“AMMO – Not to be used against the enemy!”
Bitcoin tumbles back to the $60000 level after mini rally
Cryptocurrencies fell on Tuesday evening 1st October 2024, with Bitcoin retreating to the $60,000 level following an unstable beginning to what is typically one of its best performing months.
Shares associated with digital currencies also fell in after-hours trading. Crypto exchange Coinbase saw a decline of about 1%, and MicroStrategy experienced a 2% drop, following a decrease of 7.4% and 3.5% at the close.
Escalating conflicts in the Middle East have curbed investors’ appetite for risk as the new trading month and quarter got underway. On Tuesday 1st October 2024, Iran executed a ballistic missile strike on Israel in response to the recent assassination of Hezbollah leader Hassan Nasrallah and an Iranian commander in Lebanon.
The growing turmoil in the Middle East has driven oil prices higher and bolstered the U.S. dollar, casting a shadow over Bitcoin and other speculative assets.
Bitcoin 7-day chart from CoinMarketCap
“If my mind can conceive it, and my heart can believe it – then I can achieve it.”
Muhammad Ali – (Cassius Clay) 1942 – 2016
He was an American professional boxer, activist, spokesperson for civil rights and entertainer. Nicknamed “the Greatest“, he is regarded as one of the most significant sports figures of the 20th century and is often regarded as the greatest heavyweight boxer of all time.
CONCEIVE – BELIEVE – ACHIEVE
China property stocks surge as stimulus induced rally continues
Shares of many Chinese property stocks listed in Hong Kong soared to their highest levels in more than a year, propelled by the ongoing stimulus rally in China
The real estate sector emerged as the top performer in the Hang Seng Index on Wednesday 2nd October 2024.
Chinese stocks experienced a rally, climbing over 7% to complete their sixth consecutive day of gains.
Ireland’s 13-billion-euro Apple windfall
Ireland stands to gain a substantial financial boost following a pivotal ruling by the European Union’s highest court, which requires Apple to pay €13 billion (around $14 billion) in back taxes. Initially resisted by Dublin, this windfall is now seen as a transformative chance for the nation.
The settlement’s roots trace back to 2016 when the European Commission deemed that Apple had received illegal state aid via favorable tax deals with Ireland. After prolonged legal disputes, the EU court’s verdict has concluded the issue, mandating Apple to settle the substantial amount.
The Irish government has devised a strategic plan to capitalise on this unforeseen fiscal advantage. The funds are designated for various key sectors to promote sustained economic growth and societal welfare. A considerable portion is allocated for infrastructure enhancements, including transport network upgrades and sustainable energy initiatives, in line with Ireland’s green economy transition goals.
The windfall will also bolster progress in healthcare and education. Plans are in place to improve healthcare facilities and services, enhancing access and care quality for residents. In education, investments will focus on updating educational institutions, fostering research and innovation, and preparing the workforce with future-oriented skills.
The financial influx also presents a chance to tackle housing deficits, with investments directed towards boosting affordable housing availability and ameliorating living standards nationwide. This comprehensive strategy aims to forge a more equitable and thriving society.
In essence, Ireland’s $14 billion windfall from Apple offers an exceptional opportunity to effectuate considerable improvements across diverse sectors, potentially reshaping the country’s economic and social fabric for generations.
It’s quite remarkable how a fortune from just ONE company can be utterly transformational for an entire country.
As of September 2024, Apple’s market cap sat at around $3.4 trillion. This makes Apple the most valuable company in the world by market cap.
Just so you know, 14 billion of 3.4 trillion equals about 0.41%. A small drop in a massive financial ocean.
Freetrade buys UK arm of Australian investing platform Stake
Freetrade acquires Stake’s UK customer base, increasing domestic presence amid intense competition with similar apps such as Robinhood
The British retail investment platform Freetrade is set to acquire the UK customer base of its Australian competitor Stake, highlighting the growing competition in the UK’s digital investment sector. The acquisition, initially reported by CNBC, entails Freetrade assuming responsibility for all of Stake’s UK clients and their assets.
Freetrade currently oversees more than £2 billion in assets for its UK customer base.
Euro zone inflation falls to 1.8% in September 2024 below the ECB target of 2%
In September 2024, inflation in the Euro zone fell to 1.8%, falling below the European Central Bank’s target of 2%, according to early data from Eurostat released on Tuesday 1st October 2024
Excluding the more volatile prices of energy, food, alcohol, and tobacco, the core inflation rate stood at 2.7%, marginally below the anticipated forecasts.
This inflation figure matched the predictions of economists.
Robinhood launches crypto transfers in Europe directly through its app
The retail investment platform Robinhood has announced the introduction of cryptocurrency transfers in and out of its app for European customers
As part of its international expansion efforts, the company aims to enhance its product offerings in the region.
According to a blog post-dated Tuesday 1st October 2024, Robinhood will enable customers within the European Union to deposit and withdraw over 20 different digital currencies via its platform, including Bitcoin, Ethereum, Solana, and USD Coin.
This development grants Robinhood’s European clientele the option of “self-custody” of assets, allowing them to personally hold their cryptocurrencies in a privately-owned wallet, rather than relying on a third-party service to manage their funds.
German inflation falls to 1.8% in September 2024
In September 2024, the German consumer price index softened to 1.8%, falling below expectations based on preliminary data from Destatis, the national statistics office.
Month-on-month, the preliminary harmonized CPI saw a slight decrease of 0.1%.
According to recent analysis, the last instance of the German harmonized CPI falling below 2%, the inflation target rate of the European Central Bank, was in February 2021.
“Working from home again I see – and what’s this one called?” – “I call it… TABLET!”
“That’s a good one – could be worth a few bob”.
“How wonderful it is that nobody need wait a single moment before starting to improve the world.”
Anne Frank 1929 – 1945
Annelies Marie “Anne” Frank, 1929 – 1945 was a German-born Jewish girl who authored a diary that chronicled her family’s life while concealed during the Nazi occupation of the Netherlands. The renowned diarist, Anne Frank, detailed daily existence from their secret refuge in an Amsterdam attic.
Frank kept and regularly wrote in a diary she had received as a birthday present in 1942.
After their arrest, the Frank family was sent to concentration camps. Anne Frank and her sister, Margot, were moved from Auschwitz to Bergen-Belsen concentration camp on November 1, 1944, where they both passed away, likely from typhus.
See Wikipedia
Swiss central bank cuts rates by 0.25% in third reduction this year
The Swiss National Bank on Thursday 26th September 2024 took another step to loosen monetary policy this year, bringing its key interest rate down by 0.25% to 1.0%
The cut in interest rates occurs against a backdrop of muted domestic inflation and a surge in the Swiss franc’s value.
Notably, it marked the first instance of a major Western central bank lowering interest rates in March 2024.
Mervyn King’s perspective on interest rates and inflation – too low for too long
Lord Mervyn King, the former Governor of the Bank of England, has been a prominent voice in the ongoing debate about interest rates and inflation. His insights are particularly valuable given his extensive experience in central banking and economic policy
King has been critical of the Bank of England’s approach to interest rates in recent years. He argues that the central bank kept rates too low for too long, which he believes contributed significantly to the current high levels of inflation. According to King, the prolonged period of low interest rates created an environment where inflation could take root and grow unchecked. This, he suggests, was a misstep that central banks around the world are now grappling with.
In his recent comments, King has emphasised the need for a balanced approach to managing inflation. While he acknowledges that raising interest rates is a necessary tool to combat rising prices, he also warns against the potential negative impacts of aggressive rate hikes. King points out that rapid increases in interest rates can stifle economic growth, leading to higher unemployment and other economic challenges.
King’s perspective is that central banks should have acted more decisively when inflation first began to rise. By delaying action, they allowed inflation to become more entrenched, making it harder to control. He advocates for a more proactive stance in the future, where central banks are quicker to adjust interest rates in response to economic indicators.
As policymakers prepare for potential further rate hikes, King’s cautionary advice serves as a reminder of the delicate balance required in monetary policy. His insights underscore the importance of not only addressing inflation but also considering the broader economic implications of interest rate decisions.
In summary, Mervyn King calls for a nuanced approach to interest rates, one that carefully weighs the need to control inflation against the potential economic fallout of higher rates. His views highlight the complexities of monetary policy in today’s economic landscape
UK economic growth revised down to 0.5%
The UK’s economic growth for the period between April and June 2024 was lower than initially estimated, as reported by the ONS
The Gross Domestic Product (GDP), which quantifies the economic activity of companies, governments, and individuals within a country, increased by 0.5%, a revision from the preliminary figure of 0.6%.
Both the manufacturing and construction sectors experienced greater declines than initially calculated.
This information comes to light as the Labour government, which prioritises economic growth, gears up to present its first Budget at the end of October 2024.
The Office for National Statistics (ONS), the publisher of these statistics, noted a significant 3.1% decrease in the production of transport and related equipment during this quarter, following a sustained period of expansion, a stark contrast to the initially estimated 0.7% decrease.
The ONS indicated that this downturn could be attributed to factories scaling back production in anticipation of the transition towards electric vehicle manufacturing.
Additionally, the construction sector saw a downturn, continuing the trend of decreased new home construction.
However, the ONS said that the outlook was improving.
U.S. Fed preferred inflation measure came in at 2.2% in August 2024
In August 2024, U.S. inflation edged closer to the Federal Reserve’s target, potentially paving the way for future reductions in interest rates, according to a report from the U.S. Commerce Department released Friday 27th September 2024
The personal consumption expenditures price index (PCE), which is the Fed’s preferred gauge for assessing the cost of goods and services in the U.S. economy, increased by 0.1% for the month. This increment set the annual inflation rate at 2.2%.
Economists had anticipated a 0.1% monthly increase in the PCE inflation figure and a 2.3% rise from the previous year.
When food and energy are excluded, the core PCE, which rose by 0.1% in August 2024, showed a 2.7% increase from the same period last year.
Federal Reserve officials often give more weight to the core PCE as a more accurate indicator of long-term inflationary trends. The projections were 0.2% monthly and 2.7% annually.
China’s tech stocks rally to 13-month high on new stimulus
Chinese technology stocks, such as the previously underperforming Alibaba, have surged this week, reaching peaks not observed in over a year
The stock surge follows the announcement of stimulus measures by China’s central bank to boost the world’s second-largest economy.
On Thursday 26th September 2024 in the U.S., Alibaba’s shares closed above $100 for the first time since August 2023.
Tencent’s shares ended at their highest point in over two and a half years.
Yuan hits strongest level against U.S. dollar in over 16 months
China’s yuan hit its strongest level in over 16 months on Wednesday 25th September 2024 after Beijing unveiled a slew of stimulus measures to shore up the slowing economy on Tuesday 24th September 2024.
The Chinese yuan had weakened against the U.S. dollar over the last several weeks, as the dollar strengthened, and as investors fretted about China’s economic growth prospects pre-stimulus measure.
Unlike the Fed’s focus on a main interest rate, the PBOC uses a variety of rates to manage monetary policy.
Chinese stocks up sharply after Beijing confirms stimulus measures
Chinese stocks continued to rise following state media reports that China’s top leaders have endorsed the government’s recent measures to bolster their economy.
The CSI 300 index in Mainland China continued its rally for a seventh consecutive day, reaching its highest point in about four months, subsequent to a meeting of China’s highest officials confirming the government’s latest economic stimulus actions.
South Korea’s Kospi index surged by 1.9%, driven by advances in semiconductor company SK Hynix, which declared the commencement of mass production of the world’s inaugural 12-layer HBM3E chip, utilised in AI applications.
See SK Hynix Newsroom report here
U.S. consumer confidence falls the most in three years
In September 2024, consumer sentiment plummeted, marking the most significant drop in over three years, driven by escalating concerns over employment and business conditions, according to a report by the Conference Board released on Tuesday 24th September 2024.
The consumer confidence index reportedly fell to 98.7 from 105.6 in August 2024, marking the largest one-month drop since August 2021. This was contrary to the forecast of 104 and a stark contrast to the 132.6 reading in February 2020, just before the Covid pandemic’s onset.
All five components surveyed by the organisation declined this month, with the most significant decrease observed in the age bracket of 35-54 with incomes under $50,000.
Concerning
“Consumer evaluations of the present business conditions have turned negative, and the outlook on the current labour market has further weakened. There is also a growing pessimism about future labour market conditions, business conditions, and income prospects,” the Conference Board’s chief economist reportedly commented.
This significant dip in the confidence index last occurred as inflation began its ascent to the highest point in over four decades.
Following the announcement, stocks experienced temporary declines, and Treasury yields decreased.
UK’s wealth creators are threatening to exit en masse ahead of proposed tax changes
Labour’s proposal to dismantle the UK’s non-dom tax system may lead to an exodus of the ultra-wealthy, as advisors and research bodies have cautioned.
Switzerland, Monaco, Italy, Greece, Malta, Dubai, and the Caribbean are becoming popular relocation destinations, sensing the apprehension among affluent investors.
Meanwhile, London’s super-prime real estate market could experience a decrease in transactions, although this may present opportunities for wealthy U.S. and other global buyers.
Nearly two-thirds (63%) of affluent investors have indicated they would depart from the U.K. within two years or ‘sooner’ if the Labour government proceeds with its intention to abolish the colonial-era tax concession.
Furthermore, 67% stated they would have chosen not to migrate to Britain initially, as per a recent Oxford Economics study evaluating the impact of these plans.
The UK’s non-dom regime, a tax rule with a 200-year history, allows individuals residing in the UK but domiciled elsewhere to not pay tax on foreign income and capital gains for up to 15 years. As of 2023, an estimated 74,000 people enjoyed the status, up from 68,900 the previous year.
Labour last month set out plans to abolish the status, expanding on a pledge set out in its election manifesto
Dow up 500 points, S&P 500 closes above 5700 as both reach new highs!
Stocks soared on Thursday 19th September 2024, with the Dow Jones Industrial Average and the S&P 500 reaching new record highs, following the Federal Reserve’s decision on Wednesday to cut interest rates by half a percentage point.
The Dow Jones climbed 522.09 points to close at 42025, surpassing 42000 for the first time. The S&P 500 ascended to a close of 5713, breaking the 5700 threshold. Meanwhile, the Nasdaq Composite jumped 2.51% to finish at 18013.
Dow Jones one-day chart
S&P 500 one-day chart
UK, Japan and China leave rates unchanged after jumbo U.S. cut
Bank of England holds UK interest rate at 5%
Interest rates are “now gradually on the path down”, the Bank of England governor reportedly said after borrowing costs were held at 5%.
He later reportedly remarked that inflation had “come down a long way” but warned the Bank would need to see more evidence that it will remain low before cutting rates further.
Bank of Japan holds rate steady at around 0.25%
The Bank of Japan has maintained its benchmark interest rate at approximately 0.25%, marking the highest rate since 2008, following a two-day meeting.
The People’s Bank of China (PBOC) holds rates at 3.35%
The People’s Bank of China (PBOC) unexpectedly held the one-year loan prime rate (LPR) at 3.35%, as well as the five-year LPR at 3.85%.
London is again Europe’s best stock market!
The London Stock Market has recently been hailed as Europe’s best stock market!
According to a survey by Bank of America, Wall Street says that the UK is now the most preferred equity market in Europe.
This positive sentiment comes as the FTSE 100 hit recent highs, reflecting a shift in investor confidence towards the UK stock market.
It’s quite a turnaround, especially considering the challenges the UK market has faced in recent years.
U.S. cuts interest rate aggressively by 0.50% bringing the Fed rate range to 4.75% – 5.0%
The Federal Open Market Committee (FOMC) has voted to reduce the interest rate by 0.50% after having maintained its benchmark rate within the range of 5.25% to 5.50% since July 2023
The previous rate was the highest seen for 23 years and remained unchanged even though the Fed’s favoured inflation gauge has decreased from 3.3% to 2.5%, and the unemployment rate has climbed from 3.5% to 4.2% during this period.
Following the interest rate cut today, 18th September 2024 of 0.50%, the new rate now stands at 4.75% to 5.0%.
UK inflation sticks at 2.2% unchanged in August 2024
UK inflation was reported at 2.2% for August 2024, according to the Office for National Statistics (ONS) data released on Wednesday 18th August 2024
The consumer price index (CPI) figure aligned with the forecasts of analysts and remained consistent with July’s inflation rate of 2.2%.
Previously, the headline CPI had stabilised at 2% in both May and June 2024, which met the Bank of England’s target rate.
Big Tech aiming to raise $100 billion for AI data centres
In a substantial effort to strengthen the infrastructure required for artificial intelligence (AI), BlackRock and Microsoft have unveiled a significant fundraising endeavour.
The initiative, dubbed the Global AI Infrastructure Investment Partnership (GAIIP), seeks to secure $30 billion in private equity capital, with the possibility of leveraging up to $100 billion including debt financing.
The main objective of this initiative is to establish new and larger data centers to accommodate the escalating demand for computing power spurred by advancements in AI. These data centres are vital for meeting the growing computational requirements of AI applications, which necessitate substantial processing power and storage capacity. Additionally, the partnership will focus on investing in the energy infrastructure required to operate these data centres in an environmentally sustainable manner.
BlackRock, the global investment management corporation, contributes its vast network of corporate relationships and private equity expertise. Microsoft, a pioneer in technology and AI, offers the necessary technological expertise and industry leadership. Together, their goal is to establish a strong infrastructure that will bolster AI innovation and contribute to economic expansion.
The investment will be primarily directed towards the United States, with a portion also being allocated to partner countries. This strategic emphasis aims to boost American AI competitiveness and encourage worldwide cooperation. The partnership is designed to support an open architecture and a wide-ranging ecosystem, enabling a variety of partners and companies to leverage the infrastructure.
NVIDIA, a leading force in AI technology, will contribute to GAIIP by providing its expertise in AI data centres and manufacturing facilities. This partnership is anticipated to improve AI supply chains and energy procurement, offering advantages to both consumers and the broader industry.
This collaboration marks a substantial move towards establishing the infrastructure of tomorrow and powering it in an eco-friendly manner.