The semiconductor shortage is continuing to bleed out the auto industry’s production numbers. Meanwhile, bank-backed cryptocurrencies could be a thing in the U.S. fairly soon. So what will the stock market do today?
- The S&P 500 is up 0.82%
- The Dow Jones Industrial Average is up 0.83%
- The Nasdaq Composite is up 0.92%
So what else will the stock market do today? Here are some of the top stories.
What Will the Stock Market Do Today? Talk CBDC.
What’s a CBDC, you ask? It’s a Central Bank Digital Currency, a sort of response to digital currency that exists in a centralized way. CBDCs are digital currencies backed by banks with some sort of fiat. These cryptos are not the DeFi tokens that investors have been clamoring for for passive income. Rather, countries are toying with the idea of creating CBDCs backed by their own fiat, in order to create a national digital currency.
There are plenty of countries who are looking into CBDCs. In fact, the Atlantic Council has an online tool where you can look at countries’ progress on creating digital currencies. According to the data, 34 countries are somewhere between the development, pilot and launch of their own national crypto, each with their own intents and purposes and varying degrees of success. On top of that, there are 33 countries in the research stage, including the U.S.
And on July 27, the Atlantic Council is hoping to push the U.S. past research and into some sort of development. According to Axios, the CBDC bulls will go in front of Congress to testify on central bank-backed digital currency.
While Congress may need some convincing, you can be sure that the Atlantic Council has the backing of the Federal Reserve. Jerome Powell, chairman of the Fed, is making known is bullishness on CBDC. In his two-day address of the economy with Congress, Powell spent a fair bit of time railing against stablecoins and promoting the idea of dollar-backed digital tender. Of course, he also said the project cannot be implemented if Congress is not on board, so he’s likely to be watching this testimony with fingers crossed.
Chip Woes Continue
The car market is off the charts right now. Customers are buying cars before they even lay eyes on them, and many are relegated to signing up for waiting lists. However, manufacturing continues to be strangled by supply chain issues, barring many customers from purchasing. As a result, consumer spending on vehicles saw a 2% decrease in June.
Chips, of course, are to blame for all of this. Even as demand rebounds in a resounding way, automakers are simply unable to deliver. The chip shortage is preventing new cars from seeing production. And now, companies that weren’t as affected are seeing their own woes.
BMW and Daimler, the company behind Mercedes Benz, say today that the chip shortage has reached their factories in a resounding way. Shortages have forced both companies to stop assembly, decreasing their output by tens of thousands of cars. On U.S. soil, companies are struggling just as badly. General Motors (NYSE:GM) is slowing production of their vastly popular pickup models, citing the shortage.
This all comes at a time when chip manufacturers themselves are trying to up their game. In fact, Intel (NASDAQ:INTC) is flirting with the idea of acquiring New York-based chip company GlobalFoundries in order to give itself the tools to manufacture chips to sell to other companies. Were this to happen, we’d see chip production ramp up vastly in the U.S., as well as provide some competition for Taiwan Semiconductor (NYSE:TSM), who owns over 56% of the chip market share.
What Else We’re Watching
- Elon Musk is announcing Tesla’s (NASDAQ:TSLA) plan to open its supercharging stations to other electric vehicle (EV) models as early as this year.
- Today’s a big day for tech earnings, with Intel, Snap Inc. (NYSE:SNAP) and Twitter (NYSE:TWTR) all posting their Q2 numbers this afternoon.
- A virtual horse-racing NFT (non-fungible token) app called Zed Run just made $20 million in its newest funding round, thanks to investments from The Chernin Group.
On the date of publication, Brenden Rearick did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.