The information in this message does not represent any financial or investment advice. They're just random thoughts in my head.
gm @everyone
**MACRO** - Well well well. As expected the Fed kept interest rates the same yesterday, but a hawkish press conference once again left the market in a panicked state. The major point of concern is the fact that the door has been left open for a further 25bp hike by year end, with only two rate cuts anticipated for 2024 (the market was previously expecting more aggressive action). While Powell did note the easing up of the labour market, it appears that we saw a fully fledged "higher for longer" message from Powell. My feel was this is what the market was expecting but I guess I was wrong because 2Y interest rates have surged to new highs of 5.17%, taking the rest of the curve along with it with 10Y now at 4.47%. It's a bitter end to the third quarter and right now macro seems to be a tussle between tech/AI productivity growth and sustained high interest rates. It's worth noting that UK inflation earlier this week fell to 6.7% vs 7.1% expectations, despite rising energy prices, which resulted in the BoE also holding rates today. You are definitely seeing the impact of high interest rates on global core inflation currently but it seems that Powell and the Fed want to nip it in the bud which means they are likely to "overdo" it and and they are doing just that. It seems that labour market/economic data needs to get worse for them to move more aggressively, and I don't see why they would change paths here while inflation remains where it does; ie we need to see a bigger drop in in inflation and/or employment numbers for Powell to become dovish. IMO it doesn't mean "it's all over", if you have continued strong earnings from the tech sector that will drive equities, and this is the battle we will continue to see from here on.
**CRYPTO** - Prices initially held up well as stocks fell and rates soared higher, but crypto broke this morning with BTC dropping to 26.6K and ETH to 1587. We've not displayed much correlation to macro so far this year but it appears yesterday's FOMC was just about hawkish enough to take its toll on the crypto market as well. The move was led by BTC and interestingly BTC dominance has actually dropped from 50.3% to 50.1% overnight; makes me think maybe there's some macro funds selling or shorting BTC. ETH/BTC has remained the same at 0.059. After a strong H1 it's been a disappointing second half of the year for crypto with a slew of positive news failing to send it to higher highs. Personally I think what's to come is still meaningfully positive but the road does feel long. We are now less than 6 months away from the SEC's final decision on BTC ETFs and 7 months away from the BTC halving which I believe should still coincide with potential rate cuts, imo we are not far away from the tide turning but of course the question is how volatile can things be in between now and then; 6 months is a long time for crypto.
**NFTs & Misc** - Mostly flat price action once again although Sugartown Oras were unable to hold onto their recent gains and dropped 21% yesterday. Pudgy Penguins continue to be a strong performer, up 7% to an impressive FP of 4.3ETH as rumours swirl about upcoming announcements. We saw a drastically low 16.5ETH Fidenza sale yesterday on X2Y2 which sadly appears to be a stolen item, but presumably was the only place the seller could get liquidity with the bid on OpenSea being north of 40ETH. Today we will see the Nakamigos Cloaks mint which has been reracked to a free mint for holders. In FT world it seems to be a sea of red statswise with most metrics lower in 24H with many key prices dropping, although there are certain winners across the board. Not surprised to see profit-taking but I think it's early doors in this story yet.
GL today!