SIGNALS OF A SLOWDOWN

Despite yesterday’s CPI’s report, the producer price index (PPI) report, a measure of wholesale prices, revealed that remained unchanged in September, which indicates a possible slowdown in inflation. The index was up 1.8% from a year ago, with a 0.2% rise excluding food and energy. On the consumer side, the consumer price index increased by 0.2% for the month and 2.4% year-over-year. Moreover, the index for services saw a notable increase driven by deposit services costs, while goods prices declined, especially in energy-related items like gasoline and diesel fuel.

THRIVING QUARTER

The leading asset management firm, BlackRock, experienced a surge in assets under management in the third quarter, reaching a record high of $11.48 trillion. This growth was fueled by strong inflows into exchange-traded funds and a bullish equity market. CEO Larry Fink attributed this success to the firm’s ambitious strategy, which includes recent acquisitions in infrastructure and private markets. In addition, BlackRock saw a substantial increase in net inflows, with ETFs and fixed-income products attracting the most investments. The company’s net income also rose to $1.63 billion during this period, and with its shares rising by 18% in 2024, BlackRock’s performance remains strong despite the recent market volatility. Moreover, investors are optimistic about the company’s future prospects, especially as it continues to expand its presence in key investment areas.

MIXED RESULTS

JPMorgan Chase has also reported its third-quarter results, but these showcased a mixed performance, with a decline in profits due to increased provisions for potential loan losses. The bank’s net income reached $12.9 billion as they set aside more money to cushion against deteriorating borrower conditions, notably in the credit card sector. Nevertheless, it is important to remark that JPMorgan’s Wall Street operations still exceeded expectations, registering a remarkable 29% surge in revenue compared to the previous year. Furthermore, despite the recent economic uncertainties, particularly geopolitical tensions, the bank’s investment banking division demonstrated resilience with a strong performance in deal-making activities. CEO Jamie Dimon reiterated his confidence in the robustness of the U.S. economy, emphasizing the bank’s ability to weather challenges, and as the bank strives for sustained growth and stability even with the ongoing uncertainties, its recent achievements reflect its commitment to long-term success.

ALTCOINS’ TURMOILS

This week, altcoin prices have been  experiencing a general decline, largely attributed to underwhelming U.S. macroeconomic data. Cryptocurrencies like Stacks, Immutable, and Kaspa saw notable drops amid this trend, while Uniswap managed to buck the trend with a nearly 17% increase following the announcement of a new Layer-2 platform by its developer. Let’s remark that the current economic climate plays a significant role in these fluctuations, with a weak economy typically leading to reduced consumer spending and a preference for safer investment options. And while the U.S. economy is still relatively robust, recent inflation data showed a mild increase, although slightly below analysts’ expectations. This impacted altcoins as investors may be turning to more established or reliable assets during times of economic uncertainty.

RISING DEMAND

There has been a recent increase in overnight repurchase agreements, which is causing challenges for banks that mediate these short-term borrowing deals involving U.S. government securities. This rise in demand for these agreements may lead to funding issues at the end of each financial quarter and year. The repo market is an important source of quick and cost-effective borrowing for various financial entities, like hedge funds and Wall Street firms. However, the market has seen a higher demand due to changing trading strategies, even though banks are hesitant to expand their capacity due to higher costs. This strain was particularly noticeable at the end of the third quarter, resulting in a significant increase in the secured overnight financing rate (SOFR) and raising concerns about potential market issues. Additionally, the boost in repo volume was driven by an increase in basis trades, indicating greater complexity and possible risks within the financial market.