Tuesday's Markets Update (February 20, 2024)

20 Feb 2024 by rate3

On Tuesday, the CB economic index dropped, and stock followed suit with large tech companies leading the decline due to concerns over high valuations. Major retailers reported mixed earnings. In foreign markets, the CAC in France hit an all-time high, cocoa prices continued their rally reaching an all-time high due to poor weather conditions, while steel futures dropped on China's economic slowdown. With Bitcoin still oscillating around 52K and Ethereum lingering just under 3K, the larger crypto market entered a short-term correction mode with Polkadot (-5%), Cosmos (-4%), and Solana (-4%) leading the retreat. In other news, 10 Autoglyphs were sold for 5K ETH.

Details

The Conference Board Leading Economic Index (LEI) decreased by 0.4% in January 2024, following a 0.2% decline in December 2023. Despite the decline, only four out of ten components were negative contributors over the previous six months, and the index does not currently signal a recession. However, real GDP growth is expected to slow to near zero percent in Q2 and Q3 of 2024.(CB)

Crypto

Coinbase International Exchange (launched in May 2023) hit a record $1 billion in daily trading volume for the first time, with the bulk of trades in Ethereum and Bitcoin. However, this figure is separate from the company's main US exchange, which reported $3.2 billion in spot trading volume on the same day. (source)
A complete set of 10 Autoglyphs has sold for 5,000 ETH, or about $14.6 million, marking the highest NFT sale in two years and the fifth-largest on-chain purchase. Autoglyphs have gained acclaim, being exhibited at prestigious venues and even donated to Europe's largest modern art museum, Centre Pompidou.(source)

World Markets

The CAC 40 hit ATH, rising 0.34% due to positive corporate news. Air Liquide and Veolia saw significant gains, while losses from Renault and ArcelorMittal moderated the increase.
South Africa's unemployment rate rose to 32.1% in Q4 2023, with job losses in community & social services, construction, agriculture, trade, and manufacturing. Employment fell, but finance, transport, and mining added jobs. The youth unemployment was 59.4%. (StatsSA)
Mozambique's economy grew by 5.36% YoY in Q4 2023, due to positive contributions from sectors like accommodation & food services, construction, transport & storage, information & communications, finance, agriculture, and fisheries. Despite a slowdown in the extractive industry and poor manufacturing performance, 2023 saw the strongest GDP growth since 2015, reaching 5%.

Currencies

The euro has strengthened (above the $1.08) due to a weaker dollar and data indicating slower wage growth in the Eurozone. Despite decelerating wage growth, it remains above a level consistent with 2% inflation. ECB officials have expressed caution about rate cuts, suggesting they are likely this year but without giving a specific timeline.
The Mexican peso reached a one-month high around 17 per USD in February, benefiting from a weaker US dollar and the Bank of Mexico maintaining its record high interest rate. Banxico revised its inflation expectations upwards for most of 2024.

Commodities

Steel rebar futures dropped to CNY 3,750 per tonne in February due to low demand for ferrous metals. New home sales fell by 34% in major Chinese cities, leading to a surge in steel rebar stocks and a 4% increase in iron ore inventories. The PBoC's loan prime rate cut did little to improve demand optimism.
Cocoa prices have reached a record high of over $6,030 per tonne due to concerns over crop conditions in West Africa, the leading cocoa-producing region. Fears of a fourth consecutive global deficit are growing as unfavorable weather conditions potentially reduce crop yields.

Comment: Freedom or Not?

Lately, I have seen some of my young readers playing with a number of pro-state ideologies, thinking it would be cool to limit some of our freedoms in exchange for more 'stability' and 'fairness' in their lives. This reflects a more general world trend towards limiting our freedom of self-expression, including the freedoms to travel and to engage in entrepreneurship.

It is obvious to many that the governance mechanisms of the current world — and those of most countries — must be altered to reflect advancements in technology from 21st century, primarily by making those mechanisms much more decentralized. However, decentralization brings with it the choice of which governance system to follow.

It seems to me that some young people may be seduced by the glamor and beautiful, yet empty, symbols of past epochs and their leading states. I am very familiar with life in one of those bygone era's leaders—the USSR—and I would like to offer some practical observations based on personal experience. These insights are intended for the young, nomadic crypto-entrepreneurs who, for ideological reasons, might wish to return to those 'glorious' times and "become" citizens of the Soviet Union.

You can. Why not? However, as a business owner and a crypto enthusiast, you might be considered a criminal Soviet citizen.

In the USSR, it was a criminal offense to own a business and to hold any type of currency other than the ruble. Additionally, your frequent travels, especially to the EU and USA, might make you a suspect as a CIA agent for the KGB.

Besides, it was not allowed to leave the territory of the USSR without State authorization, and you would have had to be a member of the KPSS. To travel even within the countries of the Warsaw Pact, you would need written approval from your Soviet factory boss, your Communist Party chief, and pass an interview with local KGB operatives.

Furthermore, any earnings from outside the USSR would belong to the State. Even if you had a personal contract with a foreign employer, all proceeds would go to a local affiliate of Vneshtorg. You would then receive Vneshtorg Bank 'checks' that you could only exchange at 'Berezka' shops in the USSR.

There are some other minor requirements for USSR Citizen, like you can't own a printer or to read certain books, or to move from city to city without a local militcia (police) chief authorization / registration, also as a KPSS member you would need to visit regularly (1-2 times a months) local party cell's meetings etc.

Yes, there was a brief period of time—roughly between the enactment of the Law on Cooperation in May 1988 and the official dissolution of the Soviet Union in December 1991—when those restrictions, although still 'official,' were not observed and were largely ignored by the old and confused enforcement apparatus of the USSR.

However, it was only after the new Russian Constitution was adopted under Boris Yeltsin in December 1993 that all those restrictions officially became void.

So, if your startup's team has just developed an MVP of the Time Machine, do not rush to set your test dials to the USSR somewhere between 1917 and 1991 without first carefully considering other available options.