Week 5 is here and high 5 for an interesting week. The Pen is back bringing you the trendiest news from the week which went, with all things global economy, financial markets, money, tech, blockchain, and crypto. This time we're bringing back our favorite celebs, Elon Musk, CZ, and of course JP Morgan, together for the first time this year. Here's to another wrap-up filled with wood, mood, and good news with differing views. Have a good read.
MOODY'S IN GOOD MOOD
Moody's is developing a scoring system for stablecoins. The move is aimed at bringing stability and credibility to the cryptocurrency market and is being seen as a significant development in the crypto space. Moody's has been in the business for over 100 years, so this step toward cryptocurrencies shows that the agency recognizes the potential of this market.
House Minority Leader Kevin McCarthy opposes increasing the debt ceiling, calling for fiscal responsibility and addressing the root causes of rising debt. His stance aligns with traditional Republican views, but experts argue for a temporary suspension to support economic recovery during the COVID-19 pandemic. The issue highlights the government's ongoing debate on addressing the country's debt while supporting economic recovery.
GERMAN ECONOMY SHRINKS
The German economy unexpectedly contracted in Q4 2023, causing concerns about its strength and ability to recover from the COVID-19 pandemic. Weak exports, declining industrial production, and reduced consumer spending were factors contributing to the contraction. The German government is taking steps to support the economy, but the contraction has wider implications for the EU's recovery from the pandemic and raises questions about the speed and strength of the global economic recovery.
US' HARD-BOILED EGGS
Egg prices in the US doubled in 2022 due to COVID-19's impact on the egg supply chain, rising feed costs and increased demand for eggs as consumers shifted to more at-home meals. The average retail price of $2.30 per dozen in November 2022 was a significant increase from the January average of $1.10. The high prices have impacted consumers and the egg industry, with some farmers struggling to meet demand and stay afloat. The increase highlights broader food inflation challenges in the US and other countries.
ELON'S PAYPAL 3.0 PROJECT
Did the Pen team call it last year? Well, Elon Musk has now expressed interest in building a payment system for Twitter using cryptocurrency. In a recent tweet, he stated that he would like to see Twitter have a native cryptocurrency or a crypto-based payment system. He further added that he has had conversations with several crypto developers regarding this matter. This move by Elon Musk has sparked discussions and speculations about the future of cryptocurrency and its adoption in the mainstream. While the details of the plan are yet to be revealed, it has the potential to significantly boost the popularity and usage of cryptocurrency.
IMF FORECASTS UK RECESSION
The UK will be the only G7 economy to shrink in 2023, according to the International Monetary Fund (IMF). The IMF's World Economic Outlook report estimates that the UK economy will shrink by 4.5% in 2023 due to Brexit uncertainty, weak consumer spending, and slow COVID-19 vaccine rollout. The IMF predicts modest growth for the European Union and the United States. The report highlights ongoing challenges faced by the UK, calling for policymakers to take action to support the economy's recovery.
UK BRINGING CRYPTO TO MAINSTREAM
The UK is pushing ahead with plans to improve its digital infrastructure and boost its position as a technology hub. The government is investing in next-gen technologies like 5G, AI, and IoT, promoting startups and innovation and creating a supportive regulatory framework. The aim is to attract international investment and talent to drive economic growth.
ADANI BACKS OFF
Adani Enterprises has called off a $24 billion deal to acquire a stake in Reliance Retail. The deal was expected to help Adani expand its retail footprint in India and compete with other e-commerce giants in the country. However, it has now been canceled due to differences between the two companies over the terms and conditions of the deal.
U.S. LABOR MARKET GOING "TOO" STRONG
US job openings, which climbed to 11 million at the end of 2022, reflect a strong labor market. The increase in job openings is seen as a sign of a healthy economy and robust demand for workers, as businesses seek to fill positions. The report states that the labor market is too strong for the Federal Reserve, which is grappling with how to keep the economy growing without igniting inflation. The Fed has signaled it may begin to raise interest rates to cool the economy, but it must balance that against the risk of stifling growth and employment.
CREDIT SUISSE BACKS OFF FROM ADANI
Credit Suisse has assigned a zero lending value to Adani Group bonds following allegations of deception and flawed financial statements made by Hindenburg Research. This marks a blow to the Indian conglomerate and could cause investors to reassess the risk associated with Adani's bonds. Probably, Credit Suisse can't take any more heat after their recent share decline and weak earnings reports.
ChatGPT UNLEASHES AI STOCK FRENZY
AI language model "ChatGPT" on stock trading. The model has caused a stampede of stock traders who are using it to make informed trading decisions, leading to an increase in stock trading activity. ChatGPT is using its vast knowledge of finance and economics to analyze market trends and make predictions, which has attracted many investors to use the tool. ChatGPT is changing the stock trading landscape and creating a new era of AI-assisted investing. Moreover, the rising popularity of ChatGPT is causing the same trading trends which we saw in 2017 of all things blockchain and pre-dot com bubble with all things...dot com.
AIG OFFS CFO
AIG announced the termination of its interim CFO, Sid Lyons, due to a violation of confidentiality. The insurer provided no further details regarding the violation but stated that it is conducting a review of its internal controls and policies. The company also stated that it is committed to maintaining the highest level of ethical and professional standards.
Cathie WOODS LOGGS WELL
ARK Innovation ETF (ARKK), led by prominent stock picker Cathie Wood, saw its best month ever in January 2023, as tech shares rose. The ETF gained 26.4% in January, beating its previous record from November 2022. The strong performance was driven by the technology sector, which saw a surge in demand from investors.
THE FED PREPARED TO LAND SOFTLY
The Federal Reserve expects a soft landing for the US economy without a recession, but there is a possibility of stagflation instead, according to MarketWatch. Stagflation occurs when there is both inflation and a stagnant economy, which could be a result of the government's huge stimulus package combined with supply chain disruptions and strong consumer demand.
Binance CEO, Changpeng Zhao, has issued a warning to Wall Street after recent wild price swings in the Bitcoin, Ethereum, and cryptocurrency markets. He warned that traditional finance could be disrupted by the fast-growing crypto market, saying that it was a matter of time before Wall Street adopted cryptocurrencies in a significant way. He also emphasized the importance of being proactive in embracing change and adapting to the new reality.
BITCOIN TO $ 1.5 MILLION IN 7 YEARS?
A report by ARK Invest, led by Cathie Wood, predicts that Bitcoin will reach $1.5 million by 2030. The report highlights the growing acceptance of Bitcoin and cryptocurrencies as a legitimate asset class, as well as their potential to disrupt traditional financial systems. It also emphasizes the limited supply of Bitcoin, which could drive up its price over time, and notes the increasing institutional investment in the cryptocurrency.
BURRY BURIED HIS TWITTER AFTER TWEETING SELL
Michael Burry, the investor known for betting against the housing market prior to the 2008 financial crisis (as depicted in the movie "The Big Short"), has deleted his Twitter account and reportedly sold his stock market holdings shortly after tweeting "sell". The reason for his actions is unclear.
META DIP UNBLOCKED
Meta, the parent company of Facebook and more, added $ 100 billion to its value after it soared more than 20% this week. Speculations have it, that Meta's move towards more blockchain-based technologies combined with the increasing interest in the technology and cryptocurrencies, in general, has caused a sudden rise of interest in the stock share.
THE BOE'S CALL FOR CBDC
The Bank of England (BOE) and the UK Treasury believe that the UK is likely to need a digital currency, according to the Telegraph. This comes as central banks around the world are exploring the potential benefits and risks of digital currencies, as well as how they could be integrated into existing monetary systems. The BOE and Treasury have not yet reached a conclusion on whether a digital currency would be beneficial for the UK, but they are reportedly looking into the matter as a precautionary measure.
HAPPY BIRTHDAY BREXIT
The third anniversary of the UK's departure from the European Union (Brexit) has been marked with a mixture of emotions in both the UK and the EU. In the UK, some see Brexit as an opportunity for the country to chart its own course and establish new trade deals with other countries, while others see it as a mistake that has weakened the country's economy and international standing. In the EU, there is a sense of regret over the loss of one of its largest and most influential members, but also a determination to move forward and deepen its own integration. The implementation of Brexit has been complicated and is still ongoing, with many issues related to trade, immigration, and Northern Ireland unresolved.
JP MORGAN GOT WOOD
JP Morgan Asset Management has invested hundreds of millions of dollars in Forestr, a new platform for investing in carbon offsets and carbon capture technology. The investment is part of JP Morgan's broader effort to address climate change and support the transition to a low-carbon economy. The move is seen as a recognition of the increasing demand for environmentally responsible investment opportunities, as well as the growing market for carbon credits. The investment also highlights the ongoing challenge for the financial industry to balance financial performance with social and environmental responsibility.
Till we yield again