Original author: PSE Trading Trader@MacroFang
BTC holding on to levels above $28,000 suggests there is pent-up interest in the cryptocurrency. Blackstone Group CEO Larry Fink acknowledged the pent-up interest, saying there is growing demand for cryptocurrencies from clients around the world. Although he could not provide specific details or comment on the status of the application, Finks remarks highlighted the growing demand for cryptocurrencies.
BlackRock CEO Larry Fink
Very Bullish: Investors Expect Long Positions Ahead of ETF Approval
Despite the recent rally from $27,000 to $30,700, investors are aware that the approval of the BTC ETF is not yet fully reflected in market prices. This is why BTC remains above $28,000 as investors are eager not to miss out on further upside potential once approval is actually obtained. Market dynamics tend to exhibit short-term memory, and the current situation may be forgotten in the coming weeks, causing BTC to remain at higher levels.
BTC Still above 28 K = Pent-up interest
Fake ETF news won’t affect SEC approval
Fake ETF news circulating on platforms like Twitter is unlikely to have an impact on SEC approval. The Securities and Exchange Commission (SEC) is primarily focused on regulatory aspects and will not make decisions based on BTC price action or social media speculation. Therefore, while such news may create temporary noise in the market, it is unlikely to impact the SECs approval process.
BTC ETF Approval Timeline
US stock market
US Stock Market - Positive Sentiment and Supportive Factors
Looking at the current stock market positioning theme, SP 500 futures saw balanced flows in the first half of the week, followed by fresh short positions on Thursday. Net positioning remains at about $27 billion in net short positions, about the same level as last week. Despite the large swings, current positioning is not overextended and is in the bottom decile of positioning over the past three years. ETF inflows have increased recently. Similarly, Nasdaqs flows, while different, appear to have stalled or even retraced slightly in terms of net bearish positioning.
Sentiment toward U.S. stocks is turning positive, supported by a variety of factors. These factors, including strong macro data, including strong non-farm payrolls, in-line CPI, and the Feds signal that it will continue to pause on rate hikes, have contributed to the positive sentiment.
Additionally, expectations for third-quarter earnings support consensus-beating EPS growth expectations through 2024. The U.S. is seen as a safe haven from geopolitical risks, further boosting the outlook for U.S. stocks. Institutional money is flowing into technology and growth sectors, suggesting these sectors could lead any rebound at the end of the year, with a rotation more likely in 2024. Despite the challenges posed by major event risks, it remains important to maintain focus on favorable macro conditions.
US STOCKS – Stocks move higher amid volatile yield environment
U.S. stocks had a positive week, with share prices rising, while interest rate markets showed volatility in yields. The SP 500 (SPX) rose 0.5%, with sectors such as energy (+4.5%), utilities (+3.6%) and real estate (+2.3%) outperforming. Interest rate markets have seen surprises, with real and nominal yields falling while inflation expectations have risen. Stress indicators show some concern, creating a more pronounced focus on potential risks.
However, despite volatile market dynamics, the U.S. economy remains strong and shows no signs of an imminent recession. Third-quarter gross domestic product (GDP) growth is expected to be close to 4%, the job market added 336,000 jobs in September, and the manufacturing sector appears to be recovering from contraction. The Fed has made it clear that it will not raise interest rates again at this time, given the rise in long-term Treasury yields. While the Fed may take precautionary cuts to reduce the likelihood of a recession, inflation remains above its 2% target, which could limit opportunities for rate cuts until activity data shows clear signs of deterioration.
Notably, there were encouraging signs of an acceleration in core prices and an unexpected acceleration in housing prices, which may reflect a rebound from previously lower readings.
Asia-Pacific
Investors prefer “value” and “low-risk” stocks
Investors in Asia Pacific favor value and low-risk stocks for a variety of reasons. The region has witnessed significant outflows from emerging market funds, particularly Chinese funds, with investors expressing pessimism. This pessimism stems from concerns about a recovery in consumption and expectations of policy changes that may come from Chinas third plenary session. As a result, investors are actively looking for value stocks with long-term potential, even though short-term market sentiment may be negative.
Factors driving investor preference for “value” and “low-risk” stocks
Overall, Asia-Pacific investors preference for value and low-risk stocks reflects their cautious approach to a recovery in consumption, policy changes and market sentiment. Amid uncertain market conditions, they actively look for stock investment opportunities with long-term potential and stability.
