"Unstoppable!"

Hi There! Last week, Hurricane Beryl unleashed her devastating fury on parts my island of Grenada and its sister isles - Carriacou and Petite Martinique. The aftermath is nothing short of catastrophic, with both Carriacou and Petite Martinique suffering an unimaginable 98% destruction. For all those who reached out to ask about my family, I am grateful to report that they are safe, with zero to minimal damage. Unfortunately, the same cannot be said for some of my friends and their families in the northern part of mainland Grenada and on Grenada's sister islands. The extent of the devastation in those areas is heart-wrenching, and my thoughts and prayers are with everyone affected. To see these beloved islands, showcased in previous issues, now in ruins is a deep sorrow that words cannot fully capture. My heart goes out to all who have been impacted by this tragedy.

Alright, let’s dig in!

Last week, the S&P 500 sparked fireworks by hitting its 34th record close of the year, ending the week with a 0.6% rise. The Nasdaq also reached a new high, advancing 0.9%, driven by gains in tech giants like Apple (AAPL), Microsoft (MSFT), and Meta (META). The Dow climbed 0.2%.

Sector Highlights:

• Technology: Continued to lead major indexes.

• Connsumer Discretionary: Tesla (TSLA) surged over 25% due to strong vehicle deliveries, and Amazon (AMZN) rose on a $100 billion AI and data center investment. Ford (F) also outperformed.

Fixed Income/Treasury:

• Treasury Yields ended lower, reflecting softer economic data. The 10-year yield fell over 0.10%, and the 2-year yield dropped by over 0.15%.

• The Bloomberg U.S. Aggregate Index traded higher (up almost 1.7%) as Treasury yields fell. Market fully priced in two rate cuts for 2024, with the first expected in September.

Commodities:

• WTI Crude had its fourth straight weekly gain, up 2.2%. This was driven by lower inventories and strong gasoline demand.

• Gold Futures advanced nearly 2.3% on signs of a slowing U.S. economy.

• Silver and copper had broad gains.

• The dollar index fell, while the euro strengthened post-elections.

U.S. Economic Recap:

• June Payrolls Report: Nonfarm payrolls grew by 206,000, unemployment rose to 4.1%. Private-sector payrolls increased by 136,000, with gains in social assistance, healthcare, and construction.

• Labour Market Indicators: Quits rate in leisure and hospitality fell, while healthcare and construction sectors saw higher churn rates. Hiring was strongest in the South.

Global Market Recap:

• Europe:

  • French Elections: Relief rally as the far-right National Rally did not clinch a majority.

  • U.K. Elections: Labour Party's victory ended a 14-year Conservative rule.

  • European Indexes: FTSE 100 and CAC 40 were higher on the week. STOXX 600 also showed gains.

• Asia:

  • Japan's Nikkei: Climbed above 40,000 due to strong tech performance.

  • China: Mainland benchmarks ended negatively despite state-funded ETF buying. PBOC plans to borrow bonds to slow the bond rally.

  • India and Taiwan: Reached record levels.

Cryptocurrency Market Recap:

• Bitcoin: Dropped under $58,000 amid movements in Mt. Gox and German Government wallets.

  • Mt. Gox Trustee: Moved 47,228 BTC, initiating creditor disbursements, causing Bitcoin to fall as low as $54,000.

  • Germany: Continued transferring Bitcoin to exchanges, most recently moving $75 million likely for sale. Germany's Bitcoin holdings total ~$2.2 billion, with plans to sell $1.1 billion in seized cryptocurrency.

  • U.S.: Potential Bitcoin sales from the U.S. were noted, following a $237 million transfer to Coinbase in June.

• UN Development Program: Partnered with Internet Computer (ICP) for a digital credentials pilot in Cambodia. The project aims to secure and manage Universal Trusted Credentials (UTC), encouraging micro, small, and medium enterprises in the digital economy.

Here are other key highlights from last week:

• Aptos launched keyless wallets that use ZK-proofs to verify identities

• Consensys acquired Wallet Guard to help protect MetaMask Users

• Pudgy Penguins floor price surged to 12.25 ETH

• Mantra to tokenize $500M real estate assets for UAE Builder MAG Group

This is a key week in the markets!

Key U.S. Economic Events to Watch:

• Tuesday July 9:

  • U.S. Treasury Secretary Janice Yellen commented on the labour market's impact on inflation, global inflationary impulses, and investment restrictions on China.

    • Yellen emphasized that the labour market is no longer driving inflation as significantly as it did during the early pandemic recovery.

    • She highlighted that inflation would continue to decrease over time but noted that rents were keeping inflation higher than desired.

    • Yellen also mentioned that the significant inflationary impulse seen in 2022 was global in nature, primarily stemming from supply chain disruptions after the pandemic.

    • Regarding investment restrictions on China, she stressed that these measures are narrowly targeted at clear national security risks, particularly in areas like artificial intelligence (AI).

• Wednesday July 10:

  • Fed Chair Powell Testimony Day 2

    • Semi-Annual Monetary Policy Report before the Senate Banking Committee.

• Thursday July 11:

  • Consumer Price Index (CPI)

  • Jobless Claims

• Friday July 12:

  • Producer Price Index (PPI)

  • University of Michigan (UoM) Consumer Sentiment

Fed Speakers:

• Tuesday July 9:

  • FOMC Member Barr:

    • Focused on financial inclusion and innovation, highlighting the role of banks and fintech in promoting financial access.

    • Emphasized the responsible adoption of new financial services and the use of alternative data.

    • Discussed the potential of real-time payments and the importance of the Community Reinvestment Act (CRA).

  • Fed Chair Powell Testimony Day 1

    • Delivered the Semi-Annual Monetary Policy Report before the Senate Banking Committee.

    • Stressed the need for more robust inflation data before considering rate cuts.

    • Indicated that the timing of rate cuts depends on economic data and labour market conditions.

    • Mentioned that unexpected weakening in the labour market could justify a rate cut.

  • FOMC Member Bowman:

    • Advocated for an inclusive financial system, promoting equitable access to financial services.

    • Highlighted the role of community banks in fostering financial inclusion and supporting local economies.

Wednesday July 10:

• Fed Chair Powell Testimony Day 2

• FOMC Member Goolsbee: Opening remarks at the Fed Listens event.

• FOMC Member Bowman: Opening remarks at the Fed Listens event.

• FOMC Member Cook: Speech on inflation and monetary policy in Adelaide.

Thursday July 11:

• FOMC Member Bostic: Discussion on economic inclusion at the National Credit Union Administration's Diversity, Equity, and Inclusion Summit.

• FOMC Member Musalem: Speech on the U.S. economy and monetary policy in Arkansas.

Earnings Releases:

Notable earnings releases this week are outlined in the chart below.

Key Global Economic Events this week:

• Tuesday:

  • China CPI and PPI

  • Reserve Bank of New Zealand (RBNZ) Interest Rate Decision

• Thursday:

  • UK GDP

Trading Tip:

The opening month of the first three quarters produces the greatest gains!

Week 6/30/24 - 7/06/24 Recap

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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.