Tuesday's Markets Update (May 14, 2024)

14 May 2024 by rate3

On Tuesday, stocks rose a bit as investors digested the mixed inflation data. Producer prices climbed in April. Powell cautioned about inflation and advised staying patient with rate hikes. However, markets still expect cuts by September. Meme stocks like GameStop and AMC soared. On the world markets, copper prices continued to rally, while German investors' confidence increased on GDP growth expectations. BTC fluctuated back to 61K, dragging most of the crypto market into the red again. At the same time, meme-coin Pepe surged again by more than 3% (+30% in the past seven days).

Details

Small business confidence ticked up slightly to 89.7 (previous 88.5) in April, but remains low. Inflation is still the top concern, but fewer plan price hikes. Hiring is up a bit, with many open positions unfilled. Sales outlook is still negative, though less so. Overall, cost pressures persist, and owners are pessimistic. (Nfib)
Core producer prices, excluding food and energy, surged 2.4% year-over-year in April, the highest in 8 months. However, a 3.9% rise in cost for portfolio management was a main factor. Monthly prices also jumped sharply, exceeding expectations. (BLS)
Consumer debt hit a record $17.69 trillion in Q1 2024, up $184 billion from the previous quarter. Mortgages and auto loans drove the increase, while credit card balances dipped slightly. Delinquency rates rose to 3.2%, but are still lower than pre-pandemic levels. (NYFed)

Crypto

Wisconsin became the first US state to invest in Bitcoin, buying nearly $100 million worth. (source)

World Markets

German economic confidence jumped to a two-year high in May (to 47.1 from 42.9), exceeding expectations. Both current conditions and future outlook improved, fueled by strong Q1 GDP and positive signs in Europe and China. Sectors like construction and domestic spending are seeing a brighter future. (Zew)
South Africa's unemployment hit a new high of 32.9% in Q1 2024, with over 8 million jobless. Job losses were widespread, except in trade and manufacturing. The broader unemployment rate, including discouraged workers, is even higher at 41.9%. Youth unemployment remains stubbornly high at nearly 60%. (ZA)
Palestine's inflation dropped to 33.5% YoY in April, down from a record high 37% in March. Prices for some goods like food decreased, while others like tobacco increased more quickly. Monthly inflation fell to -1.9%. (Pcbs)

Currencies

Dollar dropped after mixed inflation data. Producer prices surged, but a prior month's revision offered some ease. Fed Chair Powell signaled holding rates despite inflation concerns. Markets now look to tomorrow's CPI data for clues on future rate cuts. Dollar weakened against most major currencies except the yen and Euro.
The Chinese yuan hovered near a two-week low of 7.24 against the dollar before a key Chinese interest rate decision. The central bank is likely to hold rates, but economic signals are mixed. Import growth surprised analysts, while exports remained steady.

Commodities

The price of Brent crude oil stayed around $83.50. It rose slightly the day before due to worries about Canada's wildfires impacting their oil production. Iraq reversed course and said they'll follow OPEC+ production cuts, easing some supply concerns. Investors are now waiting for reports this week for a clearer picture of the oil market.

Comment: The Dawn of the Cortex Era

There's one striking difference between bones of Neanderthals found in Europe as well as in Asia up to the Altai Mountains and those of Homo Sapience found all across the world. Besides crane size and bone structure, which mark Neanderthals as smarter and much stronger than our early ancestors, more than 50% of all Neanderthals' remains have marks of violence imposed on them by other Neanderthals. On the other hand, Homo Sapiences' "domestic violence" percentage was much lower.

It doesn't mean that Neanderthals were just brutes. Not at all, they were remarkably tolerant too, but only to members of their own small groups. For the rest of the Neanderthals' world, they had only one means of communication - the weaponed aggression. Not surprisingly, then, that there had never been too many Neanderthals around. Estimates put their number to about 10 thousand at around 45,000-40,000 BC - same as the number of humans living at the same time. However, we are still here, and they are not. All because our genetic predecessors used much more apt adaptation and survival strategy - tribal cooperation.

If you are not persuaded, look to the mirror. Where are your big sharp teeth and other necessary appendages of aggression? They are gone with those who were stupid enough to use them against their own kind. A negative selection process was in play for millions of years. We are the proud result - a smart but defenseless and caring animal with a lot of friends. We have to stay such if we want to succeed in that survival game.

Yes, a hypothalamus with its urge to eat, to multiply or to fight or flight, is still right in the center of our brain, but so many of us act like it is the brain. It is not. Most of our brain mass is there for us to communicate, to interact and to invent.

So, yes, we had had "great" man-apes like Ashurbanipal, Genghis Khan or Napoleon grabbing huge pieces of land and exterminating millions of humans for the sake of their own egos. But their "empires" were short-lived and Romans or Persians, or Brits managed to build much longer world-wide presence based on a cooperation as much as on a violence. So, we - humans - are slowly but surely evolving from being hypothalamus-driven monkeys to cortex-led individuals.

Let's not stop there just because several aging ape-man on a top are currently enslaved by their primordial instincts rather than by better parts of their cranial cavity.