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Mid-Market Update: Stock market rally is what is, poor labor data, Treasury’s record issuance, oil rises, Gold mania continues

Mid-Market Update: Stock market rally is what is, poor labor data, Treasury’s record issuance, oil rises, Gold mania continues



Another bullish day for US stocks was driven by strong earnings, another vaccine deal, optimism Capitol Hill will wrap up stimulus talks by the end of the week and despite a couple (ADP & ISM) bad labor reports.  Risk appetite is also unfazed as Wall Street starts to recognize it is becoming more likely November could deliver a Biden presidency. 

Earnings continue to come in at a fast clip and mostly mixed, but the bigger names seem to have impressed.  CVS delivered strong earnings and raised their full-year adjusted earnings forecast.   Last night, Disney was able to squeeze out a profit despite theme parks delivering a near $2 billion loss.  Disney continues to see their streaming service see strong subscriber numbers, 57.5 million, albeit lower than the consensus estimate of 58.4 million.  Disney is comfortable to also test out a strategy with the release of Mulan for about $30 in early September. 


Johnson & Johnson reached a pact with the US government to provide 100 million doses of their experimental coronavirus vaccine.  The US government now has vaccine bets spread across J&J, Moderna, and Pfizer. 

Stimulus Talks

Capitol Hill seems to be making progress with negotiations over the virus stimulus bill.  Lawmakers have agreed upon a deadline for a deal.  They still have a long way to go, but at least offers are being put on the table. 

ADP/ISM Services

Both the ADP private payroll report and ISM Services employment index paint a bad picture for the labor market.  ADP showed hiring stalled in July, only creating 160,000 jobs, much lower than the market forecast of 1.2 million.  The ISM services report was mixed, as activity improved but the employment index declined.  The upturn in activity is not creating jobs and this could spell trouble for Friday’s nonfarm payroll report.


President Trump spoke earlier on Fox News and reiterated ‘big jobs number coming on Friday’.  In June 2018, President Trump implied he knew NFP was going to beat expectations when he tweeted he was looking forward to the employment numbers.  Trump is betting his re-election that the economy will bounce back stronger with him than with Biden.  If ADP and ISM have anything to say about Friday’s numbers, investors may expect a softer reading than the consensus estimate of 1.5 million jobs created. 

President Trump’s re-election chances are starting to look grim.  The President is still struggling in delivering a strategy against the coronavirus.  The US death toll is now over 156,000 and we are still seeing a 1,000 Americans a day dying.  In an Axios interview, Trump said the virus was “under control” and that the death toll “is what it is”.  The uncertainty of the virus in the Fall and how President Trump will try to handle it will start to weigh heavily on labor market.  The stimulus trade remains intact and while we won’t see a massive correction in global equities, the recovery will not be balanced and large parts of the economy will struggle. 


Treasury yields are climbing higher after the Treasury quarterly refunding plans announced a record $112 billion, higher than the market forecast of $108 billion, and significantly higher than the prior quarter’s $96 billion.  Everyone is running towards long-dated bonds as investors seem to believe the Fed is not raising rates for many years, possibly not until after the 2028 Presidential election.   

Stick a fork in the US dollar.  The dollar resumed its slide after the Treasury announced record US bond issuance that saw larger increases in sale sized for longer treasuries.  The euro may have a price barrier at 1.19, but that might not last much longer.  


Crude prices kept their gains after the EIA report posted a much larger-than-expected draw, which was similar to the yesterday’s API release.  Nothing really to get excited about the EIA report, national crude production declined by 100,000 bpd, gasoline inventories rose half a million barrels, and crude imports from Saudi Arabia fell to their second lowest level on record.

The crude supply fundamentals seem fairly in check, so oil prices will likely continue to follow the move in stocks.  This month, OPEC+ began relaxing their record production cuts this month, but the cheaters are expected to make up their shortcomings from earlier in the year.  Also, higher demand in the Persian Gulf will likely absorb a lot of the production that comes back online. 

WTI crude is starting to break away from its tight trading range, but that will not continue if the US economic recover falters and the job creation flatlines. WTI crude’s bullish momentum should fizzle ahead of the $45 level and until after Friday’s non-farm payroll report.   


The gold trade just went from ridiculous to ludicrous speed.  The Treasury quarterly record bond issuance put an exclamation point on the belief the Fed will not raise rates for several years and that they will do more before the year ends.  Gold is about to benefit from another wave of inflows from the fixed income market.  The search for yield is likely to see many investors just continue to add to their gold holdings.


Cryptocurrencies are benefiting from the dollar’s freefall.  Bitcoin and Ether will continue to thrive as real yields continue to make fresh record lows, forcing institutional investors look everywhere outside the fixed income space for opportunities.  Emerging markets still look risky and Bitcoin and other digital coins are seeing strong waves of new interest. 

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California bill aims to cap crypto ATM withdrawals at $1K per day to combat scams

A new legislative investigation found some crypto ATMs charging a premium as high as 33%, while a few ATMs had limits of up to $50,000.



A new legislative investigation found some crypto ATMs charging a premium as high as 33%, while a few ATMs had limits of up to $50,000. California legislators have proposed a new bill titled “Digital financial asset transaction kiosks,” calling for a cap on crypto ATM withdrawals of $1,000 per day in light of growing scams. Additionally, starting in 2025, the law would limit operators’ fees to $5 or 15% (whichever is higher). The bill, if approved, would come into effect on Jan. 1, 2024. The bill was introduced after legislative members visited a crypto ATM in Sacramento and found markups as high as 33% on some crypto assets compared with their prices on crypto exchanges. On average, a crypto ATM charges fees between 12% and 25%, according to a legislative analysis. Government officials also found ATMs with limits as high as $50,000, prompting them to take regulatory measures to curb such high premiums and withdrawal limits. There are more than 3,200 Bitcoin ATMs in California, according to Coin ATM Radar. Democratic State Senator Monique Limón, who co-authored the proposed legislation, said the “new bill is about ensuring that people who have been frauded in our communities don’t continue to watch our state step aside” when there are real issues happening. Another provision of the bill would require digital financial asset businesses to obtain a license from the California Department of Financial Protection and Innovation by July 2025 Crypto ATMs are a popular way for people to exchange cash for their choice of cryptocurrency but have become a hub for scams and exploits because of the nature of transactions (i.e., hard cash). Unlike bank and wire transfers, each transaction leaves less of a trail. Related: CoinSmart president says crypto taxes are a ‘little bit more favorable’ outside US Some residents have recently been caught up in such scams, where the scammer persuades the victim to go to a nearby crypto ATM and deposit cash for the crypto of their choice. Some of those affected by ATM scams have lauded the bill and said the low transaction limit would give victims time to realize if they are being duped, reported the LA Times. On the other hand, crypto ATM businesses said the new bill would harm the small operators who must pay rent on their ATMs. The operators noted that the bill fails to address the core issue of the fraud and instead takes a punitive path focused on a specific technology. They warned such a move would shudder the industry and hurt consumers while doing nothing to stop bad actors. Magazine: Bitcoin is on a collision course with ‘Net Zero’ promises

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Bitcoin price must break $31K to avoid 2023 ‘bearish fractal’

BTC price needs to recoup some more key levels before ditching longer-term bearish risk, the latest Bitcoin analysis says.



BTC price needs to recoup some more key levels before ditching longer-term bearish risk, the latest Bitcoin analysis says.

Bitcoin (BTC) held above $30,000 at the Oct. 23 Wall Street open as analysis said BTC price strength could cancel its “bearish fractal.”

BTC/USD 1-hour chart. Source: TradingView

BTC price preserves majority of early upside

Data from Cointelegraph Markets Pro and TradingView followed BTC/USD as it hovered near $30,700, still up 2.5% on Oct. 23.

The largest cryptocurrency made snap gains after the Oct. 22 weekly close, stopping just shy of $31,000 in what became its highest levels since July. 

Now, popular trader and analyst Rekt Capital is keen to see the $31,000 level break. 

“Bitcoin has Weekly Closed above the Lower High resistance to confirm the breakout,” he commented alongside the weekly chart.

BTC/USD annotated chart. Source: Rekt Capital/X

Rekt Capital argued that BTC/USD could disregard the bearish chart fractal in play throughout 2023 next. This had involved the two year-to-date highs near $32,000 forming a doubletop formation, with downside due as a result.

Specifically, Bitcoin requires a “breach” of $31,000 in order to do so. 

More encouraging cues came from the True Market Deviation indicator from on-chain analytics firm Glassnode.

As noted by its lead analyst, Checkmate, on Oct. 23, the metric, also known as the Average Active Investor (AVIV) profit ratio, has crossed a key level.

Bitcoin’s True Mean Market price (TMM) — the level that BTC/USD spends exactly 50% above or below — is now below its spot price, at $29,780. 

“Have we now paid our bear market dues?” Checkmate queried, describing TMM as Bitcoin’s “most accurate cost basis model.”

Bitcoin True Market Deviation (AVIV) chart. Source: Checkmate/X

Institutions awaken in “Uptober"

Analyzing the potential drivers of the rally, meanwhile, James Van Straten, research and data analyst at crypto insights firm CryptoSlate, flagged the potential approval of the United States’ first Bitcoin spot-price-based exchange-traded fund (ETF).

Related: BTC price nears 2023 highs — 5 things to know in Bitcoin this week

While not yet awarded the green light, a U.S. spot ETF is being treated as an inevitability after legal battles resulted in regulators losing sway.

“The potential approval of a spot ETF for Bitcoin has spurred a significant increase in bullish inflows in the crypto market,” Van Straten wrote in an update published on Oct. 23.

He noted that Glassnode data shows inflows via over-the-counter (OTC) trading desks spiking since late September.

“In addition, the Purpose Bitcoin ETF, with its holdings of approximately 25,000 Bitcoin, has observed consistent inflow throughout the past month. Even though these inflows might not be termed as ‘large,’ they denote a positive market sentiment,” he continued.

“This uptick in inflows across various platforms indicates an optimistic market response to the potential approval of a Bitcoin ETF, bolstering the overall landscape of digital assets.”
Bitcoin transfers to OTC desk wallets. Source: CryptoSlate/Glassnode

The largest Bitcoin institutional investment vehicle, the Grayscale Bitcoin Trust (GBTC), continues to see a lower discount to the Bitcoin spot price, having already seen its smallest negative margin since December 2021.

This stood at -13.12% as of Oct. 23, per data from monitoring resource CoinGlass.

GBTC premium vs. asset holdings vs. BTC/USD chart (screenshot). Source: CoinGlass

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

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Fighting the Surveillance State Begins with the Individual

It’s a well-known fact at this point that in the United States and most of the so-called free countries that there is a robust surveillance state in…



It’s a well-known fact at this point that in the United States and most of the so-called free countries that there is a robust surveillance state in place, collecting data on the entire populace. This has been proven beyond a shadow of a doubt by people like Edward Snowden, a National Security Agency (NSA) whistleblower who exposed that the NSA was conducting mass surveillance on US citizens and the world as a whole. The NSA used applications like those from Prism Systems to piggyback on corporations and the data collection their users had agreed to in the terms of service. Google would scan all emails sent to a Gmail address to use for personalized advertising. The government then went to these companies and demanded the data, and this is what makes the surveillance state so interesting. Neo-Marxists like Shoshana Zuboff have dubbed this “surveillance capitalism.” In China, the mass surveillance is conducted at a loss. Setting up closed-circuit television cameras and hiring government workers to be a mandatory editorial staff for blogs and social media can get quite expensive. But if you parasitically leech off a profitable business practice it means that the surveillance state will turn a profit, which is a great asset and an even greater weakness for the system. You see, when that is what your surveillance state is predicated on you’ve effectively given your subjects an opt-out button. They stop using services that spy on them. There is software and online services that are called “open source,” which refers to software whose code is publicly available and can be viewed by anyone so that you can see exactly what that software does. The opposite of this, and what you’re likely already familiar with, is proprietary software. Open-source software generally markets itself as privacy respecting and doesn’t participate in data collection. Services like that can really undo the tricky situation we’ve found ourselves in. It’s a simple fact of life that when the government is given a power—whether that be to regulate, surveil, tax, or plunder—it is nigh impossible to wrestle it away from the state outside somehow disposing of the state entirely. This is why the issue of undoing mass surveillance is of the utmost importance. If the government has the power to spy on its populace, it will. There are people, like the creators of The Social Dilemma, who think that the solution to these privacy invasions isn’t less government but more government, arguing that data collection should be taxed to dissuade the practice or that regulation needs to be put into place to actively prevent abuses. This is silly to anyone who understands the effect regulations have and how the internet really works. You see, data collection is necessary. You can’t have email without some elements of data collection because it’s simply how the protocol functions. The issue is how that data is stored and used. A tax on data collection itself will simply become another cost of doing business. A large company like Google can afford to pay a tax. But a company like Proton Mail, a smaller, more privacy-respecting business, likely couldn’t. Proton Mail’s business model is based on paid subscriptions. If there were additional taxes imposed on them, it’s possible that they would not be able to afford the cost and would be forced out of the market. To reiterate, if one really cares about the destruction of the surveillance state, the first step is to personally make changes to how you interact with online services and to whom you choose to give your data.

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