THE RISE OF ETHER
The Ether token is performing better than Bitcoin, with a 28% rise compared to Bitcoin’s 21% increase this year. This switch is attributed in part to speculation that the upcoming wave of U.S. crypto exchange-traded funds will focus on Ether, resulting in increased investor interest. In addition, proportion of Ether being used for staking has reached an all-time high of 25%, thereby reducing its supply and potentially boosting prices. As a result of these events, the price of Ether reached $3,000 before falling back to $2,920. Moreover, despite expectations of a possible approval, there is still uncertainty regarding future legal issues of Ether exchange-traded funds. Nonetheless, experts anticipate Ether to continue outperforming Bitcoin until decisions regarding exchange-traded funds are made, and institutional investors are showing increased interest in Ether futures.
MORTGAGE RATES SOARED
As reported by the Mortgage Bankers Association (MBA), last week, mortgage interest rates surged to the highest level since early December, causing a sharp decline in mortgage demand. The average interest rate for 30-year fixed-rate mortgages increased to 7.06% from 6.87%, leading to a decrease in both refinancing and home purchase applications. The rise in rates was triggered by the latest uptick in inflation, which reduced hopes for a near-term rate cut, making it challenging for potential homebuyers due to affordability constraints in a market with higher rates and home values. Consequenlty, this resulted in an 11% drop in applications to refinance a home loan compared to the previous week and a 10% decrease in applications for mortgages to purchase a home. Furthermore, the increase in rates also led to a shift towards adjustable-rate mortgages, which offer lower interest rates but are considered riskier.
ALL EYES ON NVIDIA
Today’s featured topic centers on Nvidia Corporation’s much-anticipated earnings report and its potential implications for the market. This event is of particular interest to investors as they await to see if the AI chipmaker can sustain its strong performance, while also observing if it meets revenue projections. The earnings report will be released after market closes. Moreover, given Nvidia’s prominent role in powering AI technology, gamers, and data centers, its quarterly results are closely scrutinized for insights into the health of these sectors and the broader economy. Wall Street is expecting a remarkable performance, projecting revenue of over $20 billion in the last quarter, which is a big jump from the previous year. Nevertheless, there are concerns that even a strong performance may not satisfy the high expectations. Thus, it is important to keep in mind that any unexpected outcomes in the earnings report could lead to fluctuations in the stock price, potentially influencing market trends.
AMAZON JOINS THE DOW
Amazon.com is joining the Dow Jones Industrial Average, replacing Walgreens Boots Alliance. Amazon’s inclusion in the Dow is a reflection of the company’s outstanding performance in the stock market. Unlike other indices, the Dow is based on share price rather than market capitalization. This means companies with higher share prices have a greater impact on the index, and the addition of Amazon, a technology leader, is expected to change the Dow’s focus, which has previously lagged behind other indices due to less exposure to tech stocks. Amazon’s stock market success has propelled the company to a market value of over $1.7 trillion. The last major change to the Dow occurred in 2020, thus, this change in the Dow marks an important milestone, and reflects the careful selection and management of the index to keep it relevant to the economy.
INTERNATIONAL NEWS
According to JPMorgan Chase & Co strategists, European banks may have peaked in returning capital to shareholders, due to potential central bank rate cuts which could dampen the sector’s earnings. The strategists also express caution as positive factors such as higher bond yields and earnings per share growth appear to be fading. Despite the European economy’s avoidance of recession, its outlook remains uncertain. While banks have benefited from the European Central Bank’s tightening measures, concerns remain about a potential slowdown in lending revenue and earnings growth for banks in the region. Though banks have been among the top-performing sectors, there are concerns about when central banks will start reversing their interest rate hikes. The strategists acknowledge investor hesitancy about their decision to underweight banks, and suggest that the peak for banks may have coincided with the peak for bond yields. Examples of banks increasing shareholder payouts include Banco Santander SA, as well as share buyback plans from major banks such as Deutsche Bank AG, Intesa Sanpaolo SpA, and UniCredit SpA.
