(Chip Somodevilla/Getty Images) |
J-Pow gets another curveball |
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Mattel made a less competitive version of Scrabble for Gen Z and anyone else who's "a little intimidated" by the classic game. Millennials' reaction: * flips board over and storms out *. Tech stocks helped reboot markets into the green yesterday. After a hot inflation report, investors were soothed by news that producer prices rose less than expected last month. 💅 Miss Quizality: Our weekly quiz is taking off its glasses and letting down its ponytail with a fresh makeover. Check out the new lewk and see if you can ace it. Try the first Q: |
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That's hot… not in a "Simple Life" way. US consumer prices came in hotter than expected for a third month straight. Investors got the inflation ick after learning that March prices were up 3.5% from a year earlier, meaning the pace of inflation picked up. After the bummer report, traders slashed their bets on a June interest-rate cut. It's all a blow for President Biden with the big election looming and prices being a key issue. Highlights from the March Consumer Price Index: |
- Gas and housing accounted for more than half of the inflation surge. Energy prices popped 1%+ over the month — with shelter up nearly 6% from a year ago (#RentAnxiety).
- Proteins ⬆️: The index for meats, poultry, fish, and eggs rose nearly 1% in March, fueled by a 4.6% surge in egg prices (bird flu's back).
- Sweets ⬇️: You might wanna swap your omelet for a pastry. The prices of bakery goods and cereal fell, and butter was down a whopping 5%.
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So long, hot rate-cut summer… we hardly knew ye. Inflation had been cooling for a while, which gave investors hope for June rate cuts. At the Fed's meeting last month, most officials maintained their forecast of three cuts this year, and traders' bets on a June cut rose to odds of 75%. But after the CPI came out, traders on Wednesday were pricing in just two rate cuts this year, starting in September instead of June. They even priced in a 13% chance for no cuts at all in 2024. Expectations shifted yesterday after some welcome news: |
- US producer prices (aka: wholesale) rose less than expected last month — though it was the biggest gain in a year.
- Still, it was enough to make traders bet that the US central bank could start easing rates in late July, with equal likelihood of a July vs. September cut.
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Investors hate uncertainty… The Fed needs to see consistent cooling in the economy and inflation to start cutting, but recent data has been muddling perceived progress. Job growth and inflation both accelerated last month, casting doubt over the summer-cuts forecast. The Fed has kept rates steady — at their highest level in 20+ years — since last July. |
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Fruit of a poisoned trade?… A trial kicked off in New York this week that tackles a core premise underpinning the multibillion-dollar decentralized finance market. Prosecutors allege that crypto trader Avraham Eisenberg committed fraud by manipulating futures contracts to steal $110M from the Mango Markets decentralized exchange (DEX) in 2022. The trial has sparked a debate around "smart contracts," the code powering trading programs on blockchains like ethereum and solana. Eisenberg's lawyer argues that because the solana smart contract behind Mango let him make the trades, he's in the clear. Meet "code is law." |
- Code is law = the idea that any trade that a smart contract technically allows is OK. This idea has long been at the core of DeFi.
- But also, maybe it's not… Regulators don't appear convinced, and Eisenberg's trial looks to be the first time the argument's been brought before a criminal jury.
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Clouds rollin' in… on DeFi summer. Decentralized finance is a fundamental part of what distinguishes crypto from traditional markets. It's an umbrella term covering the trade of digital assets (like: ethereum, NFTs, dog-themed tokens) without a third party like a brokerage. Things had been looking up for the industry. Decentralized exchange volumes hit a record $267B last month, and Uniswap, the largest DEX on ethereum, just passed $2T in cumulative trading volume. But DeFi's under threat. |
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You can't always choose your champions… While the Mango Market case is about whether Eisenberg committed fraud, a verdict has the potential to either embolden DeFi traders or chill the market. The timing's rough. On Wednesday, as Eisenberg's trial called into question the rules of the DeFi game, Uniswap's CEO said his exchange received a Wells notice from the SEC, suggesting the regulator is prepping a lawsuit. Uniswap said the SEC's notice focused on whether the company conducted unregistered sales of securities. |
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🤖 Techy… Bitcoin miners cranked their rigs up ahead of this month's halving, a pre-programed event that'll see their rewards get cut by 50%. As of Wednesday, miners were generating record computing power in hope of stocking up on BTC. 📜 Policy… Despite some industry optimism, the CEO of investment firm VanEck said that he expects the SEC will reject applications for spot ethereum ETFs next month. VanEck attracted $629M into its spot bitcoin ETF after the SEC's approval this year. 🌶️ Spicy… Nearly a third of consumers surveyed last month by Deutsche Bank said they expect BTC to fall below $20K by year's end. Still, they don't think crypto's going anywhere: less than 1% said they think the tech's "just a fad." |
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- Overdue: The US credit-card-delinquency rate hit its highest level on record, with 3.5% of balances past due. 11% of debtors only made minimum payments as consumers struggled with inflated living costs.
- Grounded: Lufthansa paused flights to and from Iran's capital, Tehran, after the US warned Iran or its proxies might attack Israel in response to a strike on an Iranian diplomatic building in Syria.
- Essay: Plagiarism-detection software co Turnitin said that students submitted as many as 22M papers in the past year that may've used genAI. AI's use in the classroom is being debated in school districts.
- HeyDJ: Spotify is said to be building DIY song-remixing features that'll let listeners speed up, mash up, and edit tunes. The move could win back ears from TikTok, where user-manipulated jams are popular.
- Especial: Constellation Brands' beer sales foamed up 11% in Q1 while its wine and spirit sales fell. Hoppy hype was driven by Constellation's Mexican brands, especially Modelo and Pacifico.
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- Earnings expected from Citigroup, Progressive, BlackRock, Wells Fargo, and JPMorgan Chase
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Authors of this Snacks own bitcoin, ethereum, and uniswap and shares of: Alphabet |
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Sherwood Media, LLC produces fresh and unique perspectives on topical financial news and is a fully owned subsidiary of Robinhood Markets, Inc., and any views expressed here do not necessarily reflect the views of any other Robinhood affiliate... See more |
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