“Coinbase announces a new partnership with BlackRock, Tiffany and Co launches NFTs and Amazon acquires IRobot”
The Stock Market
The S&P 500 has fared well over the last fortnight, surging 5%. In fact, July was the best month for stocks since 2020. This comes as oil prices hit the lowest point they have been since the beginning of the invasion of Ukraine and inflation has potentially peaked. This was mirrored in the fact that the Fed raised rates at the consensus 0.75%. Controversially, the US GDP figures were released, showing a Q2 contraction in GDP, signalling a recession. On that day, the market leaped, potentially due to the diminished probability of further rate hikes. There were jitters last Friday, however, due to the US economy adding 528,000 jobs in July, far higher than expected. Commentators suggest that the strong labour market, in tandem with the Fed’s stance to “get wages down”, has increased market fear of greater quantitative tightening.
Earnings season continued, with more tech giants revealing figures. Both Apple and Amazon beat consensus, with Amazon performing particularly well, rising 13% on the day. Amazon also announced a deal on Friday to acquire Roomba-maker IRobot for $1.7 billion – commentators have suggested the data provided by robot hoovers could be invaluable to marketers. Both Microsoft and Alphabet missed earnings, with Alphabet’s net income missing by 6% and Microsoft’s missing by just under 3%. Outside of technology, both Coca-Cola and McDonald’s outperformed expectations. The big news coming from McDonald’s however, is that the restaurant chain is raising the price of its cheeseburger in the UK for the first time in 14 years. A cheeseburger will now cost £1.19, up 20%. Companies are still struggling with inflationary pressures. Walmart, the largest company in the world by revenue, announced a profit warning, two weeks before its earnings are due. The company cites inflationary pressures. Additionally, Unilever revealed it has recently raised prices across its brands by 11% and signalled it expects further price hikes.
In the UK, the Bank of England raised rates by the expected 0.5%. GBP/USD now sits at 1.207. The Bank of England predicts that UK inflation will hit 13% this year. In more bearish news, manufacturing levels have fallen to the lowest levels seen since June 2020 and corporate insolvencies have jumped. Despite this, the FTSE100 has climbed 2.7% and the FTSE250 is up 1% over the last fortnight.
The Crypto Market
Bitcoin exhibited a modest 2% rise over the last two weeks and currently sits at $23,250. Similarly, Ethereum has risen just over 6%, perching just above the $1700 mark. The positive price action of the large coins has increased bullish sentiment in the market, with the total crypto market cap now above $1.1 trillion, up 5% over the last fortnight.
It has been a busy couple of weeks for Coinbase. Firstly, the SEC announced a probe into whether Coinbase was letting American clients trade assets that are actually securities. In more positive news, Coinbase announced a partnership with BlackRock, where Coinbase will provide crypto trading and custody to BlackRock clients. Coinbase shares surged 30% on the news and overall Coinbase shares are up 80% over the past month.
Binance CEO, CZ, has launched a defamation lawsuit against Bloomberg. Bloomberg’s 250th issue was entitled “Changpeng Zhao’s Ponzi Scheme”, which CZ deemed to be “malicious”. In separate news, CZ has stated that high inflation and a recession will drive greater adoption of Bitcoin this year. Meta announced its earnings which revealed its Metaverse division lost $2.8 billion last quarter. Additionally, the CEO expected losses of the division to increase over Q3, due to increased investment in the metaverse. More positively, the revenues of the Metaverse division have increased by 48%, now at $452m.
In Other News…
Gucci has announced it will accept Ape Coin in all of its stores. The luxury fashion brand previously announced in May it will start to accept crypto and has now added Bored Ape Yacht Club’s token.
Meme coin Banano has officially been listed on its first regulated exchange, XGo. The banana-themed coin has been around since 2018 and remains a microcap coin.
Tiffany and Co announced and auctioned their first NFTs. Called NFTiffs, the NFTs are based on CryptoPunks and can be redeemed for real world jewellery. The NFTs cost 30 ETH and sold out in just over 20 minutes.
Honduras has launched “Bitcoin Valley”. The tourist town of Santa Lucia has adopted Bitcoin in an attempt to attract crypto enthusiasts.
Bitfinex and Tether have launched a video calling app, called Keet. Keet focuses largely on privacy.