Nasdaq's Surge: US Economic Strength & Crypto Implications
Recent market performance suggests the US economy and its financial markets remain distinct from global peers. Since early April, the Nasdaq has surged 31%, while the S&P 500 climbed 24%. This outperformance contrasts with other major indices like Germany's DAX, France's CAC, Japan's Nikkei, and China's Shanghai Composite.
Both the Nasdaq and S&P 500 reached record highs on Thursday. Demand for US Treasury notes remains strong despite concerns about fiscal sustainability.
US Economic Strength and the 'Exceptional' Narrative
This data challenges the narrative of capital flight from the US due to debt concerns and past trade policies. Hani Redha, portfolio manager at PineBridge Investments, highlighted several factors supporting US economic strength, including deregulation.
Further supporting this view, the real per capita GDP growth in the US significantly outpaces the EU. Robin Brooks, a senior fellow at the Brookings Institution, attributes this to deeply rooted structural factors. Strong US jobs data also bolsters this narrative.
Implications for Bitcoin (BTC) and the US Dollar (DXY)
The resurgence of US equity markets may positively correlate with Bitcoin and the broader crypto market. Bitcoin has already risen 44% to $108,000 since early April lows, and some see it as part of the ongoing US economic strength narrative. A pro-crypto presidential administration may also contribute to this trend.
Furthermore, this renewed US economic strength could support the US dollar. The strong jobs data reduces the likelihood of a significant downturn. Meanwhile, concerns about a too-strong Euro are emerging from European Central Bank officials, as highlighted by recent FT and Bloomberg reports.
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