TechFlow news, July 16, QCP Capital released a report stating that the most obvious characteristic of the market this week is "divergence": in areas such as crude oil, interest rates, the Chinese economy, and cryptocurrency funding, there is a significant disconnect between surface narratives and underlying fundamentals.
In terms of crude oil, although peace deals face crisis and shipments through the Strait of Hormuz have dropped to lows not seen since late May, Saudi Arabia resetting pricing and OPEC and its allies increasing quotas again indicate that the supply side is recovering.
In terms of interest rates, Waller's stance has turned clearly hawkish, but consumer demand is weakening, and revolving credit has contracted after exceeding 10% growth in April. Regarding China, factory prices are near four-year highs, but retail sales have declined.
In terms of cryptocurrency, MicroStrategy adjusted its financing path, increasing USD reserves through equity financing without utilizing its Bitcoin holdings.
QCP believes that when such widespread divergence appears between market surface and underlying structure, what deserves attention next is which end will be repriced first.
