SVET Weekly Markets Update (June 27, 2022)
Despite continuing epic exodus of institutional investors from all assets categories, BTC (and, essentially, all Alts) prices correlation with US major stock indexes (primarily, with NASDAQ) remains very high in all time frames. Accordingly, following the main economic indicators publications becomes crucial to form short, medium and long-term crypto market outlooks.
This week crypto-markets dynamics might be partially affected by updates of the following three indicators - DGO, Personal Income / Expenditure and PMI.
On Monday June 27 at 7:30 AM EDT US Census bureau will publish its Durable Goods Orders May Report (DGO or Report on Durable Goods Manufacturers Shipments, Inventories and Orders).
Due to the increasing recession risks markets expect no change in a volume of durable goods (expensive items that last three years or more) placed with US domestic manufacturers for delivery. For comparison, in April new orders increased 0.4% to 265.3 billion USD.
DGO, which is based on a monthly survey conducted by the U.S. Census Bureau, has been downgrading in 2022 from its pick in January (>3%) to -0.7% in February and to 0.6% in March.
This indicator is closely watched by institutional investors, which treat it as an important leading indicator of the US economy long-term dynamic. It is specially true in our times, when worlds major supply chains disruptions is one of the key rational for FED chairman’s war against the US economic prosperity.
Accordingly, DGO sudden revision might affect market pricing both ways. However, this indicator (which main components are capital goods, transportation equipment, machinery, computers / electronic products and primary metals) has a lesser impact on NASDAQ than on DJI. So, it is not expected to affect BTC pricing significantly.
Thursday June 30 2022 at 7.30 AM ET the Personal Income and Outlays (the dollar value of purchases of durable and non-durable goods and services by U.S. consumers) May Report will be published on the US Bureau of Economic Analysis site. Previous (April) report says: (quote) Personal income increased $89.3 billion (0.4 percent) … Disposable personal income (DPI) increased $48.3 billion (0.3 percent) and personal consumption expenditures (PCE) increased $152.3 billion (0.9 percent) (end quote).
According to the same source US Personal Income increased 0.1% in January, 0.6% in February, 0.5% in March and 0.4% in April. As inflationary pressure on prices in a consumer sector increases corps need to increase salaries as well in order to retain their key personnel. Therefore most analytics expect this indicator to increase another 0.5% in May.
However, a contrarian view puts it at 0.3%, arguing that corps started to slowly adjust their employees compensation policies to the expected recession already two months ago.
On the other hand, personal consumption expenditures (PCE) were growing faster than incomes during all first-halve of 2022: 2.1% in January, 0.6% in February, 1.4% in March and 0.9% in April.
Under ‘normal’ circumstances, a negative US consumers saving rate signifies US consumers positive spending outlooks, and, accordingly, is bullish for stock / crypto markets. However, we are living in the distorted economic reality, created by FED chairman.
Rising US economic prosperity is not in chairman’s agenda at all in this paranoiac world. It is replaced by a mindless execution of his god-like powers. The monstrous bureaucratic financial pyramid is set, under his dominion, to determine how much of central bank issued paper notes everyone of us can use in order to get goods and services, which we, ourselves, produce.
In this inverted world the gigantic financial coercion apparatus is set to prevent entrepreneurs and investors from using business opportunities presented to them by cyclical prices increases in order to make technological advancement and to produce cheaper goods and services. Instead, this apparatus uses its printing fiat-money monopoly to forcefully suppress all forms of normal economic activities until some outdated criteria is formally met.
At the same time, those forceful interventions into economic mechanisms functioning can’t stop natural demand / supply divergence cycles. Govs bureaucrats can only aggravate its severity by haphazardly injecting large amount of excessive liquidity into the world financial system and then trying to compensate for one grave mistake by committing another one.
Today they are committing the crime against humanity by stopping all major entrepreneurial /investment activities aimed at correcting the acute deficit in energy as well as in some basic foods and materials caused by out-of-control geopolitical factors.
After more that a hundred year, during which 9 out of 10 such ‘interventions’ ended by a deep economic recession or a stagflation, mass medias continue to sheer-lead for this archaic apparatus, where one politically motivated ‘tzar’ has to decide the economic future of every human being on this planet.
Friday July 01 2022, 9:00 AM ET is ISM Managers Index (PMI) time. Published by Institute to Supply Management it measure business (as opposed to consumers) sentiments.
(quote) The ISM Manufacturing PMI for the US unexpectedly rose to 56.1 in May of 2022 from 55.4 in April and beating market forecasts of 54.5. Faster increases were seen for new orders (55.1 vs 53.5), production (54.2 vs 53.6) and inventories (55.9 vs 51.6). Also, price pressures eased for a second month (82.2 vs 84.6) while employment contracted (49.6 vs 50.9), although companies improved their progress on addressing moderate-term labor shortages at all tiers of the supply chain. (end quote)
It is widely expected to be reduced to 55.0 in May as a result of sober economic outlooks, which started to prevail among US corps execs about two months ago.