SETTING THE BAR HIGHER
During yesterday evening’s post-market trading session, Bitcoin experienced a sharp increase in value, surpassing $93,000 briefly, driven by market expectations of additional interest-rate cuts by the Federal Reserve and the supportive stance of President-elect Donald Trump towards cryptocurrency. The digital asset, which rose nearly 6% to establish a new record of $93,462, but it later settled at $91,305 earlier this morning, and as of 8:00 AM CST, the crypto had a value just below the 91,000 mark. Let’s highlight that Trump pledges to establish a regulatory environment favoring crypto and positioning the U.S. as a global crypto hub are facing scrutiny regarding their feasibility and potential implementation timelines. This verbal backing could sustain Bitcoin’s upward trajectory towards $100,000, and as a result, the financial industry is abuzz with the crypto boom, witnessing heightened trading activity and inflows into U.S. Bitcoin exchange-traded funds. In addition, many believe that the largest digital asset could skyrocket to $500,000 if Trump’s initiatives materialize, however, it is important to remark that some investors are unsure if a correction is imminent, especially due to some doubts about the likelihood of Trump’s proposed strategic reserve for Bitcoin.
STEADY RISE
In October, the producer price index for final demand in the U.S. increased by 0.2% compared to the previous month. This marked a steady rise in final demand prices, with a 2.4% increase over the past year. The boost in prices was mainly led by a 0.3% uptick in final demand services, while goods also saw a minor increase of 0.1%. Notably, prices for final demand excluding foods, energy, and trade services rose by 0.3% in October. It is worth noting that various sectors and industries played a role in these price movements, with services like portfolio management and goods such as carbon steel scrap experiencing price hikes, while items like liquefied petroleum gas saw price declines. Additionally, there was a substantial surge in prices for unprocessed goods for intermediate demand, driven largely by a significant 9.9% increase in the index for unprocessed energy materials.
6-MONTH LOW
According to the U.S. Labor Department, last week was remarkable for the job market, as the number of Americans filing for unemployment benefits dropped to its lowest level since May, indicating a strong demand for workers despite recent disruptions like hurricanes and strikes. Initial claims fell by 4,000 to 217,000, below the average of the past two years. In addition, the four-week moving average of new jobless claims also declined to 221,000, reflecting a positive trend in the labor market. Moreover, the number of people receiving benefits decreased to 1.87 million. Overall, although some states are witnessing increases in claims before seasonal adjustments, the downward trend in jobless claims points towards a healthy job market in the U.S.
CONTINUOUS DOWNTREND
Currently, gold prices are on a downward trend for the fifth consecutive day, touching their lowest point in eight weeks. This decline is attributed to the strengthening U.S. dollar and rising Treasury yields, which have made gold more costly for international buyers and diminished its perceived value as a hedge against inflation. It is worth highlighting that although recent data indicated a potential decrease in inflation next month, the anticipation of future inflationary pressures is affecting the market sentiment, and as a result, the Federal Reserve remains cautious about implementing further interest rate cuts, with differing views among officials on the risks associated with inflation. Additionally, silver, platinum, and palladium prices have also experienced declines, reflecting the overall trends in the precious metals sector.
POSSIBLE GROWTH DUE TO AI
Due to the transformative potential of Artificial Intelligence (AI) across various industries, Wall Street has been closely monitoring the advancements in this technology, and in fact, many analysts are predicting a significant increase in global GDP by 2030 as a direct result of the AI revolution, with varying estimates indicating substantial growth opportunities. Moreover, the recent release of Form 13F filings has allowed investors to track the trading activities of major companies, such as Google’s parent company, Alphabet, which in its latest disclosure, unveiled a portfolio of 42 stocks valued at $1.84 billion. Within these developments, Alphabet notably decreased its investment in Snowflake, a cloud-data warehousing company, in the third quarter. This indicates that Alphabet is making strategic adjustments to its portfolio, potentially shifting focus towards other companies that are expected to drive future growth. Nevertheless, despite this, it is worth noting that Snowflake remains competitive by leveraging AI and machine learning in its services, and that the continued innovation and adoption of AI technologies across industries will likely present lucrative opportunities for companies like Snowflake in the long term.
