SignalPlus Morning Briefing (19 Dec 2023)

The last (effectively) trading week of the year brings forth US Core PCE, UK PCI, Canada CPI, BoC Minutes, and the BoJ meeting while we bid adieu to a surprising year. Hawkish central banking speak attempted feebly to push back on the current dovish manifestations, with the question is how fast and how much global central bankers will be cutting in early 2024, rather than a question of if.

The SPY ETF saw record inflows last week with the index trading up 2.5% on the week for its 7th straight weekly gain, the strong streak since 2017. While the ‘magnificient 7’ continued their unassailable rally, we are seeing signs that the equity rally is finally starting to broaden in depth, with the equal weight SPX index outperforming its cap-weight brethen by nearly 3% over the past month. The risk rally is still not to be faded… yet.

In Crypto, one of the bigger stories was the revival of Solana, which was partially left for dead with the demise of SBF and FTX’s deep association with the chain. Solana has returned a staggering ~350% return on the year, well outpacing BTC and ETH, and has recently surpassed Ethereum on daily active addresses and NFT sales (albeit both remain in depressed levels).

Will this trend continue next year if crypto continues to gain and DeFi makes a comeback? Has the user community voted with its feet with their L1 blockchain preference? Or will a return of institutional money shift the attention back to ETH as the traditional community tends to prefer a “tried and true” chain? After a long bear market, it’s good to be speculating on ecosystem developments once again as we head into the new year.

A rising tide lifts all boats, and may the positive momentum continue.