Wednesday's Markets Update (September 27, 2023)

28 Sep 2023 by rate3

On Wednesday, Manufacturing orders rose above expectations and the Nasdaq closed slightly in the green, with Palantir increasing 6.4% on the news that it got $250M for AI services with the Army. BTC attempted to breach a resistance at 27K but then retreated back to 26.3K. Other news: McHenry threatened to subpoena Gensler; Binance is leaving Russia.

Details

Manufacturing orders unexpectedly rebounded in August, led by machinery, fabricated metal products, computers and electronics, and electrical equipment. Orders for machinery led the increase, followed by fabricated metal products, computers and electronics, and electrical equipment. On the other hand, orders declined for transportation equipment, primary metals, and capital goods. However, orders for non-defense capital goods excluding aircraft, a closely watched proxy for business spending plans, went up 0.9%, recovering from a 0.4% fall in July.

Comment

We have already seen in the previous data that manufacturers continue to insist on an upcoming economic recovery and count on the recession being avoided. On the one hand, this underlines an unusual resilience of the economy (compared to previous recessions), boosted by growing government expenditures, including those on the war. On the other hand, we see that negative economic signals continue to accumulate. Overall, this could signify a more prolonged period during which the Fed might hold its high rates.

Crypto

McHenry, the chair of the House Financial Services Committee, threatened to subpoena SEC Chair Gensler at the beginning of Wednesday's hearing. He accused Gensler of not being transparent to Congress;
Binance is selling its Russian business to local exchange CommEX and exiting the country completely. The process will take up to a year.
Comment

One branch of the government, the executive branch, is completely disdainful of the regulatory branch. This is a sign of a non-functioning governance system. The only answer is massive deregulation and complete decentralization. The number of bureaucrats overseeing markets must be cut by at least 90% to keep the economy competitive in the dawn of amazing technological breakthroughs, including blockchain and AI, that have occurred in the past decade. These advances allow us to get rid of bureaucrats who are only serving their own interests.