Cryptocurrencies and traditional finance find themselves in the spotlight once again as investors prepare for the important announcements in the United States.
The tech giants will release their earnings after the close of trading on Tuesday. Meanwhile, the Federal Open Market Committee (FOMC) will shed light on the future of interest rates during its July 25-26 meeting.
Tech giants signal the end of the slowdown?
The economic health of the United States provides an interesting backdrop for big tech companies. In particular, Alphabet and Microsoft, as they prepare to disclose their quarterly earnings.
Despite the uncertainty in the market, these tech powerhouses are expected to signal a halt to the nearly year-long slowdown in cloud business. increase in technology expenses And digital advertising can make up for this lull.
In fact, their stock is already showing that expectation, with Alphabet down 0.40% and Microsoft up 0.65%.
The Nasdaq Composite Index, a technology gauge, has also thrived, posting an impressive rise of around 33.40% this year. Much of that rally can be attributed to large-cap, price-sensitive growth companies.
The upside is fueled by the enormous promise of artificial intelligence, along with expectations of a culmination of the US Federal Reserve’s hawkish tightening cycle.
“The real test will be for companies with significant exposure to AI as investors are eager to see if these companies can report results strong enough to support their skyrocketing share prices in recent months.” He said James DeMert, Chief Information Officer, Main Street Research.
FOMC: economic indicators and decisions
With low inflation and a gentle economic downturn, the Federal Reserve faces a pivotal decision. Will he listen to the weak economic data and decide not to raise additional interest rates?
The market expects an interest rate increase of 25 basis points, the highest level in almost 17 years.
“If inflation does not continue to show progress and there are no suggestions of a significant slowdown in economic activity, then a second hike of 25 basis points (a quarter point) should come sooner rather than later, but this decision is for the future.” He said Christopher J. Waller, Member of the Board of Governors of the Federal Reserve.
As the FOMC goes through its deliberations, it’s clear that inflation continues to be a huge concern.
“While things seem to be moving in the right direction with inflation, we are still at the beginning of a long process,” he said. He said Karen Dinan, Harvard University economist.
Cryptocurrency market for influence
Despite the volatility of macro guidance, Bitcoin has largely maintained its trading range, oscillating between $29,000 and $31,500.
“Bitcoin has been fluctuating within a narrow range for a little over a week and is likely to continue to do so until the conclusion of this week’s FOMC meeting.” He said Yuya Hasegawa, analyst at Bitbank.
While traditional markets await verdict from tech giants and the Federal Open Market Committee, the cryptocurrency industry is also watching closely as an impending interest rate hike could have other implications for inflation.
“FOMC rate decisions going forward are likely to continue to be ‘live’, and Bitcoin may not break out of $31,500 for another while,” Hasegawa concluded.
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