U.S. Weekly Inflows Reach $8.6B as Bonds Outpace Stocks
Fixed income funds led the weekly flows as the market looks to rebound.
Fixed income funds led the weekly flows as the market looks to rebound.
Apple shares lost ground amid concerns about iPhone 16 sales.
On today's episode of Catalysts, Hosts Seana Smith and Madison Mills break down key stories from how an interest rate cut and the election may impact markets to TikTok's legal battle against a potential ban in the US. While tech has certainly spearheaded the market's record growth this year, many investors are gearing up for a potential rotation as interest rates ease. HSBC head of equity strategy for the Americas Nicole Inui explains that the market will likely broaden outside of tech, benefiting sectors like financials (XLF), utilities (XLU), and healthcare (XLV). She adds, "When we look at the market as a whole, it looks like it's trading at a very hefty premium. You take out the Mag Seven, you take out tech, valuations aren't as elevated compared to historical levels. So yes, tech, Mag Seven, you still see strong earnings growth." EY chief economist Greg Daco expects the Federal Reserve to initiate a 25-basis-point cut as it kicks off its rate-easing cycle. However, he notes that the central bank walks a delicate tightrope: "If you ease monetary policy by 25 basis points, it does little to nothing in terms of consumer rates, auto loan rates, mortgage rates, very little. But the risks are asymmetric. If the Fed does not ease monetary policy by as much as markets are anticipating, then you'll actually see a repricing of rates and you're going to see upward movement in terms of rates, and that could damage consumer spending activity, housing activity, business investment. That is the real risk right now." Meanwhile, TikTok is in court on Monday for a key hearing in its ongoing battle to block a law that could ban the app in the US. Rachel Tipograph, the CEO of e-commerce analytics company MikMak, tells Yahoo Finance that the odds of a TikTok disruption, either through a ban or a sale, are rising. Looking at Snapchat (SNAP) and Meta Platforms (META) stock, the analyst says, “There is an implied probability there that TikTok disruption is more likely than not in the next four months, and I feel that could manifest into either a complete sale, complete ban, or somewhere in between.” He says this means “eyeballs and money move away from TikTok” which helps Meta and Snapchat. GenWealth Financial Advisors financial advisor and host of "Get Ready for the Future Show" Scott Inman joins Catalysts to discuss how the election may impact markets (^DJI,^GSPC, ^IXIC) and how investors can best prepare their portfolios for the rest of the year. He believes that markets "don't really care about who is in office," noting that they have performed well and GDP (gross domestic product) has grown regardless of a Democratic or Republican administration. This post was written by Melanie Riehl
The US dollar has fallen a bit in the past 24 hours, testing the crucial 140 level. This is a market that I think continues to see a lot of influence on risk appetite not only here, but also in several other markets around the world.
The Aussie dollar continues to see a lot of range bound trading, although the first day of the week is looking very positive. This is a market that has a massive ceiling above, and also a lot of questions about the overall global economy.
U.S. stock futures were mixed on Monday. The market is gauging what’s to come at the Federal Reserve’s monetary-policy meeting and the potential for a bigger rate cut than previously expected. Dow Jones Industrial Average futures were up 102 points, or 0.3%.
According to CoinDesk, more than 40 financial firms will join the Bank for International Settlements (BIS) to explore how tokenization can enhance wholesale cross-border payments in Project Agorá. The initiative aims to combine wholesale central bank money with tokenized commercial bank deposits, the BIS announced on Monday.The financial firms were selected by the BIS following a public call for participation in May. Project Agorá will now enter its design phase, focusing on the digitization of real-world assets. Tokenization, a technology several countries are exploring, is at the core of this project. The BIS launched Project Agorá in April, bringing together seven monetary authorities from the U.K., Japan, South Korea, Mexico, Switzerland, the U.S., and Europe.The project builds on the BIS's unified ledger concept and aims to investigate how tokenized commercial bank deposits can be seamlessly integrated with tokenized wholesale central bank money in a public-private programmable core financial platform. This major public-private partnership seeks to address several structural inefficiencies in current payment systems, particularly in cross-border transactions.The BIS highlighted the challenges for cross-border payments, including different legal, regulatory, and technical requirements, as well as varying operating hours. Project Agorá aims to overcome these obstacles and improve the efficiency of international payments.
The central bank is widely expected to cut interest rates on Wednesday by 25 or 50 basis points.
According to PANews, X Payments, a wholly-owned subsidiary of Elon Musk's X (formerly Twitter), has obtained a money transfer license in Oklahoma. This brings the total number of states where X Payments is licensed to 37. The company aims to secure licenses in all 50 states and plans to launch its payment services across the United States later this year.
Speculation about the budget has left some feeling they need to take action to protect themselves from whatever it holds in store, but this could backfire.