2022 07 03 YOLO Markets Weekly Recap
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Expect market to remain range-bound
The latest market trend seems to be the opposite of last year with US and European markets in their decline while Chinese equities edge up. This is likely due to the high inflation seen in US and most of European countries causing strain in the economies which led to central banks hiking rates. Coupled with various macroeconomic events, it stroke fears in investors that recession might hit shore in the coming months.
The Nerdz believes that the downtrend is likely to continue for the next few months as we start to see the impact of high inflation and supply chain issue hitting the performance of companies and consumer confidence.
Meanwhile, China seems to be moving in the opposite direction after the markets and economy plunged to its lowest for the past year (partly due to CCP tightening their controls). Its CPI numbers seem moderate but with a lower than expected GDP rate. It is no wonder that the Chinese government is looking to implement pro growth policies to boost its Covid battered economy. This could bring tailwind for Chinese equities to rally but The Nerdz remains cautious with the selection of Chinese equities as it is highly subjected to China’s policy and strategy.
Short Term: Cautious
Medium Term: Bearish
Long Term: Opportunistic
Voyager Digital suspends activities amidst margin calls and defaults across the sector
Digital asset brokerage Voyager Digital has paused all customer trading, deposits, withdrawals and loyalty rewards. The news comes a few days after one of Voyager’s customers failed to make payments on a loan worth hundreds of millions of dollars, fueling growing concerns of an insolvency contagion effect across the industry.
3AC files for bankruptcy after weeks of insolvency rumours
Three Arrows Capital, a crypto hedge fund, filed for Chapter 15 bankruptcy in the Southern District of New York late Friday after weeks of speculation that it was functionally insolvent. The firm borrowed large amounts of funds from several crypto lenders, including BlockFi, Celsius, Babel Finance and Voyager Digital, but was unable to pay. The lenders halted withdrawals or needed credit lines extended to weather the storm.
Meta is ending its Libra stablecoin experiment
Meta will shut down Novi, the social media company’s digital wallet payments pilot by Sep, ending its three years libra stablecoin experiment. Novi had been Meta’s wallet for its libra stablecoin revealed in June 2019 but regulatory pressures forced the stablecoin project to change course as it became a money-transfer pilot for crypto-based remittances in 2020. However, it never got beyond the U.S. and Guatemala.
KPMG enters the metaverse
KPMG has opened its first metaverse collaboration hub that will connect employees, clients and others with Web3. The hub will be focused on education, collaboration, training, events and workshops. The long-term objective for the company is to examine other potential metaverse use cases such as health care, consumer, retail, media and financial services.
US and European markets continue its decline while China market remains uptrend
US and European markets dipped for the past week amidst the on-going war, supply chain shock and recession fears. US yield curve has flattened significantly too with short end yields rising and long end term falling. On the other hand, Chinese equities are performing well as they continue its reversal since months of decline. This is in reaction to the fact that the Chinese government is pushing for pro-growth policies to boost its economy which was badly affected by Covid lockdown.
NFT sales volume drops to its low after a year of hype
With the crypto market plunging to its low, hype around NFT has died down with its daily sales dropping to its low. However, top NFT projects such as BAYC seem to be holding its prices well (BAYC is hovering around 90eth but with dropping sales volume).