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APRIL 29, 2024

OUTFLOWS CONTINUE

Joining the outflows from Grayscale Bitcoin Trust, which has faced continuous outflows totaling $17.1 billion over the past three and a half months, are other bitcoin exchange-traded funds (ETFs) like the Fidelity Wise Origin Bitcoin Fund (FBTC) and the ARK 21Shares Bitcoin ETF (ARKB). Recent withdrawals of $23 million from FBTC and $31 million from ARKB signify a shift in investor sentiment towards these funds. In addition, the Bitwise Bitcoin ETF (BITB) also experienced its first two outflows this month, totaling $7 million and $6 million. In contrast, the iShares Bitcoin Trust (IBIT) has maintained its streak of inflows, while the Franklin Bitcoin ETF (EZBC) has yet to see withdrawals despite volatile market conditions. Moreover, as investors brace for potential shifts in interest rates following a Federal Reserve meeting, the cryptocurrency market has faced a decline, with Bitcoin trading below $62,000 as of 8:00 AM CST.

DEBT PLAN

The U.S. Treasury plans to maintain its current schedule for selling long-term debt this week, offering relief as the Federal Reserve rapidly reduces its securities holdings. The Treasury is expected to follow its guidance from January and not expand its quarterly refunding auctions, with $125 billion in longer-term securities set for next week. This consistent borrowing approach is necessary due to the growing federal budget deficit, leading the government to sell more bonds to private buyers. Moreover, it is worth noting that the Treasuries market is facing challenges as U.S. government bonds are experiencing their largest monthly loss since 2022, driven by high inflation data and substantial auction sizes, and while some stabilization is possible, experts like from Wells Fargo & Co. remain cautious about the impact of the Fed’s actions on Treasury auctions. Furthermore, it is believed that the Fed may announce changes to its policies soon, with Chair Jerome Powell expected to provide further information during the upcoming press conference after the Fed’s policy decision.

RISE DUE TO LAUNCH

Tesla’s stock has surged in U.S. as it reached a milestone in launching its self-driving technology in China. The company’s shares jumped over 12% following the announcement that Chinese authorities had lifted restrictions on Tesla cars due to meeting data security requirements. This move paves the way for Tesla’s Full Self-Driving (FSD) technology to be introduced in China, the biggest electric vehicle market. Despite previously being banned from certain government properties over data security concerns, Tesla is set to benefit from this breakthrough and gain access to essential mapping and navigation technology through a deal with Chinese internet giant Baidu. This progress allows Tesla to legally operate FSD on Chinese roads and gather crucial data for its autonomous driving systems, putting the company in a stronger position against local competitors such as BYD, Nio, and XPeng in the competitive Chinese market.

INTERNATIONAL NEWS

The Japanese yen saw a significant rise after hitting its weakest level against the dollar in 34 years, triggering speculation about potential government intervention to support the currency for the first time since 2022. In a market with reduced activity due to a holiday in Japan, the yen experienced volatile swings, with a more than 2% rally this morning following an earlier drop to 160.17 per dollar. As a result of the sudden and substantial jump, analysts suspect intervention based on the sudden and substantial jump, however, government officials have neither confirmed nor denied involvement. Moreover, the market’s uncertainty regarding possible intervention, coupled with concerns about the Federal Reserve’s stance on inflation, has made trading unpredictable, and while a weaker yen can have benefits for Japan, such as boosting economic growth and increasing the value of overseas assets, the potential consequences of intervention remain uncertain.

KEY EVENTS HAPPENING THIS WEEK

Monday: Earnings report fro. ON Semiconductor (before market opens), and Paramount Global (after market closes).

Tuesday: Employment cost index report for first quarter, S&P Case-Shiller home price index report for February, Chicago Business Barometer (PMI) and consumer confidence reports for April, and earnings reports from McDonald’s, Coca-Cola, Eli Lilly, PayPal, Restaurant Brands International (before market opens), Amazon, Advanced Micro Devices, Pinterest, Super Micro Computer and Starbucks (after market closes).

Wednesday: Construction spending and job openings reports for March, ADP employment and ISM manufacturing reports for April, FOMC interest-rate decision, Fed Chair Powell press conference, and earnings reports from CVS Health, Pfizer, Yum Brands (before market opens), Qualcomm, DoorDash, eBay, Etsy and Carvana (after market closes).

Thursday: U.S. productivity and unit-labor costs reports for first quarter, factory orders report for March, initial jobless claims for week ending on April 27, and earnings reports from Moderna, Cigna, Peloton Interactive (before market opens), Apple, Block, Coinbase, Cloudflare, Draftkings, and Amgen (after market opens).

Friday: U.S. employment report, unemployment rate and ISM services reports for April, and speeches from New York Fed President John Williams and Chicago Fed President Austan Goolsbee.

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