MARKET CLOSED
Due to the Good Friday holiday, the stock market is closed today.
ALIGNED WITH EXPECTATIONS
According to the latest report from the Commerce Department, inflation in February aligned with the expectations set by the Federal Reserve as the core Personal Consumption Expenditures (PCE) price index increased by 2.8% over the past 12 months. Rising energy costs were a key contributor to the headline inflation figure, with goods prices experiencing a more significant increase compared to services. Notably, consumer spending surged by 0.8%, surpassing the initial estimate of 0.5%, which may signal additional inflationary pressures. Let’s remember that the Fed places great importance on the core inflation rate when making policy decisions, as it provides a better measure of long-term inflationary pressures, and although the latest inflation data gives hope for a possible rate cut, market expectations suggest that the Federal Reserve will maintain its current stance on interest rates until at least the June meeting.
SURGE OF MEME COINS
Meme coins, led by the Solana-based dogwifhat (WIF), have experienced a surge for the second consecutive day, taking the lead in the market category. The meme coin category showed an average 8% increase, surpassing niches like decentralized finance and exchange tokens. The surge began yesterday due to speculation about DOGE’s potential use in an upcoming payments service by social app X. Consequently, bets on the future price reached a record $2 billion. In addition, tokens like FLOKI and WIF experienced significant jumps, with WIF becoming the third-largest meme token by market capitalization. However, despite these gains, trading firms cautioned about a potential pullback, noting exhaustion in bitcoin and ether price action and high leverage costs for speculators. As for other cryptos, Bitcoin’s value raded around $70,000 with minimal changes in the past 24 hours, while Ether, SOL, and ADA experienced minor declines, and BCH rose by 4%.
VALUATION CONTROVERSY
Despite recently reporting significant gains, MicroStrategy stock is experiencing a decline following a statement made by the hedge fund Kerrisdale Capital. Kerrisdale Capital revealed that it is in favor of Bitcoin but has a negative outlook on MicroStrategy, as the company’s shares have surged mainly due to the rising value of the cryptocurrency it owns. The hedge fund believes that the relationship between Bitcoin and MicroStrategy is unbalanced and that MicroStrategy’s stock is overvalued, trading at a premium more than twice the value of its bitcoin holdings. This diverging views between Kerrisdale Capital and the market on the valuation of MicroStrategy, created uncertainty among investors, which ultimately led to a decrease on MicroStrategy’s shares of 10%. Nonetheless, it is still worth highlighting that despite this sell-off, MicroStrategy’s stock has nearly tripled over the course of this year.
INTERNATIONAL NEWS
The release of more economic data from European countries is further confirming that it is very possible that the European Central Bank could start cutting interest rates this year. French inflation has recently dropped below 3% for the first time in over two years. Meanwhile, although Italy reported an increase of 1.3% in inflation, it was 0.2% lower than expectations. Additionally, in March, France’s consumer prices rose by 2.4%, down from 3.2% in the previous month. As of now, expectations remain hopeful for a possible rate cut happening in June, nonetheless, there are still concerns about wage increases potentially driving up prices exist despite the favorable inflation figures. Moreover, France’s decreased inflation has affected tax revenue but could also aid in driving economic recovery.
