Summing Up The Week

After four years of basically being able to ignore commentary from the White House, this week reminded me of the power of ex-President Donald Trump’s rhetoric on the markets. With positive news coming out early in the week, the stock market continued the rally it saw last week. But, then, Trump’s interview with Bloomberg broke Tuesday evening, and his anti-Taiwan comments sent stocks tumbling.

Make no mistake, surprises are back and we’ll likely see even more volatility headed forward.

Let’s take a look at the news that moved market this week…

Market News

Empire State Manufacturing Index remains in contraction

On Monday, the New York Empire State Manufacturing Index showed manufacturing activity remains in contraction, falling 0.6 in July to -6.6 when economits expected no change, reported MarketWatch.

While a miss of that nature may seem like a negative catalyst for stocks, the weakness in the index has been consistent for the majority of the year. “Economists don’t think the index has been a a good predictor of movements of the national ISM manufacturing index in the wake of the pandemic,” reported MarketWatch.

Powell says Fed won’t wait for 2% inflation to cut rates

On Monday, Federal Reserve Chair Jerome Powell said the central bank won’t wait for inflation to drop to 2% before cutting rates in an interview at the Economic Club of Washington D.C., reported CNBC.

Their reasoning deals with the “long and variable lags” which could means inflation could continue to come down even after the Fed cuts rates. “The implication of that is that if you wait until inflation gets all the way down to 2%, you’ve probably waited too long, because the tightening that you’re doing, or the level of tightness that you have, is still having effects which will probably drive inflation below 2%,” Powell said.

As a result, the stock market, which had already been rallying earlier, continued its climb as the market favors a lower benchmark interest rate, or, at the very least, a cut indicating that the Fed won’t be hiking rates again this cycle.

Retail Sales beats expectations

On Tuesday, the Retail Sales Report for June beat analyst expectations showing a collective total of $704.3 billion in sales firmly against economists’ expectations for a -0.3% decline, reported Yahoo! Finance. Bearish analysts have long been touting a weakening consumer, even though reports continue to show the contrary to be the case. While some companies like McDonald’s (MCD) are reporting decreasing sales, this is because consumers are prioritizing value. Thanks to inflation causing companies like MCD to think they can raise prices indefinitely, the consumers are responding with a resounding, “No way!”

However, as the retail sales report shows, consumers aren’t stopping spending; they’re just choosing what they’ll spend money on. And, for the moment, consumers are telling low-end providers that price hikes are no longer acceptable.

Nasdaq tanks on Trump’s China comments

On Wednesday, ex-President Donald Trump’s China and tariff rhetoric in a Bloomberg interview released Tuesday evening caused the S&P 500 to drop more than -1.30% and the Nasdaq to fall more than -2.50%, reported Yahoo! Finance.

In the interview, Trump stated he wanted to place extremely high tariffs on incoming Chinese goods and also questioned whether the United States should protect Taiwan given that the country had taken the U.S.’s semiconductor manufacturing business. Trump went on to say that he thought Taiwan should have to pay the U.S. for the protective services it provides.

As a result, semiconductor stocks, which depend on Taiwan Semiconductor (TSMC) to manufacture their chips, sold off substantially. Market Darling Nvidia (NVDA) fell more than -6.75% on Wednesday. Nvidia’s selloff cascaded into the rest of the Artificial Intelligence (AI) sector taking down the rest of the “Magnificent 7” with Apple (AAPL) dropping -2.53%, Tesla (TSLA) selling off -3.17% and Meta (META) falling -5.67%.

Next Week’s Gameplan

As we head deeper into earnings season with some of the big technology companies like Meta (META) reporting next week, we also have a number of very key economic data coming out throughout the week, too.

First, on Thursday, we get the U.S. Gross Domestic Product (GDP) for the second quarter with economists expecting a growth of 1.4%. That’s obviously anemic so the Bulls are hoping that the results come in higher.

Then, on Friday, we get the big mamma-jamma, the Personal Consumption Expenditures (PCE) index for June. This is the Federal Reserve’s preferred gauge of inflation and economists are expecting a year-over-year figure of 2.6% as disinflation continues to draw the figure down to the Fed’s 2% target.

As demonstrated this past week, now that we’re getting closer to the presidential election, the rhetoric from both candidates, particularly Trump as the markets are pricing in a Trump victory, there are a lot of potential surprises which can continue to the volatility we’ve seen recently.

So, get your buying and selling plans ready and remember to keep calm and keep investing on, friends!

Check out Get Irked Premium on Substack!

THANK YOU FOR YOUR ONGOING SUPPORT!

Crytpo Corner

Bitcoin Price Action

The Bulls are Back in Bitcoin!

After what looked like very week price action in Bitcoin, the Bulls roared back last weekend and pushed the big orange cryptocurrency through several key resistance levels. First, Bitcoin broke last week’s high at $59,533.06 before shooting through the next point of resistance at $63,801.26 on Monday before setting a new weekly high at $66,139.00 on Wednesday.

When Bitcoin took a breather and pulled back on Tuesday, it set a much, much higher weekly low at $62,410.33. All of this price action with higher-highs and higher-lows reinforces the fact that the Bulls have retaken the narrative.

However, all this being said, I remain cautious in assuming we’re headed into a new cycle. Granted, this price action is incredibly positive, but unless Bitcoin makes a new all-time high, I have to remain disciplined to my historical analysis which suggests that it may be unlikely Bitcoin is done selling off. As I’ve referenced before, the shallowest pullback from an all-time high in Bitcoin’s history was -31.24% in January 2021. So far, Bitcoin has only pulled back -27.54% from its ATH.

Is it possible this selloff will become the shallowest pullback in Bitcoin’s history? Absolutely. Am I willing to bet on that? Absolutely not.

The Bullish Case

Bulls believe the cycle pullback and that Bitcoin’s headed for new all-time highs. In fact, some Bulls believe Bitcoin will score a new all-time high before the end of July with some of the more bullish Bulls thinking we’ll see a six-figure number before the end of the summer. The momentum certainly has shifted in the Bulls favor, so we’ll have to see where Bitcoin heads from here to make those price targets.

The Bearish Case

Bears were taken completely off-guard by the last week’s price action. Most Bears were predicting we’d see a selloff to $50,000 within the next week with some of the more bearish claiming we’d sub-$50K shortly. While that narrative isn’t completely off the table, this price action is difficult to impossible to argue; the Bulls have shifted momentum and the Bear narrative has been defeated, for the moment, at least.

Bitcoin Trade Update

Premium subscribers to Get Irked get access to all the moves I’ve made in my Bitcoin trade over the past week as well as my next thirty (30) … yes, 30 … buys in Bitcoin including price levels, quantities, and a full layout of my ongoing long-term trade in the world’s biggest crypto.

If you aren’t already, subscribe to my Substack today!

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 July, Bitcoin dropped -28% to a low of $53,500.00.

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.