Friday's Markets Update (April 26, 2024)

26 Apr 2024 by rate3

On Friday, stocks increased after positive earnings reports from tech giants, putting major indexes on track for their first green week in five as consumer sentiment fell below expectations. Internationally, the yen reached heights not seen since the 1990s, while copper increased a two-year high. The crypto market traded sideways mostly, with BTC and ETH hovering above 63.5K and 3.1K.

Details

PCE inflation rose to a 4-month high of 2.7% YoY in March, exceeding expectations (2.6%). This follows a historical trend of inflation averaging 3.3% over the past decades, with peaks as high as 11.6% in 1980 and lows of -1.47% in 2009. (BEA)
Consumer confidence fell slightly in April to a 2.5-year high, driven down by a more negative outlook on the future, according to the University of Michigan. Inflation expectations rose modestly. Consumers are uncertain about the economy but not worried about global events yet. (SCA)

Crypto

BTC investments are slowing down with investors pulling $218M out of the ETF products after a key economic report showed weaker growth. This reduces expectations of Fed interest rate cuts, which typically make investors avoid riskier assets like Bitcoin. This comes after a strong start following the launch of several Bitcoin ETFs in January. (source)

World Markets

Spain's unemployment rate jumped to a one-year high of 12.29% in Q1, exceeding expectations (11.8%). The number of unemployed rose and the labor force participation rate dipped. (INE)
Russia's central bank kept interest rates at a record 16% to fight inflation. Strong economic growth and limited production capacity are pushing prices up. Labor shortages due to mobilization are making it worse. The bank expects inflation to stay high this year and keeps rates high, even though the economy is doing better than expected.

Currencies

DXY rose after inflation data came in higher than expected, strengthening expectations of continued high interest rates. However, a weaker-than-expected GDP report later caused some uncertainty. Strong underlying inflation and a tight labor market cloud the picture for potential rate cuts in 2024.
The Japanese yen hit a 34-year low (156) against the dollar as the Bank of Japan kept interest rates unchanged. Despite rising inflation forecasts and a healthy economy, the BOJ's dovish stance weakened the yen. Authorities are watching for signs they might intervene to stop the yen's decline.

Commodities

Copper prices continued to soar reaching 2-years high due to supply concerns. Mine shutdowns in Panama, Zambia, and South America threaten production. China, a major producer, plans to cut output. Strong demand for copper in electric vehicles is fueling the price increase.

On Week 18, The Fed interest rate decision is the main event, followed by key jobs and manufacturing data. Earnings reports from major companies like Amazon and Apple will also be watched closely. Internationally, inflation data from various countries and GDP figures for several economies are on the agenda. Manufacturing data from China and other countries is also being released.

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 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.