In this week’s recap, we see how most of the world markets ended lower, including the US stock market. U.S. stock futures fell on Friday, as the Dow Jones fell over 300 points down near 1% & is on pace to post its worst week since January, down nearly 2%, as the Federal Reserve added 2 rate hikes to its 2023 forecast & increased its inflation projection for the year. Friday futures for the S&P 500 & Nasdaq were lower by nearly 1% & -0.50%, respectively. The prices of commodities had fallen sharply on Thursday, cutting into months of gains & weighed on equity markets, as China took steps to head off rising prices. The decline was widespread, with futures prices for palladium & platinum falling over -11% & -7%, respectively, along with declines of nearly -6% for corn futures & -4.8% for contracts tied to copper. Oil prices also down over -1%.
China has long been home to over 50% of the world’s Bitcoin miners, but the Chinese gov’t wants them to leave. Mining is the energy-intensive process that both creates new coins & maintains a log of all transactions of existing digital tokens. In May, it called for a severe crackdown on mining & trading. The exodus is underway, with many of the miners moving to Texas, which often has some of the world’s lowest energy prices, & its share of renewables is growing over time.
The U.S. Federal Reserve Bank (central bank) has provided an upgraded outlook for economic growth. The median projection among Federal Open Market Committee members is for the real U.S. GDP to grow by +7.0% in 2021, before slowing to +2.4% in 2024, with both projections higher than the previous +6.5% and +2.2%.
Current Microsoft CEO to replace John Thompson as chairman of the board; the UK has agreed to a free trade deal with Australia; Israel elects new prime minister by a razor-thin 60–59 majority; Bitcoin hit $40K after Musk’s tweets; The Philippines continues the Visiting Forces Agreement (AFV) with the United States; Fed’s position on interest rates affects the price of precious metals. Lots of weather events this week: floods, sandstorms, and droughts in the US, new plagues in Australia, among others.