Wednesday's Markets Update (April 24, 2024)

24 Apr 2024 by rate3

On Wednesday, stocks are mostly in the red as economic reports continue to send mixed signals, reflecting deteriorating fundamentals but still showing strong consumer morale. Internationally, commodities are still on the rise, with copper reaching a two-year high. BTC suddenly plunged by 4% prompting the rest of the crypto market to follow suit, with Bitcoin Cash, Cardano, Avalanche, Chainlink, and Solana decreasing by 4% or more.

Details

Orders for durable goods like machinery and vehicles jumped 2.6% in March, exceeding expectations. This was the biggest increase since last November. Transportation equipment led the surge, with strong demand for civilian aircraft and autos. Even categories with prior declines saw improvement. Business spending plans also showed a slight increase. (Census)
Mortgage rates continued to climb for the third week in a row, reaching a 5-month high of 7.24% for a 30-year fixed-rate loan. This increase tracks with rising Treasury yields as investors bet on the Fed delaying or avoiding interest rate cuts. (MBA)

Crypto

The market for borrowing and lending cryptocurrencies using NFTs as collateral reached $2 billion in Q1 2024, up 44% from the prior quarter. NFT holders are using these loans to invest in other assets, but analysts expect the money to eventually flow back into established cryptocurrencies and blue-chip NFTs. (source)

World Markets

Germany's business confidence rose for the third month in a row, hitting a 1-year high (89.4) in April. This is likely due to hopes of lower interest rates from the ECB and some easing of inflation. Manufacturers and service providers are more optimistic, while traders and constructors remain downbeat. (IFO)
UK manufacturers are feeling more optimistic, with expectations for rising output reaching a six-month high. However, costs remain high and are expected to keep rising, potentially pushing up prices for consumers.
Indonesia's central bank raised interest rates to a record high (6.25%) to fight inflation (increased to 3.05% in March) and support the weakening rupiah currency. This is the first rate hike this year and aims to keep inflation within target. (BI)

Currencies

Dollar held after felling following data showed slowing US growth, adding to expectations of Fed rate cuts. A strong euro, British pound, and Australian dollar due to positive economic data in those regions also pressured the greenback. Investors are watching key US economic reports this week for clues on future interest rates.

Commodities

Copper prices are nearing two-year highs due to supply disruptions. A major mine closure and Western sanctions on Russia limited copper concentrate. However, high prices are curbing some Chinese demand, and some investors are taking profits. A weaker dollar due to slower US business activity is also supporting copper prices.

Comment: Coins With the Face.

Watching meme coins rise and rise on the Solana layer made me salute Adam Smith and his "invisible hand" once again.

After staying in crypto for 10 years, I thought I had seen it all, but new, younger, and bolder generations of degens can't stop astonishing me with their sturdiness and adaptability. The crazed, brainless Boomers high-post in governments and corporations continue to throw shell after shell at them in the form of regulations, registrations, and limitations with the sole purpose of forcing them to live the same dumb and obedient lives their parents lived. However, degens keep inventing new ways to live fast and fully.

Boomers think it's just a bunch of teens sitting in their mother's basement, lured by dangerous and mostly foreign strangers into nefarious schemes of printing funny money and pyramid schemes in their way to an undeserved fortune.

Nothing could be further from the truth. In fact, if you follow the lifecycle of many meme coins, you can watch the human dramas developing in new "virtual settings", but still ruled by the same iron law of "supply and demand", just as in the slow-moving "business-lives" of Boomers and X-Gens but at a lightning-fast speed.

Take, for example, the story of Slerf ($SLERF) developers who "burned the LP and the tokens that were set aside for the airdrop" while "mint authority was already revoked." The developer also added, "Guys, I f***** up. There is nothing I can do to fix this. I am so f****** sorry."

In the Boomer-infested world, it is equivalent to not paying promised dividends to your shareholders because you accidentally burned your bank with an army-issued flamethrower. So, Boomers would sell it. However, the next day, this meme coin did the opposite – it rallied and rallied hard to a market cap of over $400 million with trading volumes on Solana exceeding $3 billion in two days.

You can argue that this is madness, but I say you are wrong. It's a teamwork. A team of thousands of degens read the post and trusted that this developer was just a human prone to mistakes – not a crook, as Boomers would think him to be before publicly crucifying him and sending him off to Sing-Sing or somewhere.

Nope. Those thousands of degens were smart enough to understand in split seconds that this is a real business they are running, and it is in their best interest to keep it going, no matter what happens. So, they bought instead of selling.

If you now start moralizing and saying that these small pieces of code are worthless and "produce nothing," and that these degens should "find a job" instead of "speculating", I would kindly remind you that Boomers have managed to build and defend a world that provides those degens – mostly Gen Z – with zero jobs, zero cash, zero equities, zero hope, and the vision of three upcoming apocalypses – AI, Climatic and Thermonuclear.

So, please, keep your opinions to yourself before you understand why degens are in such a hurry to live their lives to the fullest, like billions of beautiful but one-season-only butterflies.