“Hit Me With Your Best Shot!”

Hi there! These past few days have been something else, oui. Single-digit temperatures and a wind chill that feels like -100, cutting straight through my island bones. The only thing getting me through it is the memories of Miss Junie’s cocoa tea. Just the thought of it takes me back to our kitchen back home…the pot gently bubbling away, and that old wooden spoon perched just right so the tea wouldn’t boil over. The aroma? Lawd! The rich scent of freshly-made Grenadian cocoa balls, a couple of bay leaves, a smidgen of nutmeg, and a piece of cinnamon bark. Once that starts boiling, it’s like a warm hug for my soul.

For me, waking up to the smell of cocoa tea simmering on the stove was pure euphoria. I remember feeling like the house itself was waking up with me, filling every corner with comfort and a kind of quiet strength. There’s something about that first sip too…the way it wrapped around me and made me feel ready to face the day.

When I’m dealing with this kind of winter chill, a cup of Grenadian cocoa tea just hits differently. It connects me to Grenada, to my roots, to all those mornings spent sitting at the table with my mom, listening to the world wake up. Out here in this freezing cold, that cup of cocoa tea is a reminder that no matter how far I am, Grenada is always with me.

Alright, let’s dig in!

Last Week’s Market Overview (January 12 - January 18, 2025)

Markets surged last week, with the S&P 500 posting its best gains since the November election. Lower-than-expected inflation data fueled optimism, leading to a decline in Treasury yields and a boost for equities. A strong start to the Q4 earnings season further bolstered sentiment. The Bloomberg Aggregate Bond Index also climbed, as investors priced in a higher probability of multiple rate cuts in 2025 following dovish Fed commentary. Meanwhile, commodity markets advanced, led by energy and industrial metals, while cryptocurrency markets hit new highs.

U.S. Markets Recap

Equities:

The S&P 500 recorded its strongest week since November, gaining daily except Thursday, as inflation data and rate cut expectations drove optimism. Value stocks outperformed, with financials and natural resources leading the way, while technology underperformed due to weakness in Apple (AAPL). The Nasdaq trailed slightly, reflecting the shift in investor preferences.

• S&P 500: +2.91%

• Nasdaq: +2.45%

• Dow: +3.69%

• Russell 2000: +3.85%

Fixed Income: Treasury yields fell after the CPI report, with the 10-year yield declining the most. The Treasury yield curve flattened, and corporate credit spreads tightened, signaling a positive risk sentiment. Investors are pricing in a 50% probability of two rate cuts this year, with long-term yields reflecting a higher term premium and robust economic growth expectations.

Commodities: The Bloomberg Commodity Index rose 1.5%, driven by a 2% gain in WTI crude oil, marking its fourth consecutive weekly advance. Factors such as stricter sanctions on Russian oil and cold weather supported higher prices. In industrial metals, aluminum led with a 5% gain, and copper surpassed its 200-day moving average. Gold also climbed nearly 1%.

Currencies: The U.S. Dollar Index saw a slight pullback, providing a macro tailwind for risk assets. Emerging market currencies gained against the dollar, while the euro and pound remained relatively stable amid economic data releases from Europe.

U.S. Economic Recap (January 12 - January 18, 2025)

• Retail Sales: December retail sales rose 0.4%, with an upward revision for November. Consumer spending remains solid, although auto sales softened, prompting expectations for increased dealer incentives.

• Inflation: Energy prices drove a significant portion of December's inflation rise, with headline inflation up 2.9% year-over-year. Core inflation rose 0.2% month-over-month, signaling a slower upward trend.

• Import Prices: Excluding energy, import prices increased 0.2%, easing inflation fears and offering relief to markets.

Global Markets Recap (January 12 - January 18, 2025)

Europe: European equities gained but underperformed the U.S. market, with investors wary of trade uncertainties under the new U.S. administration.

Asia: Chinese GDP hit its 5% target, boosting the Shanghai Composite and Hang Seng. Japanese equities lagged ahead of an anticipated Bank of Japan rate hike.

Crypto Recap (January 12 - January 18, 2025)

• Bitcoin surged to a new all-time high of $108,786, driven by optimism surrounding the Trump administration and the launch of new meme coins.

• Spot bitcoin ETFs saw inflows nearing $1 billion.

• Last week’s top crypto gainers: $TRUMP (memecoin), $RAY, $SOL

Here are other key highlights from last week:

• BlackRock launched IBIT spot bitcoin ETF in Canada.

• Berachain gets flooded with $1.6B in pre-launch liquidity.

• CryptoPunks NFT floor price spikes 13% on rumors of IP sale.

• Jio Platforms Ltd. is collaborating with Polygon Labs to Bring Web3 Capabilities to 450+ Million Jio Users.

Another exiting week in the markets!

Key U.S. Economic Releases:

1. Thursday: Jobless Claims

2. Friday: Services PMI, Manufacturing PMI, Existing Home Sales, Consumer Sentiment

Other Key Events This Week:

• Trump Inauguration (Jan 20): President Trump did not mention crypto in his speech but credited himself for Bitcoin's rally.

• World Economic Forum (Jan 20-24): Key discussions include geopolitical risks, economic uncertainty, and technological advancements. Expect market-moving comments from global leaders.

Fed speakers this week: No scheduled speeches this week as the Fed enters its blackout period ahead of the January 29 policy meeting.

Earnings: Netflix ($NFLX) kicked off this week earnings with a bang and is now trading at all-time highs thanks to a stellar earnings report. Other key companies reporting this week (outlined in red below) include tech giants, major financial institutions, and consumer discretionary firms.

Global Economic Events This Week:

• Tuesday (1/21/2025): UK Claimant Count, German ZEW Economic Sentiment, Canada CPI, New Zealand CPI 

• Wednesday (1/22/2025): ECB President Lagarde Speaks 

• Thursday (1/23/2025): Canada Retail Sales, BoJ Interest Rate Decision

• Friday (1/24/2025): Eurozone, Germany, France, and UK PMI data, ECB President Lagarde Speaks

Trading Tip:

“Keep an eye on Oracle (ORCL)!”

Week 1/12/25 - 1/18/25 Recap

Special Tools and Strategies

Guide to Using Decentralized Exchanges (DEXs) and DeFi Wallets

As the crypto bull market cranks up, an increasing number of beginner investors are eager to jump into decentralized finance (DeFi). A new crypto token is called out on X (formerly Twitter), and you might be wondering, "Where do I buy it?" The answer depends on the token/coin and the blockchain it is launched on. Other factors such as market cap, volume, and supply also play a role in deciding where to purchase it. Typically, if you conduct thorough research, the project's team will provide details on which blockchain and platform to use for purchasing.

From there, you can visit the designated platform to make your purchase. As mentioned previously, decentralized exchanges (DEXs) like Uniswap are common options for trading tokens. If you're new to the space, it is highly recommended to start with small amounts to familiarize yourself with the platform and understand how to swap in and out of the crypto you want to purchase.

What is Decentralized Finance (DeFi)?

Decentralized Finance (DeFi) refers to a blockchain-based form of finance that does not rely on central financial intermediaries such as banks and brokerages. Instead, it utilizes smart contracts on blockchain networks, allowing users to lend, borrow, trade, and earn interest on digital assets in a permissionless and transparent manner. DeFi platforms provide users with financial freedom and control over their assets while eliminating the need for intermediaries.

Choosing the Right DeFi Wallet for Your DEX

When selecting a DeFi wallet compatible with your chosen decentralized exchange, consider the following factors:

• Compatibility: Ensure the wallet supports the blockchain network required by the DEX. For example, if using Uniswap, you'll need a wallet compatible with the Ethereum network, such as Metamask.

• Security Features: Look for wallets offering robust security measures like two-factor authentication (2FA), private key encryption, and backup options. Never share your seed phrase.

• User Interface: Beginners should prioritize wallets with intuitive designs and step-by-step guides. For instance, Phantom is user-friendly for Solana-based DEXs like Raydium.

• Reputation: Choose wallets with positive reviews and active development support.

How to Fund Your DeFi Wallet

Follow these steps to set up and fund your wallet properly:

1. Set Up Your Wallet:

   • Download the wallet (e.g., Metamask for Ethereum, Keplr for Injective).

   • Secure your seed phrase safely.

2. Acquire Crypto for Gas Fees:

   • Each blockchain requires specific tokens for transaction fees. For example, Ethereum needs ETH, while Binance Smart Chain needs BNB.

   • Purchase the required cryptocurrency from a centralized exchange like Binance or Coinbase.

3. Transfer Funds to Your Wallet:

   • Withdraw the purchased crypto to your wallet address.

   • Double-check the correct network (e.g., select Binance Smart Chain (BSC) when sending BNB).

4. Confirm Network Selection:

   • Ensure you're connected to the right blockchain before making transactions to avoid loss of funds.

Steps to Trade on a Decentralized Exchange (DEX)

Once your wallet is funded, follow these steps to execute trades:

1. Connect Your Wallet to the DEX:

   • Visit the DEX website (e.g., PancakeSwap for Binance Smart Chain).

   • Click "Connect Wallet" and approve the connection.

2. Verify Sufficient Gas Fees:

   • Ensure you have enough cryptocurrency for gas fees to avoid transaction failures.

3. Select and Confirm Trades:

   • Choose the token pair you want to trade (e.g., BNB to another token).

   • Enter the amount and review transaction details carefully.

4. Understand Slippage and Price Impact:

   • Slippage refers to the difference between the expected and actual trade price due to market movement. Set an appropriate tolerance to avoid failed transactions.

Safety Tips and Common Pitfalls to Avoid:

• Always verify URLs to avoid phishing sites.

• Double-check wallet addresses before transfers.

• Monitor gas fees, as high fees can reduce profits.

• Use official wallet applications to prevent scams.

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.