🌳 US GDP Rose by 2.8% in Q2; Blackrock Not Expecting “Long List of Crypto ETFs”

Macro & TradFi

The U.S. economy expanded (https://www.ft.com/content/5698c615-7263-4e46-9997-93e93e129323) at an annualized rate of 2.8% in the second quarter, indicating strong consumer resilience as the Federal Reserve contemplates interest rate cuts. This growth exceeded economists' expectations of 2% and was an improvement from the first quarter's 1.4% rate. Recent data suggests the Fed's efforts to control inflation are effective, with inflation now around 3%. While traders slightly reduced their bets on interest rate cuts following the GDP data, expectations remain for two to three cuts this year. Consumer spending accelerated to a 2.3% rise, but signs of a softening labor market raise concerns. Analysts predict the Fed may cut rates as early as September, with the economy's overall performance positioning the U.S. as a leader among advanced economies. President Biden and Treasury Secretary Janet Yellen have touted the latest GDP report as evidence of robust economic growth and declining inflation.

In other news, OpenAI has unveiled a prototype of its search engine, SearchGPT (https://www.cnbc.com/2024/07/25/openai-announces-a-search-engine-called-searchgpt.html), designed to provide "fast and timely answers with clear and relevant sources," currently being tested with a small user group. This development aims to enhance user experience by allowing more natural interactions, which could intensify competition with Google, causing Alphabet shares to drop over 3% following the announcement. The launch follows Google's recent updates to its search features, which have faced criticism for inaccuracies. OpenAI's initiative is part of its broader strategy to lead in the generative AI market, backed by significant investments from Microsoft, while also enhancing its executive team to navigate the evolving AI landscape.

On Thursday, U.S. stock indexes experienced mixed results, with the Nasdaq ending 0.9% lower following its worst day since 2022, while the S&P 500 declined by 0.5%, and the Dow Jones Industrial Average managed a slight gain of 0.2%. This downturn was largely influenced by disappointing earnings from major tech companies, particularly Alphabet, which fell 3.1%, and Microsoft, down 2.5%. Conversely, Tesla saw a 2% rise despite broader declines in the tech sector. The Russell 2000 small-cap index outperformed, gaining 1.3%, as investors shifted focus to smaller companies amid expectations of impending interest rate cuts by the Federal Reserve. Notable decliners included Edwards Lifesciences, which plummeted 31.3% after cutting its sales forecast, and Ford, whose shares sank 18.4% following mixed earnings results. On the upside, ServiceNow's shares soared 13.4% after exceeding earnings expectations, while Molina Healthcare rose 12.3% on strong revenue growth. Investors remained attentive to economic data ahead of the Fed's potential rate cuts, with Thursday's report showing better-than-expected economic growth in the second quarter. Next week, The BOJ's interest rate decision is due on 31 July, Wednesday.

DeFi & CeFi

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   •   Franklin Templeton eyes Solana ETF after its ETH ETF launch

   •   Thailand distributing digital money to 45M citizens to boost economy