Daily Commentary

MarketMinder’s View: This is a good, detailed look at a new push by a number of individual banks to create an interbank money transfer network on the blockchain, which many refer to as a stablecoin. (The coverage touches on several individual banks, so keep in mind we don’t make individual stock recommendations.) These banks, leveraging the network built by The Clearing House, the unseen system behind direct deposit transactions, are stepping up efforts to produce a potentially instantaneous, low-cost, maybe even international system allowing for secure money transfer on the blockchain. Many have long talked of stablecoins and the blockchain as revolutions that could upend the existing banking system, but the reality was always reversed: Banks were much more likely to adopt blockchain technology and block out new entrants, just as in past innovations like the development of Zelle, noted herein. This also follows last month’s announcement that traditional payment technology firms will dive into OUSD, a consortium of 140 financial firms and payment tech companies using the blockchain. Existing firms simply have trust, relationships, networks and assets that can leverage this technology very effectively. All in all, nothing in this is a huge source of future profit. This is more about enhancing service and crowding out a potential source of competition.

MarketMinder’s View: This article touches on a hot-button political issue and wades into electoral politics in the process, so please note MarketMinder favors no party nor any politician. The hot-button issue? Construction and permitting of data centers, cloud-computing hubs central to AI development and growth. Data centers gobble up power and water, so the attendant fear is they will drive up voters’ utility bills—and they are unpopular as a result. Hence, New York Governor Kathy Hochul is bending to legislative pressure and implementing a one-year moratorium on large data center permits (although those already in process will proceed). It is the nation’s first statewide pause, although local blowback is common. While we get the idea of this, there is a counterpoint: Investment into these facilities—while not the only factor driving economic growth—is a notable contributor to it. If such cancellations and broad bans become more widespread, it could interrupt this investment, which tallies into the trillions of dollars. Markets, which already see that investment, could see a shock from sweeping cancellations. While the current scale is too small to wallop stocks, this is a possible risk we are watching.

MarketMinder’s View: This is small beer, as the scale of the economic relationship involving people that cross the UK/Spanish border at the rocky promontory the Brits seized during the War of Spanish Succession is a teensy 15,000 people. But the border was somewhat of a thorny political issue, considering Brexit removed the UK from the EU’s unified, Schengen passport-free travel area. And it was unresolved in the 2020 EU/UK post-Brexit deal. So this is somewhat noteworthy from a symbolic perspective, signifying tighter ties emerging in recent months between Britain and the EU that have smoothed over some trade differences.