Markets

Yesterday, the stock market experienced a decline following the release of inflation data exceeding expectations, which unsettled investors. However, Dick's Sporting Goods had an exceptional Thursday, with a remarkable 15% surge in its stock price. This surge was fueled by the company's record-breaking sales performance in the fourth quarter, attributed partly to increased consumer spending on higher-priced items.

Finance

The Bull Economy?

Trillions of dollars appear to be potentially shifting out of cash funds and into the stock market, sparking excitement among stock-market bulls. However, they may face disappointment.

Despite the anticipation of a rate cut by the Federal Reserve, assets in money-market funds have continued to grow rapidly. Currently standing at around $6.5 trillion, according to industry tracker Crane Data, these funds saw an increase of over $150 billion in assets during the first two months of 2024. This is approximately $50 billion more than the same period last year.

While this year's market rally, partly driven by optimism for growth stocks like Nvidia involved in artificial intelligence, has garnered considerable support, it also has its skeptics. The ongoing influx of funds into cash reserves suggests that not everyone is eager to join the market surge. However, optimists may argue that this reinforces the notion that there is still room for stocks and other risky assets to grow.

Both perspectives may miss the mark. The apparent correlation between investors prioritizing safety and stability over risk and reward isn't as straightforward as it seems.

Peter Crane, president of Crane Data, notes, "The 'wall of cash' idea has been around since money funds reached a trillion dollars back in the late '90s. The reality is that cash primarily competes with cash."

It's essential to consider that for every buyer of stocks, there is a corresponding seller. When an investor withdraws cash from a money-market fund to purchase Nvidia shares, that cash ends up in another investor's possession. While it's common to describe market movements as money "flowing into" or "out of" the market, this doesn't always accurately capture the dynamics when prices rise or fall.

Tech

Steve Mnuchin wants to buy TikTok

Following the passage of a bill by the House that could potentially lead to a ban on TikTok if its Chinese owner ByteDance fails to divest, former Treasury Secretary Steven Mnuchin revealed to CNBC his plans to assemble a team of investors, likening them to the Avengers, with the intention of acquiring the popular social media platform. Mnuchin, who served as Treasury Secretary during Donald Trump's presidency from 2017 to 2021 and currently heads the investment fund Liberty Strategic Capital, did not disclose the identities of the other members of this financial consortium. However, experts speculate that China is likely to oppose any sale of TikTok to a US-based entity.

Politics

Biden-Ireland Split on Israel

Irish Taoiseach Leo Varadkar's visit to the White House for St. Patrick’s Day had a solemn undertone this year as he advocated for a cease-fire in Gaza, President Biden's ancestral homeland. The traditional event, marked by green ties and nostalgia, has been a fixture in Washington for many years, with President Biden, a proud Irish-American, embracing the tradition since assuming office. During Varadkar's visit on Friday for a one-on-one meeting with the president, and his subsequent return on Sunday for a reception where he presents a bowl of shamrock to the U.S. president, the ongoing conflict in the Middle East cast a shadow over the festivities.

The Irish public has historically shown support for Palestinian civilians, possibly rooted in a shared history of striving for independence. While Irish leaders have denounced Hamas's attacks on Israel, they have also advocated for a lasting cease-fire and expressed concern over escalating civilian casualties and the unfolding humanitarian crisis in Gaza.

Varadkar, despite facing calls at home to boycott the White House engagements, emphasized during his meeting with Biden the urgent need for a cease-fire to facilitate the delivery of essential supplies and evacuate civilians. He also stressed the importance of working towards a two-state solution. Biden, acknowledging the need for increased humanitarian assistance, expressed agreement with Varadkar's remarks.

Economy

U.S. Consumers Are Still Feeling the Pain

Despite a backdrop of easing inflation, robust growth, and anticipated interest rate cuts, U.S. consumers are exhibiting slightly less optimism regarding the country's economic prospects.

According to the University of Michigan's consumer-confidence survey, there was a slight decline to 76.5 in mid-March from 76.9 the previous month, primarily due to a more pessimistic outlook for the future. This reading fell short of economists' expectations of a minor increase, as indicated by a poll conducted by The Wall Street Journal.

However, sentiments about current economic conditions remained relatively steady.

Joanne Hsu, the survey director, remarked, "Consumer views have stabilized into a holding pattern; consumers perceived few signals that the economy is currently improving or deteriorating."

This muted sentiment contrasts with the backdrop of an improving economic environment. While inflation slightly exceeded expectations last month, it remains significantly below the peaks seen last year and is projected to decrease further in the upcoming months, signaling potential interest rate cuts by the Federal Reserve.

Despite the prevailing high rates, the U.S. economy has demonstrated greater resilience compared to many other developed economies, achieving growth of over 3% in the final quarter of last year.

Hsu suggested that consumers may be adopting a wait-and-see approach towards the economy, especially with presidential elections looming later this year.

"Many are withholding judgment about the trajectory of the economy, particularly in the long term," she added.

Crypto

Craig Wright is NOT the Creator of Bitcoin

Following a six-week trial, a UK court concluded that Australian computer scientist Craig Wright is not the elusive Satoshi Nakamoto, widely believed to be the creator of Bitcoin. Wright has persistently asserted that he assumed the pseudonym and penned a seminal white paper on Bitcoin in 2008, establishing the foundation for the cryptocurrency. Over the years, he has pursued legal action against numerous developers, alleging infringement of his intellectual property rights. However, the judge emphasized that the evidence refuting his claim to be Satoshi is substantial. While the enigma surrounding crypto's most significant figure endures, at least one potential suspect has been eliminated.

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