Summing Up The Week

The economic datapoints for the week came in fairly in-line, not causing much of a market reaction in either direction as stocks continued to grind higher. The real market-moving catalyst was Thursday’s Presidential Debate, where President Joe Biden’s performance caused some Democratic fundraisers to call for him to drop out of the race.

I remain apolitical when it comes to my investing as the stock market tends to perform well regardless of which party is in power (somewhat counterintuitively, the S&P 500 performs slightly better when a Democrat is in the White House, on average). 

In general, the markets see a second term for ex-president Donald Trump as a positive as he has been doubling down one extending the tax cuts he implemented during his first term which resulted in significant profits for corporations.

Let’s look at the news that moved the markets (or didn’t) this week…

Market News

Consumer Confidence slightly decreases but still reassuring

On Tuesday, the U.S. consumer confidence survey showed a slight decrease in June, dropping to 100.4 from 101.3 in May, reported Reuters. Reuters attributed the decrease to concerns about the economy, however consumers remained about both the labor market and their inflation expectations.

Economists looked at the stability of the survey results as reassuring, but warned that the health of the labor market remains a key worry for consumers. “Confidence pulled back in June but remained within the same narrow range that’s held throughout the past two years, as strength in current labor market views continued to outweigh concerns about the future,” said Dana Peterson, chief economist at the Conference Board. “However, if material weaknesses in the labor market appear, confidence could weaken as the year progresses.”

Durable Goods Orders remain weak

On Thursday, the durable goods orders index showed a rise of 0.1% in May where economists had predicted a 1.0% drop, however revisions for April took it from 0.6% to 0.2%, showing weakness overall, reported MarketWatch. Durable goods include longer-lasting products such as small as household appliances (like refrigerators and washing machines) to as large as airplanes manufactured by Boeing (BA).

MarketWatch pointed to orders for new cars and trucks rising 0.7% which explains why the index beat the Wall Street expectations, however, “if transportation is omitted, new orders for manufactured goods fell 0.1% and declined in May for third time in the past six months.”

While the market showed no reaction to the figure with the S&P 500 index continuing to  grind higher on Thursday.

Biden fumbles the Presidential Debate to Trump

On Thursday, the first of two presidential debates between President Joseph Biden and ex-president Donald Trump, initially considered a non-market-moving event,  caused stocks to rally when Biden’s performance left Democratic fundraisers sounding the alarm for him to drop out of the race, reported CNBC.

Biden’s organizers claimed the standing President was suffering from a cold, however long pauses, rambling statements, and sometimes answers that were entirely off-topic left supporters talking about Biden’s need to drop out of the race. One particularly awkward reply I witnessed while watching the debates live was when Biden claimed his administration had “beaten Medicare” when, in reality, it was thought that he meant to say “beaten COVID-19.”

Don’t get me wrong, everyone misspeaks, except when you’re the President during a campaign debate. If there was ever a time to take some Day-Quil, that would have been it.

While Trump’s performance also left much to be desired as the ex-president chose to namecall and decry Biden’s presidency as “the worst in the country’s history” rather than actually provide substantive answers to questions regarding abortion, daycare costs, Black wages, and many more, Biden’s nearly dementia-like appearance was damning.

As a result, the markets have started pricing in a Trump victory which caused stocks to rally on the hopes for low interest rates, increased government spending, and extended tax cuts on corporations and the wealthy in Trump’s second term.

PCE results in-line as inflation rose 2.6% in May

On Friday, the Personal Core Expenditures (PCE) index, the Federal Reserve’s preferred gauge of inflation, came in showing inflation had risen 2.6% in May, in line with economist expectations, reported CNBC. Stocks more or less shrugged off the PCE number as the figure was neither positive nor negative with the markets rallying on the back of increase expectations for a second Trump presidency after Biden’s performance in Thursday’s debate failed to impress supporters. 

Next Week’s Gameplan

Next week is another shortened holiday week thanks to Independence Day on Thursday, July 4, but it could still be an exciting one as there are quite a few economic datapoints coming out.

On Monday, we’ll get the PMI and ISM manufacturing numbers followed by Federal Reserve Chairman Jerome Powell giving a speech in Portugal on Tuesday. On Wednesday, we get the PMI and ISM services numbers as well as the minutes from the Fed meeting in June. Then, on Friday, the big report – the nonfarm payrolls jobs report for June (why do they always release the biggest potential market-moving catalysts on Fridays?).

To make matters even more interesting, there will be a lot less volume in the markets when we get the jobs report as many traders will take Friday off to make a long weekend out of the 4th of July. Additionally, a lot of other professionals are taking the entire week off, so if we do get a market-moving event, the volatility could potentially be magnified thanks to the lack of participants in the market.

Stay tuned, because I’ll be back here to cover what happens next Friday!

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Crytpo Corner

Bitcoin Price Action

Bitcoin’s Freefall Shows No End in Sight…

Bitcoin gave no love to the Bulls once again this week, plummeting through last week’s support at $63,300.93, falling through the key support at $60,150.00, and dropping deep into the $58K range before finally making a bottom at $58,414.28 on Monday.

The Bullish Case

Some Bulls are making the argument that Bitcoin’s making an inverse head-and-shoulder pattern on the chart which could signify a reversal of the move coming soon followed by a significant break of Bitcoin’s all-time high. These Bulls argue that this selloff is a buying opportunity to capitalize on (of course, I add throughout every dip, so I agree that this pullback is a buying opportunity… regardless of how low Bitcoin may go).

The Bearish Case

Bears maintain the upper-hand as the downward momentum most certainly reinforced the narrative the Bears have been selling for several weeks now. Bears believe that this double-test under the key psychological $60K support means that there are lower-lows ahead. Bears argue that $56,500.00, the next key support under the weekly low, won’t hold and that we’ll see Bitcoin test the $50K range in the next few weeks.

Bitcoin Trade Update

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Not Your Keys, Not Your Crypto…

In light of brokerage failures in 2022, I no longer keep any of my crypto on an exchange and I only keep enough USD on the exchanges I use to execute my next few buys. I use multiple cold wallets from the brands Ledger and Trezor to hold my crypto (click the links to access the direct sites, and I receive no affiliate benefits from these links).

Additionally, I have now divided my allocated USD between two different exchanges – Gemini and Coinbase – in case one (or both) becomes insolvent. Disclaimer: We both receive a bonus if you use my Gemini referral link to open an account.

I do not trust anyone in the space, even with Coinbase (COIN) being publicly traded (and one of my own Investments in Play positions).

No price target is unrealistic in the cryptocurrency space – Bullish or Bearish.

While traditional stock market investors and traders may think the price targets in the cryptocurrency space are outlandish due to the incredible spread (possible moves include drops of -90% or more and gains of +1000% or more), Bitcoin has demonstrated that, more than any speculative asset, its price is capable of doing anything.

Here are some of Bitcoin’s price movements over the past couple of years:

• In 2017, Bitcoin rose +2,707% from its January low of $734.64 to make an all-time high of $19,891.99 in December.
• Then, Bitcoin crashed nearly -85% from its high to a December 2018 low of $3128.89.
• In the first half of 2019, Bitcoin rallied +343% to $13,868.44.
• In December, Bitcoin crashed -54% to a low of $6430.00 in December 2019.
• In February 2020, Bitcoin rallied +64% to $10,522.51.
• In March , Bitcoin crashed nearly -63% to a low of $3858.00, mostly in 24 hours.
• Then, Bitcoin rallied +988% to a new all-time high of $41,986.37 in January 2021.
• Later in January 2021, Bitcoin dropped -32% to a low of $28,732.00.
• In February, Bitcoin rallied +103% to a new all-time high of $58,367.00.
• Later in February, Bitcoin dropped -26% to a low of $43,016.00.
• In April , Bitcoin rallied +51% to a new all-time high of $64,896.75.
• In June , Bitcoin crashed -56% to a low of $28,800.00.
• In November, Bitcoin rallied +140% to a new all-time high of $69,000.00.
• In November 2022, Bitcoin crashed -78% to a low of $15,460.00.
• In April 2023, Bitcoin rallied +101% to a high of $31,050.00.
• In June, Bitcoin dropped -20% to a low of $24,750.00
• In July, Bitcoin rallied +29% to a high of $31,862.21.
• In September, Bitcoin dropped -22% to a low of $24,900.00.
• In January 2024, Bitcoin rallied +97% to a high of $49,102.29.
• Later in January, Bitcoin dropped -22% to a low of $38,501.00.
• In March, Bitcoin rallied +92% to a new all-time high of $73,835.57.
• In May, Bitcoin dropped -23% to a low of $56,500.00.

Where will Bitcoin go from here? Truly, anything is possible…

What if Bitcoin’s headed to zero?

DISCLAIMER: Anyone considering speculating in the crypto sector should only do so with funds they are prepared to lose completely. All interested individuals should consult a professional financial adviser to see if speculation is right for them. No Get Irked contributor is a financial professional of any kind.