So last week we saw strong 'hard' data prompted a big (hawkish) repricing of rate-cut expectations (initial timing and velocity).
Source: Bloomberg
So inside the space of 1 week, we have seen the probability of an 80% chance of over 170bps in rate cuts plummet to just a 45% chance of just 132bps in rate cuts.
US Stocks just didn't care either way - we were getting to record highs on this large Friday OpEx (Gamma unclenched) no matter what. All the majors exploded higher today with Nasdaq the major winner on the week. Small Caps actually ended the week in the red (the 4th weekly loss in a row)...
Source: Market Watch
The S&P 500 finally joined the Nasdaq at new record highs, surpassing its record high close (4,796.6 3 JAN 22) and intraday record high (4818.6 4 JAN 22)
While the MAG7 stocks also ripped to new highs last week.
US equity markets melted up in the second-half of the holiday-shortened week, completely decoupling from the Treasury market - which saw yields (inverted) rocket back higher, round tripping the post-FOMC move entirely...
Source: Bloomberg
Bitcoin has been punched in the face at the cash equity trading open in the US every day since spot ETFs began trading. Friday was different though as buyers appeared near USD$40k and bid the cryptocurrency back above USD$42k -practically unchanged on the week...
Source: Bloomberg
But it's not all bad news for BTC, in an impressive display of computational might, the Bitcoin network has shattered its all-time high hash rate, surpassing a staggering 500 exahashes per second. This unprecedented surge signals a robust increase in the raw processing power securing the king of cryptocurrencies, sending ripples of excitement and cautious optimism through the industry.
For the uninitiated, hash rate essentially measures the muscle behind Bitcoin’s digital fortress. It reflects the number of complex calculations the network can perform every second, acting as a formidable barrier against potential attackers.
To highlight the enormity of this number: - For every star in our Milky Way galaxy, the Bitcoin network is calculating 5 billion computations per second. - It would take 2,000 years for the entire global population, each performing one hash/second, to match the Bitcoin network's hash rate. - The Bitcoin network performs 67 times more hashes per second than there are grains of sand on Earth. - By number of raw operations/second, Bitcoin is 500x more performance than the world's most powerful supercomputer.
Yet, there are skeptics out there that still believe "bitcoin is backed by nothing".
Finally, be careful what you wish for on 'encouraging' hard-data signals being positive. The lagged effect of the unprecedented loosing of financial conditions is about to strike hard...
...and with it 'animal spirits' will be reborn - and the threat of stagflation will return.
Happy Monday!
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Andy is the founder of ANDIKA Pty Ltd, a licensed securities & derivatives dealer. He's the author of fiction and non-fiction books and has been a University lecturer on risk and investment.
