Fed's Contradictory Signals and Future Implications: Final Thoughts | June 14, 2023
While the Federal Reserve's recent decisions and language raise some contradictions, it's clear there is some level of uncertainty regarding the economic climate and the effectiveness of rate hikes. This was evident in the recent press conference where a 'skip' and 'pause' were used interchangeably. There's also inconsistency in their use of the dot plot as a significant reference, while previously advising us not to focus too much on it. Amid high inflation, the decision to outline future hikes instead of an immediate one can be perplexing, but it might reflect their cautious approach.
Economic indicators present a mixed picture, with steady credit spreads, loosening financial conditions, a robust stock market, and recovering housing sector. Yet, the decision to increase the terminal rate in the future doesn't quite align with these positive indicators. It suggests a strategy of allowing inflation to grow stronger before deciding on more aggressive rate hikes. This could be a risky move, potentially leading to past mistakes being repeated and inflation spiraling out of control. The fact remains that there's no strong case for a hawkish pause, and the groundwork could be laid for a stronger economy and potential inflation return. #FED #FOMC #Inflation #MarketUpdate 
Fed's Contradictory Signals and Future Implications: Final Thoughts | June 14, 2023
While the Federal Reserve's recent decisions and language raise some contradictions, it's clear there is some level of uncertainty regarding the economic climate and the effectiveness of rate hikes. This was evident in the recent press conference where a 'skip' and 'pause' were used interchangeably. There's also inconsistency in their use of the dot plot as a significant reference, while previously advising us not to focus too much on it. Amid high inflation, the decision to outline future hikes instead of an immediate one can be perplexing, but it might reflect their cautious approach.
Economic indicators present a mixed picture, with steady credit spreads, loosening financial conditions, a robust stock market, and recovering housing sector. Yet, the decision to increase the terminal rate in the future doesn't quite align with these positive indicators. It suggests a strategy of allowing inflation to grow stronger before deciding on more aggressive rate hikes. This could be a risky move, potentially leading to past mistakes being repeated and inflation spiraling out of control. The fact remains that there's no strong case for a hawkish pause, and the groundwork could be laid for a stronger economy and potential inflation return. #FED #FOMC #Inflation #MarketUpdate
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Fed Halts Rate Hikes: Assessing the Future Amidst Inflation Concerns | June 14, 2023
The Federal Reserve, breaking from a series of 10 rate hikes over 14 months, has held its policy rate steady at 5.0%-5.25%, providing a window to assess the implications of the 5 percentage point hikes already executed. However, this doesn't necessarily signal an end to potential rate increases; the Fed will continue to monitor incoming data for signs of declining inflation in the following months.
In an effort to guide inflation back to the 2% mark over time, the central bank will consider various factors, including the cumulative effect of monetary tightening, the time lag of monetary policy's impact on economic activity and inflation, and recent financial developments. While May's Core Consumer Price Index rose 5.3% year-over-year, surpassing the central bank's target, the Fed primarily relies on the core PCE Index to measure inflation, which will be reported on June 30. Looking forward, the Federal Open Market Committee's next meeting is scheduled for July 25-26. #FOMC #FED #MarketUpdate #RateHike 
Fed Decision In 30 Minutes. Prepare The Horses | June 14, 2023
Market dynamics are significantly influenced whenever Jerome Powell, the Chair of the Federal Reserve, addresses a press conference, more so than his previous two counterparts. While it is anticipated that U.S. Federal Reserve officials will maintain current interest rates, the future remains uncertain. Consequently, investors will be keenly observing for any subtle indications of forthcoming policy changes. #FOMC #RateHike #MarketUpdate
A Look at NIO's Performance and Future Prospects | June 14, 2023
Despite a nearly 90% drop from its 2021 high, #NIO remains a company with considerable growth potential, and its new ET5 sedan is positioned as a strong competitor to Tesla's Model 3. As the company continues to expand its revenues, it's expected to see improved profitability which could raise its stock price in the coming years. NIO's rise as a major player in the electric vehicle industry, particularly in the large and lucrative Chinese market, further underlines its potential. Their latest release, the premium ET5 vehicle, is poised to compete with the Model 3 globally as the company increases its international presence.
Yet, NIO is still a young company and its stock price decrease could be attributed to its current lack of profitability. However, with strong production capabilities and promising revenue growth prospects, NIO remains a compelling investment opportunity. It's important to note that NIO's main market, China, has been facing COVID-19 related challenges that have temporarily affected sales. But as the situation stabilizes, improved sales growth and profitability for NIO are expected. Its recent earnings report exceeded analyst estimates, indicating potential for continued improvement. While NIO is likely several years away from turning a profit, the prospect of solid sales growth could drive a higher stock price in the future. However, there are risks, including geopolitical factors and potential production issues. Despite these, NIO's significant growth potential makes it an investment worth considering. #NIO #MarketUpdate 
U.S. Producer Price Index: May's Yearly Rise Misses Expectations, Monthly Decline Recorded | June 14, 2023
In May, the U.S. Bureau of Labor Statistics reported that the year-over-year Producer Price Index (PPI) for final demand grew by 1.1%, a downturn from April's 2.3% hike. This reading fell short of the anticipated market forecast of 1.5%.
Meanwhile, the Core PPI, which excludes volatile items such as food and energy, saw a 2.8% annual increase during the same period, narrowly missing the market projection of 2.9%. On a month-to-month basis, the PPI experienced a 0.3% decrease while the Core PPI saw a 0.2% rise. #PPI #FOMC #MarketUpdate 
Premarket Movers: Inventiva Soars and Other Notable Gainers | June 14, 2023
Shares of Inventiva are experiencing a 24% surge in pre-market trading, contributing to a significant movement among stocks before the opening bell. Cyxtera Technologies' shares have soared by 134.6% following a 12% drop the previous day. WiSA Technologies, seeing a 44.2% surge, has begun accepting pre-orders for their WiSA E multichannel audio development kits. T2 Biosystems also saw a 32% increase, having recently reported a partnership with Vanderbilt University Medical Center for the clinical use of their T2Bacteria panel.
Oncorus's shares rose 27.5% in the wake of a 10% decline, in light of news about the company's upcoming NASDAQ suspension and board-approved liquidation. Meanwhile, Inventiva's stock is up due to its Phase II clinical trial for treating T2D and NAFLD patients with lanifibranor reaching its primary efficacy endpoint. Agile Therapeutics' shares also ascended by 21.7% following the announcement of a new agreement to enhance access to Twirla. Notably, shares of Kuke Music Holding, NightHawk Biosciences, NextDecade Corporation, and Nikola Corporation also recorded increases in pre-market trading. #CYXT, #WISA, #TTOO, #ONCR, #IVA, #AGRX, #KUKE, #NHWK, #NEXT, #NKLA #MarketUpdate 
Market Pace Slows Down: Fed's Decision Day | June 14, 2023
A slight deceleration is anticipated in the market's momentum as attention shifts to the Federal Reserve's actions. Nasdaq 100 and S&P futures have shown gains, with increases of 0.3% and 0.2% respectively, while Dow futures have recorded a minor 0.1% decline. Despite this slowdown, investor risk appetite remains strong, underlined by the S&P 500 reaching a one-year high and extending its gains for the fourth consecutive session. Across multiple asset classes, optimism persists with rising oil prices and tightening credit spreads. However, a growing skepticism around potential rate cuts by central banks this year has triggered a sovereign bond selloff, as investors adjust their expectations to accommodate longer periods of higher rates.
As for bond market trends, both the 10-year and 2-year Treasury yields have seen a decrease of 4 basis points, further emphasizing the market's anticipation of steady rates from the Fed. While a rate hike might be signaled for July, this will largely depend on incoming data. Future projections suggest a 25 basis point increase in the median dot by year's end, with the Fed likely cutting rates by 75 basis points next year. In the lead-up to the market opening, the May Producer Price Index (PPI) is expected to drop slightly, with the core PPI seeing a marginal increase. This data primarily impacts corporate pricing power and is unlikely to suggest significant profit-led inflation, as such inflation trends usually occur at the end of supply chains and are not representative of the broader economy. #FOMC #CPI #PPI #SPX #NDX #MarketUpdate https://nostr.build/i/6e5668336d0f923f3ef34bb549dc8bfaf2a797d9b89e1821b82403cbab1009d7.webp
Market Roundup | June 13, 2023
U.S. stocks posted gains Today as data revealed a decrease in consumer inflation, which led to expectations of a pause in the Federal Reserve's rate hikes. The tech-centric Nasdaq Composite ascended by 0.83%, with the Dow Jones and the S&P 500 also witnessing an uplift. All sectors of the S&P 500, barring Utilities, reported positive movement. The May Consumer Price Index (CPI) showed a year-on-year slowdown, fostering anticipation that the Federal Reserve may refrain from immediate rate changes in their upcoming policy decision.
Treasury yields, however, climbed; the 10-year yield rose by six basis points to 3.83%, while the more Fed-sensitive 2-year yield increased by eight basis points to 4.67%. On the other hand, the dollar index dropped by 0.34% to 103.31. Market sentiment following these changes indicates a 'hawkish pause' from the Federal Reserve, keeping the door open for possible rate hikes in the future. In contrast, Biogen, one of the active stocks on the S&P 500, faced losses, particularly after news broke that its Alzheimer's treatment, developed in partnership with Eisai, might not achieve widespread use in Europe. #SPX #NDX #DJI #MarketUpdate 
Closing Bell Thoughts | June 13, 2023
After a key day in the market, the results aligned well with projections, showing a subtle cooling effect. The market started strong, indicating robust performance, but soon revealed underlying weakness. Yet, there's reason for optimism, as bonds, despite decreasing prices, show promise for a potential downturn. Key indicators to monitor include risk radar and paradoxical market movements when data improves. The past 24 hours have been fairly stable for the dollar, but a significant increase in yields, while the dollar remains constant, signals a hawkish market, highlighting the ongoing inflation issue.
The stock market has been providing positive signs of economic improvement, outperforming due to the economic data not being as gloomy as anticipated. This scenario is causing a rally in the stock market and other cyclic elements. As a result, there's a strong correlation between the 10-year stock trajectory and the recent economic data, indicating an economy performing better than expected. However, this superior economic performance impacts the necessity for owning traditional safe havens like treasuries. This holds true until inflation overheats, calling for a strategic rethink. We'll explore this further tomorrow. #SPX #NDX #DJI #MarketUpdate 
Apple's Rules Impact Damus and Potentially Other Crypto Apps | June 13, 2023
Apple's App Store has issued a warning to the decentralized social networking app, Damus, requiring compliance with its in-app purchase mechanism within two weeks, or face removal. The 'zaps' feature in Damus, which lets users tip content creators using Bitcoin through the Lightning Network, is considered non-compliant. The implications of this clampdown could potentially extend to any app interacting with the Lightning Network on the App Store.
While Damus views this move as suspiciously timed given their upcoming discussion on Bitcoin and decentralized social media at the Oslo Freedom Forum, it's worth noting that this instance is part of Apple's broader strategy to maintain strict control over emerging technologies. This policy was visible in the company's decision to charge a 30% commission on in-app #NFT sales and insist on in-house in-app purchase mechanisms for apps like OpenAI's ChatGPT chatbot. Despite some legal scrutiny, it appears that Apple's policies have been upheld as legally sound thus far, suggesting that other apps might have to comply or face similar restrictions. #AAPL #BTC #Crypto #MarketUpdate 
Drafting Digital Asset Legislation: A Catch-22 of Clarity and Complexity | June 13, 2023
A bill proposed by Representatives Patrick McHenry and Glenn "GT" Thompson attempts to circumnavigate the complexities of the existing legal framework surrounding cryptocurrency, by creating a new asset category - "digital assets." This class further splits into "digital commodities" and "restricted digital assets", the latter remaining subject to securities laws according to the Howey Test. While the intent of this draft legislation is to provide clarity to the burgeoning crypto industry, it arguably introduces new layers of uncertainty.
One of the bill's key issues is the six-point criterion for "restricted digital assets". Among these criteria is a rule preventing digital assets from involving the sale or offer of equity or debt securities - an attempt to forestall regulatory arbitrage. However, without clear definitions of these terms, the legislation's effectiveness is questionable. Furthermore, other issues, including granting expansive jurisdiction to the #CFTC without additional funding and potential discrepancies in regulations between #DeFi and #CeFi exchanges, render the bill's overall viability doubtful. In an attempt to extricate crypto assets from securities laws, the bill paradoxically offers potential loopholes for traditional securities to bypass these laws. #BTC #ETH #LTC #Crypto #MarketUpdate 