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APRIL 11, 2023

ACCESS TO CREDIT BECOMING A MAJOR CONCERN

As the economy continues to face uncertain times, access to credit has become a growing concern among Americans. The latest monthly survey from the New York Federal Reserve shows that a record-high 58.2% of respondents found it harder to get credit than a year ago. Additionally, almost 53% of respondents expect credit to become even more scarce in the next year, while many express their worries about missing minimum debt payments in the upcoming months. The potential implications of this credit shortage on the overall economy are yet to be fully understood, but it is becoming increasingly clear that the current financial climate is causing great concern for many Americans.

RECESSION AND DEFLATION DUE TO DECLINE IN MONEY SUPPLY GROWTH

Economists are warning of a looming recession and deflation due to plummeting money supply growth in the UK, Europe, and the U.S. – a contrast to the consensus that economies are improving, and inflation is caused by supply shocks and high energy prices. Economists like Simon Ward and Tim Congdon argue that growth and inflation depend on the quantity of money in circulation and its velocity, and they are urging central banks to cut rates and restore positive money growth. It is worth noting that these economists correctly predicted high inflation during the pandemic.

MONEY MARKET FUNDS DURING FINANCIAL INSTABILITY

Investors around the globe are turning to money market funds due to recent financial instability. It has been reported that U.S. investors put $367 billion into funds after the collapse of Silicon Valley Bank and the resulting sharp drop in the stock market. Furthermore, European investors put $19.35 billion into euro-denominated money market funds when Credit Suisse experienced a significant crisis that sent shockwaves through financial markets. By investing in money market funds, people were able to move their money to safer locations away from the volatile stock market and other high-risk investments.

SBPV URGES JOB PROTECTION AMID UBS AND CREDIT SUISSE MERGER

The Swiss Bank Employees’ Association (SBPV) has requested Credit Suisse and UBS to temporarily put on hold any plans to cut jobs during their emergency merger. Natalia Ferrara, SBPV Managing Director, addressed an open letter to Swiss lawmakers calling for their assistance in supporting the affected employees of the two banks and asking to freeze layoffs until the end of 2023. Ferrara has also requested politicians to take responsibility for this situation. While it has been suggested that UBS might cut up to 30% of its workforce after the takeover – resulting in 11,000 job losses in Switzerland, UBS said it is too early to predict layoffs as plans are still in the development stage.

GLOBAL EXPORT RESTRICTIONS

According to a study carried out by the Organization for Economic Co-Operation and Development (OECD), global export restrictions for raw materials needed for electric vehicles and renewable energy have increased by more than five times in the past ten years. The study showed that about a tenth of the global value of exports of crucial materials has faced at least one export restriction measure, affecting the supply of lithium, cobalt, and more. China, India, Argentina, Russia, Vietnam, and Kazakhstan were the top countries with new export restrictions. These measures took the form of export taxes instead of caps on quantities, as taxes are exempted under World Trade Organization rules.

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MARKET RECAP – APRIL 22, 2024

STOCK MARKET Dow Jones ended at $38,239.98 (+0.67%) S&P 500 ended at $5,010.60 (+0.87%) Nasdaq Composite ended at $15,451.31 (+1.11%) The stock market had a positive start to the week as all major indexes showed gains. This was largely attributed to a rebound in tech shares, a decrease in tensions in the Middle East following […]

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APRIL 22, 2024

HALVING AFTERMATH Following the lasted halving event which went ahead last Friday, Bitcoin’s price has remained steady, trading above $65,800, but there was a noticeable drop in transaction fees. On-chain data shows medium-priority transactions costing $8.48 and high-priority transactions at $9.32, significantly lower than the initial spike post-halving. Moreover, despite expectations that miner revenue would […]

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MARKET RECAP, APRIL 19, 2024

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