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The Macro Situation
The best news of the week is that a tentative agreement on the debt ceiling has been reached.
A US default would have grave global effects on markets, especially because the US dollar is still the world reserve currency. So some movement on negotiations and a further default date (now June 5) is welcome news.
Germany, which is Europe’s largest economy, has technically fallen into recession; in contrast, the US economy has been ever resilient. Coupled with false data about rising jobless claims, it appears the economy may have grown as much as 2.9% GDP-wise.
And that means inflation is up 0.4% from April and 4.7% on the year! As a result, macro-dependent investments are down.
Look for the Fed to consider future rate hikes. Current sentiment amongst economists is over a 60% likelihood in June.
Macro-Dependent Tickers
- TBF for another slide in US Treasuries (assuming debt ceiling is raised).
-Todd Mei, PhD and Sebastian Purcell, PhD
Stock Watch
It’s a repeat of last week (and well, the past few weeks). AI is the main contender, and we reported last week that NVDA is one to watch. On Thursday, NVDA surged from 305 to just under 380. Even MU remains resilient despite a ban in China due to “security risks”.
TSLA may be overvalued, but it’ll pick up some steam with its new deal with Ford, which will give Ford customers access to the Tesla charging network.
Stock Tickers to follow:
AI:
- Microsoft (MSFT)
- Alphabet (GOOG)
- Meta (META)
- Amazon (AMZN)
- Nvidia (NVDA)
- Micron Technologies (MU)
- Advanced Micro Devices (AMD)
Green:
- Tesla (TSLA)
Crypto Watch
XRP Limbo persists with no decision on the SEC case, though there are reasons to be optimistic in attitude . . . optimism in investment is a different question.
The Bank Safety Narrative is still in play with Bitcoin. It has dropped due to US debt ceiling worries, which may involve moving liquidity to other hedges. A weakened US dollar and what would be a drop in overall liquidity due the drop in US credit rating makes Bitcoin’s status as a hedge risky. If a US default occurs, it is possible that Bitcoin would gain along with gold as the global economy tries to steady.
Arbitrum and Polygon are platforms to watch as eventually their goliath status ought to break free as the macroeconomic situation becomes more stable.
To recap, Polygon is making significant progress with the development of Zk-rollup technology; and Arbitrum’s reign as the “DeFi king” remains uncontested.
Crypto Narratives:
- Bank Safety: BTC
- SEC v. XRP
- DeFi Goliath: ARB, MATIC
- “AI” Narrative: FET, RLC, GAI, RNDR
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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.
