Reporting Season, CoinBase IPO and Crypto Market Records

14 Nis 2021

Yesterday was quite rich in all sorts of macroeconomic stats. China's trade balance data showed a sharp rise in imports (up 38.1% year-on-year) and exports (up 30%). At the same time, exports grew much less than analysts' expectations, while imports showed an opposite tendency. This is a clear sign that China's economy is recovering faster than the rest of the world. On the one hand, this is a cause for joy. On the other hand, the rest of the world is alarming.

The UK data came out rather mixed. GDP in February grew by 0.4%, which is lower than analysts' forecasts (they had expected an increase of 0.6%). Along with this, industrial production grew by 1%, which is two times higher than experts' expectations.

The US inflation turned out slightly higher than forecasted and reminded the markets that prices are going up. On an annualized basis, growth was 2.6% with the Fed inflation target of about 2%. Yes, this does not mean that the FedReserve will drop everything and start raising the rate. But there is definitely a reason to think.

CoinBase IPO is due today. The preliminary capitalization estimates are approximately $100 billion, which means this IPO will become one of the largest in history. The cryptocurrency market did not wait for the rise in prices for CoinBase shares following the IPO and rushed to new heights. Well, the background for the IPO is just perfect, one can only rejoice at such a good choice of the moment by the organizers of the public offering.

The reporting season in the USA begins in full today. Banks traditionally open it. In general, the current environment (ultra-soft monetary policy) is quite toxic for banks and is essentially killing the traditional banking business along with its margins. But most of the large banks have long since moved into the category of investment banks with large trading divisions. So investment income and trading income will almost certainly pull the big picture. The greater the scale of this kind of activity a bank has, the better financial results can be expected from it.