Weekly Market Recap: Interest Rates, Cryptocurrencies, and Global Economic Developments
Hey traders, Marcello here, founder of The Day Trading Academy. Today, we’re recapping last week’s market activity, covering finance, the economy, and everything in between. The big news: the interest rate gods have finally spoken. We’re likely to see an interest rate cut soon. And on the crypto front, Japan’s central bank is starting to integrate XRP. Let’s dive in.
Monday: U.S. Stock Markets Continue Their Rally
Monday marked the eighth consecutive session of gains in U.S. stocks. Traders eagerly awaited comments from Jerome Powell, the chairman of the Federal Reserve, who was scheduled to speak on Wednesday regarding interest rates. Interest rates remain a crucial factor for the economy, as the U.S. remains the largest economy in the world, with nearly 70% of it driven by consumer spending.
If Powell suggests a policy shift towards lower interest rates, the implications are significant. While he didn’t outright say rates would drop, his comments hinted at a change in policy that could come as early as September. Lower interest rates mean everything from credit card payments to mortgages becomes cheaper, stimulating consumer activity. About 17% of the U.S. economy is tied to the housing market, and lower mortgage rates would make homes more affordable, further energizing economic growth.
Thursday: U.S. Labor Market Weakness
On Thursday, new data highlighted weakness in the U.S. labor market. Last week, it was revealed that job creation numbers had been overstated by a million. This week, initial jobless claims rose by 2,000 to 232,000, while continuing claims increased by 4,000, reaching their highest level since November 2021. While the U.S. economy shows signs of shakiness, upcoming interest rate cuts could provide a much-needed boost.
Global Climate and Environmental News
In a surprising twist, the Atlantic Ocean is cooling at record speeds, leaving climate scientists puzzled. Just last week, 50 cities across the U.S. reported record-low temperatures in the midst of summer, despite concerns over global warming. This rapid cooling of the Atlantic adds to the confusion, raising questions about the complex relationship between human activity and climate change.
On another note, exposure to high levels of fluoride—particularly in drinking water—continues to raise concerns. Fluoride, a chemical from the chlorine family, has been linked to lower IQs in children when found in concentrations above 1.5 milligrams per liter. While we’re told to avoid swallowing toothpaste, it’s worth noting that the fluoride levels in toothpaste are lower than in our drinking water.
Market Movements Across the Globe
European markets performed well last week, with Spain leading the way at nearly 3% gains. Latin America saw mixed results, with Brazil’s Bovespa index rising by 1.23%. In Africa and the Middle East, Saudi Arabia emerged as the strongest performer. Meanwhile, in Asia-Pacific, Thailand enjoyed a 4% rise, making it the most positive market in the region.
Japan’s Big Crypto Move
A major headline this week is Japan’s decision to adopt XRP, commonly known as Ripple in the crypto world, for transactions starting in 2025. This move positions Japan as a leader in the digital money industry, allowing customers to connect seamlessly to XRP for nationwide payments and even earn rewards.
Cryptocurrency Update
Bitcoin rose by 7.7% this week, closing Friday evening just shy of $64,000. This rally coincided with successful Middle East peace talks that helped reduce global supply risks, including for oil. Oil prices fell significantly, with U.S. crude closing at $74.83 and Brent at $79.02.
Precious Metals Soar
Gold continues to reach record highs, gaining 0.17% to hit $2,513 per ounce, while silver is up 2.64% to $29.88. This year alone, gold is up 22%, making each bar of gold—those large, million-dollar ones—a highly sought-after commodity. Once interest rates are lowered, expect these prices to surge even more.
Global Economic Outlook
China’s economy is showing signs of strain, with new home prices falling at the fastest rate in nine years. This comes amid growing social unrest and skyrocketing youth unemployment. China’s one-child policy has left the country facing a demographic crisis, with too few young people to support its rapidly aging population. The Chinese government is now expanding its social security fund by $406 billion to address the situation, though their pension system is projected to run out of money by 2035.
In Europe, inflation in the Eurozone ticked up slightly in June, while Germany’s producer price index fell 0.8% month-over-month. Meanwhile, Canada’s annual inflation rate cooled to a 40-month low of 2.5%, with core inflation easing as well.
Political News
Venezuela’s Supreme Justice Tribunal ratified Nicolás Maduro’s victory in the country’s presidential election. I was born in Venezuela, and it serves as a reminder: be careful who you vote for. Socialism took hold there, and now Venezuela is struggling under extreme leftist leadership.
Meanwhile, in the U.S., Robert F. Kennedy Jr. officially dropped out of the presidential race on Friday and surprisingly endorsed Donald Trump, citing a desire to “save the children.” It’s notable as the first time a Kennedy has publicly supported a right-wing candidate.
Corporate News
Pavel Durov, CEO of Telegram, was arrested in France and faces up to 20 years in prison. The European Union and the UK are cracking down on online speech, with more people being arrested for their words than in Russia.
In stock news, Bank of America fell by 2.5% after Warren Buffett announced plans to continue selling off shares, having already sold $551 million worth since mid-July. On a brighter note, Target’s earnings report showed a 40% increase in net income, pushing the stock up 11% on Wednesday.
Final Thoughts
It’s been an eventful week in the markets, from interest rates and climate developments to big moves in cryptocurrency and global politics. Keep an eye on the upcoming interest rate cuts—these could be a turning point for the economy. Thanks for tuning in, and as always, stay informed and prepared. Remember, the preppers were right.
Let me know if you have any questions!
