MARKET CLOSED
Due to the Memorial Day holiday, the stock market will be closed today.
CRYPTO REBOUND
The market sentiment towards digital assets such as cryptocurrencies has shifted as a wave of new venture-capital and hedge funds have launched in the first quarter of this year, signaling renewed interest and confidence in the sector. The bankruptcy of established players has opened the door for fresh entrants to capitalize on the market rebound, with many existing funds showing strong performance and delivering significant returns to investors. The total value of crypto-dedicated hedge funds has soared to $21 billion, reaching levels not seen since October 2022. This resurgence in the market can be attributed, in part, to the introduction of exchange-traded funds (ETFs) that provide investors with exposure to assets like Bitcoin and Ether. While the market revival has brought excitement, fundraising for new ventures remains challenging, with smaller investment amounts compared to previous years. Furthermore, the increasing popularity of ETFs presents stiff competition for traditional hedge funds in the digital asset space, offering investors easier and more cost-effective avenues for gaining exposure to cryptocurrencies.
SLIGHT RECOVERY
After the setbacks witnessed last week in which gold prices were at their lowest level in two weeks, the metal has managed to increase as it rose by 0.2% to $2,339.9 per troy ounce ahead of the release of U.S. inflation data this week. The reason behind the last week’s decrease of gold prices was because the anticipation of potential interest rate cuts has been dampened by recent comments from the Federal Reserve, and as higher rates strengthen the U.S. dollar, the sentiment towards non-interest-bearing assets like gold, was less positive. Nonetheless, as things remain uncertain regarding what is going to happen with rate cuts, market attention has now turned to the upcoming U.S. Personal Consumption Expenditures price index report, which will provide insights into the Fed’s monetary policy direction.
INTERNATIONAL NEWS
European shares faced challenges in gaining momentum as trading remained light following a warning from a European Central Bank official indicating a need for continued restrictive policy throughout the year. The Stoxx Europe 600 index saw minimal movement, with trading levels below the norm due to UK and U.S. market closures. Although the bank plans to lower rates, Chief Economist Philip Lane emphasized the necessity of maintaining restrictive policies until at least 2024. Moreover, market analysts anticipate a temporary increase in Eurozone inflation for May, which may prompt some considerations for future rate cuts. Nevertheless, despite this, it is worth remarking that the June rate cut is still anticipated, although uncertainties loom over subsequent steps.
KEY EVENTS HAPPENING THIS WEEK
Monday: Market closed.
Tuesday: S&P Case-Shiller home price index report for March, consumer confidence report for May, and speeches from Cleveland Fed President Loretta Mester, Fed Gov. Michelle Bowman, Minneapolis Fed President Neel Kashkari, Gov. Lisa Cook and San Francisco Fed President Mary Daly.
Wednesday: Fed Beige Book and speech from New York Fed President John Williams.
Thursday: First revision of GDP for first quarter, pending home sales, advanced U.S. trade balance in goods, retail and wholesale inventories reports April, initial jobless claims report for week ending on May 25, and speeches from New York Fed President John Williams and Dallas Fed President Lorie Logan.
Friday: Personal income and spending, and PCE index reports for April, and Chicago Business Barometer (PMI) report for May.
