Bitcoin Breaks $30K As The Economy Slows

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Markets were mostly unchanged on Monday, although bitcoin topped $30,000. Investors await bank earnings and rate reports.

• US stocks were unchanged on Monday after the long weekend, indicating that investors are still weighing in and waiting for economic data. Asia Pacific markets mostly rose on Tuesday. South Korea’s Kospi Index rose 1.4% as the country’s central bank kept interest rates unchanged at 3.5%. On the other hand, China’s Shanghai Composite fell 0.4% as prices in the country rose 0.7% year-on-year for March, which was less than expected.

• Bitcoin broke $30,000 for the first time since June last year. The largest cryptocurrency by market cap is up 86% year-to-date as investors flock to it amid the banking turmoil.

• Warren Buffett said in an interview with Nikkei that he was considering increasing investment in five Japanese trading houses, which are conglomerates that import various products into Japan. Shares of that Japanese trading company rose at least 2%.

• Alibaba on Tuesday morning revealed an artificial intelligence chatbot called Tongyi Qianwen that will eventually be integrated into all of its products. The news didn’t have much of a lasting impact on the Hong Kong-listed company’s shares, which recently rose 0.77% — but rival Baidu is down 6.79%.

• forefront Samsung could see a sharp 96% drop in quarterly profit, and plans to cut memory chip production. So why did Wall Street respond so positively to the news?

Markets in the United States reopened on Monday, but appeared to be holding back the post-holiday slack as investors digested several signs of a slowing – but still strong – economy.

First, although consumers felt it was hard to get credit in March, the banking turmoil is abating. Charles Schwab said average daily outflows were down from February, and the bank added $53 billion in net new client assets in March. This trend is consistent with the broader banking industry, according to Federal Reserve data. For the period ended March 29, deposits increased by $42.3 billion on a non-seasonal adjusted basis.

Similarly, although the tech sector was hit by the bad news, the storm clouds had a positive side. PC shipments fell in the first quarter – but IDC believes the bloated demand allows companies to finish their “realignment” and improve their supply chains. In fact, Dell stock rose 2.98% and HP rose 1.54% on the news — though Apple fell 1.6%, perhaps because it saw the biggest drop in shipments.

The same “bad news is good news” dynamic played out in the memory chip sector. Samsung’s plan to cut chip production helped push rivals Micron Technology and Western Digital up 8.04% and 8.22%, respectively. Analysts think there has been a lot of chips flooding the market, and short supply is a good thing.

Outside of these industries, however, the major stock indexes are mostly unchanged. The S&P 500 was up 0.1%, the Dow Jones Industrial Average was up 0.3%, and the Nasdaq Composite was down 0.03%.

Investors are looking forward to a series of economic indicators this week. On the earnings front, JPMorgan Chase, Wells Fargo, and Citigroup all provide quarterly results. Traders will certainly look at these reports, but they will also want to see what the US CPI and PPI have to say about the economy. If they bolster last week’s jobs report and indicate that the economy isn’t overheating, the Fed may actually be able to steer markets into a legendary “soft landing.” Investors are keeping their fingers crossed.

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