Investors are still losing confidence in the Fed’s ability to deal with inflation. Gold surged as a result, while Musk’s tweets sent the crypto markets falling again.
Here we go again.
Inflation, folks, is real.
And – as promised, inflation fears are pushing up gold up again. The metal used as a store of value and a hedge against inflation reached a three-month-high, jumping by 0.3%, to $1,849.45 an ounce. The surge is likely to continue, due to spiking commodity prices and inflation concerns. Watch for $2000 an ounce as the next stop.
However, investors are still expecting that the Fed will raise rates. As a result, the S&P 500 futures are down 0.3%. European makets fell by 0.4%, emerging markets by 0.1%. Asian and pacific markets were unchanged.
As a result, gold might fall when markets expects a rate hike. But knowing the Fed, the rate hike is a long-ways away.
Chinese Authoritarians Can’t Supress Inflation
While the Fed is keeping its easy money stance, the CCP in China went into panic mode. Concerned over inflation, the Chinese authorities tried to stamp our inflation with threats against businesses.
Iron-ore futures in Singapore rose 2.4% to $206.55 a ton, after a recent dip of 11% near the end of the week, when iron fell below $200.
The falling price was the result of a pressure by Chinese regulators concerned with rising prices. Local regulators warned companies against “hoarding material,” “spreading roumors” and engaging in “market manipulation.”
Not surprisingly, threats didn’t work. The dip was transitory, unlike inflationary pressures. Government commands can’t do anything about the trillions of new money in circulation, which will inevitably find its way to consumer prices.
Musk Sends Bitcoin Tumbling
Despite inflation fears, “digital gold” is not faring very well.
Musk tweeted about Bitcoin again, which was bad news for Bitcoin. The tech billionaire sent out a tweet that was interpreted as a hint that Tesla would sell/has sold its Bitcoin holdings.
Bitcoin fell close to $42000, down $4000 from its Friday price. Musk later “clarified” that Tesla had not sold any Bitcoin. The price settled above $45500, having lost 7.3% in the last 24 hours.
The global crypto markets were are 7,77% in the last 24 hours, and Dogecoin is down 4.7%.
Musk has cut seriously into this year’s Bitcoin’s gains relative to gold. The Bitcoin-to-gold ratio is down back to where it was in February.
Redbox going public
Redbox has announced it would go public after merging with an SPAC Seaport Global. The company privides automated DVD rental services at over 42,000 kiosks across the U.S.
The physical rental business fell 37 percent last year, but the company is confident that there will be a rebound once the pandemic subsides. The company is also looking to expand into the digital market.
Treasuries, Oil Steady
The Dollar Spot Index didn’t move much, and neither did bond yields, which were at 1.63% for 10-year U.S. Treasuries.
Oil was steady, with West Texas Intermediate crude at $65.34 a barrel and Brent crude wat $68.70 a barrel.