Tuesday's Markets Update (July 9, 2024)

09 Jul 2024 by rate3

On Tuesday, the SP and Nasdaq hit new highs, while the Dow Jones fell after Powell's testimony, despite him reiterating the Fed's plan to stick to reaching a 2% inflation target. Internationally, Mexican inflation unexpectedly jumped to a one-year high. BTC and ETH continued to fluctuate near 58K and 3K levels, with bulls searching for an opening in the bears' defense in hopes of a fast retaliation.

Details

Small business confidence unexpectedly rose in June, but remains below average. Inflation is the top concern, pushing firms to raise prices and wages. Despite some relief from backlogs, pessimism lingers about the coming months. 1Y trend: "Down" (Nfib)

Crypto

Flatcoins address the issue of inflation in stablecoins. They maintain purchasing power by tracking the consumer price index, making them resistant to inflation. Coinbase Ventures investor Brian Armstrong sees flatcoins as a necessary update to the financial system, offering a medium of exchange that doesn't suffer from inflation. (source)

World Markets

Mexico's inflation jumped to a 1-year high of 4.98% in June, exceeding expectations. Food, restaurants, and education costs rose the most. This is likely due to post-election jitters weakening the peso. Core inflation, excluding volatile items, continued a year-long decline. 1Y trend: "Up" (Inegi)

Comment: The Labor of All Countries Unite

As of the June 2024 elections in the UK, the Labour Party achieved a significant victory over the Conservatives. Here are the results in numbers:

- Labour Party: Won 354 seats, a substantial gain from their previous standing, securing a clear majority in Parliament.

- Conservative Party: Secured 197 seats, losing many seats compared to the previous election.

- Liberal Democrats: Maintained a stable presence with 25 seats.

- Scottish National Party (SNP): Held onto 45 seats.

- Other Parties: The remaining seats were distributed among smaller parties and independents.

The voter turnout was approximately 72%, reflecting a high level of public engagement in this pivotal election. These results mark a decisive shift in UK politics, with the Labour Party gaining a strong mandate to implement their policies.

Following the Labour Party's significant victory over the Conservatives in the June 2024 elections, the major outlines of their policies include:

1. Economic Policy:

Public Investment: Increased investment in public infrastructure, including transportation, housing, and green energy projects.
Tax Reforms: Introduction of higher taxes on the wealthy and large corporations to fund public services.
Living Wage: Raising the minimum wage to ensure a living wage for all workers.
2. Healthcare:

NHS Funding: Significant increases in funding for the National Health Service (NHS) to reduce waiting times and improve services.
Mental Health: Enhanced focus on mental health services, with more resources allocated for support and treatment.
3. Education:

Free School Meals: Expansion of free school meals to all primary school children.
Higher Education: Reforms to make higher education more affordable, including potential reductions in tuition fees and increased support for vocational training.
4. Climate Policy:

Green New Deal: Comprehensive policies aimed at achieving net-zero emissions by 2050, including investments in renewable energy and green jobs.
Sustainable Agriculture: Support for sustainable farming practices and reduction of carbon footprint in agriculture.
5. Social Policies:

Housing: Large-scale public housing projects to address the housing crisis, including measures to ensure affordable rent and home ownership.
Social Security: Enhancements to the social security system to support vulnerable populations, including increased benefits and support services.
6. Brexit and Foreign Policy:

EU Relations: Strengthening ties with the European Union and exploring opportunities for closer cooperation in trade, security, and environmental policies.
Human Rights: Emphasis on promoting human rights and democratic values in international relations.
7. Labour Rights:

Worker Protections: Stronger protections for workers, including enhanced rights for gig economy workers and stricter regulations on zero-hour contracts.
Trade Unions: Support for trade unions and collective bargaining to ensure fair wages and working conditions.
These policies reflect the Labour Party's commitment to largely pro-big-government, inflationary measures under the umbrella of focusing on social justice and human rights.

FYI: The British Parliament consists of two houses: the House of Commons and the House of Lords. The House of Commons has 650 seats, each representing a geographical area of the UK known as a constituency. The House of Lords does not have a fixed number of seats, as it is comprised of appointed life peers, bishops, and hereditary peers, with its membership varying over time.