Chapter 1: Weekly Financial Overview

This week witnessed a robust recovery in U.S. stock markets, spurred by signs that inflationary pressures and recession fears might be diminishing. On Friday, equities rallied significantly, with the Dow Jones climbing over 2%, while both the S&P 500 and Nasdaq experienced increases exceeding 3%. Investor sentiment improved following a survey indicating a more optimistic consumer outlook on inflation, alongside remarks from St. Louis Federal Reserve Bank President James Bullard, who suggested that recession fears might be overstated. All three major indexes broke a three-week losing streak, with the S&P gaining 6.5%, the Dow rising 5.4%, and the Nasdaq surging 7.5%. In addition, oil futures increased by 3%, and yields on the 10-year U.S. Treasury note also rose. The pressing question remains whether these markets have hit a bottom or if they are simply staging a bear market rally following oversold conditions.

This broader view of the U.S. dollar shows it resting at a significant resistance level. The 103.82 mark, which served as a swing-high in 2017, has recently provided short-term support. Additionally, a Fibonacci retracement at 101.80 has helped establish support since late May. However, the upper wick on last week's candle suggests a potential reversal, occurring shortly after the Federal Open Market Committee's decision to raise rates by 75 basis points. When a market fails to advance on seemingly favorable news, it may indicate underlying issues.

Cryptocurrency markets also mirrored the optimistic stock sentiment. Data from blockchain analytics firm IntoTheBlock reveals that "giga-whales" (entities holding over 100,000 BTC) have increased their holdings by 16% in the last month, now possessing over 776,000 BTC valued at more than $16 billion. Earlier this month, Bitcoin whale activity reached a four-month peak as these large holders took advantage of market dips. At the time of this report, Bitcoin was trading above $21.2k, reflecting a rise of over 20% from recent lows, while Ethereum approached $1230, up over 38%.

Today's featured infographic presents data from central banks and governmental sources, illustrating the fluctuations in policy interest rates and inflation rates since the year's commencement, inspired by a chart created by Macrobond.

Section 1.1: Bitcoin Miners and Market Dynamics

Bitcoin miners uniquely act as net sellers of the cryptocurrency. They receive 900 BTC daily and aim to hold as much as possible. Ironically, their intention to hold leads to increased sales during bear markets when market conditions compel them to liquidate. In the initial four months of 2022, public mining companies sold 30% of their Bitcoin production. A sharp decline in mining profitability forced these miners to elevate their selling rate to over 100% of their output in May. The situation has deteriorated in June, likely resulting in even higher selling rates. While public miners constitute roughly 20% of Bitcoin's hash rate, their behavior can provide insights into private miners' actions. These miners are among the largest holders, controlling approximately 800,000 BTC, with public miners owning 46,000 BTC. If they are required to liquidate a significant portion of their holdings, this could further depress Bitcoin's price.

Subsection 1.1.1: Understanding the Circular Economy

Chapter 2: Current Economic Challenges

Video Description: A look at how U.S. inflation has reached its lowest level in three years and its implications for global markets.

Video Description: The Federal Reserve's recent decision to implement significant rate cuts and the potential impact on the economy.

Market Humor: Powell's Rate Hikes Signal Tightening Policy!