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U.S. Bancorp Depositary Shares repstg 1/1000th Pfd Ser B

19.3800
USD
-2.71%
19.3800
USD
-2.71%
18.5500 25.0000
52 weeks
52 weeks

Mkt Cap 796.80M

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With Accelerating China Issues, What Is Bitcoin’s Place In Macro?

Pakistan is facing a similar fate as Sri Lanka and the Taiwan situation is heating up. Geopolitics can give us a glimpse into bitcoin’s role in macroeconomics. Listen To This Episode: “Fed Watch” is a macro podcast, true to bitcoin’s rebel nature. Each episode we question mainstream and bitcoin narratives by examining current events in macro from across the globe, with an emphasis on central banks and currencies. In this episode, Christian Keroles and I go through several charts, giving market updates on bitcoin, the dollar index (DXY) and the Hong Kong dollar. Next, we examine the deteriorating situation in Pakistan and ask the question, “Is it the next Sri Lanka?” Lastly, we discuss the Taiwan/China situation and I read several important snippets, one from Chinese foriegn minister Wang Yi and the other from think tank expert Wang Wen. Bitcoin And Other Currencies We open by looking at a weekly chart of bitcoin. We’ve done this for the last few shows because it is a good way to anchor our conversation. As you can see below, the price has been very stable, sitting on the fence in regards to the volume-by-price indicator on the right. If we zoom out, the last period with weekly candles similar to the time of recording was back in September-October 2020, right before the monster rally from $10,000 to $40,000. Of course, we aren’t saying that it will happen again exactly like that, but it is possible. The dollar index (DXY) is the other major currency we take a look at today. I believe it is important to check the dollar almost every episode because it is the main competition for bitcoin. It does seem as though it has peaked for the time being, but there is no sign that it will crash. Instead, the dollar is most likely to form a new elevated range above 100 for the next few years. This is similar to how it formed a new higher range from 2015 to 2021. I’ll add that a strong dollar is not bearish for bitcoin. Perhaps initially, a strong dollar is correlated to lower bitcoin, but after the dollar has stabilized in a higher range is when bitcoin has traditionally rallied. Below is a screenshot from the Hong Kong Monetary Authority website. Each month they release statistics on their foreign currency reserves, which they use to stabilize their peg. On August 3, 2022, I speculated that maintaining the Hong Kong dollar (HKD) peg was rapidly draining their reserves. However, according to this press release, they only used slightly more than 1% of their reserves in July to maintain the peg. That means the HKD is likely able to keep the peg (if they want to) for several years. Pakistan On The Brink The developing situation in Pakistan has a lot of things in common with the recent collapse in Sri Lanka. In the podcast, I point to their involvement with the World Economic Forum (WEF). Pakistan has received hundreds of millions of dollars in funding to revamp their agricultural sector and add national parks. Another similarity between Pakistan and Sri Lanka is the important role Chinese funding has played in the last decade. Sri Lanka lost control of their major port because they couldn’t pay back Chinese loans and now Pakistan is saddled with approximately $20 billion in high-interest loans to China and Chinese companies. Pakistan has only two months left in the budget and are desperately courting new lenders. The Chinese have turned them down, the Arab states are thinking twice. The only place to turn is back to the IMF — and that means harsh austerity. Perhaps unsurprisingly, both Sri Lanka and Pakistan are important nodes in China’s Belt and Road Initiative (BRI). As I’ve said on many occasions, the BRI is doomed to failure. They are attempting to make places and routes economically viable where the long span of history hasn’t already done on its own. No amount of money can overturn millennia of culture and eons of geography. Once again, one of the important links in the BRI has been bankrupted by the Chinese central planners. Taiwan/China Situation I’ve been discussing the Nancy Pelosi situation and the Chinese response for days on my Telegram live streams. In this episode of the podcast, I read some excerpts from a noted Chinese minister and a Chinese think-tank expert. You can read Wang Yi’s full comments here. Suffice it to say for this article, he repeated “One China” many times and said the U.S. is the side trying to change the status quo. He also had very harsh words for Tsai Ing-wen, the sitting President of Taiwan. He said she “betrayed the ancestors.” In another translation, I heard Yi’s original comments also said she betrayed her ancestors [and her race]. The next comments I read were from Wang Wen, executive dean of the Chongyang Institute for Financial Studies at Renmin University of China (RDCY) and the executive director of the China-U.S. People-to-People Exchange Research Center. He tries to explain why China’s response was so weak and that China should not provoke an armed conflict with the U.S. until it can “outperform the U.S. in terms of economic power, attain financial and military strength comparable to that of the U.S. and develop an overwhelming capacity to counter international sanctions.” Sounds a long way off to me. I’ll simply advise the reader to not get caught up in fear-baiting rhetoric about Taiwan and China. They are disciples of Sun Tzu, who said “appear strong when you are weak.” Wen also quoted Sun Tzu. “A major military clash with the US is not the goal of China's foreign policy, nor is it the path to a better life for the common people. Recall what Sun Tzu wrote in The Art of War: ’Do not act unless there is something to gain 非利不动; do not use military force without the certainty of victory 非得不用; do not go to war unless the situation is critical 非危不战.’” We wrapped up the podcast talking about the upcoming consumer price index data release and other things pertinent to bitcoin. Overall, a must listen episode! That does it for this week. Thanks to the watchers and listeners. If you enjoy this content please subscribe, review and share! Don’t forget to check out Fed Watch Clips on YouTube. Liking and sharing videos is the best way for us to reach new people. This is a guest post by Ansel Lindner. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc. or Bitcoin Magazine. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. Today’s Big Picture Asia-Pacific equity indexes ended today’s session down across the board. India’s Sensex ended the day essentially flat, down 0.06%, China’s Shanghai Composite and Australia’s ASX All Ordinaries declined 0.54% and 0.55%, respectively while Japan’s Nikkei fell 0.65%, Taiwan’s TAIEX dropped 0.74% and South Korea’s KOSPI declined 0.90%. Hong Kong’s Hang Seng led the way, down 1.96% on a broad selloff led by Health Technology and Health Services names while Transportation and Communications sectors provided the only relief. By mid-day trading, major European equity indices are down across the board and U.S. futures point to a positive open later this morning. At 8:30 AM ET, the much anticipated July Consumer Price Index (CPI) report was released: The headline figure for the month was expected to fall to 8.7% from June’s blistering 9.1% reading with core CPI that excludes food and energy ticking higher to 6.1% in July vs. 6.0% the prior month. The actual numbers show that inflation hit 8.5%, and core inflation was 5.9%. With the national average retail price for a gallon of gas falling through late June and July from its June 14 high of $5.016 per gallon per data from AAA, forecasters had expected the month over month decline in the headline CPI for July. The July Employment Report also showed wage inflation ran hotter than expected during the month. Let’s also keep in mind that we will be facing a “wash, rinse, repeat” cycle when it comes to inflation data and expectations for the Fed given tomorrow’s July Producer Price Index report. Data Download International Economy Producer prices in Japan rose by 8.6% YoY in July, compared with market forecasts of 8.4% and following an upwardly revised 9.4% the prior month. While marking the 17th straight month of producer inflation, the latest reading was the softest since last December. China's annual inflation rate rose to 2.7% in July from 2.5% in June and compared with market forecasts of 2.9% but even so the July figure marked the highest reading in the last year. The country’s Producer Price Inflation figure for July eased to a 17-month low of 4.2% YoY from 6.1% the prior month and less than the market consensus of 4.8%. Annual inflation rate in Germany was confirmed at 7.5% YoY for the month of July, down slightly from June’s 7.6% reading but still above the March and April figures of 7.3%-7.4%. The annual inflation rate in Italy slowed to 7.9% YoY in July from June’s 8% reading matching expectations for the month. While energy prices declined, prices for food and transportation rose at a faster pace. Domestic Economy This morning we have the usual Wednesday weekly reports for MBA Mortgage Applications and Crude Oil Inventories from the U.S. Energy Information Administration. At 10 AM ET, Wholesale Inventories for June will be published, and the figure is expected to rise 1.9%. While investors and economists will keep more than a passing interest in those reports and data, as we discussed above, it will be the July Consumer Price Index report at 8:30 AM ET that will shape not only how the US stock market opens today, but also expectations for the Fed’s next course of monetary policy action. The U.S. Energy Information Administration (EIA) expects domestic production of crude oil, natural gas and coal will all increase next year compared with this year. It forecast US crude production rising 6.7% to an all-time annual high 12.7M bbl/day in 2023 from 11.9M bbl/day in 2022, US natural gas output climbing to 100B cubic feet (cf)/day from 97B cf/day, and US coal production inching up to 601M short tons in 2023 from an expected 599M this year. The EIA also modestly increased its 2022 average nationwide gasoline price forecast to $4.07/GALLON vs. $4.05 if called for last month. It now also sees 2023 prices at $3.59/GAL vs. its previous forecast of $3.57. Markets Stocks continued in their holding pattern waiting for the latest CPI print save for some fundamental stories pushing Technology names and small caps around. The Dow and the S&P 500 were down slightly at 0.18% and 0.42%, respectively while the Nasdaq Composite dropped 1.19% and the Russell 2000 closed down 1.46% on the day. Energy names led the way yesterday but were overpowered by Technology and Consumer Discretionary sectors. Here’s how the major market indicators stack up year-to-date: Dow Jones Industrial Average: -9.81% S&P 500: -13.51% Nasdaq Composite: -20.14% Russell 2000: -15.83% Bitcoin (BTC-USD): -52.08% Ether (ETH-USD): -55.38% Stocks to Watch Before trading kicks off, CyberArk (CYBR), Fox Corp. (FOXA), Jack in the Box (JACK), Nomad Foods (NOMD), Vita Coco (COCO), Tufin Software (TUFN), and Wendy’s (WEN) will be among the companies issuing their latest quarterly results and guidance. At 9 AM ET, Samsung (SSNLF) will hold its Galaxy Unpacked 2022 at which it is expected to introduce new Galaxy foldable smartphone models, a new Galaxy Watch, and Galaxy Buds. Shares of advertising technology platform company The Trade Desk (TTD) jumped after the company reported quarterly results that topped expectations and guided current quarter revenue above the consensus forecast. The RealReal (REAL) reported a smaller than expected bottom line loss for its June quarter as revenue for the period rose 47.2% YoY to %154.44 million, topping the $153.99 million consensus. However, the company issued downside guidance for both the current quarter and 2022. Revenue for the September quarter is now expected to be $145-$155 million vs. the $164.3 million consensus; for the full year of 2022, revenue is forecasted to be $615-$635 million vs. the $653.7 million consensus. Shares of Coinbase Global (COIN) moved lower after it reported June quarter results that missed top and bottom line expectations. Revenue for the quarter fell 63.7% YoY as Total trading volume fell 53.0% YoY and 29.8% sequentially to $217 billion. Monthly Transacting Users (MTUs) grew 2.3% YoY but fell 2.2% sequentially to 9.0 million. For the current quarter, Coinbase sees the number of MTUs trending lower sequentially and total trading volume to be lower compared to the June quarter. Shares of Sweetgreen (SG) tumbled in aftermarket trading last night after the company missed quarterly revenue expectations, lowered its 2022 forecast, announced it will lay off 5% of its workforce, and downsize to smaller offices. ChipMOS TECHNOLOGIES (IMOS) reported its July revenue was $65.1 million, a decrease of 19.4% YoY and down 7.7% MoM. Taiwan Semiconductor (TSM) reported its July revenue increased 49.9% YoY to NT$186.76 billion, which equates to a 6.2% MoM improvement. Electric vehicle subscription startup Autonomy placed a $1.2 billion order for 23K electric vehicles with 17 global automakers, including BMW (BMWYY), Canoo (GOEV), Fisker (FSR), Ford (F), General Motors (GM), Hyundai (HYMTF), Lucid Group (LCID), Mercedes-Benz (DDAIF), Polestar (PSNY), Rivian (RIVN), Stellantis (STLA), Subaru (FUJHY), Tesla (TSLA), Toyota Motor (TM), VinFast, Volvo Car (VLVOF) and Volkswagen (VLKAF). IPOs As of now, no IPOs are slated to be priced this week. Readers looking to dig more into the upcoming IPO calendar should visit Nasdaq’s Latest & Upcoming IPOs page. After Today’s Market Close Bumble (BMBL), CACI International (CACI), Coherent (COHR), Dutch Bros. (BROS), Red Robin Gourmet (RRGB), and Walt Disney (DIS) are expected to report their quarterly results after equities stop trading today. Those looking for more on which companies are reporting when, head on over to Nasdaq’s Earnings Calendar. On the Horizon Thursday, August 11 Germany: Thomson Reuters Ipsos Monthly Global Primary Consumer Sentiment Index - August US: Weekly Initial & Continuing Jobless Claims US: Producer Price Index – July US: Weekly EIA Natural Gas Inventories Friday, August 12 Japan: Thomson Reuters Ipsos Monthly Global Primary Consumer Sentiment Index - August China: China Thomson Reuters Ipsos Monthly Global Primary Consumer Sentiment Index - August Eurozone: Industrial Production - June US: Import/Export Prices – July US: University of Michigan Consumer Sentiment Index (Preliminary) – August Thought for the Day “The release date is just one day, but the record is forever.” ~ Bruce Springsteen Disclosures Tufin Software (TUFN), CyberArk (CYBR) are constituents of the Foxberry Tematica Research Cybersecurity & Data Privacy Index Canoo (GOEV), Fisker (FSR), Lucid Group (LCID), Rivian (RIVN), Tesla (TSLA), Vita Coco (COCO) are constituents of the Tematica BITA Cleaner Living Index Canoo (GOEV), Fisker (FSR), Lucid Group (LCID), Rivian (RIVN), Tesla (TSLA), Vita Coco (COCO) are constituents of the Tematica BITA Cleaner Living Sustainability Screened Index The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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