Market Observations - Jan 30

Crypto Market Rundown:

Bitcoin is on course to advance for a 5th straight month. BTC is up about 2% in January, a whirlwind month for traders marked by the rollout of the first U.S. spot Bitcoin exchange-traded funds. The last time the largest digital asset managed a winning streak like this was the October 2020 to March 2021 stretch oiled by pandemic-era easy money. On Monday, Invesco and Galaxy Asset Management said their BTCO ETF will waive fees for the first six months and eventually charge a lower expense ratio than previously — the latest move in the nascent industry’s already-established fee war.

The global crypto market cap is $1.66T, a 2.56% increase over the last day. The total market volume in the previous 24 hours is $57.63B, a 46.95% increase day/day. BTC.D (Bitcoin dominance) is currently 51.12%, an increase of 0.19% over the day. The real winner of the day was Bittensor - TAO is trading near $460, up over 31% in the past 24 hours.

Top 5 Gainers on Uphold Ascent in the past 24H

1. Bittensor (TAO) +30.87%
2. Turbo (TURBO) +21.67%
3. SEI (SEI) +15.04%
4. Render Token (RNDR) +11.35%
5. MAGIC (MAGIC) +10.35%

Top 5 Losers on Uphold Ascent in the past 24H

1. Ribbon Finance (RBN) -11.30%
2. Shapeshift FOX Token (FOX) -9.90%
3. HAPI Protocol (HAPI) -7.13% (TWAP Only)
4. Alpeh Zero (AZERO) -6.23%
5. Injective (INJ) -4.54%

Send our team a message if you would like to learn more about our product offerings - Uphold Intelligence (Research) and Uphold Ascent (OTC platform). Reach out to Christopher Robin Siedentopf, Adam Blumenfeld, Bob O'Brien, or email [email protected] for more information.

FWIW:

Now that the S&P 500 is on target to post a positive performance for January after selling off during the first week of the year, investors are breathing a sigh of relief.

There is an old saying on Wall Street: “As goes January, so goes the year.”

Since WWII, whenever the S&P 500 rose in price in its opening month, the market was up an average of 16.0% for the entire year, rising in price 85% of the time (with an average 11.4% gain coming during the remaining 11 months of the year). For the nine election years with positive January returns, the S&P 500 gained an average of 15.6% and rose in price 100% of the time. Finally, the “January Barometer” reminds us to “let your winners ride.”

Since 1990, the three sectors with the highest returns during an “up” January went on to record an average full-year price increase of 21.2% versus 15.0% for the S&P 500, advancing in price 95% of the time (versus 79% for the market) and outpaced the broad market 84% of the time.

Even though there is no guarantee that this will repeat, this pattern offers encouraging implications for the current front-runners: communication services, financials, and information technology. Year to date through January 26, the S&P 500 rose 2.8% in price, accompanied by gains for the growth and value indices and 5/11 sectors. Underperformers included the mid- and small-cap indices and the materials, real estate, and utility sectors. Finally, 42% of the S&P 1500’s 153 subindustries advanced in price, led by interactive media and services, movies and entertainment, and semiconductors. Laggards included agricultural products and services, automobile manufacturers, and diversified metals and mining.?

The United States economy has been and remains the driving force of the global economic engine. We are encouraged by the European Union’s progress of late. China remains in a difficult economic and political position, with each of these areas feeding on the other. Some signs emerging market countries are beginning to feel the effects of increased global liquidity. Interestingly, there has been a pick-up in conversation about the BRICS de-dollarization efforts. The opinion remains the same. The effort is doomed to failure, particularly since the progenitor, China, is having such a difficult time. The United States financial markets remain the preferred home for U.S. and global investors.

U.S. Monday Market Wrap: A New Record!

S&P rises rapidly as Wall Street looks forward to mega-cap tech earnings and the Federal Reserve’s rate policy decision.

The S&P gained 0.76% to close at 4927.93. the Dow added 224 points or 0.59%, and the Nasdaq climbed 1.12%. It’s the 6th record close for the S&P and Dow.

Ten of the eleven S&P sectors closed green. Consumer discretionary +1.46% led, and energy -0.14% lagged.

This is the busiest week for earnings, with around 19% of S&P companies reporting.

The Dallas Fed’s Texas Manufacturing Outlook Survey showed that general business activity fell again in January, marking its 21st consecutive month in contraction territory. The state is second behind California in factory activity and first as an exporter of manufactured goods.

iRobot shares fell another 8% after Amazon officially called off its planned acquisition, saying there is “no path” to regulatory approval. In response, iRobot will lay off around 350 employees, and its founder and CEO will step down as the company explores its next steps.

Shipping stocks remain in focus due to the Middle East’s geopolitical issues, with Jeffries upgrading Zim Integrated Shipping Services due to the recent rise in spot rates. The international shipping company’s shares popped 8% and are trading near 6-month highs.

Electronic manufacturer Sanmina soared 17% after earnings beat and revenue matched expectations. Meanwhile, telecommunications company Calix fell 22% after beating expectations but forecasting guidance for its current quarter well below consensus estimates.

U.S. stock-index futures are a smidge lower as I type, indicating a pause for the rally that’s pushed the S&P to a new record. (we’re about 1.5% from the 5k milestone). Earnings will be a key test, as will the Federal Reserve’s decision tomorrow, with bulls likely looking for dovish signals from Chair Jerome Powell.?

The U.S. dollar is mixed ahead of the start of the FOMC meeting and is mostly staying in its recent ranges. The euro, which was sold below $1.08 yesterday for the first time since mid-December, is holding above it today. The less-than-expected projection of U.S. Treasury borrowing requirements for Q1 and Q2 weighed on U.S. rates, dragging the dollar lower against the yen. It is trading near a 4-day low, a little above JPY147.00.

Overnight, a new security law in Hong Kong helped trigger a 2.3% slide in the Hang Seng. China’s CSI 300 is off 1.8%. Japan’s market was narrowly mixed, and most of the other large markets fell outside of Australia.

Europe’s SXXP is rising for the 5th consecutive session, matching its longest advancing streak since last July.

U.S. index futures are slightly softer.

European benchmark 10-year yields are mostly 1-2 bps higher, though the U.K. Gilt yield is a little lower. The 10-year U.S. Treasury yield is slightly lower, at 4.06%.

Gold is trading with a firmer bias and is traded to $2040 today, its best level since January 16.

After yesterday’s stunning reversal from nearly $79.30 to about $76.40, March WTI is trading quietly straddling $77 a barrel.

Today’s chief economic news from the Eurozone is the first estimate of Q4 23 GDP. It was flat amid expectations of a 0.1% contraction. Details are not included in the initial report. However, the largest four economies have reported their figures. The Bundesbank warned of downside risks to German growth, and these materialized. Europe’s largest economy contracted by 0.3%, but the 0.1% contraction in Q3 was revised to flat. The French economy stagnated in Q4 23, and its 0.1% in Q3 was also revised to flat. In contrast, Italy expanded by 0.2% (0.1% in Q3 23), Spain grew by 0.6%, and Q3 was revised to 0.4% from 0.3%.

House price data from November and the Conference Board’s measure of consumer confidence are second fiddle today to the JOLTS report on job openings. The number of job openings trended lower last year, increasing only in 2 months (through November (April, and August). At 8.79m in November, they were down about 18% y/y. In November 2019, they stood at 6.92m. The median forecast is for a decline to 8.72m, which would be the least since March 2021.

Meanwhile, the estimate for Friday’s nonfarm payrolls has crept up to 180k, according to the median in Bloomberg’s survey. The average in Q4 23 was 165k, the lowest three-month average since January 2021. Note, too, that it is a busy day in a busy week of corporate earnings, including Alphabet (Google), Microsoft, Advanced Micro Devices, General Motors, Starbucks, and Pfizer.

NOT FINANCIAL ADVICE

Please note that Uphold and its affiliates do not provide investment, tax, or legal advice. This message is for informational purposes only and takes no account of particular personal or market circumstances, and should not be relied upon as investment, tax, or legal advice. For investment, tax, or legal advice and before taking any action you should consult your own advisors. Note that digital assets such as cryptocurrencies present unique risks for investors. Please see our disclaimer regarding risks specific to holding digital assets before investing.