MARKET REACTION

Bad news has been good news ever since the Federal Reserve was been started its interest rate hikes last year June, it is because traders assumed bad news meant a pivot by the Federal Reserve. I think the narrative is about to change because of the CIP data we got last week but the investor did not react that much to the CIP data and they even expect another rate hike next month. Normally, a lower than except inflation data should have reduced these expectations of a rate hike. All this can be explained by the big Bank earning for the first quarter which suggests banks are not making lending difficult that much.

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The surprising part is the market reaction to a quick drop in consumer spending last March. On a good day, a 1% drop in retail sales would have led to a huge market rally on the hopes that the FED would pivot instead the market dripped because people were thinking there would be a recession. Things have changed now in the market, it appears that bad news is becoming bad news in the market because much bad news is about to spring forth. Also, geopolitical tension is rising daily, and this for sure will lead to FUD in the crypto market. You should know the uncertainty in the crypto market is not good, the market can handle bad or good news but it can not handle uncertainty.

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While cryptocurrency isn't moving in the same direction as stock as it use to be with AI, an AI crackdown could still do serious demand through tech stock. Cryptocurrency could be resilient despite all the certainty that is going on in the market, cryptocurrency is not reliant on anything but it's very sensitive to stimulative measures the central banks are likely to embark on to address some factors. You must not forget that Hong Kong will open door to cryptocurrency this year and many better things are yet to come.