Monday's Markets Update (July 8, 2024)

08 Jul 2024 by rate3

On Monday, the stock market closed with the S&P and Nasdaq setting new records again, while the DJ dropped. Inflation expectations fell for the second month in a row. Internationally, the French elections outcome brought relief to investors, as no party won a majority, reducing concerns over extreme fiscal policies. BTC (56K) and ETH (2.9K) are lingering at levels not seen in more than six months after the massive crash, blamed by different sources on panicking whales, MG's sell-offs, and the German government.

Details

Consumers expect inflation to fall across most categories in the next year, with one-year expectations down to 3% in June from 3.2% in May. This decrease is accompanied by a rise in expected earnings growth. 1Y trend: "Up" (NFed)

Crypto

There's a lot of talk about Germany selling BTC (13K sold from 37K BTC in total), but it's a small part of the overall market. Even if they sold everything, it would only account for a fraction of recent trading. In fact, many governments hold BTC, with the US leading the pack with 213K BTC. (source)
Messari is publicly criticizing the SEC for failing to prevent crypto fraud and argues new technology can provide better oversight. They're cutting ties with the SEC and plan to challenge their authority through lawsuits, media, and lobbying Congress. This aggressive move has been supported by many in the crypto community. (source) .

Commodities

Steel prices in China plunged to a 7-year low in July on weak economic data. Investors are doubtful that government stimulus will boost demand for steel used in construction. Home sales and building activity are down, and despite hopes for infrastructure spending, the outlook for steel remains grim. This is due to efforts to control housing prices, which could hurt struggling property developers, a major source of steel demand. 1Y trend: "Down"

Comment: On the French "DeadLock"

According to the latest mass-media reports, the French legislative elections, with 577 seats of the 17th National Assembly at stake, which was held on June 7, 2024, resulted in a "deadlock".

The left-wing New Popular Front emerged victorious, securing 182 seats and overshadowing Macron's centrist alliance, which garnered 168 seats, and the far-right National Rally party, which obtained 143 seats

NFP (New Popular Front - a broad left-wing electoral alliance launched on 10 June) secured 182 seats (289 is needed for a majority), 168 seats were passed to Ensemble parties (a liberal political coalition created by Macron), 143 - to RN-supported candidates (Rassemblement National or National Front from 1972 to 2018, far-right party, described as populist and nationalist, headed by Marine Le Pen), and the rest - to smaller parties, including, LR (The Republicans, a liberal conservative party, largely inspired by the tradition of Gaullism).

The fact that no one won a majority of seats in the National Assembly made the main-stream commentators to panic and to cry for "unity" and "capability to govern". Instead, they have to embrace new opportunities which this French "involuntary decentralization" provides.

Hopefully, now, instead of dictating their dear leaders' rush "ordinances" to "stupid masses", some politicians of this over-centralized state will start learning the basics of listening to what 90% of their own population have been telling them over the past 20 years.