Month: August 2024

At a certain level of spending, lifestyle can significantly impact your wealth

Even more than the returns on your portfolio. And managing returns is much more difficult. Wealth is simply the difference between what you have and what you want. It’s a two-sided equation, but many people only think about the part where they earn more. This is not bad. Just don’t be fanatical about it. Some people spend an extra 20 hours a week analyzing and choosing the best stocks or even ETFs with a commission one-tenth of a percent lower than the current one, while losing dozens of times that difference on wine, restaurants, and maintaining an expensive car. However, it’s much more efficient to simply switch to a Toyota. Today’s market turbulence is a reminder of the importance of financial prudence. As portfolios take a hit, it’s worth reflecting on the fundamentals of wealth: knowing the balance between what you have and what you desire. In volatile times like these, it is crucial to focus on what you can control – like your spending habits -rather than getting caught up in the elusive pursuit of outsmarting market swings. As markets fall, remember the wisdom from Taleb’s first and best book, “Fooled by Randomness,” where he talks about Nero Tulip: “He did not depend on a bull market, so a bear market did not bother him much.” submitted by /u/FXgram_ [link] [comments]

Analysts weigh in on market selloff.

US stock futures tumbled Monday as the global stock selloff deepened, driven by fears that the Federal Reserve is moving too late to support a slowing economy. Nasdaq 100 futures fell sharply by 3.3% after the index entered a technical correction on Friday. S&P 500 contracts dropped more than 2.1%. Europe’s Stoxx 600 benchmark declined over 2.2%, marking its largest three-day drop since June 2022. In Japan, the Topix and Nikkei indexes both plunged over 12%. Taiwan’s benchmark had its worst day on record, while a broader gauge of Asian shares experienced its steepest decline in over four years. The yen surged more than 2.7% against the dollar. submitted by /u/Ankle_be [link] [comments]

Are You Buying This Dip or Is the Bottom Still Far Off? What’s Happening in the Markets This Morning

Market Update: Japan’s stock market experiences its largest 2-day plunge on record. The “Magnificent 7” stocks shed over $1 trillion in market value today. The cryptocurrency market loses over $500 billion in market cap within 24 hours. Markets are now factoring in a 60% probability of an emergency Fed rate cut. South Korea has suspended all sell orders on its stock market. Nasdaq futures drop by as much as 6.5% in a single day. Today’s decline will be remembered as historic. Not much more detail PRE-MARKET TRADING OFFICIALLY OPENS: Nvidia, $NVDA, -8% Tesla, $TSLA: -6% Apple, $AAPL: -6% Alphabet, $GOOGL: -5% Meta, $META: -5% Microsoft, $MSFT: -5% Amazon, $AMZN -4% The Magnificent 7 is currently set to erase $1.5 TRILLION of market cap today alone. Bond markets are now pricing in a 60% likelihood of an emergency interest rate cut within the next week. This would be the first emergency rate cut since March 2020, during the pandemic. Was something missed? submitted by /u/XGramatik [link] [comments]

Oil prices drop as US recession fears spark broader selloff

London (Reuters) -Oil futures extended losses in a volatile session on Monday as fears of a recession in top oil consumer the United States offset supply worries stemming from mounting tensions in the Middle East, the world’s largest oil producing region. Share markets also tumbled across Asia as U.S. recession fears sent investors rushing from risk assets while wagering that rapid rate cuts will be needed to drive economic growth. Brent crude futures dropped 53 cents, or 0.7%, to $76.28 a barrel by 0819 GMT. U.S. West Texas Intermediate crude futures were down 57 cents, or 0.6%, at $72.95. Brent and WTI tumbled more than 3% on Friday submitted by /u/Ankle_be [link] [comments]

Two United States Senators have introduced a bill aimed at expanding the Secret Service’s powers to combat cryptocurrency-related crime.

The “Combatting Money Laundering in Cyber Crime Act of 2024” bill was introduced by Nevada’s Catherine Cortez Masto and Iowa’s Charles Grassley on Aug. 2. It would expand the Secret Service’s authority to investigate cryptocurrency transactions made by unlicensed money transmitting businesses and potential frauds committed against US financial institutions. https://preview.redd.it/wek2pro35tgd1.png?width=631&format=png&auto=webp&s=d385389591a1fb8da64d53d71e2456809d6b92f0 submitted by /u/Lor1al [link] [comments]

The crypto market has crashed, with Bitcoin’s price dropping to nearly $49,000 at its lowest point and Ethereum falling to $2,100. Altcoins from the top 100 by market capitalization have seen declines of up to 30% in just one day.

The total volume of long liquidations on exchanges has exceeded $1.05 billion in the past 24 hours, according to Coinglass. Over 270,000 traders had their positions forcibly closed, most of them in Bitcoin and Ethereum. Additionally, more than $350 million in liquidations have been recorded in decentralized finance applications, according to The Block. submitted by /u/FXgram_ [link] [comments]

Is Buffett signaling the end for Apple? Are we looking at a short play ahead? Where’s Michael Burry?

Warren Buffett’s Berkshire Hathaway now holds its smallest position in Apple, $AAPL, since 2017. https://preview.redd.it/3maql47wdpgd1.png?width=1116&format=png&auto=webp&s=e90606d319d8e8187a836bf886d605f74bf55110 Currently, Berkshire Hathaway owns just 400 million shares of $AAPL, a 56% drop from the 906 million shares held in 2023. Since March 31st, Berkshire has reduced its Apple holdings from $135.4 billion to $84.2 billion. The rest of Berkshire’s top 5 holdings remain unchanged, according to Zerohedge. This indicates that Buffett specifically chose to sell $AAPL. Meanwhile, Berkshire Hathaway only bought back $345 million of its own stock in Q2, the lowest amount since 2018. Last quarter, Berkshire Hathaway sold a staggering $75.5 billion worth of stock, making it the largest quarterly sale in the company’s history, according to Zerohedge. https://preview.redd.it/avkipg12epgd1.png?width=1114&format=png&auto=webp&s=ae73d2478f8cb330a00c22787893794ed452b073 Buffett is now sitting on a record $277 billion in cash. To put this in perspective, Berkshire Hathaway now owns about 4% of all Treasury bills issued to the public. They even hold more T-Bills than the $195 billion on the Fed’s balance sheet. When Warren Buffett holds more T-Bills than the Fed itself, it’s clear he’s concerned. Brace yourself. Now, about the housing market. https://preview.redd.it/upe64kfndpgd1.png?width=838&format=png&auto=webp&s=2bb28ab1fe7ad0979de5c21f62b1b428b89a6c31 U.S. pending home sales dropped by 5.7% year-over-year in July, the largest decline in 9 months. Houston, Atlanta, and Minneapolis saw the biggest drops, with declines of 30.5%, 16.1%, and 15.2%, respectively. Pending home sales are now officially down 30% since 2021, despite mortgage rates falling to 6.8% from 7.2% in May. Additionally, 6.8% of homes on the market saw price drops in July, according to Redfin. Is the housing market finally cooling off? submitted by /u/XGramatik [link] [comments]

The 10-Year Note Yield experienced its largest weekly decline since the 2008 Financial Crisis, dropping 40 basis points last week.

Additionally, the average interest rate on a 30-year fixed mortgage fell by 22 basis points in just one day, on Friday. Meanwhile, $TLT, a widely followed bond-tracking ETF, surged by 6%, marking its biggest gain since January 2023. $TLT has now risen 2% year-to-date after being down over 10% just four months ago. For the first time since 2020, the bond markets are behaving as if we’re heading into a recession. So much for a “soft landing.” submitted by /u/AdLow8046 [link] [comments]

Increasing popularity of safe-haven stocks

https://preview.redd.it/66112uaxdogd1.jpg?width=863&format=pjpg&auto=webp&s=4a07202423f509469b5830de6b1c29abc7d1ecde On Friday, 74% of companies in the Utilities sector reached a new 52-week high, the highest percentage since March 2019. This is the fifth-largest share over the past 14 years. As the stock market sell-off intensified, investors shifted their capital into more defensive stocks like utilities. Consequently, the S&P 500 Utilities sector rallied by 4.4% over the past week and is now up 17.1% year-to-date. submitted by /u/FXgram_ [link] [comments]

Pepperstone, Chris Weston: A Traders’ Week Ahead Playbook – Markets to go after a more prolific central bank response

Authored by Chris Weston With broad market volatility coming alive, and with uncertainty rising, we ask whether the economic data this week can lead to calmer conditions and a turn in sentiment and direction. Or whether the ugly moves seen in so many of our key markets morph into something even more sinister, with the market starting to go after a more emphatic central bank response. As many try to model the extent of the US and synchronized global growth slowdown, we’re at a point in the cycle where market players are facing an inability to price certainty and risk. In turn, the would-be buyers of risk stand aside, resulting in a deterioration in liquidity conditions and violent price action, de-risking, and further hedging of portfolios. What really matters now is whether money managers and traders feel sentiment has become too pessimistic, or if this deleveraging and risk aversion manifests into even higher volatility and drawdown. To answer this pertinent question the market needs to see the outcome of the data to offer increased confidence to price the risk of recession, and how that may feed into earnings expectations, consumer behaviours and business decisions. If we are going to look at the data this week that has the potential influence, then the US ISM services, US weekly jobless claims and US SLOOS (Senior Loan Officer Survey) would be event risks I instinctively see as having the potentially move the dial. US and European corporate earnings also come in thick and fast, but while these will offer idiosyncratic pockets of volatility in individual names, there should be limited read-through into broad market volatility. The unwind of a 9-month low vol grind higher in risky assets What we’ve witnessed and what many have traded, is really a case of slowly, slowly then all at once. In essence, the explosion in volatility has been the result of a 9-month grind higher in global equity bourses – and notably those within the US, Japanese and the equity indices with a large weighting to tech and high growth – where pension and hedge funds have run short volatility strategies to enhance returns. Improved earnings expectations, the reassurance of ‘the Fed put’, and a consensus view that the US economy was moving towards a soft landing -have seen pullbacks in equity and carry strategies well supported, with active players chasing price when the bullish momentum resumed. Is this time different? The US and global data flow has been slowing for several months, but after last week’s poor US ISM manufacturing report, the rise in US weekly jobless claims, a weak nonfarm payrolls report (with the Sahm rule triggered), and Intel laying off 15,000 employees, some in the market are asking if the US is already in recession. The question of whether the Fed has kept rates too high for too long is also in the mix, with increased debate around whether we’re seeing evidence of a policy mistake from the Fed. The bulls will point out that this is not the first time in the past three years that market participants have priced a high chance of US recession risk. However, the dynamic unfolding in markets does have a different feel to other episodes. We’ve opined many times before that there is a key difference between the Fed cutting rates towards a neutral setting for insurance purposes, relative to a scenario where the Fed front load rate cuts and pull out more ‘emergency’ measures. US interest rate swap pricing emergency action US interest rate swaps now price almost 50bp of cuts for the September FOMC meeting, and 115bp of cuts by December – essentially portraying two 50bp cuts and one 25bp cut this year, which can clearly be considered more of an ‘emergency’ measure. Many have bought into the US 2yr Treasury, where yields fell an incredible 27bp on Friday, and 50bp on the week. This has resulted in the US Treasury yield curve (2s vs 10s) aggressively steeping on the week and where having been ‘inverted’ since July 2022 (i.e. short-term yields are higher than long-term Treasury yields) we’re now looking at the yield curve turning positive – statistically a signal that recession risk is rising. In equity, we’ve seen a sharp drawdown (and underperformance) from US small caps, consumer discretionary names, high beta equity plays and low-quality equity, with a solid flight into staples. In the FX markets, we’ve all witnessed an incredible unwind of the JPY-funded carry trade and this is feeding into huge selling of Japanese equities, which is also weighing on other DM equity markets. Markets to go after the Fed This is a market that feels the Fed and other central banks need to move out of a restrictive policy setting, and with a real sense of urgency. If they don’t sense that urgency, then markets will go after central banks and take their pound of flash. The economic concerns have spread into the corporate credit markets, with US high yield spreads widening 34bp on Friday (53bp on the week, and while at 3.59% are not yet at truly worrying levels, if the rate of change and the deterioration in the credit markets continues then equity will not take it kindly. Multi-asset implied volatility – G10 FX, VIX index, Gold We can see in the options market huge hedging activity, where notably the VIX index (S&P500 30-day implied volatility) went on a wild ride on Friday pushing into 30%, before settling at 23.4%. The VIX at 23% implies a move weekly move in the S&P500 of -/+3.3%, and for those who like two-way intraday trading opportunity, this is an almost nirvana level of volatility. A VIX index above 30% – should it occur – suggests intraday moves can get a little wild and traders need to be in front of the platform to react dynamically. This level of volatility also typically leads to reduced liquidity in order books, which can perpetuate movement and lead to wider bid-offer spreads and… Continue reading Pepperstone, Chris Weston: A Traders’ Week Ahead Playbook – Markets to go after a more prolific central bank response