Commentary: Paul Ebeling on Wall Street and Beyond

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“Investors are preoccupied with Russia/Ukraine, as it quietly sets up for then next Bull leg” — Paul Ebeling

The Super Bowl market study is arbitrary and tongue-in-cheek, so no pros will be trading on these results, it is for entertainment purposes only. The study finds that when there is an action-packed offensive game with a combined score of 46 pts or more, stocks are up 13.7% those yrs Vs only 9.9% gains when the score is under 46. There you go!

Since the beginning of this yr, business news has been flooded with stories about historic market volatilitydecades-high inflation rates, and an increasingly hawkish Fed.

Meanwhile, it is earnings season. And corporate America has been announcing lots of good news with its Quarterly financial results. Against this this backdrop, a real Bullish story has emerged: Expectations for earnings growth are being revised up!

“Since the beginning of the earnings season, Q-4 Y 2021 EPS has been revised up 4.3% to $53.48 (+26% y/y) and Y 2022 EPS has been revised up 0.6% at $224.90 (+8% y/y). And looking to Y 2023 EPS has been revised up 0.7% since the beginning of the earnings season to $247.54 (+10% y/y). We are Bullish with a huge cache of dry powder.], as our evidence shows prospects are more Bullish than bearish.

Added to that, global central bankers are urging traders against bets on a supersized policy response to soaring inflation, on hope they can successfully cool mounting price pressures without derailing economic recoveries.

Plus: The stablecoin boom make digital dollar push urgent

The rise of cryptocurrencies is the biggest financial trends to emerge in many yrs, and it raised the stakes for regulators to exert more influence over the sector, while protecting investors.

The rapid adoption of digital tokens has made the development of a central bank digital currency (CBDC) an urgent proposition, a Top official told us, especially as a multi-agency debate unfolds over crypto regulation.

“We absolutely support an urgent study of CBDC,” Treasury Under Secretary for Domestic Finance said in an interview last wk. He believes a Fed coin will probably determine how stablecoins coexist with a CBDC, which can happen. And it is possible a CBDC could supplant stablecoins, depending on the kinds of features the Fed would choose for it.

The Fed is currently reviewing the pros and cons of issuing a CBDC after releasing a report last month. Analysts like Shayne and me are postulating what impact it might have on stablecoins and financial markets. But we do not see anything happening yet this year. Stay tuned…

Have prosperous week, Keep the Faith!

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