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In terms of related economic indicators, crude oil prices have continued to fall at a rate of about $5 per week in recent weeks, implying lower inflation numbers in the future.
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Markets around the world are showing signs of easing inflationary pressures. This includes PPI which came in lower than expected and a slew of market indicators such as BDI, crude oil, and long-term rates. Not all is fine and dandy however as the crypto contagion continues.
The biggest crypto institutional bankruptcy unfolded this past week. It's a terrible event for the crypto ecosystem, but probably not material elsewhere. In FTX's case, we are talking about $10-$30 billion in assets just before its bankruptcy during the financial crisis.
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The trading session was volatile however, ending the day in negative territory on Wednesday
Crypto’s been known for volatility, but with recent moves in large cap techs such as Amazon dropping 20% post earnings, it’s been a breath of fresh air that crypto has been able to buck the trend.
While the US economy has been buoyant despite inflationary pressures, we are finally seeing many key metrics turn for the worse this week. Besides economic measures, the resignation of the UK prime minister as a result of their inability to provide credible solutions to deal with rampant inflation has caused many politicians elsewhere to look up.
While it’s too early to tell whether this is the beginning of a rally or simply an anomaly, some of the economic indicators are starting to soften, despite inflation not coming down fast enough for the Fed’s liking.
Given this is the first week of the month, the biggest news event was Non-Farm Payrolls. Economically, it was a good report. But we are playing “good news is bad news” now. Anything that will force the Fed to continue hiking will mean more pain for financial markets, and indeed markets reacted accordingly this Friday.
This article discusses the importance of understanding the difference between an increase in money supply and inflation and how Bitcoin was specifically built as a hedge against inflation.
PennyWorks delivers insights after the Bank of England's commitment to buying bonds to tame the financial chaos that ensued shortly after their tax cut plan.