CURRENTLY VOLATILE
U.S. Bitcoin exchange-traded funds (ETFs) are witnessing a sustained period of daily net outflows, marking their longest streak since the beginning of the year, as investors navigate a shift away from riskier assets amidst global market uncertainties. Data gathered through Bloomberg reveals that approximately $1.2 billion has been withdrawn from a collection of 12 Bitcoin ETFs over an eight-day span leading up to September 6. This pullback coincides with a turbulent phase for shares and commodities, triggered by apprehensions surrounding economic growth and deflationary pressures in China. The volatile market conditions have reverberated throughout the cryptocurrency realm, where Bitcoin has struggled in September, registering a 7% decline in value. Despite this downturn, Bitcoin displayed a marginal recovery over the weekend, with prices hovering around $55,300 as of 8:00 AM CST. Factors such as influential figures’ social media interactions and the performance of U.S. presidential candidates, particularly the pro-crypto nominee Donald Trump, appear to influence market sentiment. Moreover, traders anticipate Bitcoin to oscillate within the range of $53,000 to $57,000 until the release of U.S. consumer price data due on Wednesday morning.
GLEAMING METALS
Gold futures are on the rise, and analysts at ING have stated that this positive trend is likely to continue due to the anticipated U.S. interest rate cut this month. This trend is also supported by strong demand from banks and Asian buyers. Additionally, geopolitical risks and uncertainties leading up to the U.S. election in November are driving safe haven demand for gold. Furthermore, it is worth noting that gold-backed ETFs have experienced a resurgence in global inflows for the past four months, and ING analysts predict that gold prices will average $2,580 in the fourth quarter and $2,700 next year. Meanwhile, base metal prices, such as copper and aluminum, have also been on the rise after a sharp selloff, with China’s declining metal-exchange stocks potentially driving increased demand. Moreover, zinc and nickel prices have also seen marginal increases.
NEW S&P 500 ADDITIONS
Investors are responding well to the recent S&P 500 additions announcement on Friday. Stocks Palantir Technologies, Dell Technologies, and Erie Indemnity will be added to the S&P 500 index, replacing American Airlines, Etsy, and Bio-Rad Laboratories. The newly added companies will be trading on the index on September 23, and this announcement has caused their stock prices to rise, with Palantir gaining 8%, Dell rising by 5.7%, and Erie seeing a 2.3% increase. Analysts have stated that being included in the S&P 500 will bring more attention and potentially higher valuations for these stocks, as investors tracking the index are likely to purchase shares of the newly added companies. On the other hand, American Airlines, Etsy, and Bio-Rad Laboratories, which are being removed from the S&P 500, have experienced slight decreases in their stock prices. Overall, this change in the index composition is seen as a positive development for the newly added companies and could influence investor interest and valuation in the future.
INTERNATIONAL NEWS
In China, core inflation has dropped to its lowest point in over three years, signaling a significant slowdown in consumer demand. The consumer price index, excluding volatile food and energy costs, only rose by 0.3% in August, the smallest increase since March 2021. This trend reflects a broader deflationary pressure on the economy, as weak consumption and investment demand have led to price wars in key sectors like electric vehicles and solar. This has hindered China’s efforts to achieve its growth target of approximately 5%, and analysts are advocating for more robust fiscal and monetary policies to counter deflation and stimulate economic activity. In addition, former central bank Governor Yi Gang has also highlighted the urgency of addressing deflationary pressures.
KEY EVENTS HAPPENING THIS WEEK
MONDAY: Wholesale inventories report for July, and consumer credit report for August.
TUESDAY: NFIB optimism index report for August.
WEDNESDAY: Consumer price index (CPI) and core CPI reports for August.
THURSDAY: Monthly U.S. federal budget, producer price index (PPI) and core PPI reports for August, and initial jobless claims report for week ending on September 7.
FRIDAY: Import price index report for August, and preliminary consumer sentiment report for September.
