July 7, 2023

📰 News Organizations

• NY Fed Concludes Digital-Dollar Test With Banks. A monthslong test with some of the world’s largest banks found that digital dollars could be an effective way to improve domestic and cross-border payments. The Fed’s New York Innovation Center spent 12 weeks testing a technology known as a regulated liability network, which allows banks to simulate issuing digital money.
  

• Bitcoin Surges to 13-Month High Amid Growing Institutional Demand. Bitcoin reached a 13-month high, defying weaker stock prices and yields, as institutional interest in the cryptocurrency continues to intensify. The participation of legacy financial institutions entering the Bitcoin market adds further validity to an asset that was once considered a fleeting trend.

• Revolut Ceases Offering Solana, Cardano, and Polygon Tokens to US Users. Following Bakkt Holdings Inc.'s decision to delist the cryptocurrencies, Revolut has also discontinued the availability of Solana, Cardano, and Polygon tokens to its US users. The move aligns with the US SEC's classification of these tokens as unregistered securities.

• JetBlue to Terminate American Airlines Partnership Following DOJ Antitrust Case Loss. JetBlue has announced the termination of its partnership with American Airlines after a federal judge ruled the agreement as anticompetitive. While American Airlines plans to appeal the ruling, JetBlue will shift its focus towards acquiring budget carrier Spirit Airlines.
  

• GM, Toyota US Sales Jump in Sign of Auto Industry Strength. GM sales rose almost 19% in the quarter and were up 15% at retail, the company said in a statement Wednesday. The gains were due in part to strong sales of its Chevrolet Suburban, which posted a two-fold increase. Toyota and Stellantis NV also saw increases in the quarter.
  

• Mortgage Rate Soars to 7.22% After Strong Economic Data. Mortgage rates follow loosely the yield on the 10-year Treasury, which leapt higher following a much stronger-than-expected employment report from ADP. For a homebuyer taking out a $400,000 mortgage, the monthly payment of principal and interest rose to $2,720 from $2,637 in just a week.

🐦 Twitter

• Threads has drawn more than 23 million sign-ups since its launch Wednesday night, according to badges that show up on Instagram when people join the new app. Meta CEO Mark Zuckerberg said Threads drew 10 million sign-ups in seven hours. Source.
  
  

• During 2008 when everything was melting down, interbank lending was one of the things that seized up. Same for 2019 (repo spike). The Fed now uses a system of higher bank reserves so that individual banks have more internal liquidity. They are less reliant on interbank lending. Source.
  
  

• Per ADP, June private payrolls jumped to 497k vs. 225K est. & 267k prior month, biggest gain since Feb. 2022; leisure and hospitality added most jobs since Sept. 2021 (likely to be some seasonal adjustment issues at play, which flattered number like was case in June 2022). Source.
  
  

• S&P 500 dividends grew 3% over the last year, the slowest growth rate since Q2 2021. Historical average growth rate is 6%. Source.
  
  

• Loan issuance in the subprime auto ABS market grew by 70% from 2016-2021 to $40.5 billion. But now, for the first time since the 1990s, investors are at risk of not having their principal returned due to borrowers falling behind on their payments. Source.
  

📓 Online Publications

• Job Openings Decreased to 9.8 million in May. The U.S. Bureau of Labor Statistics reported the data on Thursday. Over the month, the number of hires and total separations was little changed at 6.2 million and 5.9 million, respectively. Within separations, quits (4.0 million) increased, while layoffs and discharges (1.6 million) changed little.
  

• Binance CEO Reveals Next Bitcoin Bull Run. CZ explained that the price of Bitcoin has historically moved in four-year bull cycles and his best bet was that this would continue to occur. While he admitted that he couldn’t see the future, Zhao emphasized the upcoming Bitcoin halving event in 2024 and declared 2025 to be the most likely year for the next bull market.

• Tether Launches USDt On Kava. The integration of Tether's USDt on Kava makes deep stablecoin liquidity across Cosmos’ Inter-Blockchain Communication (IBC) and Ethereum Virtual Machine (EVM) ecosystems easily accessible. With native USDt issued on Kava, the Cosmos ecosystem’s limited growth, fragmented liquidity, and exaggerated volatility get addressed by the addition of natively issued USDt for users and developers.

• Circle Quietly Launches Wallet-As-A-Service Developer Platform. The service allows developers to embed web3 wallets in their apps while offering a user-friendly design. The wallets can be used with any blockchain to give users easier access to NFTs, cryptocurrencies, and other web3 digital assets. Forthcoming updates will allow developers to have control over user private keys.
  

• Circle Considers Issuing Stablecoin in Japan Under New Rules. In an interview with CoinDesk Japan, Allaire said that if stablecoins become more widely used for cross-border trade, foreign currency transactions and global commerce, Japan will become an extremely large market. Japan's stablecoin bill makes it one of the first countries to establish a framework for the use of overseas stablecoin.

🎧 Podcasts

• Inflation Success Draws Investors to Latin America. Latin American countries outpaced the Federal Reserve and other central banks in promptly raising interest rates amid inflation concerns in 2021, resulting in a decline in inflation rates. This proactive approach, coupled with the region's appealing combination of high-interest rates and low inflation, has captured the attention of investors. Source(1:35)
  
  

• First US Law Over AI Hiring. The hiring manager who decides whether you get your next job may not be human as companies increasingly adopt AI tools for hiring. And a New York City law that took effect yesterday wants to make sure that the AI doesn’t have a baked-in algorithm bias. The law requires companies to notify job candidates who live in NYC that AI is being used and let them request info on what data is being collected. Source(2:25)
  
  

• Inflation Will Stabilize But With Growth Challenges. Julian Brigden says inflation is projected to stabilize and show a minor increase in the near future, while deflationary pressures driven by energy factors are subsiding. However, maintaining a strong labor market and managing growth becomes challenging due to the robust equity market, risking potential core inflation and potential actions by the Federal Reserve to address the situation. Source(11:09)
  
  

• Rents Will Continue To Go Up. Median income earners can only afford 25% of current listings for all properties on the market. These include linear, cyclical, and hybrid markets. 25% of homes for sale are lower than $256,000 which is the maximum of what a household earning a median income of $75,000 can afford. Jason Hartman says that the rest will choose to rent instead of buy which means the rents will continue to go up. Source(11:04)