Bullish reversal. The rise of crypto assets ensured a Green Week and the TradFi stock index hit new all-time highs! What happened in the market this week?
BTC retested the 60,000 mark over the weekend, but it rose nearly 8 percent on Wednesday after U. S. consumer price index (CPI) inflation matched analysts' expectations.
The CPI released on Wednesday showed the first drop in three months, although inflation continues to exceed the U. S. Federal Reserve's long-term target of 2 percent. The release of the series coincided with the 4-month data on retail sales and oil inventories, which, on the contrary, indicates a decline in demand, giving investors a reason for optimism and increasing the likelihood of a rate cut.
Market participants continue to believe that future rate cuts are certainly a positive, but it is important to note that they are only one factor in the broader economic equation, and their occurrence often coincides with the peak of a recession, as lowering them lowers the risk-free rate and theoretically increases returns. relative attractiveness of risk assets. 1
Why was the SP SPX's initial reaction to the Consumer Price Index so optimistic?
This has been an extremely volatile week for many investors, resulting in impressive short positions in popular GameStop and AMC stocks (along with other sharply declining stocks and several commodities including silver, orange juice, and cheese).
This time, with hedge fund participation, GME and AMC stocks were up 300% by Tuesday, but they pulled back later in the week after announcing a significant plan to sell the shares, wiping out the bulls' gains and dampening the enthusiasm of retail traders.
On cryptocurrency Twitter, #MemeWatch2024 became the top topic of the week as celebrities joined the platform to voice their opinions on the future trajectory of the #eth price ahead of the first deadline for sec to approve or reject spot #Etf ETH, which comes on September 23.
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