S&P 500 and Nasdaq Close Another Week at Record Highs

Posted on May 25, 2024May 25, 2024 by Skerdian Meta

The week’s trading saw the Dow ended lower, the S&P 500 closed the week flat while Nasdaq posted gains, continuing its streak of positive weekly performance. However, the SPX made another record high during the week.

US Stock Markets Showed Mixed Performance

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Bitcoin Whales Amass $1.4B in BTC Following US Congress FIT21 Bill Approval

Posted on May 25, 2024May 26, 2024 by Arslan Butt

The recent regulatory changes in the United States have triggered a bullish wave in the Bitcoin (BTC) market, significantly impacting the altcoin sector.

Several Congress members urged SEC Chair Gary Gensler and other commissioners to approve spot Ethereum (ETH) ETFs. Additionally, the FIT21 bill establishes clear cryptocurrency regulations in the world’s largest economy.

These developments have fueled a renewed interest and significant investments in Bitcoin, with whales accumulating $1.4 billion worth of BTC.

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Ethereum struggles to find a bottom, faces an uphill task

Posted on May 25, 2024May 25, 2024 by Olumide Adesina

Ethereum’s price maintained its move below the $3,800 mark on Saturday morning, The $3,605 support level is the next level to be cautious of in the event of a further decline.
Looking more closely at the price study, Ethereum has a significant demand zone between $3,700 and $3,850, where around 1.81 million addresses purchased over 1.66 million ETH, taking into account the Input-Output Model and Profitability statistics.

As selling pressure builds, this range can offer support. The next crucial zone of support is between $3,580 and $3,462, where 3.13 million addresses bought more than 1.50 million ETH, in case this zone fails to hold.

The precise effect on price action is yet unknown as the market gets closer to the debut and start of trading for all eight spot Ethereum ETF applications by the biggest asset managers in the world.
The digital financial space is anxiously expecting the official launch and final approval of S-1 applications before acting, as prices have not yet responded to the approval of the 19b-4 spot ETH ETF filings.

The US Securities and Exchange Commission (SEC) recently approved the Ethereum ETF applications, which has sparked speculation about the next price movements for the market’s second-largest cryptocurrency as the trading launch date draws near.

Nevertheless, there are concerns surrounding large transfers of Ethereum (ETH) to cryptocurrency exchanges, stemming from worries about profit-taking, portfolio rebalancing, and potential market speculation.

Despite the approval of ETFs, they have not yet been given the green light for launch, as this requires a cleared S-1 filing which includes detailed information about the firm’s financials, risk profile, and the securities it plans to offer. VanEck has resubmitted its S-1 filing to the SEC, with experts forecasting that approvals could take weeks to months.

Persistent worries also exist around the possibility of large withdrawals following Grayscale’s disclosure of intentions to transform its Grayscale Ethereum Trust (ETHE) into a spot Ether ETF, akin to what happened to Grayscale Bitcoin Trust (GBTC) after spot Bitcoin ETFs were adopted in January.
Over the past week, the price of Ethereum has increased by 21.82%; in the past month, it has increased by 20.14%; and over the past year, it has increased by 108.63%.

Posted on May 25, 2024 by Skerdian Meta

US Durable Goods Orders for April

Summary:

Headline Durable Goods Orders: Up 0.7% (vs. -0.8% expected, prior +0.9%)
Excluding Transportation: Up 0.4% (vs. 0.1% expected, prior 0.0%)
Excluding Defense: 0.0% MoM (prior 1.2%)
Nondefense Capital Goods Excluding Aircraft: Up 0.3% (vs. 0.1% expected, prior -0.2%)
Shipments: Up 1.2% MoM, 2.3% YoY

Detailed Analysis:

Headline Durable Goods Orders:
- Current Month: 0.7% increase
- Expectations: Significantly above the forecast of a -0.8% decline
- Previous Month Revision: Adjusted to 0.8% from the preliminary 0.9%
Excluding Transportation:
- Current Month: 0.4% increase, higher than the 0.1% expected
- Previous Month: Flat at 0.0%
Excluding Defense:
- Current Month: 0.0% month-over-month change, down from the prior month’s 1.2%
Nondefense Capital Goods Excluding Aircraft:
- Current Month: 0.3% increase, better than the expected 0.1%
- Previous Month: Revised to a -0.2% decline
Shipments:
- Current Month: Increased by 1.2%
- Year-over-Year: Up 2.3%

Annual Overview:

Durable Goods Orders: Increased by 0.5% over the year
Excluding Transportation: Up 2.1%
Excluding Defense: Up 1.4%

Observations:

Third Consecutive Monthly Increase: Durable goods orders have been rising for three straight months.
Transportation Equipment: Led the increase with a 1.2% gain, also marking the third consecutive month of increases.
Volatility: The durable goods number can be volatile; last month’s preliminary showed a 2.6% gain, which was later revised to 0.8%.

The gain in durable goods orders was the third consecutive monthly increase. Transportation equipment – also up three consecutive months, led the increase with a 1.2% gain for the month. Of note is that this number can be quite volatile. Last month the preliminary release showed 2.6% gain in durable goods. It ended up at 0.8%. So be aware

Colombia in Freefall: Bonds Plunge Sharply Following President Petro’s Debt Ceiling Alert

Posted on May 25, 2024 by Ignacio Teson

The Head of State remarked that he would cease payments if lawmakers did not approve an increase in the nation’s budget limit.

Colombian bonds plunged by more than 30% during Friday afternoon, following President Gustavo Petro’s warning to lawmakers that failure to approve an increase in the nation’s debt ceiling would result in payment cessation.

According to a post on X (formerly Twitter), the President argued that if congressional committees do not approve raising the limit, “there will simply be a default or I will have to declare an economic emergency… I will not hesitate to do so.”

It’s an unnecessary comment. Colombia may not default. While it’s necessary to raise the limit, this might not be the way to ask Congress to do it.

According to Bloomberg data, Colombian bonds with a maturity of two years fell by 30.5%, while those with three and seven years lost 12.4% each. Ten-year bonds dropped nearly 19%, while those with maturities of 15 and 30 years were down by 12.7% and 7% respectively. At the same time, the Colombian peso depreciated, and the dollar closed with an increase of almost 8% at 3,837.58 pesos.

Finance Minister Ricardo Bonilla emphasized that the Government is committed to servicing public debt, though he noted that the National Government is urging Congress to swiftly approve the project.

Ethereum ETF: What Approval Means and What to Expect

Posted on May 25, 2024 by Ignacio Teson

The Securities and Exchange Commission (SEC) has given the green light for the first exchange-traded funds (ETFs) that directly invest in Ethereum.

Despite this, Ethereum spot ETFs could take months to officially debut. The U.S. Securities and Exchange Commission (SEC) has given the green light for the first exchange-traded funds (ETFs) that directly invest in the cryptocurrency Ether from the Ethereum protocol. The agency approved the 19b-4 filings from BlackRock, Fidelity, Grayscale, Bitwise, VanEck, Ark, Invesco Galaxy, and Franklin Templeton.

However, Ethereum spot ETFs could take months to officially debut, as the ETF sponsors have not yet received the S-1 registration. This is a significant difference compared to the process of Bitcoin ETFs, which began trading the day after receiving SEC approval.

[[ETH/USD-graph]]

Ethereum has faced more scrutiny as a potential security compared to Bitcoin, and the SEC has been somewhat constrained by Congress and major funds. There has been significant pressure for this decision to happen.

The SEC may eventually continue its campaign against Ethereum, particularly regarding staking. It’s worth noting that the Ethereum network operates on a “Proof of Stake” consensus mechanism, where ETH holders can stake their tokens to secure the network and earn rewards.

Drawing a parallel to Bitcoin’s history, when the Bitcoin ETF was approved, its price stood at $47,000. Subsequently, it dipped to $40,000 within the next 20 days before rebounding sharply to $73,000. This represented nearly a 100% increase within a month and a half. Similarly, Ethereum might undergo a similar trajectory with this news, potentially retracing to $3,000 before aiming to reclaim its previous peak or even surpass it.

Mexican Peso Ends Week on a Negative Note

Posted on May 25, 2024 by Ignacio Teson

The Mexican peso appreciated slightly against the dollar on Friday, gaining ground as the greenback retreated. However, the peso ended the week negatively due to concerns over the Federal Reserve’s interest rate policies.

The exchange rate closed the day at 16.6942 pesos per dollar. With Thursday’s official close at 16.7330 pesos, according to data from the Bank of Mexico (Banxico), this represented a gain of 3.88 centavos, or 0.23 percent.

Throughout the day, the dollar traded within a range, hitting a high of 16.7625 pesos and a low of 16.6740 pesos. The Dollar Index (DXY) from the Intercontinental Exchange, which measures the greenback against six major currencies, fell 0.37% to 104.72 points.

This week, the Federal Reserve’s meeting minutes revealed that some central bank officials have doubts about the disinflation process. Several members maintained a stance favoring rate hikes if inflationary risks increase.

[[USD/MXN-graph]]

Additionally, it was reported that orders for durable or capital goods in the United States rose more than expected in April, suggesting the U.S. economy is far from slowing down and that price pressures may persist.

Despite the peso recovering ground on Friday after three consecutive days of losses, it was not enough to offset its weekly decline. With last Friday’s close at 16.6044 pesos, the peso lost 8.98 centavos or 0.54 percent over the week.

Uncertainty remains regarding the Federal Reserve’s future decisions on interest rates. The two major questions are when rates will decrease and at what pace.

Wall Street ends a mixed week; Nasdaq hits record high

Posted on May 25, 2024May 25, 2024 by Ignacio Teson

The outstanding performance of Nvidia’s stock helped the Nasdaq overcome pressures stemming from concerns about Federal Reserve interest rates.

All three major Wall Street indices rose in Friday’s trading. The standout was the Nasdaq, which, driven by Nvidia’s stock, reached a new record high and marked its fifth consecutive weekly gain.

The Dow Jones Industrial Average, comprising 30 large companies, edged up 0.01% to close at 39,069.59 points. The S&P 500, which includes 500 different stocks, advanced 0.70% to 5,304.72 points, while the Nasdaq Composite rose 1.10% to 16,920.79 points.

[[SPX-graph]]

This week was characterized by worries about the possibility that the Federal Reserve might need to keep interest rates high for a longer period, a stance the central bank reinforced with the minutes from its latest meeting.

However, Nvidia’s stellar performance over the week (+15.13%), culminating in a record high after a very strong quarterly report, boosted tech stocks and alleviated some of the market pressures.

Gains were predominant across sectors, led by the communication sector (1.29%). Within the Dow Jones, notable advances were seen in Intel (2.13%) and JPMorgan (1.92%), while Salesforce (-2.25%) and Johnson & Johnson (-1.82%) posted losses.

For the week, amid interest rate pressures, the Dow Jones declined by 3.37% after five weeks of gains. The S&P 500 and Nasdaq, however, rose by 0.05% and 1.41% respectively, both extending their winning streaks to five weeks.