🏦 Fed's Daly: 25bps on the Horizon?

Good Morning!

Markets balance rate cut hopes against geopolitical tensions and high-stakes earnings. Financial markets are in limbo, juggling rate cut optimism with Middle East tensions and Nvidia's looming earnings. Key data drops this week, including EU inflation Friday, will shape ECB's September decision. Nvidia's report Wednesday could spark an AI rally or dampen spirits. U.S. PCE index Friday will influence Fed's next move, with traders eyeing potential cut size.

In today’s email:

• FedWatch: Daly signals 25bps rate cut in September

• Bitcoin: Bitcoin taking a breather below $63k now

• Telegram: Polymarket expects Pavel Durov release by October

• Gold: Is $2500/oz a new floor?

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THE BIG IDEA

From crypto skeptic to bitcoin's unlikely champion, Donald Trump's journey is a tale for the digital age

The architect of this transformation? A trio of Puerto Rican friends with a vision and the audacity to make it happen.

It all began over steaks in San Juan. Amanda Fabiano, Tracy Hoyos-López, and David Bailey hatched a plan to bring Trump into the crypto fold. Their strategy? Leverage bitcoin mining's potential for energy innovation and economic growth to appeal to Trump's America-first sensibilities.

Bailey's promise of $100 million and 5 million votes caught Trump's attention, setting the stage for a series of high-stakes meetings. From Trump Tower to Mar-a-Lago, the crypto crew made their case, bringing together mining CEOs and industry heavyweights to convince the former president.

The transformation was swift. Trump launched NFTs, embraced crypto donations, and soon found himself headlining the 2024 Bitcoin Conference in Nashville. There, he delivered a 50-minute speech that would have made Satoshi Nakamoto proud, vowing to keep all government-held bitcoin and show SEC Chair Gary Gensler the door.

But it wasn't all smooth sailing

The team navigated concerns about partisanship and logistical nightmares, even resorting to creative suit-pressing techniques for Bailey's big Trump Tower meeting.

The Nashville conference marked the culmination of their efforts, featuring a star-studded roundtable with the Winklevoss twins, Coinbase's legal chief, and even Kid Rock. Trump's claim of raising $25 million in crypto funds highlighted the growing intersection of digital currency and politics.

As the 2024 election approaches, the stakes couldn't be higher. Hoyos-López believes the industry's fate hangs in the balance, rallying bitcoiners as single-issue voters. Will this unlikely alliance reshape American politics, or is it just another plot twist in the crypto saga? Only time will tell.

MARKETS AT A GLANCE

TOP NEWS

Dow hits record high while tech stocks drag down S&P 500 and Nasdaq amid market rotation and Nvidia earnings anticipation

Wall Street's playing musical chairs. The Dow hit a fresh record, climbing 0.16% to 41,240.52, while the S&P 500 and Nasdaq took a breather, dipping 0.32% and 0.85% respectively. Investors seem to be swapping tech for energy, with the latter sector jumping over 1%. All eyes are on Nvidia's earnings Wednesday, which could make or break the AI party.

Fed's Daly signals likely quarter-point rate cut in September, barring unexpected economic shifts

San Francisco Fed President Mary Daly's joining the rate-cut chorus. She's singing the same tune as Powell, saying "the time is upon us" to ease up on those interest rates. Daly's betting on a quarter-point trim next month, unless something wild pops up on the economic radar. With inflation cooling and jobs still steady, Daly thinks it's time to take the foot off the brake. She's wary of keeping things too tight as the economy downshifts, warning it could be a recipe for trouble. The Fed's aiming for that Goldilocks economy – not too hot, not too cold.

BHP focuses on copper growth after beating profit expectations, with plans for expansion in Chile, South Australia, and Argentina

BHP's doubling down on copper. After its failed Anglo American bid, the mining giant's pivoting to Plan A: beefing up existing projects. With a better-than-expected $13.66 billion profit, BHP's eyeing copper provinces in Chile, South Australia, and Argentina. CEO Mike Henry's clear: it's full steam ahead on their original strategy, aiming to ride the green energy wave.

CRYPTO

Analyst predicts Bitcoin could hit $150,000 by end of 2024, but short-term sellers may pose challenges

Bitcoin's gearing up for what some are calling "batshit season," with one analyst eyeing a potential $150,000 price tag by 2024's end. But hold your horses - short-term sellers are getting antsy, with 33,155 BTC on the move. While the recent 6.2% jump has bulls excited, derivatives traders are still playing it cool, suggesting this rally might face some turbulence.

Telegram CEO Pavel Durov's potential release by October sparks speculation on Polymarket, with bettors skeptical about an August release

The crypto world's buzzing about Telegram CEO Pavel Durov's French vacation gone wrong. Arrested over the weekend, Durov's facing some serious allegations - from money laundering to things we can't even mention here! French prosecutors say he could be out by Wednesday, but Polymarket bettors aren't buying it. They're putting their money on a September release, with a 72% chance he'll be free before October. Meanwhile, Toncoin's taking a hit, down 6.8%. Looks like Durov's unexpected stay is causing ripples beyond just his travel plans.

Spot bitcoin ETFs enjoy eighth consecutive day of inflows, with BlackRock's IBIT leading at $224 million, while ether ETFs continue to see outflows

The crypto market's serving up a tale of two coins. Bitcoin ETFs are on a hot streak, raking in $202 million on Monday alone, marking their eighth straight day in the green. BlackRock's IBIT is the star of the show, pulling in a cool $224 million. Meanwhile, ether ETFs are singing the blues, with outflows for eight days running. Bitcoin's trading at $63,077, down 1.54%, while ether's slipped 2.26% to $2,689. Guess investors are playing favorites in this digital gold rush.

Aave Labs proposes using BlackRock's BUIDL shares to stabilize GHO stablecoin, potentially boosting its market cap and expanding into real-world assets

Aave Labs is shaking things up in the stablecoin game. They're eyeing BlackRock's BUIDL shares to keep their GHO stablecoin steady at $1. This move could give GHO a much-needed boost, as it's currently trailing behind big players like PYUSD and First Digital USD. The plan? Let users swap USDC for BUIDL shares when minting GHO. It's a win-win: Aave dips its toes into real-world assets, and GHO gets a stability upgrade. The proposal's still in its early stages, but if it flies, it could be a game-changer for Aave's $120 million market cap stablecoin.

GOLD

Bank of America strategist advises buying gold despite record prices, citing potential inflation risks from future Fed rate cuts

Gold's shining brighter than tech stocks this year, up a dazzling 20%. Bank of America's Michael Hartnett is telling investors to follow central banks' lead and keep stacking that precious metal. Why? He's eyeing potential Fed rate cuts that could reignite inflation, historically gold's best friend. Interestingly, gold's rally isn't driven by typical investors - they're actually cashing out. It's central banks, especially China's, doing the heavy lifting. With gold now the second-largest reserve asset, Hartnett's pointing to ETFs like IAUM and GLDM for those looking to join the gold rush.

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