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The Macro Situation
There was moderately good news with indications that both the jobs market and inflation are easing. The weekly numbers for unemployment were up (239,000). Consumer prices rose 5% in March compared to 6% in February. Nonetheless, respective numbers are still high; and so there are some concerns about how much more the Fed is willing to raise rates per their March meeting notes.
On the other hand, as banks seek more safety, the emerging credit crunch can’t be ignored as a significant factor helping to push spending and wages (and hence inflation) down. As well, wholesale producer price costs are down. The PPI is at 2.7% compared to an expected 4.9%.
Because inflation is still higher than the Fed target, and because banks and the economy seem to have stabilized, we can expect a 25bps increase in May and then a pause.
Macro-Dependent Tickers
- Long-term US Bonds (TLT, IEF)
- Gold (GLD), Silver (SLV)
- Index: SPY, QQQ
Precious metals are benefiting from weak US economic data and the weakening US dollar. The SPY tracks the S&P 500, and with stability settling into the economy, markets will react positively. Look for short-term bullish sentiment before we get a better sense of what kind of recession is in view.
Stock Watch
Stock Tickers to follow:
AI:
- Microsoft (MSFT)
- Micron Technology (MU)
- Meta (META)
Oil:
- XOM, SLB, RIG
Last week, we mentioned Meta’s entry in the AI space with SAM (Segment Anything Model). Coupled with its more aggressive cutting measures, Meta could end up much better than its tech competitors. On the semiconductor front, news of Samsung’s cut in profits and reductions have boosted Micron for the time being.
Exon-Mobile’s diversification outperforms its competitors as the oil market works out its pricing in view of conflicting factors — recession, activity in China, and limited oil supply. XOM has taken another step in its Guyana oil project, with its floating production platform arriving off its coast.
Crypto Watch
Crypto Tickers to follow:
- “The Goliath” Narrative: ETH, AVAX
- “Liquid Staking” Narrative: JOE, LIDO, CVX
- “Bank Safety” Narrative: BTC, ETH
- “Sovereign Currency Hedge” Narrative: PAXG
- “AI” Narrative: AGIX, FET, RLC
Ethereum completed its Shanghai upgrade, its final step in its move to Proof-of-Stake. Selling pressure prior to the upgrade has been weathered; and ETH breached the $2000 mark at the end of the week and is holding strong.
Avalanche has been doing well since January 2023. It once breached the $22 mark and is currently just below $20. AVAX has been quietly making progress on the network development side. Its Cortina Upgrade supports X-Chain, which makes exchanging money quicker and enables faster development of hosted applications.
Trader Joe continues its rise within the DeFi lending space, benefitting from its exposure on Arbitrum and its adoption of Uniswap v3 concentrated liquidity trading. Convex Finance (CVX) is one of the big gainers, breaking through the $6 mark recently. Its boost is not only due to the increased activity in the DeFi space, but also to a recent proposal to remove all gauge weight hard caps that limit the weight of any single pool.
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This newsletter was created by The Art of the Bubble/1.2 Labs and is provided for educational and entertainment purposes only. You should expect no financial returns one way or another based on the statements contained herein.Robin Technologies and Analytics LLC is the firm that distributes The Art of The Bubble products. The firm does not provide individually tailored investment advice and does not take a subscriber’s or anyone’s personal circumstances into consideration when discussing investments; nor is Robin Technologies and Analytics LLC registered as an investment adviser or broker-dealer in any jurisdiction.
