Equities finally got their act together yesterday, with all three major averages up around 1%. They appear set to add to those gains today, too.
Gold and silver are also buoyant in the early going. Crude oil and the dollar are slightly lower, while Treasuries are slightly higher.
On the news front, a Wall Street Journal headline today reads “Resilient economy puts central banks in a bind.” The thesis of the article is that the Federal Reserve and its foreign counterparts need to see A) Slower growth B) More layoffs/slowing wage growth and C) Further evidence of inflation cooling before taking their feet off the brakes.
But ironically, it was dovish comments from Atlanta Fed President Raphael Bostic that ignited yesterday’s sharp rally. Plus, the bond market remains concerned about the future outlook. Yield curve inversion measures like the 2-year/10-year and 3-month/10-year Treasury spreads are sinking ever deeper into negative territory, an indication of rising recession worry.
In the cryptocurrency industry, shares of the San Diego-based bank Silvergate Capital (SI) melted down this week amid worries about its capital and liquidity. Silvergate has more than $11 billion in assets and investors are worried that crypto-related losses could torpedo its balance sheet. Silvergate provides deposit accounts, money transfers, and other services to crypto-related businesses and individuals transacting in that market.
Meanwhile, the New York Times has a story about how quickly Artificial Intelligence (AI) technology is advancing, and how regulators can’t keep up. I feel like we’ve seen this dynamic before – MANY TIMES! The Internet revolution of the 1990s comes to mind.
