GDP Jumps 6.4% In 1st Quarter
Economic recovery is in full swing helped fueled by government spending and those nice “stimmies.” We are now closer to where we started before the pandemic punched us in the face.
This was the best period for GDP since 2003, with the exception of the reopening-fueled 3rd Quarter in 2020. S&P 500 companies have reported the strongest growth earnings in more than a decade. Economists were aiming for 6.5% increase, but we just missed the mark.
Consumers, who make up 68.2% of the economy, have increased their spending by 10.7% last quarter. The weak link in our economic recovery, which is the service industry, even saw growth of 4.6%.
The Bureau of Economic Research still has not declared an end of the recession since the GDP has not officially passed its previous peak before the pandemic. That and the unemployment numbers make it too soon to fully reopen, but we are getting closer.
In the meantime, the Federal Reserve have left interest rates near zero and will continue purchasing assets to further support economic growth.
Ethereum Hit New Highs
This week Ethereum hit new all-time highs, breaking out of Bitcoin’s shadow to reach $2,700. Bitcoin still remains stuck around the $54 mark but shows several indicators it could start moving soon.
The massive spike came about after news of its ongoing integration into the country’s financial systems. The European Investment Bank will start selling bonds on the Ethereum network. This move is backed by Goldman Sachs and other big players signaling a huge shift in focus on the altcoin.
It seems Ethereum is starting to finally be accepted by financial institutions as a solid platform to adapt.
Big Week of Earnings
This week was packed with quarterly earnings reports from the top Tech companies. The week started off with Tesla earnings showing their best quarter yet, backed by over $100 million from Bitcoin profits taken. Their crypto portfolio Is rumored to be sitting at around $2.5 Billion, up from their initial $1.5 billion investment.
Though their earnings were up 74% year over year, the stock still plummeted following the call. Analysts were overall very unimpressed by the numbers. When excluding the sales of regulatory credits and Bitcoin profits, Tesla expectations were worse than predicted.
The rest of the big tech earnings were all well-received. These included Alphabet, Google’s parent company, Apple, Facebook, Amazon and many more. The biggest winners this week seem to be UPS and Crocs with their better than estimated earnings.
All Eyes Are on China
The Apple iPhone has been a hot commodity lately, pushing revenue 16% higher than initially predicted. But they were particularly popular in China.
China’s focus on 5G products could be a big factor in pushing their earnings so high. The sales coming from China represented a 88.3% growth from last year. One more surprising figure is the sales from them accounted for 19.8% of sales last quarter.
Tesla saw an even bigger reliance on the Chinese market, receiving 28.84% of revenue last quarter.
More attention is now being focused on capitalizing on this growth in China and maintaining market dominance.
