September 2024

MACRO 

• The U.S. job market, once marked by record-low unemployment and robust hiring, is showing signs of cooling, with the unemployment rate rising to 4.1% and wage growth slowing. While the job market remains relatively strong, hiring has dipped below pre-pandemic levels, competition for jobs has intensified, and some sectors are experiencing downward pressure on salaries, indicating a shift from the extraordinary conditions seen during the pandemic. WSJ
• Federal Reserve Chair Jerome Powell signaled an imminent shift towards interest-rate cuts to prevent further weakening of the U.S. labor market, effectively concluding the Fed's aggressive inflation-fighting stance. Powell's comments at the Jackson Hole symposium led to a market rally, with investors anticipating a potential rate cut of 0.25 to 0.5 percentage points in September, though the exact magnitude remains uncertain as the Fed assesses incoming economic data. WSJ
• Small-cap stocks, represented by the Russell 2000 index, have recently surged by 9%, marking their highest level since early 2022 and significantly outperforming the S&P 500. This rally is fueled by declining inflation and the prospect of lower interest rates, which tend to benefit smaller companies more. The Economist 

MICRO

• In June, U.S. home prices reached a new high of $426,900, despite declining home sales for the fourth consecutive month, highlighting the ongoing affordability crisis fueled by high prices and elevated mortgage rates. The limited housing inventory continues to drive up prices, with more than one-third of homes selling above their list price, even as the market shows signs of shifting towards a potential balance between buyers and sellers. WSJ
• In August, U.S. consumer confidence hit a six-month high, driven by optimism about the economy despite rising concerns over the labor market following an increase in the unemployment rate to 4.3%. The Conference Board's report suggested that recession fears are easing, though mixed sentiments persist as Americans balance improved business outlooks with anxiety about job stability. Fox Business 
• U.S. consumer spending rose by 0.5% in July, indicating continued economic strength despite concerns over the labor market, where the unemployment rate climbed to 4.3%. The PCE price index, a key inflation measure, increased by 0.2%, with core inflation also rising 2.6% year-on-year. While personal income grew by 0.3%, the saving rate fell to 2.9%, the lowest since June 2022. These figures suggest that while spending remains robust, the Federal Reserve is less likely to implement a large interest rate cut in September. Reuters

MUST KNOW

• After Japan's central bank governor hinted at further rate hikes, causing market turmoil, Deputy Governor Shinichi Uchida reassured markets by pledging not to raise interest rates during periods of instability. Uchida's comments led to a recovery in Tokyo stock prices and a decline in the yen, reversing some of the market movements triggered by Governor Kazuo Ueda's earlier statements. WSJ
• The percentage of million-dollar homes in the U.S. has hit a record high, with 8.5% of homes now valued above $1 million, up from 4% pre-pandemic and 7.6% last year, according to Redfin data reported by The Wall Street Journal. California cities, particularly San Francisco, lead the trend, with 80.6% of homes exceeding the million-dollar mark. Anaheim experienced one of the sharpest increases, while Austin, Texas, was the only major metro area to see a decline. WSJ
• The U.S. Labor Department revealed that job growth between 2023 and early 2024 was overestimated by 818,000 jobs, indicating that the labor market was weaker than initially believed. The revision suggests that employers added about 174,000 jobs per month, down from the previously reported 242,000. This significant adjustment points to earlier and more severe cracks in the job market, raising concerns about the economy's strength and influencing Federal Reserve considerations on interest rate decisions. Ny Times

CRYPTO

• Circle CEO Jeremy Allaire announced plans to introduce tap-and-go payments using USDC on iPhones, following Apple's decision to open its NFC chip and Secure Element to third-party developers. This move will enable iPhone-based wallets to facilitate blockchain-based transactions, expanding the use of USDC and other cryptocurrencies for point-of-sale payments. Cointelegraph
• The Grayscale Avalanche Trust provides investors with exposure to the price of Avalanche (AVAX) through a security, eliminating the need to directly purchase, store, or manage AVAX. The trust's shares are designed to track the market price of AVAX, minus fees and expenses, offering a simplified way to invest in this digital asset. Grayscale
• Sony's blockchain subsidiary, Sony Block Solution Labs, has developed "Soneium," a public blockchain designed to support Web3 infrastructure. The goal is to create widely accessible blockchain services, leveraging Sony's existing businesses and intellectual property. Soneium aims to decentralize internet power, address current Web3 challenges, and foster new applications like Web3 games and NFT marketplaces. Sony