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MAY 26, 2023

SPACE PEPES NFT PROJECT SOARS ON BITCOIN

The Space Pepes NFT project, built on the Bitcoin platform, gained more popularity than established projects like the Bored Ape Yacht Club, and it achieved trades worth nearly $7.4 million in just one week. This success can be attributed to the implementation of Ordinals, which is a new method that enables the attachment of diverse data to small units of Bitcoin known as Satoshis. While Ethereum has traditionally been the leading platform for NFTs, the increasing significance of Bitcoin could result in a rise in the number of NFTs on its blockchain.

DEBT LIMIT AGREEMENT NEARS

White House and Republican negotiators are reportedly getting closer to reaching an agreement that would increase the U.S. debt limit and establish a cap on federal spending for two years. However, despite recent progress, the details of the agreement remain uncertain, as the two sides have not yet agreed on the amount of the cap. According to the proposed deal, defense spending would increase by 3% next year, aligning with President Joe Biden’s budget request. Additionally, the plan includes upgrading the national grid to support renewable energy and approving projects favored by the Republican party. Moreover, the current agreement would reduce the budget increase for the Internal Revenue Service by $10 billion.

HIGH INFLATION AND INCREASED SPENDING

Recent reports showed that inflation remained high in April, potentially leading to prolonged higher interest rates. The consumer sentiment report revealed that the personal consumption expenditures price index, which measures various goods and services, increased by 0.4% (excluding food and energy costs), exceeding expectations. Nonetheless, despite the elevated inflation rate, consumer spending and income increased by 0.8% and 0.4% respectively, with both exceeding the projected growth of 0.4%. Prices of goods and services experienced modest increases, with goods rising by 0.3% and services by 0.4%. Moreover, food prices rose by 6.9% annually, while energy prices fell by 6.3%.

POSITIVE ECONOMIC GROWTH

Revisions on the first quarter economic data have revealed that the U.S. economy grew faster than previously estimated despite higher than expected inflation rates. In addition, the labor market also saw fewer jobless claims than anticipated. This adds to the growing view that there may not be a recession on the horizon, however, inflation levels remain a concern. Meanwhile, consumer spending is also remaining steady, with strong sales reported by companies such as Best Buy, Urban Outfitters, and Abercrombie & Fitch, and the Atlanta Fed is estimating second quarter GDP growth to reach 2.9%.

SHIFT FROM STOCKS

According to a note from Bank of America Corp, investors are backing out of stocks and shifting their money towards money market funds and bonds. As a result, stocks had outflows of $3.9 billion in the week through May 24th, making it the third straight week of redemptions and making flows flat for the year until now. On the other hand, around $756 billion have entered cash funds in 2023, making it the biggest addition since 2020.

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