News

ChainCatcher News, according to Bloomberg, the three types of investors in Michael Saylor’s Strategy—Bitcoin holders, leveraged equity traders, and preferred shareholders—are all facing pressure. This week, Strategy sold 32 Bitcoins, marking its first sale since the end of 2022 and breaking its “never sell” commitment. Bitcoin has fallen to a four-month low, Strategy’s share price has dropped about 70% from last year’s peak, and the STRC preferred share has fallen below its $100 par value. STRC’s annualized dividend is 11.5%. If the market continues to weaken, the pressure of paying dividends will continue to rise.

On June 5, as the redemption window for the new quarter opened, the redemption storm in the US private credit market struck once more. Several leading institutions have disclosed record withdrawal requests, and the confidence in this $1.8 trillion industry is far from restored. Notably, Blackstone's BCRED saw redemption requests reach 10%, hitting a historical high and triggering the 5% limit again, while the redemption ratio for the Cliffwater flagship fund rose to 17%, prompting Partners Group to block exit channels. Fitch data indicates that the default rate in private credit has surged to a historical peak of 6%, and PIMCO has warned that a prolonged credit default cycle has begun. The private credit industry is overly concentrated in software assets, and the disruptive impact of artificial intelligence is putting this sector under reevaluation pressure. PIMCO's Chief Investment Officer Daniel Ivascyn cautioned that 'the first prolonged credit default cycle in years has started.'

Recently, tech giants such as Meta, Cisco, and IBM have attributed large-scale layoffs to artificial intelligence improving efficiency. According to a report by Challenger, Gray & Christmas, AI has been the main reason for layoffs over the past three months, with 21,500 AI-related layoffs in April, and more than 38,000 in May, accounting for 40% of total layoffs. These signs have sparked concerns in the market about whether AI will bring a “jobs apocalypse.”However, from macro data, the U.S. labor market has not yet shown signs of a broad slowdown. The nonfarm payrolls reports for the past two months have both exceeded expectations; year-to-date, the average monthly increase is about 80,000 jobs, enough to keep the unemployment rate stabilizing at a historically low 4.3%. The market expects nonfarm payrolls in May to increase by between 85,000 and 120,000, with the unemployment rate remaining at 4.3%, and average hourly wages rising 0.3% month-on-month.Leading indicators suggest that this month's employment report may be above expectations. In May, the ISM manufacturing employment sub-index rose to 48.6, and the services employment sub-index was 47.9; the ADP employment report showed an increase of 122,000 jobs, higher than last month's 109,000; the four-week moving average of initial jobless claims rose to 215,000. Overall, headline job growth may be in the range of 120,000 to 160,000.Combined with the ongoing closure of the Strait of Hormuz accelerating inflation above the Federal Reserve’s 2% target, the market has started pricing in rate hikes within the year. The CME FedWatch tool shows a roughly 50% chance of at least one rate hike by December. If May’s nonfarm payrolls data significantly exceeds expectations (over 110,000) and uncertainty in the Middle East persists, this could push the dollar index to break through its current consolidation range.From a technical perspective, the dollar index has been consolidating in a narrow range in recent weeks, reflecting a mix of geopolitical risks and mixed economic data. If it breaks above 99.50, it could test one-year highs near 100.50; if it breaks downwards, it may fall toward 97.50. The recent low volatility is unlikely to last, and the May nonfarm payrolls report may be a key catalyst for the market’s direction.