\n

See Related:<\/em><\/strong> United States May Enter Mild Recession As Yet Another Hike In Fed Rates Expected<\/a><\/p>\n\n\n\n

Yellen warned that waiting until the last minute to take action on this issue would cause harm to \"business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States.\"<\/em> Yellen believes that defaulting on their debt would be a financial catastrophe, raising the cost of borrowing without an end, making future investment \"substantially more costly.\u201d<\/em><\/p>\n","post_title":"United States May Fund Its Deficit By Printing More Money; Could Default By June 1st","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-may-fund-its-deficit-by-printing-more-money-could-default-by-june-1st","to_ping":"","pinged":"","post_modified":"2023-05-04 13:04:05","post_modified_gmt":"2023-05-04 03:04:05","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11422","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

ADVERTISEMENT
\n

If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests.\"<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> United States May Enter Mild Recession As Yet Another Hike In Fed Rates Expected<\/a><\/p>\n\n\n\n

Yellen warned that waiting until the last minute to take action on this issue would cause harm to \"business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States.\"<\/em> Yellen believes that defaulting on their debt would be a financial catastrophe, raising the cost of borrowing without an end, making future investment \"substantially more costly.\u201d<\/em><\/p>\n","post_title":"United States May Fund Its Deficit By Printing More Money; Could Default By June 1st","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-may-fund-its-deficit-by-printing-more-money-could-default-by-june-1st","to_ping":"","pinged":"","post_modified":"2023-05-04 13:04:05","post_modified_gmt":"2023-05-04 03:04:05","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11422","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

ADVERTISEMENT
\n

\"After reviewing recent federal tax receipts, our best estimate is that we will be unable to continue to satisfy all of the government\u2019s obligations by early June, and potentially as early as June 1, if Congress does not raise or suspend the debt limit before that time.<\/em><\/p>\n\n\n\n

If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests.\"<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> United States May Enter Mild Recession As Yet Another Hike In Fed Rates Expected<\/a><\/p>\n\n\n\n

Yellen warned that waiting until the last minute to take action on this issue would cause harm to \"business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States.\"<\/em> Yellen believes that defaulting on their debt would be a financial catastrophe, raising the cost of borrowing without an end, making future investment \"substantially more costly.\u201d<\/em><\/p>\n","post_title":"United States May Fund Its Deficit By Printing More Money; Could Default By June 1st","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-may-fund-its-deficit-by-printing-more-money-could-default-by-june-1st","to_ping":"","pinged":"","post_modified":"2023-05-04 13:04:05","post_modified_gmt":"2023-05-04 03:04:05","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11422","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

ADVERTISEMENT
\n

United States Treasury Secretary, Janet Yellen, wrote to House Speaker Kevin McCarthy;<\/p>\n\n\n\n

\"After reviewing recent federal tax receipts, our best estimate is that we will be unable to continue to satisfy all of the government\u2019s obligations by early June, and potentially as early as June 1, if Congress does not raise or suspend the debt limit before that time.<\/em><\/p>\n\n\n\n

If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests.\"<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> United States May Enter Mild Recession As Yet Another Hike In Fed Rates Expected<\/a><\/p>\n\n\n\n

Yellen warned that waiting until the last minute to take action on this issue would cause harm to \"business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States.\"<\/em> Yellen believes that defaulting on their debt would be a financial catastrophe, raising the cost of borrowing without an end, making future investment \"substantially more costly.\u201d<\/em><\/p>\n","post_title":"United States May Fund Its Deficit By Printing More Money; Could Default By June 1st","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-may-fund-its-deficit-by-printing-more-money-could-default-by-june-1st","to_ping":"","pinged":"","post_modified":"2023-05-04 13:04:05","post_modified_gmt":"2023-05-04 03:04:05","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11422","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

ADVERTISEMENT
\n

Could The United States Default By June?<\/h2>\n\n\n\n

United States Treasury Secretary, Janet Yellen, wrote to House Speaker Kevin McCarthy;<\/p>\n\n\n\n

\"After reviewing recent federal tax receipts, our best estimate is that we will be unable to continue to satisfy all of the government\u2019s obligations by early June, and potentially as early as June 1, if Congress does not raise or suspend the debt limit before that time.<\/em><\/p>\n\n\n\n

If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests.\"<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> United States May Enter Mild Recession As Yet Another Hike In Fed Rates Expected<\/a><\/p>\n\n\n\n

Yellen warned that waiting until the last minute to take action on this issue would cause harm to \"business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States.\"<\/em> Yellen believes that defaulting on their debt would be a financial catastrophe, raising the cost of borrowing without an end, making future investment \"substantially more costly.\u201d<\/em><\/p>\n","post_title":"United States May Fund Its Deficit By Printing More Money; Could Default By June 1st","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-may-fund-its-deficit-by-printing-more-money-could-default-by-june-1st","to_ping":"","pinged":"","post_modified":"2023-05-04 13:04:05","post_modified_gmt":"2023-05-04 03:04:05","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11422","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

ADVERTISEMENT
\n

See Related:<\/em><\/strong> Ray Dalio; The Federal Reserve Is Setting Off A \u201cTerrible Calamity\u201d<\/a><\/p>\n\n\n\n

Could The United States Default By June?<\/h2>\n\n\n\n

United States Treasury Secretary, Janet Yellen, wrote to House Speaker Kevin McCarthy;<\/p>\n\n\n\n

\"After reviewing recent federal tax receipts, our best estimate is that we will be unable to continue to satisfy all of the government\u2019s obligations by early June, and potentially as early as June 1, if Congress does not raise or suspend the debt limit before that time.<\/em><\/p>\n\n\n\n

If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests.\"<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> United States May Enter Mild Recession As Yet Another Hike In Fed Rates Expected<\/a><\/p>\n\n\n\n

Yellen warned that waiting until the last minute to take action on this issue would cause harm to \"business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States.\"<\/em> Yellen believes that defaulting on their debt would be a financial catastrophe, raising the cost of borrowing without an end, making future investment \"substantially more costly.\u201d<\/em><\/p>\n","post_title":"United States May Fund Its Deficit By Printing More Money; Could Default By June 1st","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-may-fund-its-deficit-by-printing-more-money-could-default-by-june-1st","to_ping":"","pinged":"","post_modified":"2023-05-04 13:04:05","post_modified_gmt":"2023-05-04 03:04:05","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11422","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

ADVERTISEMENT
\n

I think in the end, it\u2019s always the case that they print a lot of money in and make it easier to pay off, but you have the reduced value of money.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> Ray Dalio; The Federal Reserve Is Setting Off A \u201cTerrible Calamity\u201d<\/a><\/p>\n\n\n\n

Could The United States Default By June?<\/h2>\n\n\n\n

United States Treasury Secretary, Janet Yellen, wrote to House Speaker Kevin McCarthy;<\/p>\n\n\n\n

\"After reviewing recent federal tax receipts, our best estimate is that we will be unable to continue to satisfy all of the government\u2019s obligations by early June, and potentially as early as June 1, if Congress does not raise or suspend the debt limit before that time.<\/em><\/p>\n\n\n\n

If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests.\"<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> United States May Enter Mild Recession As Yet Another Hike In Fed Rates Expected<\/a><\/p>\n\n\n\n

Yellen warned that waiting until the last minute to take action on this issue would cause harm to \"business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States.\"<\/em> Yellen believes that defaulting on their debt would be a financial catastrophe, raising the cost of borrowing without an end, making future investment \"substantially more costly.\u201d<\/em><\/p>\n","post_title":"United States May Fund Its Deficit By Printing More Money; Could Default By June 1st","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-may-fund-its-deficit-by-printing-more-money-could-default-by-june-1st","to_ping":"","pinged":"","post_modified":"2023-05-04 13:04:05","post_modified_gmt":"2023-05-04 03:04:05","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11422","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

ADVERTISEMENT
\n

I think when it comes down to it, there\u2019s just too much debt, and we\u2019re adding to it too quickly\u2026 Either that debt will be paid off with hard money, in which case there\u2019s not much printing and so on, or it will be paid off with printing a lot of money to make it easier to pay off. <\/em><\/p>\n\n\n\n

I think in the end, it\u2019s always the case that they print a lot of money in and make it easier to pay off, but you have the reduced value of money.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> Ray Dalio; The Federal Reserve Is Setting Off A \u201cTerrible Calamity\u201d<\/a><\/p>\n\n\n\n

Could The United States Default By June?<\/h2>\n\n\n\n

United States Treasury Secretary, Janet Yellen, wrote to House Speaker Kevin McCarthy;<\/p>\n\n\n\n

\"After reviewing recent federal tax receipts, our best estimate is that we will be unable to continue to satisfy all of the government\u2019s obligations by early June, and potentially as early as June 1, if Congress does not raise or suspend the debt limit before that time.<\/em><\/p>\n\n\n\n

If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests.\"<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> United States May Enter Mild Recession As Yet Another Hike In Fed Rates Expected<\/a><\/p>\n\n\n\n

Yellen warned that waiting until the last minute to take action on this issue would cause harm to \"business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States.\"<\/em> Yellen believes that defaulting on their debt would be a financial catastrophe, raising the cost of borrowing without an end, making future investment \"substantially more costly.\u201d<\/em><\/p>\n","post_title":"United States May Fund Its Deficit By Printing More Money; Could Default By June 1st","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-may-fund-its-deficit-by-printing-more-money-could-default-by-june-1st","to_ping":"","pinged":"","post_modified":"2023-05-04 13:04:05","post_modified_gmt":"2023-05-04 03:04:05","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11422","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

ADVERTISEMENT
\n

\u201cSo I think you\u2019re in the part of the cycle where you\u2019ve had the tightening and then the dominoes are beginning to fall. And I think that that\u2019s going to produce more problems.<\/em><\/p>\n\n\n\n

I think when it comes down to it, there\u2019s just too much debt, and we\u2019re adding to it too quickly\u2026 Either that debt will be paid off with hard money, in which case there\u2019s not much printing and so on, or it will be paid off with printing a lot of money to make it easier to pay off. <\/em><\/p>\n\n\n\n

I think in the end, it\u2019s always the case that they print a lot of money in and make it easier to pay off, but you have the reduced value of money.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> Ray Dalio; The Federal Reserve Is Setting Off A \u201cTerrible Calamity\u201d<\/a><\/p>\n\n\n\n

Could The United States Default By June?<\/h2>\n\n\n\n

United States Treasury Secretary, Janet Yellen, wrote to House Speaker Kevin McCarthy;<\/p>\n\n\n\n

\"After reviewing recent federal tax receipts, our best estimate is that we will be unable to continue to satisfy all of the government\u2019s obligations by early June, and potentially as early as June 1, if Congress does not raise or suspend the debt limit before that time.<\/em><\/p>\n\n\n\n

If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests.\"<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> United States May Enter Mild Recession As Yet Another Hike In Fed Rates Expected<\/a><\/p>\n\n\n\n

Yellen warned that waiting until the last minute to take action on this issue would cause harm to \"business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States.\"<\/em> Yellen believes that defaulting on their debt would be a financial catastrophe, raising the cost of borrowing without an end, making future investment \"substantially more costly.\u201d<\/em><\/p>\n","post_title":"United States May Fund Its Deficit By Printing More Money; Could Default By June 1st","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-may-fund-its-deficit-by-printing-more-money-could-default-by-june-1st","to_ping":"","pinged":"","post_modified":"2023-05-04 13:04:05","post_modified_gmt":"2023-05-04 03:04:05","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11422","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

ADVERTISEMENT
\n

Ray Dalio, the billionaire founder of one of the world\u2019s largest hedge funds, Bridgewater Associates, was recently\u00a0interviewed<\/a>. He explains that the United States' $31.45T debt may have to be resolved by printing more money, also referred to as currency debasement.<\/p>\n\n\n\n

\u201cSo I think you\u2019re in the part of the cycle where you\u2019ve had the tightening and then the dominoes are beginning to fall. And I think that that\u2019s going to produce more problems.<\/em><\/p>\n\n\n\n

I think when it comes down to it, there\u2019s just too much debt, and we\u2019re adding to it too quickly\u2026 Either that debt will be paid off with hard money, in which case there\u2019s not much printing and so on, or it will be paid off with printing a lot of money to make it easier to pay off. <\/em><\/p>\n\n\n\n

I think in the end, it\u2019s always the case that they print a lot of money in and make it easier to pay off, but you have the reduced value of money.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> Ray Dalio; The Federal Reserve Is Setting Off A \u201cTerrible Calamity\u201d<\/a><\/p>\n\n\n\n

Could The United States Default By June?<\/h2>\n\n\n\n

United States Treasury Secretary, Janet Yellen, wrote to House Speaker Kevin McCarthy;<\/p>\n\n\n\n

\"After reviewing recent federal tax receipts, our best estimate is that we will be unable to continue to satisfy all of the government\u2019s obligations by early June, and potentially as early as June 1, if Congress does not raise or suspend the debt limit before that time.<\/em><\/p>\n\n\n\n

If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests.\"<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> United States May Enter Mild Recession As Yet Another Hike In Fed Rates Expected<\/a><\/p>\n\n\n\n

Yellen warned that waiting until the last minute to take action on this issue would cause harm to \"business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States.\"<\/em> Yellen believes that defaulting on their debt would be a financial catastrophe, raising the cost of borrowing without an end, making future investment \"substantially more costly.\u201d<\/em><\/p>\n","post_title":"United States May Fund Its Deficit By Printing More Money; Could Default By June 1st","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-may-fund-its-deficit-by-printing-more-money-could-default-by-june-1st","to_ping":"","pinged":"","post_modified":"2023-05-04 13:04:05","post_modified_gmt":"2023-05-04 03:04:05","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11422","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

ADVERTISEMENT
\n

See Related:<\/em><\/strong> Bitcoin Is Close To Testing $30,000 Again; Ethereum Revives Bullish Momentum Above $1,800<\/a><\/p>\n","post_title":"The Fed Raises Interest Rates By 25 BPS This Wednesday; Effects On Crypto And Financial Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-fed-raises-interest-rates-by-25-bps-this-wednesday-effects-on-crypto-and-financial-markets","to_ping":"","pinged":"","post_modified":"2023-05-04 22:08:47","post_modified_gmt":"2023-05-04 12:08:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11491","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11422,"post_author":"12","post_date":"2023-05-02 17:50:37","post_date_gmt":"2023-05-02 07:50:37","post_content":"\n

Ray Dalio, the billionaire founder of one of the world\u2019s largest hedge funds, Bridgewater Associates, was recently\u00a0interviewed<\/a>. He explains that the United States' $31.45T debt may have to be resolved by printing more money, also referred to as currency debasement.<\/p>\n\n\n\n

\u201cSo I think you\u2019re in the part of the cycle where you\u2019ve had the tightening and then the dominoes are beginning to fall. And I think that that\u2019s going to produce more problems.<\/em><\/p>\n\n\n\n

I think when it comes down to it, there\u2019s just too much debt, and we\u2019re adding to it too quickly\u2026 Either that debt will be paid off with hard money, in which case there\u2019s not much printing and so on, or it will be paid off with printing a lot of money to make it easier to pay off. <\/em><\/p>\n\n\n\n

I think in the end, it\u2019s always the case that they print a lot of money in and make it easier to pay off, but you have the reduced value of money.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> Ray Dalio; The Federal Reserve Is Setting Off A \u201cTerrible Calamity\u201d<\/a><\/p>\n\n\n\n

Could The United States Default By June?<\/h2>\n\n\n\n

United States Treasury Secretary, Janet Yellen, wrote to House Speaker Kevin McCarthy;<\/p>\n\n\n\n

\"After reviewing recent federal tax receipts, our best estimate is that we will be unable to continue to satisfy all of the government\u2019s obligations by early June, and potentially as early as June 1, if Congress does not raise or suspend the debt limit before that time.<\/em><\/p>\n\n\n\n

If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests.\"<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> United States May Enter Mild Recession As Yet Another Hike In Fed Rates Expected<\/a><\/p>\n\n\n\n

Yellen warned that waiting until the last minute to take action on this issue would cause harm to \"business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States.\"<\/em> Yellen believes that defaulting on their debt would be a financial catastrophe, raising the cost of borrowing without an end, making future investment \"substantially more costly.\u201d<\/em><\/p>\n","post_title":"United States May Fund Its Deficit By Printing More Money; Could Default By June 1st","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-may-fund-its-deficit-by-printing-more-money-could-default-by-june-1st","to_ping":"","pinged":"","post_modified":"2023-05-04 13:04:05","post_modified_gmt":"2023-05-04 03:04:05","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11422","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

ADVERTISEMENT
\n

Stocks aren't the only assets that could significantly lose their value. Investors should remember that cryptocurrencies could also be in the situation to make an even bigger fall. The crypto market displayed a high correlation with U.S. equities. If a downtrend is witnessed in the stock market, the same is usually replicated in the crypto-sphere.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Bitcoin Is Close To Testing $30,000 Again; Ethereum Revives Bullish Momentum Above $1,800<\/a><\/p>\n","post_title":"The Fed Raises Interest Rates By 25 BPS This Wednesday; Effects On Crypto And Financial Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-fed-raises-interest-rates-by-25-bps-this-wednesday-effects-on-crypto-and-financial-markets","to_ping":"","pinged":"","post_modified":"2023-05-04 22:08:47","post_modified_gmt":"2023-05-04 12:08:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11491","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11422,"post_author":"12","post_date":"2023-05-02 17:50:37","post_date_gmt":"2023-05-02 07:50:37","post_content":"\n

Ray Dalio, the billionaire founder of one of the world\u2019s largest hedge funds, Bridgewater Associates, was recently\u00a0interviewed<\/a>. He explains that the United States' $31.45T debt may have to be resolved by printing more money, also referred to as currency debasement.<\/p>\n\n\n\n

\u201cSo I think you\u2019re in the part of the cycle where you\u2019ve had the tightening and then the dominoes are beginning to fall. And I think that that\u2019s going to produce more problems.<\/em><\/p>\n\n\n\n

I think when it comes down to it, there\u2019s just too much debt, and we\u2019re adding to it too quickly\u2026 Either that debt will be paid off with hard money, in which case there\u2019s not much printing and so on, or it will be paid off with printing a lot of money to make it easier to pay off. <\/em><\/p>\n\n\n\n

I think in the end, it\u2019s always the case that they print a lot of money in and make it easier to pay off, but you have the reduced value of money.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> Ray Dalio; The Federal Reserve Is Setting Off A \u201cTerrible Calamity\u201d<\/a><\/p>\n\n\n\n

Could The United States Default By June?<\/h2>\n\n\n\n

United States Treasury Secretary, Janet Yellen, wrote to House Speaker Kevin McCarthy;<\/p>\n\n\n\n

\"After reviewing recent federal tax receipts, our best estimate is that we will be unable to continue to satisfy all of the government\u2019s obligations by early June, and potentially as early as June 1, if Congress does not raise or suspend the debt limit before that time.<\/em><\/p>\n\n\n\n

If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests.\"<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> United States May Enter Mild Recession As Yet Another Hike In Fed Rates Expected<\/a><\/p>\n\n\n\n

Yellen warned that waiting until the last minute to take action on this issue would cause harm to \"business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States.\"<\/em> Yellen believes that defaulting on their debt would be a financial catastrophe, raising the cost of borrowing without an end, making future investment \"substantially more costly.\u201d<\/em><\/p>\n","post_title":"United States May Fund Its Deficit By Printing More Money; Could Default By June 1st","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-may-fund-its-deficit-by-printing-more-money-could-default-by-june-1st","to_ping":"","pinged":"","post_modified":"2023-05-04 13:04:05","post_modified_gmt":"2023-05-04 03:04:05","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11422","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

ADVERTISEMENT
\n

At the same time, Brian Jacobsen, chief economist at Annex Wealth Management, said<\/a> that the manufacturing and housing sectors are in a recession already. The famous investor Jeremy Grantham warned that the U.S. stock market could experience significant losses soon, and a recommendation is that investors should continue to take a defensive investment approach.<\/p>\n\n\n\n

Stocks aren't the only assets that could significantly lose their value. Investors should remember that cryptocurrencies could also be in the situation to make an even bigger fall. The crypto market displayed a high correlation with U.S. equities. If a downtrend is witnessed in the stock market, the same is usually replicated in the crypto-sphere.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Bitcoin Is Close To Testing $30,000 Again; Ethereum Revives Bullish Momentum Above $1,800<\/a><\/p>\n","post_title":"The Fed Raises Interest Rates By 25 BPS This Wednesday; Effects On Crypto And Financial Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-fed-raises-interest-rates-by-25-bps-this-wednesday-effects-on-crypto-and-financial-markets","to_ping":"","pinged":"","post_modified":"2023-05-04 22:08:47","post_modified_gmt":"2023-05-04 12:08:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11491","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11422,"post_author":"12","post_date":"2023-05-02 17:50:37","post_date_gmt":"2023-05-02 07:50:37","post_content":"\n

Ray Dalio, the billionaire founder of one of the world\u2019s largest hedge funds, Bridgewater Associates, was recently\u00a0interviewed<\/a>. He explains that the United States' $31.45T debt may have to be resolved by printing more money, also referred to as currency debasement.<\/p>\n\n\n\n

\u201cSo I think you\u2019re in the part of the cycle where you\u2019ve had the tightening and then the dominoes are beginning to fall. And I think that that\u2019s going to produce more problems.<\/em><\/p>\n\n\n\n

I think when it comes down to it, there\u2019s just too much debt, and we\u2019re adding to it too quickly\u2026 Either that debt will be paid off with hard money, in which case there\u2019s not much printing and so on, or it will be paid off with printing a lot of money to make it easier to pay off. <\/em><\/p>\n\n\n\n

I think in the end, it\u2019s always the case that they print a lot of money in and make it easier to pay off, but you have the reduced value of money.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> Ray Dalio; The Federal Reserve Is Setting Off A \u201cTerrible Calamity\u201d<\/a><\/p>\n\n\n\n

Could The United States Default By June?<\/h2>\n\n\n\n

United States Treasury Secretary, Janet Yellen, wrote to House Speaker Kevin McCarthy;<\/p>\n\n\n\n

\"After reviewing recent federal tax receipts, our best estimate is that we will be unable to continue to satisfy all of the government\u2019s obligations by early June, and potentially as early as June 1, if Congress does not raise or suspend the debt limit before that time.<\/em><\/p>\n\n\n\n

If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests.\"<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> United States May Enter Mild Recession As Yet Another Hike In Fed Rates Expected<\/a><\/p>\n\n\n\n

Yellen warned that waiting until the last minute to take action on this issue would cause harm to \"business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States.\"<\/em> Yellen believes that defaulting on their debt would be a financial catastrophe, raising the cost of borrowing without an end, making future investment \"substantially more costly.\u201d<\/em><\/p>\n","post_title":"United States May Fund Its Deficit By Printing More Money; Could Default By June 1st","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-may-fund-its-deficit-by-printing-more-money-could-default-by-june-1st","to_ping":"","pinged":"","post_modified":"2023-05-04 13:04:05","post_modified_gmt":"2023-05-04 03:04:05","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11422","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

ADVERTISEMENT
\n

Higher rates encourage saving over spending and make the debt more costly. Companies with bigger credit or other loans with variable interest rates could be in a difficult situation. We expect to see a meaningful slowdown in economic growth and a weakening of the labour market in the United States in the upcoming months. <\/p>\n\n\n\n

At the same time, Brian Jacobsen, chief economist at Annex Wealth Management, said<\/a> that the manufacturing and housing sectors are in a recession already. The famous investor Jeremy Grantham warned that the U.S. stock market could experience significant losses soon, and a recommendation is that investors should continue to take a defensive investment approach.<\/p>\n\n\n\n

Stocks aren't the only assets that could significantly lose their value. Investors should remember that cryptocurrencies could also be in the situation to make an even bigger fall. The crypto market displayed a high correlation with U.S. equities. If a downtrend is witnessed in the stock market, the same is usually replicated in the crypto-sphere.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Bitcoin Is Close To Testing $30,000 Again; Ethereum Revives Bullish Momentum Above $1,800<\/a><\/p>\n","post_title":"The Fed Raises Interest Rates By 25 BPS This Wednesday; Effects On Crypto And Financial Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-fed-raises-interest-rates-by-25-bps-this-wednesday-effects-on-crypto-and-financial-markets","to_ping":"","pinged":"","post_modified":"2023-05-04 22:08:47","post_modified_gmt":"2023-05-04 12:08:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11491","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11422,"post_author":"12","post_date":"2023-05-02 17:50:37","post_date_gmt":"2023-05-02 07:50:37","post_content":"\n

Ray Dalio, the billionaire founder of one of the world\u2019s largest hedge funds, Bridgewater Associates, was recently\u00a0interviewed<\/a>. He explains that the United States' $31.45T debt may have to be resolved by printing more money, also referred to as currency debasement.<\/p>\n\n\n\n

\u201cSo I think you\u2019re in the part of the cycle where you\u2019ve had the tightening and then the dominoes are beginning to fall. And I think that that\u2019s going to produce more problems.<\/em><\/p>\n\n\n\n

I think when it comes down to it, there\u2019s just too much debt, and we\u2019re adding to it too quickly\u2026 Either that debt will be paid off with hard money, in which case there\u2019s not much printing and so on, or it will be paid off with printing a lot of money to make it easier to pay off. <\/em><\/p>\n\n\n\n

I think in the end, it\u2019s always the case that they print a lot of money in and make it easier to pay off, but you have the reduced value of money.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> Ray Dalio; The Federal Reserve Is Setting Off A \u201cTerrible Calamity\u201d<\/a><\/p>\n\n\n\n

Could The United States Default By June?<\/h2>\n\n\n\n

United States Treasury Secretary, Janet Yellen, wrote to House Speaker Kevin McCarthy;<\/p>\n\n\n\n

\"After reviewing recent federal tax receipts, our best estimate is that we will be unable to continue to satisfy all of the government\u2019s obligations by early June, and potentially as early as June 1, if Congress does not raise or suspend the debt limit before that time.<\/em><\/p>\n\n\n\n

If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests.\"<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> United States May Enter Mild Recession As Yet Another Hike In Fed Rates Expected<\/a><\/p>\n\n\n\n

Yellen warned that waiting until the last minute to take action on this issue would cause harm to \"business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States.\"<\/em> Yellen believes that defaulting on their debt would be a financial catastrophe, raising the cost of borrowing without an end, making future investment \"substantially more costly.\u201d<\/em><\/p>\n","post_title":"United States May Fund Its Deficit By Printing More Money; Could Default By June 1st","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-may-fund-its-deficit-by-printing-more-money-could-default-by-june-1st","to_ping":"","pinged":"","post_modified":"2023-05-04 13:04:05","post_modified_gmt":"2023-05-04 03:04:05","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11422","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

ADVERTISEMENT
\n

See Related: <\/em><\/strong>United States May Fund Its Deficit By Printing More Money; Could Default By June 1st<\/a><\/p>\n\n\n\n

Higher rates encourage saving over spending and make the debt more costly. Companies with bigger credit or other loans with variable interest rates could be in a difficult situation. We expect to see a meaningful slowdown in economic growth and a weakening of the labour market in the United States in the upcoming months. <\/p>\n\n\n\n

At the same time, Brian Jacobsen, chief economist at Annex Wealth Management, said<\/a> that the manufacturing and housing sectors are in a recession already. The famous investor Jeremy Grantham warned that the U.S. stock market could experience significant losses soon, and a recommendation is that investors should continue to take a defensive investment approach.<\/p>\n\n\n\n

Stocks aren't the only assets that could significantly lose their value. Investors should remember that cryptocurrencies could also be in the situation to make an even bigger fall. The crypto market displayed a high correlation with U.S. equities. If a downtrend is witnessed in the stock market, the same is usually replicated in the crypto-sphere.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Bitcoin Is Close To Testing $30,000 Again; Ethereum Revives Bullish Momentum Above $1,800<\/a><\/p>\n","post_title":"The Fed Raises Interest Rates By 25 BPS This Wednesday; Effects On Crypto And Financial Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-fed-raises-interest-rates-by-25-bps-this-wednesday-effects-on-crypto-and-financial-markets","to_ping":"","pinged":"","post_modified":"2023-05-04 22:08:47","post_modified_gmt":"2023-05-04 12:08:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11491","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11422,"post_author":"12","post_date":"2023-05-02 17:50:37","post_date_gmt":"2023-05-02 07:50:37","post_content":"\n

Ray Dalio, the billionaire founder of one of the world\u2019s largest hedge funds, Bridgewater Associates, was recently\u00a0interviewed<\/a>. He explains that the United States' $31.45T debt may have to be resolved by printing more money, also referred to as currency debasement.<\/p>\n\n\n\n

\u201cSo I think you\u2019re in the part of the cycle where you\u2019ve had the tightening and then the dominoes are beginning to fall. And I think that that\u2019s going to produce more problems.<\/em><\/p>\n\n\n\n

I think when it comes down to it, there\u2019s just too much debt, and we\u2019re adding to it too quickly\u2026 Either that debt will be paid off with hard money, in which case there\u2019s not much printing and so on, or it will be paid off with printing a lot of money to make it easier to pay off. <\/em><\/p>\n\n\n\n

I think in the end, it\u2019s always the case that they print a lot of money in and make it easier to pay off, but you have the reduced value of money.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> Ray Dalio; The Federal Reserve Is Setting Off A \u201cTerrible Calamity\u201d<\/a><\/p>\n\n\n\n

Could The United States Default By June?<\/h2>\n\n\n\n

United States Treasury Secretary, Janet Yellen, wrote to House Speaker Kevin McCarthy;<\/p>\n\n\n\n

\"After reviewing recent federal tax receipts, our best estimate is that we will be unable to continue to satisfy all of the government\u2019s obligations by early June, and potentially as early as June 1, if Congress does not raise or suspend the debt limit before that time.<\/em><\/p>\n\n\n\n

If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests.\"<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> United States May Enter Mild Recession As Yet Another Hike In Fed Rates Expected<\/a><\/p>\n\n\n\n

Yellen warned that waiting until the last minute to take action on this issue would cause harm to \"business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States.\"<\/em> Yellen believes that defaulting on their debt would be a financial catastrophe, raising the cost of borrowing without an end, making future investment \"substantially more costly.\u201d<\/em><\/p>\n","post_title":"United States May Fund Its Deficit By Printing More Money; Could Default By June 1st","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-may-fund-its-deficit-by-printing-more-money-could-default-by-june-1st","to_ping":"","pinged":"","post_modified":"2023-05-04 13:04:05","post_modified_gmt":"2023-05-04 03:04:05","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11422","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

ADVERTISEMENT
\n

\"We have a possible debt default on our hands and a spreading bank crisis. The banking turmoil that started with Silicon Valley Bank's collapse in March remains unresolved, and First Republic's failure and takeover by CEO Jamie Dimon's JPMorgan has reignited worries about broader financial instability. Moreover, political disagreement about raising the U.S. government's borrowing limit is fanning fears of a debt-ceiling crisis.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>United States May Fund Its Deficit By Printing More Money; Could Default By June 1st<\/a><\/p>\n\n\n\n

Higher rates encourage saving over spending and make the debt more costly. Companies with bigger credit or other loans with variable interest rates could be in a difficult situation. We expect to see a meaningful slowdown in economic growth and a weakening of the labour market in the United States in the upcoming months. <\/p>\n\n\n\n

At the same time, Brian Jacobsen, chief economist at Annex Wealth Management, said<\/a> that the manufacturing and housing sectors are in a recession already. The famous investor Jeremy Grantham warned that the U.S. stock market could experience significant losses soon, and a recommendation is that investors should continue to take a defensive investment approach.<\/p>\n\n\n\n

Stocks aren't the only assets that could significantly lose their value. Investors should remember that cryptocurrencies could also be in the situation to make an even bigger fall. The crypto market displayed a high correlation with U.S. equities. If a downtrend is witnessed in the stock market, the same is usually replicated in the crypto-sphere.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Bitcoin Is Close To Testing $30,000 Again; Ethereum Revives Bullish Momentum Above $1,800<\/a><\/p>\n","post_title":"The Fed Raises Interest Rates By 25 BPS This Wednesday; Effects On Crypto And Financial Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-fed-raises-interest-rates-by-25-bps-this-wednesday-effects-on-crypto-and-financial-markets","to_ping":"","pinged":"","post_modified":"2023-05-04 22:08:47","post_modified_gmt":"2023-05-04 12:08:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11491","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11422,"post_author":"12","post_date":"2023-05-02 17:50:37","post_date_gmt":"2023-05-02 07:50:37","post_content":"\n

Ray Dalio, the billionaire founder of one of the world\u2019s largest hedge funds, Bridgewater Associates, was recently\u00a0interviewed<\/a>. He explains that the United States' $31.45T debt may have to be resolved by printing more money, also referred to as currency debasement.<\/p>\n\n\n\n

\u201cSo I think you\u2019re in the part of the cycle where you\u2019ve had the tightening and then the dominoes are beginning to fall. And I think that that\u2019s going to produce more problems.<\/em><\/p>\n\n\n\n

I think when it comes down to it, there\u2019s just too much debt, and we\u2019re adding to it too quickly\u2026 Either that debt will be paid off with hard money, in which case there\u2019s not much printing and so on, or it will be paid off with printing a lot of money to make it easier to pay off. <\/em><\/p>\n\n\n\n

I think in the end, it\u2019s always the case that they print a lot of money in and make it easier to pay off, but you have the reduced value of money.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> Ray Dalio; The Federal Reserve Is Setting Off A \u201cTerrible Calamity\u201d<\/a><\/p>\n\n\n\n

Could The United States Default By June?<\/h2>\n\n\n\n

United States Treasury Secretary, Janet Yellen, wrote to House Speaker Kevin McCarthy;<\/p>\n\n\n\n

\"After reviewing recent federal tax receipts, our best estimate is that we will be unable to continue to satisfy all of the government\u2019s obligations by early June, and potentially as early as June 1, if Congress does not raise or suspend the debt limit before that time.<\/em><\/p>\n\n\n\n

If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests.\"<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> United States May Enter Mild Recession As Yet Another Hike In Fed Rates Expected<\/a><\/p>\n\n\n\n

Yellen warned that waiting until the last minute to take action on this issue would cause harm to \"business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States.\"<\/em> Yellen believes that defaulting on their debt would be a financial catastrophe, raising the cost of borrowing without an end, making future investment \"substantially more costly.\u201d<\/em><\/p>\n","post_title":"United States May Fund Its Deficit By Printing More Money; Could Default By June 1st","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-may-fund-its-deficit-by-printing-more-money-could-default-by-june-1st","to_ping":"","pinged":"","post_modified":"2023-05-04 13:04:05","post_modified_gmt":"2023-05-04 03:04:05","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11422","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

ADVERTISEMENT
\n

Many companies could face liquidity problems, and economist David Rosenberg has warned that the U.S. economy is facing two big risks. David Rosenberg said<\/a>:<\/p>\n\n\n\n

\"We have a possible debt default on our hands and a spreading bank crisis. The banking turmoil that started with Silicon Valley Bank's collapse in March remains unresolved, and First Republic's failure and takeover by CEO Jamie Dimon's JPMorgan has reignited worries about broader financial instability. Moreover, political disagreement about raising the U.S. government's borrowing limit is fanning fears of a debt-ceiling crisis.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>United States May Fund Its Deficit By Printing More Money; Could Default By June 1st<\/a><\/p>\n\n\n\n

Higher rates encourage saving over spending and make the debt more costly. Companies with bigger credit or other loans with variable interest rates could be in a difficult situation. We expect to see a meaningful slowdown in economic growth and a weakening of the labour market in the United States in the upcoming months. <\/p>\n\n\n\n

At the same time, Brian Jacobsen, chief economist at Annex Wealth Management, said<\/a> that the manufacturing and housing sectors are in a recession already. The famous investor Jeremy Grantham warned that the U.S. stock market could experience significant losses soon, and a recommendation is that investors should continue to take a defensive investment approach.<\/p>\n\n\n\n

Stocks aren't the only assets that could significantly lose their value. Investors should remember that cryptocurrencies could also be in the situation to make an even bigger fall. The crypto market displayed a high correlation with U.S. equities. If a downtrend is witnessed in the stock market, the same is usually replicated in the crypto-sphere.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Bitcoin Is Close To Testing $30,000 Again; Ethereum Revives Bullish Momentum Above $1,800<\/a><\/p>\n","post_title":"The Fed Raises Interest Rates By 25 BPS This Wednesday; Effects On Crypto And Financial Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-fed-raises-interest-rates-by-25-bps-this-wednesday-effects-on-crypto-and-financial-markets","to_ping":"","pinged":"","post_modified":"2023-05-04 22:08:47","post_modified_gmt":"2023-05-04 12:08:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11491","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11422,"post_author":"12","post_date":"2023-05-02 17:50:37","post_date_gmt":"2023-05-02 07:50:37","post_content":"\n

Ray Dalio, the billionaire founder of one of the world\u2019s largest hedge funds, Bridgewater Associates, was recently\u00a0interviewed<\/a>. He explains that the United States' $31.45T debt may have to be resolved by printing more money, also referred to as currency debasement.<\/p>\n\n\n\n

\u201cSo I think you\u2019re in the part of the cycle where you\u2019ve had the tightening and then the dominoes are beginning to fall. And I think that that\u2019s going to produce more problems.<\/em><\/p>\n\n\n\n

I think when it comes down to it, there\u2019s just too much debt, and we\u2019re adding to it too quickly\u2026 Either that debt will be paid off with hard money, in which case there\u2019s not much printing and so on, or it will be paid off with printing a lot of money to make it easier to pay off. <\/em><\/p>\n\n\n\n

I think in the end, it\u2019s always the case that they print a lot of money in and make it easier to pay off, but you have the reduced value of money.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> Ray Dalio; The Federal Reserve Is Setting Off A \u201cTerrible Calamity\u201d<\/a><\/p>\n\n\n\n

Could The United States Default By June?<\/h2>\n\n\n\n

United States Treasury Secretary, Janet Yellen, wrote to House Speaker Kevin McCarthy;<\/p>\n\n\n\n

\"After reviewing recent federal tax receipts, our best estimate is that we will be unable to continue to satisfy all of the government\u2019s obligations by early June, and potentially as early as June 1, if Congress does not raise or suspend the debt limit before that time.<\/em><\/p>\n\n\n\n

If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests.\"<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> United States May Enter Mild Recession As Yet Another Hike In Fed Rates Expected<\/a><\/p>\n\n\n\n

Yellen warned that waiting until the last minute to take action on this issue would cause harm to \"business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States.\"<\/em> Yellen believes that defaulting on their debt would be a financial catastrophe, raising the cost of borrowing without an end, making future investment \"substantially more costly.\u201d<\/em><\/p>\n","post_title":"United States May Fund Its Deficit By Printing More Money; Could Default By June 1st","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-may-fund-its-deficit-by-printing-more-money-could-default-by-june-1st","to_ping":"","pinged":"","post_modified":"2023-05-04 13:04:05","post_modified_gmt":"2023-05-04 03:04:05","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11422","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

ADVERTISEMENT
\n

Many analysts and economists are worried that the high-interest rates will push the economy into a recession. It is important to mention that government data showed last week that economic growth in the first quarter slowed sequentially, with real gross domestic product increasing at a 1.1% annual pace, compared with a 2.6% gain in the prior three-month period. With higher interest rates, companies need to spend more money to borrow money to invest in growth. Historically, higher rates lead companies to reduce spending (especially on hiring). <\/p>\n\n\n\n

Many companies could face liquidity problems, and economist David Rosenberg has warned that the U.S. economy is facing two big risks. David Rosenberg said<\/a>:<\/p>\n\n\n\n

\"We have a possible debt default on our hands and a spreading bank crisis. The banking turmoil that started with Silicon Valley Bank's collapse in March remains unresolved, and First Republic's failure and takeover by CEO Jamie Dimon's JPMorgan has reignited worries about broader financial instability. Moreover, political disagreement about raising the U.S. government's borrowing limit is fanning fears of a debt-ceiling crisis.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>United States May Fund Its Deficit By Printing More Money; Could Default By June 1st<\/a><\/p>\n\n\n\n

Higher rates encourage saving over spending and make the debt more costly. Companies with bigger credit or other loans with variable interest rates could be in a difficult situation. We expect to see a meaningful slowdown in economic growth and a weakening of the labour market in the United States in the upcoming months. <\/p>\n\n\n\n

At the same time, Brian Jacobsen, chief economist at Annex Wealth Management, said<\/a> that the manufacturing and housing sectors are in a recession already. The famous investor Jeremy Grantham warned that the U.S. stock market could experience significant losses soon, and a recommendation is that investors should continue to take a defensive investment approach.<\/p>\n\n\n\n

Stocks aren't the only assets that could significantly lose their value. Investors should remember that cryptocurrencies could also be in the situation to make an even bigger fall. The crypto market displayed a high correlation with U.S. equities. If a downtrend is witnessed in the stock market, the same is usually replicated in the crypto-sphere.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Bitcoin Is Close To Testing $30,000 Again; Ethereum Revives Bullish Momentum Above $1,800<\/a><\/p>\n","post_title":"The Fed Raises Interest Rates By 25 BPS This Wednesday; Effects On Crypto And Financial Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-fed-raises-interest-rates-by-25-bps-this-wednesday-effects-on-crypto-and-financial-markets","to_ping":"","pinged":"","post_modified":"2023-05-04 22:08:47","post_modified_gmt":"2023-05-04 12:08:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11491","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11422,"post_author":"12","post_date":"2023-05-02 17:50:37","post_date_gmt":"2023-05-02 07:50:37","post_content":"\n

Ray Dalio, the billionaire founder of one of the world\u2019s largest hedge funds, Bridgewater Associates, was recently\u00a0interviewed<\/a>. He explains that the United States' $31.45T debt may have to be resolved by printing more money, also referred to as currency debasement.<\/p>\n\n\n\n

\u201cSo I think you\u2019re in the part of the cycle where you\u2019ve had the tightening and then the dominoes are beginning to fall. And I think that that\u2019s going to produce more problems.<\/em><\/p>\n\n\n\n

I think when it comes down to it, there\u2019s just too much debt, and we\u2019re adding to it too quickly\u2026 Either that debt will be paid off with hard money, in which case there\u2019s not much printing and so on, or it will be paid off with printing a lot of money to make it easier to pay off. <\/em><\/p>\n\n\n\n

I think in the end, it\u2019s always the case that they print a lot of money in and make it easier to pay off, but you have the reduced value of money.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> Ray Dalio; The Federal Reserve Is Setting Off A \u201cTerrible Calamity\u201d<\/a><\/p>\n\n\n\n

Could The United States Default By June?<\/h2>\n\n\n\n

United States Treasury Secretary, Janet Yellen, wrote to House Speaker Kevin McCarthy;<\/p>\n\n\n\n

\"After reviewing recent federal tax receipts, our best estimate is that we will be unable to continue to satisfy all of the government\u2019s obligations by early June, and potentially as early as June 1, if Congress does not raise or suspend the debt limit before that time.<\/em><\/p>\n\n\n\n

If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests.\"<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> United States May Enter Mild Recession As Yet Another Hike In Fed Rates Expected<\/a><\/p>\n\n\n\n

Yellen warned that waiting until the last minute to take action on this issue would cause harm to \"business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States.\"<\/em> Yellen believes that defaulting on their debt would be a financial catastrophe, raising the cost of borrowing without an end, making future investment \"substantially more costly.\u201d<\/em><\/p>\n","post_title":"United States May Fund Its Deficit By Printing More Money; Could Default By June 1st","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-may-fund-its-deficit-by-printing-more-money-could-default-by-june-1st","to_ping":"","pinged":"","post_modified":"2023-05-04 13:04:05","post_modified_gmt":"2023-05-04 03:04:05","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11422","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

ADVERTISEMENT
\n
\"\"<\/figure>\n\n\n\n

Many analysts and economists are worried that the high-interest rates will push the economy into a recession. It is important to mention that government data showed last week that economic growth in the first quarter slowed sequentially, with real gross domestic product increasing at a 1.1% annual pace, compared with a 2.6% gain in the prior three-month period. With higher interest rates, companies need to spend more money to borrow money to invest in growth. Historically, higher rates lead companies to reduce spending (especially on hiring). <\/p>\n\n\n\n

Many companies could face liquidity problems, and economist David Rosenberg has warned that the U.S. economy is facing two big risks. David Rosenberg said<\/a>:<\/p>\n\n\n\n

\"We have a possible debt default on our hands and a spreading bank crisis. The banking turmoil that started with Silicon Valley Bank's collapse in March remains unresolved, and First Republic's failure and takeover by CEO Jamie Dimon's JPMorgan has reignited worries about broader financial instability. Moreover, political disagreement about raising the U.S. government's borrowing limit is fanning fears of a debt-ceiling crisis.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>United States May Fund Its Deficit By Printing More Money; Could Default By June 1st<\/a><\/p>\n\n\n\n

Higher rates encourage saving over spending and make the debt more costly. Companies with bigger credit or other loans with variable interest rates could be in a difficult situation. We expect to see a meaningful slowdown in economic growth and a weakening of the labour market in the United States in the upcoming months. <\/p>\n\n\n\n

At the same time, Brian Jacobsen, chief economist at Annex Wealth Management, said<\/a> that the manufacturing and housing sectors are in a recession already. The famous investor Jeremy Grantham warned that the U.S. stock market could experience significant losses soon, and a recommendation is that investors should continue to take a defensive investment approach.<\/p>\n\n\n\n

Stocks aren't the only assets that could significantly lose their value. Investors should remember that cryptocurrencies could also be in the situation to make an even bigger fall. The crypto market displayed a high correlation with U.S. equities. If a downtrend is witnessed in the stock market, the same is usually replicated in the crypto-sphere.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Bitcoin Is Close To Testing $30,000 Again; Ethereum Revives Bullish Momentum Above $1,800<\/a><\/p>\n","post_title":"The Fed Raises Interest Rates By 25 BPS This Wednesday; Effects On Crypto And Financial Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-fed-raises-interest-rates-by-25-bps-this-wednesday-effects-on-crypto-and-financial-markets","to_ping":"","pinged":"","post_modified":"2023-05-04 22:08:47","post_modified_gmt":"2023-05-04 12:08:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11491","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11422,"post_author":"12","post_date":"2023-05-02 17:50:37","post_date_gmt":"2023-05-02 07:50:37","post_content":"\n

Ray Dalio, the billionaire founder of one of the world\u2019s largest hedge funds, Bridgewater Associates, was recently\u00a0interviewed<\/a>. He explains that the United States' $31.45T debt may have to be resolved by printing more money, also referred to as currency debasement.<\/p>\n\n\n\n

\u201cSo I think you\u2019re in the part of the cycle where you\u2019ve had the tightening and then the dominoes are beginning to fall. And I think that that\u2019s going to produce more problems.<\/em><\/p>\n\n\n\n

I think when it comes down to it, there\u2019s just too much debt, and we\u2019re adding to it too quickly\u2026 Either that debt will be paid off with hard money, in which case there\u2019s not much printing and so on, or it will be paid off with printing a lot of money to make it easier to pay off. <\/em><\/p>\n\n\n\n

I think in the end, it\u2019s always the case that they print a lot of money in and make it easier to pay off, but you have the reduced value of money.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> Ray Dalio; The Federal Reserve Is Setting Off A \u201cTerrible Calamity\u201d<\/a><\/p>\n\n\n\n

Could The United States Default By June?<\/h2>\n\n\n\n

United States Treasury Secretary, Janet Yellen, wrote to House Speaker Kevin McCarthy;<\/p>\n\n\n\n

\"After reviewing recent federal tax receipts, our best estimate is that we will be unable to continue to satisfy all of the government\u2019s obligations by early June, and potentially as early as June 1, if Congress does not raise or suspend the debt limit before that time.<\/em><\/p>\n\n\n\n

If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests.\"<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> United States May Enter Mild Recession As Yet Another Hike In Fed Rates Expected<\/a><\/p>\n\n\n\n

Yellen warned that waiting until the last minute to take action on this issue would cause harm to \"business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States.\"<\/em> Yellen believes that defaulting on their debt would be a financial catastrophe, raising the cost of borrowing without an end, making future investment \"substantially more costly.\u201d<\/em><\/p>\n","post_title":"United States May Fund Its Deficit By Printing More Money; Could Default By June 1st","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-may-fund-its-deficit-by-printing-more-money-could-default-by-june-1st","to_ping":"","pinged":"","post_modified":"2023-05-04 13:04:05","post_modified_gmt":"2023-05-04 03:04:05","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11422","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

ADVERTISEMENT
\n

The U.S. Central Bank warned that tighter credit conditions for households and businesses are expected to affect economic activity. In the picture below, we can see that even without this rise in interest rates, the federal funds rate was at the highest level since the 2007 financial crisis.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Many analysts and economists are worried that the high-interest rates will push the economy into a recession. It is important to mention that government data showed last week that economic growth in the first quarter slowed sequentially, with real gross domestic product increasing at a 1.1% annual pace, compared with a 2.6% gain in the prior three-month period. With higher interest rates, companies need to spend more money to borrow money to invest in growth. Historically, higher rates lead companies to reduce spending (especially on hiring). <\/p>\n\n\n\n

Many companies could face liquidity problems, and economist David Rosenberg has warned that the U.S. economy is facing two big risks. David Rosenberg said<\/a>:<\/p>\n\n\n\n

\"We have a possible debt default on our hands and a spreading bank crisis. The banking turmoil that started with Silicon Valley Bank's collapse in March remains unresolved, and First Republic's failure and takeover by CEO Jamie Dimon's JPMorgan has reignited worries about broader financial instability. Moreover, political disagreement about raising the U.S. government's borrowing limit is fanning fears of a debt-ceiling crisis.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>United States May Fund Its Deficit By Printing More Money; Could Default By June 1st<\/a><\/p>\n\n\n\n

Higher rates encourage saving over spending and make the debt more costly. Companies with bigger credit or other loans with variable interest rates could be in a difficult situation. We expect to see a meaningful slowdown in economic growth and a weakening of the labour market in the United States in the upcoming months. <\/p>\n\n\n\n

At the same time, Brian Jacobsen, chief economist at Annex Wealth Management, said<\/a> that the manufacturing and housing sectors are in a recession already. The famous investor Jeremy Grantham warned that the U.S. stock market could experience significant losses soon, and a recommendation is that investors should continue to take a defensive investment approach.<\/p>\n\n\n\n

Stocks aren't the only assets that could significantly lose their value. Investors should remember that cryptocurrencies could also be in the situation to make an even bigger fall. The crypto market displayed a high correlation with U.S. equities. If a downtrend is witnessed in the stock market, the same is usually replicated in the crypto-sphere.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Bitcoin Is Close To Testing $30,000 Again; Ethereum Revives Bullish Momentum Above $1,800<\/a><\/p>\n","post_title":"The Fed Raises Interest Rates By 25 BPS This Wednesday; Effects On Crypto And Financial Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-fed-raises-interest-rates-by-25-bps-this-wednesday-effects-on-crypto-and-financial-markets","to_ping":"","pinged":"","post_modified":"2023-05-04 22:08:47","post_modified_gmt":"2023-05-04 12:08:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11491","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11422,"post_author":"12","post_date":"2023-05-02 17:50:37","post_date_gmt":"2023-05-02 07:50:37","post_content":"\n

Ray Dalio, the billionaire founder of one of the world\u2019s largest hedge funds, Bridgewater Associates, was recently\u00a0interviewed<\/a>. He explains that the United States' $31.45T debt may have to be resolved by printing more money, also referred to as currency debasement.<\/p>\n\n\n\n

\u201cSo I think you\u2019re in the part of the cycle where you\u2019ve had the tightening and then the dominoes are beginning to fall. And I think that that\u2019s going to produce more problems.<\/em><\/p>\n\n\n\n

I think when it comes down to it, there\u2019s just too much debt, and we\u2019re adding to it too quickly\u2026 Either that debt will be paid off with hard money, in which case there\u2019s not much printing and so on, or it will be paid off with printing a lot of money to make it easier to pay off. <\/em><\/p>\n\n\n\n

I think in the end, it\u2019s always the case that they print a lot of money in and make it easier to pay off, but you have the reduced value of money.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> Ray Dalio; The Federal Reserve Is Setting Off A \u201cTerrible Calamity\u201d<\/a><\/p>\n\n\n\n

Could The United States Default By June?<\/h2>\n\n\n\n

United States Treasury Secretary, Janet Yellen, wrote to House Speaker Kevin McCarthy;<\/p>\n\n\n\n

\"After reviewing recent federal tax receipts, our best estimate is that we will be unable to continue to satisfy all of the government\u2019s obligations by early June, and potentially as early as June 1, if Congress does not raise or suspend the debt limit before that time.<\/em><\/p>\n\n\n\n

If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests.\"<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> United States May Enter Mild Recession As Yet Another Hike In Fed Rates Expected<\/a><\/p>\n\n\n\n

Yellen warned that waiting until the last minute to take action on this issue would cause harm to \"business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States.\"<\/em> Yellen believes that defaulting on their debt would be a financial catastrophe, raising the cost of borrowing without an end, making future investment \"substantially more costly.\u201d<\/em><\/p>\n","post_title":"United States May Fund Its Deficit By Printing More Money; Could Default By June 1st","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-may-fund-its-deficit-by-printing-more-money-could-default-by-june-1st","to_ping":"","pinged":"","post_modified":"2023-05-04 13:04:05","post_modified_gmt":"2023-05-04 03:04:05","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11422","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

ADVERTISEMENT
\n

As widely expected, the U.S. Central Bank raised interest rates by 25bps this Wednesday. It signalled it could pause further increases, giving officials time to assess the fallout from recent bank failures, wait on the resolution of a political stand-off over the U.S. debt ceiling and monitor the course of inflation. The federal funds rate is now in a range of 5% to 5.25%, which is the highest level since 2006. <\/p>\n\n\n\n

The U.S. Central Bank warned that tighter credit conditions for households and businesses are expected to affect economic activity. In the picture below, we can see that even without this rise in interest rates, the federal funds rate was at the highest level since the 2007 financial crisis.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Many analysts and economists are worried that the high-interest rates will push the economy into a recession. It is important to mention that government data showed last week that economic growth in the first quarter slowed sequentially, with real gross domestic product increasing at a 1.1% annual pace, compared with a 2.6% gain in the prior three-month period. With higher interest rates, companies need to spend more money to borrow money to invest in growth. Historically, higher rates lead companies to reduce spending (especially on hiring). <\/p>\n\n\n\n

Many companies could face liquidity problems, and economist David Rosenberg has warned that the U.S. economy is facing two big risks. David Rosenberg said<\/a>:<\/p>\n\n\n\n

\"We have a possible debt default on our hands and a spreading bank crisis. The banking turmoil that started with Silicon Valley Bank's collapse in March remains unresolved, and First Republic's failure and takeover by CEO Jamie Dimon's JPMorgan has reignited worries about broader financial instability. Moreover, political disagreement about raising the U.S. government's borrowing limit is fanning fears of a debt-ceiling crisis.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>United States May Fund Its Deficit By Printing More Money; Could Default By June 1st<\/a><\/p>\n\n\n\n

Higher rates encourage saving over spending and make the debt more costly. Companies with bigger credit or other loans with variable interest rates could be in a difficult situation. We expect to see a meaningful slowdown in economic growth and a weakening of the labour market in the United States in the upcoming months. <\/p>\n\n\n\n

At the same time, Brian Jacobsen, chief economist at Annex Wealth Management, said<\/a> that the manufacturing and housing sectors are in a recession already. The famous investor Jeremy Grantham warned that the U.S. stock market could experience significant losses soon, and a recommendation is that investors should continue to take a defensive investment approach.<\/p>\n\n\n\n

Stocks aren't the only assets that could significantly lose their value. Investors should remember that cryptocurrencies could also be in the situation to make an even bigger fall. The crypto market displayed a high correlation with U.S. equities. If a downtrend is witnessed in the stock market, the same is usually replicated in the crypto-sphere.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Bitcoin Is Close To Testing $30,000 Again; Ethereum Revives Bullish Momentum Above $1,800<\/a><\/p>\n","post_title":"The Fed Raises Interest Rates By 25 BPS This Wednesday; Effects On Crypto And Financial Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-fed-raises-interest-rates-by-25-bps-this-wednesday-effects-on-crypto-and-financial-markets","to_ping":"","pinged":"","post_modified":"2023-05-04 22:08:47","post_modified_gmt":"2023-05-04 12:08:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11491","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11422,"post_author":"12","post_date":"2023-05-02 17:50:37","post_date_gmt":"2023-05-02 07:50:37","post_content":"\n

Ray Dalio, the billionaire founder of one of the world\u2019s largest hedge funds, Bridgewater Associates, was recently\u00a0interviewed<\/a>. He explains that the United States' $31.45T debt may have to be resolved by printing more money, also referred to as currency debasement.<\/p>\n\n\n\n

\u201cSo I think you\u2019re in the part of the cycle where you\u2019ve had the tightening and then the dominoes are beginning to fall. And I think that that\u2019s going to produce more problems.<\/em><\/p>\n\n\n\n

I think when it comes down to it, there\u2019s just too much debt, and we\u2019re adding to it too quickly\u2026 Either that debt will be paid off with hard money, in which case there\u2019s not much printing and so on, or it will be paid off with printing a lot of money to make it easier to pay off. <\/em><\/p>\n\n\n\n

I think in the end, it\u2019s always the case that they print a lot of money in and make it easier to pay off, but you have the reduced value of money.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> Ray Dalio; The Federal Reserve Is Setting Off A \u201cTerrible Calamity\u201d<\/a><\/p>\n\n\n\n

Could The United States Default By June?<\/h2>\n\n\n\n

United States Treasury Secretary, Janet Yellen, wrote to House Speaker Kevin McCarthy;<\/p>\n\n\n\n

\"After reviewing recent federal tax receipts, our best estimate is that we will be unable to continue to satisfy all of the government\u2019s obligations by early June, and potentially as early as June 1, if Congress does not raise or suspend the debt limit before that time.<\/em><\/p>\n\n\n\n

If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests.\"<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> United States May Enter Mild Recession As Yet Another Hike In Fed Rates Expected<\/a><\/p>\n\n\n\n

Yellen warned that waiting until the last minute to take action on this issue would cause harm to \"business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States.\"<\/em> Yellen believes that defaulting on their debt would be a financial catastrophe, raising the cost of borrowing without an end, making future investment \"substantially more costly.\u201d<\/em><\/p>\n","post_title":"United States May Fund Its Deficit By Printing More Money; Could Default By June 1st","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-may-fund-its-deficit-by-printing-more-money-could-default-by-june-1st","to_ping":"","pinged":"","post_modified":"2023-05-04 13:04:05","post_modified_gmt":"2023-05-04 03:04:05","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11422","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

ADVERTISEMENT
\n

Gold is commonly regarded as a safe-haven asset, particularly amid economic uncertainty or geopolitical instability. Investors typically turn to gold as a means of preserving value when other assets are considered risky.<\/p>\n","post_title":"Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-surged-significantly-after-the-release-of-lower-than-anticipated-inflation-figures","to_ping":"","pinged":"","post_modified":"2023-11-16 20:00:45","post_modified_gmt":"2023-11-16 09:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14319","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11491,"post_author":"14","post_date":"2023-05-04 21:53:10","post_date_gmt":"2023-05-04 11:53:10","post_content":"\n

As widely expected, the U.S. Central Bank raised interest rates by 25bps this Wednesday. It signalled it could pause further increases, giving officials time to assess the fallout from recent bank failures, wait on the resolution of a political stand-off over the U.S. debt ceiling and monitor the course of inflation. The federal funds rate is now in a range of 5% to 5.25%, which is the highest level since 2006. <\/p>\n\n\n\n

The U.S. Central Bank warned that tighter credit conditions for households and businesses are expected to affect economic activity. In the picture below, we can see that even without this rise in interest rates, the federal funds rate was at the highest level since the 2007 financial crisis.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Many analysts and economists are worried that the high-interest rates will push the economy into a recession. It is important to mention that government data showed last week that economic growth in the first quarter slowed sequentially, with real gross domestic product increasing at a 1.1% annual pace, compared with a 2.6% gain in the prior three-month period. With higher interest rates, companies need to spend more money to borrow money to invest in growth. Historically, higher rates lead companies to reduce spending (especially on hiring). <\/p>\n\n\n\n

Many companies could face liquidity problems, and economist David Rosenberg has warned that the U.S. economy is facing two big risks. David Rosenberg said<\/a>:<\/p>\n\n\n\n

\"We have a possible debt default on our hands and a spreading bank crisis. The banking turmoil that started with Silicon Valley Bank's collapse in March remains unresolved, and First Republic's failure and takeover by CEO Jamie Dimon's JPMorgan has reignited worries about broader financial instability. Moreover, political disagreement about raising the U.S. government's borrowing limit is fanning fears of a debt-ceiling crisis.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>United States May Fund Its Deficit By Printing More Money; Could Default By June 1st<\/a><\/p>\n\n\n\n

Higher rates encourage saving over spending and make the debt more costly. Companies with bigger credit or other loans with variable interest rates could be in a difficult situation. We expect to see a meaningful slowdown in economic growth and a weakening of the labour market in the United States in the upcoming months. <\/p>\n\n\n\n

At the same time, Brian Jacobsen, chief economist at Annex Wealth Management, said<\/a> that the manufacturing and housing sectors are in a recession already. The famous investor Jeremy Grantham warned that the U.S. stock market could experience significant losses soon, and a recommendation is that investors should continue to take a defensive investment approach.<\/p>\n\n\n\n

Stocks aren't the only assets that could significantly lose their value. Investors should remember that cryptocurrencies could also be in the situation to make an even bigger fall. The crypto market displayed a high correlation with U.S. equities. If a downtrend is witnessed in the stock market, the same is usually replicated in the crypto-sphere.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Bitcoin Is Close To Testing $30,000 Again; Ethereum Revives Bullish Momentum Above $1,800<\/a><\/p>\n","post_title":"The Fed Raises Interest Rates By 25 BPS This Wednesday; Effects On Crypto And Financial Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-fed-raises-interest-rates-by-25-bps-this-wednesday-effects-on-crypto-and-financial-markets","to_ping":"","pinged":"","post_modified":"2023-05-04 22:08:47","post_modified_gmt":"2023-05-04 12:08:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11491","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11422,"post_author":"12","post_date":"2023-05-02 17:50:37","post_date_gmt":"2023-05-02 07:50:37","post_content":"\n

Ray Dalio, the billionaire founder of one of the world\u2019s largest hedge funds, Bridgewater Associates, was recently\u00a0interviewed<\/a>. He explains that the United States' $31.45T debt may have to be resolved by printing more money, also referred to as currency debasement.<\/p>\n\n\n\n

\u201cSo I think you\u2019re in the part of the cycle where you\u2019ve had the tightening and then the dominoes are beginning to fall. And I think that that\u2019s going to produce more problems.<\/em><\/p>\n\n\n\n

I think when it comes down to it, there\u2019s just too much debt, and we\u2019re adding to it too quickly\u2026 Either that debt will be paid off with hard money, in which case there\u2019s not much printing and so on, or it will be paid off with printing a lot of money to make it easier to pay off. <\/em><\/p>\n\n\n\n

I think in the end, it\u2019s always the case that they print a lot of money in and make it easier to pay off, but you have the reduced value of money.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> Ray Dalio; The Federal Reserve Is Setting Off A \u201cTerrible Calamity\u201d<\/a><\/p>\n\n\n\n

Could The United States Default By June?<\/h2>\n\n\n\n

United States Treasury Secretary, Janet Yellen, wrote to House Speaker Kevin McCarthy;<\/p>\n\n\n\n

\"After reviewing recent federal tax receipts, our best estimate is that we will be unable to continue to satisfy all of the government\u2019s obligations by early June, and potentially as early as June 1, if Congress does not raise or suspend the debt limit before that time.<\/em><\/p>\n\n\n\n

If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests.\"<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> United States May Enter Mild Recession As Yet Another Hike In Fed Rates Expected<\/a><\/p>\n\n\n\n

Yellen warned that waiting until the last minute to take action on this issue would cause harm to \"business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States.\"<\/em> Yellen believes that defaulting on their debt would be a financial catastrophe, raising the cost of borrowing without an end, making future investment \"substantially more costly.\u201d<\/em><\/p>\n","post_title":"United States May Fund Its Deficit By Printing More Money; Could Default By June 1st","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-may-fund-its-deficit-by-printing-more-money-could-default-by-june-1st","to_ping":"","pinged":"","post_modified":"2023-05-04 13:04:05","post_modified_gmt":"2023-05-04 03:04:05","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11422","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

ADVERTISEMENT
\n

This is likely to drive demand destruction, and weakening pricing power and margins for corporates in the coming quarters, and because of this JPMorgan analysts are adopting a defensive stance, maintaining underweight allocations in equities and cryptocurrencies. Nevertheless, they propose an increase in the investment allocation towards gold due to its potential to rise in value during economic downturns, offering a hedge against potential losses in alternative investments.<\/p>\n\n\n\n

Gold is commonly regarded as a safe-haven asset, particularly amid economic uncertainty or geopolitical instability. Investors typically turn to gold as a means of preserving value when other assets are considered risky.<\/p>\n","post_title":"Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-surged-significantly-after-the-release-of-lower-than-anticipated-inflation-figures","to_ping":"","pinged":"","post_modified":"2023-11-16 20:00:45","post_modified_gmt":"2023-11-16 09:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14319","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11491,"post_author":"14","post_date":"2023-05-04 21:53:10","post_date_gmt":"2023-05-04 11:53:10","post_content":"\n

As widely expected, the U.S. Central Bank raised interest rates by 25bps this Wednesday. It signalled it could pause further increases, giving officials time to assess the fallout from recent bank failures, wait on the resolution of a political stand-off over the U.S. debt ceiling and monitor the course of inflation. The federal funds rate is now in a range of 5% to 5.25%, which is the highest level since 2006. <\/p>\n\n\n\n

The U.S. Central Bank warned that tighter credit conditions for households and businesses are expected to affect economic activity. In the picture below, we can see that even without this rise in interest rates, the federal funds rate was at the highest level since the 2007 financial crisis.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Many analysts and economists are worried that the high-interest rates will push the economy into a recession. It is important to mention that government data showed last week that economic growth in the first quarter slowed sequentially, with real gross domestic product increasing at a 1.1% annual pace, compared with a 2.6% gain in the prior three-month period. With higher interest rates, companies need to spend more money to borrow money to invest in growth. Historically, higher rates lead companies to reduce spending (especially on hiring). <\/p>\n\n\n\n

Many companies could face liquidity problems, and economist David Rosenberg has warned that the U.S. economy is facing two big risks. David Rosenberg said<\/a>:<\/p>\n\n\n\n

\"We have a possible debt default on our hands and a spreading bank crisis. The banking turmoil that started with Silicon Valley Bank's collapse in March remains unresolved, and First Republic's failure and takeover by CEO Jamie Dimon's JPMorgan has reignited worries about broader financial instability. Moreover, political disagreement about raising the U.S. government's borrowing limit is fanning fears of a debt-ceiling crisis.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>United States May Fund Its Deficit By Printing More Money; Could Default By June 1st<\/a><\/p>\n\n\n\n

Higher rates encourage saving over spending and make the debt more costly. Companies with bigger credit or other loans with variable interest rates could be in a difficult situation. We expect to see a meaningful slowdown in economic growth and a weakening of the labour market in the United States in the upcoming months. <\/p>\n\n\n\n

At the same time, Brian Jacobsen, chief economist at Annex Wealth Management, said<\/a> that the manufacturing and housing sectors are in a recession already. The famous investor Jeremy Grantham warned that the U.S. stock market could experience significant losses soon, and a recommendation is that investors should continue to take a defensive investment approach.<\/p>\n\n\n\n

Stocks aren't the only assets that could significantly lose their value. Investors should remember that cryptocurrencies could also be in the situation to make an even bigger fall. The crypto market displayed a high correlation with U.S. equities. If a downtrend is witnessed in the stock market, the same is usually replicated in the crypto-sphere.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Bitcoin Is Close To Testing $30,000 Again; Ethereum Revives Bullish Momentum Above $1,800<\/a><\/p>\n","post_title":"The Fed Raises Interest Rates By 25 BPS This Wednesday; Effects On Crypto And Financial Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-fed-raises-interest-rates-by-25-bps-this-wednesday-effects-on-crypto-and-financial-markets","to_ping":"","pinged":"","post_modified":"2023-05-04 22:08:47","post_modified_gmt":"2023-05-04 12:08:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11491","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11422,"post_author":"12","post_date":"2023-05-02 17:50:37","post_date_gmt":"2023-05-02 07:50:37","post_content":"\n

Ray Dalio, the billionaire founder of one of the world\u2019s largest hedge funds, Bridgewater Associates, was recently\u00a0interviewed<\/a>. He explains that the United States' $31.45T debt may have to be resolved by printing more money, also referred to as currency debasement.<\/p>\n\n\n\n

\u201cSo I think you\u2019re in the part of the cycle where you\u2019ve had the tightening and then the dominoes are beginning to fall. And I think that that\u2019s going to produce more problems.<\/em><\/p>\n\n\n\n

I think when it comes down to it, there\u2019s just too much debt, and we\u2019re adding to it too quickly\u2026 Either that debt will be paid off with hard money, in which case there\u2019s not much printing and so on, or it will be paid off with printing a lot of money to make it easier to pay off. <\/em><\/p>\n\n\n\n

I think in the end, it\u2019s always the case that they print a lot of money in and make it easier to pay off, but you have the reduced value of money.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> Ray Dalio; The Federal Reserve Is Setting Off A \u201cTerrible Calamity\u201d<\/a><\/p>\n\n\n\n

Could The United States Default By June?<\/h2>\n\n\n\n

United States Treasury Secretary, Janet Yellen, wrote to House Speaker Kevin McCarthy;<\/p>\n\n\n\n

\"After reviewing recent federal tax receipts, our best estimate is that we will be unable to continue to satisfy all of the government\u2019s obligations by early June, and potentially as early as June 1, if Congress does not raise or suspend the debt limit before that time.<\/em><\/p>\n\n\n\n

If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests.\"<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> United States May Enter Mild Recession As Yet Another Hike In Fed Rates Expected<\/a><\/p>\n\n\n\n

Yellen warned that waiting until the last minute to take action on this issue would cause harm to \"business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States.\"<\/em> Yellen believes that defaulting on their debt would be a financial catastrophe, raising the cost of borrowing without an end, making future investment \"substantially more costly.\u201d<\/em><\/p>\n","post_title":"United States May Fund Its Deficit By Printing More Money; Could Default By June 1st","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-may-fund-its-deficit-by-printing-more-money-could-default-by-june-1st","to_ping":"","pinged":"","post_modified":"2023-05-04 13:04:05","post_modified_gmt":"2023-05-04 03:04:05","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11422","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

ADVERTISEMENT
\n

However, analysts from JPMorgan warned that the risk-reward ratio for many stocks remains unattractive currently and restrictive monetary policy is likely to remain in place for some time. JPMorgan analysts anticipate that most adverse effects resulting from increased interest rates haven't manifested thus far. They highlight an upward trend in consumer loan delinquencies and corporate bankruptcies, suggesting that these patterns are probable to persist unless interest rates are lowered.<\/p>\n\n\n\n

This is likely to drive demand destruction, and weakening pricing power and margins for corporates in the coming quarters, and because of this JPMorgan analysts are adopting a defensive stance, maintaining underweight allocations in equities and cryptocurrencies. Nevertheless, they propose an increase in the investment allocation towards gold due to its potential to rise in value during economic downturns, offering a hedge against potential losses in alternative investments.<\/p>\n\n\n\n

Gold is commonly regarded as a safe-haven asset, particularly amid economic uncertainty or geopolitical instability. Investors typically turn to gold as a means of preserving value when other assets are considered risky.<\/p>\n","post_title":"Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-surged-significantly-after-the-release-of-lower-than-anticipated-inflation-figures","to_ping":"","pinged":"","post_modified":"2023-11-16 20:00:45","post_modified_gmt":"2023-11-16 09:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14319","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11491,"post_author":"14","post_date":"2023-05-04 21:53:10","post_date_gmt":"2023-05-04 11:53:10","post_content":"\n

As widely expected, the U.S. Central Bank raised interest rates by 25bps this Wednesday. It signalled it could pause further increases, giving officials time to assess the fallout from recent bank failures, wait on the resolution of a political stand-off over the U.S. debt ceiling and monitor the course of inflation. The federal funds rate is now in a range of 5% to 5.25%, which is the highest level since 2006. <\/p>\n\n\n\n

The U.S. Central Bank warned that tighter credit conditions for households and businesses are expected to affect economic activity. In the picture below, we can see that even without this rise in interest rates, the federal funds rate was at the highest level since the 2007 financial crisis.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Many analysts and economists are worried that the high-interest rates will push the economy into a recession. It is important to mention that government data showed last week that economic growth in the first quarter slowed sequentially, with real gross domestic product increasing at a 1.1% annual pace, compared with a 2.6% gain in the prior three-month period. With higher interest rates, companies need to spend more money to borrow money to invest in growth. Historically, higher rates lead companies to reduce spending (especially on hiring). <\/p>\n\n\n\n

Many companies could face liquidity problems, and economist David Rosenberg has warned that the U.S. economy is facing two big risks. David Rosenberg said<\/a>:<\/p>\n\n\n\n

\"We have a possible debt default on our hands and a spreading bank crisis. The banking turmoil that started with Silicon Valley Bank's collapse in March remains unresolved, and First Republic's failure and takeover by CEO Jamie Dimon's JPMorgan has reignited worries about broader financial instability. Moreover, political disagreement about raising the U.S. government's borrowing limit is fanning fears of a debt-ceiling crisis.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>United States May Fund Its Deficit By Printing More Money; Could Default By June 1st<\/a><\/p>\n\n\n\n

Higher rates encourage saving over spending and make the debt more costly. Companies with bigger credit or other loans with variable interest rates could be in a difficult situation. We expect to see a meaningful slowdown in economic growth and a weakening of the labour market in the United States in the upcoming months. <\/p>\n\n\n\n

At the same time, Brian Jacobsen, chief economist at Annex Wealth Management, said<\/a> that the manufacturing and housing sectors are in a recession already. The famous investor Jeremy Grantham warned that the U.S. stock market could experience significant losses soon, and a recommendation is that investors should continue to take a defensive investment approach.<\/p>\n\n\n\n

Stocks aren't the only assets that could significantly lose their value. Investors should remember that cryptocurrencies could also be in the situation to make an even bigger fall. The crypto market displayed a high correlation with U.S. equities. If a downtrend is witnessed in the stock market, the same is usually replicated in the crypto-sphere.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Bitcoin Is Close To Testing $30,000 Again; Ethereum Revives Bullish Momentum Above $1,800<\/a><\/p>\n","post_title":"The Fed Raises Interest Rates By 25 BPS This Wednesday; Effects On Crypto And Financial Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-fed-raises-interest-rates-by-25-bps-this-wednesday-effects-on-crypto-and-financial-markets","to_ping":"","pinged":"","post_modified":"2023-05-04 22:08:47","post_modified_gmt":"2023-05-04 12:08:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11491","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11422,"post_author":"12","post_date":"2023-05-02 17:50:37","post_date_gmt":"2023-05-02 07:50:37","post_content":"\n

Ray Dalio, the billionaire founder of one of the world\u2019s largest hedge funds, Bridgewater Associates, was recently\u00a0interviewed<\/a>. He explains that the United States' $31.45T debt may have to be resolved by printing more money, also referred to as currency debasement.<\/p>\n\n\n\n

\u201cSo I think you\u2019re in the part of the cycle where you\u2019ve had the tightening and then the dominoes are beginning to fall. And I think that that\u2019s going to produce more problems.<\/em><\/p>\n\n\n\n

I think when it comes down to it, there\u2019s just too much debt, and we\u2019re adding to it too quickly\u2026 Either that debt will be paid off with hard money, in which case there\u2019s not much printing and so on, or it will be paid off with printing a lot of money to make it easier to pay off. <\/em><\/p>\n\n\n\n

I think in the end, it\u2019s always the case that they print a lot of money in and make it easier to pay off, but you have the reduced value of money.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> Ray Dalio; The Federal Reserve Is Setting Off A \u201cTerrible Calamity\u201d<\/a><\/p>\n\n\n\n

Could The United States Default By June?<\/h2>\n\n\n\n

United States Treasury Secretary, Janet Yellen, wrote to House Speaker Kevin McCarthy;<\/p>\n\n\n\n

\"After reviewing recent federal tax receipts, our best estimate is that we will be unable to continue to satisfy all of the government\u2019s obligations by early June, and potentially as early as June 1, if Congress does not raise or suspend the debt limit before that time.<\/em><\/p>\n\n\n\n

If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests.\"<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> United States May Enter Mild Recession As Yet Another Hike In Fed Rates Expected<\/a><\/p>\n\n\n\n

Yellen warned that waiting until the last minute to take action on this issue would cause harm to \"business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States.\"<\/em> Yellen believes that defaulting on their debt would be a financial catastrophe, raising the cost of borrowing without an end, making future investment \"substantially more costly.\u201d<\/em><\/p>\n","post_title":"United States May Fund Its Deficit By Printing More Money; Could Default By June 1st","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-may-fund-its-deficit-by-printing-more-money-could-default-by-june-1st","to_ping":"","pinged":"","post_modified":"2023-05-04 13:04:05","post_modified_gmt":"2023-05-04 03:04:05","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11422","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

ADVERTISEMENT
\n

See Related:<\/strong><\/em> Gala is announcing a partnership with Stick Figure Productions to distribute Four Down on the Blockchain<\/a><\/p>\n\n\n\n

However, analysts from JPMorgan warned that the risk-reward ratio for many stocks remains unattractive currently and restrictive monetary policy is likely to remain in place for some time. JPMorgan analysts anticipate that most adverse effects resulting from increased interest rates haven't manifested thus far. They highlight an upward trend in consumer loan delinquencies and corporate bankruptcies, suggesting that these patterns are probable to persist unless interest rates are lowered.<\/p>\n\n\n\n

This is likely to drive demand destruction, and weakening pricing power and margins for corporates in the coming quarters, and because of this JPMorgan analysts are adopting a defensive stance, maintaining underweight allocations in equities and cryptocurrencies. Nevertheless, they propose an increase in the investment allocation towards gold due to its potential to rise in value during economic downturns, offering a hedge against potential losses in alternative investments.<\/p>\n\n\n\n

Gold is commonly regarded as a safe-haven asset, particularly amid economic uncertainty or geopolitical instability. Investors typically turn to gold as a means of preserving value when other assets are considered risky.<\/p>\n","post_title":"Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-surged-significantly-after-the-release-of-lower-than-anticipated-inflation-figures","to_ping":"","pinged":"","post_modified":"2023-11-16 20:00:45","post_modified_gmt":"2023-11-16 09:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14319","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11491,"post_author":"14","post_date":"2023-05-04 21:53:10","post_date_gmt":"2023-05-04 11:53:10","post_content":"\n

As widely expected, the U.S. Central Bank raised interest rates by 25bps this Wednesday. It signalled it could pause further increases, giving officials time to assess the fallout from recent bank failures, wait on the resolution of a political stand-off over the U.S. debt ceiling and monitor the course of inflation. The federal funds rate is now in a range of 5% to 5.25%, which is the highest level since 2006. <\/p>\n\n\n\n

The U.S. Central Bank warned that tighter credit conditions for households and businesses are expected to affect economic activity. In the picture below, we can see that even without this rise in interest rates, the federal funds rate was at the highest level since the 2007 financial crisis.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Many analysts and economists are worried that the high-interest rates will push the economy into a recession. It is important to mention that government data showed last week that economic growth in the first quarter slowed sequentially, with real gross domestic product increasing at a 1.1% annual pace, compared with a 2.6% gain in the prior three-month period. With higher interest rates, companies need to spend more money to borrow money to invest in growth. Historically, higher rates lead companies to reduce spending (especially on hiring). <\/p>\n\n\n\n

Many companies could face liquidity problems, and economist David Rosenberg has warned that the U.S. economy is facing two big risks. David Rosenberg said<\/a>:<\/p>\n\n\n\n

\"We have a possible debt default on our hands and a spreading bank crisis. The banking turmoil that started with Silicon Valley Bank's collapse in March remains unresolved, and First Republic's failure and takeover by CEO Jamie Dimon's JPMorgan has reignited worries about broader financial instability. Moreover, political disagreement about raising the U.S. government's borrowing limit is fanning fears of a debt-ceiling crisis.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>United States May Fund Its Deficit By Printing More Money; Could Default By June 1st<\/a><\/p>\n\n\n\n

Higher rates encourage saving over spending and make the debt more costly. Companies with bigger credit or other loans with variable interest rates could be in a difficult situation. We expect to see a meaningful slowdown in economic growth and a weakening of the labour market in the United States in the upcoming months. <\/p>\n\n\n\n

At the same time, Brian Jacobsen, chief economist at Annex Wealth Management, said<\/a> that the manufacturing and housing sectors are in a recession already. The famous investor Jeremy Grantham warned that the U.S. stock market could experience significant losses soon, and a recommendation is that investors should continue to take a defensive investment approach.<\/p>\n\n\n\n

Stocks aren't the only assets that could significantly lose their value. Investors should remember that cryptocurrencies could also be in the situation to make an even bigger fall. The crypto market displayed a high correlation with U.S. equities. If a downtrend is witnessed in the stock market, the same is usually replicated in the crypto-sphere.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Bitcoin Is Close To Testing $30,000 Again; Ethereum Revives Bullish Momentum Above $1,800<\/a><\/p>\n","post_title":"The Fed Raises Interest Rates By 25 BPS This Wednesday; Effects On Crypto And Financial Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-fed-raises-interest-rates-by-25-bps-this-wednesday-effects-on-crypto-and-financial-markets","to_ping":"","pinged":"","post_modified":"2023-05-04 22:08:47","post_modified_gmt":"2023-05-04 12:08:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11491","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11422,"post_author":"12","post_date":"2023-05-02 17:50:37","post_date_gmt":"2023-05-02 07:50:37","post_content":"\n

Ray Dalio, the billionaire founder of one of the world\u2019s largest hedge funds, Bridgewater Associates, was recently\u00a0interviewed<\/a>. He explains that the United States' $31.45T debt may have to be resolved by printing more money, also referred to as currency debasement.<\/p>\n\n\n\n

\u201cSo I think you\u2019re in the part of the cycle where you\u2019ve had the tightening and then the dominoes are beginning to fall. And I think that that\u2019s going to produce more problems.<\/em><\/p>\n\n\n\n

I think when it comes down to it, there\u2019s just too much debt, and we\u2019re adding to it too quickly\u2026 Either that debt will be paid off with hard money, in which case there\u2019s not much printing and so on, or it will be paid off with printing a lot of money to make it easier to pay off. <\/em><\/p>\n\n\n\n

I think in the end, it\u2019s always the case that they print a lot of money in and make it easier to pay off, but you have the reduced value of money.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> Ray Dalio; The Federal Reserve Is Setting Off A \u201cTerrible Calamity\u201d<\/a><\/p>\n\n\n\n

Could The United States Default By June?<\/h2>\n\n\n\n

United States Treasury Secretary, Janet Yellen, wrote to House Speaker Kevin McCarthy;<\/p>\n\n\n\n

\"After reviewing recent federal tax receipts, our best estimate is that we will be unable to continue to satisfy all of the government\u2019s obligations by early June, and potentially as early as June 1, if Congress does not raise or suspend the debt limit before that time.<\/em><\/p>\n\n\n\n

If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests.\"<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> United States May Enter Mild Recession As Yet Another Hike In Fed Rates Expected<\/a><\/p>\n\n\n\n

Yellen warned that waiting until the last minute to take action on this issue would cause harm to \"business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States.\"<\/em> Yellen believes that defaulting on their debt would be a financial catastrophe, raising the cost of borrowing without an end, making future investment \"substantially more costly.\u201d<\/em><\/p>\n","post_title":"United States May Fund Its Deficit By Printing More Money; Could Default By June 1st","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-may-fund-its-deficit-by-printing-more-money-could-default-by-june-1st","to_ping":"","pinged":"","post_modified":"2023-05-04 13:04:05","post_modified_gmt":"2023-05-04 03:04:05","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11422","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

ADVERTISEMENT
\n

\u201cAcross the board, it\u2019s a good report and I think this will comfort the excessively data-dependent Fed policymakers that policy is sufficiently restrictive to bring inflation down to 2 percent.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/strong><\/em> Gala is announcing a partnership with Stick Figure Productions to distribute Four Down on the Blockchain<\/a><\/p>\n\n\n\n

However, analysts from JPMorgan warned that the risk-reward ratio for many stocks remains unattractive currently and restrictive monetary policy is likely to remain in place for some time. JPMorgan analysts anticipate that most adverse effects resulting from increased interest rates haven't manifested thus far. They highlight an upward trend in consumer loan delinquencies and corporate bankruptcies, suggesting that these patterns are probable to persist unless interest rates are lowered.<\/p>\n\n\n\n

This is likely to drive demand destruction, and weakening pricing power and margins for corporates in the coming quarters, and because of this JPMorgan analysts are adopting a defensive stance, maintaining underweight allocations in equities and cryptocurrencies. Nevertheless, they propose an increase in the investment allocation towards gold due to its potential to rise in value during economic downturns, offering a hedge against potential losses in alternative investments.<\/p>\n\n\n\n

Gold is commonly regarded as a safe-haven asset, particularly amid economic uncertainty or geopolitical instability. Investors typically turn to gold as a means of preserving value when other assets are considered risky.<\/p>\n","post_title":"Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-surged-significantly-after-the-release-of-lower-than-anticipated-inflation-figures","to_ping":"","pinged":"","post_modified":"2023-11-16 20:00:45","post_modified_gmt":"2023-11-16 09:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14319","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11491,"post_author":"14","post_date":"2023-05-04 21:53:10","post_date_gmt":"2023-05-04 11:53:10","post_content":"\n

As widely expected, the U.S. Central Bank raised interest rates by 25bps this Wednesday. It signalled it could pause further increases, giving officials time to assess the fallout from recent bank failures, wait on the resolution of a political stand-off over the U.S. debt ceiling and monitor the course of inflation. The federal funds rate is now in a range of 5% to 5.25%, which is the highest level since 2006. <\/p>\n\n\n\n

The U.S. Central Bank warned that tighter credit conditions for households and businesses are expected to affect economic activity. In the picture below, we can see that even without this rise in interest rates, the federal funds rate was at the highest level since the 2007 financial crisis.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Many analysts and economists are worried that the high-interest rates will push the economy into a recession. It is important to mention that government data showed last week that economic growth in the first quarter slowed sequentially, with real gross domestic product increasing at a 1.1% annual pace, compared with a 2.6% gain in the prior three-month period. With higher interest rates, companies need to spend more money to borrow money to invest in growth. Historically, higher rates lead companies to reduce spending (especially on hiring). <\/p>\n\n\n\n

Many companies could face liquidity problems, and economist David Rosenberg has warned that the U.S. economy is facing two big risks. David Rosenberg said<\/a>:<\/p>\n\n\n\n

\"We have a possible debt default on our hands and a spreading bank crisis. The banking turmoil that started with Silicon Valley Bank's collapse in March remains unresolved, and First Republic's failure and takeover by CEO Jamie Dimon's JPMorgan has reignited worries about broader financial instability. Moreover, political disagreement about raising the U.S. government's borrowing limit is fanning fears of a debt-ceiling crisis.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>United States May Fund Its Deficit By Printing More Money; Could Default By June 1st<\/a><\/p>\n\n\n\n

Higher rates encourage saving over spending and make the debt more costly. Companies with bigger credit or other loans with variable interest rates could be in a difficult situation. We expect to see a meaningful slowdown in economic growth and a weakening of the labour market in the United States in the upcoming months. <\/p>\n\n\n\n

At the same time, Brian Jacobsen, chief economist at Annex Wealth Management, said<\/a> that the manufacturing and housing sectors are in a recession already. The famous investor Jeremy Grantham warned that the U.S. stock market could experience significant losses soon, and a recommendation is that investors should continue to take a defensive investment approach.<\/p>\n\n\n\n

Stocks aren't the only assets that could significantly lose their value. Investors should remember that cryptocurrencies could also be in the situation to make an even bigger fall. The crypto market displayed a high correlation with U.S. equities. If a downtrend is witnessed in the stock market, the same is usually replicated in the crypto-sphere.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Bitcoin Is Close To Testing $30,000 Again; Ethereum Revives Bullish Momentum Above $1,800<\/a><\/p>\n","post_title":"The Fed Raises Interest Rates By 25 BPS This Wednesday; Effects On Crypto And Financial Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-fed-raises-interest-rates-by-25-bps-this-wednesday-effects-on-crypto-and-financial-markets","to_ping":"","pinged":"","post_modified":"2023-05-04 22:08:47","post_modified_gmt":"2023-05-04 12:08:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11491","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11422,"post_author":"12","post_date":"2023-05-02 17:50:37","post_date_gmt":"2023-05-02 07:50:37","post_content":"\n

Ray Dalio, the billionaire founder of one of the world\u2019s largest hedge funds, Bridgewater Associates, was recently\u00a0interviewed<\/a>. He explains that the United States' $31.45T debt may have to be resolved by printing more money, also referred to as currency debasement.<\/p>\n\n\n\n

\u201cSo I think you\u2019re in the part of the cycle where you\u2019ve had the tightening and then the dominoes are beginning to fall. And I think that that\u2019s going to produce more problems.<\/em><\/p>\n\n\n\n

I think when it comes down to it, there\u2019s just too much debt, and we\u2019re adding to it too quickly\u2026 Either that debt will be paid off with hard money, in which case there\u2019s not much printing and so on, or it will be paid off with printing a lot of money to make it easier to pay off. <\/em><\/p>\n\n\n\n

I think in the end, it\u2019s always the case that they print a lot of money in and make it easier to pay off, but you have the reduced value of money.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> Ray Dalio; The Federal Reserve Is Setting Off A \u201cTerrible Calamity\u201d<\/a><\/p>\n\n\n\n

Could The United States Default By June?<\/h2>\n\n\n\n

United States Treasury Secretary, Janet Yellen, wrote to House Speaker Kevin McCarthy;<\/p>\n\n\n\n

\"After reviewing recent federal tax receipts, our best estimate is that we will be unable to continue to satisfy all of the government\u2019s obligations by early June, and potentially as early as June 1, if Congress does not raise or suspend the debt limit before that time.<\/em><\/p>\n\n\n\n

If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests.\"<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> United States May Enter Mild Recession As Yet Another Hike In Fed Rates Expected<\/a><\/p>\n\n\n\n

Yellen warned that waiting until the last minute to take action on this issue would cause harm to \"business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States.\"<\/em> Yellen believes that defaulting on their debt would be a financial catastrophe, raising the cost of borrowing without an end, making future investment \"substantially more costly.\u201d<\/em><\/p>\n","post_title":"United States May Fund Its Deficit By Printing More Money; Could Default By June 1st","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-may-fund-its-deficit-by-printing-more-money-could-default-by-june-1st","to_ping":"","pinged":"","post_modified":"2023-05-04 13:04:05","post_modified_gmt":"2023-05-04 03:04:05","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11422","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

ADVERTISEMENT
\n

Earlier this month, the Federal Reserve maintained its benchmark interest rate at the highest level in 22 years. Following this Tuesday's report, prominent analysts and economists indicated only a 1 percent probability that the central bank would increase rates during its upcoming policy meeting in December. Gregory Daco, chief economist at EY Parthenon, said<\/a>:<\/p>\n\n\n\n

\u201cAcross the board, it\u2019s a good report and I think this will comfort the excessively data-dependent Fed policymakers that policy is sufficiently restrictive to bring inflation down to 2 percent.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/strong><\/em> Gala is announcing a partnership with Stick Figure Productions to distribute Four Down on the Blockchain<\/a><\/p>\n\n\n\n

However, analysts from JPMorgan warned that the risk-reward ratio for many stocks remains unattractive currently and restrictive monetary policy is likely to remain in place for some time. JPMorgan analysts anticipate that most adverse effects resulting from increased interest rates haven't manifested thus far. They highlight an upward trend in consumer loan delinquencies and corporate bankruptcies, suggesting that these patterns are probable to persist unless interest rates are lowered.<\/p>\n\n\n\n

This is likely to drive demand destruction, and weakening pricing power and margins for corporates in the coming quarters, and because of this JPMorgan analysts are adopting a defensive stance, maintaining underweight allocations in equities and cryptocurrencies. Nevertheless, they propose an increase in the investment allocation towards gold due to its potential to rise in value during economic downturns, offering a hedge against potential losses in alternative investments.<\/p>\n\n\n\n

Gold is commonly regarded as a safe-haven asset, particularly amid economic uncertainty or geopolitical instability. Investors typically turn to gold as a means of preserving value when other assets are considered risky.<\/p>\n","post_title":"Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-surged-significantly-after-the-release-of-lower-than-anticipated-inflation-figures","to_ping":"","pinged":"","post_modified":"2023-11-16 20:00:45","post_modified_gmt":"2023-11-16 09:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14319","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11491,"post_author":"14","post_date":"2023-05-04 21:53:10","post_date_gmt":"2023-05-04 11:53:10","post_content":"\n

As widely expected, the U.S. Central Bank raised interest rates by 25bps this Wednesday. It signalled it could pause further increases, giving officials time to assess the fallout from recent bank failures, wait on the resolution of a political stand-off over the U.S. debt ceiling and monitor the course of inflation. The federal funds rate is now in a range of 5% to 5.25%, which is the highest level since 2006. <\/p>\n\n\n\n

The U.S. Central Bank warned that tighter credit conditions for households and businesses are expected to affect economic activity. In the picture below, we can see that even without this rise in interest rates, the federal funds rate was at the highest level since the 2007 financial crisis.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Many analysts and economists are worried that the high-interest rates will push the economy into a recession. It is important to mention that government data showed last week that economic growth in the first quarter slowed sequentially, with real gross domestic product increasing at a 1.1% annual pace, compared with a 2.6% gain in the prior three-month period. With higher interest rates, companies need to spend more money to borrow money to invest in growth. Historically, higher rates lead companies to reduce spending (especially on hiring). <\/p>\n\n\n\n

Many companies could face liquidity problems, and economist David Rosenberg has warned that the U.S. economy is facing two big risks. David Rosenberg said<\/a>:<\/p>\n\n\n\n

\"We have a possible debt default on our hands and a spreading bank crisis. The banking turmoil that started with Silicon Valley Bank's collapse in March remains unresolved, and First Republic's failure and takeover by CEO Jamie Dimon's JPMorgan has reignited worries about broader financial instability. Moreover, political disagreement about raising the U.S. government's borrowing limit is fanning fears of a debt-ceiling crisis.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>United States May Fund Its Deficit By Printing More Money; Could Default By June 1st<\/a><\/p>\n\n\n\n

Higher rates encourage saving over spending and make the debt more costly. Companies with bigger credit or other loans with variable interest rates could be in a difficult situation. We expect to see a meaningful slowdown in economic growth and a weakening of the labour market in the United States in the upcoming months. <\/p>\n\n\n\n

At the same time, Brian Jacobsen, chief economist at Annex Wealth Management, said<\/a> that the manufacturing and housing sectors are in a recession already. The famous investor Jeremy Grantham warned that the U.S. stock market could experience significant losses soon, and a recommendation is that investors should continue to take a defensive investment approach.<\/p>\n\n\n\n

Stocks aren't the only assets that could significantly lose their value. Investors should remember that cryptocurrencies could also be in the situation to make an even bigger fall. The crypto market displayed a high correlation with U.S. equities. If a downtrend is witnessed in the stock market, the same is usually replicated in the crypto-sphere.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Bitcoin Is Close To Testing $30,000 Again; Ethereum Revives Bullish Momentum Above $1,800<\/a><\/p>\n","post_title":"The Fed Raises Interest Rates By 25 BPS This Wednesday; Effects On Crypto And Financial Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-fed-raises-interest-rates-by-25-bps-this-wednesday-effects-on-crypto-and-financial-markets","to_ping":"","pinged":"","post_modified":"2023-05-04 22:08:47","post_modified_gmt":"2023-05-04 12:08:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11491","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11422,"post_author":"12","post_date":"2023-05-02 17:50:37","post_date_gmt":"2023-05-02 07:50:37","post_content":"\n

Ray Dalio, the billionaire founder of one of the world\u2019s largest hedge funds, Bridgewater Associates, was recently\u00a0interviewed<\/a>. He explains that the United States' $31.45T debt may have to be resolved by printing more money, also referred to as currency debasement.<\/p>\n\n\n\n

\u201cSo I think you\u2019re in the part of the cycle where you\u2019ve had the tightening and then the dominoes are beginning to fall. And I think that that\u2019s going to produce more problems.<\/em><\/p>\n\n\n\n

I think when it comes down to it, there\u2019s just too much debt, and we\u2019re adding to it too quickly\u2026 Either that debt will be paid off with hard money, in which case there\u2019s not much printing and so on, or it will be paid off with printing a lot of money to make it easier to pay off. <\/em><\/p>\n\n\n\n

I think in the end, it\u2019s always the case that they print a lot of money in and make it easier to pay off, but you have the reduced value of money.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> Ray Dalio; The Federal Reserve Is Setting Off A \u201cTerrible Calamity\u201d<\/a><\/p>\n\n\n\n

Could The United States Default By June?<\/h2>\n\n\n\n

United States Treasury Secretary, Janet Yellen, wrote to House Speaker Kevin McCarthy;<\/p>\n\n\n\n

\"After reviewing recent federal tax receipts, our best estimate is that we will be unable to continue to satisfy all of the government\u2019s obligations by early June, and potentially as early as June 1, if Congress does not raise or suspend the debt limit before that time.<\/em><\/p>\n\n\n\n

If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests.\"<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> United States May Enter Mild Recession As Yet Another Hike In Fed Rates Expected<\/a><\/p>\n\n\n\n

Yellen warned that waiting until the last minute to take action on this issue would cause harm to \"business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States.\"<\/em> Yellen believes that defaulting on their debt would be a financial catastrophe, raising the cost of borrowing without an end, making future investment \"substantially more costly.\u201d<\/em><\/p>\n","post_title":"United States May Fund Its Deficit By Printing More Money; Could Default By June 1st","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-may-fund-its-deficit-by-printing-more-money-could-default-by-june-1st","to_ping":"","pinged":"","post_modified":"2023-05-04 13:04:05","post_modified_gmt":"2023-05-04 03:04:05","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11422","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

ADVERTISEMENT
\n
\"Inflation
Inflation edges down in October<\/em><\/figcaption><\/figure>\n\n\n\n

Earlier this month, the Federal Reserve maintained its benchmark interest rate at the highest level in 22 years. Following this Tuesday's report, prominent analysts and economists indicated only a 1 percent probability that the central bank would increase rates during its upcoming policy meeting in December. Gregory Daco, chief economist at EY Parthenon, said<\/a>:<\/p>\n\n\n\n

\u201cAcross the board, it\u2019s a good report and I think this will comfort the excessively data-dependent Fed policymakers that policy is sufficiently restrictive to bring inflation down to 2 percent.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/strong><\/em> Gala is announcing a partnership with Stick Figure Productions to distribute Four Down on the Blockchain<\/a><\/p>\n\n\n\n

However, analysts from JPMorgan warned that the risk-reward ratio for many stocks remains unattractive currently and restrictive monetary policy is likely to remain in place for some time. JPMorgan analysts anticipate that most adverse effects resulting from increased interest rates haven't manifested thus far. They highlight an upward trend in consumer loan delinquencies and corporate bankruptcies, suggesting that these patterns are probable to persist unless interest rates are lowered.<\/p>\n\n\n\n

This is likely to drive demand destruction, and weakening pricing power and margins for corporates in the coming quarters, and because of this JPMorgan analysts are adopting a defensive stance, maintaining underweight allocations in equities and cryptocurrencies. Nevertheless, they propose an increase in the investment allocation towards gold due to its potential to rise in value during economic downturns, offering a hedge against potential losses in alternative investments.<\/p>\n\n\n\n

Gold is commonly regarded as a safe-haven asset, particularly amid economic uncertainty or geopolitical instability. Investors typically turn to gold as a means of preserving value when other assets are considered risky.<\/p>\n","post_title":"Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-surged-significantly-after-the-release-of-lower-than-anticipated-inflation-figures","to_ping":"","pinged":"","post_modified":"2023-11-16 20:00:45","post_modified_gmt":"2023-11-16 09:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14319","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11491,"post_author":"14","post_date":"2023-05-04 21:53:10","post_date_gmt":"2023-05-04 11:53:10","post_content":"\n

As widely expected, the U.S. Central Bank raised interest rates by 25bps this Wednesday. It signalled it could pause further increases, giving officials time to assess the fallout from recent bank failures, wait on the resolution of a political stand-off over the U.S. debt ceiling and monitor the course of inflation. The federal funds rate is now in a range of 5% to 5.25%, which is the highest level since 2006. <\/p>\n\n\n\n

The U.S. Central Bank warned that tighter credit conditions for households and businesses are expected to affect economic activity. In the picture below, we can see that even without this rise in interest rates, the federal funds rate was at the highest level since the 2007 financial crisis.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Many analysts and economists are worried that the high-interest rates will push the economy into a recession. It is important to mention that government data showed last week that economic growth in the first quarter slowed sequentially, with real gross domestic product increasing at a 1.1% annual pace, compared with a 2.6% gain in the prior three-month period. With higher interest rates, companies need to spend more money to borrow money to invest in growth. Historically, higher rates lead companies to reduce spending (especially on hiring). <\/p>\n\n\n\n

Many companies could face liquidity problems, and economist David Rosenberg has warned that the U.S. economy is facing two big risks. David Rosenberg said<\/a>:<\/p>\n\n\n\n

\"We have a possible debt default on our hands and a spreading bank crisis. The banking turmoil that started with Silicon Valley Bank's collapse in March remains unresolved, and First Republic's failure and takeover by CEO Jamie Dimon's JPMorgan has reignited worries about broader financial instability. Moreover, political disagreement about raising the U.S. government's borrowing limit is fanning fears of a debt-ceiling crisis.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>United States May Fund Its Deficit By Printing More Money; Could Default By June 1st<\/a><\/p>\n\n\n\n

Higher rates encourage saving over spending and make the debt more costly. Companies with bigger credit or other loans with variable interest rates could be in a difficult situation. We expect to see a meaningful slowdown in economic growth and a weakening of the labour market in the United States in the upcoming months. <\/p>\n\n\n\n

At the same time, Brian Jacobsen, chief economist at Annex Wealth Management, said<\/a> that the manufacturing and housing sectors are in a recession already. The famous investor Jeremy Grantham warned that the U.S. stock market could experience significant losses soon, and a recommendation is that investors should continue to take a defensive investment approach.<\/p>\n\n\n\n

Stocks aren't the only assets that could significantly lose their value. Investors should remember that cryptocurrencies could also be in the situation to make an even bigger fall. The crypto market displayed a high correlation with U.S. equities. If a downtrend is witnessed in the stock market, the same is usually replicated in the crypto-sphere.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Bitcoin Is Close To Testing $30,000 Again; Ethereum Revives Bullish Momentum Above $1,800<\/a><\/p>\n","post_title":"The Fed Raises Interest Rates By 25 BPS This Wednesday; Effects On Crypto And Financial Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-fed-raises-interest-rates-by-25-bps-this-wednesday-effects-on-crypto-and-financial-markets","to_ping":"","pinged":"","post_modified":"2023-05-04 22:08:47","post_modified_gmt":"2023-05-04 12:08:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11491","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11422,"post_author":"12","post_date":"2023-05-02 17:50:37","post_date_gmt":"2023-05-02 07:50:37","post_content":"\n

Ray Dalio, the billionaire founder of one of the world\u2019s largest hedge funds, Bridgewater Associates, was recently\u00a0interviewed<\/a>. He explains that the United States' $31.45T debt may have to be resolved by printing more money, also referred to as currency debasement.<\/p>\n\n\n\n

\u201cSo I think you\u2019re in the part of the cycle where you\u2019ve had the tightening and then the dominoes are beginning to fall. And I think that that\u2019s going to produce more problems.<\/em><\/p>\n\n\n\n

I think when it comes down to it, there\u2019s just too much debt, and we\u2019re adding to it too quickly\u2026 Either that debt will be paid off with hard money, in which case there\u2019s not much printing and so on, or it will be paid off with printing a lot of money to make it easier to pay off. <\/em><\/p>\n\n\n\n

I think in the end, it\u2019s always the case that they print a lot of money in and make it easier to pay off, but you have the reduced value of money.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> Ray Dalio; The Federal Reserve Is Setting Off A \u201cTerrible Calamity\u201d<\/a><\/p>\n\n\n\n

Could The United States Default By June?<\/h2>\n\n\n\n

United States Treasury Secretary, Janet Yellen, wrote to House Speaker Kevin McCarthy;<\/p>\n\n\n\n

\"After reviewing recent federal tax receipts, our best estimate is that we will be unable to continue to satisfy all of the government\u2019s obligations by early June, and potentially as early as June 1, if Congress does not raise or suspend the debt limit before that time.<\/em><\/p>\n\n\n\n

If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests.\"<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> United States May Enter Mild Recession As Yet Another Hike In Fed Rates Expected<\/a><\/p>\n\n\n\n

Yellen warned that waiting until the last minute to take action on this issue would cause harm to \"business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States.\"<\/em> Yellen believes that defaulting on their debt would be a financial catastrophe, raising the cost of borrowing without an end, making future investment \"substantially more costly.\u201d<\/em><\/p>\n","post_title":"United States May Fund Its Deficit By Printing More Money; Could Default By June 1st","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-may-fund-its-deficit-by-printing-more-money-could-default-by-june-1st","to_ping":"","pinged":"","post_modified":"2023-05-04 13:04:05","post_modified_gmt":"2023-05-04 03:04:05","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11422","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

ADVERTISEMENT
\n

Additionally promising, Wall Street's prices held steady over the month following a 0.4% increase in September. Core prices, which exclude the unpredictable food and energy sectors, rose by 4%, slightly slower compared to the rate observed in September. The report signifies a significant achievement for the Fed in its battle against inflation but in the upcoming weeks, policymakers will monitor the service category closely, seeking further deceleration as their interest rate increases impact demand.<\/p>\n\n\n\n

\"Inflation
Inflation edges down in October<\/em><\/figcaption><\/figure>\n\n\n\n

Earlier this month, the Federal Reserve maintained its benchmark interest rate at the highest level in 22 years. Following this Tuesday's report, prominent analysts and economists indicated only a 1 percent probability that the central bank would increase rates during its upcoming policy meeting in December. Gregory Daco, chief economist at EY Parthenon, said<\/a>:<\/p>\n\n\n\n

\u201cAcross the board, it\u2019s a good report and I think this will comfort the excessively data-dependent Fed policymakers that policy is sufficiently restrictive to bring inflation down to 2 percent.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/strong><\/em> Gala is announcing a partnership with Stick Figure Productions to distribute Four Down on the Blockchain<\/a><\/p>\n\n\n\n

However, analysts from JPMorgan warned that the risk-reward ratio for many stocks remains unattractive currently and restrictive monetary policy is likely to remain in place for some time. JPMorgan analysts anticipate that most adverse effects resulting from increased interest rates haven't manifested thus far. They highlight an upward trend in consumer loan delinquencies and corporate bankruptcies, suggesting that these patterns are probable to persist unless interest rates are lowered.<\/p>\n\n\n\n

This is likely to drive demand destruction, and weakening pricing power and margins for corporates in the coming quarters, and because of this JPMorgan analysts are adopting a defensive stance, maintaining underweight allocations in equities and cryptocurrencies. Nevertheless, they propose an increase in the investment allocation towards gold due to its potential to rise in value during economic downturns, offering a hedge against potential losses in alternative investments.<\/p>\n\n\n\n

Gold is commonly regarded as a safe-haven asset, particularly amid economic uncertainty or geopolitical instability. Investors typically turn to gold as a means of preserving value when other assets are considered risky.<\/p>\n","post_title":"Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-surged-significantly-after-the-release-of-lower-than-anticipated-inflation-figures","to_ping":"","pinged":"","post_modified":"2023-11-16 20:00:45","post_modified_gmt":"2023-11-16 09:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14319","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11491,"post_author":"14","post_date":"2023-05-04 21:53:10","post_date_gmt":"2023-05-04 11:53:10","post_content":"\n

As widely expected, the U.S. Central Bank raised interest rates by 25bps this Wednesday. It signalled it could pause further increases, giving officials time to assess the fallout from recent bank failures, wait on the resolution of a political stand-off over the U.S. debt ceiling and monitor the course of inflation. The federal funds rate is now in a range of 5% to 5.25%, which is the highest level since 2006. <\/p>\n\n\n\n

The U.S. Central Bank warned that tighter credit conditions for households and businesses are expected to affect economic activity. In the picture below, we can see that even without this rise in interest rates, the federal funds rate was at the highest level since the 2007 financial crisis.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Many analysts and economists are worried that the high-interest rates will push the economy into a recession. It is important to mention that government data showed last week that economic growth in the first quarter slowed sequentially, with real gross domestic product increasing at a 1.1% annual pace, compared with a 2.6% gain in the prior three-month period. With higher interest rates, companies need to spend more money to borrow money to invest in growth. Historically, higher rates lead companies to reduce spending (especially on hiring). <\/p>\n\n\n\n

Many companies could face liquidity problems, and economist David Rosenberg has warned that the U.S. economy is facing two big risks. David Rosenberg said<\/a>:<\/p>\n\n\n\n

\"We have a possible debt default on our hands and a spreading bank crisis. The banking turmoil that started with Silicon Valley Bank's collapse in March remains unresolved, and First Republic's failure and takeover by CEO Jamie Dimon's JPMorgan has reignited worries about broader financial instability. Moreover, political disagreement about raising the U.S. government's borrowing limit is fanning fears of a debt-ceiling crisis.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>United States May Fund Its Deficit By Printing More Money; Could Default By June 1st<\/a><\/p>\n\n\n\n

Higher rates encourage saving over spending and make the debt more costly. Companies with bigger credit or other loans with variable interest rates could be in a difficult situation. We expect to see a meaningful slowdown in economic growth and a weakening of the labour market in the United States in the upcoming months. <\/p>\n\n\n\n

At the same time, Brian Jacobsen, chief economist at Annex Wealth Management, said<\/a> that the manufacturing and housing sectors are in a recession already. The famous investor Jeremy Grantham warned that the U.S. stock market could experience significant losses soon, and a recommendation is that investors should continue to take a defensive investment approach.<\/p>\n\n\n\n

Stocks aren't the only assets that could significantly lose their value. Investors should remember that cryptocurrencies could also be in the situation to make an even bigger fall. The crypto market displayed a high correlation with U.S. equities. If a downtrend is witnessed in the stock market, the same is usually replicated in the crypto-sphere.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Bitcoin Is Close To Testing $30,000 Again; Ethereum Revives Bullish Momentum Above $1,800<\/a><\/p>\n","post_title":"The Fed Raises Interest Rates By 25 BPS This Wednesday; Effects On Crypto And Financial Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-fed-raises-interest-rates-by-25-bps-this-wednesday-effects-on-crypto-and-financial-markets","to_ping":"","pinged":"","post_modified":"2023-05-04 22:08:47","post_modified_gmt":"2023-05-04 12:08:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11491","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11422,"post_author":"12","post_date":"2023-05-02 17:50:37","post_date_gmt":"2023-05-02 07:50:37","post_content":"\n

Ray Dalio, the billionaire founder of one of the world\u2019s largest hedge funds, Bridgewater Associates, was recently\u00a0interviewed<\/a>. He explains that the United States' $31.45T debt may have to be resolved by printing more money, also referred to as currency debasement.<\/p>\n\n\n\n

\u201cSo I think you\u2019re in the part of the cycle where you\u2019ve had the tightening and then the dominoes are beginning to fall. And I think that that\u2019s going to produce more problems.<\/em><\/p>\n\n\n\n

I think when it comes down to it, there\u2019s just too much debt, and we\u2019re adding to it too quickly\u2026 Either that debt will be paid off with hard money, in which case there\u2019s not much printing and so on, or it will be paid off with printing a lot of money to make it easier to pay off. <\/em><\/p>\n\n\n\n

I think in the end, it\u2019s always the case that they print a lot of money in and make it easier to pay off, but you have the reduced value of money.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> Ray Dalio; The Federal Reserve Is Setting Off A \u201cTerrible Calamity\u201d<\/a><\/p>\n\n\n\n

Could The United States Default By June?<\/h2>\n\n\n\n

United States Treasury Secretary, Janet Yellen, wrote to House Speaker Kevin McCarthy;<\/p>\n\n\n\n

\"After reviewing recent federal tax receipts, our best estimate is that we will be unable to continue to satisfy all of the government\u2019s obligations by early June, and potentially as early as June 1, if Congress does not raise or suspend the debt limit before that time.<\/em><\/p>\n\n\n\n

If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests.\"<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> United States May Enter Mild Recession As Yet Another Hike In Fed Rates Expected<\/a><\/p>\n\n\n\n

Yellen warned that waiting until the last minute to take action on this issue would cause harm to \"business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States.\"<\/em> Yellen believes that defaulting on their debt would be a financial catastrophe, raising the cost of borrowing without an end, making future investment \"substantially more costly.\u201d<\/em><\/p>\n","post_title":"United States May Fund Its Deficit By Printing More Money; Could Default By June 1st","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-may-fund-its-deficit-by-printing-more-money-could-default-by-june-1st","to_ping":"","pinged":"","post_modified":"2023-05-04 13:04:05","post_modified_gmt":"2023-05-04 03:04:05","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11422","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

ADVERTISEMENT
\n

Wall Street's main indexes<\/a> surged significantly on Tuesday following the release of lower-than-anticipated inflation figures, which increased the belief that the Federal Reserve had concluded its interest rate hikes. The annual rate of inflation measured by the Consumer Price Index (CPI), which monitors the expenses of a variety of goods and services -\u00a0 slowed to 3.2% last month, dropping from September's 3.7% and marking the most subdued rate since July.<\/p>\n\n\n\n

Additionally promising, Wall Street's prices held steady over the month following a 0.4% increase in September. Core prices, which exclude the unpredictable food and energy sectors, rose by 4%, slightly slower compared to the rate observed in September. The report signifies a significant achievement for the Fed in its battle against inflation but in the upcoming weeks, policymakers will monitor the service category closely, seeking further deceleration as their interest rate increases impact demand.<\/p>\n\n\n\n

\"Inflation
Inflation edges down in October<\/em><\/figcaption><\/figure>\n\n\n\n

Earlier this month, the Federal Reserve maintained its benchmark interest rate at the highest level in 22 years. Following this Tuesday's report, prominent analysts and economists indicated only a 1 percent probability that the central bank would increase rates during its upcoming policy meeting in December. Gregory Daco, chief economist at EY Parthenon, said<\/a>:<\/p>\n\n\n\n

\u201cAcross the board, it\u2019s a good report and I think this will comfort the excessively data-dependent Fed policymakers that policy is sufficiently restrictive to bring inflation down to 2 percent.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/strong><\/em> Gala is announcing a partnership with Stick Figure Productions to distribute Four Down on the Blockchain<\/a><\/p>\n\n\n\n

However, analysts from JPMorgan warned that the risk-reward ratio for many stocks remains unattractive currently and restrictive monetary policy is likely to remain in place for some time. JPMorgan analysts anticipate that most adverse effects resulting from increased interest rates haven't manifested thus far. They highlight an upward trend in consumer loan delinquencies and corporate bankruptcies, suggesting that these patterns are probable to persist unless interest rates are lowered.<\/p>\n\n\n\n

This is likely to drive demand destruction, and weakening pricing power and margins for corporates in the coming quarters, and because of this JPMorgan analysts are adopting a defensive stance, maintaining underweight allocations in equities and cryptocurrencies. Nevertheless, they propose an increase in the investment allocation towards gold due to its potential to rise in value during economic downturns, offering a hedge against potential losses in alternative investments.<\/p>\n\n\n\n

Gold is commonly regarded as a safe-haven asset, particularly amid economic uncertainty or geopolitical instability. Investors typically turn to gold as a means of preserving value when other assets are considered risky.<\/p>\n","post_title":"Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-surged-significantly-after-the-release-of-lower-than-anticipated-inflation-figures","to_ping":"","pinged":"","post_modified":"2023-11-16 20:00:45","post_modified_gmt":"2023-11-16 09:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14319","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11491,"post_author":"14","post_date":"2023-05-04 21:53:10","post_date_gmt":"2023-05-04 11:53:10","post_content":"\n

As widely expected, the U.S. Central Bank raised interest rates by 25bps this Wednesday. It signalled it could pause further increases, giving officials time to assess the fallout from recent bank failures, wait on the resolution of a political stand-off over the U.S. debt ceiling and monitor the course of inflation. The federal funds rate is now in a range of 5% to 5.25%, which is the highest level since 2006. <\/p>\n\n\n\n

The U.S. Central Bank warned that tighter credit conditions for households and businesses are expected to affect economic activity. In the picture below, we can see that even without this rise in interest rates, the federal funds rate was at the highest level since the 2007 financial crisis.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Many analysts and economists are worried that the high-interest rates will push the economy into a recession. It is important to mention that government data showed last week that economic growth in the first quarter slowed sequentially, with real gross domestic product increasing at a 1.1% annual pace, compared with a 2.6% gain in the prior three-month period. With higher interest rates, companies need to spend more money to borrow money to invest in growth. Historically, higher rates lead companies to reduce spending (especially on hiring). <\/p>\n\n\n\n

Many companies could face liquidity problems, and economist David Rosenberg has warned that the U.S. economy is facing two big risks. David Rosenberg said<\/a>:<\/p>\n\n\n\n

\"We have a possible debt default on our hands and a spreading bank crisis. The banking turmoil that started with Silicon Valley Bank's collapse in March remains unresolved, and First Republic's failure and takeover by CEO Jamie Dimon's JPMorgan has reignited worries about broader financial instability. Moreover, political disagreement about raising the U.S. government's borrowing limit is fanning fears of a debt-ceiling crisis.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>United States May Fund Its Deficit By Printing More Money; Could Default By June 1st<\/a><\/p>\n\n\n\n

Higher rates encourage saving over spending and make the debt more costly. Companies with bigger credit or other loans with variable interest rates could be in a difficult situation. We expect to see a meaningful slowdown in economic growth and a weakening of the labour market in the United States in the upcoming months. <\/p>\n\n\n\n

At the same time, Brian Jacobsen, chief economist at Annex Wealth Management, said<\/a> that the manufacturing and housing sectors are in a recession already. The famous investor Jeremy Grantham warned that the U.S. stock market could experience significant losses soon, and a recommendation is that investors should continue to take a defensive investment approach.<\/p>\n\n\n\n

Stocks aren't the only assets that could significantly lose their value. Investors should remember that cryptocurrencies could also be in the situation to make an even bigger fall. The crypto market displayed a high correlation with U.S. equities. If a downtrend is witnessed in the stock market, the same is usually replicated in the crypto-sphere.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Bitcoin Is Close To Testing $30,000 Again; Ethereum Revives Bullish Momentum Above $1,800<\/a><\/p>\n","post_title":"The Fed Raises Interest Rates By 25 BPS This Wednesday; Effects On Crypto And Financial Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-fed-raises-interest-rates-by-25-bps-this-wednesday-effects-on-crypto-and-financial-markets","to_ping":"","pinged":"","post_modified":"2023-05-04 22:08:47","post_modified_gmt":"2023-05-04 12:08:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11491","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11422,"post_author":"12","post_date":"2023-05-02 17:50:37","post_date_gmt":"2023-05-02 07:50:37","post_content":"\n

Ray Dalio, the billionaire founder of one of the world\u2019s largest hedge funds, Bridgewater Associates, was recently\u00a0interviewed<\/a>. He explains that the United States' $31.45T debt may have to be resolved by printing more money, also referred to as currency debasement.<\/p>\n\n\n\n

\u201cSo I think you\u2019re in the part of the cycle where you\u2019ve had the tightening and then the dominoes are beginning to fall. And I think that that\u2019s going to produce more problems.<\/em><\/p>\n\n\n\n

I think when it comes down to it, there\u2019s just too much debt, and we\u2019re adding to it too quickly\u2026 Either that debt will be paid off with hard money, in which case there\u2019s not much printing and so on, or it will be paid off with printing a lot of money to make it easier to pay off. <\/em><\/p>\n\n\n\n

I think in the end, it\u2019s always the case that they print a lot of money in and make it easier to pay off, but you have the reduced value of money.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> Ray Dalio; The Federal Reserve Is Setting Off A \u201cTerrible Calamity\u201d<\/a><\/p>\n\n\n\n

Could The United States Default By June?<\/h2>\n\n\n\n

United States Treasury Secretary, Janet Yellen, wrote to House Speaker Kevin McCarthy;<\/p>\n\n\n\n

\"After reviewing recent federal tax receipts, our best estimate is that we will be unable to continue to satisfy all of the government\u2019s obligations by early June, and potentially as early as June 1, if Congress does not raise or suspend the debt limit before that time.<\/em><\/p>\n\n\n\n

If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests.\"<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> United States May Enter Mild Recession As Yet Another Hike In Fed Rates Expected<\/a><\/p>\n\n\n\n

Yellen warned that waiting until the last minute to take action on this issue would cause harm to \"business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States.\"<\/em> Yellen believes that defaulting on their debt would be a financial catastrophe, raising the cost of borrowing without an end, making future investment \"substantially more costly.\u201d<\/em><\/p>\n","post_title":"United States May Fund Its Deficit By Printing More Money; Could Default By June 1st","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-may-fund-its-deficit-by-printing-more-money-could-default-by-june-1st","to_ping":"","pinged":"","post_modified":"2023-05-04 13:04:05","post_modified_gmt":"2023-05-04 03:04:05","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11422","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

ADVERTISEMENT
\n

On the other side, JPMorgan strategists believe that the risk-reward ratio for numerous stocks is currently unappealing and according to them, restrictive monetary policy is likely to remain in place for some time which could potentially cause a recession. Considering this scenario, investors worried about a possible U.S. recession can opt for a more defensive strategy in the market. They can enhance their financial flexibility by reducing their stock or cryptocurrency exposure and augmenting their cash reserves.<\/p>\n","post_title":"Investor Optimism Rises In November 2023. Does Strong Buying Activity Indicate The Possibility Of Further Gains In The Coming Weeks?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"investor-optimism-rises-in-november-2023-does-strong-buying-activity-indicate-the-possibility-of-further-gains-in-the-coming-weeks","to_ping":"","pinged":"","post_modified":"2023-11-23 01:39:12","post_modified_gmt":"2023-11-22 14:39:12","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14444","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14319,"post_author":"14","post_date":"2023-11-15 18:02:37","post_date_gmt":"2023-11-15 07:02:37","post_content":"\n

Wall Street's main indexes<\/a> surged significantly on Tuesday following the release of lower-than-anticipated inflation figures, which increased the belief that the Federal Reserve had concluded its interest rate hikes. The annual rate of inflation measured by the Consumer Price Index (CPI), which monitors the expenses of a variety of goods and services -\u00a0 slowed to 3.2% last month, dropping from September's 3.7% and marking the most subdued rate since July.<\/p>\n\n\n\n

Additionally promising, Wall Street's prices held steady over the month following a 0.4% increase in September. Core prices, which exclude the unpredictable food and energy sectors, rose by 4%, slightly slower compared to the rate observed in September. The report signifies a significant achievement for the Fed in its battle against inflation but in the upcoming weeks, policymakers will monitor the service category closely, seeking further deceleration as their interest rate increases impact demand.<\/p>\n\n\n\n

\"Inflation
Inflation edges down in October<\/em><\/figcaption><\/figure>\n\n\n\n

Earlier this month, the Federal Reserve maintained its benchmark interest rate at the highest level in 22 years. Following this Tuesday's report, prominent analysts and economists indicated only a 1 percent probability that the central bank would increase rates during its upcoming policy meeting in December. Gregory Daco, chief economist at EY Parthenon, said<\/a>:<\/p>\n\n\n\n

\u201cAcross the board, it\u2019s a good report and I think this will comfort the excessively data-dependent Fed policymakers that policy is sufficiently restrictive to bring inflation down to 2 percent.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/strong><\/em> Gala is announcing a partnership with Stick Figure Productions to distribute Four Down on the Blockchain<\/a><\/p>\n\n\n\n

However, analysts from JPMorgan warned that the risk-reward ratio for many stocks remains unattractive currently and restrictive monetary policy is likely to remain in place for some time. JPMorgan analysts anticipate that most adverse effects resulting from increased interest rates haven't manifested thus far. They highlight an upward trend in consumer loan delinquencies and corporate bankruptcies, suggesting that these patterns are probable to persist unless interest rates are lowered.<\/p>\n\n\n\n

This is likely to drive demand destruction, and weakening pricing power and margins for corporates in the coming quarters, and because of this JPMorgan analysts are adopting a defensive stance, maintaining underweight allocations in equities and cryptocurrencies. Nevertheless, they propose an increase in the investment allocation towards gold due to its potential to rise in value during economic downturns, offering a hedge against potential losses in alternative investments.<\/p>\n\n\n\n

Gold is commonly regarded as a safe-haven asset, particularly amid economic uncertainty or geopolitical instability. Investors typically turn to gold as a means of preserving value when other assets are considered risky.<\/p>\n","post_title":"Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-surged-significantly-after-the-release-of-lower-than-anticipated-inflation-figures","to_ping":"","pinged":"","post_modified":"2023-11-16 20:00:45","post_modified_gmt":"2023-11-16 09:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14319","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11491,"post_author":"14","post_date":"2023-05-04 21:53:10","post_date_gmt":"2023-05-04 11:53:10","post_content":"\n

As widely expected, the U.S. Central Bank raised interest rates by 25bps this Wednesday. It signalled it could pause further increases, giving officials time to assess the fallout from recent bank failures, wait on the resolution of a political stand-off over the U.S. debt ceiling and monitor the course of inflation. The federal funds rate is now in a range of 5% to 5.25%, which is the highest level since 2006. <\/p>\n\n\n\n

The U.S. Central Bank warned that tighter credit conditions for households and businesses are expected to affect economic activity. In the picture below, we can see that even without this rise in interest rates, the federal funds rate was at the highest level since the 2007 financial crisis.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Many analysts and economists are worried that the high-interest rates will push the economy into a recession. It is important to mention that government data showed last week that economic growth in the first quarter slowed sequentially, with real gross domestic product increasing at a 1.1% annual pace, compared with a 2.6% gain in the prior three-month period. With higher interest rates, companies need to spend more money to borrow money to invest in growth. Historically, higher rates lead companies to reduce spending (especially on hiring). <\/p>\n\n\n\n

Many companies could face liquidity problems, and economist David Rosenberg has warned that the U.S. economy is facing two big risks. David Rosenberg said<\/a>:<\/p>\n\n\n\n

\"We have a possible debt default on our hands and a spreading bank crisis. The banking turmoil that started with Silicon Valley Bank's collapse in March remains unresolved, and First Republic's failure and takeover by CEO Jamie Dimon's JPMorgan has reignited worries about broader financial instability. Moreover, political disagreement about raising the U.S. government's borrowing limit is fanning fears of a debt-ceiling crisis.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>United States May Fund Its Deficit By Printing More Money; Could Default By June 1st<\/a><\/p>\n\n\n\n

Higher rates encourage saving over spending and make the debt more costly. Companies with bigger credit or other loans with variable interest rates could be in a difficult situation. We expect to see a meaningful slowdown in economic growth and a weakening of the labour market in the United States in the upcoming months. <\/p>\n\n\n\n

At the same time, Brian Jacobsen, chief economist at Annex Wealth Management, said<\/a> that the manufacturing and housing sectors are in a recession already. The famous investor Jeremy Grantham warned that the U.S. stock market could experience significant losses soon, and a recommendation is that investors should continue to take a defensive investment approach.<\/p>\n\n\n\n

Stocks aren't the only assets that could significantly lose their value. Investors should remember that cryptocurrencies could also be in the situation to make an even bigger fall. The crypto market displayed a high correlation with U.S. equities. If a downtrend is witnessed in the stock market, the same is usually replicated in the crypto-sphere.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Bitcoin Is Close To Testing $30,000 Again; Ethereum Revives Bullish Momentum Above $1,800<\/a><\/p>\n","post_title":"The Fed Raises Interest Rates By 25 BPS This Wednesday; Effects On Crypto And Financial Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-fed-raises-interest-rates-by-25-bps-this-wednesday-effects-on-crypto-and-financial-markets","to_ping":"","pinged":"","post_modified":"2023-05-04 22:08:47","post_modified_gmt":"2023-05-04 12:08:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11491","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11422,"post_author":"12","post_date":"2023-05-02 17:50:37","post_date_gmt":"2023-05-02 07:50:37","post_content":"\n

Ray Dalio, the billionaire founder of one of the world\u2019s largest hedge funds, Bridgewater Associates, was recently\u00a0interviewed<\/a>. He explains that the United States' $31.45T debt may have to be resolved by printing more money, also referred to as currency debasement.<\/p>\n\n\n\n

\u201cSo I think you\u2019re in the part of the cycle where you\u2019ve had the tightening and then the dominoes are beginning to fall. And I think that that\u2019s going to produce more problems.<\/em><\/p>\n\n\n\n

I think when it comes down to it, there\u2019s just too much debt, and we\u2019re adding to it too quickly\u2026 Either that debt will be paid off with hard money, in which case there\u2019s not much printing and so on, or it will be paid off with printing a lot of money to make it easier to pay off. <\/em><\/p>\n\n\n\n

I think in the end, it\u2019s always the case that they print a lot of money in and make it easier to pay off, but you have the reduced value of money.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> Ray Dalio; The Federal Reserve Is Setting Off A \u201cTerrible Calamity\u201d<\/a><\/p>\n\n\n\n

Could The United States Default By June?<\/h2>\n\n\n\n

United States Treasury Secretary, Janet Yellen, wrote to House Speaker Kevin McCarthy;<\/p>\n\n\n\n

\"After reviewing recent federal tax receipts, our best estimate is that we will be unable to continue to satisfy all of the government\u2019s obligations by early June, and potentially as early as June 1, if Congress does not raise or suspend the debt limit before that time.<\/em><\/p>\n\n\n\n

If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests.\"<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> United States May Enter Mild Recession As Yet Another Hike In Fed Rates Expected<\/a><\/p>\n\n\n\n

Yellen warned that waiting until the last minute to take action on this issue would cause harm to \"business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States.\"<\/em> Yellen believes that defaulting on their debt would be a financial catastrophe, raising the cost of borrowing without an end, making future investment \"substantially more costly.\u201d<\/em><\/p>\n","post_title":"United States May Fund Its Deficit By Printing More Money; Could Default By June 1st","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-may-fund-its-deficit-by-printing-more-money-could-default-by-june-1st","to_ping":"","pinged":"","post_modified":"2023-05-04 13:04:05","post_modified_gmt":"2023-05-04 03:04:05","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11422","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

ADVERTISEMENT
\n

Jeffrey Roach, the chief economist at LPL Financial,<\/a> foresees that most of the negative consequences stemming from higher interest rates have not materialized yet and due to this, he anticipates a deceleration in U.S. economic growth. Market expectations that the Federal Reserve will keep interest rates unchanged at its December meeting currently stand above 90% and any information that the Federal Reserve could start to cut rates in the first quarter of 2024 should be positive for stocks in the short-term period.<\/p>\n\n\n\n

On the other side, JPMorgan strategists believe that the risk-reward ratio for numerous stocks is currently unappealing and according to them, restrictive monetary policy is likely to remain in place for some time which could potentially cause a recession. Considering this scenario, investors worried about a possible U.S. recession can opt for a more defensive strategy in the market. They can enhance their financial flexibility by reducing their stock or cryptocurrency exposure and augmenting their cash reserves.<\/p>\n","post_title":"Investor Optimism Rises In November 2023. Does Strong Buying Activity Indicate The Possibility Of Further Gains In The Coming Weeks?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"investor-optimism-rises-in-november-2023-does-strong-buying-activity-indicate-the-possibility-of-further-gains-in-the-coming-weeks","to_ping":"","pinged":"","post_modified":"2023-11-23 01:39:12","post_modified_gmt":"2023-11-22 14:39:12","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14444","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14319,"post_author":"14","post_date":"2023-11-15 18:02:37","post_date_gmt":"2023-11-15 07:02:37","post_content":"\n

Wall Street's main indexes<\/a> surged significantly on Tuesday following the release of lower-than-anticipated inflation figures, which increased the belief that the Federal Reserve had concluded its interest rate hikes. The annual rate of inflation measured by the Consumer Price Index (CPI), which monitors the expenses of a variety of goods and services -\u00a0 slowed to 3.2% last month, dropping from September's 3.7% and marking the most subdued rate since July.<\/p>\n\n\n\n

Additionally promising, Wall Street's prices held steady over the month following a 0.4% increase in September. Core prices, which exclude the unpredictable food and energy sectors, rose by 4%, slightly slower compared to the rate observed in September. The report signifies a significant achievement for the Fed in its battle against inflation but in the upcoming weeks, policymakers will monitor the service category closely, seeking further deceleration as their interest rate increases impact demand.<\/p>\n\n\n\n

\"Inflation
Inflation edges down in October<\/em><\/figcaption><\/figure>\n\n\n\n

Earlier this month, the Federal Reserve maintained its benchmark interest rate at the highest level in 22 years. Following this Tuesday's report, prominent analysts and economists indicated only a 1 percent probability that the central bank would increase rates during its upcoming policy meeting in December. Gregory Daco, chief economist at EY Parthenon, said<\/a>:<\/p>\n\n\n\n

\u201cAcross the board, it\u2019s a good report and I think this will comfort the excessively data-dependent Fed policymakers that policy is sufficiently restrictive to bring inflation down to 2 percent.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/strong><\/em> Gala is announcing a partnership with Stick Figure Productions to distribute Four Down on the Blockchain<\/a><\/p>\n\n\n\n

However, analysts from JPMorgan warned that the risk-reward ratio for many stocks remains unattractive currently and restrictive monetary policy is likely to remain in place for some time. JPMorgan analysts anticipate that most adverse effects resulting from increased interest rates haven't manifested thus far. They highlight an upward trend in consumer loan delinquencies and corporate bankruptcies, suggesting that these patterns are probable to persist unless interest rates are lowered.<\/p>\n\n\n\n

This is likely to drive demand destruction, and weakening pricing power and margins for corporates in the coming quarters, and because of this JPMorgan analysts are adopting a defensive stance, maintaining underweight allocations in equities and cryptocurrencies. Nevertheless, they propose an increase in the investment allocation towards gold due to its potential to rise in value during economic downturns, offering a hedge against potential losses in alternative investments.<\/p>\n\n\n\n

Gold is commonly regarded as a safe-haven asset, particularly amid economic uncertainty or geopolitical instability. Investors typically turn to gold as a means of preserving value when other assets are considered risky.<\/p>\n","post_title":"Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-surged-significantly-after-the-release-of-lower-than-anticipated-inflation-figures","to_ping":"","pinged":"","post_modified":"2023-11-16 20:00:45","post_modified_gmt":"2023-11-16 09:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14319","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11491,"post_author":"14","post_date":"2023-05-04 21:53:10","post_date_gmt":"2023-05-04 11:53:10","post_content":"\n

As widely expected, the U.S. Central Bank raised interest rates by 25bps this Wednesday. It signalled it could pause further increases, giving officials time to assess the fallout from recent bank failures, wait on the resolution of a political stand-off over the U.S. debt ceiling and monitor the course of inflation. The federal funds rate is now in a range of 5% to 5.25%, which is the highest level since 2006. <\/p>\n\n\n\n

The U.S. Central Bank warned that tighter credit conditions for households and businesses are expected to affect economic activity. In the picture below, we can see that even without this rise in interest rates, the federal funds rate was at the highest level since the 2007 financial crisis.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Many analysts and economists are worried that the high-interest rates will push the economy into a recession. It is important to mention that government data showed last week that economic growth in the first quarter slowed sequentially, with real gross domestic product increasing at a 1.1% annual pace, compared with a 2.6% gain in the prior three-month period. With higher interest rates, companies need to spend more money to borrow money to invest in growth. Historically, higher rates lead companies to reduce spending (especially on hiring). <\/p>\n\n\n\n

Many companies could face liquidity problems, and economist David Rosenberg has warned that the U.S. economy is facing two big risks. David Rosenberg said<\/a>:<\/p>\n\n\n\n

\"We have a possible debt default on our hands and a spreading bank crisis. The banking turmoil that started with Silicon Valley Bank's collapse in March remains unresolved, and First Republic's failure and takeover by CEO Jamie Dimon's JPMorgan has reignited worries about broader financial instability. Moreover, political disagreement about raising the U.S. government's borrowing limit is fanning fears of a debt-ceiling crisis.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>United States May Fund Its Deficit By Printing More Money; Could Default By June 1st<\/a><\/p>\n\n\n\n

Higher rates encourage saving over spending and make the debt more costly. Companies with bigger credit or other loans with variable interest rates could be in a difficult situation. We expect to see a meaningful slowdown in economic growth and a weakening of the labour market in the United States in the upcoming months. <\/p>\n\n\n\n

At the same time, Brian Jacobsen, chief economist at Annex Wealth Management, said<\/a> that the manufacturing and housing sectors are in a recession already. The famous investor Jeremy Grantham warned that the U.S. stock market could experience significant losses soon, and a recommendation is that investors should continue to take a defensive investment approach.<\/p>\n\n\n\n

Stocks aren't the only assets that could significantly lose their value. Investors should remember that cryptocurrencies could also be in the situation to make an even bigger fall. The crypto market displayed a high correlation with U.S. equities. If a downtrend is witnessed in the stock market, the same is usually replicated in the crypto-sphere.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Bitcoin Is Close To Testing $30,000 Again; Ethereum Revives Bullish Momentum Above $1,800<\/a><\/p>\n","post_title":"The Fed Raises Interest Rates By 25 BPS This Wednesday; Effects On Crypto And Financial Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-fed-raises-interest-rates-by-25-bps-this-wednesday-effects-on-crypto-and-financial-markets","to_ping":"","pinged":"","post_modified":"2023-05-04 22:08:47","post_modified_gmt":"2023-05-04 12:08:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11491","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11422,"post_author":"12","post_date":"2023-05-02 17:50:37","post_date_gmt":"2023-05-02 07:50:37","post_content":"\n

Ray Dalio, the billionaire founder of one of the world\u2019s largest hedge funds, Bridgewater Associates, was recently\u00a0interviewed<\/a>. He explains that the United States' $31.45T debt may have to be resolved by printing more money, also referred to as currency debasement.<\/p>\n\n\n\n

\u201cSo I think you\u2019re in the part of the cycle where you\u2019ve had the tightening and then the dominoes are beginning to fall. And I think that that\u2019s going to produce more problems.<\/em><\/p>\n\n\n\n

I think when it comes down to it, there\u2019s just too much debt, and we\u2019re adding to it too quickly\u2026 Either that debt will be paid off with hard money, in which case there\u2019s not much printing and so on, or it will be paid off with printing a lot of money to make it easier to pay off. <\/em><\/p>\n\n\n\n

I think in the end, it\u2019s always the case that they print a lot of money in and make it easier to pay off, but you have the reduced value of money.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> Ray Dalio; The Federal Reserve Is Setting Off A \u201cTerrible Calamity\u201d<\/a><\/p>\n\n\n\n

Could The United States Default By June?<\/h2>\n\n\n\n

United States Treasury Secretary, Janet Yellen, wrote to House Speaker Kevin McCarthy;<\/p>\n\n\n\n

\"After reviewing recent federal tax receipts, our best estimate is that we will be unable to continue to satisfy all of the government\u2019s obligations by early June, and potentially as early as June 1, if Congress does not raise or suspend the debt limit before that time.<\/em><\/p>\n\n\n\n

If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests.\"<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> United States May Enter Mild Recession As Yet Another Hike In Fed Rates Expected<\/a><\/p>\n\n\n\n

Yellen warned that waiting until the last minute to take action on this issue would cause harm to \"business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States.\"<\/em> Yellen believes that defaulting on their debt would be a financial catastrophe, raising the cost of borrowing without an end, making future investment \"substantially more costly.\u201d<\/em><\/p>\n","post_title":"United States May Fund Its Deficit By Printing More Money; Could Default By June 1st","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-may-fund-its-deficit-by-printing-more-money-could-default-by-june-1st","to_ping":"","pinged":"","post_modified":"2023-05-04 13:04:05","post_modified_gmt":"2023-05-04 03:04:05","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11422","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

ADVERTISEMENT
\n

Deceleration In United States Economic Growth<\/h2>\n\n\n\n

Jeffrey Roach, the chief economist at LPL Financial,<\/a> foresees that most of the negative consequences stemming from higher interest rates have not materialized yet and due to this, he anticipates a deceleration in U.S. economic growth. Market expectations that the Federal Reserve will keep interest rates unchanged at its December meeting currently stand above 90% and any information that the Federal Reserve could start to cut rates in the first quarter of 2024 should be positive for stocks in the short-term period.<\/p>\n\n\n\n

On the other side, JPMorgan strategists believe that the risk-reward ratio for numerous stocks is currently unappealing and according to them, restrictive monetary policy is likely to remain in place for some time which could potentially cause a recession. Considering this scenario, investors worried about a possible U.S. recession can opt for a more defensive strategy in the market. They can enhance their financial flexibility by reducing their stock or cryptocurrency exposure and augmenting their cash reserves.<\/p>\n","post_title":"Investor Optimism Rises In November 2023. Does Strong Buying Activity Indicate The Possibility Of Further Gains In The Coming Weeks?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"investor-optimism-rises-in-november-2023-does-strong-buying-activity-indicate-the-possibility-of-further-gains-in-the-coming-weeks","to_ping":"","pinged":"","post_modified":"2023-11-23 01:39:12","post_modified_gmt":"2023-11-22 14:39:12","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14444","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14319,"post_author":"14","post_date":"2023-11-15 18:02:37","post_date_gmt":"2023-11-15 07:02:37","post_content":"\n

Wall Street's main indexes<\/a> surged significantly on Tuesday following the release of lower-than-anticipated inflation figures, which increased the belief that the Federal Reserve had concluded its interest rate hikes. The annual rate of inflation measured by the Consumer Price Index (CPI), which monitors the expenses of a variety of goods and services -\u00a0 slowed to 3.2% last month, dropping from September's 3.7% and marking the most subdued rate since July.<\/p>\n\n\n\n

Additionally promising, Wall Street's prices held steady over the month following a 0.4% increase in September. Core prices, which exclude the unpredictable food and energy sectors, rose by 4%, slightly slower compared to the rate observed in September. The report signifies a significant achievement for the Fed in its battle against inflation but in the upcoming weeks, policymakers will monitor the service category closely, seeking further deceleration as their interest rate increases impact demand.<\/p>\n\n\n\n

\"Inflation
Inflation edges down in October<\/em><\/figcaption><\/figure>\n\n\n\n

Earlier this month, the Federal Reserve maintained its benchmark interest rate at the highest level in 22 years. Following this Tuesday's report, prominent analysts and economists indicated only a 1 percent probability that the central bank would increase rates during its upcoming policy meeting in December. Gregory Daco, chief economist at EY Parthenon, said<\/a>:<\/p>\n\n\n\n

\u201cAcross the board, it\u2019s a good report and I think this will comfort the excessively data-dependent Fed policymakers that policy is sufficiently restrictive to bring inflation down to 2 percent.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/strong><\/em> Gala is announcing a partnership with Stick Figure Productions to distribute Four Down on the Blockchain<\/a><\/p>\n\n\n\n

However, analysts from JPMorgan warned that the risk-reward ratio for many stocks remains unattractive currently and restrictive monetary policy is likely to remain in place for some time. JPMorgan analysts anticipate that most adverse effects resulting from increased interest rates haven't manifested thus far. They highlight an upward trend in consumer loan delinquencies and corporate bankruptcies, suggesting that these patterns are probable to persist unless interest rates are lowered.<\/p>\n\n\n\n

This is likely to drive demand destruction, and weakening pricing power and margins for corporates in the coming quarters, and because of this JPMorgan analysts are adopting a defensive stance, maintaining underweight allocations in equities and cryptocurrencies. Nevertheless, they propose an increase in the investment allocation towards gold due to its potential to rise in value during economic downturns, offering a hedge against potential losses in alternative investments.<\/p>\n\n\n\n

Gold is commonly regarded as a safe-haven asset, particularly amid economic uncertainty or geopolitical instability. Investors typically turn to gold as a means of preserving value when other assets are considered risky.<\/p>\n","post_title":"Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-surged-significantly-after-the-release-of-lower-than-anticipated-inflation-figures","to_ping":"","pinged":"","post_modified":"2023-11-16 20:00:45","post_modified_gmt":"2023-11-16 09:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14319","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11491,"post_author":"14","post_date":"2023-05-04 21:53:10","post_date_gmt":"2023-05-04 11:53:10","post_content":"\n

As widely expected, the U.S. Central Bank raised interest rates by 25bps this Wednesday. It signalled it could pause further increases, giving officials time to assess the fallout from recent bank failures, wait on the resolution of a political stand-off over the U.S. debt ceiling and monitor the course of inflation. The federal funds rate is now in a range of 5% to 5.25%, which is the highest level since 2006. <\/p>\n\n\n\n

The U.S. Central Bank warned that tighter credit conditions for households and businesses are expected to affect economic activity. In the picture below, we can see that even without this rise in interest rates, the federal funds rate was at the highest level since the 2007 financial crisis.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Many analysts and economists are worried that the high-interest rates will push the economy into a recession. It is important to mention that government data showed last week that economic growth in the first quarter slowed sequentially, with real gross domestic product increasing at a 1.1% annual pace, compared with a 2.6% gain in the prior three-month period. With higher interest rates, companies need to spend more money to borrow money to invest in growth. Historically, higher rates lead companies to reduce spending (especially on hiring). <\/p>\n\n\n\n

Many companies could face liquidity problems, and economist David Rosenberg has warned that the U.S. economy is facing two big risks. David Rosenberg said<\/a>:<\/p>\n\n\n\n

\"We have a possible debt default on our hands and a spreading bank crisis. The banking turmoil that started with Silicon Valley Bank's collapse in March remains unresolved, and First Republic's failure and takeover by CEO Jamie Dimon's JPMorgan has reignited worries about broader financial instability. Moreover, political disagreement about raising the U.S. government's borrowing limit is fanning fears of a debt-ceiling crisis.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>United States May Fund Its Deficit By Printing More Money; Could Default By June 1st<\/a><\/p>\n\n\n\n

Higher rates encourage saving over spending and make the debt more costly. Companies with bigger credit or other loans with variable interest rates could be in a difficult situation. We expect to see a meaningful slowdown in economic growth and a weakening of the labour market in the United States in the upcoming months. <\/p>\n\n\n\n

At the same time, Brian Jacobsen, chief economist at Annex Wealth Management, said<\/a> that the manufacturing and housing sectors are in a recession already. The famous investor Jeremy Grantham warned that the U.S. stock market could experience significant losses soon, and a recommendation is that investors should continue to take a defensive investment approach.<\/p>\n\n\n\n

Stocks aren't the only assets that could significantly lose their value. Investors should remember that cryptocurrencies could also be in the situation to make an even bigger fall. The crypto market displayed a high correlation with U.S. equities. If a downtrend is witnessed in the stock market, the same is usually replicated in the crypto-sphere.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Bitcoin Is Close To Testing $30,000 Again; Ethereum Revives Bullish Momentum Above $1,800<\/a><\/p>\n","post_title":"The Fed Raises Interest Rates By 25 BPS This Wednesday; Effects On Crypto And Financial Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-fed-raises-interest-rates-by-25-bps-this-wednesday-effects-on-crypto-and-financial-markets","to_ping":"","pinged":"","post_modified":"2023-05-04 22:08:47","post_modified_gmt":"2023-05-04 12:08:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11491","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11422,"post_author":"12","post_date":"2023-05-02 17:50:37","post_date_gmt":"2023-05-02 07:50:37","post_content":"\n

Ray Dalio, the billionaire founder of one of the world\u2019s largest hedge funds, Bridgewater Associates, was recently\u00a0interviewed<\/a>. He explains that the United States' $31.45T debt may have to be resolved by printing more money, also referred to as currency debasement.<\/p>\n\n\n\n

\u201cSo I think you\u2019re in the part of the cycle where you\u2019ve had the tightening and then the dominoes are beginning to fall. And I think that that\u2019s going to produce more problems.<\/em><\/p>\n\n\n\n

I think when it comes down to it, there\u2019s just too much debt, and we\u2019re adding to it too quickly\u2026 Either that debt will be paid off with hard money, in which case there\u2019s not much printing and so on, or it will be paid off with printing a lot of money to make it easier to pay off. <\/em><\/p>\n\n\n\n

I think in the end, it\u2019s always the case that they print a lot of money in and make it easier to pay off, but you have the reduced value of money.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> Ray Dalio; The Federal Reserve Is Setting Off A \u201cTerrible Calamity\u201d<\/a><\/p>\n\n\n\n

Could The United States Default By June?<\/h2>\n\n\n\n

United States Treasury Secretary, Janet Yellen, wrote to House Speaker Kevin McCarthy;<\/p>\n\n\n\n

\"After reviewing recent federal tax receipts, our best estimate is that we will be unable to continue to satisfy all of the government\u2019s obligations by early June, and potentially as early as June 1, if Congress does not raise or suspend the debt limit before that time.<\/em><\/p>\n\n\n\n

If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests.\"<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> United States May Enter Mild Recession As Yet Another Hike In Fed Rates Expected<\/a><\/p>\n\n\n\n

Yellen warned that waiting until the last minute to take action on this issue would cause harm to \"business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States.\"<\/em> Yellen believes that defaulting on their debt would be a financial catastrophe, raising the cost of borrowing without an end, making future investment \"substantially more costly.\u201d<\/em><\/p>\n","post_title":"United States May Fund Its Deficit By Printing More Money; Could Default By June 1st","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-may-fund-its-deficit-by-printing-more-money-could-default-by-june-1st","to_ping":"","pinged":"","post_modified":"2023-05-04 13:04:05","post_modified_gmt":"2023-05-04 03:04:05","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11422","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

ADVERTISEMENT
\n

U.S. economic growth(inflation and interest rates) has been resilient year-to-date and Bill Adams, a chief economist for Comerica Bank, recently said the U.S. economy has been much stronger in 2023 than economists expected. Bill Adams suggests that the annual real GDP is anticipated to reach approximately 2.4% this year, a substantial increase from the Federal Reserve's December 2022 dot plot prediction of 0.5%. However, he also warned that the outcome in the upcoming months will decide if the U.S. economy can smoothly achieve a so-called \"soft landing\" without veering into a recession.<\/p>\n\n\n\n

Deceleration In United States Economic Growth<\/h2>\n\n\n\n

Jeffrey Roach, the chief economist at LPL Financial,<\/a> foresees that most of the negative consequences stemming from higher interest rates have not materialized yet and due to this, he anticipates a deceleration in U.S. economic growth. Market expectations that the Federal Reserve will keep interest rates unchanged at its December meeting currently stand above 90% and any information that the Federal Reserve could start to cut rates in the first quarter of 2024 should be positive for stocks in the short-term period.<\/p>\n\n\n\n

On the other side, JPMorgan strategists believe that the risk-reward ratio for numerous stocks is currently unappealing and according to them, restrictive monetary policy is likely to remain in place for some time which could potentially cause a recession. Considering this scenario, investors worried about a possible U.S. recession can opt for a more defensive strategy in the market. They can enhance their financial flexibility by reducing their stock or cryptocurrency exposure and augmenting their cash reserves.<\/p>\n","post_title":"Investor Optimism Rises In November 2023. Does Strong Buying Activity Indicate The Possibility Of Further Gains In The Coming Weeks?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"investor-optimism-rises-in-november-2023-does-strong-buying-activity-indicate-the-possibility-of-further-gains-in-the-coming-weeks","to_ping":"","pinged":"","post_modified":"2023-11-23 01:39:12","post_modified_gmt":"2023-11-22 14:39:12","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14444","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14319,"post_author":"14","post_date":"2023-11-15 18:02:37","post_date_gmt":"2023-11-15 07:02:37","post_content":"\n

Wall Street's main indexes<\/a> surged significantly on Tuesday following the release of lower-than-anticipated inflation figures, which increased the belief that the Federal Reserve had concluded its interest rate hikes. The annual rate of inflation measured by the Consumer Price Index (CPI), which monitors the expenses of a variety of goods and services -\u00a0 slowed to 3.2% last month, dropping from September's 3.7% and marking the most subdued rate since July.<\/p>\n\n\n\n

Additionally promising, Wall Street's prices held steady over the month following a 0.4% increase in September. Core prices, which exclude the unpredictable food and energy sectors, rose by 4%, slightly slower compared to the rate observed in September. The report signifies a significant achievement for the Fed in its battle against inflation but in the upcoming weeks, policymakers will monitor the service category closely, seeking further deceleration as their interest rate increases impact demand.<\/p>\n\n\n\n

\"Inflation
Inflation edges down in October<\/em><\/figcaption><\/figure>\n\n\n\n

Earlier this month, the Federal Reserve maintained its benchmark interest rate at the highest level in 22 years. Following this Tuesday's report, prominent analysts and economists indicated only a 1 percent probability that the central bank would increase rates during its upcoming policy meeting in December. Gregory Daco, chief economist at EY Parthenon, said<\/a>:<\/p>\n\n\n\n

\u201cAcross the board, it\u2019s a good report and I think this will comfort the excessively data-dependent Fed policymakers that policy is sufficiently restrictive to bring inflation down to 2 percent.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/strong><\/em> Gala is announcing a partnership with Stick Figure Productions to distribute Four Down on the Blockchain<\/a><\/p>\n\n\n\n

However, analysts from JPMorgan warned that the risk-reward ratio for many stocks remains unattractive currently and restrictive monetary policy is likely to remain in place for some time. JPMorgan analysts anticipate that most adverse effects resulting from increased interest rates haven't manifested thus far. They highlight an upward trend in consumer loan delinquencies and corporate bankruptcies, suggesting that these patterns are probable to persist unless interest rates are lowered.<\/p>\n\n\n\n

This is likely to drive demand destruction, and weakening pricing power and margins for corporates in the coming quarters, and because of this JPMorgan analysts are adopting a defensive stance, maintaining underweight allocations in equities and cryptocurrencies. Nevertheless, they propose an increase in the investment allocation towards gold due to its potential to rise in value during economic downturns, offering a hedge against potential losses in alternative investments.<\/p>\n\n\n\n

Gold is commonly regarded as a safe-haven asset, particularly amid economic uncertainty or geopolitical instability. Investors typically turn to gold as a means of preserving value when other assets are considered risky.<\/p>\n","post_title":"Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-surged-significantly-after-the-release-of-lower-than-anticipated-inflation-figures","to_ping":"","pinged":"","post_modified":"2023-11-16 20:00:45","post_modified_gmt":"2023-11-16 09:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14319","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11491,"post_author":"14","post_date":"2023-05-04 21:53:10","post_date_gmt":"2023-05-04 11:53:10","post_content":"\n

As widely expected, the U.S. Central Bank raised interest rates by 25bps this Wednesday. It signalled it could pause further increases, giving officials time to assess the fallout from recent bank failures, wait on the resolution of a political stand-off over the U.S. debt ceiling and monitor the course of inflation. The federal funds rate is now in a range of 5% to 5.25%, which is the highest level since 2006. <\/p>\n\n\n\n

The U.S. Central Bank warned that tighter credit conditions for households and businesses are expected to affect economic activity. In the picture below, we can see that even without this rise in interest rates, the federal funds rate was at the highest level since the 2007 financial crisis.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Many analysts and economists are worried that the high-interest rates will push the economy into a recession. It is important to mention that government data showed last week that economic growth in the first quarter slowed sequentially, with real gross domestic product increasing at a 1.1% annual pace, compared with a 2.6% gain in the prior three-month period. With higher interest rates, companies need to spend more money to borrow money to invest in growth. Historically, higher rates lead companies to reduce spending (especially on hiring). <\/p>\n\n\n\n

Many companies could face liquidity problems, and economist David Rosenberg has warned that the U.S. economy is facing two big risks. David Rosenberg said<\/a>:<\/p>\n\n\n\n

\"We have a possible debt default on our hands and a spreading bank crisis. The banking turmoil that started with Silicon Valley Bank's collapse in March remains unresolved, and First Republic's failure and takeover by CEO Jamie Dimon's JPMorgan has reignited worries about broader financial instability. Moreover, political disagreement about raising the U.S. government's borrowing limit is fanning fears of a debt-ceiling crisis.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>United States May Fund Its Deficit By Printing More Money; Could Default By June 1st<\/a><\/p>\n\n\n\n

Higher rates encourage saving over spending and make the debt more costly. Companies with bigger credit or other loans with variable interest rates could be in a difficult situation. We expect to see a meaningful slowdown in economic growth and a weakening of the labour market in the United States in the upcoming months. <\/p>\n\n\n\n

At the same time, Brian Jacobsen, chief economist at Annex Wealth Management, said<\/a> that the manufacturing and housing sectors are in a recession already. The famous investor Jeremy Grantham warned that the U.S. stock market could experience significant losses soon, and a recommendation is that investors should continue to take a defensive investment approach.<\/p>\n\n\n\n

Stocks aren't the only assets that could significantly lose their value. Investors should remember that cryptocurrencies could also be in the situation to make an even bigger fall. The crypto market displayed a high correlation with U.S. equities. If a downtrend is witnessed in the stock market, the same is usually replicated in the crypto-sphere.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Bitcoin Is Close To Testing $30,000 Again; Ethereum Revives Bullish Momentum Above $1,800<\/a><\/p>\n","post_title":"The Fed Raises Interest Rates By 25 BPS This Wednesday; Effects On Crypto And Financial Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-fed-raises-interest-rates-by-25-bps-this-wednesday-effects-on-crypto-and-financial-markets","to_ping":"","pinged":"","post_modified":"2023-05-04 22:08:47","post_modified_gmt":"2023-05-04 12:08:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11491","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11422,"post_author":"12","post_date":"2023-05-02 17:50:37","post_date_gmt":"2023-05-02 07:50:37","post_content":"\n

Ray Dalio, the billionaire founder of one of the world\u2019s largest hedge funds, Bridgewater Associates, was recently\u00a0interviewed<\/a>. He explains that the United States' $31.45T debt may have to be resolved by printing more money, also referred to as currency debasement.<\/p>\n\n\n\n

\u201cSo I think you\u2019re in the part of the cycle where you\u2019ve had the tightening and then the dominoes are beginning to fall. And I think that that\u2019s going to produce more problems.<\/em><\/p>\n\n\n\n

I think when it comes down to it, there\u2019s just too much debt, and we\u2019re adding to it too quickly\u2026 Either that debt will be paid off with hard money, in which case there\u2019s not much printing and so on, or it will be paid off with printing a lot of money to make it easier to pay off. <\/em><\/p>\n\n\n\n

I think in the end, it\u2019s always the case that they print a lot of money in and make it easier to pay off, but you have the reduced value of money.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> Ray Dalio; The Federal Reserve Is Setting Off A \u201cTerrible Calamity\u201d<\/a><\/p>\n\n\n\n

Could The United States Default By June?<\/h2>\n\n\n\n

United States Treasury Secretary, Janet Yellen, wrote to House Speaker Kevin McCarthy;<\/p>\n\n\n\n

\"After reviewing recent federal tax receipts, our best estimate is that we will be unable to continue to satisfy all of the government\u2019s obligations by early June, and potentially as early as June 1, if Congress does not raise or suspend the debt limit before that time.<\/em><\/p>\n\n\n\n

If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests.\"<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> United States May Enter Mild Recession As Yet Another Hike In Fed Rates Expected<\/a><\/p>\n\n\n\n

Yellen warned that waiting until the last minute to take action on this issue would cause harm to \"business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States.\"<\/em> Yellen believes that defaulting on their debt would be a financial catastrophe, raising the cost of borrowing without an end, making future investment \"substantially more costly.\u201d<\/em><\/p>\n","post_title":"United States May Fund Its Deficit By Printing More Money; Could Default By June 1st","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-may-fund-its-deficit-by-printing-more-money-could-default-by-june-1st","to_ping":"","pinged":"","post_modified":"2023-05-04 13:04:05","post_modified_gmt":"2023-05-04 03:04:05","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11422","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

ADVERTISEMENT
\n

Corporate profits are also the big driver of what the market is likely to do in the near term and because of this investors are closely monitoring third-quarter U.S. earnings. Third-quarter earnings season is essentially at the finish line and of the 480 companies that have reported so far, 80% have beaten analysts' expectations. The inflation and interest rates will continue to significantly impact stock prices in December.<\/p>\n\n\n\n

U.S. economic growth(inflation and interest rates) has been resilient year-to-date and Bill Adams, a chief economist for Comerica Bank, recently said the U.S. economy has been much stronger in 2023 than economists expected. Bill Adams suggests that the annual real GDP is anticipated to reach approximately 2.4% this year, a substantial increase from the Federal Reserve's December 2022 dot plot prediction of 0.5%. However, he also warned that the outcome in the upcoming months will decide if the U.S. economy can smoothly achieve a so-called \"soft landing\" without veering into a recession.<\/p>\n\n\n\n

Deceleration In United States Economic Growth<\/h2>\n\n\n\n

Jeffrey Roach, the chief economist at LPL Financial,<\/a> foresees that most of the negative consequences stemming from higher interest rates have not materialized yet and due to this, he anticipates a deceleration in U.S. economic growth. Market expectations that the Federal Reserve will keep interest rates unchanged at its December meeting currently stand above 90% and any information that the Federal Reserve could start to cut rates in the first quarter of 2024 should be positive for stocks in the short-term period.<\/p>\n\n\n\n

On the other side, JPMorgan strategists believe that the risk-reward ratio for numerous stocks is currently unappealing and according to them, restrictive monetary policy is likely to remain in place for some time which could potentially cause a recession. Considering this scenario, investors worried about a possible U.S. recession can opt for a more defensive strategy in the market. They can enhance their financial flexibility by reducing their stock or cryptocurrency exposure and augmenting their cash reserves.<\/p>\n","post_title":"Investor Optimism Rises In November 2023. Does Strong Buying Activity Indicate The Possibility Of Further Gains In The Coming Weeks?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"investor-optimism-rises-in-november-2023-does-strong-buying-activity-indicate-the-possibility-of-further-gains-in-the-coming-weeks","to_ping":"","pinged":"","post_modified":"2023-11-23 01:39:12","post_modified_gmt":"2023-11-22 14:39:12","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14444","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14319,"post_author":"14","post_date":"2023-11-15 18:02:37","post_date_gmt":"2023-11-15 07:02:37","post_content":"\n

Wall Street's main indexes<\/a> surged significantly on Tuesday following the release of lower-than-anticipated inflation figures, which increased the belief that the Federal Reserve had concluded its interest rate hikes. The annual rate of inflation measured by the Consumer Price Index (CPI), which monitors the expenses of a variety of goods and services -\u00a0 slowed to 3.2% last month, dropping from September's 3.7% and marking the most subdued rate since July.<\/p>\n\n\n\n

Additionally promising, Wall Street's prices held steady over the month following a 0.4% increase in September. Core prices, which exclude the unpredictable food and energy sectors, rose by 4%, slightly slower compared to the rate observed in September. The report signifies a significant achievement for the Fed in its battle against inflation but in the upcoming weeks, policymakers will monitor the service category closely, seeking further deceleration as their interest rate increases impact demand.<\/p>\n\n\n\n

\"Inflation
Inflation edges down in October<\/em><\/figcaption><\/figure>\n\n\n\n

Earlier this month, the Federal Reserve maintained its benchmark interest rate at the highest level in 22 years. Following this Tuesday's report, prominent analysts and economists indicated only a 1 percent probability that the central bank would increase rates during its upcoming policy meeting in December. Gregory Daco, chief economist at EY Parthenon, said<\/a>:<\/p>\n\n\n\n

\u201cAcross the board, it\u2019s a good report and I think this will comfort the excessively data-dependent Fed policymakers that policy is sufficiently restrictive to bring inflation down to 2 percent.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/strong><\/em> Gala is announcing a partnership with Stick Figure Productions to distribute Four Down on the Blockchain<\/a><\/p>\n\n\n\n

However, analysts from JPMorgan warned that the risk-reward ratio for many stocks remains unattractive currently and restrictive monetary policy is likely to remain in place for some time. JPMorgan analysts anticipate that most adverse effects resulting from increased interest rates haven't manifested thus far. They highlight an upward trend in consumer loan delinquencies and corporate bankruptcies, suggesting that these patterns are probable to persist unless interest rates are lowered.<\/p>\n\n\n\n

This is likely to drive demand destruction, and weakening pricing power and margins for corporates in the coming quarters, and because of this JPMorgan analysts are adopting a defensive stance, maintaining underweight allocations in equities and cryptocurrencies. Nevertheless, they propose an increase in the investment allocation towards gold due to its potential to rise in value during economic downturns, offering a hedge against potential losses in alternative investments.<\/p>\n\n\n\n

Gold is commonly regarded as a safe-haven asset, particularly amid economic uncertainty or geopolitical instability. Investors typically turn to gold as a means of preserving value when other assets are considered risky.<\/p>\n","post_title":"Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-surged-significantly-after-the-release-of-lower-than-anticipated-inflation-figures","to_ping":"","pinged":"","post_modified":"2023-11-16 20:00:45","post_modified_gmt":"2023-11-16 09:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14319","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11491,"post_author":"14","post_date":"2023-05-04 21:53:10","post_date_gmt":"2023-05-04 11:53:10","post_content":"\n

As widely expected, the U.S. Central Bank raised interest rates by 25bps this Wednesday. It signalled it could pause further increases, giving officials time to assess the fallout from recent bank failures, wait on the resolution of a political stand-off over the U.S. debt ceiling and monitor the course of inflation. The federal funds rate is now in a range of 5% to 5.25%, which is the highest level since 2006. <\/p>\n\n\n\n

The U.S. Central Bank warned that tighter credit conditions for households and businesses are expected to affect economic activity. In the picture below, we can see that even without this rise in interest rates, the federal funds rate was at the highest level since the 2007 financial crisis.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Many analysts and economists are worried that the high-interest rates will push the economy into a recession. It is important to mention that government data showed last week that economic growth in the first quarter slowed sequentially, with real gross domestic product increasing at a 1.1% annual pace, compared with a 2.6% gain in the prior three-month period. With higher interest rates, companies need to spend more money to borrow money to invest in growth. Historically, higher rates lead companies to reduce spending (especially on hiring). <\/p>\n\n\n\n

Many companies could face liquidity problems, and economist David Rosenberg has warned that the U.S. economy is facing two big risks. David Rosenberg said<\/a>:<\/p>\n\n\n\n

\"We have a possible debt default on our hands and a spreading bank crisis. The banking turmoil that started with Silicon Valley Bank's collapse in March remains unresolved, and First Republic's failure and takeover by CEO Jamie Dimon's JPMorgan has reignited worries about broader financial instability. Moreover, political disagreement about raising the U.S. government's borrowing limit is fanning fears of a debt-ceiling crisis.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>United States May Fund Its Deficit By Printing More Money; Could Default By June 1st<\/a><\/p>\n\n\n\n

Higher rates encourage saving over spending and make the debt more costly. Companies with bigger credit or other loans with variable interest rates could be in a difficult situation. We expect to see a meaningful slowdown in economic growth and a weakening of the labour market in the United States in the upcoming months. <\/p>\n\n\n\n

At the same time, Brian Jacobsen, chief economist at Annex Wealth Management, said<\/a> that the manufacturing and housing sectors are in a recession already. The famous investor Jeremy Grantham warned that the U.S. stock market could experience significant losses soon, and a recommendation is that investors should continue to take a defensive investment approach.<\/p>\n\n\n\n

Stocks aren't the only assets that could significantly lose their value. Investors should remember that cryptocurrencies could also be in the situation to make an even bigger fall. The crypto market displayed a high correlation with U.S. equities. If a downtrend is witnessed in the stock market, the same is usually replicated in the crypto-sphere.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Bitcoin Is Close To Testing $30,000 Again; Ethereum Revives Bullish Momentum Above $1,800<\/a><\/p>\n","post_title":"The Fed Raises Interest Rates By 25 BPS This Wednesday; Effects On Crypto And Financial Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-fed-raises-interest-rates-by-25-bps-this-wednesday-effects-on-crypto-and-financial-markets","to_ping":"","pinged":"","post_modified":"2023-05-04 22:08:47","post_modified_gmt":"2023-05-04 12:08:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11491","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11422,"post_author":"12","post_date":"2023-05-02 17:50:37","post_date_gmt":"2023-05-02 07:50:37","post_content":"\n

Ray Dalio, the billionaire founder of one of the world\u2019s largest hedge funds, Bridgewater Associates, was recently\u00a0interviewed<\/a>. He explains that the United States' $31.45T debt may have to be resolved by printing more money, also referred to as currency debasement.<\/p>\n\n\n\n

\u201cSo I think you\u2019re in the part of the cycle where you\u2019ve had the tightening and then the dominoes are beginning to fall. And I think that that\u2019s going to produce more problems.<\/em><\/p>\n\n\n\n

I think when it comes down to it, there\u2019s just too much debt, and we\u2019re adding to it too quickly\u2026 Either that debt will be paid off with hard money, in which case there\u2019s not much printing and so on, or it will be paid off with printing a lot of money to make it easier to pay off. <\/em><\/p>\n\n\n\n

I think in the end, it\u2019s always the case that they print a lot of money in and make it easier to pay off, but you have the reduced value of money.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> Ray Dalio; The Federal Reserve Is Setting Off A \u201cTerrible Calamity\u201d<\/a><\/p>\n\n\n\n

Could The United States Default By June?<\/h2>\n\n\n\n

United States Treasury Secretary, Janet Yellen, wrote to House Speaker Kevin McCarthy;<\/p>\n\n\n\n

\"After reviewing recent federal tax receipts, our best estimate is that we will be unable to continue to satisfy all of the government\u2019s obligations by early June, and potentially as early as June 1, if Congress does not raise or suspend the debt limit before that time.<\/em><\/p>\n\n\n\n

If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests.\"<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> United States May Enter Mild Recession As Yet Another Hike In Fed Rates Expected<\/a><\/p>\n\n\n\n

Yellen warned that waiting until the last minute to take action on this issue would cause harm to \"business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States.\"<\/em> Yellen believes that defaulting on their debt would be a financial catastrophe, raising the cost of borrowing without an end, making future investment \"substantially more costly.\u201d<\/em><\/p>\n","post_title":"United States May Fund Its Deficit By Printing More Money; Could Default By June 1st","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-may-fund-its-deficit-by-printing-more-money-could-default-by-june-1st","to_ping":"","pinged":"","post_modified":"2023-05-04 13:04:05","post_modified_gmt":"2023-05-04 03:04:05","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11422","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

ADVERTISEMENT
\n

GDP And Corporate Profits<\/h2>\n\n\n\n

Corporate profits are also the big driver of what the market is likely to do in the near term and because of this investors are closely monitoring third-quarter U.S. earnings. Third-quarter earnings season is essentially at the finish line and of the 480 companies that have reported so far, 80% have beaten analysts' expectations. The inflation and interest rates will continue to significantly impact stock prices in December.<\/p>\n\n\n\n

U.S. economic growth(inflation and interest rates) has been resilient year-to-date and Bill Adams, a chief economist for Comerica Bank, recently said the U.S. economy has been much stronger in 2023 than economists expected. Bill Adams suggests that the annual real GDP is anticipated to reach approximately 2.4% this year, a substantial increase from the Federal Reserve's December 2022 dot plot prediction of 0.5%. However, he also warned that the outcome in the upcoming months will decide if the U.S. economy can smoothly achieve a so-called \"soft landing\" without veering into a recession.<\/p>\n\n\n\n

Deceleration In United States Economic Growth<\/h2>\n\n\n\n

Jeffrey Roach, the chief economist at LPL Financial,<\/a> foresees that most of the negative consequences stemming from higher interest rates have not materialized yet and due to this, he anticipates a deceleration in U.S. economic growth. Market expectations that the Federal Reserve will keep interest rates unchanged at its December meeting currently stand above 90% and any information that the Federal Reserve could start to cut rates in the first quarter of 2024 should be positive for stocks in the short-term period.<\/p>\n\n\n\n

On the other side, JPMorgan strategists believe that the risk-reward ratio for numerous stocks is currently unappealing and according to them, restrictive monetary policy is likely to remain in place for some time which could potentially cause a recession. Considering this scenario, investors worried about a possible U.S. recession can opt for a more defensive strategy in the market. They can enhance their financial flexibility by reducing their stock or cryptocurrency exposure and augmenting their cash reserves.<\/p>\n","post_title":"Investor Optimism Rises In November 2023. Does Strong Buying Activity Indicate The Possibility Of Further Gains In The Coming Weeks?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"investor-optimism-rises-in-november-2023-does-strong-buying-activity-indicate-the-possibility-of-further-gains-in-the-coming-weeks","to_ping":"","pinged":"","post_modified":"2023-11-23 01:39:12","post_modified_gmt":"2023-11-22 14:39:12","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14444","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14319,"post_author":"14","post_date":"2023-11-15 18:02:37","post_date_gmt":"2023-11-15 07:02:37","post_content":"\n

Wall Street's main indexes<\/a> surged significantly on Tuesday following the release of lower-than-anticipated inflation figures, which increased the belief that the Federal Reserve had concluded its interest rate hikes. The annual rate of inflation measured by the Consumer Price Index (CPI), which monitors the expenses of a variety of goods and services -\u00a0 slowed to 3.2% last month, dropping from September's 3.7% and marking the most subdued rate since July.<\/p>\n\n\n\n

Additionally promising, Wall Street's prices held steady over the month following a 0.4% increase in September. Core prices, which exclude the unpredictable food and energy sectors, rose by 4%, slightly slower compared to the rate observed in September. The report signifies a significant achievement for the Fed in its battle against inflation but in the upcoming weeks, policymakers will monitor the service category closely, seeking further deceleration as their interest rate increases impact demand.<\/p>\n\n\n\n

\"Inflation
Inflation edges down in October<\/em><\/figcaption><\/figure>\n\n\n\n

Earlier this month, the Federal Reserve maintained its benchmark interest rate at the highest level in 22 years. Following this Tuesday's report, prominent analysts and economists indicated only a 1 percent probability that the central bank would increase rates during its upcoming policy meeting in December. Gregory Daco, chief economist at EY Parthenon, said<\/a>:<\/p>\n\n\n\n

\u201cAcross the board, it\u2019s a good report and I think this will comfort the excessively data-dependent Fed policymakers that policy is sufficiently restrictive to bring inflation down to 2 percent.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/strong><\/em> Gala is announcing a partnership with Stick Figure Productions to distribute Four Down on the Blockchain<\/a><\/p>\n\n\n\n

However, analysts from JPMorgan warned that the risk-reward ratio for many stocks remains unattractive currently and restrictive monetary policy is likely to remain in place for some time. JPMorgan analysts anticipate that most adverse effects resulting from increased interest rates haven't manifested thus far. They highlight an upward trend in consumer loan delinquencies and corporate bankruptcies, suggesting that these patterns are probable to persist unless interest rates are lowered.<\/p>\n\n\n\n

This is likely to drive demand destruction, and weakening pricing power and margins for corporates in the coming quarters, and because of this JPMorgan analysts are adopting a defensive stance, maintaining underweight allocations in equities and cryptocurrencies. Nevertheless, they propose an increase in the investment allocation towards gold due to its potential to rise in value during economic downturns, offering a hedge against potential losses in alternative investments.<\/p>\n\n\n\n

Gold is commonly regarded as a safe-haven asset, particularly amid economic uncertainty or geopolitical instability. Investors typically turn to gold as a means of preserving value when other assets are considered risky.<\/p>\n","post_title":"Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-surged-significantly-after-the-release-of-lower-than-anticipated-inflation-figures","to_ping":"","pinged":"","post_modified":"2023-11-16 20:00:45","post_modified_gmt":"2023-11-16 09:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14319","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11491,"post_author":"14","post_date":"2023-05-04 21:53:10","post_date_gmt":"2023-05-04 11:53:10","post_content":"\n

As widely expected, the U.S. Central Bank raised interest rates by 25bps this Wednesday. It signalled it could pause further increases, giving officials time to assess the fallout from recent bank failures, wait on the resolution of a political stand-off over the U.S. debt ceiling and monitor the course of inflation. The federal funds rate is now in a range of 5% to 5.25%, which is the highest level since 2006. <\/p>\n\n\n\n

The U.S. Central Bank warned that tighter credit conditions for households and businesses are expected to affect economic activity. In the picture below, we can see that even without this rise in interest rates, the federal funds rate was at the highest level since the 2007 financial crisis.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Many analysts and economists are worried that the high-interest rates will push the economy into a recession. It is important to mention that government data showed last week that economic growth in the first quarter slowed sequentially, with real gross domestic product increasing at a 1.1% annual pace, compared with a 2.6% gain in the prior three-month period. With higher interest rates, companies need to spend more money to borrow money to invest in growth. Historically, higher rates lead companies to reduce spending (especially on hiring). <\/p>\n\n\n\n

Many companies could face liquidity problems, and economist David Rosenberg has warned that the U.S. economy is facing two big risks. David Rosenberg said<\/a>:<\/p>\n\n\n\n

\"We have a possible debt default on our hands and a spreading bank crisis. The banking turmoil that started with Silicon Valley Bank's collapse in March remains unresolved, and First Republic's failure and takeover by CEO Jamie Dimon's JPMorgan has reignited worries about broader financial instability. Moreover, political disagreement about raising the U.S. government's borrowing limit is fanning fears of a debt-ceiling crisis.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>United States May Fund Its Deficit By Printing More Money; Could Default By June 1st<\/a><\/p>\n\n\n\n

Higher rates encourage saving over spending and make the debt more costly. Companies with bigger credit or other loans with variable interest rates could be in a difficult situation. We expect to see a meaningful slowdown in economic growth and a weakening of the labour market in the United States in the upcoming months. <\/p>\n\n\n\n

At the same time, Brian Jacobsen, chief economist at Annex Wealth Management, said<\/a> that the manufacturing and housing sectors are in a recession already. The famous investor Jeremy Grantham warned that the U.S. stock market could experience significant losses soon, and a recommendation is that investors should continue to take a defensive investment approach.<\/p>\n\n\n\n

Stocks aren't the only assets that could significantly lose their value. Investors should remember that cryptocurrencies could also be in the situation to make an even bigger fall. The crypto market displayed a high correlation with U.S. equities. If a downtrend is witnessed in the stock market, the same is usually replicated in the crypto-sphere.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Bitcoin Is Close To Testing $30,000 Again; Ethereum Revives Bullish Momentum Above $1,800<\/a><\/p>\n","post_title":"The Fed Raises Interest Rates By 25 BPS This Wednesday; Effects On Crypto And Financial Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-fed-raises-interest-rates-by-25-bps-this-wednesday-effects-on-crypto-and-financial-markets","to_ping":"","pinged":"","post_modified":"2023-05-04 22:08:47","post_modified_gmt":"2023-05-04 12:08:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11491","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11422,"post_author":"12","post_date":"2023-05-02 17:50:37","post_date_gmt":"2023-05-02 07:50:37","post_content":"\n

Ray Dalio, the billionaire founder of one of the world\u2019s largest hedge funds, Bridgewater Associates, was recently\u00a0interviewed<\/a>. He explains that the United States' $31.45T debt may have to be resolved by printing more money, also referred to as currency debasement.<\/p>\n\n\n\n

\u201cSo I think you\u2019re in the part of the cycle where you\u2019ve had the tightening and then the dominoes are beginning to fall. And I think that that\u2019s going to produce more problems.<\/em><\/p>\n\n\n\n

I think when it comes down to it, there\u2019s just too much debt, and we\u2019re adding to it too quickly\u2026 Either that debt will be paid off with hard money, in which case there\u2019s not much printing and so on, or it will be paid off with printing a lot of money to make it easier to pay off. <\/em><\/p>\n\n\n\n

I think in the end, it\u2019s always the case that they print a lot of money in and make it easier to pay off, but you have the reduced value of money.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> Ray Dalio; The Federal Reserve Is Setting Off A \u201cTerrible Calamity\u201d<\/a><\/p>\n\n\n\n

Could The United States Default By June?<\/h2>\n\n\n\n

United States Treasury Secretary, Janet Yellen, wrote to House Speaker Kevin McCarthy;<\/p>\n\n\n\n

\"After reviewing recent federal tax receipts, our best estimate is that we will be unable to continue to satisfy all of the government\u2019s obligations by early June, and potentially as early as June 1, if Congress does not raise or suspend the debt limit before that time.<\/em><\/p>\n\n\n\n

If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests.\"<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> United States May Enter Mild Recession As Yet Another Hike In Fed Rates Expected<\/a><\/p>\n\n\n\n

Yellen warned that waiting until the last minute to take action on this issue would cause harm to \"business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States.\"<\/em> Yellen believes that defaulting on their debt would be a financial catastrophe, raising the cost of borrowing without an end, making future investment \"substantially more costly.\u201d<\/em><\/p>\n","post_title":"United States May Fund Its Deficit By Printing More Money; Could Default By June 1st","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-may-fund-its-deficit-by-printing-more-money-could-default-by-june-1st","to_ping":"","pinged":"","post_modified":"2023-05-04 13:04:05","post_modified_gmt":"2023-05-04 03:04:05","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11422","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

ADVERTISEMENT
\n

See Related:<\/em><\/strong> Federal Reserve Officials Banned From Trading Crypto(Opens in a new browser tab)<\/a><\/p>\n\n\n\n

GDP And Corporate Profits<\/h2>\n\n\n\n

Corporate profits are also the big driver of what the market is likely to do in the near term and because of this investors are closely monitoring third-quarter U.S. earnings. Third-quarter earnings season is essentially at the finish line and of the 480 companies that have reported so far, 80% have beaten analysts' expectations. The inflation and interest rates will continue to significantly impact stock prices in December.<\/p>\n\n\n\n

U.S. economic growth(inflation and interest rates) has been resilient year-to-date and Bill Adams, a chief economist for Comerica Bank, recently said the U.S. economy has been much stronger in 2023 than economists expected. Bill Adams suggests that the annual real GDP is anticipated to reach approximately 2.4% this year, a substantial increase from the Federal Reserve's December 2022 dot plot prediction of 0.5%. However, he also warned that the outcome in the upcoming months will decide if the U.S. economy can smoothly achieve a so-called \"soft landing\" without veering into a recession.<\/p>\n\n\n\n

Deceleration In United States Economic Growth<\/h2>\n\n\n\n

Jeffrey Roach, the chief economist at LPL Financial,<\/a> foresees that most of the negative consequences stemming from higher interest rates have not materialized yet and due to this, he anticipates a deceleration in U.S. economic growth. Market expectations that the Federal Reserve will keep interest rates unchanged at its December meeting currently stand above 90% and any information that the Federal Reserve could start to cut rates in the first quarter of 2024 should be positive for stocks in the short-term period.<\/p>\n\n\n\n

On the other side, JPMorgan strategists believe that the risk-reward ratio for numerous stocks is currently unappealing and according to them, restrictive monetary policy is likely to remain in place for some time which could potentially cause a recession. Considering this scenario, investors worried about a possible U.S. recession can opt for a more defensive strategy in the market. They can enhance their financial flexibility by reducing their stock or cryptocurrency exposure and augmenting their cash reserves.<\/p>\n","post_title":"Investor Optimism Rises In November 2023. Does Strong Buying Activity Indicate The Possibility Of Further Gains In The Coming Weeks?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"investor-optimism-rises-in-november-2023-does-strong-buying-activity-indicate-the-possibility-of-further-gains-in-the-coming-weeks","to_ping":"","pinged":"","post_modified":"2023-11-23 01:39:12","post_modified_gmt":"2023-11-22 14:39:12","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14444","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14319,"post_author":"14","post_date":"2023-11-15 18:02:37","post_date_gmt":"2023-11-15 07:02:37","post_content":"\n

Wall Street's main indexes<\/a> surged significantly on Tuesday following the release of lower-than-anticipated inflation figures, which increased the belief that the Federal Reserve had concluded its interest rate hikes. The annual rate of inflation measured by the Consumer Price Index (CPI), which monitors the expenses of a variety of goods and services -\u00a0 slowed to 3.2% last month, dropping from September's 3.7% and marking the most subdued rate since July.<\/p>\n\n\n\n

Additionally promising, Wall Street's prices held steady over the month following a 0.4% increase in September. Core prices, which exclude the unpredictable food and energy sectors, rose by 4%, slightly slower compared to the rate observed in September. The report signifies a significant achievement for the Fed in its battle against inflation but in the upcoming weeks, policymakers will monitor the service category closely, seeking further deceleration as their interest rate increases impact demand.<\/p>\n\n\n\n

\"Inflation
Inflation edges down in October<\/em><\/figcaption><\/figure>\n\n\n\n

Earlier this month, the Federal Reserve maintained its benchmark interest rate at the highest level in 22 years. Following this Tuesday's report, prominent analysts and economists indicated only a 1 percent probability that the central bank would increase rates during its upcoming policy meeting in December. Gregory Daco, chief economist at EY Parthenon, said<\/a>:<\/p>\n\n\n\n

\u201cAcross the board, it\u2019s a good report and I think this will comfort the excessively data-dependent Fed policymakers that policy is sufficiently restrictive to bring inflation down to 2 percent.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/strong><\/em> Gala is announcing a partnership with Stick Figure Productions to distribute Four Down on the Blockchain<\/a><\/p>\n\n\n\n

However, analysts from JPMorgan warned that the risk-reward ratio for many stocks remains unattractive currently and restrictive monetary policy is likely to remain in place for some time. JPMorgan analysts anticipate that most adverse effects resulting from increased interest rates haven't manifested thus far. They highlight an upward trend in consumer loan delinquencies and corporate bankruptcies, suggesting that these patterns are probable to persist unless interest rates are lowered.<\/p>\n\n\n\n

This is likely to drive demand destruction, and weakening pricing power and margins for corporates in the coming quarters, and because of this JPMorgan analysts are adopting a defensive stance, maintaining underweight allocations in equities and cryptocurrencies. Nevertheless, they propose an increase in the investment allocation towards gold due to its potential to rise in value during economic downturns, offering a hedge against potential losses in alternative investments.<\/p>\n\n\n\n

Gold is commonly regarded as a safe-haven asset, particularly amid economic uncertainty or geopolitical instability. Investors typically turn to gold as a means of preserving value when other assets are considered risky.<\/p>\n","post_title":"Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-surged-significantly-after-the-release-of-lower-than-anticipated-inflation-figures","to_ping":"","pinged":"","post_modified":"2023-11-16 20:00:45","post_modified_gmt":"2023-11-16 09:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14319","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11491,"post_author":"14","post_date":"2023-05-04 21:53:10","post_date_gmt":"2023-05-04 11:53:10","post_content":"\n

As widely expected, the U.S. Central Bank raised interest rates by 25bps this Wednesday. It signalled it could pause further increases, giving officials time to assess the fallout from recent bank failures, wait on the resolution of a political stand-off over the U.S. debt ceiling and monitor the course of inflation. The federal funds rate is now in a range of 5% to 5.25%, which is the highest level since 2006. <\/p>\n\n\n\n

The U.S. Central Bank warned that tighter credit conditions for households and businesses are expected to affect economic activity. In the picture below, we can see that even without this rise in interest rates, the federal funds rate was at the highest level since the 2007 financial crisis.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Many analysts and economists are worried that the high-interest rates will push the economy into a recession. It is important to mention that government data showed last week that economic growth in the first quarter slowed sequentially, with real gross domestic product increasing at a 1.1% annual pace, compared with a 2.6% gain in the prior three-month period. With higher interest rates, companies need to spend more money to borrow money to invest in growth. Historically, higher rates lead companies to reduce spending (especially on hiring). <\/p>\n\n\n\n

Many companies could face liquidity problems, and economist David Rosenberg has warned that the U.S. economy is facing two big risks. David Rosenberg said<\/a>:<\/p>\n\n\n\n

\"We have a possible debt default on our hands and a spreading bank crisis. The banking turmoil that started with Silicon Valley Bank's collapse in March remains unresolved, and First Republic's failure and takeover by CEO Jamie Dimon's JPMorgan has reignited worries about broader financial instability. Moreover, political disagreement about raising the U.S. government's borrowing limit is fanning fears of a debt-ceiling crisis.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>United States May Fund Its Deficit By Printing More Money; Could Default By June 1st<\/a><\/p>\n\n\n\n

Higher rates encourage saving over spending and make the debt more costly. Companies with bigger credit or other loans with variable interest rates could be in a difficult situation. We expect to see a meaningful slowdown in economic growth and a weakening of the labour market in the United States in the upcoming months. <\/p>\n\n\n\n

At the same time, Brian Jacobsen, chief economist at Annex Wealth Management, said<\/a> that the manufacturing and housing sectors are in a recession already. The famous investor Jeremy Grantham warned that the U.S. stock market could experience significant losses soon, and a recommendation is that investors should continue to take a defensive investment approach.<\/p>\n\n\n\n

Stocks aren't the only assets that could significantly lose their value. Investors should remember that cryptocurrencies could also be in the situation to make an even bigger fall. The crypto market displayed a high correlation with U.S. equities. If a downtrend is witnessed in the stock market, the same is usually replicated in the crypto-sphere.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Bitcoin Is Close To Testing $30,000 Again; Ethereum Revives Bullish Momentum Above $1,800<\/a><\/p>\n","post_title":"The Fed Raises Interest Rates By 25 BPS This Wednesday; Effects On Crypto And Financial Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-fed-raises-interest-rates-by-25-bps-this-wednesday-effects-on-crypto-and-financial-markets","to_ping":"","pinged":"","post_modified":"2023-05-04 22:08:47","post_modified_gmt":"2023-05-04 12:08:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11491","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11422,"post_author":"12","post_date":"2023-05-02 17:50:37","post_date_gmt":"2023-05-02 07:50:37","post_content":"\n

Ray Dalio, the billionaire founder of one of the world\u2019s largest hedge funds, Bridgewater Associates, was recently\u00a0interviewed<\/a>. He explains that the United States' $31.45T debt may have to be resolved by printing more money, also referred to as currency debasement.<\/p>\n\n\n\n

\u201cSo I think you\u2019re in the part of the cycle where you\u2019ve had the tightening and then the dominoes are beginning to fall. And I think that that\u2019s going to produce more problems.<\/em><\/p>\n\n\n\n

I think when it comes down to it, there\u2019s just too much debt, and we\u2019re adding to it too quickly\u2026 Either that debt will be paid off with hard money, in which case there\u2019s not much printing and so on, or it will be paid off with printing a lot of money to make it easier to pay off. <\/em><\/p>\n\n\n\n

I think in the end, it\u2019s always the case that they print a lot of money in and make it easier to pay off, but you have the reduced value of money.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> Ray Dalio; The Federal Reserve Is Setting Off A \u201cTerrible Calamity\u201d<\/a><\/p>\n\n\n\n

Could The United States Default By June?<\/h2>\n\n\n\n

United States Treasury Secretary, Janet Yellen, wrote to House Speaker Kevin McCarthy;<\/p>\n\n\n\n

\"After reviewing recent federal tax receipts, our best estimate is that we will be unable to continue to satisfy all of the government\u2019s obligations by early June, and potentially as early as June 1, if Congress does not raise or suspend the debt limit before that time.<\/em><\/p>\n\n\n\n

If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests.\"<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> United States May Enter Mild Recession As Yet Another Hike In Fed Rates Expected<\/a><\/p>\n\n\n\n

Yellen warned that waiting until the last minute to take action on this issue would cause harm to \"business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States.\"<\/em> Yellen believes that defaulting on their debt would be a financial catastrophe, raising the cost of borrowing without an end, making future investment \"substantially more costly.\u201d<\/em><\/p>\n","post_title":"United States May Fund Its Deficit By Printing More Money; Could Default By June 1st","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-may-fund-its-deficit-by-printing-more-money-could-default-by-june-1st","to_ping":"","pinged":"","post_modified":"2023-05-04 13:04:05","post_modified_gmt":"2023-05-04 03:04:05","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11422","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

ADVERTISEMENT
\n

Positive information is that the annual rate of inflation measured by the Consumer Price Index (CPI), which monitors the expenses of a variety of goods and services -  slowed to 3.2% in October, dropping from September's 3.7% and marking the most subdued rate since July 2023. It is also important to say that inflation is significantly lower than 2022 peak levels which were above 9% and because of this many investors anticipate the Fed could begin to cut interest rates as soon as the first half of 2024.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Federal Reserve Officials Banned From Trading Crypto(Opens in a new browser tab)<\/a><\/p>\n\n\n\n

GDP And Corporate Profits<\/h2>\n\n\n\n

Corporate profits are also the big driver of what the market is likely to do in the near term and because of this investors are closely monitoring third-quarter U.S. earnings. Third-quarter earnings season is essentially at the finish line and of the 480 companies that have reported so far, 80% have beaten analysts' expectations. The inflation and interest rates will continue to significantly impact stock prices in December.<\/p>\n\n\n\n

U.S. economic growth(inflation and interest rates) has been resilient year-to-date and Bill Adams, a chief economist for Comerica Bank, recently said the U.S. economy has been much stronger in 2023 than economists expected. Bill Adams suggests that the annual real GDP is anticipated to reach approximately 2.4% this year, a substantial increase from the Federal Reserve's December 2022 dot plot prediction of 0.5%. However, he also warned that the outcome in the upcoming months will decide if the U.S. economy can smoothly achieve a so-called \"soft landing\" without veering into a recession.<\/p>\n\n\n\n

Deceleration In United States Economic Growth<\/h2>\n\n\n\n

Jeffrey Roach, the chief economist at LPL Financial,<\/a> foresees that most of the negative consequences stemming from higher interest rates have not materialized yet and due to this, he anticipates a deceleration in U.S. economic growth. Market expectations that the Federal Reserve will keep interest rates unchanged at its December meeting currently stand above 90% and any information that the Federal Reserve could start to cut rates in the first quarter of 2024 should be positive for stocks in the short-term period.<\/p>\n\n\n\n

On the other side, JPMorgan strategists believe that the risk-reward ratio for numerous stocks is currently unappealing and according to them, restrictive monetary policy is likely to remain in place for some time which could potentially cause a recession. Considering this scenario, investors worried about a possible U.S. recession can opt for a more defensive strategy in the market. They can enhance their financial flexibility by reducing their stock or cryptocurrency exposure and augmenting their cash reserves.<\/p>\n","post_title":"Investor Optimism Rises In November 2023. Does Strong Buying Activity Indicate The Possibility Of Further Gains In The Coming Weeks?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"investor-optimism-rises-in-november-2023-does-strong-buying-activity-indicate-the-possibility-of-further-gains-in-the-coming-weeks","to_ping":"","pinged":"","post_modified":"2023-11-23 01:39:12","post_modified_gmt":"2023-11-22 14:39:12","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14444","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14319,"post_author":"14","post_date":"2023-11-15 18:02:37","post_date_gmt":"2023-11-15 07:02:37","post_content":"\n

Wall Street's main indexes<\/a> surged significantly on Tuesday following the release of lower-than-anticipated inflation figures, which increased the belief that the Federal Reserve had concluded its interest rate hikes. The annual rate of inflation measured by the Consumer Price Index (CPI), which monitors the expenses of a variety of goods and services -\u00a0 slowed to 3.2% last month, dropping from September's 3.7% and marking the most subdued rate since July.<\/p>\n\n\n\n

Additionally promising, Wall Street's prices held steady over the month following a 0.4% increase in September. Core prices, which exclude the unpredictable food and energy sectors, rose by 4%, slightly slower compared to the rate observed in September. The report signifies a significant achievement for the Fed in its battle against inflation but in the upcoming weeks, policymakers will monitor the service category closely, seeking further deceleration as their interest rate increases impact demand.<\/p>\n\n\n\n

\"Inflation
Inflation edges down in October<\/em><\/figcaption><\/figure>\n\n\n\n

Earlier this month, the Federal Reserve maintained its benchmark interest rate at the highest level in 22 years. Following this Tuesday's report, prominent analysts and economists indicated only a 1 percent probability that the central bank would increase rates during its upcoming policy meeting in December. Gregory Daco, chief economist at EY Parthenon, said<\/a>:<\/p>\n\n\n\n

\u201cAcross the board, it\u2019s a good report and I think this will comfort the excessively data-dependent Fed policymakers that policy is sufficiently restrictive to bring inflation down to 2 percent.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/strong><\/em> Gala is announcing a partnership with Stick Figure Productions to distribute Four Down on the Blockchain<\/a><\/p>\n\n\n\n

However, analysts from JPMorgan warned that the risk-reward ratio for many stocks remains unattractive currently and restrictive monetary policy is likely to remain in place for some time. JPMorgan analysts anticipate that most adverse effects resulting from increased interest rates haven't manifested thus far. They highlight an upward trend in consumer loan delinquencies and corporate bankruptcies, suggesting that these patterns are probable to persist unless interest rates are lowered.<\/p>\n\n\n\n

This is likely to drive demand destruction, and weakening pricing power and margins for corporates in the coming quarters, and because of this JPMorgan analysts are adopting a defensive stance, maintaining underweight allocations in equities and cryptocurrencies. Nevertheless, they propose an increase in the investment allocation towards gold due to its potential to rise in value during economic downturns, offering a hedge against potential losses in alternative investments.<\/p>\n\n\n\n

Gold is commonly regarded as a safe-haven asset, particularly amid economic uncertainty or geopolitical instability. Investors typically turn to gold as a means of preserving value when other assets are considered risky.<\/p>\n","post_title":"Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-surged-significantly-after-the-release-of-lower-than-anticipated-inflation-figures","to_ping":"","pinged":"","post_modified":"2023-11-16 20:00:45","post_modified_gmt":"2023-11-16 09:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14319","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11491,"post_author":"14","post_date":"2023-05-04 21:53:10","post_date_gmt":"2023-05-04 11:53:10","post_content":"\n

As widely expected, the U.S. Central Bank raised interest rates by 25bps this Wednesday. It signalled it could pause further increases, giving officials time to assess the fallout from recent bank failures, wait on the resolution of a political stand-off over the U.S. debt ceiling and monitor the course of inflation. The federal funds rate is now in a range of 5% to 5.25%, which is the highest level since 2006. <\/p>\n\n\n\n

The U.S. Central Bank warned that tighter credit conditions for households and businesses are expected to affect economic activity. In the picture below, we can see that even without this rise in interest rates, the federal funds rate was at the highest level since the 2007 financial crisis.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Many analysts and economists are worried that the high-interest rates will push the economy into a recession. It is important to mention that government data showed last week that economic growth in the first quarter slowed sequentially, with real gross domestic product increasing at a 1.1% annual pace, compared with a 2.6% gain in the prior three-month period. With higher interest rates, companies need to spend more money to borrow money to invest in growth. Historically, higher rates lead companies to reduce spending (especially on hiring). <\/p>\n\n\n\n

Many companies could face liquidity problems, and economist David Rosenberg has warned that the U.S. economy is facing two big risks. David Rosenberg said<\/a>:<\/p>\n\n\n\n

\"We have a possible debt default on our hands and a spreading bank crisis. The banking turmoil that started with Silicon Valley Bank's collapse in March remains unresolved, and First Republic's failure and takeover by CEO Jamie Dimon's JPMorgan has reignited worries about broader financial instability. Moreover, political disagreement about raising the U.S. government's borrowing limit is fanning fears of a debt-ceiling crisis.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>United States May Fund Its Deficit By Printing More Money; Could Default By June 1st<\/a><\/p>\n\n\n\n

Higher rates encourage saving over spending and make the debt more costly. Companies with bigger credit or other loans with variable interest rates could be in a difficult situation. We expect to see a meaningful slowdown in economic growth and a weakening of the labour market in the United States in the upcoming months. <\/p>\n\n\n\n

At the same time, Brian Jacobsen, chief economist at Annex Wealth Management, said<\/a> that the manufacturing and housing sectors are in a recession already. The famous investor Jeremy Grantham warned that the U.S. stock market could experience significant losses soon, and a recommendation is that investors should continue to take a defensive investment approach.<\/p>\n\n\n\n

Stocks aren't the only assets that could significantly lose their value. Investors should remember that cryptocurrencies could also be in the situation to make an even bigger fall. The crypto market displayed a high correlation with U.S. equities. If a downtrend is witnessed in the stock market, the same is usually replicated in the crypto-sphere.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Bitcoin Is Close To Testing $30,000 Again; Ethereum Revives Bullish Momentum Above $1,800<\/a><\/p>\n","post_title":"The Fed Raises Interest Rates By 25 BPS This Wednesday; Effects On Crypto And Financial Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-fed-raises-interest-rates-by-25-bps-this-wednesday-effects-on-crypto-and-financial-markets","to_ping":"","pinged":"","post_modified":"2023-05-04 22:08:47","post_modified_gmt":"2023-05-04 12:08:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11491","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11422,"post_author":"12","post_date":"2023-05-02 17:50:37","post_date_gmt":"2023-05-02 07:50:37","post_content":"\n

Ray Dalio, the billionaire founder of one of the world\u2019s largest hedge funds, Bridgewater Associates, was recently\u00a0interviewed<\/a>. He explains that the United States' $31.45T debt may have to be resolved by printing more money, also referred to as currency debasement.<\/p>\n\n\n\n

\u201cSo I think you\u2019re in the part of the cycle where you\u2019ve had the tightening and then the dominoes are beginning to fall. And I think that that\u2019s going to produce more problems.<\/em><\/p>\n\n\n\n

I think when it comes down to it, there\u2019s just too much debt, and we\u2019re adding to it too quickly\u2026 Either that debt will be paid off with hard money, in which case there\u2019s not much printing and so on, or it will be paid off with printing a lot of money to make it easier to pay off. <\/em><\/p>\n\n\n\n

I think in the end, it\u2019s always the case that they print a lot of money in and make it easier to pay off, but you have the reduced value of money.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> Ray Dalio; The Federal Reserve Is Setting Off A \u201cTerrible Calamity\u201d<\/a><\/p>\n\n\n\n

Could The United States Default By June?<\/h2>\n\n\n\n

United States Treasury Secretary, Janet Yellen, wrote to House Speaker Kevin McCarthy;<\/p>\n\n\n\n

\"After reviewing recent federal tax receipts, our best estimate is that we will be unable to continue to satisfy all of the government\u2019s obligations by early June, and potentially as early as June 1, if Congress does not raise or suspend the debt limit before that time.<\/em><\/p>\n\n\n\n

If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests.\"<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> United States May Enter Mild Recession As Yet Another Hike In Fed Rates Expected<\/a><\/p>\n\n\n\n

Yellen warned that waiting until the last minute to take action on this issue would cause harm to \"business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States.\"<\/em> Yellen believes that defaulting on their debt would be a financial catastrophe, raising the cost of borrowing without an end, making future investment \"substantially more costly.\u201d<\/em><\/p>\n","post_title":"United States May Fund Its Deficit By Printing More Money; Could Default By June 1st","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-may-fund-its-deficit-by-printing-more-money-could-default-by-june-1st","to_ping":"","pinged":"","post_modified":"2023-05-04 13:04:05","post_modified_gmt":"2023-05-04 03:04:05","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11422","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

ADVERTISEMENT
\n
\"The
The S&P 500 index's strong advance off its October 27 low continues to make progress<\/em><\/figcaption><\/figure>\n\n\n\n

Positive information is that the annual rate of inflation measured by the Consumer Price Index (CPI), which monitors the expenses of a variety of goods and services -  slowed to 3.2% in October, dropping from September's 3.7% and marking the most subdued rate since July 2023. It is also important to say that inflation is significantly lower than 2022 peak levels which were above 9% and because of this many investors anticipate the Fed could begin to cut interest rates as soon as the first half of 2024.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Federal Reserve Officials Banned From Trading Crypto(Opens in a new browser tab)<\/a><\/p>\n\n\n\n

GDP And Corporate Profits<\/h2>\n\n\n\n

Corporate profits are also the big driver of what the market is likely to do in the near term and because of this investors are closely monitoring third-quarter U.S. earnings. Third-quarter earnings season is essentially at the finish line and of the 480 companies that have reported so far, 80% have beaten analysts' expectations. The inflation and interest rates will continue to significantly impact stock prices in December.<\/p>\n\n\n\n

U.S. economic growth(inflation and interest rates) has been resilient year-to-date and Bill Adams, a chief economist for Comerica Bank, recently said the U.S. economy has been much stronger in 2023 than economists expected. Bill Adams suggests that the annual real GDP is anticipated to reach approximately 2.4% this year, a substantial increase from the Federal Reserve's December 2022 dot plot prediction of 0.5%. However, he also warned that the outcome in the upcoming months will decide if the U.S. economy can smoothly achieve a so-called \"soft landing\" without veering into a recession.<\/p>\n\n\n\n

Deceleration In United States Economic Growth<\/h2>\n\n\n\n

Jeffrey Roach, the chief economist at LPL Financial,<\/a> foresees that most of the negative consequences stemming from higher interest rates have not materialized yet and due to this, he anticipates a deceleration in U.S. economic growth. Market expectations that the Federal Reserve will keep interest rates unchanged at its December meeting currently stand above 90% and any information that the Federal Reserve could start to cut rates in the first quarter of 2024 should be positive for stocks in the short-term period.<\/p>\n\n\n\n

On the other side, JPMorgan strategists believe that the risk-reward ratio for numerous stocks is currently unappealing and according to them, restrictive monetary policy is likely to remain in place for some time which could potentially cause a recession. Considering this scenario, investors worried about a possible U.S. recession can opt for a more defensive strategy in the market. They can enhance their financial flexibility by reducing their stock or cryptocurrency exposure and augmenting their cash reserves.<\/p>\n","post_title":"Investor Optimism Rises In November 2023. Does Strong Buying Activity Indicate The Possibility Of Further Gains In The Coming Weeks?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"investor-optimism-rises-in-november-2023-does-strong-buying-activity-indicate-the-possibility-of-further-gains-in-the-coming-weeks","to_ping":"","pinged":"","post_modified":"2023-11-23 01:39:12","post_modified_gmt":"2023-11-22 14:39:12","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14444","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14319,"post_author":"14","post_date":"2023-11-15 18:02:37","post_date_gmt":"2023-11-15 07:02:37","post_content":"\n

Wall Street's main indexes<\/a> surged significantly on Tuesday following the release of lower-than-anticipated inflation figures, which increased the belief that the Federal Reserve had concluded its interest rate hikes. The annual rate of inflation measured by the Consumer Price Index (CPI), which monitors the expenses of a variety of goods and services -\u00a0 slowed to 3.2% last month, dropping from September's 3.7% and marking the most subdued rate since July.<\/p>\n\n\n\n

Additionally promising, Wall Street's prices held steady over the month following a 0.4% increase in September. Core prices, which exclude the unpredictable food and energy sectors, rose by 4%, slightly slower compared to the rate observed in September. The report signifies a significant achievement for the Fed in its battle against inflation but in the upcoming weeks, policymakers will monitor the service category closely, seeking further deceleration as their interest rate increases impact demand.<\/p>\n\n\n\n

\"Inflation
Inflation edges down in October<\/em><\/figcaption><\/figure>\n\n\n\n

Earlier this month, the Federal Reserve maintained its benchmark interest rate at the highest level in 22 years. Following this Tuesday's report, prominent analysts and economists indicated only a 1 percent probability that the central bank would increase rates during its upcoming policy meeting in December. Gregory Daco, chief economist at EY Parthenon, said<\/a>:<\/p>\n\n\n\n

\u201cAcross the board, it\u2019s a good report and I think this will comfort the excessively data-dependent Fed policymakers that policy is sufficiently restrictive to bring inflation down to 2 percent.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/strong><\/em> Gala is announcing a partnership with Stick Figure Productions to distribute Four Down on the Blockchain<\/a><\/p>\n\n\n\n

However, analysts from JPMorgan warned that the risk-reward ratio for many stocks remains unattractive currently and restrictive monetary policy is likely to remain in place for some time. JPMorgan analysts anticipate that most adverse effects resulting from increased interest rates haven't manifested thus far. They highlight an upward trend in consumer loan delinquencies and corporate bankruptcies, suggesting that these patterns are probable to persist unless interest rates are lowered.<\/p>\n\n\n\n

This is likely to drive demand destruction, and weakening pricing power and margins for corporates in the coming quarters, and because of this JPMorgan analysts are adopting a defensive stance, maintaining underweight allocations in equities and cryptocurrencies. Nevertheless, they propose an increase in the investment allocation towards gold due to its potential to rise in value during economic downturns, offering a hedge against potential losses in alternative investments.<\/p>\n\n\n\n

Gold is commonly regarded as a safe-haven asset, particularly amid economic uncertainty or geopolitical instability. Investors typically turn to gold as a means of preserving value when other assets are considered risky.<\/p>\n","post_title":"Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-surged-significantly-after-the-release-of-lower-than-anticipated-inflation-figures","to_ping":"","pinged":"","post_modified":"2023-11-16 20:00:45","post_modified_gmt":"2023-11-16 09:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14319","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11491,"post_author":"14","post_date":"2023-05-04 21:53:10","post_date_gmt":"2023-05-04 11:53:10","post_content":"\n

As widely expected, the U.S. Central Bank raised interest rates by 25bps this Wednesday. It signalled it could pause further increases, giving officials time to assess the fallout from recent bank failures, wait on the resolution of a political stand-off over the U.S. debt ceiling and monitor the course of inflation. The federal funds rate is now in a range of 5% to 5.25%, which is the highest level since 2006. <\/p>\n\n\n\n

The U.S. Central Bank warned that tighter credit conditions for households and businesses are expected to affect economic activity. In the picture below, we can see that even without this rise in interest rates, the federal funds rate was at the highest level since the 2007 financial crisis.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Many analysts and economists are worried that the high-interest rates will push the economy into a recession. It is important to mention that government data showed last week that economic growth in the first quarter slowed sequentially, with real gross domestic product increasing at a 1.1% annual pace, compared with a 2.6% gain in the prior three-month period. With higher interest rates, companies need to spend more money to borrow money to invest in growth. Historically, higher rates lead companies to reduce spending (especially on hiring). <\/p>\n\n\n\n

Many companies could face liquidity problems, and economist David Rosenberg has warned that the U.S. economy is facing two big risks. David Rosenberg said<\/a>:<\/p>\n\n\n\n

\"We have a possible debt default on our hands and a spreading bank crisis. The banking turmoil that started with Silicon Valley Bank's collapse in March remains unresolved, and First Republic's failure and takeover by CEO Jamie Dimon's JPMorgan has reignited worries about broader financial instability. Moreover, political disagreement about raising the U.S. government's borrowing limit is fanning fears of a debt-ceiling crisis.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>United States May Fund Its Deficit By Printing More Money; Could Default By June 1st<\/a><\/p>\n\n\n\n

Higher rates encourage saving over spending and make the debt more costly. Companies with bigger credit or other loans with variable interest rates could be in a difficult situation. We expect to see a meaningful slowdown in economic growth and a weakening of the labour market in the United States in the upcoming months. <\/p>\n\n\n\n

At the same time, Brian Jacobsen, chief economist at Annex Wealth Management, said<\/a> that the manufacturing and housing sectors are in a recession already. The famous investor Jeremy Grantham warned that the U.S. stock market could experience significant losses soon, and a recommendation is that investors should continue to take a defensive investment approach.<\/p>\n\n\n\n

Stocks aren't the only assets that could significantly lose their value. Investors should remember that cryptocurrencies could also be in the situation to make an even bigger fall. The crypto market displayed a high correlation with U.S. equities. If a downtrend is witnessed in the stock market, the same is usually replicated in the crypto-sphere.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Bitcoin Is Close To Testing $30,000 Again; Ethereum Revives Bullish Momentum Above $1,800<\/a><\/p>\n","post_title":"The Fed Raises Interest Rates By 25 BPS This Wednesday; Effects On Crypto And Financial Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-fed-raises-interest-rates-by-25-bps-this-wednesday-effects-on-crypto-and-financial-markets","to_ping":"","pinged":"","post_modified":"2023-05-04 22:08:47","post_modified_gmt":"2023-05-04 12:08:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11491","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11422,"post_author":"12","post_date":"2023-05-02 17:50:37","post_date_gmt":"2023-05-02 07:50:37","post_content":"\n

Ray Dalio, the billionaire founder of one of the world\u2019s largest hedge funds, Bridgewater Associates, was recently\u00a0interviewed<\/a>. He explains that the United States' $31.45T debt may have to be resolved by printing more money, also referred to as currency debasement.<\/p>\n\n\n\n

\u201cSo I think you\u2019re in the part of the cycle where you\u2019ve had the tightening and then the dominoes are beginning to fall. And I think that that\u2019s going to produce more problems.<\/em><\/p>\n\n\n\n

I think when it comes down to it, there\u2019s just too much debt, and we\u2019re adding to it too quickly\u2026 Either that debt will be paid off with hard money, in which case there\u2019s not much printing and so on, or it will be paid off with printing a lot of money to make it easier to pay off. <\/em><\/p>\n\n\n\n

I think in the end, it\u2019s always the case that they print a lot of money in and make it easier to pay off, but you have the reduced value of money.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> Ray Dalio; The Federal Reserve Is Setting Off A \u201cTerrible Calamity\u201d<\/a><\/p>\n\n\n\n

Could The United States Default By June?<\/h2>\n\n\n\n

United States Treasury Secretary, Janet Yellen, wrote to House Speaker Kevin McCarthy;<\/p>\n\n\n\n

\"After reviewing recent federal tax receipts, our best estimate is that we will be unable to continue to satisfy all of the government\u2019s obligations by early June, and potentially as early as June 1, if Congress does not raise or suspend the debt limit before that time.<\/em><\/p>\n\n\n\n

If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests.\"<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> United States May Enter Mild Recession As Yet Another Hike In Fed Rates Expected<\/a><\/p>\n\n\n\n

Yellen warned that waiting until the last minute to take action on this issue would cause harm to \"business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States.\"<\/em> Yellen believes that defaulting on their debt would be a financial catastrophe, raising the cost of borrowing without an end, making future investment \"substantially more costly.\u201d<\/em><\/p>\n","post_title":"United States May Fund Its Deficit By Printing More Money; Could Default By June 1st","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-may-fund-its-deficit-by-printing-more-money-could-default-by-june-1st","to_ping":"","pinged":"","post_modified":"2023-05-04 13:04:05","post_modified_gmt":"2023-05-04 03:04:05","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11422","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

ADVERTISEMENT
\n

Investors remain optimistic that the market can resume its bullish momentum in December given that the fourth quarter has historically been one of the best three-month stretches of the year for the S&P 500. Investors anticipated the Federal Reserve<\/a> may have already reached its terminal interest rate; however, the primary driving forces affecting stock prices over recent weeks, inflation and interest rates, will continue to hold significant importance in December.<\/p>\n\n\n\n

\"The
The S&P 500 index's strong advance off its October 27 low continues to make progress<\/em><\/figcaption><\/figure>\n\n\n\n

Positive information is that the annual rate of inflation measured by the Consumer Price Index (CPI), which monitors the expenses of a variety of goods and services -  slowed to 3.2% in October, dropping from September's 3.7% and marking the most subdued rate since July 2023. It is also important to say that inflation is significantly lower than 2022 peak levels which were above 9% and because of this many investors anticipate the Fed could begin to cut interest rates as soon as the first half of 2024.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Federal Reserve Officials Banned From Trading Crypto(Opens in a new browser tab)<\/a><\/p>\n\n\n\n

GDP And Corporate Profits<\/h2>\n\n\n\n

Corporate profits are also the big driver of what the market is likely to do in the near term and because of this investors are closely monitoring third-quarter U.S. earnings. Third-quarter earnings season is essentially at the finish line and of the 480 companies that have reported so far, 80% have beaten analysts' expectations. The inflation and interest rates will continue to significantly impact stock prices in December.<\/p>\n\n\n\n

U.S. economic growth(inflation and interest rates) has been resilient year-to-date and Bill Adams, a chief economist for Comerica Bank, recently said the U.S. economy has been much stronger in 2023 than economists expected. Bill Adams suggests that the annual real GDP is anticipated to reach approximately 2.4% this year, a substantial increase from the Federal Reserve's December 2022 dot plot prediction of 0.5%. However, he also warned that the outcome in the upcoming months will decide if the U.S. economy can smoothly achieve a so-called \"soft landing\" without veering into a recession.<\/p>\n\n\n\n

Deceleration In United States Economic Growth<\/h2>\n\n\n\n

Jeffrey Roach, the chief economist at LPL Financial,<\/a> foresees that most of the negative consequences stemming from higher interest rates have not materialized yet and due to this, he anticipates a deceleration in U.S. economic growth. Market expectations that the Federal Reserve will keep interest rates unchanged at its December meeting currently stand above 90% and any information that the Federal Reserve could start to cut rates in the first quarter of 2024 should be positive for stocks in the short-term period.<\/p>\n\n\n\n

On the other side, JPMorgan strategists believe that the risk-reward ratio for numerous stocks is currently unappealing and according to them, restrictive monetary policy is likely to remain in place for some time which could potentially cause a recession. Considering this scenario, investors worried about a possible U.S. recession can opt for a more defensive strategy in the market. They can enhance their financial flexibility by reducing their stock or cryptocurrency exposure and augmenting their cash reserves.<\/p>\n","post_title":"Investor Optimism Rises In November 2023. Does Strong Buying Activity Indicate The Possibility Of Further Gains In The Coming Weeks?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"investor-optimism-rises-in-november-2023-does-strong-buying-activity-indicate-the-possibility-of-further-gains-in-the-coming-weeks","to_ping":"","pinged":"","post_modified":"2023-11-23 01:39:12","post_modified_gmt":"2023-11-22 14:39:12","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14444","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14319,"post_author":"14","post_date":"2023-11-15 18:02:37","post_date_gmt":"2023-11-15 07:02:37","post_content":"\n

Wall Street's main indexes<\/a> surged significantly on Tuesday following the release of lower-than-anticipated inflation figures, which increased the belief that the Federal Reserve had concluded its interest rate hikes. The annual rate of inflation measured by the Consumer Price Index (CPI), which monitors the expenses of a variety of goods and services -\u00a0 slowed to 3.2% last month, dropping from September's 3.7% and marking the most subdued rate since July.<\/p>\n\n\n\n

Additionally promising, Wall Street's prices held steady over the month following a 0.4% increase in September. Core prices, which exclude the unpredictable food and energy sectors, rose by 4%, slightly slower compared to the rate observed in September. The report signifies a significant achievement for the Fed in its battle against inflation but in the upcoming weeks, policymakers will monitor the service category closely, seeking further deceleration as their interest rate increases impact demand.<\/p>\n\n\n\n

\"Inflation
Inflation edges down in October<\/em><\/figcaption><\/figure>\n\n\n\n

Earlier this month, the Federal Reserve maintained its benchmark interest rate at the highest level in 22 years. Following this Tuesday's report, prominent analysts and economists indicated only a 1 percent probability that the central bank would increase rates during its upcoming policy meeting in December. Gregory Daco, chief economist at EY Parthenon, said<\/a>:<\/p>\n\n\n\n

\u201cAcross the board, it\u2019s a good report and I think this will comfort the excessively data-dependent Fed policymakers that policy is sufficiently restrictive to bring inflation down to 2 percent.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/strong><\/em> Gala is announcing a partnership with Stick Figure Productions to distribute Four Down on the Blockchain<\/a><\/p>\n\n\n\n

However, analysts from JPMorgan warned that the risk-reward ratio for many stocks remains unattractive currently and restrictive monetary policy is likely to remain in place for some time. JPMorgan analysts anticipate that most adverse effects resulting from increased interest rates haven't manifested thus far. They highlight an upward trend in consumer loan delinquencies and corporate bankruptcies, suggesting that these patterns are probable to persist unless interest rates are lowered.<\/p>\n\n\n\n

This is likely to drive demand destruction, and weakening pricing power and margins for corporates in the coming quarters, and because of this JPMorgan analysts are adopting a defensive stance, maintaining underweight allocations in equities and cryptocurrencies. Nevertheless, they propose an increase in the investment allocation towards gold due to its potential to rise in value during economic downturns, offering a hedge against potential losses in alternative investments.<\/p>\n\n\n\n

Gold is commonly regarded as a safe-haven asset, particularly amid economic uncertainty or geopolitical instability. Investors typically turn to gold as a means of preserving value when other assets are considered risky.<\/p>\n","post_title":"Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-surged-significantly-after-the-release-of-lower-than-anticipated-inflation-figures","to_ping":"","pinged":"","post_modified":"2023-11-16 20:00:45","post_modified_gmt":"2023-11-16 09:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14319","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11491,"post_author":"14","post_date":"2023-05-04 21:53:10","post_date_gmt":"2023-05-04 11:53:10","post_content":"\n

As widely expected, the U.S. Central Bank raised interest rates by 25bps this Wednesday. It signalled it could pause further increases, giving officials time to assess the fallout from recent bank failures, wait on the resolution of a political stand-off over the U.S. debt ceiling and monitor the course of inflation. The federal funds rate is now in a range of 5% to 5.25%, which is the highest level since 2006. <\/p>\n\n\n\n

The U.S. Central Bank warned that tighter credit conditions for households and businesses are expected to affect economic activity. In the picture below, we can see that even without this rise in interest rates, the federal funds rate was at the highest level since the 2007 financial crisis.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Many analysts and economists are worried that the high-interest rates will push the economy into a recession. It is important to mention that government data showed last week that economic growth in the first quarter slowed sequentially, with real gross domestic product increasing at a 1.1% annual pace, compared with a 2.6% gain in the prior three-month period. With higher interest rates, companies need to spend more money to borrow money to invest in growth. Historically, higher rates lead companies to reduce spending (especially on hiring). <\/p>\n\n\n\n

Many companies could face liquidity problems, and economist David Rosenberg has warned that the U.S. economy is facing two big risks. David Rosenberg said<\/a>:<\/p>\n\n\n\n

\"We have a possible debt default on our hands and a spreading bank crisis. The banking turmoil that started with Silicon Valley Bank's collapse in March remains unresolved, and First Republic's failure and takeover by CEO Jamie Dimon's JPMorgan has reignited worries about broader financial instability. Moreover, political disagreement about raising the U.S. government's borrowing limit is fanning fears of a debt-ceiling crisis.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>United States May Fund Its Deficit By Printing More Money; Could Default By June 1st<\/a><\/p>\n\n\n\n

Higher rates encourage saving over spending and make the debt more costly. Companies with bigger credit or other loans with variable interest rates could be in a difficult situation. We expect to see a meaningful slowdown in economic growth and a weakening of the labour market in the United States in the upcoming months. <\/p>\n\n\n\n

At the same time, Brian Jacobsen, chief economist at Annex Wealth Management, said<\/a> that the manufacturing and housing sectors are in a recession already. The famous investor Jeremy Grantham warned that the U.S. stock market could experience significant losses soon, and a recommendation is that investors should continue to take a defensive investment approach.<\/p>\n\n\n\n

Stocks aren't the only assets that could significantly lose their value. Investors should remember that cryptocurrencies could also be in the situation to make an even bigger fall. The crypto market displayed a high correlation with U.S. equities. If a downtrend is witnessed in the stock market, the same is usually replicated in the crypto-sphere.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Bitcoin Is Close To Testing $30,000 Again; Ethereum Revives Bullish Momentum Above $1,800<\/a><\/p>\n","post_title":"The Fed Raises Interest Rates By 25 BPS This Wednesday; Effects On Crypto And Financial Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-fed-raises-interest-rates-by-25-bps-this-wednesday-effects-on-crypto-and-financial-markets","to_ping":"","pinged":"","post_modified":"2023-05-04 22:08:47","post_modified_gmt":"2023-05-04 12:08:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11491","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11422,"post_author":"12","post_date":"2023-05-02 17:50:37","post_date_gmt":"2023-05-02 07:50:37","post_content":"\n

Ray Dalio, the billionaire founder of one of the world\u2019s largest hedge funds, Bridgewater Associates, was recently\u00a0interviewed<\/a>. He explains that the United States' $31.45T debt may have to be resolved by printing more money, also referred to as currency debasement.<\/p>\n\n\n\n

\u201cSo I think you\u2019re in the part of the cycle where you\u2019ve had the tightening and then the dominoes are beginning to fall. And I think that that\u2019s going to produce more problems.<\/em><\/p>\n\n\n\n

I think when it comes down to it, there\u2019s just too much debt, and we\u2019re adding to it too quickly\u2026 Either that debt will be paid off with hard money, in which case there\u2019s not much printing and so on, or it will be paid off with printing a lot of money to make it easier to pay off. <\/em><\/p>\n\n\n\n

I think in the end, it\u2019s always the case that they print a lot of money in and make it easier to pay off, but you have the reduced value of money.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> Ray Dalio; The Federal Reserve Is Setting Off A \u201cTerrible Calamity\u201d<\/a><\/p>\n\n\n\n

Could The United States Default By June?<\/h2>\n\n\n\n

United States Treasury Secretary, Janet Yellen, wrote to House Speaker Kevin McCarthy;<\/p>\n\n\n\n

\"After reviewing recent federal tax receipts, our best estimate is that we will be unable to continue to satisfy all of the government\u2019s obligations by early June, and potentially as early as June 1, if Congress does not raise or suspend the debt limit before that time.<\/em><\/p>\n\n\n\n

If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests.\"<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> United States May Enter Mild Recession As Yet Another Hike In Fed Rates Expected<\/a><\/p>\n\n\n\n

Yellen warned that waiting until the last minute to take action on this issue would cause harm to \"business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States.\"<\/em> Yellen believes that defaulting on their debt would be a financial catastrophe, raising the cost of borrowing without an end, making future investment \"substantially more costly.\u201d<\/em><\/p>\n","post_title":"United States May Fund Its Deficit By Printing More Money; Could Default By June 1st","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-may-fund-its-deficit-by-printing-more-money-could-default-by-june-1st","to_ping":"","pinged":"","post_modified":"2023-05-04 13:04:05","post_modified_gmt":"2023-05-04 03:04:05","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11422","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

ADVERTISEMENT
\n

\"They've (Fed) already taken rates up a lot... they will keep rates up in that range for longer than what the market is currently expecting. Markets do not expect more hikes and are instead focused on rate cuts.\"<\/em><\/p>\n","post_title":"U.S. Stocks Had The Highest Monthly Rally Of 2023 In November. What To Expect From The Rest Of December?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"u-s-stocks-had-the-highest-monthly-rally-of-2023-in-november-what-to-expect-from-the-rest-of-december","to_ping":"","pinged":"","post_modified":"2023-12-13 21:49:51","post_modified_gmt":"2023-12-13 10:49:51","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14611","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14444,"post_author":"14","post_date":"2023-11-23 01:38:54","post_date_gmt":"2023-11-22 14:38:54","post_content":"\n

Investors remain optimistic that the market can resume its bullish momentum in December given that the fourth quarter has historically been one of the best three-month stretches of the year for the S&P 500. Investors anticipated the Federal Reserve<\/a> may have already reached its terminal interest rate; however, the primary driving forces affecting stock prices over recent weeks, inflation and interest rates, will continue to hold significant importance in December.<\/p>\n\n\n\n

\"The
The S&P 500 index's strong advance off its October 27 low continues to make progress<\/em><\/figcaption><\/figure>\n\n\n\n

Positive information is that the annual rate of inflation measured by the Consumer Price Index (CPI), which monitors the expenses of a variety of goods and services -  slowed to 3.2% in October, dropping from September's 3.7% and marking the most subdued rate since July 2023. It is also important to say that inflation is significantly lower than 2022 peak levels which were above 9% and because of this many investors anticipate the Fed could begin to cut interest rates as soon as the first half of 2024.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Federal Reserve Officials Banned From Trading Crypto(Opens in a new browser tab)<\/a><\/p>\n\n\n\n

GDP And Corporate Profits<\/h2>\n\n\n\n

Corporate profits are also the big driver of what the market is likely to do in the near term and because of this investors are closely monitoring third-quarter U.S. earnings. Third-quarter earnings season is essentially at the finish line and of the 480 companies that have reported so far, 80% have beaten analysts' expectations. The inflation and interest rates will continue to significantly impact stock prices in December.<\/p>\n\n\n\n

U.S. economic growth(inflation and interest rates) has been resilient year-to-date and Bill Adams, a chief economist for Comerica Bank, recently said the U.S. economy has been much stronger in 2023 than economists expected. Bill Adams suggests that the annual real GDP is anticipated to reach approximately 2.4% this year, a substantial increase from the Federal Reserve's December 2022 dot plot prediction of 0.5%. However, he also warned that the outcome in the upcoming months will decide if the U.S. economy can smoothly achieve a so-called \"soft landing\" without veering into a recession.<\/p>\n\n\n\n

Deceleration In United States Economic Growth<\/h2>\n\n\n\n

Jeffrey Roach, the chief economist at LPL Financial,<\/a> foresees that most of the negative consequences stemming from higher interest rates have not materialized yet and due to this, he anticipates a deceleration in U.S. economic growth. Market expectations that the Federal Reserve will keep interest rates unchanged at its December meeting currently stand above 90% and any information that the Federal Reserve could start to cut rates in the first quarter of 2024 should be positive for stocks in the short-term period.<\/p>\n\n\n\n

On the other side, JPMorgan strategists believe that the risk-reward ratio for numerous stocks is currently unappealing and according to them, restrictive monetary policy is likely to remain in place for some time which could potentially cause a recession. Considering this scenario, investors worried about a possible U.S. recession can opt for a more defensive strategy in the market. They can enhance their financial flexibility by reducing their stock or cryptocurrency exposure and augmenting their cash reserves.<\/p>\n","post_title":"Investor Optimism Rises In November 2023. Does Strong Buying Activity Indicate The Possibility Of Further Gains In The Coming Weeks?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"investor-optimism-rises-in-november-2023-does-strong-buying-activity-indicate-the-possibility-of-further-gains-in-the-coming-weeks","to_ping":"","pinged":"","post_modified":"2023-11-23 01:39:12","post_modified_gmt":"2023-11-22 14:39:12","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14444","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14319,"post_author":"14","post_date":"2023-11-15 18:02:37","post_date_gmt":"2023-11-15 07:02:37","post_content":"\n

Wall Street's main indexes<\/a> surged significantly on Tuesday following the release of lower-than-anticipated inflation figures, which increased the belief that the Federal Reserve had concluded its interest rate hikes. The annual rate of inflation measured by the Consumer Price Index (CPI), which monitors the expenses of a variety of goods and services -\u00a0 slowed to 3.2% last month, dropping from September's 3.7% and marking the most subdued rate since July.<\/p>\n\n\n\n

Additionally promising, Wall Street's prices held steady over the month following a 0.4% increase in September. Core prices, which exclude the unpredictable food and energy sectors, rose by 4%, slightly slower compared to the rate observed in September. The report signifies a significant achievement for the Fed in its battle against inflation but in the upcoming weeks, policymakers will monitor the service category closely, seeking further deceleration as their interest rate increases impact demand.<\/p>\n\n\n\n

\"Inflation
Inflation edges down in October<\/em><\/figcaption><\/figure>\n\n\n\n

Earlier this month, the Federal Reserve maintained its benchmark interest rate at the highest level in 22 years. Following this Tuesday's report, prominent analysts and economists indicated only a 1 percent probability that the central bank would increase rates during its upcoming policy meeting in December. Gregory Daco, chief economist at EY Parthenon, said<\/a>:<\/p>\n\n\n\n

\u201cAcross the board, it\u2019s a good report and I think this will comfort the excessively data-dependent Fed policymakers that policy is sufficiently restrictive to bring inflation down to 2 percent.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/strong><\/em> Gala is announcing a partnership with Stick Figure Productions to distribute Four Down on the Blockchain<\/a><\/p>\n\n\n\n

However, analysts from JPMorgan warned that the risk-reward ratio for many stocks remains unattractive currently and restrictive monetary policy is likely to remain in place for some time. JPMorgan analysts anticipate that most adverse effects resulting from increased interest rates haven't manifested thus far. They highlight an upward trend in consumer loan delinquencies and corporate bankruptcies, suggesting that these patterns are probable to persist unless interest rates are lowered.<\/p>\n\n\n\n

This is likely to drive demand destruction, and weakening pricing power and margins for corporates in the coming quarters, and because of this JPMorgan analysts are adopting a defensive stance, maintaining underweight allocations in equities and cryptocurrencies. Nevertheless, they propose an increase in the investment allocation towards gold due to its potential to rise in value during economic downturns, offering a hedge against potential losses in alternative investments.<\/p>\n\n\n\n

Gold is commonly regarded as a safe-haven asset, particularly amid economic uncertainty or geopolitical instability. Investors typically turn to gold as a means of preserving value when other assets are considered risky.<\/p>\n","post_title":"Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-surged-significantly-after-the-release-of-lower-than-anticipated-inflation-figures","to_ping":"","pinged":"","post_modified":"2023-11-16 20:00:45","post_modified_gmt":"2023-11-16 09:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14319","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11491,"post_author":"14","post_date":"2023-05-04 21:53:10","post_date_gmt":"2023-05-04 11:53:10","post_content":"\n

As widely expected, the U.S. Central Bank raised interest rates by 25bps this Wednesday. It signalled it could pause further increases, giving officials time to assess the fallout from recent bank failures, wait on the resolution of a political stand-off over the U.S. debt ceiling and monitor the course of inflation. The federal funds rate is now in a range of 5% to 5.25%, which is the highest level since 2006. <\/p>\n\n\n\n

The U.S. Central Bank warned that tighter credit conditions for households and businesses are expected to affect economic activity. In the picture below, we can see that even without this rise in interest rates, the federal funds rate was at the highest level since the 2007 financial crisis.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Many analysts and economists are worried that the high-interest rates will push the economy into a recession. It is important to mention that government data showed last week that economic growth in the first quarter slowed sequentially, with real gross domestic product increasing at a 1.1% annual pace, compared with a 2.6% gain in the prior three-month period. With higher interest rates, companies need to spend more money to borrow money to invest in growth. Historically, higher rates lead companies to reduce spending (especially on hiring). <\/p>\n\n\n\n

Many companies could face liquidity problems, and economist David Rosenberg has warned that the U.S. economy is facing two big risks. David Rosenberg said<\/a>:<\/p>\n\n\n\n

\"We have a possible debt default on our hands and a spreading bank crisis. The banking turmoil that started with Silicon Valley Bank's collapse in March remains unresolved, and First Republic's failure and takeover by CEO Jamie Dimon's JPMorgan has reignited worries about broader financial instability. Moreover, political disagreement about raising the U.S. government's borrowing limit is fanning fears of a debt-ceiling crisis.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>United States May Fund Its Deficit By Printing More Money; Could Default By June 1st<\/a><\/p>\n\n\n\n

Higher rates encourage saving over spending and make the debt more costly. Companies with bigger credit or other loans with variable interest rates could be in a difficult situation. We expect to see a meaningful slowdown in economic growth and a weakening of the labour market in the United States in the upcoming months. <\/p>\n\n\n\n

At the same time, Brian Jacobsen, chief economist at Annex Wealth Management, said<\/a> that the manufacturing and housing sectors are in a recession already. The famous investor Jeremy Grantham warned that the U.S. stock market could experience significant losses soon, and a recommendation is that investors should continue to take a defensive investment approach.<\/p>\n\n\n\n

Stocks aren't the only assets that could significantly lose their value. Investors should remember that cryptocurrencies could also be in the situation to make an even bigger fall. The crypto market displayed a high correlation with U.S. equities. If a downtrend is witnessed in the stock market, the same is usually replicated in the crypto-sphere.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Bitcoin Is Close To Testing $30,000 Again; Ethereum Revives Bullish Momentum Above $1,800<\/a><\/p>\n","post_title":"The Fed Raises Interest Rates By 25 BPS This Wednesday; Effects On Crypto And Financial Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-fed-raises-interest-rates-by-25-bps-this-wednesday-effects-on-crypto-and-financial-markets","to_ping":"","pinged":"","post_modified":"2023-05-04 22:08:47","post_modified_gmt":"2023-05-04 12:08:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11491","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11422,"post_author":"12","post_date":"2023-05-02 17:50:37","post_date_gmt":"2023-05-02 07:50:37","post_content":"\n

Ray Dalio, the billionaire founder of one of the world\u2019s largest hedge funds, Bridgewater Associates, was recently\u00a0interviewed<\/a>. He explains that the United States' $31.45T debt may have to be resolved by printing more money, also referred to as currency debasement.<\/p>\n\n\n\n

\u201cSo I think you\u2019re in the part of the cycle where you\u2019ve had the tightening and then the dominoes are beginning to fall. And I think that that\u2019s going to produce more problems.<\/em><\/p>\n\n\n\n

I think when it comes down to it, there\u2019s just too much debt, and we\u2019re adding to it too quickly\u2026 Either that debt will be paid off with hard money, in which case there\u2019s not much printing and so on, or it will be paid off with printing a lot of money to make it easier to pay off. <\/em><\/p>\n\n\n\n

I think in the end, it\u2019s always the case that they print a lot of money in and make it easier to pay off, but you have the reduced value of money.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> Ray Dalio; The Federal Reserve Is Setting Off A \u201cTerrible Calamity\u201d<\/a><\/p>\n\n\n\n

Could The United States Default By June?<\/h2>\n\n\n\n

United States Treasury Secretary, Janet Yellen, wrote to House Speaker Kevin McCarthy;<\/p>\n\n\n\n

\"After reviewing recent federal tax receipts, our best estimate is that we will be unable to continue to satisfy all of the government\u2019s obligations by early June, and potentially as early as June 1, if Congress does not raise or suspend the debt limit before that time.<\/em><\/p>\n\n\n\n

If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests.\"<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> United States May Enter Mild Recession As Yet Another Hike In Fed Rates Expected<\/a><\/p>\n\n\n\n

Yellen warned that waiting until the last minute to take action on this issue would cause harm to \"business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States.\"<\/em> Yellen believes that defaulting on their debt would be a financial catastrophe, raising the cost of borrowing without an end, making future investment \"substantially more costly.\u201d<\/em><\/p>\n","post_title":"United States May Fund Its Deficit By Printing More Money; Could Default By June 1st","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-may-fund-its-deficit-by-printing-more-money-could-default-by-june-1st","to_ping":"","pinged":"","post_modified":"2023-05-04 13:04:05","post_modified_gmt":"2023-05-04 03:04:05","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11422","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

ADVERTISEMENT
\n

The focus of investors has shifted now to the conclusion of the Fed's two-day meeting on Wednesday, eagerly awaiting their decision on interest rates, along with the release of the November producer price index (PPI) data. Jason Pride, chief of investment strategy and research at Glenmede, said<\/a>:<\/p>\n\n\n\n

\"They've (Fed) already taken rates up a lot... they will keep rates up in that range for longer than what the market is currently expecting. Markets do not expect more hikes and are instead focused on rate cuts.\"<\/em><\/p>\n","post_title":"U.S. Stocks Had The Highest Monthly Rally Of 2023 In November. What To Expect From The Rest Of December?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"u-s-stocks-had-the-highest-monthly-rally-of-2023-in-november-what-to-expect-from-the-rest-of-december","to_ping":"","pinged":"","post_modified":"2023-12-13 21:49:51","post_modified_gmt":"2023-12-13 10:49:51","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14611","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14444,"post_author":"14","post_date":"2023-11-23 01:38:54","post_date_gmt":"2023-11-22 14:38:54","post_content":"\n

Investors remain optimistic that the market can resume its bullish momentum in December given that the fourth quarter has historically been one of the best three-month stretches of the year for the S&P 500. Investors anticipated the Federal Reserve<\/a> may have already reached its terminal interest rate; however, the primary driving forces affecting stock prices over recent weeks, inflation and interest rates, will continue to hold significant importance in December.<\/p>\n\n\n\n

\"The
The S&P 500 index's strong advance off its October 27 low continues to make progress<\/em><\/figcaption><\/figure>\n\n\n\n

Positive information is that the annual rate of inflation measured by the Consumer Price Index (CPI), which monitors the expenses of a variety of goods and services -  slowed to 3.2% in October, dropping from September's 3.7% and marking the most subdued rate since July 2023. It is also important to say that inflation is significantly lower than 2022 peak levels which were above 9% and because of this many investors anticipate the Fed could begin to cut interest rates as soon as the first half of 2024.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Federal Reserve Officials Banned From Trading Crypto(Opens in a new browser tab)<\/a><\/p>\n\n\n\n

GDP And Corporate Profits<\/h2>\n\n\n\n

Corporate profits are also the big driver of what the market is likely to do in the near term and because of this investors are closely monitoring third-quarter U.S. earnings. Third-quarter earnings season is essentially at the finish line and of the 480 companies that have reported so far, 80% have beaten analysts' expectations. The inflation and interest rates will continue to significantly impact stock prices in December.<\/p>\n\n\n\n

U.S. economic growth(inflation and interest rates) has been resilient year-to-date and Bill Adams, a chief economist for Comerica Bank, recently said the U.S. economy has been much stronger in 2023 than economists expected. Bill Adams suggests that the annual real GDP is anticipated to reach approximately 2.4% this year, a substantial increase from the Federal Reserve's December 2022 dot plot prediction of 0.5%. However, he also warned that the outcome in the upcoming months will decide if the U.S. economy can smoothly achieve a so-called \"soft landing\" without veering into a recession.<\/p>\n\n\n\n

Deceleration In United States Economic Growth<\/h2>\n\n\n\n

Jeffrey Roach, the chief economist at LPL Financial,<\/a> foresees that most of the negative consequences stemming from higher interest rates have not materialized yet and due to this, he anticipates a deceleration in U.S. economic growth. Market expectations that the Federal Reserve will keep interest rates unchanged at its December meeting currently stand above 90% and any information that the Federal Reserve could start to cut rates in the first quarter of 2024 should be positive for stocks in the short-term period.<\/p>\n\n\n\n

On the other side, JPMorgan strategists believe that the risk-reward ratio for numerous stocks is currently unappealing and according to them, restrictive monetary policy is likely to remain in place for some time which could potentially cause a recession. Considering this scenario, investors worried about a possible U.S. recession can opt for a more defensive strategy in the market. They can enhance their financial flexibility by reducing their stock or cryptocurrency exposure and augmenting their cash reserves.<\/p>\n","post_title":"Investor Optimism Rises In November 2023. Does Strong Buying Activity Indicate The Possibility Of Further Gains In The Coming Weeks?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"investor-optimism-rises-in-november-2023-does-strong-buying-activity-indicate-the-possibility-of-further-gains-in-the-coming-weeks","to_ping":"","pinged":"","post_modified":"2023-11-23 01:39:12","post_modified_gmt":"2023-11-22 14:39:12","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14444","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14319,"post_author":"14","post_date":"2023-11-15 18:02:37","post_date_gmt":"2023-11-15 07:02:37","post_content":"\n

Wall Street's main indexes<\/a> surged significantly on Tuesday following the release of lower-than-anticipated inflation figures, which increased the belief that the Federal Reserve had concluded its interest rate hikes. The annual rate of inflation measured by the Consumer Price Index (CPI), which monitors the expenses of a variety of goods and services -\u00a0 slowed to 3.2% last month, dropping from September's 3.7% and marking the most subdued rate since July.<\/p>\n\n\n\n

Additionally promising, Wall Street's prices held steady over the month following a 0.4% increase in September. Core prices, which exclude the unpredictable food and energy sectors, rose by 4%, slightly slower compared to the rate observed in September. The report signifies a significant achievement for the Fed in its battle against inflation but in the upcoming weeks, policymakers will monitor the service category closely, seeking further deceleration as their interest rate increases impact demand.<\/p>\n\n\n\n

\"Inflation
Inflation edges down in October<\/em><\/figcaption><\/figure>\n\n\n\n

Earlier this month, the Federal Reserve maintained its benchmark interest rate at the highest level in 22 years. Following this Tuesday's report, prominent analysts and economists indicated only a 1 percent probability that the central bank would increase rates during its upcoming policy meeting in December. Gregory Daco, chief economist at EY Parthenon, said<\/a>:<\/p>\n\n\n\n

\u201cAcross the board, it\u2019s a good report and I think this will comfort the excessively data-dependent Fed policymakers that policy is sufficiently restrictive to bring inflation down to 2 percent.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/strong><\/em> Gala is announcing a partnership with Stick Figure Productions to distribute Four Down on the Blockchain<\/a><\/p>\n\n\n\n

However, analysts from JPMorgan warned that the risk-reward ratio for many stocks remains unattractive currently and restrictive monetary policy is likely to remain in place for some time. JPMorgan analysts anticipate that most adverse effects resulting from increased interest rates haven't manifested thus far. They highlight an upward trend in consumer loan delinquencies and corporate bankruptcies, suggesting that these patterns are probable to persist unless interest rates are lowered.<\/p>\n\n\n\n

This is likely to drive demand destruction, and weakening pricing power and margins for corporates in the coming quarters, and because of this JPMorgan analysts are adopting a defensive stance, maintaining underweight allocations in equities and cryptocurrencies. Nevertheless, they propose an increase in the investment allocation towards gold due to its potential to rise in value during economic downturns, offering a hedge against potential losses in alternative investments.<\/p>\n\n\n\n

Gold is commonly regarded as a safe-haven asset, particularly amid economic uncertainty or geopolitical instability. Investors typically turn to gold as a means of preserving value when other assets are considered risky.<\/p>\n","post_title":"Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-surged-significantly-after-the-release-of-lower-than-anticipated-inflation-figures","to_ping":"","pinged":"","post_modified":"2023-11-16 20:00:45","post_modified_gmt":"2023-11-16 09:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14319","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11491,"post_author":"14","post_date":"2023-05-04 21:53:10","post_date_gmt":"2023-05-04 11:53:10","post_content":"\n

As widely expected, the U.S. Central Bank raised interest rates by 25bps this Wednesday. It signalled it could pause further increases, giving officials time to assess the fallout from recent bank failures, wait on the resolution of a political stand-off over the U.S. debt ceiling and monitor the course of inflation. The federal funds rate is now in a range of 5% to 5.25%, which is the highest level since 2006. <\/p>\n\n\n\n

The U.S. Central Bank warned that tighter credit conditions for households and businesses are expected to affect economic activity. In the picture below, we can see that even without this rise in interest rates, the federal funds rate was at the highest level since the 2007 financial crisis.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Many analysts and economists are worried that the high-interest rates will push the economy into a recession. It is important to mention that government data showed last week that economic growth in the first quarter slowed sequentially, with real gross domestic product increasing at a 1.1% annual pace, compared with a 2.6% gain in the prior three-month period. With higher interest rates, companies need to spend more money to borrow money to invest in growth. Historically, higher rates lead companies to reduce spending (especially on hiring). <\/p>\n\n\n\n

Many companies could face liquidity problems, and economist David Rosenberg has warned that the U.S. economy is facing two big risks. David Rosenberg said<\/a>:<\/p>\n\n\n\n

\"We have a possible debt default on our hands and a spreading bank crisis. The banking turmoil that started with Silicon Valley Bank's collapse in March remains unresolved, and First Republic's failure and takeover by CEO Jamie Dimon's JPMorgan has reignited worries about broader financial instability. Moreover, political disagreement about raising the U.S. government's borrowing limit is fanning fears of a debt-ceiling crisis.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>United States May Fund Its Deficit By Printing More Money; Could Default By June 1st<\/a><\/p>\n\n\n\n

Higher rates encourage saving over spending and make the debt more costly. Companies with bigger credit or other loans with variable interest rates could be in a difficult situation. We expect to see a meaningful slowdown in economic growth and a weakening of the labour market in the United States in the upcoming months. <\/p>\n\n\n\n

At the same time, Brian Jacobsen, chief economist at Annex Wealth Management, said<\/a> that the manufacturing and housing sectors are in a recession already. The famous investor Jeremy Grantham warned that the U.S. stock market could experience significant losses soon, and a recommendation is that investors should continue to take a defensive investment approach.<\/p>\n\n\n\n

Stocks aren't the only assets that could significantly lose their value. Investors should remember that cryptocurrencies could also be in the situation to make an even bigger fall. The crypto market displayed a high correlation with U.S. equities. If a downtrend is witnessed in the stock market, the same is usually replicated in the crypto-sphere.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Bitcoin Is Close To Testing $30,000 Again; Ethereum Revives Bullish Momentum Above $1,800<\/a><\/p>\n","post_title":"The Fed Raises Interest Rates By 25 BPS This Wednesday; Effects On Crypto And Financial Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-fed-raises-interest-rates-by-25-bps-this-wednesday-effects-on-crypto-and-financial-markets","to_ping":"","pinged":"","post_modified":"2023-05-04 22:08:47","post_modified_gmt":"2023-05-04 12:08:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11491","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11422,"post_author":"12","post_date":"2023-05-02 17:50:37","post_date_gmt":"2023-05-02 07:50:37","post_content":"\n

Ray Dalio, the billionaire founder of one of the world\u2019s largest hedge funds, Bridgewater Associates, was recently\u00a0interviewed<\/a>. He explains that the United States' $31.45T debt may have to be resolved by printing more money, also referred to as currency debasement.<\/p>\n\n\n\n

\u201cSo I think you\u2019re in the part of the cycle where you\u2019ve had the tightening and then the dominoes are beginning to fall. And I think that that\u2019s going to produce more problems.<\/em><\/p>\n\n\n\n

I think when it comes down to it, there\u2019s just too much debt, and we\u2019re adding to it too quickly\u2026 Either that debt will be paid off with hard money, in which case there\u2019s not much printing and so on, or it will be paid off with printing a lot of money to make it easier to pay off. <\/em><\/p>\n\n\n\n

I think in the end, it\u2019s always the case that they print a lot of money in and make it easier to pay off, but you have the reduced value of money.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> Ray Dalio; The Federal Reserve Is Setting Off A \u201cTerrible Calamity\u201d<\/a><\/p>\n\n\n\n

Could The United States Default By June?<\/h2>\n\n\n\n

United States Treasury Secretary, Janet Yellen, wrote to House Speaker Kevin McCarthy;<\/p>\n\n\n\n

\"After reviewing recent federal tax receipts, our best estimate is that we will be unable to continue to satisfy all of the government\u2019s obligations by early June, and potentially as early as June 1, if Congress does not raise or suspend the debt limit before that time.<\/em><\/p>\n\n\n\n

If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests.\"<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> United States May Enter Mild Recession As Yet Another Hike In Fed Rates Expected<\/a><\/p>\n\n\n\n

Yellen warned that waiting until the last minute to take action on this issue would cause harm to \"business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States.\"<\/em> Yellen believes that defaulting on their debt would be a financial catastrophe, raising the cost of borrowing without an end, making future investment \"substantially more costly.\u201d<\/em><\/p>\n","post_title":"United States May Fund Its Deficit By Printing More Money; Could Default By June 1st","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-may-fund-its-deficit-by-printing-more-money-could-default-by-june-1st","to_ping":"","pinged":"","post_modified":"2023-05-04 13:04:05","post_modified_gmt":"2023-05-04 03:04:05","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11422","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

Most Read

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\n

However, certain analysts are expressing skepticism. JPMorgan Asset Management advises investors to remain cautious due to the possibility of a recession, while Soci\u00e9t\u00e9 G\u00e9n\u00e9rale cautions them to brace for a volatile 2024, predicting that the index will fluctuate between nearing its record high, experiencing a decline, and subsequently rebounding.<\/p>\n\n\n\n

The focus of investors has shifted now to the conclusion of the Fed's two-day meeting on Wednesday, eagerly awaiting their decision on interest rates, along with the release of the November producer price index (PPI) data. Jason Pride, chief of investment strategy and research at Glenmede, said<\/a>:<\/p>\n\n\n\n

\"They've (Fed) already taken rates up a lot... they will keep rates up in that range for longer than what the market is currently expecting. Markets do not expect more hikes and are instead focused on rate cuts.\"<\/em><\/p>\n","post_title":"U.S. Stocks Had The Highest Monthly Rally Of 2023 In November. What To Expect From The Rest Of December?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"u-s-stocks-had-the-highest-monthly-rally-of-2023-in-november-what-to-expect-from-the-rest-of-december","to_ping":"","pinged":"","post_modified":"2023-12-13 21:49:51","post_modified_gmt":"2023-12-13 10:49:51","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14611","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14444,"post_author":"14","post_date":"2023-11-23 01:38:54","post_date_gmt":"2023-11-22 14:38:54","post_content":"\n

Investors remain optimistic that the market can resume its bullish momentum in December given that the fourth quarter has historically been one of the best three-month stretches of the year for the S&P 500. Investors anticipated the Federal Reserve<\/a> may have already reached its terminal interest rate; however, the primary driving forces affecting stock prices over recent weeks, inflation and interest rates, will continue to hold significant importance in December.<\/p>\n\n\n\n

\"The
The S&P 500 index's strong advance off its October 27 low continues to make progress<\/em><\/figcaption><\/figure>\n\n\n\n

Positive information is that the annual rate of inflation measured by the Consumer Price Index (CPI), which monitors the expenses of a variety of goods and services -  slowed to 3.2% in October, dropping from September's 3.7% and marking the most subdued rate since July 2023. It is also important to say that inflation is significantly lower than 2022 peak levels which were above 9% and because of this many investors anticipate the Fed could begin to cut interest rates as soon as the first half of 2024.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Federal Reserve Officials Banned From Trading Crypto(Opens in a new browser tab)<\/a><\/p>\n\n\n\n

GDP And Corporate Profits<\/h2>\n\n\n\n

Corporate profits are also the big driver of what the market is likely to do in the near term and because of this investors are closely monitoring third-quarter U.S. earnings. Third-quarter earnings season is essentially at the finish line and of the 480 companies that have reported so far, 80% have beaten analysts' expectations. The inflation and interest rates will continue to significantly impact stock prices in December.<\/p>\n\n\n\n

U.S. economic growth(inflation and interest rates) has been resilient year-to-date and Bill Adams, a chief economist for Comerica Bank, recently said the U.S. economy has been much stronger in 2023 than economists expected. Bill Adams suggests that the annual real GDP is anticipated to reach approximately 2.4% this year, a substantial increase from the Federal Reserve's December 2022 dot plot prediction of 0.5%. However, he also warned that the outcome in the upcoming months will decide if the U.S. economy can smoothly achieve a so-called \"soft landing\" without veering into a recession.<\/p>\n\n\n\n

Deceleration In United States Economic Growth<\/h2>\n\n\n\n

Jeffrey Roach, the chief economist at LPL Financial,<\/a> foresees that most of the negative consequences stemming from higher interest rates have not materialized yet and due to this, he anticipates a deceleration in U.S. economic growth. Market expectations that the Federal Reserve will keep interest rates unchanged at its December meeting currently stand above 90% and any information that the Federal Reserve could start to cut rates in the first quarter of 2024 should be positive for stocks in the short-term period.<\/p>\n\n\n\n

On the other side, JPMorgan strategists believe that the risk-reward ratio for numerous stocks is currently unappealing and according to them, restrictive monetary policy is likely to remain in place for some time which could potentially cause a recession. Considering this scenario, investors worried about a possible U.S. recession can opt for a more defensive strategy in the market. They can enhance their financial flexibility by reducing their stock or cryptocurrency exposure and augmenting their cash reserves.<\/p>\n","post_title":"Investor Optimism Rises In November 2023. Does Strong Buying Activity Indicate The Possibility Of Further Gains In The Coming Weeks?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"investor-optimism-rises-in-november-2023-does-strong-buying-activity-indicate-the-possibility-of-further-gains-in-the-coming-weeks","to_ping":"","pinged":"","post_modified":"2023-11-23 01:39:12","post_modified_gmt":"2023-11-22 14:39:12","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14444","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14319,"post_author":"14","post_date":"2023-11-15 18:02:37","post_date_gmt":"2023-11-15 07:02:37","post_content":"\n

Wall Street's main indexes<\/a> surged significantly on Tuesday following the release of lower-than-anticipated inflation figures, which increased the belief that the Federal Reserve had concluded its interest rate hikes. The annual rate of inflation measured by the Consumer Price Index (CPI), which monitors the expenses of a variety of goods and services -\u00a0 slowed to 3.2% last month, dropping from September's 3.7% and marking the most subdued rate since July.<\/p>\n\n\n\n

Additionally promising, Wall Street's prices held steady over the month following a 0.4% increase in September. Core prices, which exclude the unpredictable food and energy sectors, rose by 4%, slightly slower compared to the rate observed in September. The report signifies a significant achievement for the Fed in its battle against inflation but in the upcoming weeks, policymakers will monitor the service category closely, seeking further deceleration as their interest rate increases impact demand.<\/p>\n\n\n\n

\"Inflation
Inflation edges down in October<\/em><\/figcaption><\/figure>\n\n\n\n

Earlier this month, the Federal Reserve maintained its benchmark interest rate at the highest level in 22 years. Following this Tuesday's report, prominent analysts and economists indicated only a 1 percent probability that the central bank would increase rates during its upcoming policy meeting in December. Gregory Daco, chief economist at EY Parthenon, said<\/a>:<\/p>\n\n\n\n

\u201cAcross the board, it\u2019s a good report and I think this will comfort the excessively data-dependent Fed policymakers that policy is sufficiently restrictive to bring inflation down to 2 percent.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/strong><\/em> Gala is announcing a partnership with Stick Figure Productions to distribute Four Down on the Blockchain<\/a><\/p>\n\n\n\n

However, analysts from JPMorgan warned that the risk-reward ratio for many stocks remains unattractive currently and restrictive monetary policy is likely to remain in place for some time. JPMorgan analysts anticipate that most adverse effects resulting from increased interest rates haven't manifested thus far. They highlight an upward trend in consumer loan delinquencies and corporate bankruptcies, suggesting that these patterns are probable to persist unless interest rates are lowered.<\/p>\n\n\n\n

This is likely to drive demand destruction, and weakening pricing power and margins for corporates in the coming quarters, and because of this JPMorgan analysts are adopting a defensive stance, maintaining underweight allocations in equities and cryptocurrencies. Nevertheless, they propose an increase in the investment allocation towards gold due to its potential to rise in value during economic downturns, offering a hedge against potential losses in alternative investments.<\/p>\n\n\n\n

Gold is commonly regarded as a safe-haven asset, particularly amid economic uncertainty or geopolitical instability. Investors typically turn to gold as a means of preserving value when other assets are considered risky.<\/p>\n","post_title":"Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-surged-significantly-after-the-release-of-lower-than-anticipated-inflation-figures","to_ping":"","pinged":"","post_modified":"2023-11-16 20:00:45","post_modified_gmt":"2023-11-16 09:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14319","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11491,"post_author":"14","post_date":"2023-05-04 21:53:10","post_date_gmt":"2023-05-04 11:53:10","post_content":"\n

As widely expected, the U.S. Central Bank raised interest rates by 25bps this Wednesday. It signalled it could pause further increases, giving officials time to assess the fallout from recent bank failures, wait on the resolution of a political stand-off over the U.S. debt ceiling and monitor the course of inflation. The federal funds rate is now in a range of 5% to 5.25%, which is the highest level since 2006. <\/p>\n\n\n\n

The U.S. Central Bank warned that tighter credit conditions for households and businesses are expected to affect economic activity. In the picture below, we can see that even without this rise in interest rates, the federal funds rate was at the highest level since the 2007 financial crisis.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Many analysts and economists are worried that the high-interest rates will push the economy into a recession. It is important to mention that government data showed last week that economic growth in the first quarter slowed sequentially, with real gross domestic product increasing at a 1.1% annual pace, compared with a 2.6% gain in the prior three-month period. With higher interest rates, companies need to spend more money to borrow money to invest in growth. Historically, higher rates lead companies to reduce spending (especially on hiring). <\/p>\n\n\n\n

Many companies could face liquidity problems, and economist David Rosenberg has warned that the U.S. economy is facing two big risks. David Rosenberg said<\/a>:<\/p>\n\n\n\n

\"We have a possible debt default on our hands and a spreading bank crisis. The banking turmoil that started with Silicon Valley Bank's collapse in March remains unresolved, and First Republic's failure and takeover by CEO Jamie Dimon's JPMorgan has reignited worries about broader financial instability. Moreover, political disagreement about raising the U.S. government's borrowing limit is fanning fears of a debt-ceiling crisis.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>United States May Fund Its Deficit By Printing More Money; Could Default By June 1st<\/a><\/p>\n\n\n\n

Higher rates encourage saving over spending and make the debt more costly. Companies with bigger credit or other loans with variable interest rates could be in a difficult situation. We expect to see a meaningful slowdown in economic growth and a weakening of the labour market in the United States in the upcoming months. <\/p>\n\n\n\n

At the same time, Brian Jacobsen, chief economist at Annex Wealth Management, said<\/a> that the manufacturing and housing sectors are in a recession already. The famous investor Jeremy Grantham warned that the U.S. stock market could experience significant losses soon, and a recommendation is that investors should continue to take a defensive investment approach.<\/p>\n\n\n\n

Stocks aren't the only assets that could significantly lose their value. Investors should remember that cryptocurrencies could also be in the situation to make an even bigger fall. The crypto market displayed a high correlation with U.S. equities. If a downtrend is witnessed in the stock market, the same is usually replicated in the crypto-sphere.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Bitcoin Is Close To Testing $30,000 Again; Ethereum Revives Bullish Momentum Above $1,800<\/a><\/p>\n","post_title":"The Fed Raises Interest Rates By 25 BPS This Wednesday; Effects On Crypto And Financial Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-fed-raises-interest-rates-by-25-bps-this-wednesday-effects-on-crypto-and-financial-markets","to_ping":"","pinged":"","post_modified":"2023-05-04 22:08:47","post_modified_gmt":"2023-05-04 12:08:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11491","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11422,"post_author":"12","post_date":"2023-05-02 17:50:37","post_date_gmt":"2023-05-02 07:50:37","post_content":"\n

Ray Dalio, the billionaire founder of one of the world\u2019s largest hedge funds, Bridgewater Associates, was recently\u00a0interviewed<\/a>. He explains that the United States' $31.45T debt may have to be resolved by printing more money, also referred to as currency debasement.<\/p>\n\n\n\n

\u201cSo I think you\u2019re in the part of the cycle where you\u2019ve had the tightening and then the dominoes are beginning to fall. And I think that that\u2019s going to produce more problems.<\/em><\/p>\n\n\n\n

I think when it comes down to it, there\u2019s just too much debt, and we\u2019re adding to it too quickly\u2026 Either that debt will be paid off with hard money, in which case there\u2019s not much printing and so on, or it will be paid off with printing a lot of money to make it easier to pay off. <\/em><\/p>\n\n\n\n

I think in the end, it\u2019s always the case that they print a lot of money in and make it easier to pay off, but you have the reduced value of money.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> Ray Dalio; The Federal Reserve Is Setting Off A \u201cTerrible Calamity\u201d<\/a><\/p>\n\n\n\n

Could The United States Default By June?<\/h2>\n\n\n\n

United States Treasury Secretary, Janet Yellen, wrote to House Speaker Kevin McCarthy;<\/p>\n\n\n\n

\"After reviewing recent federal tax receipts, our best estimate is that we will be unable to continue to satisfy all of the government\u2019s obligations by early June, and potentially as early as June 1, if Congress does not raise or suspend the debt limit before that time.<\/em><\/p>\n\n\n\n

If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests.\"<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> United States May Enter Mild Recession As Yet Another Hike In Fed Rates Expected<\/a><\/p>\n\n\n\n

Yellen warned that waiting until the last minute to take action on this issue would cause harm to \"business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States.\"<\/em> Yellen believes that defaulting on their debt would be a financial catastrophe, raising the cost of borrowing without an end, making future investment \"substantially more costly.\u201d<\/em><\/p>\n","post_title":"United States May Fund Its Deficit By Printing More Money; Could Default By June 1st","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-may-fund-its-deficit-by-printing-more-money-could-default-by-june-1st","to_ping":"","pinged":"","post_modified":"2023-05-04 13:04:05","post_modified_gmt":"2023-05-04 03:04:05","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11422","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

ADVERTISEMENT
\n

Analysts Index Review<\/h2>\n\n\n\n

However, certain analysts are expressing skepticism. JPMorgan Asset Management advises investors to remain cautious due to the possibility of a recession, while Soci\u00e9t\u00e9 G\u00e9n\u00e9rale cautions them to brace for a volatile 2024, predicting that the index will fluctuate between nearing its record high, experiencing a decline, and subsequently rebounding.<\/p>\n\n\n\n

The focus of investors has shifted now to the conclusion of the Fed's two-day meeting on Wednesday, eagerly awaiting their decision on interest rates, along with the release of the November producer price index (PPI) data. Jason Pride, chief of investment strategy and research at Glenmede, said<\/a>:<\/p>\n\n\n\n

\"They've (Fed) already taken rates up a lot... they will keep rates up in that range for longer than what the market is currently expecting. Markets do not expect more hikes and are instead focused on rate cuts.\"<\/em><\/p>\n","post_title":"U.S. Stocks Had The Highest Monthly Rally Of 2023 In November. What To Expect From The Rest Of December?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"u-s-stocks-had-the-highest-monthly-rally-of-2023-in-november-what-to-expect-from-the-rest-of-december","to_ping":"","pinged":"","post_modified":"2023-12-13 21:49:51","post_modified_gmt":"2023-12-13 10:49:51","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14611","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14444,"post_author":"14","post_date":"2023-11-23 01:38:54","post_date_gmt":"2023-11-22 14:38:54","post_content":"\n

Investors remain optimistic that the market can resume its bullish momentum in December given that the fourth quarter has historically been one of the best three-month stretches of the year for the S&P 500. Investors anticipated the Federal Reserve<\/a> may have already reached its terminal interest rate; however, the primary driving forces affecting stock prices over recent weeks, inflation and interest rates, will continue to hold significant importance in December.<\/p>\n\n\n\n

\"The
The S&P 500 index's strong advance off its October 27 low continues to make progress<\/em><\/figcaption><\/figure>\n\n\n\n

Positive information is that the annual rate of inflation measured by the Consumer Price Index (CPI), which monitors the expenses of a variety of goods and services -  slowed to 3.2% in October, dropping from September's 3.7% and marking the most subdued rate since July 2023. It is also important to say that inflation is significantly lower than 2022 peak levels which were above 9% and because of this many investors anticipate the Fed could begin to cut interest rates as soon as the first half of 2024.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Federal Reserve Officials Banned From Trading Crypto(Opens in a new browser tab)<\/a><\/p>\n\n\n\n

GDP And Corporate Profits<\/h2>\n\n\n\n

Corporate profits are also the big driver of what the market is likely to do in the near term and because of this investors are closely monitoring third-quarter U.S. earnings. Third-quarter earnings season is essentially at the finish line and of the 480 companies that have reported so far, 80% have beaten analysts' expectations. The inflation and interest rates will continue to significantly impact stock prices in December.<\/p>\n\n\n\n

U.S. economic growth(inflation and interest rates) has been resilient year-to-date and Bill Adams, a chief economist for Comerica Bank, recently said the U.S. economy has been much stronger in 2023 than economists expected. Bill Adams suggests that the annual real GDP is anticipated to reach approximately 2.4% this year, a substantial increase from the Federal Reserve's December 2022 dot plot prediction of 0.5%. However, he also warned that the outcome in the upcoming months will decide if the U.S. economy can smoothly achieve a so-called \"soft landing\" without veering into a recession.<\/p>\n\n\n\n

Deceleration In United States Economic Growth<\/h2>\n\n\n\n

Jeffrey Roach, the chief economist at LPL Financial,<\/a> foresees that most of the negative consequences stemming from higher interest rates have not materialized yet and due to this, he anticipates a deceleration in U.S. economic growth. Market expectations that the Federal Reserve will keep interest rates unchanged at its December meeting currently stand above 90% and any information that the Federal Reserve could start to cut rates in the first quarter of 2024 should be positive for stocks in the short-term period.<\/p>\n\n\n\n

On the other side, JPMorgan strategists believe that the risk-reward ratio for numerous stocks is currently unappealing and according to them, restrictive monetary policy is likely to remain in place for some time which could potentially cause a recession. Considering this scenario, investors worried about a possible U.S. recession can opt for a more defensive strategy in the market. They can enhance their financial flexibility by reducing their stock or cryptocurrency exposure and augmenting their cash reserves.<\/p>\n","post_title":"Investor Optimism Rises In November 2023. Does Strong Buying Activity Indicate The Possibility Of Further Gains In The Coming Weeks?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"investor-optimism-rises-in-november-2023-does-strong-buying-activity-indicate-the-possibility-of-further-gains-in-the-coming-weeks","to_ping":"","pinged":"","post_modified":"2023-11-23 01:39:12","post_modified_gmt":"2023-11-22 14:39:12","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14444","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14319,"post_author":"14","post_date":"2023-11-15 18:02:37","post_date_gmt":"2023-11-15 07:02:37","post_content":"\n

Wall Street's main indexes<\/a> surged significantly on Tuesday following the release of lower-than-anticipated inflation figures, which increased the belief that the Federal Reserve had concluded its interest rate hikes. The annual rate of inflation measured by the Consumer Price Index (CPI), which monitors the expenses of a variety of goods and services -\u00a0 slowed to 3.2% last month, dropping from September's 3.7% and marking the most subdued rate since July.<\/p>\n\n\n\n

Additionally promising, Wall Street's prices held steady over the month following a 0.4% increase in September. Core prices, which exclude the unpredictable food and energy sectors, rose by 4%, slightly slower compared to the rate observed in September. The report signifies a significant achievement for the Fed in its battle against inflation but in the upcoming weeks, policymakers will monitor the service category closely, seeking further deceleration as their interest rate increases impact demand.<\/p>\n\n\n\n

\"Inflation
Inflation edges down in October<\/em><\/figcaption><\/figure>\n\n\n\n

Earlier this month, the Federal Reserve maintained its benchmark interest rate at the highest level in 22 years. Following this Tuesday's report, prominent analysts and economists indicated only a 1 percent probability that the central bank would increase rates during its upcoming policy meeting in December. Gregory Daco, chief economist at EY Parthenon, said<\/a>:<\/p>\n\n\n\n

\u201cAcross the board, it\u2019s a good report and I think this will comfort the excessively data-dependent Fed policymakers that policy is sufficiently restrictive to bring inflation down to 2 percent.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/strong><\/em> Gala is announcing a partnership with Stick Figure Productions to distribute Four Down on the Blockchain<\/a><\/p>\n\n\n\n

However, analysts from JPMorgan warned that the risk-reward ratio for many stocks remains unattractive currently and restrictive monetary policy is likely to remain in place for some time. JPMorgan analysts anticipate that most adverse effects resulting from increased interest rates haven't manifested thus far. They highlight an upward trend in consumer loan delinquencies and corporate bankruptcies, suggesting that these patterns are probable to persist unless interest rates are lowered.<\/p>\n\n\n\n

This is likely to drive demand destruction, and weakening pricing power and margins for corporates in the coming quarters, and because of this JPMorgan analysts are adopting a defensive stance, maintaining underweight allocations in equities and cryptocurrencies. Nevertheless, they propose an increase in the investment allocation towards gold due to its potential to rise in value during economic downturns, offering a hedge against potential losses in alternative investments.<\/p>\n\n\n\n

Gold is commonly regarded as a safe-haven asset, particularly amid economic uncertainty or geopolitical instability. Investors typically turn to gold as a means of preserving value when other assets are considered risky.<\/p>\n","post_title":"Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-surged-significantly-after-the-release-of-lower-than-anticipated-inflation-figures","to_ping":"","pinged":"","post_modified":"2023-11-16 20:00:45","post_modified_gmt":"2023-11-16 09:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14319","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11491,"post_author":"14","post_date":"2023-05-04 21:53:10","post_date_gmt":"2023-05-04 11:53:10","post_content":"\n

As widely expected, the U.S. Central Bank raised interest rates by 25bps this Wednesday. It signalled it could pause further increases, giving officials time to assess the fallout from recent bank failures, wait on the resolution of a political stand-off over the U.S. debt ceiling and monitor the course of inflation. The federal funds rate is now in a range of 5% to 5.25%, which is the highest level since 2006. <\/p>\n\n\n\n

The U.S. Central Bank warned that tighter credit conditions for households and businesses are expected to affect economic activity. In the picture below, we can see that even without this rise in interest rates, the federal funds rate was at the highest level since the 2007 financial crisis.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Many analysts and economists are worried that the high-interest rates will push the economy into a recession. It is important to mention that government data showed last week that economic growth in the first quarter slowed sequentially, with real gross domestic product increasing at a 1.1% annual pace, compared with a 2.6% gain in the prior three-month period. With higher interest rates, companies need to spend more money to borrow money to invest in growth. Historically, higher rates lead companies to reduce spending (especially on hiring). <\/p>\n\n\n\n

Many companies could face liquidity problems, and economist David Rosenberg has warned that the U.S. economy is facing two big risks. David Rosenberg said<\/a>:<\/p>\n\n\n\n

\"We have a possible debt default on our hands and a spreading bank crisis. The banking turmoil that started with Silicon Valley Bank's collapse in March remains unresolved, and First Republic's failure and takeover by CEO Jamie Dimon's JPMorgan has reignited worries about broader financial instability. Moreover, political disagreement about raising the U.S. government's borrowing limit is fanning fears of a debt-ceiling crisis.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>United States May Fund Its Deficit By Printing More Money; Could Default By June 1st<\/a><\/p>\n\n\n\n

Higher rates encourage saving over spending and make the debt more costly. Companies with bigger credit or other loans with variable interest rates could be in a difficult situation. We expect to see a meaningful slowdown in economic growth and a weakening of the labour market in the United States in the upcoming months. <\/p>\n\n\n\n

At the same time, Brian Jacobsen, chief economist at Annex Wealth Management, said<\/a> that the manufacturing and housing sectors are in a recession already. The famous investor Jeremy Grantham warned that the U.S. stock market could experience significant losses soon, and a recommendation is that investors should continue to take a defensive investment approach.<\/p>\n\n\n\n

Stocks aren't the only assets that could significantly lose their value. Investors should remember that cryptocurrencies could also be in the situation to make an even bigger fall. The crypto market displayed a high correlation with U.S. equities. If a downtrend is witnessed in the stock market, the same is usually replicated in the crypto-sphere.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Bitcoin Is Close To Testing $30,000 Again; Ethereum Revives Bullish Momentum Above $1,800<\/a><\/p>\n","post_title":"The Fed Raises Interest Rates By 25 BPS This Wednesday; Effects On Crypto And Financial Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-fed-raises-interest-rates-by-25-bps-this-wednesday-effects-on-crypto-and-financial-markets","to_ping":"","pinged":"","post_modified":"2023-05-04 22:08:47","post_modified_gmt":"2023-05-04 12:08:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11491","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11422,"post_author":"12","post_date":"2023-05-02 17:50:37","post_date_gmt":"2023-05-02 07:50:37","post_content":"\n

Ray Dalio, the billionaire founder of one of the world\u2019s largest hedge funds, Bridgewater Associates, was recently\u00a0interviewed<\/a>. He explains that the United States' $31.45T debt may have to be resolved by printing more money, also referred to as currency debasement.<\/p>\n\n\n\n

\u201cSo I think you\u2019re in the part of the cycle where you\u2019ve had the tightening and then the dominoes are beginning to fall. And I think that that\u2019s going to produce more problems.<\/em><\/p>\n\n\n\n

I think when it comes down to it, there\u2019s just too much debt, and we\u2019re adding to it too quickly\u2026 Either that debt will be paid off with hard money, in which case there\u2019s not much printing and so on, or it will be paid off with printing a lot of money to make it easier to pay off. <\/em><\/p>\n\n\n\n

I think in the end, it\u2019s always the case that they print a lot of money in and make it easier to pay off, but you have the reduced value of money.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> Ray Dalio; The Federal Reserve Is Setting Off A \u201cTerrible Calamity\u201d<\/a><\/p>\n\n\n\n

Could The United States Default By June?<\/h2>\n\n\n\n

United States Treasury Secretary, Janet Yellen, wrote to House Speaker Kevin McCarthy;<\/p>\n\n\n\n

\"After reviewing recent federal tax receipts, our best estimate is that we will be unable to continue to satisfy all of the government\u2019s obligations by early June, and potentially as early as June 1, if Congress does not raise or suspend the debt limit before that time.<\/em><\/p>\n\n\n\n

If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests.\"<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> United States May Enter Mild Recession As Yet Another Hike In Fed Rates Expected<\/a><\/p>\n\n\n\n

Yellen warned that waiting until the last minute to take action on this issue would cause harm to \"business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States.\"<\/em> Yellen believes that defaulting on their debt would be a financial catastrophe, raising the cost of borrowing without an end, making future investment \"substantially more costly.\u201d<\/em><\/p>\n","post_title":"United States May Fund Its Deficit By Printing More Money; Could Default By June 1st","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-may-fund-its-deficit-by-printing-more-money-could-default-by-june-1st","to_ping":"","pinged":"","post_modified":"2023-05-04 13:04:05","post_modified_gmt":"2023-05-04 03:04:05","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11422","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

ADVERTISEMENT
\n

Encouragingly, Bank of America's<\/a> Savita Subramanian anticipates ongoing positive momentum for the S&P 500, projecting it to reach a record-breaking 5,000 points by year-end. Additionally, both BMO's Brian Belski and Deutsche Bank's Binky Chadha have established price targets of 5,100 points each.<\/p>\n\n\n\n

Analysts Index Review<\/h2>\n\n\n\n

However, certain analysts are expressing skepticism. JPMorgan Asset Management advises investors to remain cautious due to the possibility of a recession, while Soci\u00e9t\u00e9 G\u00e9n\u00e9rale cautions them to brace for a volatile 2024, predicting that the index will fluctuate between nearing its record high, experiencing a decline, and subsequently rebounding.<\/p>\n\n\n\n

The focus of investors has shifted now to the conclusion of the Fed's two-day meeting on Wednesday, eagerly awaiting their decision on interest rates, along with the release of the November producer price index (PPI) data. Jason Pride, chief of investment strategy and research at Glenmede, said<\/a>:<\/p>\n\n\n\n

\"They've (Fed) already taken rates up a lot... they will keep rates up in that range for longer than what the market is currently expecting. Markets do not expect more hikes and are instead focused on rate cuts.\"<\/em><\/p>\n","post_title":"U.S. Stocks Had The Highest Monthly Rally Of 2023 In November. What To Expect From The Rest Of December?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"u-s-stocks-had-the-highest-monthly-rally-of-2023-in-november-what-to-expect-from-the-rest-of-december","to_ping":"","pinged":"","post_modified":"2023-12-13 21:49:51","post_modified_gmt":"2023-12-13 10:49:51","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14611","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14444,"post_author":"14","post_date":"2023-11-23 01:38:54","post_date_gmt":"2023-11-22 14:38:54","post_content":"\n

Investors remain optimistic that the market can resume its bullish momentum in December given that the fourth quarter has historically been one of the best three-month stretches of the year for the S&P 500. Investors anticipated the Federal Reserve<\/a> may have already reached its terminal interest rate; however, the primary driving forces affecting stock prices over recent weeks, inflation and interest rates, will continue to hold significant importance in December.<\/p>\n\n\n\n

\"The
The S&P 500 index's strong advance off its October 27 low continues to make progress<\/em><\/figcaption><\/figure>\n\n\n\n

Positive information is that the annual rate of inflation measured by the Consumer Price Index (CPI), which monitors the expenses of a variety of goods and services -  slowed to 3.2% in October, dropping from September's 3.7% and marking the most subdued rate since July 2023. It is also important to say that inflation is significantly lower than 2022 peak levels which were above 9% and because of this many investors anticipate the Fed could begin to cut interest rates as soon as the first half of 2024.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Federal Reserve Officials Banned From Trading Crypto(Opens in a new browser tab)<\/a><\/p>\n\n\n\n

GDP And Corporate Profits<\/h2>\n\n\n\n

Corporate profits are also the big driver of what the market is likely to do in the near term and because of this investors are closely monitoring third-quarter U.S. earnings. Third-quarter earnings season is essentially at the finish line and of the 480 companies that have reported so far, 80% have beaten analysts' expectations. The inflation and interest rates will continue to significantly impact stock prices in December.<\/p>\n\n\n\n

U.S. economic growth(inflation and interest rates) has been resilient year-to-date and Bill Adams, a chief economist for Comerica Bank, recently said the U.S. economy has been much stronger in 2023 than economists expected. Bill Adams suggests that the annual real GDP is anticipated to reach approximately 2.4% this year, a substantial increase from the Federal Reserve's December 2022 dot plot prediction of 0.5%. However, he also warned that the outcome in the upcoming months will decide if the U.S. economy can smoothly achieve a so-called \"soft landing\" without veering into a recession.<\/p>\n\n\n\n

Deceleration In United States Economic Growth<\/h2>\n\n\n\n

Jeffrey Roach, the chief economist at LPL Financial,<\/a> foresees that most of the negative consequences stemming from higher interest rates have not materialized yet and due to this, he anticipates a deceleration in U.S. economic growth. Market expectations that the Federal Reserve will keep interest rates unchanged at its December meeting currently stand above 90% and any information that the Federal Reserve could start to cut rates in the first quarter of 2024 should be positive for stocks in the short-term period.<\/p>\n\n\n\n

On the other side, JPMorgan strategists believe that the risk-reward ratio for numerous stocks is currently unappealing and according to them, restrictive monetary policy is likely to remain in place for some time which could potentially cause a recession. Considering this scenario, investors worried about a possible U.S. recession can opt for a more defensive strategy in the market. They can enhance their financial flexibility by reducing their stock or cryptocurrency exposure and augmenting their cash reserves.<\/p>\n","post_title":"Investor Optimism Rises In November 2023. Does Strong Buying Activity Indicate The Possibility Of Further Gains In The Coming Weeks?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"investor-optimism-rises-in-november-2023-does-strong-buying-activity-indicate-the-possibility-of-further-gains-in-the-coming-weeks","to_ping":"","pinged":"","post_modified":"2023-11-23 01:39:12","post_modified_gmt":"2023-11-22 14:39:12","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14444","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14319,"post_author":"14","post_date":"2023-11-15 18:02:37","post_date_gmt":"2023-11-15 07:02:37","post_content":"\n

Wall Street's main indexes<\/a> surged significantly on Tuesday following the release of lower-than-anticipated inflation figures, which increased the belief that the Federal Reserve had concluded its interest rate hikes. The annual rate of inflation measured by the Consumer Price Index (CPI), which monitors the expenses of a variety of goods and services -\u00a0 slowed to 3.2% last month, dropping from September's 3.7% and marking the most subdued rate since July.<\/p>\n\n\n\n

Additionally promising, Wall Street's prices held steady over the month following a 0.4% increase in September. Core prices, which exclude the unpredictable food and energy sectors, rose by 4%, slightly slower compared to the rate observed in September. The report signifies a significant achievement for the Fed in its battle against inflation but in the upcoming weeks, policymakers will monitor the service category closely, seeking further deceleration as their interest rate increases impact demand.<\/p>\n\n\n\n

\"Inflation
Inflation edges down in October<\/em><\/figcaption><\/figure>\n\n\n\n

Earlier this month, the Federal Reserve maintained its benchmark interest rate at the highest level in 22 years. Following this Tuesday's report, prominent analysts and economists indicated only a 1 percent probability that the central bank would increase rates during its upcoming policy meeting in December. Gregory Daco, chief economist at EY Parthenon, said<\/a>:<\/p>\n\n\n\n

\u201cAcross the board, it\u2019s a good report and I think this will comfort the excessively data-dependent Fed policymakers that policy is sufficiently restrictive to bring inflation down to 2 percent.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/strong><\/em> Gala is announcing a partnership with Stick Figure Productions to distribute Four Down on the Blockchain<\/a><\/p>\n\n\n\n

However, analysts from JPMorgan warned that the risk-reward ratio for many stocks remains unattractive currently and restrictive monetary policy is likely to remain in place for some time. JPMorgan analysts anticipate that most adverse effects resulting from increased interest rates haven't manifested thus far. They highlight an upward trend in consumer loan delinquencies and corporate bankruptcies, suggesting that these patterns are probable to persist unless interest rates are lowered.<\/p>\n\n\n\n

This is likely to drive demand destruction, and weakening pricing power and margins for corporates in the coming quarters, and because of this JPMorgan analysts are adopting a defensive stance, maintaining underweight allocations in equities and cryptocurrencies. Nevertheless, they propose an increase in the investment allocation towards gold due to its potential to rise in value during economic downturns, offering a hedge against potential losses in alternative investments.<\/p>\n\n\n\n

Gold is commonly regarded as a safe-haven asset, particularly amid economic uncertainty or geopolitical instability. Investors typically turn to gold as a means of preserving value when other assets are considered risky.<\/p>\n","post_title":"Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-surged-significantly-after-the-release-of-lower-than-anticipated-inflation-figures","to_ping":"","pinged":"","post_modified":"2023-11-16 20:00:45","post_modified_gmt":"2023-11-16 09:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14319","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11491,"post_author":"14","post_date":"2023-05-04 21:53:10","post_date_gmt":"2023-05-04 11:53:10","post_content":"\n

As widely expected, the U.S. Central Bank raised interest rates by 25bps this Wednesday. It signalled it could pause further increases, giving officials time to assess the fallout from recent bank failures, wait on the resolution of a political stand-off over the U.S. debt ceiling and monitor the course of inflation. The federal funds rate is now in a range of 5% to 5.25%, which is the highest level since 2006. <\/p>\n\n\n\n

The U.S. Central Bank warned that tighter credit conditions for households and businesses are expected to affect economic activity. In the picture below, we can see that even without this rise in interest rates, the federal funds rate was at the highest level since the 2007 financial crisis.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Many analysts and economists are worried that the high-interest rates will push the economy into a recession. It is important to mention that government data showed last week that economic growth in the first quarter slowed sequentially, with real gross domestic product increasing at a 1.1% annual pace, compared with a 2.6% gain in the prior three-month period. With higher interest rates, companies need to spend more money to borrow money to invest in growth. Historically, higher rates lead companies to reduce spending (especially on hiring). <\/p>\n\n\n\n

Many companies could face liquidity problems, and economist David Rosenberg has warned that the U.S. economy is facing two big risks. David Rosenberg said<\/a>:<\/p>\n\n\n\n

\"We have a possible debt default on our hands and a spreading bank crisis. The banking turmoil that started with Silicon Valley Bank's collapse in March remains unresolved, and First Republic's failure and takeover by CEO Jamie Dimon's JPMorgan has reignited worries about broader financial instability. Moreover, political disagreement about raising the U.S. government's borrowing limit is fanning fears of a debt-ceiling crisis.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>United States May Fund Its Deficit By Printing More Money; Could Default By June 1st<\/a><\/p>\n\n\n\n

Higher rates encourage saving over spending and make the debt more costly. Companies with bigger credit or other loans with variable interest rates could be in a difficult situation. We expect to see a meaningful slowdown in economic growth and a weakening of the labour market in the United States in the upcoming months. <\/p>\n\n\n\n

At the same time, Brian Jacobsen, chief economist at Annex Wealth Management, said<\/a> that the manufacturing and housing sectors are in a recession already. The famous investor Jeremy Grantham warned that the U.S. stock market could experience significant losses soon, and a recommendation is that investors should continue to take a defensive investment approach.<\/p>\n\n\n\n

Stocks aren't the only assets that could significantly lose their value. Investors should remember that cryptocurrencies could also be in the situation to make an even bigger fall. The crypto market displayed a high correlation with U.S. equities. If a downtrend is witnessed in the stock market, the same is usually replicated in the crypto-sphere.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Bitcoin Is Close To Testing $30,000 Again; Ethereum Revives Bullish Momentum Above $1,800<\/a><\/p>\n","post_title":"The Fed Raises Interest Rates By 25 BPS This Wednesday; Effects On Crypto And Financial Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-fed-raises-interest-rates-by-25-bps-this-wednesday-effects-on-crypto-and-financial-markets","to_ping":"","pinged":"","post_modified":"2023-05-04 22:08:47","post_modified_gmt":"2023-05-04 12:08:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11491","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11422,"post_author":"12","post_date":"2023-05-02 17:50:37","post_date_gmt":"2023-05-02 07:50:37","post_content":"\n

Ray Dalio, the billionaire founder of one of the world\u2019s largest hedge funds, Bridgewater Associates, was recently\u00a0interviewed<\/a>. He explains that the United States' $31.45T debt may have to be resolved by printing more money, also referred to as currency debasement.<\/p>\n\n\n\n

\u201cSo I think you\u2019re in the part of the cycle where you\u2019ve had the tightening and then the dominoes are beginning to fall. And I think that that\u2019s going to produce more problems.<\/em><\/p>\n\n\n\n

I think when it comes down to it, there\u2019s just too much debt, and we\u2019re adding to it too quickly\u2026 Either that debt will be paid off with hard money, in which case there\u2019s not much printing and so on, or it will be paid off with printing a lot of money to make it easier to pay off. <\/em><\/p>\n\n\n\n

I think in the end, it\u2019s always the case that they print a lot of money in and make it easier to pay off, but you have the reduced value of money.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> Ray Dalio; The Federal Reserve Is Setting Off A \u201cTerrible Calamity\u201d<\/a><\/p>\n\n\n\n

Could The United States Default By June?<\/h2>\n\n\n\n

United States Treasury Secretary, Janet Yellen, wrote to House Speaker Kevin McCarthy;<\/p>\n\n\n\n

\"After reviewing recent federal tax receipts, our best estimate is that we will be unable to continue to satisfy all of the government\u2019s obligations by early June, and potentially as early as June 1, if Congress does not raise or suspend the debt limit before that time.<\/em><\/p>\n\n\n\n

If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests.\"<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> United States May Enter Mild Recession As Yet Another Hike In Fed Rates Expected<\/a><\/p>\n\n\n\n

Yellen warned that waiting until the last minute to take action on this issue would cause harm to \"business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States.\"<\/em> Yellen believes that defaulting on their debt would be a financial catastrophe, raising the cost of borrowing without an end, making future investment \"substantially more costly.\u201d<\/em><\/p>\n","post_title":"United States May Fund Its Deficit By Printing More Money; Could Default By June 1st","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-may-fund-its-deficit-by-printing-more-money-could-default-by-june-1st","to_ping":"","pinged":"","post_modified":"2023-05-04 13:04:05","post_modified_gmt":"2023-05-04 03:04:05","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11422","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

ADVERTISEMENT
\n
\"S&P
S&P 500 rose 9% in November 2023<\/em><\/figcaption><\/figure>\n\n\n\n

Encouragingly, Bank of America's<\/a> Savita Subramanian anticipates ongoing positive momentum for the S&P 500, projecting it to reach a record-breaking 5,000 points by year-end. Additionally, both BMO's Brian Belski and Deutsche Bank's Binky Chadha have established price targets of 5,100 points each.<\/p>\n\n\n\n

Analysts Index Review<\/h2>\n\n\n\n

However, certain analysts are expressing skepticism. JPMorgan Asset Management advises investors to remain cautious due to the possibility of a recession, while Soci\u00e9t\u00e9 G\u00e9n\u00e9rale cautions them to brace for a volatile 2024, predicting that the index will fluctuate between nearing its record high, experiencing a decline, and subsequently rebounding.<\/p>\n\n\n\n

The focus of investors has shifted now to the conclusion of the Fed's two-day meeting on Wednesday, eagerly awaiting their decision on interest rates, along with the release of the November producer price index (PPI) data. Jason Pride, chief of investment strategy and research at Glenmede, said<\/a>:<\/p>\n\n\n\n

\"They've (Fed) already taken rates up a lot... they will keep rates up in that range for longer than what the market is currently expecting. Markets do not expect more hikes and are instead focused on rate cuts.\"<\/em><\/p>\n","post_title":"U.S. Stocks Had The Highest Monthly Rally Of 2023 In November. What To Expect From The Rest Of December?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"u-s-stocks-had-the-highest-monthly-rally-of-2023-in-november-what-to-expect-from-the-rest-of-december","to_ping":"","pinged":"","post_modified":"2023-12-13 21:49:51","post_modified_gmt":"2023-12-13 10:49:51","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14611","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14444,"post_author":"14","post_date":"2023-11-23 01:38:54","post_date_gmt":"2023-11-22 14:38:54","post_content":"\n

Investors remain optimistic that the market can resume its bullish momentum in December given that the fourth quarter has historically been one of the best three-month stretches of the year for the S&P 500. Investors anticipated the Federal Reserve<\/a> may have already reached its terminal interest rate; however, the primary driving forces affecting stock prices over recent weeks, inflation and interest rates, will continue to hold significant importance in December.<\/p>\n\n\n\n

\"The
The S&P 500 index's strong advance off its October 27 low continues to make progress<\/em><\/figcaption><\/figure>\n\n\n\n

Positive information is that the annual rate of inflation measured by the Consumer Price Index (CPI), which monitors the expenses of a variety of goods and services -  slowed to 3.2% in October, dropping from September's 3.7% and marking the most subdued rate since July 2023. It is also important to say that inflation is significantly lower than 2022 peak levels which were above 9% and because of this many investors anticipate the Fed could begin to cut interest rates as soon as the first half of 2024.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Federal Reserve Officials Banned From Trading Crypto(Opens in a new browser tab)<\/a><\/p>\n\n\n\n

GDP And Corporate Profits<\/h2>\n\n\n\n

Corporate profits are also the big driver of what the market is likely to do in the near term and because of this investors are closely monitoring third-quarter U.S. earnings. Third-quarter earnings season is essentially at the finish line and of the 480 companies that have reported so far, 80% have beaten analysts' expectations. The inflation and interest rates will continue to significantly impact stock prices in December.<\/p>\n\n\n\n

U.S. economic growth(inflation and interest rates) has been resilient year-to-date and Bill Adams, a chief economist for Comerica Bank, recently said the U.S. economy has been much stronger in 2023 than economists expected. Bill Adams suggests that the annual real GDP is anticipated to reach approximately 2.4% this year, a substantial increase from the Federal Reserve's December 2022 dot plot prediction of 0.5%. However, he also warned that the outcome in the upcoming months will decide if the U.S. economy can smoothly achieve a so-called \"soft landing\" without veering into a recession.<\/p>\n\n\n\n

Deceleration In United States Economic Growth<\/h2>\n\n\n\n

Jeffrey Roach, the chief economist at LPL Financial,<\/a> foresees that most of the negative consequences stemming from higher interest rates have not materialized yet and due to this, he anticipates a deceleration in U.S. economic growth. Market expectations that the Federal Reserve will keep interest rates unchanged at its December meeting currently stand above 90% and any information that the Federal Reserve could start to cut rates in the first quarter of 2024 should be positive for stocks in the short-term period.<\/p>\n\n\n\n

On the other side, JPMorgan strategists believe that the risk-reward ratio for numerous stocks is currently unappealing and according to them, restrictive monetary policy is likely to remain in place for some time which could potentially cause a recession. Considering this scenario, investors worried about a possible U.S. recession can opt for a more defensive strategy in the market. They can enhance their financial flexibility by reducing their stock or cryptocurrency exposure and augmenting their cash reserves.<\/p>\n","post_title":"Investor Optimism Rises In November 2023. Does Strong Buying Activity Indicate The Possibility Of Further Gains In The Coming Weeks?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"investor-optimism-rises-in-november-2023-does-strong-buying-activity-indicate-the-possibility-of-further-gains-in-the-coming-weeks","to_ping":"","pinged":"","post_modified":"2023-11-23 01:39:12","post_modified_gmt":"2023-11-22 14:39:12","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14444","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14319,"post_author":"14","post_date":"2023-11-15 18:02:37","post_date_gmt":"2023-11-15 07:02:37","post_content":"\n

Wall Street's main indexes<\/a> surged significantly on Tuesday following the release of lower-than-anticipated inflation figures, which increased the belief that the Federal Reserve had concluded its interest rate hikes. The annual rate of inflation measured by the Consumer Price Index (CPI), which monitors the expenses of a variety of goods and services -\u00a0 slowed to 3.2% last month, dropping from September's 3.7% and marking the most subdued rate since July.<\/p>\n\n\n\n

Additionally promising, Wall Street's prices held steady over the month following a 0.4% increase in September. Core prices, which exclude the unpredictable food and energy sectors, rose by 4%, slightly slower compared to the rate observed in September. The report signifies a significant achievement for the Fed in its battle against inflation but in the upcoming weeks, policymakers will monitor the service category closely, seeking further deceleration as their interest rate increases impact demand.<\/p>\n\n\n\n

\"Inflation
Inflation edges down in October<\/em><\/figcaption><\/figure>\n\n\n\n

Earlier this month, the Federal Reserve maintained its benchmark interest rate at the highest level in 22 years. Following this Tuesday's report, prominent analysts and economists indicated only a 1 percent probability that the central bank would increase rates during its upcoming policy meeting in December. Gregory Daco, chief economist at EY Parthenon, said<\/a>:<\/p>\n\n\n\n

\u201cAcross the board, it\u2019s a good report and I think this will comfort the excessively data-dependent Fed policymakers that policy is sufficiently restrictive to bring inflation down to 2 percent.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/strong><\/em> Gala is announcing a partnership with Stick Figure Productions to distribute Four Down on the Blockchain<\/a><\/p>\n\n\n\n

However, analysts from JPMorgan warned that the risk-reward ratio for many stocks remains unattractive currently and restrictive monetary policy is likely to remain in place for some time. JPMorgan analysts anticipate that most adverse effects resulting from increased interest rates haven't manifested thus far. They highlight an upward trend in consumer loan delinquencies and corporate bankruptcies, suggesting that these patterns are probable to persist unless interest rates are lowered.<\/p>\n\n\n\n

This is likely to drive demand destruction, and weakening pricing power and margins for corporates in the coming quarters, and because of this JPMorgan analysts are adopting a defensive stance, maintaining underweight allocations in equities and cryptocurrencies. Nevertheless, they propose an increase in the investment allocation towards gold due to its potential to rise in value during economic downturns, offering a hedge against potential losses in alternative investments.<\/p>\n\n\n\n

Gold is commonly regarded as a safe-haven asset, particularly amid economic uncertainty or geopolitical instability. Investors typically turn to gold as a means of preserving value when other assets are considered risky.<\/p>\n","post_title":"Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-surged-significantly-after-the-release-of-lower-than-anticipated-inflation-figures","to_ping":"","pinged":"","post_modified":"2023-11-16 20:00:45","post_modified_gmt":"2023-11-16 09:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14319","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11491,"post_author":"14","post_date":"2023-05-04 21:53:10","post_date_gmt":"2023-05-04 11:53:10","post_content":"\n

As widely expected, the U.S. Central Bank raised interest rates by 25bps this Wednesday. It signalled it could pause further increases, giving officials time to assess the fallout from recent bank failures, wait on the resolution of a political stand-off over the U.S. debt ceiling and monitor the course of inflation. The federal funds rate is now in a range of 5% to 5.25%, which is the highest level since 2006. <\/p>\n\n\n\n

The U.S. Central Bank warned that tighter credit conditions for households and businesses are expected to affect economic activity. In the picture below, we can see that even without this rise in interest rates, the federal funds rate was at the highest level since the 2007 financial crisis.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Many analysts and economists are worried that the high-interest rates will push the economy into a recession. It is important to mention that government data showed last week that economic growth in the first quarter slowed sequentially, with real gross domestic product increasing at a 1.1% annual pace, compared with a 2.6% gain in the prior three-month period. With higher interest rates, companies need to spend more money to borrow money to invest in growth. Historically, higher rates lead companies to reduce spending (especially on hiring). <\/p>\n\n\n\n

Many companies could face liquidity problems, and economist David Rosenberg has warned that the U.S. economy is facing two big risks. David Rosenberg said<\/a>:<\/p>\n\n\n\n

\"We have a possible debt default on our hands and a spreading bank crisis. The banking turmoil that started with Silicon Valley Bank's collapse in March remains unresolved, and First Republic's failure and takeover by CEO Jamie Dimon's JPMorgan has reignited worries about broader financial instability. Moreover, political disagreement about raising the U.S. government's borrowing limit is fanning fears of a debt-ceiling crisis.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>United States May Fund Its Deficit By Printing More Money; Could Default By June 1st<\/a><\/p>\n\n\n\n

Higher rates encourage saving over spending and make the debt more costly. Companies with bigger credit or other loans with variable interest rates could be in a difficult situation. We expect to see a meaningful slowdown in economic growth and a weakening of the labour market in the United States in the upcoming months. <\/p>\n\n\n\n

At the same time, Brian Jacobsen, chief economist at Annex Wealth Management, said<\/a> that the manufacturing and housing sectors are in a recession already. The famous investor Jeremy Grantham warned that the U.S. stock market could experience significant losses soon, and a recommendation is that investors should continue to take a defensive investment approach.<\/p>\n\n\n\n

Stocks aren't the only assets that could significantly lose their value. Investors should remember that cryptocurrencies could also be in the situation to make an even bigger fall. The crypto market displayed a high correlation with U.S. equities. If a downtrend is witnessed in the stock market, the same is usually replicated in the crypto-sphere.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Bitcoin Is Close To Testing $30,000 Again; Ethereum Revives Bullish Momentum Above $1,800<\/a><\/p>\n","post_title":"The Fed Raises Interest Rates By 25 BPS This Wednesday; Effects On Crypto And Financial Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-fed-raises-interest-rates-by-25-bps-this-wednesday-effects-on-crypto-and-financial-markets","to_ping":"","pinged":"","post_modified":"2023-05-04 22:08:47","post_modified_gmt":"2023-05-04 12:08:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11491","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11422,"post_author":"12","post_date":"2023-05-02 17:50:37","post_date_gmt":"2023-05-02 07:50:37","post_content":"\n

Ray Dalio, the billionaire founder of one of the world\u2019s largest hedge funds, Bridgewater Associates, was recently\u00a0interviewed<\/a>. He explains that the United States' $31.45T debt may have to be resolved by printing more money, also referred to as currency debasement.<\/p>\n\n\n\n

\u201cSo I think you\u2019re in the part of the cycle where you\u2019ve had the tightening and then the dominoes are beginning to fall. And I think that that\u2019s going to produce more problems.<\/em><\/p>\n\n\n\n

I think when it comes down to it, there\u2019s just too much debt, and we\u2019re adding to it too quickly\u2026 Either that debt will be paid off with hard money, in which case there\u2019s not much printing and so on, or it will be paid off with printing a lot of money to make it easier to pay off. <\/em><\/p>\n\n\n\n

I think in the end, it\u2019s always the case that they print a lot of money in and make it easier to pay off, but you have the reduced value of money.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> Ray Dalio; The Federal Reserve Is Setting Off A \u201cTerrible Calamity\u201d<\/a><\/p>\n\n\n\n

Could The United States Default By June?<\/h2>\n\n\n\n

United States Treasury Secretary, Janet Yellen, wrote to House Speaker Kevin McCarthy;<\/p>\n\n\n\n

\"After reviewing recent federal tax receipts, our best estimate is that we will be unable to continue to satisfy all of the government\u2019s obligations by early June, and potentially as early as June 1, if Congress does not raise or suspend the debt limit before that time.<\/em><\/p>\n\n\n\n

If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests.\"<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> United States May Enter Mild Recession As Yet Another Hike In Fed Rates Expected<\/a><\/p>\n\n\n\n

Yellen warned that waiting until the last minute to take action on this issue would cause harm to \"business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States.\"<\/em> Yellen believes that defaulting on their debt would be a financial catastrophe, raising the cost of borrowing without an end, making future investment \"substantially more costly.\u201d<\/em><\/p>\n","post_title":"United States May Fund Its Deficit By Printing More Money; Could Default By June 1st","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-may-fund-its-deficit-by-printing-more-money-could-default-by-june-1st","to_ping":"","pinged":"","post_modified":"2023-05-04 13:04:05","post_modified_gmt":"2023-05-04 03:04:05","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11422","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

ADVERTISEMENT
\n

See Related:<\/em><\/strong> SlingTV Partners With BitPay To Accept Crypto For Subscriptions<\/a><\/p>\n\n\n\n

\"S&P
S&P 500 rose 9% in November 2023<\/em><\/figcaption><\/figure>\n\n\n\n

Encouragingly, Bank of America's<\/a> Savita Subramanian anticipates ongoing positive momentum for the S&P 500, projecting it to reach a record-breaking 5,000 points by year-end. Additionally, both BMO's Brian Belski and Deutsche Bank's Binky Chadha have established price targets of 5,100 points each.<\/p>\n\n\n\n

Analysts Index Review<\/h2>\n\n\n\n

However, certain analysts are expressing skepticism. JPMorgan Asset Management advises investors to remain cautious due to the possibility of a recession, while Soci\u00e9t\u00e9 G\u00e9n\u00e9rale cautions them to brace for a volatile 2024, predicting that the index will fluctuate between nearing its record high, experiencing a decline, and subsequently rebounding.<\/p>\n\n\n\n

The focus of investors has shifted now to the conclusion of the Fed's two-day meeting on Wednesday, eagerly awaiting their decision on interest rates, along with the release of the November producer price index (PPI) data. Jason Pride, chief of investment strategy and research at Glenmede, said<\/a>:<\/p>\n\n\n\n

\"They've (Fed) already taken rates up a lot... they will keep rates up in that range for longer than what the market is currently expecting. Markets do not expect more hikes and are instead focused on rate cuts.\"<\/em><\/p>\n","post_title":"U.S. Stocks Had The Highest Monthly Rally Of 2023 In November. What To Expect From The Rest Of December?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"u-s-stocks-had-the-highest-monthly-rally-of-2023-in-november-what-to-expect-from-the-rest-of-december","to_ping":"","pinged":"","post_modified":"2023-12-13 21:49:51","post_modified_gmt":"2023-12-13 10:49:51","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14611","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14444,"post_author":"14","post_date":"2023-11-23 01:38:54","post_date_gmt":"2023-11-22 14:38:54","post_content":"\n

Investors remain optimistic that the market can resume its bullish momentum in December given that the fourth quarter has historically been one of the best three-month stretches of the year for the S&P 500. Investors anticipated the Federal Reserve<\/a> may have already reached its terminal interest rate; however, the primary driving forces affecting stock prices over recent weeks, inflation and interest rates, will continue to hold significant importance in December.<\/p>\n\n\n\n

\"The
The S&P 500 index's strong advance off its October 27 low continues to make progress<\/em><\/figcaption><\/figure>\n\n\n\n

Positive information is that the annual rate of inflation measured by the Consumer Price Index (CPI), which monitors the expenses of a variety of goods and services -  slowed to 3.2% in October, dropping from September's 3.7% and marking the most subdued rate since July 2023. It is also important to say that inflation is significantly lower than 2022 peak levels which were above 9% and because of this many investors anticipate the Fed could begin to cut interest rates as soon as the first half of 2024.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Federal Reserve Officials Banned From Trading Crypto(Opens in a new browser tab)<\/a><\/p>\n\n\n\n

GDP And Corporate Profits<\/h2>\n\n\n\n

Corporate profits are also the big driver of what the market is likely to do in the near term and because of this investors are closely monitoring third-quarter U.S. earnings. Third-quarter earnings season is essentially at the finish line and of the 480 companies that have reported so far, 80% have beaten analysts' expectations. The inflation and interest rates will continue to significantly impact stock prices in December.<\/p>\n\n\n\n

U.S. economic growth(inflation and interest rates) has been resilient year-to-date and Bill Adams, a chief economist for Comerica Bank, recently said the U.S. economy has been much stronger in 2023 than economists expected. Bill Adams suggests that the annual real GDP is anticipated to reach approximately 2.4% this year, a substantial increase from the Federal Reserve's December 2022 dot plot prediction of 0.5%. However, he also warned that the outcome in the upcoming months will decide if the U.S. economy can smoothly achieve a so-called \"soft landing\" without veering into a recession.<\/p>\n\n\n\n

Deceleration In United States Economic Growth<\/h2>\n\n\n\n

Jeffrey Roach, the chief economist at LPL Financial,<\/a> foresees that most of the negative consequences stemming from higher interest rates have not materialized yet and due to this, he anticipates a deceleration in U.S. economic growth. Market expectations that the Federal Reserve will keep interest rates unchanged at its December meeting currently stand above 90% and any information that the Federal Reserve could start to cut rates in the first quarter of 2024 should be positive for stocks in the short-term period.<\/p>\n\n\n\n

On the other side, JPMorgan strategists believe that the risk-reward ratio for numerous stocks is currently unappealing and according to them, restrictive monetary policy is likely to remain in place for some time which could potentially cause a recession. Considering this scenario, investors worried about a possible U.S. recession can opt for a more defensive strategy in the market. They can enhance their financial flexibility by reducing their stock or cryptocurrency exposure and augmenting their cash reserves.<\/p>\n","post_title":"Investor Optimism Rises In November 2023. Does Strong Buying Activity Indicate The Possibility Of Further Gains In The Coming Weeks?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"investor-optimism-rises-in-november-2023-does-strong-buying-activity-indicate-the-possibility-of-further-gains-in-the-coming-weeks","to_ping":"","pinged":"","post_modified":"2023-11-23 01:39:12","post_modified_gmt":"2023-11-22 14:39:12","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14444","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14319,"post_author":"14","post_date":"2023-11-15 18:02:37","post_date_gmt":"2023-11-15 07:02:37","post_content":"\n

Wall Street's main indexes<\/a> surged significantly on Tuesday following the release of lower-than-anticipated inflation figures, which increased the belief that the Federal Reserve had concluded its interest rate hikes. The annual rate of inflation measured by the Consumer Price Index (CPI), which monitors the expenses of a variety of goods and services -\u00a0 slowed to 3.2% last month, dropping from September's 3.7% and marking the most subdued rate since July.<\/p>\n\n\n\n

Additionally promising, Wall Street's prices held steady over the month following a 0.4% increase in September. Core prices, which exclude the unpredictable food and energy sectors, rose by 4%, slightly slower compared to the rate observed in September. The report signifies a significant achievement for the Fed in its battle against inflation but in the upcoming weeks, policymakers will monitor the service category closely, seeking further deceleration as their interest rate increases impact demand.<\/p>\n\n\n\n

\"Inflation
Inflation edges down in October<\/em><\/figcaption><\/figure>\n\n\n\n

Earlier this month, the Federal Reserve maintained its benchmark interest rate at the highest level in 22 years. Following this Tuesday's report, prominent analysts and economists indicated only a 1 percent probability that the central bank would increase rates during its upcoming policy meeting in December. Gregory Daco, chief economist at EY Parthenon, said<\/a>:<\/p>\n\n\n\n

\u201cAcross the board, it\u2019s a good report and I think this will comfort the excessively data-dependent Fed policymakers that policy is sufficiently restrictive to bring inflation down to 2 percent.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/strong><\/em> Gala is announcing a partnership with Stick Figure Productions to distribute Four Down on the Blockchain<\/a><\/p>\n\n\n\n

However, analysts from JPMorgan warned that the risk-reward ratio for many stocks remains unattractive currently and restrictive monetary policy is likely to remain in place for some time. JPMorgan analysts anticipate that most adverse effects resulting from increased interest rates haven't manifested thus far. They highlight an upward trend in consumer loan delinquencies and corporate bankruptcies, suggesting that these patterns are probable to persist unless interest rates are lowered.<\/p>\n\n\n\n

This is likely to drive demand destruction, and weakening pricing power and margins for corporates in the coming quarters, and because of this JPMorgan analysts are adopting a defensive stance, maintaining underweight allocations in equities and cryptocurrencies. Nevertheless, they propose an increase in the investment allocation towards gold due to its potential to rise in value during economic downturns, offering a hedge against potential losses in alternative investments.<\/p>\n\n\n\n

Gold is commonly regarded as a safe-haven asset, particularly amid economic uncertainty or geopolitical instability. Investors typically turn to gold as a means of preserving value when other assets are considered risky.<\/p>\n","post_title":"Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-surged-significantly-after-the-release-of-lower-than-anticipated-inflation-figures","to_ping":"","pinged":"","post_modified":"2023-11-16 20:00:45","post_modified_gmt":"2023-11-16 09:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14319","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11491,"post_author":"14","post_date":"2023-05-04 21:53:10","post_date_gmt":"2023-05-04 11:53:10","post_content":"\n

As widely expected, the U.S. Central Bank raised interest rates by 25bps this Wednesday. It signalled it could pause further increases, giving officials time to assess the fallout from recent bank failures, wait on the resolution of a political stand-off over the U.S. debt ceiling and monitor the course of inflation. The federal funds rate is now in a range of 5% to 5.25%, which is the highest level since 2006. <\/p>\n\n\n\n

The U.S. Central Bank warned that tighter credit conditions for households and businesses are expected to affect economic activity. In the picture below, we can see that even without this rise in interest rates, the federal funds rate was at the highest level since the 2007 financial crisis.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Many analysts and economists are worried that the high-interest rates will push the economy into a recession. It is important to mention that government data showed last week that economic growth in the first quarter slowed sequentially, with real gross domestic product increasing at a 1.1% annual pace, compared with a 2.6% gain in the prior three-month period. With higher interest rates, companies need to spend more money to borrow money to invest in growth. Historically, higher rates lead companies to reduce spending (especially on hiring). <\/p>\n\n\n\n

Many companies could face liquidity problems, and economist David Rosenberg has warned that the U.S. economy is facing two big risks. David Rosenberg said<\/a>:<\/p>\n\n\n\n

\"We have a possible debt default on our hands and a spreading bank crisis. The banking turmoil that started with Silicon Valley Bank's collapse in March remains unresolved, and First Republic's failure and takeover by CEO Jamie Dimon's JPMorgan has reignited worries about broader financial instability. Moreover, political disagreement about raising the U.S. government's borrowing limit is fanning fears of a debt-ceiling crisis.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>United States May Fund Its Deficit By Printing More Money; Could Default By June 1st<\/a><\/p>\n\n\n\n

Higher rates encourage saving over spending and make the debt more costly. Companies with bigger credit or other loans with variable interest rates could be in a difficult situation. We expect to see a meaningful slowdown in economic growth and a weakening of the labour market in the United States in the upcoming months. <\/p>\n\n\n\n

At the same time, Brian Jacobsen, chief economist at Annex Wealth Management, said<\/a> that the manufacturing and housing sectors are in a recession already. The famous investor Jeremy Grantham warned that the U.S. stock market could experience significant losses soon, and a recommendation is that investors should continue to take a defensive investment approach.<\/p>\n\n\n\n

Stocks aren't the only assets that could significantly lose their value. Investors should remember that cryptocurrencies could also be in the situation to make an even bigger fall. The crypto market displayed a high correlation with U.S. equities. If a downtrend is witnessed in the stock market, the same is usually replicated in the crypto-sphere.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Bitcoin Is Close To Testing $30,000 Again; Ethereum Revives Bullish Momentum Above $1,800<\/a><\/p>\n","post_title":"The Fed Raises Interest Rates By 25 BPS This Wednesday; Effects On Crypto And Financial Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-fed-raises-interest-rates-by-25-bps-this-wednesday-effects-on-crypto-and-financial-markets","to_ping":"","pinged":"","post_modified":"2023-05-04 22:08:47","post_modified_gmt":"2023-05-04 12:08:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11491","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11422,"post_author":"12","post_date":"2023-05-02 17:50:37","post_date_gmt":"2023-05-02 07:50:37","post_content":"\n

Ray Dalio, the billionaire founder of one of the world\u2019s largest hedge funds, Bridgewater Associates, was recently\u00a0interviewed<\/a>. He explains that the United States' $31.45T debt may have to be resolved by printing more money, also referred to as currency debasement.<\/p>\n\n\n\n

\u201cSo I think you\u2019re in the part of the cycle where you\u2019ve had the tightening and then the dominoes are beginning to fall. And I think that that\u2019s going to produce more problems.<\/em><\/p>\n\n\n\n

I think when it comes down to it, there\u2019s just too much debt, and we\u2019re adding to it too quickly\u2026 Either that debt will be paid off with hard money, in which case there\u2019s not much printing and so on, or it will be paid off with printing a lot of money to make it easier to pay off. <\/em><\/p>\n\n\n\n

I think in the end, it\u2019s always the case that they print a lot of money in and make it easier to pay off, but you have the reduced value of money.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> Ray Dalio; The Federal Reserve Is Setting Off A \u201cTerrible Calamity\u201d<\/a><\/p>\n\n\n\n

Could The United States Default By June?<\/h2>\n\n\n\n

United States Treasury Secretary, Janet Yellen, wrote to House Speaker Kevin McCarthy;<\/p>\n\n\n\n

\"After reviewing recent federal tax receipts, our best estimate is that we will be unable to continue to satisfy all of the government\u2019s obligations by early June, and potentially as early as June 1, if Congress does not raise or suspend the debt limit before that time.<\/em><\/p>\n\n\n\n

If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests.\"<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> United States May Enter Mild Recession As Yet Another Hike In Fed Rates Expected<\/a><\/p>\n\n\n\n

Yellen warned that waiting until the last minute to take action on this issue would cause harm to \"business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States.\"<\/em> Yellen believes that defaulting on their debt would be a financial catastrophe, raising the cost of borrowing without an end, making future investment \"substantially more costly.\u201d<\/em><\/p>\n","post_title":"United States May Fund Its Deficit By Printing More Money; Could Default By June 1st","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-may-fund-its-deficit-by-printing-more-money-could-default-by-june-1st","to_ping":"","pinged":"","post_modified":"2023-05-04 13:04:05","post_modified_gmt":"2023-05-04 03:04:05","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11422","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

Most Read

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\n

The positive developments contributed significantly to driving the S&P 500 to its second most successful November since 1980 and it's noteworthy to highlight that the only instance when the index performed better in November was during its recovery post the pandemic in 2020.<\/p>\n\n\n\n

See Related:<\/em><\/strong> SlingTV Partners With BitPay To Accept Crypto For Subscriptions<\/a><\/p>\n\n\n\n

\"S&P
S&P 500 rose 9% in November 2023<\/em><\/figcaption><\/figure>\n\n\n\n

Encouragingly, Bank of America's<\/a> Savita Subramanian anticipates ongoing positive momentum for the S&P 500, projecting it to reach a record-breaking 5,000 points by year-end. Additionally, both BMO's Brian Belski and Deutsche Bank's Binky Chadha have established price targets of 5,100 points each.<\/p>\n\n\n\n

Analysts Index Review<\/h2>\n\n\n\n

However, certain analysts are expressing skepticism. JPMorgan Asset Management advises investors to remain cautious due to the possibility of a recession, while Soci\u00e9t\u00e9 G\u00e9n\u00e9rale cautions them to brace for a volatile 2024, predicting that the index will fluctuate between nearing its record high, experiencing a decline, and subsequently rebounding.<\/p>\n\n\n\n

The focus of investors has shifted now to the conclusion of the Fed's two-day meeting on Wednesday, eagerly awaiting their decision on interest rates, along with the release of the November producer price index (PPI) data. Jason Pride, chief of investment strategy and research at Glenmede, said<\/a>:<\/p>\n\n\n\n

\"They've (Fed) already taken rates up a lot... they will keep rates up in that range for longer than what the market is currently expecting. Markets do not expect more hikes and are instead focused on rate cuts.\"<\/em><\/p>\n","post_title":"U.S. Stocks Had The Highest Monthly Rally Of 2023 In November. What To Expect From The Rest Of December?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"u-s-stocks-had-the-highest-monthly-rally-of-2023-in-november-what-to-expect-from-the-rest-of-december","to_ping":"","pinged":"","post_modified":"2023-12-13 21:49:51","post_modified_gmt":"2023-12-13 10:49:51","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14611","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14444,"post_author":"14","post_date":"2023-11-23 01:38:54","post_date_gmt":"2023-11-22 14:38:54","post_content":"\n

Investors remain optimistic that the market can resume its bullish momentum in December given that the fourth quarter has historically been one of the best three-month stretches of the year for the S&P 500. Investors anticipated the Federal Reserve<\/a> may have already reached its terminal interest rate; however, the primary driving forces affecting stock prices over recent weeks, inflation and interest rates, will continue to hold significant importance in December.<\/p>\n\n\n\n

\"The
The S&P 500 index's strong advance off its October 27 low continues to make progress<\/em><\/figcaption><\/figure>\n\n\n\n

Positive information is that the annual rate of inflation measured by the Consumer Price Index (CPI), which monitors the expenses of a variety of goods and services -  slowed to 3.2% in October, dropping from September's 3.7% and marking the most subdued rate since July 2023. It is also important to say that inflation is significantly lower than 2022 peak levels which were above 9% and because of this many investors anticipate the Fed could begin to cut interest rates as soon as the first half of 2024.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Federal Reserve Officials Banned From Trading Crypto(Opens in a new browser tab)<\/a><\/p>\n\n\n\n

GDP And Corporate Profits<\/h2>\n\n\n\n

Corporate profits are also the big driver of what the market is likely to do in the near term and because of this investors are closely monitoring third-quarter U.S. earnings. Third-quarter earnings season is essentially at the finish line and of the 480 companies that have reported so far, 80% have beaten analysts' expectations. The inflation and interest rates will continue to significantly impact stock prices in December.<\/p>\n\n\n\n

U.S. economic growth(inflation and interest rates) has been resilient year-to-date and Bill Adams, a chief economist for Comerica Bank, recently said the U.S. economy has been much stronger in 2023 than economists expected. Bill Adams suggests that the annual real GDP is anticipated to reach approximately 2.4% this year, a substantial increase from the Federal Reserve's December 2022 dot plot prediction of 0.5%. However, he also warned that the outcome in the upcoming months will decide if the U.S. economy can smoothly achieve a so-called \"soft landing\" without veering into a recession.<\/p>\n\n\n\n

Deceleration In United States Economic Growth<\/h2>\n\n\n\n

Jeffrey Roach, the chief economist at LPL Financial,<\/a> foresees that most of the negative consequences stemming from higher interest rates have not materialized yet and due to this, he anticipates a deceleration in U.S. economic growth. Market expectations that the Federal Reserve will keep interest rates unchanged at its December meeting currently stand above 90% and any information that the Federal Reserve could start to cut rates in the first quarter of 2024 should be positive for stocks in the short-term period.<\/p>\n\n\n\n

On the other side, JPMorgan strategists believe that the risk-reward ratio for numerous stocks is currently unappealing and according to them, restrictive monetary policy is likely to remain in place for some time which could potentially cause a recession. Considering this scenario, investors worried about a possible U.S. recession can opt for a more defensive strategy in the market. They can enhance their financial flexibility by reducing their stock or cryptocurrency exposure and augmenting their cash reserves.<\/p>\n","post_title":"Investor Optimism Rises In November 2023. Does Strong Buying Activity Indicate The Possibility Of Further Gains In The Coming Weeks?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"investor-optimism-rises-in-november-2023-does-strong-buying-activity-indicate-the-possibility-of-further-gains-in-the-coming-weeks","to_ping":"","pinged":"","post_modified":"2023-11-23 01:39:12","post_modified_gmt":"2023-11-22 14:39:12","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14444","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14319,"post_author":"14","post_date":"2023-11-15 18:02:37","post_date_gmt":"2023-11-15 07:02:37","post_content":"\n

Wall Street's main indexes<\/a> surged significantly on Tuesday following the release of lower-than-anticipated inflation figures, which increased the belief that the Federal Reserve had concluded its interest rate hikes. The annual rate of inflation measured by the Consumer Price Index (CPI), which monitors the expenses of a variety of goods and services -\u00a0 slowed to 3.2% last month, dropping from September's 3.7% and marking the most subdued rate since July.<\/p>\n\n\n\n

Additionally promising, Wall Street's prices held steady over the month following a 0.4% increase in September. Core prices, which exclude the unpredictable food and energy sectors, rose by 4%, slightly slower compared to the rate observed in September. The report signifies a significant achievement for the Fed in its battle against inflation but in the upcoming weeks, policymakers will monitor the service category closely, seeking further deceleration as their interest rate increases impact demand.<\/p>\n\n\n\n

\"Inflation
Inflation edges down in October<\/em><\/figcaption><\/figure>\n\n\n\n

Earlier this month, the Federal Reserve maintained its benchmark interest rate at the highest level in 22 years. Following this Tuesday's report, prominent analysts and economists indicated only a 1 percent probability that the central bank would increase rates during its upcoming policy meeting in December. Gregory Daco, chief economist at EY Parthenon, said<\/a>:<\/p>\n\n\n\n

\u201cAcross the board, it\u2019s a good report and I think this will comfort the excessively data-dependent Fed policymakers that policy is sufficiently restrictive to bring inflation down to 2 percent.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/strong><\/em> Gala is announcing a partnership with Stick Figure Productions to distribute Four Down on the Blockchain<\/a><\/p>\n\n\n\n

However, analysts from JPMorgan warned that the risk-reward ratio for many stocks remains unattractive currently and restrictive monetary policy is likely to remain in place for some time. JPMorgan analysts anticipate that most adverse effects resulting from increased interest rates haven't manifested thus far. They highlight an upward trend in consumer loan delinquencies and corporate bankruptcies, suggesting that these patterns are probable to persist unless interest rates are lowered.<\/p>\n\n\n\n

This is likely to drive demand destruction, and weakening pricing power and margins for corporates in the coming quarters, and because of this JPMorgan analysts are adopting a defensive stance, maintaining underweight allocations in equities and cryptocurrencies. Nevertheless, they propose an increase in the investment allocation towards gold due to its potential to rise in value during economic downturns, offering a hedge against potential losses in alternative investments.<\/p>\n\n\n\n

Gold is commonly regarded as a safe-haven asset, particularly amid economic uncertainty or geopolitical instability. Investors typically turn to gold as a means of preserving value when other assets are considered risky.<\/p>\n","post_title":"Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-surged-significantly-after-the-release-of-lower-than-anticipated-inflation-figures","to_ping":"","pinged":"","post_modified":"2023-11-16 20:00:45","post_modified_gmt":"2023-11-16 09:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14319","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11491,"post_author":"14","post_date":"2023-05-04 21:53:10","post_date_gmt":"2023-05-04 11:53:10","post_content":"\n

As widely expected, the U.S. Central Bank raised interest rates by 25bps this Wednesday. It signalled it could pause further increases, giving officials time to assess the fallout from recent bank failures, wait on the resolution of a political stand-off over the U.S. debt ceiling and monitor the course of inflation. The federal funds rate is now in a range of 5% to 5.25%, which is the highest level since 2006. <\/p>\n\n\n\n

The U.S. Central Bank warned that tighter credit conditions for households and businesses are expected to affect economic activity. In the picture below, we can see that even without this rise in interest rates, the federal funds rate was at the highest level since the 2007 financial crisis.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Many analysts and economists are worried that the high-interest rates will push the economy into a recession. It is important to mention that government data showed last week that economic growth in the first quarter slowed sequentially, with real gross domestic product increasing at a 1.1% annual pace, compared with a 2.6% gain in the prior three-month period. With higher interest rates, companies need to spend more money to borrow money to invest in growth. Historically, higher rates lead companies to reduce spending (especially on hiring). <\/p>\n\n\n\n

Many companies could face liquidity problems, and economist David Rosenberg has warned that the U.S. economy is facing two big risks. David Rosenberg said<\/a>:<\/p>\n\n\n\n

\"We have a possible debt default on our hands and a spreading bank crisis. The banking turmoil that started with Silicon Valley Bank's collapse in March remains unresolved, and First Republic's failure and takeover by CEO Jamie Dimon's JPMorgan has reignited worries about broader financial instability. Moreover, political disagreement about raising the U.S. government's borrowing limit is fanning fears of a debt-ceiling crisis.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>United States May Fund Its Deficit By Printing More Money; Could Default By June 1st<\/a><\/p>\n\n\n\n

Higher rates encourage saving over spending and make the debt more costly. Companies with bigger credit or other loans with variable interest rates could be in a difficult situation. We expect to see a meaningful slowdown in economic growth and a weakening of the labour market in the United States in the upcoming months. <\/p>\n\n\n\n

At the same time, Brian Jacobsen, chief economist at Annex Wealth Management, said<\/a> that the manufacturing and housing sectors are in a recession already. The famous investor Jeremy Grantham warned that the U.S. stock market could experience significant losses soon, and a recommendation is that investors should continue to take a defensive investment approach.<\/p>\n\n\n\n

Stocks aren't the only assets that could significantly lose their value. Investors should remember that cryptocurrencies could also be in the situation to make an even bigger fall. The crypto market displayed a high correlation with U.S. equities. If a downtrend is witnessed in the stock market, the same is usually replicated in the crypto-sphere.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Bitcoin Is Close To Testing $30,000 Again; Ethereum Revives Bullish Momentum Above $1,800<\/a><\/p>\n","post_title":"The Fed Raises Interest Rates By 25 BPS This Wednesday; Effects On Crypto And Financial Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-fed-raises-interest-rates-by-25-bps-this-wednesday-effects-on-crypto-and-financial-markets","to_ping":"","pinged":"","post_modified":"2023-05-04 22:08:47","post_modified_gmt":"2023-05-04 12:08:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11491","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11422,"post_author":"12","post_date":"2023-05-02 17:50:37","post_date_gmt":"2023-05-02 07:50:37","post_content":"\n

Ray Dalio, the billionaire founder of one of the world\u2019s largest hedge funds, Bridgewater Associates, was recently\u00a0interviewed<\/a>. He explains that the United States' $31.45T debt may have to be resolved by printing more money, also referred to as currency debasement.<\/p>\n\n\n\n

\u201cSo I think you\u2019re in the part of the cycle where you\u2019ve had the tightening and then the dominoes are beginning to fall. And I think that that\u2019s going to produce more problems.<\/em><\/p>\n\n\n\n

I think when it comes down to it, there\u2019s just too much debt, and we\u2019re adding to it too quickly\u2026 Either that debt will be paid off with hard money, in which case there\u2019s not much printing and so on, or it will be paid off with printing a lot of money to make it easier to pay off. <\/em><\/p>\n\n\n\n

I think in the end, it\u2019s always the case that they print a lot of money in and make it easier to pay off, but you have the reduced value of money.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> Ray Dalio; The Federal Reserve Is Setting Off A \u201cTerrible Calamity\u201d<\/a><\/p>\n\n\n\n

Could The United States Default By June?<\/h2>\n\n\n\n

United States Treasury Secretary, Janet Yellen, wrote to House Speaker Kevin McCarthy;<\/p>\n\n\n\n

\"After reviewing recent federal tax receipts, our best estimate is that we will be unable to continue to satisfy all of the government\u2019s obligations by early June, and potentially as early as June 1, if Congress does not raise or suspend the debt limit before that time.<\/em><\/p>\n\n\n\n

If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests.\"<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> United States May Enter Mild Recession As Yet Another Hike In Fed Rates Expected<\/a><\/p>\n\n\n\n

Yellen warned that waiting until the last minute to take action on this issue would cause harm to \"business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States.\"<\/em> Yellen believes that defaulting on their debt would be a financial catastrophe, raising the cost of borrowing without an end, making future investment \"substantially more costly.\u201d<\/em><\/p>\n","post_title":"United States May Fund Its Deficit By Printing More Money; Could Default By June 1st","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-may-fund-its-deficit-by-printing-more-money-could-default-by-june-1st","to_ping":"","pinged":"","post_modified":"2023-05-04 13:04:05","post_modified_gmt":"2023-05-04 03:04:05","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11422","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

ADVERTISEMENT
\n

Should that prediction materialize, there's a strong likelihood that policymakers will attain their desired \"soft landing\" scenario, despite raising borrowing rates from nearly zero to approximately 5.5% within a mere 15-month timeframe. Growth has remained strong, and the unemployment rate is still hovering below 4% even as inflation has rapidly cooled.<\/p>\n\n\n\n

The positive developments contributed significantly to driving the S&P 500 to its second most successful November since 1980 and it's noteworthy to highlight that the only instance when the index performed better in November was during its recovery post the pandemic in 2020.<\/p>\n\n\n\n

See Related:<\/em><\/strong> SlingTV Partners With BitPay To Accept Crypto For Subscriptions<\/a><\/p>\n\n\n\n

\"S&P
S&P 500 rose 9% in November 2023<\/em><\/figcaption><\/figure>\n\n\n\n

Encouragingly, Bank of America's<\/a> Savita Subramanian anticipates ongoing positive momentum for the S&P 500, projecting it to reach a record-breaking 5,000 points by year-end. Additionally, both BMO's Brian Belski and Deutsche Bank's Binky Chadha have established price targets of 5,100 points each.<\/p>\n\n\n\n

Analysts Index Review<\/h2>\n\n\n\n

However, certain analysts are expressing skepticism. JPMorgan Asset Management advises investors to remain cautious due to the possibility of a recession, while Soci\u00e9t\u00e9 G\u00e9n\u00e9rale cautions them to brace for a volatile 2024, predicting that the index will fluctuate between nearing its record high, experiencing a decline, and subsequently rebounding.<\/p>\n\n\n\n

The focus of investors has shifted now to the conclusion of the Fed's two-day meeting on Wednesday, eagerly awaiting their decision on interest rates, along with the release of the November producer price index (PPI) data. Jason Pride, chief of investment strategy and research at Glenmede, said<\/a>:<\/p>\n\n\n\n

\"They've (Fed) already taken rates up a lot... they will keep rates up in that range for longer than what the market is currently expecting. Markets do not expect more hikes and are instead focused on rate cuts.\"<\/em><\/p>\n","post_title":"U.S. Stocks Had The Highest Monthly Rally Of 2023 In November. What To Expect From The Rest Of December?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"u-s-stocks-had-the-highest-monthly-rally-of-2023-in-november-what-to-expect-from-the-rest-of-december","to_ping":"","pinged":"","post_modified":"2023-12-13 21:49:51","post_modified_gmt":"2023-12-13 10:49:51","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14611","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14444,"post_author":"14","post_date":"2023-11-23 01:38:54","post_date_gmt":"2023-11-22 14:38:54","post_content":"\n

Investors remain optimistic that the market can resume its bullish momentum in December given that the fourth quarter has historically been one of the best three-month stretches of the year for the S&P 500. Investors anticipated the Federal Reserve<\/a> may have already reached its terminal interest rate; however, the primary driving forces affecting stock prices over recent weeks, inflation and interest rates, will continue to hold significant importance in December.<\/p>\n\n\n\n

\"The
The S&P 500 index's strong advance off its October 27 low continues to make progress<\/em><\/figcaption><\/figure>\n\n\n\n

Positive information is that the annual rate of inflation measured by the Consumer Price Index (CPI), which monitors the expenses of a variety of goods and services -  slowed to 3.2% in October, dropping from September's 3.7% and marking the most subdued rate since July 2023. It is also important to say that inflation is significantly lower than 2022 peak levels which were above 9% and because of this many investors anticipate the Fed could begin to cut interest rates as soon as the first half of 2024.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Federal Reserve Officials Banned From Trading Crypto(Opens in a new browser tab)<\/a><\/p>\n\n\n\n

GDP And Corporate Profits<\/h2>\n\n\n\n

Corporate profits are also the big driver of what the market is likely to do in the near term and because of this investors are closely monitoring third-quarter U.S. earnings. Third-quarter earnings season is essentially at the finish line and of the 480 companies that have reported so far, 80% have beaten analysts' expectations. The inflation and interest rates will continue to significantly impact stock prices in December.<\/p>\n\n\n\n

U.S. economic growth(inflation and interest rates) has been resilient year-to-date and Bill Adams, a chief economist for Comerica Bank, recently said the U.S. economy has been much stronger in 2023 than economists expected. Bill Adams suggests that the annual real GDP is anticipated to reach approximately 2.4% this year, a substantial increase from the Federal Reserve's December 2022 dot plot prediction of 0.5%. However, he also warned that the outcome in the upcoming months will decide if the U.S. economy can smoothly achieve a so-called \"soft landing\" without veering into a recession.<\/p>\n\n\n\n

Deceleration In United States Economic Growth<\/h2>\n\n\n\n

Jeffrey Roach, the chief economist at LPL Financial,<\/a> foresees that most of the negative consequences stemming from higher interest rates have not materialized yet and due to this, he anticipates a deceleration in U.S. economic growth. Market expectations that the Federal Reserve will keep interest rates unchanged at its December meeting currently stand above 90% and any information that the Federal Reserve could start to cut rates in the first quarter of 2024 should be positive for stocks in the short-term period.<\/p>\n\n\n\n

On the other side, JPMorgan strategists believe that the risk-reward ratio for numerous stocks is currently unappealing and according to them, restrictive monetary policy is likely to remain in place for some time which could potentially cause a recession. Considering this scenario, investors worried about a possible U.S. recession can opt for a more defensive strategy in the market. They can enhance their financial flexibility by reducing their stock or cryptocurrency exposure and augmenting their cash reserves.<\/p>\n","post_title":"Investor Optimism Rises In November 2023. Does Strong Buying Activity Indicate The Possibility Of Further Gains In The Coming Weeks?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"investor-optimism-rises-in-november-2023-does-strong-buying-activity-indicate-the-possibility-of-further-gains-in-the-coming-weeks","to_ping":"","pinged":"","post_modified":"2023-11-23 01:39:12","post_modified_gmt":"2023-11-22 14:39:12","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14444","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14319,"post_author":"14","post_date":"2023-11-15 18:02:37","post_date_gmt":"2023-11-15 07:02:37","post_content":"\n

Wall Street's main indexes<\/a> surged significantly on Tuesday following the release of lower-than-anticipated inflation figures, which increased the belief that the Federal Reserve had concluded its interest rate hikes. The annual rate of inflation measured by the Consumer Price Index (CPI), which monitors the expenses of a variety of goods and services -\u00a0 slowed to 3.2% last month, dropping from September's 3.7% and marking the most subdued rate since July.<\/p>\n\n\n\n

Additionally promising, Wall Street's prices held steady over the month following a 0.4% increase in September. Core prices, which exclude the unpredictable food and energy sectors, rose by 4%, slightly slower compared to the rate observed in September. The report signifies a significant achievement for the Fed in its battle against inflation but in the upcoming weeks, policymakers will monitor the service category closely, seeking further deceleration as their interest rate increases impact demand.<\/p>\n\n\n\n

\"Inflation
Inflation edges down in October<\/em><\/figcaption><\/figure>\n\n\n\n

Earlier this month, the Federal Reserve maintained its benchmark interest rate at the highest level in 22 years. Following this Tuesday's report, prominent analysts and economists indicated only a 1 percent probability that the central bank would increase rates during its upcoming policy meeting in December. Gregory Daco, chief economist at EY Parthenon, said<\/a>:<\/p>\n\n\n\n

\u201cAcross the board, it\u2019s a good report and I think this will comfort the excessively data-dependent Fed policymakers that policy is sufficiently restrictive to bring inflation down to 2 percent.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/strong><\/em> Gala is announcing a partnership with Stick Figure Productions to distribute Four Down on the Blockchain<\/a><\/p>\n\n\n\n

However, analysts from JPMorgan warned that the risk-reward ratio for many stocks remains unattractive currently and restrictive monetary policy is likely to remain in place for some time. JPMorgan analysts anticipate that most adverse effects resulting from increased interest rates haven't manifested thus far. They highlight an upward trend in consumer loan delinquencies and corporate bankruptcies, suggesting that these patterns are probable to persist unless interest rates are lowered.<\/p>\n\n\n\n

This is likely to drive demand destruction, and weakening pricing power and margins for corporates in the coming quarters, and because of this JPMorgan analysts are adopting a defensive stance, maintaining underweight allocations in equities and cryptocurrencies. Nevertheless, they propose an increase in the investment allocation towards gold due to its potential to rise in value during economic downturns, offering a hedge against potential losses in alternative investments.<\/p>\n\n\n\n

Gold is commonly regarded as a safe-haven asset, particularly amid economic uncertainty or geopolitical instability. Investors typically turn to gold as a means of preserving value when other assets are considered risky.<\/p>\n","post_title":"Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-surged-significantly-after-the-release-of-lower-than-anticipated-inflation-figures","to_ping":"","pinged":"","post_modified":"2023-11-16 20:00:45","post_modified_gmt":"2023-11-16 09:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14319","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11491,"post_author":"14","post_date":"2023-05-04 21:53:10","post_date_gmt":"2023-05-04 11:53:10","post_content":"\n

As widely expected, the U.S. Central Bank raised interest rates by 25bps this Wednesday. It signalled it could pause further increases, giving officials time to assess the fallout from recent bank failures, wait on the resolution of a political stand-off over the U.S. debt ceiling and monitor the course of inflation. The federal funds rate is now in a range of 5% to 5.25%, which is the highest level since 2006. <\/p>\n\n\n\n

The U.S. Central Bank warned that tighter credit conditions for households and businesses are expected to affect economic activity. In the picture below, we can see that even without this rise in interest rates, the federal funds rate was at the highest level since the 2007 financial crisis.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Many analysts and economists are worried that the high-interest rates will push the economy into a recession. It is important to mention that government data showed last week that economic growth in the first quarter slowed sequentially, with real gross domestic product increasing at a 1.1% annual pace, compared with a 2.6% gain in the prior three-month period. With higher interest rates, companies need to spend more money to borrow money to invest in growth. Historically, higher rates lead companies to reduce spending (especially on hiring). <\/p>\n\n\n\n

Many companies could face liquidity problems, and economist David Rosenberg has warned that the U.S. economy is facing two big risks. David Rosenberg said<\/a>:<\/p>\n\n\n\n

\"We have a possible debt default on our hands and a spreading bank crisis. The banking turmoil that started with Silicon Valley Bank's collapse in March remains unresolved, and First Republic's failure and takeover by CEO Jamie Dimon's JPMorgan has reignited worries about broader financial instability. Moreover, political disagreement about raising the U.S. government's borrowing limit is fanning fears of a debt-ceiling crisis.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>United States May Fund Its Deficit By Printing More Money; Could Default By June 1st<\/a><\/p>\n\n\n\n

Higher rates encourage saving over spending and make the debt more costly. Companies with bigger credit or other loans with variable interest rates could be in a difficult situation. We expect to see a meaningful slowdown in economic growth and a weakening of the labour market in the United States in the upcoming months. <\/p>\n\n\n\n

At the same time, Brian Jacobsen, chief economist at Annex Wealth Management, said<\/a> that the manufacturing and housing sectors are in a recession already. The famous investor Jeremy Grantham warned that the U.S. stock market could experience significant losses soon, and a recommendation is that investors should continue to take a defensive investment approach.<\/p>\n\n\n\n

Stocks aren't the only assets that could significantly lose their value. Investors should remember that cryptocurrencies could also be in the situation to make an even bigger fall. The crypto market displayed a high correlation with U.S. equities. If a downtrend is witnessed in the stock market, the same is usually replicated in the crypto-sphere.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Bitcoin Is Close To Testing $30,000 Again; Ethereum Revives Bullish Momentum Above $1,800<\/a><\/p>\n","post_title":"The Fed Raises Interest Rates By 25 BPS This Wednesday; Effects On Crypto And Financial Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-fed-raises-interest-rates-by-25-bps-this-wednesday-effects-on-crypto-and-financial-markets","to_ping":"","pinged":"","post_modified":"2023-05-04 22:08:47","post_modified_gmt":"2023-05-04 12:08:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11491","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11422,"post_author":"12","post_date":"2023-05-02 17:50:37","post_date_gmt":"2023-05-02 07:50:37","post_content":"\n

Ray Dalio, the billionaire founder of one of the world\u2019s largest hedge funds, Bridgewater Associates, was recently\u00a0interviewed<\/a>. He explains that the United States' $31.45T debt may have to be resolved by printing more money, also referred to as currency debasement.<\/p>\n\n\n\n

\u201cSo I think you\u2019re in the part of the cycle where you\u2019ve had the tightening and then the dominoes are beginning to fall. And I think that that\u2019s going to produce more problems.<\/em><\/p>\n\n\n\n

I think when it comes down to it, there\u2019s just too much debt, and we\u2019re adding to it too quickly\u2026 Either that debt will be paid off with hard money, in which case there\u2019s not much printing and so on, or it will be paid off with printing a lot of money to make it easier to pay off. <\/em><\/p>\n\n\n\n

I think in the end, it\u2019s always the case that they print a lot of money in and make it easier to pay off, but you have the reduced value of money.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> Ray Dalio; The Federal Reserve Is Setting Off A \u201cTerrible Calamity\u201d<\/a><\/p>\n\n\n\n

Could The United States Default By June?<\/h2>\n\n\n\n

United States Treasury Secretary, Janet Yellen, wrote to House Speaker Kevin McCarthy;<\/p>\n\n\n\n

\"After reviewing recent federal tax receipts, our best estimate is that we will be unable to continue to satisfy all of the government\u2019s obligations by early June, and potentially as early as June 1, if Congress does not raise or suspend the debt limit before that time.<\/em><\/p>\n\n\n\n

If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests.\"<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> United States May Enter Mild Recession As Yet Another Hike In Fed Rates Expected<\/a><\/p>\n\n\n\n

Yellen warned that waiting until the last minute to take action on this issue would cause harm to \"business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States.\"<\/em> Yellen believes that defaulting on their debt would be a financial catastrophe, raising the cost of borrowing without an end, making future investment \"substantially more costly.\u201d<\/em><\/p>\n","post_title":"United States May Fund Its Deficit By Printing More Money; Could Default By June 1st","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-may-fund-its-deficit-by-printing-more-money-could-default-by-june-1st","to_ping":"","pinged":"","post_modified":"2023-05-04 13:04:05","post_modified_gmt":"2023-05-04 03:04:05","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11422","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

ADVERTISEMENT
\n

Policymakers And U.S. Stocks<\/h2>\n\n\n\n

Should that prediction materialize, there's a strong likelihood that policymakers will attain their desired \"soft landing\" scenario, despite raising borrowing rates from nearly zero to approximately 5.5% within a mere 15-month timeframe. Growth has remained strong, and the unemployment rate is still hovering below 4% even as inflation has rapidly cooled.<\/p>\n\n\n\n

The positive developments contributed significantly to driving the S&P 500 to its second most successful November since 1980 and it's noteworthy to highlight that the only instance when the index performed better in November was during its recovery post the pandemic in 2020.<\/p>\n\n\n\n

See Related:<\/em><\/strong> SlingTV Partners With BitPay To Accept Crypto For Subscriptions<\/a><\/p>\n\n\n\n

\"S&P
S&P 500 rose 9% in November 2023<\/em><\/figcaption><\/figure>\n\n\n\n

Encouragingly, Bank of America's<\/a> Savita Subramanian anticipates ongoing positive momentum for the S&P 500, projecting it to reach a record-breaking 5,000 points by year-end. Additionally, both BMO's Brian Belski and Deutsche Bank's Binky Chadha have established price targets of 5,100 points each.<\/p>\n\n\n\n

Analysts Index Review<\/h2>\n\n\n\n

However, certain analysts are expressing skepticism. JPMorgan Asset Management advises investors to remain cautious due to the possibility of a recession, while Soci\u00e9t\u00e9 G\u00e9n\u00e9rale cautions them to brace for a volatile 2024, predicting that the index will fluctuate between nearing its record high, experiencing a decline, and subsequently rebounding.<\/p>\n\n\n\n

The focus of investors has shifted now to the conclusion of the Fed's two-day meeting on Wednesday, eagerly awaiting their decision on interest rates, along with the release of the November producer price index (PPI) data. Jason Pride, chief of investment strategy and research at Glenmede, said<\/a>:<\/p>\n\n\n\n

\"They've (Fed) already taken rates up a lot... they will keep rates up in that range for longer than what the market is currently expecting. Markets do not expect more hikes and are instead focused on rate cuts.\"<\/em><\/p>\n","post_title":"U.S. Stocks Had The Highest Monthly Rally Of 2023 In November. What To Expect From The Rest Of December?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"u-s-stocks-had-the-highest-monthly-rally-of-2023-in-november-what-to-expect-from-the-rest-of-december","to_ping":"","pinged":"","post_modified":"2023-12-13 21:49:51","post_modified_gmt":"2023-12-13 10:49:51","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14611","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14444,"post_author":"14","post_date":"2023-11-23 01:38:54","post_date_gmt":"2023-11-22 14:38:54","post_content":"\n

Investors remain optimistic that the market can resume its bullish momentum in December given that the fourth quarter has historically been one of the best three-month stretches of the year for the S&P 500. Investors anticipated the Federal Reserve<\/a> may have already reached its terminal interest rate; however, the primary driving forces affecting stock prices over recent weeks, inflation and interest rates, will continue to hold significant importance in December.<\/p>\n\n\n\n

\"The
The S&P 500 index's strong advance off its October 27 low continues to make progress<\/em><\/figcaption><\/figure>\n\n\n\n

Positive information is that the annual rate of inflation measured by the Consumer Price Index (CPI), which monitors the expenses of a variety of goods and services -  slowed to 3.2% in October, dropping from September's 3.7% and marking the most subdued rate since July 2023. It is also important to say that inflation is significantly lower than 2022 peak levels which were above 9% and because of this many investors anticipate the Fed could begin to cut interest rates as soon as the first half of 2024.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Federal Reserve Officials Banned From Trading Crypto(Opens in a new browser tab)<\/a><\/p>\n\n\n\n

GDP And Corporate Profits<\/h2>\n\n\n\n

Corporate profits are also the big driver of what the market is likely to do in the near term and because of this investors are closely monitoring third-quarter U.S. earnings. Third-quarter earnings season is essentially at the finish line and of the 480 companies that have reported so far, 80% have beaten analysts' expectations. The inflation and interest rates will continue to significantly impact stock prices in December.<\/p>\n\n\n\n

U.S. economic growth(inflation and interest rates) has been resilient year-to-date and Bill Adams, a chief economist for Comerica Bank, recently said the U.S. economy has been much stronger in 2023 than economists expected. Bill Adams suggests that the annual real GDP is anticipated to reach approximately 2.4% this year, a substantial increase from the Federal Reserve's December 2022 dot plot prediction of 0.5%. However, he also warned that the outcome in the upcoming months will decide if the U.S. economy can smoothly achieve a so-called \"soft landing\" without veering into a recession.<\/p>\n\n\n\n

Deceleration In United States Economic Growth<\/h2>\n\n\n\n

Jeffrey Roach, the chief economist at LPL Financial,<\/a> foresees that most of the negative consequences stemming from higher interest rates have not materialized yet and due to this, he anticipates a deceleration in U.S. economic growth. Market expectations that the Federal Reserve will keep interest rates unchanged at its December meeting currently stand above 90% and any information that the Federal Reserve could start to cut rates in the first quarter of 2024 should be positive for stocks in the short-term period.<\/p>\n\n\n\n

On the other side, JPMorgan strategists believe that the risk-reward ratio for numerous stocks is currently unappealing and according to them, restrictive monetary policy is likely to remain in place for some time which could potentially cause a recession. Considering this scenario, investors worried about a possible U.S. recession can opt for a more defensive strategy in the market. They can enhance their financial flexibility by reducing their stock or cryptocurrency exposure and augmenting their cash reserves.<\/p>\n","post_title":"Investor Optimism Rises In November 2023. Does Strong Buying Activity Indicate The Possibility Of Further Gains In The Coming Weeks?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"investor-optimism-rises-in-november-2023-does-strong-buying-activity-indicate-the-possibility-of-further-gains-in-the-coming-weeks","to_ping":"","pinged":"","post_modified":"2023-11-23 01:39:12","post_modified_gmt":"2023-11-22 14:39:12","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14444","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14319,"post_author":"14","post_date":"2023-11-15 18:02:37","post_date_gmt":"2023-11-15 07:02:37","post_content":"\n

Wall Street's main indexes<\/a> surged significantly on Tuesday following the release of lower-than-anticipated inflation figures, which increased the belief that the Federal Reserve had concluded its interest rate hikes. The annual rate of inflation measured by the Consumer Price Index (CPI), which monitors the expenses of a variety of goods and services -\u00a0 slowed to 3.2% last month, dropping from September's 3.7% and marking the most subdued rate since July.<\/p>\n\n\n\n

Additionally promising, Wall Street's prices held steady over the month following a 0.4% increase in September. Core prices, which exclude the unpredictable food and energy sectors, rose by 4%, slightly slower compared to the rate observed in September. The report signifies a significant achievement for the Fed in its battle against inflation but in the upcoming weeks, policymakers will monitor the service category closely, seeking further deceleration as their interest rate increases impact demand.<\/p>\n\n\n\n

\"Inflation
Inflation edges down in October<\/em><\/figcaption><\/figure>\n\n\n\n

Earlier this month, the Federal Reserve maintained its benchmark interest rate at the highest level in 22 years. Following this Tuesday's report, prominent analysts and economists indicated only a 1 percent probability that the central bank would increase rates during its upcoming policy meeting in December. Gregory Daco, chief economist at EY Parthenon, said<\/a>:<\/p>\n\n\n\n

\u201cAcross the board, it\u2019s a good report and I think this will comfort the excessively data-dependent Fed policymakers that policy is sufficiently restrictive to bring inflation down to 2 percent.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/strong><\/em> Gala is announcing a partnership with Stick Figure Productions to distribute Four Down on the Blockchain<\/a><\/p>\n\n\n\n

However, analysts from JPMorgan warned that the risk-reward ratio for many stocks remains unattractive currently and restrictive monetary policy is likely to remain in place for some time. JPMorgan analysts anticipate that most adverse effects resulting from increased interest rates haven't manifested thus far. They highlight an upward trend in consumer loan delinquencies and corporate bankruptcies, suggesting that these patterns are probable to persist unless interest rates are lowered.<\/p>\n\n\n\n

This is likely to drive demand destruction, and weakening pricing power and margins for corporates in the coming quarters, and because of this JPMorgan analysts are adopting a defensive stance, maintaining underweight allocations in equities and cryptocurrencies. Nevertheless, they propose an increase in the investment allocation towards gold due to its potential to rise in value during economic downturns, offering a hedge against potential losses in alternative investments.<\/p>\n\n\n\n

Gold is commonly regarded as a safe-haven asset, particularly amid economic uncertainty or geopolitical instability. Investors typically turn to gold as a means of preserving value when other assets are considered risky.<\/p>\n","post_title":"Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-surged-significantly-after-the-release-of-lower-than-anticipated-inflation-figures","to_ping":"","pinged":"","post_modified":"2023-11-16 20:00:45","post_modified_gmt":"2023-11-16 09:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14319","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11491,"post_author":"14","post_date":"2023-05-04 21:53:10","post_date_gmt":"2023-05-04 11:53:10","post_content":"\n

As widely expected, the U.S. Central Bank raised interest rates by 25bps this Wednesday. It signalled it could pause further increases, giving officials time to assess the fallout from recent bank failures, wait on the resolution of a political stand-off over the U.S. debt ceiling and monitor the course of inflation. The federal funds rate is now in a range of 5% to 5.25%, which is the highest level since 2006. <\/p>\n\n\n\n

The U.S. Central Bank warned that tighter credit conditions for households and businesses are expected to affect economic activity. In the picture below, we can see that even without this rise in interest rates, the federal funds rate was at the highest level since the 2007 financial crisis.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Many analysts and economists are worried that the high-interest rates will push the economy into a recession. It is important to mention that government data showed last week that economic growth in the first quarter slowed sequentially, with real gross domestic product increasing at a 1.1% annual pace, compared with a 2.6% gain in the prior three-month period. With higher interest rates, companies need to spend more money to borrow money to invest in growth. Historically, higher rates lead companies to reduce spending (especially on hiring). <\/p>\n\n\n\n

Many companies could face liquidity problems, and economist David Rosenberg has warned that the U.S. economy is facing two big risks. David Rosenberg said<\/a>:<\/p>\n\n\n\n

\"We have a possible debt default on our hands and a spreading bank crisis. The banking turmoil that started with Silicon Valley Bank's collapse in March remains unresolved, and First Republic's failure and takeover by CEO Jamie Dimon's JPMorgan has reignited worries about broader financial instability. Moreover, political disagreement about raising the U.S. government's borrowing limit is fanning fears of a debt-ceiling crisis.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>United States May Fund Its Deficit By Printing More Money; Could Default By June 1st<\/a><\/p>\n\n\n\n

Higher rates encourage saving over spending and make the debt more costly. Companies with bigger credit or other loans with variable interest rates could be in a difficult situation. We expect to see a meaningful slowdown in economic growth and a weakening of the labour market in the United States in the upcoming months. <\/p>\n\n\n\n

At the same time, Brian Jacobsen, chief economist at Annex Wealth Management, said<\/a> that the manufacturing and housing sectors are in a recession already. The famous investor Jeremy Grantham warned that the U.S. stock market could experience significant losses soon, and a recommendation is that investors should continue to take a defensive investment approach.<\/p>\n\n\n\n

Stocks aren't the only assets that could significantly lose their value. Investors should remember that cryptocurrencies could also be in the situation to make an even bigger fall. The crypto market displayed a high correlation with U.S. equities. If a downtrend is witnessed in the stock market, the same is usually replicated in the crypto-sphere.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Bitcoin Is Close To Testing $30,000 Again; Ethereum Revives Bullish Momentum Above $1,800<\/a><\/p>\n","post_title":"The Fed Raises Interest Rates By 25 BPS This Wednesday; Effects On Crypto And Financial Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-fed-raises-interest-rates-by-25-bps-this-wednesday-effects-on-crypto-and-financial-markets","to_ping":"","pinged":"","post_modified":"2023-05-04 22:08:47","post_modified_gmt":"2023-05-04 12:08:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11491","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11422,"post_author":"12","post_date":"2023-05-02 17:50:37","post_date_gmt":"2023-05-02 07:50:37","post_content":"\n

Ray Dalio, the billionaire founder of one of the world\u2019s largest hedge funds, Bridgewater Associates, was recently\u00a0interviewed<\/a>. He explains that the United States' $31.45T debt may have to be resolved by printing more money, also referred to as currency debasement.<\/p>\n\n\n\n

\u201cSo I think you\u2019re in the part of the cycle where you\u2019ve had the tightening and then the dominoes are beginning to fall. And I think that that\u2019s going to produce more problems.<\/em><\/p>\n\n\n\n

I think when it comes down to it, there\u2019s just too much debt, and we\u2019re adding to it too quickly\u2026 Either that debt will be paid off with hard money, in which case there\u2019s not much printing and so on, or it will be paid off with printing a lot of money to make it easier to pay off. <\/em><\/p>\n\n\n\n

I think in the end, it\u2019s always the case that they print a lot of money in and make it easier to pay off, but you have the reduced value of money.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> Ray Dalio; The Federal Reserve Is Setting Off A \u201cTerrible Calamity\u201d<\/a><\/p>\n\n\n\n

Could The United States Default By June?<\/h2>\n\n\n\n

United States Treasury Secretary, Janet Yellen, wrote to House Speaker Kevin McCarthy;<\/p>\n\n\n\n

\"After reviewing recent federal tax receipts, our best estimate is that we will be unable to continue to satisfy all of the government\u2019s obligations by early June, and potentially as early as June 1, if Congress does not raise or suspend the debt limit before that time.<\/em><\/p>\n\n\n\n

If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests.\"<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> United States May Enter Mild Recession As Yet Another Hike In Fed Rates Expected<\/a><\/p>\n\n\n\n

Yellen warned that waiting until the last minute to take action on this issue would cause harm to \"business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States.\"<\/em> Yellen believes that defaulting on their debt would be a financial catastrophe, raising the cost of borrowing without an end, making future investment \"substantially more costly.\u201d<\/em><\/p>\n","post_title":"United States May Fund Its Deficit By Printing More Money; Could Default By June 1st","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-may-fund-its-deficit-by-printing-more-money-could-default-by-june-1st","to_ping":"","pinged":"","post_modified":"2023-05-04 13:04:05","post_modified_gmt":"2023-05-04 03:04:05","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11422","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

ADVERTISEMENT
\n

This triggered a surge in speculation that the Fed has finished its tightening cycle. Most traders, as indicated by the CME Group's Fedwatch tool, think that the central bank has raised interest rates for the last time this year, shifting their focus to potential rate cuts around mid-2024.<\/p>\n\n\n\n

Policymakers And U.S. Stocks<\/h2>\n\n\n\n

Should that prediction materialize, there's a strong likelihood that policymakers will attain their desired \"soft landing\" scenario, despite raising borrowing rates from nearly zero to approximately 5.5% within a mere 15-month timeframe. Growth has remained strong, and the unemployment rate is still hovering below 4% even as inflation has rapidly cooled.<\/p>\n\n\n\n

The positive developments contributed significantly to driving the S&P 500 to its second most successful November since 1980 and it's noteworthy to highlight that the only instance when the index performed better in November was during its recovery post the pandemic in 2020.<\/p>\n\n\n\n

See Related:<\/em><\/strong> SlingTV Partners With BitPay To Accept Crypto For Subscriptions<\/a><\/p>\n\n\n\n

\"S&P
S&P 500 rose 9% in November 2023<\/em><\/figcaption><\/figure>\n\n\n\n

Encouragingly, Bank of America's<\/a> Savita Subramanian anticipates ongoing positive momentum for the S&P 500, projecting it to reach a record-breaking 5,000 points by year-end. Additionally, both BMO's Brian Belski and Deutsche Bank's Binky Chadha have established price targets of 5,100 points each.<\/p>\n\n\n\n

Analysts Index Review<\/h2>\n\n\n\n

However, certain analysts are expressing skepticism. JPMorgan Asset Management advises investors to remain cautious due to the possibility of a recession, while Soci\u00e9t\u00e9 G\u00e9n\u00e9rale cautions them to brace for a volatile 2024, predicting that the index will fluctuate between nearing its record high, experiencing a decline, and subsequently rebounding.<\/p>\n\n\n\n

The focus of investors has shifted now to the conclusion of the Fed's two-day meeting on Wednesday, eagerly awaiting their decision on interest rates, along with the release of the November producer price index (PPI) data. Jason Pride, chief of investment strategy and research at Glenmede, said<\/a>:<\/p>\n\n\n\n

\"They've (Fed) already taken rates up a lot... they will keep rates up in that range for longer than what the market is currently expecting. Markets do not expect more hikes and are instead focused on rate cuts.\"<\/em><\/p>\n","post_title":"U.S. Stocks Had The Highest Monthly Rally Of 2023 In November. What To Expect From The Rest Of December?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"u-s-stocks-had-the-highest-monthly-rally-of-2023-in-november-what-to-expect-from-the-rest-of-december","to_ping":"","pinged":"","post_modified":"2023-12-13 21:49:51","post_modified_gmt":"2023-12-13 10:49:51","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14611","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14444,"post_author":"14","post_date":"2023-11-23 01:38:54","post_date_gmt":"2023-11-22 14:38:54","post_content":"\n

Investors remain optimistic that the market can resume its bullish momentum in December given that the fourth quarter has historically been one of the best three-month stretches of the year for the S&P 500. Investors anticipated the Federal Reserve<\/a> may have already reached its terminal interest rate; however, the primary driving forces affecting stock prices over recent weeks, inflation and interest rates, will continue to hold significant importance in December.<\/p>\n\n\n\n

\"The
The S&P 500 index's strong advance off its October 27 low continues to make progress<\/em><\/figcaption><\/figure>\n\n\n\n

Positive information is that the annual rate of inflation measured by the Consumer Price Index (CPI), which monitors the expenses of a variety of goods and services -  slowed to 3.2% in October, dropping from September's 3.7% and marking the most subdued rate since July 2023. It is also important to say that inflation is significantly lower than 2022 peak levels which were above 9% and because of this many investors anticipate the Fed could begin to cut interest rates as soon as the first half of 2024.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Federal Reserve Officials Banned From Trading Crypto(Opens in a new browser tab)<\/a><\/p>\n\n\n\n

GDP And Corporate Profits<\/h2>\n\n\n\n

Corporate profits are also the big driver of what the market is likely to do in the near term and because of this investors are closely monitoring third-quarter U.S. earnings. Third-quarter earnings season is essentially at the finish line and of the 480 companies that have reported so far, 80% have beaten analysts' expectations. The inflation and interest rates will continue to significantly impact stock prices in December.<\/p>\n\n\n\n

U.S. economic growth(inflation and interest rates) has been resilient year-to-date and Bill Adams, a chief economist for Comerica Bank, recently said the U.S. economy has been much stronger in 2023 than economists expected. Bill Adams suggests that the annual real GDP is anticipated to reach approximately 2.4% this year, a substantial increase from the Federal Reserve's December 2022 dot plot prediction of 0.5%. However, he also warned that the outcome in the upcoming months will decide if the U.S. economy can smoothly achieve a so-called \"soft landing\" without veering into a recession.<\/p>\n\n\n\n

Deceleration In United States Economic Growth<\/h2>\n\n\n\n

Jeffrey Roach, the chief economist at LPL Financial,<\/a> foresees that most of the negative consequences stemming from higher interest rates have not materialized yet and due to this, he anticipates a deceleration in U.S. economic growth. Market expectations that the Federal Reserve will keep interest rates unchanged at its December meeting currently stand above 90% and any information that the Federal Reserve could start to cut rates in the first quarter of 2024 should be positive for stocks in the short-term period.<\/p>\n\n\n\n

On the other side, JPMorgan strategists believe that the risk-reward ratio for numerous stocks is currently unappealing and according to them, restrictive monetary policy is likely to remain in place for some time which could potentially cause a recession. Considering this scenario, investors worried about a possible U.S. recession can opt for a more defensive strategy in the market. They can enhance their financial flexibility by reducing their stock or cryptocurrency exposure and augmenting their cash reserves.<\/p>\n","post_title":"Investor Optimism Rises In November 2023. Does Strong Buying Activity Indicate The Possibility Of Further Gains In The Coming Weeks?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"investor-optimism-rises-in-november-2023-does-strong-buying-activity-indicate-the-possibility-of-further-gains-in-the-coming-weeks","to_ping":"","pinged":"","post_modified":"2023-11-23 01:39:12","post_modified_gmt":"2023-11-22 14:39:12","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14444","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14319,"post_author":"14","post_date":"2023-11-15 18:02:37","post_date_gmt":"2023-11-15 07:02:37","post_content":"\n

Wall Street's main indexes<\/a> surged significantly on Tuesday following the release of lower-than-anticipated inflation figures, which increased the belief that the Federal Reserve had concluded its interest rate hikes. The annual rate of inflation measured by the Consumer Price Index (CPI), which monitors the expenses of a variety of goods and services -\u00a0 slowed to 3.2% last month, dropping from September's 3.7% and marking the most subdued rate since July.<\/p>\n\n\n\n

Additionally promising, Wall Street's prices held steady over the month following a 0.4% increase in September. Core prices, which exclude the unpredictable food and energy sectors, rose by 4%, slightly slower compared to the rate observed in September. The report signifies a significant achievement for the Fed in its battle against inflation but in the upcoming weeks, policymakers will monitor the service category closely, seeking further deceleration as their interest rate increases impact demand.<\/p>\n\n\n\n

\"Inflation
Inflation edges down in October<\/em><\/figcaption><\/figure>\n\n\n\n

Earlier this month, the Federal Reserve maintained its benchmark interest rate at the highest level in 22 years. Following this Tuesday's report, prominent analysts and economists indicated only a 1 percent probability that the central bank would increase rates during its upcoming policy meeting in December. Gregory Daco, chief economist at EY Parthenon, said<\/a>:<\/p>\n\n\n\n

\u201cAcross the board, it\u2019s a good report and I think this will comfort the excessively data-dependent Fed policymakers that policy is sufficiently restrictive to bring inflation down to 2 percent.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/strong><\/em> Gala is announcing a partnership with Stick Figure Productions to distribute Four Down on the Blockchain<\/a><\/p>\n\n\n\n

However, analysts from JPMorgan warned that the risk-reward ratio for many stocks remains unattractive currently and restrictive monetary policy is likely to remain in place for some time. JPMorgan analysts anticipate that most adverse effects resulting from increased interest rates haven't manifested thus far. They highlight an upward trend in consumer loan delinquencies and corporate bankruptcies, suggesting that these patterns are probable to persist unless interest rates are lowered.<\/p>\n\n\n\n

This is likely to drive demand destruction, and weakening pricing power and margins for corporates in the coming quarters, and because of this JPMorgan analysts are adopting a defensive stance, maintaining underweight allocations in equities and cryptocurrencies. Nevertheless, they propose an increase in the investment allocation towards gold due to its potential to rise in value during economic downturns, offering a hedge against potential losses in alternative investments.<\/p>\n\n\n\n

Gold is commonly regarded as a safe-haven asset, particularly amid economic uncertainty or geopolitical instability. Investors typically turn to gold as a means of preserving value when other assets are considered risky.<\/p>\n","post_title":"Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-surged-significantly-after-the-release-of-lower-than-anticipated-inflation-figures","to_ping":"","pinged":"","post_modified":"2023-11-16 20:00:45","post_modified_gmt":"2023-11-16 09:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14319","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11491,"post_author":"14","post_date":"2023-05-04 21:53:10","post_date_gmt":"2023-05-04 11:53:10","post_content":"\n

As widely expected, the U.S. Central Bank raised interest rates by 25bps this Wednesday. It signalled it could pause further increases, giving officials time to assess the fallout from recent bank failures, wait on the resolution of a political stand-off over the U.S. debt ceiling and monitor the course of inflation. The federal funds rate is now in a range of 5% to 5.25%, which is the highest level since 2006. <\/p>\n\n\n\n

The U.S. Central Bank warned that tighter credit conditions for households and businesses are expected to affect economic activity. In the picture below, we can see that even without this rise in interest rates, the federal funds rate was at the highest level since the 2007 financial crisis.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Many analysts and economists are worried that the high-interest rates will push the economy into a recession. It is important to mention that government data showed last week that economic growth in the first quarter slowed sequentially, with real gross domestic product increasing at a 1.1% annual pace, compared with a 2.6% gain in the prior three-month period. With higher interest rates, companies need to spend more money to borrow money to invest in growth. Historically, higher rates lead companies to reduce spending (especially on hiring). <\/p>\n\n\n\n

Many companies could face liquidity problems, and economist David Rosenberg has warned that the U.S. economy is facing two big risks. David Rosenberg said<\/a>:<\/p>\n\n\n\n

\"We have a possible debt default on our hands and a spreading bank crisis. The banking turmoil that started with Silicon Valley Bank's collapse in March remains unresolved, and First Republic's failure and takeover by CEO Jamie Dimon's JPMorgan has reignited worries about broader financial instability. Moreover, political disagreement about raising the U.S. government's borrowing limit is fanning fears of a debt-ceiling crisis.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>United States May Fund Its Deficit By Printing More Money; Could Default By June 1st<\/a><\/p>\n\n\n\n

Higher rates encourage saving over spending and make the debt more costly. Companies with bigger credit or other loans with variable interest rates could be in a difficult situation. We expect to see a meaningful slowdown in economic growth and a weakening of the labour market in the United States in the upcoming months. <\/p>\n\n\n\n

At the same time, Brian Jacobsen, chief economist at Annex Wealth Management, said<\/a> that the manufacturing and housing sectors are in a recession already. The famous investor Jeremy Grantham warned that the U.S. stock market could experience significant losses soon, and a recommendation is that investors should continue to take a defensive investment approach.<\/p>\n\n\n\n

Stocks aren't the only assets that could significantly lose their value. Investors should remember that cryptocurrencies could also be in the situation to make an even bigger fall. The crypto market displayed a high correlation with U.S. equities. If a downtrend is witnessed in the stock market, the same is usually replicated in the crypto-sphere.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Bitcoin Is Close To Testing $30,000 Again; Ethereum Revives Bullish Momentum Above $1,800<\/a><\/p>\n","post_title":"The Fed Raises Interest Rates By 25 BPS This Wednesday; Effects On Crypto And Financial Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-fed-raises-interest-rates-by-25-bps-this-wednesday-effects-on-crypto-and-financial-markets","to_ping":"","pinged":"","post_modified":"2023-05-04 22:08:47","post_modified_gmt":"2023-05-04 12:08:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11491","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11422,"post_author":"12","post_date":"2023-05-02 17:50:37","post_date_gmt":"2023-05-02 07:50:37","post_content":"\n

Ray Dalio, the billionaire founder of one of the world\u2019s largest hedge funds, Bridgewater Associates, was recently\u00a0interviewed<\/a>. He explains that the United States' $31.45T debt may have to be resolved by printing more money, also referred to as currency debasement.<\/p>\n\n\n\n

\u201cSo I think you\u2019re in the part of the cycle where you\u2019ve had the tightening and then the dominoes are beginning to fall. And I think that that\u2019s going to produce more problems.<\/em><\/p>\n\n\n\n

I think when it comes down to it, there\u2019s just too much debt, and we\u2019re adding to it too quickly\u2026 Either that debt will be paid off with hard money, in which case there\u2019s not much printing and so on, or it will be paid off with printing a lot of money to make it easier to pay off. <\/em><\/p>\n\n\n\n

I think in the end, it\u2019s always the case that they print a lot of money in and make it easier to pay off, but you have the reduced value of money.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> Ray Dalio; The Federal Reserve Is Setting Off A \u201cTerrible Calamity\u201d<\/a><\/p>\n\n\n\n

Could The United States Default By June?<\/h2>\n\n\n\n

United States Treasury Secretary, Janet Yellen, wrote to House Speaker Kevin McCarthy;<\/p>\n\n\n\n

\"After reviewing recent federal tax receipts, our best estimate is that we will be unable to continue to satisfy all of the government\u2019s obligations by early June, and potentially as early as June 1, if Congress does not raise or suspend the debt limit before that time.<\/em><\/p>\n\n\n\n

If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests.\"<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> United States May Enter Mild Recession As Yet Another Hike In Fed Rates Expected<\/a><\/p>\n\n\n\n

Yellen warned that waiting until the last minute to take action on this issue would cause harm to \"business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States.\"<\/em> Yellen believes that defaulting on their debt would be a financial catastrophe, raising the cost of borrowing without an end, making future investment \"substantially more costly.\u201d<\/em><\/p>\n","post_title":"United States May Fund Its Deficit By Printing More Money; Could Default By June 1st","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-may-fund-its-deficit-by-printing-more-money-could-default-by-june-1st","to_ping":"","pinged":"","post_modified":"2023-05-04 13:04:05","post_modified_gmt":"2023-05-04 03:04:05","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11422","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

ADVERTISEMENT
\n

Encouraging news from this Tuesday revealed that the November Consumer Price Index (CPI) increased by 3.1% every year, aligning with the predictions of economists surveyed by Reuters<\/a>. Similarly, core prices, which exclude fluctuating items like food and energy expenses, also met expectations, rising by 4% annually.<\/p>\n\n\n\n

This triggered a surge in speculation that the Fed has finished its tightening cycle. Most traders, as indicated by the CME Group's Fedwatch tool, think that the central bank has raised interest rates for the last time this year, shifting their focus to potential rate cuts around mid-2024.<\/p>\n\n\n\n

Policymakers And U.S. Stocks<\/h2>\n\n\n\n

Should that prediction materialize, there's a strong likelihood that policymakers will attain their desired \"soft landing\" scenario, despite raising borrowing rates from nearly zero to approximately 5.5% within a mere 15-month timeframe. Growth has remained strong, and the unemployment rate is still hovering below 4% even as inflation has rapidly cooled.<\/p>\n\n\n\n

The positive developments contributed significantly to driving the S&P 500 to its second most successful November since 1980 and it's noteworthy to highlight that the only instance when the index performed better in November was during its recovery post the pandemic in 2020.<\/p>\n\n\n\n

See Related:<\/em><\/strong> SlingTV Partners With BitPay To Accept Crypto For Subscriptions<\/a><\/p>\n\n\n\n

\"S&P
S&P 500 rose 9% in November 2023<\/em><\/figcaption><\/figure>\n\n\n\n

Encouragingly, Bank of America's<\/a> Savita Subramanian anticipates ongoing positive momentum for the S&P 500, projecting it to reach a record-breaking 5,000 points by year-end. Additionally, both BMO's Brian Belski and Deutsche Bank's Binky Chadha have established price targets of 5,100 points each.<\/p>\n\n\n\n

Analysts Index Review<\/h2>\n\n\n\n

However, certain analysts are expressing skepticism. JPMorgan Asset Management advises investors to remain cautious due to the possibility of a recession, while Soci\u00e9t\u00e9 G\u00e9n\u00e9rale cautions them to brace for a volatile 2024, predicting that the index will fluctuate between nearing its record high, experiencing a decline, and subsequently rebounding.<\/p>\n\n\n\n

The focus of investors has shifted now to the conclusion of the Fed's two-day meeting on Wednesday, eagerly awaiting their decision on interest rates, along with the release of the November producer price index (PPI) data. Jason Pride, chief of investment strategy and research at Glenmede, said<\/a>:<\/p>\n\n\n\n

\"They've (Fed) already taken rates up a lot... they will keep rates up in that range for longer than what the market is currently expecting. Markets do not expect more hikes and are instead focused on rate cuts.\"<\/em><\/p>\n","post_title":"U.S. Stocks Had The Highest Monthly Rally Of 2023 In November. What To Expect From The Rest Of December?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"u-s-stocks-had-the-highest-monthly-rally-of-2023-in-november-what-to-expect-from-the-rest-of-december","to_ping":"","pinged":"","post_modified":"2023-12-13 21:49:51","post_modified_gmt":"2023-12-13 10:49:51","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14611","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14444,"post_author":"14","post_date":"2023-11-23 01:38:54","post_date_gmt":"2023-11-22 14:38:54","post_content":"\n

Investors remain optimistic that the market can resume its bullish momentum in December given that the fourth quarter has historically been one of the best three-month stretches of the year for the S&P 500. Investors anticipated the Federal Reserve<\/a> may have already reached its terminal interest rate; however, the primary driving forces affecting stock prices over recent weeks, inflation and interest rates, will continue to hold significant importance in December.<\/p>\n\n\n\n

\"The
The S&P 500 index's strong advance off its October 27 low continues to make progress<\/em><\/figcaption><\/figure>\n\n\n\n

Positive information is that the annual rate of inflation measured by the Consumer Price Index (CPI), which monitors the expenses of a variety of goods and services -  slowed to 3.2% in October, dropping from September's 3.7% and marking the most subdued rate since July 2023. It is also important to say that inflation is significantly lower than 2022 peak levels which were above 9% and because of this many investors anticipate the Fed could begin to cut interest rates as soon as the first half of 2024.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Federal Reserve Officials Banned From Trading Crypto(Opens in a new browser tab)<\/a><\/p>\n\n\n\n

GDP And Corporate Profits<\/h2>\n\n\n\n

Corporate profits are also the big driver of what the market is likely to do in the near term and because of this investors are closely monitoring third-quarter U.S. earnings. Third-quarter earnings season is essentially at the finish line and of the 480 companies that have reported so far, 80% have beaten analysts' expectations. The inflation and interest rates will continue to significantly impact stock prices in December.<\/p>\n\n\n\n

U.S. economic growth(inflation and interest rates) has been resilient year-to-date and Bill Adams, a chief economist for Comerica Bank, recently said the U.S. economy has been much stronger in 2023 than economists expected. Bill Adams suggests that the annual real GDP is anticipated to reach approximately 2.4% this year, a substantial increase from the Federal Reserve's December 2022 dot plot prediction of 0.5%. However, he also warned that the outcome in the upcoming months will decide if the U.S. economy can smoothly achieve a so-called \"soft landing\" without veering into a recession.<\/p>\n\n\n\n

Deceleration In United States Economic Growth<\/h2>\n\n\n\n

Jeffrey Roach, the chief economist at LPL Financial,<\/a> foresees that most of the negative consequences stemming from higher interest rates have not materialized yet and due to this, he anticipates a deceleration in U.S. economic growth. Market expectations that the Federal Reserve will keep interest rates unchanged at its December meeting currently stand above 90% and any information that the Federal Reserve could start to cut rates in the first quarter of 2024 should be positive for stocks in the short-term period.<\/p>\n\n\n\n

On the other side, JPMorgan strategists believe that the risk-reward ratio for numerous stocks is currently unappealing and according to them, restrictive monetary policy is likely to remain in place for some time which could potentially cause a recession. Considering this scenario, investors worried about a possible U.S. recession can opt for a more defensive strategy in the market. They can enhance their financial flexibility by reducing their stock or cryptocurrency exposure and augmenting their cash reserves.<\/p>\n","post_title":"Investor Optimism Rises In November 2023. Does Strong Buying Activity Indicate The Possibility Of Further Gains In The Coming Weeks?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"investor-optimism-rises-in-november-2023-does-strong-buying-activity-indicate-the-possibility-of-further-gains-in-the-coming-weeks","to_ping":"","pinged":"","post_modified":"2023-11-23 01:39:12","post_modified_gmt":"2023-11-22 14:39:12","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14444","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14319,"post_author":"14","post_date":"2023-11-15 18:02:37","post_date_gmt":"2023-11-15 07:02:37","post_content":"\n

Wall Street's main indexes<\/a> surged significantly on Tuesday following the release of lower-than-anticipated inflation figures, which increased the belief that the Federal Reserve had concluded its interest rate hikes. The annual rate of inflation measured by the Consumer Price Index (CPI), which monitors the expenses of a variety of goods and services -\u00a0 slowed to 3.2% last month, dropping from September's 3.7% and marking the most subdued rate since July.<\/p>\n\n\n\n

Additionally promising, Wall Street's prices held steady over the month following a 0.4% increase in September. Core prices, which exclude the unpredictable food and energy sectors, rose by 4%, slightly slower compared to the rate observed in September. The report signifies a significant achievement for the Fed in its battle against inflation but in the upcoming weeks, policymakers will monitor the service category closely, seeking further deceleration as their interest rate increases impact demand.<\/p>\n\n\n\n

\"Inflation
Inflation edges down in October<\/em><\/figcaption><\/figure>\n\n\n\n

Earlier this month, the Federal Reserve maintained its benchmark interest rate at the highest level in 22 years. Following this Tuesday's report, prominent analysts and economists indicated only a 1 percent probability that the central bank would increase rates during its upcoming policy meeting in December. Gregory Daco, chief economist at EY Parthenon, said<\/a>:<\/p>\n\n\n\n

\u201cAcross the board, it\u2019s a good report and I think this will comfort the excessively data-dependent Fed policymakers that policy is sufficiently restrictive to bring inflation down to 2 percent.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/strong><\/em> Gala is announcing a partnership with Stick Figure Productions to distribute Four Down on the Blockchain<\/a><\/p>\n\n\n\n

However, analysts from JPMorgan warned that the risk-reward ratio for many stocks remains unattractive currently and restrictive monetary policy is likely to remain in place for some time. JPMorgan analysts anticipate that most adverse effects resulting from increased interest rates haven't manifested thus far. They highlight an upward trend in consumer loan delinquencies and corporate bankruptcies, suggesting that these patterns are probable to persist unless interest rates are lowered.<\/p>\n\n\n\n

This is likely to drive demand destruction, and weakening pricing power and margins for corporates in the coming quarters, and because of this JPMorgan analysts are adopting a defensive stance, maintaining underweight allocations in equities and cryptocurrencies. Nevertheless, they propose an increase in the investment allocation towards gold due to its potential to rise in value during economic downturns, offering a hedge against potential losses in alternative investments.<\/p>\n\n\n\n

Gold is commonly regarded as a safe-haven asset, particularly amid economic uncertainty or geopolitical instability. Investors typically turn to gold as a means of preserving value when other assets are considered risky.<\/p>\n","post_title":"Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-surged-significantly-after-the-release-of-lower-than-anticipated-inflation-figures","to_ping":"","pinged":"","post_modified":"2023-11-16 20:00:45","post_modified_gmt":"2023-11-16 09:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14319","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11491,"post_author":"14","post_date":"2023-05-04 21:53:10","post_date_gmt":"2023-05-04 11:53:10","post_content":"\n

As widely expected, the U.S. Central Bank raised interest rates by 25bps this Wednesday. It signalled it could pause further increases, giving officials time to assess the fallout from recent bank failures, wait on the resolution of a political stand-off over the U.S. debt ceiling and monitor the course of inflation. The federal funds rate is now in a range of 5% to 5.25%, which is the highest level since 2006. <\/p>\n\n\n\n

The U.S. Central Bank warned that tighter credit conditions for households and businesses are expected to affect economic activity. In the picture below, we can see that even without this rise in interest rates, the federal funds rate was at the highest level since the 2007 financial crisis.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Many analysts and economists are worried that the high-interest rates will push the economy into a recession. It is important to mention that government data showed last week that economic growth in the first quarter slowed sequentially, with real gross domestic product increasing at a 1.1% annual pace, compared with a 2.6% gain in the prior three-month period. With higher interest rates, companies need to spend more money to borrow money to invest in growth. Historically, higher rates lead companies to reduce spending (especially on hiring). <\/p>\n\n\n\n

Many companies could face liquidity problems, and economist David Rosenberg has warned that the U.S. economy is facing two big risks. David Rosenberg said<\/a>:<\/p>\n\n\n\n

\"We have a possible debt default on our hands and a spreading bank crisis. The banking turmoil that started with Silicon Valley Bank's collapse in March remains unresolved, and First Republic's failure and takeover by CEO Jamie Dimon's JPMorgan has reignited worries about broader financial instability. Moreover, political disagreement about raising the U.S. government's borrowing limit is fanning fears of a debt-ceiling crisis.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>United States May Fund Its Deficit By Printing More Money; Could Default By June 1st<\/a><\/p>\n\n\n\n

Higher rates encourage saving over spending and make the debt more costly. Companies with bigger credit or other loans with variable interest rates could be in a difficult situation. We expect to see a meaningful slowdown in economic growth and a weakening of the labour market in the United States in the upcoming months. <\/p>\n\n\n\n

At the same time, Brian Jacobsen, chief economist at Annex Wealth Management, said<\/a> that the manufacturing and housing sectors are in a recession already. The famous investor Jeremy Grantham warned that the U.S. stock market could experience significant losses soon, and a recommendation is that investors should continue to take a defensive investment approach.<\/p>\n\n\n\n

Stocks aren't the only assets that could significantly lose their value. Investors should remember that cryptocurrencies could also be in the situation to make an even bigger fall. The crypto market displayed a high correlation with U.S. equities. If a downtrend is witnessed in the stock market, the same is usually replicated in the crypto-sphere.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Bitcoin Is Close To Testing $30,000 Again; Ethereum Revives Bullish Momentum Above $1,800<\/a><\/p>\n","post_title":"The Fed Raises Interest Rates By 25 BPS This Wednesday; Effects On Crypto And Financial Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-fed-raises-interest-rates-by-25-bps-this-wednesday-effects-on-crypto-and-financial-markets","to_ping":"","pinged":"","post_modified":"2023-05-04 22:08:47","post_modified_gmt":"2023-05-04 12:08:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11491","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11422,"post_author":"12","post_date":"2023-05-02 17:50:37","post_date_gmt":"2023-05-02 07:50:37","post_content":"\n

Ray Dalio, the billionaire founder of one of the world\u2019s largest hedge funds, Bridgewater Associates, was recently\u00a0interviewed<\/a>. He explains that the United States' $31.45T debt may have to be resolved by printing more money, also referred to as currency debasement.<\/p>\n\n\n\n

\u201cSo I think you\u2019re in the part of the cycle where you\u2019ve had the tightening and then the dominoes are beginning to fall. And I think that that\u2019s going to produce more problems.<\/em><\/p>\n\n\n\n

I think when it comes down to it, there\u2019s just too much debt, and we\u2019re adding to it too quickly\u2026 Either that debt will be paid off with hard money, in which case there\u2019s not much printing and so on, or it will be paid off with printing a lot of money to make it easier to pay off. <\/em><\/p>\n\n\n\n

I think in the end, it\u2019s always the case that they print a lot of money in and make it easier to pay off, but you have the reduced value of money.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> Ray Dalio; The Federal Reserve Is Setting Off A \u201cTerrible Calamity\u201d<\/a><\/p>\n\n\n\n

Could The United States Default By June?<\/h2>\n\n\n\n

United States Treasury Secretary, Janet Yellen, wrote to House Speaker Kevin McCarthy;<\/p>\n\n\n\n

\"After reviewing recent federal tax receipts, our best estimate is that we will be unable to continue to satisfy all of the government\u2019s obligations by early June, and potentially as early as June 1, if Congress does not raise or suspend the debt limit before that time.<\/em><\/p>\n\n\n\n

If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests.\"<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> United States May Enter Mild Recession As Yet Another Hike In Fed Rates Expected<\/a><\/p>\n\n\n\n

Yellen warned that waiting until the last minute to take action on this issue would cause harm to \"business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States.\"<\/em> Yellen believes that defaulting on their debt would be a financial catastrophe, raising the cost of borrowing without an end, making future investment \"substantially more costly.\u201d<\/em><\/p>\n","post_title":"United States May Fund Its Deficit By Printing More Money; Could Default By June 1st","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-may-fund-its-deficit-by-printing-more-money-could-default-by-june-1st","to_ping":"","pinged":"","post_modified":"2023-05-04 13:04:05","post_modified_gmt":"2023-05-04 03:04:05","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11422","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

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\n

U.S. stocks had the highest monthly rally of 2023 in November; the benchmark S&P 500 rose 9%, the tech-heavy Nasdaq Composite surged 11% and the Dow Jones Industrial Average climbed 2,900 points higher. The key news for investors in the past month was the November 14 release of the Consumer Price Index, revealing a 3.2% inflation increase in October, lower than anticipated.<\/p>\n\n\n\n

Encouraging news from this Tuesday revealed that the November Consumer Price Index (CPI) increased by 3.1% every year, aligning with the predictions of economists surveyed by Reuters<\/a>. Similarly, core prices, which exclude fluctuating items like food and energy expenses, also met expectations, rising by 4% annually.<\/p>\n\n\n\n

This triggered a surge in speculation that the Fed has finished its tightening cycle. Most traders, as indicated by the CME Group's Fedwatch tool, think that the central bank has raised interest rates for the last time this year, shifting their focus to potential rate cuts around mid-2024.<\/p>\n\n\n\n

Policymakers And U.S. Stocks<\/h2>\n\n\n\n

Should that prediction materialize, there's a strong likelihood that policymakers will attain their desired \"soft landing\" scenario, despite raising borrowing rates from nearly zero to approximately 5.5% within a mere 15-month timeframe. Growth has remained strong, and the unemployment rate is still hovering below 4% even as inflation has rapidly cooled.<\/p>\n\n\n\n

The positive developments contributed significantly to driving the S&P 500 to its second most successful November since 1980 and it's noteworthy to highlight that the only instance when the index performed better in November was during its recovery post the pandemic in 2020.<\/p>\n\n\n\n

See Related:<\/em><\/strong> SlingTV Partners With BitPay To Accept Crypto For Subscriptions<\/a><\/p>\n\n\n\n

\"S&P
S&P 500 rose 9% in November 2023<\/em><\/figcaption><\/figure>\n\n\n\n

Encouragingly, Bank of America's<\/a> Savita Subramanian anticipates ongoing positive momentum for the S&P 500, projecting it to reach a record-breaking 5,000 points by year-end. Additionally, both BMO's Brian Belski and Deutsche Bank's Binky Chadha have established price targets of 5,100 points each.<\/p>\n\n\n\n

Analysts Index Review<\/h2>\n\n\n\n

However, certain analysts are expressing skepticism. JPMorgan Asset Management advises investors to remain cautious due to the possibility of a recession, while Soci\u00e9t\u00e9 G\u00e9n\u00e9rale cautions them to brace for a volatile 2024, predicting that the index will fluctuate between nearing its record high, experiencing a decline, and subsequently rebounding.<\/p>\n\n\n\n

The focus of investors has shifted now to the conclusion of the Fed's two-day meeting on Wednesday, eagerly awaiting their decision on interest rates, along with the release of the November producer price index (PPI) data. Jason Pride, chief of investment strategy and research at Glenmede, said<\/a>:<\/p>\n\n\n\n

\"They've (Fed) already taken rates up a lot... they will keep rates up in that range for longer than what the market is currently expecting. Markets do not expect more hikes and are instead focused on rate cuts.\"<\/em><\/p>\n","post_title":"U.S. Stocks Had The Highest Monthly Rally Of 2023 In November. What To Expect From The Rest Of December?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"u-s-stocks-had-the-highest-monthly-rally-of-2023-in-november-what-to-expect-from-the-rest-of-december","to_ping":"","pinged":"","post_modified":"2023-12-13 21:49:51","post_modified_gmt":"2023-12-13 10:49:51","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14611","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14444,"post_author":"14","post_date":"2023-11-23 01:38:54","post_date_gmt":"2023-11-22 14:38:54","post_content":"\n

Investors remain optimistic that the market can resume its bullish momentum in December given that the fourth quarter has historically been one of the best three-month stretches of the year for the S&P 500. Investors anticipated the Federal Reserve<\/a> may have already reached its terminal interest rate; however, the primary driving forces affecting stock prices over recent weeks, inflation and interest rates, will continue to hold significant importance in December.<\/p>\n\n\n\n

\"The
The S&P 500 index's strong advance off its October 27 low continues to make progress<\/em><\/figcaption><\/figure>\n\n\n\n

Positive information is that the annual rate of inflation measured by the Consumer Price Index (CPI), which monitors the expenses of a variety of goods and services -  slowed to 3.2% in October, dropping from September's 3.7% and marking the most subdued rate since July 2023. It is also important to say that inflation is significantly lower than 2022 peak levels which were above 9% and because of this many investors anticipate the Fed could begin to cut interest rates as soon as the first half of 2024.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Federal Reserve Officials Banned From Trading Crypto(Opens in a new browser tab)<\/a><\/p>\n\n\n\n

GDP And Corporate Profits<\/h2>\n\n\n\n

Corporate profits are also the big driver of what the market is likely to do in the near term and because of this investors are closely monitoring third-quarter U.S. earnings. Third-quarter earnings season is essentially at the finish line and of the 480 companies that have reported so far, 80% have beaten analysts' expectations. The inflation and interest rates will continue to significantly impact stock prices in December.<\/p>\n\n\n\n

U.S. economic growth(inflation and interest rates) has been resilient year-to-date and Bill Adams, a chief economist for Comerica Bank, recently said the U.S. economy has been much stronger in 2023 than economists expected. Bill Adams suggests that the annual real GDP is anticipated to reach approximately 2.4% this year, a substantial increase from the Federal Reserve's December 2022 dot plot prediction of 0.5%. However, he also warned that the outcome in the upcoming months will decide if the U.S. economy can smoothly achieve a so-called \"soft landing\" without veering into a recession.<\/p>\n\n\n\n

Deceleration In United States Economic Growth<\/h2>\n\n\n\n

Jeffrey Roach, the chief economist at LPL Financial,<\/a> foresees that most of the negative consequences stemming from higher interest rates have not materialized yet and due to this, he anticipates a deceleration in U.S. economic growth. Market expectations that the Federal Reserve will keep interest rates unchanged at its December meeting currently stand above 90% and any information that the Federal Reserve could start to cut rates in the first quarter of 2024 should be positive for stocks in the short-term period.<\/p>\n\n\n\n

On the other side, JPMorgan strategists believe that the risk-reward ratio for numerous stocks is currently unappealing and according to them, restrictive monetary policy is likely to remain in place for some time which could potentially cause a recession. Considering this scenario, investors worried about a possible U.S. recession can opt for a more defensive strategy in the market. They can enhance their financial flexibility by reducing their stock or cryptocurrency exposure and augmenting their cash reserves.<\/p>\n","post_title":"Investor Optimism Rises In November 2023. Does Strong Buying Activity Indicate The Possibility Of Further Gains In The Coming Weeks?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"investor-optimism-rises-in-november-2023-does-strong-buying-activity-indicate-the-possibility-of-further-gains-in-the-coming-weeks","to_ping":"","pinged":"","post_modified":"2023-11-23 01:39:12","post_modified_gmt":"2023-11-22 14:39:12","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14444","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14319,"post_author":"14","post_date":"2023-11-15 18:02:37","post_date_gmt":"2023-11-15 07:02:37","post_content":"\n

Wall Street's main indexes<\/a> surged significantly on Tuesday following the release of lower-than-anticipated inflation figures, which increased the belief that the Federal Reserve had concluded its interest rate hikes. The annual rate of inflation measured by the Consumer Price Index (CPI), which monitors the expenses of a variety of goods and services -\u00a0 slowed to 3.2% last month, dropping from September's 3.7% and marking the most subdued rate since July.<\/p>\n\n\n\n

Additionally promising, Wall Street's prices held steady over the month following a 0.4% increase in September. Core prices, which exclude the unpredictable food and energy sectors, rose by 4%, slightly slower compared to the rate observed in September. The report signifies a significant achievement for the Fed in its battle against inflation but in the upcoming weeks, policymakers will monitor the service category closely, seeking further deceleration as their interest rate increases impact demand.<\/p>\n\n\n\n

\"Inflation
Inflation edges down in October<\/em><\/figcaption><\/figure>\n\n\n\n

Earlier this month, the Federal Reserve maintained its benchmark interest rate at the highest level in 22 years. Following this Tuesday's report, prominent analysts and economists indicated only a 1 percent probability that the central bank would increase rates during its upcoming policy meeting in December. Gregory Daco, chief economist at EY Parthenon, said<\/a>:<\/p>\n\n\n\n

\u201cAcross the board, it\u2019s a good report and I think this will comfort the excessively data-dependent Fed policymakers that policy is sufficiently restrictive to bring inflation down to 2 percent.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/strong><\/em> Gala is announcing a partnership with Stick Figure Productions to distribute Four Down on the Blockchain<\/a><\/p>\n\n\n\n

However, analysts from JPMorgan warned that the risk-reward ratio for many stocks remains unattractive currently and restrictive monetary policy is likely to remain in place for some time. JPMorgan analysts anticipate that most adverse effects resulting from increased interest rates haven't manifested thus far. They highlight an upward trend in consumer loan delinquencies and corporate bankruptcies, suggesting that these patterns are probable to persist unless interest rates are lowered.<\/p>\n\n\n\n

This is likely to drive demand destruction, and weakening pricing power and margins for corporates in the coming quarters, and because of this JPMorgan analysts are adopting a defensive stance, maintaining underweight allocations in equities and cryptocurrencies. Nevertheless, they propose an increase in the investment allocation towards gold due to its potential to rise in value during economic downturns, offering a hedge against potential losses in alternative investments.<\/p>\n\n\n\n

Gold is commonly regarded as a safe-haven asset, particularly amid economic uncertainty or geopolitical instability. Investors typically turn to gold as a means of preserving value when other assets are considered risky.<\/p>\n","post_title":"Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-surged-significantly-after-the-release-of-lower-than-anticipated-inflation-figures","to_ping":"","pinged":"","post_modified":"2023-11-16 20:00:45","post_modified_gmt":"2023-11-16 09:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14319","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11491,"post_author":"14","post_date":"2023-05-04 21:53:10","post_date_gmt":"2023-05-04 11:53:10","post_content":"\n

As widely expected, the U.S. Central Bank raised interest rates by 25bps this Wednesday. It signalled it could pause further increases, giving officials time to assess the fallout from recent bank failures, wait on the resolution of a political stand-off over the U.S. debt ceiling and monitor the course of inflation. The federal funds rate is now in a range of 5% to 5.25%, which is the highest level since 2006. <\/p>\n\n\n\n

The U.S. Central Bank warned that tighter credit conditions for households and businesses are expected to affect economic activity. In the picture below, we can see that even without this rise in interest rates, the federal funds rate was at the highest level since the 2007 financial crisis.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Many analysts and economists are worried that the high-interest rates will push the economy into a recession. It is important to mention that government data showed last week that economic growth in the first quarter slowed sequentially, with real gross domestic product increasing at a 1.1% annual pace, compared with a 2.6% gain in the prior three-month period. With higher interest rates, companies need to spend more money to borrow money to invest in growth. Historically, higher rates lead companies to reduce spending (especially on hiring). <\/p>\n\n\n\n

Many companies could face liquidity problems, and economist David Rosenberg has warned that the U.S. economy is facing two big risks. David Rosenberg said<\/a>:<\/p>\n\n\n\n

\"We have a possible debt default on our hands and a spreading bank crisis. The banking turmoil that started with Silicon Valley Bank's collapse in March remains unresolved, and First Republic's failure and takeover by CEO Jamie Dimon's JPMorgan has reignited worries about broader financial instability. Moreover, political disagreement about raising the U.S. government's borrowing limit is fanning fears of a debt-ceiling crisis.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>United States May Fund Its Deficit By Printing More Money; Could Default By June 1st<\/a><\/p>\n\n\n\n

Higher rates encourage saving over spending and make the debt more costly. Companies with bigger credit or other loans with variable interest rates could be in a difficult situation. We expect to see a meaningful slowdown in economic growth and a weakening of the labour market in the United States in the upcoming months. <\/p>\n\n\n\n

At the same time, Brian Jacobsen, chief economist at Annex Wealth Management, said<\/a> that the manufacturing and housing sectors are in a recession already. The famous investor Jeremy Grantham warned that the U.S. stock market could experience significant losses soon, and a recommendation is that investors should continue to take a defensive investment approach.<\/p>\n\n\n\n

Stocks aren't the only assets that could significantly lose their value. Investors should remember that cryptocurrencies could also be in the situation to make an even bigger fall. The crypto market displayed a high correlation with U.S. equities. If a downtrend is witnessed in the stock market, the same is usually replicated in the crypto-sphere.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Bitcoin Is Close To Testing $30,000 Again; Ethereum Revives Bullish Momentum Above $1,800<\/a><\/p>\n","post_title":"The Fed Raises Interest Rates By 25 BPS This Wednesday; Effects On Crypto And Financial Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-fed-raises-interest-rates-by-25-bps-this-wednesday-effects-on-crypto-and-financial-markets","to_ping":"","pinged":"","post_modified":"2023-05-04 22:08:47","post_modified_gmt":"2023-05-04 12:08:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11491","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11422,"post_author":"12","post_date":"2023-05-02 17:50:37","post_date_gmt":"2023-05-02 07:50:37","post_content":"\n

Ray Dalio, the billionaire founder of one of the world\u2019s largest hedge funds, Bridgewater Associates, was recently\u00a0interviewed<\/a>. He explains that the United States' $31.45T debt may have to be resolved by printing more money, also referred to as currency debasement.<\/p>\n\n\n\n

\u201cSo I think you\u2019re in the part of the cycle where you\u2019ve had the tightening and then the dominoes are beginning to fall. And I think that that\u2019s going to produce more problems.<\/em><\/p>\n\n\n\n

I think when it comes down to it, there\u2019s just too much debt, and we\u2019re adding to it too quickly\u2026 Either that debt will be paid off with hard money, in which case there\u2019s not much printing and so on, or it will be paid off with printing a lot of money to make it easier to pay off. <\/em><\/p>\n\n\n\n

I think in the end, it\u2019s always the case that they print a lot of money in and make it easier to pay off, but you have the reduced value of money.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> Ray Dalio; The Federal Reserve Is Setting Off A \u201cTerrible Calamity\u201d<\/a><\/p>\n\n\n\n

Could The United States Default By June?<\/h2>\n\n\n\n

United States Treasury Secretary, Janet Yellen, wrote to House Speaker Kevin McCarthy;<\/p>\n\n\n\n

\"After reviewing recent federal tax receipts, our best estimate is that we will be unable to continue to satisfy all of the government\u2019s obligations by early June, and potentially as early as June 1, if Congress does not raise or suspend the debt limit before that time.<\/em><\/p>\n\n\n\n

If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests.\"<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> United States May Enter Mild Recession As Yet Another Hike In Fed Rates Expected<\/a><\/p>\n\n\n\n

Yellen warned that waiting until the last minute to take action on this issue would cause harm to \"business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States.\"<\/em> Yellen believes that defaulting on their debt would be a financial catastrophe, raising the cost of borrowing without an end, making future investment \"substantially more costly.\u201d<\/em><\/p>\n","post_title":"United States May Fund Its Deficit By Printing More Money; Could Default By June 1st","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-may-fund-its-deficit-by-printing-more-money-could-default-by-june-1st","to_ping":"","pinged":"","post_modified":"2023-05-04 13:04:05","post_modified_gmt":"2023-05-04 03:04:05","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11422","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

ADVERTISEMENT
\n

The Fed's decision to maintain rates while hinting at potential cuts in 2024 reflects a balancing act to nurture economic stability amidst inflation concerns.<\/p>\n","post_title":"US Bank Stocks Slide On Fed's Rate-Cut Dismissal","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"us-bank-stocks-slide-on-feds-rate-cut-dismissal","to_ping":"","pinged":"","post_modified":"2023-12-16 20:44:05","post_modified_gmt":"2023-12-16 09:44:05","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14666","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14611,"post_author":"14","post_date":"2023-12-13 21:49:46","post_date_gmt":"2023-12-13 10:49:46","post_content":"\n

U.S. stocks had the highest monthly rally of 2023 in November; the benchmark S&P 500 rose 9%, the tech-heavy Nasdaq Composite surged 11% and the Dow Jones Industrial Average climbed 2,900 points higher. The key news for investors in the past month was the November 14 release of the Consumer Price Index, revealing a 3.2% inflation increase in October, lower than anticipated.<\/p>\n\n\n\n

Encouraging news from this Tuesday revealed that the November Consumer Price Index (CPI) increased by 3.1% every year, aligning with the predictions of economists surveyed by Reuters<\/a>. Similarly, core prices, which exclude fluctuating items like food and energy expenses, also met expectations, rising by 4% annually.<\/p>\n\n\n\n

This triggered a surge in speculation that the Fed has finished its tightening cycle. Most traders, as indicated by the CME Group's Fedwatch tool, think that the central bank has raised interest rates for the last time this year, shifting their focus to potential rate cuts around mid-2024.<\/p>\n\n\n\n

Policymakers And U.S. Stocks<\/h2>\n\n\n\n

Should that prediction materialize, there's a strong likelihood that policymakers will attain their desired \"soft landing\" scenario, despite raising borrowing rates from nearly zero to approximately 5.5% within a mere 15-month timeframe. Growth has remained strong, and the unemployment rate is still hovering below 4% even as inflation has rapidly cooled.<\/p>\n\n\n\n

The positive developments contributed significantly to driving the S&P 500 to its second most successful November since 1980 and it's noteworthy to highlight that the only instance when the index performed better in November was during its recovery post the pandemic in 2020.<\/p>\n\n\n\n

See Related:<\/em><\/strong> SlingTV Partners With BitPay To Accept Crypto For Subscriptions<\/a><\/p>\n\n\n\n

\"S&P
S&P 500 rose 9% in November 2023<\/em><\/figcaption><\/figure>\n\n\n\n

Encouragingly, Bank of America's<\/a> Savita Subramanian anticipates ongoing positive momentum for the S&P 500, projecting it to reach a record-breaking 5,000 points by year-end. Additionally, both BMO's Brian Belski and Deutsche Bank's Binky Chadha have established price targets of 5,100 points each.<\/p>\n\n\n\n

Analysts Index Review<\/h2>\n\n\n\n

However, certain analysts are expressing skepticism. JPMorgan Asset Management advises investors to remain cautious due to the possibility of a recession, while Soci\u00e9t\u00e9 G\u00e9n\u00e9rale cautions them to brace for a volatile 2024, predicting that the index will fluctuate between nearing its record high, experiencing a decline, and subsequently rebounding.<\/p>\n\n\n\n

The focus of investors has shifted now to the conclusion of the Fed's two-day meeting on Wednesday, eagerly awaiting their decision on interest rates, along with the release of the November producer price index (PPI) data. Jason Pride, chief of investment strategy and research at Glenmede, said<\/a>:<\/p>\n\n\n\n

\"They've (Fed) already taken rates up a lot... they will keep rates up in that range for longer than what the market is currently expecting. Markets do not expect more hikes and are instead focused on rate cuts.\"<\/em><\/p>\n","post_title":"U.S. Stocks Had The Highest Monthly Rally Of 2023 In November. What To Expect From The Rest Of December?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"u-s-stocks-had-the-highest-monthly-rally-of-2023-in-november-what-to-expect-from-the-rest-of-december","to_ping":"","pinged":"","post_modified":"2023-12-13 21:49:51","post_modified_gmt":"2023-12-13 10:49:51","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14611","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14444,"post_author":"14","post_date":"2023-11-23 01:38:54","post_date_gmt":"2023-11-22 14:38:54","post_content":"\n

Investors remain optimistic that the market can resume its bullish momentum in December given that the fourth quarter has historically been one of the best three-month stretches of the year for the S&P 500. Investors anticipated the Federal Reserve<\/a> may have already reached its terminal interest rate; however, the primary driving forces affecting stock prices over recent weeks, inflation and interest rates, will continue to hold significant importance in December.<\/p>\n\n\n\n

\"The
The S&P 500 index's strong advance off its October 27 low continues to make progress<\/em><\/figcaption><\/figure>\n\n\n\n

Positive information is that the annual rate of inflation measured by the Consumer Price Index (CPI), which monitors the expenses of a variety of goods and services -  slowed to 3.2% in October, dropping from September's 3.7% and marking the most subdued rate since July 2023. It is also important to say that inflation is significantly lower than 2022 peak levels which were above 9% and because of this many investors anticipate the Fed could begin to cut interest rates as soon as the first half of 2024.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Federal Reserve Officials Banned From Trading Crypto(Opens in a new browser tab)<\/a><\/p>\n\n\n\n

GDP And Corporate Profits<\/h2>\n\n\n\n

Corporate profits are also the big driver of what the market is likely to do in the near term and because of this investors are closely monitoring third-quarter U.S. earnings. Third-quarter earnings season is essentially at the finish line and of the 480 companies that have reported so far, 80% have beaten analysts' expectations. The inflation and interest rates will continue to significantly impact stock prices in December.<\/p>\n\n\n\n

U.S. economic growth(inflation and interest rates) has been resilient year-to-date and Bill Adams, a chief economist for Comerica Bank, recently said the U.S. economy has been much stronger in 2023 than economists expected. Bill Adams suggests that the annual real GDP is anticipated to reach approximately 2.4% this year, a substantial increase from the Federal Reserve's December 2022 dot plot prediction of 0.5%. However, he also warned that the outcome in the upcoming months will decide if the U.S. economy can smoothly achieve a so-called \"soft landing\" without veering into a recession.<\/p>\n\n\n\n

Deceleration In United States Economic Growth<\/h2>\n\n\n\n

Jeffrey Roach, the chief economist at LPL Financial,<\/a> foresees that most of the negative consequences stemming from higher interest rates have not materialized yet and due to this, he anticipates a deceleration in U.S. economic growth. Market expectations that the Federal Reserve will keep interest rates unchanged at its December meeting currently stand above 90% and any information that the Federal Reserve could start to cut rates in the first quarter of 2024 should be positive for stocks in the short-term period.<\/p>\n\n\n\n

On the other side, JPMorgan strategists believe that the risk-reward ratio for numerous stocks is currently unappealing and according to them, restrictive monetary policy is likely to remain in place for some time which could potentially cause a recession. Considering this scenario, investors worried about a possible U.S. recession can opt for a more defensive strategy in the market. They can enhance their financial flexibility by reducing their stock or cryptocurrency exposure and augmenting their cash reserves.<\/p>\n","post_title":"Investor Optimism Rises In November 2023. Does Strong Buying Activity Indicate The Possibility Of Further Gains In The Coming Weeks?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"investor-optimism-rises-in-november-2023-does-strong-buying-activity-indicate-the-possibility-of-further-gains-in-the-coming-weeks","to_ping":"","pinged":"","post_modified":"2023-11-23 01:39:12","post_modified_gmt":"2023-11-22 14:39:12","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14444","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14319,"post_author":"14","post_date":"2023-11-15 18:02:37","post_date_gmt":"2023-11-15 07:02:37","post_content":"\n

Wall Street's main indexes<\/a> surged significantly on Tuesday following the release of lower-than-anticipated inflation figures, which increased the belief that the Federal Reserve had concluded its interest rate hikes. The annual rate of inflation measured by the Consumer Price Index (CPI), which monitors the expenses of a variety of goods and services -\u00a0 slowed to 3.2% last month, dropping from September's 3.7% and marking the most subdued rate since July.<\/p>\n\n\n\n

Additionally promising, Wall Street's prices held steady over the month following a 0.4% increase in September. Core prices, which exclude the unpredictable food and energy sectors, rose by 4%, slightly slower compared to the rate observed in September. The report signifies a significant achievement for the Fed in its battle against inflation but in the upcoming weeks, policymakers will monitor the service category closely, seeking further deceleration as their interest rate increases impact demand.<\/p>\n\n\n\n

\"Inflation
Inflation edges down in October<\/em><\/figcaption><\/figure>\n\n\n\n

Earlier this month, the Federal Reserve maintained its benchmark interest rate at the highest level in 22 years. Following this Tuesday's report, prominent analysts and economists indicated only a 1 percent probability that the central bank would increase rates during its upcoming policy meeting in December. Gregory Daco, chief economist at EY Parthenon, said<\/a>:<\/p>\n\n\n\n

\u201cAcross the board, it\u2019s a good report and I think this will comfort the excessively data-dependent Fed policymakers that policy is sufficiently restrictive to bring inflation down to 2 percent.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/strong><\/em> Gala is announcing a partnership with Stick Figure Productions to distribute Four Down on the Blockchain<\/a><\/p>\n\n\n\n

However, analysts from JPMorgan warned that the risk-reward ratio for many stocks remains unattractive currently and restrictive monetary policy is likely to remain in place for some time. JPMorgan analysts anticipate that most adverse effects resulting from increased interest rates haven't manifested thus far. They highlight an upward trend in consumer loan delinquencies and corporate bankruptcies, suggesting that these patterns are probable to persist unless interest rates are lowered.<\/p>\n\n\n\n

This is likely to drive demand destruction, and weakening pricing power and margins for corporates in the coming quarters, and because of this JPMorgan analysts are adopting a defensive stance, maintaining underweight allocations in equities and cryptocurrencies. Nevertheless, they propose an increase in the investment allocation towards gold due to its potential to rise in value during economic downturns, offering a hedge against potential losses in alternative investments.<\/p>\n\n\n\n

Gold is commonly regarded as a safe-haven asset, particularly amid economic uncertainty or geopolitical instability. Investors typically turn to gold as a means of preserving value when other assets are considered risky.<\/p>\n","post_title":"Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-surged-significantly-after-the-release-of-lower-than-anticipated-inflation-figures","to_ping":"","pinged":"","post_modified":"2023-11-16 20:00:45","post_modified_gmt":"2023-11-16 09:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14319","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11491,"post_author":"14","post_date":"2023-05-04 21:53:10","post_date_gmt":"2023-05-04 11:53:10","post_content":"\n

As widely expected, the U.S. Central Bank raised interest rates by 25bps this Wednesday. It signalled it could pause further increases, giving officials time to assess the fallout from recent bank failures, wait on the resolution of a political stand-off over the U.S. debt ceiling and monitor the course of inflation. The federal funds rate is now in a range of 5% to 5.25%, which is the highest level since 2006. <\/p>\n\n\n\n

The U.S. Central Bank warned that tighter credit conditions for households and businesses are expected to affect economic activity. In the picture below, we can see that even without this rise in interest rates, the federal funds rate was at the highest level since the 2007 financial crisis.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Many analysts and economists are worried that the high-interest rates will push the economy into a recession. It is important to mention that government data showed last week that economic growth in the first quarter slowed sequentially, with real gross domestic product increasing at a 1.1% annual pace, compared with a 2.6% gain in the prior three-month period. With higher interest rates, companies need to spend more money to borrow money to invest in growth. Historically, higher rates lead companies to reduce spending (especially on hiring). <\/p>\n\n\n\n

Many companies could face liquidity problems, and economist David Rosenberg has warned that the U.S. economy is facing two big risks. David Rosenberg said<\/a>:<\/p>\n\n\n\n

\"We have a possible debt default on our hands and a spreading bank crisis. The banking turmoil that started with Silicon Valley Bank's collapse in March remains unresolved, and First Republic's failure and takeover by CEO Jamie Dimon's JPMorgan has reignited worries about broader financial instability. Moreover, political disagreement about raising the U.S. government's borrowing limit is fanning fears of a debt-ceiling crisis.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>United States May Fund Its Deficit By Printing More Money; Could Default By June 1st<\/a><\/p>\n\n\n\n

Higher rates encourage saving over spending and make the debt more costly. Companies with bigger credit or other loans with variable interest rates could be in a difficult situation. We expect to see a meaningful slowdown in economic growth and a weakening of the labour market in the United States in the upcoming months. <\/p>\n\n\n\n

At the same time, Brian Jacobsen, chief economist at Annex Wealth Management, said<\/a> that the manufacturing and housing sectors are in a recession already. The famous investor Jeremy Grantham warned that the U.S. stock market could experience significant losses soon, and a recommendation is that investors should continue to take a defensive investment approach.<\/p>\n\n\n\n

Stocks aren't the only assets that could significantly lose their value. Investors should remember that cryptocurrencies could also be in the situation to make an even bigger fall. The crypto market displayed a high correlation with U.S. equities. If a downtrend is witnessed in the stock market, the same is usually replicated in the crypto-sphere.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Bitcoin Is Close To Testing $30,000 Again; Ethereum Revives Bullish Momentum Above $1,800<\/a><\/p>\n","post_title":"The Fed Raises Interest Rates By 25 BPS This Wednesday; Effects On Crypto And Financial Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-fed-raises-interest-rates-by-25-bps-this-wednesday-effects-on-crypto-and-financial-markets","to_ping":"","pinged":"","post_modified":"2023-05-04 22:08:47","post_modified_gmt":"2023-05-04 12:08:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11491","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11422,"post_author":"12","post_date":"2023-05-02 17:50:37","post_date_gmt":"2023-05-02 07:50:37","post_content":"\n

Ray Dalio, the billionaire founder of one of the world\u2019s largest hedge funds, Bridgewater Associates, was recently\u00a0interviewed<\/a>. He explains that the United States' $31.45T debt may have to be resolved by printing more money, also referred to as currency debasement.<\/p>\n\n\n\n

\u201cSo I think you\u2019re in the part of the cycle where you\u2019ve had the tightening and then the dominoes are beginning to fall. And I think that that\u2019s going to produce more problems.<\/em><\/p>\n\n\n\n

I think when it comes down to it, there\u2019s just too much debt, and we\u2019re adding to it too quickly\u2026 Either that debt will be paid off with hard money, in which case there\u2019s not much printing and so on, or it will be paid off with printing a lot of money to make it easier to pay off. <\/em><\/p>\n\n\n\n

I think in the end, it\u2019s always the case that they print a lot of money in and make it easier to pay off, but you have the reduced value of money.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> Ray Dalio; The Federal Reserve Is Setting Off A \u201cTerrible Calamity\u201d<\/a><\/p>\n\n\n\n

Could The United States Default By June?<\/h2>\n\n\n\n

United States Treasury Secretary, Janet Yellen, wrote to House Speaker Kevin McCarthy;<\/p>\n\n\n\n

\"After reviewing recent federal tax receipts, our best estimate is that we will be unable to continue to satisfy all of the government\u2019s obligations by early June, and potentially as early as June 1, if Congress does not raise or suspend the debt limit before that time.<\/em><\/p>\n\n\n\n

If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests.\"<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> United States May Enter Mild Recession As Yet Another Hike In Fed Rates Expected<\/a><\/p>\n\n\n\n

Yellen warned that waiting until the last minute to take action on this issue would cause harm to \"business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States.\"<\/em> Yellen believes that defaulting on their debt would be a financial catastrophe, raising the cost of borrowing without an end, making future investment \"substantially more costly.\u201d<\/em><\/p>\n","post_title":"United States May Fund Its Deficit By Printing More Money; Could Default By June 1st","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-may-fund-its-deficit-by-printing-more-money-could-default-by-june-1st","to_ping":"","pinged":"","post_modified":"2023-05-04 13:04:05","post_modified_gmt":"2023-05-04 03:04:05","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11422","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

ADVERTISEMENT
\n

High inflation rates have impacted President Biden's approval ratings. Speculations about the Fed's cautious policy actions during a presidential election year persist, especially considering the economic landscape and real rates.<\/p>\n\n\n\n

The Fed's decision to maintain rates while hinting at potential cuts in 2024 reflects a balancing act to nurture economic stability amidst inflation concerns.<\/p>\n","post_title":"US Bank Stocks Slide On Fed's Rate-Cut Dismissal","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"us-bank-stocks-slide-on-feds-rate-cut-dismissal","to_ping":"","pinged":"","post_modified":"2023-12-16 20:44:05","post_modified_gmt":"2023-12-16 09:44:05","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14666","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14611,"post_author":"14","post_date":"2023-12-13 21:49:46","post_date_gmt":"2023-12-13 10:49:46","post_content":"\n

U.S. stocks had the highest monthly rally of 2023 in November; the benchmark S&P 500 rose 9%, the tech-heavy Nasdaq Composite surged 11% and the Dow Jones Industrial Average climbed 2,900 points higher. The key news for investors in the past month was the November 14 release of the Consumer Price Index, revealing a 3.2% inflation increase in October, lower than anticipated.<\/p>\n\n\n\n

Encouraging news from this Tuesday revealed that the November Consumer Price Index (CPI) increased by 3.1% every year, aligning with the predictions of economists surveyed by Reuters<\/a>. Similarly, core prices, which exclude fluctuating items like food and energy expenses, also met expectations, rising by 4% annually.<\/p>\n\n\n\n

This triggered a surge in speculation that the Fed has finished its tightening cycle. Most traders, as indicated by the CME Group's Fedwatch tool, think that the central bank has raised interest rates for the last time this year, shifting their focus to potential rate cuts around mid-2024.<\/p>\n\n\n\n

Policymakers And U.S. Stocks<\/h2>\n\n\n\n

Should that prediction materialize, there's a strong likelihood that policymakers will attain their desired \"soft landing\" scenario, despite raising borrowing rates from nearly zero to approximately 5.5% within a mere 15-month timeframe. Growth has remained strong, and the unemployment rate is still hovering below 4% even as inflation has rapidly cooled.<\/p>\n\n\n\n

The positive developments contributed significantly to driving the S&P 500 to its second most successful November since 1980 and it's noteworthy to highlight that the only instance when the index performed better in November was during its recovery post the pandemic in 2020.<\/p>\n\n\n\n

See Related:<\/em><\/strong> SlingTV Partners With BitPay To Accept Crypto For Subscriptions<\/a><\/p>\n\n\n\n

\"S&P
S&P 500 rose 9% in November 2023<\/em><\/figcaption><\/figure>\n\n\n\n

Encouragingly, Bank of America's<\/a> Savita Subramanian anticipates ongoing positive momentum for the S&P 500, projecting it to reach a record-breaking 5,000 points by year-end. Additionally, both BMO's Brian Belski and Deutsche Bank's Binky Chadha have established price targets of 5,100 points each.<\/p>\n\n\n\n

Analysts Index Review<\/h2>\n\n\n\n

However, certain analysts are expressing skepticism. JPMorgan Asset Management advises investors to remain cautious due to the possibility of a recession, while Soci\u00e9t\u00e9 G\u00e9n\u00e9rale cautions them to brace for a volatile 2024, predicting that the index will fluctuate between nearing its record high, experiencing a decline, and subsequently rebounding.<\/p>\n\n\n\n

The focus of investors has shifted now to the conclusion of the Fed's two-day meeting on Wednesday, eagerly awaiting their decision on interest rates, along with the release of the November producer price index (PPI) data. Jason Pride, chief of investment strategy and research at Glenmede, said<\/a>:<\/p>\n\n\n\n

\"They've (Fed) already taken rates up a lot... they will keep rates up in that range for longer than what the market is currently expecting. Markets do not expect more hikes and are instead focused on rate cuts.\"<\/em><\/p>\n","post_title":"U.S. Stocks Had The Highest Monthly Rally Of 2023 In November. What To Expect From The Rest Of December?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"u-s-stocks-had-the-highest-monthly-rally-of-2023-in-november-what-to-expect-from-the-rest-of-december","to_ping":"","pinged":"","post_modified":"2023-12-13 21:49:51","post_modified_gmt":"2023-12-13 10:49:51","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14611","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14444,"post_author":"14","post_date":"2023-11-23 01:38:54","post_date_gmt":"2023-11-22 14:38:54","post_content":"\n

Investors remain optimistic that the market can resume its bullish momentum in December given that the fourth quarter has historically been one of the best three-month stretches of the year for the S&P 500. Investors anticipated the Federal Reserve<\/a> may have already reached its terminal interest rate; however, the primary driving forces affecting stock prices over recent weeks, inflation and interest rates, will continue to hold significant importance in December.<\/p>\n\n\n\n

\"The
The S&P 500 index's strong advance off its October 27 low continues to make progress<\/em><\/figcaption><\/figure>\n\n\n\n

Positive information is that the annual rate of inflation measured by the Consumer Price Index (CPI), which monitors the expenses of a variety of goods and services -  slowed to 3.2% in October, dropping from September's 3.7% and marking the most subdued rate since July 2023. It is also important to say that inflation is significantly lower than 2022 peak levels which were above 9% and because of this many investors anticipate the Fed could begin to cut interest rates as soon as the first half of 2024.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Federal Reserve Officials Banned From Trading Crypto(Opens in a new browser tab)<\/a><\/p>\n\n\n\n

GDP And Corporate Profits<\/h2>\n\n\n\n

Corporate profits are also the big driver of what the market is likely to do in the near term and because of this investors are closely monitoring third-quarter U.S. earnings. Third-quarter earnings season is essentially at the finish line and of the 480 companies that have reported so far, 80% have beaten analysts' expectations. The inflation and interest rates will continue to significantly impact stock prices in December.<\/p>\n\n\n\n

U.S. economic growth(inflation and interest rates) has been resilient year-to-date and Bill Adams, a chief economist for Comerica Bank, recently said the U.S. economy has been much stronger in 2023 than economists expected. Bill Adams suggests that the annual real GDP is anticipated to reach approximately 2.4% this year, a substantial increase from the Federal Reserve's December 2022 dot plot prediction of 0.5%. However, he also warned that the outcome in the upcoming months will decide if the U.S. economy can smoothly achieve a so-called \"soft landing\" without veering into a recession.<\/p>\n\n\n\n

Deceleration In United States Economic Growth<\/h2>\n\n\n\n

Jeffrey Roach, the chief economist at LPL Financial,<\/a> foresees that most of the negative consequences stemming from higher interest rates have not materialized yet and due to this, he anticipates a deceleration in U.S. economic growth. Market expectations that the Federal Reserve will keep interest rates unchanged at its December meeting currently stand above 90% and any information that the Federal Reserve could start to cut rates in the first quarter of 2024 should be positive for stocks in the short-term period.<\/p>\n\n\n\n

On the other side, JPMorgan strategists believe that the risk-reward ratio for numerous stocks is currently unappealing and according to them, restrictive monetary policy is likely to remain in place for some time which could potentially cause a recession. Considering this scenario, investors worried about a possible U.S. recession can opt for a more defensive strategy in the market. They can enhance their financial flexibility by reducing their stock or cryptocurrency exposure and augmenting their cash reserves.<\/p>\n","post_title":"Investor Optimism Rises In November 2023. Does Strong Buying Activity Indicate The Possibility Of Further Gains In The Coming Weeks?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"investor-optimism-rises-in-november-2023-does-strong-buying-activity-indicate-the-possibility-of-further-gains-in-the-coming-weeks","to_ping":"","pinged":"","post_modified":"2023-11-23 01:39:12","post_modified_gmt":"2023-11-22 14:39:12","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14444","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14319,"post_author":"14","post_date":"2023-11-15 18:02:37","post_date_gmt":"2023-11-15 07:02:37","post_content":"\n

Wall Street's main indexes<\/a> surged significantly on Tuesday following the release of lower-than-anticipated inflation figures, which increased the belief that the Federal Reserve had concluded its interest rate hikes. The annual rate of inflation measured by the Consumer Price Index (CPI), which monitors the expenses of a variety of goods and services -\u00a0 slowed to 3.2% last month, dropping from September's 3.7% and marking the most subdued rate since July.<\/p>\n\n\n\n

Additionally promising, Wall Street's prices held steady over the month following a 0.4% increase in September. Core prices, which exclude the unpredictable food and energy sectors, rose by 4%, slightly slower compared to the rate observed in September. The report signifies a significant achievement for the Fed in its battle against inflation but in the upcoming weeks, policymakers will monitor the service category closely, seeking further deceleration as their interest rate increases impact demand.<\/p>\n\n\n\n

\"Inflation
Inflation edges down in October<\/em><\/figcaption><\/figure>\n\n\n\n

Earlier this month, the Federal Reserve maintained its benchmark interest rate at the highest level in 22 years. Following this Tuesday's report, prominent analysts and economists indicated only a 1 percent probability that the central bank would increase rates during its upcoming policy meeting in December. Gregory Daco, chief economist at EY Parthenon, said<\/a>:<\/p>\n\n\n\n

\u201cAcross the board, it\u2019s a good report and I think this will comfort the excessively data-dependent Fed policymakers that policy is sufficiently restrictive to bring inflation down to 2 percent.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/strong><\/em> Gala is announcing a partnership with Stick Figure Productions to distribute Four Down on the Blockchain<\/a><\/p>\n\n\n\n

However, analysts from JPMorgan warned that the risk-reward ratio for many stocks remains unattractive currently and restrictive monetary policy is likely to remain in place for some time. JPMorgan analysts anticipate that most adverse effects resulting from increased interest rates haven't manifested thus far. They highlight an upward trend in consumer loan delinquencies and corporate bankruptcies, suggesting that these patterns are probable to persist unless interest rates are lowered.<\/p>\n\n\n\n

This is likely to drive demand destruction, and weakening pricing power and margins for corporates in the coming quarters, and because of this JPMorgan analysts are adopting a defensive stance, maintaining underweight allocations in equities and cryptocurrencies. Nevertheless, they propose an increase in the investment allocation towards gold due to its potential to rise in value during economic downturns, offering a hedge against potential losses in alternative investments.<\/p>\n\n\n\n

Gold is commonly regarded as a safe-haven asset, particularly amid economic uncertainty or geopolitical instability. Investors typically turn to gold as a means of preserving value when other assets are considered risky.<\/p>\n","post_title":"Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-surged-significantly-after-the-release-of-lower-than-anticipated-inflation-figures","to_ping":"","pinged":"","post_modified":"2023-11-16 20:00:45","post_modified_gmt":"2023-11-16 09:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14319","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11491,"post_author":"14","post_date":"2023-05-04 21:53:10","post_date_gmt":"2023-05-04 11:53:10","post_content":"\n

As widely expected, the U.S. Central Bank raised interest rates by 25bps this Wednesday. It signalled it could pause further increases, giving officials time to assess the fallout from recent bank failures, wait on the resolution of a political stand-off over the U.S. debt ceiling and monitor the course of inflation. The federal funds rate is now in a range of 5% to 5.25%, which is the highest level since 2006. <\/p>\n\n\n\n

The U.S. Central Bank warned that tighter credit conditions for households and businesses are expected to affect economic activity. In the picture below, we can see that even without this rise in interest rates, the federal funds rate was at the highest level since the 2007 financial crisis.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Many analysts and economists are worried that the high-interest rates will push the economy into a recession. It is important to mention that government data showed last week that economic growth in the first quarter slowed sequentially, with real gross domestic product increasing at a 1.1% annual pace, compared with a 2.6% gain in the prior three-month period. With higher interest rates, companies need to spend more money to borrow money to invest in growth. Historically, higher rates lead companies to reduce spending (especially on hiring). <\/p>\n\n\n\n

Many companies could face liquidity problems, and economist David Rosenberg has warned that the U.S. economy is facing two big risks. David Rosenberg said<\/a>:<\/p>\n\n\n\n

\"We have a possible debt default on our hands and a spreading bank crisis. The banking turmoil that started with Silicon Valley Bank's collapse in March remains unresolved, and First Republic's failure and takeover by CEO Jamie Dimon's JPMorgan has reignited worries about broader financial instability. Moreover, political disagreement about raising the U.S. government's borrowing limit is fanning fears of a debt-ceiling crisis.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>United States May Fund Its Deficit By Printing More Money; Could Default By June 1st<\/a><\/p>\n\n\n\n

Higher rates encourage saving over spending and make the debt more costly. Companies with bigger credit or other loans with variable interest rates could be in a difficult situation. We expect to see a meaningful slowdown in economic growth and a weakening of the labour market in the United States in the upcoming months. <\/p>\n\n\n\n

At the same time, Brian Jacobsen, chief economist at Annex Wealth Management, said<\/a> that the manufacturing and housing sectors are in a recession already. The famous investor Jeremy Grantham warned that the U.S. stock market could experience significant losses soon, and a recommendation is that investors should continue to take a defensive investment approach.<\/p>\n\n\n\n

Stocks aren't the only assets that could significantly lose their value. Investors should remember that cryptocurrencies could also be in the situation to make an even bigger fall. The crypto market displayed a high correlation with U.S. equities. If a downtrend is witnessed in the stock market, the same is usually replicated in the crypto-sphere.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Bitcoin Is Close To Testing $30,000 Again; Ethereum Revives Bullish Momentum Above $1,800<\/a><\/p>\n","post_title":"The Fed Raises Interest Rates By 25 BPS This Wednesday; Effects On Crypto And Financial Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-fed-raises-interest-rates-by-25-bps-this-wednesday-effects-on-crypto-and-financial-markets","to_ping":"","pinged":"","post_modified":"2023-05-04 22:08:47","post_modified_gmt":"2023-05-04 12:08:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11491","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11422,"post_author":"12","post_date":"2023-05-02 17:50:37","post_date_gmt":"2023-05-02 07:50:37","post_content":"\n

Ray Dalio, the billionaire founder of one of the world\u2019s largest hedge funds, Bridgewater Associates, was recently\u00a0interviewed<\/a>. He explains that the United States' $31.45T debt may have to be resolved by printing more money, also referred to as currency debasement.<\/p>\n\n\n\n

\u201cSo I think you\u2019re in the part of the cycle where you\u2019ve had the tightening and then the dominoes are beginning to fall. And I think that that\u2019s going to produce more problems.<\/em><\/p>\n\n\n\n

I think when it comes down to it, there\u2019s just too much debt, and we\u2019re adding to it too quickly\u2026 Either that debt will be paid off with hard money, in which case there\u2019s not much printing and so on, or it will be paid off with printing a lot of money to make it easier to pay off. <\/em><\/p>\n\n\n\n

I think in the end, it\u2019s always the case that they print a lot of money in and make it easier to pay off, but you have the reduced value of money.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> Ray Dalio; The Federal Reserve Is Setting Off A \u201cTerrible Calamity\u201d<\/a><\/p>\n\n\n\n

Could The United States Default By June?<\/h2>\n\n\n\n

United States Treasury Secretary, Janet Yellen, wrote to House Speaker Kevin McCarthy;<\/p>\n\n\n\n

\"After reviewing recent federal tax receipts, our best estimate is that we will be unable to continue to satisfy all of the government\u2019s obligations by early June, and potentially as early as June 1, if Congress does not raise or suspend the debt limit before that time.<\/em><\/p>\n\n\n\n

If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests.\"<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> United States May Enter Mild Recession As Yet Another Hike In Fed Rates Expected<\/a><\/p>\n\n\n\n

Yellen warned that waiting until the last minute to take action on this issue would cause harm to \"business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States.\"<\/em> Yellen believes that defaulting on their debt would be a financial catastrophe, raising the cost of borrowing without an end, making future investment \"substantially more costly.\u201d<\/em><\/p>\n","post_title":"United States May Fund Its Deficit By Printing More Money; Could Default By June 1st","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-may-fund-its-deficit-by-printing-more-money-could-default-by-june-1st","to_ping":"","pinged":"","post_modified":"2023-05-04 13:04:05","post_modified_gmt":"2023-05-04 03:04:05","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11422","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

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\n

While the Fed highlighted its readiness to address inflation concerns<\/a>, it emphasized a patient approach to observe the impact of prior policy tightening on the economy. The possibility of future rate hikes remains contingent on inflation patterns.<\/p>\n\n\n\n

High inflation rates have impacted President Biden's approval ratings. Speculations about the Fed's cautious policy actions during a presidential election year persist, especially considering the economic landscape and real rates.<\/p>\n\n\n\n

The Fed's decision to maintain rates while hinting at potential cuts in 2024 reflects a balancing act to nurture economic stability amidst inflation concerns.<\/p>\n","post_title":"US Bank Stocks Slide On Fed's Rate-Cut Dismissal","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"us-bank-stocks-slide-on-feds-rate-cut-dismissal","to_ping":"","pinged":"","post_modified":"2023-12-16 20:44:05","post_modified_gmt":"2023-12-16 09:44:05","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14666","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14611,"post_author":"14","post_date":"2023-12-13 21:49:46","post_date_gmt":"2023-12-13 10:49:46","post_content":"\n

U.S. stocks had the highest monthly rally of 2023 in November; the benchmark S&P 500 rose 9%, the tech-heavy Nasdaq Composite surged 11% and the Dow Jones Industrial Average climbed 2,900 points higher. The key news for investors in the past month was the November 14 release of the Consumer Price Index, revealing a 3.2% inflation increase in October, lower than anticipated.<\/p>\n\n\n\n

Encouraging news from this Tuesday revealed that the November Consumer Price Index (CPI) increased by 3.1% every year, aligning with the predictions of economists surveyed by Reuters<\/a>. Similarly, core prices, which exclude fluctuating items like food and energy expenses, also met expectations, rising by 4% annually.<\/p>\n\n\n\n

This triggered a surge in speculation that the Fed has finished its tightening cycle. Most traders, as indicated by the CME Group's Fedwatch tool, think that the central bank has raised interest rates for the last time this year, shifting their focus to potential rate cuts around mid-2024.<\/p>\n\n\n\n

Policymakers And U.S. Stocks<\/h2>\n\n\n\n

Should that prediction materialize, there's a strong likelihood that policymakers will attain their desired \"soft landing\" scenario, despite raising borrowing rates from nearly zero to approximately 5.5% within a mere 15-month timeframe. Growth has remained strong, and the unemployment rate is still hovering below 4% even as inflation has rapidly cooled.<\/p>\n\n\n\n

The positive developments contributed significantly to driving the S&P 500 to its second most successful November since 1980 and it's noteworthy to highlight that the only instance when the index performed better in November was during its recovery post the pandemic in 2020.<\/p>\n\n\n\n

See Related:<\/em><\/strong> SlingTV Partners With BitPay To Accept Crypto For Subscriptions<\/a><\/p>\n\n\n\n

\"S&P
S&P 500 rose 9% in November 2023<\/em><\/figcaption><\/figure>\n\n\n\n

Encouragingly, Bank of America's<\/a> Savita Subramanian anticipates ongoing positive momentum for the S&P 500, projecting it to reach a record-breaking 5,000 points by year-end. Additionally, both BMO's Brian Belski and Deutsche Bank's Binky Chadha have established price targets of 5,100 points each.<\/p>\n\n\n\n

Analysts Index Review<\/h2>\n\n\n\n

However, certain analysts are expressing skepticism. JPMorgan Asset Management advises investors to remain cautious due to the possibility of a recession, while Soci\u00e9t\u00e9 G\u00e9n\u00e9rale cautions them to brace for a volatile 2024, predicting that the index will fluctuate between nearing its record high, experiencing a decline, and subsequently rebounding.<\/p>\n\n\n\n

The focus of investors has shifted now to the conclusion of the Fed's two-day meeting on Wednesday, eagerly awaiting their decision on interest rates, along with the release of the November producer price index (PPI) data. Jason Pride, chief of investment strategy and research at Glenmede, said<\/a>:<\/p>\n\n\n\n

\"They've (Fed) already taken rates up a lot... they will keep rates up in that range for longer than what the market is currently expecting. Markets do not expect more hikes and are instead focused on rate cuts.\"<\/em><\/p>\n","post_title":"U.S. Stocks Had The Highest Monthly Rally Of 2023 In November. What To Expect From The Rest Of December?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"u-s-stocks-had-the-highest-monthly-rally-of-2023-in-november-what-to-expect-from-the-rest-of-december","to_ping":"","pinged":"","post_modified":"2023-12-13 21:49:51","post_modified_gmt":"2023-12-13 10:49:51","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14611","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14444,"post_author":"14","post_date":"2023-11-23 01:38:54","post_date_gmt":"2023-11-22 14:38:54","post_content":"\n

Investors remain optimistic that the market can resume its bullish momentum in December given that the fourth quarter has historically been one of the best three-month stretches of the year for the S&P 500. Investors anticipated the Federal Reserve<\/a> may have already reached its terminal interest rate; however, the primary driving forces affecting stock prices over recent weeks, inflation and interest rates, will continue to hold significant importance in December.<\/p>\n\n\n\n

\"The
The S&P 500 index's strong advance off its October 27 low continues to make progress<\/em><\/figcaption><\/figure>\n\n\n\n

Positive information is that the annual rate of inflation measured by the Consumer Price Index (CPI), which monitors the expenses of a variety of goods and services -  slowed to 3.2% in October, dropping from September's 3.7% and marking the most subdued rate since July 2023. It is also important to say that inflation is significantly lower than 2022 peak levels which were above 9% and because of this many investors anticipate the Fed could begin to cut interest rates as soon as the first half of 2024.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Federal Reserve Officials Banned From Trading Crypto(Opens in a new browser tab)<\/a><\/p>\n\n\n\n

GDP And Corporate Profits<\/h2>\n\n\n\n

Corporate profits are also the big driver of what the market is likely to do in the near term and because of this investors are closely monitoring third-quarter U.S. earnings. Third-quarter earnings season is essentially at the finish line and of the 480 companies that have reported so far, 80% have beaten analysts' expectations. The inflation and interest rates will continue to significantly impact stock prices in December.<\/p>\n\n\n\n

U.S. economic growth(inflation and interest rates) has been resilient year-to-date and Bill Adams, a chief economist for Comerica Bank, recently said the U.S. economy has been much stronger in 2023 than economists expected. Bill Adams suggests that the annual real GDP is anticipated to reach approximately 2.4% this year, a substantial increase from the Federal Reserve's December 2022 dot plot prediction of 0.5%. However, he also warned that the outcome in the upcoming months will decide if the U.S. economy can smoothly achieve a so-called \"soft landing\" without veering into a recession.<\/p>\n\n\n\n

Deceleration In United States Economic Growth<\/h2>\n\n\n\n

Jeffrey Roach, the chief economist at LPL Financial,<\/a> foresees that most of the negative consequences stemming from higher interest rates have not materialized yet and due to this, he anticipates a deceleration in U.S. economic growth. Market expectations that the Federal Reserve will keep interest rates unchanged at its December meeting currently stand above 90% and any information that the Federal Reserve could start to cut rates in the first quarter of 2024 should be positive for stocks in the short-term period.<\/p>\n\n\n\n

On the other side, JPMorgan strategists believe that the risk-reward ratio for numerous stocks is currently unappealing and according to them, restrictive monetary policy is likely to remain in place for some time which could potentially cause a recession. Considering this scenario, investors worried about a possible U.S. recession can opt for a more defensive strategy in the market. They can enhance their financial flexibility by reducing their stock or cryptocurrency exposure and augmenting their cash reserves.<\/p>\n","post_title":"Investor Optimism Rises In November 2023. Does Strong Buying Activity Indicate The Possibility Of Further Gains In The Coming Weeks?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"investor-optimism-rises-in-november-2023-does-strong-buying-activity-indicate-the-possibility-of-further-gains-in-the-coming-weeks","to_ping":"","pinged":"","post_modified":"2023-11-23 01:39:12","post_modified_gmt":"2023-11-22 14:39:12","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14444","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14319,"post_author":"14","post_date":"2023-11-15 18:02:37","post_date_gmt":"2023-11-15 07:02:37","post_content":"\n

Wall Street's main indexes<\/a> surged significantly on Tuesday following the release of lower-than-anticipated inflation figures, which increased the belief that the Federal Reserve had concluded its interest rate hikes. The annual rate of inflation measured by the Consumer Price Index (CPI), which monitors the expenses of a variety of goods and services -\u00a0 slowed to 3.2% last month, dropping from September's 3.7% and marking the most subdued rate since July.<\/p>\n\n\n\n

Additionally promising, Wall Street's prices held steady over the month following a 0.4% increase in September. Core prices, which exclude the unpredictable food and energy sectors, rose by 4%, slightly slower compared to the rate observed in September. The report signifies a significant achievement for the Fed in its battle against inflation but in the upcoming weeks, policymakers will monitor the service category closely, seeking further deceleration as their interest rate increases impact demand.<\/p>\n\n\n\n

\"Inflation
Inflation edges down in October<\/em><\/figcaption><\/figure>\n\n\n\n

Earlier this month, the Federal Reserve maintained its benchmark interest rate at the highest level in 22 years. Following this Tuesday's report, prominent analysts and economists indicated only a 1 percent probability that the central bank would increase rates during its upcoming policy meeting in December. Gregory Daco, chief economist at EY Parthenon, said<\/a>:<\/p>\n\n\n\n

\u201cAcross the board, it\u2019s a good report and I think this will comfort the excessively data-dependent Fed policymakers that policy is sufficiently restrictive to bring inflation down to 2 percent.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/strong><\/em> Gala is announcing a partnership with Stick Figure Productions to distribute Four Down on the Blockchain<\/a><\/p>\n\n\n\n

However, analysts from JPMorgan warned that the risk-reward ratio for many stocks remains unattractive currently and restrictive monetary policy is likely to remain in place for some time. JPMorgan analysts anticipate that most adverse effects resulting from increased interest rates haven't manifested thus far. They highlight an upward trend in consumer loan delinquencies and corporate bankruptcies, suggesting that these patterns are probable to persist unless interest rates are lowered.<\/p>\n\n\n\n

This is likely to drive demand destruction, and weakening pricing power and margins for corporates in the coming quarters, and because of this JPMorgan analysts are adopting a defensive stance, maintaining underweight allocations in equities and cryptocurrencies. Nevertheless, they propose an increase in the investment allocation towards gold due to its potential to rise in value during economic downturns, offering a hedge against potential losses in alternative investments.<\/p>\n\n\n\n

Gold is commonly regarded as a safe-haven asset, particularly amid economic uncertainty or geopolitical instability. Investors typically turn to gold as a means of preserving value when other assets are considered risky.<\/p>\n","post_title":"Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-surged-significantly-after-the-release-of-lower-than-anticipated-inflation-figures","to_ping":"","pinged":"","post_modified":"2023-11-16 20:00:45","post_modified_gmt":"2023-11-16 09:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14319","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11491,"post_author":"14","post_date":"2023-05-04 21:53:10","post_date_gmt":"2023-05-04 11:53:10","post_content":"\n

As widely expected, the U.S. Central Bank raised interest rates by 25bps this Wednesday. It signalled it could pause further increases, giving officials time to assess the fallout from recent bank failures, wait on the resolution of a political stand-off over the U.S. debt ceiling and monitor the course of inflation. The federal funds rate is now in a range of 5% to 5.25%, which is the highest level since 2006. <\/p>\n\n\n\n

The U.S. Central Bank warned that tighter credit conditions for households and businesses are expected to affect economic activity. In the picture below, we can see that even without this rise in interest rates, the federal funds rate was at the highest level since the 2007 financial crisis.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Many analysts and economists are worried that the high-interest rates will push the economy into a recession. It is important to mention that government data showed last week that economic growth in the first quarter slowed sequentially, with real gross domestic product increasing at a 1.1% annual pace, compared with a 2.6% gain in the prior three-month period. With higher interest rates, companies need to spend more money to borrow money to invest in growth. Historically, higher rates lead companies to reduce spending (especially on hiring). <\/p>\n\n\n\n

Many companies could face liquidity problems, and economist David Rosenberg has warned that the U.S. economy is facing two big risks. David Rosenberg said<\/a>:<\/p>\n\n\n\n

\"We have a possible debt default on our hands and a spreading bank crisis. The banking turmoil that started with Silicon Valley Bank's collapse in March remains unresolved, and First Republic's failure and takeover by CEO Jamie Dimon's JPMorgan has reignited worries about broader financial instability. Moreover, political disagreement about raising the U.S. government's borrowing limit is fanning fears of a debt-ceiling crisis.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>United States May Fund Its Deficit By Printing More Money; Could Default By June 1st<\/a><\/p>\n\n\n\n

Higher rates encourage saving over spending and make the debt more costly. Companies with bigger credit or other loans with variable interest rates could be in a difficult situation. We expect to see a meaningful slowdown in economic growth and a weakening of the labour market in the United States in the upcoming months. <\/p>\n\n\n\n

At the same time, Brian Jacobsen, chief economist at Annex Wealth Management, said<\/a> that the manufacturing and housing sectors are in a recession already. The famous investor Jeremy Grantham warned that the U.S. stock market could experience significant losses soon, and a recommendation is that investors should continue to take a defensive investment approach.<\/p>\n\n\n\n

Stocks aren't the only assets that could significantly lose their value. Investors should remember that cryptocurrencies could also be in the situation to make an even bigger fall. The crypto market displayed a high correlation with U.S. equities. If a downtrend is witnessed in the stock market, the same is usually replicated in the crypto-sphere.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Bitcoin Is Close To Testing $30,000 Again; Ethereum Revives Bullish Momentum Above $1,800<\/a><\/p>\n","post_title":"The Fed Raises Interest Rates By 25 BPS This Wednesday; Effects On Crypto And Financial Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-fed-raises-interest-rates-by-25-bps-this-wednesday-effects-on-crypto-and-financial-markets","to_ping":"","pinged":"","post_modified":"2023-05-04 22:08:47","post_modified_gmt":"2023-05-04 12:08:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11491","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11422,"post_author":"12","post_date":"2023-05-02 17:50:37","post_date_gmt":"2023-05-02 07:50:37","post_content":"\n

Ray Dalio, the billionaire founder of one of the world\u2019s largest hedge funds, Bridgewater Associates, was recently\u00a0interviewed<\/a>. He explains that the United States' $31.45T debt may have to be resolved by printing more money, also referred to as currency debasement.<\/p>\n\n\n\n

\u201cSo I think you\u2019re in the part of the cycle where you\u2019ve had the tightening and then the dominoes are beginning to fall. And I think that that\u2019s going to produce more problems.<\/em><\/p>\n\n\n\n

I think when it comes down to it, there\u2019s just too much debt, and we\u2019re adding to it too quickly\u2026 Either that debt will be paid off with hard money, in which case there\u2019s not much printing and so on, or it will be paid off with printing a lot of money to make it easier to pay off. <\/em><\/p>\n\n\n\n

I think in the end, it\u2019s always the case that they print a lot of money in and make it easier to pay off, but you have the reduced value of money.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> Ray Dalio; The Federal Reserve Is Setting Off A \u201cTerrible Calamity\u201d<\/a><\/p>\n\n\n\n

Could The United States Default By June?<\/h2>\n\n\n\n

United States Treasury Secretary, Janet Yellen, wrote to House Speaker Kevin McCarthy;<\/p>\n\n\n\n

\"After reviewing recent federal tax receipts, our best estimate is that we will be unable to continue to satisfy all of the government\u2019s obligations by early June, and potentially as early as June 1, if Congress does not raise or suspend the debt limit before that time.<\/em><\/p>\n\n\n\n

If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests.\"<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> United States May Enter Mild Recession As Yet Another Hike In Fed Rates Expected<\/a><\/p>\n\n\n\n

Yellen warned that waiting until the last minute to take action on this issue would cause harm to \"business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States.\"<\/em> Yellen believes that defaulting on their debt would be a financial catastrophe, raising the cost of borrowing without an end, making future investment \"substantially more costly.\u201d<\/em><\/p>\n","post_title":"United States May Fund Its Deficit By Printing More Money; Could Default By June 1st","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-may-fund-its-deficit-by-printing-more-money-could-default-by-june-1st","to_ping":"","pinged":"","post_modified":"2023-05-04 13:04:05","post_modified_gmt":"2023-05-04 03:04:05","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11422","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

ADVERTISEMENT
\n

The Federal Open Market Committee unanimously voted to retain the benchmark overnight borrowing rate between 5.25%-5.5%. This step hinted at at least three rate cuts in 2024, a less aggressive stance than market expectations but more pronounced than previously indicated.<\/p>\n\n\n\n

While the Fed highlighted its readiness to address inflation concerns<\/a>, it emphasized a patient approach to observe the impact of prior policy tightening on the economy. The possibility of future rate hikes remains contingent on inflation patterns.<\/p>\n\n\n\n

High inflation rates have impacted President Biden's approval ratings. Speculations about the Fed's cautious policy actions during a presidential election year persist, especially considering the economic landscape and real rates.<\/p>\n\n\n\n

The Fed's decision to maintain rates while hinting at potential cuts in 2024 reflects a balancing act to nurture economic stability amidst inflation concerns.<\/p>\n","post_title":"US Bank Stocks Slide On Fed's Rate-Cut Dismissal","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"us-bank-stocks-slide-on-feds-rate-cut-dismissal","to_ping":"","pinged":"","post_modified":"2023-12-16 20:44:05","post_modified_gmt":"2023-12-16 09:44:05","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14666","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14611,"post_author":"14","post_date":"2023-12-13 21:49:46","post_date_gmt":"2023-12-13 10:49:46","post_content":"\n

U.S. stocks had the highest monthly rally of 2023 in November; the benchmark S&P 500 rose 9%, the tech-heavy Nasdaq Composite surged 11% and the Dow Jones Industrial Average climbed 2,900 points higher. The key news for investors in the past month was the November 14 release of the Consumer Price Index, revealing a 3.2% inflation increase in October, lower than anticipated.<\/p>\n\n\n\n

Encouraging news from this Tuesday revealed that the November Consumer Price Index (CPI) increased by 3.1% every year, aligning with the predictions of economists surveyed by Reuters<\/a>. Similarly, core prices, which exclude fluctuating items like food and energy expenses, also met expectations, rising by 4% annually.<\/p>\n\n\n\n

This triggered a surge in speculation that the Fed has finished its tightening cycle. Most traders, as indicated by the CME Group's Fedwatch tool, think that the central bank has raised interest rates for the last time this year, shifting their focus to potential rate cuts around mid-2024.<\/p>\n\n\n\n

Policymakers And U.S. Stocks<\/h2>\n\n\n\n

Should that prediction materialize, there's a strong likelihood that policymakers will attain their desired \"soft landing\" scenario, despite raising borrowing rates from nearly zero to approximately 5.5% within a mere 15-month timeframe. Growth has remained strong, and the unemployment rate is still hovering below 4% even as inflation has rapidly cooled.<\/p>\n\n\n\n

The positive developments contributed significantly to driving the S&P 500 to its second most successful November since 1980 and it's noteworthy to highlight that the only instance when the index performed better in November was during its recovery post the pandemic in 2020.<\/p>\n\n\n\n

See Related:<\/em><\/strong> SlingTV Partners With BitPay To Accept Crypto For Subscriptions<\/a><\/p>\n\n\n\n

\"S&P
S&P 500 rose 9% in November 2023<\/em><\/figcaption><\/figure>\n\n\n\n

Encouragingly, Bank of America's<\/a> Savita Subramanian anticipates ongoing positive momentum for the S&P 500, projecting it to reach a record-breaking 5,000 points by year-end. Additionally, both BMO's Brian Belski and Deutsche Bank's Binky Chadha have established price targets of 5,100 points each.<\/p>\n\n\n\n

Analysts Index Review<\/h2>\n\n\n\n

However, certain analysts are expressing skepticism. JPMorgan Asset Management advises investors to remain cautious due to the possibility of a recession, while Soci\u00e9t\u00e9 G\u00e9n\u00e9rale cautions them to brace for a volatile 2024, predicting that the index will fluctuate between nearing its record high, experiencing a decline, and subsequently rebounding.<\/p>\n\n\n\n

The focus of investors has shifted now to the conclusion of the Fed's two-day meeting on Wednesday, eagerly awaiting their decision on interest rates, along with the release of the November producer price index (PPI) data. Jason Pride, chief of investment strategy and research at Glenmede, said<\/a>:<\/p>\n\n\n\n

\"They've (Fed) already taken rates up a lot... they will keep rates up in that range for longer than what the market is currently expecting. Markets do not expect more hikes and are instead focused on rate cuts.\"<\/em><\/p>\n","post_title":"U.S. Stocks Had The Highest Monthly Rally Of 2023 In November. What To Expect From The Rest Of December?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"u-s-stocks-had-the-highest-monthly-rally-of-2023-in-november-what-to-expect-from-the-rest-of-december","to_ping":"","pinged":"","post_modified":"2023-12-13 21:49:51","post_modified_gmt":"2023-12-13 10:49:51","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14611","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14444,"post_author":"14","post_date":"2023-11-23 01:38:54","post_date_gmt":"2023-11-22 14:38:54","post_content":"\n

Investors remain optimistic that the market can resume its bullish momentum in December given that the fourth quarter has historically been one of the best three-month stretches of the year for the S&P 500. Investors anticipated the Federal Reserve<\/a> may have already reached its terminal interest rate; however, the primary driving forces affecting stock prices over recent weeks, inflation and interest rates, will continue to hold significant importance in December.<\/p>\n\n\n\n

\"The
The S&P 500 index's strong advance off its October 27 low continues to make progress<\/em><\/figcaption><\/figure>\n\n\n\n

Positive information is that the annual rate of inflation measured by the Consumer Price Index (CPI), which monitors the expenses of a variety of goods and services -  slowed to 3.2% in October, dropping from September's 3.7% and marking the most subdued rate since July 2023. It is also important to say that inflation is significantly lower than 2022 peak levels which were above 9% and because of this many investors anticipate the Fed could begin to cut interest rates as soon as the first half of 2024.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Federal Reserve Officials Banned From Trading Crypto(Opens in a new browser tab)<\/a><\/p>\n\n\n\n

GDP And Corporate Profits<\/h2>\n\n\n\n

Corporate profits are also the big driver of what the market is likely to do in the near term and because of this investors are closely monitoring third-quarter U.S. earnings. Third-quarter earnings season is essentially at the finish line and of the 480 companies that have reported so far, 80% have beaten analysts' expectations. The inflation and interest rates will continue to significantly impact stock prices in December.<\/p>\n\n\n\n

U.S. economic growth(inflation and interest rates) has been resilient year-to-date and Bill Adams, a chief economist for Comerica Bank, recently said the U.S. economy has been much stronger in 2023 than economists expected. Bill Adams suggests that the annual real GDP is anticipated to reach approximately 2.4% this year, a substantial increase from the Federal Reserve's December 2022 dot plot prediction of 0.5%. However, he also warned that the outcome in the upcoming months will decide if the U.S. economy can smoothly achieve a so-called \"soft landing\" without veering into a recession.<\/p>\n\n\n\n

Deceleration In United States Economic Growth<\/h2>\n\n\n\n

Jeffrey Roach, the chief economist at LPL Financial,<\/a> foresees that most of the negative consequences stemming from higher interest rates have not materialized yet and due to this, he anticipates a deceleration in U.S. economic growth. Market expectations that the Federal Reserve will keep interest rates unchanged at its December meeting currently stand above 90% and any information that the Federal Reserve could start to cut rates in the first quarter of 2024 should be positive for stocks in the short-term period.<\/p>\n\n\n\n

On the other side, JPMorgan strategists believe that the risk-reward ratio for numerous stocks is currently unappealing and according to them, restrictive monetary policy is likely to remain in place for some time which could potentially cause a recession. Considering this scenario, investors worried about a possible U.S. recession can opt for a more defensive strategy in the market. They can enhance their financial flexibility by reducing their stock or cryptocurrency exposure and augmenting their cash reserves.<\/p>\n","post_title":"Investor Optimism Rises In November 2023. Does Strong Buying Activity Indicate The Possibility Of Further Gains In The Coming Weeks?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"investor-optimism-rises-in-november-2023-does-strong-buying-activity-indicate-the-possibility-of-further-gains-in-the-coming-weeks","to_ping":"","pinged":"","post_modified":"2023-11-23 01:39:12","post_modified_gmt":"2023-11-22 14:39:12","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14444","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14319,"post_author":"14","post_date":"2023-11-15 18:02:37","post_date_gmt":"2023-11-15 07:02:37","post_content":"\n

Wall Street's main indexes<\/a> surged significantly on Tuesday following the release of lower-than-anticipated inflation figures, which increased the belief that the Federal Reserve had concluded its interest rate hikes. The annual rate of inflation measured by the Consumer Price Index (CPI), which monitors the expenses of a variety of goods and services -\u00a0 slowed to 3.2% last month, dropping from September's 3.7% and marking the most subdued rate since July.<\/p>\n\n\n\n

Additionally promising, Wall Street's prices held steady over the month following a 0.4% increase in September. Core prices, which exclude the unpredictable food and energy sectors, rose by 4%, slightly slower compared to the rate observed in September. The report signifies a significant achievement for the Fed in its battle against inflation but in the upcoming weeks, policymakers will monitor the service category closely, seeking further deceleration as their interest rate increases impact demand.<\/p>\n\n\n\n

\"Inflation
Inflation edges down in October<\/em><\/figcaption><\/figure>\n\n\n\n

Earlier this month, the Federal Reserve maintained its benchmark interest rate at the highest level in 22 years. Following this Tuesday's report, prominent analysts and economists indicated only a 1 percent probability that the central bank would increase rates during its upcoming policy meeting in December. Gregory Daco, chief economist at EY Parthenon, said<\/a>:<\/p>\n\n\n\n

\u201cAcross the board, it\u2019s a good report and I think this will comfort the excessively data-dependent Fed policymakers that policy is sufficiently restrictive to bring inflation down to 2 percent.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/strong><\/em> Gala is announcing a partnership with Stick Figure Productions to distribute Four Down on the Blockchain<\/a><\/p>\n\n\n\n

However, analysts from JPMorgan warned that the risk-reward ratio for many stocks remains unattractive currently and restrictive monetary policy is likely to remain in place for some time. JPMorgan analysts anticipate that most adverse effects resulting from increased interest rates haven't manifested thus far. They highlight an upward trend in consumer loan delinquencies and corporate bankruptcies, suggesting that these patterns are probable to persist unless interest rates are lowered.<\/p>\n\n\n\n

This is likely to drive demand destruction, and weakening pricing power and margins for corporates in the coming quarters, and because of this JPMorgan analysts are adopting a defensive stance, maintaining underweight allocations in equities and cryptocurrencies. Nevertheless, they propose an increase in the investment allocation towards gold due to its potential to rise in value during economic downturns, offering a hedge against potential losses in alternative investments.<\/p>\n\n\n\n

Gold is commonly regarded as a safe-haven asset, particularly amid economic uncertainty or geopolitical instability. Investors typically turn to gold as a means of preserving value when other assets are considered risky.<\/p>\n","post_title":"Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-surged-significantly-after-the-release-of-lower-than-anticipated-inflation-figures","to_ping":"","pinged":"","post_modified":"2023-11-16 20:00:45","post_modified_gmt":"2023-11-16 09:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14319","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11491,"post_author":"14","post_date":"2023-05-04 21:53:10","post_date_gmt":"2023-05-04 11:53:10","post_content":"\n

As widely expected, the U.S. Central Bank raised interest rates by 25bps this Wednesday. It signalled it could pause further increases, giving officials time to assess the fallout from recent bank failures, wait on the resolution of a political stand-off over the U.S. debt ceiling and monitor the course of inflation. The federal funds rate is now in a range of 5% to 5.25%, which is the highest level since 2006. <\/p>\n\n\n\n

The U.S. Central Bank warned that tighter credit conditions for households and businesses are expected to affect economic activity. In the picture below, we can see that even without this rise in interest rates, the federal funds rate was at the highest level since the 2007 financial crisis.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Many analysts and economists are worried that the high-interest rates will push the economy into a recession. It is important to mention that government data showed last week that economic growth in the first quarter slowed sequentially, with real gross domestic product increasing at a 1.1% annual pace, compared with a 2.6% gain in the prior three-month period. With higher interest rates, companies need to spend more money to borrow money to invest in growth. Historically, higher rates lead companies to reduce spending (especially on hiring). <\/p>\n\n\n\n

Many companies could face liquidity problems, and economist David Rosenberg has warned that the U.S. economy is facing two big risks. David Rosenberg said<\/a>:<\/p>\n\n\n\n

\"We have a possible debt default on our hands and a spreading bank crisis. The banking turmoil that started with Silicon Valley Bank's collapse in March remains unresolved, and First Republic's failure and takeover by CEO Jamie Dimon's JPMorgan has reignited worries about broader financial instability. Moreover, political disagreement about raising the U.S. government's borrowing limit is fanning fears of a debt-ceiling crisis.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>United States May Fund Its Deficit By Printing More Money; Could Default By June 1st<\/a><\/p>\n\n\n\n

Higher rates encourage saving over spending and make the debt more costly. Companies with bigger credit or other loans with variable interest rates could be in a difficult situation. We expect to see a meaningful slowdown in economic growth and a weakening of the labour market in the United States in the upcoming months. <\/p>\n\n\n\n

At the same time, Brian Jacobsen, chief economist at Annex Wealth Management, said<\/a> that the manufacturing and housing sectors are in a recession already. The famous investor Jeremy Grantham warned that the U.S. stock market could experience significant losses soon, and a recommendation is that investors should continue to take a defensive investment approach.<\/p>\n\n\n\n

Stocks aren't the only assets that could significantly lose their value. Investors should remember that cryptocurrencies could also be in the situation to make an even bigger fall. The crypto market displayed a high correlation with U.S. equities. If a downtrend is witnessed in the stock market, the same is usually replicated in the crypto-sphere.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Bitcoin Is Close To Testing $30,000 Again; Ethereum Revives Bullish Momentum Above $1,800<\/a><\/p>\n","post_title":"The Fed Raises Interest Rates By 25 BPS This Wednesday; Effects On Crypto And Financial Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-fed-raises-interest-rates-by-25-bps-this-wednesday-effects-on-crypto-and-financial-markets","to_ping":"","pinged":"","post_modified":"2023-05-04 22:08:47","post_modified_gmt":"2023-05-04 12:08:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11491","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11422,"post_author":"12","post_date":"2023-05-02 17:50:37","post_date_gmt":"2023-05-02 07:50:37","post_content":"\n

Ray Dalio, the billionaire founder of one of the world\u2019s largest hedge funds, Bridgewater Associates, was recently\u00a0interviewed<\/a>. He explains that the United States' $31.45T debt may have to be resolved by printing more money, also referred to as currency debasement.<\/p>\n\n\n\n

\u201cSo I think you\u2019re in the part of the cycle where you\u2019ve had the tightening and then the dominoes are beginning to fall. And I think that that\u2019s going to produce more problems.<\/em><\/p>\n\n\n\n

I think when it comes down to it, there\u2019s just too much debt, and we\u2019re adding to it too quickly\u2026 Either that debt will be paid off with hard money, in which case there\u2019s not much printing and so on, or it will be paid off with printing a lot of money to make it easier to pay off. <\/em><\/p>\n\n\n\n

I think in the end, it\u2019s always the case that they print a lot of money in and make it easier to pay off, but you have the reduced value of money.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> Ray Dalio; The Federal Reserve Is Setting Off A \u201cTerrible Calamity\u201d<\/a><\/p>\n\n\n\n

Could The United States Default By June?<\/h2>\n\n\n\n

United States Treasury Secretary, Janet Yellen, wrote to House Speaker Kevin McCarthy;<\/p>\n\n\n\n

\"After reviewing recent federal tax receipts, our best estimate is that we will be unable to continue to satisfy all of the government\u2019s obligations by early June, and potentially as early as June 1, if Congress does not raise or suspend the debt limit before that time.<\/em><\/p>\n\n\n\n

If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests.\"<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> United States May Enter Mild Recession As Yet Another Hike In Fed Rates Expected<\/a><\/p>\n\n\n\n

Yellen warned that waiting until the last minute to take action on this issue would cause harm to \"business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States.\"<\/em> Yellen believes that defaulting on their debt would be a financial catastrophe, raising the cost of borrowing without an end, making future investment \"substantially more costly.\u201d<\/em><\/p>\n","post_title":"United States May Fund Its Deficit By Printing More Money; Could Default By June 1st","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-may-fund-its-deficit-by-printing-more-money-could-default-by-june-1st","to_ping":"","pinged":"","post_modified":"2023-05-04 13:04:05","post_modified_gmt":"2023-05-04 03:04:05","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11422","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

ADVERTISEMENT
\n

Recently, the Fed maintained its key interest rate for the third consecutive time, signaling potential multiple rate cuts in 2024<\/a>, CNBC<\/em> reported. Despite inflation easing and steady economic conditions, this decision anticipates a series of cuts in the coming year.<\/p>\n\n\n\n

The Federal Open Market Committee unanimously voted to retain the benchmark overnight borrowing rate between 5.25%-5.5%. This step hinted at at least three rate cuts in 2024, a less aggressive stance than market expectations but more pronounced than previously indicated.<\/p>\n\n\n\n

While the Fed highlighted its readiness to address inflation concerns<\/a>, it emphasized a patient approach to observe the impact of prior policy tightening on the economy. The possibility of future rate hikes remains contingent on inflation patterns.<\/p>\n\n\n\n

High inflation rates have impacted President Biden's approval ratings. Speculations about the Fed's cautious policy actions during a presidential election year persist, especially considering the economic landscape and real rates.<\/p>\n\n\n\n

The Fed's decision to maintain rates while hinting at potential cuts in 2024 reflects a balancing act to nurture economic stability amidst inflation concerns.<\/p>\n","post_title":"US Bank Stocks Slide On Fed's Rate-Cut Dismissal","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"us-bank-stocks-slide-on-feds-rate-cut-dismissal","to_ping":"","pinged":"","post_modified":"2023-12-16 20:44:05","post_modified_gmt":"2023-12-16 09:44:05","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14666","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14611,"post_author":"14","post_date":"2023-12-13 21:49:46","post_date_gmt":"2023-12-13 10:49:46","post_content":"\n

U.S. stocks had the highest monthly rally of 2023 in November; the benchmark S&P 500 rose 9%, the tech-heavy Nasdaq Composite surged 11% and the Dow Jones Industrial Average climbed 2,900 points higher. The key news for investors in the past month was the November 14 release of the Consumer Price Index, revealing a 3.2% inflation increase in October, lower than anticipated.<\/p>\n\n\n\n

Encouraging news from this Tuesday revealed that the November Consumer Price Index (CPI) increased by 3.1% every year, aligning with the predictions of economists surveyed by Reuters<\/a>. Similarly, core prices, which exclude fluctuating items like food and energy expenses, also met expectations, rising by 4% annually.<\/p>\n\n\n\n

This triggered a surge in speculation that the Fed has finished its tightening cycle. Most traders, as indicated by the CME Group's Fedwatch tool, think that the central bank has raised interest rates for the last time this year, shifting their focus to potential rate cuts around mid-2024.<\/p>\n\n\n\n

Policymakers And U.S. Stocks<\/h2>\n\n\n\n

Should that prediction materialize, there's a strong likelihood that policymakers will attain their desired \"soft landing\" scenario, despite raising borrowing rates from nearly zero to approximately 5.5% within a mere 15-month timeframe. Growth has remained strong, and the unemployment rate is still hovering below 4% even as inflation has rapidly cooled.<\/p>\n\n\n\n

The positive developments contributed significantly to driving the S&P 500 to its second most successful November since 1980 and it's noteworthy to highlight that the only instance when the index performed better in November was during its recovery post the pandemic in 2020.<\/p>\n\n\n\n

See Related:<\/em><\/strong> SlingTV Partners With BitPay To Accept Crypto For Subscriptions<\/a><\/p>\n\n\n\n

\"S&P
S&P 500 rose 9% in November 2023<\/em><\/figcaption><\/figure>\n\n\n\n

Encouragingly, Bank of America's<\/a> Savita Subramanian anticipates ongoing positive momentum for the S&P 500, projecting it to reach a record-breaking 5,000 points by year-end. Additionally, both BMO's Brian Belski and Deutsche Bank's Binky Chadha have established price targets of 5,100 points each.<\/p>\n\n\n\n

Analysts Index Review<\/h2>\n\n\n\n

However, certain analysts are expressing skepticism. JPMorgan Asset Management advises investors to remain cautious due to the possibility of a recession, while Soci\u00e9t\u00e9 G\u00e9n\u00e9rale cautions them to brace for a volatile 2024, predicting that the index will fluctuate between nearing its record high, experiencing a decline, and subsequently rebounding.<\/p>\n\n\n\n

The focus of investors has shifted now to the conclusion of the Fed's two-day meeting on Wednesday, eagerly awaiting their decision on interest rates, along with the release of the November producer price index (PPI) data. Jason Pride, chief of investment strategy and research at Glenmede, said<\/a>:<\/p>\n\n\n\n

\"They've (Fed) already taken rates up a lot... they will keep rates up in that range for longer than what the market is currently expecting. Markets do not expect more hikes and are instead focused on rate cuts.\"<\/em><\/p>\n","post_title":"U.S. Stocks Had The Highest Monthly Rally Of 2023 In November. What To Expect From The Rest Of December?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"u-s-stocks-had-the-highest-monthly-rally-of-2023-in-november-what-to-expect-from-the-rest-of-december","to_ping":"","pinged":"","post_modified":"2023-12-13 21:49:51","post_modified_gmt":"2023-12-13 10:49:51","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14611","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14444,"post_author":"14","post_date":"2023-11-23 01:38:54","post_date_gmt":"2023-11-22 14:38:54","post_content":"\n

Investors remain optimistic that the market can resume its bullish momentum in December given that the fourth quarter has historically been one of the best three-month stretches of the year for the S&P 500. Investors anticipated the Federal Reserve<\/a> may have already reached its terminal interest rate; however, the primary driving forces affecting stock prices over recent weeks, inflation and interest rates, will continue to hold significant importance in December.<\/p>\n\n\n\n

\"The
The S&P 500 index's strong advance off its October 27 low continues to make progress<\/em><\/figcaption><\/figure>\n\n\n\n

Positive information is that the annual rate of inflation measured by the Consumer Price Index (CPI), which monitors the expenses of a variety of goods and services -  slowed to 3.2% in October, dropping from September's 3.7% and marking the most subdued rate since July 2023. It is also important to say that inflation is significantly lower than 2022 peak levels which were above 9% and because of this many investors anticipate the Fed could begin to cut interest rates as soon as the first half of 2024.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Federal Reserve Officials Banned From Trading Crypto(Opens in a new browser tab)<\/a><\/p>\n\n\n\n

GDP And Corporate Profits<\/h2>\n\n\n\n

Corporate profits are also the big driver of what the market is likely to do in the near term and because of this investors are closely monitoring third-quarter U.S. earnings. Third-quarter earnings season is essentially at the finish line and of the 480 companies that have reported so far, 80% have beaten analysts' expectations. The inflation and interest rates will continue to significantly impact stock prices in December.<\/p>\n\n\n\n

U.S. economic growth(inflation and interest rates) has been resilient year-to-date and Bill Adams, a chief economist for Comerica Bank, recently said the U.S. economy has been much stronger in 2023 than economists expected. Bill Adams suggests that the annual real GDP is anticipated to reach approximately 2.4% this year, a substantial increase from the Federal Reserve's December 2022 dot plot prediction of 0.5%. However, he also warned that the outcome in the upcoming months will decide if the U.S. economy can smoothly achieve a so-called \"soft landing\" without veering into a recession.<\/p>\n\n\n\n

Deceleration In United States Economic Growth<\/h2>\n\n\n\n

Jeffrey Roach, the chief economist at LPL Financial,<\/a> foresees that most of the negative consequences stemming from higher interest rates have not materialized yet and due to this, he anticipates a deceleration in U.S. economic growth. Market expectations that the Federal Reserve will keep interest rates unchanged at its December meeting currently stand above 90% and any information that the Federal Reserve could start to cut rates in the first quarter of 2024 should be positive for stocks in the short-term period.<\/p>\n\n\n\n

On the other side, JPMorgan strategists believe that the risk-reward ratio for numerous stocks is currently unappealing and according to them, restrictive monetary policy is likely to remain in place for some time which could potentially cause a recession. Considering this scenario, investors worried about a possible U.S. recession can opt for a more defensive strategy in the market. They can enhance their financial flexibility by reducing their stock or cryptocurrency exposure and augmenting their cash reserves.<\/p>\n","post_title":"Investor Optimism Rises In November 2023. Does Strong Buying Activity Indicate The Possibility Of Further Gains In The Coming Weeks?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"investor-optimism-rises-in-november-2023-does-strong-buying-activity-indicate-the-possibility-of-further-gains-in-the-coming-weeks","to_ping":"","pinged":"","post_modified":"2023-11-23 01:39:12","post_modified_gmt":"2023-11-22 14:39:12","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14444","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14319,"post_author":"14","post_date":"2023-11-15 18:02:37","post_date_gmt":"2023-11-15 07:02:37","post_content":"\n

Wall Street's main indexes<\/a> surged significantly on Tuesday following the release of lower-than-anticipated inflation figures, which increased the belief that the Federal Reserve had concluded its interest rate hikes. The annual rate of inflation measured by the Consumer Price Index (CPI), which monitors the expenses of a variety of goods and services -\u00a0 slowed to 3.2% last month, dropping from September's 3.7% and marking the most subdued rate since July.<\/p>\n\n\n\n

Additionally promising, Wall Street's prices held steady over the month following a 0.4% increase in September. Core prices, which exclude the unpredictable food and energy sectors, rose by 4%, slightly slower compared to the rate observed in September. The report signifies a significant achievement for the Fed in its battle against inflation but in the upcoming weeks, policymakers will monitor the service category closely, seeking further deceleration as their interest rate increases impact demand.<\/p>\n\n\n\n

\"Inflation
Inflation edges down in October<\/em><\/figcaption><\/figure>\n\n\n\n

Earlier this month, the Federal Reserve maintained its benchmark interest rate at the highest level in 22 years. Following this Tuesday's report, prominent analysts and economists indicated only a 1 percent probability that the central bank would increase rates during its upcoming policy meeting in December. Gregory Daco, chief economist at EY Parthenon, said<\/a>:<\/p>\n\n\n\n

\u201cAcross the board, it\u2019s a good report and I think this will comfort the excessively data-dependent Fed policymakers that policy is sufficiently restrictive to bring inflation down to 2 percent.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/strong><\/em> Gala is announcing a partnership with Stick Figure Productions to distribute Four Down on the Blockchain<\/a><\/p>\n\n\n\n

However, analysts from JPMorgan warned that the risk-reward ratio for many stocks remains unattractive currently and restrictive monetary policy is likely to remain in place for some time. JPMorgan analysts anticipate that most adverse effects resulting from increased interest rates haven't manifested thus far. They highlight an upward trend in consumer loan delinquencies and corporate bankruptcies, suggesting that these patterns are probable to persist unless interest rates are lowered.<\/p>\n\n\n\n

This is likely to drive demand destruction, and weakening pricing power and margins for corporates in the coming quarters, and because of this JPMorgan analysts are adopting a defensive stance, maintaining underweight allocations in equities and cryptocurrencies. Nevertheless, they propose an increase in the investment allocation towards gold due to its potential to rise in value during economic downturns, offering a hedge against potential losses in alternative investments.<\/p>\n\n\n\n

Gold is commonly regarded as a safe-haven asset, particularly amid economic uncertainty or geopolitical instability. Investors typically turn to gold as a means of preserving value when other assets are considered risky.<\/p>\n","post_title":"Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-surged-significantly-after-the-release-of-lower-than-anticipated-inflation-figures","to_ping":"","pinged":"","post_modified":"2023-11-16 20:00:45","post_modified_gmt":"2023-11-16 09:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14319","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11491,"post_author":"14","post_date":"2023-05-04 21:53:10","post_date_gmt":"2023-05-04 11:53:10","post_content":"\n

As widely expected, the U.S. Central Bank raised interest rates by 25bps this Wednesday. It signalled it could pause further increases, giving officials time to assess the fallout from recent bank failures, wait on the resolution of a political stand-off over the U.S. debt ceiling and monitor the course of inflation. The federal funds rate is now in a range of 5% to 5.25%, which is the highest level since 2006. <\/p>\n\n\n\n

The U.S. Central Bank warned that tighter credit conditions for households and businesses are expected to affect economic activity. In the picture below, we can see that even without this rise in interest rates, the federal funds rate was at the highest level since the 2007 financial crisis.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Many analysts and economists are worried that the high-interest rates will push the economy into a recession. It is important to mention that government data showed last week that economic growth in the first quarter slowed sequentially, with real gross domestic product increasing at a 1.1% annual pace, compared with a 2.6% gain in the prior three-month period. With higher interest rates, companies need to spend more money to borrow money to invest in growth. Historically, higher rates lead companies to reduce spending (especially on hiring). <\/p>\n\n\n\n

Many companies could face liquidity problems, and economist David Rosenberg has warned that the U.S. economy is facing two big risks. David Rosenberg said<\/a>:<\/p>\n\n\n\n

\"We have a possible debt default on our hands and a spreading bank crisis. The banking turmoil that started with Silicon Valley Bank's collapse in March remains unresolved, and First Republic's failure and takeover by CEO Jamie Dimon's JPMorgan has reignited worries about broader financial instability. Moreover, political disagreement about raising the U.S. government's borrowing limit is fanning fears of a debt-ceiling crisis.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>United States May Fund Its Deficit By Printing More Money; Could Default By June 1st<\/a><\/p>\n\n\n\n

Higher rates encourage saving over spending and make the debt more costly. Companies with bigger credit or other loans with variable interest rates could be in a difficult situation. We expect to see a meaningful slowdown in economic growth and a weakening of the labour market in the United States in the upcoming months. <\/p>\n\n\n\n

At the same time, Brian Jacobsen, chief economist at Annex Wealth Management, said<\/a> that the manufacturing and housing sectors are in a recession already. The famous investor Jeremy Grantham warned that the U.S. stock market could experience significant losses soon, and a recommendation is that investors should continue to take a defensive investment approach.<\/p>\n\n\n\n

Stocks aren't the only assets that could significantly lose their value. Investors should remember that cryptocurrencies could also be in the situation to make an even bigger fall. The crypto market displayed a high correlation with U.S. equities. If a downtrend is witnessed in the stock market, the same is usually replicated in the crypto-sphere.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Bitcoin Is Close To Testing $30,000 Again; Ethereum Revives Bullish Momentum Above $1,800<\/a><\/p>\n","post_title":"The Fed Raises Interest Rates By 25 BPS This Wednesday; Effects On Crypto And Financial Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-fed-raises-interest-rates-by-25-bps-this-wednesday-effects-on-crypto-and-financial-markets","to_ping":"","pinged":"","post_modified":"2023-05-04 22:08:47","post_modified_gmt":"2023-05-04 12:08:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11491","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11422,"post_author":"12","post_date":"2023-05-02 17:50:37","post_date_gmt":"2023-05-02 07:50:37","post_content":"\n

Ray Dalio, the billionaire founder of one of the world\u2019s largest hedge funds, Bridgewater Associates, was recently\u00a0interviewed<\/a>. He explains that the United States' $31.45T debt may have to be resolved by printing more money, also referred to as currency debasement.<\/p>\n\n\n\n

\u201cSo I think you\u2019re in the part of the cycle where you\u2019ve had the tightening and then the dominoes are beginning to fall. And I think that that\u2019s going to produce more problems.<\/em><\/p>\n\n\n\n

I think when it comes down to it, there\u2019s just too much debt, and we\u2019re adding to it too quickly\u2026 Either that debt will be paid off with hard money, in which case there\u2019s not much printing and so on, or it will be paid off with printing a lot of money to make it easier to pay off. <\/em><\/p>\n\n\n\n

I think in the end, it\u2019s always the case that they print a lot of money in and make it easier to pay off, but you have the reduced value of money.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> Ray Dalio; The Federal Reserve Is Setting Off A \u201cTerrible Calamity\u201d<\/a><\/p>\n\n\n\n

Could The United States Default By June?<\/h2>\n\n\n\n

United States Treasury Secretary, Janet Yellen, wrote to House Speaker Kevin McCarthy;<\/p>\n\n\n\n

\"After reviewing recent federal tax receipts, our best estimate is that we will be unable to continue to satisfy all of the government\u2019s obligations by early June, and potentially as early as June 1, if Congress does not raise or suspend the debt limit before that time.<\/em><\/p>\n\n\n\n

If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests.\"<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> United States May Enter Mild Recession As Yet Another Hike In Fed Rates Expected<\/a><\/p>\n\n\n\n

Yellen warned that waiting until the last minute to take action on this issue would cause harm to \"business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States.\"<\/em> Yellen believes that defaulting on their debt would be a financial catastrophe, raising the cost of borrowing without an end, making future investment \"substantially more costly.\u201d<\/em><\/p>\n","post_title":"United States May Fund Its Deficit By Printing More Money; Could Default By June 1st","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-may-fund-its-deficit-by-printing-more-money-could-default-by-june-1st","to_ping":"","pinged":"","post_modified":"2023-05-04 13:04:05","post_modified_gmt":"2023-05-04 03:04:05","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11422","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

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\n

The Fed's Cautionary Rate-Cut Signals<\/h2>\n\n\n\n

Recently, the Fed maintained its key interest rate for the third consecutive time, signaling potential multiple rate cuts in 2024<\/a>, CNBC<\/em> reported. Despite inflation easing and steady economic conditions, this decision anticipates a series of cuts in the coming year.<\/p>\n\n\n\n

The Federal Open Market Committee unanimously voted to retain the benchmark overnight borrowing rate between 5.25%-5.5%. This step hinted at at least three rate cuts in 2024, a less aggressive stance than market expectations but more pronounced than previously indicated.<\/p>\n\n\n\n

While the Fed highlighted its readiness to address inflation concerns<\/a>, it emphasized a patient approach to observe the impact of prior policy tightening on the economy. The possibility of future rate hikes remains contingent on inflation patterns.<\/p>\n\n\n\n

High inflation rates have impacted President Biden's approval ratings. Speculations about the Fed's cautious policy actions during a presidential election year persist, especially considering the economic landscape and real rates.<\/p>\n\n\n\n

The Fed's decision to maintain rates while hinting at potential cuts in 2024 reflects a balancing act to nurture economic stability amidst inflation concerns.<\/p>\n","post_title":"US Bank Stocks Slide On Fed's Rate-Cut Dismissal","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"us-bank-stocks-slide-on-feds-rate-cut-dismissal","to_ping":"","pinged":"","post_modified":"2023-12-16 20:44:05","post_modified_gmt":"2023-12-16 09:44:05","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14666","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14611,"post_author":"14","post_date":"2023-12-13 21:49:46","post_date_gmt":"2023-12-13 10:49:46","post_content":"\n

U.S. stocks had the highest monthly rally of 2023 in November; the benchmark S&P 500 rose 9%, the tech-heavy Nasdaq Composite surged 11% and the Dow Jones Industrial Average climbed 2,900 points higher. The key news for investors in the past month was the November 14 release of the Consumer Price Index, revealing a 3.2% inflation increase in October, lower than anticipated.<\/p>\n\n\n\n

Encouraging news from this Tuesday revealed that the November Consumer Price Index (CPI) increased by 3.1% every year, aligning with the predictions of economists surveyed by Reuters<\/a>. Similarly, core prices, which exclude fluctuating items like food and energy expenses, also met expectations, rising by 4% annually.<\/p>\n\n\n\n

This triggered a surge in speculation that the Fed has finished its tightening cycle. Most traders, as indicated by the CME Group's Fedwatch tool, think that the central bank has raised interest rates for the last time this year, shifting their focus to potential rate cuts around mid-2024.<\/p>\n\n\n\n

Policymakers And U.S. Stocks<\/h2>\n\n\n\n

Should that prediction materialize, there's a strong likelihood that policymakers will attain their desired \"soft landing\" scenario, despite raising borrowing rates from nearly zero to approximately 5.5% within a mere 15-month timeframe. Growth has remained strong, and the unemployment rate is still hovering below 4% even as inflation has rapidly cooled.<\/p>\n\n\n\n

The positive developments contributed significantly to driving the S&P 500 to its second most successful November since 1980 and it's noteworthy to highlight that the only instance when the index performed better in November was during its recovery post the pandemic in 2020.<\/p>\n\n\n\n

See Related:<\/em><\/strong> SlingTV Partners With BitPay To Accept Crypto For Subscriptions<\/a><\/p>\n\n\n\n

\"S&P
S&P 500 rose 9% in November 2023<\/em><\/figcaption><\/figure>\n\n\n\n

Encouragingly, Bank of America's<\/a> Savita Subramanian anticipates ongoing positive momentum for the S&P 500, projecting it to reach a record-breaking 5,000 points by year-end. Additionally, both BMO's Brian Belski and Deutsche Bank's Binky Chadha have established price targets of 5,100 points each.<\/p>\n\n\n\n

Analysts Index Review<\/h2>\n\n\n\n

However, certain analysts are expressing skepticism. JPMorgan Asset Management advises investors to remain cautious due to the possibility of a recession, while Soci\u00e9t\u00e9 G\u00e9n\u00e9rale cautions them to brace for a volatile 2024, predicting that the index will fluctuate between nearing its record high, experiencing a decline, and subsequently rebounding.<\/p>\n\n\n\n

The focus of investors has shifted now to the conclusion of the Fed's two-day meeting on Wednesday, eagerly awaiting their decision on interest rates, along with the release of the November producer price index (PPI) data. Jason Pride, chief of investment strategy and research at Glenmede, said<\/a>:<\/p>\n\n\n\n

\"They've (Fed) already taken rates up a lot... they will keep rates up in that range for longer than what the market is currently expecting. Markets do not expect more hikes and are instead focused on rate cuts.\"<\/em><\/p>\n","post_title":"U.S. Stocks Had The Highest Monthly Rally Of 2023 In November. What To Expect From The Rest Of December?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"u-s-stocks-had-the-highest-monthly-rally-of-2023-in-november-what-to-expect-from-the-rest-of-december","to_ping":"","pinged":"","post_modified":"2023-12-13 21:49:51","post_modified_gmt":"2023-12-13 10:49:51","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14611","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14444,"post_author":"14","post_date":"2023-11-23 01:38:54","post_date_gmt":"2023-11-22 14:38:54","post_content":"\n

Investors remain optimistic that the market can resume its bullish momentum in December given that the fourth quarter has historically been one of the best three-month stretches of the year for the S&P 500. Investors anticipated the Federal Reserve<\/a> may have already reached its terminal interest rate; however, the primary driving forces affecting stock prices over recent weeks, inflation and interest rates, will continue to hold significant importance in December.<\/p>\n\n\n\n

\"The
The S&P 500 index's strong advance off its October 27 low continues to make progress<\/em><\/figcaption><\/figure>\n\n\n\n

Positive information is that the annual rate of inflation measured by the Consumer Price Index (CPI), which monitors the expenses of a variety of goods and services -  slowed to 3.2% in October, dropping from September's 3.7% and marking the most subdued rate since July 2023. It is also important to say that inflation is significantly lower than 2022 peak levels which were above 9% and because of this many investors anticipate the Fed could begin to cut interest rates as soon as the first half of 2024.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Federal Reserve Officials Banned From Trading Crypto(Opens in a new browser tab)<\/a><\/p>\n\n\n\n

GDP And Corporate Profits<\/h2>\n\n\n\n

Corporate profits are also the big driver of what the market is likely to do in the near term and because of this investors are closely monitoring third-quarter U.S. earnings. Third-quarter earnings season is essentially at the finish line and of the 480 companies that have reported so far, 80% have beaten analysts' expectations. The inflation and interest rates will continue to significantly impact stock prices in December.<\/p>\n\n\n\n

U.S. economic growth(inflation and interest rates) has been resilient year-to-date and Bill Adams, a chief economist for Comerica Bank, recently said the U.S. economy has been much stronger in 2023 than economists expected. Bill Adams suggests that the annual real GDP is anticipated to reach approximately 2.4% this year, a substantial increase from the Federal Reserve's December 2022 dot plot prediction of 0.5%. However, he also warned that the outcome in the upcoming months will decide if the U.S. economy can smoothly achieve a so-called \"soft landing\" without veering into a recession.<\/p>\n\n\n\n

Deceleration In United States Economic Growth<\/h2>\n\n\n\n

Jeffrey Roach, the chief economist at LPL Financial,<\/a> foresees that most of the negative consequences stemming from higher interest rates have not materialized yet and due to this, he anticipates a deceleration in U.S. economic growth. Market expectations that the Federal Reserve will keep interest rates unchanged at its December meeting currently stand above 90% and any information that the Federal Reserve could start to cut rates in the first quarter of 2024 should be positive for stocks in the short-term period.<\/p>\n\n\n\n

On the other side, JPMorgan strategists believe that the risk-reward ratio for numerous stocks is currently unappealing and according to them, restrictive monetary policy is likely to remain in place for some time which could potentially cause a recession. Considering this scenario, investors worried about a possible U.S. recession can opt for a more defensive strategy in the market. They can enhance their financial flexibility by reducing their stock or cryptocurrency exposure and augmenting their cash reserves.<\/p>\n","post_title":"Investor Optimism Rises In November 2023. Does Strong Buying Activity Indicate The Possibility Of Further Gains In The Coming Weeks?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"investor-optimism-rises-in-november-2023-does-strong-buying-activity-indicate-the-possibility-of-further-gains-in-the-coming-weeks","to_ping":"","pinged":"","post_modified":"2023-11-23 01:39:12","post_modified_gmt":"2023-11-22 14:39:12","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14444","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14319,"post_author":"14","post_date":"2023-11-15 18:02:37","post_date_gmt":"2023-11-15 07:02:37","post_content":"\n

Wall Street's main indexes<\/a> surged significantly on Tuesday following the release of lower-than-anticipated inflation figures, which increased the belief that the Federal Reserve had concluded its interest rate hikes. The annual rate of inflation measured by the Consumer Price Index (CPI), which monitors the expenses of a variety of goods and services -\u00a0 slowed to 3.2% last month, dropping from September's 3.7% and marking the most subdued rate since July.<\/p>\n\n\n\n

Additionally promising, Wall Street's prices held steady over the month following a 0.4% increase in September. Core prices, which exclude the unpredictable food and energy sectors, rose by 4%, slightly slower compared to the rate observed in September. The report signifies a significant achievement for the Fed in its battle against inflation but in the upcoming weeks, policymakers will monitor the service category closely, seeking further deceleration as their interest rate increases impact demand.<\/p>\n\n\n\n

\"Inflation
Inflation edges down in October<\/em><\/figcaption><\/figure>\n\n\n\n

Earlier this month, the Federal Reserve maintained its benchmark interest rate at the highest level in 22 years. Following this Tuesday's report, prominent analysts and economists indicated only a 1 percent probability that the central bank would increase rates during its upcoming policy meeting in December. Gregory Daco, chief economist at EY Parthenon, said<\/a>:<\/p>\n\n\n\n

\u201cAcross the board, it\u2019s a good report and I think this will comfort the excessively data-dependent Fed policymakers that policy is sufficiently restrictive to bring inflation down to 2 percent.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/strong><\/em> Gala is announcing a partnership with Stick Figure Productions to distribute Four Down on the Blockchain<\/a><\/p>\n\n\n\n

However, analysts from JPMorgan warned that the risk-reward ratio for many stocks remains unattractive currently and restrictive monetary policy is likely to remain in place for some time. JPMorgan analysts anticipate that most adverse effects resulting from increased interest rates haven't manifested thus far. They highlight an upward trend in consumer loan delinquencies and corporate bankruptcies, suggesting that these patterns are probable to persist unless interest rates are lowered.<\/p>\n\n\n\n

This is likely to drive demand destruction, and weakening pricing power and margins for corporates in the coming quarters, and because of this JPMorgan analysts are adopting a defensive stance, maintaining underweight allocations in equities and cryptocurrencies. Nevertheless, they propose an increase in the investment allocation towards gold due to its potential to rise in value during economic downturns, offering a hedge against potential losses in alternative investments.<\/p>\n\n\n\n

Gold is commonly regarded as a safe-haven asset, particularly amid economic uncertainty or geopolitical instability. Investors typically turn to gold as a means of preserving value when other assets are considered risky.<\/p>\n","post_title":"Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-surged-significantly-after-the-release-of-lower-than-anticipated-inflation-figures","to_ping":"","pinged":"","post_modified":"2023-11-16 20:00:45","post_modified_gmt":"2023-11-16 09:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14319","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11491,"post_author":"14","post_date":"2023-05-04 21:53:10","post_date_gmt":"2023-05-04 11:53:10","post_content":"\n

As widely expected, the U.S. Central Bank raised interest rates by 25bps this Wednesday. It signalled it could pause further increases, giving officials time to assess the fallout from recent bank failures, wait on the resolution of a political stand-off over the U.S. debt ceiling and monitor the course of inflation. The federal funds rate is now in a range of 5% to 5.25%, which is the highest level since 2006. <\/p>\n\n\n\n

The U.S. Central Bank warned that tighter credit conditions for households and businesses are expected to affect economic activity. In the picture below, we can see that even without this rise in interest rates, the federal funds rate was at the highest level since the 2007 financial crisis.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Many analysts and economists are worried that the high-interest rates will push the economy into a recession. It is important to mention that government data showed last week that economic growth in the first quarter slowed sequentially, with real gross domestic product increasing at a 1.1% annual pace, compared with a 2.6% gain in the prior three-month period. With higher interest rates, companies need to spend more money to borrow money to invest in growth. Historically, higher rates lead companies to reduce spending (especially on hiring). <\/p>\n\n\n\n

Many companies could face liquidity problems, and economist David Rosenberg has warned that the U.S. economy is facing two big risks. David Rosenberg said<\/a>:<\/p>\n\n\n\n

\"We have a possible debt default on our hands and a spreading bank crisis. The banking turmoil that started with Silicon Valley Bank's collapse in March remains unresolved, and First Republic's failure and takeover by CEO Jamie Dimon's JPMorgan has reignited worries about broader financial instability. Moreover, political disagreement about raising the U.S. government's borrowing limit is fanning fears of a debt-ceiling crisis.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>United States May Fund Its Deficit By Printing More Money; Could Default By June 1st<\/a><\/p>\n\n\n\n

Higher rates encourage saving over spending and make the debt more costly. Companies with bigger credit or other loans with variable interest rates could be in a difficult situation. We expect to see a meaningful slowdown in economic growth and a weakening of the labour market in the United States in the upcoming months. <\/p>\n\n\n\n

At the same time, Brian Jacobsen, chief economist at Annex Wealth Management, said<\/a> that the manufacturing and housing sectors are in a recession already. The famous investor Jeremy Grantham warned that the U.S. stock market could experience significant losses soon, and a recommendation is that investors should continue to take a defensive investment approach.<\/p>\n\n\n\n

Stocks aren't the only assets that could significantly lose their value. Investors should remember that cryptocurrencies could also be in the situation to make an even bigger fall. The crypto market displayed a high correlation with U.S. equities. If a downtrend is witnessed in the stock market, the same is usually replicated in the crypto-sphere.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Bitcoin Is Close To Testing $30,000 Again; Ethereum Revives Bullish Momentum Above $1,800<\/a><\/p>\n","post_title":"The Fed Raises Interest Rates By 25 BPS This Wednesday; Effects On Crypto And Financial Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-fed-raises-interest-rates-by-25-bps-this-wednesday-effects-on-crypto-and-financial-markets","to_ping":"","pinged":"","post_modified":"2023-05-04 22:08:47","post_modified_gmt":"2023-05-04 12:08:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11491","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11422,"post_author":"12","post_date":"2023-05-02 17:50:37","post_date_gmt":"2023-05-02 07:50:37","post_content":"\n

Ray Dalio, the billionaire founder of one of the world\u2019s largest hedge funds, Bridgewater Associates, was recently\u00a0interviewed<\/a>. He explains that the United States' $31.45T debt may have to be resolved by printing more money, also referred to as currency debasement.<\/p>\n\n\n\n

\u201cSo I think you\u2019re in the part of the cycle where you\u2019ve had the tightening and then the dominoes are beginning to fall. And I think that that\u2019s going to produce more problems.<\/em><\/p>\n\n\n\n

I think when it comes down to it, there\u2019s just too much debt, and we\u2019re adding to it too quickly\u2026 Either that debt will be paid off with hard money, in which case there\u2019s not much printing and so on, or it will be paid off with printing a lot of money to make it easier to pay off. <\/em><\/p>\n\n\n\n

I think in the end, it\u2019s always the case that they print a lot of money in and make it easier to pay off, but you have the reduced value of money.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> Ray Dalio; The Federal Reserve Is Setting Off A \u201cTerrible Calamity\u201d<\/a><\/p>\n\n\n\n

Could The United States Default By June?<\/h2>\n\n\n\n

United States Treasury Secretary, Janet Yellen, wrote to House Speaker Kevin McCarthy;<\/p>\n\n\n\n

\"After reviewing recent federal tax receipts, our best estimate is that we will be unable to continue to satisfy all of the government\u2019s obligations by early June, and potentially as early as June 1, if Congress does not raise or suspend the debt limit before that time.<\/em><\/p>\n\n\n\n

If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests.\"<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> United States May Enter Mild Recession As Yet Another Hike In Fed Rates Expected<\/a><\/p>\n\n\n\n

Yellen warned that waiting until the last minute to take action on this issue would cause harm to \"business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States.\"<\/em> Yellen believes that defaulting on their debt would be a financial catastrophe, raising the cost of borrowing without an end, making future investment \"substantially more costly.\u201d<\/em><\/p>\n","post_title":"United States May Fund Its Deficit By Printing More Money; Could Default By June 1st","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-may-fund-its-deficit-by-printing-more-money-could-default-by-june-1st","to_ping":"","pinged":"","post_modified":"2023-05-04 13:04:05","post_modified_gmt":"2023-05-04 03:04:05","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11422","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

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\n

See Related:<\/em><\/strong> Recession Fears And A Slow Labour Market Exert Pressure On Stocks<\/a><\/p>\n\n\n\n

The Fed's Cautionary Rate-Cut Signals<\/h2>\n\n\n\n

Recently, the Fed maintained its key interest rate for the third consecutive time, signaling potential multiple rate cuts in 2024<\/a>, CNBC<\/em> reported. Despite inflation easing and steady economic conditions, this decision anticipates a series of cuts in the coming year.<\/p>\n\n\n\n

The Federal Open Market Committee unanimously voted to retain the benchmark overnight borrowing rate between 5.25%-5.5%. This step hinted at at least three rate cuts in 2024, a less aggressive stance than market expectations but more pronounced than previously indicated.<\/p>\n\n\n\n

While the Fed highlighted its readiness to address inflation concerns<\/a>, it emphasized a patient approach to observe the impact of prior policy tightening on the economy. The possibility of future rate hikes remains contingent on inflation patterns.<\/p>\n\n\n\n

High inflation rates have impacted President Biden's approval ratings. Speculations about the Fed's cautious policy actions during a presidential election year persist, especially considering the economic landscape and real rates.<\/p>\n\n\n\n

The Fed's decision to maintain rates while hinting at potential cuts in 2024 reflects a balancing act to nurture economic stability amidst inflation concerns.<\/p>\n","post_title":"US Bank Stocks Slide On Fed's Rate-Cut Dismissal","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"us-bank-stocks-slide-on-feds-rate-cut-dismissal","to_ping":"","pinged":"","post_modified":"2023-12-16 20:44:05","post_modified_gmt":"2023-12-16 09:44:05","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14666","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14611,"post_author":"14","post_date":"2023-12-13 21:49:46","post_date_gmt":"2023-12-13 10:49:46","post_content":"\n

U.S. stocks had the highest monthly rally of 2023 in November; the benchmark S&P 500 rose 9%, the tech-heavy Nasdaq Composite surged 11% and the Dow Jones Industrial Average climbed 2,900 points higher. The key news for investors in the past month was the November 14 release of the Consumer Price Index, revealing a 3.2% inflation increase in October, lower than anticipated.<\/p>\n\n\n\n

Encouraging news from this Tuesday revealed that the November Consumer Price Index (CPI) increased by 3.1% every year, aligning with the predictions of economists surveyed by Reuters<\/a>. Similarly, core prices, which exclude fluctuating items like food and energy expenses, also met expectations, rising by 4% annually.<\/p>\n\n\n\n

This triggered a surge in speculation that the Fed has finished its tightening cycle. Most traders, as indicated by the CME Group's Fedwatch tool, think that the central bank has raised interest rates for the last time this year, shifting their focus to potential rate cuts around mid-2024.<\/p>\n\n\n\n

Policymakers And U.S. Stocks<\/h2>\n\n\n\n

Should that prediction materialize, there's a strong likelihood that policymakers will attain their desired \"soft landing\" scenario, despite raising borrowing rates from nearly zero to approximately 5.5% within a mere 15-month timeframe. Growth has remained strong, and the unemployment rate is still hovering below 4% even as inflation has rapidly cooled.<\/p>\n\n\n\n

The positive developments contributed significantly to driving the S&P 500 to its second most successful November since 1980 and it's noteworthy to highlight that the only instance when the index performed better in November was during its recovery post the pandemic in 2020.<\/p>\n\n\n\n

See Related:<\/em><\/strong> SlingTV Partners With BitPay To Accept Crypto For Subscriptions<\/a><\/p>\n\n\n\n

\"S&P
S&P 500 rose 9% in November 2023<\/em><\/figcaption><\/figure>\n\n\n\n

Encouragingly, Bank of America's<\/a> Savita Subramanian anticipates ongoing positive momentum for the S&P 500, projecting it to reach a record-breaking 5,000 points by year-end. Additionally, both BMO's Brian Belski and Deutsche Bank's Binky Chadha have established price targets of 5,100 points each.<\/p>\n\n\n\n

Analysts Index Review<\/h2>\n\n\n\n

However, certain analysts are expressing skepticism. JPMorgan Asset Management advises investors to remain cautious due to the possibility of a recession, while Soci\u00e9t\u00e9 G\u00e9n\u00e9rale cautions them to brace for a volatile 2024, predicting that the index will fluctuate between nearing its record high, experiencing a decline, and subsequently rebounding.<\/p>\n\n\n\n

The focus of investors has shifted now to the conclusion of the Fed's two-day meeting on Wednesday, eagerly awaiting their decision on interest rates, along with the release of the November producer price index (PPI) data. Jason Pride, chief of investment strategy and research at Glenmede, said<\/a>:<\/p>\n\n\n\n

\"They've (Fed) already taken rates up a lot... they will keep rates up in that range for longer than what the market is currently expecting. Markets do not expect more hikes and are instead focused on rate cuts.\"<\/em><\/p>\n","post_title":"U.S. Stocks Had The Highest Monthly Rally Of 2023 In November. What To Expect From The Rest Of December?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"u-s-stocks-had-the-highest-monthly-rally-of-2023-in-november-what-to-expect-from-the-rest-of-december","to_ping":"","pinged":"","post_modified":"2023-12-13 21:49:51","post_modified_gmt":"2023-12-13 10:49:51","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14611","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14444,"post_author":"14","post_date":"2023-11-23 01:38:54","post_date_gmt":"2023-11-22 14:38:54","post_content":"\n

Investors remain optimistic that the market can resume its bullish momentum in December given that the fourth quarter has historically been one of the best three-month stretches of the year for the S&P 500. Investors anticipated the Federal Reserve<\/a> may have already reached its terminal interest rate; however, the primary driving forces affecting stock prices over recent weeks, inflation and interest rates, will continue to hold significant importance in December.<\/p>\n\n\n\n

\"The
The S&P 500 index's strong advance off its October 27 low continues to make progress<\/em><\/figcaption><\/figure>\n\n\n\n

Positive information is that the annual rate of inflation measured by the Consumer Price Index (CPI), which monitors the expenses of a variety of goods and services -  slowed to 3.2% in October, dropping from September's 3.7% and marking the most subdued rate since July 2023. It is also important to say that inflation is significantly lower than 2022 peak levels which were above 9% and because of this many investors anticipate the Fed could begin to cut interest rates as soon as the first half of 2024.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Federal Reserve Officials Banned From Trading Crypto(Opens in a new browser tab)<\/a><\/p>\n\n\n\n

GDP And Corporate Profits<\/h2>\n\n\n\n

Corporate profits are also the big driver of what the market is likely to do in the near term and because of this investors are closely monitoring third-quarter U.S. earnings. Third-quarter earnings season is essentially at the finish line and of the 480 companies that have reported so far, 80% have beaten analysts' expectations. The inflation and interest rates will continue to significantly impact stock prices in December.<\/p>\n\n\n\n

U.S. economic growth(inflation and interest rates) has been resilient year-to-date and Bill Adams, a chief economist for Comerica Bank, recently said the U.S. economy has been much stronger in 2023 than economists expected. Bill Adams suggests that the annual real GDP is anticipated to reach approximately 2.4% this year, a substantial increase from the Federal Reserve's December 2022 dot plot prediction of 0.5%. However, he also warned that the outcome in the upcoming months will decide if the U.S. economy can smoothly achieve a so-called \"soft landing\" without veering into a recession.<\/p>\n\n\n\n

Deceleration In United States Economic Growth<\/h2>\n\n\n\n

Jeffrey Roach, the chief economist at LPL Financial,<\/a> foresees that most of the negative consequences stemming from higher interest rates have not materialized yet and due to this, he anticipates a deceleration in U.S. economic growth. Market expectations that the Federal Reserve will keep interest rates unchanged at its December meeting currently stand above 90% and any information that the Federal Reserve could start to cut rates in the first quarter of 2024 should be positive for stocks in the short-term period.<\/p>\n\n\n\n

On the other side, JPMorgan strategists believe that the risk-reward ratio for numerous stocks is currently unappealing and according to them, restrictive monetary policy is likely to remain in place for some time which could potentially cause a recession. Considering this scenario, investors worried about a possible U.S. recession can opt for a more defensive strategy in the market. They can enhance their financial flexibility by reducing their stock or cryptocurrency exposure and augmenting their cash reserves.<\/p>\n","post_title":"Investor Optimism Rises In November 2023. Does Strong Buying Activity Indicate The Possibility Of Further Gains In The Coming Weeks?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"investor-optimism-rises-in-november-2023-does-strong-buying-activity-indicate-the-possibility-of-further-gains-in-the-coming-weeks","to_ping":"","pinged":"","post_modified":"2023-11-23 01:39:12","post_modified_gmt":"2023-11-22 14:39:12","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14444","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14319,"post_author":"14","post_date":"2023-11-15 18:02:37","post_date_gmt":"2023-11-15 07:02:37","post_content":"\n

Wall Street's main indexes<\/a> surged significantly on Tuesday following the release of lower-than-anticipated inflation figures, which increased the belief that the Federal Reserve had concluded its interest rate hikes. The annual rate of inflation measured by the Consumer Price Index (CPI), which monitors the expenses of a variety of goods and services -\u00a0 slowed to 3.2% last month, dropping from September's 3.7% and marking the most subdued rate since July.<\/p>\n\n\n\n

Additionally promising, Wall Street's prices held steady over the month following a 0.4% increase in September. Core prices, which exclude the unpredictable food and energy sectors, rose by 4%, slightly slower compared to the rate observed in September. The report signifies a significant achievement for the Fed in its battle against inflation but in the upcoming weeks, policymakers will monitor the service category closely, seeking further deceleration as their interest rate increases impact demand.<\/p>\n\n\n\n

\"Inflation
Inflation edges down in October<\/em><\/figcaption><\/figure>\n\n\n\n

Earlier this month, the Federal Reserve maintained its benchmark interest rate at the highest level in 22 years. Following this Tuesday's report, prominent analysts and economists indicated only a 1 percent probability that the central bank would increase rates during its upcoming policy meeting in December. Gregory Daco, chief economist at EY Parthenon, said<\/a>:<\/p>\n\n\n\n

\u201cAcross the board, it\u2019s a good report and I think this will comfort the excessively data-dependent Fed policymakers that policy is sufficiently restrictive to bring inflation down to 2 percent.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/strong><\/em> Gala is announcing a partnership with Stick Figure Productions to distribute Four Down on the Blockchain<\/a><\/p>\n\n\n\n

However, analysts from JPMorgan warned that the risk-reward ratio for many stocks remains unattractive currently and restrictive monetary policy is likely to remain in place for some time. JPMorgan analysts anticipate that most adverse effects resulting from increased interest rates haven't manifested thus far. They highlight an upward trend in consumer loan delinquencies and corporate bankruptcies, suggesting that these patterns are probable to persist unless interest rates are lowered.<\/p>\n\n\n\n

This is likely to drive demand destruction, and weakening pricing power and margins for corporates in the coming quarters, and because of this JPMorgan analysts are adopting a defensive stance, maintaining underweight allocations in equities and cryptocurrencies. Nevertheless, they propose an increase in the investment allocation towards gold due to its potential to rise in value during economic downturns, offering a hedge against potential losses in alternative investments.<\/p>\n\n\n\n

Gold is commonly regarded as a safe-haven asset, particularly amid economic uncertainty or geopolitical instability. Investors typically turn to gold as a means of preserving value when other assets are considered risky.<\/p>\n","post_title":"Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-surged-significantly-after-the-release-of-lower-than-anticipated-inflation-figures","to_ping":"","pinged":"","post_modified":"2023-11-16 20:00:45","post_modified_gmt":"2023-11-16 09:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14319","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11491,"post_author":"14","post_date":"2023-05-04 21:53:10","post_date_gmt":"2023-05-04 11:53:10","post_content":"\n

As widely expected, the U.S. Central Bank raised interest rates by 25bps this Wednesday. It signalled it could pause further increases, giving officials time to assess the fallout from recent bank failures, wait on the resolution of a political stand-off over the U.S. debt ceiling and monitor the course of inflation. The federal funds rate is now in a range of 5% to 5.25%, which is the highest level since 2006. <\/p>\n\n\n\n

The U.S. Central Bank warned that tighter credit conditions for households and businesses are expected to affect economic activity. In the picture below, we can see that even without this rise in interest rates, the federal funds rate was at the highest level since the 2007 financial crisis.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Many analysts and economists are worried that the high-interest rates will push the economy into a recession. It is important to mention that government data showed last week that economic growth in the first quarter slowed sequentially, with real gross domestic product increasing at a 1.1% annual pace, compared with a 2.6% gain in the prior three-month period. With higher interest rates, companies need to spend more money to borrow money to invest in growth. Historically, higher rates lead companies to reduce spending (especially on hiring). <\/p>\n\n\n\n

Many companies could face liquidity problems, and economist David Rosenberg has warned that the U.S. economy is facing two big risks. David Rosenberg said<\/a>:<\/p>\n\n\n\n

\"We have a possible debt default on our hands and a spreading bank crisis. The banking turmoil that started with Silicon Valley Bank's collapse in March remains unresolved, and First Republic's failure and takeover by CEO Jamie Dimon's JPMorgan has reignited worries about broader financial instability. Moreover, political disagreement about raising the U.S. government's borrowing limit is fanning fears of a debt-ceiling crisis.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>United States May Fund Its Deficit By Printing More Money; Could Default By June 1st<\/a><\/p>\n\n\n\n

Higher rates encourage saving over spending and make the debt more costly. Companies with bigger credit or other loans with variable interest rates could be in a difficult situation. We expect to see a meaningful slowdown in economic growth and a weakening of the labour market in the United States in the upcoming months. <\/p>\n\n\n\n

At the same time, Brian Jacobsen, chief economist at Annex Wealth Management, said<\/a> that the manufacturing and housing sectors are in a recession already. The famous investor Jeremy Grantham warned that the U.S. stock market could experience significant losses soon, and a recommendation is that investors should continue to take a defensive investment approach.<\/p>\n\n\n\n

Stocks aren't the only assets that could significantly lose their value. Investors should remember that cryptocurrencies could also be in the situation to make an even bigger fall. The crypto market displayed a high correlation with U.S. equities. If a downtrend is witnessed in the stock market, the same is usually replicated in the crypto-sphere.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Bitcoin Is Close To Testing $30,000 Again; Ethereum Revives Bullish Momentum Above $1,800<\/a><\/p>\n","post_title":"The Fed Raises Interest Rates By 25 BPS This Wednesday; Effects On Crypto And Financial Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-fed-raises-interest-rates-by-25-bps-this-wednesday-effects-on-crypto-and-financial-markets","to_ping":"","pinged":"","post_modified":"2023-05-04 22:08:47","post_modified_gmt":"2023-05-04 12:08:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11491","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11422,"post_author":"12","post_date":"2023-05-02 17:50:37","post_date_gmt":"2023-05-02 07:50:37","post_content":"\n

Ray Dalio, the billionaire founder of one of the world\u2019s largest hedge funds, Bridgewater Associates, was recently\u00a0interviewed<\/a>. He explains that the United States' $31.45T debt may have to be resolved by printing more money, also referred to as currency debasement.<\/p>\n\n\n\n

\u201cSo I think you\u2019re in the part of the cycle where you\u2019ve had the tightening and then the dominoes are beginning to fall. And I think that that\u2019s going to produce more problems.<\/em><\/p>\n\n\n\n

I think when it comes down to it, there\u2019s just too much debt, and we\u2019re adding to it too quickly\u2026 Either that debt will be paid off with hard money, in which case there\u2019s not much printing and so on, or it will be paid off with printing a lot of money to make it easier to pay off. <\/em><\/p>\n\n\n\n

I think in the end, it\u2019s always the case that they print a lot of money in and make it easier to pay off, but you have the reduced value of money.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> Ray Dalio; The Federal Reserve Is Setting Off A \u201cTerrible Calamity\u201d<\/a><\/p>\n\n\n\n

Could The United States Default By June?<\/h2>\n\n\n\n

United States Treasury Secretary, Janet Yellen, wrote to House Speaker Kevin McCarthy;<\/p>\n\n\n\n

\"After reviewing recent federal tax receipts, our best estimate is that we will be unable to continue to satisfy all of the government\u2019s obligations by early June, and potentially as early as June 1, if Congress does not raise or suspend the debt limit before that time.<\/em><\/p>\n\n\n\n

If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests.\"<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> United States May Enter Mild Recession As Yet Another Hike In Fed Rates Expected<\/a><\/p>\n\n\n\n

Yellen warned that waiting until the last minute to take action on this issue would cause harm to \"business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States.\"<\/em> Yellen believes that defaulting on their debt would be a financial catastrophe, raising the cost of borrowing without an end, making future investment \"substantially more costly.\u201d<\/em><\/p>\n","post_title":"United States May Fund Its Deficit By Printing More Money; Could Default By June 1st","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-may-fund-its-deficit-by-printing-more-money-could-default-by-june-1st","to_ping":"","pinged":"","post_modified":"2023-05-04 13:04:05","post_modified_gmt":"2023-05-04 03:04:05","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11422","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

ADVERTISEMENT
\n

Stocks like Regions Financial, KeyCorp, Western Alliance, and Truist Financial witnessed declines ranging from 1% to 2.9%. Conversely, JPMorgan Chase, Wells Fargo, and Morgan Stanley showed marginal increases, while Bank of America, Citigroup, and Goldman Sachs registered slight drops.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Recession Fears And A Slow Labour Market Exert Pressure On Stocks<\/a><\/p>\n\n\n\n

The Fed's Cautionary Rate-Cut Signals<\/h2>\n\n\n\n

Recently, the Fed maintained its key interest rate for the third consecutive time, signaling potential multiple rate cuts in 2024<\/a>, CNBC<\/em> reported. Despite inflation easing and steady economic conditions, this decision anticipates a series of cuts in the coming year.<\/p>\n\n\n\n

The Federal Open Market Committee unanimously voted to retain the benchmark overnight borrowing rate between 5.25%-5.5%. This step hinted at at least three rate cuts in 2024, a less aggressive stance than market expectations but more pronounced than previously indicated.<\/p>\n\n\n\n

While the Fed highlighted its readiness to address inflation concerns<\/a>, it emphasized a patient approach to observe the impact of prior policy tightening on the economy. The possibility of future rate hikes remains contingent on inflation patterns.<\/p>\n\n\n\n

High inflation rates have impacted President Biden's approval ratings. Speculations about the Fed's cautious policy actions during a presidential election year persist, especially considering the economic landscape and real rates.<\/p>\n\n\n\n

The Fed's decision to maintain rates while hinting at potential cuts in 2024 reflects a balancing act to nurture economic stability amidst inflation concerns.<\/p>\n","post_title":"US Bank Stocks Slide On Fed's Rate-Cut Dismissal","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"us-bank-stocks-slide-on-feds-rate-cut-dismissal","to_ping":"","pinged":"","post_modified":"2023-12-16 20:44:05","post_modified_gmt":"2023-12-16 09:44:05","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14666","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14611,"post_author":"14","post_date":"2023-12-13 21:49:46","post_date_gmt":"2023-12-13 10:49:46","post_content":"\n

U.S. stocks had the highest monthly rally of 2023 in November; the benchmark S&P 500 rose 9%, the tech-heavy Nasdaq Composite surged 11% and the Dow Jones Industrial Average climbed 2,900 points higher. The key news for investors in the past month was the November 14 release of the Consumer Price Index, revealing a 3.2% inflation increase in October, lower than anticipated.<\/p>\n\n\n\n

Encouraging news from this Tuesday revealed that the November Consumer Price Index (CPI) increased by 3.1% every year, aligning with the predictions of economists surveyed by Reuters<\/a>. Similarly, core prices, which exclude fluctuating items like food and energy expenses, also met expectations, rising by 4% annually.<\/p>\n\n\n\n

This triggered a surge in speculation that the Fed has finished its tightening cycle. Most traders, as indicated by the CME Group's Fedwatch tool, think that the central bank has raised interest rates for the last time this year, shifting their focus to potential rate cuts around mid-2024.<\/p>\n\n\n\n

Policymakers And U.S. Stocks<\/h2>\n\n\n\n

Should that prediction materialize, there's a strong likelihood that policymakers will attain their desired \"soft landing\" scenario, despite raising borrowing rates from nearly zero to approximately 5.5% within a mere 15-month timeframe. Growth has remained strong, and the unemployment rate is still hovering below 4% even as inflation has rapidly cooled.<\/p>\n\n\n\n

The positive developments contributed significantly to driving the S&P 500 to its second most successful November since 1980 and it's noteworthy to highlight that the only instance when the index performed better in November was during its recovery post the pandemic in 2020.<\/p>\n\n\n\n

See Related:<\/em><\/strong> SlingTV Partners With BitPay To Accept Crypto For Subscriptions<\/a><\/p>\n\n\n\n

\"S&P
S&P 500 rose 9% in November 2023<\/em><\/figcaption><\/figure>\n\n\n\n

Encouragingly, Bank of America's<\/a> Savita Subramanian anticipates ongoing positive momentum for the S&P 500, projecting it to reach a record-breaking 5,000 points by year-end. Additionally, both BMO's Brian Belski and Deutsche Bank's Binky Chadha have established price targets of 5,100 points each.<\/p>\n\n\n\n

Analysts Index Review<\/h2>\n\n\n\n

However, certain analysts are expressing skepticism. JPMorgan Asset Management advises investors to remain cautious due to the possibility of a recession, while Soci\u00e9t\u00e9 G\u00e9n\u00e9rale cautions them to brace for a volatile 2024, predicting that the index will fluctuate between nearing its record high, experiencing a decline, and subsequently rebounding.<\/p>\n\n\n\n

The focus of investors has shifted now to the conclusion of the Fed's two-day meeting on Wednesday, eagerly awaiting their decision on interest rates, along with the release of the November producer price index (PPI) data. Jason Pride, chief of investment strategy and research at Glenmede, said<\/a>:<\/p>\n\n\n\n

\"They've (Fed) already taken rates up a lot... they will keep rates up in that range for longer than what the market is currently expecting. Markets do not expect more hikes and are instead focused on rate cuts.\"<\/em><\/p>\n","post_title":"U.S. Stocks Had The Highest Monthly Rally Of 2023 In November. What To Expect From The Rest Of December?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"u-s-stocks-had-the-highest-monthly-rally-of-2023-in-november-what-to-expect-from-the-rest-of-december","to_ping":"","pinged":"","post_modified":"2023-12-13 21:49:51","post_modified_gmt":"2023-12-13 10:49:51","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14611","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14444,"post_author":"14","post_date":"2023-11-23 01:38:54","post_date_gmt":"2023-11-22 14:38:54","post_content":"\n

Investors remain optimistic that the market can resume its bullish momentum in December given that the fourth quarter has historically been one of the best three-month stretches of the year for the S&P 500. Investors anticipated the Federal Reserve<\/a> may have already reached its terminal interest rate; however, the primary driving forces affecting stock prices over recent weeks, inflation and interest rates, will continue to hold significant importance in December.<\/p>\n\n\n\n

\"The
The S&P 500 index's strong advance off its October 27 low continues to make progress<\/em><\/figcaption><\/figure>\n\n\n\n

Positive information is that the annual rate of inflation measured by the Consumer Price Index (CPI), which monitors the expenses of a variety of goods and services -  slowed to 3.2% in October, dropping from September's 3.7% and marking the most subdued rate since July 2023. It is also important to say that inflation is significantly lower than 2022 peak levels which were above 9% and because of this many investors anticipate the Fed could begin to cut interest rates as soon as the first half of 2024.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Federal Reserve Officials Banned From Trading Crypto(Opens in a new browser tab)<\/a><\/p>\n\n\n\n

GDP And Corporate Profits<\/h2>\n\n\n\n

Corporate profits are also the big driver of what the market is likely to do in the near term and because of this investors are closely monitoring third-quarter U.S. earnings. Third-quarter earnings season is essentially at the finish line and of the 480 companies that have reported so far, 80% have beaten analysts' expectations. The inflation and interest rates will continue to significantly impact stock prices in December.<\/p>\n\n\n\n

U.S. economic growth(inflation and interest rates) has been resilient year-to-date and Bill Adams, a chief economist for Comerica Bank, recently said the U.S. economy has been much stronger in 2023 than economists expected. Bill Adams suggests that the annual real GDP is anticipated to reach approximately 2.4% this year, a substantial increase from the Federal Reserve's December 2022 dot plot prediction of 0.5%. However, he also warned that the outcome in the upcoming months will decide if the U.S. economy can smoothly achieve a so-called \"soft landing\" without veering into a recession.<\/p>\n\n\n\n

Deceleration In United States Economic Growth<\/h2>\n\n\n\n

Jeffrey Roach, the chief economist at LPL Financial,<\/a> foresees that most of the negative consequences stemming from higher interest rates have not materialized yet and due to this, he anticipates a deceleration in U.S. economic growth. Market expectations that the Federal Reserve will keep interest rates unchanged at its December meeting currently stand above 90% and any information that the Federal Reserve could start to cut rates in the first quarter of 2024 should be positive for stocks in the short-term period.<\/p>\n\n\n\n

On the other side, JPMorgan strategists believe that the risk-reward ratio for numerous stocks is currently unappealing and according to them, restrictive monetary policy is likely to remain in place for some time which could potentially cause a recession. Considering this scenario, investors worried about a possible U.S. recession can opt for a more defensive strategy in the market. They can enhance their financial flexibility by reducing their stock or cryptocurrency exposure and augmenting their cash reserves.<\/p>\n","post_title":"Investor Optimism Rises In November 2023. Does Strong Buying Activity Indicate The Possibility Of Further Gains In The Coming Weeks?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"investor-optimism-rises-in-november-2023-does-strong-buying-activity-indicate-the-possibility-of-further-gains-in-the-coming-weeks","to_ping":"","pinged":"","post_modified":"2023-11-23 01:39:12","post_modified_gmt":"2023-11-22 14:39:12","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14444","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14319,"post_author":"14","post_date":"2023-11-15 18:02:37","post_date_gmt":"2023-11-15 07:02:37","post_content":"\n

Wall Street's main indexes<\/a> surged significantly on Tuesday following the release of lower-than-anticipated inflation figures, which increased the belief that the Federal Reserve had concluded its interest rate hikes. The annual rate of inflation measured by the Consumer Price Index (CPI), which monitors the expenses of a variety of goods and services -\u00a0 slowed to 3.2% last month, dropping from September's 3.7% and marking the most subdued rate since July.<\/p>\n\n\n\n

Additionally promising, Wall Street's prices held steady over the month following a 0.4% increase in September. Core prices, which exclude the unpredictable food and energy sectors, rose by 4%, slightly slower compared to the rate observed in September. The report signifies a significant achievement for the Fed in its battle against inflation but in the upcoming weeks, policymakers will monitor the service category closely, seeking further deceleration as their interest rate increases impact demand.<\/p>\n\n\n\n

\"Inflation
Inflation edges down in October<\/em><\/figcaption><\/figure>\n\n\n\n

Earlier this month, the Federal Reserve maintained its benchmark interest rate at the highest level in 22 years. Following this Tuesday's report, prominent analysts and economists indicated only a 1 percent probability that the central bank would increase rates during its upcoming policy meeting in December. Gregory Daco, chief economist at EY Parthenon, said<\/a>:<\/p>\n\n\n\n

\u201cAcross the board, it\u2019s a good report and I think this will comfort the excessively data-dependent Fed policymakers that policy is sufficiently restrictive to bring inflation down to 2 percent.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/strong><\/em> Gala is announcing a partnership with Stick Figure Productions to distribute Four Down on the Blockchain<\/a><\/p>\n\n\n\n

However, analysts from JPMorgan warned that the risk-reward ratio for many stocks remains unattractive currently and restrictive monetary policy is likely to remain in place for some time. JPMorgan analysts anticipate that most adverse effects resulting from increased interest rates haven't manifested thus far. They highlight an upward trend in consumer loan delinquencies and corporate bankruptcies, suggesting that these patterns are probable to persist unless interest rates are lowered.<\/p>\n\n\n\n

This is likely to drive demand destruction, and weakening pricing power and margins for corporates in the coming quarters, and because of this JPMorgan analysts are adopting a defensive stance, maintaining underweight allocations in equities and cryptocurrencies. Nevertheless, they propose an increase in the investment allocation towards gold due to its potential to rise in value during economic downturns, offering a hedge against potential losses in alternative investments.<\/p>\n\n\n\n

Gold is commonly regarded as a safe-haven asset, particularly amid economic uncertainty or geopolitical instability. Investors typically turn to gold as a means of preserving value when other assets are considered risky.<\/p>\n","post_title":"Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-surged-significantly-after-the-release-of-lower-than-anticipated-inflation-figures","to_ping":"","pinged":"","post_modified":"2023-11-16 20:00:45","post_modified_gmt":"2023-11-16 09:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14319","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11491,"post_author":"14","post_date":"2023-05-04 21:53:10","post_date_gmt":"2023-05-04 11:53:10","post_content":"\n

As widely expected, the U.S. Central Bank raised interest rates by 25bps this Wednesday. It signalled it could pause further increases, giving officials time to assess the fallout from recent bank failures, wait on the resolution of a political stand-off over the U.S. debt ceiling and monitor the course of inflation. The federal funds rate is now in a range of 5% to 5.25%, which is the highest level since 2006. <\/p>\n\n\n\n

The U.S. Central Bank warned that tighter credit conditions for households and businesses are expected to affect economic activity. In the picture below, we can see that even without this rise in interest rates, the federal funds rate was at the highest level since the 2007 financial crisis.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Many analysts and economists are worried that the high-interest rates will push the economy into a recession. It is important to mention that government data showed last week that economic growth in the first quarter slowed sequentially, with real gross domestic product increasing at a 1.1% annual pace, compared with a 2.6% gain in the prior three-month period. With higher interest rates, companies need to spend more money to borrow money to invest in growth. Historically, higher rates lead companies to reduce spending (especially on hiring). <\/p>\n\n\n\n

Many companies could face liquidity problems, and economist David Rosenberg has warned that the U.S. economy is facing two big risks. David Rosenberg said<\/a>:<\/p>\n\n\n\n

\"We have a possible debt default on our hands and a spreading bank crisis. The banking turmoil that started with Silicon Valley Bank's collapse in March remains unresolved, and First Republic's failure and takeover by CEO Jamie Dimon's JPMorgan has reignited worries about broader financial instability. Moreover, political disagreement about raising the U.S. government's borrowing limit is fanning fears of a debt-ceiling crisis.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>United States May Fund Its Deficit By Printing More Money; Could Default By June 1st<\/a><\/p>\n\n\n\n

Higher rates encourage saving over spending and make the debt more costly. Companies with bigger credit or other loans with variable interest rates could be in a difficult situation. We expect to see a meaningful slowdown in economic growth and a weakening of the labour market in the United States in the upcoming months. <\/p>\n\n\n\n

At the same time, Brian Jacobsen, chief economist at Annex Wealth Management, said<\/a> that the manufacturing and housing sectors are in a recession already. The famous investor Jeremy Grantham warned that the U.S. stock market could experience significant losses soon, and a recommendation is that investors should continue to take a defensive investment approach.<\/p>\n\n\n\n

Stocks aren't the only assets that could significantly lose their value. Investors should remember that cryptocurrencies could also be in the situation to make an even bigger fall. The crypto market displayed a high correlation with U.S. equities. If a downtrend is witnessed in the stock market, the same is usually replicated in the crypto-sphere.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Bitcoin Is Close To Testing $30,000 Again; Ethereum Revives Bullish Momentum Above $1,800<\/a><\/p>\n","post_title":"The Fed Raises Interest Rates By 25 BPS This Wednesday; Effects On Crypto And Financial Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-fed-raises-interest-rates-by-25-bps-this-wednesday-effects-on-crypto-and-financial-markets","to_ping":"","pinged":"","post_modified":"2023-05-04 22:08:47","post_modified_gmt":"2023-05-04 12:08:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11491","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11422,"post_author":"12","post_date":"2023-05-02 17:50:37","post_date_gmt":"2023-05-02 07:50:37","post_content":"\n

Ray Dalio, the billionaire founder of one of the world\u2019s largest hedge funds, Bridgewater Associates, was recently\u00a0interviewed<\/a>. He explains that the United States' $31.45T debt may have to be resolved by printing more money, also referred to as currency debasement.<\/p>\n\n\n\n

\u201cSo I think you\u2019re in the part of the cycle where you\u2019ve had the tightening and then the dominoes are beginning to fall. And I think that that\u2019s going to produce more problems.<\/em><\/p>\n\n\n\n

I think when it comes down to it, there\u2019s just too much debt, and we\u2019re adding to it too quickly\u2026 Either that debt will be paid off with hard money, in which case there\u2019s not much printing and so on, or it will be paid off with printing a lot of money to make it easier to pay off. <\/em><\/p>\n\n\n\n

I think in the end, it\u2019s always the case that they print a lot of money in and make it easier to pay off, but you have the reduced value of money.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> Ray Dalio; The Federal Reserve Is Setting Off A \u201cTerrible Calamity\u201d<\/a><\/p>\n\n\n\n

Could The United States Default By June?<\/h2>\n\n\n\n

United States Treasury Secretary, Janet Yellen, wrote to House Speaker Kevin McCarthy;<\/p>\n\n\n\n

\"After reviewing recent federal tax receipts, our best estimate is that we will be unable to continue to satisfy all of the government\u2019s obligations by early June, and potentially as early as June 1, if Congress does not raise or suspend the debt limit before that time.<\/em><\/p>\n\n\n\n

If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests.\"<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> United States May Enter Mild Recession As Yet Another Hike In Fed Rates Expected<\/a><\/p>\n\n\n\n

Yellen warned that waiting until the last minute to take action on this issue would cause harm to \"business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States.\"<\/em> Yellen believes that defaulting on their debt would be a financial catastrophe, raising the cost of borrowing without an end, making future investment \"substantially more costly.\u201d<\/em><\/p>\n","post_title":"United States May Fund Its Deficit By Printing More Money; Could Default By June 1st","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-may-fund-its-deficit-by-printing-more-money-could-default-by-june-1st","to_ping":"","pinged":"","post_modified":"2023-05-04 13:04:05","post_modified_gmt":"2023-05-04 03:04:05","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11422","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

ADVERTISEMENT
\n

Amidst recent anticipations of a rate cut in early 2024 that would support loan growth and reduce the cost of deposits, Williams' remarks triggered a shift in market sentiment. The KBW Regional Banking Index, which surged the previous day, experienced a decline of 1.5% in afternoon trading, while the S&P 500 Banks Index slipped by 0.5%.<\/p>\n\n\n\n

Stocks like Regions Financial, KeyCorp, Western Alliance, and Truist Financial witnessed declines ranging from 1% to 2.9%. Conversely, JPMorgan Chase, Wells Fargo, and Morgan Stanley showed marginal increases, while Bank of America, Citigroup, and Goldman Sachs registered slight drops.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Recession Fears And A Slow Labour Market Exert Pressure On Stocks<\/a><\/p>\n\n\n\n

The Fed's Cautionary Rate-Cut Signals<\/h2>\n\n\n\n

Recently, the Fed maintained its key interest rate for the third consecutive time, signaling potential multiple rate cuts in 2024<\/a>, CNBC<\/em> reported. Despite inflation easing and steady economic conditions, this decision anticipates a series of cuts in the coming year.<\/p>\n\n\n\n

The Federal Open Market Committee unanimously voted to retain the benchmark overnight borrowing rate between 5.25%-5.5%. This step hinted at at least three rate cuts in 2024, a less aggressive stance than market expectations but more pronounced than previously indicated.<\/p>\n\n\n\n

While the Fed highlighted its readiness to address inflation concerns<\/a>, it emphasized a patient approach to observe the impact of prior policy tightening on the economy. The possibility of future rate hikes remains contingent on inflation patterns.<\/p>\n\n\n\n

High inflation rates have impacted President Biden's approval ratings. Speculations about the Fed's cautious policy actions during a presidential election year persist, especially considering the economic landscape and real rates.<\/p>\n\n\n\n

The Fed's decision to maintain rates while hinting at potential cuts in 2024 reflects a balancing act to nurture economic stability amidst inflation concerns.<\/p>\n","post_title":"US Bank Stocks Slide On Fed's Rate-Cut Dismissal","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"us-bank-stocks-slide-on-feds-rate-cut-dismissal","to_ping":"","pinged":"","post_modified":"2023-12-16 20:44:05","post_modified_gmt":"2023-12-16 09:44:05","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14666","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14611,"post_author":"14","post_date":"2023-12-13 21:49:46","post_date_gmt":"2023-12-13 10:49:46","post_content":"\n

U.S. stocks had the highest monthly rally of 2023 in November; the benchmark S&P 500 rose 9%, the tech-heavy Nasdaq Composite surged 11% and the Dow Jones Industrial Average climbed 2,900 points higher. The key news for investors in the past month was the November 14 release of the Consumer Price Index, revealing a 3.2% inflation increase in October, lower than anticipated.<\/p>\n\n\n\n

Encouraging news from this Tuesday revealed that the November Consumer Price Index (CPI) increased by 3.1% every year, aligning with the predictions of economists surveyed by Reuters<\/a>. Similarly, core prices, which exclude fluctuating items like food and energy expenses, also met expectations, rising by 4% annually.<\/p>\n\n\n\n

This triggered a surge in speculation that the Fed has finished its tightening cycle. Most traders, as indicated by the CME Group's Fedwatch tool, think that the central bank has raised interest rates for the last time this year, shifting their focus to potential rate cuts around mid-2024.<\/p>\n\n\n\n

Policymakers And U.S. Stocks<\/h2>\n\n\n\n

Should that prediction materialize, there's a strong likelihood that policymakers will attain their desired \"soft landing\" scenario, despite raising borrowing rates from nearly zero to approximately 5.5% within a mere 15-month timeframe. Growth has remained strong, and the unemployment rate is still hovering below 4% even as inflation has rapidly cooled.<\/p>\n\n\n\n

The positive developments contributed significantly to driving the S&P 500 to its second most successful November since 1980 and it's noteworthy to highlight that the only instance when the index performed better in November was during its recovery post the pandemic in 2020.<\/p>\n\n\n\n

See Related:<\/em><\/strong> SlingTV Partners With BitPay To Accept Crypto For Subscriptions<\/a><\/p>\n\n\n\n

\"S&P
S&P 500 rose 9% in November 2023<\/em><\/figcaption><\/figure>\n\n\n\n

Encouragingly, Bank of America's<\/a> Savita Subramanian anticipates ongoing positive momentum for the S&P 500, projecting it to reach a record-breaking 5,000 points by year-end. Additionally, both BMO's Brian Belski and Deutsche Bank's Binky Chadha have established price targets of 5,100 points each.<\/p>\n\n\n\n

Analysts Index Review<\/h2>\n\n\n\n

However, certain analysts are expressing skepticism. JPMorgan Asset Management advises investors to remain cautious due to the possibility of a recession, while Soci\u00e9t\u00e9 G\u00e9n\u00e9rale cautions them to brace for a volatile 2024, predicting that the index will fluctuate between nearing its record high, experiencing a decline, and subsequently rebounding.<\/p>\n\n\n\n

The focus of investors has shifted now to the conclusion of the Fed's two-day meeting on Wednesday, eagerly awaiting their decision on interest rates, along with the release of the November producer price index (PPI) data. Jason Pride, chief of investment strategy and research at Glenmede, said<\/a>:<\/p>\n\n\n\n

\"They've (Fed) already taken rates up a lot... they will keep rates up in that range for longer than what the market is currently expecting. Markets do not expect more hikes and are instead focused on rate cuts.\"<\/em><\/p>\n","post_title":"U.S. Stocks Had The Highest Monthly Rally Of 2023 In November. What To Expect From The Rest Of December?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"u-s-stocks-had-the-highest-monthly-rally-of-2023-in-november-what-to-expect-from-the-rest-of-december","to_ping":"","pinged":"","post_modified":"2023-12-13 21:49:51","post_modified_gmt":"2023-12-13 10:49:51","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14611","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14444,"post_author":"14","post_date":"2023-11-23 01:38:54","post_date_gmt":"2023-11-22 14:38:54","post_content":"\n

Investors remain optimistic that the market can resume its bullish momentum in December given that the fourth quarter has historically been one of the best three-month stretches of the year for the S&P 500. Investors anticipated the Federal Reserve<\/a> may have already reached its terminal interest rate; however, the primary driving forces affecting stock prices over recent weeks, inflation and interest rates, will continue to hold significant importance in December.<\/p>\n\n\n\n

\"The
The S&P 500 index's strong advance off its October 27 low continues to make progress<\/em><\/figcaption><\/figure>\n\n\n\n

Positive information is that the annual rate of inflation measured by the Consumer Price Index (CPI), which monitors the expenses of a variety of goods and services -  slowed to 3.2% in October, dropping from September's 3.7% and marking the most subdued rate since July 2023. It is also important to say that inflation is significantly lower than 2022 peak levels which were above 9% and because of this many investors anticipate the Fed could begin to cut interest rates as soon as the first half of 2024.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Federal Reserve Officials Banned From Trading Crypto(Opens in a new browser tab)<\/a><\/p>\n\n\n\n

GDP And Corporate Profits<\/h2>\n\n\n\n

Corporate profits are also the big driver of what the market is likely to do in the near term and because of this investors are closely monitoring third-quarter U.S. earnings. Third-quarter earnings season is essentially at the finish line and of the 480 companies that have reported so far, 80% have beaten analysts' expectations. The inflation and interest rates will continue to significantly impact stock prices in December.<\/p>\n\n\n\n

U.S. economic growth(inflation and interest rates) has been resilient year-to-date and Bill Adams, a chief economist for Comerica Bank, recently said the U.S. economy has been much stronger in 2023 than economists expected. Bill Adams suggests that the annual real GDP is anticipated to reach approximately 2.4% this year, a substantial increase from the Federal Reserve's December 2022 dot plot prediction of 0.5%. However, he also warned that the outcome in the upcoming months will decide if the U.S. economy can smoothly achieve a so-called \"soft landing\" without veering into a recession.<\/p>\n\n\n\n

Deceleration In United States Economic Growth<\/h2>\n\n\n\n

Jeffrey Roach, the chief economist at LPL Financial,<\/a> foresees that most of the negative consequences stemming from higher interest rates have not materialized yet and due to this, he anticipates a deceleration in U.S. economic growth. Market expectations that the Federal Reserve will keep interest rates unchanged at its December meeting currently stand above 90% and any information that the Federal Reserve could start to cut rates in the first quarter of 2024 should be positive for stocks in the short-term period.<\/p>\n\n\n\n

On the other side, JPMorgan strategists believe that the risk-reward ratio for numerous stocks is currently unappealing and according to them, restrictive monetary policy is likely to remain in place for some time which could potentially cause a recession. Considering this scenario, investors worried about a possible U.S. recession can opt for a more defensive strategy in the market. They can enhance their financial flexibility by reducing their stock or cryptocurrency exposure and augmenting their cash reserves.<\/p>\n","post_title":"Investor Optimism Rises In November 2023. Does Strong Buying Activity Indicate The Possibility Of Further Gains In The Coming Weeks?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"investor-optimism-rises-in-november-2023-does-strong-buying-activity-indicate-the-possibility-of-further-gains-in-the-coming-weeks","to_ping":"","pinged":"","post_modified":"2023-11-23 01:39:12","post_modified_gmt":"2023-11-22 14:39:12","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14444","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14319,"post_author":"14","post_date":"2023-11-15 18:02:37","post_date_gmt":"2023-11-15 07:02:37","post_content":"\n

Wall Street's main indexes<\/a> surged significantly on Tuesday following the release of lower-than-anticipated inflation figures, which increased the belief that the Federal Reserve had concluded its interest rate hikes. The annual rate of inflation measured by the Consumer Price Index (CPI), which monitors the expenses of a variety of goods and services -\u00a0 slowed to 3.2% last month, dropping from September's 3.7% and marking the most subdued rate since July.<\/p>\n\n\n\n

Additionally promising, Wall Street's prices held steady over the month following a 0.4% increase in September. Core prices, which exclude the unpredictable food and energy sectors, rose by 4%, slightly slower compared to the rate observed in September. The report signifies a significant achievement for the Fed in its battle against inflation but in the upcoming weeks, policymakers will monitor the service category closely, seeking further deceleration as their interest rate increases impact demand.<\/p>\n\n\n\n

\"Inflation
Inflation edges down in October<\/em><\/figcaption><\/figure>\n\n\n\n

Earlier this month, the Federal Reserve maintained its benchmark interest rate at the highest level in 22 years. Following this Tuesday's report, prominent analysts and economists indicated only a 1 percent probability that the central bank would increase rates during its upcoming policy meeting in December. Gregory Daco, chief economist at EY Parthenon, said<\/a>:<\/p>\n\n\n\n

\u201cAcross the board, it\u2019s a good report and I think this will comfort the excessively data-dependent Fed policymakers that policy is sufficiently restrictive to bring inflation down to 2 percent.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/strong><\/em> Gala is announcing a partnership with Stick Figure Productions to distribute Four Down on the Blockchain<\/a><\/p>\n\n\n\n

However, analysts from JPMorgan warned that the risk-reward ratio for many stocks remains unattractive currently and restrictive monetary policy is likely to remain in place for some time. JPMorgan analysts anticipate that most adverse effects resulting from increased interest rates haven't manifested thus far. They highlight an upward trend in consumer loan delinquencies and corporate bankruptcies, suggesting that these patterns are probable to persist unless interest rates are lowered.<\/p>\n\n\n\n

This is likely to drive demand destruction, and weakening pricing power and margins for corporates in the coming quarters, and because of this JPMorgan analysts are adopting a defensive stance, maintaining underweight allocations in equities and cryptocurrencies. Nevertheless, they propose an increase in the investment allocation towards gold due to its potential to rise in value during economic downturns, offering a hedge against potential losses in alternative investments.<\/p>\n\n\n\n

Gold is commonly regarded as a safe-haven asset, particularly amid economic uncertainty or geopolitical instability. Investors typically turn to gold as a means of preserving value when other assets are considered risky.<\/p>\n","post_title":"Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-surged-significantly-after-the-release-of-lower-than-anticipated-inflation-figures","to_ping":"","pinged":"","post_modified":"2023-11-16 20:00:45","post_modified_gmt":"2023-11-16 09:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14319","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11491,"post_author":"14","post_date":"2023-05-04 21:53:10","post_date_gmt":"2023-05-04 11:53:10","post_content":"\n

As widely expected, the U.S. Central Bank raised interest rates by 25bps this Wednesday. It signalled it could pause further increases, giving officials time to assess the fallout from recent bank failures, wait on the resolution of a political stand-off over the U.S. debt ceiling and monitor the course of inflation. The federal funds rate is now in a range of 5% to 5.25%, which is the highest level since 2006. <\/p>\n\n\n\n

The U.S. Central Bank warned that tighter credit conditions for households and businesses are expected to affect economic activity. In the picture below, we can see that even without this rise in interest rates, the federal funds rate was at the highest level since the 2007 financial crisis.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Many analysts and economists are worried that the high-interest rates will push the economy into a recession. It is important to mention that government data showed last week that economic growth in the first quarter slowed sequentially, with real gross domestic product increasing at a 1.1% annual pace, compared with a 2.6% gain in the prior three-month period. With higher interest rates, companies need to spend more money to borrow money to invest in growth. Historically, higher rates lead companies to reduce spending (especially on hiring). <\/p>\n\n\n\n

Many companies could face liquidity problems, and economist David Rosenberg has warned that the U.S. economy is facing two big risks. David Rosenberg said<\/a>:<\/p>\n\n\n\n

\"We have a possible debt default on our hands and a spreading bank crisis. The banking turmoil that started with Silicon Valley Bank's collapse in March remains unresolved, and First Republic's failure and takeover by CEO Jamie Dimon's JPMorgan has reignited worries about broader financial instability. Moreover, political disagreement about raising the U.S. government's borrowing limit is fanning fears of a debt-ceiling crisis.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>United States May Fund Its Deficit By Printing More Money; Could Default By June 1st<\/a><\/p>\n\n\n\n

Higher rates encourage saving over spending and make the debt more costly. Companies with bigger credit or other loans with variable interest rates could be in a difficult situation. We expect to see a meaningful slowdown in economic growth and a weakening of the labour market in the United States in the upcoming months. <\/p>\n\n\n\n

At the same time, Brian Jacobsen, chief economist at Annex Wealth Management, said<\/a> that the manufacturing and housing sectors are in a recession already. The famous investor Jeremy Grantham warned that the U.S. stock market could experience significant losses soon, and a recommendation is that investors should continue to take a defensive investment approach.<\/p>\n\n\n\n

Stocks aren't the only assets that could significantly lose their value. Investors should remember that cryptocurrencies could also be in the situation to make an even bigger fall. The crypto market displayed a high correlation with U.S. equities. If a downtrend is witnessed in the stock market, the same is usually replicated in the crypto-sphere.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Bitcoin Is Close To Testing $30,000 Again; Ethereum Revives Bullish Momentum Above $1,800<\/a><\/p>\n","post_title":"The Fed Raises Interest Rates By 25 BPS This Wednesday; Effects On Crypto And Financial Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-fed-raises-interest-rates-by-25-bps-this-wednesday-effects-on-crypto-and-financial-markets","to_ping":"","pinged":"","post_modified":"2023-05-04 22:08:47","post_modified_gmt":"2023-05-04 12:08:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11491","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11422,"post_author":"12","post_date":"2023-05-02 17:50:37","post_date_gmt":"2023-05-02 07:50:37","post_content":"\n

Ray Dalio, the billionaire founder of one of the world\u2019s largest hedge funds, Bridgewater Associates, was recently\u00a0interviewed<\/a>. He explains that the United States' $31.45T debt may have to be resolved by printing more money, also referred to as currency debasement.<\/p>\n\n\n\n

\u201cSo I think you\u2019re in the part of the cycle where you\u2019ve had the tightening and then the dominoes are beginning to fall. And I think that that\u2019s going to produce more problems.<\/em><\/p>\n\n\n\n

I think when it comes down to it, there\u2019s just too much debt, and we\u2019re adding to it too quickly\u2026 Either that debt will be paid off with hard money, in which case there\u2019s not much printing and so on, or it will be paid off with printing a lot of money to make it easier to pay off. <\/em><\/p>\n\n\n\n

I think in the end, it\u2019s always the case that they print a lot of money in and make it easier to pay off, but you have the reduced value of money.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> Ray Dalio; The Federal Reserve Is Setting Off A \u201cTerrible Calamity\u201d<\/a><\/p>\n\n\n\n

Could The United States Default By June?<\/h2>\n\n\n\n

United States Treasury Secretary, Janet Yellen, wrote to House Speaker Kevin McCarthy;<\/p>\n\n\n\n

\"After reviewing recent federal tax receipts, our best estimate is that we will be unable to continue to satisfy all of the government\u2019s obligations by early June, and potentially as early as June 1, if Congress does not raise or suspend the debt limit before that time.<\/em><\/p>\n\n\n\n

If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests.\"<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> United States May Enter Mild Recession As Yet Another Hike In Fed Rates Expected<\/a><\/p>\n\n\n\n

Yellen warned that waiting until the last minute to take action on this issue would cause harm to \"business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States.\"<\/em> Yellen believes that defaulting on their debt would be a financial catastrophe, raising the cost of borrowing without an end, making future investment \"substantially more costly.\u201d<\/em><\/p>\n","post_title":"United States May Fund Its Deficit By Printing More Money; Could Default By June 1st","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-may-fund-its-deficit-by-printing-more-money-could-default-by-june-1st","to_ping":"","pinged":"","post_modified":"2023-05-04 13:04:05","post_modified_gmt":"2023-05-04 03:04:05","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11422","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

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\n

Stock Rate Cuts In 2024<\/h2>\n\n\n\n

Amidst recent anticipations of a rate cut in early 2024 that would support loan growth and reduce the cost of deposits, Williams' remarks triggered a shift in market sentiment. The KBW Regional Banking Index, which surged the previous day, experienced a decline of 1.5% in afternoon trading, while the S&P 500 Banks Index slipped by 0.5%.<\/p>\n\n\n\n

Stocks like Regions Financial, KeyCorp, Western Alliance, and Truist Financial witnessed declines ranging from 1% to 2.9%. Conversely, JPMorgan Chase, Wells Fargo, and Morgan Stanley showed marginal increases, while Bank of America, Citigroup, and Goldman Sachs registered slight drops.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Recession Fears And A Slow Labour Market Exert Pressure On Stocks<\/a><\/p>\n\n\n\n

The Fed's Cautionary Rate-Cut Signals<\/h2>\n\n\n\n

Recently, the Fed maintained its key interest rate for the third consecutive time, signaling potential multiple rate cuts in 2024<\/a>, CNBC<\/em> reported. Despite inflation easing and steady economic conditions, this decision anticipates a series of cuts in the coming year.<\/p>\n\n\n\n

The Federal Open Market Committee unanimously voted to retain the benchmark overnight borrowing rate between 5.25%-5.5%. This step hinted at at least three rate cuts in 2024, a less aggressive stance than market expectations but more pronounced than previously indicated.<\/p>\n\n\n\n

While the Fed highlighted its readiness to address inflation concerns<\/a>, it emphasized a patient approach to observe the impact of prior policy tightening on the economy. The possibility of future rate hikes remains contingent on inflation patterns.<\/p>\n\n\n\n

High inflation rates have impacted President Biden's approval ratings. Speculations about the Fed's cautious policy actions during a presidential election year persist, especially considering the economic landscape and real rates.<\/p>\n\n\n\n

The Fed's decision to maintain rates while hinting at potential cuts in 2024 reflects a balancing act to nurture economic stability amidst inflation concerns.<\/p>\n","post_title":"US Bank Stocks Slide On Fed's Rate-Cut Dismissal","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"us-bank-stocks-slide-on-feds-rate-cut-dismissal","to_ping":"","pinged":"","post_modified":"2023-12-16 20:44:05","post_modified_gmt":"2023-12-16 09:44:05","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14666","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14611,"post_author":"14","post_date":"2023-12-13 21:49:46","post_date_gmt":"2023-12-13 10:49:46","post_content":"\n

U.S. stocks had the highest monthly rally of 2023 in November; the benchmark S&P 500 rose 9%, the tech-heavy Nasdaq Composite surged 11% and the Dow Jones Industrial Average climbed 2,900 points higher. The key news for investors in the past month was the November 14 release of the Consumer Price Index, revealing a 3.2% inflation increase in October, lower than anticipated.<\/p>\n\n\n\n

Encouraging news from this Tuesday revealed that the November Consumer Price Index (CPI) increased by 3.1% every year, aligning with the predictions of economists surveyed by Reuters<\/a>. Similarly, core prices, which exclude fluctuating items like food and energy expenses, also met expectations, rising by 4% annually.<\/p>\n\n\n\n

This triggered a surge in speculation that the Fed has finished its tightening cycle. Most traders, as indicated by the CME Group's Fedwatch tool, think that the central bank has raised interest rates for the last time this year, shifting their focus to potential rate cuts around mid-2024.<\/p>\n\n\n\n

Policymakers And U.S. Stocks<\/h2>\n\n\n\n

Should that prediction materialize, there's a strong likelihood that policymakers will attain their desired \"soft landing\" scenario, despite raising borrowing rates from nearly zero to approximately 5.5% within a mere 15-month timeframe. Growth has remained strong, and the unemployment rate is still hovering below 4% even as inflation has rapidly cooled.<\/p>\n\n\n\n

The positive developments contributed significantly to driving the S&P 500 to its second most successful November since 1980 and it's noteworthy to highlight that the only instance when the index performed better in November was during its recovery post the pandemic in 2020.<\/p>\n\n\n\n

See Related:<\/em><\/strong> SlingTV Partners With BitPay To Accept Crypto For Subscriptions<\/a><\/p>\n\n\n\n

\"S&P
S&P 500 rose 9% in November 2023<\/em><\/figcaption><\/figure>\n\n\n\n

Encouragingly, Bank of America's<\/a> Savita Subramanian anticipates ongoing positive momentum for the S&P 500, projecting it to reach a record-breaking 5,000 points by year-end. Additionally, both BMO's Brian Belski and Deutsche Bank's Binky Chadha have established price targets of 5,100 points each.<\/p>\n\n\n\n

Analysts Index Review<\/h2>\n\n\n\n

However, certain analysts are expressing skepticism. JPMorgan Asset Management advises investors to remain cautious due to the possibility of a recession, while Soci\u00e9t\u00e9 G\u00e9n\u00e9rale cautions them to brace for a volatile 2024, predicting that the index will fluctuate between nearing its record high, experiencing a decline, and subsequently rebounding.<\/p>\n\n\n\n

The focus of investors has shifted now to the conclusion of the Fed's two-day meeting on Wednesday, eagerly awaiting their decision on interest rates, along with the release of the November producer price index (PPI) data. Jason Pride, chief of investment strategy and research at Glenmede, said<\/a>:<\/p>\n\n\n\n

\"They've (Fed) already taken rates up a lot... they will keep rates up in that range for longer than what the market is currently expecting. Markets do not expect more hikes and are instead focused on rate cuts.\"<\/em><\/p>\n","post_title":"U.S. Stocks Had The Highest Monthly Rally Of 2023 In November. What To Expect From The Rest Of December?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"u-s-stocks-had-the-highest-monthly-rally-of-2023-in-november-what-to-expect-from-the-rest-of-december","to_ping":"","pinged":"","post_modified":"2023-12-13 21:49:51","post_modified_gmt":"2023-12-13 10:49:51","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14611","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14444,"post_author":"14","post_date":"2023-11-23 01:38:54","post_date_gmt":"2023-11-22 14:38:54","post_content":"\n

Investors remain optimistic that the market can resume its bullish momentum in December given that the fourth quarter has historically been one of the best three-month stretches of the year for the S&P 500. Investors anticipated the Federal Reserve<\/a> may have already reached its terminal interest rate; however, the primary driving forces affecting stock prices over recent weeks, inflation and interest rates, will continue to hold significant importance in December.<\/p>\n\n\n\n

\"The
The S&P 500 index's strong advance off its October 27 low continues to make progress<\/em><\/figcaption><\/figure>\n\n\n\n

Positive information is that the annual rate of inflation measured by the Consumer Price Index (CPI), which monitors the expenses of a variety of goods and services -  slowed to 3.2% in October, dropping from September's 3.7% and marking the most subdued rate since July 2023. It is also important to say that inflation is significantly lower than 2022 peak levels which were above 9% and because of this many investors anticipate the Fed could begin to cut interest rates as soon as the first half of 2024.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Federal Reserve Officials Banned From Trading Crypto(Opens in a new browser tab)<\/a><\/p>\n\n\n\n

GDP And Corporate Profits<\/h2>\n\n\n\n

Corporate profits are also the big driver of what the market is likely to do in the near term and because of this investors are closely monitoring third-quarter U.S. earnings. Third-quarter earnings season is essentially at the finish line and of the 480 companies that have reported so far, 80% have beaten analysts' expectations. The inflation and interest rates will continue to significantly impact stock prices in December.<\/p>\n\n\n\n

U.S. economic growth(inflation and interest rates) has been resilient year-to-date and Bill Adams, a chief economist for Comerica Bank, recently said the U.S. economy has been much stronger in 2023 than economists expected. Bill Adams suggests that the annual real GDP is anticipated to reach approximately 2.4% this year, a substantial increase from the Federal Reserve's December 2022 dot plot prediction of 0.5%. However, he also warned that the outcome in the upcoming months will decide if the U.S. economy can smoothly achieve a so-called \"soft landing\" without veering into a recession.<\/p>\n\n\n\n

Deceleration In United States Economic Growth<\/h2>\n\n\n\n

Jeffrey Roach, the chief economist at LPL Financial,<\/a> foresees that most of the negative consequences stemming from higher interest rates have not materialized yet and due to this, he anticipates a deceleration in U.S. economic growth. Market expectations that the Federal Reserve will keep interest rates unchanged at its December meeting currently stand above 90% and any information that the Federal Reserve could start to cut rates in the first quarter of 2024 should be positive for stocks in the short-term period.<\/p>\n\n\n\n

On the other side, JPMorgan strategists believe that the risk-reward ratio for numerous stocks is currently unappealing and according to them, restrictive monetary policy is likely to remain in place for some time which could potentially cause a recession. Considering this scenario, investors worried about a possible U.S. recession can opt for a more defensive strategy in the market. They can enhance their financial flexibility by reducing their stock or cryptocurrency exposure and augmenting their cash reserves.<\/p>\n","post_title":"Investor Optimism Rises In November 2023. Does Strong Buying Activity Indicate The Possibility Of Further Gains In The Coming Weeks?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"investor-optimism-rises-in-november-2023-does-strong-buying-activity-indicate-the-possibility-of-further-gains-in-the-coming-weeks","to_ping":"","pinged":"","post_modified":"2023-11-23 01:39:12","post_modified_gmt":"2023-11-22 14:39:12","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14444","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14319,"post_author":"14","post_date":"2023-11-15 18:02:37","post_date_gmt":"2023-11-15 07:02:37","post_content":"\n

Wall Street's main indexes<\/a> surged significantly on Tuesday following the release of lower-than-anticipated inflation figures, which increased the belief that the Federal Reserve had concluded its interest rate hikes. The annual rate of inflation measured by the Consumer Price Index (CPI), which monitors the expenses of a variety of goods and services -\u00a0 slowed to 3.2% last month, dropping from September's 3.7% and marking the most subdued rate since July.<\/p>\n\n\n\n

Additionally promising, Wall Street's prices held steady over the month following a 0.4% increase in September. Core prices, which exclude the unpredictable food and energy sectors, rose by 4%, slightly slower compared to the rate observed in September. The report signifies a significant achievement for the Fed in its battle against inflation but in the upcoming weeks, policymakers will monitor the service category closely, seeking further deceleration as their interest rate increases impact demand.<\/p>\n\n\n\n

\"Inflation
Inflation edges down in October<\/em><\/figcaption><\/figure>\n\n\n\n

Earlier this month, the Federal Reserve maintained its benchmark interest rate at the highest level in 22 years. Following this Tuesday's report, prominent analysts and economists indicated only a 1 percent probability that the central bank would increase rates during its upcoming policy meeting in December. Gregory Daco, chief economist at EY Parthenon, said<\/a>:<\/p>\n\n\n\n

\u201cAcross the board, it\u2019s a good report and I think this will comfort the excessively data-dependent Fed policymakers that policy is sufficiently restrictive to bring inflation down to 2 percent.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/strong><\/em> Gala is announcing a partnership with Stick Figure Productions to distribute Four Down on the Blockchain<\/a><\/p>\n\n\n\n

However, analysts from JPMorgan warned that the risk-reward ratio for many stocks remains unattractive currently and restrictive monetary policy is likely to remain in place for some time. JPMorgan analysts anticipate that most adverse effects resulting from increased interest rates haven't manifested thus far. They highlight an upward trend in consumer loan delinquencies and corporate bankruptcies, suggesting that these patterns are probable to persist unless interest rates are lowered.<\/p>\n\n\n\n

This is likely to drive demand destruction, and weakening pricing power and margins for corporates in the coming quarters, and because of this JPMorgan analysts are adopting a defensive stance, maintaining underweight allocations in equities and cryptocurrencies. Nevertheless, they propose an increase in the investment allocation towards gold due to its potential to rise in value during economic downturns, offering a hedge against potential losses in alternative investments.<\/p>\n\n\n\n

Gold is commonly regarded as a safe-haven asset, particularly amid economic uncertainty or geopolitical instability. Investors typically turn to gold as a means of preserving value when other assets are considered risky.<\/p>\n","post_title":"Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-surged-significantly-after-the-release-of-lower-than-anticipated-inflation-figures","to_ping":"","pinged":"","post_modified":"2023-11-16 20:00:45","post_modified_gmt":"2023-11-16 09:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14319","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11491,"post_author":"14","post_date":"2023-05-04 21:53:10","post_date_gmt":"2023-05-04 11:53:10","post_content":"\n

As widely expected, the U.S. Central Bank raised interest rates by 25bps this Wednesday. It signalled it could pause further increases, giving officials time to assess the fallout from recent bank failures, wait on the resolution of a political stand-off over the U.S. debt ceiling and monitor the course of inflation. The federal funds rate is now in a range of 5% to 5.25%, which is the highest level since 2006. <\/p>\n\n\n\n

The U.S. Central Bank warned that tighter credit conditions for households and businesses are expected to affect economic activity. In the picture below, we can see that even without this rise in interest rates, the federal funds rate was at the highest level since the 2007 financial crisis.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Many analysts and economists are worried that the high-interest rates will push the economy into a recession. It is important to mention that government data showed last week that economic growth in the first quarter slowed sequentially, with real gross domestic product increasing at a 1.1% annual pace, compared with a 2.6% gain in the prior three-month period. With higher interest rates, companies need to spend more money to borrow money to invest in growth. Historically, higher rates lead companies to reduce spending (especially on hiring). <\/p>\n\n\n\n

Many companies could face liquidity problems, and economist David Rosenberg has warned that the U.S. economy is facing two big risks. David Rosenberg said<\/a>:<\/p>\n\n\n\n

\"We have a possible debt default on our hands and a spreading bank crisis. The banking turmoil that started with Silicon Valley Bank's collapse in March remains unresolved, and First Republic's failure and takeover by CEO Jamie Dimon's JPMorgan has reignited worries about broader financial instability. Moreover, political disagreement about raising the U.S. government's borrowing limit is fanning fears of a debt-ceiling crisis.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>United States May Fund Its Deficit By Printing More Money; Could Default By June 1st<\/a><\/p>\n\n\n\n

Higher rates encourage saving over spending and make the debt more costly. Companies with bigger credit or other loans with variable interest rates could be in a difficult situation. We expect to see a meaningful slowdown in economic growth and a weakening of the labour market in the United States in the upcoming months. <\/p>\n\n\n\n

At the same time, Brian Jacobsen, chief economist at Annex Wealth Management, said<\/a> that the manufacturing and housing sectors are in a recession already. The famous investor Jeremy Grantham warned that the U.S. stock market could experience significant losses soon, and a recommendation is that investors should continue to take a defensive investment approach.<\/p>\n\n\n\n

Stocks aren't the only assets that could significantly lose their value. Investors should remember that cryptocurrencies could also be in the situation to make an even bigger fall. The crypto market displayed a high correlation with U.S. equities. If a downtrend is witnessed in the stock market, the same is usually replicated in the crypto-sphere.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Bitcoin Is Close To Testing $30,000 Again; Ethereum Revives Bullish Momentum Above $1,800<\/a><\/p>\n","post_title":"The Fed Raises Interest Rates By 25 BPS This Wednesday; Effects On Crypto And Financial Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-fed-raises-interest-rates-by-25-bps-this-wednesday-effects-on-crypto-and-financial-markets","to_ping":"","pinged":"","post_modified":"2023-05-04 22:08:47","post_modified_gmt":"2023-05-04 12:08:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11491","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11422,"post_author":"12","post_date":"2023-05-02 17:50:37","post_date_gmt":"2023-05-02 07:50:37","post_content":"\n

Ray Dalio, the billionaire founder of one of the world\u2019s largest hedge funds, Bridgewater Associates, was recently\u00a0interviewed<\/a>. He explains that the United States' $31.45T debt may have to be resolved by printing more money, also referred to as currency debasement.<\/p>\n\n\n\n

\u201cSo I think you\u2019re in the part of the cycle where you\u2019ve had the tightening and then the dominoes are beginning to fall. And I think that that\u2019s going to produce more problems.<\/em><\/p>\n\n\n\n

I think when it comes down to it, there\u2019s just too much debt, and we\u2019re adding to it too quickly\u2026 Either that debt will be paid off with hard money, in which case there\u2019s not much printing and so on, or it will be paid off with printing a lot of money to make it easier to pay off. <\/em><\/p>\n\n\n\n

I think in the end, it\u2019s always the case that they print a lot of money in and make it easier to pay off, but you have the reduced value of money.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> Ray Dalio; The Federal Reserve Is Setting Off A \u201cTerrible Calamity\u201d<\/a><\/p>\n\n\n\n

Could The United States Default By June?<\/h2>\n\n\n\n

United States Treasury Secretary, Janet Yellen, wrote to House Speaker Kevin McCarthy;<\/p>\n\n\n\n

\"After reviewing recent federal tax receipts, our best estimate is that we will be unable to continue to satisfy all of the government\u2019s obligations by early June, and potentially as early as June 1, if Congress does not raise or suspend the debt limit before that time.<\/em><\/p>\n\n\n\n

If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests.\"<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> United States May Enter Mild Recession As Yet Another Hike In Fed Rates Expected<\/a><\/p>\n\n\n\n

Yellen warned that waiting until the last minute to take action on this issue would cause harm to \"business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States.\"<\/em> Yellen believes that defaulting on their debt would be a financial catastrophe, raising the cost of borrowing without an end, making future investment \"substantially more costly.\u201d<\/em><\/p>\n","post_title":"United States May Fund Its Deficit By Printing More Money; Could Default By June 1st","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-may-fund-its-deficit-by-printing-more-money-could-default-by-june-1st","to_ping":"","pinged":"","post_modified":"2023-05-04 13:04:05","post_modified_gmt":"2023-05-04 03:04:05","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11422","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

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\n

In an interview with CNBC<\/em>, John Williams deflated expectations for rate cuts early next year. Reuters reported that this led to a dip in bank stocks<\/a>, albeit close to their pre-crisis levels of March.<\/p>\n\n\n\n

Stock Rate Cuts In 2024<\/h2>\n\n\n\n

Amidst recent anticipations of a rate cut in early 2024 that would support loan growth and reduce the cost of deposits, Williams' remarks triggered a shift in market sentiment. The KBW Regional Banking Index, which surged the previous day, experienced a decline of 1.5% in afternoon trading, while the S&P 500 Banks Index slipped by 0.5%.<\/p>\n\n\n\n

Stocks like Regions Financial, KeyCorp, Western Alliance, and Truist Financial witnessed declines ranging from 1% to 2.9%. Conversely, JPMorgan Chase, Wells Fargo, and Morgan Stanley showed marginal increases, while Bank of America, Citigroup, and Goldman Sachs registered slight drops.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Recession Fears And A Slow Labour Market Exert Pressure On Stocks<\/a><\/p>\n\n\n\n

The Fed's Cautionary Rate-Cut Signals<\/h2>\n\n\n\n

Recently, the Fed maintained its key interest rate for the third consecutive time, signaling potential multiple rate cuts in 2024<\/a>, CNBC<\/em> reported. Despite inflation easing and steady economic conditions, this decision anticipates a series of cuts in the coming year.<\/p>\n\n\n\n

The Federal Open Market Committee unanimously voted to retain the benchmark overnight borrowing rate between 5.25%-5.5%. This step hinted at at least three rate cuts in 2024, a less aggressive stance than market expectations but more pronounced than previously indicated.<\/p>\n\n\n\n

While the Fed highlighted its readiness to address inflation concerns<\/a>, it emphasized a patient approach to observe the impact of prior policy tightening on the economy. The possibility of future rate hikes remains contingent on inflation patterns.<\/p>\n\n\n\n

High inflation rates have impacted President Biden's approval ratings. Speculations about the Fed's cautious policy actions during a presidential election year persist, especially considering the economic landscape and real rates.<\/p>\n\n\n\n

The Fed's decision to maintain rates while hinting at potential cuts in 2024 reflects a balancing act to nurture economic stability amidst inflation concerns.<\/p>\n","post_title":"US Bank Stocks Slide On Fed's Rate-Cut Dismissal","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"us-bank-stocks-slide-on-feds-rate-cut-dismissal","to_ping":"","pinged":"","post_modified":"2023-12-16 20:44:05","post_modified_gmt":"2023-12-16 09:44:05","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14666","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14611,"post_author":"14","post_date":"2023-12-13 21:49:46","post_date_gmt":"2023-12-13 10:49:46","post_content":"\n

U.S. stocks had the highest monthly rally of 2023 in November; the benchmark S&P 500 rose 9%, the tech-heavy Nasdaq Composite surged 11% and the Dow Jones Industrial Average climbed 2,900 points higher. The key news for investors in the past month was the November 14 release of the Consumer Price Index, revealing a 3.2% inflation increase in October, lower than anticipated.<\/p>\n\n\n\n

Encouraging news from this Tuesday revealed that the November Consumer Price Index (CPI) increased by 3.1% every year, aligning with the predictions of economists surveyed by Reuters<\/a>. Similarly, core prices, which exclude fluctuating items like food and energy expenses, also met expectations, rising by 4% annually.<\/p>\n\n\n\n

This triggered a surge in speculation that the Fed has finished its tightening cycle. Most traders, as indicated by the CME Group's Fedwatch tool, think that the central bank has raised interest rates for the last time this year, shifting their focus to potential rate cuts around mid-2024.<\/p>\n\n\n\n

Policymakers And U.S. Stocks<\/h2>\n\n\n\n

Should that prediction materialize, there's a strong likelihood that policymakers will attain their desired \"soft landing\" scenario, despite raising borrowing rates from nearly zero to approximately 5.5% within a mere 15-month timeframe. Growth has remained strong, and the unemployment rate is still hovering below 4% even as inflation has rapidly cooled.<\/p>\n\n\n\n

The positive developments contributed significantly to driving the S&P 500 to its second most successful November since 1980 and it's noteworthy to highlight that the only instance when the index performed better in November was during its recovery post the pandemic in 2020.<\/p>\n\n\n\n

See Related:<\/em><\/strong> SlingTV Partners With BitPay To Accept Crypto For Subscriptions<\/a><\/p>\n\n\n\n

\"S&P
S&P 500 rose 9% in November 2023<\/em><\/figcaption><\/figure>\n\n\n\n

Encouragingly, Bank of America's<\/a> Savita Subramanian anticipates ongoing positive momentum for the S&P 500, projecting it to reach a record-breaking 5,000 points by year-end. Additionally, both BMO's Brian Belski and Deutsche Bank's Binky Chadha have established price targets of 5,100 points each.<\/p>\n\n\n\n

Analysts Index Review<\/h2>\n\n\n\n

However, certain analysts are expressing skepticism. JPMorgan Asset Management advises investors to remain cautious due to the possibility of a recession, while Soci\u00e9t\u00e9 G\u00e9n\u00e9rale cautions them to brace for a volatile 2024, predicting that the index will fluctuate between nearing its record high, experiencing a decline, and subsequently rebounding.<\/p>\n\n\n\n

The focus of investors has shifted now to the conclusion of the Fed's two-day meeting on Wednesday, eagerly awaiting their decision on interest rates, along with the release of the November producer price index (PPI) data. Jason Pride, chief of investment strategy and research at Glenmede, said<\/a>:<\/p>\n\n\n\n

\"They've (Fed) already taken rates up a lot... they will keep rates up in that range for longer than what the market is currently expecting. Markets do not expect more hikes and are instead focused on rate cuts.\"<\/em><\/p>\n","post_title":"U.S. Stocks Had The Highest Monthly Rally Of 2023 In November. What To Expect From The Rest Of December?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"u-s-stocks-had-the-highest-monthly-rally-of-2023-in-november-what-to-expect-from-the-rest-of-december","to_ping":"","pinged":"","post_modified":"2023-12-13 21:49:51","post_modified_gmt":"2023-12-13 10:49:51","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14611","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14444,"post_author":"14","post_date":"2023-11-23 01:38:54","post_date_gmt":"2023-11-22 14:38:54","post_content":"\n

Investors remain optimistic that the market can resume its bullish momentum in December given that the fourth quarter has historically been one of the best three-month stretches of the year for the S&P 500. Investors anticipated the Federal Reserve<\/a> may have already reached its terminal interest rate; however, the primary driving forces affecting stock prices over recent weeks, inflation and interest rates, will continue to hold significant importance in December.<\/p>\n\n\n\n

\"The
The S&P 500 index's strong advance off its October 27 low continues to make progress<\/em><\/figcaption><\/figure>\n\n\n\n

Positive information is that the annual rate of inflation measured by the Consumer Price Index (CPI), which monitors the expenses of a variety of goods and services -  slowed to 3.2% in October, dropping from September's 3.7% and marking the most subdued rate since July 2023. It is also important to say that inflation is significantly lower than 2022 peak levels which were above 9% and because of this many investors anticipate the Fed could begin to cut interest rates as soon as the first half of 2024.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Federal Reserve Officials Banned From Trading Crypto(Opens in a new browser tab)<\/a><\/p>\n\n\n\n

GDP And Corporate Profits<\/h2>\n\n\n\n

Corporate profits are also the big driver of what the market is likely to do in the near term and because of this investors are closely monitoring third-quarter U.S. earnings. Third-quarter earnings season is essentially at the finish line and of the 480 companies that have reported so far, 80% have beaten analysts' expectations. The inflation and interest rates will continue to significantly impact stock prices in December.<\/p>\n\n\n\n

U.S. economic growth(inflation and interest rates) has been resilient year-to-date and Bill Adams, a chief economist for Comerica Bank, recently said the U.S. economy has been much stronger in 2023 than economists expected. Bill Adams suggests that the annual real GDP is anticipated to reach approximately 2.4% this year, a substantial increase from the Federal Reserve's December 2022 dot plot prediction of 0.5%. However, he also warned that the outcome in the upcoming months will decide if the U.S. economy can smoothly achieve a so-called \"soft landing\" without veering into a recession.<\/p>\n\n\n\n

Deceleration In United States Economic Growth<\/h2>\n\n\n\n

Jeffrey Roach, the chief economist at LPL Financial,<\/a> foresees that most of the negative consequences stemming from higher interest rates have not materialized yet and due to this, he anticipates a deceleration in U.S. economic growth. Market expectations that the Federal Reserve will keep interest rates unchanged at its December meeting currently stand above 90% and any information that the Federal Reserve could start to cut rates in the first quarter of 2024 should be positive for stocks in the short-term period.<\/p>\n\n\n\n

On the other side, JPMorgan strategists believe that the risk-reward ratio for numerous stocks is currently unappealing and according to them, restrictive monetary policy is likely to remain in place for some time which could potentially cause a recession. Considering this scenario, investors worried about a possible U.S. recession can opt for a more defensive strategy in the market. They can enhance their financial flexibility by reducing their stock or cryptocurrency exposure and augmenting their cash reserves.<\/p>\n","post_title":"Investor Optimism Rises In November 2023. Does Strong Buying Activity Indicate The Possibility Of Further Gains In The Coming Weeks?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"investor-optimism-rises-in-november-2023-does-strong-buying-activity-indicate-the-possibility-of-further-gains-in-the-coming-weeks","to_ping":"","pinged":"","post_modified":"2023-11-23 01:39:12","post_modified_gmt":"2023-11-22 14:39:12","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14444","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14319,"post_author":"14","post_date":"2023-11-15 18:02:37","post_date_gmt":"2023-11-15 07:02:37","post_content":"\n

Wall Street's main indexes<\/a> surged significantly on Tuesday following the release of lower-than-anticipated inflation figures, which increased the belief that the Federal Reserve had concluded its interest rate hikes. The annual rate of inflation measured by the Consumer Price Index (CPI), which monitors the expenses of a variety of goods and services -\u00a0 slowed to 3.2% last month, dropping from September's 3.7% and marking the most subdued rate since July.<\/p>\n\n\n\n

Additionally promising, Wall Street's prices held steady over the month following a 0.4% increase in September. Core prices, which exclude the unpredictable food and energy sectors, rose by 4%, slightly slower compared to the rate observed in September. The report signifies a significant achievement for the Fed in its battle against inflation but in the upcoming weeks, policymakers will monitor the service category closely, seeking further deceleration as their interest rate increases impact demand.<\/p>\n\n\n\n

\"Inflation
Inflation edges down in October<\/em><\/figcaption><\/figure>\n\n\n\n

Earlier this month, the Federal Reserve maintained its benchmark interest rate at the highest level in 22 years. Following this Tuesday's report, prominent analysts and economists indicated only a 1 percent probability that the central bank would increase rates during its upcoming policy meeting in December. Gregory Daco, chief economist at EY Parthenon, said<\/a>:<\/p>\n\n\n\n

\u201cAcross the board, it\u2019s a good report and I think this will comfort the excessively data-dependent Fed policymakers that policy is sufficiently restrictive to bring inflation down to 2 percent.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/strong><\/em> Gala is announcing a partnership with Stick Figure Productions to distribute Four Down on the Blockchain<\/a><\/p>\n\n\n\n

However, analysts from JPMorgan warned that the risk-reward ratio for many stocks remains unattractive currently and restrictive monetary policy is likely to remain in place for some time. JPMorgan analysts anticipate that most adverse effects resulting from increased interest rates haven't manifested thus far. They highlight an upward trend in consumer loan delinquencies and corporate bankruptcies, suggesting that these patterns are probable to persist unless interest rates are lowered.<\/p>\n\n\n\n

This is likely to drive demand destruction, and weakening pricing power and margins for corporates in the coming quarters, and because of this JPMorgan analysts are adopting a defensive stance, maintaining underweight allocations in equities and cryptocurrencies. Nevertheless, they propose an increase in the investment allocation towards gold due to its potential to rise in value during economic downturns, offering a hedge against potential losses in alternative investments.<\/p>\n\n\n\n

Gold is commonly regarded as a safe-haven asset, particularly amid economic uncertainty or geopolitical instability. Investors typically turn to gold as a means of preserving value when other assets are considered risky.<\/p>\n","post_title":"Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-surged-significantly-after-the-release-of-lower-than-anticipated-inflation-figures","to_ping":"","pinged":"","post_modified":"2023-11-16 20:00:45","post_modified_gmt":"2023-11-16 09:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14319","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11491,"post_author":"14","post_date":"2023-05-04 21:53:10","post_date_gmt":"2023-05-04 11:53:10","post_content":"\n

As widely expected, the U.S. Central Bank raised interest rates by 25bps this Wednesday. It signalled it could pause further increases, giving officials time to assess the fallout from recent bank failures, wait on the resolution of a political stand-off over the U.S. debt ceiling and monitor the course of inflation. The federal funds rate is now in a range of 5% to 5.25%, which is the highest level since 2006. <\/p>\n\n\n\n

The U.S. Central Bank warned that tighter credit conditions for households and businesses are expected to affect economic activity. In the picture below, we can see that even without this rise in interest rates, the federal funds rate was at the highest level since the 2007 financial crisis.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Many analysts and economists are worried that the high-interest rates will push the economy into a recession. It is important to mention that government data showed last week that economic growth in the first quarter slowed sequentially, with real gross domestic product increasing at a 1.1% annual pace, compared with a 2.6% gain in the prior three-month period. With higher interest rates, companies need to spend more money to borrow money to invest in growth. Historically, higher rates lead companies to reduce spending (especially on hiring). <\/p>\n\n\n\n

Many companies could face liquidity problems, and economist David Rosenberg has warned that the U.S. economy is facing two big risks. David Rosenberg said<\/a>:<\/p>\n\n\n\n

\"We have a possible debt default on our hands and a spreading bank crisis. The banking turmoil that started with Silicon Valley Bank's collapse in March remains unresolved, and First Republic's failure and takeover by CEO Jamie Dimon's JPMorgan has reignited worries about broader financial instability. Moreover, political disagreement about raising the U.S. government's borrowing limit is fanning fears of a debt-ceiling crisis.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>United States May Fund Its Deficit By Printing More Money; Could Default By June 1st<\/a><\/p>\n\n\n\n

Higher rates encourage saving over spending and make the debt more costly. Companies with bigger credit or other loans with variable interest rates could be in a difficult situation. We expect to see a meaningful slowdown in economic growth and a weakening of the labour market in the United States in the upcoming months. <\/p>\n\n\n\n

At the same time, Brian Jacobsen, chief economist at Annex Wealth Management, said<\/a> that the manufacturing and housing sectors are in a recession already. The famous investor Jeremy Grantham warned that the U.S. stock market could experience significant losses soon, and a recommendation is that investors should continue to take a defensive investment approach.<\/p>\n\n\n\n

Stocks aren't the only assets that could significantly lose their value. Investors should remember that cryptocurrencies could also be in the situation to make an even bigger fall. The crypto market displayed a high correlation with U.S. equities. If a downtrend is witnessed in the stock market, the same is usually replicated in the crypto-sphere.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Bitcoin Is Close To Testing $30,000 Again; Ethereum Revives Bullish Momentum Above $1,800<\/a><\/p>\n","post_title":"The Fed Raises Interest Rates By 25 BPS This Wednesday; Effects On Crypto And Financial Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-fed-raises-interest-rates-by-25-bps-this-wednesday-effects-on-crypto-and-financial-markets","to_ping":"","pinged":"","post_modified":"2023-05-04 22:08:47","post_modified_gmt":"2023-05-04 12:08:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11491","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11422,"post_author":"12","post_date":"2023-05-02 17:50:37","post_date_gmt":"2023-05-02 07:50:37","post_content":"\n

Ray Dalio, the billionaire founder of one of the world\u2019s largest hedge funds, Bridgewater Associates, was recently\u00a0interviewed<\/a>. He explains that the United States' $31.45T debt may have to be resolved by printing more money, also referred to as currency debasement.<\/p>\n\n\n\n

\u201cSo I think you\u2019re in the part of the cycle where you\u2019ve had the tightening and then the dominoes are beginning to fall. And I think that that\u2019s going to produce more problems.<\/em><\/p>\n\n\n\n

I think when it comes down to it, there\u2019s just too much debt, and we\u2019re adding to it too quickly\u2026 Either that debt will be paid off with hard money, in which case there\u2019s not much printing and so on, or it will be paid off with printing a lot of money to make it easier to pay off. <\/em><\/p>\n\n\n\n

I think in the end, it\u2019s always the case that they print a lot of money in and make it easier to pay off, but you have the reduced value of money.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> Ray Dalio; The Federal Reserve Is Setting Off A \u201cTerrible Calamity\u201d<\/a><\/p>\n\n\n\n

Could The United States Default By June?<\/h2>\n\n\n\n

United States Treasury Secretary, Janet Yellen, wrote to House Speaker Kevin McCarthy;<\/p>\n\n\n\n

\"After reviewing recent federal tax receipts, our best estimate is that we will be unable to continue to satisfy all of the government\u2019s obligations by early June, and potentially as early as June 1, if Congress does not raise or suspend the debt limit before that time.<\/em><\/p>\n\n\n\n

If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests.\"<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> United States May Enter Mild Recession As Yet Another Hike In Fed Rates Expected<\/a><\/p>\n\n\n\n

Yellen warned that waiting until the last minute to take action on this issue would cause harm to \"business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States.\"<\/em> Yellen believes that defaulting on their debt would be a financial catastrophe, raising the cost of borrowing without an end, making future investment \"substantially more costly.\u201d<\/em><\/p>\n","post_title":"United States May Fund Its Deficit By Printing More Money; Could Default By June 1st","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-may-fund-its-deficit-by-printing-more-money-could-default-by-june-1st","to_ping":"","pinged":"","post_modified":"2023-05-04 13:04:05","post_modified_gmt":"2023-05-04 03:04:05","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11422","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

Most Read

Subscribe To Our Newsletter

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Follow The Distributed

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\n

The US banking sector faced a downward trend on Friday after one of the policymakers from the Federal Reserve curbed market hopes of imminent interest-rate cuts.<\/p>\n\n\n\n

In an interview with CNBC<\/em>, John Williams deflated expectations for rate cuts early next year. Reuters reported that this led to a dip in bank stocks<\/a>, albeit close to their pre-crisis levels of March.<\/p>\n\n\n\n

Stock Rate Cuts In 2024<\/h2>\n\n\n\n

Amidst recent anticipations of a rate cut in early 2024 that would support loan growth and reduce the cost of deposits, Williams' remarks triggered a shift in market sentiment. The KBW Regional Banking Index, which surged the previous day, experienced a decline of 1.5% in afternoon trading, while the S&P 500 Banks Index slipped by 0.5%.<\/p>\n\n\n\n

Stocks like Regions Financial, KeyCorp, Western Alliance, and Truist Financial witnessed declines ranging from 1% to 2.9%. Conversely, JPMorgan Chase, Wells Fargo, and Morgan Stanley showed marginal increases, while Bank of America, Citigroup, and Goldman Sachs registered slight drops.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Recession Fears And A Slow Labour Market Exert Pressure On Stocks<\/a><\/p>\n\n\n\n

The Fed's Cautionary Rate-Cut Signals<\/h2>\n\n\n\n

Recently, the Fed maintained its key interest rate for the third consecutive time, signaling potential multiple rate cuts in 2024<\/a>, CNBC<\/em> reported. Despite inflation easing and steady economic conditions, this decision anticipates a series of cuts in the coming year.<\/p>\n\n\n\n

The Federal Open Market Committee unanimously voted to retain the benchmark overnight borrowing rate between 5.25%-5.5%. This step hinted at at least three rate cuts in 2024, a less aggressive stance than market expectations but more pronounced than previously indicated.<\/p>\n\n\n\n

While the Fed highlighted its readiness to address inflation concerns<\/a>, it emphasized a patient approach to observe the impact of prior policy tightening on the economy. The possibility of future rate hikes remains contingent on inflation patterns.<\/p>\n\n\n\n

High inflation rates have impacted President Biden's approval ratings. Speculations about the Fed's cautious policy actions during a presidential election year persist, especially considering the economic landscape and real rates.<\/p>\n\n\n\n

The Fed's decision to maintain rates while hinting at potential cuts in 2024 reflects a balancing act to nurture economic stability amidst inflation concerns.<\/p>\n","post_title":"US Bank Stocks Slide On Fed's Rate-Cut Dismissal","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"us-bank-stocks-slide-on-feds-rate-cut-dismissal","to_ping":"","pinged":"","post_modified":"2023-12-16 20:44:05","post_modified_gmt":"2023-12-16 09:44:05","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14666","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14611,"post_author":"14","post_date":"2023-12-13 21:49:46","post_date_gmt":"2023-12-13 10:49:46","post_content":"\n

U.S. stocks had the highest monthly rally of 2023 in November; the benchmark S&P 500 rose 9%, the tech-heavy Nasdaq Composite surged 11% and the Dow Jones Industrial Average climbed 2,900 points higher. The key news for investors in the past month was the November 14 release of the Consumer Price Index, revealing a 3.2% inflation increase in October, lower than anticipated.<\/p>\n\n\n\n

Encouraging news from this Tuesday revealed that the November Consumer Price Index (CPI) increased by 3.1% every year, aligning with the predictions of economists surveyed by Reuters<\/a>. Similarly, core prices, which exclude fluctuating items like food and energy expenses, also met expectations, rising by 4% annually.<\/p>\n\n\n\n

This triggered a surge in speculation that the Fed has finished its tightening cycle. Most traders, as indicated by the CME Group's Fedwatch tool, think that the central bank has raised interest rates for the last time this year, shifting their focus to potential rate cuts around mid-2024.<\/p>\n\n\n\n

Policymakers And U.S. Stocks<\/h2>\n\n\n\n

Should that prediction materialize, there's a strong likelihood that policymakers will attain their desired \"soft landing\" scenario, despite raising borrowing rates from nearly zero to approximately 5.5% within a mere 15-month timeframe. Growth has remained strong, and the unemployment rate is still hovering below 4% even as inflation has rapidly cooled.<\/p>\n\n\n\n

The positive developments contributed significantly to driving the S&P 500 to its second most successful November since 1980 and it's noteworthy to highlight that the only instance when the index performed better in November was during its recovery post the pandemic in 2020.<\/p>\n\n\n\n

See Related:<\/em><\/strong> SlingTV Partners With BitPay To Accept Crypto For Subscriptions<\/a><\/p>\n\n\n\n

\"S&P
S&P 500 rose 9% in November 2023<\/em><\/figcaption><\/figure>\n\n\n\n

Encouragingly, Bank of America's<\/a> Savita Subramanian anticipates ongoing positive momentum for the S&P 500, projecting it to reach a record-breaking 5,000 points by year-end. Additionally, both BMO's Brian Belski and Deutsche Bank's Binky Chadha have established price targets of 5,100 points each.<\/p>\n\n\n\n

Analysts Index Review<\/h2>\n\n\n\n

However, certain analysts are expressing skepticism. JPMorgan Asset Management advises investors to remain cautious due to the possibility of a recession, while Soci\u00e9t\u00e9 G\u00e9n\u00e9rale cautions them to brace for a volatile 2024, predicting that the index will fluctuate between nearing its record high, experiencing a decline, and subsequently rebounding.<\/p>\n\n\n\n

The focus of investors has shifted now to the conclusion of the Fed's two-day meeting on Wednesday, eagerly awaiting their decision on interest rates, along with the release of the November producer price index (PPI) data. Jason Pride, chief of investment strategy and research at Glenmede, said<\/a>:<\/p>\n\n\n\n

\"They've (Fed) already taken rates up a lot... they will keep rates up in that range for longer than what the market is currently expecting. Markets do not expect more hikes and are instead focused on rate cuts.\"<\/em><\/p>\n","post_title":"U.S. Stocks Had The Highest Monthly Rally Of 2023 In November. What To Expect From The Rest Of December?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"u-s-stocks-had-the-highest-monthly-rally-of-2023-in-november-what-to-expect-from-the-rest-of-december","to_ping":"","pinged":"","post_modified":"2023-12-13 21:49:51","post_modified_gmt":"2023-12-13 10:49:51","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14611","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14444,"post_author":"14","post_date":"2023-11-23 01:38:54","post_date_gmt":"2023-11-22 14:38:54","post_content":"\n

Investors remain optimistic that the market can resume its bullish momentum in December given that the fourth quarter has historically been one of the best three-month stretches of the year for the S&P 500. Investors anticipated the Federal Reserve<\/a> may have already reached its terminal interest rate; however, the primary driving forces affecting stock prices over recent weeks, inflation and interest rates, will continue to hold significant importance in December.<\/p>\n\n\n\n

\"The
The S&P 500 index's strong advance off its October 27 low continues to make progress<\/em><\/figcaption><\/figure>\n\n\n\n

Positive information is that the annual rate of inflation measured by the Consumer Price Index (CPI), which monitors the expenses of a variety of goods and services -  slowed to 3.2% in October, dropping from September's 3.7% and marking the most subdued rate since July 2023. It is also important to say that inflation is significantly lower than 2022 peak levels which were above 9% and because of this many investors anticipate the Fed could begin to cut interest rates as soon as the first half of 2024.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Federal Reserve Officials Banned From Trading Crypto(Opens in a new browser tab)<\/a><\/p>\n\n\n\n

GDP And Corporate Profits<\/h2>\n\n\n\n

Corporate profits are also the big driver of what the market is likely to do in the near term and because of this investors are closely monitoring third-quarter U.S. earnings. Third-quarter earnings season is essentially at the finish line and of the 480 companies that have reported so far, 80% have beaten analysts' expectations. The inflation and interest rates will continue to significantly impact stock prices in December.<\/p>\n\n\n\n

U.S. economic growth(inflation and interest rates) has been resilient year-to-date and Bill Adams, a chief economist for Comerica Bank, recently said the U.S. economy has been much stronger in 2023 than economists expected. Bill Adams suggests that the annual real GDP is anticipated to reach approximately 2.4% this year, a substantial increase from the Federal Reserve's December 2022 dot plot prediction of 0.5%. However, he also warned that the outcome in the upcoming months will decide if the U.S. economy can smoothly achieve a so-called \"soft landing\" without veering into a recession.<\/p>\n\n\n\n

Deceleration In United States Economic Growth<\/h2>\n\n\n\n

Jeffrey Roach, the chief economist at LPL Financial,<\/a> foresees that most of the negative consequences stemming from higher interest rates have not materialized yet and due to this, he anticipates a deceleration in U.S. economic growth. Market expectations that the Federal Reserve will keep interest rates unchanged at its December meeting currently stand above 90% and any information that the Federal Reserve could start to cut rates in the first quarter of 2024 should be positive for stocks in the short-term period.<\/p>\n\n\n\n

On the other side, JPMorgan strategists believe that the risk-reward ratio for numerous stocks is currently unappealing and according to them, restrictive monetary policy is likely to remain in place for some time which could potentially cause a recession. Considering this scenario, investors worried about a possible U.S. recession can opt for a more defensive strategy in the market. They can enhance their financial flexibility by reducing their stock or cryptocurrency exposure and augmenting their cash reserves.<\/p>\n","post_title":"Investor Optimism Rises In November 2023. Does Strong Buying Activity Indicate The Possibility Of Further Gains In The Coming Weeks?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"investor-optimism-rises-in-november-2023-does-strong-buying-activity-indicate-the-possibility-of-further-gains-in-the-coming-weeks","to_ping":"","pinged":"","post_modified":"2023-11-23 01:39:12","post_modified_gmt":"2023-11-22 14:39:12","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14444","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14319,"post_author":"14","post_date":"2023-11-15 18:02:37","post_date_gmt":"2023-11-15 07:02:37","post_content":"\n

Wall Street's main indexes<\/a> surged significantly on Tuesday following the release of lower-than-anticipated inflation figures, which increased the belief that the Federal Reserve had concluded its interest rate hikes. The annual rate of inflation measured by the Consumer Price Index (CPI), which monitors the expenses of a variety of goods and services -\u00a0 slowed to 3.2% last month, dropping from September's 3.7% and marking the most subdued rate since July.<\/p>\n\n\n\n

Additionally promising, Wall Street's prices held steady over the month following a 0.4% increase in September. Core prices, which exclude the unpredictable food and energy sectors, rose by 4%, slightly slower compared to the rate observed in September. The report signifies a significant achievement for the Fed in its battle against inflation but in the upcoming weeks, policymakers will monitor the service category closely, seeking further deceleration as their interest rate increases impact demand.<\/p>\n\n\n\n

\"Inflation
Inflation edges down in October<\/em><\/figcaption><\/figure>\n\n\n\n

Earlier this month, the Federal Reserve maintained its benchmark interest rate at the highest level in 22 years. Following this Tuesday's report, prominent analysts and economists indicated only a 1 percent probability that the central bank would increase rates during its upcoming policy meeting in December. Gregory Daco, chief economist at EY Parthenon, said<\/a>:<\/p>\n\n\n\n

\u201cAcross the board, it\u2019s a good report and I think this will comfort the excessively data-dependent Fed policymakers that policy is sufficiently restrictive to bring inflation down to 2 percent.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/strong><\/em> Gala is announcing a partnership with Stick Figure Productions to distribute Four Down on the Blockchain<\/a><\/p>\n\n\n\n

However, analysts from JPMorgan warned that the risk-reward ratio for many stocks remains unattractive currently and restrictive monetary policy is likely to remain in place for some time. JPMorgan analysts anticipate that most adverse effects resulting from increased interest rates haven't manifested thus far. They highlight an upward trend in consumer loan delinquencies and corporate bankruptcies, suggesting that these patterns are probable to persist unless interest rates are lowered.<\/p>\n\n\n\n

This is likely to drive demand destruction, and weakening pricing power and margins for corporates in the coming quarters, and because of this JPMorgan analysts are adopting a defensive stance, maintaining underweight allocations in equities and cryptocurrencies. Nevertheless, they propose an increase in the investment allocation towards gold due to its potential to rise in value during economic downturns, offering a hedge against potential losses in alternative investments.<\/p>\n\n\n\n

Gold is commonly regarded as a safe-haven asset, particularly amid economic uncertainty or geopolitical instability. Investors typically turn to gold as a means of preserving value when other assets are considered risky.<\/p>\n","post_title":"Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-surged-significantly-after-the-release-of-lower-than-anticipated-inflation-figures","to_ping":"","pinged":"","post_modified":"2023-11-16 20:00:45","post_modified_gmt":"2023-11-16 09:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14319","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11491,"post_author":"14","post_date":"2023-05-04 21:53:10","post_date_gmt":"2023-05-04 11:53:10","post_content":"\n

As widely expected, the U.S. Central Bank raised interest rates by 25bps this Wednesday. It signalled it could pause further increases, giving officials time to assess the fallout from recent bank failures, wait on the resolution of a political stand-off over the U.S. debt ceiling and monitor the course of inflation. The federal funds rate is now in a range of 5% to 5.25%, which is the highest level since 2006. <\/p>\n\n\n\n

The U.S. Central Bank warned that tighter credit conditions for households and businesses are expected to affect economic activity. In the picture below, we can see that even without this rise in interest rates, the federal funds rate was at the highest level since the 2007 financial crisis.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Many analysts and economists are worried that the high-interest rates will push the economy into a recession. It is important to mention that government data showed last week that economic growth in the first quarter slowed sequentially, with real gross domestic product increasing at a 1.1% annual pace, compared with a 2.6% gain in the prior three-month period. With higher interest rates, companies need to spend more money to borrow money to invest in growth. Historically, higher rates lead companies to reduce spending (especially on hiring). <\/p>\n\n\n\n

Many companies could face liquidity problems, and economist David Rosenberg has warned that the U.S. economy is facing two big risks. David Rosenberg said<\/a>:<\/p>\n\n\n\n

\"We have a possible debt default on our hands and a spreading bank crisis. The banking turmoil that started with Silicon Valley Bank's collapse in March remains unresolved, and First Republic's failure and takeover by CEO Jamie Dimon's JPMorgan has reignited worries about broader financial instability. Moreover, political disagreement about raising the U.S. government's borrowing limit is fanning fears of a debt-ceiling crisis.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>United States May Fund Its Deficit By Printing More Money; Could Default By June 1st<\/a><\/p>\n\n\n\n

Higher rates encourage saving over spending and make the debt more costly. Companies with bigger credit or other loans with variable interest rates could be in a difficult situation. We expect to see a meaningful slowdown in economic growth and a weakening of the labour market in the United States in the upcoming months. <\/p>\n\n\n\n

At the same time, Brian Jacobsen, chief economist at Annex Wealth Management, said<\/a> that the manufacturing and housing sectors are in a recession already. The famous investor Jeremy Grantham warned that the U.S. stock market could experience significant losses soon, and a recommendation is that investors should continue to take a defensive investment approach.<\/p>\n\n\n\n

Stocks aren't the only assets that could significantly lose their value. Investors should remember that cryptocurrencies could also be in the situation to make an even bigger fall. The crypto market displayed a high correlation with U.S. equities. If a downtrend is witnessed in the stock market, the same is usually replicated in the crypto-sphere.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Bitcoin Is Close To Testing $30,000 Again; Ethereum Revives Bullish Momentum Above $1,800<\/a><\/p>\n","post_title":"The Fed Raises Interest Rates By 25 BPS This Wednesday; Effects On Crypto And Financial Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-fed-raises-interest-rates-by-25-bps-this-wednesday-effects-on-crypto-and-financial-markets","to_ping":"","pinged":"","post_modified":"2023-05-04 22:08:47","post_modified_gmt":"2023-05-04 12:08:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11491","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11422,"post_author":"12","post_date":"2023-05-02 17:50:37","post_date_gmt":"2023-05-02 07:50:37","post_content":"\n

Ray Dalio, the billionaire founder of one of the world\u2019s largest hedge funds, Bridgewater Associates, was recently\u00a0interviewed<\/a>. He explains that the United States' $31.45T debt may have to be resolved by printing more money, also referred to as currency debasement.<\/p>\n\n\n\n

\u201cSo I think you\u2019re in the part of the cycle where you\u2019ve had the tightening and then the dominoes are beginning to fall. And I think that that\u2019s going to produce more problems.<\/em><\/p>\n\n\n\n

I think when it comes down to it, there\u2019s just too much debt, and we\u2019re adding to it too quickly\u2026 Either that debt will be paid off with hard money, in which case there\u2019s not much printing and so on, or it will be paid off with printing a lot of money to make it easier to pay off. <\/em><\/p>\n\n\n\n

I think in the end, it\u2019s always the case that they print a lot of money in and make it easier to pay off, but you have the reduced value of money.\u201d<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> Ray Dalio; The Federal Reserve Is Setting Off A \u201cTerrible Calamity\u201d<\/a><\/p>\n\n\n\n

Could The United States Default By June?<\/h2>\n\n\n\n

United States Treasury Secretary, Janet Yellen, wrote to House Speaker Kevin McCarthy;<\/p>\n\n\n\n

\"After reviewing recent federal tax receipts, our best estimate is that we will be unable to continue to satisfy all of the government\u2019s obligations by early June, and potentially as early as June 1, if Congress does not raise or suspend the debt limit before that time.<\/em><\/p>\n\n\n\n

If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests.\"<\/em><\/p>\n\n\n\n

See Related:<\/em><\/strong> United States May Enter Mild Recession As Yet Another Hike In Fed Rates Expected<\/a><\/p>\n\n\n\n

Yellen warned that waiting until the last minute to take action on this issue would cause harm to \"business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States.\"<\/em> Yellen believes that defaulting on their debt would be a financial catastrophe, raising the cost of borrowing without an end, making future investment \"substantially more costly.\u201d<\/em><\/p>\n","post_title":"United States May Fund Its Deficit By Printing More Money; Could Default By June 1st","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-may-fund-its-deficit-by-printing-more-money-could-default-by-june-1st","to_ping":"","pinged":"","post_modified":"2023-05-04 13:04:05","post_modified_gmt":"2023-05-04 03:04:05","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11422","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

ADVERTISEMENT
\n
  • The sentiment in the banking sector has shifted despite recent gains.<\/li>\n<\/ul>\n\n\n\n

    The US banking sector faced a downward trend on Friday after one of the policymakers from the Federal Reserve curbed market hopes of imminent interest-rate cuts.<\/p>\n\n\n\n

    In an interview with CNBC<\/em>, John Williams deflated expectations for rate cuts early next year. Reuters reported that this led to a dip in bank stocks<\/a>, albeit close to their pre-crisis levels of March.<\/p>\n\n\n\n

    Stock Rate Cuts In 2024<\/h2>\n\n\n\n

    Amidst recent anticipations of a rate cut in early 2024 that would support loan growth and reduce the cost of deposits, Williams' remarks triggered a shift in market sentiment. The KBW Regional Banking Index, which surged the previous day, experienced a decline of 1.5% in afternoon trading, while the S&P 500 Banks Index slipped by 0.5%.<\/p>\n\n\n\n

    Stocks like Regions Financial, KeyCorp, Western Alliance, and Truist Financial witnessed declines ranging from 1% to 2.9%. Conversely, JPMorgan Chase, Wells Fargo, and Morgan Stanley showed marginal increases, while Bank of America, Citigroup, and Goldman Sachs registered slight drops.<\/p>\n\n\n\n

    See Related:<\/em><\/strong> Recession Fears And A Slow Labour Market Exert Pressure On Stocks<\/a><\/p>\n\n\n\n

    The Fed's Cautionary Rate-Cut Signals<\/h2>\n\n\n\n

    Recently, the Fed maintained its key interest rate for the third consecutive time, signaling potential multiple rate cuts in 2024<\/a>, CNBC<\/em> reported. Despite inflation easing and steady economic conditions, this decision anticipates a series of cuts in the coming year.<\/p>\n\n\n\n

    The Federal Open Market Committee unanimously voted to retain the benchmark overnight borrowing rate between 5.25%-5.5%. This step hinted at at least three rate cuts in 2024, a less aggressive stance than market expectations but more pronounced than previously indicated.<\/p>\n\n\n\n

    While the Fed highlighted its readiness to address inflation concerns<\/a>, it emphasized a patient approach to observe the impact of prior policy tightening on the economy. The possibility of future rate hikes remains contingent on inflation patterns.<\/p>\n\n\n\n

    High inflation rates have impacted President Biden's approval ratings. Speculations about the Fed's cautious policy actions during a presidential election year persist, especially considering the economic landscape and real rates.<\/p>\n\n\n\n

    The Fed's decision to maintain rates while hinting at potential cuts in 2024 reflects a balancing act to nurture economic stability amidst inflation concerns.<\/p>\n","post_title":"US Bank Stocks Slide On Fed's Rate-Cut Dismissal","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"us-bank-stocks-slide-on-feds-rate-cut-dismissal","to_ping":"","pinged":"","post_modified":"2023-12-16 20:44:05","post_modified_gmt":"2023-12-16 09:44:05","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14666","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14611,"post_author":"14","post_date":"2023-12-13 21:49:46","post_date_gmt":"2023-12-13 10:49:46","post_content":"\n

    U.S. stocks had the highest monthly rally of 2023 in November; the benchmark S&P 500 rose 9%, the tech-heavy Nasdaq Composite surged 11% and the Dow Jones Industrial Average climbed 2,900 points higher. The key news for investors in the past month was the November 14 release of the Consumer Price Index, revealing a 3.2% inflation increase in October, lower than anticipated.<\/p>\n\n\n\n

    Encouraging news from this Tuesday revealed that the November Consumer Price Index (CPI) increased by 3.1% every year, aligning with the predictions of economists surveyed by Reuters<\/a>. Similarly, core prices, which exclude fluctuating items like food and energy expenses, also met expectations, rising by 4% annually.<\/p>\n\n\n\n

    This triggered a surge in speculation that the Fed has finished its tightening cycle. Most traders, as indicated by the CME Group's Fedwatch tool, think that the central bank has raised interest rates for the last time this year, shifting their focus to potential rate cuts around mid-2024.<\/p>\n\n\n\n

    Policymakers And U.S. Stocks<\/h2>\n\n\n\n

    Should that prediction materialize, there's a strong likelihood that policymakers will attain their desired \"soft landing\" scenario, despite raising borrowing rates from nearly zero to approximately 5.5% within a mere 15-month timeframe. Growth has remained strong, and the unemployment rate is still hovering below 4% even as inflation has rapidly cooled.<\/p>\n\n\n\n

    The positive developments contributed significantly to driving the S&P 500 to its second most successful November since 1980 and it's noteworthy to highlight that the only instance when the index performed better in November was during its recovery post the pandemic in 2020.<\/p>\n\n\n\n

    See Related:<\/em><\/strong> SlingTV Partners With BitPay To Accept Crypto For Subscriptions<\/a><\/p>\n\n\n\n

    \"S&P
    S&P 500 rose 9% in November 2023<\/em><\/figcaption><\/figure>\n\n\n\n

    Encouragingly, Bank of America's<\/a> Savita Subramanian anticipates ongoing positive momentum for the S&P 500, projecting it to reach a record-breaking 5,000 points by year-end. Additionally, both BMO's Brian Belski and Deutsche Bank's Binky Chadha have established price targets of 5,100 points each.<\/p>\n\n\n\n

    Analysts Index Review<\/h2>\n\n\n\n

    However, certain analysts are expressing skepticism. JPMorgan Asset Management advises investors to remain cautious due to the possibility of a recession, while Soci\u00e9t\u00e9 G\u00e9n\u00e9rale cautions them to brace for a volatile 2024, predicting that the index will fluctuate between nearing its record high, experiencing a decline, and subsequently rebounding.<\/p>\n\n\n\n

    The focus of investors has shifted now to the conclusion of the Fed's two-day meeting on Wednesday, eagerly awaiting their decision on interest rates, along with the release of the November producer price index (PPI) data. Jason Pride, chief of investment strategy and research at Glenmede, said<\/a>:<\/p>\n\n\n\n

    \"They've (Fed) already taken rates up a lot... they will keep rates up in that range for longer than what the market is currently expecting. Markets do not expect more hikes and are instead focused on rate cuts.\"<\/em><\/p>\n","post_title":"U.S. Stocks Had The Highest Monthly Rally Of 2023 In November. What To Expect From The Rest Of December?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"u-s-stocks-had-the-highest-monthly-rally-of-2023-in-november-what-to-expect-from-the-rest-of-december","to_ping":"","pinged":"","post_modified":"2023-12-13 21:49:51","post_modified_gmt":"2023-12-13 10:49:51","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14611","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14444,"post_author":"14","post_date":"2023-11-23 01:38:54","post_date_gmt":"2023-11-22 14:38:54","post_content":"\n

    Investors remain optimistic that the market can resume its bullish momentum in December given that the fourth quarter has historically been one of the best three-month stretches of the year for the S&P 500. Investors anticipated the Federal Reserve<\/a> may have already reached its terminal interest rate; however, the primary driving forces affecting stock prices over recent weeks, inflation and interest rates, will continue to hold significant importance in December.<\/p>\n\n\n\n

    \"The
    The S&P 500 index's strong advance off its October 27 low continues to make progress<\/em><\/figcaption><\/figure>\n\n\n\n

    Positive information is that the annual rate of inflation measured by the Consumer Price Index (CPI), which monitors the expenses of a variety of goods and services -  slowed to 3.2% in October, dropping from September's 3.7% and marking the most subdued rate since July 2023. It is also important to say that inflation is significantly lower than 2022 peak levels which were above 9% and because of this many investors anticipate the Fed could begin to cut interest rates as soon as the first half of 2024.<\/p>\n\n\n\n

    See Related:<\/em><\/strong> Federal Reserve Officials Banned From Trading Crypto(Opens in a new browser tab)<\/a><\/p>\n\n\n\n

    GDP And Corporate Profits<\/h2>\n\n\n\n

    Corporate profits are also the big driver of what the market is likely to do in the near term and because of this investors are closely monitoring third-quarter U.S. earnings. Third-quarter earnings season is essentially at the finish line and of the 480 companies that have reported so far, 80% have beaten analysts' expectations. The inflation and interest rates will continue to significantly impact stock prices in December.<\/p>\n\n\n\n

    U.S. economic growth(inflation and interest rates) has been resilient year-to-date and Bill Adams, a chief economist for Comerica Bank, recently said the U.S. economy has been much stronger in 2023 than economists expected. Bill Adams suggests that the annual real GDP is anticipated to reach approximately 2.4% this year, a substantial increase from the Federal Reserve's December 2022 dot plot prediction of 0.5%. However, he also warned that the outcome in the upcoming months will decide if the U.S. economy can smoothly achieve a so-called \"soft landing\" without veering into a recession.<\/p>\n\n\n\n

    Deceleration In United States Economic Growth<\/h2>\n\n\n\n

    Jeffrey Roach, the chief economist at LPL Financial,<\/a> foresees that most of the negative consequences stemming from higher interest rates have not materialized yet and due to this, he anticipates a deceleration in U.S. economic growth. Market expectations that the Federal Reserve will keep interest rates unchanged at its December meeting currently stand above 90% and any information that the Federal Reserve could start to cut rates in the first quarter of 2024 should be positive for stocks in the short-term period.<\/p>\n\n\n\n

    On the other side, JPMorgan strategists believe that the risk-reward ratio for numerous stocks is currently unappealing and according to them, restrictive monetary policy is likely to remain in place for some time which could potentially cause a recession. Considering this scenario, investors worried about a possible U.S. recession can opt for a more defensive strategy in the market. They can enhance their financial flexibility by reducing their stock or cryptocurrency exposure and augmenting their cash reserves.<\/p>\n","post_title":"Investor Optimism Rises In November 2023. Does Strong Buying Activity Indicate The Possibility Of Further Gains In The Coming Weeks?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"investor-optimism-rises-in-november-2023-does-strong-buying-activity-indicate-the-possibility-of-further-gains-in-the-coming-weeks","to_ping":"","pinged":"","post_modified":"2023-11-23 01:39:12","post_modified_gmt":"2023-11-22 14:39:12","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14444","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14319,"post_author":"14","post_date":"2023-11-15 18:02:37","post_date_gmt":"2023-11-15 07:02:37","post_content":"\n

    Wall Street's main indexes<\/a> surged significantly on Tuesday following the release of lower-than-anticipated inflation figures, which increased the belief that the Federal Reserve had concluded its interest rate hikes. The annual rate of inflation measured by the Consumer Price Index (CPI), which monitors the expenses of a variety of goods and services -\u00a0 slowed to 3.2% last month, dropping from September's 3.7% and marking the most subdued rate since July.<\/p>\n\n\n\n

    Additionally promising, Wall Street's prices held steady over the month following a 0.4% increase in September. Core prices, which exclude the unpredictable food and energy sectors, rose by 4%, slightly slower compared to the rate observed in September. The report signifies a significant achievement for the Fed in its battle against inflation but in the upcoming weeks, policymakers will monitor the service category closely, seeking further deceleration as their interest rate increases impact demand.<\/p>\n\n\n\n

    \"Inflation
    Inflation edges down in October<\/em><\/figcaption><\/figure>\n\n\n\n

    Earlier this month, the Federal Reserve maintained its benchmark interest rate at the highest level in 22 years. Following this Tuesday's report, prominent analysts and economists indicated only a 1 percent probability that the central bank would increase rates during its upcoming policy meeting in December. Gregory Daco, chief economist at EY Parthenon, said<\/a>:<\/p>\n\n\n\n

    \u201cAcross the board, it\u2019s a good report and I think this will comfort the excessively data-dependent Fed policymakers that policy is sufficiently restrictive to bring inflation down to 2 percent.\u201d<\/em><\/p>\n\n\n\n

    See Related:<\/strong><\/em> Gala is announcing a partnership with Stick Figure Productions to distribute Four Down on the Blockchain<\/a><\/p>\n\n\n\n

    However, analysts from JPMorgan warned that the risk-reward ratio for many stocks remains unattractive currently and restrictive monetary policy is likely to remain in place for some time. JPMorgan analysts anticipate that most adverse effects resulting from increased interest rates haven't manifested thus far. They highlight an upward trend in consumer loan delinquencies and corporate bankruptcies, suggesting that these patterns are probable to persist unless interest rates are lowered.<\/p>\n\n\n\n

    This is likely to drive demand destruction, and weakening pricing power and margins for corporates in the coming quarters, and because of this JPMorgan analysts are adopting a defensive stance, maintaining underweight allocations in equities and cryptocurrencies. Nevertheless, they propose an increase in the investment allocation towards gold due to its potential to rise in value during economic downturns, offering a hedge against potential losses in alternative investments.<\/p>\n\n\n\n

    Gold is commonly regarded as a safe-haven asset, particularly amid economic uncertainty or geopolitical instability. Investors typically turn to gold as a means of preserving value when other assets are considered risky.<\/p>\n","post_title":"Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-surged-significantly-after-the-release-of-lower-than-anticipated-inflation-figures","to_ping":"","pinged":"","post_modified":"2023-11-16 20:00:45","post_modified_gmt":"2023-11-16 09:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14319","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11491,"post_author":"14","post_date":"2023-05-04 21:53:10","post_date_gmt":"2023-05-04 11:53:10","post_content":"\n

    As widely expected, the U.S. Central Bank raised interest rates by 25bps this Wednesday. It signalled it could pause further increases, giving officials time to assess the fallout from recent bank failures, wait on the resolution of a political stand-off over the U.S. debt ceiling and monitor the course of inflation. The federal funds rate is now in a range of 5% to 5.25%, which is the highest level since 2006. <\/p>\n\n\n\n

    The U.S. Central Bank warned that tighter credit conditions for households and businesses are expected to affect economic activity. In the picture below, we can see that even without this rise in interest rates, the federal funds rate was at the highest level since the 2007 financial crisis.<\/p>\n\n\n\n

    \"\"<\/figure>\n\n\n\n

    Many analysts and economists are worried that the high-interest rates will push the economy into a recession. It is important to mention that government data showed last week that economic growth in the first quarter slowed sequentially, with real gross domestic product increasing at a 1.1% annual pace, compared with a 2.6% gain in the prior three-month period. With higher interest rates, companies need to spend more money to borrow money to invest in growth. Historically, higher rates lead companies to reduce spending (especially on hiring). <\/p>\n\n\n\n

    Many companies could face liquidity problems, and economist David Rosenberg has warned that the U.S. economy is facing two big risks. David Rosenberg said<\/a>:<\/p>\n\n\n\n

    \"We have a possible debt default on our hands and a spreading bank crisis. The banking turmoil that started with Silicon Valley Bank's collapse in March remains unresolved, and First Republic's failure and takeover by CEO Jamie Dimon's JPMorgan has reignited worries about broader financial instability. Moreover, political disagreement about raising the U.S. government's borrowing limit is fanning fears of a debt-ceiling crisis.\"<\/em><\/p>\n\n\n\n

    See Related: <\/em><\/strong>United States May Fund Its Deficit By Printing More Money; Could Default By June 1st<\/a><\/p>\n\n\n\n

    Higher rates encourage saving over spending and make the debt more costly. Companies with bigger credit or other loans with variable interest rates could be in a difficult situation. We expect to see a meaningful slowdown in economic growth and a weakening of the labour market in the United States in the upcoming months. <\/p>\n\n\n\n

    At the same time, Brian Jacobsen, chief economist at Annex Wealth Management, said<\/a> that the manufacturing and housing sectors are in a recession already. The famous investor Jeremy Grantham warned that the U.S. stock market could experience significant losses soon, and a recommendation is that investors should continue to take a defensive investment approach.<\/p>\n\n\n\n

    Stocks aren't the only assets that could significantly lose their value. Investors should remember that cryptocurrencies could also be in the situation to make an even bigger fall. The crypto market displayed a high correlation with U.S. equities. If a downtrend is witnessed in the stock market, the same is usually replicated in the crypto-sphere.<\/p>\n\n\n\n

    See Related:<\/em><\/strong> Bitcoin Is Close To Testing $30,000 Again; Ethereum Revives Bullish Momentum Above $1,800<\/a><\/p>\n","post_title":"The Fed Raises Interest Rates By 25 BPS This Wednesday; Effects On Crypto And Financial Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-fed-raises-interest-rates-by-25-bps-this-wednesday-effects-on-crypto-and-financial-markets","to_ping":"","pinged":"","post_modified":"2023-05-04 22:08:47","post_modified_gmt":"2023-05-04 12:08:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11491","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11422,"post_author":"12","post_date":"2023-05-02 17:50:37","post_date_gmt":"2023-05-02 07:50:37","post_content":"\n

    Ray Dalio, the billionaire founder of one of the world\u2019s largest hedge funds, Bridgewater Associates, was recently\u00a0interviewed<\/a>. He explains that the United States' $31.45T debt may have to be resolved by printing more money, also referred to as currency debasement.<\/p>\n\n\n\n

    \u201cSo I think you\u2019re in the part of the cycle where you\u2019ve had the tightening and then the dominoes are beginning to fall. And I think that that\u2019s going to produce more problems.<\/em><\/p>\n\n\n\n

    I think when it comes down to it, there\u2019s just too much debt, and we\u2019re adding to it too quickly\u2026 Either that debt will be paid off with hard money, in which case there\u2019s not much printing and so on, or it will be paid off with printing a lot of money to make it easier to pay off. <\/em><\/p>\n\n\n\n

    I think in the end, it\u2019s always the case that they print a lot of money in and make it easier to pay off, but you have the reduced value of money.\u201d<\/em><\/p>\n\n\n\n

    See Related:<\/em><\/strong> Ray Dalio; The Federal Reserve Is Setting Off A \u201cTerrible Calamity\u201d<\/a><\/p>\n\n\n\n

    Could The United States Default By June?<\/h2>\n\n\n\n

    United States Treasury Secretary, Janet Yellen, wrote to House Speaker Kevin McCarthy;<\/p>\n\n\n\n

    \"After reviewing recent federal tax receipts, our best estimate is that we will be unable to continue to satisfy all of the government\u2019s obligations by early June, and potentially as early as June 1, if Congress does not raise or suspend the debt limit before that time.<\/em><\/p>\n\n\n\n

    If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests.\"<\/em><\/p>\n\n\n\n

    See Related:<\/em><\/strong> United States May Enter Mild Recession As Yet Another Hike In Fed Rates Expected<\/a><\/p>\n\n\n\n

    Yellen warned that waiting until the last minute to take action on this issue would cause harm to \"business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States.\"<\/em> Yellen believes that defaulting on their debt would be a financial catastrophe, raising the cost of borrowing without an end, making future investment \"substantially more costly.\u201d<\/em><\/p>\n","post_title":"United States May Fund Its Deficit By Printing More Money; Could Default By June 1st","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-may-fund-its-deficit-by-printing-more-money-could-default-by-june-1st","to_ping":"","pinged":"","post_modified":"2023-05-04 13:04:05","post_modified_gmt":"2023-05-04 03:04:05","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11422","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

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    \n
  • Recently, the Fed dismissed speculations of an imminent rate cut.<\/li>\n\n\n\n
  • The sentiment in the banking sector has shifted despite recent gains.<\/li>\n<\/ul>\n\n\n\n

    The US banking sector faced a downward trend on Friday after one of the policymakers from the Federal Reserve curbed market hopes of imminent interest-rate cuts.<\/p>\n\n\n\n

    In an interview with CNBC<\/em>, John Williams deflated expectations for rate cuts early next year. Reuters reported that this led to a dip in bank stocks<\/a>, albeit close to their pre-crisis levels of March.<\/p>\n\n\n\n

    Stock Rate Cuts In 2024<\/h2>\n\n\n\n

    Amidst recent anticipations of a rate cut in early 2024 that would support loan growth and reduce the cost of deposits, Williams' remarks triggered a shift in market sentiment. The KBW Regional Banking Index, which surged the previous day, experienced a decline of 1.5% in afternoon trading, while the S&P 500 Banks Index slipped by 0.5%.<\/p>\n\n\n\n

    Stocks like Regions Financial, KeyCorp, Western Alliance, and Truist Financial witnessed declines ranging from 1% to 2.9%. Conversely, JPMorgan Chase, Wells Fargo, and Morgan Stanley showed marginal increases, while Bank of America, Citigroup, and Goldman Sachs registered slight drops.<\/p>\n\n\n\n

    See Related:<\/em><\/strong> Recession Fears And A Slow Labour Market Exert Pressure On Stocks<\/a><\/p>\n\n\n\n

    The Fed's Cautionary Rate-Cut Signals<\/h2>\n\n\n\n

    Recently, the Fed maintained its key interest rate for the third consecutive time, signaling potential multiple rate cuts in 2024<\/a>, CNBC<\/em> reported. Despite inflation easing and steady economic conditions, this decision anticipates a series of cuts in the coming year.<\/p>\n\n\n\n

    The Federal Open Market Committee unanimously voted to retain the benchmark overnight borrowing rate between 5.25%-5.5%. This step hinted at at least three rate cuts in 2024, a less aggressive stance than market expectations but more pronounced than previously indicated.<\/p>\n\n\n\n

    While the Fed highlighted its readiness to address inflation concerns<\/a>, it emphasized a patient approach to observe the impact of prior policy tightening on the economy. The possibility of future rate hikes remains contingent on inflation patterns.<\/p>\n\n\n\n

    High inflation rates have impacted President Biden's approval ratings. Speculations about the Fed's cautious policy actions during a presidential election year persist, especially considering the economic landscape and real rates.<\/p>\n\n\n\n

    The Fed's decision to maintain rates while hinting at potential cuts in 2024 reflects a balancing act to nurture economic stability amidst inflation concerns.<\/p>\n","post_title":"US Bank Stocks Slide On Fed's Rate-Cut Dismissal","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"us-bank-stocks-slide-on-feds-rate-cut-dismissal","to_ping":"","pinged":"","post_modified":"2023-12-16 20:44:05","post_modified_gmt":"2023-12-16 09:44:05","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14666","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14611,"post_author":"14","post_date":"2023-12-13 21:49:46","post_date_gmt":"2023-12-13 10:49:46","post_content":"\n

    U.S. stocks had the highest monthly rally of 2023 in November; the benchmark S&P 500 rose 9%, the tech-heavy Nasdaq Composite surged 11% and the Dow Jones Industrial Average climbed 2,900 points higher. The key news for investors in the past month was the November 14 release of the Consumer Price Index, revealing a 3.2% inflation increase in October, lower than anticipated.<\/p>\n\n\n\n

    Encouraging news from this Tuesday revealed that the November Consumer Price Index (CPI) increased by 3.1% every year, aligning with the predictions of economists surveyed by Reuters<\/a>. Similarly, core prices, which exclude fluctuating items like food and energy expenses, also met expectations, rising by 4% annually.<\/p>\n\n\n\n

    This triggered a surge in speculation that the Fed has finished its tightening cycle. Most traders, as indicated by the CME Group's Fedwatch tool, think that the central bank has raised interest rates for the last time this year, shifting their focus to potential rate cuts around mid-2024.<\/p>\n\n\n\n

    Policymakers And U.S. Stocks<\/h2>\n\n\n\n

    Should that prediction materialize, there's a strong likelihood that policymakers will attain their desired \"soft landing\" scenario, despite raising borrowing rates from nearly zero to approximately 5.5% within a mere 15-month timeframe. Growth has remained strong, and the unemployment rate is still hovering below 4% even as inflation has rapidly cooled.<\/p>\n\n\n\n

    The positive developments contributed significantly to driving the S&P 500 to its second most successful November since 1980 and it's noteworthy to highlight that the only instance when the index performed better in November was during its recovery post the pandemic in 2020.<\/p>\n\n\n\n

    See Related:<\/em><\/strong> SlingTV Partners With BitPay To Accept Crypto For Subscriptions<\/a><\/p>\n\n\n\n

    \"S&P
    S&P 500 rose 9% in November 2023<\/em><\/figcaption><\/figure>\n\n\n\n

    Encouragingly, Bank of America's<\/a> Savita Subramanian anticipates ongoing positive momentum for the S&P 500, projecting it to reach a record-breaking 5,000 points by year-end. Additionally, both BMO's Brian Belski and Deutsche Bank's Binky Chadha have established price targets of 5,100 points each.<\/p>\n\n\n\n

    Analysts Index Review<\/h2>\n\n\n\n

    However, certain analysts are expressing skepticism. JPMorgan Asset Management advises investors to remain cautious due to the possibility of a recession, while Soci\u00e9t\u00e9 G\u00e9n\u00e9rale cautions them to brace for a volatile 2024, predicting that the index will fluctuate between nearing its record high, experiencing a decline, and subsequently rebounding.<\/p>\n\n\n\n

    The focus of investors has shifted now to the conclusion of the Fed's two-day meeting on Wednesday, eagerly awaiting their decision on interest rates, along with the release of the November producer price index (PPI) data. Jason Pride, chief of investment strategy and research at Glenmede, said<\/a>:<\/p>\n\n\n\n

    \"They've (Fed) already taken rates up a lot... they will keep rates up in that range for longer than what the market is currently expecting. Markets do not expect more hikes and are instead focused on rate cuts.\"<\/em><\/p>\n","post_title":"U.S. Stocks Had The Highest Monthly Rally Of 2023 In November. What To Expect From The Rest Of December?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"u-s-stocks-had-the-highest-monthly-rally-of-2023-in-november-what-to-expect-from-the-rest-of-december","to_ping":"","pinged":"","post_modified":"2023-12-13 21:49:51","post_modified_gmt":"2023-12-13 10:49:51","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14611","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14444,"post_author":"14","post_date":"2023-11-23 01:38:54","post_date_gmt":"2023-11-22 14:38:54","post_content":"\n

    Investors remain optimistic that the market can resume its bullish momentum in December given that the fourth quarter has historically been one of the best three-month stretches of the year for the S&P 500. Investors anticipated the Federal Reserve<\/a> may have already reached its terminal interest rate; however, the primary driving forces affecting stock prices over recent weeks, inflation and interest rates, will continue to hold significant importance in December.<\/p>\n\n\n\n

    \"The
    The S&P 500 index's strong advance off its October 27 low continues to make progress<\/em><\/figcaption><\/figure>\n\n\n\n

    Positive information is that the annual rate of inflation measured by the Consumer Price Index (CPI), which monitors the expenses of a variety of goods and services -  slowed to 3.2% in October, dropping from September's 3.7% and marking the most subdued rate since July 2023. It is also important to say that inflation is significantly lower than 2022 peak levels which were above 9% and because of this many investors anticipate the Fed could begin to cut interest rates as soon as the first half of 2024.<\/p>\n\n\n\n

    See Related:<\/em><\/strong> Federal Reserve Officials Banned From Trading Crypto(Opens in a new browser tab)<\/a><\/p>\n\n\n\n

    GDP And Corporate Profits<\/h2>\n\n\n\n

    Corporate profits are also the big driver of what the market is likely to do in the near term and because of this investors are closely monitoring third-quarter U.S. earnings. Third-quarter earnings season is essentially at the finish line and of the 480 companies that have reported so far, 80% have beaten analysts' expectations. The inflation and interest rates will continue to significantly impact stock prices in December.<\/p>\n\n\n\n

    U.S. economic growth(inflation and interest rates) has been resilient year-to-date and Bill Adams, a chief economist for Comerica Bank, recently said the U.S. economy has been much stronger in 2023 than economists expected. Bill Adams suggests that the annual real GDP is anticipated to reach approximately 2.4% this year, a substantial increase from the Federal Reserve's December 2022 dot plot prediction of 0.5%. However, he also warned that the outcome in the upcoming months will decide if the U.S. economy can smoothly achieve a so-called \"soft landing\" without veering into a recession.<\/p>\n\n\n\n

    Deceleration In United States Economic Growth<\/h2>\n\n\n\n

    Jeffrey Roach, the chief economist at LPL Financial,<\/a> foresees that most of the negative consequences stemming from higher interest rates have not materialized yet and due to this, he anticipates a deceleration in U.S. economic growth. Market expectations that the Federal Reserve will keep interest rates unchanged at its December meeting currently stand above 90% and any information that the Federal Reserve could start to cut rates in the first quarter of 2024 should be positive for stocks in the short-term period.<\/p>\n\n\n\n

    On the other side, JPMorgan strategists believe that the risk-reward ratio for numerous stocks is currently unappealing and according to them, restrictive monetary policy is likely to remain in place for some time which could potentially cause a recession. Considering this scenario, investors worried about a possible U.S. recession can opt for a more defensive strategy in the market. They can enhance their financial flexibility by reducing their stock or cryptocurrency exposure and augmenting their cash reserves.<\/p>\n","post_title":"Investor Optimism Rises In November 2023. Does Strong Buying Activity Indicate The Possibility Of Further Gains In The Coming Weeks?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"investor-optimism-rises-in-november-2023-does-strong-buying-activity-indicate-the-possibility-of-further-gains-in-the-coming-weeks","to_ping":"","pinged":"","post_modified":"2023-11-23 01:39:12","post_modified_gmt":"2023-11-22 14:39:12","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14444","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14319,"post_author":"14","post_date":"2023-11-15 18:02:37","post_date_gmt":"2023-11-15 07:02:37","post_content":"\n

    Wall Street's main indexes<\/a> surged significantly on Tuesday following the release of lower-than-anticipated inflation figures, which increased the belief that the Federal Reserve had concluded its interest rate hikes. The annual rate of inflation measured by the Consumer Price Index (CPI), which monitors the expenses of a variety of goods and services -\u00a0 slowed to 3.2% last month, dropping from September's 3.7% and marking the most subdued rate since July.<\/p>\n\n\n\n

    Additionally promising, Wall Street's prices held steady over the month following a 0.4% increase in September. Core prices, which exclude the unpredictable food and energy sectors, rose by 4%, slightly slower compared to the rate observed in September. The report signifies a significant achievement for the Fed in its battle against inflation but in the upcoming weeks, policymakers will monitor the service category closely, seeking further deceleration as their interest rate increases impact demand.<\/p>\n\n\n\n

    \"Inflation
    Inflation edges down in October<\/em><\/figcaption><\/figure>\n\n\n\n

    Earlier this month, the Federal Reserve maintained its benchmark interest rate at the highest level in 22 years. Following this Tuesday's report, prominent analysts and economists indicated only a 1 percent probability that the central bank would increase rates during its upcoming policy meeting in December. Gregory Daco, chief economist at EY Parthenon, said<\/a>:<\/p>\n\n\n\n

    \u201cAcross the board, it\u2019s a good report and I think this will comfort the excessively data-dependent Fed policymakers that policy is sufficiently restrictive to bring inflation down to 2 percent.\u201d<\/em><\/p>\n\n\n\n

    See Related:<\/strong><\/em> Gala is announcing a partnership with Stick Figure Productions to distribute Four Down on the Blockchain<\/a><\/p>\n\n\n\n

    However, analysts from JPMorgan warned that the risk-reward ratio for many stocks remains unattractive currently and restrictive monetary policy is likely to remain in place for some time. JPMorgan analysts anticipate that most adverse effects resulting from increased interest rates haven't manifested thus far. They highlight an upward trend in consumer loan delinquencies and corporate bankruptcies, suggesting that these patterns are probable to persist unless interest rates are lowered.<\/p>\n\n\n\n

    This is likely to drive demand destruction, and weakening pricing power and margins for corporates in the coming quarters, and because of this JPMorgan analysts are adopting a defensive stance, maintaining underweight allocations in equities and cryptocurrencies. Nevertheless, they propose an increase in the investment allocation towards gold due to its potential to rise in value during economic downturns, offering a hedge against potential losses in alternative investments.<\/p>\n\n\n\n

    Gold is commonly regarded as a safe-haven asset, particularly amid economic uncertainty or geopolitical instability. Investors typically turn to gold as a means of preserving value when other assets are considered risky.<\/p>\n","post_title":"Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-surged-significantly-after-the-release-of-lower-than-anticipated-inflation-figures","to_ping":"","pinged":"","post_modified":"2023-11-16 20:00:45","post_modified_gmt":"2023-11-16 09:00:45","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14319","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11491,"post_author":"14","post_date":"2023-05-04 21:53:10","post_date_gmt":"2023-05-04 11:53:10","post_content":"\n

    As widely expected, the U.S. Central Bank raised interest rates by 25bps this Wednesday. It signalled it could pause further increases, giving officials time to assess the fallout from recent bank failures, wait on the resolution of a political stand-off over the U.S. debt ceiling and monitor the course of inflation. The federal funds rate is now in a range of 5% to 5.25%, which is the highest level since 2006. <\/p>\n\n\n\n

    The U.S. Central Bank warned that tighter credit conditions for households and businesses are expected to affect economic activity. In the picture below, we can see that even without this rise in interest rates, the federal funds rate was at the highest level since the 2007 financial crisis.<\/p>\n\n\n\n

    \"\"<\/figure>\n\n\n\n

    Many analysts and economists are worried that the high-interest rates will push the economy into a recession. It is important to mention that government data showed last week that economic growth in the first quarter slowed sequentially, with real gross domestic product increasing at a 1.1% annual pace, compared with a 2.6% gain in the prior three-month period. With higher interest rates, companies need to spend more money to borrow money to invest in growth. Historically, higher rates lead companies to reduce spending (especially on hiring). <\/p>\n\n\n\n

    Many companies could face liquidity problems, and economist David Rosenberg has warned that the U.S. economy is facing two big risks. David Rosenberg said<\/a>:<\/p>\n\n\n\n

    \"We have a possible debt default on our hands and a spreading bank crisis. The banking turmoil that started with Silicon Valley Bank's collapse in March remains unresolved, and First Republic's failure and takeover by CEO Jamie Dimon's JPMorgan has reignited worries about broader financial instability. Moreover, political disagreement about raising the U.S. government's borrowing limit is fanning fears of a debt-ceiling crisis.\"<\/em><\/p>\n\n\n\n

    See Related: <\/em><\/strong>United States May Fund Its Deficit By Printing More Money; Could Default By June 1st<\/a><\/p>\n\n\n\n

    Higher rates encourage saving over spending and make the debt more costly. Companies with bigger credit or other loans with variable interest rates could be in a difficult situation. We expect to see a meaningful slowdown in economic growth and a weakening of the labour market in the United States in the upcoming months. <\/p>\n\n\n\n

    At the same time, Brian Jacobsen, chief economist at Annex Wealth Management, said<\/a> that the manufacturing and housing sectors are in a recession already. The famous investor Jeremy Grantham warned that the U.S. stock market could experience significant losses soon, and a recommendation is that investors should continue to take a defensive investment approach.<\/p>\n\n\n\n

    Stocks aren't the only assets that could significantly lose their value. Investors should remember that cryptocurrencies could also be in the situation to make an even bigger fall. The crypto market displayed a high correlation with U.S. equities. If a downtrend is witnessed in the stock market, the same is usually replicated in the crypto-sphere.<\/p>\n\n\n\n

    See Related:<\/em><\/strong> Bitcoin Is Close To Testing $30,000 Again; Ethereum Revives Bullish Momentum Above $1,800<\/a><\/p>\n","post_title":"The Fed Raises Interest Rates By 25 BPS This Wednesday; Effects On Crypto And Financial Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"the-fed-raises-interest-rates-by-25-bps-this-wednesday-effects-on-crypto-and-financial-markets","to_ping":"","pinged":"","post_modified":"2023-05-04 22:08:47","post_modified_gmt":"2023-05-04 12:08:47","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11491","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11422,"post_author":"12","post_date":"2023-05-02 17:50:37","post_date_gmt":"2023-05-02 07:50:37","post_content":"\n

    Ray Dalio, the billionaire founder of one of the world\u2019s largest hedge funds, Bridgewater Associates, was recently\u00a0interviewed<\/a>. He explains that the United States' $31.45T debt may have to be resolved by printing more money, also referred to as currency debasement.<\/p>\n\n\n\n

    \u201cSo I think you\u2019re in the part of the cycle where you\u2019ve had the tightening and then the dominoes are beginning to fall. And I think that that\u2019s going to produce more problems.<\/em><\/p>\n\n\n\n

    I think when it comes down to it, there\u2019s just too much debt, and we\u2019re adding to it too quickly\u2026 Either that debt will be paid off with hard money, in which case there\u2019s not much printing and so on, or it will be paid off with printing a lot of money to make it easier to pay off. <\/em><\/p>\n\n\n\n

    I think in the end, it\u2019s always the case that they print a lot of money in and make it easier to pay off, but you have the reduced value of money.\u201d<\/em><\/p>\n\n\n\n

    See Related:<\/em><\/strong> Ray Dalio; The Federal Reserve Is Setting Off A \u201cTerrible Calamity\u201d<\/a><\/p>\n\n\n\n

    Could The United States Default By June?<\/h2>\n\n\n\n

    United States Treasury Secretary, Janet Yellen, wrote to House Speaker Kevin McCarthy;<\/p>\n\n\n\n

    \"After reviewing recent federal tax receipts, our best estimate is that we will be unable to continue to satisfy all of the government\u2019s obligations by early June, and potentially as early as June 1, if Congress does not raise or suspend the debt limit before that time.<\/em><\/p>\n\n\n\n

    If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests.\"<\/em><\/p>\n\n\n\n

    See Related:<\/em><\/strong> United States May Enter Mild Recession As Yet Another Hike In Fed Rates Expected<\/a><\/p>\n\n\n\n

    Yellen warned that waiting until the last minute to take action on this issue would cause harm to \"business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States.\"<\/em> Yellen believes that defaulting on their debt would be a financial catastrophe, raising the cost of borrowing without an end, making future investment \"substantially more costly.\u201d<\/em><\/p>\n","post_title":"United States May Fund Its Deficit By Printing More Money; Could Default By June 1st","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-may-fund-its-deficit-by-printing-more-money-could-default-by-june-1st","to_ping":"","pinged":"","post_modified":"2023-05-04 13:04:05","post_modified_gmt":"2023-05-04 03:04:05","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11422","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

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