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APRIL 23, 2024

CRYPTO ON DECLINE

Global interest in investing in cryptocurrencies continued to decrease for a second week in a row due to concerns about the persistence of high interest rates. According to a report from CoinShares International Ltd., $206 million was withdrawn from crypto assets in the week through April 19. The majority of these outflows came from U.S. ETFs, with new ETFs receiving less money compared to prior weeks. Notably, U.S. spot Bitcoin ETFs experienced outflows of $192 million in the week but did not attract many short sale opportunities. Meanwhile, Ethereum related funds also experienced outflows for the sixth consecutive week. Additionally, the report stated that crypto-linked stocks saw outflows for the 11th week in a row, totaling $9 million, as concerns over the impact of the halving on crypto-mining companies persist.

PRICES TUMBLED

Despite reaching record highs earlier this month, gold prices have fallen sharply as the metal dropped below $2,300 an ounce. The decline was influenced by reduced tensions in the Middle East and expectations of the Federal Reserve maintaining higher interest rates. As a result, gold bullion decreased by over 2%, and the momentum continues on decline as of 8:00 AM CST. In addition, other metals like silver, palladium, and platinum also saw declines. Nonetheless, it is still worth noting that despite the decline, gold remains up around 15% since February, driven by factors like geopolitical risks and demand from China. The focus now shifts to upcoming U.S. economic data that could offer insight into the Fed’s monetary policy direction.

ACCELERATING GROWTH

General Motors exceeded expectations in the first quarter, raising their 2024 forecast after reporting strong performance in North America. The company’s adjusted earnings and free cash flow projections were increased, leading to a surge in shares. Despite losses in China and other international markets, GM’s North American operations, driven by robust truck sales, contributed significantly to the company’s success. Additionally, sales of profitable pickups remained strong, while efforts to scale up production of electric vehicles were highlighted. GM emphasized its focus on capital efficiency, profit growth, and creating shareholder value. Also, although U.S. vehicle inventory levels are rising, the company expressed confidence in the upcoming selling season. Moreover, GM continues to monitor and adjust its strategies to maintain a resilient performance amid economic challenges.

LACK OF CONFIDENCE

Tesla’s highly anticipated first quarter earnings report scheduled to be released later today is expected to bring crucial updates on their current performance and future outlook, as investor confidence dips amid a rollercoaster quarter. Consequently, Tesla’s stock price has plummeted by 43% year-to-date and 19% in its recent seven-day slump due to disappointing results in the fourth quarter for last year, missed delivery targets, and uncertainties around a low-cost EV model. Furthermore, the company is projected to report an adjusted EPS of $0.52 on revenue of $22.31 billion, marking its first revenue decline in four years. Operating profits are anticipated to decrease by 40% to $1.49 billion, with adjusted net income and EBITDA forecasted at $1.79 billion and $3.32 billion, respectively. Moreover, let’s remember that concerns about demand have led to multiple price cuts and speculation about Tesla’s future product roadmap, including the potential cancellation of a cost-efficient EV model in favor of robotaxis.

INTERNATIONAL NEWS

The European Central Bank is likely to lower interest rates at their June meeting, as stated by Vice President Luis de Guindos. He mentioned that recent trends support this decision. However, despite this, there are still uncertainties ahead due to factors like inflation, global tensions, and productivity. In addition, while Europe may see a small recovery later in 2024, the growth is expected to be below potential. Moreover, Guindos also emphasized the importance of decisions made by the U.S. Federal Reserve, which can impact the global economy, including the euro-U.S. dollar exchange rate.

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