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FEBRUARY 29, 2024

INFLATION RATE SLOWED

According to recent data, the Federal Reserve’s preferred inflation gauge, the Personal Consumption Expenditures (PCE) index, experienced a slight dip in January, in line with expectations. This indicator, excluding volatile food and energy costs, increased 2.8% year-over-year, consistent with economists’ forecasts. Having increased 0.4% from the prior month, the core PCE index indicated a gradual, yet steady, rise. The inflation data raised concerns amidst a surprising report on price hikes from the Consumer Price Index (CPI), leading to stock market declines and a shift in investors’ interest rate cut forecasts. Consequently, the market now expects three interest rate cuts by 2024, down from six anticipated previously. The Federal Reserve, based on their recent minutes, seeks higher confidence in the declining inflation trajectory before considering any prompt rate adjustments. Fed Chair Jerome Powell has emphasized a cautious approach to lowering interest rates, acknowledging the associated risks. These developments reflect the concerns and considerations of officials amid the current economic landscape.

BULLISH MOMENTUM

The cryptocurrency market is experiencing gains as most cryptos seem to be in a bullish momentum. For instance, earlier this morning Bitcoin reached $64,000 and Ethereum almost hit $3,500. In addition, popular meme tokens like Dogecoin continue to be a focal point for traders as it experienced a 40% surge before slightly pulling back, leading to a record amount of bets on DOGE’s future value, reaching $1 billion. About 70% of traders are optimistic and think DOGE will keep going up, nontheless, it is worth noting that some experts are warning that DOGE’s value might reverse soon. Furthermore, despite BTC’s positive momentum, BTC fell slightly and it’s price value is $62,896.62 as of 8:00 AM CST. Moreover, despite the gains experienced by Ether, its price remain uncertain as although technical indicators, such as the relative strength index (RSI) and Bollinger Bands, support the idea of a bullish market with the potential for further price increases, there are also signals from Ethereum’s derivative markets that indicate a potential price correction.

UPTICK IN CLAIMS

In the week ending February 240,000, the number of people in the U.S. who applied for unemployment benefits rose to 215,000, which was higher than what experts had expected. At the same time, the number of people who were already receiving these benefits also went up, reaching 1.91 million. These numbers suggest that there may be some changes happening in the job market, which could affect the overall economy. Although the overall economic situation seems stable, these rising numbers indicate that it’s important to keep an eye on how the job market is doing and how it might impact the economy. The percentage of people with unemployment benefits also increased slightly to 1.3%, and the average number of claims over the past four weeks went down to 212,500.

EXCEEDING EXPECTATIONS

Salesforce reported that its revenue in the latest quarter surpassed expectations, showing a 10.8% increase to $9.29 billion, despite a 9% decline in professional services revenue. This positive news was followed by a forecast of lower revenue for the new fiscal year, leading to a 6% initial drop in Salesforce’s stock, which later rebounded by 1%. Additionally, Salesforce revealed plans to pay dividends at 40 cents per share and announced its intention to acquire a sales commission software business. The company also disclosed plans to sell its products on Amazon Web Services Marketplace. Looking ahead, Salesforce projected earnings between $9.68 and $9.76 per share, with revenue ranging from $37.7 billion to $38.0 billion, reflecting an approximately 8.6% growth at the mid-range. Moreover, despite the company’s anticipation of increased demand for AI products, its estimates did not account for a significant impact from this category. Salesforce also confirmed plans to initiate dividend payments to shareholders, underscoring its 14% increase in share value this year, which outpaced the S&P 500 index’s 6% gain during the same period.

INTERNATIONAL NEWS

Preliminary data for February indicated a decrease in inflation rates across six economically significant German states, with the trend suggesting a continued downward trajectory for German inflation. Notably, North Rhine-Westphalia, the country’s most populous state, experienced a decline from 3.0% to 2.6% in February. Saxony and Baden-Wuerttemberg saw the largest decreases, falling to 3.0% from 3.5% and 2.7% from 3.2%, respectively. Subsequently, Bavaria reported a drop to 2.6% from 2.9%, while Brandenburg fell to 3.5% from 3.7% and Hesse decreased to 2.1% from 2.2% in the previous month. Despite economists’ forecasts indicating Germany’s harmonised inflation at 2.7% in February, down from 3.1% in January. Moreover, the national inflation data for February is being published by individual euro zone countries before the EU-wide release slated for Friday, and this release is expected to show headline inflation slowing to 2.5% year-on-year in February from 2.8% in January.

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