Tuesday's Markets Update (April 30, 2024)

30 Apr 2024 by rate3

On Tuesday, stocks slumped as stronger wage data fueled inflation fears before a key Fed decision on Wednesday. As a consequence, the dollar index rides to its five-month high. Internationally, it was added by an unexpected surge of the EU's GDP leading to European markets dump on fears of the ECB revising its dovish stance. This selloff extends fiercely into the crypto market with BTC (-5%) dumping to 60K and ETH going under 3K. Major alts are in a deep red with Solana and Avalanche decreasing for more than 9%.

Details

Worker compensation grew faster than expected in Q1 2024, rising 1.2% QQ. Both wages and benefits saw a slight increase. This continues a year-on-year trend of 4.2% growth, which remains elevated. (BLS)
Home prices surged in February, with the national index jumping 7.3% YoY, the fastest pace in months. San Diego San Diego (11.4%) led the gains, with prices spiking over 11%. Most cities saw monthly increases as well, with San Diego and San Francisco experiencing the biggest jumps. Other cities with record prices growth were Chicago (8.9%) and Detroit (8.9%). Only Tampa saw a decline. (SP)
Texas' service sector weakened significantly in April according to a key business survey. The index dropped to a 5-month low, with revenue growth stagnating and employment declining slightly. Businesses reported a less optimistic outlook and ongoing price pressures, though input costs eased slightly. (DFed)
Chicago's business activity contracted for a fifth month in April, falling at the fastest pace since November 2022. The Chicago PMI index dropped to 37.9, lower than expected, indicating a significant slowdown in economic activity. (ISM)

Crypto

The top 0.1% of wallets control over 40% of all Bitcoin. This means wealth is concentrated among a small number of holders, with the vast majority owning very little.
46.8M wallet addresses have >$1;
10K wallets - >$10M.
100K wallets - >$1 million.
The top 105 wallets - 3 million BTC (15% of the total supply).
The top 2K wallets - 40% of the total supply (largest holds ~250K BTC). (source)

World Markets

Eurozone growth surprised economists, rising 0.4% compared to the previous year. This is 2x stronger than expected (0.2%) following slow growth in the past two quarters. (EC)
Eurozone inflation stayed flat at 2.4% in April, as expected. Prices for some goods like food rose slightly, but non-energy industrial goods and services saw slower inflation. Energy prices decreased but at a slower pace than the previous month. Core inflation, excluding food and energy, dipped to 2.7%. (ES)
Germany's economy grew slightly (0.2%) in Q1, beating expectations but still contracting YoY (-0.2%). This marks a technical recession, with construction and exports fueling the small gain despite a drop in consumer spending. (DEst)
Italy's economy grew 0.3% in the first quarter of 2024, exceeding expectations. This is an improvement from the previous quarter and aligns with stronger growth in the Eurozone. The rise was driven by exports, but domestic demand fell. This could give the European Central Bank more flexibility on interest rates. (IStat)
Spain's economy grew faster than expected in Q1 2024, expanding by 0.7%. Household spending rose slightly, while government spending fell. Exports and investment also increased. Overall, the annual growth rate rose to 2.4%, beating expectations. (INE)
China's factory activity grew slightly in April, marking the second month of expansion. However, the pace of growth slowed, with new orders, foreign sales, and employment all rising at a weaker pace. Input costs rose to a seven-month high, while businesses became slightly less optimistic about the future. (CH)

Currencies

The dollar rose close to its five-month high as strong economic data, including rising employment costs, fueled expectations of the Fed keeping interest rates high for longer. This outlook weakened the Japanese yen, further boosting the dollar.

Comment: Is That Imminent?

It feels imminent. I'm sure that many feel that now. That's why there is so much passive acceptance of it as a fact across all types of media, even on those that are famous for being "rebellious" like Joe Rogan's.

In the 1980s, there was a gigantic movement against nuclear war. Street marches involved millions, thousands of books on the subject were published, hundreds of anti-war songs were sung, and dozens of blockbusters were released. It's even confirmed that Ronald Reagan called Gorbachev on a direct line and proposed to start a drastic nuclear warhead reduction program because he (Reagan, of course) was watching "The Day After" on TV.

Instead, what are we watching? Bloomberg? Crypto news? The Olympics? Everyone is living in someone else's bubble, thinking that they're changing the world but leaving the really important decisions to some dude in the office they disdain. No issues are raised about it. Not at all.

So it means only one thing: we have all already subconsciously accepted that we can do nothing about it despite our so-called "democratic system". So we are now going like cattle to slaughter, watching the latest episode of Dune on our smartphones. Why?

I think it's because that's how history works. No one can do anything because everyone subconsciously knows that it's finished anyway. Everything around is wrong and must be changed. There are millions of peaceful ways to change things, but we are wired to choose the shortcut: war.

The war we'll get then.