News

BlockBeats News, June 5th, the latest research from the Boston Fed pointed out that with the improvement in energy efficiency and the growth in domestic crude oil production, the U.S. economy's sensitivity to oil price increases has significantly decreased. Unlike the oil crisis of the 1970s, the current oil price increase no longer massively impacts the job market. The additional jobs created by the oil and gas industry's expansion can partially offset the pressure on other industries. Therefore, the possibility of high oil prices leading to a "stagflation" situation of high inflation and high unemployment has noticeably decreased. However, the report also warned that the cushioning effect of oil price shocks on employment has weakened, implying that the inflationary pressure from rising energy prices may be more enduring. The Fed does not need to overly worry about energy price hikes leading to an economic downturn, but should focus more on containing inflation. The current market consensus is that the Fed's June meeting will keep rates unchanged, but some officials have begun discussing the possibility of raising rates later this year. Meanwhile, Morgan Stanley believes that the current oil price surge is more of a short-term supply disruption and is not sufficient to be a key factor driving rate hikes. The institution expects the U.S. interest rate to remain unchanged for the whole year and is likely to start a rate-cutting cycle in 2027. However, as geopolitical conflicts push up energy prices, the market's view on the Fed's policy path has significantly shifted. Fed officials have recently been sending frequent hawkish signals, emphasizing that if inflation remains persistently above the target level, further policy tightening is not ruled out.

BlockBeats News, June 5th. Although the situation in the Middle East has entered the final stage of US-Iran negotiations, there is still a considerable distance to go before the real risk is resolved. Whether it is the Iran fund unfreezing negotiations, Lebanon ceasefire conditions, or the power struggle between Israel and Hezbollah, they are currently still in the negotiation stage rather than a full-scale easing. Therefore, geopolitical risks have not disappeared, but the market's short-term attention has temporarily shifted to the US non-farm payroll report and unemployment rate data to be released tonight. Currently, the US economy is sending contradictory signals. On the one hand, total business layoffs in May hit the highest level since 2020, and initial jobless claims have also risen to a new high since February, indicating that some businesses are beginning to become more conservative about future demand; on the other hand, the market expects that non-farm payrolls will continue to grow positively in May, and the unemployment rate may also remain steady at 4.3%. This state of a cooling labor market that has not significantly deteriorated yet also explains why San Francisco Fed President Daly emphasized that the Fed is currently unable to commit to rate cuts and cannot rule out the possibility of further policy tightening. However, if we look at the overall asset market, the truly noteworthy issue at the moment is not interest rates but the high concentration of global funds on the AI growth narrative. From SpaceX launching its IPO roadshow, to Anthropic publicly calling for a pause in cutting-edge AI research, to global technology ETFs continuing to attract inflows, all indicate that the market's expectations for the future productivity revolution driven by AI are still intensifying. At the same time, a concerning phenomenon is emerging. According to current data, the total market value of US stocks is about $75 to $76 trillion, while the US M2 money supply is about $22.8 trillion, resulting in a ratio of 316%, far exceeding not only the approximately 150% before the 2008 financial crisis but also surpassing the level of about 300% during the peak of the 2000 dot-com bubble. This means that the expansion rate of stock market value has far outpaced the growth rate of physical money supply. More importantly, this round of market value expansion is highly concentrated in a few large tech companies. AI-benefiting companies like NVIDIA, Microsoft, Apple, Alphabet, and Amazon continue to drive index performance, creating a typical concentration effect of funds. Since the increase in stock market value does not require an equivalent cash inflow, the rate of growth in market paper wealth far exceeds the speed of actual liquidity expansion. Once the market begins to see profit-taking behavior from large institutions, price fluctuations in the overvalued environment could be further amplified. From a global perspective, the ratio of US market value to the money supply is also in an extreme position. Japan is about 102%, major European markets mostly range between 50% to 90%, while the US exceeds 300%. This reflects that global capital is rapidly concentrating on the US technology and AI industry at an unprecedented pace, pushing market expectations for future growth to historic highs. Therefore, the significance of tonight's non-farm payroll data lies not only in determining the Federal Reserve's next policy direction but also in validating whether the current market's willingness to accord a high valuation is still justified. If employment remains resilient, the market may continue to embrace an environment of high valuation coexisting with high interest rates. However, if economic data begins to weaken and corporate profit growth fails to keep up with the vision outlined by AI investments, the future risks the market faces will no longer be merely a lack of liquidity but rather valuation pressure accumulated from an overreliance on a few growth narratives. For the crypto market, this is also a signal worth noting. As global capital continues to concentrate on AI and large-cap tech stocks, cryptocurrencies still need to compete for capital allocation with these high-growth assets in the short term. However, if future markets start to question the rationality of U.S. stock valuations, the speed of fund rotation and risk repricing may be much faster than currently anticipated by the market.

According to PolyBeats monitoring, on the prediction market Polymarket, a savvy trader has placed a $1,100 bet on "Will the U.S. strike Cuba by December 31, 2026?", with an average buying probability of 53.0%. Currently, the probability of "Yes" is 45.0%.Trader 0x29d33707 has bet $1,100, with the top-performing category in this market being Geopolitics, with a net profit of $90,500. Out of 104 settled trades in this category, the trader has a win rate of 78/104 (75%), with 41 trades where the buy price was below $0.8 and the sell price was above $0.95. Within a similar cost range ($0.451-$0.6), the median historical investment amount is $939.On June 4th, AP reported that the U.S. imposed sanctions on the Cuban president and his wife. When asked if the U.S. aimed to hasten the collapse of the Cuban regime, Trump stated that the U.S. simply hoped Cuba would become a well-governed country, mentioning that Cuba has already "to some extent collapsed," and the U.S. would address the Cuba issue after completing actions regarding Iran.Militarily, during Trump's second term, U.S. military actions significantly expanded, including strikes on suspected drug ships in the Caribbean and East Pacific; Axios noted recent military build-up near Cuba, with Trump pushing for political change in Cuba, but he leans more towards a peaceful transition. CNN also reported on the same day that the U.S. has deployed an aircraft carrier to the region, and Secretary of State Rubio has repeatedly stated that Cuba poses a threat to the U.S., but he has also expressed openness to negotiation solutions that could lead Cuba towards democracy, prosperity, freedom, and normalization.Account:0x29d337076f24d135b7b2b08796edfff4e32cb2ed.