The Party is Over...🎈
PPI Data, Fragmentation, and The Crypto Police
GM Friends & Investors,
The party is officially over…
Party City filed for bankruptcy this week. Citing a heavy debt load and competition as the main reason for the move.
Having to compete with mega giants like Amazon and Walmart, Inflation hit the party store extra hard shrinking its market cap. (Last trading around $0.50/share)
Highlights:
MSFT Cuts Jobs
Inflation Easing?
Good News in Housing
S&P 500
The markets were bouncing around this week trading sideways.
More economic data was released at the end of the week which major indexes reacted positively to. The numbers showed that information, while still high, is beginning to ease.
On a side note:
Inflation may be coming down, but tech companies are still getting hit hard. Microsoft made it official and decided to cut 10,000 employees as it adjusts to a harsher economic climate.
Economy
Inflation finally easing?
The Producer Price Index (PPI) is a way for us to measure inflation. It measures the price of goods when they are sold by producers. To calculate the PPI, the cost of the goods and their market value are taken into account.
Last month, the PPI numbers for December 2022 were released. The report showed that the index dropped by 0.5%. This is more than the Dow Jones prediction of a 0.1% decrease.
What does it mean?
The lower PPI numbers indicate that prices for goods sold by producers have decreased. This could be a sign that inflation is starting to slow down.
Experts believe that these lower inflation numbers from the PPI and the Consumer Price Index could affect the policy decisions of the Federal Reserve.
Around the World
What is Fragmentation?
Fragmentation is when a supply chain is broken up into different parts. This is something that the International Monetary Fund (IMF) has noticed, and they think it could cost the global economy up to 7% of GDP.
What caused the separation?
The IMF believes that Russia's war in Ukraine and the pandemic have caused countries to become disconnected.
Who does it affect?
Fragmentation will have a particularly big effect on people with lower incomes, as they will no longer be able to access cheaper imported goods.
Crypto
The Crypto Police
The US government is working hard to tackle cryptocurrency-related cybercrime. This effort has seen the formation of the National Cryptocurrency Enforcement Team (NCET), and this week they took their first action.
Caught: The founder of the crypto exchange Bitzlato was arrested. It is believed that since 2019 the platform had received $2.5 billion in crypto, with over 25% coming from illegal sources.
John Melican, Chief Legal Officer of Elliptic, commented: “It’s clear that the government is upping their game in the fight against crypto fraud and crime, with both new resources and new tactics."
Real Estate
Good News in the Home Sector
For the first time in a year, builders have a more positive outlook on the single-family housing market. Analysts were expecting the sentiment to drop, but it actually increased in January!
Experts believe this shift is due to the recent decrease in mortgage rates.
The National Association of Home Builders (NAHB) still predicts a decline in single-family starts this year compared to last year, but they believe we are seeing a change for the better. NAHB's chief economist said:
"It looks like the housing market is on the upswing!"
This is great news for both builders and buyers.
Thank you for reading!
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