The Bigger the Hit to a Country’s GDP, the Higher the Stock Market Jumps

The US economy shrank by an annual rate of 32.9% between April and June, the sharpest contraction triggered by the coronavirus pandemic since the second world war.

This economic shock in April, May, and June was over three times as sharp as the previous record of 10% in 1958 and about four times the worst quarter during the Great Recession.

“This is something we have never seen before,” said Jason Reed, assistant chair of finance at the University of Notre Dame.

“At first I felt it was like a natural disaster that had hit the entire country at the same time. Now it is evolving into something worse than that.”

The record-settling fall in the gross domestic product, the broadest measure of economic activity compared to the same time last year after for the second week in a row following a four-month decline 1.43 million Americans filed for unemployment benefits last week.

Economists expect the economy to recover sharply later this year, but the recent rise in infections across the US is clouding that outlook.

Interestingly, during this time, the S&P 500 jumped 24% thanks to all the money printing the Federal Reserve did. After the initial $3 trillion stimulus package, another trillion-dollar aid is expected soon. For now, Congress is struggling to strike a deal on the new round of financial support.

On Wednesday, the Fed said the US economy is facing significant challenges from the coronavirus pandemic and vowed to continue to take aggressive action to support the economy to recovery.

The US’s GDP report came as Germany, Europe’s largest economy, recorded a slump in economic growth, contracting by 10.1% in Q2, the most significant decline since 1970, while its stock market DAX jumped 28%.

The fall in GDP came as parts of the US economy shut down in an attempt to halt the spread of coronavirus across the country. The closures led to a historic number of layoffs that sent unemployment soaring to levels not seen since the 1930s Great Depression.

Now, as the first month of the third quarter comes to an end, the S&P 500 jumped 3.6% in July. But it was precious metals that stole the show.

Gold jumped 10.6% this month and broke the 2011 record to hit a new all-time high in Q2. This has been in part due to a 1.6% decline in the US dollar index, which further hit over two-year low with a 4% decrease in July.

Meanwhile, bitcoin the ‘digital gold’ woke from the slumber just last week and spiked 23.6% in July, after a 68% jump in Q2, now trading above $11,300.

“Gold, Silver, Bitcoin all hitting, or going, to new ATH,” said Max Keiser adding the bad news is all of this is because,

“global central banks are staging a debt-for-equity coup disenfranchising 7.6 billion people who will be left for dead unless they have some Gold, Silver, Bitcoin.”

Read Original/a>
Author: AnTy

Crypto Exchanges Are On a Hiring Spree in Anticipation of Heightened BTC Halving Interest

The commerce department announced this week that the US economy shrank 4.8% in the first three months of the year, the steepest decline since the last recession. The same is the case for Europe that covers 19 countries, its economy shrank by 3.8% in Q1 of 2020, the biggest fall since 1995 when eurozone statistics first began.

Meanwhile, another 3.8 million people lost their jobs in the US last week but the pace of layoffs is slowing. Overall, an unprecedented 30 million Americans filed for unemployment benefits in the six weeks.

The US unemployment is on course to reach the levels unseen since the Great Depression as with a backlog of claims, these figures are undercounting the number of people out of work.

In March, the jobless rate rose to 4.4%. JP Morgan predicted that unemployment could reach 20%.

Exchanges focused on expansion

In the crypto market, however, crypto exchanges are on a hiring spree. Kraken that was planning to hire 250 staffers, will be recruiting 350.

Binance recently shared that its staff has grown to over 1,000 expand its workforce 25% in the first quarter. They are hiring for more people to support its recently launched mining operation, Binance Pool.

Coinbase has posted dozens of openings while crypto exchange OKEx plans to hire more staff in May to expand its workforce of over 1000 employees.

“There’s a greater awareness of crypto as an asset class among the general public,” said Nic Carter, co-founder of Coin Metrics about this trend that just added five full-time employees as well.

But the crypto sector has had its share of exodus too with ConsenSys cutting workers. Crypto-carrers.com also saw a decline in new positions, from 300 last year to 84 in April this year.

This could be because exchanges, which make the bulk of its money from trading fees, are benefiting immensely from the heightened volatility in not April but also from the March crash.

Halving in Effect

With halving less than 12 days away now, the speculation in the market is particularly heightened as we saw spot exchanges leading the current rally.

During the last two halvings as well, the bitcoin price exploded. In the wake of the 2012 halving, BTC price jumped from $12 to $1,000 and following the 2016 halving, the price had a 1,000% spike.

So, this workforce expansion could be crypto exchanges anticipating a flood of speculators and investors who don’t wanna miss out on the halving. Lex Sokolin of ConsenSys told Bloomberg,

“It is really nuts to me that there’s such speculation, since everyone already knows it is going to happen, and should be pricing it in as past information.”

“What we can learn is that the crypto markets are still irrational and short-term oriented, and that companies are betting on the speculation of others to drive their own staffing decisions.”

For now, Bitcoin’s price is trading just under $9,000 preparing for the miner inflow to be cut down in half.

Read Original/a>
Author: AnTy