"Christmas in July!"

Hi There! I believe somewhere in my past life, I was a painter, probably crafting masterpieces in a bohemian Parisian loft. This past weekend, I ventured into the lively realm of Painting with a Twist with some of my girlfriends. Normally, my perfectionism is so intense that it can hinder my growth. So, it comes as no surprise that I was the little girl who always coloured between the lines no matter what.

Determined to have fun and defy my usual tendencies, I set out to paint outside the lines and embrace a riot of colours. With every bold stroke, I felt an unexpected surge of freedom. The laughter and encouragement from the ladies only fueled my creative courage.

By the end of the night, my chaotic, vibrant painting was far from perfect, but it was a beautiful testament to my growth. That night, with a paintbrush in hand and a bottle of water in the other, I created a perfectly imperfect masterpiece, celebrating the joy of letting go.

Alright, let’s dig in!

Last week, the markets experienced a mix of gains and losses influenced by various economic data, earnings reports, and geopolitical events. The S&P 500 and Nasdaq showed modest gains of 0.2% and 0.8%, respectively. While, the Dow dipped slightly by 0.5%. Mega-cap AI stocks saw a slight pullback, shifting investor attention to other outperforming sectors.

Despite slight downturns in some areas, the first half of 2024 has been strong for stocks, especially in the technology sector.

• Amazon (AMZN): Shares surged after announcing a discounted shopping option.

• FedEx (FDX): Positive earnings surprise boosted shares.

• Nike (NKE) faced a significant drop, shedding $28 billion in value due to poor sales performance.

• Rivian (RIVN) surged following a $1 billion investment from Volkswagen.

• Walgreens (WBA) and Micron Technology (MU) experienced declines after disappointing earnings.

Fixed Income/Treasury

Bonds saw volatility with the Bloomberg U.S. Aggregate Index closing lower. The 10-year Treasury yield moved back above 4.3%, influenced by revised U.S. GDP numbers plus global economic data and inflation reports from Canada and Australia.

Commodities

• Crude oil and gasoline futures dropped on concerns about global energy demand.

• Gold futures steadied, aiming for a third consecutive quarterly gain.

• Silver and copper futures were relatively unchanged.

• The dollar strengthened, while the Japanese yen weakened significantly.

U.S. Economic Recap

• Personal Consumption Expenditure (PCE): The Fed’s preferred metric remained stable, with the annual headline rate at 2.6%. This was an indication of slowing inflation.

• GDP: Revised upward slightly for Q1, with strong residential investment.

• Labour Market: Continuing jobless claims rose slightly, indicating a potential cooling in the labour market.

• Consumer Spending: Revised downward, suggesting weaker trajectory for the rest of the year.

Global Market Recap

• Europe: Cautious trading ahead of the French election and conflicting ECB rate cut signals. The STOXX 600 ended lower.

• UK: Final Q1 GDP numbers showed an upward revision.

• Asia: Mixed performance with Japan showing gains and China’s markets rallying on Friday but closing near four-month lows.

Cryptocurrency Recap

• Price Decline: Crypto prices fell by up to 7.5% at the start of the week, driven by $150 million in liquidations and regulatory actions.

• Coinbase Lawsuit: Coinbase sued the SEC and FDIC for more information on alleged efforts to undermine the crypto industry.

• Bitcoin ETFs: U.S. spot bitcoin ETFs saw net inflows after a week of outflows, signaling renewed investor interest.

• Solana ETF Filing: VanEck filed for the first Solana ETF in the U.S., boosting SOL prices.

• Bitcoin Activity: Onchain data indicated that Bitcoin wallet activity dropped to its lowest level since 2010, suggesting reduced retail participation and market consolidation.

Here are other key highlights from last week:

• Ethereum price prediction market launched on PancakeSwap with AI

• RWA Swarm Markets ($SMT) platform launched tokenized Gold

• Sui ($SUI) expanded custody with Copper to attract institutional finance

• Goblintown creators launched 'Portals' to move NFTs across Ethereum

• Japanese village turned to NFTs to help older adults

This is a short but busy week in the markets!

Key U.S. Economic Data to Watch:

• Monday July 1, 2024

  • ISM Manufacturing PMI - the lowest since February 2024

• Tuesday July 2, 2024

  • JOLTS Job Openings

    • Rose to 8.149 million

• Wednesday July 3, 2024

  • ADP Nonfarm Payrolls

    • the lowest since February

  • Jobless Claims

    • Rose to 238,000.

  • ISM Services PMI

    • Dropped to 48.8, the lowest since May 2020.

  • FOMC Minutes

    • The latest FOMC minutes reveal a dovish tone, emphasizing multiple factors contributing to continued disinflation, including easing demand-supply pressures, past monetary tightening effects, and rental market developments.

    • Notably, for the first time, the Fed identified artificial intelligence (AI) as potentially deflationary by boosting productivity.

    • Additionally, participants noted that well-anchored long-term inflation expectations support the disinflation process but stressed the need for more favorable data to ensure inflation trends towards the 2% target.

• Friday July 5, 2024

  • Nonfarm Payrolls

  • Unemployment Rate

Fed Speakers

• Fed Chair Powell (Tuesday):

  • Highlighted significant progress on inflation.

  • Emphasized the need for more confidence before reducing policy rates.

  • Noted the strength of the labour market and the resumption of the disinflation trend.

• FOMC Member Williams (Wednesday & Friday)

  • Scheduled to participate in a panel discussion titled "Drivers of equilibrium interest rates" at the ECB Forum on Central Banking, in Sintra on Wednesday

  • Scheduled to speak at the Suresh Tendulkar Memorial Lecture hosted by the Reserve Bank of India, in Mumbai on Friday

Earnings Releases:

Only four companies are scheduled to report earnings this week.

Key Global Economic Events this week:

• Monday, July 1:

  • Germany CPI

  • ECB President Lagarde Speaks

• Tuesday, July 2:

  • Euro Area CPI

  • Australia Retail Sales

• Wednesday, July 3:

  • ECB President Lagarde Speaks

• Thursday, July 4:

  • UK Parliamentary Elections

  • UK Construction PMI

• Friday, July 5:

  • Canada Unemployment Rate

  • ECB President Lagarde Speaks

Trading Tip:

Create an entry confirmation checklist to avoid panic buying or selling!

Week 6/23/24 - 6/29/24 Recap

Special Tools and Strategies

In a previous issue (Issue #46), I discussed the Fear and Greed Index and its usefulness in market analysis. Today, I am introducing the BitcoinBuzz Sentiment Indicator, developed by the cryptocurrency exchange Gemini, which serves a similar purpose for Bitcoin.

What is the BitcoinBuzz Indicator?

BitcoinBuzz is an innovative indicator that provides a comprehensive view of Bitcoin's market sentiment. It leverages sentiment analysis from multiple sources to create a score between 1 and 10, giving a clear snapshot of Bitcoin's market sentiment. This score combines several factors, including:

• Crypto News Sentiment: Uses advanced word embeddings to assess whether BTC news is positive or negative.

• On-chain BTC Flows: Tracks the activities of BTC whale wallets interacting with the Gemini Exchange.

• Gemini BTC Volumes: Reflects overall buying and selling pressure on the Gemini Exchange.

• BTCUSD Price Momentum: Analyzes price movements using various moving averages and volatility measures.

• BTCUSD Breadth: Measures BTC's price strength relative to its 52-week high/low and Bollinger Bands.

Although it doesn't predict future movements, BitcoinBuzz offers valuable insights into the current market sentiment, helping investors understand the rapidly changing Bitcoin market.

Understanding the Buzz

The BitcoinBuzz scale is divided into five categories, reflecting different levels of market sentiment:

1. Buzzing Frenzy (8.5-10):

   • Represents extreme excitement and high market activity.

   • Indicates a state of euphoria with widespread positive sentiment.

2. Buzzing Chatter (6-8.5):

   • Reflects high discussion and positive sentiment.

   • Suggests an active market with increased investor interest.

3. Buzzing Shift (4-6):

   • Indicates a transitional phase in market sentiment.

   • Signals a potential turning point in market dynamics.

4. Buzzing Whispers (2.5-4):

   • Represents a quieter market environment.

   • Suggests consolidation or decreased interest.

5. Buzzing Lull (1-2.5):

   • Denotes minimal activity and negative sentiment.

   • Indicates a market slump or significant decline in interest.

Analyzing and Combining the BitcoinBuzz Components

To create the BitcoinBuzz score:

1. Sentiment Analysis: Gemini uses word embeddings to evaluate the sentiment of crypto news. Word embeddings are numerical representations of words that help machines understand and process language.

2. Price and Flow Analysis:

   • On-chain BTC flows offer insights into significant transactions involving BTC whale wallets.

   • Gemini BTC volumes provide a view of the overall market activity on the Gemini Exchange.

   • BTCUSD momentum identifies price trends using moving averages and volatility parameters.

   • BTCUSD breadth tracks price strength relative to historical highs/lows and Bollinger Bands.

3. Smoothing the Data:

   • A 30-day exponential moving average (EMA) smooths out the components to reduce noise.

   • A five-day EMA accounts for volatility differences, refining the final score.

The resulting BitcoinBuzz Indicator, with a score between 1 and 10, is a mean-weighted sum of all these components, offering a clear and concise view of Bitcoin's market sentiment.

Use this tool to gain deeper insights into the current market sentiment for Bitcoin, helping you make more informed investment decisions.

Disclaimer: This newsletter is strictly educational. The information this report provides does not constitute investment, financial, trading, or any other advice. You should not treat any of the report’s content as such. Please be careful and do your research.