SURGING INFLOWS

Bitcoin exchange-traded funds (ETFs) listed in the U.S. are currently playing a crucial role in boosting the scarcity of cryptocurrency assets. As of yesterday, BTC ETFs experienced an influx of $136.0 million, with BlackRock’s IBIT ETF leading the way with $98.9 million. This significant contribution pushed IBIT’s total net inflows above $21 billion, solidifying its position as a top choice for investors. Other notable ETFs like Fidelity’s FBTC and Bitwise’s BITB also saw increased inflows. The total inflows experienced yesterday amounted to 2,132 BTC, with IBIT alone receiving 1,548 BTC, which is nearly five times the daily mined supply of Bitcoin. This surge in Bitcoin ETF inflows has now reached a total of $17.8 billion, highlighting sustained investor interest in these investment vehicles. Additionally, Ethereum ETFs saw $62.5 million in inflows, with BlackRock’s ETHA leading the charge. Nonetheless, it is important to remark that despite this positive trend, total outflows from Ether ETFs remain high at $624.4 million – something that underscores investor uncertainty surrounding Ethereum compared to Bitcoin.

GROWTH EXPECTED

Micron Technology Inc. is gearing up to announce its financial results, highlighting strong demand for AI technology while acknowledging slower sales in traditional markets like PCs and smartphones. The company’s high-bandwidth memory chips, crucial for AI data processing, are expected to drive significant growth, and any positive comments on AI demand could spark a revival in the AI chip sector following lackluster reports from key competitors. Moreover, it is worth highlighting that despite a previous stock decline and market uncertainty post-Micron’s last update, analysts are eyeing the current low expectations as a potential opportunity for a stock rebound. In fact, the options market is currently signaling heightened optimism, and it is hinting at a possible uptick in Micron’s stock price. Furthermore, Citigroup foresees a turnaround in DRAM pricing trends in the months ahead, which indicates a promising long-term outlook for Micron. Overall, analysts see substantial potential for Micron’s stock price to surge over the next year, solidifying its position as an attractive investment choice in the semiconductor industry.

RECORD-LOW

Mortgage rates have recently hit a two-year low, prompting many homeowners to take advantage of potential savings by refinancing their home loans. This surge in refinance applications has seen a 20% increase compared to the previous week and a massive 175% spike from a year ago. The average interest rate for 30-year fixed-rate mortgages has dropped to 6.13%, leading to a sharp increase in both conventional and government refinance applications. Nevertheless, it is worth noting that despite the majority of mortgage demand being driven by refinance applications, the overall level of activity is still relatively modest compared to previous refinancing waves. Additionally, homebuyers are facing challenges due to high home prices and limited housing supply. Moreover, as mortgage rates remain stable for the time being, the market is anticipating more economic data later in the week and at the start of October to gauge the direction of future trends in mortgage rates and refinancing activity.

SHORT LIVED?

Despite the recent positive trend in the commodity market, with metals like copper showing steady gains and gold prices holding strong, analysts are differing on whether the boost from China’s economic stimulus may be short-lived. Sucden Financial has stated that despite the promising rise in metal prices, they believe that the effects of China’s stimulus package may not have a lasting impact on price trends. On the other hand, HSBC Global Research predicts that copper and aluminum prices could remain range-bound as they await a demand-driven rally following China’s central bank’s rate cuts. However, HSBC Global Research has a less optimistic outlook on lithium due to a surplus supply compared to demand, signaling a more challenging situation within the commodity market. Overall, the mixed analysis from these financial institutions highlights the complexity of predicting commodity market trends, making it essential for investors to closely monitor market developments to make informed decisions in this fluctuating environment.

IGNORING OBSTACLES

Despite China’s central bank efforts to deploy aggressive monetary tactics to jumpstart their economy, experts are warning that their measures may not be addressing the key obstacle to growth. As previously informed, by injecting liquidity and reducing borrowing costs, the People’s Bank of China aims to stimulate market optimism and potentially supplement these actions with a fiscal stimulus package. However, while the central bank’s actions are seen as a positive first step, doubts persist regarding their overall impact, given the underlying issues of subdued credit demand and low consumer sentiment. In fact, experts are highlighting that the real challenge lies in the persistently weak consumer demand, driven by deflationary pressures and a downturn in property investment. Consequently, experts have stated that the focus on monetary measures may not be sufficient, and emphasize the need for fiscal policies that directly inject money into consumers’ pockets to revitalize spending and confidence.