BOUNCE BACK
Bitcoin has surged past the $60,000 as the crypto was driven by inflows into exchange-traded funds (ETFs). Data showed that Bitcoin ETFs saw significant net inflows, with BlackRock’s IBIT leading at $92 million. This surge in ETF activity marked the second-highest level this month. Additionally, Japan’s Metaplanet acquired $3.4 million worth of Bitcoin, further boosting the digital asset’s value. As a result, major tokens like XRP and Binance Coin experienced gains, while Dogecoin saw a 5% increase following Elon Musk’s involvement. Moreover, it is worth highlighting that despite some market caution due to ETF options withdrawals by major exchanges, the overall sentiment remains positive as interest in Bitcoin and cryptocurrencies continues to grow.
ANOTHER RECORD RALLY
Gold prices have surged to yet another all-time high as investors eagerly anticipate Federal Reserve Chair Jerome Powell’s upcoming speech at the Jackson Hole symposium. Climbing to $2,528.72 per ounce, gold has marked a remarkable 22% gain so far this year. Market analysts are closely monitoring Powell’s address for signals on potential interest rate cuts, which are typically favorable for gold due to its non-interest-bearing nature. Moreover, with a muted response from the dollar and bond yields, the momentum driving gold’s ascent is largely being fueled by positive market sentiment and a lack of selling pressure, keeping the path of least resistance tilted upward. Factors such as robust purchases by central banks, geopolitical tensions, and expectations of further rate cuts by the Fed have all contributed to this rally in gold prices. Furthermore, the possibility of gold hitting $2,700 per ounce by mid-next year is being speculated, although caution surrounds a recent decline in Chinese gold demand as imports dipped during the last month.
POSSIBLE DOWNWARD REVISION
In recent findings, it has been suggested that the U.S. job growth in the first three months of the year, may have been significantly lower than the figures that were previously reported, and this could pose potential challenges for the Federal Reserve in adjusting interest rates. Economists are anticipating a substantial downward revision of at least 600,000 jobs, with some projections reaching up to a million. This revision indicates a gradual cooling off of the labor market, sparking discussions about the state of the overall economy and employment trends, and potentially influencing decisions by the Fed. Nevertheless, despite the possible revision, it is important to remark that the economy has still been adding a notable number of jobs each month, which signals a relatively healthy pace of hiring. Moreover, some analysts argue that the current data might overstate the moderation in employment growth, particularly due to the exclusion of unauthorized immigrants in the QCEW figures.
SALES DECLINE
Lowe’s second earnings results were above expectations, but the home improver retailer also revealed a downward revision in its full-year forecast due to a decline in quarterly sales and an anticipated weakening demand for do-it-yourself projects. The company now expects total sales to range between $82.7 billion and $83.2 billion, a decrease from its previous estimate of $84 billion to $85 billion. Likewise, adjusted earnings per share are projected to be approximately $11.70 to $11.90, compared to the prior outlook of $12 to $12.30. Lowe’s attributed the decrease in sales to lower-than-expected DIY sales and a challenging macroeconomic environment. This disappointing performance led to a decline in comparable sales by 5.1%, although growth was observed in its online business and sales to home professionals. Moreover, it is worth noting that with uncertainties in consumer spending and economic conditions influencing market sentiment, Lowe’s and other home improvement retailers are facing headwinds due to factors such as higher mortgage rates and elevated borrowing costs.
FOSTERING ECONOMIC COOPERATION
Last week, the United States and China came together to strengthen their collaboration in maintaining financial stability. During a meeting in Shanghai, representatives from key financial regulatory bodies discussed various topics such as capital markets, cross-border payments, and monetary policy. The discussions were described as professional and constructive, emphasizing the importance of cooperation in managing financial risks and potential crises. The two countries exchanged letters to support coordination and shared contact lists for effective communication in times of financial stress. This agreement marks a significant step towards ongoing efforts to enhance economic and financial cooperation between the U.S. and China. Additionally, technical experts presented reports on the operational resilience of systematically important global banks, climate risk stress testing, and financial institutions. The discussions highlighted the shared interest in addressing financial challenges and promoting sustainable growth through finance.
