’s unemployment rate dropped to a 20-month low of 2.4% in September. Joblessness decreased, while the labor force participation rate increased. However, the number of employed individuals also declined. The jobs-to-applications ratio slightly improved to 1.24. Spain’s retail sales surged 4.1% YoY in September, driven by strong growth in non-food products. Monthly sales also rose 1%, the biggest gain in nearly a year. However, e-commerce sales declined 8.2%.
Currencies
The dollar index surged, hovering near a three-month high. Investors are awaiting key economic data releases this week, including GDP, PCE inflation, and payrolls. Market expectations for a 25bps Fed rate cut are above 90%.
Commodities
Gold prices surged above $2,750, fueled by expectations of a potential Fed rate cut and economic uncertainty. Lower interest rates typically boost gold’s appeal as a non-interest-bearing asset. Meanwhile, China’s gold demand has weakened this year.
Tuesday
On Tuesday, stocks closed mixed as job openings fell and home price increase slowed, with technology leading gains ahead of earnings and more economic data. The Nasdaq approached an ATH, while the Dow fell. Alphabet rose ahead of its earnings report, while McDonald’s and Ford declined due to weaker results. Investors are watching for clues about the Fed’s rate decision from upcoming economic data and tech earnings. German consumer confidence improved, and Brazil’s digital asset imports surged by 40%. BTC and ETH are on the rise, with BTC leading the charge with a 4% gain, almost reaching its ATH. ETH is slowly following with an increase to $2.7K.
Details
Job openings fell to a 28-month low of 7.443M in September. The decline was widespread across sectors and regions. While hires and separations remained stable, the cooling job market suggests a potential slowdown in economic activity. Texas’ service sector improved in October, with a positive reading in the Dallas Fed’s general business activity index. Revenues and hours worked increased, signaling a rebound in demand. However, input costs, including wages and benefits, continued to rise. Firms expect future growth but also increased uncertainty. Retail inventories grew modestly in September, while wholesale inventories declined. Home prices increased 5.2% YoY in August, the slowest pace in 10 months. Rising mortgage rates and seasonal factors contributed to the slowdown. The trade deficit widened significantly in September to $108.2B, the highest level since March 2022.
Crypto
Brazil’s digital asset imports surged 40% in September 2024, reaching $1.4B. Exports remained stable at $44 million, resulting in a net inflow of $1.385B. Cryptocurrencies and stablecoins accounted for 70% of all trades.
World Markets
German consumer confidence improved for the second consecutive month in November, reaching its highest level since April 2022. Income expectations and the propensity to buy increased, while the economic outlook remained pessimistic.
Wednesday
On Wednesday, stocks closed lower as investors digested mixed corporate earnings and economic data. Tech stocks were uncertain, with Nvidia and AMD declining, while Alphabet rose. Slower GDP growth and a strong labor market tempered hopes for Fed rate cuts. Investors are awaiting earnings from Meta, Microsoft, Apple, and Amazon. In the EU, inflation is accelerating as economic growth continues to slow down, exacerbating stagflationary expectations. BTC has corrected slightly but is still holding above $72K, while ETH sits at $2.6K.
Details
Personal consumption expenditure increased 1.5% in Q3 2024, the slowest pace since Q2 2020. GDP grew 2.8% in Q3 2024, slower than Q2. Private sector added 233K jobs in October, far exceeding expectations. 30-year fixed mortgage rates rose to 6.73% in the week ending October 25, the highest level in three months.
Crypto
A recent poll by Paradigm suggests that 5% of voters are single-issue crypto voters, potentially influencing close elections.
World Markets
The Eurozone economy grew 0.9% YoY in Q3 2024, marking the strongest growth in three quarters. Eurozone economic sentiment weakened in October 2024, as industrial confidence declined due to falling production and order books.
Thursday
On Thursday, stocks closed sharply lower, led by tech stocks. Disappointing earnings from Microsoft and Meta, coupled with concerns about AI costs, pressured the market. A strong labor market and rising inflation also dampened hopes for Fed rate cuts. Europe’s unemployment rate is at a historical low, with production still sliding and inflation picking up. BTC tumbled below $70K on profit-taking before the elections, while ETH is stable within its $2.4K-$2.6K range.
Details
In September, core PCE inflation rose 0.3% MoM, the highest in five months, and decreased 2.1% YoY, the lowest level since 2021. Job cuts in October totaled 55,597, up from the previous month. The Chicago PMI fell to 41.6 in October 2024, indicating a sharp contraction in business activity.
Crypto
Florida has invested nearly $800M in cryptocurrencies, according to its CFO Jimmy Patronis. He believes crypto is here to stay and Florida aims to capitalize on this opportunity.
World Markets
Eurozone annual inflation accelerated to 2% in October, reaching the ECB’s target. German retail sales surged 3.8% YoY in September, exceeding expectations. French annual inflation rose to 1.2% in October, driven by higher food and energy prices.
Currencies
The dollar fell slightly but is set to close October with the strongest monthly rise in over two years. The British pound fell to a three-month low of $1.285 after the Labour government’s budget announcement.
Friday
On Friday, stocks closed higher, with Amazon and Intel leading the gains after strong earnings. A weak jobs report, the upcoming Fed meeting, and the election added uncertainty. Oil prices increased again due to tensions in the Middle East, while China’s manufacturing prospects improved on stimulus measures. BTC and ETH remained unchanged, sitting just below $70K and above $2.6K, respectively.
Details
Unemployment rate remained steady at 4.1%. Job growth slowed significantly in October, adding only 12K jobs. The ISM Manufacturing PMI fell to 46.5 in October, indicating a continued contraction in the sector.
Crypto
Crypto industry layoffs continue. Consensys, Kraken, dYdX, and Nova Labs have recently reduced their workforces due to market conditions and strategic shifts. Following a CNN/SRSS poll, Harris saw her odds improve in battleground states, though Trump leads overall.
World Markets
Brazil’s manufacturing PMI eased to 52.9 in October but still indicated solid growth. Argentina’s central bank slashed its interest rate by 500 basis points to 35%. China’s Caixin Manufacturing PMI rose to 50.3 in October. Russia’s manufacturing PMI rose to 50.6 in October, signaling expansion.
Commodities
Oil prices rose, driven by tensions between Iran and Israel. OPEC+ may delay production cuts due to weak demand and rising supply. However, overall sentiment remains cautious due to geopolitical risks and economic uncertainties.
On Week 45, the upcoming presidential elections on Tuesday will be closely monitored by global investors, alongside the Fed’s interest rate decision and various economic indicators like the ISM Services PMI and consumer sentiment. Earnings reports from large and mid-cap companies will also be significant. Additionally, interest rate decisions from several countries, along with Germany’s industrial data and European PMIs, will offer insights into the European economy. In China, key events include the National People’s Congress and important trade and inflation metrics.
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SVET Markets Weekly Update – October 14–18, 2024
On Week 42, equities achieved new ATHs driven by a tech rally and positive economic indicators, including a surprising rise in retail sales. The dollar index advanced on expectations of slower Fed rate cuts connected to robust job and inflation data. The ECB lowered interest rates by 25 basis points, while the Eurozone reported a 2.5% YoY drop in construction output. India’s inflation climbed to 5.49%, exceeding targets, and the Brazilian real and Mexican peso weakened amid foreign exchange concerns and geopolitical tensions. Gold and silver prices soared to new highs, fueled by safe-haven demand amid election uncertainty. BTC is poised for new highs, contrasting with ETH’s underperformance.
Monday
On Monday, equities rose, with the Dow and S&P reaching new ATHs. The Nasdaq also gained. Tech, utilities, and real estate sectors led the gains, while energy declined. The dollar reached a 2-month high. China’s exports hit a 5-month low as India’s inflation jumped to its highest in 9 months. ETH outperformed BTC (66K), reaching 2.6K, fueled by enthusiasm following a narrowing in the presidential race.
Crypto
Crypto investors are more bullish on BTC, pouring $419M into ETF funds the previous week. This shift from negative flows is attributed to a perceived increase in the likelihood of a GOP-led White House. Investors are now prioritizing presidential politics over economic data.
World Markets
China’s trade surplus widened to $81.71 billion in September, exceeding expectations but slowing from August. Exports grew at the slowest pace in five months. Imports fell due to weak domestic demand. The surplus with the US narrowed to $33.33 billion. For the first nine months, the overall surplus was $689.5 billion, with exports up 4.3% and imports up 2.2%.
China’s banks extended $1.59 trillion in new loans in September, the lowest September loan total since 2018, raising concerns about Beijing’s ability to stimulate the economy and achieve its 5% growth target. Total social financing met expectations, but outstanding loan growth slowed to 8.1% from 8.5% in August.
India’s inflation rose to 5.49% in September, exceeding expectations and the RBI’s target of 4%. Food prices surged, contributing significantly to the increase. Housing costs rose, while fuel prices fell less sharply. The CPI rose 0.6% from August.
Currencies
The dollar index rose, nearing its highest levels in two months. Expectations for smaller Fed rate cuts increased after strong jobs and inflation data. While higher jobless claims and slowing producer inflation offered some counterargument, markets still see an 87% chance of a 25 basis point cut in November.
Commodities
Natural gas prices dropped to $2.48/MMBtu, extending a decline from a three-month high. A smaller-than-expected storage injection offered some support, but robust supply and uncertainty about a hurricane’s impact kept prices low. Cooler weather forecasts in some regions provided short-term stabilization.
Sugar prices rose slightly, recovering from a three-week low. Concerns about low supply due to drought in Brazil and geopolitical tensions supported prices. Brazilian sugar output fell 16% in late September.
Tuesday
On Tuesday, equities fell, led by the energy, technology, and healthcare sectors. Megacap chip stocks like Nvidia, AMD, and Broadcom declined significantly. Apple rose due to strong demand for older models. New York manufacturing activity is sharply down. Oil prices are down, while gold prices are up. European investor sentiment improved as EU industrial output rebounded. BTC and ETH stumbled at 67K and 2.6K, but remain in a bullish trend.
Details
The NY Empire State Manufacturing Index fell to -11.9 in October, surprising analysts. This is the worst reading since May, indicating a contraction in New York State. New orders, shipments, and inventories fell. Delivery times shortened, but supply availability worsened. Labor market conditions improved slightly.
World Markets
The ZEW Indicator for the Euro Area rose to 20.1 in October, exceeding expectations. Improved sentiment is driven by stable inflation expectations, potential ECB rate cuts, and stronger economic forecasts.
Germany’s ZEW Current Conditions Index fell to -86.9 in October, the lowest since May 2020. This indicates a rapidly worsening economic situation in Germany.
South Korea’s unemployment rate rose slightly to 2.5% in September but remains near decades lows. The number of unemployed people fell, while the number of employed people rose. The labor force participation rate remained unchanged.
The Brazilian real weakened to a one-month low of 5.65 per USD in October. Concerns about reduced foreign exchange inflows and a stronger US dollar contributed to the decline. Selling pressure was capped by stronger economic data, favoring a hawkish stance by the Brazilian central bank.
Commodities
Gold prices rose slightly to $2,665 per ounce, supported by declining Treasury yields. Weaker New York manufacturing data increased the appeal of gold as a non-yielding asset.
WTI crude oil futures fell 4.4% to $70.6 per barrel due to reduced supply disruption fears. The IEA cut demand forecasts, and Chinese oil demand declined. OPEC lowered its global oil demand forecast.
Wednesday
On Wednesday, equities rose as utilities and financials outperformed, while communication services and consumer staples lagged. Gold reached a new ATH as the Mexican peso weakened following Trump’s comments about re-shoring car production. BTC is edging towards 68K as the presidential race appears to be heading in a pro-crypto direction, while ETH is still stuck at 2.6K.
Details
Export prices fell 0.7% in September, exceeding expectations. Non-agricultural export prices fell 0.9%, while agricultural export prices rose 0.6%. For Q3, export prices fell 1.1%, the most since December 2023.
30-year fixed-rate mortgage rates rose to 6.52% in the week ended October 11th, the highest in two months.
Crypto
The a16z State of Crypto report reveals trends in the digital asset industry, noting a significant overlap between crypto and AI users. Thirty-four percent of crypto projects utilize AI, up from 27% last year. Monthly active addresses exceed 220 million, a 300% increase since September 2023.
World Markets
India’s merchandise trade deficit was $20.8B in September, the lowest since April and below expectations of $24.6B. Imports rose 1.6% to $55.4B, while exports grew 0.5% to $34.6B.
The Bank of Indonesia maintained its interest rate at 6% during its October meeting to achieve an inflation target of 2.5% ± 1%.
Currencies
The Mexican peso weakened to 19.9 per USD in October, reaching a one-month low. Trump’s threat of tariffs on Mexican cars raised concerns about disruptions to the automotive sector.
Commodities
Gold surged to $2,680 per ounce, reaching a record high as Treasury yields fell.
Comment: What Does “Data Depended Fed” Mean?
Since Powell’s anointment to the Fed throne, all we keep hearing from him is that he’s ‘data dependent.’ Ask yourself: what does that mean? Were previous Fed heads also ‘dependent’ on data? What about Paul Volcker, who caused one of the deepest recessions — in fact, the stagflation — in our history?
It would be absurd to say that Volcker couldn’t read statistics and not to see the dark abyss to which his stubbornness was leading businesses and consumers. Why wasn’t he reversing his detrimental policies then? Because he was not ‘data dependent’ and believed in the ‘cause,’ perhaps?
Isn’t that right? Those individuals upstairs now possess such unprecedented powers that it has led them to view the rest of us as lab rats. Some of those ‘scientists’ are megalomaniacs like Volcker, who insist on proving their outlandish ‘economic theories’ no matter what.
Of course, some are well-intentioned and genuinely seek ‘universal good and prosperity,’ or are, more likely, ordinary bureaucrats interested in their careers first and foremost. In that case, they try to navigate between opposing political forces pressuring them and label themselves ‘data dependent.’
In fact, if they truly are, then they can only act in unison with a prevailing macro-trend by magnifying it — injecting more or less liquidity into the markets. In other words, being ‘data dependent’ means they are always late, by definition. So the question is, why do they exist at all if they can only exacerbate market volatility instead of preventing it?
If, by contrast, they see themselves as Volcker-like missionaries, it means they claim a divine power to know what the future holds and are able to direct us to or from it. This is preposterously foolish, and most bureaucrats who have taken Financial History 101 understand that.
No wonder, then, that we are now stuck with Powell — one of those learned bureaucrats who feeds us ‘data dependent’ fallacies in order to keep his job longer despite all good reasons.
Thursday
On Thursday, equities ended mixed after the Dow and S&P briefly reached new ATHs, with semiconductor shares leading the gains. Retail sales increased, and jobless claims were lower than expected, suggesting strong consumer spending. Traders are now focusing on the upcoming earnings reports from Big Tech. Gold reached a new ATH as the ECB cut its rate. BTC (at 68K) continued to edge up on election optimism, while ETH remained stuck at 2.6K.
Details
The NAHB/Wells Fargo Housing Market Index rose to 43 in October, exceeding expectations. Current sales conditions and sales expectations rose, supported by expectations of Fed rate cuts. Traffic of prospective buyers increased slightly. The share of builders cutting prices remained unchanged.
The Philadelphia Fed Manufacturing Index rose to 10.3 in October, exceeding expectations. New orders, shipments, and employment all increased. Future growth expectations improved, signaling optimism.
Crypto
Spot BTC ETFs have seen over $20B in net inflows, despite BTC’s seven-month downtrend. BTC has struggled to surpass $68.3K since June and has declined since March.
World Markets
The ECB lowered interest rates by 25 bp, as expected. This follows similar moves in September and June. The deposit facility rate is now 3.25%. Inflation is falling and is expected to decline toward the 2% target in 2025. Wage growth remains high but is easing.
Eurozone inflation fell to 1.7% in September, below the ECB target of 2%. Services inflation slowed, energy prices fell, and core inflation eased to 2.7%.
China’s economy grew 4.6% in Q3, below expectations. This is the slowest growth since Q1 2023, due to property weakness, weak domestic demand, deflation risks, and trade frictions.
Currencies
The dollar index rose to 11-week highs, supported by strong US economic data and a potential Trump victory. Retail sales rose more than expected, and jobless claims fell.
Commodities
Gold surged past $2,710 per ounce, hitting a record high due to strong demand for safe-haven assets and recent interest rate cuts by central banks.
Friday
On Friday, equities rose, fueled by strong tech performance. This week, the S&P 500 is up 0.2% and the Dow is up 1%. Gold reached a new ATH, while silver is at its highest in 12 years. BTC touched $69K and is set to make a new ATH, while ETH, still at $2.6K, is lagging far behind.
Details
Building permits fell by 2.9% in September. Regional decreases were seen in the Northeast (-13.1%), Midwest (-2.9%), and South (-6.1%), while the West saw a 10.9% increase.
Crypto
AI meme coins are becoming a new trend in cryptocurrency, sparking conversations about institutional investment. The integration of AI into these coins is viewed as a potential advantage, though skepticism remains about the viability of many mid-tier projects.
World Markets
In August, Euro Area construction output fell 2.5% YoY. This follows a trend of declining output throughout 2024.
Currencies
The euro rose to $1.086 but is set for its third weekly decline as markets expect more cuts from the ECB. Strong economic data in the US has lowered expectations for aggressive Fed cuts.
Commodities
Silver prices rose to $33 per ounce, the highest in nearly 12 years, following gold’s increase amid safe-haven demand due to US election uncertainty and Middle East tensions.
Gold surged past $2,710 per ounce, hitting a record high due to strong demand for safe-haven assets and recent interest rate cuts by central banks.
On Week 43, the earnings season brings Tesla, Coca-Cola, 3M, General Motors, and Verizon releasing quarterly reports. Also, PMI data, durable goods orders, and home sales reports will be featured. Investors will also watch Germany’s Ifo index and confidence figures for various countries.
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SVET Markets Weekly Update – October 7–11, 2024
On Week 41, stocks reached new highs as investors reacted to inflation data. Oil prices climbed due to Middle East tensions. The dollar strengthened, while the Euro weakened. Crypto followed stocks, with BTC rising but ETH remaining relatively stable.
Monday
On Monday, equities tumbled as investors now assign a 95% chance of a 25 basis point cut in November. Globally, crude oil climbed to a six-week high, while steel prices reached their highest level in three months, as the dollar remained elevated due to the rising threat of global conflicts. Meanwhile, BTC and ETH stayed unchanged from their post-drop levels of approximately $62K and $2.4K amid a lack of corporate investor interest driven by political uncertainty.
Details
Consumer credit increased by $8.93B in August, following an upwardly revised $26.63B jump in the prior month, and below market expectations of a $12 billion rise. Consumer credit increased at a seasonally adjusted annual rate of 2.1 percent.
Crypto
Elon Musk believes Polymarket could more accurately predict the presidential election than traditional polling. He recently gave a speech supporting Trump, who is leading Harris (51 to 48) in the polls according to Polymarket.
World Markets
Retail Sales in the Euro Area increased 0.80 percent in August MoM.
Currencies
The dollar index held around 102.5 after surging half a percent in the previous session following a stronger-than-expected jobs report (254K vs. 140K expected), while the unemployment rate fell to 4.1% from 4.2%. Markets now see around a 95% chance of a more modest 25 bps rate cut in November.
Commodities
WTI crude oil futures climbed to $77.1 per barrel, a six-week high, as tensions in the Middle East escalate. Investors are focused on whether Israel will respond to last week’s Iranian missile attack.
Steel rebar futures surged 7% to CNY 3,420 per tonne in the last session of September, the highest in three months, amid an improved construction input outlook after key Chinese cities relaxed home-buying curbs.
Tuesday
On Tuesday, equities are up; nine out of the 11 S&P sectors ended higher, led by technology, communication services, and consumer discretionary. Oil dropped on risks-overestimates, as rubber reached a 7-year high on China stimulus and uranium rose to its highest in a month on expected supply cuts. BTC and ETH lingered at week’s old levels of $62K and $2.4K.
Details
The NFIB Small Business Optimism Index increased to 91.5 in September from 91.2 in August, missing forecasts of 91.7. The Uncertainty Index rose 11 points to 103, the highest reading recorded. Fifty-one percent of owners reported capital outlays in the last six months, down five points from August.
The RealClearMarkets/TIPP Economic Optimism Index increased by 0.8 points to 46.9 in October 2024, the highest since April 2023. Sentiment has been on the rise for four consecutive months, though it remains entrenched in negative territory.
Crypto
Solana leads Q3 2024 in bridged net inflows. Ethereum retains market dominance but underperforms. Aptos challenges Solana with GameFi.
World Markets
The Reserve Bank of New Zealand lowered its official cash rate (OCR) by 50 basis points to 4.75% during its October 2024 policy meeting, marking the second consecutive rate cut and aligning with market expectations. New Zealand’s annual inflation rate eased to 3.3% in Q2 2024, from 4% in the previous quarter.
Industrial production in Argentina fell by 6.9% YoY in August, marking the fifteenth consecutive month of contraction.
Commodities
WTI crude oil futures fell by 4.6% to $73.5 per barrel on Tuesday, as anticipated supply disruptions stemming from geopolitical risks in the Middle East have not yet materialized.
Uranium rose to $82 per pound in October, the highest in over a month, as risks to supply coincided with robust power demand for major nuclear energy producers.
Rubber futures traded around 210 cents per kg, holding close to a recent over 7–1/2-year high of 214 US cents per kg, on the back of China’s massive stimulus measures.
Wednesday
On Wednesday, stocks hit new records as investors react to Fed minutes and inflation data. Tech giants lead market higher, offsetting concerns over Alphabet’s potential divestiture. Dollar index increased to 8-day high as traders predict smaller rate cut. BTC and ETH dropped briefly but returned to $63K and $2.4K.
Details
Mortgage rates rise to 6.36%, highest since August, as Treasury yields increase, reflecting investor belief that the Fed won’t lower interest rates as swiftly. Jumbo loan rates climb to 6.64% and FHA-backed mortgage rates rise to 6.22%.
World Markets
The Reserve Bank of India (RBI) kept its benchmark policy repo rate at 6.5% for the tenth consecutive meeting in October 2024, aligning with market expectations but tweaked its policy stance to neutral, opening the door for rate cuts amid early signs of a growth slowdown in the economy.
Currencies
Dollar index surges to 8-session high as traders predict smaller 25bps Fed rate cut. Policymakers divided on rate cut size, reinforcing Fed’s view on economic outlook. Traders await CPI and PPI data.
Thursday
On Thursday, stocks ended mixed after a higher-than-expected core inflation report increased uncertainty over the Fed’s rate decision. Fed remains divided on rate cuts as initial jobless claims reached a 14-month high. Oil and the dollar are in their second week of rallying amid worsening geopolitics. BTC dipped below $60K, while ETH continues to linger around $2.4K.
Details
Unemployment claims rise to 258K, highest in 14 months, driven by Michigan and hurricane-affected states. Annual inflation slows to 2.4% in September, lowest since February 2021, but above forecasts. Core inflation unexpectedly rises to 3.3%, driven by services and shelter costs.
Crypto
Spot ETH ETFs have struggled to match the demand seen in spot bitcoin ETFs. Factors such as the absence of staking yield and the complex marketing of ETH hinder investor interest. While BTC ETFs garnered nearly $19B in inflows over ten months, ether ETFs, launched in July, have faced $556M in net outflows.
World Markets
In September, Argentina’s consumer prices rose by 3.5% MoM, the lowest since November 2021, after a 4.2% increase in August. YoY, prices surged by 209%, marking the fifth month of disinflation.
Currencies
The dollar index remained around 102.9, poised for its second consecutive weekly gain as recent economic data and central bank cues influenced traders’ expectations regarding Fed interest rate cuts.
Friday
On Friday, equities rallied, driven by strong bank earnings and a positive economic outlook. Meanwhile, producers’ (PPI) inflation remained unchanged as consumer price index (CPI) rose, creating uncertainty about Fed rate cuts. The dollar reached a 2-month high as Indian industrial production declined for the first time since 2022. Crypto traders followed stocks, with BTC jumping to 64K but ETH remaining around 2.4K.
Details
The University of Michigan consumer sentiment dropped to 68.9 in October, lower than expectations, with current conditions and expectations both weakening. Inflation expectations rose slightly for the year ahead but eased for the five-year outlook.
Factory gate prices (PPI) held steady in September, below expectations, while service prices rose. Annual producer price inflation eased to 1.8%, with core inflation increasing to 2.8%, exceeding forecasts.
Crypto
Liberland, a micronation seeking recognition between Croatia and Serbia, operates under a unique on-chain governance system. Newly appointed Prime Minister Justin Sun aims to establish it as the “freest nation,” boosting interest and causing the Liberland Dollar to surge over 200%.
World Markets
India’s industrial production fell by 0.1% YoY in August 2024, marking its first decline since October 2022, primarily due to a 4.3% drop in mining and a 3.7% reduction in electricity output.
The Bank of Korea cut its base rate to 3.25%, the first time in nearly two years, due to easing inflation and weakening economic output.
Currencies
The Euro weakened to 2-month low (around $1.09), influenced by dollar strength and expectations of slow Fed rate cuts. The ECB is anticipated to lower rates further, while Eurozone inflation fell to 1.8%, the lowest since April 2021.
The dollar index approached 103, its highest in nearly two months, amid economic data suggesting persistent inflation.
Commodities
Gold rose above $2,640 per ounce as traders reacted to mixed economic data,
SVET Markets Weekly Update – September 23–27, 2024
On Week 39, stocks closed in positive territory, helped by a 3% GDP growth in Q3. In contrast, the eurozone economy contracted in September. The People’s Bank of China has implemented several drastic measures to stimulate growth leading to the Chinese stock market having its best week since 2008. Silver prices surged to a 12-year high due to the Fed easing and geopolitical tensions. BTC crossed the 200MA and continued to test the $66K mark, while ETH remained stuck below $2.7K.
Monday
On Monday, stocks reached new highs yet again. Intel shares rose on investment news, while Tesla gained ahead of its robotaxi launch. Economic data, however, raised concerns about growth, with manufacturing at a 15-month low and job market indicators weakening. Internationally, the EU economy contracted sharply, while gold, natural gas, and coffee all rose due to a combination of geopolitical and climatic factors. ETH took the lead, slowly rising to 2.7K, while BTC stalled just under its 200MA.
Details
The manufacturing sector continued to shrink in September, with new orders falling at the fastest pace in over a year. This led to lower production, slower delivery times, and job cuts. Input prices declined to a six-month low due to lower energy costs and reduced supply chain pressures.
World Markets
The eurozone economy contracted in September, with manufacturing and service sectors both declining. Germany and France are heavily affected after the “Olympics effect” dissipated. New orders, backlogs, and exports fell, while job losses rose. Input costs slowed, but output prices increased slightly.
Commodities
Natural gas prices rose to their highest level in nearly two months due to potential supply disruptions from a tropical storm and lower-than-expected storage increases. Gold prices made a new record high, propelled by expectations of lower interest rates and rising geopolitical tensions. Arabica coffee prices reached 13-year highs due to dry weather in Brazil, the world’s largest producer.
Tuesday
On Tuesday, markets edged up, lifted by Nvidia’s surge, despite consumer confidence dipping to a 3-year low and the Richmond manufacturing sector dropping to its lowest level since May 2020. Internationally, Chinese stocks skyrocketed thanks to lavish CCP stimulus. Silver prices also soared over 5%, catching up to gold as investors sought a safe haven. BTC and ETH remained largely unchanged, continuing to demonstrate some upward potential.
Details
The manufacturing sector in the Richmond 5th District contracted further in September. It is the steepest decline since May 2020, with shipments, employment, and new orders all declining. However, firms remained optimistic about future prospects, expecting improvements in shipments and new orders in the coming months.
World Markets
The PBoC has taken several drastic steps to stimulate the economy, including cutting interest rates and reserve requirements. These measures aim to boost lending, lower borrowing costs, and increase investment.
Wednesday
On Wednesday, stocks were mixed, with energy stocks declining while tech stocks gained, led by Nvidia, Intel, and AMD, suggesting strong AI demand. Internationally, the Euro rose to a 14-month high on Fed easing and China stimulus, while Argentina’s economy shrank less than expected. BTC and ETH stalled around $63K and $2.5K.
Details
The number of building permits issued in the US increased slightly in August MoM. Most regions saw increases, with the Midwest experiencing the largest jump. However, the West saw a slight decline.
Commodities
Despite the growing cryptocurrency adoption, its use as a payment method remains low. Silver prices surged over 5%, reaching levels not seen since May, driven by geopolitical tensions and US interest rate cut expectations.
Thursday
On Thursday, stocks were mixed, with the S&P reaching a new ATH before closing in red, while the Dow gained slightly. Semiconductor stocks performed well. Internationally, silver reached a 12-year high, while the Euro area money supply reached a new record. BTC and ETH lingered below $66K and $2.6K.
Details
Factory orders unexpectedly held steady in August, defying expectations of a decline. Orders for transportation equipment fell, but those for fabricated metal products and machinery increased.
World Markets
The Euro Area’s money supply reached a new record of 16.4 trillion euros in August 2024, marking an all-time high.
Commodities
Silver prices surged to a 12-year high, fueled by expectations of further interest rate cuts by the Fed and stimulus measures in China.
Friday
On Friday, stocks closed mixed, with the S&P and Nasdaq falling slightly, while the Dow reached a new record. Investors weighed recent mixed data. BTC crossed the 200MA and continued to test $66K, while ETH is still stuck under $2.7K.
Details
The PCE price index rose 2.2% in August, the lowest since February 2021. The University of Michigan consumer sentiment index rose to 70.1 in September, the highest in five months.
World Markets
China’s stock market had its best week since 2008 after policy announcements aimed at boosting economic growth.
Commodities
Hurricane Helene caused a surge in natural gas prices. Despite the storm’s impact, LNG exports remained strong, supporting prices.
On Week 40, key growth, inflation, and spending figures, plus earnings from major companies, will be released. Europe and Asia will publish manufacturing and services data. Key countries such as Germany, Japan, and China will release their PMI data.
Evernomics — Digital Wealth Growth Intellectual Contracts Platform — is your way to invest in your bright future without hassle. For more reports: https://evernomics.com/
SVET Markets Weekly Update (September 16–20, 2024)
On Week 38, stocks posted gains after the Fed’s 50 basis point rate cut. Accordingly, gold prices surged, reaching a new ATH, buoyed by the Fed’s easing measures. In contrast, the Central Banks of China and Japan held rates steady. In the crypto market, BTC initially rose but faced resistance at its 200-day moving average, retreating to around $63K. ETH followed a similar trend but moved more slowly, barely reaching $2.6K before pulling back.
Monday
On Monday, stocks traded mixed, with investors awaiting the Fed’s interest rate decision on Wednesday. The Dow hit a new ATH, while expectations for a larger rate cut increased, and the energy and financial sectors outperformed as chipmaker stocks fell. Internationally, gold reached a new ATH again, while silver jumped to $31. Meanwhile, BTC and ETH returned to their bearish ranges of $57K and $2.3K after a short-lived attempt at recovery initiated by MicroStrategy’s $1B buy-in.
Details
The NY Empire State Manufacturing Index unexpectedly rose in September to 11.5 — the highest in 2 years — indicating a growth in business activity for the first time in nearly a year. New orders and shipments increased, while labor market conditions remained soft. Firms’ optimism about future conditions improved, but capital spending declined.
Crypto
High-net-worth families in North America, Asia Pacific, and Europe are expected to significantly increase their wealth over the next decade by growing their fortunes from $5.5 trillion today to $9.5 trillion in 2030. North American families are projected to experience the largest growth, with their wealth increasing by 258% from $1.12 trillion in 2019 to $4 trillion in 2030. Asia Pacific families are expected to see their wealth grow by 208%, from $650 billion to $2 trillion. Meanwhile, European families are projected to increase their wealth by 157%, from $1.1 trillion to $2.8 trillion. Ultra-high-net-worth individuals are typically defined as those with investable assets of at least $30 million.
World Markets
Hourly labor costs in the Euro Area rose by 4.7% in Q2 2024, down from 5% in Q1. Wage growth slowed, while non-wage costs increased. Construction, industry, and services saw significant labor cost increases. Germany, France, and Italy experienced moderate rises, while Bulgaria, Croatia, and Romania recorded substantial increases.
Turkish motor vehicle production fell sharply in August 2024, down 26.7% from the previous year. This decline marks the lowest production level since August 1980. Overall, car production in Turkey has averaged 51,550 units per month since 1974, with a record high of 163,460 units in November 2017.
Peru’s economy grew significantly (+4.47%) in July YoY, driven by strong manufacturing, mining, and construction sectors. Other sectors like utilities, fishing, and telecommunications also expanded. However, agriculture declined due to adverse weather conditions and early harvesting. Overall, the economy grew by 2.78% in the first seven months of 2024.
Commodities
Gold prices reached a new record high (2590), driven by a weaker dollar, lower bond yields, and growing expectations for a significant US interest rate cut. The Fed is likely to cut rates by 50 basis points, according to market expectations. This follows recent economic data showing a softening labor market and declining inflation. The ECB’s rate cut also supported gold prices.
Silver prices surged to a two-month high (31), driven by rising expectations of a more aggressive Fed rate cut. Market sentiment shifted towards a larger 50 basis point cut, influenced by signs of a slowing labor market and weaker-than-expected Chinese economic data.
Tuesday
On Tuesday, stocks traded flat to the red as investors awaited the Fed’s rate decision tomorrow. The market is divided on the size of the expected rate cut (25 or 50 points). Mega-cap stocks showed mixed performance. Retail sales unexpectedly rose in August, defying expectations. Internationally, the economic sentiment for the Euro Area dropped to an eleven-month low. BTC and ETH attempted to surge yet again, with BTC reaching above $60K, where it was met by strong bear resistance, unlikely to soften before political uncertainties ease.
Details
Retail sales rose slightly in August, defying expectations of a decline. Sales increased in various categories, including miscellaneous stores, nonstore retailers, and health and personal care stores. However, sales fell in sectors like gasoline stations, electronics, and food. Excluding certain categories, retail sales rose 0.3% in August. YoY retail sales rose 2.1% in August compared to the previous year, following a revised 2.9% increase in July.
Crypto
65 countries are actively exploring CBDCs. All G20 nations are involved, with 19 in advanced stages. 44 countries are piloting CBDCs, a 22% increase from the previous year. This global trend is driven by declining cash usage and concerns about cryptocurrencies and tech giants’ influence on money creation.
World Markets
The ZEW Indicator of Economic Sentiment for the Euro Area continued to decline in September, reaching an eleven-month low. This reflects growing uncertainty about the economy and monetary policies. Analysts are divided on the outlook, with more expecting no change or a deterioration. The current economic situation and inflation expectations have also worsened.
Japan’s trade deficit narrowed in August, but remained above expectations. Exports increased for the ninth consecutive month, but at a slower pace than forecast. Imports grew at the slowest rate in five months, falling short of estimates.
India’s trade deficit widened to $29.7 billion in August, the highest in ten months. Exports declined by 9.3%, while imports increased by 3.3%. Rising shipping costs and a slowdown in China are impacting exports.
Mongolia’s trade surplus narrowed in August, primarily due to a surge in imports, particularly of vehicles, machinery, and appliances. Exports grew at a slower pace, led by sales of natural stones and precious metals. China was Mongolia’s largest trading partner (exports — 91.9%, imports — 40.2%; Russian exports — 25%).
Indonesia’s trade surplus narrowed in August despite a surge in exports. Exports to major markets like the US, Japan, ASEAN, and the EU grew significantly. However, imports also rose due to government import duties. For the year, Indonesia’s trade balance remains positive but has declined compared to the previous year.
Commodities
Sugar prices have risen (20) due to lower production in Brazil and rising oil prices. While India’s large crop and Thailand’s production challenges have influenced prices, overall global supply concerns remain.
Palladium prices hit a five-month high (1040), driven by increased ETF holdings, primarily due to rising European demand. Analysts predict that palladium prices may face downward pressure in the long term due to potential decreases in global vehicle production and the substitution of palladium with platinum in autocatalysts.
On Wednesday, stocks finished lower after the Fed cut rates by 50 basis points. While the initial market reaction was positive — during which the S&P hit a new ATH (5692) — Powell’s comments tempered optimism. Overall, investors remain cautious despite the aggressive rate cut, as the Fed hinted at a slower pace of future cuts. Tech stocks, including Nvidia, Microsoft, Oracle, and AMD, declined, while Apple gained. Internationally, many smaller central banks, which are overly dependent on the dollar in their oil trade, such as Saudi Arabia, the UAE, Bahrain, Qatar, and Kuwait, cut their rates in unison with the Fed by 25 to 50 basis points. BTC jumped above $61K but quickly retreated due to short-lived investor optimism about the Fed’s jumbo rate cut, while ETH remained unperturbed.
Details
The Fed cut interest rates by 50 basis points to 4.75%-5%, marking the first rate reduction since the pandemic. They forecast further rate cuts in the coming years to slow inflation. While inflation projections were lowered, economic growth forecasts were slightly reduced. The unemployment rate is expected to rise slightly.
Crypto
Bhutan has secretly amassed significantly more BTC than El Salvador, making it a major player in the crypto space. While El Salvador has been publicly embracing BTC, Bhutan has quietly accumulated 13,029 BTC (compare to 2,381 BTC accumulated by El Salvador), valued at over $758 million. This revelation highlights Bhutan’s growing influence in the crypto world and suggests a broader trend of nations adopting cryptocurrency.
World Markets
Eurozone inflation slowed to a two-year low (2.2% from 2.6%) in August, primarily due to lower energy prices. Core inflation also declined slightly (2.8% from 2.9%). Most major economies saw inflation rates decrease with sharp drops observed in Germany (2% vs 2.6%) and France (2.2% vs 2.7%), but a few smaller countries experienced increases (Latvia, Malta, Finland, and Slovakia). The ECB forecasts inflation to remain above its target for the next few years.
On Week 39, will feature inflation data, consumer spending, and Fed speeches. Globally, PMI data, interest rate decisions, and inflation reports will be released for various countries.
Evernomics — Digital Wealth Growth Intellectual Contracts Platform — is your way to invest in your bright future without hassle. For more reports: https://evernomics.com/
SVET Markets Weekly Update – September 9th –13th, 2024
On Week 37, stocks continued to rise, driven by strong performance in the tech and semiconductor sectors. Economic data, including inflation and the PPI, indicated signs of easing, bolstering expectations for a 50-point rate cut by the Fed. Internationally, gold reached a new ATH, and silver surged above USD 30 amid concerns about a slowing economy and potential rate cuts. BTC and ETH faced challenges in maintaining their positions ahead of the presidential debate. As investors anticipated a better performance from Trump, demand for digital assets slumped, causing BTC to dip below 57K. Meanwhile, ETH struggled to hold above 2.3K. However, both cryptocurrencies surged following MicroStrategy’s announcement of a USD 1B BTC purchase.
Monday
On Monday, stocks attempted to rebound after a rough week, driven by investor optimism about lower prices and a potential rate cut. Investors are now focused on Wednesday’s inflation data to gauge the Fed’s upcoming policy decision on September 18. Internationally, the Chinese yuan weakened as the latest inflation data showed weak economic performance despite the CPC’s efforts. BTC crossed above 57K, while ETH lingers above 2.3k, continuing to lag significantly behind BTC after three consecutive “red” months — the worst performance for ETH since 2018. In other news, El Salvador is marking the third anniversary of its BTC holdings, with more than 25% overall profits on its 5,800 BTC holding, placing it third in the world among governments.
Details
Consumer credit surged by 25.45B in July, exceeding expectations (12.5). Credit card balances and other loans both saw significant increases, indicating strong demand for credit despite economic concerns.
Crypto
El Salvador made its first BTC purchase on September 6, 2021, shortly before adopting BTC as legal tender. Since then, the country has significantly increased its BTC holdings. As of now, El Salvador owns over 5,800 BTC, with substantial profits (25.88% gain). The country is currently the third-largest government holder of BTC globally.
World Markets
Japan’s GDP grew by 0.7% at a stronger pace in Q2 2024 than previously expected, mainly due to higher wages and a recovery in the automotive industry. While private consumption and business investment increased, government spending and net trade contributed less to the growth.
Taiwan’s exports surged 16.8% in August, driven by strong sales of technology products. Shipments to the US, ASEAN, Europe, and China & Hong Kong all increased significantly. Overall, exports for the first eight months of 2024 were up 10.9% compared to the previous year.
Currencies
The dollar remained relatively stable as investors weighed the potential for a Fed interest rate cut on the upcoming September 18 meeting. The recent jobs report showed mixed results, with fewer jobs added than expected but a lower unemployment rate and steady wage growth. Investors will closely watch inflation data this week for more clues on the Fed’s decision.
The Chinese yuan weakened against the dollar (7.11) as inflation data revealed a modest increase in consumer prices but a sharper decline in producer prices. This indicates a challenging economic environment for China, with weak domestic demand and slowing growth.
Commodities
Natural gas prices dropped 4% due to an incoming storm expected to reduce demand in Louisiana. The storm could cause power outages and disrupt LNG exports. While past hurricanes impacted supply, today’s storms mainly affect demand as most US gas comes from inland sources. Oversupply and mild winter weather have also contributed to lower prices. Production cuts have helped stabilize prices.
Comment: What’s Up With Japan?
The Japanese yen has slipped toward 143 per dollar; however, it remains far from the record highs of 300 reached during the peak of Japan’s economic miracle in the 1980s, before the Plaza Accord, which devastated Japanese manufacturing.
Recently, the Japan Stock Market Index (JP225) achieved an all-time high (ATH) above 40,000, driven by a continuing appreciation of Japanese assets. Notably, this rise in asset values has not been accompanied by corresponding GDP growth, which has consistently stayed below 2% — a stark contrast to the impressive 8% growth experienced during the 1980s boom.
Traditionally, Japan’s unemployment rate has been very low, ranging from 2% to 3%, and was even below 2% during the 1980s. The rate tends to reach a maximum of approximately 5% during times of crisis, such as between 2007 and 2010. This low unemployment situation indicates a limited pool of additional labor resources available for Japanese entrepreneurs to enhance local productivity.
In terms of inflation, Japan has also historically maintained low annual rates. As of July 2024, the inflation rate was recorded at 2.8%. However, this is significantly lower than the peak inflation rates of around 25% in the 1970s and 10% in the 1980s. The Japanese central bank has sustained a very loose monetary policy, keeping interest rates below 1% since the 1990s, compared to an 8% rate in the 1980s. Despite this accommodative policy, economic growth has remained elusive.
Business confidence in Japan has been notably weak, rarely surpassing the 20 mark and remaining mostly below zero since the 1990s. Similarly, consumer confidence has been on a downward trend on average since the 1980s, declining from a level of 50 to recent figures of approximately 20 to 30.
In summary, the Japanese economy serves as a poignant example of how countries with limited natural resources but high-value human capital and excellent technological capabilities can mismanage their economic potential. This mismanagement is often driven by ingrained nationalistic tendencies and overly conservative political attitudes that shy away from “risky” initiatives and revolutionary social and political reforms.
Tuesday
On Tuesday, stocks traded mixed, with tech stocks outperforming banking shares as investors reacted to lower earnings expectations. The market awaited a crucial inflation report that could influence Fed rate cuts. Internationally, China’s car sales declined amid an ongoing economic slowdown. BTC strengthened its position slightly prior to the presidential debate, as investors anticipated Trump’s better performance and fueled demand for digital assets. However, BTC trading fluctuated based on how well the debates were unfolding, dipping below 57K. Meanwhile, ETH continued to struggle to maintain a price above 2.3K.
Details
The NFIB Small Business Optimism Index fell to 91.2 in August, its lowest level in three months. Inflation remains a major concern for small business owners, as sales expectations decline and costs rise. Uncertainty among owners is increasing, and fewer expect improved business conditions in the future.
Crypto
Wealth advisers (as opposed to TradeFi) are rapidly adopting BTC ETFs, despite their overall flows being overshadowed by other investors. BlackRock’s BTC ETF has attracted significant inflows.
World Markets
China’s car sales declined YoY by 5.0% in August but outperformed expectations. New energy vehicle sales continued to grow strongly, accounting for nearly half of total car sales. Overall, vehicle sales for the first eight months of 2024 increased slightly.
The Reuters Tankan sentiment index for Japanese manufacturers declined to +4 in September due to concerns about sluggish Chinese demand and a global electric vehicle slowdown. Manufacturers anticipate further deterioration in sentiment over the next three months.
Brazil’s inflation rate slowed in August to 4.24%, falling below expectations. Prices for transportation, housing, health, and personal expenses declined, while food prices rose.
Currencies
The Brazilian real weakened past 5.66 against the dollar due to a stronger dollar and concerns about Brazil’s fiscal policy. Inflation eased slightly in August, but rising inflationary pressures have prompted the central bank to maintain a hawkish stance. Political tensions have also impacted the currency, contributing to economic uncertainty.
Commodities
Urals oil prices fell sharply to a four-week low of 66 due to concerns about rising oil supply. Libya’s potential oil production resumption and OPEC’s planned output increase are adding pressure to prices.
Wednesday
On Wednesday, stocks rallied, led by tech stocks, as inflation eased. The S&P and Nasdaq surged, with chipmakers driving the gains. However, core inflation rose, suggesting a smaller Fed rate cut. Internationally, the British economy stagnated for the second month in a row as Chinese stocks approached their yearly lows. Meanwhile, BTC and ETH continued to dip after Trump’s lackluster performance during the debate.
Details
Inflation slowed in August to a 3-year low of 2.5% (from 2.9). Energy prices fell, while food and transportation inflation eased. However, shelter costs rose. Core inflation remained steady, but monthly core inflation increased slightly.
Thursday
On Thursday, stocks continued to rise, fueled by strong performance in the tech and semiconductor sectors. Economic data, including the PPI, showed signs of easing inflation, supporting expectations for a 25-point rate cut by the Fed. Globally, gold reached a new ATH, while silver surged due to China’s revised green technology prospects. BTC and ETH remained at 58K and 2.3K, respectively, suppressed by political uncertainties.
Details
Factory gate prices (PPI) rose slightly in August, driven by increases in services costs. Producer price inflation slowed year-over-year, but core inflation increased slightly.
Friday
On Friday, stocks continued to rise on momentum, fueled by expectations of a 50-basis-point Fed rate cut due to lower inflation and rising unemployment. Tech and semiconductor stocks led the rally. Internationally, gold reached a new ATH while silver surged past 30 as industrial production in the Eurozone declined. BTC climbed above 60K, while ETH broke past 2.4, following MicroStrategy’s announcement of purchasing 1B worth of BTC.
Details
The University of Michigan’s consumer sentiment index rose in September, reaching its highest point since May. Consumers’ optimism about future financial conditions and the economy improved, while inflation expectations for the coming year declined.
Crypto
PolitiFi meme coins, inspired by political figures, have experienced a significant price drop after a strong first half of 2024. Despite the upcoming US elections and growing political interest in crypto, these tokens have lost nearly 90% of their peak value.
World Markets
Industrial production in the Eurozone fell by 2.2% in July YoY. This marks a decline from the average growth rate of 0.89% since 1991. Chinese banks increased lending in August but remained below expectations. The Russian ruble weakened past 91 as the central bank raised interest rates to combat rising inflation.
Commodities
Gold hit a record high (2580) due to a weaker dollar and lower bond yields. Silver prices surged past 30 due to speculation of a larger-than-expected Fed rate cut.
On Week 38, investors will focus on the Fed meeting at Wed, Sept 18 as well as central banks worldwide announcing interest rate decisions. Economic data releases will focus on inflation, retail sales, manufacturing activity, housing indicators, and GDP growth.
Evernomics — Digital Wealth Growth Intellectual Contracts Platform — is your way to invest in your bright future without hassle. For more reports: https://evernomics.com/
SVET Markets Weekly Update – September 2–6, 2024On Week 36, global stocks took a hit, driven by concerns about a weakening labor market and a slump in the tech sector. Locally, job cuts increased significantly, while the unemployment rate remained steady. Crude oil prices plummeted to a thirteen-month low amid fears of a global economic slowdown. In the Eurozone, private sector activity strengthened, except in Germany. BTC and ETH plunged, targeting 50K and 2K, respectively, as the Ethereum Foundation increased its selling activity.
Tuesday
On Tuesday, stocks plunged, led by technology and economic concerns, with Nvidia and other chipmakers suffering significant downs. Communication services stocks also underperformed. Weak factory data added to the market’s woes, raising concerns about the economy and Fed’s potential actions. Globally, crude oil prices dipped to a nine-month low due to a weakening world economy. Meanwhile, BTC is around 57.6K and ETH is around 2.4K, both continuing to show red, signaling bearish trends.
Details
The ISM Manufacturing PMI rose slightly in August but remained below 50, indicating continued contraction. New orders, production, and employment all declined, while input costs increased at a faster pace than expected. These results suggest that the Federal Reserve’s interest rate hikes are having a negative impact on the manufacturing sector.
Crypto
A poll shows that 50% of cryptocurrency holders intend to vote for Donald Trump, while only 38% favor Kamala Harris. Among non-crypto voters, Harris leads with 53% compared to Trump’s 41%. The survey indicates that 15% of voters own cryptocurrencies or NFTs, with a notable representation of young and racial minority groups among these users.
World Markets
The Brazilian economy grew faster than expected in the second quarter, driven by increased consumer spending and government investment. However, net exports were a drag on growth due to higher imports and lower commodity prices. This stronger-than-expected performance may support the case for a rate hike by the Brazilian central bank.
Currencies
The dollar rose slightly as traders weighed economic data. The ISM Manufacturing PMI showed that factory activity continued to contract, raising concerns about the impact of interest rates. Investors are looking for more economic data to inform the Fed’s expected rate cut. The dollar gained against the Australian dollar but lost ground against the yen.
Commodities
Crude oil prices plunged to a nine-month-low, below 71, driven by weaker-than-expected Chinese economic data and lower oil demand in the U.S. and China. Meanwhile, OPEC signaled plans to increase production in the fourth quarter. Gold prices dipped below $2,500 as investors awaited economic data to gauge the likelihood of a Fed rate cut. While recent inflation data has tempered expectations for a significant cut, markets still anticipate a total of 100 bps in rate cuts this year. In Europe, the ECB is also expected to lower rates due to slowing inflation.
Wednesday
On Wednesday, stocks traded mixed but closed slightly in the green, correcting upward after Monday’s drop, the sharpest seen since early August. A decline in job openings to a four-year low raised expectations of a larger Fed rate cut. Energy and tech stocks underperformed. Globally, oil prices continue to drop due to fears of a global recession. BTC and ETH were almost unchanged, technically remaining bearish, with 50K and 1.7K as the next targets.
Details
Job openings declined in July for the first time in two years, falling to the lowest level since 2021. This decrease was primarily driven by fewer openings in healthcare, government, and transportation sectors. While hires and separations remained relatively stable, job quits decreased to a two-year low. Factory orders rebounded strongly in July, increasing by 5% and exceeding expectations. This growth was driven by a surge in durable goods orders, particularly for transportation equipment. However, excluding transportation, orders grew at a much slower pace. Despite all “re-shoring” rhetoric, the trade deficit widened in July to its highest level in two years. Exports reached a record high, but imports grew even faster, driven by technology goods and intellectual property. The deficits with China and Canada also expanded.
Crypto
El Salvador’s President Nayib Bukele, a strong supporter of BTC, has acknowledged that his cryptocurrency initiative hasn’t gone as intended. In a recent interview, Bukele admitted that “Bitcoin hasn’t had the widespread adoption we hoped for.”
World Markets
The Eurozone’s private sector activity strengthened in August for the sixth consecutive month, led by services. However, manufacturing remained weak, and new orders, employment, and business confidence declined. While input costs fell, output prices rose. France and Spain contributed to the overall improvement, while Germany experienced a second consecutive decline. The German private sector contracted at a faster pace in August, driven by a sharp decline in manufacturing. New business and exports fell significantly, while job cuts increased. Inflation rose slightly, but cost pressures eased. Business confidence weakened, particularly in manufacturing.
Commodities
Crude oil prices fell sharply, reaching the lowest level in 10 months (68). Concerns about rising supply, a potential deal to restart Libyan oil production, and weak economic data from China and the US contributed to the decline.
Thursday
On Thursday, stocks traded mixed as investors anticipated Friday’s employment report. Private payrolls data showed weaker-than-expected job growth, but falling unemployment claims provided some optimism. Overall, conflicting economic signals raised concerns about a potential recession and the Fed’s monetary policy. Internationally, the Eurozone construction sector continued to contract. BTC and ETH dropped marginally to 56K and 2.4K, reinforcing bearish sentiments.
Details
Job cuts surged in August, reaching a five-month high. Tech companies led the layoffs, reflecting growing economic uncertainty. This aligns with other indicators suggesting a softening labor market, supporting the case for lower interest rates. Initial unemployment claims decreased slightly but remained elevated compared to earlier this year. The decline suggests a marginally improving labor market, but it remains historically tight. Outstanding claims also fell, and the four-week moving average decreased. The ISM Services PMI rose slightly in August, surpassing expectations. While new orders and employment showed growth, production slowed, and the backlog of orders decreased. Prices continued to rise at a faster pace, driven by increased costs in various sectors.
Crypto
Private Telegram groups are not private anymore. The corresponding statement was removed today from TG FAQ. Telegram generates substantial revenue from cryptocurrency-related activities. Despite an overall loss, the company reported $342.5 million in revenue in 2023, with over 40% stemming from its cryptocurrency wallet and collectible sales.
World Markets
The Eurozone construction sector continued to contract in August, with new orders falling sharply. This led to a decline in activity, employment, and purchasing. All three segments of the construction sector experienced contractions, with housing and commercial construction seeing the steepest declines. While input prices rose slightly, inflation remained below long-term averages. Despite this, construction companies remain pessimistic about the future.
Friday
On Friday, stocks plunged due to concerns about a weakening labor market and tech sell-off. Major tech companies and chipmakers suffered significant downside. The August jobs report and Fed comments further fueled market anxiety, leading to the worst weekly performance since early 2023. Globally, oil dropped to its yearly lows on global economy slowdown concerns. BTC and ETH were followed by stocks preparing to test 50K and 2.0K, correspondingly, again.
Details
The unemployment rate decreased to 4.2% in August from 4.3% in the prior month, matching expectations. The number of unemployed people remained stable, with a slight decrease in temporary layoffs. Long-term unemployment persisted, accounting for over 20% of the unemployed.
Crypto
The Ethereum Foundation has substantial ETH reserves ($650 million worth of funds) but has been selling some (1K ETH just today) to fund operations and support the ecosystem. This has caused controversy within the community. Vitalik has also been selling Starknet tokens for similar reasons.
World Markets
The FAO Food Price Index declined in August, primarily due to lower cereal and sugar prices. Wheat prices fell amid weak demand and increased competition from Black Sea exports. Sugar prices dropped due to improved production prospects. Meat prices also decreased slightly. However, vegetable oil prices rose due to higher palm oil costs. Dairy prices increased due to strong import demand and limited supplies.
Commodities
WTI crude oil prices fell sharply this week due to OPEC+ delaying production increases, weak economic data in China and the U.S., and potential supply increases from Libya. However, a significant drop in U.S. oil inventories provided some support. Overall, oil prices experienced their worst weekly decline in months.
On Week 37, global investors will be closely watching local inflation data as well as that from Euro Area, China, Mexico, Brazil, Russia, and India. Other important releases include the ECB interest rate decision as well as trade data, consumer confidence surveys, GDP growth, and unemployment rates in various countries.
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