No Result
View All Result
No Result
View All Result
No Result
View All Result
\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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

BlackRock ETF Details<\/h2>\n\n\n\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

See Related:<\/strong><\/em> Fidelity Joins BlackRock\u2019s Push For Ethereum ETF<\/a><\/p>\n\n\n\n

BlackRock ETF Details<\/h2>\n\n\n\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

The SEC has yet to decide on BlackRock's iShares Bitcoin Trust (IBTC) application, with the deadline set for January 15. Analysts anticipate a decision will be issued for several spot Bitcoin ETF applications earlier in January.<\/p>\n\n\n\n

See Related:<\/strong><\/em> Fidelity Joins BlackRock\u2019s Push For Ethereum ETF<\/a><\/p>\n\n\n\n

BlackRock ETF Details<\/h2>\n\n\n\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

The proposed approach introduces an innovative method for the redemption of ETF shares. A Bitcoin ETF would enable fund investors to gain exposure to Bitcoin without directly purchasing or storing the cryptocurrency. While the SEC has hesitated to approve such ETFs due to concerns about Bitcoin market manipulation, this new strategy addresses those worries.<\/p>\n\n\n\n

The SEC has yet to decide on BlackRock's iShares Bitcoin Trust (IBTC) application, with the deadline set for January 15. Analysts anticipate a decision will be issued for several spot Bitcoin ETF applications earlier in January.<\/p>\n\n\n\n

See Related:<\/strong><\/em> Fidelity Joins BlackRock\u2019s Push For Ethereum ETF<\/a><\/p>\n\n\n\n

BlackRock ETF Details<\/h2>\n\n\n\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

BlackRock aims to facilitate the participation of Wall Street banks in its potential Bitcoin ETF approval. Recent SEC memo <\/a>detailing a late November meeting involving BlackRock, Nasdaq, and the Commission. During this meeting, they discussed feedback regarding BlackRock's Bitcoin ETF application.<\/p>\n\n\n\n

The proposed approach introduces an innovative method for the redemption of ETF shares. A Bitcoin ETF would enable fund investors to gain exposure to Bitcoin without directly purchasing or storing the cryptocurrency. While the SEC has hesitated to approve such ETFs due to concerns about Bitcoin market manipulation, this new strategy addresses those worries.<\/p>\n\n\n\n

The SEC has yet to decide on BlackRock's iShares Bitcoin Trust (IBTC) application, with the deadline set for January 15. Analysts anticipate a decision will be issued for several spot Bitcoin ETF applications earlier in January.<\/p>\n\n\n\n

See Related:<\/strong><\/em> Fidelity Joins BlackRock\u2019s Push For Ethereum ETF<\/a><\/p>\n\n\n\n

BlackRock ETF Details<\/h2>\n\n\n\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

Following the progress of Wall Street's main indexes seen last year, investors are still optimistic about the prospect of another robust year ahead. This optimism is rooted in the anticipation that a decelerating economy will result in a gentle landing rather than a full-scale recession, especially as the Fed initiates rate cuts in the first half of 2024.<\/p>\n","post_title":"Wall Street's Main Indexes Fell At The Beginning Of 2024 year. Investors Locked In Profits After A Strong 2023 And Wait For The Federal Reserve's Meeting","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-at-the-beginning-of-2024-year-investors-locked-in-profits-after-a-strong-2023-and-wait-for-the-federal-reserves-meeting","to_ping":"","pinged":"","post_modified":"2024-01-06 18:33:13","post_modified_gmt":"2024-01-06 07:33:13","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14888","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14629,"post_author":"15","post_date":"2023-12-15 19:46:11","post_date_gmt":"2023-12-15 08:46:11","post_content":"\n

BlackRock aims to facilitate the participation of Wall Street banks in its potential Bitcoin ETF approval. Recent SEC memo <\/a>detailing a late November meeting involving BlackRock, Nasdaq, and the Commission. During this meeting, they discussed feedback regarding BlackRock's Bitcoin ETF application.<\/p>\n\n\n\n

The proposed approach introduces an innovative method for the redemption of ETF shares. A Bitcoin ETF would enable fund investors to gain exposure to Bitcoin without directly purchasing or storing the cryptocurrency. While the SEC has hesitated to approve such ETFs due to concerns about Bitcoin market manipulation, this new strategy addresses those worries.<\/p>\n\n\n\n

The SEC has yet to decide on BlackRock's iShares Bitcoin Trust (IBTC) application, with the deadline set for January 15. Analysts anticipate a decision will be issued for several spot Bitcoin ETF applications earlier in January.<\/p>\n\n\n\n

See Related:<\/strong><\/em> Fidelity Joins BlackRock\u2019s Push For Ethereum ETF<\/a><\/p>\n\n\n\n

BlackRock ETF Details<\/h2>\n\n\n\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

 \"The job market is cooling and we should see confirmation of that in this Friday\u2019s jobs report\"<\/em><\/p>\n\n\n\n

Following the progress of Wall Street's main indexes seen last year, investors are still optimistic about the prospect of another robust year ahead. This optimism is rooted in the anticipation that a decelerating economy will result in a gentle landing rather than a full-scale recession, especially as the Fed initiates rate cuts in the first half of 2024.<\/p>\n","post_title":"Wall Street's Main Indexes Fell At The Beginning Of 2024 year. Investors Locked In Profits After A Strong 2023 And Wait For The Federal Reserve's Meeting","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-at-the-beginning-of-2024-year-investors-locked-in-profits-after-a-strong-2023-and-wait-for-the-federal-reserves-meeting","to_ping":"","pinged":"","post_modified":"2024-01-06 18:33:13","post_modified_gmt":"2024-01-06 07:33:13","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14888","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14629,"post_author":"15","post_date":"2023-12-15 19:46:11","post_date_gmt":"2023-12-15 08:46:11","post_content":"\n

BlackRock aims to facilitate the participation of Wall Street banks in its potential Bitcoin ETF approval. Recent SEC memo <\/a>detailing a late November meeting involving BlackRock, Nasdaq, and the Commission. During this meeting, they discussed feedback regarding BlackRock's Bitcoin ETF application.<\/p>\n\n\n\n

The proposed approach introduces an innovative method for the redemption of ETF shares. A Bitcoin ETF would enable fund investors to gain exposure to Bitcoin without directly purchasing or storing the cryptocurrency. While the SEC has hesitated to approve such ETFs due to concerns about Bitcoin market manipulation, this new strategy addresses those worries.<\/p>\n\n\n\n

The SEC has yet to decide on BlackRock's iShares Bitcoin Trust (IBTC) application, with the deadline set for January 15. Analysts anticipate a decision will be issued for several spot Bitcoin ETF applications earlier in January.<\/p>\n\n\n\n

See Related:<\/strong><\/em> Fidelity Joins BlackRock\u2019s Push For Ethereum ETF<\/a><\/p>\n\n\n\n

BlackRock ETF Details<\/h2>\n\n\n\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

This week will witness a series of labor market data releases, culminating in the government's December employment report on Friday. These reports could significantly influence the forecast for the Fed's interest rate trajectory this year, prompting investors to scrutinize the data. Jeffrey Roach, chief economist at LPL Financial, added<\/a>:<\/p>\n\n\n\n

 \"The job market is cooling and we should see confirmation of that in this Friday\u2019s jobs report\"<\/em><\/p>\n\n\n\n

Following the progress of Wall Street's main indexes seen last year, investors are still optimistic about the prospect of another robust year ahead. This optimism is rooted in the anticipation that a decelerating economy will result in a gentle landing rather than a full-scale recession, especially as the Fed initiates rate cuts in the first half of 2024.<\/p>\n","post_title":"Wall Street's Main Indexes Fell At The Beginning Of 2024 year. Investors Locked In Profits After A Strong 2023 And Wait For The Federal Reserve's Meeting","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-at-the-beginning-of-2024-year-investors-locked-in-profits-after-a-strong-2023-and-wait-for-the-federal-reserves-meeting","to_ping":"","pinged":"","post_modified":"2024-01-06 18:33:13","post_modified_gmt":"2024-01-06 07:33:13","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14888","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14629,"post_author":"15","post_date":"2023-12-15 19:46:11","post_date_gmt":"2023-12-15 08:46:11","post_content":"\n

BlackRock aims to facilitate the participation of Wall Street banks in its potential Bitcoin ETF approval. Recent SEC memo <\/a>detailing a late November meeting involving BlackRock, Nasdaq, and the Commission. During this meeting, they discussed feedback regarding BlackRock's Bitcoin ETF application.<\/p>\n\n\n\n

The proposed approach introduces an innovative method for the redemption of ETF shares. A Bitcoin ETF would enable fund investors to gain exposure to Bitcoin without directly purchasing or storing the cryptocurrency. While the SEC has hesitated to approve such ETFs due to concerns about Bitcoin market manipulation, this new strategy addresses those worries.<\/p>\n\n\n\n

The SEC has yet to decide on BlackRock's iShares Bitcoin Trust (IBTC) application, with the deadline set for January 15. Analysts anticipate a decision will be issued for several spot Bitcoin ETF applications earlier in January.<\/p>\n\n\n\n

See Related:<\/strong><\/em> Fidelity Joins BlackRock\u2019s Push For Ethereum ETF<\/a><\/p>\n\n\n\n

BlackRock ETF Details<\/h2>\n\n\n\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

Despite this, JPMorgan Asset Management advises investors to be cautious due to potential recession risks. At the same time, analysts at Soci\u00e9t\u00e9 G\u00e9n\u00e9rale anticipate a turbulent 2024 for U.S. stocks, projecting fluctuations that could involve nearing recent highs, encountering declines, and subsequently rebounding.<\/p>\n\n\n\n

This week will witness a series of labor market data releases, culminating in the government's December employment report on Friday. These reports could significantly influence the forecast for the Fed's interest rate trajectory this year, prompting investors to scrutinize the data. Jeffrey Roach, chief economist at LPL Financial, added<\/a>:<\/p>\n\n\n\n

 \"The job market is cooling and we should see confirmation of that in this Friday\u2019s jobs report\"<\/em><\/p>\n\n\n\n

Following the progress of Wall Street's main indexes seen last year, investors are still optimistic about the prospect of another robust year ahead. This optimism is rooted in the anticipation that a decelerating economy will result in a gentle landing rather than a full-scale recession, especially as the Fed initiates rate cuts in the first half of 2024.<\/p>\n","post_title":"Wall Street's Main Indexes Fell At The Beginning Of 2024 year. Investors Locked In Profits After A Strong 2023 And Wait For The Federal Reserve's Meeting","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-at-the-beginning-of-2024-year-investors-locked-in-profits-after-a-strong-2023-and-wait-for-the-federal-reserves-meeting","to_ping":"","pinged":"","post_modified":"2024-01-06 18:33:13","post_modified_gmt":"2024-01-06 07:33:13","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14888","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14629,"post_author":"15","post_date":"2023-12-15 19:46:11","post_date_gmt":"2023-12-15 08:46:11","post_content":"\n

BlackRock aims to facilitate the participation of Wall Street banks in its potential Bitcoin ETF approval. Recent SEC memo <\/a>detailing a late November meeting involving BlackRock, Nasdaq, and the Commission. During this meeting, they discussed feedback regarding BlackRock's Bitcoin ETF application.<\/p>\n\n\n\n

The proposed approach introduces an innovative method for the redemption of ETF shares. A Bitcoin ETF would enable fund investors to gain exposure to Bitcoin without directly purchasing or storing the cryptocurrency. While the SEC has hesitated to approve such ETFs due to concerns about Bitcoin market manipulation, this new strategy addresses those worries.<\/p>\n\n\n\n

The SEC has yet to decide on BlackRock's iShares Bitcoin Trust (IBTC) application, with the deadline set for January 15. Analysts anticipate a decision will be issued for several spot Bitcoin ETF applications earlier in January.<\/p>\n\n\n\n

See Related:<\/strong><\/em> Fidelity Joins BlackRock\u2019s Push For Ethereum ETF<\/a><\/p>\n\n\n\n

BlackRock ETF Details<\/h2>\n\n\n\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

Richmond Fed President Thomas Barkin, a voting member in the FOMC's rate-setting committee, said recently that the U.S. central bank is \"making real progress\" towards taming inflation and a soft landing seeming \"increasingly conceivable\". Encouragingly, the American Association of Individual Investors (AAII) Sentiment Survey indicated a surge in optimism among individual investors regarding the short-term outlook for the U.S. stock market, reaching its peak level in more than two and a half years.<\/p>\n\n\n\n

Despite this, JPMorgan Asset Management advises investors to be cautious due to potential recession risks. At the same time, analysts at Soci\u00e9t\u00e9 G\u00e9n\u00e9rale anticipate a turbulent 2024 for U.S. stocks, projecting fluctuations that could involve nearing recent highs, encountering declines, and subsequently rebounding.<\/p>\n\n\n\n

This week will witness a series of labor market data releases, culminating in the government's December employment report on Friday. These reports could significantly influence the forecast for the Fed's interest rate trajectory this year, prompting investors to scrutinize the data. Jeffrey Roach, chief economist at LPL Financial, added<\/a>:<\/p>\n\n\n\n

 \"The job market is cooling and we should see confirmation of that in this Friday\u2019s jobs report\"<\/em><\/p>\n\n\n\n

Following the progress of Wall Street's main indexes seen last year, investors are still optimistic about the prospect of another robust year ahead. This optimism is rooted in the anticipation that a decelerating economy will result in a gentle landing rather than a full-scale recession, especially as the Fed initiates rate cuts in the first half of 2024.<\/p>\n","post_title":"Wall Street's Main Indexes Fell At The Beginning Of 2024 year. Investors Locked In Profits After A Strong 2023 And Wait For The Federal Reserve's Meeting","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-at-the-beginning-of-2024-year-investors-locked-in-profits-after-a-strong-2023-and-wait-for-the-federal-reserves-meeting","to_ping":"","pinged":"","post_modified":"2024-01-06 18:33:13","post_modified_gmt":"2024-01-06 07:33:13","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14888","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14629,"post_author":"15","post_date":"2023-12-15 19:46:11","post_date_gmt":"2023-12-15 08:46:11","post_content":"\n

BlackRock aims to facilitate the participation of Wall Street banks in its potential Bitcoin ETF approval. Recent SEC memo <\/a>detailing a late November meeting involving BlackRock, Nasdaq, and the Commission. During this meeting, they discussed feedback regarding BlackRock's Bitcoin ETF application.<\/p>\n\n\n\n

The proposed approach introduces an innovative method for the redemption of ETF shares. A Bitcoin ETF would enable fund investors to gain exposure to Bitcoin without directly purchasing or storing the cryptocurrency. While the SEC has hesitated to approve such ETFs due to concerns about Bitcoin market manipulation, this new strategy addresses those worries.<\/p>\n\n\n\n

The SEC has yet to decide on BlackRock's iShares Bitcoin Trust (IBTC) application, with the deadline set for January 15. Analysts anticipate a decision will be issued for several spot Bitcoin ETF applications earlier in January.<\/p>\n\n\n\n

See Related:<\/strong><\/em> Fidelity Joins BlackRock\u2019s Push For Ethereum ETF<\/a><\/p>\n\n\n\n

BlackRock ETF Details<\/h2>\n\n\n\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

Central Bank And Inflation<\/h2>\n\n\n\n

Richmond Fed President Thomas Barkin, a voting member in the FOMC's rate-setting committee, said recently that the U.S. central bank is \"making real progress\" towards taming inflation and a soft landing seeming \"increasingly conceivable\". Encouragingly, the American Association of Individual Investors (AAII) Sentiment Survey indicated a surge in optimism among individual investors regarding the short-term outlook for the U.S. stock market, reaching its peak level in more than two and a half years.<\/p>\n\n\n\n

Despite this, JPMorgan Asset Management advises investors to be cautious due to potential recession risks. At the same time, analysts at Soci\u00e9t\u00e9 G\u00e9n\u00e9rale anticipate a turbulent 2024 for U.S. stocks, projecting fluctuations that could involve nearing recent highs, encountering declines, and subsequently rebounding.<\/p>\n\n\n\n

This week will witness a series of labor market data releases, culminating in the government's December employment report on Friday. These reports could significantly influence the forecast for the Fed's interest rate trajectory this year, prompting investors to scrutinize the data. Jeffrey Roach, chief economist at LPL Financial, added<\/a>:<\/p>\n\n\n\n

 \"The job market is cooling and we should see confirmation of that in this Friday\u2019s jobs report\"<\/em><\/p>\n\n\n\n

Following the progress of Wall Street's main indexes seen last year, investors are still optimistic about the prospect of another robust year ahead. This optimism is rooted in the anticipation that a decelerating economy will result in a gentle landing rather than a full-scale recession, especially as the Fed initiates rate cuts in the first half of 2024.<\/p>\n","post_title":"Wall Street's Main Indexes Fell At The Beginning Of 2024 year. Investors Locked In Profits After A Strong 2023 And Wait For The Federal Reserve's Meeting","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-at-the-beginning-of-2024-year-investors-locked-in-profits-after-a-strong-2023-and-wait-for-the-federal-reserves-meeting","to_ping":"","pinged":"","post_modified":"2024-01-06 18:33:13","post_modified_gmt":"2024-01-06 07:33:13","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14888","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14629,"post_author":"15","post_date":"2023-12-15 19:46:11","post_date_gmt":"2023-12-15 08:46:11","post_content":"\n

BlackRock aims to facilitate the participation of Wall Street banks in its potential Bitcoin ETF approval. Recent SEC memo <\/a>detailing a late November meeting involving BlackRock, Nasdaq, and the Commission. During this meeting, they discussed feedback regarding BlackRock's Bitcoin ETF application.<\/p>\n\n\n\n

The proposed approach introduces an innovative method for the redemption of ETF shares. A Bitcoin ETF would enable fund investors to gain exposure to Bitcoin without directly purchasing or storing the cryptocurrency. While the SEC has hesitated to approve such ETFs due to concerns about Bitcoin market manipulation, this new strategy addresses those worries.<\/p>\n\n\n\n

The SEC has yet to decide on BlackRock's iShares Bitcoin Trust (IBTC) application, with the deadline set for January 15. Analysts anticipate a decision will be issued for several spot Bitcoin ETF applications earlier in January.<\/p>\n\n\n\n

See Related:<\/strong><\/em> Fidelity Joins BlackRock\u2019s Push For Ethereum ETF<\/a><\/p>\n\n\n\n

BlackRock ETF Details<\/h2>\n\n\n\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

See Related:<\/em><\/strong> Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures<\/a><\/p>\n\n\n\n

Central Bank And Inflation<\/h2>\n\n\n\n

Richmond Fed President Thomas Barkin, a voting member in the FOMC's rate-setting committee, said recently that the U.S. central bank is \"making real progress\" towards taming inflation and a soft landing seeming \"increasingly conceivable\". Encouragingly, the American Association of Individual Investors (AAII) Sentiment Survey indicated a surge in optimism among individual investors regarding the short-term outlook for the U.S. stock market, reaching its peak level in more than two and a half years.<\/p>\n\n\n\n

Despite this, JPMorgan Asset Management advises investors to be cautious due to potential recession risks. At the same time, analysts at Soci\u00e9t\u00e9 G\u00e9n\u00e9rale anticipate a turbulent 2024 for U.S. stocks, projecting fluctuations that could involve nearing recent highs, encountering declines, and subsequently rebounding.<\/p>\n\n\n\n

This week will witness a series of labor market data releases, culminating in the government's December employment report on Friday. These reports could significantly influence the forecast for the Fed's interest rate trajectory this year, prompting investors to scrutinize the data. Jeffrey Roach, chief economist at LPL Financial, added<\/a>:<\/p>\n\n\n\n

 \"The job market is cooling and we should see confirmation of that in this Friday\u2019s jobs report\"<\/em><\/p>\n\n\n\n

Following the progress of Wall Street's main indexes seen last year, investors are still optimistic about the prospect of another robust year ahead. This optimism is rooted in the anticipation that a decelerating economy will result in a gentle landing rather than a full-scale recession, especially as the Fed initiates rate cuts in the first half of 2024.<\/p>\n","post_title":"Wall Street's Main Indexes Fell At The Beginning Of 2024 year. Investors Locked In Profits After A Strong 2023 And Wait For The Federal Reserve's Meeting","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-at-the-beginning-of-2024-year-investors-locked-in-profits-after-a-strong-2023-and-wait-for-the-federal-reserves-meeting","to_ping":"","pinged":"","post_modified":"2024-01-06 18:33:13","post_modified_gmt":"2024-01-06 07:33:13","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14888","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14629,"post_author":"15","post_date":"2023-12-15 19:46:11","post_date_gmt":"2023-12-15 08:46:11","post_content":"\n

BlackRock aims to facilitate the participation of Wall Street banks in its potential Bitcoin ETF approval. Recent SEC memo <\/a>detailing a late November meeting involving BlackRock, Nasdaq, and the Commission. During this meeting, they discussed feedback regarding BlackRock's Bitcoin ETF application.<\/p>\n\n\n\n

The proposed approach introduces an innovative method for the redemption of ETF shares. A Bitcoin ETF would enable fund investors to gain exposure to Bitcoin without directly purchasing or storing the cryptocurrency. While the SEC has hesitated to approve such ETFs due to concerns about Bitcoin market manipulation, this new strategy addresses those worries.<\/p>\n\n\n\n

The SEC has yet to decide on BlackRock's iShares Bitcoin Trust (IBTC) application, with the deadline set for January 15. Analysts anticipate a decision will be issued for several spot Bitcoin ETF applications earlier in January.<\/p>\n\n\n\n

See Related:<\/strong><\/em> Fidelity Joins BlackRock\u2019s Push For Ethereum ETF<\/a><\/p>\n\n\n\n

BlackRock ETF Details<\/h2>\n\n\n\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

The Fed's December meeting minutes are set to be disclosed at 2:00 p.m. ET, potentially providing information regarding the central bank's shift toward reducing interest rates. Although it's widely anticipated that the Fed will keep interest rates unchanged this month, traders have priced in a 65.7% probability of a 25 basis point rate reduction in March, according to CMEGroup's FedWatch tool.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures<\/a><\/p>\n\n\n\n

Central Bank And Inflation<\/h2>\n\n\n\n

Richmond Fed President Thomas Barkin, a voting member in the FOMC's rate-setting committee, said recently that the U.S. central bank is \"making real progress\" towards taming inflation and a soft landing seeming \"increasingly conceivable\". Encouragingly, the American Association of Individual Investors (AAII) Sentiment Survey indicated a surge in optimism among individual investors regarding the short-term outlook for the U.S. stock market, reaching its peak level in more than two and a half years.<\/p>\n\n\n\n

Despite this, JPMorgan Asset Management advises investors to be cautious due to potential recession risks. At the same time, analysts at Soci\u00e9t\u00e9 G\u00e9n\u00e9rale anticipate a turbulent 2024 for U.S. stocks, projecting fluctuations that could involve nearing recent highs, encountering declines, and subsequently rebounding.<\/p>\n\n\n\n

This week will witness a series of labor market data releases, culminating in the government's December employment report on Friday. These reports could significantly influence the forecast for the Fed's interest rate trajectory this year, prompting investors to scrutinize the data. Jeffrey Roach, chief economist at LPL Financial, added<\/a>:<\/p>\n\n\n\n

 \"The job market is cooling and we should see confirmation of that in this Friday\u2019s jobs report\"<\/em><\/p>\n\n\n\n

Following the progress of Wall Street's main indexes seen last year, investors are still optimistic about the prospect of another robust year ahead. This optimism is rooted in the anticipation that a decelerating economy will result in a gentle landing rather than a full-scale recession, especially as the Fed initiates rate cuts in the first half of 2024.<\/p>\n","post_title":"Wall Street's Main Indexes Fell At The Beginning Of 2024 year. Investors Locked In Profits After A Strong 2023 And Wait For The Federal Reserve's Meeting","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-at-the-beginning-of-2024-year-investors-locked-in-profits-after-a-strong-2023-and-wait-for-the-federal-reserves-meeting","to_ping":"","pinged":"","post_modified":"2024-01-06 18:33:13","post_modified_gmt":"2024-01-06 07:33:13","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14888","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14629,"post_author":"15","post_date":"2023-12-15 19:46:11","post_date_gmt":"2023-12-15 08:46:11","post_content":"\n

BlackRock aims to facilitate the participation of Wall Street banks in its potential Bitcoin ETF approval. Recent SEC memo <\/a>detailing a late November meeting involving BlackRock, Nasdaq, and the Commission. During this meeting, they discussed feedback regarding BlackRock's Bitcoin ETF application.<\/p>\n\n\n\n

The proposed approach introduces an innovative method for the redemption of ETF shares. A Bitcoin ETF would enable fund investors to gain exposure to Bitcoin without directly purchasing or storing the cryptocurrency. While the SEC has hesitated to approve such ETFs due to concerns about Bitcoin market manipulation, this new strategy addresses those worries.<\/p>\n\n\n\n

The SEC has yet to decide on BlackRock's iShares Bitcoin Trust (IBTC) application, with the deadline set for January 15. Analysts anticipate a decision will be issued for several spot Bitcoin ETF applications earlier in January.<\/p>\n\n\n\n

See Related:<\/strong><\/em> Fidelity Joins BlackRock\u2019s Push For Ethereum ETF<\/a><\/p>\n\n\n\n

BlackRock ETF Details<\/h2>\n\n\n\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n
\"\"
The Nasdaq Composite kicked off the year with a 1.5% drop pressured by a selloff in the tech sector<\/figcaption><\/figure>\n\n\n\n

The Fed's December meeting minutes are set to be disclosed at 2:00 p.m. ET, potentially providing information regarding the central bank's shift toward reducing interest rates. Although it's widely anticipated that the Fed will keep interest rates unchanged this month, traders have priced in a 65.7% probability of a 25 basis point rate reduction in March, according to CMEGroup's FedWatch tool.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures<\/a><\/p>\n\n\n\n

Central Bank And Inflation<\/h2>\n\n\n\n

Richmond Fed President Thomas Barkin, a voting member in the FOMC's rate-setting committee, said recently that the U.S. central bank is \"making real progress\" towards taming inflation and a soft landing seeming \"increasingly conceivable\". Encouragingly, the American Association of Individual Investors (AAII) Sentiment Survey indicated a surge in optimism among individual investors regarding the short-term outlook for the U.S. stock market, reaching its peak level in more than two and a half years.<\/p>\n\n\n\n

Despite this, JPMorgan Asset Management advises investors to be cautious due to potential recession risks. At the same time, analysts at Soci\u00e9t\u00e9 G\u00e9n\u00e9rale anticipate a turbulent 2024 for U.S. stocks, projecting fluctuations that could involve nearing recent highs, encountering declines, and subsequently rebounding.<\/p>\n\n\n\n

This week will witness a series of labor market data releases, culminating in the government's December employment report on Friday. These reports could significantly influence the forecast for the Fed's interest rate trajectory this year, prompting investors to scrutinize the data. Jeffrey Roach, chief economist at LPL Financial, added<\/a>:<\/p>\n\n\n\n

 \"The job market is cooling and we should see confirmation of that in this Friday\u2019s jobs report\"<\/em><\/p>\n\n\n\n

Following the progress of Wall Street's main indexes seen last year, investors are still optimistic about the prospect of another robust year ahead. This optimism is rooted in the anticipation that a decelerating economy will result in a gentle landing rather than a full-scale recession, especially as the Fed initiates rate cuts in the first half of 2024.<\/p>\n","post_title":"Wall Street's Main Indexes Fell At The Beginning Of 2024 year. Investors Locked In Profits After A Strong 2023 And Wait For The Federal Reserve's Meeting","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-at-the-beginning-of-2024-year-investors-locked-in-profits-after-a-strong-2023-and-wait-for-the-federal-reserves-meeting","to_ping":"","pinged":"","post_modified":"2024-01-06 18:33:13","post_modified_gmt":"2024-01-06 07:33:13","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14888","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14629,"post_author":"15","post_date":"2023-12-15 19:46:11","post_date_gmt":"2023-12-15 08:46:11","post_content":"\n

BlackRock aims to facilitate the participation of Wall Street banks in its potential Bitcoin ETF approval. Recent SEC memo <\/a>detailing a late November meeting involving BlackRock, Nasdaq, and the Commission. During this meeting, they discussed feedback regarding BlackRock's Bitcoin ETF application.<\/p>\n\n\n\n

The proposed approach introduces an innovative method for the redemption of ETF shares. A Bitcoin ETF would enable fund investors to gain exposure to Bitcoin without directly purchasing or storing the cryptocurrency. While the SEC has hesitated to approve such ETFs due to concerns about Bitcoin market manipulation, this new strategy addresses those worries.<\/p>\n\n\n\n

The SEC has yet to decide on BlackRock's iShares Bitcoin Trust (IBTC) application, with the deadline set for January 15. Analysts anticipate a decision will be issued for several spot Bitcoin ETF applications earlier in January.<\/p>\n\n\n\n

See Related:<\/strong><\/em> Fidelity Joins BlackRock\u2019s Push For Ethereum ETF<\/a><\/p>\n\n\n\n

BlackRock ETF Details<\/h2>\n\n\n\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

\"The decline yesterday, today, and maybe for the next couple of weeks, is a result of people locking in profits and reconsidering what the narrative is - are rates going down five or six times as it appeared to be at the end of last year?\"<\/em><\/p>\n\n\n\n

\"\"
The Nasdaq Composite kicked off the year with a 1.5% drop pressured by a selloff in the tech sector<\/figcaption><\/figure>\n\n\n\n

The Fed's December meeting minutes are set to be disclosed at 2:00 p.m. ET, potentially providing information regarding the central bank's shift toward reducing interest rates. Although it's widely anticipated that the Fed will keep interest rates unchanged this month, traders have priced in a 65.7% probability of a 25 basis point rate reduction in March, according to CMEGroup's FedWatch tool.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures<\/a><\/p>\n\n\n\n

Central Bank And Inflation<\/h2>\n\n\n\n

Richmond Fed President Thomas Barkin, a voting member in the FOMC's rate-setting committee, said recently that the U.S. central bank is \"making real progress\" towards taming inflation and a soft landing seeming \"increasingly conceivable\". Encouragingly, the American Association of Individual Investors (AAII) Sentiment Survey indicated a surge in optimism among individual investors regarding the short-term outlook for the U.S. stock market, reaching its peak level in more than two and a half years.<\/p>\n\n\n\n

Despite this, JPMorgan Asset Management advises investors to be cautious due to potential recession risks. At the same time, analysts at Soci\u00e9t\u00e9 G\u00e9n\u00e9rale anticipate a turbulent 2024 for U.S. stocks, projecting fluctuations that could involve nearing recent highs, encountering declines, and subsequently rebounding.<\/p>\n\n\n\n

This week will witness a series of labor market data releases, culminating in the government's December employment report on Friday. These reports could significantly influence the forecast for the Fed's interest rate trajectory this year, prompting investors to scrutinize the data. Jeffrey Roach, chief economist at LPL Financial, added<\/a>:<\/p>\n\n\n\n

 \"The job market is cooling and we should see confirmation of that in this Friday\u2019s jobs report\"<\/em><\/p>\n\n\n\n

Following the progress of Wall Street's main indexes seen last year, investors are still optimistic about the prospect of another robust year ahead. This optimism is rooted in the anticipation that a decelerating economy will result in a gentle landing rather than a full-scale recession, especially as the Fed initiates rate cuts in the first half of 2024.<\/p>\n","post_title":"Wall Street's Main Indexes Fell At The Beginning Of 2024 year. Investors Locked In Profits After A Strong 2023 And Wait For The Federal Reserve's Meeting","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-at-the-beginning-of-2024-year-investors-locked-in-profits-after-a-strong-2023-and-wait-for-the-federal-reserves-meeting","to_ping":"","pinged":"","post_modified":"2024-01-06 18:33:13","post_modified_gmt":"2024-01-06 07:33:13","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14888","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14629,"post_author":"15","post_date":"2023-12-15 19:46:11","post_date_gmt":"2023-12-15 08:46:11","post_content":"\n

BlackRock aims to facilitate the participation of Wall Street banks in its potential Bitcoin ETF approval. Recent SEC memo <\/a>detailing a late November meeting involving BlackRock, Nasdaq, and the Commission. During this meeting, they discussed feedback regarding BlackRock's Bitcoin ETF application.<\/p>\n\n\n\n

The proposed approach introduces an innovative method for the redemption of ETF shares. A Bitcoin ETF would enable fund investors to gain exposure to Bitcoin without directly purchasing or storing the cryptocurrency. While the SEC has hesitated to approve such ETFs due to concerns about Bitcoin market manipulation, this new strategy addresses those worries.<\/p>\n\n\n\n

The SEC has yet to decide on BlackRock's iShares Bitcoin Trust (IBTC) application, with the deadline set for January 15. Analysts anticipate a decision will be issued for several spot Bitcoin ETF applications earlier in January.<\/p>\n\n\n\n

See Related:<\/strong><\/em> Fidelity Joins BlackRock\u2019s Push For Ethereum ETF<\/a><\/p>\n\n\n\n

BlackRock ETF Details<\/h2>\n\n\n\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

Wall Street's main indexes fell at the beginning of the 2024 year as investors locked in profits after a very successful 2023 and are currently waiting for the Federal Reserve's<\/a> meeting that could offer hints on its interest rate path. Ken Polcari, managing partner at Kace Capital Advisors, said:<\/p>\n\n\n\n

\"The decline yesterday, today, and maybe for the next couple of weeks, is a result of people locking in profits and reconsidering what the narrative is - are rates going down five or six times as it appeared to be at the end of last year?\"<\/em><\/p>\n\n\n\n

\"\"
The Nasdaq Composite kicked off the year with a 1.5% drop pressured by a selloff in the tech sector<\/figcaption><\/figure>\n\n\n\n

The Fed's December meeting minutes are set to be disclosed at 2:00 p.m. ET, potentially providing information regarding the central bank's shift toward reducing interest rates. Although it's widely anticipated that the Fed will keep interest rates unchanged this month, traders have priced in a 65.7% probability of a 25 basis point rate reduction in March, according to CMEGroup's FedWatch tool.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures<\/a><\/p>\n\n\n\n

Central Bank And Inflation<\/h2>\n\n\n\n

Richmond Fed President Thomas Barkin, a voting member in the FOMC's rate-setting committee, said recently that the U.S. central bank is \"making real progress\" towards taming inflation and a soft landing seeming \"increasingly conceivable\". Encouragingly, the American Association of Individual Investors (AAII) Sentiment Survey indicated a surge in optimism among individual investors regarding the short-term outlook for the U.S. stock market, reaching its peak level in more than two and a half years.<\/p>\n\n\n\n

Despite this, JPMorgan Asset Management advises investors to be cautious due to potential recession risks. At the same time, analysts at Soci\u00e9t\u00e9 G\u00e9n\u00e9rale anticipate a turbulent 2024 for U.S. stocks, projecting fluctuations that could involve nearing recent highs, encountering declines, and subsequently rebounding.<\/p>\n\n\n\n

This week will witness a series of labor market data releases, culminating in the government's December employment report on Friday. These reports could significantly influence the forecast for the Fed's interest rate trajectory this year, prompting investors to scrutinize the data. Jeffrey Roach, chief economist at LPL Financial, added<\/a>:<\/p>\n\n\n\n

 \"The job market is cooling and we should see confirmation of that in this Friday\u2019s jobs report\"<\/em><\/p>\n\n\n\n

Following the progress of Wall Street's main indexes seen last year, investors are still optimistic about the prospect of another robust year ahead. This optimism is rooted in the anticipation that a decelerating economy will result in a gentle landing rather than a full-scale recession, especially as the Fed initiates rate cuts in the first half of 2024.<\/p>\n","post_title":"Wall Street's Main Indexes Fell At The Beginning Of 2024 year. Investors Locked In Profits After A Strong 2023 And Wait For The Federal Reserve's Meeting","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-at-the-beginning-of-2024-year-investors-locked-in-profits-after-a-strong-2023-and-wait-for-the-federal-reserves-meeting","to_ping":"","pinged":"","post_modified":"2024-01-06 18:33:13","post_modified_gmt":"2024-01-06 07:33:13","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14888","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14629,"post_author":"15","post_date":"2023-12-15 19:46:11","post_date_gmt":"2023-12-15 08:46:11","post_content":"\n

BlackRock aims to facilitate the participation of Wall Street banks in its potential Bitcoin ETF approval. Recent SEC memo <\/a>detailing a late November meeting involving BlackRock, Nasdaq, and the Commission. During this meeting, they discussed feedback regarding BlackRock's Bitcoin ETF application.<\/p>\n\n\n\n

The proposed approach introduces an innovative method for the redemption of ETF shares. A Bitcoin ETF would enable fund investors to gain exposure to Bitcoin without directly purchasing or storing the cryptocurrency. While the SEC has hesitated to approve such ETFs due to concerns about Bitcoin market manipulation, this new strategy addresses those worries.<\/p>\n\n\n\n

The SEC has yet to decide on BlackRock's iShares Bitcoin Trust (IBTC) application, with the deadline set for January 15. Analysts anticipate a decision will be issued for several spot Bitcoin ETF applications earlier in January.<\/p>\n\n\n\n

See Related:<\/strong><\/em> Fidelity Joins BlackRock\u2019s Push For Ethereum ETF<\/a><\/p>\n\n\n\n

BlackRock ETF Details<\/h2>\n\n\n\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

As the QT process continues, policymakers and market participants must remain vigilant, considering the potential ramifications for financial stability and economic growth. This dynamic landscape necessitates ongoing analysis and adaptation to ensure that monetary policy objectives align with evolving economic conditions.<\/p>\n","post_title":"Decoding Wall Street's Shift: A Closer Look At Wall Street's Changing Perspective","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"decoding-wall-streets-shift-a-closer-look-at-wall-streets-changing-perspective","to_ping":"","pinged":"","post_modified":"2024-01-10 07:51:25","post_modified_gmt":"2024-01-09 20:51:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14931","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14888,"post_author":"14","post_date":"2024-01-06 18:33:09","post_date_gmt":"2024-01-06 07:33:09","post_content":"\n

Wall Street's main indexes fell at the beginning of the 2024 year as investors locked in profits after a very successful 2023 and are currently waiting for the Federal Reserve's<\/a> meeting that could offer hints on its interest rate path. Ken Polcari, managing partner at Kace Capital Advisors, said:<\/p>\n\n\n\n

\"The decline yesterday, today, and maybe for the next couple of weeks, is a result of people locking in profits and reconsidering what the narrative is - are rates going down five or six times as it appeared to be at the end of last year?\"<\/em><\/p>\n\n\n\n

\"\"
The Nasdaq Composite kicked off the year with a 1.5% drop pressured by a selloff in the tech sector<\/figcaption><\/figure>\n\n\n\n

The Fed's December meeting minutes are set to be disclosed at 2:00 p.m. ET, potentially providing information regarding the central bank's shift toward reducing interest rates. Although it's widely anticipated that the Fed will keep interest rates unchanged this month, traders have priced in a 65.7% probability of a 25 basis point rate reduction in March, according to CMEGroup's FedWatch tool.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures<\/a><\/p>\n\n\n\n

Central Bank And Inflation<\/h2>\n\n\n\n

Richmond Fed President Thomas Barkin, a voting member in the FOMC's rate-setting committee, said recently that the U.S. central bank is \"making real progress\" towards taming inflation and a soft landing seeming \"increasingly conceivable\". Encouragingly, the American Association of Individual Investors (AAII) Sentiment Survey indicated a surge in optimism among individual investors regarding the short-term outlook for the U.S. stock market, reaching its peak level in more than two and a half years.<\/p>\n\n\n\n

Despite this, JPMorgan Asset Management advises investors to be cautious due to potential recession risks. At the same time, analysts at Soci\u00e9t\u00e9 G\u00e9n\u00e9rale anticipate a turbulent 2024 for U.S. stocks, projecting fluctuations that could involve nearing recent highs, encountering declines, and subsequently rebounding.<\/p>\n\n\n\n

This week will witness a series of labor market data releases, culminating in the government's December employment report on Friday. These reports could significantly influence the forecast for the Fed's interest rate trajectory this year, prompting investors to scrutinize the data. Jeffrey Roach, chief economist at LPL Financial, added<\/a>:<\/p>\n\n\n\n

 \"The job market is cooling and we should see confirmation of that in this Friday\u2019s jobs report\"<\/em><\/p>\n\n\n\n

Following the progress of Wall Street's main indexes seen last year, investors are still optimistic about the prospect of another robust year ahead. This optimism is rooted in the anticipation that a decelerating economy will result in a gentle landing rather than a full-scale recession, especially as the Fed initiates rate cuts in the first half of 2024.<\/p>\n","post_title":"Wall Street's Main Indexes Fell At The Beginning Of 2024 year. Investors Locked In Profits After A Strong 2023 And Wait For The Federal Reserve's Meeting","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-at-the-beginning-of-2024-year-investors-locked-in-profits-after-a-strong-2023-and-wait-for-the-federal-reserves-meeting","to_ping":"","pinged":"","post_modified":"2024-01-06 18:33:13","post_modified_gmt":"2024-01-06 07:33:13","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14888","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14629,"post_author":"15","post_date":"2023-12-15 19:46:11","post_date_gmt":"2023-12-15 08:46:11","post_content":"\n

BlackRock aims to facilitate the participation of Wall Street banks in its potential Bitcoin ETF approval. Recent SEC memo <\/a>detailing a late November meeting involving BlackRock, Nasdaq, and the Commission. During this meeting, they discussed feedback regarding BlackRock's Bitcoin ETF application.<\/p>\n\n\n\n

The proposed approach introduces an innovative method for the redemption of ETF shares. A Bitcoin ETF would enable fund investors to gain exposure to Bitcoin without directly purchasing or storing the cryptocurrency. While the SEC has hesitated to approve such ETFs due to concerns about Bitcoin market manipulation, this new strategy addresses those worries.<\/p>\n\n\n\n

The SEC has yet to decide on BlackRock's iShares Bitcoin Trust (IBTC) application, with the deadline set for January 15. Analysts anticipate a decision will be issued for several spot Bitcoin ETF applications earlier in January.<\/p>\n\n\n\n

See Related:<\/strong><\/em> Fidelity Joins BlackRock\u2019s Push For Ethereum ETF<\/a><\/p>\n\n\n\n

BlackRock ETF Details<\/h2>\n\n\n\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

From a technical standpoint, the Federal Reserve's<\/a> balance sheet management serves as a critical tool in its monetary policy arsenal. The evolving predictions by Wall Street's primary dealers underscore the complexities involved in forecasting economic variables, such as inflation and interest rates.<\/p>\n\n\n\n

As the QT process continues, policymakers and market participants must remain vigilant, considering the potential ramifications for financial stability and economic growth. This dynamic landscape necessitates ongoing analysis and adaptation to ensure that monetary policy objectives align with evolving economic conditions.<\/p>\n","post_title":"Decoding Wall Street's Shift: A Closer Look At Wall Street's Changing Perspective","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"decoding-wall-streets-shift-a-closer-look-at-wall-streets-changing-perspective","to_ping":"","pinged":"","post_modified":"2024-01-10 07:51:25","post_modified_gmt":"2024-01-09 20:51:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14931","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14888,"post_author":"14","post_date":"2024-01-06 18:33:09","post_date_gmt":"2024-01-06 07:33:09","post_content":"\n

Wall Street's main indexes fell at the beginning of the 2024 year as investors locked in profits after a very successful 2023 and are currently waiting for the Federal Reserve's<\/a> meeting that could offer hints on its interest rate path. Ken Polcari, managing partner at Kace Capital Advisors, said:<\/p>\n\n\n\n

\"The decline yesterday, today, and maybe for the next couple of weeks, is a result of people locking in profits and reconsidering what the narrative is - are rates going down five or six times as it appeared to be at the end of last year?\"<\/em><\/p>\n\n\n\n

\"\"
The Nasdaq Composite kicked off the year with a 1.5% drop pressured by a selloff in the tech sector<\/figcaption><\/figure>\n\n\n\n

The Fed's December meeting minutes are set to be disclosed at 2:00 p.m. ET, potentially providing information regarding the central bank's shift toward reducing interest rates. Although it's widely anticipated that the Fed will keep interest rates unchanged this month, traders have priced in a 65.7% probability of a 25 basis point rate reduction in March, according to CMEGroup's FedWatch tool.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures<\/a><\/p>\n\n\n\n

Central Bank And Inflation<\/h2>\n\n\n\n

Richmond Fed President Thomas Barkin, a voting member in the FOMC's rate-setting committee, said recently that the U.S. central bank is \"making real progress\" towards taming inflation and a soft landing seeming \"increasingly conceivable\". Encouragingly, the American Association of Individual Investors (AAII) Sentiment Survey indicated a surge in optimism among individual investors regarding the short-term outlook for the U.S. stock market, reaching its peak level in more than two and a half years.<\/p>\n\n\n\n

Despite this, JPMorgan Asset Management advises investors to be cautious due to potential recession risks. At the same time, analysts at Soci\u00e9t\u00e9 G\u00e9n\u00e9rale anticipate a turbulent 2024 for U.S. stocks, projecting fluctuations that could involve nearing recent highs, encountering declines, and subsequently rebounding.<\/p>\n\n\n\n

This week will witness a series of labor market data releases, culminating in the government's December employment report on Friday. These reports could significantly influence the forecast for the Fed's interest rate trajectory this year, prompting investors to scrutinize the data. Jeffrey Roach, chief economist at LPL Financial, added<\/a>:<\/p>\n\n\n\n

 \"The job market is cooling and we should see confirmation of that in this Friday\u2019s jobs report\"<\/em><\/p>\n\n\n\n

Following the progress of Wall Street's main indexes seen last year, investors are still optimistic about the prospect of another robust year ahead. This optimism is rooted in the anticipation that a decelerating economy will result in a gentle landing rather than a full-scale recession, especially as the Fed initiates rate cuts in the first half of 2024.<\/p>\n","post_title":"Wall Street's Main Indexes Fell At The Beginning Of 2024 year. Investors Locked In Profits After A Strong 2023 And Wait For The Federal Reserve's Meeting","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-at-the-beginning-of-2024-year-investors-locked-in-profits-after-a-strong-2023-and-wait-for-the-federal-reserves-meeting","to_ping":"","pinged":"","post_modified":"2024-01-06 18:33:13","post_modified_gmt":"2024-01-06 07:33:13","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14888","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14629,"post_author":"15","post_date":"2023-12-15 19:46:11","post_date_gmt":"2023-12-15 08:46:11","post_content":"\n

BlackRock aims to facilitate the participation of Wall Street banks in its potential Bitcoin ETF approval. Recent SEC memo <\/a>detailing a late November meeting involving BlackRock, Nasdaq, and the Commission. During this meeting, they discussed feedback regarding BlackRock's Bitcoin ETF application.<\/p>\n\n\n\n

The proposed approach introduces an innovative method for the redemption of ETF shares. A Bitcoin ETF would enable fund investors to gain exposure to Bitcoin without directly purchasing or storing the cryptocurrency. While the SEC has hesitated to approve such ETFs due to concerns about Bitcoin market manipulation, this new strategy addresses those worries.<\/p>\n\n\n\n

The SEC has yet to decide on BlackRock's iShares Bitcoin Trust (IBTC) application, with the deadline set for January 15. Analysts anticipate a decision will be issued for several spot Bitcoin ETF applications earlier in January.<\/p>\n\n\n\n

See Related:<\/strong><\/em> Fidelity Joins BlackRock\u2019s Push For Ethereum ETF<\/a><\/p>\n\n\n\n

BlackRock ETF Details<\/h2>\n\n\n\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

A Technical Perspective<\/h2>\n\n\n\n

From a technical standpoint, the Federal Reserve's<\/a> balance sheet management serves as a critical tool in its monetary policy arsenal. The evolving predictions by Wall Street's primary dealers underscore the complexities involved in forecasting economic variables, such as inflation and interest rates.<\/p>\n\n\n\n

As the QT process continues, policymakers and market participants must remain vigilant, considering the potential ramifications for financial stability and economic growth. This dynamic landscape necessitates ongoing analysis and adaptation to ensure that monetary policy objectives align with evolving economic conditions.<\/p>\n","post_title":"Decoding Wall Street's Shift: A Closer Look At Wall Street's Changing Perspective","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"decoding-wall-streets-shift-a-closer-look-at-wall-streets-changing-perspective","to_ping":"","pinged":"","post_modified":"2024-01-10 07:51:25","post_modified_gmt":"2024-01-09 20:51:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14931","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14888,"post_author":"14","post_date":"2024-01-06 18:33:09","post_date_gmt":"2024-01-06 07:33:09","post_content":"\n

Wall Street's main indexes fell at the beginning of the 2024 year as investors locked in profits after a very successful 2023 and are currently waiting for the Federal Reserve's<\/a> meeting that could offer hints on its interest rate path. Ken Polcari, managing partner at Kace Capital Advisors, said:<\/p>\n\n\n\n

\"The decline yesterday, today, and maybe for the next couple of weeks, is a result of people locking in profits and reconsidering what the narrative is - are rates going down five or six times as it appeared to be at the end of last year?\"<\/em><\/p>\n\n\n\n

\"\"
The Nasdaq Composite kicked off the year with a 1.5% drop pressured by a selloff in the tech sector<\/figcaption><\/figure>\n\n\n\n

The Fed's December meeting minutes are set to be disclosed at 2:00 p.m. ET, potentially providing information regarding the central bank's shift toward reducing interest rates. Although it's widely anticipated that the Fed will keep interest rates unchanged this month, traders have priced in a 65.7% probability of a 25 basis point rate reduction in March, according to CMEGroup's FedWatch tool.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures<\/a><\/p>\n\n\n\n

Central Bank And Inflation<\/h2>\n\n\n\n

Richmond Fed President Thomas Barkin, a voting member in the FOMC's rate-setting committee, said recently that the U.S. central bank is \"making real progress\" towards taming inflation and a soft landing seeming \"increasingly conceivable\". Encouragingly, the American Association of Individual Investors (AAII) Sentiment Survey indicated a surge in optimism among individual investors regarding the short-term outlook for the U.S. stock market, reaching its peak level in more than two and a half years.<\/p>\n\n\n\n

Despite this, JPMorgan Asset Management advises investors to be cautious due to potential recession risks. At the same time, analysts at Soci\u00e9t\u00e9 G\u00e9n\u00e9rale anticipate a turbulent 2024 for U.S. stocks, projecting fluctuations that could involve nearing recent highs, encountering declines, and subsequently rebounding.<\/p>\n\n\n\n

This week will witness a series of labor market data releases, culminating in the government's December employment report on Friday. These reports could significantly influence the forecast for the Fed's interest rate trajectory this year, prompting investors to scrutinize the data. Jeffrey Roach, chief economist at LPL Financial, added<\/a>:<\/p>\n\n\n\n

 \"The job market is cooling and we should see confirmation of that in this Friday\u2019s jobs report\"<\/em><\/p>\n\n\n\n

Following the progress of Wall Street's main indexes seen last year, investors are still optimistic about the prospect of another robust year ahead. This optimism is rooted in the anticipation that a decelerating economy will result in a gentle landing rather than a full-scale recession, especially as the Fed initiates rate cuts in the first half of 2024.<\/p>\n","post_title":"Wall Street's Main Indexes Fell At The Beginning Of 2024 year. Investors Locked In Profits After A Strong 2023 And Wait For The Federal Reserve's Meeting","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-at-the-beginning-of-2024-year-investors-locked-in-profits-after-a-strong-2023-and-wait-for-the-federal-reserves-meeting","to_ping":"","pinged":"","post_modified":"2024-01-06 18:33:13","post_modified_gmt":"2024-01-06 07:33:13","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14888","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14629,"post_author":"15","post_date":"2023-12-15 19:46:11","post_date_gmt":"2023-12-15 08:46:11","post_content":"\n

BlackRock aims to facilitate the participation of Wall Street banks in its potential Bitcoin ETF approval. Recent SEC memo <\/a>detailing a late November meeting involving BlackRock, Nasdaq, and the Commission. During this meeting, they discussed feedback regarding BlackRock's Bitcoin ETF application.<\/p>\n\n\n\n

The proposed approach introduces an innovative method for the redemption of ETF shares. A Bitcoin ETF would enable fund investors to gain exposure to Bitcoin without directly purchasing or storing the cryptocurrency. While the SEC has hesitated to approve such ETFs due to concerns about Bitcoin market manipulation, this new strategy addresses those worries.<\/p>\n\n\n\n

The SEC has yet to decide on BlackRock's iShares Bitcoin Trust (IBTC) application, with the deadline set for January 15. Analysts anticipate a decision will be issued for several spot Bitcoin ETF applications earlier in January.<\/p>\n\n\n\n

See Related:<\/strong><\/em> Fidelity Joins BlackRock\u2019s Push For Ethereum ETF<\/a><\/p>\n\n\n\n

BlackRock ETF Details<\/h2>\n\n\n\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

The recalibrated timeline for QT indicates a more prolonged period of balance sheet reduction. As the Federal Reserve continues to navigate its policy decisions, market participants, businesses, and consumers should monitor these developments closely. Changes in the balance sheet size can influence interest rates, liquidity conditions, and overall financial market dynamics.<\/p>\n\n\n\n

A Technical Perspective<\/h2>\n\n\n\n

From a technical standpoint, the Federal Reserve's<\/a> balance sheet management serves as a critical tool in its monetary policy arsenal. The evolving predictions by Wall Street's primary dealers underscore the complexities involved in forecasting economic variables, such as inflation and interest rates.<\/p>\n\n\n\n

As the QT process continues, policymakers and market participants must remain vigilant, considering the potential ramifications for financial stability and economic growth. This dynamic landscape necessitates ongoing analysis and adaptation to ensure that monetary policy objectives align with evolving economic conditions.<\/p>\n","post_title":"Decoding Wall Street's Shift: A Closer Look At Wall Street's Changing Perspective","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"decoding-wall-streets-shift-a-closer-look-at-wall-streets-changing-perspective","to_ping":"","pinged":"","post_modified":"2024-01-10 07:51:25","post_modified_gmt":"2024-01-09 20:51:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14931","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14888,"post_author":"14","post_date":"2024-01-06 18:33:09","post_date_gmt":"2024-01-06 07:33:09","post_content":"\n

Wall Street's main indexes fell at the beginning of the 2024 year as investors locked in profits after a very successful 2023 and are currently waiting for the Federal Reserve's<\/a> meeting that could offer hints on its interest rate path. Ken Polcari, managing partner at Kace Capital Advisors, said:<\/p>\n\n\n\n

\"The decline yesterday, today, and maybe for the next couple of weeks, is a result of people locking in profits and reconsidering what the narrative is - are rates going down five or six times as it appeared to be at the end of last year?\"<\/em><\/p>\n\n\n\n

\"\"
The Nasdaq Composite kicked off the year with a 1.5% drop pressured by a selloff in the tech sector<\/figcaption><\/figure>\n\n\n\n

The Fed's December meeting minutes are set to be disclosed at 2:00 p.m. ET, potentially providing information regarding the central bank's shift toward reducing interest rates. Although it's widely anticipated that the Fed will keep interest rates unchanged this month, traders have priced in a 65.7% probability of a 25 basis point rate reduction in March, according to CMEGroup's FedWatch tool.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures<\/a><\/p>\n\n\n\n

Central Bank And Inflation<\/h2>\n\n\n\n

Richmond Fed President Thomas Barkin, a voting member in the FOMC's rate-setting committee, said recently that the U.S. central bank is \"making real progress\" towards taming inflation and a soft landing seeming \"increasingly conceivable\". Encouragingly, the American Association of Individual Investors (AAII) Sentiment Survey indicated a surge in optimism among individual investors regarding the short-term outlook for the U.S. stock market, reaching its peak level in more than two and a half years.<\/p>\n\n\n\n

Despite this, JPMorgan Asset Management advises investors to be cautious due to potential recession risks. At the same time, analysts at Soci\u00e9t\u00e9 G\u00e9n\u00e9rale anticipate a turbulent 2024 for U.S. stocks, projecting fluctuations that could involve nearing recent highs, encountering declines, and subsequently rebounding.<\/p>\n\n\n\n

This week will witness a series of labor market data releases, culminating in the government's December employment report on Friday. These reports could significantly influence the forecast for the Fed's interest rate trajectory this year, prompting investors to scrutinize the data. Jeffrey Roach, chief economist at LPL Financial, added<\/a>:<\/p>\n\n\n\n

 \"The job market is cooling and we should see confirmation of that in this Friday\u2019s jobs report\"<\/em><\/p>\n\n\n\n

Following the progress of Wall Street's main indexes seen last year, investors are still optimistic about the prospect of another robust year ahead. This optimism is rooted in the anticipation that a decelerating economy will result in a gentle landing rather than a full-scale recession, especially as the Fed initiates rate cuts in the first half of 2024.<\/p>\n","post_title":"Wall Street's Main Indexes Fell At The Beginning Of 2024 year. Investors Locked In Profits After A Strong 2023 And Wait For The Federal Reserve's Meeting","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-at-the-beginning-of-2024-year-investors-locked-in-profits-after-a-strong-2023-and-wait-for-the-federal-reserves-meeting","to_ping":"","pinged":"","post_modified":"2024-01-06 18:33:13","post_modified_gmt":"2024-01-06 07:33:13","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14888","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14629,"post_author":"15","post_date":"2023-12-15 19:46:11","post_date_gmt":"2023-12-15 08:46:11","post_content":"\n

BlackRock aims to facilitate the participation of Wall Street banks in its potential Bitcoin ETF approval. Recent SEC memo <\/a>detailing a late November meeting involving BlackRock, Nasdaq, and the Commission. During this meeting, they discussed feedback regarding BlackRock's Bitcoin ETF application.<\/p>\n\n\n\n

The proposed approach introduces an innovative method for the redemption of ETF shares. A Bitcoin ETF would enable fund investors to gain exposure to Bitcoin without directly purchasing or storing the cryptocurrency. While the SEC has hesitated to approve such ETFs due to concerns about Bitcoin market manipulation, this new strategy addresses those worries.<\/p>\n\n\n\n

The SEC has yet to decide on BlackRock's iShares Bitcoin Trust (IBTC) application, with the deadline set for January 15. Analysts anticipate a decision will be issued for several spot Bitcoin ETF applications earlier in January.<\/p>\n\n\n\n

See Related:<\/strong><\/em> Fidelity Joins BlackRock\u2019s Push For Ethereum ETF<\/a><\/p>\n\n\n\n

BlackRock ETF Details<\/h2>\n\n\n\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

What This Means for the Economy<\/h2>\n\n\n\n

The recalibrated timeline for QT indicates a more prolonged period of balance sheet reduction. As the Federal Reserve continues to navigate its policy decisions, market participants, businesses, and consumers should monitor these developments closely. Changes in the balance sheet size can influence interest rates, liquidity conditions, and overall financial market dynamics.<\/p>\n\n\n\n

A Technical Perspective<\/h2>\n\n\n\n

From a technical standpoint, the Federal Reserve's<\/a> balance sheet management serves as a critical tool in its monetary policy arsenal. The evolving predictions by Wall Street's primary dealers underscore the complexities involved in forecasting economic variables, such as inflation and interest rates.<\/p>\n\n\n\n

As the QT process continues, policymakers and market participants must remain vigilant, considering the potential ramifications for financial stability and economic growth. This dynamic landscape necessitates ongoing analysis and adaptation to ensure that monetary policy objectives align with evolving economic conditions.<\/p>\n","post_title":"Decoding Wall Street's Shift: A Closer Look At Wall Street's Changing Perspective","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"decoding-wall-streets-shift-a-closer-look-at-wall-streets-changing-perspective","to_ping":"","pinged":"","post_modified":"2024-01-10 07:51:25","post_modified_gmt":"2024-01-09 20:51:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14931","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14888,"post_author":"14","post_date":"2024-01-06 18:33:09","post_date_gmt":"2024-01-06 07:33:09","post_content":"\n

Wall Street's main indexes fell at the beginning of the 2024 year as investors locked in profits after a very successful 2023 and are currently waiting for the Federal Reserve's<\/a> meeting that could offer hints on its interest rate path. Ken Polcari, managing partner at Kace Capital Advisors, said:<\/p>\n\n\n\n

\"The decline yesterday, today, and maybe for the next couple of weeks, is a result of people locking in profits and reconsidering what the narrative is - are rates going down five or six times as it appeared to be at the end of last year?\"<\/em><\/p>\n\n\n\n

\"\"
The Nasdaq Composite kicked off the year with a 1.5% drop pressured by a selloff in the tech sector<\/figcaption><\/figure>\n\n\n\n

The Fed's December meeting minutes are set to be disclosed at 2:00 p.m. ET, potentially providing information regarding the central bank's shift toward reducing interest rates. Although it's widely anticipated that the Fed will keep interest rates unchanged this month, traders have priced in a 65.7% probability of a 25 basis point rate reduction in March, according to CMEGroup's FedWatch tool.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures<\/a><\/p>\n\n\n\n

Central Bank And Inflation<\/h2>\n\n\n\n

Richmond Fed President Thomas Barkin, a voting member in the FOMC's rate-setting committee, said recently that the U.S. central bank is \"making real progress\" towards taming inflation and a soft landing seeming \"increasingly conceivable\". Encouragingly, the American Association of Individual Investors (AAII) Sentiment Survey indicated a surge in optimism among individual investors regarding the short-term outlook for the U.S. stock market, reaching its peak level in more than two and a half years.<\/p>\n\n\n\n

Despite this, JPMorgan Asset Management advises investors to be cautious due to potential recession risks. At the same time, analysts at Soci\u00e9t\u00e9 G\u00e9n\u00e9rale anticipate a turbulent 2024 for U.S. stocks, projecting fluctuations that could involve nearing recent highs, encountering declines, and subsequently rebounding.<\/p>\n\n\n\n

This week will witness a series of labor market data releases, culminating in the government's December employment report on Friday. These reports could significantly influence the forecast for the Fed's interest rate trajectory this year, prompting investors to scrutinize the data. Jeffrey Roach, chief economist at LPL Financial, added<\/a>:<\/p>\n\n\n\n

 \"The job market is cooling and we should see confirmation of that in this Friday\u2019s jobs report\"<\/em><\/p>\n\n\n\n

Following the progress of Wall Street's main indexes seen last year, investors are still optimistic about the prospect of another robust year ahead. This optimism is rooted in the anticipation that a decelerating economy will result in a gentle landing rather than a full-scale recession, especially as the Fed initiates rate cuts in the first half of 2024.<\/p>\n","post_title":"Wall Street's Main Indexes Fell At The Beginning Of 2024 year. Investors Locked In Profits After A Strong 2023 And Wait For The Federal Reserve's Meeting","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-at-the-beginning-of-2024-year-investors-locked-in-profits-after-a-strong-2023-and-wait-for-the-federal-reserves-meeting","to_ping":"","pinged":"","post_modified":"2024-01-06 18:33:13","post_modified_gmt":"2024-01-06 07:33:13","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14888","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14629,"post_author":"15","post_date":"2023-12-15 19:46:11","post_date_gmt":"2023-12-15 08:46:11","post_content":"\n

BlackRock aims to facilitate the participation of Wall Street banks in its potential Bitcoin ETF approval. Recent SEC memo <\/a>detailing a late November meeting involving BlackRock, Nasdaq, and the Commission. During this meeting, they discussed feedback regarding BlackRock's Bitcoin ETF application.<\/p>\n\n\n\n

The proposed approach introduces an innovative method for the redemption of ETF shares. A Bitcoin ETF would enable fund investors to gain exposure to Bitcoin without directly purchasing or storing the cryptocurrency. While the SEC has hesitated to approve such ETFs due to concerns about Bitcoin market manipulation, this new strategy addresses those worries.<\/p>\n\n\n\n

The SEC has yet to decide on BlackRock's iShares Bitcoin Trust (IBTC) application, with the deadline set for January 15. Analysts anticipate a decision will be issued for several spot Bitcoin ETF applications earlier in January.<\/p>\n\n\n\n

See Related:<\/strong><\/em> Fidelity Joins BlackRock\u2019s Push For Ethereum ETF<\/a><\/p>\n\n\n\n

BlackRock ETF Details<\/h2>\n\n\n\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

What This Means for the Economy<\/h2>\n\n\n\n

The recalibrated timeline for QT indicates a more prolonged period of balance sheet reduction. As the Federal Reserve continues to navigate its policy decisions, market participants, businesses, and consumers should monitor these developments closely. Changes in the balance sheet size can influence interest rates, liquidity conditions, and overall financial market dynamics.<\/p>\n\n\n\n

A Technical Perspective<\/h2>\n\n\n\n

From a technical standpoint, the Federal Reserve's<\/a> balance sheet management serves as a critical tool in its monetary policy arsenal. The evolving predictions by Wall Street's primary dealers underscore the complexities involved in forecasting economic variables, such as inflation and interest rates.<\/p>\n\n\n\n

As the QT process continues, policymakers and market participants must remain vigilant, considering the potential ramifications for financial stability and economic growth. This dynamic landscape necessitates ongoing analysis and adaptation to ensure that monetary policy objectives align with evolving economic conditions.<\/p>\n","post_title":"Decoding Wall Street's Shift: A Closer Look At Wall Street's Changing Perspective","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"decoding-wall-streets-shift-a-closer-look-at-wall-streets-changing-perspective","to_ping":"","pinged":"","post_modified":"2024-01-10 07:51:25","post_modified_gmt":"2024-01-09 20:51:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14931","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14888,"post_author":"14","post_date":"2024-01-06 18:33:09","post_date_gmt":"2024-01-06 07:33:09","post_content":"\n

Wall Street's main indexes fell at the beginning of the 2024 year as investors locked in profits after a very successful 2023 and are currently waiting for the Federal Reserve's<\/a> meeting that could offer hints on its interest rate path. Ken Polcari, managing partner at Kace Capital Advisors, said:<\/p>\n\n\n\n

\"The decline yesterday, today, and maybe for the next couple of weeks, is a result of people locking in profits and reconsidering what the narrative is - are rates going down five or six times as it appeared to be at the end of last year?\"<\/em><\/p>\n\n\n\n

\"\"
The Nasdaq Composite kicked off the year with a 1.5% drop pressured by a selloff in the tech sector<\/figcaption><\/figure>\n\n\n\n

The Fed's December meeting minutes are set to be disclosed at 2:00 p.m. ET, potentially providing information regarding the central bank's shift toward reducing interest rates. Although it's widely anticipated that the Fed will keep interest rates unchanged this month, traders have priced in a 65.7% probability of a 25 basis point rate reduction in March, according to CMEGroup's FedWatch tool.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures<\/a><\/p>\n\n\n\n

Central Bank And Inflation<\/h2>\n\n\n\n

Richmond Fed President Thomas Barkin, a voting member in the FOMC's rate-setting committee, said recently that the U.S. central bank is \"making real progress\" towards taming inflation and a soft landing seeming \"increasingly conceivable\". Encouragingly, the American Association of Individual Investors (AAII) Sentiment Survey indicated a surge in optimism among individual investors regarding the short-term outlook for the U.S. stock market, reaching its peak level in more than two and a half years.<\/p>\n\n\n\n

Despite this, JPMorgan Asset Management advises investors to be cautious due to potential recession risks. At the same time, analysts at Soci\u00e9t\u00e9 G\u00e9n\u00e9rale anticipate a turbulent 2024 for U.S. stocks, projecting fluctuations that could involve nearing recent highs, encountering declines, and subsequently rebounding.<\/p>\n\n\n\n

This week will witness a series of labor market data releases, culminating in the government's December employment report on Friday. These reports could significantly influence the forecast for the Fed's interest rate trajectory this year, prompting investors to scrutinize the data. Jeffrey Roach, chief economist at LPL Financial, added<\/a>:<\/p>\n\n\n\n

 \"The job market is cooling and we should see confirmation of that in this Friday\u2019s jobs report\"<\/em><\/p>\n\n\n\n

Following the progress of Wall Street's main indexes seen last year, investors are still optimistic about the prospect of another robust year ahead. This optimism is rooted in the anticipation that a decelerating economy will result in a gentle landing rather than a full-scale recession, especially as the Fed initiates rate cuts in the first half of 2024.<\/p>\n","post_title":"Wall Street's Main Indexes Fell At The Beginning Of 2024 year. Investors Locked In Profits After A Strong 2023 And Wait For The Federal Reserve's Meeting","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-at-the-beginning-of-2024-year-investors-locked-in-profits-after-a-strong-2023-and-wait-for-the-federal-reserves-meeting","to_ping":"","pinged":"","post_modified":"2024-01-06 18:33:13","post_modified_gmt":"2024-01-06 07:33:13","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14888","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14629,"post_author":"15","post_date":"2023-12-15 19:46:11","post_date_gmt":"2023-12-15 08:46:11","post_content":"\n

BlackRock aims to facilitate the participation of Wall Street banks in its potential Bitcoin ETF approval. Recent SEC memo <\/a>detailing a late November meeting involving BlackRock, Nasdaq, and the Commission. During this meeting, they discussed feedback regarding BlackRock's Bitcoin ETF application.<\/p>\n\n\n\n

The proposed approach introduces an innovative method for the redemption of ETF shares. A Bitcoin ETF would enable fund investors to gain exposure to Bitcoin without directly purchasing or storing the cryptocurrency. While the SEC has hesitated to approve such ETFs due to concerns about Bitcoin market manipulation, this new strategy addresses those worries.<\/p>\n\n\n\n

The SEC has yet to decide on BlackRock's iShares Bitcoin Trust (IBTC) application, with the deadline set for January 15. Analysts anticipate a decision will be issued for several spot Bitcoin ETF applications earlier in January.<\/p>\n\n\n\n

See Related:<\/strong><\/em> Fidelity Joins BlackRock\u2019s Push For Ethereum ETF<\/a><\/p>\n\n\n\n

BlackRock ETF Details<\/h2>\n\n\n\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

The quantitative tightening process has been an integral part of the Federal Reserve's strategy to combat inflation. Alongside rate hikes, the central bank initiated large-scale purchases of Treasury bonds and mortgage-backed securities during the COVID-19 pandemic's onset in 2020. This move led to an expansion of its holdings to approximately $9 trillion by mid-2022. However, since last year, the Fed has been gradually reducing its balance sheet size, although specific guidance on the timeline remains somewhat ambiguous.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

What This Means for the Economy<\/h2>\n\n\n\n

The recalibrated timeline for QT indicates a more prolonged period of balance sheet reduction. As the Federal Reserve continues to navigate its policy decisions, market participants, businesses, and consumers should monitor these developments closely. Changes in the balance sheet size can influence interest rates, liquidity conditions, and overall financial market dynamics.<\/p>\n\n\n\n

A Technical Perspective<\/h2>\n\n\n\n

From a technical standpoint, the Federal Reserve's<\/a> balance sheet management serves as a critical tool in its monetary policy arsenal. The evolving predictions by Wall Street's primary dealers underscore the complexities involved in forecasting economic variables, such as inflation and interest rates.<\/p>\n\n\n\n

As the QT process continues, policymakers and market participants must remain vigilant, considering the potential ramifications for financial stability and economic growth. This dynamic landscape necessitates ongoing analysis and adaptation to ensure that monetary policy objectives align with evolving economic conditions.<\/p>\n","post_title":"Decoding Wall Street's Shift: A Closer Look At Wall Street's Changing Perspective","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"decoding-wall-streets-shift-a-closer-look-at-wall-streets-changing-perspective","to_ping":"","pinged":"","post_modified":"2024-01-10 07:51:25","post_modified_gmt":"2024-01-09 20:51:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14931","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14888,"post_author":"14","post_date":"2024-01-06 18:33:09","post_date_gmt":"2024-01-06 07:33:09","post_content":"\n

Wall Street's main indexes fell at the beginning of the 2024 year as investors locked in profits after a very successful 2023 and are currently waiting for the Federal Reserve's<\/a> meeting that could offer hints on its interest rate path. Ken Polcari, managing partner at Kace Capital Advisors, said:<\/p>\n\n\n\n

\"The decline yesterday, today, and maybe for the next couple of weeks, is a result of people locking in profits and reconsidering what the narrative is - are rates going down five or six times as it appeared to be at the end of last year?\"<\/em><\/p>\n\n\n\n

\"\"
The Nasdaq Composite kicked off the year with a 1.5% drop pressured by a selloff in the tech sector<\/figcaption><\/figure>\n\n\n\n

The Fed's December meeting minutes are set to be disclosed at 2:00 p.m. ET, potentially providing information regarding the central bank's shift toward reducing interest rates. Although it's widely anticipated that the Fed will keep interest rates unchanged this month, traders have priced in a 65.7% probability of a 25 basis point rate reduction in March, according to CMEGroup's FedWatch tool.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures<\/a><\/p>\n\n\n\n

Central Bank And Inflation<\/h2>\n\n\n\n

Richmond Fed President Thomas Barkin, a voting member in the FOMC's rate-setting committee, said recently that the U.S. central bank is \"making real progress\" towards taming inflation and a soft landing seeming \"increasingly conceivable\". Encouragingly, the American Association of Individual Investors (AAII) Sentiment Survey indicated a surge in optimism among individual investors regarding the short-term outlook for the U.S. stock market, reaching its peak level in more than two and a half years.<\/p>\n\n\n\n

Despite this, JPMorgan Asset Management advises investors to be cautious due to potential recession risks. At the same time, analysts at Soci\u00e9t\u00e9 G\u00e9n\u00e9rale anticipate a turbulent 2024 for U.S. stocks, projecting fluctuations that could involve nearing recent highs, encountering declines, and subsequently rebounding.<\/p>\n\n\n\n

This week will witness a series of labor market data releases, culminating in the government's December employment report on Friday. These reports could significantly influence the forecast for the Fed's interest rate trajectory this year, prompting investors to scrutinize the data. Jeffrey Roach, chief economist at LPL Financial, added<\/a>:<\/p>\n\n\n\n

 \"The job market is cooling and we should see confirmation of that in this Friday\u2019s jobs report\"<\/em><\/p>\n\n\n\n

Following the progress of Wall Street's main indexes seen last year, investors are still optimistic about the prospect of another robust year ahead. This optimism is rooted in the anticipation that a decelerating economy will result in a gentle landing rather than a full-scale recession, especially as the Fed initiates rate cuts in the first half of 2024.<\/p>\n","post_title":"Wall Street's Main Indexes Fell At The Beginning Of 2024 year. Investors Locked In Profits After A Strong 2023 And Wait For The Federal Reserve's Meeting","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-at-the-beginning-of-2024-year-investors-locked-in-profits-after-a-strong-2023-and-wait-for-the-federal-reserves-meeting","to_ping":"","pinged":"","post_modified":"2024-01-06 18:33:13","post_modified_gmt":"2024-01-06 07:33:13","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14888","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14629,"post_author":"15","post_date":"2023-12-15 19:46:11","post_date_gmt":"2023-12-15 08:46:11","post_content":"\n

BlackRock aims to facilitate the participation of Wall Street banks in its potential Bitcoin ETF approval. Recent SEC memo <\/a>detailing a late November meeting involving BlackRock, Nasdaq, and the Commission. During this meeting, they discussed feedback regarding BlackRock's Bitcoin ETF application.<\/p>\n\n\n\n

The proposed approach introduces an innovative method for the redemption of ETF shares. A Bitcoin ETF would enable fund investors to gain exposure to Bitcoin without directly purchasing or storing the cryptocurrency. While the SEC has hesitated to approve such ETFs due to concerns about Bitcoin market manipulation, this new strategy addresses those worries.<\/p>\n\n\n\n

The SEC has yet to decide on BlackRock's iShares Bitcoin Trust (IBTC) application, with the deadline set for January 15. Analysts anticipate a decision will be issued for several spot Bitcoin ETF applications earlier in January.<\/p>\n\n\n\n

See Related:<\/strong><\/em> Fidelity Joins BlackRock\u2019s Push For Ethereum ETF<\/a><\/p>\n\n\n\n

BlackRock ETF Details<\/h2>\n\n\n\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

Federal Reserve Strategy<\/h2>\n\n\n\n

The quantitative tightening process has been an integral part of the Federal Reserve's strategy to combat inflation. Alongside rate hikes, the central bank initiated large-scale purchases of Treasury bonds and mortgage-backed securities during the COVID-19 pandemic's onset in 2020. This move led to an expansion of its holdings to approximately $9 trillion by mid-2022. However, since last year, the Fed has been gradually reducing its balance sheet size, although specific guidance on the timeline remains somewhat ambiguous.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

What This Means for the Economy<\/h2>\n\n\n\n

The recalibrated timeline for QT indicates a more prolonged period of balance sheet reduction. As the Federal Reserve continues to navigate its policy decisions, market participants, businesses, and consumers should monitor these developments closely. Changes in the balance sheet size can influence interest rates, liquidity conditions, and overall financial market dynamics.<\/p>\n\n\n\n

A Technical Perspective<\/h2>\n\n\n\n

From a technical standpoint, the Federal Reserve's<\/a> balance sheet management serves as a critical tool in its monetary policy arsenal. The evolving predictions by Wall Street's primary dealers underscore the complexities involved in forecasting economic variables, such as inflation and interest rates.<\/p>\n\n\n\n

As the QT process continues, policymakers and market participants must remain vigilant, considering the potential ramifications for financial stability and economic growth. This dynamic landscape necessitates ongoing analysis and adaptation to ensure that monetary policy objectives align with evolving economic conditions.<\/p>\n","post_title":"Decoding Wall Street's Shift: A Closer Look At Wall Street's Changing Perspective","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"decoding-wall-streets-shift-a-closer-look-at-wall-streets-changing-perspective","to_ping":"","pinged":"","post_modified":"2024-01-10 07:51:25","post_modified_gmt":"2024-01-09 20:51:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14931","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14888,"post_author":"14","post_date":"2024-01-06 18:33:09","post_date_gmt":"2024-01-06 07:33:09","post_content":"\n

Wall Street's main indexes fell at the beginning of the 2024 year as investors locked in profits after a very successful 2023 and are currently waiting for the Federal Reserve's<\/a> meeting that could offer hints on its interest rate path. Ken Polcari, managing partner at Kace Capital Advisors, said:<\/p>\n\n\n\n

\"The decline yesterday, today, and maybe for the next couple of weeks, is a result of people locking in profits and reconsidering what the narrative is - are rates going down five or six times as it appeared to be at the end of last year?\"<\/em><\/p>\n\n\n\n

\"\"
The Nasdaq Composite kicked off the year with a 1.5% drop pressured by a selloff in the tech sector<\/figcaption><\/figure>\n\n\n\n

The Fed's December meeting minutes are set to be disclosed at 2:00 p.m. ET, potentially providing information regarding the central bank's shift toward reducing interest rates. Although it's widely anticipated that the Fed will keep interest rates unchanged this month, traders have priced in a 65.7% probability of a 25 basis point rate reduction in March, according to CMEGroup's FedWatch tool.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures<\/a><\/p>\n\n\n\n

Central Bank And Inflation<\/h2>\n\n\n\n

Richmond Fed President Thomas Barkin, a voting member in the FOMC's rate-setting committee, said recently that the U.S. central bank is \"making real progress\" towards taming inflation and a soft landing seeming \"increasingly conceivable\". Encouragingly, the American Association of Individual Investors (AAII) Sentiment Survey indicated a surge in optimism among individual investors regarding the short-term outlook for the U.S. stock market, reaching its peak level in more than two and a half years.<\/p>\n\n\n\n

Despite this, JPMorgan Asset Management advises investors to be cautious due to potential recession risks. At the same time, analysts at Soci\u00e9t\u00e9 G\u00e9n\u00e9rale anticipate a turbulent 2024 for U.S. stocks, projecting fluctuations that could involve nearing recent highs, encountering declines, and subsequently rebounding.<\/p>\n\n\n\n

This week will witness a series of labor market data releases, culminating in the government's December employment report on Friday. These reports could significantly influence the forecast for the Fed's interest rate trajectory this year, prompting investors to scrutinize the data. Jeffrey Roach, chief economist at LPL Financial, added<\/a>:<\/p>\n\n\n\n

 \"The job market is cooling and we should see confirmation of that in this Friday\u2019s jobs report\"<\/em><\/p>\n\n\n\n

Following the progress of Wall Street's main indexes seen last year, investors are still optimistic about the prospect of another robust year ahead. This optimism is rooted in the anticipation that a decelerating economy will result in a gentle landing rather than a full-scale recession, especially as the Fed initiates rate cuts in the first half of 2024.<\/p>\n","post_title":"Wall Street's Main Indexes Fell At The Beginning Of 2024 year. Investors Locked In Profits After A Strong 2023 And Wait For The Federal Reserve's Meeting","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-at-the-beginning-of-2024-year-investors-locked-in-profits-after-a-strong-2023-and-wait-for-the-federal-reserves-meeting","to_ping":"","pinged":"","post_modified":"2024-01-06 18:33:13","post_modified_gmt":"2024-01-06 07:33:13","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14888","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14629,"post_author":"15","post_date":"2023-12-15 19:46:11","post_date_gmt":"2023-12-15 08:46:11","post_content":"\n

BlackRock aims to facilitate the participation of Wall Street banks in its potential Bitcoin ETF approval. Recent SEC memo <\/a>detailing a late November meeting involving BlackRock, Nasdaq, and the Commission. During this meeting, they discussed feedback regarding BlackRock's Bitcoin ETF application.<\/p>\n\n\n\n

The proposed approach introduces an innovative method for the redemption of ETF shares. A Bitcoin ETF would enable fund investors to gain exposure to Bitcoin without directly purchasing or storing the cryptocurrency. While the SEC has hesitated to approve such ETFs due to concerns about Bitcoin market manipulation, this new strategy addresses those worries.<\/p>\n\n\n\n

The SEC has yet to decide on BlackRock's iShares Bitcoin Trust (IBTC) application, with the deadline set for January 15. Analysts anticipate a decision will be issued for several spot Bitcoin ETF applications earlier in January.<\/p>\n\n\n\n

See Related:<\/strong><\/em> Fidelity Joins BlackRock\u2019s Push For Ethereum ETF<\/a><\/p>\n\n\n\n

BlackRock ETF Details<\/h2>\n\n\n\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

This adjustment carries significant implications. If these predictions materialize, the Federal Reserve's balance sheet<\/a> will likely shrink to approximately $6.75 trillion, down from its current level of roughly $7.764 trillion. Moreover, banks estimated that the central bank's reverse repo facility would hold $375 billion when QT concludes, a reduction from the anticipated $625 billion as forecasted in October.<\/p>\n\n\n\n

Federal Reserve Strategy<\/h2>\n\n\n\n

The quantitative tightening process has been an integral part of the Federal Reserve's strategy to combat inflation. Alongside rate hikes, the central bank initiated large-scale purchases of Treasury bonds and mortgage-backed securities during the COVID-19 pandemic's onset in 2020. This move led to an expansion of its holdings to approximately $9 trillion by mid-2022. However, since last year, the Fed has been gradually reducing its balance sheet size, although specific guidance on the timeline remains somewhat ambiguous.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

What This Means for the Economy<\/h2>\n\n\n\n

The recalibrated timeline for QT indicates a more prolonged period of balance sheet reduction. As the Federal Reserve continues to navigate its policy decisions, market participants, businesses, and consumers should monitor these developments closely. Changes in the balance sheet size can influence interest rates, liquidity conditions, and overall financial market dynamics.<\/p>\n\n\n\n

A Technical Perspective<\/h2>\n\n\n\n

From a technical standpoint, the Federal Reserve's<\/a> balance sheet management serves as a critical tool in its monetary policy arsenal. The evolving predictions by Wall Street's primary dealers underscore the complexities involved in forecasting economic variables, such as inflation and interest rates.<\/p>\n\n\n\n

As the QT process continues, policymakers and market participants must remain vigilant, considering the potential ramifications for financial stability and economic growth. This dynamic landscape necessitates ongoing analysis and adaptation to ensure that monetary policy objectives align with evolving economic conditions.<\/p>\n","post_title":"Decoding Wall Street's Shift: A Closer Look At Wall Street's Changing Perspective","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"decoding-wall-streets-shift-a-closer-look-at-wall-streets-changing-perspective","to_ping":"","pinged":"","post_modified":"2024-01-10 07:51:25","post_modified_gmt":"2024-01-09 20:51:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14931","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14888,"post_author":"14","post_date":"2024-01-06 18:33:09","post_date_gmt":"2024-01-06 07:33:09","post_content":"\n

Wall Street's main indexes fell at the beginning of the 2024 year as investors locked in profits after a very successful 2023 and are currently waiting for the Federal Reserve's<\/a> meeting that could offer hints on its interest rate path. Ken Polcari, managing partner at Kace Capital Advisors, said:<\/p>\n\n\n\n

\"The decline yesterday, today, and maybe for the next couple of weeks, is a result of people locking in profits and reconsidering what the narrative is - are rates going down five or six times as it appeared to be at the end of last year?\"<\/em><\/p>\n\n\n\n

\"\"
The Nasdaq Composite kicked off the year with a 1.5% drop pressured by a selloff in the tech sector<\/figcaption><\/figure>\n\n\n\n

The Fed's December meeting minutes are set to be disclosed at 2:00 p.m. ET, potentially providing information regarding the central bank's shift toward reducing interest rates. Although it's widely anticipated that the Fed will keep interest rates unchanged this month, traders have priced in a 65.7% probability of a 25 basis point rate reduction in March, according to CMEGroup's FedWatch tool.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures<\/a><\/p>\n\n\n\n

Central Bank And Inflation<\/h2>\n\n\n\n

Richmond Fed President Thomas Barkin, a voting member in the FOMC's rate-setting committee, said recently that the U.S. central bank is \"making real progress\" towards taming inflation and a soft landing seeming \"increasingly conceivable\". Encouragingly, the American Association of Individual Investors (AAII) Sentiment Survey indicated a surge in optimism among individual investors regarding the short-term outlook for the U.S. stock market, reaching its peak level in more than two and a half years.<\/p>\n\n\n\n

Despite this, JPMorgan Asset Management advises investors to be cautious due to potential recession risks. At the same time, analysts at Soci\u00e9t\u00e9 G\u00e9n\u00e9rale anticipate a turbulent 2024 for U.S. stocks, projecting fluctuations that could involve nearing recent highs, encountering declines, and subsequently rebounding.<\/p>\n\n\n\n

This week will witness a series of labor market data releases, culminating in the government's December employment report on Friday. These reports could significantly influence the forecast for the Fed's interest rate trajectory this year, prompting investors to scrutinize the data. Jeffrey Roach, chief economist at LPL Financial, added<\/a>:<\/p>\n\n\n\n

 \"The job market is cooling and we should see confirmation of that in this Friday\u2019s jobs report\"<\/em><\/p>\n\n\n\n

Following the progress of Wall Street's main indexes seen last year, investors are still optimistic about the prospect of another robust year ahead. This optimism is rooted in the anticipation that a decelerating economy will result in a gentle landing rather than a full-scale recession, especially as the Fed initiates rate cuts in the first half of 2024.<\/p>\n","post_title":"Wall Street's Main Indexes Fell At The Beginning Of 2024 year. Investors Locked In Profits After A Strong 2023 And Wait For The Federal Reserve's Meeting","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-at-the-beginning-of-2024-year-investors-locked-in-profits-after-a-strong-2023-and-wait-for-the-federal-reserves-meeting","to_ping":"","pinged":"","post_modified":"2024-01-06 18:33:13","post_modified_gmt":"2024-01-06 07:33:13","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14888","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14629,"post_author":"15","post_date":"2023-12-15 19:46:11","post_date_gmt":"2023-12-15 08:46:11","post_content":"\n

BlackRock aims to facilitate the participation of Wall Street banks in its potential Bitcoin ETF approval. Recent SEC memo <\/a>detailing a late November meeting involving BlackRock, Nasdaq, and the Commission. During this meeting, they discussed feedback regarding BlackRock's Bitcoin ETF application.<\/p>\n\n\n\n

The proposed approach introduces an innovative method for the redemption of ETF shares. A Bitcoin ETF would enable fund investors to gain exposure to Bitcoin without directly purchasing or storing the cryptocurrency. While the SEC has hesitated to approve such ETFs due to concerns about Bitcoin market manipulation, this new strategy addresses those worries.<\/p>\n\n\n\n

The SEC has yet to decide on BlackRock's iShares Bitcoin Trust (IBTC) application, with the deadline set for January 15. Analysts anticipate a decision will be issued for several spot Bitcoin ETF applications earlier in January.<\/p>\n\n\n\n

See Related:<\/strong><\/em> Fidelity Joins BlackRock\u2019s Push For Ethereum ETF<\/a><\/p>\n\n\n\n

BlackRock ETF Details<\/h2>\n\n\n\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

Previously, primary dealers\u2014major banks\u2014projected that the QT process would conclude by the third quarter. However, the sentiment has evolved. According to the latest survey taken before the Fed's December 12-13 policy meeting, these banks now foresee the QT process ending in the fourth quarter.<\/p>\n\n\n\n

This adjustment carries significant implications. If these predictions materialize, the Federal Reserve's balance sheet<\/a> will likely shrink to approximately $6.75 trillion, down from its current level of roughly $7.764 trillion. Moreover, banks estimated that the central bank's reverse repo facility would hold $375 billion when QT concludes, a reduction from the anticipated $625 billion as forecasted in October.<\/p>\n\n\n\n

Federal Reserve Strategy<\/h2>\n\n\n\n

The quantitative tightening process has been an integral part of the Federal Reserve's strategy to combat inflation. Alongside rate hikes, the central bank initiated large-scale purchases of Treasury bonds and mortgage-backed securities during the COVID-19 pandemic's onset in 2020. This move led to an expansion of its holdings to approximately $9 trillion by mid-2022. However, since last year, the Fed has been gradually reducing its balance sheet size, although specific guidance on the timeline remains somewhat ambiguous.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

What This Means for the Economy<\/h2>\n\n\n\n

The recalibrated timeline for QT indicates a more prolonged period of balance sheet reduction. As the Federal Reserve continues to navigate its policy decisions, market participants, businesses, and consumers should monitor these developments closely. Changes in the balance sheet size can influence interest rates, liquidity conditions, and overall financial market dynamics.<\/p>\n\n\n\n

A Technical Perspective<\/h2>\n\n\n\n

From a technical standpoint, the Federal Reserve's<\/a> balance sheet management serves as a critical tool in its monetary policy arsenal. The evolving predictions by Wall Street's primary dealers underscore the complexities involved in forecasting economic variables, such as inflation and interest rates.<\/p>\n\n\n\n

As the QT process continues, policymakers and market participants must remain vigilant, considering the potential ramifications for financial stability and economic growth. This dynamic landscape necessitates ongoing analysis and adaptation to ensure that monetary policy objectives align with evolving economic conditions.<\/p>\n","post_title":"Decoding Wall Street's Shift: A Closer Look At Wall Street's Changing Perspective","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"decoding-wall-streets-shift-a-closer-look-at-wall-streets-changing-perspective","to_ping":"","pinged":"","post_modified":"2024-01-10 07:51:25","post_modified_gmt":"2024-01-09 20:51:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14931","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14888,"post_author":"14","post_date":"2024-01-06 18:33:09","post_date_gmt":"2024-01-06 07:33:09","post_content":"\n

Wall Street's main indexes fell at the beginning of the 2024 year as investors locked in profits after a very successful 2023 and are currently waiting for the Federal Reserve's<\/a> meeting that could offer hints on its interest rate path. Ken Polcari, managing partner at Kace Capital Advisors, said:<\/p>\n\n\n\n

\"The decline yesterday, today, and maybe for the next couple of weeks, is a result of people locking in profits and reconsidering what the narrative is - are rates going down five or six times as it appeared to be at the end of last year?\"<\/em><\/p>\n\n\n\n

\"\"
The Nasdaq Composite kicked off the year with a 1.5% drop pressured by a selloff in the tech sector<\/figcaption><\/figure>\n\n\n\n

The Fed's December meeting minutes are set to be disclosed at 2:00 p.m. ET, potentially providing information regarding the central bank's shift toward reducing interest rates. Although it's widely anticipated that the Fed will keep interest rates unchanged this month, traders have priced in a 65.7% probability of a 25 basis point rate reduction in March, according to CMEGroup's FedWatch tool.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures<\/a><\/p>\n\n\n\n

Central Bank And Inflation<\/h2>\n\n\n\n

Richmond Fed President Thomas Barkin, a voting member in the FOMC's rate-setting committee, said recently that the U.S. central bank is \"making real progress\" towards taming inflation and a soft landing seeming \"increasingly conceivable\". Encouragingly, the American Association of Individual Investors (AAII) Sentiment Survey indicated a surge in optimism among individual investors regarding the short-term outlook for the U.S. stock market, reaching its peak level in more than two and a half years.<\/p>\n\n\n\n

Despite this, JPMorgan Asset Management advises investors to be cautious due to potential recession risks. At the same time, analysts at Soci\u00e9t\u00e9 G\u00e9n\u00e9rale anticipate a turbulent 2024 for U.S. stocks, projecting fluctuations that could involve nearing recent highs, encountering declines, and subsequently rebounding.<\/p>\n\n\n\n

This week will witness a series of labor market data releases, culminating in the government's December employment report on Friday. These reports could significantly influence the forecast for the Fed's interest rate trajectory this year, prompting investors to scrutinize the data. Jeffrey Roach, chief economist at LPL Financial, added<\/a>:<\/p>\n\n\n\n

 \"The job market is cooling and we should see confirmation of that in this Friday\u2019s jobs report\"<\/em><\/p>\n\n\n\n

Following the progress of Wall Street's main indexes seen last year, investors are still optimistic about the prospect of another robust year ahead. This optimism is rooted in the anticipation that a decelerating economy will result in a gentle landing rather than a full-scale recession, especially as the Fed initiates rate cuts in the first half of 2024.<\/p>\n","post_title":"Wall Street's Main Indexes Fell At The Beginning Of 2024 year. Investors Locked In Profits After A Strong 2023 And Wait For The Federal Reserve's Meeting","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-at-the-beginning-of-2024-year-investors-locked-in-profits-after-a-strong-2023-and-wait-for-the-federal-reserves-meeting","to_ping":"","pinged":"","post_modified":"2024-01-06 18:33:13","post_modified_gmt":"2024-01-06 07:33:13","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14888","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14629,"post_author":"15","post_date":"2023-12-15 19:46:11","post_date_gmt":"2023-12-15 08:46:11","post_content":"\n

BlackRock aims to facilitate the participation of Wall Street banks in its potential Bitcoin ETF approval. Recent SEC memo <\/a>detailing a late November meeting involving BlackRock, Nasdaq, and the Commission. During this meeting, they discussed feedback regarding BlackRock's Bitcoin ETF application.<\/p>\n\n\n\n

The proposed approach introduces an innovative method for the redemption of ETF shares. A Bitcoin ETF would enable fund investors to gain exposure to Bitcoin without directly purchasing or storing the cryptocurrency. While the SEC has hesitated to approve such ETFs due to concerns about Bitcoin market manipulation, this new strategy addresses those worries.<\/p>\n\n\n\n

The SEC has yet to decide on BlackRock's iShares Bitcoin Trust (IBTC) application, with the deadline set for January 15. Analysts anticipate a decision will be issued for several spot Bitcoin ETF applications earlier in January.<\/p>\n\n\n\n

See Related:<\/strong><\/em> Fidelity Joins BlackRock\u2019s Push For Ethereum ETF<\/a><\/p>\n\n\n\n

BlackRock ETF Details<\/h2>\n\n\n\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

A Change in Perspective<\/h2>\n\n\n\n

Previously, primary dealers\u2014major banks\u2014projected that the QT process would conclude by the third quarter. However, the sentiment has evolved. According to the latest survey taken before the Fed's December 12-13 policy meeting, these banks now foresee the QT process ending in the fourth quarter.<\/p>\n\n\n\n

This adjustment carries significant implications. If these predictions materialize, the Federal Reserve's balance sheet<\/a> will likely shrink to approximately $6.75 trillion, down from its current level of roughly $7.764 trillion. Moreover, banks estimated that the central bank's reverse repo facility would hold $375 billion when QT concludes, a reduction from the anticipated $625 billion as forecasted in October.<\/p>\n\n\n\n

Federal Reserve Strategy<\/h2>\n\n\n\n

The quantitative tightening process has been an integral part of the Federal Reserve's strategy to combat inflation. Alongside rate hikes, the central bank initiated large-scale purchases of Treasury bonds and mortgage-backed securities during the COVID-19 pandemic's onset in 2020. This move led to an expansion of its holdings to approximately $9 trillion by mid-2022. However, since last year, the Fed has been gradually reducing its balance sheet size, although specific guidance on the timeline remains somewhat ambiguous.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

What This Means for the Economy<\/h2>\n\n\n\n

The recalibrated timeline for QT indicates a more prolonged period of balance sheet reduction. As the Federal Reserve continues to navigate its policy decisions, market participants, businesses, and consumers should monitor these developments closely. Changes in the balance sheet size can influence interest rates, liquidity conditions, and overall financial market dynamics.<\/p>\n\n\n\n

A Technical Perspective<\/h2>\n\n\n\n

From a technical standpoint, the Federal Reserve's<\/a> balance sheet management serves as a critical tool in its monetary policy arsenal. The evolving predictions by Wall Street's primary dealers underscore the complexities involved in forecasting economic variables, such as inflation and interest rates.<\/p>\n\n\n\n

As the QT process continues, policymakers and market participants must remain vigilant, considering the potential ramifications for financial stability and economic growth. This dynamic landscape necessitates ongoing analysis and adaptation to ensure that monetary policy objectives align with evolving economic conditions.<\/p>\n","post_title":"Decoding Wall Street's Shift: A Closer Look At Wall Street's Changing Perspective","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"decoding-wall-streets-shift-a-closer-look-at-wall-streets-changing-perspective","to_ping":"","pinged":"","post_modified":"2024-01-10 07:51:25","post_modified_gmt":"2024-01-09 20:51:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14931","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14888,"post_author":"14","post_date":"2024-01-06 18:33:09","post_date_gmt":"2024-01-06 07:33:09","post_content":"\n

Wall Street's main indexes fell at the beginning of the 2024 year as investors locked in profits after a very successful 2023 and are currently waiting for the Federal Reserve's<\/a> meeting that could offer hints on its interest rate path. Ken Polcari, managing partner at Kace Capital Advisors, said:<\/p>\n\n\n\n

\"The decline yesterday, today, and maybe for the next couple of weeks, is a result of people locking in profits and reconsidering what the narrative is - are rates going down five or six times as it appeared to be at the end of last year?\"<\/em><\/p>\n\n\n\n

\"\"
The Nasdaq Composite kicked off the year with a 1.5% drop pressured by a selloff in the tech sector<\/figcaption><\/figure>\n\n\n\n

The Fed's December meeting minutes are set to be disclosed at 2:00 p.m. ET, potentially providing information regarding the central bank's shift toward reducing interest rates. Although it's widely anticipated that the Fed will keep interest rates unchanged this month, traders have priced in a 65.7% probability of a 25 basis point rate reduction in March, according to CMEGroup's FedWatch tool.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures<\/a><\/p>\n\n\n\n

Central Bank And Inflation<\/h2>\n\n\n\n

Richmond Fed President Thomas Barkin, a voting member in the FOMC's rate-setting committee, said recently that the U.S. central bank is \"making real progress\" towards taming inflation and a soft landing seeming \"increasingly conceivable\". Encouragingly, the American Association of Individual Investors (AAII) Sentiment Survey indicated a surge in optimism among individual investors regarding the short-term outlook for the U.S. stock market, reaching its peak level in more than two and a half years.<\/p>\n\n\n\n

Despite this, JPMorgan Asset Management advises investors to be cautious due to potential recession risks. At the same time, analysts at Soci\u00e9t\u00e9 G\u00e9n\u00e9rale anticipate a turbulent 2024 for U.S. stocks, projecting fluctuations that could involve nearing recent highs, encountering declines, and subsequently rebounding.<\/p>\n\n\n\n

This week will witness a series of labor market data releases, culminating in the government's December employment report on Friday. These reports could significantly influence the forecast for the Fed's interest rate trajectory this year, prompting investors to scrutinize the data. Jeffrey Roach, chief economist at LPL Financial, added<\/a>:<\/p>\n\n\n\n

 \"The job market is cooling and we should see confirmation of that in this Friday\u2019s jobs report\"<\/em><\/p>\n\n\n\n

Following the progress of Wall Street's main indexes seen last year, investors are still optimistic about the prospect of another robust year ahead. This optimism is rooted in the anticipation that a decelerating economy will result in a gentle landing rather than a full-scale recession, especially as the Fed initiates rate cuts in the first half of 2024.<\/p>\n","post_title":"Wall Street's Main Indexes Fell At The Beginning Of 2024 year. Investors Locked In Profits After A Strong 2023 And Wait For The Federal Reserve's Meeting","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-at-the-beginning-of-2024-year-investors-locked-in-profits-after-a-strong-2023-and-wait-for-the-federal-reserves-meeting","to_ping":"","pinged":"","post_modified":"2024-01-06 18:33:13","post_modified_gmt":"2024-01-06 07:33:13","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14888","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14629,"post_author":"15","post_date":"2023-12-15 19:46:11","post_date_gmt":"2023-12-15 08:46:11","post_content":"\n

BlackRock aims to facilitate the participation of Wall Street banks in its potential Bitcoin ETF approval. Recent SEC memo <\/a>detailing a late November meeting involving BlackRock, Nasdaq, and the Commission. During this meeting, they discussed feedback regarding BlackRock's Bitcoin ETF application.<\/p>\n\n\n\n

The proposed approach introduces an innovative method for the redemption of ETF shares. A Bitcoin ETF would enable fund investors to gain exposure to Bitcoin without directly purchasing or storing the cryptocurrency. While the SEC has hesitated to approve such ETFs due to concerns about Bitcoin market manipulation, this new strategy addresses those worries.<\/p>\n\n\n\n

The SEC has yet to decide on BlackRock's iShares Bitcoin Trust (IBTC) application, with the deadline set for January 15. Analysts anticipate a decision will be issued for several spot Bitcoin ETF applications earlier in January.<\/p>\n\n\n\n

See Related:<\/strong><\/em> Fidelity Joins BlackRock\u2019s Push For Ethereum ETF<\/a><\/p>\n\n\n\n

BlackRock ETF Details<\/h2>\n\n\n\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

In a recent survey conducted by the New York Federal Reserve<\/a>, Wall Street's major banks have recalibrated their predictions regarding the Federal Reserve's balance sheet drawdown. This shift suggests that the U.S. central bank might conclude its quantitative tightening (QT) process later than initially anticipated.<\/p>\n\n\n\n

A Change in Perspective<\/h2>\n\n\n\n

Previously, primary dealers\u2014major banks\u2014projected that the QT process would conclude by the third quarter. However, the sentiment has evolved. According to the latest survey taken before the Fed's December 12-13 policy meeting, these banks now foresee the QT process ending in the fourth quarter.<\/p>\n\n\n\n

This adjustment carries significant implications. If these predictions materialize, the Federal Reserve's balance sheet<\/a> will likely shrink to approximately $6.75 trillion, down from its current level of roughly $7.764 trillion. Moreover, banks estimated that the central bank's reverse repo facility would hold $375 billion when QT concludes, a reduction from the anticipated $625 billion as forecasted in October.<\/p>\n\n\n\n

Federal Reserve Strategy<\/h2>\n\n\n\n

The quantitative tightening process has been an integral part of the Federal Reserve's strategy to combat inflation. Alongside rate hikes, the central bank initiated large-scale purchases of Treasury bonds and mortgage-backed securities during the COVID-19 pandemic's onset in 2020. This move led to an expansion of its holdings to approximately $9 trillion by mid-2022. However, since last year, the Fed has been gradually reducing its balance sheet size, although specific guidance on the timeline remains somewhat ambiguous.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

What This Means for the Economy<\/h2>\n\n\n\n

The recalibrated timeline for QT indicates a more prolonged period of balance sheet reduction. As the Federal Reserve continues to navigate its policy decisions, market participants, businesses, and consumers should monitor these developments closely. Changes in the balance sheet size can influence interest rates, liquidity conditions, and overall financial market dynamics.<\/p>\n\n\n\n

A Technical Perspective<\/h2>\n\n\n\n

From a technical standpoint, the Federal Reserve's<\/a> balance sheet management serves as a critical tool in its monetary policy arsenal. The evolving predictions by Wall Street's primary dealers underscore the complexities involved in forecasting economic variables, such as inflation and interest rates.<\/p>\n\n\n\n

As the QT process continues, policymakers and market participants must remain vigilant, considering the potential ramifications for financial stability and economic growth. This dynamic landscape necessitates ongoing analysis and adaptation to ensure that monetary policy objectives align with evolving economic conditions.<\/p>\n","post_title":"Decoding Wall Street's Shift: A Closer Look At Wall Street's Changing Perspective","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"decoding-wall-streets-shift-a-closer-look-at-wall-streets-changing-perspective","to_ping":"","pinged":"","post_modified":"2024-01-10 07:51:25","post_modified_gmt":"2024-01-09 20:51:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14931","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14888,"post_author":"14","post_date":"2024-01-06 18:33:09","post_date_gmt":"2024-01-06 07:33:09","post_content":"\n

Wall Street's main indexes fell at the beginning of the 2024 year as investors locked in profits after a very successful 2023 and are currently waiting for the Federal Reserve's<\/a> meeting that could offer hints on its interest rate path. Ken Polcari, managing partner at Kace Capital Advisors, said:<\/p>\n\n\n\n

\"The decline yesterday, today, and maybe for the next couple of weeks, is a result of people locking in profits and reconsidering what the narrative is - are rates going down five or six times as it appeared to be at the end of last year?\"<\/em><\/p>\n\n\n\n

\"\"
The Nasdaq Composite kicked off the year with a 1.5% drop pressured by a selloff in the tech sector<\/figcaption><\/figure>\n\n\n\n

The Fed's December meeting minutes are set to be disclosed at 2:00 p.m. ET, potentially providing information regarding the central bank's shift toward reducing interest rates. Although it's widely anticipated that the Fed will keep interest rates unchanged this month, traders have priced in a 65.7% probability of a 25 basis point rate reduction in March, according to CMEGroup's FedWatch tool.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures<\/a><\/p>\n\n\n\n

Central Bank And Inflation<\/h2>\n\n\n\n

Richmond Fed President Thomas Barkin, a voting member in the FOMC's rate-setting committee, said recently that the U.S. central bank is \"making real progress\" towards taming inflation and a soft landing seeming \"increasingly conceivable\". Encouragingly, the American Association of Individual Investors (AAII) Sentiment Survey indicated a surge in optimism among individual investors regarding the short-term outlook for the U.S. stock market, reaching its peak level in more than two and a half years.<\/p>\n\n\n\n

Despite this, JPMorgan Asset Management advises investors to be cautious due to potential recession risks. At the same time, analysts at Soci\u00e9t\u00e9 G\u00e9n\u00e9rale anticipate a turbulent 2024 for U.S. stocks, projecting fluctuations that could involve nearing recent highs, encountering declines, and subsequently rebounding.<\/p>\n\n\n\n

This week will witness a series of labor market data releases, culminating in the government's December employment report on Friday. These reports could significantly influence the forecast for the Fed's interest rate trajectory this year, prompting investors to scrutinize the data. Jeffrey Roach, chief economist at LPL Financial, added<\/a>:<\/p>\n\n\n\n

 \"The job market is cooling and we should see confirmation of that in this Friday\u2019s jobs report\"<\/em><\/p>\n\n\n\n

Following the progress of Wall Street's main indexes seen last year, investors are still optimistic about the prospect of another robust year ahead. This optimism is rooted in the anticipation that a decelerating economy will result in a gentle landing rather than a full-scale recession, especially as the Fed initiates rate cuts in the first half of 2024.<\/p>\n","post_title":"Wall Street's Main Indexes Fell At The Beginning Of 2024 year. Investors Locked In Profits After A Strong 2023 And Wait For The Federal Reserve's Meeting","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-at-the-beginning-of-2024-year-investors-locked-in-profits-after-a-strong-2023-and-wait-for-the-federal-reserves-meeting","to_ping":"","pinged":"","post_modified":"2024-01-06 18:33:13","post_modified_gmt":"2024-01-06 07:33:13","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14888","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14629,"post_author":"15","post_date":"2023-12-15 19:46:11","post_date_gmt":"2023-12-15 08:46:11","post_content":"\n

BlackRock aims to facilitate the participation of Wall Street banks in its potential Bitcoin ETF approval. Recent SEC memo <\/a>detailing a late November meeting involving BlackRock, Nasdaq, and the Commission. During this meeting, they discussed feedback regarding BlackRock's Bitcoin ETF application.<\/p>\n\n\n\n

The proposed approach introduces an innovative method for the redemption of ETF shares. A Bitcoin ETF would enable fund investors to gain exposure to Bitcoin without directly purchasing or storing the cryptocurrency. While the SEC has hesitated to approve such ETFs due to concerns about Bitcoin market manipulation, this new strategy addresses those worries.<\/p>\n\n\n\n

The SEC has yet to decide on BlackRock's iShares Bitcoin Trust (IBTC) application, with the deadline set for January 15. Analysts anticipate a decision will be issued for several spot Bitcoin ETF applications earlier in January.<\/p>\n\n\n\n

See Related:<\/strong><\/em> Fidelity Joins BlackRock\u2019s Push For Ethereum ETF<\/a><\/p>\n\n\n\n

BlackRock ETF Details<\/h2>\n\n\n\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

At the same time, the escalation of geopolitical uncertainties introduces an additional challenge and heightens the potential for unforeseen risks in both markets and economic performance. Considering these factors, the perspective is likely to stay cautious as long as interest rates remain significantly restrictive and the looming presence of geopolitical risks persists.<\/p>\n","post_title":"Wall Street Weakened As Retail Sales Data Hampers Expectations For A Cut In Interest Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-weakened-as-retail-sales-data-hampers-expectations-for-a-cut-in-interest-rates","to_ping":"","pinged":"","post_modified":"2024-01-19 05:56:51","post_modified_gmt":"2024-01-18 18:56:51","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15043","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14931,"post_author":"18","post_date":"2024-01-10 07:51:17","post_date_gmt":"2024-01-09 20:51:17","post_content":"\n

In a recent survey conducted by the New York Federal Reserve<\/a>, Wall Street's major banks have recalibrated their predictions regarding the Federal Reserve's balance sheet drawdown. This shift suggests that the U.S. central bank might conclude its quantitative tightening (QT) process later than initially anticipated.<\/p>\n\n\n\n

A Change in Perspective<\/h2>\n\n\n\n

Previously, primary dealers\u2014major banks\u2014projected that the QT process would conclude by the third quarter. However, the sentiment has evolved. According to the latest survey taken before the Fed's December 12-13 policy meeting, these banks now foresee the QT process ending in the fourth quarter.<\/p>\n\n\n\n

This adjustment carries significant implications. If these predictions materialize, the Federal Reserve's balance sheet<\/a> will likely shrink to approximately $6.75 trillion, down from its current level of roughly $7.764 trillion. Moreover, banks estimated that the central bank's reverse repo facility would hold $375 billion when QT concludes, a reduction from the anticipated $625 billion as forecasted in October.<\/p>\n\n\n\n

Federal Reserve Strategy<\/h2>\n\n\n\n

The quantitative tightening process has been an integral part of the Federal Reserve's strategy to combat inflation. Alongside rate hikes, the central bank initiated large-scale purchases of Treasury bonds and mortgage-backed securities during the COVID-19 pandemic's onset in 2020. This move led to an expansion of its holdings to approximately $9 trillion by mid-2022. However, since last year, the Fed has been gradually reducing its balance sheet size, although specific guidance on the timeline remains somewhat ambiguous.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

What This Means for the Economy<\/h2>\n\n\n\n

The recalibrated timeline for QT indicates a more prolonged period of balance sheet reduction. As the Federal Reserve continues to navigate its policy decisions, market participants, businesses, and consumers should monitor these developments closely. Changes in the balance sheet size can influence interest rates, liquidity conditions, and overall financial market dynamics.<\/p>\n\n\n\n

A Technical Perspective<\/h2>\n\n\n\n

From a technical standpoint, the Federal Reserve's<\/a> balance sheet management serves as a critical tool in its monetary policy arsenal. The evolving predictions by Wall Street's primary dealers underscore the complexities involved in forecasting economic variables, such as inflation and interest rates.<\/p>\n\n\n\n

As the QT process continues, policymakers and market participants must remain vigilant, considering the potential ramifications for financial stability and economic growth. This dynamic landscape necessitates ongoing analysis and adaptation to ensure that monetary policy objectives align with evolving economic conditions.<\/p>\n","post_title":"Decoding Wall Street's Shift: A Closer Look At Wall Street's Changing Perspective","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"decoding-wall-streets-shift-a-closer-look-at-wall-streets-changing-perspective","to_ping":"","pinged":"","post_modified":"2024-01-10 07:51:25","post_modified_gmt":"2024-01-09 20:51:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14931","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14888,"post_author":"14","post_date":"2024-01-06 18:33:09","post_date_gmt":"2024-01-06 07:33:09","post_content":"\n

Wall Street's main indexes fell at the beginning of the 2024 year as investors locked in profits after a very successful 2023 and are currently waiting for the Federal Reserve's<\/a> meeting that could offer hints on its interest rate path. Ken Polcari, managing partner at Kace Capital Advisors, said:<\/p>\n\n\n\n

\"The decline yesterday, today, and maybe for the next couple of weeks, is a result of people locking in profits and reconsidering what the narrative is - are rates going down five or six times as it appeared to be at the end of last year?\"<\/em><\/p>\n\n\n\n

\"\"
The Nasdaq Composite kicked off the year with a 1.5% drop pressured by a selloff in the tech sector<\/figcaption><\/figure>\n\n\n\n

The Fed's December meeting minutes are set to be disclosed at 2:00 p.m. ET, potentially providing information regarding the central bank's shift toward reducing interest rates. Although it's widely anticipated that the Fed will keep interest rates unchanged this month, traders have priced in a 65.7% probability of a 25 basis point rate reduction in March, according to CMEGroup's FedWatch tool.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures<\/a><\/p>\n\n\n\n

Central Bank And Inflation<\/h2>\n\n\n\n

Richmond Fed President Thomas Barkin, a voting member in the FOMC's rate-setting committee, said recently that the U.S. central bank is \"making real progress\" towards taming inflation and a soft landing seeming \"increasingly conceivable\". Encouragingly, the American Association of Individual Investors (AAII) Sentiment Survey indicated a surge in optimism among individual investors regarding the short-term outlook for the U.S. stock market, reaching its peak level in more than two and a half years.<\/p>\n\n\n\n

Despite this, JPMorgan Asset Management advises investors to be cautious due to potential recession risks. At the same time, analysts at Soci\u00e9t\u00e9 G\u00e9n\u00e9rale anticipate a turbulent 2024 for U.S. stocks, projecting fluctuations that could involve nearing recent highs, encountering declines, and subsequently rebounding.<\/p>\n\n\n\n

This week will witness a series of labor market data releases, culminating in the government's December employment report on Friday. These reports could significantly influence the forecast for the Fed's interest rate trajectory this year, prompting investors to scrutinize the data. Jeffrey Roach, chief economist at LPL Financial, added<\/a>:<\/p>\n\n\n\n

 \"The job market is cooling and we should see confirmation of that in this Friday\u2019s jobs report\"<\/em><\/p>\n\n\n\n

Following the progress of Wall Street's main indexes seen last year, investors are still optimistic about the prospect of another robust year ahead. This optimism is rooted in the anticipation that a decelerating economy will result in a gentle landing rather than a full-scale recession, especially as the Fed initiates rate cuts in the first half of 2024.<\/p>\n","post_title":"Wall Street's Main Indexes Fell At The Beginning Of 2024 year. Investors Locked In Profits After A Strong 2023 And Wait For The Federal Reserve's Meeting","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-at-the-beginning-of-2024-year-investors-locked-in-profits-after-a-strong-2023-and-wait-for-the-federal-reserves-meeting","to_ping":"","pinged":"","post_modified":"2024-01-06 18:33:13","post_modified_gmt":"2024-01-06 07:33:13","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14888","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14629,"post_author":"15","post_date":"2023-12-15 19:46:11","post_date_gmt":"2023-12-15 08:46:11","post_content":"\n

BlackRock aims to facilitate the participation of Wall Street banks in its potential Bitcoin ETF approval. Recent SEC memo <\/a>detailing a late November meeting involving BlackRock, Nasdaq, and the Commission. During this meeting, they discussed feedback regarding BlackRock's Bitcoin ETF application.<\/p>\n\n\n\n

The proposed approach introduces an innovative method for the redemption of ETF shares. A Bitcoin ETF would enable fund investors to gain exposure to Bitcoin without directly purchasing or storing the cryptocurrency. While the SEC has hesitated to approve such ETFs due to concerns about Bitcoin market manipulation, this new strategy addresses those worries.<\/p>\n\n\n\n

The SEC has yet to decide on BlackRock's iShares Bitcoin Trust (IBTC) application, with the deadline set for January 15. Analysts anticipate a decision will be issued for several spot Bitcoin ETF applications earlier in January.<\/p>\n\n\n\n

See Related:<\/strong><\/em> Fidelity Joins BlackRock\u2019s Push For Ethereum ETF<\/a><\/p>\n\n\n\n

BlackRock ETF Details<\/h2>\n\n\n\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

It is also important to mention that a decline in U.S. stocks sent Wall Street's<\/a> \"fear gauge\" to a two-month high while JPMorgan analysts predict that the majority of negative consequences stemming from higher interest rates have not materialized yet. On Tuesday, Federal Reserve Governor Christopher Waller also emphasized that the central bank should refrain from hastily reducing interest rates until there is a clear indication that lower inflation is likely to persist.<\/p>\n\n\n\n

At the same time, the escalation of geopolitical uncertainties introduces an additional challenge and heightens the potential for unforeseen risks in both markets and economic performance. Considering these factors, the perspective is likely to stay cautious as long as interest rates remain significantly restrictive and the looming presence of geopolitical risks persists.<\/p>\n","post_title":"Wall Street Weakened As Retail Sales Data Hampers Expectations For A Cut In Interest Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-weakened-as-retail-sales-data-hampers-expectations-for-a-cut-in-interest-rates","to_ping":"","pinged":"","post_modified":"2024-01-19 05:56:51","post_modified_gmt":"2024-01-18 18:56:51","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15043","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14931,"post_author":"18","post_date":"2024-01-10 07:51:17","post_date_gmt":"2024-01-09 20:51:17","post_content":"\n

In a recent survey conducted by the New York Federal Reserve<\/a>, Wall Street's major banks have recalibrated their predictions regarding the Federal Reserve's balance sheet drawdown. This shift suggests that the U.S. central bank might conclude its quantitative tightening (QT) process later than initially anticipated.<\/p>\n\n\n\n

A Change in Perspective<\/h2>\n\n\n\n

Previously, primary dealers\u2014major banks\u2014projected that the QT process would conclude by the third quarter. However, the sentiment has evolved. According to the latest survey taken before the Fed's December 12-13 policy meeting, these banks now foresee the QT process ending in the fourth quarter.<\/p>\n\n\n\n

This adjustment carries significant implications. If these predictions materialize, the Federal Reserve's balance sheet<\/a> will likely shrink to approximately $6.75 trillion, down from its current level of roughly $7.764 trillion. Moreover, banks estimated that the central bank's reverse repo facility would hold $375 billion when QT concludes, a reduction from the anticipated $625 billion as forecasted in October.<\/p>\n\n\n\n

Federal Reserve Strategy<\/h2>\n\n\n\n

The quantitative tightening process has been an integral part of the Federal Reserve's strategy to combat inflation. Alongside rate hikes, the central bank initiated large-scale purchases of Treasury bonds and mortgage-backed securities during the COVID-19 pandemic's onset in 2020. This move led to an expansion of its holdings to approximately $9 trillion by mid-2022. However, since last year, the Fed has been gradually reducing its balance sheet size, although specific guidance on the timeline remains somewhat ambiguous.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

What This Means for the Economy<\/h2>\n\n\n\n

The recalibrated timeline for QT indicates a more prolonged period of balance sheet reduction. As the Federal Reserve continues to navigate its policy decisions, market participants, businesses, and consumers should monitor these developments closely. Changes in the balance sheet size can influence interest rates, liquidity conditions, and overall financial market dynamics.<\/p>\n\n\n\n

A Technical Perspective<\/h2>\n\n\n\n

From a technical standpoint, the Federal Reserve's<\/a> balance sheet management serves as a critical tool in its monetary policy arsenal. The evolving predictions by Wall Street's primary dealers underscore the complexities involved in forecasting economic variables, such as inflation and interest rates.<\/p>\n\n\n\n

As the QT process continues, policymakers and market participants must remain vigilant, considering the potential ramifications for financial stability and economic growth. This dynamic landscape necessitates ongoing analysis and adaptation to ensure that monetary policy objectives align with evolving economic conditions.<\/p>\n","post_title":"Decoding Wall Street's Shift: A Closer Look At Wall Street's Changing Perspective","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"decoding-wall-streets-shift-a-closer-look-at-wall-streets-changing-perspective","to_ping":"","pinged":"","post_modified":"2024-01-10 07:51:25","post_modified_gmt":"2024-01-09 20:51:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14931","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14888,"post_author":"14","post_date":"2024-01-06 18:33:09","post_date_gmt":"2024-01-06 07:33:09","post_content":"\n

Wall Street's main indexes fell at the beginning of the 2024 year as investors locked in profits after a very successful 2023 and are currently waiting for the Federal Reserve's<\/a> meeting that could offer hints on its interest rate path. Ken Polcari, managing partner at Kace Capital Advisors, said:<\/p>\n\n\n\n

\"The decline yesterday, today, and maybe for the next couple of weeks, is a result of people locking in profits and reconsidering what the narrative is - are rates going down five or six times as it appeared to be at the end of last year?\"<\/em><\/p>\n\n\n\n

\"\"
The Nasdaq Composite kicked off the year with a 1.5% drop pressured by a selloff in the tech sector<\/figcaption><\/figure>\n\n\n\n

The Fed's December meeting minutes are set to be disclosed at 2:00 p.m. ET, potentially providing information regarding the central bank's shift toward reducing interest rates. Although it's widely anticipated that the Fed will keep interest rates unchanged this month, traders have priced in a 65.7% probability of a 25 basis point rate reduction in March, according to CMEGroup's FedWatch tool.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures<\/a><\/p>\n\n\n\n

Central Bank And Inflation<\/h2>\n\n\n\n

Richmond Fed President Thomas Barkin, a voting member in the FOMC's rate-setting committee, said recently that the U.S. central bank is \"making real progress\" towards taming inflation and a soft landing seeming \"increasingly conceivable\". Encouragingly, the American Association of Individual Investors (AAII) Sentiment Survey indicated a surge in optimism among individual investors regarding the short-term outlook for the U.S. stock market, reaching its peak level in more than two and a half years.<\/p>\n\n\n\n

Despite this, JPMorgan Asset Management advises investors to be cautious due to potential recession risks. At the same time, analysts at Soci\u00e9t\u00e9 G\u00e9n\u00e9rale anticipate a turbulent 2024 for U.S. stocks, projecting fluctuations that could involve nearing recent highs, encountering declines, and subsequently rebounding.<\/p>\n\n\n\n

This week will witness a series of labor market data releases, culminating in the government's December employment report on Friday. These reports could significantly influence the forecast for the Fed's interest rate trajectory this year, prompting investors to scrutinize the data. Jeffrey Roach, chief economist at LPL Financial, added<\/a>:<\/p>\n\n\n\n

 \"The job market is cooling and we should see confirmation of that in this Friday\u2019s jobs report\"<\/em><\/p>\n\n\n\n

Following the progress of Wall Street's main indexes seen last year, investors are still optimistic about the prospect of another robust year ahead. This optimism is rooted in the anticipation that a decelerating economy will result in a gentle landing rather than a full-scale recession, especially as the Fed initiates rate cuts in the first half of 2024.<\/p>\n","post_title":"Wall Street's Main Indexes Fell At The Beginning Of 2024 year. Investors Locked In Profits After A Strong 2023 And Wait For The Federal Reserve's Meeting","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-at-the-beginning-of-2024-year-investors-locked-in-profits-after-a-strong-2023-and-wait-for-the-federal-reserves-meeting","to_ping":"","pinged":"","post_modified":"2024-01-06 18:33:13","post_modified_gmt":"2024-01-06 07:33:13","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14888","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14629,"post_author":"15","post_date":"2023-12-15 19:46:11","post_date_gmt":"2023-12-15 08:46:11","post_content":"\n

BlackRock aims to facilitate the participation of Wall Street banks in its potential Bitcoin ETF approval. Recent SEC memo <\/a>detailing a late November meeting involving BlackRock, Nasdaq, and the Commission. During this meeting, they discussed feedback regarding BlackRock's Bitcoin ETF application.<\/p>\n\n\n\n

The proposed approach introduces an innovative method for the redemption of ETF shares. A Bitcoin ETF would enable fund investors to gain exposure to Bitcoin without directly purchasing or storing the cryptocurrency. While the SEC has hesitated to approve such ETFs due to concerns about Bitcoin market manipulation, this new strategy addresses those worries.<\/p>\n\n\n\n

The SEC has yet to decide on BlackRock's iShares Bitcoin Trust (IBTC) application, with the deadline set for January 15. Analysts anticipate a decision will be issued for several spot Bitcoin ETF applications earlier in January.<\/p>\n\n\n\n

See Related:<\/strong><\/em> Fidelity Joins BlackRock\u2019s Push For Ethereum ETF<\/a><\/p>\n\n\n\n

BlackRock ETF Details<\/h2>\n\n\n\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

US Stocks And Wall Street<\/h2>\n\n\n\n

It is also important to mention that a decline in U.S. stocks sent Wall Street's<\/a> \"fear gauge\" to a two-month high while JPMorgan analysts predict that the majority of negative consequences stemming from higher interest rates have not materialized yet. On Tuesday, Federal Reserve Governor Christopher Waller also emphasized that the central bank should refrain from hastily reducing interest rates until there is a clear indication that lower inflation is likely to persist.<\/p>\n\n\n\n

At the same time, the escalation of geopolitical uncertainties introduces an additional challenge and heightens the potential for unforeseen risks in both markets and economic performance. Considering these factors, the perspective is likely to stay cautious as long as interest rates remain significantly restrictive and the looming presence of geopolitical risks persists.<\/p>\n","post_title":"Wall Street Weakened As Retail Sales Data Hampers Expectations For A Cut In Interest Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-weakened-as-retail-sales-data-hampers-expectations-for-a-cut-in-interest-rates","to_ping":"","pinged":"","post_modified":"2024-01-19 05:56:51","post_modified_gmt":"2024-01-18 18:56:51","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15043","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14931,"post_author":"18","post_date":"2024-01-10 07:51:17","post_date_gmt":"2024-01-09 20:51:17","post_content":"\n

In a recent survey conducted by the New York Federal Reserve<\/a>, Wall Street's major banks have recalibrated their predictions regarding the Federal Reserve's balance sheet drawdown. This shift suggests that the U.S. central bank might conclude its quantitative tightening (QT) process later than initially anticipated.<\/p>\n\n\n\n

A Change in Perspective<\/h2>\n\n\n\n

Previously, primary dealers\u2014major banks\u2014projected that the QT process would conclude by the third quarter. However, the sentiment has evolved. According to the latest survey taken before the Fed's December 12-13 policy meeting, these banks now foresee the QT process ending in the fourth quarter.<\/p>\n\n\n\n

This adjustment carries significant implications. If these predictions materialize, the Federal Reserve's balance sheet<\/a> will likely shrink to approximately $6.75 trillion, down from its current level of roughly $7.764 trillion. Moreover, banks estimated that the central bank's reverse repo facility would hold $375 billion when QT concludes, a reduction from the anticipated $625 billion as forecasted in October.<\/p>\n\n\n\n

Federal Reserve Strategy<\/h2>\n\n\n\n

The quantitative tightening process has been an integral part of the Federal Reserve's strategy to combat inflation. Alongside rate hikes, the central bank initiated large-scale purchases of Treasury bonds and mortgage-backed securities during the COVID-19 pandemic's onset in 2020. This move led to an expansion of its holdings to approximately $9 trillion by mid-2022. However, since last year, the Fed has been gradually reducing its balance sheet size, although specific guidance on the timeline remains somewhat ambiguous.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

What This Means for the Economy<\/h2>\n\n\n\n

The recalibrated timeline for QT indicates a more prolonged period of balance sheet reduction. As the Federal Reserve continues to navigate its policy decisions, market participants, businesses, and consumers should monitor these developments closely. Changes in the balance sheet size can influence interest rates, liquidity conditions, and overall financial market dynamics.<\/p>\n\n\n\n

A Technical Perspective<\/h2>\n\n\n\n

From a technical standpoint, the Federal Reserve's<\/a> balance sheet management serves as a critical tool in its monetary policy arsenal. The evolving predictions by Wall Street's primary dealers underscore the complexities involved in forecasting economic variables, such as inflation and interest rates.<\/p>\n\n\n\n

As the QT process continues, policymakers and market participants must remain vigilant, considering the potential ramifications for financial stability and economic growth. This dynamic landscape necessitates ongoing analysis and adaptation to ensure that monetary policy objectives align with evolving economic conditions.<\/p>\n","post_title":"Decoding Wall Street's Shift: A Closer Look At Wall Street's Changing Perspective","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"decoding-wall-streets-shift-a-closer-look-at-wall-streets-changing-perspective","to_ping":"","pinged":"","post_modified":"2024-01-10 07:51:25","post_modified_gmt":"2024-01-09 20:51:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14931","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14888,"post_author":"14","post_date":"2024-01-06 18:33:09","post_date_gmt":"2024-01-06 07:33:09","post_content":"\n

Wall Street's main indexes fell at the beginning of the 2024 year as investors locked in profits after a very successful 2023 and are currently waiting for the Federal Reserve's<\/a> meeting that could offer hints on its interest rate path. Ken Polcari, managing partner at Kace Capital Advisors, said:<\/p>\n\n\n\n

\"The decline yesterday, today, and maybe for the next couple of weeks, is a result of people locking in profits and reconsidering what the narrative is - are rates going down five or six times as it appeared to be at the end of last year?\"<\/em><\/p>\n\n\n\n

\"\"
The Nasdaq Composite kicked off the year with a 1.5% drop pressured by a selloff in the tech sector<\/figcaption><\/figure>\n\n\n\n

The Fed's December meeting minutes are set to be disclosed at 2:00 p.m. ET, potentially providing information regarding the central bank's shift toward reducing interest rates. Although it's widely anticipated that the Fed will keep interest rates unchanged this month, traders have priced in a 65.7% probability of a 25 basis point rate reduction in March, according to CMEGroup's FedWatch tool.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures<\/a><\/p>\n\n\n\n

Central Bank And Inflation<\/h2>\n\n\n\n

Richmond Fed President Thomas Barkin, a voting member in the FOMC's rate-setting committee, said recently that the U.S. central bank is \"making real progress\" towards taming inflation and a soft landing seeming \"increasingly conceivable\". Encouragingly, the American Association of Individual Investors (AAII) Sentiment Survey indicated a surge in optimism among individual investors regarding the short-term outlook for the U.S. stock market, reaching its peak level in more than two and a half years.<\/p>\n\n\n\n

Despite this, JPMorgan Asset Management advises investors to be cautious due to potential recession risks. At the same time, analysts at Soci\u00e9t\u00e9 G\u00e9n\u00e9rale anticipate a turbulent 2024 for U.S. stocks, projecting fluctuations that could involve nearing recent highs, encountering declines, and subsequently rebounding.<\/p>\n\n\n\n

This week will witness a series of labor market data releases, culminating in the government's December employment report on Friday. These reports could significantly influence the forecast for the Fed's interest rate trajectory this year, prompting investors to scrutinize the data. Jeffrey Roach, chief economist at LPL Financial, added<\/a>:<\/p>\n\n\n\n

 \"The job market is cooling and we should see confirmation of that in this Friday\u2019s jobs report\"<\/em><\/p>\n\n\n\n

Following the progress of Wall Street's main indexes seen last year, investors are still optimistic about the prospect of another robust year ahead. This optimism is rooted in the anticipation that a decelerating economy will result in a gentle landing rather than a full-scale recession, especially as the Fed initiates rate cuts in the first half of 2024.<\/p>\n","post_title":"Wall Street's Main Indexes Fell At The Beginning Of 2024 year. Investors Locked In Profits After A Strong 2023 And Wait For The Federal Reserve's Meeting","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-at-the-beginning-of-2024-year-investors-locked-in-profits-after-a-strong-2023-and-wait-for-the-federal-reserves-meeting","to_ping":"","pinged":"","post_modified":"2024-01-06 18:33:13","post_modified_gmt":"2024-01-06 07:33:13","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14888","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14629,"post_author":"15","post_date":"2023-12-15 19:46:11","post_date_gmt":"2023-12-15 08:46:11","post_content":"\n

BlackRock aims to facilitate the participation of Wall Street banks in its potential Bitcoin ETF approval. Recent SEC memo <\/a>detailing a late November meeting involving BlackRock, Nasdaq, and the Commission. During this meeting, they discussed feedback regarding BlackRock's Bitcoin ETF application.<\/p>\n\n\n\n

The proposed approach introduces an innovative method for the redemption of ETF shares. A Bitcoin ETF would enable fund investors to gain exposure to Bitcoin without directly purchasing or storing the cryptocurrency. While the SEC has hesitated to approve such ETFs due to concerns about Bitcoin market manipulation, this new strategy addresses those worries.<\/p>\n\n\n\n

The SEC has yet to decide on BlackRock's iShares Bitcoin Trust (IBTC) application, with the deadline set for January 15. Analysts anticipate a decision will be issued for several spot Bitcoin ETF applications earlier in January.<\/p>\n\n\n\n

See Related:<\/strong><\/em> Fidelity Joins BlackRock\u2019s Push For Ethereum ETF<\/a><\/p>\n\n\n\n

BlackRock ETF Details<\/h2>\n\n\n\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

\"We had news that the U.S. consumer continues to be quite healthy, but that has increased anxiety that the Fed\u2019s first rate cut could potentially be pushed to May from March. Yields are also moving higher on the strong retail sales numbers, adding to near-term worries.\"<\/em><\/p>\n\n\n\n

US Stocks And Wall Street<\/h2>\n\n\n\n

It is also important to mention that a decline in U.S. stocks sent Wall Street's<\/a> \"fear gauge\" to a two-month high while JPMorgan analysts predict that the majority of negative consequences stemming from higher interest rates have not materialized yet. On Tuesday, Federal Reserve Governor Christopher Waller also emphasized that the central bank should refrain from hastily reducing interest rates until there is a clear indication that lower inflation is likely to persist.<\/p>\n\n\n\n

At the same time, the escalation of geopolitical uncertainties introduces an additional challenge and heightens the potential for unforeseen risks in both markets and economic performance. Considering these factors, the perspective is likely to stay cautious as long as interest rates remain significantly restrictive and the looming presence of geopolitical risks persists.<\/p>\n","post_title":"Wall Street Weakened As Retail Sales Data Hampers Expectations For A Cut In Interest Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-weakened-as-retail-sales-data-hampers-expectations-for-a-cut-in-interest-rates","to_ping":"","pinged":"","post_modified":"2024-01-19 05:56:51","post_modified_gmt":"2024-01-18 18:56:51","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15043","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14931,"post_author":"18","post_date":"2024-01-10 07:51:17","post_date_gmt":"2024-01-09 20:51:17","post_content":"\n

In a recent survey conducted by the New York Federal Reserve<\/a>, Wall Street's major banks have recalibrated their predictions regarding the Federal Reserve's balance sheet drawdown. This shift suggests that the U.S. central bank might conclude its quantitative tightening (QT) process later than initially anticipated.<\/p>\n\n\n\n

A Change in Perspective<\/h2>\n\n\n\n

Previously, primary dealers\u2014major banks\u2014projected that the QT process would conclude by the third quarter. However, the sentiment has evolved. According to the latest survey taken before the Fed's December 12-13 policy meeting, these banks now foresee the QT process ending in the fourth quarter.<\/p>\n\n\n\n

This adjustment carries significant implications. If these predictions materialize, the Federal Reserve's balance sheet<\/a> will likely shrink to approximately $6.75 trillion, down from its current level of roughly $7.764 trillion. Moreover, banks estimated that the central bank's reverse repo facility would hold $375 billion when QT concludes, a reduction from the anticipated $625 billion as forecasted in October.<\/p>\n\n\n\n

Federal Reserve Strategy<\/h2>\n\n\n\n

The quantitative tightening process has been an integral part of the Federal Reserve's strategy to combat inflation. Alongside rate hikes, the central bank initiated large-scale purchases of Treasury bonds and mortgage-backed securities during the COVID-19 pandemic's onset in 2020. This move led to an expansion of its holdings to approximately $9 trillion by mid-2022. However, since last year, the Fed has been gradually reducing its balance sheet size, although specific guidance on the timeline remains somewhat ambiguous.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

What This Means for the Economy<\/h2>\n\n\n\n

The recalibrated timeline for QT indicates a more prolonged period of balance sheet reduction. As the Federal Reserve continues to navigate its policy decisions, market participants, businesses, and consumers should monitor these developments closely. Changes in the balance sheet size can influence interest rates, liquidity conditions, and overall financial market dynamics.<\/p>\n\n\n\n

A Technical Perspective<\/h2>\n\n\n\n

From a technical standpoint, the Federal Reserve's<\/a> balance sheet management serves as a critical tool in its monetary policy arsenal. The evolving predictions by Wall Street's primary dealers underscore the complexities involved in forecasting economic variables, such as inflation and interest rates.<\/p>\n\n\n\n

As the QT process continues, policymakers and market participants must remain vigilant, considering the potential ramifications for financial stability and economic growth. This dynamic landscape necessitates ongoing analysis and adaptation to ensure that monetary policy objectives align with evolving economic conditions.<\/p>\n","post_title":"Decoding Wall Street's Shift: A Closer Look At Wall Street's Changing Perspective","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"decoding-wall-streets-shift-a-closer-look-at-wall-streets-changing-perspective","to_ping":"","pinged":"","post_modified":"2024-01-10 07:51:25","post_modified_gmt":"2024-01-09 20:51:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14931","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14888,"post_author":"14","post_date":"2024-01-06 18:33:09","post_date_gmt":"2024-01-06 07:33:09","post_content":"\n

Wall Street's main indexes fell at the beginning of the 2024 year as investors locked in profits after a very successful 2023 and are currently waiting for the Federal Reserve's<\/a> meeting that could offer hints on its interest rate path. Ken Polcari, managing partner at Kace Capital Advisors, said:<\/p>\n\n\n\n

\"The decline yesterday, today, and maybe for the next couple of weeks, is a result of people locking in profits and reconsidering what the narrative is - are rates going down five or six times as it appeared to be at the end of last year?\"<\/em><\/p>\n\n\n\n

\"\"
The Nasdaq Composite kicked off the year with a 1.5% drop pressured by a selloff in the tech sector<\/figcaption><\/figure>\n\n\n\n

The Fed's December meeting minutes are set to be disclosed at 2:00 p.m. ET, potentially providing information regarding the central bank's shift toward reducing interest rates. Although it's widely anticipated that the Fed will keep interest rates unchanged this month, traders have priced in a 65.7% probability of a 25 basis point rate reduction in March, according to CMEGroup's FedWatch tool.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures<\/a><\/p>\n\n\n\n

Central Bank And Inflation<\/h2>\n\n\n\n

Richmond Fed President Thomas Barkin, a voting member in the FOMC's rate-setting committee, said recently that the U.S. central bank is \"making real progress\" towards taming inflation and a soft landing seeming \"increasingly conceivable\". Encouragingly, the American Association of Individual Investors (AAII) Sentiment Survey indicated a surge in optimism among individual investors regarding the short-term outlook for the U.S. stock market, reaching its peak level in more than two and a half years.<\/p>\n\n\n\n

Despite this, JPMorgan Asset Management advises investors to be cautious due to potential recession risks. At the same time, analysts at Soci\u00e9t\u00e9 G\u00e9n\u00e9rale anticipate a turbulent 2024 for U.S. stocks, projecting fluctuations that could involve nearing recent highs, encountering declines, and subsequently rebounding.<\/p>\n\n\n\n

This week will witness a series of labor market data releases, culminating in the government's December employment report on Friday. These reports could significantly influence the forecast for the Fed's interest rate trajectory this year, prompting investors to scrutinize the data. Jeffrey Roach, chief economist at LPL Financial, added<\/a>:<\/p>\n\n\n\n

 \"The job market is cooling and we should see confirmation of that in this Friday\u2019s jobs report\"<\/em><\/p>\n\n\n\n

Following the progress of Wall Street's main indexes seen last year, investors are still optimistic about the prospect of another robust year ahead. This optimism is rooted in the anticipation that a decelerating economy will result in a gentle landing rather than a full-scale recession, especially as the Fed initiates rate cuts in the first half of 2024.<\/p>\n","post_title":"Wall Street's Main Indexes Fell At The Beginning Of 2024 year. Investors Locked In Profits After A Strong 2023 And Wait For The Federal Reserve's Meeting","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-at-the-beginning-of-2024-year-investors-locked-in-profits-after-a-strong-2023-and-wait-for-the-federal-reserves-meeting","to_ping":"","pinged":"","post_modified":"2024-01-06 18:33:13","post_modified_gmt":"2024-01-06 07:33:13","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14888","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14629,"post_author":"15","post_date":"2023-12-15 19:46:11","post_date_gmt":"2023-12-15 08:46:11","post_content":"\n

BlackRock aims to facilitate the participation of Wall Street banks in its potential Bitcoin ETF approval. Recent SEC memo <\/a>detailing a late November meeting involving BlackRock, Nasdaq, and the Commission. During this meeting, they discussed feedback regarding BlackRock's Bitcoin ETF application.<\/p>\n\n\n\n

The proposed approach introduces an innovative method for the redemption of ETF shares. A Bitcoin ETF would enable fund investors to gain exposure to Bitcoin without directly purchasing or storing the cryptocurrency. While the SEC has hesitated to approve such ETFs due to concerns about Bitcoin market manipulation, this new strategy addresses those worries.<\/p>\n\n\n\n

The SEC has yet to decide on BlackRock's iShares Bitcoin Trust (IBTC) application, with the deadline set for January 15. Analysts anticipate a decision will be issued for several spot Bitcoin ETF applications earlier in January.<\/p>\n\n\n\n

See Related:<\/strong><\/em> Fidelity Joins BlackRock\u2019s Push For Ethereum ETF<\/a><\/p>\n\n\n\n

BlackRock ETF Details<\/h2>\n\n\n\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

Anticipations among traders for a 25-basis-point Federal Reserve rate cut in March declined to 55%, down from approximately 60% before the release of the retail sales data. Ryan Detrick, chief market strategist at Carson Group in Omaha, said<\/a>:<\/p>\n\n\n\n

\"We had news that the U.S. consumer continues to be quite healthy, but that has increased anxiety that the Fed\u2019s first rate cut could potentially be pushed to May from March. Yields are also moving higher on the strong retail sales numbers, adding to near-term worries.\"<\/em><\/p>\n\n\n\n

US Stocks And Wall Street<\/h2>\n\n\n\n

It is also important to mention that a decline in U.S. stocks sent Wall Street's<\/a> \"fear gauge\" to a two-month high while JPMorgan analysts predict that the majority of negative consequences stemming from higher interest rates have not materialized yet. On Tuesday, Federal Reserve Governor Christopher Waller also emphasized that the central bank should refrain from hastily reducing interest rates until there is a clear indication that lower inflation is likely to persist.<\/p>\n\n\n\n

At the same time, the escalation of geopolitical uncertainties introduces an additional challenge and heightens the potential for unforeseen risks in both markets and economic performance. Considering these factors, the perspective is likely to stay cautious as long as interest rates remain significantly restrictive and the looming presence of geopolitical risks persists.<\/p>\n","post_title":"Wall Street Weakened As Retail Sales Data Hampers Expectations For A Cut In Interest Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-weakened-as-retail-sales-data-hampers-expectations-for-a-cut-in-interest-rates","to_ping":"","pinged":"","post_modified":"2024-01-19 05:56:51","post_modified_gmt":"2024-01-18 18:56:51","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15043","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14931,"post_author":"18","post_date":"2024-01-10 07:51:17","post_date_gmt":"2024-01-09 20:51:17","post_content":"\n

In a recent survey conducted by the New York Federal Reserve<\/a>, Wall Street's major banks have recalibrated their predictions regarding the Federal Reserve's balance sheet drawdown. This shift suggests that the U.S. central bank might conclude its quantitative tightening (QT) process later than initially anticipated.<\/p>\n\n\n\n

A Change in Perspective<\/h2>\n\n\n\n

Previously, primary dealers\u2014major banks\u2014projected that the QT process would conclude by the third quarter. However, the sentiment has evolved. According to the latest survey taken before the Fed's December 12-13 policy meeting, these banks now foresee the QT process ending in the fourth quarter.<\/p>\n\n\n\n

This adjustment carries significant implications. If these predictions materialize, the Federal Reserve's balance sheet<\/a> will likely shrink to approximately $6.75 trillion, down from its current level of roughly $7.764 trillion. Moreover, banks estimated that the central bank's reverse repo facility would hold $375 billion when QT concludes, a reduction from the anticipated $625 billion as forecasted in October.<\/p>\n\n\n\n

Federal Reserve Strategy<\/h2>\n\n\n\n

The quantitative tightening process has been an integral part of the Federal Reserve's strategy to combat inflation. Alongside rate hikes, the central bank initiated large-scale purchases of Treasury bonds and mortgage-backed securities during the COVID-19 pandemic's onset in 2020. This move led to an expansion of its holdings to approximately $9 trillion by mid-2022. However, since last year, the Fed has been gradually reducing its balance sheet size, although specific guidance on the timeline remains somewhat ambiguous.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

What This Means for the Economy<\/h2>\n\n\n\n

The recalibrated timeline for QT indicates a more prolonged period of balance sheet reduction. As the Federal Reserve continues to navigate its policy decisions, market participants, businesses, and consumers should monitor these developments closely. Changes in the balance sheet size can influence interest rates, liquidity conditions, and overall financial market dynamics.<\/p>\n\n\n\n

A Technical Perspective<\/h2>\n\n\n\n

From a technical standpoint, the Federal Reserve's<\/a> balance sheet management serves as a critical tool in its monetary policy arsenal. The evolving predictions by Wall Street's primary dealers underscore the complexities involved in forecasting economic variables, such as inflation and interest rates.<\/p>\n\n\n\n

As the QT process continues, policymakers and market participants must remain vigilant, considering the potential ramifications for financial stability and economic growth. This dynamic landscape necessitates ongoing analysis and adaptation to ensure that monetary policy objectives align with evolving economic conditions.<\/p>\n","post_title":"Decoding Wall Street's Shift: A Closer Look At Wall Street's Changing Perspective","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"decoding-wall-streets-shift-a-closer-look-at-wall-streets-changing-perspective","to_ping":"","pinged":"","post_modified":"2024-01-10 07:51:25","post_modified_gmt":"2024-01-09 20:51:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14931","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14888,"post_author":"14","post_date":"2024-01-06 18:33:09","post_date_gmt":"2024-01-06 07:33:09","post_content":"\n

Wall Street's main indexes fell at the beginning of the 2024 year as investors locked in profits after a very successful 2023 and are currently waiting for the Federal Reserve's<\/a> meeting that could offer hints on its interest rate path. Ken Polcari, managing partner at Kace Capital Advisors, said:<\/p>\n\n\n\n

\"The decline yesterday, today, and maybe for the next couple of weeks, is a result of people locking in profits and reconsidering what the narrative is - are rates going down five or six times as it appeared to be at the end of last year?\"<\/em><\/p>\n\n\n\n

\"\"
The Nasdaq Composite kicked off the year with a 1.5% drop pressured by a selloff in the tech sector<\/figcaption><\/figure>\n\n\n\n

The Fed's December meeting minutes are set to be disclosed at 2:00 p.m. ET, potentially providing information regarding the central bank's shift toward reducing interest rates. Although it's widely anticipated that the Fed will keep interest rates unchanged this month, traders have priced in a 65.7% probability of a 25 basis point rate reduction in March, according to CMEGroup's FedWatch tool.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures<\/a><\/p>\n\n\n\n

Central Bank And Inflation<\/h2>\n\n\n\n

Richmond Fed President Thomas Barkin, a voting member in the FOMC's rate-setting committee, said recently that the U.S. central bank is \"making real progress\" towards taming inflation and a soft landing seeming \"increasingly conceivable\". Encouragingly, the American Association of Individual Investors (AAII) Sentiment Survey indicated a surge in optimism among individual investors regarding the short-term outlook for the U.S. stock market, reaching its peak level in more than two and a half years.<\/p>\n\n\n\n

Despite this, JPMorgan Asset Management advises investors to be cautious due to potential recession risks. At the same time, analysts at Soci\u00e9t\u00e9 G\u00e9n\u00e9rale anticipate a turbulent 2024 for U.S. stocks, projecting fluctuations that could involve nearing recent highs, encountering declines, and subsequently rebounding.<\/p>\n\n\n\n

This week will witness a series of labor market data releases, culminating in the government's December employment report on Friday. These reports could significantly influence the forecast for the Fed's interest rate trajectory this year, prompting investors to scrutinize the data. Jeffrey Roach, chief economist at LPL Financial, added<\/a>:<\/p>\n\n\n\n

 \"The job market is cooling and we should see confirmation of that in this Friday\u2019s jobs report\"<\/em><\/p>\n\n\n\n

Following the progress of Wall Street's main indexes seen last year, investors are still optimistic about the prospect of another robust year ahead. This optimism is rooted in the anticipation that a decelerating economy will result in a gentle landing rather than a full-scale recession, especially as the Fed initiates rate cuts in the first half of 2024.<\/p>\n","post_title":"Wall Street's Main Indexes Fell At The Beginning Of 2024 year. Investors Locked In Profits After A Strong 2023 And Wait For The Federal Reserve's Meeting","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-at-the-beginning-of-2024-year-investors-locked-in-profits-after-a-strong-2023-and-wait-for-the-federal-reserves-meeting","to_ping":"","pinged":"","post_modified":"2024-01-06 18:33:13","post_modified_gmt":"2024-01-06 07:33:13","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14888","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14629,"post_author":"15","post_date":"2023-12-15 19:46:11","post_date_gmt":"2023-12-15 08:46:11","post_content":"\n

BlackRock aims to facilitate the participation of Wall Street banks in its potential Bitcoin ETF approval. Recent SEC memo <\/a>detailing a late November meeting involving BlackRock, Nasdaq, and the Commission. During this meeting, they discussed feedback regarding BlackRock's Bitcoin ETF application.<\/p>\n\n\n\n

The proposed approach introduces an innovative method for the redemption of ETF shares. A Bitcoin ETF would enable fund investors to gain exposure to Bitcoin without directly purchasing or storing the cryptocurrency. While the SEC has hesitated to approve such ETFs due to concerns about Bitcoin market manipulation, this new strategy addresses those worries.<\/p>\n\n\n\n

The SEC has yet to decide on BlackRock's iShares Bitcoin Trust (IBTC) application, with the deadline set for January 15. Analysts anticipate a decision will be issued for several spot Bitcoin ETF applications earlier in January.<\/p>\n\n\n\n

See Related:<\/strong><\/em> Fidelity Joins BlackRock\u2019s Push For Ethereum ETF<\/a><\/p>\n\n\n\n

BlackRock ETF Details<\/h2>\n\n\n\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

Anticipations among traders for a 25-basis-point Federal Reserve rate cut in March declined to 55%, down from approximately 60% before the release of the retail sales data. Ryan Detrick, chief market strategist at Carson Group in Omaha, said<\/a>:<\/p>\n\n\n\n

\"We had news that the U.S. consumer continues to be quite healthy, but that has increased anxiety that the Fed\u2019s first rate cut could potentially be pushed to May from March. Yields are also moving higher on the strong retail sales numbers, adding to near-term worries.\"<\/em><\/p>\n\n\n\n

US Stocks And Wall Street<\/h2>\n\n\n\n

It is also important to mention that a decline in U.S. stocks sent Wall Street's<\/a> \"fear gauge\" to a two-month high while JPMorgan analysts predict that the majority of negative consequences stemming from higher interest rates have not materialized yet. On Tuesday, Federal Reserve Governor Christopher Waller also emphasized that the central bank should refrain from hastily reducing interest rates until there is a clear indication that lower inflation is likely to persist.<\/p>\n\n\n\n

At the same time, the escalation of geopolitical uncertainties introduces an additional challenge and heightens the potential for unforeseen risks in both markets and economic performance. Considering these factors, the perspective is likely to stay cautious as long as interest rates remain significantly restrictive and the looming presence of geopolitical risks persists.<\/p>\n","post_title":"Wall Street Weakened As Retail Sales Data Hampers Expectations For A Cut In Interest Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-weakened-as-retail-sales-data-hampers-expectations-for-a-cut-in-interest-rates","to_ping":"","pinged":"","post_modified":"2024-01-19 05:56:51","post_modified_gmt":"2024-01-18 18:56:51","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15043","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14931,"post_author":"18","post_date":"2024-01-10 07:51:17","post_date_gmt":"2024-01-09 20:51:17","post_content":"\n

In a recent survey conducted by the New York Federal Reserve<\/a>, Wall Street's major banks have recalibrated their predictions regarding the Federal Reserve's balance sheet drawdown. This shift suggests that the U.S. central bank might conclude its quantitative tightening (QT) process later than initially anticipated.<\/p>\n\n\n\n

A Change in Perspective<\/h2>\n\n\n\n

Previously, primary dealers\u2014major banks\u2014projected that the QT process would conclude by the third quarter. However, the sentiment has evolved. According to the latest survey taken before the Fed's December 12-13 policy meeting, these banks now foresee the QT process ending in the fourth quarter.<\/p>\n\n\n\n

This adjustment carries significant implications. If these predictions materialize, the Federal Reserve's balance sheet<\/a> will likely shrink to approximately $6.75 trillion, down from its current level of roughly $7.764 trillion. Moreover, banks estimated that the central bank's reverse repo facility would hold $375 billion when QT concludes, a reduction from the anticipated $625 billion as forecasted in October.<\/p>\n\n\n\n

Federal Reserve Strategy<\/h2>\n\n\n\n

The quantitative tightening process has been an integral part of the Federal Reserve's strategy to combat inflation. Alongside rate hikes, the central bank initiated large-scale purchases of Treasury bonds and mortgage-backed securities during the COVID-19 pandemic's onset in 2020. This move led to an expansion of its holdings to approximately $9 trillion by mid-2022. However, since last year, the Fed has been gradually reducing its balance sheet size, although specific guidance on the timeline remains somewhat ambiguous.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

What This Means for the Economy<\/h2>\n\n\n\n

The recalibrated timeline for QT indicates a more prolonged period of balance sheet reduction. As the Federal Reserve continues to navigate its policy decisions, market participants, businesses, and consumers should monitor these developments closely. Changes in the balance sheet size can influence interest rates, liquidity conditions, and overall financial market dynamics.<\/p>\n\n\n\n

A Technical Perspective<\/h2>\n\n\n\n

From a technical standpoint, the Federal Reserve's<\/a> balance sheet management serves as a critical tool in its monetary policy arsenal. The evolving predictions by Wall Street's primary dealers underscore the complexities involved in forecasting economic variables, such as inflation and interest rates.<\/p>\n\n\n\n

As the QT process continues, policymakers and market participants must remain vigilant, considering the potential ramifications for financial stability and economic growth. This dynamic landscape necessitates ongoing analysis and adaptation to ensure that monetary policy objectives align with evolving economic conditions.<\/p>\n","post_title":"Decoding Wall Street's Shift: A Closer Look At Wall Street's Changing Perspective","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"decoding-wall-streets-shift-a-closer-look-at-wall-streets-changing-perspective","to_ping":"","pinged":"","post_modified":"2024-01-10 07:51:25","post_modified_gmt":"2024-01-09 20:51:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14931","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14888,"post_author":"14","post_date":"2024-01-06 18:33:09","post_date_gmt":"2024-01-06 07:33:09","post_content":"\n

Wall Street's main indexes fell at the beginning of the 2024 year as investors locked in profits after a very successful 2023 and are currently waiting for the Federal Reserve's<\/a> meeting that could offer hints on its interest rate path. Ken Polcari, managing partner at Kace Capital Advisors, said:<\/p>\n\n\n\n

\"The decline yesterday, today, and maybe for the next couple of weeks, is a result of people locking in profits and reconsidering what the narrative is - are rates going down five or six times as it appeared to be at the end of last year?\"<\/em><\/p>\n\n\n\n

\"\"
The Nasdaq Composite kicked off the year with a 1.5% drop pressured by a selloff in the tech sector<\/figcaption><\/figure>\n\n\n\n

The Fed's December meeting minutes are set to be disclosed at 2:00 p.m. ET, potentially providing information regarding the central bank's shift toward reducing interest rates. Although it's widely anticipated that the Fed will keep interest rates unchanged this month, traders have priced in a 65.7% probability of a 25 basis point rate reduction in March, according to CMEGroup's FedWatch tool.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures<\/a><\/p>\n\n\n\n

Central Bank And Inflation<\/h2>\n\n\n\n

Richmond Fed President Thomas Barkin, a voting member in the FOMC's rate-setting committee, said recently that the U.S. central bank is \"making real progress\" towards taming inflation and a soft landing seeming \"increasingly conceivable\". Encouragingly, the American Association of Individual Investors (AAII) Sentiment Survey indicated a surge in optimism among individual investors regarding the short-term outlook for the U.S. stock market, reaching its peak level in more than two and a half years.<\/p>\n\n\n\n

Despite this, JPMorgan Asset Management advises investors to be cautious due to potential recession risks. At the same time, analysts at Soci\u00e9t\u00e9 G\u00e9n\u00e9rale anticipate a turbulent 2024 for U.S. stocks, projecting fluctuations that could involve nearing recent highs, encountering declines, and subsequently rebounding.<\/p>\n\n\n\n

This week will witness a series of labor market data releases, culminating in the government's December employment report on Friday. These reports could significantly influence the forecast for the Fed's interest rate trajectory this year, prompting investors to scrutinize the data. Jeffrey Roach, chief economist at LPL Financial, added<\/a>:<\/p>\n\n\n\n

 \"The job market is cooling and we should see confirmation of that in this Friday\u2019s jobs report\"<\/em><\/p>\n\n\n\n

Following the progress of Wall Street's main indexes seen last year, investors are still optimistic about the prospect of another robust year ahead. This optimism is rooted in the anticipation that a decelerating economy will result in a gentle landing rather than a full-scale recession, especially as the Fed initiates rate cuts in the first half of 2024.<\/p>\n","post_title":"Wall Street's Main Indexes Fell At The Beginning Of 2024 year. Investors Locked In Profits After A Strong 2023 And Wait For The Federal Reserve's Meeting","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-at-the-beginning-of-2024-year-investors-locked-in-profits-after-a-strong-2023-and-wait-for-the-federal-reserves-meeting","to_ping":"","pinged":"","post_modified":"2024-01-06 18:33:13","post_modified_gmt":"2024-01-06 07:33:13","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14888","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14629,"post_author":"15","post_date":"2023-12-15 19:46:11","post_date_gmt":"2023-12-15 08:46:11","post_content":"\n

BlackRock aims to facilitate the participation of Wall Street banks in its potential Bitcoin ETF approval. Recent SEC memo <\/a>detailing a late November meeting involving BlackRock, Nasdaq, and the Commission. During this meeting, they discussed feedback regarding BlackRock's Bitcoin ETF application.<\/p>\n\n\n\n

The proposed approach introduces an innovative method for the redemption of ETF shares. A Bitcoin ETF would enable fund investors to gain exposure to Bitcoin without directly purchasing or storing the cryptocurrency. While the SEC has hesitated to approve such ETFs due to concerns about Bitcoin market manipulation, this new strategy addresses those worries.<\/p>\n\n\n\n

The SEC has yet to decide on BlackRock's iShares Bitcoin Trust (IBTC) application, with the deadline set for January 15. Analysts anticipate a decision will be issued for several spot Bitcoin ETF applications earlier in January.<\/p>\n\n\n\n

See Related:<\/strong><\/em> Fidelity Joins BlackRock\u2019s Push For Ethereum ETF<\/a><\/p>\n\n\n\n

BlackRock ETF Details<\/h2>\n\n\n\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

The data revealed that discounts offered by retailers and a surge in motor vehicle acquisitions contributed to a greater-than-anticipated increase in U.S. retail sales, maintaining the economy on a robust trajectory in 2024. This bolstered the perspective that the Federal Reserve might not reduce interest rates as rapidly as initially anticipated for the current year.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

Anticipations among traders for a 25-basis-point Federal Reserve rate cut in March declined to 55%, down from approximately 60% before the release of the retail sales data. Ryan Detrick, chief market strategist at Carson Group in Omaha, said<\/a>:<\/p>\n\n\n\n

\"We had news that the U.S. consumer continues to be quite healthy, but that has increased anxiety that the Fed\u2019s first rate cut could potentially be pushed to May from March. Yields are also moving higher on the strong retail sales numbers, adding to near-term worries.\"<\/em><\/p>\n\n\n\n

US Stocks And Wall Street<\/h2>\n\n\n\n

It is also important to mention that a decline in U.S. stocks sent Wall Street's<\/a> \"fear gauge\" to a two-month high while JPMorgan analysts predict that the majority of negative consequences stemming from higher interest rates have not materialized yet. On Tuesday, Federal Reserve Governor Christopher Waller also emphasized that the central bank should refrain from hastily reducing interest rates until there is a clear indication that lower inflation is likely to persist.<\/p>\n\n\n\n

At the same time, the escalation of geopolitical uncertainties introduces an additional challenge and heightens the potential for unforeseen risks in both markets and economic performance. Considering these factors, the perspective is likely to stay cautious as long as interest rates remain significantly restrictive and the looming presence of geopolitical risks persists.<\/p>\n","post_title":"Wall Street Weakened As Retail Sales Data Hampers Expectations For A Cut In Interest Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-weakened-as-retail-sales-data-hampers-expectations-for-a-cut-in-interest-rates","to_ping":"","pinged":"","post_modified":"2024-01-19 05:56:51","post_modified_gmt":"2024-01-18 18:56:51","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15043","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14931,"post_author":"18","post_date":"2024-01-10 07:51:17","post_date_gmt":"2024-01-09 20:51:17","post_content":"\n

In a recent survey conducted by the New York Federal Reserve<\/a>, Wall Street's major banks have recalibrated their predictions regarding the Federal Reserve's balance sheet drawdown. This shift suggests that the U.S. central bank might conclude its quantitative tightening (QT) process later than initially anticipated.<\/p>\n\n\n\n

A Change in Perspective<\/h2>\n\n\n\n

Previously, primary dealers\u2014major banks\u2014projected that the QT process would conclude by the third quarter. However, the sentiment has evolved. According to the latest survey taken before the Fed's December 12-13 policy meeting, these banks now foresee the QT process ending in the fourth quarter.<\/p>\n\n\n\n

This adjustment carries significant implications. If these predictions materialize, the Federal Reserve's balance sheet<\/a> will likely shrink to approximately $6.75 trillion, down from its current level of roughly $7.764 trillion. Moreover, banks estimated that the central bank's reverse repo facility would hold $375 billion when QT concludes, a reduction from the anticipated $625 billion as forecasted in October.<\/p>\n\n\n\n

Federal Reserve Strategy<\/h2>\n\n\n\n

The quantitative tightening process has been an integral part of the Federal Reserve's strategy to combat inflation. Alongside rate hikes, the central bank initiated large-scale purchases of Treasury bonds and mortgage-backed securities during the COVID-19 pandemic's onset in 2020. This move led to an expansion of its holdings to approximately $9 trillion by mid-2022. However, since last year, the Fed has been gradually reducing its balance sheet size, although specific guidance on the timeline remains somewhat ambiguous.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

What This Means for the Economy<\/h2>\n\n\n\n

The recalibrated timeline for QT indicates a more prolonged period of balance sheet reduction. As the Federal Reserve continues to navigate its policy decisions, market participants, businesses, and consumers should monitor these developments closely. Changes in the balance sheet size can influence interest rates, liquidity conditions, and overall financial market dynamics.<\/p>\n\n\n\n

A Technical Perspective<\/h2>\n\n\n\n

From a technical standpoint, the Federal Reserve's<\/a> balance sheet management serves as a critical tool in its monetary policy arsenal. The evolving predictions by Wall Street's primary dealers underscore the complexities involved in forecasting economic variables, such as inflation and interest rates.<\/p>\n\n\n\n

As the QT process continues, policymakers and market participants must remain vigilant, considering the potential ramifications for financial stability and economic growth. This dynamic landscape necessitates ongoing analysis and adaptation to ensure that monetary policy objectives align with evolving economic conditions.<\/p>\n","post_title":"Decoding Wall Street's Shift: A Closer Look At Wall Street's Changing Perspective","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"decoding-wall-streets-shift-a-closer-look-at-wall-streets-changing-perspective","to_ping":"","pinged":"","post_modified":"2024-01-10 07:51:25","post_modified_gmt":"2024-01-09 20:51:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14931","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14888,"post_author":"14","post_date":"2024-01-06 18:33:09","post_date_gmt":"2024-01-06 07:33:09","post_content":"\n

Wall Street's main indexes fell at the beginning of the 2024 year as investors locked in profits after a very successful 2023 and are currently waiting for the Federal Reserve's<\/a> meeting that could offer hints on its interest rate path. Ken Polcari, managing partner at Kace Capital Advisors, said:<\/p>\n\n\n\n

\"The decline yesterday, today, and maybe for the next couple of weeks, is a result of people locking in profits and reconsidering what the narrative is - are rates going down five or six times as it appeared to be at the end of last year?\"<\/em><\/p>\n\n\n\n

\"\"
The Nasdaq Composite kicked off the year with a 1.5% drop pressured by a selloff in the tech sector<\/figcaption><\/figure>\n\n\n\n

The Fed's December meeting minutes are set to be disclosed at 2:00 p.m. ET, potentially providing information regarding the central bank's shift toward reducing interest rates. Although it's widely anticipated that the Fed will keep interest rates unchanged this month, traders have priced in a 65.7% probability of a 25 basis point rate reduction in March, according to CMEGroup's FedWatch tool.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures<\/a><\/p>\n\n\n\n

Central Bank And Inflation<\/h2>\n\n\n\n

Richmond Fed President Thomas Barkin, a voting member in the FOMC's rate-setting committee, said recently that the U.S. central bank is \"making real progress\" towards taming inflation and a soft landing seeming \"increasingly conceivable\". Encouragingly, the American Association of Individual Investors (AAII) Sentiment Survey indicated a surge in optimism among individual investors regarding the short-term outlook for the U.S. stock market, reaching its peak level in more than two and a half years.<\/p>\n\n\n\n

Despite this, JPMorgan Asset Management advises investors to be cautious due to potential recession risks. At the same time, analysts at Soci\u00e9t\u00e9 G\u00e9n\u00e9rale anticipate a turbulent 2024 for U.S. stocks, projecting fluctuations that could involve nearing recent highs, encountering declines, and subsequently rebounding.<\/p>\n\n\n\n

This week will witness a series of labor market data releases, culminating in the government's December employment report on Friday. These reports could significantly influence the forecast for the Fed's interest rate trajectory this year, prompting investors to scrutinize the data. Jeffrey Roach, chief economist at LPL Financial, added<\/a>:<\/p>\n\n\n\n

 \"The job market is cooling and we should see confirmation of that in this Friday\u2019s jobs report\"<\/em><\/p>\n\n\n\n

Following the progress of Wall Street's main indexes seen last year, investors are still optimistic about the prospect of another robust year ahead. This optimism is rooted in the anticipation that a decelerating economy will result in a gentle landing rather than a full-scale recession, especially as the Fed initiates rate cuts in the first half of 2024.<\/p>\n","post_title":"Wall Street's Main Indexes Fell At The Beginning Of 2024 year. Investors Locked In Profits After A Strong 2023 And Wait For The Federal Reserve's Meeting","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-at-the-beginning-of-2024-year-investors-locked-in-profits-after-a-strong-2023-and-wait-for-the-federal-reserves-meeting","to_ping":"","pinged":"","post_modified":"2024-01-06 18:33:13","post_modified_gmt":"2024-01-06 07:33:13","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14888","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14629,"post_author":"15","post_date":"2023-12-15 19:46:11","post_date_gmt":"2023-12-15 08:46:11","post_content":"\n

BlackRock aims to facilitate the participation of Wall Street banks in its potential Bitcoin ETF approval. Recent SEC memo <\/a>detailing a late November meeting involving BlackRock, Nasdaq, and the Commission. During this meeting, they discussed feedback regarding BlackRock's Bitcoin ETF application.<\/p>\n\n\n\n

The proposed approach introduces an innovative method for the redemption of ETF shares. A Bitcoin ETF would enable fund investors to gain exposure to Bitcoin without directly purchasing or storing the cryptocurrency. While the SEC has hesitated to approve such ETFs due to concerns about Bitcoin market manipulation, this new strategy addresses those worries.<\/p>\n\n\n\n

The SEC has yet to decide on BlackRock's iShares Bitcoin Trust (IBTC) application, with the deadline set for January 15. Analysts anticipate a decision will be issued for several spot Bitcoin ETF applications earlier in January.<\/p>\n\n\n\n

See Related:<\/strong><\/em> Fidelity Joins BlackRock\u2019s Push For Ethereum ETF<\/a><\/p>\n\n\n\n

BlackRock ETF Details<\/h2>\n\n\n\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

The December retail sales report from the Commerce Department (USRSL=ECI) depicted a robust consumer, responsible for approximately 70% of the U.S. economy. Despite facing the challenges of high inflation and a tight monetary policy, the consumer has shown resilience.<\/p>\n\n\n\n

The data revealed that discounts offered by retailers and a surge in motor vehicle acquisitions contributed to a greater-than-anticipated increase in U.S. retail sales, maintaining the economy on a robust trajectory in 2024. This bolstered the perspective that the Federal Reserve might not reduce interest rates as rapidly as initially anticipated for the current year.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

Anticipations among traders for a 25-basis-point Federal Reserve rate cut in March declined to 55%, down from approximately 60% before the release of the retail sales data. Ryan Detrick, chief market strategist at Carson Group in Omaha, said<\/a>:<\/p>\n\n\n\n

\"We had news that the U.S. consumer continues to be quite healthy, but that has increased anxiety that the Fed\u2019s first rate cut could potentially be pushed to May from March. Yields are also moving higher on the strong retail sales numbers, adding to near-term worries.\"<\/em><\/p>\n\n\n\n

US Stocks And Wall Street<\/h2>\n\n\n\n

It is also important to mention that a decline in U.S. stocks sent Wall Street's<\/a> \"fear gauge\" to a two-month high while JPMorgan analysts predict that the majority of negative consequences stemming from higher interest rates have not materialized yet. On Tuesday, Federal Reserve Governor Christopher Waller also emphasized that the central bank should refrain from hastily reducing interest rates until there is a clear indication that lower inflation is likely to persist.<\/p>\n\n\n\n

At the same time, the escalation of geopolitical uncertainties introduces an additional challenge and heightens the potential for unforeseen risks in both markets and economic performance. Considering these factors, the perspective is likely to stay cautious as long as interest rates remain significantly restrictive and the looming presence of geopolitical risks persists.<\/p>\n","post_title":"Wall Street Weakened As Retail Sales Data Hampers Expectations For A Cut In Interest Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-weakened-as-retail-sales-data-hampers-expectations-for-a-cut-in-interest-rates","to_ping":"","pinged":"","post_modified":"2024-01-19 05:56:51","post_modified_gmt":"2024-01-18 18:56:51","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15043","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14931,"post_author":"18","post_date":"2024-01-10 07:51:17","post_date_gmt":"2024-01-09 20:51:17","post_content":"\n

In a recent survey conducted by the New York Federal Reserve<\/a>, Wall Street's major banks have recalibrated their predictions regarding the Federal Reserve's balance sheet drawdown. This shift suggests that the U.S. central bank might conclude its quantitative tightening (QT) process later than initially anticipated.<\/p>\n\n\n\n

A Change in Perspective<\/h2>\n\n\n\n

Previously, primary dealers\u2014major banks\u2014projected that the QT process would conclude by the third quarter. However, the sentiment has evolved. According to the latest survey taken before the Fed's December 12-13 policy meeting, these banks now foresee the QT process ending in the fourth quarter.<\/p>\n\n\n\n

This adjustment carries significant implications. If these predictions materialize, the Federal Reserve's balance sheet<\/a> will likely shrink to approximately $6.75 trillion, down from its current level of roughly $7.764 trillion. Moreover, banks estimated that the central bank's reverse repo facility would hold $375 billion when QT concludes, a reduction from the anticipated $625 billion as forecasted in October.<\/p>\n\n\n\n

Federal Reserve Strategy<\/h2>\n\n\n\n

The quantitative tightening process has been an integral part of the Federal Reserve's strategy to combat inflation. Alongside rate hikes, the central bank initiated large-scale purchases of Treasury bonds and mortgage-backed securities during the COVID-19 pandemic's onset in 2020. This move led to an expansion of its holdings to approximately $9 trillion by mid-2022. However, since last year, the Fed has been gradually reducing its balance sheet size, although specific guidance on the timeline remains somewhat ambiguous.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

What This Means for the Economy<\/h2>\n\n\n\n

The recalibrated timeline for QT indicates a more prolonged period of balance sheet reduction. As the Federal Reserve continues to navigate its policy decisions, market participants, businesses, and consumers should monitor these developments closely. Changes in the balance sheet size can influence interest rates, liquidity conditions, and overall financial market dynamics.<\/p>\n\n\n\n

A Technical Perspective<\/h2>\n\n\n\n

From a technical standpoint, the Federal Reserve's<\/a> balance sheet management serves as a critical tool in its monetary policy arsenal. The evolving predictions by Wall Street's primary dealers underscore the complexities involved in forecasting economic variables, such as inflation and interest rates.<\/p>\n\n\n\n

As the QT process continues, policymakers and market participants must remain vigilant, considering the potential ramifications for financial stability and economic growth. This dynamic landscape necessitates ongoing analysis and adaptation to ensure that monetary policy objectives align with evolving economic conditions.<\/p>\n","post_title":"Decoding Wall Street's Shift: A Closer Look At Wall Street's Changing Perspective","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"decoding-wall-streets-shift-a-closer-look-at-wall-streets-changing-perspective","to_ping":"","pinged":"","post_modified":"2024-01-10 07:51:25","post_modified_gmt":"2024-01-09 20:51:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14931","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14888,"post_author":"14","post_date":"2024-01-06 18:33:09","post_date_gmt":"2024-01-06 07:33:09","post_content":"\n

Wall Street's main indexes fell at the beginning of the 2024 year as investors locked in profits after a very successful 2023 and are currently waiting for the Federal Reserve's<\/a> meeting that could offer hints on its interest rate path. Ken Polcari, managing partner at Kace Capital Advisors, said:<\/p>\n\n\n\n

\"The decline yesterday, today, and maybe for the next couple of weeks, is a result of people locking in profits and reconsidering what the narrative is - are rates going down five or six times as it appeared to be at the end of last year?\"<\/em><\/p>\n\n\n\n

\"\"
The Nasdaq Composite kicked off the year with a 1.5% drop pressured by a selloff in the tech sector<\/figcaption><\/figure>\n\n\n\n

The Fed's December meeting minutes are set to be disclosed at 2:00 p.m. ET, potentially providing information regarding the central bank's shift toward reducing interest rates. Although it's widely anticipated that the Fed will keep interest rates unchanged this month, traders have priced in a 65.7% probability of a 25 basis point rate reduction in March, according to CMEGroup's FedWatch tool.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures<\/a><\/p>\n\n\n\n

Central Bank And Inflation<\/h2>\n\n\n\n

Richmond Fed President Thomas Barkin, a voting member in the FOMC's rate-setting committee, said recently that the U.S. central bank is \"making real progress\" towards taming inflation and a soft landing seeming \"increasingly conceivable\". Encouragingly, the American Association of Individual Investors (AAII) Sentiment Survey indicated a surge in optimism among individual investors regarding the short-term outlook for the U.S. stock market, reaching its peak level in more than two and a half years.<\/p>\n\n\n\n

Despite this, JPMorgan Asset Management advises investors to be cautious due to potential recession risks. At the same time, analysts at Soci\u00e9t\u00e9 G\u00e9n\u00e9rale anticipate a turbulent 2024 for U.S. stocks, projecting fluctuations that could involve nearing recent highs, encountering declines, and subsequently rebounding.<\/p>\n\n\n\n

This week will witness a series of labor market data releases, culminating in the government's December employment report on Friday. These reports could significantly influence the forecast for the Fed's interest rate trajectory this year, prompting investors to scrutinize the data. Jeffrey Roach, chief economist at LPL Financial, added<\/a>:<\/p>\n\n\n\n

 \"The job market is cooling and we should see confirmation of that in this Friday\u2019s jobs report\"<\/em><\/p>\n\n\n\n

Following the progress of Wall Street's main indexes seen last year, investors are still optimistic about the prospect of another robust year ahead. This optimism is rooted in the anticipation that a decelerating economy will result in a gentle landing rather than a full-scale recession, especially as the Fed initiates rate cuts in the first half of 2024.<\/p>\n","post_title":"Wall Street's Main Indexes Fell At The Beginning Of 2024 year. Investors Locked In Profits After A Strong 2023 And Wait For The Federal Reserve's Meeting","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-at-the-beginning-of-2024-year-investors-locked-in-profits-after-a-strong-2023-and-wait-for-the-federal-reserves-meeting","to_ping":"","pinged":"","post_modified":"2024-01-06 18:33:13","post_modified_gmt":"2024-01-06 07:33:13","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14888","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14629,"post_author":"15","post_date":"2023-12-15 19:46:11","post_date_gmt":"2023-12-15 08:46:11","post_content":"\n

BlackRock aims to facilitate the participation of Wall Street banks in its potential Bitcoin ETF approval. Recent SEC memo <\/a>detailing a late November meeting involving BlackRock, Nasdaq, and the Commission. During this meeting, they discussed feedback regarding BlackRock's Bitcoin ETF application.<\/p>\n\n\n\n

The proposed approach introduces an innovative method for the redemption of ETF shares. A Bitcoin ETF would enable fund investors to gain exposure to Bitcoin without directly purchasing or storing the cryptocurrency. While the SEC has hesitated to approve such ETFs due to concerns about Bitcoin market manipulation, this new strategy addresses those worries.<\/p>\n\n\n\n

The SEC has yet to decide on BlackRock's iShares Bitcoin Trust (IBTC) application, with the deadline set for January 15. Analysts anticipate a decision will be issued for several spot Bitcoin ETF applications earlier in January.<\/p>\n\n\n\n

See Related:<\/strong><\/em> Fidelity Joins BlackRock\u2019s Push For Ethereum ETF<\/a><\/p>\n\n\n\n

BlackRock ETF Details<\/h2>\n\n\n\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

Retail Sales Report <\/h2>\n\n\n\n

The December retail sales report from the Commerce Department (USRSL=ECI) depicted a robust consumer, responsible for approximately 70% of the U.S. economy. Despite facing the challenges of high inflation and a tight monetary policy, the consumer has shown resilience.<\/p>\n\n\n\n

The data revealed that discounts offered by retailers and a surge in motor vehicle acquisitions contributed to a greater-than-anticipated increase in U.S. retail sales, maintaining the economy on a robust trajectory in 2024. This bolstered the perspective that the Federal Reserve might not reduce interest rates as rapidly as initially anticipated for the current year.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

Anticipations among traders for a 25-basis-point Federal Reserve rate cut in March declined to 55%, down from approximately 60% before the release of the retail sales data. Ryan Detrick, chief market strategist at Carson Group in Omaha, said<\/a>:<\/p>\n\n\n\n

\"We had news that the U.S. consumer continues to be quite healthy, but that has increased anxiety that the Fed\u2019s first rate cut could potentially be pushed to May from March. Yields are also moving higher on the strong retail sales numbers, adding to near-term worries.\"<\/em><\/p>\n\n\n\n

US Stocks And Wall Street<\/h2>\n\n\n\n

It is also important to mention that a decline in U.S. stocks sent Wall Street's<\/a> \"fear gauge\" to a two-month high while JPMorgan analysts predict that the majority of negative consequences stemming from higher interest rates have not materialized yet. On Tuesday, Federal Reserve Governor Christopher Waller also emphasized that the central bank should refrain from hastily reducing interest rates until there is a clear indication that lower inflation is likely to persist.<\/p>\n\n\n\n

At the same time, the escalation of geopolitical uncertainties introduces an additional challenge and heightens the potential for unforeseen risks in both markets and economic performance. Considering these factors, the perspective is likely to stay cautious as long as interest rates remain significantly restrictive and the looming presence of geopolitical risks persists.<\/p>\n","post_title":"Wall Street Weakened As Retail Sales Data Hampers Expectations For A Cut In Interest Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-weakened-as-retail-sales-data-hampers-expectations-for-a-cut-in-interest-rates","to_ping":"","pinged":"","post_modified":"2024-01-19 05:56:51","post_modified_gmt":"2024-01-18 18:56:51","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15043","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14931,"post_author":"18","post_date":"2024-01-10 07:51:17","post_date_gmt":"2024-01-09 20:51:17","post_content":"\n

In a recent survey conducted by the New York Federal Reserve<\/a>, Wall Street's major banks have recalibrated their predictions regarding the Federal Reserve's balance sheet drawdown. This shift suggests that the U.S. central bank might conclude its quantitative tightening (QT) process later than initially anticipated.<\/p>\n\n\n\n

A Change in Perspective<\/h2>\n\n\n\n

Previously, primary dealers\u2014major banks\u2014projected that the QT process would conclude by the third quarter. However, the sentiment has evolved. According to the latest survey taken before the Fed's December 12-13 policy meeting, these banks now foresee the QT process ending in the fourth quarter.<\/p>\n\n\n\n

This adjustment carries significant implications. If these predictions materialize, the Federal Reserve's balance sheet<\/a> will likely shrink to approximately $6.75 trillion, down from its current level of roughly $7.764 trillion. Moreover, banks estimated that the central bank's reverse repo facility would hold $375 billion when QT concludes, a reduction from the anticipated $625 billion as forecasted in October.<\/p>\n\n\n\n

Federal Reserve Strategy<\/h2>\n\n\n\n

The quantitative tightening process has been an integral part of the Federal Reserve's strategy to combat inflation. Alongside rate hikes, the central bank initiated large-scale purchases of Treasury bonds and mortgage-backed securities during the COVID-19 pandemic's onset in 2020. This move led to an expansion of its holdings to approximately $9 trillion by mid-2022. However, since last year, the Fed has been gradually reducing its balance sheet size, although specific guidance on the timeline remains somewhat ambiguous.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

What This Means for the Economy<\/h2>\n\n\n\n

The recalibrated timeline for QT indicates a more prolonged period of balance sheet reduction. As the Federal Reserve continues to navigate its policy decisions, market participants, businesses, and consumers should monitor these developments closely. Changes in the balance sheet size can influence interest rates, liquidity conditions, and overall financial market dynamics.<\/p>\n\n\n\n

A Technical Perspective<\/h2>\n\n\n\n

From a technical standpoint, the Federal Reserve's<\/a> balance sheet management serves as a critical tool in its monetary policy arsenal. The evolving predictions by Wall Street's primary dealers underscore the complexities involved in forecasting economic variables, such as inflation and interest rates.<\/p>\n\n\n\n

As the QT process continues, policymakers and market participants must remain vigilant, considering the potential ramifications for financial stability and economic growth. This dynamic landscape necessitates ongoing analysis and adaptation to ensure that monetary policy objectives align with evolving economic conditions.<\/p>\n","post_title":"Decoding Wall Street's Shift: A Closer Look At Wall Street's Changing Perspective","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"decoding-wall-streets-shift-a-closer-look-at-wall-streets-changing-perspective","to_ping":"","pinged":"","post_modified":"2024-01-10 07:51:25","post_modified_gmt":"2024-01-09 20:51:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14931","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14888,"post_author":"14","post_date":"2024-01-06 18:33:09","post_date_gmt":"2024-01-06 07:33:09","post_content":"\n

Wall Street's main indexes fell at the beginning of the 2024 year as investors locked in profits after a very successful 2023 and are currently waiting for the Federal Reserve's<\/a> meeting that could offer hints on its interest rate path. Ken Polcari, managing partner at Kace Capital Advisors, said:<\/p>\n\n\n\n

\"The decline yesterday, today, and maybe for the next couple of weeks, is a result of people locking in profits and reconsidering what the narrative is - are rates going down five or six times as it appeared to be at the end of last year?\"<\/em><\/p>\n\n\n\n

\"\"
The Nasdaq Composite kicked off the year with a 1.5% drop pressured by a selloff in the tech sector<\/figcaption><\/figure>\n\n\n\n

The Fed's December meeting minutes are set to be disclosed at 2:00 p.m. ET, potentially providing information regarding the central bank's shift toward reducing interest rates. Although it's widely anticipated that the Fed will keep interest rates unchanged this month, traders have priced in a 65.7% probability of a 25 basis point rate reduction in March, according to CMEGroup's FedWatch tool.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures<\/a><\/p>\n\n\n\n

Central Bank And Inflation<\/h2>\n\n\n\n

Richmond Fed President Thomas Barkin, a voting member in the FOMC's rate-setting committee, said recently that the U.S. central bank is \"making real progress\" towards taming inflation and a soft landing seeming \"increasingly conceivable\". Encouragingly, the American Association of Individual Investors (AAII) Sentiment Survey indicated a surge in optimism among individual investors regarding the short-term outlook for the U.S. stock market, reaching its peak level in more than two and a half years.<\/p>\n\n\n\n

Despite this, JPMorgan Asset Management advises investors to be cautious due to potential recession risks. At the same time, analysts at Soci\u00e9t\u00e9 G\u00e9n\u00e9rale anticipate a turbulent 2024 for U.S. stocks, projecting fluctuations that could involve nearing recent highs, encountering declines, and subsequently rebounding.<\/p>\n\n\n\n

This week will witness a series of labor market data releases, culminating in the government's December employment report on Friday. These reports could significantly influence the forecast for the Fed's interest rate trajectory this year, prompting investors to scrutinize the data. Jeffrey Roach, chief economist at LPL Financial, added<\/a>:<\/p>\n\n\n\n

 \"The job market is cooling and we should see confirmation of that in this Friday\u2019s jobs report\"<\/em><\/p>\n\n\n\n

Following the progress of Wall Street's main indexes seen last year, investors are still optimistic about the prospect of another robust year ahead. This optimism is rooted in the anticipation that a decelerating economy will result in a gentle landing rather than a full-scale recession, especially as the Fed initiates rate cuts in the first half of 2024.<\/p>\n","post_title":"Wall Street's Main Indexes Fell At The Beginning Of 2024 year. Investors Locked In Profits After A Strong 2023 And Wait For The Federal Reserve's Meeting","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-at-the-beginning-of-2024-year-investors-locked-in-profits-after-a-strong-2023-and-wait-for-the-federal-reserves-meeting","to_ping":"","pinged":"","post_modified":"2024-01-06 18:33:13","post_modified_gmt":"2024-01-06 07:33:13","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14888","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14629,"post_author":"15","post_date":"2023-12-15 19:46:11","post_date_gmt":"2023-12-15 08:46:11","post_content":"\n

BlackRock aims to facilitate the participation of Wall Street banks in its potential Bitcoin ETF approval. Recent SEC memo <\/a>detailing a late November meeting involving BlackRock, Nasdaq, and the Commission. During this meeting, they discussed feedback regarding BlackRock's Bitcoin ETF application.<\/p>\n\n\n\n

The proposed approach introduces an innovative method for the redemption of ETF shares. A Bitcoin ETF would enable fund investors to gain exposure to Bitcoin without directly purchasing or storing the cryptocurrency. While the SEC has hesitated to approve such ETFs due to concerns about Bitcoin market manipulation, this new strategy addresses those worries.<\/p>\n\n\n\n

The SEC has yet to decide on BlackRock's iShares Bitcoin Trust (IBTC) application, with the deadline set for January 15. Analysts anticipate a decision will be issued for several spot Bitcoin ETF applications earlier in January.<\/p>\n\n\n\n

See Related:<\/strong><\/em> Fidelity Joins BlackRock\u2019s Push For Ethereum ETF<\/a><\/p>\n\n\n\n

BlackRock ETF Details<\/h2>\n\n\n\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

Wall Street witnessed a significant stock decline this Wednesday following positive December U.S. retail sales data, which diminished the anticipation of an early initiation of the Federal Reserve's campaign to cut interest rates.<\/p>\n\n\n\n

Retail Sales Report <\/h2>\n\n\n\n

The December retail sales report from the Commerce Department (USRSL=ECI) depicted a robust consumer, responsible for approximately 70% of the U.S. economy. Despite facing the challenges of high inflation and a tight monetary policy, the consumer has shown resilience.<\/p>\n\n\n\n

The data revealed that discounts offered by retailers and a surge in motor vehicle acquisitions contributed to a greater-than-anticipated increase in U.S. retail sales, maintaining the economy on a robust trajectory in 2024. This bolstered the perspective that the Federal Reserve might not reduce interest rates as rapidly as initially anticipated for the current year.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

Anticipations among traders for a 25-basis-point Federal Reserve rate cut in March declined to 55%, down from approximately 60% before the release of the retail sales data. Ryan Detrick, chief market strategist at Carson Group in Omaha, said<\/a>:<\/p>\n\n\n\n

\"We had news that the U.S. consumer continues to be quite healthy, but that has increased anxiety that the Fed\u2019s first rate cut could potentially be pushed to May from March. Yields are also moving higher on the strong retail sales numbers, adding to near-term worries.\"<\/em><\/p>\n\n\n\n

US Stocks And Wall Street<\/h2>\n\n\n\n

It is also important to mention that a decline in U.S. stocks sent Wall Street's<\/a> \"fear gauge\" to a two-month high while JPMorgan analysts predict that the majority of negative consequences stemming from higher interest rates have not materialized yet. On Tuesday, Federal Reserve Governor Christopher Waller also emphasized that the central bank should refrain from hastily reducing interest rates until there is a clear indication that lower inflation is likely to persist.<\/p>\n\n\n\n

At the same time, the escalation of geopolitical uncertainties introduces an additional challenge and heightens the potential for unforeseen risks in both markets and economic performance. Considering these factors, the perspective is likely to stay cautious as long as interest rates remain significantly restrictive and the looming presence of geopolitical risks persists.<\/p>\n","post_title":"Wall Street Weakened As Retail Sales Data Hampers Expectations For A Cut In Interest Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-weakened-as-retail-sales-data-hampers-expectations-for-a-cut-in-interest-rates","to_ping":"","pinged":"","post_modified":"2024-01-19 05:56:51","post_modified_gmt":"2024-01-18 18:56:51","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15043","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14931,"post_author":"18","post_date":"2024-01-10 07:51:17","post_date_gmt":"2024-01-09 20:51:17","post_content":"\n

In a recent survey conducted by the New York Federal Reserve<\/a>, Wall Street's major banks have recalibrated their predictions regarding the Federal Reserve's balance sheet drawdown. This shift suggests that the U.S. central bank might conclude its quantitative tightening (QT) process later than initially anticipated.<\/p>\n\n\n\n

A Change in Perspective<\/h2>\n\n\n\n

Previously, primary dealers\u2014major banks\u2014projected that the QT process would conclude by the third quarter. However, the sentiment has evolved. According to the latest survey taken before the Fed's December 12-13 policy meeting, these banks now foresee the QT process ending in the fourth quarter.<\/p>\n\n\n\n

This adjustment carries significant implications. If these predictions materialize, the Federal Reserve's balance sheet<\/a> will likely shrink to approximately $6.75 trillion, down from its current level of roughly $7.764 trillion. Moreover, banks estimated that the central bank's reverse repo facility would hold $375 billion when QT concludes, a reduction from the anticipated $625 billion as forecasted in October.<\/p>\n\n\n\n

Federal Reserve Strategy<\/h2>\n\n\n\n

The quantitative tightening process has been an integral part of the Federal Reserve's strategy to combat inflation. Alongside rate hikes, the central bank initiated large-scale purchases of Treasury bonds and mortgage-backed securities during the COVID-19 pandemic's onset in 2020. This move led to an expansion of its holdings to approximately $9 trillion by mid-2022. However, since last year, the Fed has been gradually reducing its balance sheet size, although specific guidance on the timeline remains somewhat ambiguous.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

What This Means for the Economy<\/h2>\n\n\n\n

The recalibrated timeline for QT indicates a more prolonged period of balance sheet reduction. As the Federal Reserve continues to navigate its policy decisions, market participants, businesses, and consumers should monitor these developments closely. Changes in the balance sheet size can influence interest rates, liquidity conditions, and overall financial market dynamics.<\/p>\n\n\n\n

A Technical Perspective<\/h2>\n\n\n\n

From a technical standpoint, the Federal Reserve's<\/a> balance sheet management serves as a critical tool in its monetary policy arsenal. The evolving predictions by Wall Street's primary dealers underscore the complexities involved in forecasting economic variables, such as inflation and interest rates.<\/p>\n\n\n\n

As the QT process continues, policymakers and market participants must remain vigilant, considering the potential ramifications for financial stability and economic growth. This dynamic landscape necessitates ongoing analysis and adaptation to ensure that monetary policy objectives align with evolving economic conditions.<\/p>\n","post_title":"Decoding Wall Street's Shift: A Closer Look At Wall Street's Changing Perspective","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"decoding-wall-streets-shift-a-closer-look-at-wall-streets-changing-perspective","to_ping":"","pinged":"","post_modified":"2024-01-10 07:51:25","post_modified_gmt":"2024-01-09 20:51:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14931","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14888,"post_author":"14","post_date":"2024-01-06 18:33:09","post_date_gmt":"2024-01-06 07:33:09","post_content":"\n

Wall Street's main indexes fell at the beginning of the 2024 year as investors locked in profits after a very successful 2023 and are currently waiting for the Federal Reserve's<\/a> meeting that could offer hints on its interest rate path. Ken Polcari, managing partner at Kace Capital Advisors, said:<\/p>\n\n\n\n

\"The decline yesterday, today, and maybe for the next couple of weeks, is a result of people locking in profits and reconsidering what the narrative is - are rates going down five or six times as it appeared to be at the end of last year?\"<\/em><\/p>\n\n\n\n

\"\"
The Nasdaq Composite kicked off the year with a 1.5% drop pressured by a selloff in the tech sector<\/figcaption><\/figure>\n\n\n\n

The Fed's December meeting minutes are set to be disclosed at 2:00 p.m. ET, potentially providing information regarding the central bank's shift toward reducing interest rates. Although it's widely anticipated that the Fed will keep interest rates unchanged this month, traders have priced in a 65.7% probability of a 25 basis point rate reduction in March, according to CMEGroup's FedWatch tool.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures<\/a><\/p>\n\n\n\n

Central Bank And Inflation<\/h2>\n\n\n\n

Richmond Fed President Thomas Barkin, a voting member in the FOMC's rate-setting committee, said recently that the U.S. central bank is \"making real progress\" towards taming inflation and a soft landing seeming \"increasingly conceivable\". Encouragingly, the American Association of Individual Investors (AAII) Sentiment Survey indicated a surge in optimism among individual investors regarding the short-term outlook for the U.S. stock market, reaching its peak level in more than two and a half years.<\/p>\n\n\n\n

Despite this, JPMorgan Asset Management advises investors to be cautious due to potential recession risks. At the same time, analysts at Soci\u00e9t\u00e9 G\u00e9n\u00e9rale anticipate a turbulent 2024 for U.S. stocks, projecting fluctuations that could involve nearing recent highs, encountering declines, and subsequently rebounding.<\/p>\n\n\n\n

This week will witness a series of labor market data releases, culminating in the government's December employment report on Friday. These reports could significantly influence the forecast for the Fed's interest rate trajectory this year, prompting investors to scrutinize the data. Jeffrey Roach, chief economist at LPL Financial, added<\/a>:<\/p>\n\n\n\n

 \"The job market is cooling and we should see confirmation of that in this Friday\u2019s jobs report\"<\/em><\/p>\n\n\n\n

Following the progress of Wall Street's main indexes seen last year, investors are still optimistic about the prospect of another robust year ahead. This optimism is rooted in the anticipation that a decelerating economy will result in a gentle landing rather than a full-scale recession, especially as the Fed initiates rate cuts in the first half of 2024.<\/p>\n","post_title":"Wall Street's Main Indexes Fell At The Beginning Of 2024 year. Investors Locked In Profits After A Strong 2023 And Wait For The Federal Reserve's Meeting","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-at-the-beginning-of-2024-year-investors-locked-in-profits-after-a-strong-2023-and-wait-for-the-federal-reserves-meeting","to_ping":"","pinged":"","post_modified":"2024-01-06 18:33:13","post_modified_gmt":"2024-01-06 07:33:13","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14888","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14629,"post_author":"15","post_date":"2023-12-15 19:46:11","post_date_gmt":"2023-12-15 08:46:11","post_content":"\n

BlackRock aims to facilitate the participation of Wall Street banks in its potential Bitcoin ETF approval. Recent SEC memo <\/a>detailing a late November meeting involving BlackRock, Nasdaq, and the Commission. During this meeting, they discussed feedback regarding BlackRock's Bitcoin ETF application.<\/p>\n\n\n\n

The proposed approach introduces an innovative method for the redemption of ETF shares. A Bitcoin ETF would enable fund investors to gain exposure to Bitcoin without directly purchasing or storing the cryptocurrency. While the SEC has hesitated to approve such ETFs due to concerns about Bitcoin market manipulation, this new strategy addresses those worries.<\/p>\n\n\n\n

The SEC has yet to decide on BlackRock's iShares Bitcoin Trust (IBTC) application, with the deadline set for January 15. Analysts anticipate a decision will be issued for several spot Bitcoin ETF applications earlier in January.<\/p>\n\n\n\n

See Related:<\/strong><\/em> Fidelity Joins BlackRock\u2019s Push For Ethereum ETF<\/a><\/p>\n\n\n\n

BlackRock ETF Details<\/h2>\n\n\n\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

As we approach the critical months of March to May, the financial markets are at a crossroads. The potential shake-up in short-term financing markets could signal the Fed to reassess its policies. Market participants and investors must stay vigilant, and prepared for potential shifts in liquidity and policy adjustments. The coming months will \/reveal whether these concerns materialize into a significant market event or remain a contained storm in the financial teacup.<\/p>\n","post_title":"Understanding The Potential Shake-Up In U.S. Short-Term Financing Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"understanding-the-potential-shake-up-in-u-s-short-term-financing-markets","to_ping":"","pinged":"","post_modified":"2024-01-26 20:20:06","post_modified_gmt":"2024-01-26 09:20:06","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15094","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15043,"post_author":"14","post_date":"2024-01-19 05:56:40","post_date_gmt":"2024-01-18 18:56:40","post_content":"\n

Wall Street witnessed a significant stock decline this Wednesday following positive December U.S. retail sales data, which diminished the anticipation of an early initiation of the Federal Reserve's campaign to cut interest rates.<\/p>\n\n\n\n

Retail Sales Report <\/h2>\n\n\n\n

The December retail sales report from the Commerce Department (USRSL=ECI) depicted a robust consumer, responsible for approximately 70% of the U.S. economy. Despite facing the challenges of high inflation and a tight monetary policy, the consumer has shown resilience.<\/p>\n\n\n\n

The data revealed that discounts offered by retailers and a surge in motor vehicle acquisitions contributed to a greater-than-anticipated increase in U.S. retail sales, maintaining the economy on a robust trajectory in 2024. This bolstered the perspective that the Federal Reserve might not reduce interest rates as rapidly as initially anticipated for the current year.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

Anticipations among traders for a 25-basis-point Federal Reserve rate cut in March declined to 55%, down from approximately 60% before the release of the retail sales data. Ryan Detrick, chief market strategist at Carson Group in Omaha, said<\/a>:<\/p>\n\n\n\n

\"We had news that the U.S. consumer continues to be quite healthy, but that has increased anxiety that the Fed\u2019s first rate cut could potentially be pushed to May from March. Yields are also moving higher on the strong retail sales numbers, adding to near-term worries.\"<\/em><\/p>\n\n\n\n

US Stocks And Wall Street<\/h2>\n\n\n\n

It is also important to mention that a decline in U.S. stocks sent Wall Street's<\/a> \"fear gauge\" to a two-month high while JPMorgan analysts predict that the majority of negative consequences stemming from higher interest rates have not materialized yet. On Tuesday, Federal Reserve Governor Christopher Waller also emphasized that the central bank should refrain from hastily reducing interest rates until there is a clear indication that lower inflation is likely to persist.<\/p>\n\n\n\n

At the same time, the escalation of geopolitical uncertainties introduces an additional challenge and heightens the potential for unforeseen risks in both markets and economic performance. Considering these factors, the perspective is likely to stay cautious as long as interest rates remain significantly restrictive and the looming presence of geopolitical risks persists.<\/p>\n","post_title":"Wall Street Weakened As Retail Sales Data Hampers Expectations For A Cut In Interest Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-weakened-as-retail-sales-data-hampers-expectations-for-a-cut-in-interest-rates","to_ping":"","pinged":"","post_modified":"2024-01-19 05:56:51","post_modified_gmt":"2024-01-18 18:56:51","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15043","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14931,"post_author":"18","post_date":"2024-01-10 07:51:17","post_date_gmt":"2024-01-09 20:51:17","post_content":"\n

In a recent survey conducted by the New York Federal Reserve<\/a>, Wall Street's major banks have recalibrated their predictions regarding the Federal Reserve's balance sheet drawdown. This shift suggests that the U.S. central bank might conclude its quantitative tightening (QT) process later than initially anticipated.<\/p>\n\n\n\n

A Change in Perspective<\/h2>\n\n\n\n

Previously, primary dealers\u2014major banks\u2014projected that the QT process would conclude by the third quarter. However, the sentiment has evolved. According to the latest survey taken before the Fed's December 12-13 policy meeting, these banks now foresee the QT process ending in the fourth quarter.<\/p>\n\n\n\n

This adjustment carries significant implications. If these predictions materialize, the Federal Reserve's balance sheet<\/a> will likely shrink to approximately $6.75 trillion, down from its current level of roughly $7.764 trillion. Moreover, banks estimated that the central bank's reverse repo facility would hold $375 billion when QT concludes, a reduction from the anticipated $625 billion as forecasted in October.<\/p>\n\n\n\n

Federal Reserve Strategy<\/h2>\n\n\n\n

The quantitative tightening process has been an integral part of the Federal Reserve's strategy to combat inflation. Alongside rate hikes, the central bank initiated large-scale purchases of Treasury bonds and mortgage-backed securities during the COVID-19 pandemic's onset in 2020. This move led to an expansion of its holdings to approximately $9 trillion by mid-2022. However, since last year, the Fed has been gradually reducing its balance sheet size, although specific guidance on the timeline remains somewhat ambiguous.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

What This Means for the Economy<\/h2>\n\n\n\n

The recalibrated timeline for QT indicates a more prolonged period of balance sheet reduction. As the Federal Reserve continues to navigate its policy decisions, market participants, businesses, and consumers should monitor these developments closely. Changes in the balance sheet size can influence interest rates, liquidity conditions, and overall financial market dynamics.<\/p>\n\n\n\n

A Technical Perspective<\/h2>\n\n\n\n

From a technical standpoint, the Federal Reserve's<\/a> balance sheet management serves as a critical tool in its monetary policy arsenal. The evolving predictions by Wall Street's primary dealers underscore the complexities involved in forecasting economic variables, such as inflation and interest rates.<\/p>\n\n\n\n

As the QT process continues, policymakers and market participants must remain vigilant, considering the potential ramifications for financial stability and economic growth. This dynamic landscape necessitates ongoing analysis and adaptation to ensure that monetary policy objectives align with evolving economic conditions.<\/p>\n","post_title":"Decoding Wall Street's Shift: A Closer Look At Wall Street's Changing Perspective","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"decoding-wall-streets-shift-a-closer-look-at-wall-streets-changing-perspective","to_ping":"","pinged":"","post_modified":"2024-01-10 07:51:25","post_modified_gmt":"2024-01-09 20:51:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14931","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14888,"post_author":"14","post_date":"2024-01-06 18:33:09","post_date_gmt":"2024-01-06 07:33:09","post_content":"\n

Wall Street's main indexes fell at the beginning of the 2024 year as investors locked in profits after a very successful 2023 and are currently waiting for the Federal Reserve's<\/a> meeting that could offer hints on its interest rate path. Ken Polcari, managing partner at Kace Capital Advisors, said:<\/p>\n\n\n\n

\"The decline yesterday, today, and maybe for the next couple of weeks, is a result of people locking in profits and reconsidering what the narrative is - are rates going down five or six times as it appeared to be at the end of last year?\"<\/em><\/p>\n\n\n\n

\"\"
The Nasdaq Composite kicked off the year with a 1.5% drop pressured by a selloff in the tech sector<\/figcaption><\/figure>\n\n\n\n

The Fed's December meeting minutes are set to be disclosed at 2:00 p.m. ET, potentially providing information regarding the central bank's shift toward reducing interest rates. Although it's widely anticipated that the Fed will keep interest rates unchanged this month, traders have priced in a 65.7% probability of a 25 basis point rate reduction in March, according to CMEGroup's FedWatch tool.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures<\/a><\/p>\n\n\n\n

Central Bank And Inflation<\/h2>\n\n\n\n

Richmond Fed President Thomas Barkin, a voting member in the FOMC's rate-setting committee, said recently that the U.S. central bank is \"making real progress\" towards taming inflation and a soft landing seeming \"increasingly conceivable\". Encouragingly, the American Association of Individual Investors (AAII) Sentiment Survey indicated a surge in optimism among individual investors regarding the short-term outlook for the U.S. stock market, reaching its peak level in more than two and a half years.<\/p>\n\n\n\n

Despite this, JPMorgan Asset Management advises investors to be cautious due to potential recession risks. At the same time, analysts at Soci\u00e9t\u00e9 G\u00e9n\u00e9rale anticipate a turbulent 2024 for U.S. stocks, projecting fluctuations that could involve nearing recent highs, encountering declines, and subsequently rebounding.<\/p>\n\n\n\n

This week will witness a series of labor market data releases, culminating in the government's December employment report on Friday. These reports could significantly influence the forecast for the Fed's interest rate trajectory this year, prompting investors to scrutinize the data. Jeffrey Roach, chief economist at LPL Financial, added<\/a>:<\/p>\n\n\n\n

 \"The job market is cooling and we should see confirmation of that in this Friday\u2019s jobs report\"<\/em><\/p>\n\n\n\n

Following the progress of Wall Street's main indexes seen last year, investors are still optimistic about the prospect of another robust year ahead. This optimism is rooted in the anticipation that a decelerating economy will result in a gentle landing rather than a full-scale recession, especially as the Fed initiates rate cuts in the first half of 2024.<\/p>\n","post_title":"Wall Street's Main Indexes Fell At The Beginning Of 2024 year. Investors Locked In Profits After A Strong 2023 And Wait For The Federal Reserve's Meeting","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-at-the-beginning-of-2024-year-investors-locked-in-profits-after-a-strong-2023-and-wait-for-the-federal-reserves-meeting","to_ping":"","pinged":"","post_modified":"2024-01-06 18:33:13","post_modified_gmt":"2024-01-06 07:33:13","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14888","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14629,"post_author":"15","post_date":"2023-12-15 19:46:11","post_date_gmt":"2023-12-15 08:46:11","post_content":"\n

BlackRock aims to facilitate the participation of Wall Street banks in its potential Bitcoin ETF approval. Recent SEC memo <\/a>detailing a late November meeting involving BlackRock, Nasdaq, and the Commission. During this meeting, they discussed feedback regarding BlackRock's Bitcoin ETF application.<\/p>\n\n\n\n

The proposed approach introduces an innovative method for the redemption of ETF shares. A Bitcoin ETF would enable fund investors to gain exposure to Bitcoin without directly purchasing or storing the cryptocurrency. While the SEC has hesitated to approve such ETFs due to concerns about Bitcoin market manipulation, this new strategy addresses those worries.<\/p>\n\n\n\n

The SEC has yet to decide on BlackRock's iShares Bitcoin Trust (IBTC) application, with the deadline set for January 15. Analysts anticipate a decision will be issued for several spot Bitcoin ETF applications earlier in January.<\/p>\n\n\n\n

See Related:<\/strong><\/em> Fidelity Joins BlackRock\u2019s Push For Ethereum ETF<\/a><\/p>\n\n\n\n

BlackRock ETF Details<\/h2>\n\n\n\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

If short-term financing markets experience a meltdown, it could signal the need for the Fed to ease policy. Slowing the pace of quantitative tightening (QT) is seen as a potential response. Despite the central bankers' insistence on needing more data before rate cuts, markets are already pricing in cuts by May.<\/p>\n\n\n\n

As we approach the critical months of March to May, the financial markets are at a crossroads. The potential shake-up in short-term financing markets could signal the Fed to reassess its policies. Market participants and investors must stay vigilant, and prepared for potential shifts in liquidity and policy adjustments. The coming months will \/reveal whether these concerns materialize into a significant market event or remain a contained storm in the financial teacup.<\/p>\n","post_title":"Understanding The Potential Shake-Up In U.S. Short-Term Financing Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"understanding-the-potential-shake-up-in-u-s-short-term-financing-markets","to_ping":"","pinged":"","post_modified":"2024-01-26 20:20:06","post_modified_gmt":"2024-01-26 09:20:06","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15094","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15043,"post_author":"14","post_date":"2024-01-19 05:56:40","post_date_gmt":"2024-01-18 18:56:40","post_content":"\n

Wall Street witnessed a significant stock decline this Wednesday following positive December U.S. retail sales data, which diminished the anticipation of an early initiation of the Federal Reserve's campaign to cut interest rates.<\/p>\n\n\n\n

Retail Sales Report <\/h2>\n\n\n\n

The December retail sales report from the Commerce Department (USRSL=ECI) depicted a robust consumer, responsible for approximately 70% of the U.S. economy. Despite facing the challenges of high inflation and a tight monetary policy, the consumer has shown resilience.<\/p>\n\n\n\n

The data revealed that discounts offered by retailers and a surge in motor vehicle acquisitions contributed to a greater-than-anticipated increase in U.S. retail sales, maintaining the economy on a robust trajectory in 2024. This bolstered the perspective that the Federal Reserve might not reduce interest rates as rapidly as initially anticipated for the current year.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

Anticipations among traders for a 25-basis-point Federal Reserve rate cut in March declined to 55%, down from approximately 60% before the release of the retail sales data. Ryan Detrick, chief market strategist at Carson Group in Omaha, said<\/a>:<\/p>\n\n\n\n

\"We had news that the U.S. consumer continues to be quite healthy, but that has increased anxiety that the Fed\u2019s first rate cut could potentially be pushed to May from March. Yields are also moving higher on the strong retail sales numbers, adding to near-term worries.\"<\/em><\/p>\n\n\n\n

US Stocks And Wall Street<\/h2>\n\n\n\n

It is also important to mention that a decline in U.S. stocks sent Wall Street's<\/a> \"fear gauge\" to a two-month high while JPMorgan analysts predict that the majority of negative consequences stemming from higher interest rates have not materialized yet. On Tuesday, Federal Reserve Governor Christopher Waller also emphasized that the central bank should refrain from hastily reducing interest rates until there is a clear indication that lower inflation is likely to persist.<\/p>\n\n\n\n

At the same time, the escalation of geopolitical uncertainties introduces an additional challenge and heightens the potential for unforeseen risks in both markets and economic performance. Considering these factors, the perspective is likely to stay cautious as long as interest rates remain significantly restrictive and the looming presence of geopolitical risks persists.<\/p>\n","post_title":"Wall Street Weakened As Retail Sales Data Hampers Expectations For A Cut In Interest Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-weakened-as-retail-sales-data-hampers-expectations-for-a-cut-in-interest-rates","to_ping":"","pinged":"","post_modified":"2024-01-19 05:56:51","post_modified_gmt":"2024-01-18 18:56:51","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15043","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14931,"post_author":"18","post_date":"2024-01-10 07:51:17","post_date_gmt":"2024-01-09 20:51:17","post_content":"\n

In a recent survey conducted by the New York Federal Reserve<\/a>, Wall Street's major banks have recalibrated their predictions regarding the Federal Reserve's balance sheet drawdown. This shift suggests that the U.S. central bank might conclude its quantitative tightening (QT) process later than initially anticipated.<\/p>\n\n\n\n

A Change in Perspective<\/h2>\n\n\n\n

Previously, primary dealers\u2014major banks\u2014projected that the QT process would conclude by the third quarter. However, the sentiment has evolved. According to the latest survey taken before the Fed's December 12-13 policy meeting, these banks now foresee the QT process ending in the fourth quarter.<\/p>\n\n\n\n

This adjustment carries significant implications. If these predictions materialize, the Federal Reserve's balance sheet<\/a> will likely shrink to approximately $6.75 trillion, down from its current level of roughly $7.764 trillion. Moreover, banks estimated that the central bank's reverse repo facility would hold $375 billion when QT concludes, a reduction from the anticipated $625 billion as forecasted in October.<\/p>\n\n\n\n

Federal Reserve Strategy<\/h2>\n\n\n\n

The quantitative tightening process has been an integral part of the Federal Reserve's strategy to combat inflation. Alongside rate hikes, the central bank initiated large-scale purchases of Treasury bonds and mortgage-backed securities during the COVID-19 pandemic's onset in 2020. This move led to an expansion of its holdings to approximately $9 trillion by mid-2022. However, since last year, the Fed has been gradually reducing its balance sheet size, although specific guidance on the timeline remains somewhat ambiguous.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

What This Means for the Economy<\/h2>\n\n\n\n

The recalibrated timeline for QT indicates a more prolonged period of balance sheet reduction. As the Federal Reserve continues to navigate its policy decisions, market participants, businesses, and consumers should monitor these developments closely. Changes in the balance sheet size can influence interest rates, liquidity conditions, and overall financial market dynamics.<\/p>\n\n\n\n

A Technical Perspective<\/h2>\n\n\n\n

From a technical standpoint, the Federal Reserve's<\/a> balance sheet management serves as a critical tool in its monetary policy arsenal. The evolving predictions by Wall Street's primary dealers underscore the complexities involved in forecasting economic variables, such as inflation and interest rates.<\/p>\n\n\n\n

As the QT process continues, policymakers and market participants must remain vigilant, considering the potential ramifications for financial stability and economic growth. This dynamic landscape necessitates ongoing analysis and adaptation to ensure that monetary policy objectives align with evolving economic conditions.<\/p>\n","post_title":"Decoding Wall Street's Shift: A Closer Look At Wall Street's Changing Perspective","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"decoding-wall-streets-shift-a-closer-look-at-wall-streets-changing-perspective","to_ping":"","pinged":"","post_modified":"2024-01-10 07:51:25","post_modified_gmt":"2024-01-09 20:51:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14931","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14888,"post_author":"14","post_date":"2024-01-06 18:33:09","post_date_gmt":"2024-01-06 07:33:09","post_content":"\n

Wall Street's main indexes fell at the beginning of the 2024 year as investors locked in profits after a very successful 2023 and are currently waiting for the Federal Reserve's<\/a> meeting that could offer hints on its interest rate path. Ken Polcari, managing partner at Kace Capital Advisors, said:<\/p>\n\n\n\n

\"The decline yesterday, today, and maybe for the next couple of weeks, is a result of people locking in profits and reconsidering what the narrative is - are rates going down five or six times as it appeared to be at the end of last year?\"<\/em><\/p>\n\n\n\n

\"\"
The Nasdaq Composite kicked off the year with a 1.5% drop pressured by a selloff in the tech sector<\/figcaption><\/figure>\n\n\n\n

The Fed's December meeting minutes are set to be disclosed at 2:00 p.m. ET, potentially providing information regarding the central bank's shift toward reducing interest rates. Although it's widely anticipated that the Fed will keep interest rates unchanged this month, traders have priced in a 65.7% probability of a 25 basis point rate reduction in March, according to CMEGroup's FedWatch tool.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures<\/a><\/p>\n\n\n\n

Central Bank And Inflation<\/h2>\n\n\n\n

Richmond Fed President Thomas Barkin, a voting member in the FOMC's rate-setting committee, said recently that the U.S. central bank is \"making real progress\" towards taming inflation and a soft landing seeming \"increasingly conceivable\". Encouragingly, the American Association of Individual Investors (AAII) Sentiment Survey indicated a surge in optimism among individual investors regarding the short-term outlook for the U.S. stock market, reaching its peak level in more than two and a half years.<\/p>\n\n\n\n

Despite this, JPMorgan Asset Management advises investors to be cautious due to potential recession risks. At the same time, analysts at Soci\u00e9t\u00e9 G\u00e9n\u00e9rale anticipate a turbulent 2024 for U.S. stocks, projecting fluctuations that could involve nearing recent highs, encountering declines, and subsequently rebounding.<\/p>\n\n\n\n

This week will witness a series of labor market data releases, culminating in the government's December employment report on Friday. These reports could significantly influence the forecast for the Fed's interest rate trajectory this year, prompting investors to scrutinize the data. Jeffrey Roach, chief economist at LPL Financial, added<\/a>:<\/p>\n\n\n\n

 \"The job market is cooling and we should see confirmation of that in this Friday\u2019s jobs report\"<\/em><\/p>\n\n\n\n

Following the progress of Wall Street's main indexes seen last year, investors are still optimistic about the prospect of another robust year ahead. This optimism is rooted in the anticipation that a decelerating economy will result in a gentle landing rather than a full-scale recession, especially as the Fed initiates rate cuts in the first half of 2024.<\/p>\n","post_title":"Wall Street's Main Indexes Fell At The Beginning Of 2024 year. Investors Locked In Profits After A Strong 2023 And Wait For The Federal Reserve's Meeting","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-at-the-beginning-of-2024-year-investors-locked-in-profits-after-a-strong-2023-and-wait-for-the-federal-reserves-meeting","to_ping":"","pinged":"","post_modified":"2024-01-06 18:33:13","post_modified_gmt":"2024-01-06 07:33:13","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14888","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14629,"post_author":"15","post_date":"2023-12-15 19:46:11","post_date_gmt":"2023-12-15 08:46:11","post_content":"\n

BlackRock aims to facilitate the participation of Wall Street banks in its potential Bitcoin ETF approval. Recent SEC memo <\/a>detailing a late November meeting involving BlackRock, Nasdaq, and the Commission. During this meeting, they discussed feedback regarding BlackRock's Bitcoin ETF application.<\/p>\n\n\n\n

The proposed approach introduces an innovative method for the redemption of ETF shares. A Bitcoin ETF would enable fund investors to gain exposure to Bitcoin without directly purchasing or storing the cryptocurrency. While the SEC has hesitated to approve such ETFs due to concerns about Bitcoin market manipulation, this new strategy addresses those worries.<\/p>\n\n\n\n

The SEC has yet to decide on BlackRock's iShares Bitcoin Trust (IBTC) application, with the deadline set for January 15. Analysts anticipate a decision will be issued for several spot Bitcoin ETF applications earlier in January.<\/p>\n\n\n\n

See Related:<\/strong><\/em> Fidelity Joins BlackRock\u2019s Push For Ethereum ETF<\/a><\/p>\n\n\n\n

BlackRock ETF Details<\/h2>\n\n\n\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

Sudden spikes in short-term financing markets can threaten financial stability, making it harder and more expensive for firms to secure necessary funds. This situation could expose lenders struggling to stabilize deposits after last year's banking crisis. As the Fed inches closer to its 2% inflation target, the risk of policy error looms large.<\/p>\n\n\n\n

If short-term financing markets experience a meltdown, it could signal the need for the Fed to ease policy. Slowing the pace of quantitative tightening (QT) is seen as a potential response. Despite the central bankers' insistence on needing more data before rate cuts, markets are already pricing in cuts by May.<\/p>\n\n\n\n

As we approach the critical months of March to May, the financial markets are at a crossroads. The potential shake-up in short-term financing markets could signal the Fed to reassess its policies. Market participants and investors must stay vigilant, and prepared for potential shifts in liquidity and policy adjustments. The coming months will \/reveal whether these concerns materialize into a significant market event or remain a contained storm in the financial teacup.<\/p>\n","post_title":"Understanding The Potential Shake-Up In U.S. Short-Term Financing Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"understanding-the-potential-shake-up-in-u-s-short-term-financing-markets","to_ping":"","pinged":"","post_modified":"2024-01-26 20:20:06","post_modified_gmt":"2024-01-26 09:20:06","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15094","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15043,"post_author":"14","post_date":"2024-01-19 05:56:40","post_date_gmt":"2024-01-18 18:56:40","post_content":"\n

Wall Street witnessed a significant stock decline this Wednesday following positive December U.S. retail sales data, which diminished the anticipation of an early initiation of the Federal Reserve's campaign to cut interest rates.<\/p>\n\n\n\n

Retail Sales Report <\/h2>\n\n\n\n

The December retail sales report from the Commerce Department (USRSL=ECI) depicted a robust consumer, responsible for approximately 70% of the U.S. economy. Despite facing the challenges of high inflation and a tight monetary policy, the consumer has shown resilience.<\/p>\n\n\n\n

The data revealed that discounts offered by retailers and a surge in motor vehicle acquisitions contributed to a greater-than-anticipated increase in U.S. retail sales, maintaining the economy on a robust trajectory in 2024. This bolstered the perspective that the Federal Reserve might not reduce interest rates as rapidly as initially anticipated for the current year.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

Anticipations among traders for a 25-basis-point Federal Reserve rate cut in March declined to 55%, down from approximately 60% before the release of the retail sales data. Ryan Detrick, chief market strategist at Carson Group in Omaha, said<\/a>:<\/p>\n\n\n\n

\"We had news that the U.S. consumer continues to be quite healthy, but that has increased anxiety that the Fed\u2019s first rate cut could potentially be pushed to May from March. Yields are also moving higher on the strong retail sales numbers, adding to near-term worries.\"<\/em><\/p>\n\n\n\n

US Stocks And Wall Street<\/h2>\n\n\n\n

It is also important to mention that a decline in U.S. stocks sent Wall Street's<\/a> \"fear gauge\" to a two-month high while JPMorgan analysts predict that the majority of negative consequences stemming from higher interest rates have not materialized yet. On Tuesday, Federal Reserve Governor Christopher Waller also emphasized that the central bank should refrain from hastily reducing interest rates until there is a clear indication that lower inflation is likely to persist.<\/p>\n\n\n\n

At the same time, the escalation of geopolitical uncertainties introduces an additional challenge and heightens the potential for unforeseen risks in both markets and economic performance. Considering these factors, the perspective is likely to stay cautious as long as interest rates remain significantly restrictive and the looming presence of geopolitical risks persists.<\/p>\n","post_title":"Wall Street Weakened As Retail Sales Data Hampers Expectations For A Cut In Interest Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-weakened-as-retail-sales-data-hampers-expectations-for-a-cut-in-interest-rates","to_ping":"","pinged":"","post_modified":"2024-01-19 05:56:51","post_modified_gmt":"2024-01-18 18:56:51","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15043","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14931,"post_author":"18","post_date":"2024-01-10 07:51:17","post_date_gmt":"2024-01-09 20:51:17","post_content":"\n

In a recent survey conducted by the New York Federal Reserve<\/a>, Wall Street's major banks have recalibrated their predictions regarding the Federal Reserve's balance sheet drawdown. This shift suggests that the U.S. central bank might conclude its quantitative tightening (QT) process later than initially anticipated.<\/p>\n\n\n\n

A Change in Perspective<\/h2>\n\n\n\n

Previously, primary dealers\u2014major banks\u2014projected that the QT process would conclude by the third quarter. However, the sentiment has evolved. According to the latest survey taken before the Fed's December 12-13 policy meeting, these banks now foresee the QT process ending in the fourth quarter.<\/p>\n\n\n\n

This adjustment carries significant implications. If these predictions materialize, the Federal Reserve's balance sheet<\/a> will likely shrink to approximately $6.75 trillion, down from its current level of roughly $7.764 trillion. Moreover, banks estimated that the central bank's reverse repo facility would hold $375 billion when QT concludes, a reduction from the anticipated $625 billion as forecasted in October.<\/p>\n\n\n\n

Federal Reserve Strategy<\/h2>\n\n\n\n

The quantitative tightening process has been an integral part of the Federal Reserve's strategy to combat inflation. Alongside rate hikes, the central bank initiated large-scale purchases of Treasury bonds and mortgage-backed securities during the COVID-19 pandemic's onset in 2020. This move led to an expansion of its holdings to approximately $9 trillion by mid-2022. However, since last year, the Fed has been gradually reducing its balance sheet size, although specific guidance on the timeline remains somewhat ambiguous.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

What This Means for the Economy<\/h2>\n\n\n\n

The recalibrated timeline for QT indicates a more prolonged period of balance sheet reduction. As the Federal Reserve continues to navigate its policy decisions, market participants, businesses, and consumers should monitor these developments closely. Changes in the balance sheet size can influence interest rates, liquidity conditions, and overall financial market dynamics.<\/p>\n\n\n\n

A Technical Perspective<\/h2>\n\n\n\n

From a technical standpoint, the Federal Reserve's<\/a> balance sheet management serves as a critical tool in its monetary policy arsenal. The evolving predictions by Wall Street's primary dealers underscore the complexities involved in forecasting economic variables, such as inflation and interest rates.<\/p>\n\n\n\n

As the QT process continues, policymakers and market participants must remain vigilant, considering the potential ramifications for financial stability and economic growth. This dynamic landscape necessitates ongoing analysis and adaptation to ensure that monetary policy objectives align with evolving economic conditions.<\/p>\n","post_title":"Decoding Wall Street's Shift: A Closer Look At Wall Street's Changing Perspective","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"decoding-wall-streets-shift-a-closer-look-at-wall-streets-changing-perspective","to_ping":"","pinged":"","post_modified":"2024-01-10 07:51:25","post_modified_gmt":"2024-01-09 20:51:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14931","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14888,"post_author":"14","post_date":"2024-01-06 18:33:09","post_date_gmt":"2024-01-06 07:33:09","post_content":"\n

Wall Street's main indexes fell at the beginning of the 2024 year as investors locked in profits after a very successful 2023 and are currently waiting for the Federal Reserve's<\/a> meeting that could offer hints on its interest rate path. Ken Polcari, managing partner at Kace Capital Advisors, said:<\/p>\n\n\n\n

\"The decline yesterday, today, and maybe for the next couple of weeks, is a result of people locking in profits and reconsidering what the narrative is - are rates going down five or six times as it appeared to be at the end of last year?\"<\/em><\/p>\n\n\n\n

\"\"
The Nasdaq Composite kicked off the year with a 1.5% drop pressured by a selloff in the tech sector<\/figcaption><\/figure>\n\n\n\n

The Fed's December meeting minutes are set to be disclosed at 2:00 p.m. ET, potentially providing information regarding the central bank's shift toward reducing interest rates. Although it's widely anticipated that the Fed will keep interest rates unchanged this month, traders have priced in a 65.7% probability of a 25 basis point rate reduction in March, according to CMEGroup's FedWatch tool.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures<\/a><\/p>\n\n\n\n

Central Bank And Inflation<\/h2>\n\n\n\n

Richmond Fed President Thomas Barkin, a voting member in the FOMC's rate-setting committee, said recently that the U.S. central bank is \"making real progress\" towards taming inflation and a soft landing seeming \"increasingly conceivable\". Encouragingly, the American Association of Individual Investors (AAII) Sentiment Survey indicated a surge in optimism among individual investors regarding the short-term outlook for the U.S. stock market, reaching its peak level in more than two and a half years.<\/p>\n\n\n\n

Despite this, JPMorgan Asset Management advises investors to be cautious due to potential recession risks. At the same time, analysts at Soci\u00e9t\u00e9 G\u00e9n\u00e9rale anticipate a turbulent 2024 for U.S. stocks, projecting fluctuations that could involve nearing recent highs, encountering declines, and subsequently rebounding.<\/p>\n\n\n\n

This week will witness a series of labor market data releases, culminating in the government's December employment report on Friday. These reports could significantly influence the forecast for the Fed's interest rate trajectory this year, prompting investors to scrutinize the data. Jeffrey Roach, chief economist at LPL Financial, added<\/a>:<\/p>\n\n\n\n

 \"The job market is cooling and we should see confirmation of that in this Friday\u2019s jobs report\"<\/em><\/p>\n\n\n\n

Following the progress of Wall Street's main indexes seen last year, investors are still optimistic about the prospect of another robust year ahead. This optimism is rooted in the anticipation that a decelerating economy will result in a gentle landing rather than a full-scale recession, especially as the Fed initiates rate cuts in the first half of 2024.<\/p>\n","post_title":"Wall Street's Main Indexes Fell At The Beginning Of 2024 year. Investors Locked In Profits After A Strong 2023 And Wait For The Federal Reserve's Meeting","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-at-the-beginning-of-2024-year-investors-locked-in-profits-after-a-strong-2023-and-wait-for-the-federal-reserves-meeting","to_ping":"","pinged":"","post_modified":"2024-01-06 18:33:13","post_modified_gmt":"2024-01-06 07:33:13","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14888","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14629,"post_author":"15","post_date":"2023-12-15 19:46:11","post_date_gmt":"2023-12-15 08:46:11","post_content":"\n

BlackRock aims to facilitate the participation of Wall Street banks in its potential Bitcoin ETF approval. Recent SEC memo <\/a>detailing a late November meeting involving BlackRock, Nasdaq, and the Commission. During this meeting, they discussed feedback regarding BlackRock's Bitcoin ETF application.<\/p>\n\n\n\n

The proposed approach introduces an innovative method for the redemption of ETF shares. A Bitcoin ETF would enable fund investors to gain exposure to Bitcoin without directly purchasing or storing the cryptocurrency. While the SEC has hesitated to approve such ETFs due to concerns about Bitcoin market manipulation, this new strategy addresses those worries.<\/p>\n\n\n\n

The SEC has yet to decide on BlackRock's iShares Bitcoin Trust (IBTC) application, with the deadline set for January 15. Analysts anticipate a decision will be issued for several spot Bitcoin ETF applications earlier in January.<\/p>\n\n\n\n

See Related:<\/strong><\/em> Fidelity Joins BlackRock\u2019s Push For Ethereum ETF<\/a><\/p>\n\n\n\n

BlackRock ETF Details<\/h2>\n\n\n\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

Spikes In Short Term Financing Markets<\/h2>\n\n\n\n

Sudden spikes in short-term financing markets can threaten financial stability, making it harder and more expensive for firms to secure necessary funds. This situation could expose lenders struggling to stabilize deposits after last year's banking crisis. As the Fed inches closer to its 2% inflation target, the risk of policy error looms large.<\/p>\n\n\n\n

If short-term financing markets experience a meltdown, it could signal the need for the Fed to ease policy. Slowing the pace of quantitative tightening (QT) is seen as a potential response. Despite the central bankers' insistence on needing more data before rate cuts, markets are already pricing in cuts by May.<\/p>\n\n\n\n

As we approach the critical months of March to May, the financial markets are at a crossroads. The potential shake-up in short-term financing markets could signal the Fed to reassess its policies. Market participants and investors must stay vigilant, and prepared for potential shifts in liquidity and policy adjustments. The coming months will \/reveal whether these concerns materialize into a significant market event or remain a contained storm in the financial teacup.<\/p>\n","post_title":"Understanding The Potential Shake-Up In U.S. Short-Term Financing Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"understanding-the-potential-shake-up-in-u-s-short-term-financing-markets","to_ping":"","pinged":"","post_modified":"2024-01-26 20:20:06","post_modified_gmt":"2024-01-26 09:20:06","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15094","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15043,"post_author":"14","post_date":"2024-01-19 05:56:40","post_date_gmt":"2024-01-18 18:56:40","post_content":"\n

Wall Street witnessed a significant stock decline this Wednesday following positive December U.S. retail sales data, which diminished the anticipation of an early initiation of the Federal Reserve's campaign to cut interest rates.<\/p>\n\n\n\n

Retail Sales Report <\/h2>\n\n\n\n

The December retail sales report from the Commerce Department (USRSL=ECI) depicted a robust consumer, responsible for approximately 70% of the U.S. economy. Despite facing the challenges of high inflation and a tight monetary policy, the consumer has shown resilience.<\/p>\n\n\n\n

The data revealed that discounts offered by retailers and a surge in motor vehicle acquisitions contributed to a greater-than-anticipated increase in U.S. retail sales, maintaining the economy on a robust trajectory in 2024. This bolstered the perspective that the Federal Reserve might not reduce interest rates as rapidly as initially anticipated for the current year.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

Anticipations among traders for a 25-basis-point Federal Reserve rate cut in March declined to 55%, down from approximately 60% before the release of the retail sales data. Ryan Detrick, chief market strategist at Carson Group in Omaha, said<\/a>:<\/p>\n\n\n\n

\"We had news that the U.S. consumer continues to be quite healthy, but that has increased anxiety that the Fed\u2019s first rate cut could potentially be pushed to May from March. Yields are also moving higher on the strong retail sales numbers, adding to near-term worries.\"<\/em><\/p>\n\n\n\n

US Stocks And Wall Street<\/h2>\n\n\n\n

It is also important to mention that a decline in U.S. stocks sent Wall Street's<\/a> \"fear gauge\" to a two-month high while JPMorgan analysts predict that the majority of negative consequences stemming from higher interest rates have not materialized yet. On Tuesday, Federal Reserve Governor Christopher Waller also emphasized that the central bank should refrain from hastily reducing interest rates until there is a clear indication that lower inflation is likely to persist.<\/p>\n\n\n\n

At the same time, the escalation of geopolitical uncertainties introduces an additional challenge and heightens the potential for unforeseen risks in both markets and economic performance. Considering these factors, the perspective is likely to stay cautious as long as interest rates remain significantly restrictive and the looming presence of geopolitical risks persists.<\/p>\n","post_title":"Wall Street Weakened As Retail Sales Data Hampers Expectations For A Cut In Interest Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-weakened-as-retail-sales-data-hampers-expectations-for-a-cut-in-interest-rates","to_ping":"","pinged":"","post_modified":"2024-01-19 05:56:51","post_modified_gmt":"2024-01-18 18:56:51","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15043","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14931,"post_author":"18","post_date":"2024-01-10 07:51:17","post_date_gmt":"2024-01-09 20:51:17","post_content":"\n

In a recent survey conducted by the New York Federal Reserve<\/a>, Wall Street's major banks have recalibrated their predictions regarding the Federal Reserve's balance sheet drawdown. This shift suggests that the U.S. central bank might conclude its quantitative tightening (QT) process later than initially anticipated.<\/p>\n\n\n\n

A Change in Perspective<\/h2>\n\n\n\n

Previously, primary dealers\u2014major banks\u2014projected that the QT process would conclude by the third quarter. However, the sentiment has evolved. According to the latest survey taken before the Fed's December 12-13 policy meeting, these banks now foresee the QT process ending in the fourth quarter.<\/p>\n\n\n\n

This adjustment carries significant implications. If these predictions materialize, the Federal Reserve's balance sheet<\/a> will likely shrink to approximately $6.75 trillion, down from its current level of roughly $7.764 trillion. Moreover, banks estimated that the central bank's reverse repo facility would hold $375 billion when QT concludes, a reduction from the anticipated $625 billion as forecasted in October.<\/p>\n\n\n\n

Federal Reserve Strategy<\/h2>\n\n\n\n

The quantitative tightening process has been an integral part of the Federal Reserve's strategy to combat inflation. Alongside rate hikes, the central bank initiated large-scale purchases of Treasury bonds and mortgage-backed securities during the COVID-19 pandemic's onset in 2020. This move led to an expansion of its holdings to approximately $9 trillion by mid-2022. However, since last year, the Fed has been gradually reducing its balance sheet size, although specific guidance on the timeline remains somewhat ambiguous.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

What This Means for the Economy<\/h2>\n\n\n\n

The recalibrated timeline for QT indicates a more prolonged period of balance sheet reduction. As the Federal Reserve continues to navigate its policy decisions, market participants, businesses, and consumers should monitor these developments closely. Changes in the balance sheet size can influence interest rates, liquidity conditions, and overall financial market dynamics.<\/p>\n\n\n\n

A Technical Perspective<\/h2>\n\n\n\n

From a technical standpoint, the Federal Reserve's<\/a> balance sheet management serves as a critical tool in its monetary policy arsenal. The evolving predictions by Wall Street's primary dealers underscore the complexities involved in forecasting economic variables, such as inflation and interest rates.<\/p>\n\n\n\n

As the QT process continues, policymakers and market participants must remain vigilant, considering the potential ramifications for financial stability and economic growth. This dynamic landscape necessitates ongoing analysis and adaptation to ensure that monetary policy objectives align with evolving economic conditions.<\/p>\n","post_title":"Decoding Wall Street's Shift: A Closer Look At Wall Street's Changing Perspective","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"decoding-wall-streets-shift-a-closer-look-at-wall-streets-changing-perspective","to_ping":"","pinged":"","post_modified":"2024-01-10 07:51:25","post_modified_gmt":"2024-01-09 20:51:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14931","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14888,"post_author":"14","post_date":"2024-01-06 18:33:09","post_date_gmt":"2024-01-06 07:33:09","post_content":"\n

Wall Street's main indexes fell at the beginning of the 2024 year as investors locked in profits after a very successful 2023 and are currently waiting for the Federal Reserve's<\/a> meeting that could offer hints on its interest rate path. Ken Polcari, managing partner at Kace Capital Advisors, said:<\/p>\n\n\n\n

\"The decline yesterday, today, and maybe for the next couple of weeks, is a result of people locking in profits and reconsidering what the narrative is - are rates going down five or six times as it appeared to be at the end of last year?\"<\/em><\/p>\n\n\n\n

\"\"
The Nasdaq Composite kicked off the year with a 1.5% drop pressured by a selloff in the tech sector<\/figcaption><\/figure>\n\n\n\n

The Fed's December meeting minutes are set to be disclosed at 2:00 p.m. ET, potentially providing information regarding the central bank's shift toward reducing interest rates. Although it's widely anticipated that the Fed will keep interest rates unchanged this month, traders have priced in a 65.7% probability of a 25 basis point rate reduction in March, according to CMEGroup's FedWatch tool.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures<\/a><\/p>\n\n\n\n

Central Bank And Inflation<\/h2>\n\n\n\n

Richmond Fed President Thomas Barkin, a voting member in the FOMC's rate-setting committee, said recently that the U.S. central bank is \"making real progress\" towards taming inflation and a soft landing seeming \"increasingly conceivable\". Encouragingly, the American Association of Individual Investors (AAII) Sentiment Survey indicated a surge in optimism among individual investors regarding the short-term outlook for the U.S. stock market, reaching its peak level in more than two and a half years.<\/p>\n\n\n\n

Despite this, JPMorgan Asset Management advises investors to be cautious due to potential recession risks. At the same time, analysts at Soci\u00e9t\u00e9 G\u00e9n\u00e9rale anticipate a turbulent 2024 for U.S. stocks, projecting fluctuations that could involve nearing recent highs, encountering declines, and subsequently rebounding.<\/p>\n\n\n\n

This week will witness a series of labor market data releases, culminating in the government's December employment report on Friday. These reports could significantly influence the forecast for the Fed's interest rate trajectory this year, prompting investors to scrutinize the data. Jeffrey Roach, chief economist at LPL Financial, added<\/a>:<\/p>\n\n\n\n

 \"The job market is cooling and we should see confirmation of that in this Friday\u2019s jobs report\"<\/em><\/p>\n\n\n\n

Following the progress of Wall Street's main indexes seen last year, investors are still optimistic about the prospect of another robust year ahead. This optimism is rooted in the anticipation that a decelerating economy will result in a gentle landing rather than a full-scale recession, especially as the Fed initiates rate cuts in the first half of 2024.<\/p>\n","post_title":"Wall Street's Main Indexes Fell At The Beginning Of 2024 year. Investors Locked In Profits After A Strong 2023 And Wait For The Federal Reserve's Meeting","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-at-the-beginning-of-2024-year-investors-locked-in-profits-after-a-strong-2023-and-wait-for-the-federal-reserves-meeting","to_ping":"","pinged":"","post_modified":"2024-01-06 18:33:13","post_modified_gmt":"2024-01-06 07:33:13","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14888","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14629,"post_author":"15","post_date":"2023-12-15 19:46:11","post_date_gmt":"2023-12-15 08:46:11","post_content":"\n

BlackRock aims to facilitate the participation of Wall Street banks in its potential Bitcoin ETF approval. Recent SEC memo <\/a>detailing a late November meeting involving BlackRock, Nasdaq, and the Commission. During this meeting, they discussed feedback regarding BlackRock's Bitcoin ETF application.<\/p>\n\n\n\n

The proposed approach introduces an innovative method for the redemption of ETF shares. A Bitcoin ETF would enable fund investors to gain exposure to Bitcoin without directly purchasing or storing the cryptocurrency. While the SEC has hesitated to approve such ETFs due to concerns about Bitcoin market manipulation, this new strategy addresses those worries.<\/p>\n\n\n\n

The SEC has yet to decide on BlackRock's iShares Bitcoin Trust (IBTC) application, with the deadline set for January 15. Analysts anticipate a decision will be issued for several spot Bitcoin ETF applications earlier in January.<\/p>\n\n\n\n

See Related:<\/strong><\/em> Fidelity Joins BlackRock\u2019s Push For Ethereum ETF<\/a><\/p>\n\n\n\n

BlackRock ETF Details<\/h2>\n\n\n\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n
\"\"<\/figure>\n\n\n\n

Spikes In Short Term Financing Markets<\/h2>\n\n\n\n

Sudden spikes in short-term financing markets can threaten financial stability, making it harder and more expensive for firms to secure necessary funds. This situation could expose lenders struggling to stabilize deposits after last year's banking crisis. As the Fed inches closer to its 2% inflation target, the risk of policy error looms large.<\/p>\n\n\n\n

If short-term financing markets experience a meltdown, it could signal the need for the Fed to ease policy. Slowing the pace of quantitative tightening (QT) is seen as a potential response. Despite the central bankers' insistence on needing more data before rate cuts, markets are already pricing in cuts by May.<\/p>\n\n\n\n

As we approach the critical months of March to May, the financial markets are at a crossroads. The potential shake-up in short-term financing markets could signal the Fed to reassess its policies. Market participants and investors must stay vigilant, and prepared for potential shifts in liquidity and policy adjustments. The coming months will \/reveal whether these concerns materialize into a significant market event or remain a contained storm in the financial teacup.<\/p>\n","post_title":"Understanding The Potential Shake-Up In U.S. Short-Term Financing Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"understanding-the-potential-shake-up-in-u-s-short-term-financing-markets","to_ping":"","pinged":"","post_modified":"2024-01-26 20:20:06","post_modified_gmt":"2024-01-26 09:20:06","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15094","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15043,"post_author":"14","post_date":"2024-01-19 05:56:40","post_date_gmt":"2024-01-18 18:56:40","post_content":"\n

Wall Street witnessed a significant stock decline this Wednesday following positive December U.S. retail sales data, which diminished the anticipation of an early initiation of the Federal Reserve's campaign to cut interest rates.<\/p>\n\n\n\n

Retail Sales Report <\/h2>\n\n\n\n

The December retail sales report from the Commerce Department (USRSL=ECI) depicted a robust consumer, responsible for approximately 70% of the U.S. economy. Despite facing the challenges of high inflation and a tight monetary policy, the consumer has shown resilience.<\/p>\n\n\n\n

The data revealed that discounts offered by retailers and a surge in motor vehicle acquisitions contributed to a greater-than-anticipated increase in U.S. retail sales, maintaining the economy on a robust trajectory in 2024. This bolstered the perspective that the Federal Reserve might not reduce interest rates as rapidly as initially anticipated for the current year.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

Anticipations among traders for a 25-basis-point Federal Reserve rate cut in March declined to 55%, down from approximately 60% before the release of the retail sales data. Ryan Detrick, chief market strategist at Carson Group in Omaha, said<\/a>:<\/p>\n\n\n\n

\"We had news that the U.S. consumer continues to be quite healthy, but that has increased anxiety that the Fed\u2019s first rate cut could potentially be pushed to May from March. Yields are also moving higher on the strong retail sales numbers, adding to near-term worries.\"<\/em><\/p>\n\n\n\n

US Stocks And Wall Street<\/h2>\n\n\n\n

It is also important to mention that a decline in U.S. stocks sent Wall Street's<\/a> \"fear gauge\" to a two-month high while JPMorgan analysts predict that the majority of negative consequences stemming from higher interest rates have not materialized yet. On Tuesday, Federal Reserve Governor Christopher Waller also emphasized that the central bank should refrain from hastily reducing interest rates until there is a clear indication that lower inflation is likely to persist.<\/p>\n\n\n\n

At the same time, the escalation of geopolitical uncertainties introduces an additional challenge and heightens the potential for unforeseen risks in both markets and economic performance. Considering these factors, the perspective is likely to stay cautious as long as interest rates remain significantly restrictive and the looming presence of geopolitical risks persists.<\/p>\n","post_title":"Wall Street Weakened As Retail Sales Data Hampers Expectations For A Cut In Interest Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-weakened-as-retail-sales-data-hampers-expectations-for-a-cut-in-interest-rates","to_ping":"","pinged":"","post_modified":"2024-01-19 05:56:51","post_modified_gmt":"2024-01-18 18:56:51","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15043","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14931,"post_author":"18","post_date":"2024-01-10 07:51:17","post_date_gmt":"2024-01-09 20:51:17","post_content":"\n

In a recent survey conducted by the New York Federal Reserve<\/a>, Wall Street's major banks have recalibrated their predictions regarding the Federal Reserve's balance sheet drawdown. This shift suggests that the U.S. central bank might conclude its quantitative tightening (QT) process later than initially anticipated.<\/p>\n\n\n\n

A Change in Perspective<\/h2>\n\n\n\n

Previously, primary dealers\u2014major banks\u2014projected that the QT process would conclude by the third quarter. However, the sentiment has evolved. According to the latest survey taken before the Fed's December 12-13 policy meeting, these banks now foresee the QT process ending in the fourth quarter.<\/p>\n\n\n\n

This adjustment carries significant implications. If these predictions materialize, the Federal Reserve's balance sheet<\/a> will likely shrink to approximately $6.75 trillion, down from its current level of roughly $7.764 trillion. Moreover, banks estimated that the central bank's reverse repo facility would hold $375 billion when QT concludes, a reduction from the anticipated $625 billion as forecasted in October.<\/p>\n\n\n\n

Federal Reserve Strategy<\/h2>\n\n\n\n

The quantitative tightening process has been an integral part of the Federal Reserve's strategy to combat inflation. Alongside rate hikes, the central bank initiated large-scale purchases of Treasury bonds and mortgage-backed securities during the COVID-19 pandemic's onset in 2020. This move led to an expansion of its holdings to approximately $9 trillion by mid-2022. However, since last year, the Fed has been gradually reducing its balance sheet size, although specific guidance on the timeline remains somewhat ambiguous.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

What This Means for the Economy<\/h2>\n\n\n\n

The recalibrated timeline for QT indicates a more prolonged period of balance sheet reduction. As the Federal Reserve continues to navigate its policy decisions, market participants, businesses, and consumers should monitor these developments closely. Changes in the balance sheet size can influence interest rates, liquidity conditions, and overall financial market dynamics.<\/p>\n\n\n\n

A Technical Perspective<\/h2>\n\n\n\n

From a technical standpoint, the Federal Reserve's<\/a> balance sheet management serves as a critical tool in its monetary policy arsenal. The evolving predictions by Wall Street's primary dealers underscore the complexities involved in forecasting economic variables, such as inflation and interest rates.<\/p>\n\n\n\n

As the QT process continues, policymakers and market participants must remain vigilant, considering the potential ramifications for financial stability and economic growth. This dynamic landscape necessitates ongoing analysis and adaptation to ensure that monetary policy objectives align with evolving economic conditions.<\/p>\n","post_title":"Decoding Wall Street's Shift: A Closer Look At Wall Street's Changing Perspective","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"decoding-wall-streets-shift-a-closer-look-at-wall-streets-changing-perspective","to_ping":"","pinged":"","post_modified":"2024-01-10 07:51:25","post_modified_gmt":"2024-01-09 20:51:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14931","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14888,"post_author":"14","post_date":"2024-01-06 18:33:09","post_date_gmt":"2024-01-06 07:33:09","post_content":"\n

Wall Street's main indexes fell at the beginning of the 2024 year as investors locked in profits after a very successful 2023 and are currently waiting for the Federal Reserve's<\/a> meeting that could offer hints on its interest rate path. Ken Polcari, managing partner at Kace Capital Advisors, said:<\/p>\n\n\n\n

\"The decline yesterday, today, and maybe for the next couple of weeks, is a result of people locking in profits and reconsidering what the narrative is - are rates going down five or six times as it appeared to be at the end of last year?\"<\/em><\/p>\n\n\n\n

\"\"
The Nasdaq Composite kicked off the year with a 1.5% drop pressured by a selloff in the tech sector<\/figcaption><\/figure>\n\n\n\n

The Fed's December meeting minutes are set to be disclosed at 2:00 p.m. ET, potentially providing information regarding the central bank's shift toward reducing interest rates. Although it's widely anticipated that the Fed will keep interest rates unchanged this month, traders have priced in a 65.7% probability of a 25 basis point rate reduction in March, according to CMEGroup's FedWatch tool.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures<\/a><\/p>\n\n\n\n

Central Bank And Inflation<\/h2>\n\n\n\n

Richmond Fed President Thomas Barkin, a voting member in the FOMC's rate-setting committee, said recently that the U.S. central bank is \"making real progress\" towards taming inflation and a soft landing seeming \"increasingly conceivable\". Encouragingly, the American Association of Individual Investors (AAII) Sentiment Survey indicated a surge in optimism among individual investors regarding the short-term outlook for the U.S. stock market, reaching its peak level in more than two and a half years.<\/p>\n\n\n\n

Despite this, JPMorgan Asset Management advises investors to be cautious due to potential recession risks. At the same time, analysts at Soci\u00e9t\u00e9 G\u00e9n\u00e9rale anticipate a turbulent 2024 for U.S. stocks, projecting fluctuations that could involve nearing recent highs, encountering declines, and subsequently rebounding.<\/p>\n\n\n\n

This week will witness a series of labor market data releases, culminating in the government's December employment report on Friday. These reports could significantly influence the forecast for the Fed's interest rate trajectory this year, prompting investors to scrutinize the data. Jeffrey Roach, chief economist at LPL Financial, added<\/a>:<\/p>\n\n\n\n

 \"The job market is cooling and we should see confirmation of that in this Friday\u2019s jobs report\"<\/em><\/p>\n\n\n\n

Following the progress of Wall Street's main indexes seen last year, investors are still optimistic about the prospect of another robust year ahead. This optimism is rooted in the anticipation that a decelerating economy will result in a gentle landing rather than a full-scale recession, especially as the Fed initiates rate cuts in the first half of 2024.<\/p>\n","post_title":"Wall Street's Main Indexes Fell At The Beginning Of 2024 year. Investors Locked In Profits After A Strong 2023 And Wait For The Federal Reserve's Meeting","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-at-the-beginning-of-2024-year-investors-locked-in-profits-after-a-strong-2023-and-wait-for-the-federal-reserves-meeting","to_ping":"","pinged":"","post_modified":"2024-01-06 18:33:13","post_modified_gmt":"2024-01-06 07:33:13","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14888","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14629,"post_author":"15","post_date":"2023-12-15 19:46:11","post_date_gmt":"2023-12-15 08:46:11","post_content":"\n

BlackRock aims to facilitate the participation of Wall Street banks in its potential Bitcoin ETF approval. Recent SEC memo <\/a>detailing a late November meeting involving BlackRock, Nasdaq, and the Commission. During this meeting, they discussed feedback regarding BlackRock's Bitcoin ETF application.<\/p>\n\n\n\n

The proposed approach introduces an innovative method for the redemption of ETF shares. A Bitcoin ETF would enable fund investors to gain exposure to Bitcoin without directly purchasing or storing the cryptocurrency. While the SEC has hesitated to approve such ETFs due to concerns about Bitcoin market manipulation, this new strategy addresses those worries.<\/p>\n\n\n\n

The SEC has yet to decide on BlackRock's iShares Bitcoin Trust (IBTC) application, with the deadline set for January 15. Analysts anticipate a decision will be issued for several spot Bitcoin ETF applications earlier in January.<\/p>\n\n\n\n

See Related:<\/strong><\/em> Fidelity Joins BlackRock\u2019s Push For Ethereum ETF<\/a><\/p>\n\n\n\n

BlackRock ETF Details<\/h2>\n\n\n\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

See Related:<\/em><\/strong> Storm Clouds Gather Over Germany's Financial Horizon<\/a><\/p>\n\n\n\n

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

Spikes In Short Term Financing Markets<\/h2>\n\n\n\n

Sudden spikes in short-term financing markets can threaten financial stability, making it harder and more expensive for firms to secure necessary funds. This situation could expose lenders struggling to stabilize deposits after last year's banking crisis. As the Fed inches closer to its 2% inflation target, the risk of policy error looms large.<\/p>\n\n\n\n

If short-term financing markets experience a meltdown, it could signal the need for the Fed to ease policy. Slowing the pace of quantitative tightening (QT) is seen as a potential response. Despite the central bankers' insistence on needing more data before rate cuts, markets are already pricing in cuts by May.<\/p>\n\n\n\n

As we approach the critical months of March to May, the financial markets are at a crossroads. The potential shake-up in short-term financing markets could signal the Fed to reassess its policies. Market participants and investors must stay vigilant, and prepared for potential shifts in liquidity and policy adjustments. The coming months will \/reveal whether these concerns materialize into a significant market event or remain a contained storm in the financial teacup.<\/p>\n","post_title":"Understanding The Potential Shake-Up In U.S. Short-Term Financing Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"understanding-the-potential-shake-up-in-u-s-short-term-financing-markets","to_ping":"","pinged":"","post_modified":"2024-01-26 20:20:06","post_modified_gmt":"2024-01-26 09:20:06","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15094","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15043,"post_author":"14","post_date":"2024-01-19 05:56:40","post_date_gmt":"2024-01-18 18:56:40","post_content":"\n

Wall Street witnessed a significant stock decline this Wednesday following positive December U.S. retail sales data, which diminished the anticipation of an early initiation of the Federal Reserve's campaign to cut interest rates.<\/p>\n\n\n\n

Retail Sales Report <\/h2>\n\n\n\n

The December retail sales report from the Commerce Department (USRSL=ECI) depicted a robust consumer, responsible for approximately 70% of the U.S. economy. Despite facing the challenges of high inflation and a tight monetary policy, the consumer has shown resilience.<\/p>\n\n\n\n

The data revealed that discounts offered by retailers and a surge in motor vehicle acquisitions contributed to a greater-than-anticipated increase in U.S. retail sales, maintaining the economy on a robust trajectory in 2024. This bolstered the perspective that the Federal Reserve might not reduce interest rates as rapidly as initially anticipated for the current year.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

Anticipations among traders for a 25-basis-point Federal Reserve rate cut in March declined to 55%, down from approximately 60% before the release of the retail sales data. Ryan Detrick, chief market strategist at Carson Group in Omaha, said<\/a>:<\/p>\n\n\n\n

\"We had news that the U.S. consumer continues to be quite healthy, but that has increased anxiety that the Fed\u2019s first rate cut could potentially be pushed to May from March. Yields are also moving higher on the strong retail sales numbers, adding to near-term worries.\"<\/em><\/p>\n\n\n\n

US Stocks And Wall Street<\/h2>\n\n\n\n

It is also important to mention that a decline in U.S. stocks sent Wall Street's<\/a> \"fear gauge\" to a two-month high while JPMorgan analysts predict that the majority of negative consequences stemming from higher interest rates have not materialized yet. On Tuesday, Federal Reserve Governor Christopher Waller also emphasized that the central bank should refrain from hastily reducing interest rates until there is a clear indication that lower inflation is likely to persist.<\/p>\n\n\n\n

At the same time, the escalation of geopolitical uncertainties introduces an additional challenge and heightens the potential for unforeseen risks in both markets and economic performance. Considering these factors, the perspective is likely to stay cautious as long as interest rates remain significantly restrictive and the looming presence of geopolitical risks persists.<\/p>\n","post_title":"Wall Street Weakened As Retail Sales Data Hampers Expectations For A Cut In Interest Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-weakened-as-retail-sales-data-hampers-expectations-for-a-cut-in-interest-rates","to_ping":"","pinged":"","post_modified":"2024-01-19 05:56:51","post_modified_gmt":"2024-01-18 18:56:51","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15043","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14931,"post_author":"18","post_date":"2024-01-10 07:51:17","post_date_gmt":"2024-01-09 20:51:17","post_content":"\n

In a recent survey conducted by the New York Federal Reserve<\/a>, Wall Street's major banks have recalibrated their predictions regarding the Federal Reserve's balance sheet drawdown. This shift suggests that the U.S. central bank might conclude its quantitative tightening (QT) process later than initially anticipated.<\/p>\n\n\n\n

A Change in Perspective<\/h2>\n\n\n\n

Previously, primary dealers\u2014major banks\u2014projected that the QT process would conclude by the third quarter. However, the sentiment has evolved. According to the latest survey taken before the Fed's December 12-13 policy meeting, these banks now foresee the QT process ending in the fourth quarter.<\/p>\n\n\n\n

This adjustment carries significant implications. If these predictions materialize, the Federal Reserve's balance sheet<\/a> will likely shrink to approximately $6.75 trillion, down from its current level of roughly $7.764 trillion. Moreover, banks estimated that the central bank's reverse repo facility would hold $375 billion when QT concludes, a reduction from the anticipated $625 billion as forecasted in October.<\/p>\n\n\n\n

Federal Reserve Strategy<\/h2>\n\n\n\n

The quantitative tightening process has been an integral part of the Federal Reserve's strategy to combat inflation. Alongside rate hikes, the central bank initiated large-scale purchases of Treasury bonds and mortgage-backed securities during the COVID-19 pandemic's onset in 2020. This move led to an expansion of its holdings to approximately $9 trillion by mid-2022. However, since last year, the Fed has been gradually reducing its balance sheet size, although specific guidance on the timeline remains somewhat ambiguous.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

What This Means for the Economy<\/h2>\n\n\n\n

The recalibrated timeline for QT indicates a more prolonged period of balance sheet reduction. As the Federal Reserve continues to navigate its policy decisions, market participants, businesses, and consumers should monitor these developments closely. Changes in the balance sheet size can influence interest rates, liquidity conditions, and overall financial market dynamics.<\/p>\n\n\n\n

A Technical Perspective<\/h2>\n\n\n\n

From a technical standpoint, the Federal Reserve's<\/a> balance sheet management serves as a critical tool in its monetary policy arsenal. The evolving predictions by Wall Street's primary dealers underscore the complexities involved in forecasting economic variables, such as inflation and interest rates.<\/p>\n\n\n\n

As the QT process continues, policymakers and market participants must remain vigilant, considering the potential ramifications for financial stability and economic growth. This dynamic landscape necessitates ongoing analysis and adaptation to ensure that monetary policy objectives align with evolving economic conditions.<\/p>\n","post_title":"Decoding Wall Street's Shift: A Closer Look At Wall Street's Changing Perspective","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"decoding-wall-streets-shift-a-closer-look-at-wall-streets-changing-perspective","to_ping":"","pinged":"","post_modified":"2024-01-10 07:51:25","post_modified_gmt":"2024-01-09 20:51:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14931","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14888,"post_author":"14","post_date":"2024-01-06 18:33:09","post_date_gmt":"2024-01-06 07:33:09","post_content":"\n

Wall Street's main indexes fell at the beginning of the 2024 year as investors locked in profits after a very successful 2023 and are currently waiting for the Federal Reserve's<\/a> meeting that could offer hints on its interest rate path. Ken Polcari, managing partner at Kace Capital Advisors, said:<\/p>\n\n\n\n

\"The decline yesterday, today, and maybe for the next couple of weeks, is a result of people locking in profits and reconsidering what the narrative is - are rates going down five or six times as it appeared to be at the end of last year?\"<\/em><\/p>\n\n\n\n

\"\"
The Nasdaq Composite kicked off the year with a 1.5% drop pressured by a selloff in the tech sector<\/figcaption><\/figure>\n\n\n\n

The Fed's December meeting minutes are set to be disclosed at 2:00 p.m. ET, potentially providing information regarding the central bank's shift toward reducing interest rates. Although it's widely anticipated that the Fed will keep interest rates unchanged this month, traders have priced in a 65.7% probability of a 25 basis point rate reduction in March, according to CMEGroup's FedWatch tool.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures<\/a><\/p>\n\n\n\n

Central Bank And Inflation<\/h2>\n\n\n\n

Richmond Fed President Thomas Barkin, a voting member in the FOMC's rate-setting committee, said recently that the U.S. central bank is \"making real progress\" towards taming inflation and a soft landing seeming \"increasingly conceivable\". Encouragingly, the American Association of Individual Investors (AAII) Sentiment Survey indicated a surge in optimism among individual investors regarding the short-term outlook for the U.S. stock market, reaching its peak level in more than two and a half years.<\/p>\n\n\n\n

Despite this, JPMorgan Asset Management advises investors to be cautious due to potential recession risks. At the same time, analysts at Soci\u00e9t\u00e9 G\u00e9n\u00e9rale anticipate a turbulent 2024 for U.S. stocks, projecting fluctuations that could involve nearing recent highs, encountering declines, and subsequently rebounding.<\/p>\n\n\n\n

This week will witness a series of labor market data releases, culminating in the government's December employment report on Friday. These reports could significantly influence the forecast for the Fed's interest rate trajectory this year, prompting investors to scrutinize the data. Jeffrey Roach, chief economist at LPL Financial, added<\/a>:<\/p>\n\n\n\n

 \"The job market is cooling and we should see confirmation of that in this Friday\u2019s jobs report\"<\/em><\/p>\n\n\n\n

Following the progress of Wall Street's main indexes seen last year, investors are still optimistic about the prospect of another robust year ahead. This optimism is rooted in the anticipation that a decelerating economy will result in a gentle landing rather than a full-scale recession, especially as the Fed initiates rate cuts in the first half of 2024.<\/p>\n","post_title":"Wall Street's Main Indexes Fell At The Beginning Of 2024 year. Investors Locked In Profits After A Strong 2023 And Wait For The Federal Reserve's Meeting","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-at-the-beginning-of-2024-year-investors-locked-in-profits-after-a-strong-2023-and-wait-for-the-federal-reserves-meeting","to_ping":"","pinged":"","post_modified":"2024-01-06 18:33:13","post_modified_gmt":"2024-01-06 07:33:13","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14888","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14629,"post_author":"15","post_date":"2023-12-15 19:46:11","post_date_gmt":"2023-12-15 08:46:11","post_content":"\n

BlackRock aims to facilitate the participation of Wall Street banks in its potential Bitcoin ETF approval. Recent SEC memo <\/a>detailing a late November meeting involving BlackRock, Nasdaq, and the Commission. During this meeting, they discussed feedback regarding BlackRock's Bitcoin ETF application.<\/p>\n\n\n\n

The proposed approach introduces an innovative method for the redemption of ETF shares. A Bitcoin ETF would enable fund investors to gain exposure to Bitcoin without directly purchasing or storing the cryptocurrency. While the SEC has hesitated to approve such ETFs due to concerns about Bitcoin market manipulation, this new strategy addresses those worries.<\/p>\n\n\n\n

The SEC has yet to decide on BlackRock's iShares Bitcoin Trust (IBTC) application, with the deadline set for January 15. Analysts anticipate a decision will be issued for several spot Bitcoin ETF applications earlier in January.<\/p>\n\n\n\n

See Related:<\/strong><\/em> Fidelity Joins BlackRock\u2019s Push For Ethereum ETF<\/a><\/p>\n\n\n\n

BlackRock ETF Details<\/h2>\n\n\n\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

Against this backdrop, the Federal Reserve has been steadily draining cash from the financial system by unwinding pandemic-era support. BNY Mellon strategists estimate a significant decrease in cash parked overnight with the Fed, potentially dropping below $200 billion by May. The overnight reverse repurchase agreements facility could even approach zero by mid-year. This reduction in excess liquidity may expose vulnerabilities in short-term financing markets.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Storm Clouds Gather Over Germany's Financial Horizon<\/a><\/p>\n\n\n\n

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

Spikes In Short Term Financing Markets<\/h2>\n\n\n\n

Sudden spikes in short-term financing markets can threaten financial stability, making it harder and more expensive for firms to secure necessary funds. This situation could expose lenders struggling to stabilize deposits after last year's banking crisis. As the Fed inches closer to its 2% inflation target, the risk of policy error looms large.<\/p>\n\n\n\n

If short-term financing markets experience a meltdown, it could signal the need for the Fed to ease policy. Slowing the pace of quantitative tightening (QT) is seen as a potential response. Despite the central bankers' insistence on needing more data before rate cuts, markets are already pricing in cuts by May.<\/p>\n\n\n\n

As we approach the critical months of March to May, the financial markets are at a crossroads. The potential shake-up in short-term financing markets could signal the Fed to reassess its policies. Market participants and investors must stay vigilant, and prepared for potential shifts in liquidity and policy adjustments. The coming months will \/reveal whether these concerns materialize into a significant market event or remain a contained storm in the financial teacup.<\/p>\n","post_title":"Understanding The Potential Shake-Up In U.S. Short-Term Financing Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"understanding-the-potential-shake-up-in-u-s-short-term-financing-markets","to_ping":"","pinged":"","post_modified":"2024-01-26 20:20:06","post_modified_gmt":"2024-01-26 09:20:06","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15094","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15043,"post_author":"14","post_date":"2024-01-19 05:56:40","post_date_gmt":"2024-01-18 18:56:40","post_content":"\n

Wall Street witnessed a significant stock decline this Wednesday following positive December U.S. retail sales data, which diminished the anticipation of an early initiation of the Federal Reserve's campaign to cut interest rates.<\/p>\n\n\n\n

Retail Sales Report <\/h2>\n\n\n\n

The December retail sales report from the Commerce Department (USRSL=ECI) depicted a robust consumer, responsible for approximately 70% of the U.S. economy. Despite facing the challenges of high inflation and a tight monetary policy, the consumer has shown resilience.<\/p>\n\n\n\n

The data revealed that discounts offered by retailers and a surge in motor vehicle acquisitions contributed to a greater-than-anticipated increase in U.S. retail sales, maintaining the economy on a robust trajectory in 2024. This bolstered the perspective that the Federal Reserve might not reduce interest rates as rapidly as initially anticipated for the current year.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

Anticipations among traders for a 25-basis-point Federal Reserve rate cut in March declined to 55%, down from approximately 60% before the release of the retail sales data. Ryan Detrick, chief market strategist at Carson Group in Omaha, said<\/a>:<\/p>\n\n\n\n

\"We had news that the U.S. consumer continues to be quite healthy, but that has increased anxiety that the Fed\u2019s first rate cut could potentially be pushed to May from March. Yields are also moving higher on the strong retail sales numbers, adding to near-term worries.\"<\/em><\/p>\n\n\n\n

US Stocks And Wall Street<\/h2>\n\n\n\n

It is also important to mention that a decline in U.S. stocks sent Wall Street's<\/a> \"fear gauge\" to a two-month high while JPMorgan analysts predict that the majority of negative consequences stemming from higher interest rates have not materialized yet. On Tuesday, Federal Reserve Governor Christopher Waller also emphasized that the central bank should refrain from hastily reducing interest rates until there is a clear indication that lower inflation is likely to persist.<\/p>\n\n\n\n

At the same time, the escalation of geopolitical uncertainties introduces an additional challenge and heightens the potential for unforeseen risks in both markets and economic performance. Considering these factors, the perspective is likely to stay cautious as long as interest rates remain significantly restrictive and the looming presence of geopolitical risks persists.<\/p>\n","post_title":"Wall Street Weakened As Retail Sales Data Hampers Expectations For A Cut In Interest Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-weakened-as-retail-sales-data-hampers-expectations-for-a-cut-in-interest-rates","to_ping":"","pinged":"","post_modified":"2024-01-19 05:56:51","post_modified_gmt":"2024-01-18 18:56:51","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15043","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14931,"post_author":"18","post_date":"2024-01-10 07:51:17","post_date_gmt":"2024-01-09 20:51:17","post_content":"\n

In a recent survey conducted by the New York Federal Reserve<\/a>, Wall Street's major banks have recalibrated their predictions regarding the Federal Reserve's balance sheet drawdown. This shift suggests that the U.S. central bank might conclude its quantitative tightening (QT) process later than initially anticipated.<\/p>\n\n\n\n

A Change in Perspective<\/h2>\n\n\n\n

Previously, primary dealers\u2014major banks\u2014projected that the QT process would conclude by the third quarter. However, the sentiment has evolved. According to the latest survey taken before the Fed's December 12-13 policy meeting, these banks now foresee the QT process ending in the fourth quarter.<\/p>\n\n\n\n

This adjustment carries significant implications. If these predictions materialize, the Federal Reserve's balance sheet<\/a> will likely shrink to approximately $6.75 trillion, down from its current level of roughly $7.764 trillion. Moreover, banks estimated that the central bank's reverse repo facility would hold $375 billion when QT concludes, a reduction from the anticipated $625 billion as forecasted in October.<\/p>\n\n\n\n

Federal Reserve Strategy<\/h2>\n\n\n\n

The quantitative tightening process has been an integral part of the Federal Reserve's strategy to combat inflation. Alongside rate hikes, the central bank initiated large-scale purchases of Treasury bonds and mortgage-backed securities during the COVID-19 pandemic's onset in 2020. This move led to an expansion of its holdings to approximately $9 trillion by mid-2022. However, since last year, the Fed has been gradually reducing its balance sheet size, although specific guidance on the timeline remains somewhat ambiguous.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

What This Means for the Economy<\/h2>\n\n\n\n

The recalibrated timeline for QT indicates a more prolonged period of balance sheet reduction. As the Federal Reserve continues to navigate its policy decisions, market participants, businesses, and consumers should monitor these developments closely. Changes in the balance sheet size can influence interest rates, liquidity conditions, and overall financial market dynamics.<\/p>\n\n\n\n

A Technical Perspective<\/h2>\n\n\n\n

From a technical standpoint, the Federal Reserve's<\/a> balance sheet management serves as a critical tool in its monetary policy arsenal. The evolving predictions by Wall Street's primary dealers underscore the complexities involved in forecasting economic variables, such as inflation and interest rates.<\/p>\n\n\n\n

As the QT process continues, policymakers and market participants must remain vigilant, considering the potential ramifications for financial stability and economic growth. This dynamic landscape necessitates ongoing analysis and adaptation to ensure that monetary policy objectives align with evolving economic conditions.<\/p>\n","post_title":"Decoding Wall Street's Shift: A Closer Look At Wall Street's Changing Perspective","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"decoding-wall-streets-shift-a-closer-look-at-wall-streets-changing-perspective","to_ping":"","pinged":"","post_modified":"2024-01-10 07:51:25","post_modified_gmt":"2024-01-09 20:51:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14931","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14888,"post_author":"14","post_date":"2024-01-06 18:33:09","post_date_gmt":"2024-01-06 07:33:09","post_content":"\n

Wall Street's main indexes fell at the beginning of the 2024 year as investors locked in profits after a very successful 2023 and are currently waiting for the Federal Reserve's<\/a> meeting that could offer hints on its interest rate path. Ken Polcari, managing partner at Kace Capital Advisors, said:<\/p>\n\n\n\n

\"The decline yesterday, today, and maybe for the next couple of weeks, is a result of people locking in profits and reconsidering what the narrative is - are rates going down five or six times as it appeared to be at the end of last year?\"<\/em><\/p>\n\n\n\n

\"\"
The Nasdaq Composite kicked off the year with a 1.5% drop pressured by a selloff in the tech sector<\/figcaption><\/figure>\n\n\n\n

The Fed's December meeting minutes are set to be disclosed at 2:00 p.m. ET, potentially providing information regarding the central bank's shift toward reducing interest rates. Although it's widely anticipated that the Fed will keep interest rates unchanged this month, traders have priced in a 65.7% probability of a 25 basis point rate reduction in March, according to CMEGroup's FedWatch tool.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures<\/a><\/p>\n\n\n\n

Central Bank And Inflation<\/h2>\n\n\n\n

Richmond Fed President Thomas Barkin, a voting member in the FOMC's rate-setting committee, said recently that the U.S. central bank is \"making real progress\" towards taming inflation and a soft landing seeming \"increasingly conceivable\". Encouragingly, the American Association of Individual Investors (AAII) Sentiment Survey indicated a surge in optimism among individual investors regarding the short-term outlook for the U.S. stock market, reaching its peak level in more than two and a half years.<\/p>\n\n\n\n

Despite this, JPMorgan Asset Management advises investors to be cautious due to potential recession risks. At the same time, analysts at Soci\u00e9t\u00e9 G\u00e9n\u00e9rale anticipate a turbulent 2024 for U.S. stocks, projecting fluctuations that could involve nearing recent highs, encountering declines, and subsequently rebounding.<\/p>\n\n\n\n

This week will witness a series of labor market data releases, culminating in the government's December employment report on Friday. These reports could significantly influence the forecast for the Fed's interest rate trajectory this year, prompting investors to scrutinize the data. Jeffrey Roach, chief economist at LPL Financial, added<\/a>:<\/p>\n\n\n\n

 \"The job market is cooling and we should see confirmation of that in this Friday\u2019s jobs report\"<\/em><\/p>\n\n\n\n

Following the progress of Wall Street's main indexes seen last year, investors are still optimistic about the prospect of another robust year ahead. This optimism is rooted in the anticipation that a decelerating economy will result in a gentle landing rather than a full-scale recession, especially as the Fed initiates rate cuts in the first half of 2024.<\/p>\n","post_title":"Wall Street's Main Indexes Fell At The Beginning Of 2024 year. Investors Locked In Profits After A Strong 2023 And Wait For The Federal Reserve's Meeting","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-at-the-beginning-of-2024-year-investors-locked-in-profits-after-a-strong-2023-and-wait-for-the-federal-reserves-meeting","to_ping":"","pinged":"","post_modified":"2024-01-06 18:33:13","post_modified_gmt":"2024-01-06 07:33:13","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14888","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14629,"post_author":"15","post_date":"2023-12-15 19:46:11","post_date_gmt":"2023-12-15 08:46:11","post_content":"\n

BlackRock aims to facilitate the participation of Wall Street banks in its potential Bitcoin ETF approval. Recent SEC memo <\/a>detailing a late November meeting involving BlackRock, Nasdaq, and the Commission. During this meeting, they discussed feedback regarding BlackRock's Bitcoin ETF application.<\/p>\n\n\n\n

The proposed approach introduces an innovative method for the redemption of ETF shares. A Bitcoin ETF would enable fund investors to gain exposure to Bitcoin without directly purchasing or storing the cryptocurrency. While the SEC has hesitated to approve such ETFs due to concerns about Bitcoin market manipulation, this new strategy addresses those worries.<\/p>\n\n\n\n

The SEC has yet to decide on BlackRock's iShares Bitcoin Trust (IBTC) application, with the deadline set for January 15. Analysts anticipate a decision will be issued for several spot Bitcoin ETF applications earlier in January.<\/p>\n\n\n\n

See Related:<\/strong><\/em> Fidelity Joins BlackRock\u2019s Push For Ethereum ETF<\/a><\/p>\n\n\n\n

BlackRock ETF Details<\/h2>\n\n\n\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

As of now, banking executives are anticipating a series of events that may tighten the screws on short-term financing. The expiration of a Fed lending facility on March 11, coupled with limited adoption of the standing repo facility (SRF), is expected to reduce the available funding sources for banks. Simultaneously, increased demand for liquidity is on the horizon due to substantial U.S. government debt issuance and upcoming tax payments in March and April. Additionally, a move toward faster trade settlement in May could intensify the demand for short-term funding.<\/p>\n\n\n\n

Against this backdrop, the Federal Reserve has been steadily draining cash from the financial system by unwinding pandemic-era support. BNY Mellon strategists estimate a significant decrease in cash parked overnight with the Fed, potentially dropping below $200 billion by May. The overnight reverse repurchase agreements facility could even approach zero by mid-year. This reduction in excess liquidity may expose vulnerabilities in short-term financing markets.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Storm Clouds Gather Over Germany's Financial Horizon<\/a><\/p>\n\n\n\n

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

Spikes In Short Term Financing Markets<\/h2>\n\n\n\n

Sudden spikes in short-term financing markets can threaten financial stability, making it harder and more expensive for firms to secure necessary funds. This situation could expose lenders struggling to stabilize deposits after last year's banking crisis. As the Fed inches closer to its 2% inflation target, the risk of policy error looms large.<\/p>\n\n\n\n

If short-term financing markets experience a meltdown, it could signal the need for the Fed to ease policy. Slowing the pace of quantitative tightening (QT) is seen as a potential response. Despite the central bankers' insistence on needing more data before rate cuts, markets are already pricing in cuts by May.<\/p>\n\n\n\n

As we approach the critical months of March to May, the financial markets are at a crossroads. The potential shake-up in short-term financing markets could signal the Fed to reassess its policies. Market participants and investors must stay vigilant, and prepared for potential shifts in liquidity and policy adjustments. The coming months will \/reveal whether these concerns materialize into a significant market event or remain a contained storm in the financial teacup.<\/p>\n","post_title":"Understanding The Potential Shake-Up In U.S. Short-Term Financing Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"understanding-the-potential-shake-up-in-u-s-short-term-financing-markets","to_ping":"","pinged":"","post_modified":"2024-01-26 20:20:06","post_modified_gmt":"2024-01-26 09:20:06","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15094","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15043,"post_author":"14","post_date":"2024-01-19 05:56:40","post_date_gmt":"2024-01-18 18:56:40","post_content":"\n

Wall Street witnessed a significant stock decline this Wednesday following positive December U.S. retail sales data, which diminished the anticipation of an early initiation of the Federal Reserve's campaign to cut interest rates.<\/p>\n\n\n\n

Retail Sales Report <\/h2>\n\n\n\n

The December retail sales report from the Commerce Department (USRSL=ECI) depicted a robust consumer, responsible for approximately 70% of the U.S. economy. Despite facing the challenges of high inflation and a tight monetary policy, the consumer has shown resilience.<\/p>\n\n\n\n

The data revealed that discounts offered by retailers and a surge in motor vehicle acquisitions contributed to a greater-than-anticipated increase in U.S. retail sales, maintaining the economy on a robust trajectory in 2024. This bolstered the perspective that the Federal Reserve might not reduce interest rates as rapidly as initially anticipated for the current year.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

Anticipations among traders for a 25-basis-point Federal Reserve rate cut in March declined to 55%, down from approximately 60% before the release of the retail sales data. Ryan Detrick, chief market strategist at Carson Group in Omaha, said<\/a>:<\/p>\n\n\n\n

\"We had news that the U.S. consumer continues to be quite healthy, but that has increased anxiety that the Fed\u2019s first rate cut could potentially be pushed to May from March. Yields are also moving higher on the strong retail sales numbers, adding to near-term worries.\"<\/em><\/p>\n\n\n\n

US Stocks And Wall Street<\/h2>\n\n\n\n

It is also important to mention that a decline in U.S. stocks sent Wall Street's<\/a> \"fear gauge\" to a two-month high while JPMorgan analysts predict that the majority of negative consequences stemming from higher interest rates have not materialized yet. On Tuesday, Federal Reserve Governor Christopher Waller also emphasized that the central bank should refrain from hastily reducing interest rates until there is a clear indication that lower inflation is likely to persist.<\/p>\n\n\n\n

At the same time, the escalation of geopolitical uncertainties introduces an additional challenge and heightens the potential for unforeseen risks in both markets and economic performance. Considering these factors, the perspective is likely to stay cautious as long as interest rates remain significantly restrictive and the looming presence of geopolitical risks persists.<\/p>\n","post_title":"Wall Street Weakened As Retail Sales Data Hampers Expectations For A Cut In Interest Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-weakened-as-retail-sales-data-hampers-expectations-for-a-cut-in-interest-rates","to_ping":"","pinged":"","post_modified":"2024-01-19 05:56:51","post_modified_gmt":"2024-01-18 18:56:51","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15043","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14931,"post_author":"18","post_date":"2024-01-10 07:51:17","post_date_gmt":"2024-01-09 20:51:17","post_content":"\n

In a recent survey conducted by the New York Federal Reserve<\/a>, Wall Street's major banks have recalibrated their predictions regarding the Federal Reserve's balance sheet drawdown. This shift suggests that the U.S. central bank might conclude its quantitative tightening (QT) process later than initially anticipated.<\/p>\n\n\n\n

A Change in Perspective<\/h2>\n\n\n\n

Previously, primary dealers\u2014major banks\u2014projected that the QT process would conclude by the third quarter. However, the sentiment has evolved. According to the latest survey taken before the Fed's December 12-13 policy meeting, these banks now foresee the QT process ending in the fourth quarter.<\/p>\n\n\n\n

This adjustment carries significant implications. If these predictions materialize, the Federal Reserve's balance sheet<\/a> will likely shrink to approximately $6.75 trillion, down from its current level of roughly $7.764 trillion. Moreover, banks estimated that the central bank's reverse repo facility would hold $375 billion when QT concludes, a reduction from the anticipated $625 billion as forecasted in October.<\/p>\n\n\n\n

Federal Reserve Strategy<\/h2>\n\n\n\n

The quantitative tightening process has been an integral part of the Federal Reserve's strategy to combat inflation. Alongside rate hikes, the central bank initiated large-scale purchases of Treasury bonds and mortgage-backed securities during the COVID-19 pandemic's onset in 2020. This move led to an expansion of its holdings to approximately $9 trillion by mid-2022. However, since last year, the Fed has been gradually reducing its balance sheet size, although specific guidance on the timeline remains somewhat ambiguous.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

What This Means for the Economy<\/h2>\n\n\n\n

The recalibrated timeline for QT indicates a more prolonged period of balance sheet reduction. As the Federal Reserve continues to navigate its policy decisions, market participants, businesses, and consumers should monitor these developments closely. Changes in the balance sheet size can influence interest rates, liquidity conditions, and overall financial market dynamics.<\/p>\n\n\n\n

A Technical Perspective<\/h2>\n\n\n\n

From a technical standpoint, the Federal Reserve's<\/a> balance sheet management serves as a critical tool in its monetary policy arsenal. The evolving predictions by Wall Street's primary dealers underscore the complexities involved in forecasting economic variables, such as inflation and interest rates.<\/p>\n\n\n\n

As the QT process continues, policymakers and market participants must remain vigilant, considering the potential ramifications for financial stability and economic growth. This dynamic landscape necessitates ongoing analysis and adaptation to ensure that monetary policy objectives align with evolving economic conditions.<\/p>\n","post_title":"Decoding Wall Street's Shift: A Closer Look At Wall Street's Changing Perspective","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"decoding-wall-streets-shift-a-closer-look-at-wall-streets-changing-perspective","to_ping":"","pinged":"","post_modified":"2024-01-10 07:51:25","post_modified_gmt":"2024-01-09 20:51:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14931","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14888,"post_author":"14","post_date":"2024-01-06 18:33:09","post_date_gmt":"2024-01-06 07:33:09","post_content":"\n

Wall Street's main indexes fell at the beginning of the 2024 year as investors locked in profits after a very successful 2023 and are currently waiting for the Federal Reserve's<\/a> meeting that could offer hints on its interest rate path. Ken Polcari, managing partner at Kace Capital Advisors, said:<\/p>\n\n\n\n

\"The decline yesterday, today, and maybe for the next couple of weeks, is a result of people locking in profits and reconsidering what the narrative is - are rates going down five or six times as it appeared to be at the end of last year?\"<\/em><\/p>\n\n\n\n

\"\"
The Nasdaq Composite kicked off the year with a 1.5% drop pressured by a selloff in the tech sector<\/figcaption><\/figure>\n\n\n\n

The Fed's December meeting minutes are set to be disclosed at 2:00 p.m. ET, potentially providing information regarding the central bank's shift toward reducing interest rates. Although it's widely anticipated that the Fed will keep interest rates unchanged this month, traders have priced in a 65.7% probability of a 25 basis point rate reduction in March, according to CMEGroup's FedWatch tool.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures<\/a><\/p>\n\n\n\n

Central Bank And Inflation<\/h2>\n\n\n\n

Richmond Fed President Thomas Barkin, a voting member in the FOMC's rate-setting committee, said recently that the U.S. central bank is \"making real progress\" towards taming inflation and a soft landing seeming \"increasingly conceivable\". Encouragingly, the American Association of Individual Investors (AAII) Sentiment Survey indicated a surge in optimism among individual investors regarding the short-term outlook for the U.S. stock market, reaching its peak level in more than two and a half years.<\/p>\n\n\n\n

Despite this, JPMorgan Asset Management advises investors to be cautious due to potential recession risks. At the same time, analysts at Soci\u00e9t\u00e9 G\u00e9n\u00e9rale anticipate a turbulent 2024 for U.S. stocks, projecting fluctuations that could involve nearing recent highs, encountering declines, and subsequently rebounding.<\/p>\n\n\n\n

This week will witness a series of labor market data releases, culminating in the government's December employment report on Friday. These reports could significantly influence the forecast for the Fed's interest rate trajectory this year, prompting investors to scrutinize the data. Jeffrey Roach, chief economist at LPL Financial, added<\/a>:<\/p>\n\n\n\n

 \"The job market is cooling and we should see confirmation of that in this Friday\u2019s jobs report\"<\/em><\/p>\n\n\n\n

Following the progress of Wall Street's main indexes seen last year, investors are still optimistic about the prospect of another robust year ahead. This optimism is rooted in the anticipation that a decelerating economy will result in a gentle landing rather than a full-scale recession, especially as the Fed initiates rate cuts in the first half of 2024.<\/p>\n","post_title":"Wall Street's Main Indexes Fell At The Beginning Of 2024 year. Investors Locked In Profits After A Strong 2023 And Wait For The Federal Reserve's Meeting","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-at-the-beginning-of-2024-year-investors-locked-in-profits-after-a-strong-2023-and-wait-for-the-federal-reserves-meeting","to_ping":"","pinged":"","post_modified":"2024-01-06 18:33:13","post_modified_gmt":"2024-01-06 07:33:13","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14888","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14629,"post_author":"15","post_date":"2023-12-15 19:46:11","post_date_gmt":"2023-12-15 08:46:11","post_content":"\n

BlackRock aims to facilitate the participation of Wall Street banks in its potential Bitcoin ETF approval. Recent SEC memo <\/a>detailing a late November meeting involving BlackRock, Nasdaq, and the Commission. During this meeting, they discussed feedback regarding BlackRock's Bitcoin ETF application.<\/p>\n\n\n\n

The proposed approach introduces an innovative method for the redemption of ETF shares. A Bitcoin ETF would enable fund investors to gain exposure to Bitcoin without directly purchasing or storing the cryptocurrency. While the SEC has hesitated to approve such ETFs due to concerns about Bitcoin market manipulation, this new strategy addresses those worries.<\/p>\n\n\n\n

The SEC has yet to decide on BlackRock's iShares Bitcoin Trust (IBTC) application, with the deadline set for January 15. Analysts anticipate a decision will be issued for several spot Bitcoin ETF applications earlier in January.<\/p>\n\n\n\n

See Related:<\/strong><\/em> Fidelity Joins BlackRock\u2019s Push For Ethereum ETF<\/a><\/p>\n\n\n\n

BlackRock ETF Details<\/h2>\n\n\n\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

As we enter the last week of January, whispers on Wall Street suggest a potential tantrum in U.S. short-term financing markets, with the storm possibly hitting as early as March. This could prompt the Federal Reserve to reassess its policies.<\/p>\n\n\n\n

As of now, banking executives are anticipating a series of events that may tighten the screws on short-term financing. The expiration of a Fed lending facility on March 11, coupled with limited adoption of the standing repo facility (SRF), is expected to reduce the available funding sources for banks. Simultaneously, increased demand for liquidity is on the horizon due to substantial U.S. government debt issuance and upcoming tax payments in March and April. Additionally, a move toward faster trade settlement in May could intensify the demand for short-term funding.<\/p>\n\n\n\n

Against this backdrop, the Federal Reserve has been steadily draining cash from the financial system by unwinding pandemic-era support. BNY Mellon strategists estimate a significant decrease in cash parked overnight with the Fed, potentially dropping below $200 billion by May. The overnight reverse repurchase agreements facility could even approach zero by mid-year. This reduction in excess liquidity may expose vulnerabilities in short-term financing markets.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Storm Clouds Gather Over Germany's Financial Horizon<\/a><\/p>\n\n\n\n

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

Spikes In Short Term Financing Markets<\/h2>\n\n\n\n

Sudden spikes in short-term financing markets can threaten financial stability, making it harder and more expensive for firms to secure necessary funds. This situation could expose lenders struggling to stabilize deposits after last year's banking crisis. As the Fed inches closer to its 2% inflation target, the risk of policy error looms large.<\/p>\n\n\n\n

If short-term financing markets experience a meltdown, it could signal the need for the Fed to ease policy. Slowing the pace of quantitative tightening (QT) is seen as a potential response. Despite the central bankers' insistence on needing more data before rate cuts, markets are already pricing in cuts by May.<\/p>\n\n\n\n

As we approach the critical months of March to May, the financial markets are at a crossroads. The potential shake-up in short-term financing markets could signal the Fed to reassess its policies. Market participants and investors must stay vigilant, and prepared for potential shifts in liquidity and policy adjustments. The coming months will \/reveal whether these concerns materialize into a significant market event or remain a contained storm in the financial teacup.<\/p>\n","post_title":"Understanding The Potential Shake-Up In U.S. Short-Term Financing Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"understanding-the-potential-shake-up-in-u-s-short-term-financing-markets","to_ping":"","pinged":"","post_modified":"2024-01-26 20:20:06","post_modified_gmt":"2024-01-26 09:20:06","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15094","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15043,"post_author":"14","post_date":"2024-01-19 05:56:40","post_date_gmt":"2024-01-18 18:56:40","post_content":"\n

Wall Street witnessed a significant stock decline this Wednesday following positive December U.S. retail sales data, which diminished the anticipation of an early initiation of the Federal Reserve's campaign to cut interest rates.<\/p>\n\n\n\n

Retail Sales Report <\/h2>\n\n\n\n

The December retail sales report from the Commerce Department (USRSL=ECI) depicted a robust consumer, responsible for approximately 70% of the U.S. economy. Despite facing the challenges of high inflation and a tight monetary policy, the consumer has shown resilience.<\/p>\n\n\n\n

The data revealed that discounts offered by retailers and a surge in motor vehicle acquisitions contributed to a greater-than-anticipated increase in U.S. retail sales, maintaining the economy on a robust trajectory in 2024. This bolstered the perspective that the Federal Reserve might not reduce interest rates as rapidly as initially anticipated for the current year.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

Anticipations among traders for a 25-basis-point Federal Reserve rate cut in March declined to 55%, down from approximately 60% before the release of the retail sales data. Ryan Detrick, chief market strategist at Carson Group in Omaha, said<\/a>:<\/p>\n\n\n\n

\"We had news that the U.S. consumer continues to be quite healthy, but that has increased anxiety that the Fed\u2019s first rate cut could potentially be pushed to May from March. Yields are also moving higher on the strong retail sales numbers, adding to near-term worries.\"<\/em><\/p>\n\n\n\n

US Stocks And Wall Street<\/h2>\n\n\n\n

It is also important to mention that a decline in U.S. stocks sent Wall Street's<\/a> \"fear gauge\" to a two-month high while JPMorgan analysts predict that the majority of negative consequences stemming from higher interest rates have not materialized yet. On Tuesday, Federal Reserve Governor Christopher Waller also emphasized that the central bank should refrain from hastily reducing interest rates until there is a clear indication that lower inflation is likely to persist.<\/p>\n\n\n\n

At the same time, the escalation of geopolitical uncertainties introduces an additional challenge and heightens the potential for unforeseen risks in both markets and economic performance. Considering these factors, the perspective is likely to stay cautious as long as interest rates remain significantly restrictive and the looming presence of geopolitical risks persists.<\/p>\n","post_title":"Wall Street Weakened As Retail Sales Data Hampers Expectations For A Cut In Interest Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-weakened-as-retail-sales-data-hampers-expectations-for-a-cut-in-interest-rates","to_ping":"","pinged":"","post_modified":"2024-01-19 05:56:51","post_modified_gmt":"2024-01-18 18:56:51","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15043","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14931,"post_author":"18","post_date":"2024-01-10 07:51:17","post_date_gmt":"2024-01-09 20:51:17","post_content":"\n

In a recent survey conducted by the New York Federal Reserve<\/a>, Wall Street's major banks have recalibrated their predictions regarding the Federal Reserve's balance sheet drawdown. This shift suggests that the U.S. central bank might conclude its quantitative tightening (QT) process later than initially anticipated.<\/p>\n\n\n\n

A Change in Perspective<\/h2>\n\n\n\n

Previously, primary dealers\u2014major banks\u2014projected that the QT process would conclude by the third quarter. However, the sentiment has evolved. According to the latest survey taken before the Fed's December 12-13 policy meeting, these banks now foresee the QT process ending in the fourth quarter.<\/p>\n\n\n\n

This adjustment carries significant implications. If these predictions materialize, the Federal Reserve's balance sheet<\/a> will likely shrink to approximately $6.75 trillion, down from its current level of roughly $7.764 trillion. Moreover, banks estimated that the central bank's reverse repo facility would hold $375 billion when QT concludes, a reduction from the anticipated $625 billion as forecasted in October.<\/p>\n\n\n\n

Federal Reserve Strategy<\/h2>\n\n\n\n

The quantitative tightening process has been an integral part of the Federal Reserve's strategy to combat inflation. Alongside rate hikes, the central bank initiated large-scale purchases of Treasury bonds and mortgage-backed securities during the COVID-19 pandemic's onset in 2020. This move led to an expansion of its holdings to approximately $9 trillion by mid-2022. However, since last year, the Fed has been gradually reducing its balance sheet size, although specific guidance on the timeline remains somewhat ambiguous.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

What This Means for the Economy<\/h2>\n\n\n\n

The recalibrated timeline for QT indicates a more prolonged period of balance sheet reduction. As the Federal Reserve continues to navigate its policy decisions, market participants, businesses, and consumers should monitor these developments closely. Changes in the balance sheet size can influence interest rates, liquidity conditions, and overall financial market dynamics.<\/p>\n\n\n\n

A Technical Perspective<\/h2>\n\n\n\n

From a technical standpoint, the Federal Reserve's<\/a> balance sheet management serves as a critical tool in its monetary policy arsenal. The evolving predictions by Wall Street's primary dealers underscore the complexities involved in forecasting economic variables, such as inflation and interest rates.<\/p>\n\n\n\n

As the QT process continues, policymakers and market participants must remain vigilant, considering the potential ramifications for financial stability and economic growth. This dynamic landscape necessitates ongoing analysis and adaptation to ensure that monetary policy objectives align with evolving economic conditions.<\/p>\n","post_title":"Decoding Wall Street's Shift: A Closer Look At Wall Street's Changing Perspective","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"decoding-wall-streets-shift-a-closer-look-at-wall-streets-changing-perspective","to_ping":"","pinged":"","post_modified":"2024-01-10 07:51:25","post_modified_gmt":"2024-01-09 20:51:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14931","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14888,"post_author":"14","post_date":"2024-01-06 18:33:09","post_date_gmt":"2024-01-06 07:33:09","post_content":"\n

Wall Street's main indexes fell at the beginning of the 2024 year as investors locked in profits after a very successful 2023 and are currently waiting for the Federal Reserve's<\/a> meeting that could offer hints on its interest rate path. Ken Polcari, managing partner at Kace Capital Advisors, said:<\/p>\n\n\n\n

\"The decline yesterday, today, and maybe for the next couple of weeks, is a result of people locking in profits and reconsidering what the narrative is - are rates going down five or six times as it appeared to be at the end of last year?\"<\/em><\/p>\n\n\n\n

\"\"
The Nasdaq Composite kicked off the year with a 1.5% drop pressured by a selloff in the tech sector<\/figcaption><\/figure>\n\n\n\n

The Fed's December meeting minutes are set to be disclosed at 2:00 p.m. ET, potentially providing information regarding the central bank's shift toward reducing interest rates. Although it's widely anticipated that the Fed will keep interest rates unchanged this month, traders have priced in a 65.7% probability of a 25 basis point rate reduction in March, according to CMEGroup's FedWatch tool.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures<\/a><\/p>\n\n\n\n

Central Bank And Inflation<\/h2>\n\n\n\n

Richmond Fed President Thomas Barkin, a voting member in the FOMC's rate-setting committee, said recently that the U.S. central bank is \"making real progress\" towards taming inflation and a soft landing seeming \"increasingly conceivable\". Encouragingly, the American Association of Individual Investors (AAII) Sentiment Survey indicated a surge in optimism among individual investors regarding the short-term outlook for the U.S. stock market, reaching its peak level in more than two and a half years.<\/p>\n\n\n\n

Despite this, JPMorgan Asset Management advises investors to be cautious due to potential recession risks. At the same time, analysts at Soci\u00e9t\u00e9 G\u00e9n\u00e9rale anticipate a turbulent 2024 for U.S. stocks, projecting fluctuations that could involve nearing recent highs, encountering declines, and subsequently rebounding.<\/p>\n\n\n\n

This week will witness a series of labor market data releases, culminating in the government's December employment report on Friday. These reports could significantly influence the forecast for the Fed's interest rate trajectory this year, prompting investors to scrutinize the data. Jeffrey Roach, chief economist at LPL Financial, added<\/a>:<\/p>\n\n\n\n

 \"The job market is cooling and we should see confirmation of that in this Friday\u2019s jobs report\"<\/em><\/p>\n\n\n\n

Following the progress of Wall Street's main indexes seen last year, investors are still optimistic about the prospect of another robust year ahead. This optimism is rooted in the anticipation that a decelerating economy will result in a gentle landing rather than a full-scale recession, especially as the Fed initiates rate cuts in the first half of 2024.<\/p>\n","post_title":"Wall Street's Main Indexes Fell At The Beginning Of 2024 year. Investors Locked In Profits After A Strong 2023 And Wait For The Federal Reserve's Meeting","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-at-the-beginning-of-2024-year-investors-locked-in-profits-after-a-strong-2023-and-wait-for-the-federal-reserves-meeting","to_ping":"","pinged":"","post_modified":"2024-01-06 18:33:13","post_modified_gmt":"2024-01-06 07:33:13","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14888","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14629,"post_author":"15","post_date":"2023-12-15 19:46:11","post_date_gmt":"2023-12-15 08:46:11","post_content":"\n

BlackRock aims to facilitate the participation of Wall Street banks in its potential Bitcoin ETF approval. Recent SEC memo <\/a>detailing a late November meeting involving BlackRock, Nasdaq, and the Commission. During this meeting, they discussed feedback regarding BlackRock's Bitcoin ETF application.<\/p>\n\n\n\n

The proposed approach introduces an innovative method for the redemption of ETF shares. A Bitcoin ETF would enable fund investors to gain exposure to Bitcoin without directly purchasing or storing the cryptocurrency. While the SEC has hesitated to approve such ETFs due to concerns about Bitcoin market manipulation, this new strategy addresses those worries.<\/p>\n\n\n\n

The SEC has yet to decide on BlackRock's iShares Bitcoin Trust (IBTC) application, with the deadline set for January 15. Analysts anticipate a decision will be issued for several spot Bitcoin ETF applications earlier in January.<\/p>\n\n\n\n

See Related:<\/strong><\/em> Fidelity Joins BlackRock\u2019s Push For Ethereum ETF<\/a><\/p>\n\n\n\n

BlackRock ETF Details<\/h2>\n\n\n\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

Due to this, markets are showing some immediate disappointment as there's no explicit indication of imminent rate cuts. We're seeing an extremely neutral, non-committal statement from the Federal Reserve this Wednesday.<\/p>\n","post_title":"Wall Street's Main Indexes Fell As Alphabet's Projections For Rising AI Costs Dented Most Mega-Cap And Chip Stocks","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-as-alphabets-projections-for-rising-ai-costs-dented-most-mega-cap-and-chip-stocks","to_ping":"","pinged":"","post_modified":"2024-02-01 16:33:21","post_modified_gmt":"2024-02-01 05:33:21","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15225","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15094,"post_author":"18","post_date":"2024-01-26 02:18:51","post_date_gmt":"2024-01-25 15:18:51","post_content":"\n

As we enter the last week of January, whispers on Wall Street suggest a potential tantrum in U.S. short-term financing markets, with the storm possibly hitting as early as March. This could prompt the Federal Reserve to reassess its policies.<\/p>\n\n\n\n

As of now, banking executives are anticipating a series of events that may tighten the screws on short-term financing. The expiration of a Fed lending facility on March 11, coupled with limited adoption of the standing repo facility (SRF), is expected to reduce the available funding sources for banks. Simultaneously, increased demand for liquidity is on the horizon due to substantial U.S. government debt issuance and upcoming tax payments in March and April. Additionally, a move toward faster trade settlement in May could intensify the demand for short-term funding.<\/p>\n\n\n\n

Against this backdrop, the Federal Reserve has been steadily draining cash from the financial system by unwinding pandemic-era support. BNY Mellon strategists estimate a significant decrease in cash parked overnight with the Fed, potentially dropping below $200 billion by May. The overnight reverse repurchase agreements facility could even approach zero by mid-year. This reduction in excess liquidity may expose vulnerabilities in short-term financing markets.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Storm Clouds Gather Over Germany's Financial Horizon<\/a><\/p>\n\n\n\n

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

Spikes In Short Term Financing Markets<\/h2>\n\n\n\n

Sudden spikes in short-term financing markets can threaten financial stability, making it harder and more expensive for firms to secure necessary funds. This situation could expose lenders struggling to stabilize deposits after last year's banking crisis. As the Fed inches closer to its 2% inflation target, the risk of policy error looms large.<\/p>\n\n\n\n

If short-term financing markets experience a meltdown, it could signal the need for the Fed to ease policy. Slowing the pace of quantitative tightening (QT) is seen as a potential response. Despite the central bankers' insistence on needing more data before rate cuts, markets are already pricing in cuts by May.<\/p>\n\n\n\n

As we approach the critical months of March to May, the financial markets are at a crossroads. The potential shake-up in short-term financing markets could signal the Fed to reassess its policies. Market participants and investors must stay vigilant, and prepared for potential shifts in liquidity and policy adjustments. The coming months will \/reveal whether these concerns materialize into a significant market event or remain a contained storm in the financial teacup.<\/p>\n","post_title":"Understanding The Potential Shake-Up In U.S. Short-Term Financing Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"understanding-the-potential-shake-up-in-u-s-short-term-financing-markets","to_ping":"","pinged":"","post_modified":"2024-01-26 20:20:06","post_modified_gmt":"2024-01-26 09:20:06","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15094","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15043,"post_author":"14","post_date":"2024-01-19 05:56:40","post_date_gmt":"2024-01-18 18:56:40","post_content":"\n

Wall Street witnessed a significant stock decline this Wednesday following positive December U.S. retail sales data, which diminished the anticipation of an early initiation of the Federal Reserve's campaign to cut interest rates.<\/p>\n\n\n\n

Retail Sales Report <\/h2>\n\n\n\n

The December retail sales report from the Commerce Department (USRSL=ECI) depicted a robust consumer, responsible for approximately 70% of the U.S. economy. Despite facing the challenges of high inflation and a tight monetary policy, the consumer has shown resilience.<\/p>\n\n\n\n

The data revealed that discounts offered by retailers and a surge in motor vehicle acquisitions contributed to a greater-than-anticipated increase in U.S. retail sales, maintaining the economy on a robust trajectory in 2024. This bolstered the perspective that the Federal Reserve might not reduce interest rates as rapidly as initially anticipated for the current year.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

Anticipations among traders for a 25-basis-point Federal Reserve rate cut in March declined to 55%, down from approximately 60% before the release of the retail sales data. Ryan Detrick, chief market strategist at Carson Group in Omaha, said<\/a>:<\/p>\n\n\n\n

\"We had news that the U.S. consumer continues to be quite healthy, but that has increased anxiety that the Fed\u2019s first rate cut could potentially be pushed to May from March. Yields are also moving higher on the strong retail sales numbers, adding to near-term worries.\"<\/em><\/p>\n\n\n\n

US Stocks And Wall Street<\/h2>\n\n\n\n

It is also important to mention that a decline in U.S. stocks sent Wall Street's<\/a> \"fear gauge\" to a two-month high while JPMorgan analysts predict that the majority of negative consequences stemming from higher interest rates have not materialized yet. On Tuesday, Federal Reserve Governor Christopher Waller also emphasized that the central bank should refrain from hastily reducing interest rates until there is a clear indication that lower inflation is likely to persist.<\/p>\n\n\n\n

At the same time, the escalation of geopolitical uncertainties introduces an additional challenge and heightens the potential for unforeseen risks in both markets and economic performance. Considering these factors, the perspective is likely to stay cautious as long as interest rates remain significantly restrictive and the looming presence of geopolitical risks persists.<\/p>\n","post_title":"Wall Street Weakened As Retail Sales Data Hampers Expectations For A Cut In Interest Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-weakened-as-retail-sales-data-hampers-expectations-for-a-cut-in-interest-rates","to_ping":"","pinged":"","post_modified":"2024-01-19 05:56:51","post_modified_gmt":"2024-01-18 18:56:51","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15043","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14931,"post_author":"18","post_date":"2024-01-10 07:51:17","post_date_gmt":"2024-01-09 20:51:17","post_content":"\n

In a recent survey conducted by the New York Federal Reserve<\/a>, Wall Street's major banks have recalibrated their predictions regarding the Federal Reserve's balance sheet drawdown. This shift suggests that the U.S. central bank might conclude its quantitative tightening (QT) process later than initially anticipated.<\/p>\n\n\n\n

A Change in Perspective<\/h2>\n\n\n\n

Previously, primary dealers\u2014major banks\u2014projected that the QT process would conclude by the third quarter. However, the sentiment has evolved. According to the latest survey taken before the Fed's December 12-13 policy meeting, these banks now foresee the QT process ending in the fourth quarter.<\/p>\n\n\n\n

This adjustment carries significant implications. If these predictions materialize, the Federal Reserve's balance sheet<\/a> will likely shrink to approximately $6.75 trillion, down from its current level of roughly $7.764 trillion. Moreover, banks estimated that the central bank's reverse repo facility would hold $375 billion when QT concludes, a reduction from the anticipated $625 billion as forecasted in October.<\/p>\n\n\n\n

Federal Reserve Strategy<\/h2>\n\n\n\n

The quantitative tightening process has been an integral part of the Federal Reserve's strategy to combat inflation. Alongside rate hikes, the central bank initiated large-scale purchases of Treasury bonds and mortgage-backed securities during the COVID-19 pandemic's onset in 2020. This move led to an expansion of its holdings to approximately $9 trillion by mid-2022. However, since last year, the Fed has been gradually reducing its balance sheet size, although specific guidance on the timeline remains somewhat ambiguous.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

What This Means for the Economy<\/h2>\n\n\n\n

The recalibrated timeline for QT indicates a more prolonged period of balance sheet reduction. As the Federal Reserve continues to navigate its policy decisions, market participants, businesses, and consumers should monitor these developments closely. Changes in the balance sheet size can influence interest rates, liquidity conditions, and overall financial market dynamics.<\/p>\n\n\n\n

A Technical Perspective<\/h2>\n\n\n\n

From a technical standpoint, the Federal Reserve's<\/a> balance sheet management serves as a critical tool in its monetary policy arsenal. The evolving predictions by Wall Street's primary dealers underscore the complexities involved in forecasting economic variables, such as inflation and interest rates.<\/p>\n\n\n\n

As the QT process continues, policymakers and market participants must remain vigilant, considering the potential ramifications for financial stability and economic growth. This dynamic landscape necessitates ongoing analysis and adaptation to ensure that monetary policy objectives align with evolving economic conditions.<\/p>\n","post_title":"Decoding Wall Street's Shift: A Closer Look At Wall Street's Changing Perspective","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"decoding-wall-streets-shift-a-closer-look-at-wall-streets-changing-perspective","to_ping":"","pinged":"","post_modified":"2024-01-10 07:51:25","post_modified_gmt":"2024-01-09 20:51:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14931","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14888,"post_author":"14","post_date":"2024-01-06 18:33:09","post_date_gmt":"2024-01-06 07:33:09","post_content":"\n

Wall Street's main indexes fell at the beginning of the 2024 year as investors locked in profits after a very successful 2023 and are currently waiting for the Federal Reserve's<\/a> meeting that could offer hints on its interest rate path. Ken Polcari, managing partner at Kace Capital Advisors, said:<\/p>\n\n\n\n

\"The decline yesterday, today, and maybe for the next couple of weeks, is a result of people locking in profits and reconsidering what the narrative is - are rates going down five or six times as it appeared to be at the end of last year?\"<\/em><\/p>\n\n\n\n

\"\"
The Nasdaq Composite kicked off the year with a 1.5% drop pressured by a selloff in the tech sector<\/figcaption><\/figure>\n\n\n\n

The Fed's December meeting minutes are set to be disclosed at 2:00 p.m. ET, potentially providing information regarding the central bank's shift toward reducing interest rates. Although it's widely anticipated that the Fed will keep interest rates unchanged this month, traders have priced in a 65.7% probability of a 25 basis point rate reduction in March, according to CMEGroup's FedWatch tool.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures<\/a><\/p>\n\n\n\n

Central Bank And Inflation<\/h2>\n\n\n\n

Richmond Fed President Thomas Barkin, a voting member in the FOMC's rate-setting committee, said recently that the U.S. central bank is \"making real progress\" towards taming inflation and a soft landing seeming \"increasingly conceivable\". Encouragingly, the American Association of Individual Investors (AAII) Sentiment Survey indicated a surge in optimism among individual investors regarding the short-term outlook for the U.S. stock market, reaching its peak level in more than two and a half years.<\/p>\n\n\n\n

Despite this, JPMorgan Asset Management advises investors to be cautious due to potential recession risks. At the same time, analysts at Soci\u00e9t\u00e9 G\u00e9n\u00e9rale anticipate a turbulent 2024 for U.S. stocks, projecting fluctuations that could involve nearing recent highs, encountering declines, and subsequently rebounding.<\/p>\n\n\n\n

This week will witness a series of labor market data releases, culminating in the government's December employment report on Friday. These reports could significantly influence the forecast for the Fed's interest rate trajectory this year, prompting investors to scrutinize the data. Jeffrey Roach, chief economist at LPL Financial, added<\/a>:<\/p>\n\n\n\n

 \"The job market is cooling and we should see confirmation of that in this Friday\u2019s jobs report\"<\/em><\/p>\n\n\n\n

Following the progress of Wall Street's main indexes seen last year, investors are still optimistic about the prospect of another robust year ahead. This optimism is rooted in the anticipation that a decelerating economy will result in a gentle landing rather than a full-scale recession, especially as the Fed initiates rate cuts in the first half of 2024.<\/p>\n","post_title":"Wall Street's Main Indexes Fell At The Beginning Of 2024 year. Investors Locked In Profits After A Strong 2023 And Wait For The Federal Reserve's Meeting","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-at-the-beginning-of-2024-year-investors-locked-in-profits-after-a-strong-2023-and-wait-for-the-federal-reserves-meeting","to_ping":"","pinged":"","post_modified":"2024-01-06 18:33:13","post_modified_gmt":"2024-01-06 07:33:13","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14888","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14629,"post_author":"15","post_date":"2023-12-15 19:46:11","post_date_gmt":"2023-12-15 08:46:11","post_content":"\n

BlackRock aims to facilitate the participation of Wall Street banks in its potential Bitcoin ETF approval. Recent SEC memo <\/a>detailing a late November meeting involving BlackRock, Nasdaq, and the Commission. During this meeting, they discussed feedback regarding BlackRock's Bitcoin ETF application.<\/p>\n\n\n\n

The proposed approach introduces an innovative method for the redemption of ETF shares. A Bitcoin ETF would enable fund investors to gain exposure to Bitcoin without directly purchasing or storing the cryptocurrency. While the SEC has hesitated to approve such ETFs due to concerns about Bitcoin market manipulation, this new strategy addresses those worries.<\/p>\n\n\n\n

The SEC has yet to decide on BlackRock's iShares Bitcoin Trust (IBTC) application, with the deadline set for January 15. Analysts anticipate a decision will be issued for several spot Bitcoin ETF applications earlier in January.<\/p>\n\n\n\n

See Related:<\/strong><\/em> Fidelity Joins BlackRock\u2019s Push For Ethereum ETF<\/a><\/p>\n\n\n\n

BlackRock ETF Details<\/h2>\n\n\n\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

\"Not surprisingly, I don't think the Fed wants to show their hand, especially, when they have a couple of months of data to collect before they need to. The good news is we can forget about any more tightening. The bad news is it's 'when', not 'if', they're going to cut rates, and that 'when' has been pushed out to what had been the fringes of consensus.\"<\/em><\/p>\n\n\n\n

Due to this, markets are showing some immediate disappointment as there's no explicit indication of imminent rate cuts. We're seeing an extremely neutral, non-committal statement from the Federal Reserve this Wednesday.<\/p>\n","post_title":"Wall Street's Main Indexes Fell As Alphabet's Projections For Rising AI Costs Dented Most Mega-Cap And Chip Stocks","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-as-alphabets-projections-for-rising-ai-costs-dented-most-mega-cap-and-chip-stocks","to_ping":"","pinged":"","post_modified":"2024-02-01 16:33:21","post_modified_gmt":"2024-02-01 05:33:21","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15225","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15094,"post_author":"18","post_date":"2024-01-26 02:18:51","post_date_gmt":"2024-01-25 15:18:51","post_content":"\n

As we enter the last week of January, whispers on Wall Street suggest a potential tantrum in U.S. short-term financing markets, with the storm possibly hitting as early as March. This could prompt the Federal Reserve to reassess its policies.<\/p>\n\n\n\n

As of now, banking executives are anticipating a series of events that may tighten the screws on short-term financing. The expiration of a Fed lending facility on March 11, coupled with limited adoption of the standing repo facility (SRF), is expected to reduce the available funding sources for banks. Simultaneously, increased demand for liquidity is on the horizon due to substantial U.S. government debt issuance and upcoming tax payments in March and April. Additionally, a move toward faster trade settlement in May could intensify the demand for short-term funding.<\/p>\n\n\n\n

Against this backdrop, the Federal Reserve has been steadily draining cash from the financial system by unwinding pandemic-era support. BNY Mellon strategists estimate a significant decrease in cash parked overnight with the Fed, potentially dropping below $200 billion by May. The overnight reverse repurchase agreements facility could even approach zero by mid-year. This reduction in excess liquidity may expose vulnerabilities in short-term financing markets.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Storm Clouds Gather Over Germany's Financial Horizon<\/a><\/p>\n\n\n\n

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

Spikes In Short Term Financing Markets<\/h2>\n\n\n\n

Sudden spikes in short-term financing markets can threaten financial stability, making it harder and more expensive for firms to secure necessary funds. This situation could expose lenders struggling to stabilize deposits after last year's banking crisis. As the Fed inches closer to its 2% inflation target, the risk of policy error looms large.<\/p>\n\n\n\n

If short-term financing markets experience a meltdown, it could signal the need for the Fed to ease policy. Slowing the pace of quantitative tightening (QT) is seen as a potential response. Despite the central bankers' insistence on needing more data before rate cuts, markets are already pricing in cuts by May.<\/p>\n\n\n\n

As we approach the critical months of March to May, the financial markets are at a crossroads. The potential shake-up in short-term financing markets could signal the Fed to reassess its policies. Market participants and investors must stay vigilant, and prepared for potential shifts in liquidity and policy adjustments. The coming months will \/reveal whether these concerns materialize into a significant market event or remain a contained storm in the financial teacup.<\/p>\n","post_title":"Understanding The Potential Shake-Up In U.S. Short-Term Financing Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"understanding-the-potential-shake-up-in-u-s-short-term-financing-markets","to_ping":"","pinged":"","post_modified":"2024-01-26 20:20:06","post_modified_gmt":"2024-01-26 09:20:06","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15094","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15043,"post_author":"14","post_date":"2024-01-19 05:56:40","post_date_gmt":"2024-01-18 18:56:40","post_content":"\n

Wall Street witnessed a significant stock decline this Wednesday following positive December U.S. retail sales data, which diminished the anticipation of an early initiation of the Federal Reserve's campaign to cut interest rates.<\/p>\n\n\n\n

Retail Sales Report <\/h2>\n\n\n\n

The December retail sales report from the Commerce Department (USRSL=ECI) depicted a robust consumer, responsible for approximately 70% of the U.S. economy. Despite facing the challenges of high inflation and a tight monetary policy, the consumer has shown resilience.<\/p>\n\n\n\n

The data revealed that discounts offered by retailers and a surge in motor vehicle acquisitions contributed to a greater-than-anticipated increase in U.S. retail sales, maintaining the economy on a robust trajectory in 2024. This bolstered the perspective that the Federal Reserve might not reduce interest rates as rapidly as initially anticipated for the current year.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

Anticipations among traders for a 25-basis-point Federal Reserve rate cut in March declined to 55%, down from approximately 60% before the release of the retail sales data. Ryan Detrick, chief market strategist at Carson Group in Omaha, said<\/a>:<\/p>\n\n\n\n

\"We had news that the U.S. consumer continues to be quite healthy, but that has increased anxiety that the Fed\u2019s first rate cut could potentially be pushed to May from March. Yields are also moving higher on the strong retail sales numbers, adding to near-term worries.\"<\/em><\/p>\n\n\n\n

US Stocks And Wall Street<\/h2>\n\n\n\n

It is also important to mention that a decline in U.S. stocks sent Wall Street's<\/a> \"fear gauge\" to a two-month high while JPMorgan analysts predict that the majority of negative consequences stemming from higher interest rates have not materialized yet. On Tuesday, Federal Reserve Governor Christopher Waller also emphasized that the central bank should refrain from hastily reducing interest rates until there is a clear indication that lower inflation is likely to persist.<\/p>\n\n\n\n

At the same time, the escalation of geopolitical uncertainties introduces an additional challenge and heightens the potential for unforeseen risks in both markets and economic performance. Considering these factors, the perspective is likely to stay cautious as long as interest rates remain significantly restrictive and the looming presence of geopolitical risks persists.<\/p>\n","post_title":"Wall Street Weakened As Retail Sales Data Hampers Expectations For A Cut In Interest Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-weakened-as-retail-sales-data-hampers-expectations-for-a-cut-in-interest-rates","to_ping":"","pinged":"","post_modified":"2024-01-19 05:56:51","post_modified_gmt":"2024-01-18 18:56:51","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15043","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14931,"post_author":"18","post_date":"2024-01-10 07:51:17","post_date_gmt":"2024-01-09 20:51:17","post_content":"\n

In a recent survey conducted by the New York Federal Reserve<\/a>, Wall Street's major banks have recalibrated their predictions regarding the Federal Reserve's balance sheet drawdown. This shift suggests that the U.S. central bank might conclude its quantitative tightening (QT) process later than initially anticipated.<\/p>\n\n\n\n

A Change in Perspective<\/h2>\n\n\n\n

Previously, primary dealers\u2014major banks\u2014projected that the QT process would conclude by the third quarter. However, the sentiment has evolved. According to the latest survey taken before the Fed's December 12-13 policy meeting, these banks now foresee the QT process ending in the fourth quarter.<\/p>\n\n\n\n

This adjustment carries significant implications. If these predictions materialize, the Federal Reserve's balance sheet<\/a> will likely shrink to approximately $6.75 trillion, down from its current level of roughly $7.764 trillion. Moreover, banks estimated that the central bank's reverse repo facility would hold $375 billion when QT concludes, a reduction from the anticipated $625 billion as forecasted in October.<\/p>\n\n\n\n

Federal Reserve Strategy<\/h2>\n\n\n\n

The quantitative tightening process has been an integral part of the Federal Reserve's strategy to combat inflation. Alongside rate hikes, the central bank initiated large-scale purchases of Treasury bonds and mortgage-backed securities during the COVID-19 pandemic's onset in 2020. This move led to an expansion of its holdings to approximately $9 trillion by mid-2022. However, since last year, the Fed has been gradually reducing its balance sheet size, although specific guidance on the timeline remains somewhat ambiguous.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

What This Means for the Economy<\/h2>\n\n\n\n

The recalibrated timeline for QT indicates a more prolonged period of balance sheet reduction. As the Federal Reserve continues to navigate its policy decisions, market participants, businesses, and consumers should monitor these developments closely. Changes in the balance sheet size can influence interest rates, liquidity conditions, and overall financial market dynamics.<\/p>\n\n\n\n

A Technical Perspective<\/h2>\n\n\n\n

From a technical standpoint, the Federal Reserve's<\/a> balance sheet management serves as a critical tool in its monetary policy arsenal. The evolving predictions by Wall Street's primary dealers underscore the complexities involved in forecasting economic variables, such as inflation and interest rates.<\/p>\n\n\n\n

As the QT process continues, policymakers and market participants must remain vigilant, considering the potential ramifications for financial stability and economic growth. This dynamic landscape necessitates ongoing analysis and adaptation to ensure that monetary policy objectives align with evolving economic conditions.<\/p>\n","post_title":"Decoding Wall Street's Shift: A Closer Look At Wall Street's Changing Perspective","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"decoding-wall-streets-shift-a-closer-look-at-wall-streets-changing-perspective","to_ping":"","pinged":"","post_modified":"2024-01-10 07:51:25","post_modified_gmt":"2024-01-09 20:51:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14931","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14888,"post_author":"14","post_date":"2024-01-06 18:33:09","post_date_gmt":"2024-01-06 07:33:09","post_content":"\n

Wall Street's main indexes fell at the beginning of the 2024 year as investors locked in profits after a very successful 2023 and are currently waiting for the Federal Reserve's<\/a> meeting that could offer hints on its interest rate path. Ken Polcari, managing partner at Kace Capital Advisors, said:<\/p>\n\n\n\n

\"The decline yesterday, today, and maybe for the next couple of weeks, is a result of people locking in profits and reconsidering what the narrative is - are rates going down five or six times as it appeared to be at the end of last year?\"<\/em><\/p>\n\n\n\n

\"\"
The Nasdaq Composite kicked off the year with a 1.5% drop pressured by a selloff in the tech sector<\/figcaption><\/figure>\n\n\n\n

The Fed's December meeting minutes are set to be disclosed at 2:00 p.m. ET, potentially providing information regarding the central bank's shift toward reducing interest rates. Although it's widely anticipated that the Fed will keep interest rates unchanged this month, traders have priced in a 65.7% probability of a 25 basis point rate reduction in March, according to CMEGroup's FedWatch tool.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures<\/a><\/p>\n\n\n\n

Central Bank And Inflation<\/h2>\n\n\n\n

Richmond Fed President Thomas Barkin, a voting member in the FOMC's rate-setting committee, said recently that the U.S. central bank is \"making real progress\" towards taming inflation and a soft landing seeming \"increasingly conceivable\". Encouragingly, the American Association of Individual Investors (AAII) Sentiment Survey indicated a surge in optimism among individual investors regarding the short-term outlook for the U.S. stock market, reaching its peak level in more than two and a half years.<\/p>\n\n\n\n

Despite this, JPMorgan Asset Management advises investors to be cautious due to potential recession risks. At the same time, analysts at Soci\u00e9t\u00e9 G\u00e9n\u00e9rale anticipate a turbulent 2024 for U.S. stocks, projecting fluctuations that could involve nearing recent highs, encountering declines, and subsequently rebounding.<\/p>\n\n\n\n

This week will witness a series of labor market data releases, culminating in the government's December employment report on Friday. These reports could significantly influence the forecast for the Fed's interest rate trajectory this year, prompting investors to scrutinize the data. Jeffrey Roach, chief economist at LPL Financial, added<\/a>:<\/p>\n\n\n\n

 \"The job market is cooling and we should see confirmation of that in this Friday\u2019s jobs report\"<\/em><\/p>\n\n\n\n

Following the progress of Wall Street's main indexes seen last year, investors are still optimistic about the prospect of another robust year ahead. This optimism is rooted in the anticipation that a decelerating economy will result in a gentle landing rather than a full-scale recession, especially as the Fed initiates rate cuts in the first half of 2024.<\/p>\n","post_title":"Wall Street's Main Indexes Fell At The Beginning Of 2024 year. Investors Locked In Profits After A Strong 2023 And Wait For The Federal Reserve's Meeting","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-at-the-beginning-of-2024-year-investors-locked-in-profits-after-a-strong-2023-and-wait-for-the-federal-reserves-meeting","to_ping":"","pinged":"","post_modified":"2024-01-06 18:33:13","post_modified_gmt":"2024-01-06 07:33:13","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14888","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14629,"post_author":"15","post_date":"2023-12-15 19:46:11","post_date_gmt":"2023-12-15 08:46:11","post_content":"\n

BlackRock aims to facilitate the participation of Wall Street banks in its potential Bitcoin ETF approval. Recent SEC memo <\/a>detailing a late November meeting involving BlackRock, Nasdaq, and the Commission. During this meeting, they discussed feedback regarding BlackRock's Bitcoin ETF application.<\/p>\n\n\n\n

The proposed approach introduces an innovative method for the redemption of ETF shares. A Bitcoin ETF would enable fund investors to gain exposure to Bitcoin without directly purchasing or storing the cryptocurrency. While the SEC has hesitated to approve such ETFs due to concerns about Bitcoin market manipulation, this new strategy addresses those worries.<\/p>\n\n\n\n

The SEC has yet to decide on BlackRock's iShares Bitcoin Trust (IBTC) application, with the deadline set for January 15. Analysts anticipate a decision will be issued for several spot Bitcoin ETF applications earlier in January.<\/p>\n\n\n\n

See Related:<\/strong><\/em> Fidelity Joins BlackRock\u2019s Push For Ethereum ETF<\/a><\/p>\n\n\n\n

BlackRock ETF Details<\/h2>\n\n\n\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

It is also important to mention that Advanced Micro Devices saw a 3.3% decline as its first-quarter revenue forecast and increased projection for AI processors fell short of expectations. Other chip stocks including Nvidia, Broadcom, and Marvell dropped over 1% each. The attention of investors was also on the Federal Reserve's initial monetary policy decision of the year, and while it was widely anticipated that the Fed would maintain interest rates, many analysts said that the Fed is taking baby steps toward the cutting. Art Hogan, Chief Market Strategist of B.Riley Wealth, said<\/a>:<\/p>\n\n\n\n

\"Not surprisingly, I don't think the Fed wants to show their hand, especially, when they have a couple of months of data to collect before they need to. The good news is we can forget about any more tightening. The bad news is it's 'when', not 'if', they're going to cut rates, and that 'when' has been pushed out to what had been the fringes of consensus.\"<\/em><\/p>\n\n\n\n

Due to this, markets are showing some immediate disappointment as there's no explicit indication of imminent rate cuts. We're seeing an extremely neutral, non-committal statement from the Federal Reserve this Wednesday.<\/p>\n","post_title":"Wall Street's Main Indexes Fell As Alphabet's Projections For Rising AI Costs Dented Most Mega-Cap And Chip Stocks","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-as-alphabets-projections-for-rising-ai-costs-dented-most-mega-cap-and-chip-stocks","to_ping":"","pinged":"","post_modified":"2024-02-01 16:33:21","post_modified_gmt":"2024-02-01 05:33:21","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15225","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15094,"post_author":"18","post_date":"2024-01-26 02:18:51","post_date_gmt":"2024-01-25 15:18:51","post_content":"\n

As we enter the last week of January, whispers on Wall Street suggest a potential tantrum in U.S. short-term financing markets, with the storm possibly hitting as early as March. This could prompt the Federal Reserve to reassess its policies.<\/p>\n\n\n\n

As of now, banking executives are anticipating a series of events that may tighten the screws on short-term financing. The expiration of a Fed lending facility on March 11, coupled with limited adoption of the standing repo facility (SRF), is expected to reduce the available funding sources for banks. Simultaneously, increased demand for liquidity is on the horizon due to substantial U.S. government debt issuance and upcoming tax payments in March and April. Additionally, a move toward faster trade settlement in May could intensify the demand for short-term funding.<\/p>\n\n\n\n

Against this backdrop, the Federal Reserve has been steadily draining cash from the financial system by unwinding pandemic-era support. BNY Mellon strategists estimate a significant decrease in cash parked overnight with the Fed, potentially dropping below $200 billion by May. The overnight reverse repurchase agreements facility could even approach zero by mid-year. This reduction in excess liquidity may expose vulnerabilities in short-term financing markets.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Storm Clouds Gather Over Germany's Financial Horizon<\/a><\/p>\n\n\n\n

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

Spikes In Short Term Financing Markets<\/h2>\n\n\n\n

Sudden spikes in short-term financing markets can threaten financial stability, making it harder and more expensive for firms to secure necessary funds. This situation could expose lenders struggling to stabilize deposits after last year's banking crisis. As the Fed inches closer to its 2% inflation target, the risk of policy error looms large.<\/p>\n\n\n\n

If short-term financing markets experience a meltdown, it could signal the need for the Fed to ease policy. Slowing the pace of quantitative tightening (QT) is seen as a potential response. Despite the central bankers' insistence on needing more data before rate cuts, markets are already pricing in cuts by May.<\/p>\n\n\n\n

As we approach the critical months of March to May, the financial markets are at a crossroads. The potential shake-up in short-term financing markets could signal the Fed to reassess its policies. Market participants and investors must stay vigilant, and prepared for potential shifts in liquidity and policy adjustments. The coming months will \/reveal whether these concerns materialize into a significant market event or remain a contained storm in the financial teacup.<\/p>\n","post_title":"Understanding The Potential Shake-Up In U.S. Short-Term Financing Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"understanding-the-potential-shake-up-in-u-s-short-term-financing-markets","to_ping":"","pinged":"","post_modified":"2024-01-26 20:20:06","post_modified_gmt":"2024-01-26 09:20:06","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15094","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15043,"post_author":"14","post_date":"2024-01-19 05:56:40","post_date_gmt":"2024-01-18 18:56:40","post_content":"\n

Wall Street witnessed a significant stock decline this Wednesday following positive December U.S. retail sales data, which diminished the anticipation of an early initiation of the Federal Reserve's campaign to cut interest rates.<\/p>\n\n\n\n

Retail Sales Report <\/h2>\n\n\n\n

The December retail sales report from the Commerce Department (USRSL=ECI) depicted a robust consumer, responsible for approximately 70% of the U.S. economy. Despite facing the challenges of high inflation and a tight monetary policy, the consumer has shown resilience.<\/p>\n\n\n\n

The data revealed that discounts offered by retailers and a surge in motor vehicle acquisitions contributed to a greater-than-anticipated increase in U.S. retail sales, maintaining the economy on a robust trajectory in 2024. This bolstered the perspective that the Federal Reserve might not reduce interest rates as rapidly as initially anticipated for the current year.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

Anticipations among traders for a 25-basis-point Federal Reserve rate cut in March declined to 55%, down from approximately 60% before the release of the retail sales data. Ryan Detrick, chief market strategist at Carson Group in Omaha, said<\/a>:<\/p>\n\n\n\n

\"We had news that the U.S. consumer continues to be quite healthy, but that has increased anxiety that the Fed\u2019s first rate cut could potentially be pushed to May from March. Yields are also moving higher on the strong retail sales numbers, adding to near-term worries.\"<\/em><\/p>\n\n\n\n

US Stocks And Wall Street<\/h2>\n\n\n\n

It is also important to mention that a decline in U.S. stocks sent Wall Street's<\/a> \"fear gauge\" to a two-month high while JPMorgan analysts predict that the majority of negative consequences stemming from higher interest rates have not materialized yet. On Tuesday, Federal Reserve Governor Christopher Waller also emphasized that the central bank should refrain from hastily reducing interest rates until there is a clear indication that lower inflation is likely to persist.<\/p>\n\n\n\n

At the same time, the escalation of geopolitical uncertainties introduces an additional challenge and heightens the potential for unforeseen risks in both markets and economic performance. Considering these factors, the perspective is likely to stay cautious as long as interest rates remain significantly restrictive and the looming presence of geopolitical risks persists.<\/p>\n","post_title":"Wall Street Weakened As Retail Sales Data Hampers Expectations For A Cut In Interest Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-weakened-as-retail-sales-data-hampers-expectations-for-a-cut-in-interest-rates","to_ping":"","pinged":"","post_modified":"2024-01-19 05:56:51","post_modified_gmt":"2024-01-18 18:56:51","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15043","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14931,"post_author":"18","post_date":"2024-01-10 07:51:17","post_date_gmt":"2024-01-09 20:51:17","post_content":"\n

In a recent survey conducted by the New York Federal Reserve<\/a>, Wall Street's major banks have recalibrated their predictions regarding the Federal Reserve's balance sheet drawdown. This shift suggests that the U.S. central bank might conclude its quantitative tightening (QT) process later than initially anticipated.<\/p>\n\n\n\n

A Change in Perspective<\/h2>\n\n\n\n

Previously, primary dealers\u2014major banks\u2014projected that the QT process would conclude by the third quarter. However, the sentiment has evolved. According to the latest survey taken before the Fed's December 12-13 policy meeting, these banks now foresee the QT process ending in the fourth quarter.<\/p>\n\n\n\n

This adjustment carries significant implications. If these predictions materialize, the Federal Reserve's balance sheet<\/a> will likely shrink to approximately $6.75 trillion, down from its current level of roughly $7.764 trillion. Moreover, banks estimated that the central bank's reverse repo facility would hold $375 billion when QT concludes, a reduction from the anticipated $625 billion as forecasted in October.<\/p>\n\n\n\n

Federal Reserve Strategy<\/h2>\n\n\n\n

The quantitative tightening process has been an integral part of the Federal Reserve's strategy to combat inflation. Alongside rate hikes, the central bank initiated large-scale purchases of Treasury bonds and mortgage-backed securities during the COVID-19 pandemic's onset in 2020. This move led to an expansion of its holdings to approximately $9 trillion by mid-2022. However, since last year, the Fed has been gradually reducing its balance sheet size, although specific guidance on the timeline remains somewhat ambiguous.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

What This Means for the Economy<\/h2>\n\n\n\n

The recalibrated timeline for QT indicates a more prolonged period of balance sheet reduction. As the Federal Reserve continues to navigate its policy decisions, market participants, businesses, and consumers should monitor these developments closely. Changes in the balance sheet size can influence interest rates, liquidity conditions, and overall financial market dynamics.<\/p>\n\n\n\n

A Technical Perspective<\/h2>\n\n\n\n

From a technical standpoint, the Federal Reserve's<\/a> balance sheet management serves as a critical tool in its monetary policy arsenal. The evolving predictions by Wall Street's primary dealers underscore the complexities involved in forecasting economic variables, such as inflation and interest rates.<\/p>\n\n\n\n

As the QT process continues, policymakers and market participants must remain vigilant, considering the potential ramifications for financial stability and economic growth. This dynamic landscape necessitates ongoing analysis and adaptation to ensure that monetary policy objectives align with evolving economic conditions.<\/p>\n","post_title":"Decoding Wall Street's Shift: A Closer Look At Wall Street's Changing Perspective","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"decoding-wall-streets-shift-a-closer-look-at-wall-streets-changing-perspective","to_ping":"","pinged":"","post_modified":"2024-01-10 07:51:25","post_modified_gmt":"2024-01-09 20:51:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14931","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14888,"post_author":"14","post_date":"2024-01-06 18:33:09","post_date_gmt":"2024-01-06 07:33:09","post_content":"\n

Wall Street's main indexes fell at the beginning of the 2024 year as investors locked in profits after a very successful 2023 and are currently waiting for the Federal Reserve's<\/a> meeting that could offer hints on its interest rate path. Ken Polcari, managing partner at Kace Capital Advisors, said:<\/p>\n\n\n\n

\"The decline yesterday, today, and maybe for the next couple of weeks, is a result of people locking in profits and reconsidering what the narrative is - are rates going down five or six times as it appeared to be at the end of last year?\"<\/em><\/p>\n\n\n\n

\"\"
The Nasdaq Composite kicked off the year with a 1.5% drop pressured by a selloff in the tech sector<\/figcaption><\/figure>\n\n\n\n

The Fed's December meeting minutes are set to be disclosed at 2:00 p.m. ET, potentially providing information regarding the central bank's shift toward reducing interest rates. Although it's widely anticipated that the Fed will keep interest rates unchanged this month, traders have priced in a 65.7% probability of a 25 basis point rate reduction in March, according to CMEGroup's FedWatch tool.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures<\/a><\/p>\n\n\n\n

Central Bank And Inflation<\/h2>\n\n\n\n

Richmond Fed President Thomas Barkin, a voting member in the FOMC's rate-setting committee, said recently that the U.S. central bank is \"making real progress\" towards taming inflation and a soft landing seeming \"increasingly conceivable\". Encouragingly, the American Association of Individual Investors (AAII) Sentiment Survey indicated a surge in optimism among individual investors regarding the short-term outlook for the U.S. stock market, reaching its peak level in more than two and a half years.<\/p>\n\n\n\n

Despite this, JPMorgan Asset Management advises investors to be cautious due to potential recession risks. At the same time, analysts at Soci\u00e9t\u00e9 G\u00e9n\u00e9rale anticipate a turbulent 2024 for U.S. stocks, projecting fluctuations that could involve nearing recent highs, encountering declines, and subsequently rebounding.<\/p>\n\n\n\n

This week will witness a series of labor market data releases, culminating in the government's December employment report on Friday. These reports could significantly influence the forecast for the Fed's interest rate trajectory this year, prompting investors to scrutinize the data. Jeffrey Roach, chief economist at LPL Financial, added<\/a>:<\/p>\n\n\n\n

 \"The job market is cooling and we should see confirmation of that in this Friday\u2019s jobs report\"<\/em><\/p>\n\n\n\n

Following the progress of Wall Street's main indexes seen last year, investors are still optimistic about the prospect of another robust year ahead. This optimism is rooted in the anticipation that a decelerating economy will result in a gentle landing rather than a full-scale recession, especially as the Fed initiates rate cuts in the first half of 2024.<\/p>\n","post_title":"Wall Street's Main Indexes Fell At The Beginning Of 2024 year. Investors Locked In Profits After A Strong 2023 And Wait For The Federal Reserve's Meeting","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-at-the-beginning-of-2024-year-investors-locked-in-profits-after-a-strong-2023-and-wait-for-the-federal-reserves-meeting","to_ping":"","pinged":"","post_modified":"2024-01-06 18:33:13","post_modified_gmt":"2024-01-06 07:33:13","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14888","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14629,"post_author":"15","post_date":"2023-12-15 19:46:11","post_date_gmt":"2023-12-15 08:46:11","post_content":"\n

BlackRock aims to facilitate the participation of Wall Street banks in its potential Bitcoin ETF approval. Recent SEC memo <\/a>detailing a late November meeting involving BlackRock, Nasdaq, and the Commission. During this meeting, they discussed feedback regarding BlackRock's Bitcoin ETF application.<\/p>\n\n\n\n

The proposed approach introduces an innovative method for the redemption of ETF shares. A Bitcoin ETF would enable fund investors to gain exposure to Bitcoin without directly purchasing or storing the cryptocurrency. While the SEC has hesitated to approve such ETFs due to concerns about Bitcoin market manipulation, this new strategy addresses those worries.<\/p>\n\n\n\n

The SEC has yet to decide on BlackRock's iShares Bitcoin Trust (IBTC) application, with the deadline set for January 15. Analysts anticipate a decision will be issued for several spot Bitcoin ETF applications earlier in January.<\/p>\n\n\n\n

See Related:<\/strong><\/em> Fidelity Joins BlackRock\u2019s Push For Ethereum ETF<\/a><\/p>\n\n\n\n

BlackRock ETF Details<\/h2>\n\n\n\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

Revenue Forecast And Increased Projection<\/h2>\n\n\n\n

It is also important to mention that Advanced Micro Devices saw a 3.3% decline as its first-quarter revenue forecast and increased projection for AI processors fell short of expectations. Other chip stocks including Nvidia, Broadcom, and Marvell dropped over 1% each. The attention of investors was also on the Federal Reserve's initial monetary policy decision of the year, and while it was widely anticipated that the Fed would maintain interest rates, many analysts said that the Fed is taking baby steps toward the cutting. Art Hogan, Chief Market Strategist of B.Riley Wealth, said<\/a>:<\/p>\n\n\n\n

\"Not surprisingly, I don't think the Fed wants to show their hand, especially, when they have a couple of months of data to collect before they need to. The good news is we can forget about any more tightening. The bad news is it's 'when', not 'if', they're going to cut rates, and that 'when' has been pushed out to what had been the fringes of consensus.\"<\/em><\/p>\n\n\n\n

Due to this, markets are showing some immediate disappointment as there's no explicit indication of imminent rate cuts. We're seeing an extremely neutral, non-committal statement from the Federal Reserve this Wednesday.<\/p>\n","post_title":"Wall Street's Main Indexes Fell As Alphabet's Projections For Rising AI Costs Dented Most Mega-Cap And Chip Stocks","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-as-alphabets-projections-for-rising-ai-costs-dented-most-mega-cap-and-chip-stocks","to_ping":"","pinged":"","post_modified":"2024-02-01 16:33:21","post_modified_gmt":"2024-02-01 05:33:21","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15225","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15094,"post_author":"18","post_date":"2024-01-26 02:18:51","post_date_gmt":"2024-01-25 15:18:51","post_content":"\n

As we enter the last week of January, whispers on Wall Street suggest a potential tantrum in U.S. short-term financing markets, with the storm possibly hitting as early as March. This could prompt the Federal Reserve to reassess its policies.<\/p>\n\n\n\n

As of now, banking executives are anticipating a series of events that may tighten the screws on short-term financing. The expiration of a Fed lending facility on March 11, coupled with limited adoption of the standing repo facility (SRF), is expected to reduce the available funding sources for banks. Simultaneously, increased demand for liquidity is on the horizon due to substantial U.S. government debt issuance and upcoming tax payments in March and April. Additionally, a move toward faster trade settlement in May could intensify the demand for short-term funding.<\/p>\n\n\n\n

Against this backdrop, the Federal Reserve has been steadily draining cash from the financial system by unwinding pandemic-era support. BNY Mellon strategists estimate a significant decrease in cash parked overnight with the Fed, potentially dropping below $200 billion by May. The overnight reverse repurchase agreements facility could even approach zero by mid-year. This reduction in excess liquidity may expose vulnerabilities in short-term financing markets.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Storm Clouds Gather Over Germany's Financial Horizon<\/a><\/p>\n\n\n\n

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

Spikes In Short Term Financing Markets<\/h2>\n\n\n\n

Sudden spikes in short-term financing markets can threaten financial stability, making it harder and more expensive for firms to secure necessary funds. This situation could expose lenders struggling to stabilize deposits after last year's banking crisis. As the Fed inches closer to its 2% inflation target, the risk of policy error looms large.<\/p>\n\n\n\n

If short-term financing markets experience a meltdown, it could signal the need for the Fed to ease policy. Slowing the pace of quantitative tightening (QT) is seen as a potential response. Despite the central bankers' insistence on needing more data before rate cuts, markets are already pricing in cuts by May.<\/p>\n\n\n\n

As we approach the critical months of March to May, the financial markets are at a crossroads. The potential shake-up in short-term financing markets could signal the Fed to reassess its policies. Market participants and investors must stay vigilant, and prepared for potential shifts in liquidity and policy adjustments. The coming months will \/reveal whether these concerns materialize into a significant market event or remain a contained storm in the financial teacup.<\/p>\n","post_title":"Understanding The Potential Shake-Up In U.S. Short-Term Financing Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"understanding-the-potential-shake-up-in-u-s-short-term-financing-markets","to_ping":"","pinged":"","post_modified":"2024-01-26 20:20:06","post_modified_gmt":"2024-01-26 09:20:06","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15094","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15043,"post_author":"14","post_date":"2024-01-19 05:56:40","post_date_gmt":"2024-01-18 18:56:40","post_content":"\n

Wall Street witnessed a significant stock decline this Wednesday following positive December U.S. retail sales data, which diminished the anticipation of an early initiation of the Federal Reserve's campaign to cut interest rates.<\/p>\n\n\n\n

Retail Sales Report <\/h2>\n\n\n\n

The December retail sales report from the Commerce Department (USRSL=ECI) depicted a robust consumer, responsible for approximately 70% of the U.S. economy. Despite facing the challenges of high inflation and a tight monetary policy, the consumer has shown resilience.<\/p>\n\n\n\n

The data revealed that discounts offered by retailers and a surge in motor vehicle acquisitions contributed to a greater-than-anticipated increase in U.S. retail sales, maintaining the economy on a robust trajectory in 2024. This bolstered the perspective that the Federal Reserve might not reduce interest rates as rapidly as initially anticipated for the current year.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

Anticipations among traders for a 25-basis-point Federal Reserve rate cut in March declined to 55%, down from approximately 60% before the release of the retail sales data. Ryan Detrick, chief market strategist at Carson Group in Omaha, said<\/a>:<\/p>\n\n\n\n

\"We had news that the U.S. consumer continues to be quite healthy, but that has increased anxiety that the Fed\u2019s first rate cut could potentially be pushed to May from March. Yields are also moving higher on the strong retail sales numbers, adding to near-term worries.\"<\/em><\/p>\n\n\n\n

US Stocks And Wall Street<\/h2>\n\n\n\n

It is also important to mention that a decline in U.S. stocks sent Wall Street's<\/a> \"fear gauge\" to a two-month high while JPMorgan analysts predict that the majority of negative consequences stemming from higher interest rates have not materialized yet. On Tuesday, Federal Reserve Governor Christopher Waller also emphasized that the central bank should refrain from hastily reducing interest rates until there is a clear indication that lower inflation is likely to persist.<\/p>\n\n\n\n

At the same time, the escalation of geopolitical uncertainties introduces an additional challenge and heightens the potential for unforeseen risks in both markets and economic performance. Considering these factors, the perspective is likely to stay cautious as long as interest rates remain significantly restrictive and the looming presence of geopolitical risks persists.<\/p>\n","post_title":"Wall Street Weakened As Retail Sales Data Hampers Expectations For A Cut In Interest Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-weakened-as-retail-sales-data-hampers-expectations-for-a-cut-in-interest-rates","to_ping":"","pinged":"","post_modified":"2024-01-19 05:56:51","post_modified_gmt":"2024-01-18 18:56:51","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15043","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14931,"post_author":"18","post_date":"2024-01-10 07:51:17","post_date_gmt":"2024-01-09 20:51:17","post_content":"\n

In a recent survey conducted by the New York Federal Reserve<\/a>, Wall Street's major banks have recalibrated their predictions regarding the Federal Reserve's balance sheet drawdown. This shift suggests that the U.S. central bank might conclude its quantitative tightening (QT) process later than initially anticipated.<\/p>\n\n\n\n

A Change in Perspective<\/h2>\n\n\n\n

Previously, primary dealers\u2014major banks\u2014projected that the QT process would conclude by the third quarter. However, the sentiment has evolved. According to the latest survey taken before the Fed's December 12-13 policy meeting, these banks now foresee the QT process ending in the fourth quarter.<\/p>\n\n\n\n

This adjustment carries significant implications. If these predictions materialize, the Federal Reserve's balance sheet<\/a> will likely shrink to approximately $6.75 trillion, down from its current level of roughly $7.764 trillion. Moreover, banks estimated that the central bank's reverse repo facility would hold $375 billion when QT concludes, a reduction from the anticipated $625 billion as forecasted in October.<\/p>\n\n\n\n

Federal Reserve Strategy<\/h2>\n\n\n\n

The quantitative tightening process has been an integral part of the Federal Reserve's strategy to combat inflation. Alongside rate hikes, the central bank initiated large-scale purchases of Treasury bonds and mortgage-backed securities during the COVID-19 pandemic's onset in 2020. This move led to an expansion of its holdings to approximately $9 trillion by mid-2022. However, since last year, the Fed has been gradually reducing its balance sheet size, although specific guidance on the timeline remains somewhat ambiguous.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

What This Means for the Economy<\/h2>\n\n\n\n

The recalibrated timeline for QT indicates a more prolonged period of balance sheet reduction. As the Federal Reserve continues to navigate its policy decisions, market participants, businesses, and consumers should monitor these developments closely. Changes in the balance sheet size can influence interest rates, liquidity conditions, and overall financial market dynamics.<\/p>\n\n\n\n

A Technical Perspective<\/h2>\n\n\n\n

From a technical standpoint, the Federal Reserve's<\/a> balance sheet management serves as a critical tool in its monetary policy arsenal. The evolving predictions by Wall Street's primary dealers underscore the complexities involved in forecasting economic variables, such as inflation and interest rates.<\/p>\n\n\n\n

As the QT process continues, policymakers and market participants must remain vigilant, considering the potential ramifications for financial stability and economic growth. This dynamic landscape necessitates ongoing analysis and adaptation to ensure that monetary policy objectives align with evolving economic conditions.<\/p>\n","post_title":"Decoding Wall Street's Shift: A Closer Look At Wall Street's Changing Perspective","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"decoding-wall-streets-shift-a-closer-look-at-wall-streets-changing-perspective","to_ping":"","pinged":"","post_modified":"2024-01-10 07:51:25","post_modified_gmt":"2024-01-09 20:51:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14931","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14888,"post_author":"14","post_date":"2024-01-06 18:33:09","post_date_gmt":"2024-01-06 07:33:09","post_content":"\n

Wall Street's main indexes fell at the beginning of the 2024 year as investors locked in profits after a very successful 2023 and are currently waiting for the Federal Reserve's<\/a> meeting that could offer hints on its interest rate path. Ken Polcari, managing partner at Kace Capital Advisors, said:<\/p>\n\n\n\n

\"The decline yesterday, today, and maybe for the next couple of weeks, is a result of people locking in profits and reconsidering what the narrative is - are rates going down five or six times as it appeared to be at the end of last year?\"<\/em><\/p>\n\n\n\n

\"\"
The Nasdaq Composite kicked off the year with a 1.5% drop pressured by a selloff in the tech sector<\/figcaption><\/figure>\n\n\n\n

The Fed's December meeting minutes are set to be disclosed at 2:00 p.m. ET, potentially providing information regarding the central bank's shift toward reducing interest rates. Although it's widely anticipated that the Fed will keep interest rates unchanged this month, traders have priced in a 65.7% probability of a 25 basis point rate reduction in March, according to CMEGroup's FedWatch tool.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures<\/a><\/p>\n\n\n\n

Central Bank And Inflation<\/h2>\n\n\n\n

Richmond Fed President Thomas Barkin, a voting member in the FOMC's rate-setting committee, said recently that the U.S. central bank is \"making real progress\" towards taming inflation and a soft landing seeming \"increasingly conceivable\". Encouragingly, the American Association of Individual Investors (AAII) Sentiment Survey indicated a surge in optimism among individual investors regarding the short-term outlook for the U.S. stock market, reaching its peak level in more than two and a half years.<\/p>\n\n\n\n

Despite this, JPMorgan Asset Management advises investors to be cautious due to potential recession risks. At the same time, analysts at Soci\u00e9t\u00e9 G\u00e9n\u00e9rale anticipate a turbulent 2024 for U.S. stocks, projecting fluctuations that could involve nearing recent highs, encountering declines, and subsequently rebounding.<\/p>\n\n\n\n

This week will witness a series of labor market data releases, culminating in the government's December employment report on Friday. These reports could significantly influence the forecast for the Fed's interest rate trajectory this year, prompting investors to scrutinize the data. Jeffrey Roach, chief economist at LPL Financial, added<\/a>:<\/p>\n\n\n\n

 \"The job market is cooling and we should see confirmation of that in this Friday\u2019s jobs report\"<\/em><\/p>\n\n\n\n

Following the progress of Wall Street's main indexes seen last year, investors are still optimistic about the prospect of another robust year ahead. This optimism is rooted in the anticipation that a decelerating economy will result in a gentle landing rather than a full-scale recession, especially as the Fed initiates rate cuts in the first half of 2024.<\/p>\n","post_title":"Wall Street's Main Indexes Fell At The Beginning Of 2024 year. Investors Locked In Profits After A Strong 2023 And Wait For The Federal Reserve's Meeting","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-at-the-beginning-of-2024-year-investors-locked-in-profits-after-a-strong-2023-and-wait-for-the-federal-reserves-meeting","to_ping":"","pinged":"","post_modified":"2024-01-06 18:33:13","post_modified_gmt":"2024-01-06 07:33:13","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14888","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14629,"post_author":"15","post_date":"2023-12-15 19:46:11","post_date_gmt":"2023-12-15 08:46:11","post_content":"\n

BlackRock aims to facilitate the participation of Wall Street banks in its potential Bitcoin ETF approval. Recent SEC memo <\/a>detailing a late November meeting involving BlackRock, Nasdaq, and the Commission. During this meeting, they discussed feedback regarding BlackRock's Bitcoin ETF application.<\/p>\n\n\n\n

The proposed approach introduces an innovative method for the redemption of ETF shares. A Bitcoin ETF would enable fund investors to gain exposure to Bitcoin without directly purchasing or storing the cryptocurrency. While the SEC has hesitated to approve such ETFs due to concerns about Bitcoin market manipulation, this new strategy addresses those worries.<\/p>\n\n\n\n

The SEC has yet to decide on BlackRock's iShares Bitcoin Trust (IBTC) application, with the deadline set for January 15. Analysts anticipate a decision will be issued for several spot Bitcoin ETF applications earlier in January.<\/p>\n\n\n\n

See Related:<\/strong><\/em> Fidelity Joins BlackRock\u2019s Push For Ethereum ETF<\/a><\/p>\n\n\n\n

BlackRock ETF Details<\/h2>\n\n\n\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

See Related: New Bitcoin Core Update May Natively Support Apple M1 Chips<\/a><\/p>\n\n\n\n

Revenue Forecast And Increased Projection<\/h2>\n\n\n\n

It is also important to mention that Advanced Micro Devices saw a 3.3% decline as its first-quarter revenue forecast and increased projection for AI processors fell short of expectations. Other chip stocks including Nvidia, Broadcom, and Marvell dropped over 1% each. The attention of investors was also on the Federal Reserve's initial monetary policy decision of the year, and while it was widely anticipated that the Fed would maintain interest rates, many analysts said that the Fed is taking baby steps toward the cutting. Art Hogan, Chief Market Strategist of B.Riley Wealth, said<\/a>:<\/p>\n\n\n\n

\"Not surprisingly, I don't think the Fed wants to show their hand, especially, when they have a couple of months of data to collect before they need to. The good news is we can forget about any more tightening. The bad news is it's 'when', not 'if', they're going to cut rates, and that 'when' has been pushed out to what had been the fringes of consensus.\"<\/em><\/p>\n\n\n\n

Due to this, markets are showing some immediate disappointment as there's no explicit indication of imminent rate cuts. We're seeing an extremely neutral, non-committal statement from the Federal Reserve this Wednesday.<\/p>\n","post_title":"Wall Street's Main Indexes Fell As Alphabet's Projections For Rising AI Costs Dented Most Mega-Cap And Chip Stocks","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-as-alphabets-projections-for-rising-ai-costs-dented-most-mega-cap-and-chip-stocks","to_ping":"","pinged":"","post_modified":"2024-02-01 16:33:21","post_modified_gmt":"2024-02-01 05:33:21","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15225","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15094,"post_author":"18","post_date":"2024-01-26 02:18:51","post_date_gmt":"2024-01-25 15:18:51","post_content":"\n

As we enter the last week of January, whispers on Wall Street suggest a potential tantrum in U.S. short-term financing markets, with the storm possibly hitting as early as March. This could prompt the Federal Reserve to reassess its policies.<\/p>\n\n\n\n

As of now, banking executives are anticipating a series of events that may tighten the screws on short-term financing. The expiration of a Fed lending facility on March 11, coupled with limited adoption of the standing repo facility (SRF), is expected to reduce the available funding sources for banks. Simultaneously, increased demand for liquidity is on the horizon due to substantial U.S. government debt issuance and upcoming tax payments in March and April. Additionally, a move toward faster trade settlement in May could intensify the demand for short-term funding.<\/p>\n\n\n\n

Against this backdrop, the Federal Reserve has been steadily draining cash from the financial system by unwinding pandemic-era support. BNY Mellon strategists estimate a significant decrease in cash parked overnight with the Fed, potentially dropping below $200 billion by May. The overnight reverse repurchase agreements facility could even approach zero by mid-year. This reduction in excess liquidity may expose vulnerabilities in short-term financing markets.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Storm Clouds Gather Over Germany's Financial Horizon<\/a><\/p>\n\n\n\n

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

Spikes In Short Term Financing Markets<\/h2>\n\n\n\n

Sudden spikes in short-term financing markets can threaten financial stability, making it harder and more expensive for firms to secure necessary funds. This situation could expose lenders struggling to stabilize deposits after last year's banking crisis. As the Fed inches closer to its 2% inflation target, the risk of policy error looms large.<\/p>\n\n\n\n

If short-term financing markets experience a meltdown, it could signal the need for the Fed to ease policy. Slowing the pace of quantitative tightening (QT) is seen as a potential response. Despite the central bankers' insistence on needing more data before rate cuts, markets are already pricing in cuts by May.<\/p>\n\n\n\n

As we approach the critical months of March to May, the financial markets are at a crossroads. The potential shake-up in short-term financing markets could signal the Fed to reassess its policies. Market participants and investors must stay vigilant, and prepared for potential shifts in liquidity and policy adjustments. The coming months will \/reveal whether these concerns materialize into a significant market event or remain a contained storm in the financial teacup.<\/p>\n","post_title":"Understanding The Potential Shake-Up In U.S. Short-Term Financing Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"understanding-the-potential-shake-up-in-u-s-short-term-financing-markets","to_ping":"","pinged":"","post_modified":"2024-01-26 20:20:06","post_modified_gmt":"2024-01-26 09:20:06","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15094","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15043,"post_author":"14","post_date":"2024-01-19 05:56:40","post_date_gmt":"2024-01-18 18:56:40","post_content":"\n

Wall Street witnessed a significant stock decline this Wednesday following positive December U.S. retail sales data, which diminished the anticipation of an early initiation of the Federal Reserve's campaign to cut interest rates.<\/p>\n\n\n\n

Retail Sales Report <\/h2>\n\n\n\n

The December retail sales report from the Commerce Department (USRSL=ECI) depicted a robust consumer, responsible for approximately 70% of the U.S. economy. Despite facing the challenges of high inflation and a tight monetary policy, the consumer has shown resilience.<\/p>\n\n\n\n

The data revealed that discounts offered by retailers and a surge in motor vehicle acquisitions contributed to a greater-than-anticipated increase in U.S. retail sales, maintaining the economy on a robust trajectory in 2024. This bolstered the perspective that the Federal Reserve might not reduce interest rates as rapidly as initially anticipated for the current year.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

Anticipations among traders for a 25-basis-point Federal Reserve rate cut in March declined to 55%, down from approximately 60% before the release of the retail sales data. Ryan Detrick, chief market strategist at Carson Group in Omaha, said<\/a>:<\/p>\n\n\n\n

\"We had news that the U.S. consumer continues to be quite healthy, but that has increased anxiety that the Fed\u2019s first rate cut could potentially be pushed to May from March. Yields are also moving higher on the strong retail sales numbers, adding to near-term worries.\"<\/em><\/p>\n\n\n\n

US Stocks And Wall Street<\/h2>\n\n\n\n

It is also important to mention that a decline in U.S. stocks sent Wall Street's<\/a> \"fear gauge\" to a two-month high while JPMorgan analysts predict that the majority of negative consequences stemming from higher interest rates have not materialized yet. On Tuesday, Federal Reserve Governor Christopher Waller also emphasized that the central bank should refrain from hastily reducing interest rates until there is a clear indication that lower inflation is likely to persist.<\/p>\n\n\n\n

At the same time, the escalation of geopolitical uncertainties introduces an additional challenge and heightens the potential for unforeseen risks in both markets and economic performance. Considering these factors, the perspective is likely to stay cautious as long as interest rates remain significantly restrictive and the looming presence of geopolitical risks persists.<\/p>\n","post_title":"Wall Street Weakened As Retail Sales Data Hampers Expectations For A Cut In Interest Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-weakened-as-retail-sales-data-hampers-expectations-for-a-cut-in-interest-rates","to_ping":"","pinged":"","post_modified":"2024-01-19 05:56:51","post_modified_gmt":"2024-01-18 18:56:51","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15043","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14931,"post_author":"18","post_date":"2024-01-10 07:51:17","post_date_gmt":"2024-01-09 20:51:17","post_content":"\n

In a recent survey conducted by the New York Federal Reserve<\/a>, Wall Street's major banks have recalibrated their predictions regarding the Federal Reserve's balance sheet drawdown. This shift suggests that the U.S. central bank might conclude its quantitative tightening (QT) process later than initially anticipated.<\/p>\n\n\n\n

A Change in Perspective<\/h2>\n\n\n\n

Previously, primary dealers\u2014major banks\u2014projected that the QT process would conclude by the third quarter. However, the sentiment has evolved. According to the latest survey taken before the Fed's December 12-13 policy meeting, these banks now foresee the QT process ending in the fourth quarter.<\/p>\n\n\n\n

This adjustment carries significant implications. If these predictions materialize, the Federal Reserve's balance sheet<\/a> will likely shrink to approximately $6.75 trillion, down from its current level of roughly $7.764 trillion. Moreover, banks estimated that the central bank's reverse repo facility would hold $375 billion when QT concludes, a reduction from the anticipated $625 billion as forecasted in October.<\/p>\n\n\n\n

Federal Reserve Strategy<\/h2>\n\n\n\n

The quantitative tightening process has been an integral part of the Federal Reserve's strategy to combat inflation. Alongside rate hikes, the central bank initiated large-scale purchases of Treasury bonds and mortgage-backed securities during the COVID-19 pandemic's onset in 2020. This move led to an expansion of its holdings to approximately $9 trillion by mid-2022. However, since last year, the Fed has been gradually reducing its balance sheet size, although specific guidance on the timeline remains somewhat ambiguous.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

What This Means for the Economy<\/h2>\n\n\n\n

The recalibrated timeline for QT indicates a more prolonged period of balance sheet reduction. As the Federal Reserve continues to navigate its policy decisions, market participants, businesses, and consumers should monitor these developments closely. Changes in the balance sheet size can influence interest rates, liquidity conditions, and overall financial market dynamics.<\/p>\n\n\n\n

A Technical Perspective<\/h2>\n\n\n\n

From a technical standpoint, the Federal Reserve's<\/a> balance sheet management serves as a critical tool in its monetary policy arsenal. The evolving predictions by Wall Street's primary dealers underscore the complexities involved in forecasting economic variables, such as inflation and interest rates.<\/p>\n\n\n\n

As the QT process continues, policymakers and market participants must remain vigilant, considering the potential ramifications for financial stability and economic growth. This dynamic landscape necessitates ongoing analysis and adaptation to ensure that monetary policy objectives align with evolving economic conditions.<\/p>\n","post_title":"Decoding Wall Street's Shift: A Closer Look At Wall Street's Changing Perspective","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"decoding-wall-streets-shift-a-closer-look-at-wall-streets-changing-perspective","to_ping":"","pinged":"","post_modified":"2024-01-10 07:51:25","post_modified_gmt":"2024-01-09 20:51:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14931","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14888,"post_author":"14","post_date":"2024-01-06 18:33:09","post_date_gmt":"2024-01-06 07:33:09","post_content":"\n

Wall Street's main indexes fell at the beginning of the 2024 year as investors locked in profits after a very successful 2023 and are currently waiting for the Federal Reserve's<\/a> meeting that could offer hints on its interest rate path. Ken Polcari, managing partner at Kace Capital Advisors, said:<\/p>\n\n\n\n

\"The decline yesterday, today, and maybe for the next couple of weeks, is a result of people locking in profits and reconsidering what the narrative is - are rates going down five or six times as it appeared to be at the end of last year?\"<\/em><\/p>\n\n\n\n

\"\"
The Nasdaq Composite kicked off the year with a 1.5% drop pressured by a selloff in the tech sector<\/figcaption><\/figure>\n\n\n\n

The Fed's December meeting minutes are set to be disclosed at 2:00 p.m. ET, potentially providing information regarding the central bank's shift toward reducing interest rates. Although it's widely anticipated that the Fed will keep interest rates unchanged this month, traders have priced in a 65.7% probability of a 25 basis point rate reduction in March, according to CMEGroup's FedWatch tool.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures<\/a><\/p>\n\n\n\n

Central Bank And Inflation<\/h2>\n\n\n\n

Richmond Fed President Thomas Barkin, a voting member in the FOMC's rate-setting committee, said recently that the U.S. central bank is \"making real progress\" towards taming inflation and a soft landing seeming \"increasingly conceivable\". Encouragingly, the American Association of Individual Investors (AAII) Sentiment Survey indicated a surge in optimism among individual investors regarding the short-term outlook for the U.S. stock market, reaching its peak level in more than two and a half years.<\/p>\n\n\n\n

Despite this, JPMorgan Asset Management advises investors to be cautious due to potential recession risks. At the same time, analysts at Soci\u00e9t\u00e9 G\u00e9n\u00e9rale anticipate a turbulent 2024 for U.S. stocks, projecting fluctuations that could involve nearing recent highs, encountering declines, and subsequently rebounding.<\/p>\n\n\n\n

This week will witness a series of labor market data releases, culminating in the government's December employment report on Friday. These reports could significantly influence the forecast for the Fed's interest rate trajectory this year, prompting investors to scrutinize the data. Jeffrey Roach, chief economist at LPL Financial, added<\/a>:<\/p>\n\n\n\n

 \"The job market is cooling and we should see confirmation of that in this Friday\u2019s jobs report\"<\/em><\/p>\n\n\n\n

Following the progress of Wall Street's main indexes seen last year, investors are still optimistic about the prospect of another robust year ahead. This optimism is rooted in the anticipation that a decelerating economy will result in a gentle landing rather than a full-scale recession, especially as the Fed initiates rate cuts in the first half of 2024.<\/p>\n","post_title":"Wall Street's Main Indexes Fell At The Beginning Of 2024 year. Investors Locked In Profits After A Strong 2023 And Wait For The Federal Reserve's Meeting","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-at-the-beginning-of-2024-year-investors-locked-in-profits-after-a-strong-2023-and-wait-for-the-federal-reserves-meeting","to_ping":"","pinged":"","post_modified":"2024-01-06 18:33:13","post_modified_gmt":"2024-01-06 07:33:13","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14888","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14629,"post_author":"15","post_date":"2023-12-15 19:46:11","post_date_gmt":"2023-12-15 08:46:11","post_content":"\n

BlackRock aims to facilitate the participation of Wall Street banks in its potential Bitcoin ETF approval. Recent SEC memo <\/a>detailing a late November meeting involving BlackRock, Nasdaq, and the Commission. During this meeting, they discussed feedback regarding BlackRock's Bitcoin ETF application.<\/p>\n\n\n\n

The proposed approach introduces an innovative method for the redemption of ETF shares. A Bitcoin ETF would enable fund investors to gain exposure to Bitcoin without directly purchasing or storing the cryptocurrency. While the SEC has hesitated to approve such ETFs due to concerns about Bitcoin market manipulation, this new strategy addresses those worries.<\/p>\n\n\n\n

The SEC has yet to decide on BlackRock's iShares Bitcoin Trust (IBTC) application, with the deadline set for January 15. Analysts anticipate a decision will be issued for several spot Bitcoin ETF applications earlier in January.<\/p>\n\n\n\n

See Related:<\/strong><\/em> Fidelity Joins BlackRock\u2019s Push For Ethereum ETF<\/a><\/p>\n\n\n\n

BlackRock ETF Details<\/h2>\n\n\n\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

These results and forecasts from big tech names, along with Tesla's growth warning last week, have reignited attention on the risks associated with the significant influence of mega-cap companies in the S&P 500 which has hit record highs in recent weeks. Apple, Meta Platforms, and Amazon.com set to report earnings on Thursday, fell over 1% each.<\/p>\n\n\n\n

See Related: New Bitcoin Core Update May Natively Support Apple M1 Chips<\/a><\/p>\n\n\n\n

Revenue Forecast And Increased Projection<\/h2>\n\n\n\n

It is also important to mention that Advanced Micro Devices saw a 3.3% decline as its first-quarter revenue forecast and increased projection for AI processors fell short of expectations. Other chip stocks including Nvidia, Broadcom, and Marvell dropped over 1% each. The attention of investors was also on the Federal Reserve's initial monetary policy decision of the year, and while it was widely anticipated that the Fed would maintain interest rates, many analysts said that the Fed is taking baby steps toward the cutting. Art Hogan, Chief Market Strategist of B.Riley Wealth, said<\/a>:<\/p>\n\n\n\n

\"Not surprisingly, I don't think the Fed wants to show their hand, especially, when they have a couple of months of data to collect before they need to. The good news is we can forget about any more tightening. The bad news is it's 'when', not 'if', they're going to cut rates, and that 'when' has been pushed out to what had been the fringes of consensus.\"<\/em><\/p>\n\n\n\n

Due to this, markets are showing some immediate disappointment as there's no explicit indication of imminent rate cuts. We're seeing an extremely neutral, non-committal statement from the Federal Reserve this Wednesday.<\/p>\n","post_title":"Wall Street's Main Indexes Fell As Alphabet's Projections For Rising AI Costs Dented Most Mega-Cap And Chip Stocks","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-as-alphabets-projections-for-rising-ai-costs-dented-most-mega-cap-and-chip-stocks","to_ping":"","pinged":"","post_modified":"2024-02-01 16:33:21","post_modified_gmt":"2024-02-01 05:33:21","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15225","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15094,"post_author":"18","post_date":"2024-01-26 02:18:51","post_date_gmt":"2024-01-25 15:18:51","post_content":"\n

As we enter the last week of January, whispers on Wall Street suggest a potential tantrum in U.S. short-term financing markets, with the storm possibly hitting as early as March. This could prompt the Federal Reserve to reassess its policies.<\/p>\n\n\n\n

As of now, banking executives are anticipating a series of events that may tighten the screws on short-term financing. The expiration of a Fed lending facility on March 11, coupled with limited adoption of the standing repo facility (SRF), is expected to reduce the available funding sources for banks. Simultaneously, increased demand for liquidity is on the horizon due to substantial U.S. government debt issuance and upcoming tax payments in March and April. Additionally, a move toward faster trade settlement in May could intensify the demand for short-term funding.<\/p>\n\n\n\n

Against this backdrop, the Federal Reserve has been steadily draining cash from the financial system by unwinding pandemic-era support. BNY Mellon strategists estimate a significant decrease in cash parked overnight with the Fed, potentially dropping below $200 billion by May. The overnight reverse repurchase agreements facility could even approach zero by mid-year. This reduction in excess liquidity may expose vulnerabilities in short-term financing markets.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Storm Clouds Gather Over Germany's Financial Horizon<\/a><\/p>\n\n\n\n

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

Spikes In Short Term Financing Markets<\/h2>\n\n\n\n

Sudden spikes in short-term financing markets can threaten financial stability, making it harder and more expensive for firms to secure necessary funds. This situation could expose lenders struggling to stabilize deposits after last year's banking crisis. As the Fed inches closer to its 2% inflation target, the risk of policy error looms large.<\/p>\n\n\n\n

If short-term financing markets experience a meltdown, it could signal the need for the Fed to ease policy. Slowing the pace of quantitative tightening (QT) is seen as a potential response. Despite the central bankers' insistence on needing more data before rate cuts, markets are already pricing in cuts by May.<\/p>\n\n\n\n

As we approach the critical months of March to May, the financial markets are at a crossroads. The potential shake-up in short-term financing markets could signal the Fed to reassess its policies. Market participants and investors must stay vigilant, and prepared for potential shifts in liquidity and policy adjustments. The coming months will \/reveal whether these concerns materialize into a significant market event or remain a contained storm in the financial teacup.<\/p>\n","post_title":"Understanding The Potential Shake-Up In U.S. Short-Term Financing Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"understanding-the-potential-shake-up-in-u-s-short-term-financing-markets","to_ping":"","pinged":"","post_modified":"2024-01-26 20:20:06","post_modified_gmt":"2024-01-26 09:20:06","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15094","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15043,"post_author":"14","post_date":"2024-01-19 05:56:40","post_date_gmt":"2024-01-18 18:56:40","post_content":"\n

Wall Street witnessed a significant stock decline this Wednesday following positive December U.S. retail sales data, which diminished the anticipation of an early initiation of the Federal Reserve's campaign to cut interest rates.<\/p>\n\n\n\n

Retail Sales Report <\/h2>\n\n\n\n

The December retail sales report from the Commerce Department (USRSL=ECI) depicted a robust consumer, responsible for approximately 70% of the U.S. economy. Despite facing the challenges of high inflation and a tight monetary policy, the consumer has shown resilience.<\/p>\n\n\n\n

The data revealed that discounts offered by retailers and a surge in motor vehicle acquisitions contributed to a greater-than-anticipated increase in U.S. retail sales, maintaining the economy on a robust trajectory in 2024. This bolstered the perspective that the Federal Reserve might not reduce interest rates as rapidly as initially anticipated for the current year.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

Anticipations among traders for a 25-basis-point Federal Reserve rate cut in March declined to 55%, down from approximately 60% before the release of the retail sales data. Ryan Detrick, chief market strategist at Carson Group in Omaha, said<\/a>:<\/p>\n\n\n\n

\"We had news that the U.S. consumer continues to be quite healthy, but that has increased anxiety that the Fed\u2019s first rate cut could potentially be pushed to May from March. Yields are also moving higher on the strong retail sales numbers, adding to near-term worries.\"<\/em><\/p>\n\n\n\n

US Stocks And Wall Street<\/h2>\n\n\n\n

It is also important to mention that a decline in U.S. stocks sent Wall Street's<\/a> \"fear gauge\" to a two-month high while JPMorgan analysts predict that the majority of negative consequences stemming from higher interest rates have not materialized yet. On Tuesday, Federal Reserve Governor Christopher Waller also emphasized that the central bank should refrain from hastily reducing interest rates until there is a clear indication that lower inflation is likely to persist.<\/p>\n\n\n\n

At the same time, the escalation of geopolitical uncertainties introduces an additional challenge and heightens the potential for unforeseen risks in both markets and economic performance. Considering these factors, the perspective is likely to stay cautious as long as interest rates remain significantly restrictive and the looming presence of geopolitical risks persists.<\/p>\n","post_title":"Wall Street Weakened As Retail Sales Data Hampers Expectations For A Cut In Interest Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-weakened-as-retail-sales-data-hampers-expectations-for-a-cut-in-interest-rates","to_ping":"","pinged":"","post_modified":"2024-01-19 05:56:51","post_modified_gmt":"2024-01-18 18:56:51","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15043","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14931,"post_author":"18","post_date":"2024-01-10 07:51:17","post_date_gmt":"2024-01-09 20:51:17","post_content":"\n

In a recent survey conducted by the New York Federal Reserve<\/a>, Wall Street's major banks have recalibrated their predictions regarding the Federal Reserve's balance sheet drawdown. This shift suggests that the U.S. central bank might conclude its quantitative tightening (QT) process later than initially anticipated.<\/p>\n\n\n\n

A Change in Perspective<\/h2>\n\n\n\n

Previously, primary dealers\u2014major banks\u2014projected that the QT process would conclude by the third quarter. However, the sentiment has evolved. According to the latest survey taken before the Fed's December 12-13 policy meeting, these banks now foresee the QT process ending in the fourth quarter.<\/p>\n\n\n\n

This adjustment carries significant implications. If these predictions materialize, the Federal Reserve's balance sheet<\/a> will likely shrink to approximately $6.75 trillion, down from its current level of roughly $7.764 trillion. Moreover, banks estimated that the central bank's reverse repo facility would hold $375 billion when QT concludes, a reduction from the anticipated $625 billion as forecasted in October.<\/p>\n\n\n\n

Federal Reserve Strategy<\/h2>\n\n\n\n

The quantitative tightening process has been an integral part of the Federal Reserve's strategy to combat inflation. Alongside rate hikes, the central bank initiated large-scale purchases of Treasury bonds and mortgage-backed securities during the COVID-19 pandemic's onset in 2020. This move led to an expansion of its holdings to approximately $9 trillion by mid-2022. However, since last year, the Fed has been gradually reducing its balance sheet size, although specific guidance on the timeline remains somewhat ambiguous.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

What This Means for the Economy<\/h2>\n\n\n\n

The recalibrated timeline for QT indicates a more prolonged period of balance sheet reduction. As the Federal Reserve continues to navigate its policy decisions, market participants, businesses, and consumers should monitor these developments closely. Changes in the balance sheet size can influence interest rates, liquidity conditions, and overall financial market dynamics.<\/p>\n\n\n\n

A Technical Perspective<\/h2>\n\n\n\n

From a technical standpoint, the Federal Reserve's<\/a> balance sheet management serves as a critical tool in its monetary policy arsenal. The evolving predictions by Wall Street's primary dealers underscore the complexities involved in forecasting economic variables, such as inflation and interest rates.<\/p>\n\n\n\n

As the QT process continues, policymakers and market participants must remain vigilant, considering the potential ramifications for financial stability and economic growth. This dynamic landscape necessitates ongoing analysis and adaptation to ensure that monetary policy objectives align with evolving economic conditions.<\/p>\n","post_title":"Decoding Wall Street's Shift: A Closer Look At Wall Street's Changing Perspective","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"decoding-wall-streets-shift-a-closer-look-at-wall-streets-changing-perspective","to_ping":"","pinged":"","post_modified":"2024-01-10 07:51:25","post_modified_gmt":"2024-01-09 20:51:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14931","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14888,"post_author":"14","post_date":"2024-01-06 18:33:09","post_date_gmt":"2024-01-06 07:33:09","post_content":"\n

Wall Street's main indexes fell at the beginning of the 2024 year as investors locked in profits after a very successful 2023 and are currently waiting for the Federal Reserve's<\/a> meeting that could offer hints on its interest rate path. Ken Polcari, managing partner at Kace Capital Advisors, said:<\/p>\n\n\n\n

\"The decline yesterday, today, and maybe for the next couple of weeks, is a result of people locking in profits and reconsidering what the narrative is - are rates going down five or six times as it appeared to be at the end of last year?\"<\/em><\/p>\n\n\n\n

\"\"
The Nasdaq Composite kicked off the year with a 1.5% drop pressured by a selloff in the tech sector<\/figcaption><\/figure>\n\n\n\n

The Fed's December meeting minutes are set to be disclosed at 2:00 p.m. ET, potentially providing information regarding the central bank's shift toward reducing interest rates. Although it's widely anticipated that the Fed will keep interest rates unchanged this month, traders have priced in a 65.7% probability of a 25 basis point rate reduction in March, according to CMEGroup's FedWatch tool.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures<\/a><\/p>\n\n\n\n

Central Bank And Inflation<\/h2>\n\n\n\n

Richmond Fed President Thomas Barkin, a voting member in the FOMC's rate-setting committee, said recently that the U.S. central bank is \"making real progress\" towards taming inflation and a soft landing seeming \"increasingly conceivable\". Encouragingly, the American Association of Individual Investors (AAII) Sentiment Survey indicated a surge in optimism among individual investors regarding the short-term outlook for the U.S. stock market, reaching its peak level in more than two and a half years.<\/p>\n\n\n\n

Despite this, JPMorgan Asset Management advises investors to be cautious due to potential recession risks. At the same time, analysts at Soci\u00e9t\u00e9 G\u00e9n\u00e9rale anticipate a turbulent 2024 for U.S. stocks, projecting fluctuations that could involve nearing recent highs, encountering declines, and subsequently rebounding.<\/p>\n\n\n\n

This week will witness a series of labor market data releases, culminating in the government's December employment report on Friday. These reports could significantly influence the forecast for the Fed's interest rate trajectory this year, prompting investors to scrutinize the data. Jeffrey Roach, chief economist at LPL Financial, added<\/a>:<\/p>\n\n\n\n

 \"The job market is cooling and we should see confirmation of that in this Friday\u2019s jobs report\"<\/em><\/p>\n\n\n\n

Following the progress of Wall Street's main indexes seen last year, investors are still optimistic about the prospect of another robust year ahead. This optimism is rooted in the anticipation that a decelerating economy will result in a gentle landing rather than a full-scale recession, especially as the Fed initiates rate cuts in the first half of 2024.<\/p>\n","post_title":"Wall Street's Main Indexes Fell At The Beginning Of 2024 year. Investors Locked In Profits After A Strong 2023 And Wait For The Federal Reserve's Meeting","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-at-the-beginning-of-2024-year-investors-locked-in-profits-after-a-strong-2023-and-wait-for-the-federal-reserves-meeting","to_ping":"","pinged":"","post_modified":"2024-01-06 18:33:13","post_modified_gmt":"2024-01-06 07:33:13","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14888","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14629,"post_author":"15","post_date":"2023-12-15 19:46:11","post_date_gmt":"2023-12-15 08:46:11","post_content":"\n

BlackRock aims to facilitate the participation of Wall Street banks in its potential Bitcoin ETF approval. Recent SEC memo <\/a>detailing a late November meeting involving BlackRock, Nasdaq, and the Commission. During this meeting, they discussed feedback regarding BlackRock's Bitcoin ETF application.<\/p>\n\n\n\n

The proposed approach introduces an innovative method for the redemption of ETF shares. A Bitcoin ETF would enable fund investors to gain exposure to Bitcoin without directly purchasing or storing the cryptocurrency. While the SEC has hesitated to approve such ETFs due to concerns about Bitcoin market manipulation, this new strategy addresses those worries.<\/p>\n\n\n\n

The SEC has yet to decide on BlackRock's iShares Bitcoin Trust (IBTC) application, with the deadline set for January 15. Analysts anticipate a decision will be issued for several spot Bitcoin ETF applications earlier in January.<\/p>\n\n\n\n

See Related:<\/strong><\/em> Fidelity Joins BlackRock\u2019s Push For Ethereum ETF<\/a><\/p>\n\n\n\n

BlackRock ETF Details<\/h2>\n\n\n\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n
\"\"<\/figure>\n\n\n\n

These results and forecasts from big tech names, along with Tesla's growth warning last week, have reignited attention on the risks associated with the significant influence of mega-cap companies in the S&P 500 which has hit record highs in recent weeks. Apple, Meta Platforms, and Amazon.com set to report earnings on Thursday, fell over 1% each.<\/p>\n\n\n\n

See Related: New Bitcoin Core Update May Natively Support Apple M1 Chips<\/a><\/p>\n\n\n\n

Revenue Forecast And Increased Projection<\/h2>\n\n\n\n

It is also important to mention that Advanced Micro Devices saw a 3.3% decline as its first-quarter revenue forecast and increased projection for AI processors fell short of expectations. Other chip stocks including Nvidia, Broadcom, and Marvell dropped over 1% each. The attention of investors was also on the Federal Reserve's initial monetary policy decision of the year, and while it was widely anticipated that the Fed would maintain interest rates, many analysts said that the Fed is taking baby steps toward the cutting. Art Hogan, Chief Market Strategist of B.Riley Wealth, said<\/a>:<\/p>\n\n\n\n

\"Not surprisingly, I don't think the Fed wants to show their hand, especially, when they have a couple of months of data to collect before they need to. The good news is we can forget about any more tightening. The bad news is it's 'when', not 'if', they're going to cut rates, and that 'when' has been pushed out to what had been the fringes of consensus.\"<\/em><\/p>\n\n\n\n

Due to this, markets are showing some immediate disappointment as there's no explicit indication of imminent rate cuts. We're seeing an extremely neutral, non-committal statement from the Federal Reserve this Wednesday.<\/p>\n","post_title":"Wall Street's Main Indexes Fell As Alphabet's Projections For Rising AI Costs Dented Most Mega-Cap And Chip Stocks","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-as-alphabets-projections-for-rising-ai-costs-dented-most-mega-cap-and-chip-stocks","to_ping":"","pinged":"","post_modified":"2024-02-01 16:33:21","post_modified_gmt":"2024-02-01 05:33:21","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15225","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15094,"post_author":"18","post_date":"2024-01-26 02:18:51","post_date_gmt":"2024-01-25 15:18:51","post_content":"\n

As we enter the last week of January, whispers on Wall Street suggest a potential tantrum in U.S. short-term financing markets, with the storm possibly hitting as early as March. This could prompt the Federal Reserve to reassess its policies.<\/p>\n\n\n\n

As of now, banking executives are anticipating a series of events that may tighten the screws on short-term financing. The expiration of a Fed lending facility on March 11, coupled with limited adoption of the standing repo facility (SRF), is expected to reduce the available funding sources for banks. Simultaneously, increased demand for liquidity is on the horizon due to substantial U.S. government debt issuance and upcoming tax payments in March and April. Additionally, a move toward faster trade settlement in May could intensify the demand for short-term funding.<\/p>\n\n\n\n

Against this backdrop, the Federal Reserve has been steadily draining cash from the financial system by unwinding pandemic-era support. BNY Mellon strategists estimate a significant decrease in cash parked overnight with the Fed, potentially dropping below $200 billion by May. The overnight reverse repurchase agreements facility could even approach zero by mid-year. This reduction in excess liquidity may expose vulnerabilities in short-term financing markets.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Storm Clouds Gather Over Germany's Financial Horizon<\/a><\/p>\n\n\n\n

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

Spikes In Short Term Financing Markets<\/h2>\n\n\n\n

Sudden spikes in short-term financing markets can threaten financial stability, making it harder and more expensive for firms to secure necessary funds. This situation could expose lenders struggling to stabilize deposits after last year's banking crisis. As the Fed inches closer to its 2% inflation target, the risk of policy error looms large.<\/p>\n\n\n\n

If short-term financing markets experience a meltdown, it could signal the need for the Fed to ease policy. Slowing the pace of quantitative tightening (QT) is seen as a potential response. Despite the central bankers' insistence on needing more data before rate cuts, markets are already pricing in cuts by May.<\/p>\n\n\n\n

As we approach the critical months of March to May, the financial markets are at a crossroads. The potential shake-up in short-term financing markets could signal the Fed to reassess its policies. Market participants and investors must stay vigilant, and prepared for potential shifts in liquidity and policy adjustments. The coming months will \/reveal whether these concerns materialize into a significant market event or remain a contained storm in the financial teacup.<\/p>\n","post_title":"Understanding The Potential Shake-Up In U.S. Short-Term Financing Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"understanding-the-potential-shake-up-in-u-s-short-term-financing-markets","to_ping":"","pinged":"","post_modified":"2024-01-26 20:20:06","post_modified_gmt":"2024-01-26 09:20:06","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15094","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15043,"post_author":"14","post_date":"2024-01-19 05:56:40","post_date_gmt":"2024-01-18 18:56:40","post_content":"\n

Wall Street witnessed a significant stock decline this Wednesday following positive December U.S. retail sales data, which diminished the anticipation of an early initiation of the Federal Reserve's campaign to cut interest rates.<\/p>\n\n\n\n

Retail Sales Report <\/h2>\n\n\n\n

The December retail sales report from the Commerce Department (USRSL=ECI) depicted a robust consumer, responsible for approximately 70% of the U.S. economy. Despite facing the challenges of high inflation and a tight monetary policy, the consumer has shown resilience.<\/p>\n\n\n\n

The data revealed that discounts offered by retailers and a surge in motor vehicle acquisitions contributed to a greater-than-anticipated increase in U.S. retail sales, maintaining the economy on a robust trajectory in 2024. This bolstered the perspective that the Federal Reserve might not reduce interest rates as rapidly as initially anticipated for the current year.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

Anticipations among traders for a 25-basis-point Federal Reserve rate cut in March declined to 55%, down from approximately 60% before the release of the retail sales data. Ryan Detrick, chief market strategist at Carson Group in Omaha, said<\/a>:<\/p>\n\n\n\n

\"We had news that the U.S. consumer continues to be quite healthy, but that has increased anxiety that the Fed\u2019s first rate cut could potentially be pushed to May from March. Yields are also moving higher on the strong retail sales numbers, adding to near-term worries.\"<\/em><\/p>\n\n\n\n

US Stocks And Wall Street<\/h2>\n\n\n\n

It is also important to mention that a decline in U.S. stocks sent Wall Street's<\/a> \"fear gauge\" to a two-month high while JPMorgan analysts predict that the majority of negative consequences stemming from higher interest rates have not materialized yet. On Tuesday, Federal Reserve Governor Christopher Waller also emphasized that the central bank should refrain from hastily reducing interest rates until there is a clear indication that lower inflation is likely to persist.<\/p>\n\n\n\n

At the same time, the escalation of geopolitical uncertainties introduces an additional challenge and heightens the potential for unforeseen risks in both markets and economic performance. Considering these factors, the perspective is likely to stay cautious as long as interest rates remain significantly restrictive and the looming presence of geopolitical risks persists.<\/p>\n","post_title":"Wall Street Weakened As Retail Sales Data Hampers Expectations For A Cut In Interest Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-weakened-as-retail-sales-data-hampers-expectations-for-a-cut-in-interest-rates","to_ping":"","pinged":"","post_modified":"2024-01-19 05:56:51","post_modified_gmt":"2024-01-18 18:56:51","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15043","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14931,"post_author":"18","post_date":"2024-01-10 07:51:17","post_date_gmt":"2024-01-09 20:51:17","post_content":"\n

In a recent survey conducted by the New York Federal Reserve<\/a>, Wall Street's major banks have recalibrated their predictions regarding the Federal Reserve's balance sheet drawdown. This shift suggests that the U.S. central bank might conclude its quantitative tightening (QT) process later than initially anticipated.<\/p>\n\n\n\n

A Change in Perspective<\/h2>\n\n\n\n

Previously, primary dealers\u2014major banks\u2014projected that the QT process would conclude by the third quarter. However, the sentiment has evolved. According to the latest survey taken before the Fed's December 12-13 policy meeting, these banks now foresee the QT process ending in the fourth quarter.<\/p>\n\n\n\n

This adjustment carries significant implications. If these predictions materialize, the Federal Reserve's balance sheet<\/a> will likely shrink to approximately $6.75 trillion, down from its current level of roughly $7.764 trillion. Moreover, banks estimated that the central bank's reverse repo facility would hold $375 billion when QT concludes, a reduction from the anticipated $625 billion as forecasted in October.<\/p>\n\n\n\n

Federal Reserve Strategy<\/h2>\n\n\n\n

The quantitative tightening process has been an integral part of the Federal Reserve's strategy to combat inflation. Alongside rate hikes, the central bank initiated large-scale purchases of Treasury bonds and mortgage-backed securities during the COVID-19 pandemic's onset in 2020. This move led to an expansion of its holdings to approximately $9 trillion by mid-2022. However, since last year, the Fed has been gradually reducing its balance sheet size, although specific guidance on the timeline remains somewhat ambiguous.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

What This Means for the Economy<\/h2>\n\n\n\n

The recalibrated timeline for QT indicates a more prolonged period of balance sheet reduction. As the Federal Reserve continues to navigate its policy decisions, market participants, businesses, and consumers should monitor these developments closely. Changes in the balance sheet size can influence interest rates, liquidity conditions, and overall financial market dynamics.<\/p>\n\n\n\n

A Technical Perspective<\/h2>\n\n\n\n

From a technical standpoint, the Federal Reserve's<\/a> balance sheet management serves as a critical tool in its monetary policy arsenal. The evolving predictions by Wall Street's primary dealers underscore the complexities involved in forecasting economic variables, such as inflation and interest rates.<\/p>\n\n\n\n

As the QT process continues, policymakers and market participants must remain vigilant, considering the potential ramifications for financial stability and economic growth. This dynamic landscape necessitates ongoing analysis and adaptation to ensure that monetary policy objectives align with evolving economic conditions.<\/p>\n","post_title":"Decoding Wall Street's Shift: A Closer Look At Wall Street's Changing Perspective","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"decoding-wall-streets-shift-a-closer-look-at-wall-streets-changing-perspective","to_ping":"","pinged":"","post_modified":"2024-01-10 07:51:25","post_modified_gmt":"2024-01-09 20:51:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14931","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14888,"post_author":"14","post_date":"2024-01-06 18:33:09","post_date_gmt":"2024-01-06 07:33:09","post_content":"\n

Wall Street's main indexes fell at the beginning of the 2024 year as investors locked in profits after a very successful 2023 and are currently waiting for the Federal Reserve's<\/a> meeting that could offer hints on its interest rate path. Ken Polcari, managing partner at Kace Capital Advisors, said:<\/p>\n\n\n\n

\"The decline yesterday, today, and maybe for the next couple of weeks, is a result of people locking in profits and reconsidering what the narrative is - are rates going down five or six times as it appeared to be at the end of last year?\"<\/em><\/p>\n\n\n\n

\"\"
The Nasdaq Composite kicked off the year with a 1.5% drop pressured by a selloff in the tech sector<\/figcaption><\/figure>\n\n\n\n

The Fed's December meeting minutes are set to be disclosed at 2:00 p.m. ET, potentially providing information regarding the central bank's shift toward reducing interest rates. Although it's widely anticipated that the Fed will keep interest rates unchanged this month, traders have priced in a 65.7% probability of a 25 basis point rate reduction in March, according to CMEGroup's FedWatch tool.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures<\/a><\/p>\n\n\n\n

Central Bank And Inflation<\/h2>\n\n\n\n

Richmond Fed President Thomas Barkin, a voting member in the FOMC's rate-setting committee, said recently that the U.S. central bank is \"making real progress\" towards taming inflation and a soft landing seeming \"increasingly conceivable\". Encouragingly, the American Association of Individual Investors (AAII) Sentiment Survey indicated a surge in optimism among individual investors regarding the short-term outlook for the U.S. stock market, reaching its peak level in more than two and a half years.<\/p>\n\n\n\n

Despite this, JPMorgan Asset Management advises investors to be cautious due to potential recession risks. At the same time, analysts at Soci\u00e9t\u00e9 G\u00e9n\u00e9rale anticipate a turbulent 2024 for U.S. stocks, projecting fluctuations that could involve nearing recent highs, encountering declines, and subsequently rebounding.<\/p>\n\n\n\n

This week will witness a series of labor market data releases, culminating in the government's December employment report on Friday. These reports could significantly influence the forecast for the Fed's interest rate trajectory this year, prompting investors to scrutinize the data. Jeffrey Roach, chief economist at LPL Financial, added<\/a>:<\/p>\n\n\n\n

 \"The job market is cooling and we should see confirmation of that in this Friday\u2019s jobs report\"<\/em><\/p>\n\n\n\n

Following the progress of Wall Street's main indexes seen last year, investors are still optimistic about the prospect of another robust year ahead. This optimism is rooted in the anticipation that a decelerating economy will result in a gentle landing rather than a full-scale recession, especially as the Fed initiates rate cuts in the first half of 2024.<\/p>\n","post_title":"Wall Street's Main Indexes Fell At The Beginning Of 2024 year. Investors Locked In Profits After A Strong 2023 And Wait For The Federal Reserve's Meeting","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-at-the-beginning-of-2024-year-investors-locked-in-profits-after-a-strong-2023-and-wait-for-the-federal-reserves-meeting","to_ping":"","pinged":"","post_modified":"2024-01-06 18:33:13","post_modified_gmt":"2024-01-06 07:33:13","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14888","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14629,"post_author":"15","post_date":"2023-12-15 19:46:11","post_date_gmt":"2023-12-15 08:46:11","post_content":"\n

BlackRock aims to facilitate the participation of Wall Street banks in its potential Bitcoin ETF approval. Recent SEC memo <\/a>detailing a late November meeting involving BlackRock, Nasdaq, and the Commission. During this meeting, they discussed feedback regarding BlackRock's Bitcoin ETF application.<\/p>\n\n\n\n

The proposed approach introduces an innovative method for the redemption of ETF shares. A Bitcoin ETF would enable fund investors to gain exposure to Bitcoin without directly purchasing or storing the cryptocurrency. While the SEC has hesitated to approve such ETFs due to concerns about Bitcoin market manipulation, this new strategy addresses those worries.<\/p>\n\n\n\n

The SEC has yet to decide on BlackRock's iShares Bitcoin Trust (IBTC) application, with the deadline set for January 15. Analysts anticipate a decision will be issued for several spot Bitcoin ETF applications earlier in January.<\/p>\n\n\n\n

See Related:<\/strong><\/em> Fidelity Joins BlackRock\u2019s Push For Ethereum ETF<\/a><\/p>\n\n\n\n

BlackRock ETF Details<\/h2>\n\n\n\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

Microsoft (Nasdaq: MSFT) also lost 1.3% after forecasting higher costs to develop new artificial intelligence features, which overshadowed its upbeat quarterly results. Despite the optimistic outlook from the tech pioneers regarding customer enthusiasm for their generative AI-powered products, investors grew concerned about escalating development expenses for these innovative features. These mounting costs tempered their hopes for a significant sales surge from the new technology.<\/p>\n\n\n\n

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

These results and forecasts from big tech names, along with Tesla's growth warning last week, have reignited attention on the risks associated with the significant influence of mega-cap companies in the S&P 500 which has hit record highs in recent weeks. Apple, Meta Platforms, and Amazon.com set to report earnings on Thursday, fell over 1% each.<\/p>\n\n\n\n

See Related: New Bitcoin Core Update May Natively Support Apple M1 Chips<\/a><\/p>\n\n\n\n

Revenue Forecast And Increased Projection<\/h2>\n\n\n\n

It is also important to mention that Advanced Micro Devices saw a 3.3% decline as its first-quarter revenue forecast and increased projection for AI processors fell short of expectations. Other chip stocks including Nvidia, Broadcom, and Marvell dropped over 1% each. The attention of investors was also on the Federal Reserve's initial monetary policy decision of the year, and while it was widely anticipated that the Fed would maintain interest rates, many analysts said that the Fed is taking baby steps toward the cutting. Art Hogan, Chief Market Strategist of B.Riley Wealth, said<\/a>:<\/p>\n\n\n\n

\"Not surprisingly, I don't think the Fed wants to show their hand, especially, when they have a couple of months of data to collect before they need to. The good news is we can forget about any more tightening. The bad news is it's 'when', not 'if', they're going to cut rates, and that 'when' has been pushed out to what had been the fringes of consensus.\"<\/em><\/p>\n\n\n\n

Due to this, markets are showing some immediate disappointment as there's no explicit indication of imminent rate cuts. We're seeing an extremely neutral, non-committal statement from the Federal Reserve this Wednesday.<\/p>\n","post_title":"Wall Street's Main Indexes Fell As Alphabet's Projections For Rising AI Costs Dented Most Mega-Cap And Chip Stocks","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-as-alphabets-projections-for-rising-ai-costs-dented-most-mega-cap-and-chip-stocks","to_ping":"","pinged":"","post_modified":"2024-02-01 16:33:21","post_modified_gmt":"2024-02-01 05:33:21","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15225","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15094,"post_author":"18","post_date":"2024-01-26 02:18:51","post_date_gmt":"2024-01-25 15:18:51","post_content":"\n

As we enter the last week of January, whispers on Wall Street suggest a potential tantrum in U.S. short-term financing markets, with the storm possibly hitting as early as March. This could prompt the Federal Reserve to reassess its policies.<\/p>\n\n\n\n

As of now, banking executives are anticipating a series of events that may tighten the screws on short-term financing. The expiration of a Fed lending facility on March 11, coupled with limited adoption of the standing repo facility (SRF), is expected to reduce the available funding sources for banks. Simultaneously, increased demand for liquidity is on the horizon due to substantial U.S. government debt issuance and upcoming tax payments in March and April. Additionally, a move toward faster trade settlement in May could intensify the demand for short-term funding.<\/p>\n\n\n\n

Against this backdrop, the Federal Reserve has been steadily draining cash from the financial system by unwinding pandemic-era support. BNY Mellon strategists estimate a significant decrease in cash parked overnight with the Fed, potentially dropping below $200 billion by May. The overnight reverse repurchase agreements facility could even approach zero by mid-year. This reduction in excess liquidity may expose vulnerabilities in short-term financing markets.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Storm Clouds Gather Over Germany's Financial Horizon<\/a><\/p>\n\n\n\n

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

Spikes In Short Term Financing Markets<\/h2>\n\n\n\n

Sudden spikes in short-term financing markets can threaten financial stability, making it harder and more expensive for firms to secure necessary funds. This situation could expose lenders struggling to stabilize deposits after last year's banking crisis. As the Fed inches closer to its 2% inflation target, the risk of policy error looms large.<\/p>\n\n\n\n

If short-term financing markets experience a meltdown, it could signal the need for the Fed to ease policy. Slowing the pace of quantitative tightening (QT) is seen as a potential response. Despite the central bankers' insistence on needing more data before rate cuts, markets are already pricing in cuts by May.<\/p>\n\n\n\n

As we approach the critical months of March to May, the financial markets are at a crossroads. The potential shake-up in short-term financing markets could signal the Fed to reassess its policies. Market participants and investors must stay vigilant, and prepared for potential shifts in liquidity and policy adjustments. The coming months will \/reveal whether these concerns materialize into a significant market event or remain a contained storm in the financial teacup.<\/p>\n","post_title":"Understanding The Potential Shake-Up In U.S. Short-Term Financing Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"understanding-the-potential-shake-up-in-u-s-short-term-financing-markets","to_ping":"","pinged":"","post_modified":"2024-01-26 20:20:06","post_modified_gmt":"2024-01-26 09:20:06","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15094","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15043,"post_author":"14","post_date":"2024-01-19 05:56:40","post_date_gmt":"2024-01-18 18:56:40","post_content":"\n

Wall Street witnessed a significant stock decline this Wednesday following positive December U.S. retail sales data, which diminished the anticipation of an early initiation of the Federal Reserve's campaign to cut interest rates.<\/p>\n\n\n\n

Retail Sales Report <\/h2>\n\n\n\n

The December retail sales report from the Commerce Department (USRSL=ECI) depicted a robust consumer, responsible for approximately 70% of the U.S. economy. Despite facing the challenges of high inflation and a tight monetary policy, the consumer has shown resilience.<\/p>\n\n\n\n

The data revealed that discounts offered by retailers and a surge in motor vehicle acquisitions contributed to a greater-than-anticipated increase in U.S. retail sales, maintaining the economy on a robust trajectory in 2024. This bolstered the perspective that the Federal Reserve might not reduce interest rates as rapidly as initially anticipated for the current year.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

Anticipations among traders for a 25-basis-point Federal Reserve rate cut in March declined to 55%, down from approximately 60% before the release of the retail sales data. Ryan Detrick, chief market strategist at Carson Group in Omaha, said<\/a>:<\/p>\n\n\n\n

\"We had news that the U.S. consumer continues to be quite healthy, but that has increased anxiety that the Fed\u2019s first rate cut could potentially be pushed to May from March. Yields are also moving higher on the strong retail sales numbers, adding to near-term worries.\"<\/em><\/p>\n\n\n\n

US Stocks And Wall Street<\/h2>\n\n\n\n

It is also important to mention that a decline in U.S. stocks sent Wall Street's<\/a> \"fear gauge\" to a two-month high while JPMorgan analysts predict that the majority of negative consequences stemming from higher interest rates have not materialized yet. On Tuesday, Federal Reserve Governor Christopher Waller also emphasized that the central bank should refrain from hastily reducing interest rates until there is a clear indication that lower inflation is likely to persist.<\/p>\n\n\n\n

At the same time, the escalation of geopolitical uncertainties introduces an additional challenge and heightens the potential for unforeseen risks in both markets and economic performance. Considering these factors, the perspective is likely to stay cautious as long as interest rates remain significantly restrictive and the looming presence of geopolitical risks persists.<\/p>\n","post_title":"Wall Street Weakened As Retail Sales Data Hampers Expectations For A Cut In Interest Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-weakened-as-retail-sales-data-hampers-expectations-for-a-cut-in-interest-rates","to_ping":"","pinged":"","post_modified":"2024-01-19 05:56:51","post_modified_gmt":"2024-01-18 18:56:51","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15043","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14931,"post_author":"18","post_date":"2024-01-10 07:51:17","post_date_gmt":"2024-01-09 20:51:17","post_content":"\n

In a recent survey conducted by the New York Federal Reserve<\/a>, Wall Street's major banks have recalibrated their predictions regarding the Federal Reserve's balance sheet drawdown. This shift suggests that the U.S. central bank might conclude its quantitative tightening (QT) process later than initially anticipated.<\/p>\n\n\n\n

A Change in Perspective<\/h2>\n\n\n\n

Previously, primary dealers\u2014major banks\u2014projected that the QT process would conclude by the third quarter. However, the sentiment has evolved. According to the latest survey taken before the Fed's December 12-13 policy meeting, these banks now foresee the QT process ending in the fourth quarter.<\/p>\n\n\n\n

This adjustment carries significant implications. If these predictions materialize, the Federal Reserve's balance sheet<\/a> will likely shrink to approximately $6.75 trillion, down from its current level of roughly $7.764 trillion. Moreover, banks estimated that the central bank's reverse repo facility would hold $375 billion when QT concludes, a reduction from the anticipated $625 billion as forecasted in October.<\/p>\n\n\n\n

Federal Reserve Strategy<\/h2>\n\n\n\n

The quantitative tightening process has been an integral part of the Federal Reserve's strategy to combat inflation. Alongside rate hikes, the central bank initiated large-scale purchases of Treasury bonds and mortgage-backed securities during the COVID-19 pandemic's onset in 2020. This move led to an expansion of its holdings to approximately $9 trillion by mid-2022. However, since last year, the Fed has been gradually reducing its balance sheet size, although specific guidance on the timeline remains somewhat ambiguous.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

What This Means for the Economy<\/h2>\n\n\n\n

The recalibrated timeline for QT indicates a more prolonged period of balance sheet reduction. As the Federal Reserve continues to navigate its policy decisions, market participants, businesses, and consumers should monitor these developments closely. Changes in the balance sheet size can influence interest rates, liquidity conditions, and overall financial market dynamics.<\/p>\n\n\n\n

A Technical Perspective<\/h2>\n\n\n\n

From a technical standpoint, the Federal Reserve's<\/a> balance sheet management serves as a critical tool in its monetary policy arsenal. The evolving predictions by Wall Street's primary dealers underscore the complexities involved in forecasting economic variables, such as inflation and interest rates.<\/p>\n\n\n\n

As the QT process continues, policymakers and market participants must remain vigilant, considering the potential ramifications for financial stability and economic growth. This dynamic landscape necessitates ongoing analysis and adaptation to ensure that monetary policy objectives align with evolving economic conditions.<\/p>\n","post_title":"Decoding Wall Street's Shift: A Closer Look At Wall Street's Changing Perspective","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"decoding-wall-streets-shift-a-closer-look-at-wall-streets-changing-perspective","to_ping":"","pinged":"","post_modified":"2024-01-10 07:51:25","post_modified_gmt":"2024-01-09 20:51:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14931","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14888,"post_author":"14","post_date":"2024-01-06 18:33:09","post_date_gmt":"2024-01-06 07:33:09","post_content":"\n

Wall Street's main indexes fell at the beginning of the 2024 year as investors locked in profits after a very successful 2023 and are currently waiting for the Federal Reserve's<\/a> meeting that could offer hints on its interest rate path. Ken Polcari, managing partner at Kace Capital Advisors, said:<\/p>\n\n\n\n

\"The decline yesterday, today, and maybe for the next couple of weeks, is a result of people locking in profits and reconsidering what the narrative is - are rates going down five or six times as it appeared to be at the end of last year?\"<\/em><\/p>\n\n\n\n

\"\"
The Nasdaq Composite kicked off the year with a 1.5% drop pressured by a selloff in the tech sector<\/figcaption><\/figure>\n\n\n\n

The Fed's December meeting minutes are set to be disclosed at 2:00 p.m. ET, potentially providing information regarding the central bank's shift toward reducing interest rates. Although it's widely anticipated that the Fed will keep interest rates unchanged this month, traders have priced in a 65.7% probability of a 25 basis point rate reduction in March, according to CMEGroup's FedWatch tool.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures<\/a><\/p>\n\n\n\n

Central Bank And Inflation<\/h2>\n\n\n\n

Richmond Fed President Thomas Barkin, a voting member in the FOMC's rate-setting committee, said recently that the U.S. central bank is \"making real progress\" towards taming inflation and a soft landing seeming \"increasingly conceivable\". Encouragingly, the American Association of Individual Investors (AAII) Sentiment Survey indicated a surge in optimism among individual investors regarding the short-term outlook for the U.S. stock market, reaching its peak level in more than two and a half years.<\/p>\n\n\n\n

Despite this, JPMorgan Asset Management advises investors to be cautious due to potential recession risks. At the same time, analysts at Soci\u00e9t\u00e9 G\u00e9n\u00e9rale anticipate a turbulent 2024 for U.S. stocks, projecting fluctuations that could involve nearing recent highs, encountering declines, and subsequently rebounding.<\/p>\n\n\n\n

This week will witness a series of labor market data releases, culminating in the government's December employment report on Friday. These reports could significantly influence the forecast for the Fed's interest rate trajectory this year, prompting investors to scrutinize the data. Jeffrey Roach, chief economist at LPL Financial, added<\/a>:<\/p>\n\n\n\n

 \"The job market is cooling and we should see confirmation of that in this Friday\u2019s jobs report\"<\/em><\/p>\n\n\n\n

Following the progress of Wall Street's main indexes seen last year, investors are still optimistic about the prospect of another robust year ahead. This optimism is rooted in the anticipation that a decelerating economy will result in a gentle landing rather than a full-scale recession, especially as the Fed initiates rate cuts in the first half of 2024.<\/p>\n","post_title":"Wall Street's Main Indexes Fell At The Beginning Of 2024 year. Investors Locked In Profits After A Strong 2023 And Wait For The Federal Reserve's Meeting","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-at-the-beginning-of-2024-year-investors-locked-in-profits-after-a-strong-2023-and-wait-for-the-federal-reserves-meeting","to_ping":"","pinged":"","post_modified":"2024-01-06 18:33:13","post_modified_gmt":"2024-01-06 07:33:13","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14888","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14629,"post_author":"15","post_date":"2023-12-15 19:46:11","post_date_gmt":"2023-12-15 08:46:11","post_content":"\n

BlackRock aims to facilitate the participation of Wall Street banks in its potential Bitcoin ETF approval. Recent SEC memo <\/a>detailing a late November meeting involving BlackRock, Nasdaq, and the Commission. During this meeting, they discussed feedback regarding BlackRock's Bitcoin ETF application.<\/p>\n\n\n\n

The proposed approach introduces an innovative method for the redemption of ETF shares. A Bitcoin ETF would enable fund investors to gain exposure to Bitcoin without directly purchasing or storing the cryptocurrency. While the SEC has hesitated to approve such ETFs due to concerns about Bitcoin market manipulation, this new strategy addresses those worries.<\/p>\n\n\n\n

The SEC has yet to decide on BlackRock's iShares Bitcoin Trust (IBTC) application, with the deadline set for January 15. Analysts anticipate a decision will be issued for several spot Bitcoin ETF applications earlier in January.<\/p>\n\n\n\n

See Related:<\/strong><\/em> Fidelity Joins BlackRock\u2019s Push For Ethereum ETF<\/a><\/p>\n\n\n\n

BlackRock ETF Details<\/h2>\n\n\n\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

Wall Street's main indexes fell as Alphabet's projections for rising AI costs dented most megacap and chip stocks while the Federal Reserve left interest rates unchanged this Wednesday. Google's parent company experienced a 6.1% decline, resulting in a 3.0% drop in the S&P 500 communication services sector. This occurred following its announcement of holiday-season advertising sales falling short of expectations and its projection of increased spending on artificial intelligence.<\/p>\n\n\n\n

Microsoft (Nasdaq: MSFT) also lost 1.3% after forecasting higher costs to develop new artificial intelligence features, which overshadowed its upbeat quarterly results. Despite the optimistic outlook from the tech pioneers regarding customer enthusiasm for their generative AI-powered products, investors grew concerned about escalating development expenses for these innovative features. These mounting costs tempered their hopes for a significant sales surge from the new technology.<\/p>\n\n\n\n

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

These results and forecasts from big tech names, along with Tesla's growth warning last week, have reignited attention on the risks associated with the significant influence of mega-cap companies in the S&P 500 which has hit record highs in recent weeks. Apple, Meta Platforms, and Amazon.com set to report earnings on Thursday, fell over 1% each.<\/p>\n\n\n\n

See Related: New Bitcoin Core Update May Natively Support Apple M1 Chips<\/a><\/p>\n\n\n\n

Revenue Forecast And Increased Projection<\/h2>\n\n\n\n

It is also important to mention that Advanced Micro Devices saw a 3.3% decline as its first-quarter revenue forecast and increased projection for AI processors fell short of expectations. Other chip stocks including Nvidia, Broadcom, and Marvell dropped over 1% each. The attention of investors was also on the Federal Reserve's initial monetary policy decision of the year, and while it was widely anticipated that the Fed would maintain interest rates, many analysts said that the Fed is taking baby steps toward the cutting. Art Hogan, Chief Market Strategist of B.Riley Wealth, said<\/a>:<\/p>\n\n\n\n

\"Not surprisingly, I don't think the Fed wants to show their hand, especially, when they have a couple of months of data to collect before they need to. The good news is we can forget about any more tightening. The bad news is it's 'when', not 'if', they're going to cut rates, and that 'when' has been pushed out to what had been the fringes of consensus.\"<\/em><\/p>\n\n\n\n

Due to this, markets are showing some immediate disappointment as there's no explicit indication of imminent rate cuts. We're seeing an extremely neutral, non-committal statement from the Federal Reserve this Wednesday.<\/p>\n","post_title":"Wall Street's Main Indexes Fell As Alphabet's Projections For Rising AI Costs Dented Most Mega-Cap And Chip Stocks","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-as-alphabets-projections-for-rising-ai-costs-dented-most-mega-cap-and-chip-stocks","to_ping":"","pinged":"","post_modified":"2024-02-01 16:33:21","post_modified_gmt":"2024-02-01 05:33:21","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15225","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15094,"post_author":"18","post_date":"2024-01-26 02:18:51","post_date_gmt":"2024-01-25 15:18:51","post_content":"\n

As we enter the last week of January, whispers on Wall Street suggest a potential tantrum in U.S. short-term financing markets, with the storm possibly hitting as early as March. This could prompt the Federal Reserve to reassess its policies.<\/p>\n\n\n\n

As of now, banking executives are anticipating a series of events that may tighten the screws on short-term financing. The expiration of a Fed lending facility on March 11, coupled with limited adoption of the standing repo facility (SRF), is expected to reduce the available funding sources for banks. Simultaneously, increased demand for liquidity is on the horizon due to substantial U.S. government debt issuance and upcoming tax payments in March and April. Additionally, a move toward faster trade settlement in May could intensify the demand for short-term funding.<\/p>\n\n\n\n

Against this backdrop, the Federal Reserve has been steadily draining cash from the financial system by unwinding pandemic-era support. BNY Mellon strategists estimate a significant decrease in cash parked overnight with the Fed, potentially dropping below $200 billion by May. The overnight reverse repurchase agreements facility could even approach zero by mid-year. This reduction in excess liquidity may expose vulnerabilities in short-term financing markets.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Storm Clouds Gather Over Germany's Financial Horizon<\/a><\/p>\n\n\n\n

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

Spikes In Short Term Financing Markets<\/h2>\n\n\n\n

Sudden spikes in short-term financing markets can threaten financial stability, making it harder and more expensive for firms to secure necessary funds. This situation could expose lenders struggling to stabilize deposits after last year's banking crisis. As the Fed inches closer to its 2% inflation target, the risk of policy error looms large.<\/p>\n\n\n\n

If short-term financing markets experience a meltdown, it could signal the need for the Fed to ease policy. Slowing the pace of quantitative tightening (QT) is seen as a potential response. Despite the central bankers' insistence on needing more data before rate cuts, markets are already pricing in cuts by May.<\/p>\n\n\n\n

As we approach the critical months of March to May, the financial markets are at a crossroads. The potential shake-up in short-term financing markets could signal the Fed to reassess its policies. Market participants and investors must stay vigilant, and prepared for potential shifts in liquidity and policy adjustments. The coming months will \/reveal whether these concerns materialize into a significant market event or remain a contained storm in the financial teacup.<\/p>\n","post_title":"Understanding The Potential Shake-Up In U.S. Short-Term Financing Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"understanding-the-potential-shake-up-in-u-s-short-term-financing-markets","to_ping":"","pinged":"","post_modified":"2024-01-26 20:20:06","post_modified_gmt":"2024-01-26 09:20:06","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15094","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15043,"post_author":"14","post_date":"2024-01-19 05:56:40","post_date_gmt":"2024-01-18 18:56:40","post_content":"\n

Wall Street witnessed a significant stock decline this Wednesday following positive December U.S. retail sales data, which diminished the anticipation of an early initiation of the Federal Reserve's campaign to cut interest rates.<\/p>\n\n\n\n

Retail Sales Report <\/h2>\n\n\n\n

The December retail sales report from the Commerce Department (USRSL=ECI) depicted a robust consumer, responsible for approximately 70% of the U.S. economy. Despite facing the challenges of high inflation and a tight monetary policy, the consumer has shown resilience.<\/p>\n\n\n\n

The data revealed that discounts offered by retailers and a surge in motor vehicle acquisitions contributed to a greater-than-anticipated increase in U.S. retail sales, maintaining the economy on a robust trajectory in 2024. This bolstered the perspective that the Federal Reserve might not reduce interest rates as rapidly as initially anticipated for the current year.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

Anticipations among traders for a 25-basis-point Federal Reserve rate cut in March declined to 55%, down from approximately 60% before the release of the retail sales data. Ryan Detrick, chief market strategist at Carson Group in Omaha, said<\/a>:<\/p>\n\n\n\n

\"We had news that the U.S. consumer continues to be quite healthy, but that has increased anxiety that the Fed\u2019s first rate cut could potentially be pushed to May from March. Yields are also moving higher on the strong retail sales numbers, adding to near-term worries.\"<\/em><\/p>\n\n\n\n

US Stocks And Wall Street<\/h2>\n\n\n\n

It is also important to mention that a decline in U.S. stocks sent Wall Street's<\/a> \"fear gauge\" to a two-month high while JPMorgan analysts predict that the majority of negative consequences stemming from higher interest rates have not materialized yet. On Tuesday, Federal Reserve Governor Christopher Waller also emphasized that the central bank should refrain from hastily reducing interest rates until there is a clear indication that lower inflation is likely to persist.<\/p>\n\n\n\n

At the same time, the escalation of geopolitical uncertainties introduces an additional challenge and heightens the potential for unforeseen risks in both markets and economic performance. Considering these factors, the perspective is likely to stay cautious as long as interest rates remain significantly restrictive and the looming presence of geopolitical risks persists.<\/p>\n","post_title":"Wall Street Weakened As Retail Sales Data Hampers Expectations For A Cut In Interest Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-weakened-as-retail-sales-data-hampers-expectations-for-a-cut-in-interest-rates","to_ping":"","pinged":"","post_modified":"2024-01-19 05:56:51","post_modified_gmt":"2024-01-18 18:56:51","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15043","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14931,"post_author":"18","post_date":"2024-01-10 07:51:17","post_date_gmt":"2024-01-09 20:51:17","post_content":"\n

In a recent survey conducted by the New York Federal Reserve<\/a>, Wall Street's major banks have recalibrated their predictions regarding the Federal Reserve's balance sheet drawdown. This shift suggests that the U.S. central bank might conclude its quantitative tightening (QT) process later than initially anticipated.<\/p>\n\n\n\n

A Change in Perspective<\/h2>\n\n\n\n

Previously, primary dealers\u2014major banks\u2014projected that the QT process would conclude by the third quarter. However, the sentiment has evolved. According to the latest survey taken before the Fed's December 12-13 policy meeting, these banks now foresee the QT process ending in the fourth quarter.<\/p>\n\n\n\n

This adjustment carries significant implications. If these predictions materialize, the Federal Reserve's balance sheet<\/a> will likely shrink to approximately $6.75 trillion, down from its current level of roughly $7.764 trillion. Moreover, banks estimated that the central bank's reverse repo facility would hold $375 billion when QT concludes, a reduction from the anticipated $625 billion as forecasted in October.<\/p>\n\n\n\n

Federal Reserve Strategy<\/h2>\n\n\n\n

The quantitative tightening process has been an integral part of the Federal Reserve's strategy to combat inflation. Alongside rate hikes, the central bank initiated large-scale purchases of Treasury bonds and mortgage-backed securities during the COVID-19 pandemic's onset in 2020. This move led to an expansion of its holdings to approximately $9 trillion by mid-2022. However, since last year, the Fed has been gradually reducing its balance sheet size, although specific guidance on the timeline remains somewhat ambiguous.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

What This Means for the Economy<\/h2>\n\n\n\n

The recalibrated timeline for QT indicates a more prolonged period of balance sheet reduction. As the Federal Reserve continues to navigate its policy decisions, market participants, businesses, and consumers should monitor these developments closely. Changes in the balance sheet size can influence interest rates, liquidity conditions, and overall financial market dynamics.<\/p>\n\n\n\n

A Technical Perspective<\/h2>\n\n\n\n

From a technical standpoint, the Federal Reserve's<\/a> balance sheet management serves as a critical tool in its monetary policy arsenal. The evolving predictions by Wall Street's primary dealers underscore the complexities involved in forecasting economic variables, such as inflation and interest rates.<\/p>\n\n\n\n

As the QT process continues, policymakers and market participants must remain vigilant, considering the potential ramifications for financial stability and economic growth. This dynamic landscape necessitates ongoing analysis and adaptation to ensure that monetary policy objectives align with evolving economic conditions.<\/p>\n","post_title":"Decoding Wall Street's Shift: A Closer Look At Wall Street's Changing Perspective","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"decoding-wall-streets-shift-a-closer-look-at-wall-streets-changing-perspective","to_ping":"","pinged":"","post_modified":"2024-01-10 07:51:25","post_modified_gmt":"2024-01-09 20:51:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14931","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14888,"post_author":"14","post_date":"2024-01-06 18:33:09","post_date_gmt":"2024-01-06 07:33:09","post_content":"\n

Wall Street's main indexes fell at the beginning of the 2024 year as investors locked in profits after a very successful 2023 and are currently waiting for the Federal Reserve's<\/a> meeting that could offer hints on its interest rate path. Ken Polcari, managing partner at Kace Capital Advisors, said:<\/p>\n\n\n\n

\"The decline yesterday, today, and maybe for the next couple of weeks, is a result of people locking in profits and reconsidering what the narrative is - are rates going down five or six times as it appeared to be at the end of last year?\"<\/em><\/p>\n\n\n\n

\"\"
The Nasdaq Composite kicked off the year with a 1.5% drop pressured by a selloff in the tech sector<\/figcaption><\/figure>\n\n\n\n

The Fed's December meeting minutes are set to be disclosed at 2:00 p.m. ET, potentially providing information regarding the central bank's shift toward reducing interest rates. Although it's widely anticipated that the Fed will keep interest rates unchanged this month, traders have priced in a 65.7% probability of a 25 basis point rate reduction in March, according to CMEGroup's FedWatch tool.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures<\/a><\/p>\n\n\n\n

Central Bank And Inflation<\/h2>\n\n\n\n

Richmond Fed President Thomas Barkin, a voting member in the FOMC's rate-setting committee, said recently that the U.S. central bank is \"making real progress\" towards taming inflation and a soft landing seeming \"increasingly conceivable\". Encouragingly, the American Association of Individual Investors (AAII) Sentiment Survey indicated a surge in optimism among individual investors regarding the short-term outlook for the U.S. stock market, reaching its peak level in more than two and a half years.<\/p>\n\n\n\n

Despite this, JPMorgan Asset Management advises investors to be cautious due to potential recession risks. At the same time, analysts at Soci\u00e9t\u00e9 G\u00e9n\u00e9rale anticipate a turbulent 2024 for U.S. stocks, projecting fluctuations that could involve nearing recent highs, encountering declines, and subsequently rebounding.<\/p>\n\n\n\n

This week will witness a series of labor market data releases, culminating in the government's December employment report on Friday. These reports could significantly influence the forecast for the Fed's interest rate trajectory this year, prompting investors to scrutinize the data. Jeffrey Roach, chief economist at LPL Financial, added<\/a>:<\/p>\n\n\n\n

 \"The job market is cooling and we should see confirmation of that in this Friday\u2019s jobs report\"<\/em><\/p>\n\n\n\n

Following the progress of Wall Street's main indexes seen last year, investors are still optimistic about the prospect of another robust year ahead. This optimism is rooted in the anticipation that a decelerating economy will result in a gentle landing rather than a full-scale recession, especially as the Fed initiates rate cuts in the first half of 2024.<\/p>\n","post_title":"Wall Street's Main Indexes Fell At The Beginning Of 2024 year. Investors Locked In Profits After A Strong 2023 And Wait For The Federal Reserve's Meeting","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-at-the-beginning-of-2024-year-investors-locked-in-profits-after-a-strong-2023-and-wait-for-the-federal-reserves-meeting","to_ping":"","pinged":"","post_modified":"2024-01-06 18:33:13","post_modified_gmt":"2024-01-06 07:33:13","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14888","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14629,"post_author":"15","post_date":"2023-12-15 19:46:11","post_date_gmt":"2023-12-15 08:46:11","post_content":"\n

BlackRock aims to facilitate the participation of Wall Street banks in its potential Bitcoin ETF approval. Recent SEC memo <\/a>detailing a late November meeting involving BlackRock, Nasdaq, and the Commission. During this meeting, they discussed feedback regarding BlackRock's Bitcoin ETF application.<\/p>\n\n\n\n

The proposed approach introduces an innovative method for the redemption of ETF shares. A Bitcoin ETF would enable fund investors to gain exposure to Bitcoin without directly purchasing or storing the cryptocurrency. While the SEC has hesitated to approve such ETFs due to concerns about Bitcoin market manipulation, this new strategy addresses those worries.<\/p>\n\n\n\n

The SEC has yet to decide on BlackRock's iShares Bitcoin Trust (IBTC) application, with the deadline set for January 15. Analysts anticipate a decision will be issued for several spot Bitcoin ETF applications earlier in January.<\/p>\n\n\n\n

See Related:<\/strong><\/em> Fidelity Joins BlackRock\u2019s Push For Ethereum ETF<\/a><\/p>\n\n\n\n

BlackRock ETF Details<\/h2>\n\n\n\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

Investors are actively monitoring earnings and forecasts from big companies against the backdrop of high borrowing costs but remarks from the Fed's policymakers through the week, including voting member Cleveland's Loretta Mester, will also be on investors' watch list.<\/p>\n","post_title":"Fed Chair Jerome Powell Pushed Back Firmly Against Market Speculation Of Imminent Rate Cuts. What To Expect In The Days Ahead?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"fed-chair-jerome-powell-pushed-back-firmly-against-market-speculation-of-imminent-rate-cuts-what-to-expect-in-the-days-ahead","to_ping":"","pinged":"","post_modified":"2024-02-07 19:31:25","post_modified_gmt":"2024-02-07 08:31:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15327","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15225,"post_author":"14","post_date":"2024-02-01 16:33:13","post_date_gmt":"2024-02-01 05:33:13","post_content":"\n

Wall Street's main indexes fell as Alphabet's projections for rising AI costs dented most megacap and chip stocks while the Federal Reserve left interest rates unchanged this Wednesday. Google's parent company experienced a 6.1% decline, resulting in a 3.0% drop in the S&P 500 communication services sector. This occurred following its announcement of holiday-season advertising sales falling short of expectations and its projection of increased spending on artificial intelligence.<\/p>\n\n\n\n

Microsoft (Nasdaq: MSFT) also lost 1.3% after forecasting higher costs to develop new artificial intelligence features, which overshadowed its upbeat quarterly results. Despite the optimistic outlook from the tech pioneers regarding customer enthusiasm for their generative AI-powered products, investors grew concerned about escalating development expenses for these innovative features. These mounting costs tempered their hopes for a significant sales surge from the new technology.<\/p>\n\n\n\n

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

These results and forecasts from big tech names, along with Tesla's growth warning last week, have reignited attention on the risks associated with the significant influence of mega-cap companies in the S&P 500 which has hit record highs in recent weeks. Apple, Meta Platforms, and Amazon.com set to report earnings on Thursday, fell over 1% each.<\/p>\n\n\n\n

See Related: New Bitcoin Core Update May Natively Support Apple M1 Chips<\/a><\/p>\n\n\n\n

Revenue Forecast And Increased Projection<\/h2>\n\n\n\n

It is also important to mention that Advanced Micro Devices saw a 3.3% decline as its first-quarter revenue forecast and increased projection for AI processors fell short of expectations. Other chip stocks including Nvidia, Broadcom, and Marvell dropped over 1% each. The attention of investors was also on the Federal Reserve's initial monetary policy decision of the year, and while it was widely anticipated that the Fed would maintain interest rates, many analysts said that the Fed is taking baby steps toward the cutting. Art Hogan, Chief Market Strategist of B.Riley Wealth, said<\/a>:<\/p>\n\n\n\n

\"Not surprisingly, I don't think the Fed wants to show their hand, especially, when they have a couple of months of data to collect before they need to. The good news is we can forget about any more tightening. The bad news is it's 'when', not 'if', they're going to cut rates, and that 'when' has been pushed out to what had been the fringes of consensus.\"<\/em><\/p>\n\n\n\n

Due to this, markets are showing some immediate disappointment as there's no explicit indication of imminent rate cuts. We're seeing an extremely neutral, non-committal statement from the Federal Reserve this Wednesday.<\/p>\n","post_title":"Wall Street's Main Indexes Fell As Alphabet's Projections For Rising AI Costs Dented Most Mega-Cap And Chip Stocks","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-as-alphabets-projections-for-rising-ai-costs-dented-most-mega-cap-and-chip-stocks","to_ping":"","pinged":"","post_modified":"2024-02-01 16:33:21","post_modified_gmt":"2024-02-01 05:33:21","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15225","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15094,"post_author":"18","post_date":"2024-01-26 02:18:51","post_date_gmt":"2024-01-25 15:18:51","post_content":"\n

As we enter the last week of January, whispers on Wall Street suggest a potential tantrum in U.S. short-term financing markets, with the storm possibly hitting as early as March. This could prompt the Federal Reserve to reassess its policies.<\/p>\n\n\n\n

As of now, banking executives are anticipating a series of events that may tighten the screws on short-term financing. The expiration of a Fed lending facility on March 11, coupled with limited adoption of the standing repo facility (SRF), is expected to reduce the available funding sources for banks. Simultaneously, increased demand for liquidity is on the horizon due to substantial U.S. government debt issuance and upcoming tax payments in March and April. Additionally, a move toward faster trade settlement in May could intensify the demand for short-term funding.<\/p>\n\n\n\n

Against this backdrop, the Federal Reserve has been steadily draining cash from the financial system by unwinding pandemic-era support. BNY Mellon strategists estimate a significant decrease in cash parked overnight with the Fed, potentially dropping below $200 billion by May. The overnight reverse repurchase agreements facility could even approach zero by mid-year. This reduction in excess liquidity may expose vulnerabilities in short-term financing markets.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Storm Clouds Gather Over Germany's Financial Horizon<\/a><\/p>\n\n\n\n

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

Spikes In Short Term Financing Markets<\/h2>\n\n\n\n

Sudden spikes in short-term financing markets can threaten financial stability, making it harder and more expensive for firms to secure necessary funds. This situation could expose lenders struggling to stabilize deposits after last year's banking crisis. As the Fed inches closer to its 2% inflation target, the risk of policy error looms large.<\/p>\n\n\n\n

If short-term financing markets experience a meltdown, it could signal the need for the Fed to ease policy. Slowing the pace of quantitative tightening (QT) is seen as a potential response. Despite the central bankers' insistence on needing more data before rate cuts, markets are already pricing in cuts by May.<\/p>\n\n\n\n

As we approach the critical months of March to May, the financial markets are at a crossroads. The potential shake-up in short-term financing markets could signal the Fed to reassess its policies. Market participants and investors must stay vigilant, and prepared for potential shifts in liquidity and policy adjustments. The coming months will \/reveal whether these concerns materialize into a significant market event or remain a contained storm in the financial teacup.<\/p>\n","post_title":"Understanding The Potential Shake-Up In U.S. Short-Term Financing Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"understanding-the-potential-shake-up-in-u-s-short-term-financing-markets","to_ping":"","pinged":"","post_modified":"2024-01-26 20:20:06","post_modified_gmt":"2024-01-26 09:20:06","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15094","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15043,"post_author":"14","post_date":"2024-01-19 05:56:40","post_date_gmt":"2024-01-18 18:56:40","post_content":"\n

Wall Street witnessed a significant stock decline this Wednesday following positive December U.S. retail sales data, which diminished the anticipation of an early initiation of the Federal Reserve's campaign to cut interest rates.<\/p>\n\n\n\n

Retail Sales Report <\/h2>\n\n\n\n

The December retail sales report from the Commerce Department (USRSL=ECI) depicted a robust consumer, responsible for approximately 70% of the U.S. economy. Despite facing the challenges of high inflation and a tight monetary policy, the consumer has shown resilience.<\/p>\n\n\n\n

The data revealed that discounts offered by retailers and a surge in motor vehicle acquisitions contributed to a greater-than-anticipated increase in U.S. retail sales, maintaining the economy on a robust trajectory in 2024. This bolstered the perspective that the Federal Reserve might not reduce interest rates as rapidly as initially anticipated for the current year.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

Anticipations among traders for a 25-basis-point Federal Reserve rate cut in March declined to 55%, down from approximately 60% before the release of the retail sales data. Ryan Detrick, chief market strategist at Carson Group in Omaha, said<\/a>:<\/p>\n\n\n\n

\"We had news that the U.S. consumer continues to be quite healthy, but that has increased anxiety that the Fed\u2019s first rate cut could potentially be pushed to May from March. Yields are also moving higher on the strong retail sales numbers, adding to near-term worries.\"<\/em><\/p>\n\n\n\n

US Stocks And Wall Street<\/h2>\n\n\n\n

It is also important to mention that a decline in U.S. stocks sent Wall Street's<\/a> \"fear gauge\" to a two-month high while JPMorgan analysts predict that the majority of negative consequences stemming from higher interest rates have not materialized yet. On Tuesday, Federal Reserve Governor Christopher Waller also emphasized that the central bank should refrain from hastily reducing interest rates until there is a clear indication that lower inflation is likely to persist.<\/p>\n\n\n\n

At the same time, the escalation of geopolitical uncertainties introduces an additional challenge and heightens the potential for unforeseen risks in both markets and economic performance. Considering these factors, the perspective is likely to stay cautious as long as interest rates remain significantly restrictive and the looming presence of geopolitical risks persists.<\/p>\n","post_title":"Wall Street Weakened As Retail Sales Data Hampers Expectations For A Cut In Interest Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-weakened-as-retail-sales-data-hampers-expectations-for-a-cut-in-interest-rates","to_ping":"","pinged":"","post_modified":"2024-01-19 05:56:51","post_modified_gmt":"2024-01-18 18:56:51","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15043","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14931,"post_author":"18","post_date":"2024-01-10 07:51:17","post_date_gmt":"2024-01-09 20:51:17","post_content":"\n

In a recent survey conducted by the New York Federal Reserve<\/a>, Wall Street's major banks have recalibrated their predictions regarding the Federal Reserve's balance sheet drawdown. This shift suggests that the U.S. central bank might conclude its quantitative tightening (QT) process later than initially anticipated.<\/p>\n\n\n\n

A Change in Perspective<\/h2>\n\n\n\n

Previously, primary dealers\u2014major banks\u2014projected that the QT process would conclude by the third quarter. However, the sentiment has evolved. According to the latest survey taken before the Fed's December 12-13 policy meeting, these banks now foresee the QT process ending in the fourth quarter.<\/p>\n\n\n\n

This adjustment carries significant implications. If these predictions materialize, the Federal Reserve's balance sheet<\/a> will likely shrink to approximately $6.75 trillion, down from its current level of roughly $7.764 trillion. Moreover, banks estimated that the central bank's reverse repo facility would hold $375 billion when QT concludes, a reduction from the anticipated $625 billion as forecasted in October.<\/p>\n\n\n\n

Federal Reserve Strategy<\/h2>\n\n\n\n

The quantitative tightening process has been an integral part of the Federal Reserve's strategy to combat inflation. Alongside rate hikes, the central bank initiated large-scale purchases of Treasury bonds and mortgage-backed securities during the COVID-19 pandemic's onset in 2020. This move led to an expansion of its holdings to approximately $9 trillion by mid-2022. However, since last year, the Fed has been gradually reducing its balance sheet size, although specific guidance on the timeline remains somewhat ambiguous.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

What This Means for the Economy<\/h2>\n\n\n\n

The recalibrated timeline for QT indicates a more prolonged period of balance sheet reduction. As the Federal Reserve continues to navigate its policy decisions, market participants, businesses, and consumers should monitor these developments closely. Changes in the balance sheet size can influence interest rates, liquidity conditions, and overall financial market dynamics.<\/p>\n\n\n\n

A Technical Perspective<\/h2>\n\n\n\n

From a technical standpoint, the Federal Reserve's<\/a> balance sheet management serves as a critical tool in its monetary policy arsenal. The evolving predictions by Wall Street's primary dealers underscore the complexities involved in forecasting economic variables, such as inflation and interest rates.<\/p>\n\n\n\n

As the QT process continues, policymakers and market participants must remain vigilant, considering the potential ramifications for financial stability and economic growth. This dynamic landscape necessitates ongoing analysis and adaptation to ensure that monetary policy objectives align with evolving economic conditions.<\/p>\n","post_title":"Decoding Wall Street's Shift: A Closer Look At Wall Street's Changing Perspective","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"decoding-wall-streets-shift-a-closer-look-at-wall-streets-changing-perspective","to_ping":"","pinged":"","post_modified":"2024-01-10 07:51:25","post_modified_gmt":"2024-01-09 20:51:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14931","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14888,"post_author":"14","post_date":"2024-01-06 18:33:09","post_date_gmt":"2024-01-06 07:33:09","post_content":"\n

Wall Street's main indexes fell at the beginning of the 2024 year as investors locked in profits after a very successful 2023 and are currently waiting for the Federal Reserve's<\/a> meeting that could offer hints on its interest rate path. Ken Polcari, managing partner at Kace Capital Advisors, said:<\/p>\n\n\n\n

\"The decline yesterday, today, and maybe for the next couple of weeks, is a result of people locking in profits and reconsidering what the narrative is - are rates going down five or six times as it appeared to be at the end of last year?\"<\/em><\/p>\n\n\n\n

\"\"
The Nasdaq Composite kicked off the year with a 1.5% drop pressured by a selloff in the tech sector<\/figcaption><\/figure>\n\n\n\n

The Fed's December meeting minutes are set to be disclosed at 2:00 p.m. ET, potentially providing information regarding the central bank's shift toward reducing interest rates. Although it's widely anticipated that the Fed will keep interest rates unchanged this month, traders have priced in a 65.7% probability of a 25 basis point rate reduction in March, according to CMEGroup's FedWatch tool.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures<\/a><\/p>\n\n\n\n

Central Bank And Inflation<\/h2>\n\n\n\n

Richmond Fed President Thomas Barkin, a voting member in the FOMC's rate-setting committee, said recently that the U.S. central bank is \"making real progress\" towards taming inflation and a soft landing seeming \"increasingly conceivable\". Encouragingly, the American Association of Individual Investors (AAII) Sentiment Survey indicated a surge in optimism among individual investors regarding the short-term outlook for the U.S. stock market, reaching its peak level in more than two and a half years.<\/p>\n\n\n\n

Despite this, JPMorgan Asset Management advises investors to be cautious due to potential recession risks. At the same time, analysts at Soci\u00e9t\u00e9 G\u00e9n\u00e9rale anticipate a turbulent 2024 for U.S. stocks, projecting fluctuations that could involve nearing recent highs, encountering declines, and subsequently rebounding.<\/p>\n\n\n\n

This week will witness a series of labor market data releases, culminating in the government's December employment report on Friday. These reports could significantly influence the forecast for the Fed's interest rate trajectory this year, prompting investors to scrutinize the data. Jeffrey Roach, chief economist at LPL Financial, added<\/a>:<\/p>\n\n\n\n

 \"The job market is cooling and we should see confirmation of that in this Friday\u2019s jobs report\"<\/em><\/p>\n\n\n\n

Following the progress of Wall Street's main indexes seen last year, investors are still optimistic about the prospect of another robust year ahead. This optimism is rooted in the anticipation that a decelerating economy will result in a gentle landing rather than a full-scale recession, especially as the Fed initiates rate cuts in the first half of 2024.<\/p>\n","post_title":"Wall Street's Main Indexes Fell At The Beginning Of 2024 year. Investors Locked In Profits After A Strong 2023 And Wait For The Federal Reserve's Meeting","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-at-the-beginning-of-2024-year-investors-locked-in-profits-after-a-strong-2023-and-wait-for-the-federal-reserves-meeting","to_ping":"","pinged":"","post_modified":"2024-01-06 18:33:13","post_modified_gmt":"2024-01-06 07:33:13","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14888","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14629,"post_author":"15","post_date":"2023-12-15 19:46:11","post_date_gmt":"2023-12-15 08:46:11","post_content":"\n

BlackRock aims to facilitate the participation of Wall Street banks in its potential Bitcoin ETF approval. Recent SEC memo <\/a>detailing a late November meeting involving BlackRock, Nasdaq, and the Commission. During this meeting, they discussed feedback regarding BlackRock's Bitcoin ETF application.<\/p>\n\n\n\n

The proposed approach introduces an innovative method for the redemption of ETF shares. A Bitcoin ETF would enable fund investors to gain exposure to Bitcoin without directly purchasing or storing the cryptocurrency. While the SEC has hesitated to approve such ETFs due to concerns about Bitcoin market manipulation, this new strategy addresses those worries.<\/p>\n\n\n\n

The SEC has yet to decide on BlackRock's iShares Bitcoin Trust (IBTC) application, with the deadline set for January 15. Analysts anticipate a decision will be issued for several spot Bitcoin ETF applications earlier in January.<\/p>\n\n\n\n

See Related:<\/strong><\/em> Fidelity Joins BlackRock\u2019s Push For Ethereum ETF<\/a><\/p>\n\n\n\n

BlackRock ETF Details<\/h2>\n\n\n\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

\"Private clients were the biggest buyers of equities last week, led by purchases of ETFs and Tech stocks. Institutional clients were also net buyers after large outflows the week prior, while hedge fund clients were net sellers.\"<\/em><\/p>\n\n\n\n

Investors are actively monitoring earnings and forecasts from big companies against the backdrop of high borrowing costs but remarks from the Fed's policymakers through the week, including voting member Cleveland's Loretta Mester, will also be on investors' watch list.<\/p>\n","post_title":"Fed Chair Jerome Powell Pushed Back Firmly Against Market Speculation Of Imminent Rate Cuts. What To Expect In The Days Ahead?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"fed-chair-jerome-powell-pushed-back-firmly-against-market-speculation-of-imminent-rate-cuts-what-to-expect-in-the-days-ahead","to_ping":"","pinged":"","post_modified":"2024-02-07 19:31:25","post_modified_gmt":"2024-02-07 08:31:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15327","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15225,"post_author":"14","post_date":"2024-02-01 16:33:13","post_date_gmt":"2024-02-01 05:33:13","post_content":"\n

Wall Street's main indexes fell as Alphabet's projections for rising AI costs dented most megacap and chip stocks while the Federal Reserve left interest rates unchanged this Wednesday. Google's parent company experienced a 6.1% decline, resulting in a 3.0% drop in the S&P 500 communication services sector. This occurred following its announcement of holiday-season advertising sales falling short of expectations and its projection of increased spending on artificial intelligence.<\/p>\n\n\n\n

Microsoft (Nasdaq: MSFT) also lost 1.3% after forecasting higher costs to develop new artificial intelligence features, which overshadowed its upbeat quarterly results. Despite the optimistic outlook from the tech pioneers regarding customer enthusiasm for their generative AI-powered products, investors grew concerned about escalating development expenses for these innovative features. These mounting costs tempered their hopes for a significant sales surge from the new technology.<\/p>\n\n\n\n

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

These results and forecasts from big tech names, along with Tesla's growth warning last week, have reignited attention on the risks associated with the significant influence of mega-cap companies in the S&P 500 which has hit record highs in recent weeks. Apple, Meta Platforms, and Amazon.com set to report earnings on Thursday, fell over 1% each.<\/p>\n\n\n\n

See Related: New Bitcoin Core Update May Natively Support Apple M1 Chips<\/a><\/p>\n\n\n\n

Revenue Forecast And Increased Projection<\/h2>\n\n\n\n

It is also important to mention that Advanced Micro Devices saw a 3.3% decline as its first-quarter revenue forecast and increased projection for AI processors fell short of expectations. Other chip stocks including Nvidia, Broadcom, and Marvell dropped over 1% each. The attention of investors was also on the Federal Reserve's initial monetary policy decision of the year, and while it was widely anticipated that the Fed would maintain interest rates, many analysts said that the Fed is taking baby steps toward the cutting. Art Hogan, Chief Market Strategist of B.Riley Wealth, said<\/a>:<\/p>\n\n\n\n

\"Not surprisingly, I don't think the Fed wants to show their hand, especially, when they have a couple of months of data to collect before they need to. The good news is we can forget about any more tightening. The bad news is it's 'when', not 'if', they're going to cut rates, and that 'when' has been pushed out to what had been the fringes of consensus.\"<\/em><\/p>\n\n\n\n

Due to this, markets are showing some immediate disappointment as there's no explicit indication of imminent rate cuts. We're seeing an extremely neutral, non-committal statement from the Federal Reserve this Wednesday.<\/p>\n","post_title":"Wall Street's Main Indexes Fell As Alphabet's Projections For Rising AI Costs Dented Most Mega-Cap And Chip Stocks","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-as-alphabets-projections-for-rising-ai-costs-dented-most-mega-cap-and-chip-stocks","to_ping":"","pinged":"","post_modified":"2024-02-01 16:33:21","post_modified_gmt":"2024-02-01 05:33:21","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15225","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15094,"post_author":"18","post_date":"2024-01-26 02:18:51","post_date_gmt":"2024-01-25 15:18:51","post_content":"\n

As we enter the last week of January, whispers on Wall Street suggest a potential tantrum in U.S. short-term financing markets, with the storm possibly hitting as early as March. This could prompt the Federal Reserve to reassess its policies.<\/p>\n\n\n\n

As of now, banking executives are anticipating a series of events that may tighten the screws on short-term financing. The expiration of a Fed lending facility on March 11, coupled with limited adoption of the standing repo facility (SRF), is expected to reduce the available funding sources for banks. Simultaneously, increased demand for liquidity is on the horizon due to substantial U.S. government debt issuance and upcoming tax payments in March and April. Additionally, a move toward faster trade settlement in May could intensify the demand for short-term funding.<\/p>\n\n\n\n

Against this backdrop, the Federal Reserve has been steadily draining cash from the financial system by unwinding pandemic-era support. BNY Mellon strategists estimate a significant decrease in cash parked overnight with the Fed, potentially dropping below $200 billion by May. The overnight reverse repurchase agreements facility could even approach zero by mid-year. This reduction in excess liquidity may expose vulnerabilities in short-term financing markets.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Storm Clouds Gather Over Germany's Financial Horizon<\/a><\/p>\n\n\n\n

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

Spikes In Short Term Financing Markets<\/h2>\n\n\n\n

Sudden spikes in short-term financing markets can threaten financial stability, making it harder and more expensive for firms to secure necessary funds. This situation could expose lenders struggling to stabilize deposits after last year's banking crisis. As the Fed inches closer to its 2% inflation target, the risk of policy error looms large.<\/p>\n\n\n\n

If short-term financing markets experience a meltdown, it could signal the need for the Fed to ease policy. Slowing the pace of quantitative tightening (QT) is seen as a potential response. Despite the central bankers' insistence on needing more data before rate cuts, markets are already pricing in cuts by May.<\/p>\n\n\n\n

As we approach the critical months of March to May, the financial markets are at a crossroads. The potential shake-up in short-term financing markets could signal the Fed to reassess its policies. Market participants and investors must stay vigilant, and prepared for potential shifts in liquidity and policy adjustments. The coming months will \/reveal whether these concerns materialize into a significant market event or remain a contained storm in the financial teacup.<\/p>\n","post_title":"Understanding The Potential Shake-Up In U.S. Short-Term Financing Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"understanding-the-potential-shake-up-in-u-s-short-term-financing-markets","to_ping":"","pinged":"","post_modified":"2024-01-26 20:20:06","post_modified_gmt":"2024-01-26 09:20:06","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15094","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15043,"post_author":"14","post_date":"2024-01-19 05:56:40","post_date_gmt":"2024-01-18 18:56:40","post_content":"\n

Wall Street witnessed a significant stock decline this Wednesday following positive December U.S. retail sales data, which diminished the anticipation of an early initiation of the Federal Reserve's campaign to cut interest rates.<\/p>\n\n\n\n

Retail Sales Report <\/h2>\n\n\n\n

The December retail sales report from the Commerce Department (USRSL=ECI) depicted a robust consumer, responsible for approximately 70% of the U.S. economy. Despite facing the challenges of high inflation and a tight monetary policy, the consumer has shown resilience.<\/p>\n\n\n\n

The data revealed that discounts offered by retailers and a surge in motor vehicle acquisitions contributed to a greater-than-anticipated increase in U.S. retail sales, maintaining the economy on a robust trajectory in 2024. This bolstered the perspective that the Federal Reserve might not reduce interest rates as rapidly as initially anticipated for the current year.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

Anticipations among traders for a 25-basis-point Federal Reserve rate cut in March declined to 55%, down from approximately 60% before the release of the retail sales data. Ryan Detrick, chief market strategist at Carson Group in Omaha, said<\/a>:<\/p>\n\n\n\n

\"We had news that the U.S. consumer continues to be quite healthy, but that has increased anxiety that the Fed\u2019s first rate cut could potentially be pushed to May from March. Yields are also moving higher on the strong retail sales numbers, adding to near-term worries.\"<\/em><\/p>\n\n\n\n

US Stocks And Wall Street<\/h2>\n\n\n\n

It is also important to mention that a decline in U.S. stocks sent Wall Street's<\/a> \"fear gauge\" to a two-month high while JPMorgan analysts predict that the majority of negative consequences stemming from higher interest rates have not materialized yet. On Tuesday, Federal Reserve Governor Christopher Waller also emphasized that the central bank should refrain from hastily reducing interest rates until there is a clear indication that lower inflation is likely to persist.<\/p>\n\n\n\n

At the same time, the escalation of geopolitical uncertainties introduces an additional challenge and heightens the potential for unforeseen risks in both markets and economic performance. Considering these factors, the perspective is likely to stay cautious as long as interest rates remain significantly restrictive and the looming presence of geopolitical risks persists.<\/p>\n","post_title":"Wall Street Weakened As Retail Sales Data Hampers Expectations For A Cut In Interest Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-weakened-as-retail-sales-data-hampers-expectations-for-a-cut-in-interest-rates","to_ping":"","pinged":"","post_modified":"2024-01-19 05:56:51","post_modified_gmt":"2024-01-18 18:56:51","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15043","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14931,"post_author":"18","post_date":"2024-01-10 07:51:17","post_date_gmt":"2024-01-09 20:51:17","post_content":"\n

In a recent survey conducted by the New York Federal Reserve<\/a>, Wall Street's major banks have recalibrated their predictions regarding the Federal Reserve's balance sheet drawdown. This shift suggests that the U.S. central bank might conclude its quantitative tightening (QT) process later than initially anticipated.<\/p>\n\n\n\n

A Change in Perspective<\/h2>\n\n\n\n

Previously, primary dealers\u2014major banks\u2014projected that the QT process would conclude by the third quarter. However, the sentiment has evolved. According to the latest survey taken before the Fed's December 12-13 policy meeting, these banks now foresee the QT process ending in the fourth quarter.<\/p>\n\n\n\n

This adjustment carries significant implications. If these predictions materialize, the Federal Reserve's balance sheet<\/a> will likely shrink to approximately $6.75 trillion, down from its current level of roughly $7.764 trillion. Moreover, banks estimated that the central bank's reverse repo facility would hold $375 billion when QT concludes, a reduction from the anticipated $625 billion as forecasted in October.<\/p>\n\n\n\n

Federal Reserve Strategy<\/h2>\n\n\n\n

The quantitative tightening process has been an integral part of the Federal Reserve's strategy to combat inflation. Alongside rate hikes, the central bank initiated large-scale purchases of Treasury bonds and mortgage-backed securities during the COVID-19 pandemic's onset in 2020. This move led to an expansion of its holdings to approximately $9 trillion by mid-2022. However, since last year, the Fed has been gradually reducing its balance sheet size, although specific guidance on the timeline remains somewhat ambiguous.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

What This Means for the Economy<\/h2>\n\n\n\n

The recalibrated timeline for QT indicates a more prolonged period of balance sheet reduction. As the Federal Reserve continues to navigate its policy decisions, market participants, businesses, and consumers should monitor these developments closely. Changes in the balance sheet size can influence interest rates, liquidity conditions, and overall financial market dynamics.<\/p>\n\n\n\n

A Technical Perspective<\/h2>\n\n\n\n

From a technical standpoint, the Federal Reserve's<\/a> balance sheet management serves as a critical tool in its monetary policy arsenal. The evolving predictions by Wall Street's primary dealers underscore the complexities involved in forecasting economic variables, such as inflation and interest rates.<\/p>\n\n\n\n

As the QT process continues, policymakers and market participants must remain vigilant, considering the potential ramifications for financial stability and economic growth. This dynamic landscape necessitates ongoing analysis and adaptation to ensure that monetary policy objectives align with evolving economic conditions.<\/p>\n","post_title":"Decoding Wall Street's Shift: A Closer Look At Wall Street's Changing Perspective","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"decoding-wall-streets-shift-a-closer-look-at-wall-streets-changing-perspective","to_ping":"","pinged":"","post_modified":"2024-01-10 07:51:25","post_modified_gmt":"2024-01-09 20:51:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14931","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14888,"post_author":"14","post_date":"2024-01-06 18:33:09","post_date_gmt":"2024-01-06 07:33:09","post_content":"\n

Wall Street's main indexes fell at the beginning of the 2024 year as investors locked in profits after a very successful 2023 and are currently waiting for the Federal Reserve's<\/a> meeting that could offer hints on its interest rate path. Ken Polcari, managing partner at Kace Capital Advisors, said:<\/p>\n\n\n\n

\"The decline yesterday, today, and maybe for the next couple of weeks, is a result of people locking in profits and reconsidering what the narrative is - are rates going down five or six times as it appeared to be at the end of last year?\"<\/em><\/p>\n\n\n\n

\"\"
The Nasdaq Composite kicked off the year with a 1.5% drop pressured by a selloff in the tech sector<\/figcaption><\/figure>\n\n\n\n

The Fed's December meeting minutes are set to be disclosed at 2:00 p.m. ET, potentially providing information regarding the central bank's shift toward reducing interest rates. Although it's widely anticipated that the Fed will keep interest rates unchanged this month, traders have priced in a 65.7% probability of a 25 basis point rate reduction in March, according to CMEGroup's FedWatch tool.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures<\/a><\/p>\n\n\n\n

Central Bank And Inflation<\/h2>\n\n\n\n

Richmond Fed President Thomas Barkin, a voting member in the FOMC's rate-setting committee, said recently that the U.S. central bank is \"making real progress\" towards taming inflation and a soft landing seeming \"increasingly conceivable\". Encouragingly, the American Association of Individual Investors (AAII) Sentiment Survey indicated a surge in optimism among individual investors regarding the short-term outlook for the U.S. stock market, reaching its peak level in more than two and a half years.<\/p>\n\n\n\n

Despite this, JPMorgan Asset Management advises investors to be cautious due to potential recession risks. At the same time, analysts at Soci\u00e9t\u00e9 G\u00e9n\u00e9rale anticipate a turbulent 2024 for U.S. stocks, projecting fluctuations that could involve nearing recent highs, encountering declines, and subsequently rebounding.<\/p>\n\n\n\n

This week will witness a series of labor market data releases, culminating in the government's December employment report on Friday. These reports could significantly influence the forecast for the Fed's interest rate trajectory this year, prompting investors to scrutinize the data. Jeffrey Roach, chief economist at LPL Financial, added<\/a>:<\/p>\n\n\n\n

 \"The job market is cooling and we should see confirmation of that in this Friday\u2019s jobs report\"<\/em><\/p>\n\n\n\n

Following the progress of Wall Street's main indexes seen last year, investors are still optimistic about the prospect of another robust year ahead. This optimism is rooted in the anticipation that a decelerating economy will result in a gentle landing rather than a full-scale recession, especially as the Fed initiates rate cuts in the first half of 2024.<\/p>\n","post_title":"Wall Street's Main Indexes Fell At The Beginning Of 2024 year. Investors Locked In Profits After A Strong 2023 And Wait For The Federal Reserve's Meeting","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-at-the-beginning-of-2024-year-investors-locked-in-profits-after-a-strong-2023-and-wait-for-the-federal-reserves-meeting","to_ping":"","pinged":"","post_modified":"2024-01-06 18:33:13","post_modified_gmt":"2024-01-06 07:33:13","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14888","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14629,"post_author":"15","post_date":"2023-12-15 19:46:11","post_date_gmt":"2023-12-15 08:46:11","post_content":"\n

BlackRock aims to facilitate the participation of Wall Street banks in its potential Bitcoin ETF approval. Recent SEC memo <\/a>detailing a late November meeting involving BlackRock, Nasdaq, and the Commission. During this meeting, they discussed feedback regarding BlackRock's Bitcoin ETF application.<\/p>\n\n\n\n

The proposed approach introduces an innovative method for the redemption of ETF shares. A Bitcoin ETF would enable fund investors to gain exposure to Bitcoin without directly purchasing or storing the cryptocurrency. While the SEC has hesitated to approve such ETFs due to concerns about Bitcoin market manipulation, this new strategy addresses those worries.<\/p>\n\n\n\n

The SEC has yet to decide on BlackRock's iShares Bitcoin Trust (IBTC) application, with the deadline set for January 15. Analysts anticipate a decision will be issued for several spot Bitcoin ETF applications earlier in January.<\/p>\n\n\n\n

See Related:<\/strong><\/em> Fidelity Joins BlackRock\u2019s Push For Ethereum ETF<\/a><\/p>\n\n\n\n

BlackRock ETF Details<\/h2>\n\n\n\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

In their latest report on equity client flows, BofA Securities equity and quant strategist Jill Carey Hall said that the previous week saw the largest influx of U.S. equity investments in seven weeks, along with the most substantial private client inflows in over a year. Jill Carey Hall added<\/a>:<\/p>\n\n\n\n

\"Private clients were the biggest buyers of equities last week, led by purchases of ETFs and Tech stocks. Institutional clients were also net buyers after large outflows the week prior, while hedge fund clients were net sellers.\"<\/em><\/p>\n\n\n\n

Investors are actively monitoring earnings and forecasts from big companies against the backdrop of high borrowing costs but remarks from the Fed's policymakers through the week, including voting member Cleveland's Loretta Mester, will also be on investors' watch list.<\/p>\n","post_title":"Fed Chair Jerome Powell Pushed Back Firmly Against Market Speculation Of Imminent Rate Cuts. What To Expect In The Days Ahead?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"fed-chair-jerome-powell-pushed-back-firmly-against-market-speculation-of-imminent-rate-cuts-what-to-expect-in-the-days-ahead","to_ping":"","pinged":"","post_modified":"2024-02-07 19:31:25","post_modified_gmt":"2024-02-07 08:31:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15327","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15225,"post_author":"14","post_date":"2024-02-01 16:33:13","post_date_gmt":"2024-02-01 05:33:13","post_content":"\n

Wall Street's main indexes fell as Alphabet's projections for rising AI costs dented most megacap and chip stocks while the Federal Reserve left interest rates unchanged this Wednesday. Google's parent company experienced a 6.1% decline, resulting in a 3.0% drop in the S&P 500 communication services sector. This occurred following its announcement of holiday-season advertising sales falling short of expectations and its projection of increased spending on artificial intelligence.<\/p>\n\n\n\n

Microsoft (Nasdaq: MSFT) also lost 1.3% after forecasting higher costs to develop new artificial intelligence features, which overshadowed its upbeat quarterly results. Despite the optimistic outlook from the tech pioneers regarding customer enthusiasm for their generative AI-powered products, investors grew concerned about escalating development expenses for these innovative features. These mounting costs tempered their hopes for a significant sales surge from the new technology.<\/p>\n\n\n\n

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

These results and forecasts from big tech names, along with Tesla's growth warning last week, have reignited attention on the risks associated with the significant influence of mega-cap companies in the S&P 500 which has hit record highs in recent weeks. Apple, Meta Platforms, and Amazon.com set to report earnings on Thursday, fell over 1% each.<\/p>\n\n\n\n

See Related: New Bitcoin Core Update May Natively Support Apple M1 Chips<\/a><\/p>\n\n\n\n

Revenue Forecast And Increased Projection<\/h2>\n\n\n\n

It is also important to mention that Advanced Micro Devices saw a 3.3% decline as its first-quarter revenue forecast and increased projection for AI processors fell short of expectations. Other chip stocks including Nvidia, Broadcom, and Marvell dropped over 1% each. The attention of investors was also on the Federal Reserve's initial monetary policy decision of the year, and while it was widely anticipated that the Fed would maintain interest rates, many analysts said that the Fed is taking baby steps toward the cutting. Art Hogan, Chief Market Strategist of B.Riley Wealth, said<\/a>:<\/p>\n\n\n\n

\"Not surprisingly, I don't think the Fed wants to show their hand, especially, when they have a couple of months of data to collect before they need to. The good news is we can forget about any more tightening. The bad news is it's 'when', not 'if', they're going to cut rates, and that 'when' has been pushed out to what had been the fringes of consensus.\"<\/em><\/p>\n\n\n\n

Due to this, markets are showing some immediate disappointment as there's no explicit indication of imminent rate cuts. We're seeing an extremely neutral, non-committal statement from the Federal Reserve this Wednesday.<\/p>\n","post_title":"Wall Street's Main Indexes Fell As Alphabet's Projections For Rising AI Costs Dented Most Mega-Cap And Chip Stocks","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-as-alphabets-projections-for-rising-ai-costs-dented-most-mega-cap-and-chip-stocks","to_ping":"","pinged":"","post_modified":"2024-02-01 16:33:21","post_modified_gmt":"2024-02-01 05:33:21","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15225","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15094,"post_author":"18","post_date":"2024-01-26 02:18:51","post_date_gmt":"2024-01-25 15:18:51","post_content":"\n

As we enter the last week of January, whispers on Wall Street suggest a potential tantrum in U.S. short-term financing markets, with the storm possibly hitting as early as March. This could prompt the Federal Reserve to reassess its policies.<\/p>\n\n\n\n

As of now, banking executives are anticipating a series of events that may tighten the screws on short-term financing. The expiration of a Fed lending facility on March 11, coupled with limited adoption of the standing repo facility (SRF), is expected to reduce the available funding sources for banks. Simultaneously, increased demand for liquidity is on the horizon due to substantial U.S. government debt issuance and upcoming tax payments in March and April. Additionally, a move toward faster trade settlement in May could intensify the demand for short-term funding.<\/p>\n\n\n\n

Against this backdrop, the Federal Reserve has been steadily draining cash from the financial system by unwinding pandemic-era support. BNY Mellon strategists estimate a significant decrease in cash parked overnight with the Fed, potentially dropping below $200 billion by May. The overnight reverse repurchase agreements facility could even approach zero by mid-year. This reduction in excess liquidity may expose vulnerabilities in short-term financing markets.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Storm Clouds Gather Over Germany's Financial Horizon<\/a><\/p>\n\n\n\n

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

Spikes In Short Term Financing Markets<\/h2>\n\n\n\n

Sudden spikes in short-term financing markets can threaten financial stability, making it harder and more expensive for firms to secure necessary funds. This situation could expose lenders struggling to stabilize deposits after last year's banking crisis. As the Fed inches closer to its 2% inflation target, the risk of policy error looms large.<\/p>\n\n\n\n

If short-term financing markets experience a meltdown, it could signal the need for the Fed to ease policy. Slowing the pace of quantitative tightening (QT) is seen as a potential response. Despite the central bankers' insistence on needing more data before rate cuts, markets are already pricing in cuts by May.<\/p>\n\n\n\n

As we approach the critical months of March to May, the financial markets are at a crossroads. The potential shake-up in short-term financing markets could signal the Fed to reassess its policies. Market participants and investors must stay vigilant, and prepared for potential shifts in liquidity and policy adjustments. The coming months will \/reveal whether these concerns materialize into a significant market event or remain a contained storm in the financial teacup.<\/p>\n","post_title":"Understanding The Potential Shake-Up In U.S. Short-Term Financing Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"understanding-the-potential-shake-up-in-u-s-short-term-financing-markets","to_ping":"","pinged":"","post_modified":"2024-01-26 20:20:06","post_modified_gmt":"2024-01-26 09:20:06","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15094","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15043,"post_author":"14","post_date":"2024-01-19 05:56:40","post_date_gmt":"2024-01-18 18:56:40","post_content":"\n

Wall Street witnessed a significant stock decline this Wednesday following positive December U.S. retail sales data, which diminished the anticipation of an early initiation of the Federal Reserve's campaign to cut interest rates.<\/p>\n\n\n\n

Retail Sales Report <\/h2>\n\n\n\n

The December retail sales report from the Commerce Department (USRSL=ECI) depicted a robust consumer, responsible for approximately 70% of the U.S. economy. Despite facing the challenges of high inflation and a tight monetary policy, the consumer has shown resilience.<\/p>\n\n\n\n

The data revealed that discounts offered by retailers and a surge in motor vehicle acquisitions contributed to a greater-than-anticipated increase in U.S. retail sales, maintaining the economy on a robust trajectory in 2024. This bolstered the perspective that the Federal Reserve might not reduce interest rates as rapidly as initially anticipated for the current year.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

Anticipations among traders for a 25-basis-point Federal Reserve rate cut in March declined to 55%, down from approximately 60% before the release of the retail sales data. Ryan Detrick, chief market strategist at Carson Group in Omaha, said<\/a>:<\/p>\n\n\n\n

\"We had news that the U.S. consumer continues to be quite healthy, but that has increased anxiety that the Fed\u2019s first rate cut could potentially be pushed to May from March. Yields are also moving higher on the strong retail sales numbers, adding to near-term worries.\"<\/em><\/p>\n\n\n\n

US Stocks And Wall Street<\/h2>\n\n\n\n

It is also important to mention that a decline in U.S. stocks sent Wall Street's<\/a> \"fear gauge\" to a two-month high while JPMorgan analysts predict that the majority of negative consequences stemming from higher interest rates have not materialized yet. On Tuesday, Federal Reserve Governor Christopher Waller also emphasized that the central bank should refrain from hastily reducing interest rates until there is a clear indication that lower inflation is likely to persist.<\/p>\n\n\n\n

At the same time, the escalation of geopolitical uncertainties introduces an additional challenge and heightens the potential for unforeseen risks in both markets and economic performance. Considering these factors, the perspective is likely to stay cautious as long as interest rates remain significantly restrictive and the looming presence of geopolitical risks persists.<\/p>\n","post_title":"Wall Street Weakened As Retail Sales Data Hampers Expectations For A Cut In Interest Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-weakened-as-retail-sales-data-hampers-expectations-for-a-cut-in-interest-rates","to_ping":"","pinged":"","post_modified":"2024-01-19 05:56:51","post_modified_gmt":"2024-01-18 18:56:51","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15043","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14931,"post_author":"18","post_date":"2024-01-10 07:51:17","post_date_gmt":"2024-01-09 20:51:17","post_content":"\n

In a recent survey conducted by the New York Federal Reserve<\/a>, Wall Street's major banks have recalibrated their predictions regarding the Federal Reserve's balance sheet drawdown. This shift suggests that the U.S. central bank might conclude its quantitative tightening (QT) process later than initially anticipated.<\/p>\n\n\n\n

A Change in Perspective<\/h2>\n\n\n\n

Previously, primary dealers\u2014major banks\u2014projected that the QT process would conclude by the third quarter. However, the sentiment has evolved. According to the latest survey taken before the Fed's December 12-13 policy meeting, these banks now foresee the QT process ending in the fourth quarter.<\/p>\n\n\n\n

This adjustment carries significant implications. If these predictions materialize, the Federal Reserve's balance sheet<\/a> will likely shrink to approximately $6.75 trillion, down from its current level of roughly $7.764 trillion. Moreover, banks estimated that the central bank's reverse repo facility would hold $375 billion when QT concludes, a reduction from the anticipated $625 billion as forecasted in October.<\/p>\n\n\n\n

Federal Reserve Strategy<\/h2>\n\n\n\n

The quantitative tightening process has been an integral part of the Federal Reserve's strategy to combat inflation. Alongside rate hikes, the central bank initiated large-scale purchases of Treasury bonds and mortgage-backed securities during the COVID-19 pandemic's onset in 2020. This move led to an expansion of its holdings to approximately $9 trillion by mid-2022. However, since last year, the Fed has been gradually reducing its balance sheet size, although specific guidance on the timeline remains somewhat ambiguous.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

What This Means for the Economy<\/h2>\n\n\n\n

The recalibrated timeline for QT indicates a more prolonged period of balance sheet reduction. As the Federal Reserve continues to navigate its policy decisions, market participants, businesses, and consumers should monitor these developments closely. Changes in the balance sheet size can influence interest rates, liquidity conditions, and overall financial market dynamics.<\/p>\n\n\n\n

A Technical Perspective<\/h2>\n\n\n\n

From a technical standpoint, the Federal Reserve's<\/a> balance sheet management serves as a critical tool in its monetary policy arsenal. The evolving predictions by Wall Street's primary dealers underscore the complexities involved in forecasting economic variables, such as inflation and interest rates.<\/p>\n\n\n\n

As the QT process continues, policymakers and market participants must remain vigilant, considering the potential ramifications for financial stability and economic growth. This dynamic landscape necessitates ongoing analysis and adaptation to ensure that monetary policy objectives align with evolving economic conditions.<\/p>\n","post_title":"Decoding Wall Street's Shift: A Closer Look At Wall Street's Changing Perspective","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"decoding-wall-streets-shift-a-closer-look-at-wall-streets-changing-perspective","to_ping":"","pinged":"","post_modified":"2024-01-10 07:51:25","post_modified_gmt":"2024-01-09 20:51:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14931","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14888,"post_author":"14","post_date":"2024-01-06 18:33:09","post_date_gmt":"2024-01-06 07:33:09","post_content":"\n

Wall Street's main indexes fell at the beginning of the 2024 year as investors locked in profits after a very successful 2023 and are currently waiting for the Federal Reserve's<\/a> meeting that could offer hints on its interest rate path. Ken Polcari, managing partner at Kace Capital Advisors, said:<\/p>\n\n\n\n

\"The decline yesterday, today, and maybe for the next couple of weeks, is a result of people locking in profits and reconsidering what the narrative is - are rates going down five or six times as it appeared to be at the end of last year?\"<\/em><\/p>\n\n\n\n

\"\"
The Nasdaq Composite kicked off the year with a 1.5% drop pressured by a selloff in the tech sector<\/figcaption><\/figure>\n\n\n\n

The Fed's December meeting minutes are set to be disclosed at 2:00 p.m. ET, potentially providing information regarding the central bank's shift toward reducing interest rates. Although it's widely anticipated that the Fed will keep interest rates unchanged this month, traders have priced in a 65.7% probability of a 25 basis point rate reduction in March, according to CMEGroup's FedWatch tool.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures<\/a><\/p>\n\n\n\n

Central Bank And Inflation<\/h2>\n\n\n\n

Richmond Fed President Thomas Barkin, a voting member in the FOMC's rate-setting committee, said recently that the U.S. central bank is \"making real progress\" towards taming inflation and a soft landing seeming \"increasingly conceivable\". Encouragingly, the American Association of Individual Investors (AAII) Sentiment Survey indicated a surge in optimism among individual investors regarding the short-term outlook for the U.S. stock market, reaching its peak level in more than two and a half years.<\/p>\n\n\n\n

Despite this, JPMorgan Asset Management advises investors to be cautious due to potential recession risks. At the same time, analysts at Soci\u00e9t\u00e9 G\u00e9n\u00e9rale anticipate a turbulent 2024 for U.S. stocks, projecting fluctuations that could involve nearing recent highs, encountering declines, and subsequently rebounding.<\/p>\n\n\n\n

This week will witness a series of labor market data releases, culminating in the government's December employment report on Friday. These reports could significantly influence the forecast for the Fed's interest rate trajectory this year, prompting investors to scrutinize the data. Jeffrey Roach, chief economist at LPL Financial, added<\/a>:<\/p>\n\n\n\n

 \"The job market is cooling and we should see confirmation of that in this Friday\u2019s jobs report\"<\/em><\/p>\n\n\n\n

Following the progress of Wall Street's main indexes seen last year, investors are still optimistic about the prospect of another robust year ahead. This optimism is rooted in the anticipation that a decelerating economy will result in a gentle landing rather than a full-scale recession, especially as the Fed initiates rate cuts in the first half of 2024.<\/p>\n","post_title":"Wall Street's Main Indexes Fell At The Beginning Of 2024 year. Investors Locked In Profits After A Strong 2023 And Wait For The Federal Reserve's Meeting","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-at-the-beginning-of-2024-year-investors-locked-in-profits-after-a-strong-2023-and-wait-for-the-federal-reserves-meeting","to_ping":"","pinged":"","post_modified":"2024-01-06 18:33:13","post_modified_gmt":"2024-01-06 07:33:13","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14888","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14629,"post_author":"15","post_date":"2023-12-15 19:46:11","post_date_gmt":"2023-12-15 08:46:11","post_content":"\n

BlackRock aims to facilitate the participation of Wall Street banks in its potential Bitcoin ETF approval. Recent SEC memo <\/a>detailing a late November meeting involving BlackRock, Nasdaq, and the Commission. During this meeting, they discussed feedback regarding BlackRock's Bitcoin ETF application.<\/p>\n\n\n\n

The proposed approach introduces an innovative method for the redemption of ETF shares. A Bitcoin ETF would enable fund investors to gain exposure to Bitcoin without directly purchasing or storing the cryptocurrency. While the SEC has hesitated to approve such ETFs due to concerns about Bitcoin market manipulation, this new strategy addresses those worries.<\/p>\n\n\n\n

The SEC has yet to decide on BlackRock's iShares Bitcoin Trust (IBTC) application, with the deadline set for January 15. Analysts anticipate a decision will be issued for several spot Bitcoin ETF applications earlier in January.<\/p>\n\n\n\n

See Related:<\/strong><\/em> Fidelity Joins BlackRock\u2019s Push For Ethereum ETF<\/a><\/p>\n\n\n\n

BlackRock ETF Details<\/h2>\n\n\n\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

Simultaneously, approximately 80% of earnings reports are surpassing analysts' expectations. With results available from nearly half of the S&P 500 companies, including major tech-related firms, overall earnings are projected to have risen by 7.8% in the fourth quarter compared to the same period last year.<\/p>\n\n\n\n

In their latest report on equity client flows, BofA Securities equity and quant strategist Jill Carey Hall said that the previous week saw the largest influx of U.S. equity investments in seven weeks, along with the most substantial private client inflows in over a year. Jill Carey Hall added<\/a>:<\/p>\n\n\n\n

\"Private clients were the biggest buyers of equities last week, led by purchases of ETFs and Tech stocks. Institutional clients were also net buyers after large outflows the week prior, while hedge fund clients were net sellers.\"<\/em><\/p>\n\n\n\n

Investors are actively monitoring earnings and forecasts from big companies against the backdrop of high borrowing costs but remarks from the Fed's policymakers through the week, including voting member Cleveland's Loretta Mester, will also be on investors' watch list.<\/p>\n","post_title":"Fed Chair Jerome Powell Pushed Back Firmly Against Market Speculation Of Imminent Rate Cuts. What To Expect In The Days Ahead?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"fed-chair-jerome-powell-pushed-back-firmly-against-market-speculation-of-imminent-rate-cuts-what-to-expect-in-the-days-ahead","to_ping":"","pinged":"","post_modified":"2024-02-07 19:31:25","post_modified_gmt":"2024-02-07 08:31:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15327","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15225,"post_author":"14","post_date":"2024-02-01 16:33:13","post_date_gmt":"2024-02-01 05:33:13","post_content":"\n

Wall Street's main indexes fell as Alphabet's projections for rising AI costs dented most megacap and chip stocks while the Federal Reserve left interest rates unchanged this Wednesday. Google's parent company experienced a 6.1% decline, resulting in a 3.0% drop in the S&P 500 communication services sector. This occurred following its announcement of holiday-season advertising sales falling short of expectations and its projection of increased spending on artificial intelligence.<\/p>\n\n\n\n

Microsoft (Nasdaq: MSFT) also lost 1.3% after forecasting higher costs to develop new artificial intelligence features, which overshadowed its upbeat quarterly results. Despite the optimistic outlook from the tech pioneers regarding customer enthusiasm for their generative AI-powered products, investors grew concerned about escalating development expenses for these innovative features. These mounting costs tempered their hopes for a significant sales surge from the new technology.<\/p>\n\n\n\n

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

These results and forecasts from big tech names, along with Tesla's growth warning last week, have reignited attention on the risks associated with the significant influence of mega-cap companies in the S&P 500 which has hit record highs in recent weeks. Apple, Meta Platforms, and Amazon.com set to report earnings on Thursday, fell over 1% each.<\/p>\n\n\n\n

See Related: New Bitcoin Core Update May Natively Support Apple M1 Chips<\/a><\/p>\n\n\n\n

Revenue Forecast And Increased Projection<\/h2>\n\n\n\n

It is also important to mention that Advanced Micro Devices saw a 3.3% decline as its first-quarter revenue forecast and increased projection for AI processors fell short of expectations. Other chip stocks including Nvidia, Broadcom, and Marvell dropped over 1% each. The attention of investors was also on the Federal Reserve's initial monetary policy decision of the year, and while it was widely anticipated that the Fed would maintain interest rates, many analysts said that the Fed is taking baby steps toward the cutting. Art Hogan, Chief Market Strategist of B.Riley Wealth, said<\/a>:<\/p>\n\n\n\n

\"Not surprisingly, I don't think the Fed wants to show their hand, especially, when they have a couple of months of data to collect before they need to. The good news is we can forget about any more tightening. The bad news is it's 'when', not 'if', they're going to cut rates, and that 'when' has been pushed out to what had been the fringes of consensus.\"<\/em><\/p>\n\n\n\n

Due to this, markets are showing some immediate disappointment as there's no explicit indication of imminent rate cuts. We're seeing an extremely neutral, non-committal statement from the Federal Reserve this Wednesday.<\/p>\n","post_title":"Wall Street's Main Indexes Fell As Alphabet's Projections For Rising AI Costs Dented Most Mega-Cap And Chip Stocks","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-as-alphabets-projections-for-rising-ai-costs-dented-most-mega-cap-and-chip-stocks","to_ping":"","pinged":"","post_modified":"2024-02-01 16:33:21","post_modified_gmt":"2024-02-01 05:33:21","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15225","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15094,"post_author":"18","post_date":"2024-01-26 02:18:51","post_date_gmt":"2024-01-25 15:18:51","post_content":"\n

As we enter the last week of January, whispers on Wall Street suggest a potential tantrum in U.S. short-term financing markets, with the storm possibly hitting as early as March. This could prompt the Federal Reserve to reassess its policies.<\/p>\n\n\n\n

As of now, banking executives are anticipating a series of events that may tighten the screws on short-term financing. The expiration of a Fed lending facility on March 11, coupled with limited adoption of the standing repo facility (SRF), is expected to reduce the available funding sources for banks. Simultaneously, increased demand for liquidity is on the horizon due to substantial U.S. government debt issuance and upcoming tax payments in March and April. Additionally, a move toward faster trade settlement in May could intensify the demand for short-term funding.<\/p>\n\n\n\n

Against this backdrop, the Federal Reserve has been steadily draining cash from the financial system by unwinding pandemic-era support. BNY Mellon strategists estimate a significant decrease in cash parked overnight with the Fed, potentially dropping below $200 billion by May. The overnight reverse repurchase agreements facility could even approach zero by mid-year. This reduction in excess liquidity may expose vulnerabilities in short-term financing markets.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Storm Clouds Gather Over Germany's Financial Horizon<\/a><\/p>\n\n\n\n

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

Spikes In Short Term Financing Markets<\/h2>\n\n\n\n

Sudden spikes in short-term financing markets can threaten financial stability, making it harder and more expensive for firms to secure necessary funds. This situation could expose lenders struggling to stabilize deposits after last year's banking crisis. As the Fed inches closer to its 2% inflation target, the risk of policy error looms large.<\/p>\n\n\n\n

If short-term financing markets experience a meltdown, it could signal the need for the Fed to ease policy. Slowing the pace of quantitative tightening (QT) is seen as a potential response. Despite the central bankers' insistence on needing more data before rate cuts, markets are already pricing in cuts by May.<\/p>\n\n\n\n

As we approach the critical months of March to May, the financial markets are at a crossroads. The potential shake-up in short-term financing markets could signal the Fed to reassess its policies. Market participants and investors must stay vigilant, and prepared for potential shifts in liquidity and policy adjustments. The coming months will \/reveal whether these concerns materialize into a significant market event or remain a contained storm in the financial teacup.<\/p>\n","post_title":"Understanding The Potential Shake-Up In U.S. Short-Term Financing Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"understanding-the-potential-shake-up-in-u-s-short-term-financing-markets","to_ping":"","pinged":"","post_modified":"2024-01-26 20:20:06","post_modified_gmt":"2024-01-26 09:20:06","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15094","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15043,"post_author":"14","post_date":"2024-01-19 05:56:40","post_date_gmt":"2024-01-18 18:56:40","post_content":"\n

Wall Street witnessed a significant stock decline this Wednesday following positive December U.S. retail sales data, which diminished the anticipation of an early initiation of the Federal Reserve's campaign to cut interest rates.<\/p>\n\n\n\n

Retail Sales Report <\/h2>\n\n\n\n

The December retail sales report from the Commerce Department (USRSL=ECI) depicted a robust consumer, responsible for approximately 70% of the U.S. economy. Despite facing the challenges of high inflation and a tight monetary policy, the consumer has shown resilience.<\/p>\n\n\n\n

The data revealed that discounts offered by retailers and a surge in motor vehicle acquisitions contributed to a greater-than-anticipated increase in U.S. retail sales, maintaining the economy on a robust trajectory in 2024. This bolstered the perspective that the Federal Reserve might not reduce interest rates as rapidly as initially anticipated for the current year.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

Anticipations among traders for a 25-basis-point Federal Reserve rate cut in March declined to 55%, down from approximately 60% before the release of the retail sales data. Ryan Detrick, chief market strategist at Carson Group in Omaha, said<\/a>:<\/p>\n\n\n\n

\"We had news that the U.S. consumer continues to be quite healthy, but that has increased anxiety that the Fed\u2019s first rate cut could potentially be pushed to May from March. Yields are also moving higher on the strong retail sales numbers, adding to near-term worries.\"<\/em><\/p>\n\n\n\n

US Stocks And Wall Street<\/h2>\n\n\n\n

It is also important to mention that a decline in U.S. stocks sent Wall Street's<\/a> \"fear gauge\" to a two-month high while JPMorgan analysts predict that the majority of negative consequences stemming from higher interest rates have not materialized yet. On Tuesday, Federal Reserve Governor Christopher Waller also emphasized that the central bank should refrain from hastily reducing interest rates until there is a clear indication that lower inflation is likely to persist.<\/p>\n\n\n\n

At the same time, the escalation of geopolitical uncertainties introduces an additional challenge and heightens the potential for unforeseen risks in both markets and economic performance. Considering these factors, the perspective is likely to stay cautious as long as interest rates remain significantly restrictive and the looming presence of geopolitical risks persists.<\/p>\n","post_title":"Wall Street Weakened As Retail Sales Data Hampers Expectations For A Cut In Interest Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-weakened-as-retail-sales-data-hampers-expectations-for-a-cut-in-interest-rates","to_ping":"","pinged":"","post_modified":"2024-01-19 05:56:51","post_modified_gmt":"2024-01-18 18:56:51","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15043","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14931,"post_author":"18","post_date":"2024-01-10 07:51:17","post_date_gmt":"2024-01-09 20:51:17","post_content":"\n

In a recent survey conducted by the New York Federal Reserve<\/a>, Wall Street's major banks have recalibrated their predictions regarding the Federal Reserve's balance sheet drawdown. This shift suggests that the U.S. central bank might conclude its quantitative tightening (QT) process later than initially anticipated.<\/p>\n\n\n\n

A Change in Perspective<\/h2>\n\n\n\n

Previously, primary dealers\u2014major banks\u2014projected that the QT process would conclude by the third quarter. However, the sentiment has evolved. According to the latest survey taken before the Fed's December 12-13 policy meeting, these banks now foresee the QT process ending in the fourth quarter.<\/p>\n\n\n\n

This adjustment carries significant implications. If these predictions materialize, the Federal Reserve's balance sheet<\/a> will likely shrink to approximately $6.75 trillion, down from its current level of roughly $7.764 trillion. Moreover, banks estimated that the central bank's reverse repo facility would hold $375 billion when QT concludes, a reduction from the anticipated $625 billion as forecasted in October.<\/p>\n\n\n\n

Federal Reserve Strategy<\/h2>\n\n\n\n

The quantitative tightening process has been an integral part of the Federal Reserve's strategy to combat inflation. Alongside rate hikes, the central bank initiated large-scale purchases of Treasury bonds and mortgage-backed securities during the COVID-19 pandemic's onset in 2020. This move led to an expansion of its holdings to approximately $9 trillion by mid-2022. However, since last year, the Fed has been gradually reducing its balance sheet size, although specific guidance on the timeline remains somewhat ambiguous.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

What This Means for the Economy<\/h2>\n\n\n\n

The recalibrated timeline for QT indicates a more prolonged period of balance sheet reduction. As the Federal Reserve continues to navigate its policy decisions, market participants, businesses, and consumers should monitor these developments closely. Changes in the balance sheet size can influence interest rates, liquidity conditions, and overall financial market dynamics.<\/p>\n\n\n\n

A Technical Perspective<\/h2>\n\n\n\n

From a technical standpoint, the Federal Reserve's<\/a> balance sheet management serves as a critical tool in its monetary policy arsenal. The evolving predictions by Wall Street's primary dealers underscore the complexities involved in forecasting economic variables, such as inflation and interest rates.<\/p>\n\n\n\n

As the QT process continues, policymakers and market participants must remain vigilant, considering the potential ramifications for financial stability and economic growth. This dynamic landscape necessitates ongoing analysis and adaptation to ensure that monetary policy objectives align with evolving economic conditions.<\/p>\n","post_title":"Decoding Wall Street's Shift: A Closer Look At Wall Street's Changing Perspective","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"decoding-wall-streets-shift-a-closer-look-at-wall-streets-changing-perspective","to_ping":"","pinged":"","post_modified":"2024-01-10 07:51:25","post_modified_gmt":"2024-01-09 20:51:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14931","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14888,"post_author":"14","post_date":"2024-01-06 18:33:09","post_date_gmt":"2024-01-06 07:33:09","post_content":"\n

Wall Street's main indexes fell at the beginning of the 2024 year as investors locked in profits after a very successful 2023 and are currently waiting for the Federal Reserve's<\/a> meeting that could offer hints on its interest rate path. Ken Polcari, managing partner at Kace Capital Advisors, said:<\/p>\n\n\n\n

\"The decline yesterday, today, and maybe for the next couple of weeks, is a result of people locking in profits and reconsidering what the narrative is - are rates going down five or six times as it appeared to be at the end of last year?\"<\/em><\/p>\n\n\n\n

\"\"
The Nasdaq Composite kicked off the year with a 1.5% drop pressured by a selloff in the tech sector<\/figcaption><\/figure>\n\n\n\n

The Fed's December meeting minutes are set to be disclosed at 2:00 p.m. ET, potentially providing information regarding the central bank's shift toward reducing interest rates. Although it's widely anticipated that the Fed will keep interest rates unchanged this month, traders have priced in a 65.7% probability of a 25 basis point rate reduction in March, according to CMEGroup's FedWatch tool.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures<\/a><\/p>\n\n\n\n

Central Bank And Inflation<\/h2>\n\n\n\n

Richmond Fed President Thomas Barkin, a voting member in the FOMC's rate-setting committee, said recently that the U.S. central bank is \"making real progress\" towards taming inflation and a soft landing seeming \"increasingly conceivable\". Encouragingly, the American Association of Individual Investors (AAII) Sentiment Survey indicated a surge in optimism among individual investors regarding the short-term outlook for the U.S. stock market, reaching its peak level in more than two and a half years.<\/p>\n\n\n\n

Despite this, JPMorgan Asset Management advises investors to be cautious due to potential recession risks. At the same time, analysts at Soci\u00e9t\u00e9 G\u00e9n\u00e9rale anticipate a turbulent 2024 for U.S. stocks, projecting fluctuations that could involve nearing recent highs, encountering declines, and subsequently rebounding.<\/p>\n\n\n\n

This week will witness a series of labor market data releases, culminating in the government's December employment report on Friday. These reports could significantly influence the forecast for the Fed's interest rate trajectory this year, prompting investors to scrutinize the data. Jeffrey Roach, chief economist at LPL Financial, added<\/a>:<\/p>\n\n\n\n

 \"The job market is cooling and we should see confirmation of that in this Friday\u2019s jobs report\"<\/em><\/p>\n\n\n\n

Following the progress of Wall Street's main indexes seen last year, investors are still optimistic about the prospect of another robust year ahead. This optimism is rooted in the anticipation that a decelerating economy will result in a gentle landing rather than a full-scale recession, especially as the Fed initiates rate cuts in the first half of 2024.<\/p>\n","post_title":"Wall Street's Main Indexes Fell At The Beginning Of 2024 year. Investors Locked In Profits After A Strong 2023 And Wait For The Federal Reserve's Meeting","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-at-the-beginning-of-2024-year-investors-locked-in-profits-after-a-strong-2023-and-wait-for-the-federal-reserves-meeting","to_ping":"","pinged":"","post_modified":"2024-01-06 18:33:13","post_modified_gmt":"2024-01-06 07:33:13","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14888","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14629,"post_author":"15","post_date":"2023-12-15 19:46:11","post_date_gmt":"2023-12-15 08:46:11","post_content":"\n

BlackRock aims to facilitate the participation of Wall Street banks in its potential Bitcoin ETF approval. Recent SEC memo <\/a>detailing a late November meeting involving BlackRock, Nasdaq, and the Commission. During this meeting, they discussed feedback regarding BlackRock's Bitcoin ETF application.<\/p>\n\n\n\n

The proposed approach introduces an innovative method for the redemption of ETF shares. A Bitcoin ETF would enable fund investors to gain exposure to Bitcoin without directly purchasing or storing the cryptocurrency. While the SEC has hesitated to approve such ETFs due to concerns about Bitcoin market manipulation, this new strategy addresses those worries.<\/p>\n\n\n\n

The SEC has yet to decide on BlackRock's iShares Bitcoin Trust (IBTC) application, with the deadline set for January 15. Analysts anticipate a decision will be issued for several spot Bitcoin ETF applications earlier in January.<\/p>\n\n\n\n

See Related:<\/strong><\/em> Fidelity Joins BlackRock\u2019s Push For Ethereum ETF<\/a><\/p>\n\n\n\n

BlackRock ETF Details<\/h2>\n\n\n\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

Bullish sentiment has reached an \"unusually high level,\"<\/em> surpassing its historical average of 37.5% for the 13th consecutive week. The last time optimism was higher was on December 21, 2023, at 52.9%. On the other side, bearish sentiment, or expectations that stock prices will fall over the next six months, decreased by 1.6 percentage points to 24.5%. This sentiment remains below its historical average of 31.0% for the 13th consecutive week.<\/p>\n\n\n\n

Simultaneously, approximately 80% of earnings reports are surpassing analysts' expectations. With results available from nearly half of the S&P 500 companies, including major tech-related firms, overall earnings are projected to have risen by 7.8% in the fourth quarter compared to the same period last year.<\/p>\n\n\n\n

In their latest report on equity client flows, BofA Securities equity and quant strategist Jill Carey Hall said that the previous week saw the largest influx of U.S. equity investments in seven weeks, along with the most substantial private client inflows in over a year. Jill Carey Hall added<\/a>:<\/p>\n\n\n\n

\"Private clients were the biggest buyers of equities last week, led by purchases of ETFs and Tech stocks. Institutional clients were also net buyers after large outflows the week prior, while hedge fund clients were net sellers.\"<\/em><\/p>\n\n\n\n

Investors are actively monitoring earnings and forecasts from big companies against the backdrop of high borrowing costs but remarks from the Fed's policymakers through the week, including voting member Cleveland's Loretta Mester, will also be on investors' watch list.<\/p>\n","post_title":"Fed Chair Jerome Powell Pushed Back Firmly Against Market Speculation Of Imminent Rate Cuts. What To Expect In The Days Ahead?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"fed-chair-jerome-powell-pushed-back-firmly-against-market-speculation-of-imminent-rate-cuts-what-to-expect-in-the-days-ahead","to_ping":"","pinged":"","post_modified":"2024-02-07 19:31:25","post_modified_gmt":"2024-02-07 08:31:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15327","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15225,"post_author":"14","post_date":"2024-02-01 16:33:13","post_date_gmt":"2024-02-01 05:33:13","post_content":"\n

Wall Street's main indexes fell as Alphabet's projections for rising AI costs dented most megacap and chip stocks while the Federal Reserve left interest rates unchanged this Wednesday. Google's parent company experienced a 6.1% decline, resulting in a 3.0% drop in the S&P 500 communication services sector. This occurred following its announcement of holiday-season advertising sales falling short of expectations and its projection of increased spending on artificial intelligence.<\/p>\n\n\n\n

Microsoft (Nasdaq: MSFT) also lost 1.3% after forecasting higher costs to develop new artificial intelligence features, which overshadowed its upbeat quarterly results. Despite the optimistic outlook from the tech pioneers regarding customer enthusiasm for their generative AI-powered products, investors grew concerned about escalating development expenses for these innovative features. These mounting costs tempered their hopes for a significant sales surge from the new technology.<\/p>\n\n\n\n

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

These results and forecasts from big tech names, along with Tesla's growth warning last week, have reignited attention on the risks associated with the significant influence of mega-cap companies in the S&P 500 which has hit record highs in recent weeks. Apple, Meta Platforms, and Amazon.com set to report earnings on Thursday, fell over 1% each.<\/p>\n\n\n\n

See Related: New Bitcoin Core Update May Natively Support Apple M1 Chips<\/a><\/p>\n\n\n\n

Revenue Forecast And Increased Projection<\/h2>\n\n\n\n

It is also important to mention that Advanced Micro Devices saw a 3.3% decline as its first-quarter revenue forecast and increased projection for AI processors fell short of expectations. Other chip stocks including Nvidia, Broadcom, and Marvell dropped over 1% each. The attention of investors was also on the Federal Reserve's initial monetary policy decision of the year, and while it was widely anticipated that the Fed would maintain interest rates, many analysts said that the Fed is taking baby steps toward the cutting. Art Hogan, Chief Market Strategist of B.Riley Wealth, said<\/a>:<\/p>\n\n\n\n

\"Not surprisingly, I don't think the Fed wants to show their hand, especially, when they have a couple of months of data to collect before they need to. The good news is we can forget about any more tightening. The bad news is it's 'when', not 'if', they're going to cut rates, and that 'when' has been pushed out to what had been the fringes of consensus.\"<\/em><\/p>\n\n\n\n

Due to this, markets are showing some immediate disappointment as there's no explicit indication of imminent rate cuts. We're seeing an extremely neutral, non-committal statement from the Federal Reserve this Wednesday.<\/p>\n","post_title":"Wall Street's Main Indexes Fell As Alphabet's Projections For Rising AI Costs Dented Most Mega-Cap And Chip Stocks","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-as-alphabets-projections-for-rising-ai-costs-dented-most-mega-cap-and-chip-stocks","to_ping":"","pinged":"","post_modified":"2024-02-01 16:33:21","post_modified_gmt":"2024-02-01 05:33:21","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15225","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15094,"post_author":"18","post_date":"2024-01-26 02:18:51","post_date_gmt":"2024-01-25 15:18:51","post_content":"\n

As we enter the last week of January, whispers on Wall Street suggest a potential tantrum in U.S. short-term financing markets, with the storm possibly hitting as early as March. This could prompt the Federal Reserve to reassess its policies.<\/p>\n\n\n\n

As of now, banking executives are anticipating a series of events that may tighten the screws on short-term financing. The expiration of a Fed lending facility on March 11, coupled with limited adoption of the standing repo facility (SRF), is expected to reduce the available funding sources for banks. Simultaneously, increased demand for liquidity is on the horizon due to substantial U.S. government debt issuance and upcoming tax payments in March and April. Additionally, a move toward faster trade settlement in May could intensify the demand for short-term funding.<\/p>\n\n\n\n

Against this backdrop, the Federal Reserve has been steadily draining cash from the financial system by unwinding pandemic-era support. BNY Mellon strategists estimate a significant decrease in cash parked overnight with the Fed, potentially dropping below $200 billion by May. The overnight reverse repurchase agreements facility could even approach zero by mid-year. This reduction in excess liquidity may expose vulnerabilities in short-term financing markets.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Storm Clouds Gather Over Germany's Financial Horizon<\/a><\/p>\n\n\n\n

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

Spikes In Short Term Financing Markets<\/h2>\n\n\n\n

Sudden spikes in short-term financing markets can threaten financial stability, making it harder and more expensive for firms to secure necessary funds. This situation could expose lenders struggling to stabilize deposits after last year's banking crisis. As the Fed inches closer to its 2% inflation target, the risk of policy error looms large.<\/p>\n\n\n\n

If short-term financing markets experience a meltdown, it could signal the need for the Fed to ease policy. Slowing the pace of quantitative tightening (QT) is seen as a potential response. Despite the central bankers' insistence on needing more data before rate cuts, markets are already pricing in cuts by May.<\/p>\n\n\n\n

As we approach the critical months of March to May, the financial markets are at a crossroads. The potential shake-up in short-term financing markets could signal the Fed to reassess its policies. Market participants and investors must stay vigilant, and prepared for potential shifts in liquidity and policy adjustments. The coming months will \/reveal whether these concerns materialize into a significant market event or remain a contained storm in the financial teacup.<\/p>\n","post_title":"Understanding The Potential Shake-Up In U.S. Short-Term Financing Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"understanding-the-potential-shake-up-in-u-s-short-term-financing-markets","to_ping":"","pinged":"","post_modified":"2024-01-26 20:20:06","post_modified_gmt":"2024-01-26 09:20:06","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15094","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15043,"post_author":"14","post_date":"2024-01-19 05:56:40","post_date_gmt":"2024-01-18 18:56:40","post_content":"\n

Wall Street witnessed a significant stock decline this Wednesday following positive December U.S. retail sales data, which diminished the anticipation of an early initiation of the Federal Reserve's campaign to cut interest rates.<\/p>\n\n\n\n

Retail Sales Report <\/h2>\n\n\n\n

The December retail sales report from the Commerce Department (USRSL=ECI) depicted a robust consumer, responsible for approximately 70% of the U.S. economy. Despite facing the challenges of high inflation and a tight monetary policy, the consumer has shown resilience.<\/p>\n\n\n\n

The data revealed that discounts offered by retailers and a surge in motor vehicle acquisitions contributed to a greater-than-anticipated increase in U.S. retail sales, maintaining the economy on a robust trajectory in 2024. This bolstered the perspective that the Federal Reserve might not reduce interest rates as rapidly as initially anticipated for the current year.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

Anticipations among traders for a 25-basis-point Federal Reserve rate cut in March declined to 55%, down from approximately 60% before the release of the retail sales data. Ryan Detrick, chief market strategist at Carson Group in Omaha, said<\/a>:<\/p>\n\n\n\n

\"We had news that the U.S. consumer continues to be quite healthy, but that has increased anxiety that the Fed\u2019s first rate cut could potentially be pushed to May from March. Yields are also moving higher on the strong retail sales numbers, adding to near-term worries.\"<\/em><\/p>\n\n\n\n

US Stocks And Wall Street<\/h2>\n\n\n\n

It is also important to mention that a decline in U.S. stocks sent Wall Street's<\/a> \"fear gauge\" to a two-month high while JPMorgan analysts predict that the majority of negative consequences stemming from higher interest rates have not materialized yet. On Tuesday, Federal Reserve Governor Christopher Waller also emphasized that the central bank should refrain from hastily reducing interest rates until there is a clear indication that lower inflation is likely to persist.<\/p>\n\n\n\n

At the same time, the escalation of geopolitical uncertainties introduces an additional challenge and heightens the potential for unforeseen risks in both markets and economic performance. Considering these factors, the perspective is likely to stay cautious as long as interest rates remain significantly restrictive and the looming presence of geopolitical risks persists.<\/p>\n","post_title":"Wall Street Weakened As Retail Sales Data Hampers Expectations For A Cut In Interest Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-weakened-as-retail-sales-data-hampers-expectations-for-a-cut-in-interest-rates","to_ping":"","pinged":"","post_modified":"2024-01-19 05:56:51","post_modified_gmt":"2024-01-18 18:56:51","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15043","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14931,"post_author":"18","post_date":"2024-01-10 07:51:17","post_date_gmt":"2024-01-09 20:51:17","post_content":"\n

In a recent survey conducted by the New York Federal Reserve<\/a>, Wall Street's major banks have recalibrated their predictions regarding the Federal Reserve's balance sheet drawdown. This shift suggests that the U.S. central bank might conclude its quantitative tightening (QT) process later than initially anticipated.<\/p>\n\n\n\n

A Change in Perspective<\/h2>\n\n\n\n

Previously, primary dealers\u2014major banks\u2014projected that the QT process would conclude by the third quarter. However, the sentiment has evolved. According to the latest survey taken before the Fed's December 12-13 policy meeting, these banks now foresee the QT process ending in the fourth quarter.<\/p>\n\n\n\n

This adjustment carries significant implications. If these predictions materialize, the Federal Reserve's balance sheet<\/a> will likely shrink to approximately $6.75 trillion, down from its current level of roughly $7.764 trillion. Moreover, banks estimated that the central bank's reverse repo facility would hold $375 billion when QT concludes, a reduction from the anticipated $625 billion as forecasted in October.<\/p>\n\n\n\n

Federal Reserve Strategy<\/h2>\n\n\n\n

The quantitative tightening process has been an integral part of the Federal Reserve's strategy to combat inflation. Alongside rate hikes, the central bank initiated large-scale purchases of Treasury bonds and mortgage-backed securities during the COVID-19 pandemic's onset in 2020. This move led to an expansion of its holdings to approximately $9 trillion by mid-2022. However, since last year, the Fed has been gradually reducing its balance sheet size, although specific guidance on the timeline remains somewhat ambiguous.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

What This Means for the Economy<\/h2>\n\n\n\n

The recalibrated timeline for QT indicates a more prolonged period of balance sheet reduction. As the Federal Reserve continues to navigate its policy decisions, market participants, businesses, and consumers should monitor these developments closely. Changes in the balance sheet size can influence interest rates, liquidity conditions, and overall financial market dynamics.<\/p>\n\n\n\n

A Technical Perspective<\/h2>\n\n\n\n

From a technical standpoint, the Federal Reserve's<\/a> balance sheet management serves as a critical tool in its monetary policy arsenal. The evolving predictions by Wall Street's primary dealers underscore the complexities involved in forecasting economic variables, such as inflation and interest rates.<\/p>\n\n\n\n

As the QT process continues, policymakers and market participants must remain vigilant, considering the potential ramifications for financial stability and economic growth. This dynamic landscape necessitates ongoing analysis and adaptation to ensure that monetary policy objectives align with evolving economic conditions.<\/p>\n","post_title":"Decoding Wall Street's Shift: A Closer Look At Wall Street's Changing Perspective","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"decoding-wall-streets-shift-a-closer-look-at-wall-streets-changing-perspective","to_ping":"","pinged":"","post_modified":"2024-01-10 07:51:25","post_modified_gmt":"2024-01-09 20:51:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14931","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14888,"post_author":"14","post_date":"2024-01-06 18:33:09","post_date_gmt":"2024-01-06 07:33:09","post_content":"\n

Wall Street's main indexes fell at the beginning of the 2024 year as investors locked in profits after a very successful 2023 and are currently waiting for the Federal Reserve's<\/a> meeting that could offer hints on its interest rate path. Ken Polcari, managing partner at Kace Capital Advisors, said:<\/p>\n\n\n\n

\"The decline yesterday, today, and maybe for the next couple of weeks, is a result of people locking in profits and reconsidering what the narrative is - are rates going down five or six times as it appeared to be at the end of last year?\"<\/em><\/p>\n\n\n\n

\"\"
The Nasdaq Composite kicked off the year with a 1.5% drop pressured by a selloff in the tech sector<\/figcaption><\/figure>\n\n\n\n

The Fed's December meeting minutes are set to be disclosed at 2:00 p.m. ET, potentially providing information regarding the central bank's shift toward reducing interest rates. Although it's widely anticipated that the Fed will keep interest rates unchanged this month, traders have priced in a 65.7% probability of a 25 basis point rate reduction in March, according to CMEGroup's FedWatch tool.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures<\/a><\/p>\n\n\n\n

Central Bank And Inflation<\/h2>\n\n\n\n

Richmond Fed President Thomas Barkin, a voting member in the FOMC's rate-setting committee, said recently that the U.S. central bank is \"making real progress\" towards taming inflation and a soft landing seeming \"increasingly conceivable\". Encouragingly, the American Association of Individual Investors (AAII) Sentiment Survey indicated a surge in optimism among individual investors regarding the short-term outlook for the U.S. stock market, reaching its peak level in more than two and a half years.<\/p>\n\n\n\n

Despite this, JPMorgan Asset Management advises investors to be cautious due to potential recession risks. At the same time, analysts at Soci\u00e9t\u00e9 G\u00e9n\u00e9rale anticipate a turbulent 2024 for U.S. stocks, projecting fluctuations that could involve nearing recent highs, encountering declines, and subsequently rebounding.<\/p>\n\n\n\n

This week will witness a series of labor market data releases, culminating in the government's December employment report on Friday. These reports could significantly influence the forecast for the Fed's interest rate trajectory this year, prompting investors to scrutinize the data. Jeffrey Roach, chief economist at LPL Financial, added<\/a>:<\/p>\n\n\n\n

 \"The job market is cooling and we should see confirmation of that in this Friday\u2019s jobs report\"<\/em><\/p>\n\n\n\n

Following the progress of Wall Street's main indexes seen last year, investors are still optimistic about the prospect of another robust year ahead. This optimism is rooted in the anticipation that a decelerating economy will result in a gentle landing rather than a full-scale recession, especially as the Fed initiates rate cuts in the first half of 2024.<\/p>\n","post_title":"Wall Street's Main Indexes Fell At The Beginning Of 2024 year. Investors Locked In Profits After A Strong 2023 And Wait For The Federal Reserve's Meeting","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-at-the-beginning-of-2024-year-investors-locked-in-profits-after-a-strong-2023-and-wait-for-the-federal-reserves-meeting","to_ping":"","pinged":"","post_modified":"2024-01-06 18:33:13","post_modified_gmt":"2024-01-06 07:33:13","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14888","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14629,"post_author":"15","post_date":"2023-12-15 19:46:11","post_date_gmt":"2023-12-15 08:46:11","post_content":"\n

BlackRock aims to facilitate the participation of Wall Street banks in its potential Bitcoin ETF approval. Recent SEC memo <\/a>detailing a late November meeting involving BlackRock, Nasdaq, and the Commission. During this meeting, they discussed feedback regarding BlackRock's Bitcoin ETF application.<\/p>\n\n\n\n

The proposed approach introduces an innovative method for the redemption of ETF shares. A Bitcoin ETF would enable fund investors to gain exposure to Bitcoin without directly purchasing or storing the cryptocurrency. While the SEC has hesitated to approve such ETFs due to concerns about Bitcoin market manipulation, this new strategy addresses those worries.<\/p>\n\n\n\n

The SEC has yet to decide on BlackRock's iShares Bitcoin Trust (IBTC) application, with the deadline set for January 15. Analysts anticipate a decision will be issued for several spot Bitcoin ETF applications earlier in January.<\/p>\n\n\n\n

See Related:<\/strong><\/em> Fidelity Joins BlackRock\u2019s Push For Ethereum ETF<\/a><\/p>\n\n\n\n

BlackRock ETF Details<\/h2>\n\n\n\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

Positive information is that the latest American Association of Individual Investors (AAII) Sentiment Survey showed that optimism among individual investors about the short-term outlook for stocks surged again. American Association of Individual Investors (AAII) reported that bullish sentiment, or expectations that stock prices will rise over the next six months, jumped 9.8 percentage points to 49.1%.<\/p>\n\n\n\n

Bullish sentiment has reached an \"unusually high level,\"<\/em> surpassing its historical average of 37.5% for the 13th consecutive week. The last time optimism was higher was on December 21, 2023, at 52.9%. On the other side, bearish sentiment, or expectations that stock prices will fall over the next six months, decreased by 1.6 percentage points to 24.5%. This sentiment remains below its historical average of 31.0% for the 13th consecutive week.<\/p>\n\n\n\n

Simultaneously, approximately 80% of earnings reports are surpassing analysts' expectations. With results available from nearly half of the S&P 500 companies, including major tech-related firms, overall earnings are projected to have risen by 7.8% in the fourth quarter compared to the same period last year.<\/p>\n\n\n\n

In their latest report on equity client flows, BofA Securities equity and quant strategist Jill Carey Hall said that the previous week saw the largest influx of U.S. equity investments in seven weeks, along with the most substantial private client inflows in over a year. Jill Carey Hall added<\/a>:<\/p>\n\n\n\n

\"Private clients were the biggest buyers of equities last week, led by purchases of ETFs and Tech stocks. Institutional clients were also net buyers after large outflows the week prior, while hedge fund clients were net sellers.\"<\/em><\/p>\n\n\n\n

Investors are actively monitoring earnings and forecasts from big companies against the backdrop of high borrowing costs but remarks from the Fed's policymakers through the week, including voting member Cleveland's Loretta Mester, will also be on investors' watch list.<\/p>\n","post_title":"Fed Chair Jerome Powell Pushed Back Firmly Against Market Speculation Of Imminent Rate Cuts. What To Expect In The Days Ahead?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"fed-chair-jerome-powell-pushed-back-firmly-against-market-speculation-of-imminent-rate-cuts-what-to-expect-in-the-days-ahead","to_ping":"","pinged":"","post_modified":"2024-02-07 19:31:25","post_modified_gmt":"2024-02-07 08:31:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15327","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15225,"post_author":"14","post_date":"2024-02-01 16:33:13","post_date_gmt":"2024-02-01 05:33:13","post_content":"\n

Wall Street's main indexes fell as Alphabet's projections for rising AI costs dented most megacap and chip stocks while the Federal Reserve left interest rates unchanged this Wednesday. Google's parent company experienced a 6.1% decline, resulting in a 3.0% drop in the S&P 500 communication services sector. This occurred following its announcement of holiday-season advertising sales falling short of expectations and its projection of increased spending on artificial intelligence.<\/p>\n\n\n\n

Microsoft (Nasdaq: MSFT) also lost 1.3% after forecasting higher costs to develop new artificial intelligence features, which overshadowed its upbeat quarterly results. Despite the optimistic outlook from the tech pioneers regarding customer enthusiasm for their generative AI-powered products, investors grew concerned about escalating development expenses for these innovative features. These mounting costs tempered their hopes for a significant sales surge from the new technology.<\/p>\n\n\n\n

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

These results and forecasts from big tech names, along with Tesla's growth warning last week, have reignited attention on the risks associated with the significant influence of mega-cap companies in the S&P 500 which has hit record highs in recent weeks. Apple, Meta Platforms, and Amazon.com set to report earnings on Thursday, fell over 1% each.<\/p>\n\n\n\n

See Related: New Bitcoin Core Update May Natively Support Apple M1 Chips<\/a><\/p>\n\n\n\n

Revenue Forecast And Increased Projection<\/h2>\n\n\n\n

It is also important to mention that Advanced Micro Devices saw a 3.3% decline as its first-quarter revenue forecast and increased projection for AI processors fell short of expectations. Other chip stocks including Nvidia, Broadcom, and Marvell dropped over 1% each. The attention of investors was also on the Federal Reserve's initial monetary policy decision of the year, and while it was widely anticipated that the Fed would maintain interest rates, many analysts said that the Fed is taking baby steps toward the cutting. Art Hogan, Chief Market Strategist of B.Riley Wealth, said<\/a>:<\/p>\n\n\n\n

\"Not surprisingly, I don't think the Fed wants to show their hand, especially, when they have a couple of months of data to collect before they need to. The good news is we can forget about any more tightening. The bad news is it's 'when', not 'if', they're going to cut rates, and that 'when' has been pushed out to what had been the fringes of consensus.\"<\/em><\/p>\n\n\n\n

Due to this, markets are showing some immediate disappointment as there's no explicit indication of imminent rate cuts. We're seeing an extremely neutral, non-committal statement from the Federal Reserve this Wednesday.<\/p>\n","post_title":"Wall Street's Main Indexes Fell As Alphabet's Projections For Rising AI Costs Dented Most Mega-Cap And Chip Stocks","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-as-alphabets-projections-for-rising-ai-costs-dented-most-mega-cap-and-chip-stocks","to_ping":"","pinged":"","post_modified":"2024-02-01 16:33:21","post_modified_gmt":"2024-02-01 05:33:21","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15225","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15094,"post_author":"18","post_date":"2024-01-26 02:18:51","post_date_gmt":"2024-01-25 15:18:51","post_content":"\n

As we enter the last week of January, whispers on Wall Street suggest a potential tantrum in U.S. short-term financing markets, with the storm possibly hitting as early as March. This could prompt the Federal Reserve to reassess its policies.<\/p>\n\n\n\n

As of now, banking executives are anticipating a series of events that may tighten the screws on short-term financing. The expiration of a Fed lending facility on March 11, coupled with limited adoption of the standing repo facility (SRF), is expected to reduce the available funding sources for banks. Simultaneously, increased demand for liquidity is on the horizon due to substantial U.S. government debt issuance and upcoming tax payments in March and April. Additionally, a move toward faster trade settlement in May could intensify the demand for short-term funding.<\/p>\n\n\n\n

Against this backdrop, the Federal Reserve has been steadily draining cash from the financial system by unwinding pandemic-era support. BNY Mellon strategists estimate a significant decrease in cash parked overnight with the Fed, potentially dropping below $200 billion by May. The overnight reverse repurchase agreements facility could even approach zero by mid-year. This reduction in excess liquidity may expose vulnerabilities in short-term financing markets.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Storm Clouds Gather Over Germany's Financial Horizon<\/a><\/p>\n\n\n\n

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

Spikes In Short Term Financing Markets<\/h2>\n\n\n\n

Sudden spikes in short-term financing markets can threaten financial stability, making it harder and more expensive for firms to secure necessary funds. This situation could expose lenders struggling to stabilize deposits after last year's banking crisis. As the Fed inches closer to its 2% inflation target, the risk of policy error looms large.<\/p>\n\n\n\n

If short-term financing markets experience a meltdown, it could signal the need for the Fed to ease policy. Slowing the pace of quantitative tightening (QT) is seen as a potential response. Despite the central bankers' insistence on needing more data before rate cuts, markets are already pricing in cuts by May.<\/p>\n\n\n\n

As we approach the critical months of March to May, the financial markets are at a crossroads. The potential shake-up in short-term financing markets could signal the Fed to reassess its policies. Market participants and investors must stay vigilant, and prepared for potential shifts in liquidity and policy adjustments. The coming months will \/reveal whether these concerns materialize into a significant market event or remain a contained storm in the financial teacup.<\/p>\n","post_title":"Understanding The Potential Shake-Up In U.S. Short-Term Financing Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"understanding-the-potential-shake-up-in-u-s-short-term-financing-markets","to_ping":"","pinged":"","post_modified":"2024-01-26 20:20:06","post_modified_gmt":"2024-01-26 09:20:06","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15094","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15043,"post_author":"14","post_date":"2024-01-19 05:56:40","post_date_gmt":"2024-01-18 18:56:40","post_content":"\n

Wall Street witnessed a significant stock decline this Wednesday following positive December U.S. retail sales data, which diminished the anticipation of an early initiation of the Federal Reserve's campaign to cut interest rates.<\/p>\n\n\n\n

Retail Sales Report <\/h2>\n\n\n\n

The December retail sales report from the Commerce Department (USRSL=ECI) depicted a robust consumer, responsible for approximately 70% of the U.S. economy. Despite facing the challenges of high inflation and a tight monetary policy, the consumer has shown resilience.<\/p>\n\n\n\n

The data revealed that discounts offered by retailers and a surge in motor vehicle acquisitions contributed to a greater-than-anticipated increase in U.S. retail sales, maintaining the economy on a robust trajectory in 2024. This bolstered the perspective that the Federal Reserve might not reduce interest rates as rapidly as initially anticipated for the current year.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

Anticipations among traders for a 25-basis-point Federal Reserve rate cut in March declined to 55%, down from approximately 60% before the release of the retail sales data. Ryan Detrick, chief market strategist at Carson Group in Omaha, said<\/a>:<\/p>\n\n\n\n

\"We had news that the U.S. consumer continues to be quite healthy, but that has increased anxiety that the Fed\u2019s first rate cut could potentially be pushed to May from March. Yields are also moving higher on the strong retail sales numbers, adding to near-term worries.\"<\/em><\/p>\n\n\n\n

US Stocks And Wall Street<\/h2>\n\n\n\n

It is also important to mention that a decline in U.S. stocks sent Wall Street's<\/a> \"fear gauge\" to a two-month high while JPMorgan analysts predict that the majority of negative consequences stemming from higher interest rates have not materialized yet. On Tuesday, Federal Reserve Governor Christopher Waller also emphasized that the central bank should refrain from hastily reducing interest rates until there is a clear indication that lower inflation is likely to persist.<\/p>\n\n\n\n

At the same time, the escalation of geopolitical uncertainties introduces an additional challenge and heightens the potential for unforeseen risks in both markets and economic performance. Considering these factors, the perspective is likely to stay cautious as long as interest rates remain significantly restrictive and the looming presence of geopolitical risks persists.<\/p>\n","post_title":"Wall Street Weakened As Retail Sales Data Hampers Expectations For A Cut In Interest Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-weakened-as-retail-sales-data-hampers-expectations-for-a-cut-in-interest-rates","to_ping":"","pinged":"","post_modified":"2024-01-19 05:56:51","post_modified_gmt":"2024-01-18 18:56:51","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15043","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14931,"post_author":"18","post_date":"2024-01-10 07:51:17","post_date_gmt":"2024-01-09 20:51:17","post_content":"\n

In a recent survey conducted by the New York Federal Reserve<\/a>, Wall Street's major banks have recalibrated their predictions regarding the Federal Reserve's balance sheet drawdown. This shift suggests that the U.S. central bank might conclude its quantitative tightening (QT) process later than initially anticipated.<\/p>\n\n\n\n

A Change in Perspective<\/h2>\n\n\n\n

Previously, primary dealers\u2014major banks\u2014projected that the QT process would conclude by the third quarter. However, the sentiment has evolved. According to the latest survey taken before the Fed's December 12-13 policy meeting, these banks now foresee the QT process ending in the fourth quarter.<\/p>\n\n\n\n

This adjustment carries significant implications. If these predictions materialize, the Federal Reserve's balance sheet<\/a> will likely shrink to approximately $6.75 trillion, down from its current level of roughly $7.764 trillion. Moreover, banks estimated that the central bank's reverse repo facility would hold $375 billion when QT concludes, a reduction from the anticipated $625 billion as forecasted in October.<\/p>\n\n\n\n

Federal Reserve Strategy<\/h2>\n\n\n\n

The quantitative tightening process has been an integral part of the Federal Reserve's strategy to combat inflation. Alongside rate hikes, the central bank initiated large-scale purchases of Treasury bonds and mortgage-backed securities during the COVID-19 pandemic's onset in 2020. This move led to an expansion of its holdings to approximately $9 trillion by mid-2022. However, since last year, the Fed has been gradually reducing its balance sheet size, although specific guidance on the timeline remains somewhat ambiguous.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

What This Means for the Economy<\/h2>\n\n\n\n

The recalibrated timeline for QT indicates a more prolonged period of balance sheet reduction. As the Federal Reserve continues to navigate its policy decisions, market participants, businesses, and consumers should monitor these developments closely. Changes in the balance sheet size can influence interest rates, liquidity conditions, and overall financial market dynamics.<\/p>\n\n\n\n

A Technical Perspective<\/h2>\n\n\n\n

From a technical standpoint, the Federal Reserve's<\/a> balance sheet management serves as a critical tool in its monetary policy arsenal. The evolving predictions by Wall Street's primary dealers underscore the complexities involved in forecasting economic variables, such as inflation and interest rates.<\/p>\n\n\n\n

As the QT process continues, policymakers and market participants must remain vigilant, considering the potential ramifications for financial stability and economic growth. This dynamic landscape necessitates ongoing analysis and adaptation to ensure that monetary policy objectives align with evolving economic conditions.<\/p>\n","post_title":"Decoding Wall Street's Shift: A Closer Look At Wall Street's Changing Perspective","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"decoding-wall-streets-shift-a-closer-look-at-wall-streets-changing-perspective","to_ping":"","pinged":"","post_modified":"2024-01-10 07:51:25","post_modified_gmt":"2024-01-09 20:51:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14931","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14888,"post_author":"14","post_date":"2024-01-06 18:33:09","post_date_gmt":"2024-01-06 07:33:09","post_content":"\n

Wall Street's main indexes fell at the beginning of the 2024 year as investors locked in profits after a very successful 2023 and are currently waiting for the Federal Reserve's<\/a> meeting that could offer hints on its interest rate path. Ken Polcari, managing partner at Kace Capital Advisors, said:<\/p>\n\n\n\n

\"The decline yesterday, today, and maybe for the next couple of weeks, is a result of people locking in profits and reconsidering what the narrative is - are rates going down five or six times as it appeared to be at the end of last year?\"<\/em><\/p>\n\n\n\n

\"\"
The Nasdaq Composite kicked off the year with a 1.5% drop pressured by a selloff in the tech sector<\/figcaption><\/figure>\n\n\n\n

The Fed's December meeting minutes are set to be disclosed at 2:00 p.m. ET, potentially providing information regarding the central bank's shift toward reducing interest rates. Although it's widely anticipated that the Fed will keep interest rates unchanged this month, traders have priced in a 65.7% probability of a 25 basis point rate reduction in March, according to CMEGroup's FedWatch tool.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures<\/a><\/p>\n\n\n\n

Central Bank And Inflation<\/h2>\n\n\n\n

Richmond Fed President Thomas Barkin, a voting member in the FOMC's rate-setting committee, said recently that the U.S. central bank is \"making real progress\" towards taming inflation and a soft landing seeming \"increasingly conceivable\". Encouragingly, the American Association of Individual Investors (AAII) Sentiment Survey indicated a surge in optimism among individual investors regarding the short-term outlook for the U.S. stock market, reaching its peak level in more than two and a half years.<\/p>\n\n\n\n

Despite this, JPMorgan Asset Management advises investors to be cautious due to potential recession risks. At the same time, analysts at Soci\u00e9t\u00e9 G\u00e9n\u00e9rale anticipate a turbulent 2024 for U.S. stocks, projecting fluctuations that could involve nearing recent highs, encountering declines, and subsequently rebounding.<\/p>\n\n\n\n

This week will witness a series of labor market data releases, culminating in the government's December employment report on Friday. These reports could significantly influence the forecast for the Fed's interest rate trajectory this year, prompting investors to scrutinize the data. Jeffrey Roach, chief economist at LPL Financial, added<\/a>:<\/p>\n\n\n\n

 \"The job market is cooling and we should see confirmation of that in this Friday\u2019s jobs report\"<\/em><\/p>\n\n\n\n

Following the progress of Wall Street's main indexes seen last year, investors are still optimistic about the prospect of another robust year ahead. This optimism is rooted in the anticipation that a decelerating economy will result in a gentle landing rather than a full-scale recession, especially as the Fed initiates rate cuts in the first half of 2024.<\/p>\n","post_title":"Wall Street's Main Indexes Fell At The Beginning Of 2024 year. Investors Locked In Profits After A Strong 2023 And Wait For The Federal Reserve's Meeting","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-at-the-beginning-of-2024-year-investors-locked-in-profits-after-a-strong-2023-and-wait-for-the-federal-reserves-meeting","to_ping":"","pinged":"","post_modified":"2024-01-06 18:33:13","post_modified_gmt":"2024-01-06 07:33:13","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14888","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14629,"post_author":"15","post_date":"2023-12-15 19:46:11","post_date_gmt":"2023-12-15 08:46:11","post_content":"\n

BlackRock aims to facilitate the participation of Wall Street banks in its potential Bitcoin ETF approval. Recent SEC memo <\/a>detailing a late November meeting involving BlackRock, Nasdaq, and the Commission. During this meeting, they discussed feedback regarding BlackRock's Bitcoin ETF application.<\/p>\n\n\n\n

The proposed approach introduces an innovative method for the redemption of ETF shares. A Bitcoin ETF would enable fund investors to gain exposure to Bitcoin without directly purchasing or storing the cryptocurrency. While the SEC has hesitated to approve such ETFs due to concerns about Bitcoin market manipulation, this new strategy addresses those worries.<\/p>\n\n\n\n

The SEC has yet to decide on BlackRock's iShares Bitcoin Trust (IBTC) application, with the deadline set for January 15. Analysts anticipate a decision will be issued for several spot Bitcoin ETF applications earlier in January.<\/p>\n\n\n\n

See Related:<\/strong><\/em> Fidelity Joins BlackRock\u2019s Push For Ethereum ETF<\/a><\/p>\n\n\n\n

BlackRock ETF Details<\/h2>\n\n\n\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

AAII Sentiment Survey<\/h2>\n\n\n\n

Positive information is that the latest American Association of Individual Investors (AAII) Sentiment Survey showed that optimism among individual investors about the short-term outlook for stocks surged again. American Association of Individual Investors (AAII) reported that bullish sentiment, or expectations that stock prices will rise over the next six months, jumped 9.8 percentage points to 49.1%.<\/p>\n\n\n\n

Bullish sentiment has reached an \"unusually high level,\"<\/em> surpassing its historical average of 37.5% for the 13th consecutive week. The last time optimism was higher was on December 21, 2023, at 52.9%. On the other side, bearish sentiment, or expectations that stock prices will fall over the next six months, decreased by 1.6 percentage points to 24.5%. This sentiment remains below its historical average of 31.0% for the 13th consecutive week.<\/p>\n\n\n\n

Simultaneously, approximately 80% of earnings reports are surpassing analysts' expectations. With results available from nearly half of the S&P 500 companies, including major tech-related firms, overall earnings are projected to have risen by 7.8% in the fourth quarter compared to the same period last year.<\/p>\n\n\n\n

In their latest report on equity client flows, BofA Securities equity and quant strategist Jill Carey Hall said that the previous week saw the largest influx of U.S. equity investments in seven weeks, along with the most substantial private client inflows in over a year. Jill Carey Hall added<\/a>:<\/p>\n\n\n\n

\"Private clients were the biggest buyers of equities last week, led by purchases of ETFs and Tech stocks. Institutional clients were also net buyers after large outflows the week prior, while hedge fund clients were net sellers.\"<\/em><\/p>\n\n\n\n

Investors are actively monitoring earnings and forecasts from big companies against the backdrop of high borrowing costs but remarks from the Fed's policymakers through the week, including voting member Cleveland's Loretta Mester, will also be on investors' watch list.<\/p>\n","post_title":"Fed Chair Jerome Powell Pushed Back Firmly Against Market Speculation Of Imminent Rate Cuts. What To Expect In The Days Ahead?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"fed-chair-jerome-powell-pushed-back-firmly-against-market-speculation-of-imminent-rate-cuts-what-to-expect-in-the-days-ahead","to_ping":"","pinged":"","post_modified":"2024-02-07 19:31:25","post_modified_gmt":"2024-02-07 08:31:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15327","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15225,"post_author":"14","post_date":"2024-02-01 16:33:13","post_date_gmt":"2024-02-01 05:33:13","post_content":"\n

Wall Street's main indexes fell as Alphabet's projections for rising AI costs dented most megacap and chip stocks while the Federal Reserve left interest rates unchanged this Wednesday. Google's parent company experienced a 6.1% decline, resulting in a 3.0% drop in the S&P 500 communication services sector. This occurred following its announcement of holiday-season advertising sales falling short of expectations and its projection of increased spending on artificial intelligence.<\/p>\n\n\n\n

Microsoft (Nasdaq: MSFT) also lost 1.3% after forecasting higher costs to develop new artificial intelligence features, which overshadowed its upbeat quarterly results. Despite the optimistic outlook from the tech pioneers regarding customer enthusiasm for their generative AI-powered products, investors grew concerned about escalating development expenses for these innovative features. These mounting costs tempered their hopes for a significant sales surge from the new technology.<\/p>\n\n\n\n

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

These results and forecasts from big tech names, along with Tesla's growth warning last week, have reignited attention on the risks associated with the significant influence of mega-cap companies in the S&P 500 which has hit record highs in recent weeks. Apple, Meta Platforms, and Amazon.com set to report earnings on Thursday, fell over 1% each.<\/p>\n\n\n\n

See Related: New Bitcoin Core Update May Natively Support Apple M1 Chips<\/a><\/p>\n\n\n\n

Revenue Forecast And Increased Projection<\/h2>\n\n\n\n

It is also important to mention that Advanced Micro Devices saw a 3.3% decline as its first-quarter revenue forecast and increased projection for AI processors fell short of expectations. Other chip stocks including Nvidia, Broadcom, and Marvell dropped over 1% each. The attention of investors was also on the Federal Reserve's initial monetary policy decision of the year, and while it was widely anticipated that the Fed would maintain interest rates, many analysts said that the Fed is taking baby steps toward the cutting. Art Hogan, Chief Market Strategist of B.Riley Wealth, said<\/a>:<\/p>\n\n\n\n

\"Not surprisingly, I don't think the Fed wants to show their hand, especially, when they have a couple of months of data to collect before they need to. The good news is we can forget about any more tightening. The bad news is it's 'when', not 'if', they're going to cut rates, and that 'when' has been pushed out to what had been the fringes of consensus.\"<\/em><\/p>\n\n\n\n

Due to this, markets are showing some immediate disappointment as there's no explicit indication of imminent rate cuts. We're seeing an extremely neutral, non-committal statement from the Federal Reserve this Wednesday.<\/p>\n","post_title":"Wall Street's Main Indexes Fell As Alphabet's Projections For Rising AI Costs Dented Most Mega-Cap And Chip Stocks","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-as-alphabets-projections-for-rising-ai-costs-dented-most-mega-cap-and-chip-stocks","to_ping":"","pinged":"","post_modified":"2024-02-01 16:33:21","post_modified_gmt":"2024-02-01 05:33:21","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15225","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15094,"post_author":"18","post_date":"2024-01-26 02:18:51","post_date_gmt":"2024-01-25 15:18:51","post_content":"\n

As we enter the last week of January, whispers on Wall Street suggest a potential tantrum in U.S. short-term financing markets, with the storm possibly hitting as early as March. This could prompt the Federal Reserve to reassess its policies.<\/p>\n\n\n\n

As of now, banking executives are anticipating a series of events that may tighten the screws on short-term financing. The expiration of a Fed lending facility on March 11, coupled with limited adoption of the standing repo facility (SRF), is expected to reduce the available funding sources for banks. Simultaneously, increased demand for liquidity is on the horizon due to substantial U.S. government debt issuance and upcoming tax payments in March and April. Additionally, a move toward faster trade settlement in May could intensify the demand for short-term funding.<\/p>\n\n\n\n

Against this backdrop, the Federal Reserve has been steadily draining cash from the financial system by unwinding pandemic-era support. BNY Mellon strategists estimate a significant decrease in cash parked overnight with the Fed, potentially dropping below $200 billion by May. The overnight reverse repurchase agreements facility could even approach zero by mid-year. This reduction in excess liquidity may expose vulnerabilities in short-term financing markets.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Storm Clouds Gather Over Germany's Financial Horizon<\/a><\/p>\n\n\n\n

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

Spikes In Short Term Financing Markets<\/h2>\n\n\n\n

Sudden spikes in short-term financing markets can threaten financial stability, making it harder and more expensive for firms to secure necessary funds. This situation could expose lenders struggling to stabilize deposits after last year's banking crisis. As the Fed inches closer to its 2% inflation target, the risk of policy error looms large.<\/p>\n\n\n\n

If short-term financing markets experience a meltdown, it could signal the need for the Fed to ease policy. Slowing the pace of quantitative tightening (QT) is seen as a potential response. Despite the central bankers' insistence on needing more data before rate cuts, markets are already pricing in cuts by May.<\/p>\n\n\n\n

As we approach the critical months of March to May, the financial markets are at a crossroads. The potential shake-up in short-term financing markets could signal the Fed to reassess its policies. Market participants and investors must stay vigilant, and prepared for potential shifts in liquidity and policy adjustments. The coming months will \/reveal whether these concerns materialize into a significant market event or remain a contained storm in the financial teacup.<\/p>\n","post_title":"Understanding The Potential Shake-Up In U.S. Short-Term Financing Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"understanding-the-potential-shake-up-in-u-s-short-term-financing-markets","to_ping":"","pinged":"","post_modified":"2024-01-26 20:20:06","post_modified_gmt":"2024-01-26 09:20:06","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15094","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15043,"post_author":"14","post_date":"2024-01-19 05:56:40","post_date_gmt":"2024-01-18 18:56:40","post_content":"\n

Wall Street witnessed a significant stock decline this Wednesday following positive December U.S. retail sales data, which diminished the anticipation of an early initiation of the Federal Reserve's campaign to cut interest rates.<\/p>\n\n\n\n

Retail Sales Report <\/h2>\n\n\n\n

The December retail sales report from the Commerce Department (USRSL=ECI) depicted a robust consumer, responsible for approximately 70% of the U.S. economy. Despite facing the challenges of high inflation and a tight monetary policy, the consumer has shown resilience.<\/p>\n\n\n\n

The data revealed that discounts offered by retailers and a surge in motor vehicle acquisitions contributed to a greater-than-anticipated increase in U.S. retail sales, maintaining the economy on a robust trajectory in 2024. This bolstered the perspective that the Federal Reserve might not reduce interest rates as rapidly as initially anticipated for the current year.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

Anticipations among traders for a 25-basis-point Federal Reserve rate cut in March declined to 55%, down from approximately 60% before the release of the retail sales data. Ryan Detrick, chief market strategist at Carson Group in Omaha, said<\/a>:<\/p>\n\n\n\n

\"We had news that the U.S. consumer continues to be quite healthy, but that has increased anxiety that the Fed\u2019s first rate cut could potentially be pushed to May from March. Yields are also moving higher on the strong retail sales numbers, adding to near-term worries.\"<\/em><\/p>\n\n\n\n

US Stocks And Wall Street<\/h2>\n\n\n\n

It is also important to mention that a decline in U.S. stocks sent Wall Street's<\/a> \"fear gauge\" to a two-month high while JPMorgan analysts predict that the majority of negative consequences stemming from higher interest rates have not materialized yet. On Tuesday, Federal Reserve Governor Christopher Waller also emphasized that the central bank should refrain from hastily reducing interest rates until there is a clear indication that lower inflation is likely to persist.<\/p>\n\n\n\n

At the same time, the escalation of geopolitical uncertainties introduces an additional challenge and heightens the potential for unforeseen risks in both markets and economic performance. Considering these factors, the perspective is likely to stay cautious as long as interest rates remain significantly restrictive and the looming presence of geopolitical risks persists.<\/p>\n","post_title":"Wall Street Weakened As Retail Sales Data Hampers Expectations For A Cut In Interest Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-weakened-as-retail-sales-data-hampers-expectations-for-a-cut-in-interest-rates","to_ping":"","pinged":"","post_modified":"2024-01-19 05:56:51","post_modified_gmt":"2024-01-18 18:56:51","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15043","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14931,"post_author":"18","post_date":"2024-01-10 07:51:17","post_date_gmt":"2024-01-09 20:51:17","post_content":"\n

In a recent survey conducted by the New York Federal Reserve<\/a>, Wall Street's major banks have recalibrated their predictions regarding the Federal Reserve's balance sheet drawdown. This shift suggests that the U.S. central bank might conclude its quantitative tightening (QT) process later than initially anticipated.<\/p>\n\n\n\n

A Change in Perspective<\/h2>\n\n\n\n

Previously, primary dealers\u2014major banks\u2014projected that the QT process would conclude by the third quarter. However, the sentiment has evolved. According to the latest survey taken before the Fed's December 12-13 policy meeting, these banks now foresee the QT process ending in the fourth quarter.<\/p>\n\n\n\n

This adjustment carries significant implications. If these predictions materialize, the Federal Reserve's balance sheet<\/a> will likely shrink to approximately $6.75 trillion, down from its current level of roughly $7.764 trillion. Moreover, banks estimated that the central bank's reverse repo facility would hold $375 billion when QT concludes, a reduction from the anticipated $625 billion as forecasted in October.<\/p>\n\n\n\n

Federal Reserve Strategy<\/h2>\n\n\n\n

The quantitative tightening process has been an integral part of the Federal Reserve's strategy to combat inflation. Alongside rate hikes, the central bank initiated large-scale purchases of Treasury bonds and mortgage-backed securities during the COVID-19 pandemic's onset in 2020. This move led to an expansion of its holdings to approximately $9 trillion by mid-2022. However, since last year, the Fed has been gradually reducing its balance sheet size, although specific guidance on the timeline remains somewhat ambiguous.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

What This Means for the Economy<\/h2>\n\n\n\n

The recalibrated timeline for QT indicates a more prolonged period of balance sheet reduction. As the Federal Reserve continues to navigate its policy decisions, market participants, businesses, and consumers should monitor these developments closely. Changes in the balance sheet size can influence interest rates, liquidity conditions, and overall financial market dynamics.<\/p>\n\n\n\n

A Technical Perspective<\/h2>\n\n\n\n

From a technical standpoint, the Federal Reserve's<\/a> balance sheet management serves as a critical tool in its monetary policy arsenal. The evolving predictions by Wall Street's primary dealers underscore the complexities involved in forecasting economic variables, such as inflation and interest rates.<\/p>\n\n\n\n

As the QT process continues, policymakers and market participants must remain vigilant, considering the potential ramifications for financial stability and economic growth. This dynamic landscape necessitates ongoing analysis and adaptation to ensure that monetary policy objectives align with evolving economic conditions.<\/p>\n","post_title":"Decoding Wall Street's Shift: A Closer Look At Wall Street's Changing Perspective","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"decoding-wall-streets-shift-a-closer-look-at-wall-streets-changing-perspective","to_ping":"","pinged":"","post_modified":"2024-01-10 07:51:25","post_modified_gmt":"2024-01-09 20:51:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14931","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14888,"post_author":"14","post_date":"2024-01-06 18:33:09","post_date_gmt":"2024-01-06 07:33:09","post_content":"\n

Wall Street's main indexes fell at the beginning of the 2024 year as investors locked in profits after a very successful 2023 and are currently waiting for the Federal Reserve's<\/a> meeting that could offer hints on its interest rate path. Ken Polcari, managing partner at Kace Capital Advisors, said:<\/p>\n\n\n\n

\"The decline yesterday, today, and maybe for the next couple of weeks, is a result of people locking in profits and reconsidering what the narrative is - are rates going down five or six times as it appeared to be at the end of last year?\"<\/em><\/p>\n\n\n\n

\"\"
The Nasdaq Composite kicked off the year with a 1.5% drop pressured by a selloff in the tech sector<\/figcaption><\/figure>\n\n\n\n

The Fed's December meeting minutes are set to be disclosed at 2:00 p.m. ET, potentially providing information regarding the central bank's shift toward reducing interest rates. Although it's widely anticipated that the Fed will keep interest rates unchanged this month, traders have priced in a 65.7% probability of a 25 basis point rate reduction in March, according to CMEGroup's FedWatch tool.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures<\/a><\/p>\n\n\n\n

Central Bank And Inflation<\/h2>\n\n\n\n

Richmond Fed President Thomas Barkin, a voting member in the FOMC's rate-setting committee, said recently that the U.S. central bank is \"making real progress\" towards taming inflation and a soft landing seeming \"increasingly conceivable\". Encouragingly, the American Association of Individual Investors (AAII) Sentiment Survey indicated a surge in optimism among individual investors regarding the short-term outlook for the U.S. stock market, reaching its peak level in more than two and a half years.<\/p>\n\n\n\n

Despite this, JPMorgan Asset Management advises investors to be cautious due to potential recession risks. At the same time, analysts at Soci\u00e9t\u00e9 G\u00e9n\u00e9rale anticipate a turbulent 2024 for U.S. stocks, projecting fluctuations that could involve nearing recent highs, encountering declines, and subsequently rebounding.<\/p>\n\n\n\n

This week will witness a series of labor market data releases, culminating in the government's December employment report on Friday. These reports could significantly influence the forecast for the Fed's interest rate trajectory this year, prompting investors to scrutinize the data. Jeffrey Roach, chief economist at LPL Financial, added<\/a>:<\/p>\n\n\n\n

 \"The job market is cooling and we should see confirmation of that in this Friday\u2019s jobs report\"<\/em><\/p>\n\n\n\n

Following the progress of Wall Street's main indexes seen last year, investors are still optimistic about the prospect of another robust year ahead. This optimism is rooted in the anticipation that a decelerating economy will result in a gentle landing rather than a full-scale recession, especially as the Fed initiates rate cuts in the first half of 2024.<\/p>\n","post_title":"Wall Street's Main Indexes Fell At The Beginning Of 2024 year. Investors Locked In Profits After A Strong 2023 And Wait For The Federal Reserve's Meeting","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-at-the-beginning-of-2024-year-investors-locked-in-profits-after-a-strong-2023-and-wait-for-the-federal-reserves-meeting","to_ping":"","pinged":"","post_modified":"2024-01-06 18:33:13","post_modified_gmt":"2024-01-06 07:33:13","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14888","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14629,"post_author":"15","post_date":"2023-12-15 19:46:11","post_date_gmt":"2023-12-15 08:46:11","post_content":"\n

BlackRock aims to facilitate the participation of Wall Street banks in its potential Bitcoin ETF approval. Recent SEC memo <\/a>detailing a late November meeting involving BlackRock, Nasdaq, and the Commission. During this meeting, they discussed feedback regarding BlackRock's Bitcoin ETF application.<\/p>\n\n\n\n

The proposed approach introduces an innovative method for the redemption of ETF shares. A Bitcoin ETF would enable fund investors to gain exposure to Bitcoin without directly purchasing or storing the cryptocurrency. While the SEC has hesitated to approve such ETFs due to concerns about Bitcoin market manipulation, this new strategy addresses those worries.<\/p>\n\n\n\n

The SEC has yet to decide on BlackRock's iShares Bitcoin Trust (IBTC) application, with the deadline set for January 15. Analysts anticipate a decision will be issued for several spot Bitcoin ETF applications earlier in January.<\/p>\n\n\n\n

See Related:<\/strong><\/em> Fidelity Joins BlackRock\u2019s Push For Ethereum ETF<\/a><\/p>\n\n\n\n

BlackRock ETF Details<\/h2>\n\n\n\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

See Related: <\/em><\/strong>Optimism Among Individual Investors About The Short-Term Outlook Of The U.S. Stock Market Rose To Its Highest Level<\/a><\/p>\n\n\n\n

AAII Sentiment Survey<\/h2>\n\n\n\n

Positive information is that the latest American Association of Individual Investors (AAII) Sentiment Survey showed that optimism among individual investors about the short-term outlook for stocks surged again. American Association of Individual Investors (AAII) reported that bullish sentiment, or expectations that stock prices will rise over the next six months, jumped 9.8 percentage points to 49.1%.<\/p>\n\n\n\n

Bullish sentiment has reached an \"unusually high level,\"<\/em> surpassing its historical average of 37.5% for the 13th consecutive week. The last time optimism was higher was on December 21, 2023, at 52.9%. On the other side, bearish sentiment, or expectations that stock prices will fall over the next six months, decreased by 1.6 percentage points to 24.5%. This sentiment remains below its historical average of 31.0% for the 13th consecutive week.<\/p>\n\n\n\n

Simultaneously, approximately 80% of earnings reports are surpassing analysts' expectations. With results available from nearly half of the S&P 500 companies, including major tech-related firms, overall earnings are projected to have risen by 7.8% in the fourth quarter compared to the same period last year.<\/p>\n\n\n\n

In their latest report on equity client flows, BofA Securities equity and quant strategist Jill Carey Hall said that the previous week saw the largest influx of U.S. equity investments in seven weeks, along with the most substantial private client inflows in over a year. Jill Carey Hall added<\/a>:<\/p>\n\n\n\n

\"Private clients were the biggest buyers of equities last week, led by purchases of ETFs and Tech stocks. Institutional clients were also net buyers after large outflows the week prior, while hedge fund clients were net sellers.\"<\/em><\/p>\n\n\n\n

Investors are actively monitoring earnings and forecasts from big companies against the backdrop of high borrowing costs but remarks from the Fed's policymakers through the week, including voting member Cleveland's Loretta Mester, will also be on investors' watch list.<\/p>\n","post_title":"Fed Chair Jerome Powell Pushed Back Firmly Against Market Speculation Of Imminent Rate Cuts. What To Expect In The Days Ahead?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"fed-chair-jerome-powell-pushed-back-firmly-against-market-speculation-of-imminent-rate-cuts-what-to-expect-in-the-days-ahead","to_ping":"","pinged":"","post_modified":"2024-02-07 19:31:25","post_modified_gmt":"2024-02-07 08:31:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15327","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15225,"post_author":"14","post_date":"2024-02-01 16:33:13","post_date_gmt":"2024-02-01 05:33:13","post_content":"\n

Wall Street's main indexes fell as Alphabet's projections for rising AI costs dented most megacap and chip stocks while the Federal Reserve left interest rates unchanged this Wednesday. Google's parent company experienced a 6.1% decline, resulting in a 3.0% drop in the S&P 500 communication services sector. This occurred following its announcement of holiday-season advertising sales falling short of expectations and its projection of increased spending on artificial intelligence.<\/p>\n\n\n\n

Microsoft (Nasdaq: MSFT) also lost 1.3% after forecasting higher costs to develop new artificial intelligence features, which overshadowed its upbeat quarterly results. Despite the optimistic outlook from the tech pioneers regarding customer enthusiasm for their generative AI-powered products, investors grew concerned about escalating development expenses for these innovative features. These mounting costs tempered their hopes for a significant sales surge from the new technology.<\/p>\n\n\n\n

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

These results and forecasts from big tech names, along with Tesla's growth warning last week, have reignited attention on the risks associated with the significant influence of mega-cap companies in the S&P 500 which has hit record highs in recent weeks. Apple, Meta Platforms, and Amazon.com set to report earnings on Thursday, fell over 1% each.<\/p>\n\n\n\n

See Related: New Bitcoin Core Update May Natively Support Apple M1 Chips<\/a><\/p>\n\n\n\n

Revenue Forecast And Increased Projection<\/h2>\n\n\n\n

It is also important to mention that Advanced Micro Devices saw a 3.3% decline as its first-quarter revenue forecast and increased projection for AI processors fell short of expectations. Other chip stocks including Nvidia, Broadcom, and Marvell dropped over 1% each. The attention of investors was also on the Federal Reserve's initial monetary policy decision of the year, and while it was widely anticipated that the Fed would maintain interest rates, many analysts said that the Fed is taking baby steps toward the cutting. Art Hogan, Chief Market Strategist of B.Riley Wealth, said<\/a>:<\/p>\n\n\n\n

\"Not surprisingly, I don't think the Fed wants to show their hand, especially, when they have a couple of months of data to collect before they need to. The good news is we can forget about any more tightening. The bad news is it's 'when', not 'if', they're going to cut rates, and that 'when' has been pushed out to what had been the fringes of consensus.\"<\/em><\/p>\n\n\n\n

Due to this, markets are showing some immediate disappointment as there's no explicit indication of imminent rate cuts. We're seeing an extremely neutral, non-committal statement from the Federal Reserve this Wednesday.<\/p>\n","post_title":"Wall Street's Main Indexes Fell As Alphabet's Projections For Rising AI Costs Dented Most Mega-Cap And Chip Stocks","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-as-alphabets-projections-for-rising-ai-costs-dented-most-mega-cap-and-chip-stocks","to_ping":"","pinged":"","post_modified":"2024-02-01 16:33:21","post_modified_gmt":"2024-02-01 05:33:21","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15225","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15094,"post_author":"18","post_date":"2024-01-26 02:18:51","post_date_gmt":"2024-01-25 15:18:51","post_content":"\n

As we enter the last week of January, whispers on Wall Street suggest a potential tantrum in U.S. short-term financing markets, with the storm possibly hitting as early as March. This could prompt the Federal Reserve to reassess its policies.<\/p>\n\n\n\n

As of now, banking executives are anticipating a series of events that may tighten the screws on short-term financing. The expiration of a Fed lending facility on March 11, coupled with limited adoption of the standing repo facility (SRF), is expected to reduce the available funding sources for banks. Simultaneously, increased demand for liquidity is on the horizon due to substantial U.S. government debt issuance and upcoming tax payments in March and April. Additionally, a move toward faster trade settlement in May could intensify the demand for short-term funding.<\/p>\n\n\n\n

Against this backdrop, the Federal Reserve has been steadily draining cash from the financial system by unwinding pandemic-era support. BNY Mellon strategists estimate a significant decrease in cash parked overnight with the Fed, potentially dropping below $200 billion by May. The overnight reverse repurchase agreements facility could even approach zero by mid-year. This reduction in excess liquidity may expose vulnerabilities in short-term financing markets.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Storm Clouds Gather Over Germany's Financial Horizon<\/a><\/p>\n\n\n\n

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

Spikes In Short Term Financing Markets<\/h2>\n\n\n\n

Sudden spikes in short-term financing markets can threaten financial stability, making it harder and more expensive for firms to secure necessary funds. This situation could expose lenders struggling to stabilize deposits after last year's banking crisis. As the Fed inches closer to its 2% inflation target, the risk of policy error looms large.<\/p>\n\n\n\n

If short-term financing markets experience a meltdown, it could signal the need for the Fed to ease policy. Slowing the pace of quantitative tightening (QT) is seen as a potential response. Despite the central bankers' insistence on needing more data before rate cuts, markets are already pricing in cuts by May.<\/p>\n\n\n\n

As we approach the critical months of March to May, the financial markets are at a crossroads. The potential shake-up in short-term financing markets could signal the Fed to reassess its policies. Market participants and investors must stay vigilant, and prepared for potential shifts in liquidity and policy adjustments. The coming months will \/reveal whether these concerns materialize into a significant market event or remain a contained storm in the financial teacup.<\/p>\n","post_title":"Understanding The Potential Shake-Up In U.S. Short-Term Financing Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"understanding-the-potential-shake-up-in-u-s-short-term-financing-markets","to_ping":"","pinged":"","post_modified":"2024-01-26 20:20:06","post_modified_gmt":"2024-01-26 09:20:06","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15094","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15043,"post_author":"14","post_date":"2024-01-19 05:56:40","post_date_gmt":"2024-01-18 18:56:40","post_content":"\n

Wall Street witnessed a significant stock decline this Wednesday following positive December U.S. retail sales data, which diminished the anticipation of an early initiation of the Federal Reserve's campaign to cut interest rates.<\/p>\n\n\n\n

Retail Sales Report <\/h2>\n\n\n\n

The December retail sales report from the Commerce Department (USRSL=ECI) depicted a robust consumer, responsible for approximately 70% of the U.S. economy. Despite facing the challenges of high inflation and a tight monetary policy, the consumer has shown resilience.<\/p>\n\n\n\n

The data revealed that discounts offered by retailers and a surge in motor vehicle acquisitions contributed to a greater-than-anticipated increase in U.S. retail sales, maintaining the economy on a robust trajectory in 2024. This bolstered the perspective that the Federal Reserve might not reduce interest rates as rapidly as initially anticipated for the current year.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

Anticipations among traders for a 25-basis-point Federal Reserve rate cut in March declined to 55%, down from approximately 60% before the release of the retail sales data. Ryan Detrick, chief market strategist at Carson Group in Omaha, said<\/a>:<\/p>\n\n\n\n

\"We had news that the U.S. consumer continues to be quite healthy, but that has increased anxiety that the Fed\u2019s first rate cut could potentially be pushed to May from March. Yields are also moving higher on the strong retail sales numbers, adding to near-term worries.\"<\/em><\/p>\n\n\n\n

US Stocks And Wall Street<\/h2>\n\n\n\n

It is also important to mention that a decline in U.S. stocks sent Wall Street's<\/a> \"fear gauge\" to a two-month high while JPMorgan analysts predict that the majority of negative consequences stemming from higher interest rates have not materialized yet. On Tuesday, Federal Reserve Governor Christopher Waller also emphasized that the central bank should refrain from hastily reducing interest rates until there is a clear indication that lower inflation is likely to persist.<\/p>\n\n\n\n

At the same time, the escalation of geopolitical uncertainties introduces an additional challenge and heightens the potential for unforeseen risks in both markets and economic performance. Considering these factors, the perspective is likely to stay cautious as long as interest rates remain significantly restrictive and the looming presence of geopolitical risks persists.<\/p>\n","post_title":"Wall Street Weakened As Retail Sales Data Hampers Expectations For A Cut In Interest Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-weakened-as-retail-sales-data-hampers-expectations-for-a-cut-in-interest-rates","to_ping":"","pinged":"","post_modified":"2024-01-19 05:56:51","post_modified_gmt":"2024-01-18 18:56:51","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15043","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14931,"post_author":"18","post_date":"2024-01-10 07:51:17","post_date_gmt":"2024-01-09 20:51:17","post_content":"\n

In a recent survey conducted by the New York Federal Reserve<\/a>, Wall Street's major banks have recalibrated their predictions regarding the Federal Reserve's balance sheet drawdown. This shift suggests that the U.S. central bank might conclude its quantitative tightening (QT) process later than initially anticipated.<\/p>\n\n\n\n

A Change in Perspective<\/h2>\n\n\n\n

Previously, primary dealers\u2014major banks\u2014projected that the QT process would conclude by the third quarter. However, the sentiment has evolved. According to the latest survey taken before the Fed's December 12-13 policy meeting, these banks now foresee the QT process ending in the fourth quarter.<\/p>\n\n\n\n

This adjustment carries significant implications. If these predictions materialize, the Federal Reserve's balance sheet<\/a> will likely shrink to approximately $6.75 trillion, down from its current level of roughly $7.764 trillion. Moreover, banks estimated that the central bank's reverse repo facility would hold $375 billion when QT concludes, a reduction from the anticipated $625 billion as forecasted in October.<\/p>\n\n\n\n

Federal Reserve Strategy<\/h2>\n\n\n\n

The quantitative tightening process has been an integral part of the Federal Reserve's strategy to combat inflation. Alongside rate hikes, the central bank initiated large-scale purchases of Treasury bonds and mortgage-backed securities during the COVID-19 pandemic's onset in 2020. This move led to an expansion of its holdings to approximately $9 trillion by mid-2022. However, since last year, the Fed has been gradually reducing its balance sheet size, although specific guidance on the timeline remains somewhat ambiguous.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

What This Means for the Economy<\/h2>\n\n\n\n

The recalibrated timeline for QT indicates a more prolonged period of balance sheet reduction. As the Federal Reserve continues to navigate its policy decisions, market participants, businesses, and consumers should monitor these developments closely. Changes in the balance sheet size can influence interest rates, liquidity conditions, and overall financial market dynamics.<\/p>\n\n\n\n

A Technical Perspective<\/h2>\n\n\n\n

From a technical standpoint, the Federal Reserve's<\/a> balance sheet management serves as a critical tool in its monetary policy arsenal. The evolving predictions by Wall Street's primary dealers underscore the complexities involved in forecasting economic variables, such as inflation and interest rates.<\/p>\n\n\n\n

As the QT process continues, policymakers and market participants must remain vigilant, considering the potential ramifications for financial stability and economic growth. This dynamic landscape necessitates ongoing analysis and adaptation to ensure that monetary policy objectives align with evolving economic conditions.<\/p>\n","post_title":"Decoding Wall Street's Shift: A Closer Look At Wall Street's Changing Perspective","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"decoding-wall-streets-shift-a-closer-look-at-wall-streets-changing-perspective","to_ping":"","pinged":"","post_modified":"2024-01-10 07:51:25","post_modified_gmt":"2024-01-09 20:51:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14931","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14888,"post_author":"14","post_date":"2024-01-06 18:33:09","post_date_gmt":"2024-01-06 07:33:09","post_content":"\n

Wall Street's main indexes fell at the beginning of the 2024 year as investors locked in profits after a very successful 2023 and are currently waiting for the Federal Reserve's<\/a> meeting that could offer hints on its interest rate path. Ken Polcari, managing partner at Kace Capital Advisors, said:<\/p>\n\n\n\n

\"The decline yesterday, today, and maybe for the next couple of weeks, is a result of people locking in profits and reconsidering what the narrative is - are rates going down five or six times as it appeared to be at the end of last year?\"<\/em><\/p>\n\n\n\n

\"\"
The Nasdaq Composite kicked off the year with a 1.5% drop pressured by a selloff in the tech sector<\/figcaption><\/figure>\n\n\n\n

The Fed's December meeting minutes are set to be disclosed at 2:00 p.m. ET, potentially providing information regarding the central bank's shift toward reducing interest rates. Although it's widely anticipated that the Fed will keep interest rates unchanged this month, traders have priced in a 65.7% probability of a 25 basis point rate reduction in March, according to CMEGroup's FedWatch tool.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures<\/a><\/p>\n\n\n\n

Central Bank And Inflation<\/h2>\n\n\n\n

Richmond Fed President Thomas Barkin, a voting member in the FOMC's rate-setting committee, said recently that the U.S. central bank is \"making real progress\" towards taming inflation and a soft landing seeming \"increasingly conceivable\". Encouragingly, the American Association of Individual Investors (AAII) Sentiment Survey indicated a surge in optimism among individual investors regarding the short-term outlook for the U.S. stock market, reaching its peak level in more than two and a half years.<\/p>\n\n\n\n

Despite this, JPMorgan Asset Management advises investors to be cautious due to potential recession risks. At the same time, analysts at Soci\u00e9t\u00e9 G\u00e9n\u00e9rale anticipate a turbulent 2024 for U.S. stocks, projecting fluctuations that could involve nearing recent highs, encountering declines, and subsequently rebounding.<\/p>\n\n\n\n

This week will witness a series of labor market data releases, culminating in the government's December employment report on Friday. These reports could significantly influence the forecast for the Fed's interest rate trajectory this year, prompting investors to scrutinize the data. Jeffrey Roach, chief economist at LPL Financial, added<\/a>:<\/p>\n\n\n\n

 \"The job market is cooling and we should see confirmation of that in this Friday\u2019s jobs report\"<\/em><\/p>\n\n\n\n

Following the progress of Wall Street's main indexes seen last year, investors are still optimistic about the prospect of another robust year ahead. This optimism is rooted in the anticipation that a decelerating economy will result in a gentle landing rather than a full-scale recession, especially as the Fed initiates rate cuts in the first half of 2024.<\/p>\n","post_title":"Wall Street's Main Indexes Fell At The Beginning Of 2024 year. Investors Locked In Profits After A Strong 2023 And Wait For The Federal Reserve's Meeting","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-at-the-beginning-of-2024-year-investors-locked-in-profits-after-a-strong-2023-and-wait-for-the-federal-reserves-meeting","to_ping":"","pinged":"","post_modified":"2024-01-06 18:33:13","post_modified_gmt":"2024-01-06 07:33:13","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14888","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14629,"post_author":"15","post_date":"2023-12-15 19:46:11","post_date_gmt":"2023-12-15 08:46:11","post_content":"\n

BlackRock aims to facilitate the participation of Wall Street banks in its potential Bitcoin ETF approval. Recent SEC memo <\/a>detailing a late November meeting involving BlackRock, Nasdaq, and the Commission. During this meeting, they discussed feedback regarding BlackRock's Bitcoin ETF application.<\/p>\n\n\n\n

The proposed approach introduces an innovative method for the redemption of ETF shares. A Bitcoin ETF would enable fund investors to gain exposure to Bitcoin without directly purchasing or storing the cryptocurrency. While the SEC has hesitated to approve such ETFs due to concerns about Bitcoin market manipulation, this new strategy addresses those worries.<\/p>\n\n\n\n

The SEC has yet to decide on BlackRock's iShares Bitcoin Trust (IBTC) application, with the deadline set for January 15. Analysts anticipate a decision will be issued for several spot Bitcoin ETF applications earlier in January.<\/p>\n\n\n\n

See Related:<\/strong><\/em> Fidelity Joins BlackRock\u2019s Push For Ethereum ETF<\/a><\/p>\n\n\n\n

BlackRock ETF Details<\/h2>\n\n\n\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

\"The strong jobs report indicates that demand in the labor market is higher than expected. While lower interest rates would surely be welcomed, it is becoming increasingly clear that markets and the economy are coping well with the high rate environment, so policymakers are perhaps feeling that the need for monetary policy to ease is less urgent.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>Optimism Among Individual Investors About The Short-Term Outlook Of The U.S. Stock Market Rose To Its Highest Level<\/a><\/p>\n\n\n\n

AAII Sentiment Survey<\/h2>\n\n\n\n

Positive information is that the latest American Association of Individual Investors (AAII) Sentiment Survey showed that optimism among individual investors about the short-term outlook for stocks surged again. American Association of Individual Investors (AAII) reported that bullish sentiment, or expectations that stock prices will rise over the next six months, jumped 9.8 percentage points to 49.1%.<\/p>\n\n\n\n

Bullish sentiment has reached an \"unusually high level,\"<\/em> surpassing its historical average of 37.5% for the 13th consecutive week. The last time optimism was higher was on December 21, 2023, at 52.9%. On the other side, bearish sentiment, or expectations that stock prices will fall over the next six months, decreased by 1.6 percentage points to 24.5%. This sentiment remains below its historical average of 31.0% for the 13th consecutive week.<\/p>\n\n\n\n

Simultaneously, approximately 80% of earnings reports are surpassing analysts' expectations. With results available from nearly half of the S&P 500 companies, including major tech-related firms, overall earnings are projected to have risen by 7.8% in the fourth quarter compared to the same period last year.<\/p>\n\n\n\n

In their latest report on equity client flows, BofA Securities equity and quant strategist Jill Carey Hall said that the previous week saw the largest influx of U.S. equity investments in seven weeks, along with the most substantial private client inflows in over a year. Jill Carey Hall added<\/a>:<\/p>\n\n\n\n

\"Private clients were the biggest buyers of equities last week, led by purchases of ETFs and Tech stocks. Institutional clients were also net buyers after large outflows the week prior, while hedge fund clients were net sellers.\"<\/em><\/p>\n\n\n\n

Investors are actively monitoring earnings and forecasts from big companies against the backdrop of high borrowing costs but remarks from the Fed's policymakers through the week, including voting member Cleveland's Loretta Mester, will also be on investors' watch list.<\/p>\n","post_title":"Fed Chair Jerome Powell Pushed Back Firmly Against Market Speculation Of Imminent Rate Cuts. What To Expect In The Days Ahead?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"fed-chair-jerome-powell-pushed-back-firmly-against-market-speculation-of-imminent-rate-cuts-what-to-expect-in-the-days-ahead","to_ping":"","pinged":"","post_modified":"2024-02-07 19:31:25","post_modified_gmt":"2024-02-07 08:31:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15327","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15225,"post_author":"14","post_date":"2024-02-01 16:33:13","post_date_gmt":"2024-02-01 05:33:13","post_content":"\n

Wall Street's main indexes fell as Alphabet's projections for rising AI costs dented most megacap and chip stocks while the Federal Reserve left interest rates unchanged this Wednesday. Google's parent company experienced a 6.1% decline, resulting in a 3.0% drop in the S&P 500 communication services sector. This occurred following its announcement of holiday-season advertising sales falling short of expectations and its projection of increased spending on artificial intelligence.<\/p>\n\n\n\n

Microsoft (Nasdaq: MSFT) also lost 1.3% after forecasting higher costs to develop new artificial intelligence features, which overshadowed its upbeat quarterly results. Despite the optimistic outlook from the tech pioneers regarding customer enthusiasm for their generative AI-powered products, investors grew concerned about escalating development expenses for these innovative features. These mounting costs tempered their hopes for a significant sales surge from the new technology.<\/p>\n\n\n\n

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

These results and forecasts from big tech names, along with Tesla's growth warning last week, have reignited attention on the risks associated with the significant influence of mega-cap companies in the S&P 500 which has hit record highs in recent weeks. Apple, Meta Platforms, and Amazon.com set to report earnings on Thursday, fell over 1% each.<\/p>\n\n\n\n

See Related: New Bitcoin Core Update May Natively Support Apple M1 Chips<\/a><\/p>\n\n\n\n

Revenue Forecast And Increased Projection<\/h2>\n\n\n\n

It is also important to mention that Advanced Micro Devices saw a 3.3% decline as its first-quarter revenue forecast and increased projection for AI processors fell short of expectations. Other chip stocks including Nvidia, Broadcom, and Marvell dropped over 1% each. The attention of investors was also on the Federal Reserve's initial monetary policy decision of the year, and while it was widely anticipated that the Fed would maintain interest rates, many analysts said that the Fed is taking baby steps toward the cutting. Art Hogan, Chief Market Strategist of B.Riley Wealth, said<\/a>:<\/p>\n\n\n\n

\"Not surprisingly, I don't think the Fed wants to show their hand, especially, when they have a couple of months of data to collect before they need to. The good news is we can forget about any more tightening. The bad news is it's 'when', not 'if', they're going to cut rates, and that 'when' has been pushed out to what had been the fringes of consensus.\"<\/em><\/p>\n\n\n\n

Due to this, markets are showing some immediate disappointment as there's no explicit indication of imminent rate cuts. We're seeing an extremely neutral, non-committal statement from the Federal Reserve this Wednesday.<\/p>\n","post_title":"Wall Street's Main Indexes Fell As Alphabet's Projections For Rising AI Costs Dented Most Mega-Cap And Chip Stocks","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-as-alphabets-projections-for-rising-ai-costs-dented-most-mega-cap-and-chip-stocks","to_ping":"","pinged":"","post_modified":"2024-02-01 16:33:21","post_modified_gmt":"2024-02-01 05:33:21","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15225","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15094,"post_author":"18","post_date":"2024-01-26 02:18:51","post_date_gmt":"2024-01-25 15:18:51","post_content":"\n

As we enter the last week of January, whispers on Wall Street suggest a potential tantrum in U.S. short-term financing markets, with the storm possibly hitting as early as March. This could prompt the Federal Reserve to reassess its policies.<\/p>\n\n\n\n

As of now, banking executives are anticipating a series of events that may tighten the screws on short-term financing. The expiration of a Fed lending facility on March 11, coupled with limited adoption of the standing repo facility (SRF), is expected to reduce the available funding sources for banks. Simultaneously, increased demand for liquidity is on the horizon due to substantial U.S. government debt issuance and upcoming tax payments in March and April. Additionally, a move toward faster trade settlement in May could intensify the demand for short-term funding.<\/p>\n\n\n\n

Against this backdrop, the Federal Reserve has been steadily draining cash from the financial system by unwinding pandemic-era support. BNY Mellon strategists estimate a significant decrease in cash parked overnight with the Fed, potentially dropping below $200 billion by May. The overnight reverse repurchase agreements facility could even approach zero by mid-year. This reduction in excess liquidity may expose vulnerabilities in short-term financing markets.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Storm Clouds Gather Over Germany's Financial Horizon<\/a><\/p>\n\n\n\n

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

Spikes In Short Term Financing Markets<\/h2>\n\n\n\n

Sudden spikes in short-term financing markets can threaten financial stability, making it harder and more expensive for firms to secure necessary funds. This situation could expose lenders struggling to stabilize deposits after last year's banking crisis. As the Fed inches closer to its 2% inflation target, the risk of policy error looms large.<\/p>\n\n\n\n

If short-term financing markets experience a meltdown, it could signal the need for the Fed to ease policy. Slowing the pace of quantitative tightening (QT) is seen as a potential response. Despite the central bankers' insistence on needing more data before rate cuts, markets are already pricing in cuts by May.<\/p>\n\n\n\n

As we approach the critical months of March to May, the financial markets are at a crossroads. The potential shake-up in short-term financing markets could signal the Fed to reassess its policies. Market participants and investors must stay vigilant, and prepared for potential shifts in liquidity and policy adjustments. The coming months will \/reveal whether these concerns materialize into a significant market event or remain a contained storm in the financial teacup.<\/p>\n","post_title":"Understanding The Potential Shake-Up In U.S. Short-Term Financing Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"understanding-the-potential-shake-up-in-u-s-short-term-financing-markets","to_ping":"","pinged":"","post_modified":"2024-01-26 20:20:06","post_modified_gmt":"2024-01-26 09:20:06","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15094","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15043,"post_author":"14","post_date":"2024-01-19 05:56:40","post_date_gmt":"2024-01-18 18:56:40","post_content":"\n

Wall Street witnessed a significant stock decline this Wednesday following positive December U.S. retail sales data, which diminished the anticipation of an early initiation of the Federal Reserve's campaign to cut interest rates.<\/p>\n\n\n\n

Retail Sales Report <\/h2>\n\n\n\n

The December retail sales report from the Commerce Department (USRSL=ECI) depicted a robust consumer, responsible for approximately 70% of the U.S. economy. Despite facing the challenges of high inflation and a tight monetary policy, the consumer has shown resilience.<\/p>\n\n\n\n

The data revealed that discounts offered by retailers and a surge in motor vehicle acquisitions contributed to a greater-than-anticipated increase in U.S. retail sales, maintaining the economy on a robust trajectory in 2024. This bolstered the perspective that the Federal Reserve might not reduce interest rates as rapidly as initially anticipated for the current year.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

Anticipations among traders for a 25-basis-point Federal Reserve rate cut in March declined to 55%, down from approximately 60% before the release of the retail sales data. Ryan Detrick, chief market strategist at Carson Group in Omaha, said<\/a>:<\/p>\n\n\n\n

\"We had news that the U.S. consumer continues to be quite healthy, but that has increased anxiety that the Fed\u2019s first rate cut could potentially be pushed to May from March. Yields are also moving higher on the strong retail sales numbers, adding to near-term worries.\"<\/em><\/p>\n\n\n\n

US Stocks And Wall Street<\/h2>\n\n\n\n

It is also important to mention that a decline in U.S. stocks sent Wall Street's<\/a> \"fear gauge\" to a two-month high while JPMorgan analysts predict that the majority of negative consequences stemming from higher interest rates have not materialized yet. On Tuesday, Federal Reserve Governor Christopher Waller also emphasized that the central bank should refrain from hastily reducing interest rates until there is a clear indication that lower inflation is likely to persist.<\/p>\n\n\n\n

At the same time, the escalation of geopolitical uncertainties introduces an additional challenge and heightens the potential for unforeseen risks in both markets and economic performance. Considering these factors, the perspective is likely to stay cautious as long as interest rates remain significantly restrictive and the looming presence of geopolitical risks persists.<\/p>\n","post_title":"Wall Street Weakened As Retail Sales Data Hampers Expectations For A Cut In Interest Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-weakened-as-retail-sales-data-hampers-expectations-for-a-cut-in-interest-rates","to_ping":"","pinged":"","post_modified":"2024-01-19 05:56:51","post_modified_gmt":"2024-01-18 18:56:51","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15043","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14931,"post_author":"18","post_date":"2024-01-10 07:51:17","post_date_gmt":"2024-01-09 20:51:17","post_content":"\n

In a recent survey conducted by the New York Federal Reserve<\/a>, Wall Street's major banks have recalibrated their predictions regarding the Federal Reserve's balance sheet drawdown. This shift suggests that the U.S. central bank might conclude its quantitative tightening (QT) process later than initially anticipated.<\/p>\n\n\n\n

A Change in Perspective<\/h2>\n\n\n\n

Previously, primary dealers\u2014major banks\u2014projected that the QT process would conclude by the third quarter. However, the sentiment has evolved. According to the latest survey taken before the Fed's December 12-13 policy meeting, these banks now foresee the QT process ending in the fourth quarter.<\/p>\n\n\n\n

This adjustment carries significant implications. If these predictions materialize, the Federal Reserve's balance sheet<\/a> will likely shrink to approximately $6.75 trillion, down from its current level of roughly $7.764 trillion. Moreover, banks estimated that the central bank's reverse repo facility would hold $375 billion when QT concludes, a reduction from the anticipated $625 billion as forecasted in October.<\/p>\n\n\n\n

Federal Reserve Strategy<\/h2>\n\n\n\n

The quantitative tightening process has been an integral part of the Federal Reserve's strategy to combat inflation. Alongside rate hikes, the central bank initiated large-scale purchases of Treasury bonds and mortgage-backed securities during the COVID-19 pandemic's onset in 2020. This move led to an expansion of its holdings to approximately $9 trillion by mid-2022. However, since last year, the Fed has been gradually reducing its balance sheet size, although specific guidance on the timeline remains somewhat ambiguous.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

What This Means for the Economy<\/h2>\n\n\n\n

The recalibrated timeline for QT indicates a more prolonged period of balance sheet reduction. As the Federal Reserve continues to navigate its policy decisions, market participants, businesses, and consumers should monitor these developments closely. Changes in the balance sheet size can influence interest rates, liquidity conditions, and overall financial market dynamics.<\/p>\n\n\n\n

A Technical Perspective<\/h2>\n\n\n\n

From a technical standpoint, the Federal Reserve's<\/a> balance sheet management serves as a critical tool in its monetary policy arsenal. The evolving predictions by Wall Street's primary dealers underscore the complexities involved in forecasting economic variables, such as inflation and interest rates.<\/p>\n\n\n\n

As the QT process continues, policymakers and market participants must remain vigilant, considering the potential ramifications for financial stability and economic growth. This dynamic landscape necessitates ongoing analysis and adaptation to ensure that monetary policy objectives align with evolving economic conditions.<\/p>\n","post_title":"Decoding Wall Street's Shift: A Closer Look At Wall Street's Changing Perspective","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"decoding-wall-streets-shift-a-closer-look-at-wall-streets-changing-perspective","to_ping":"","pinged":"","post_modified":"2024-01-10 07:51:25","post_modified_gmt":"2024-01-09 20:51:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14931","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14888,"post_author":"14","post_date":"2024-01-06 18:33:09","post_date_gmt":"2024-01-06 07:33:09","post_content":"\n

Wall Street's main indexes fell at the beginning of the 2024 year as investors locked in profits after a very successful 2023 and are currently waiting for the Federal Reserve's<\/a> meeting that could offer hints on its interest rate path. Ken Polcari, managing partner at Kace Capital Advisors, said:<\/p>\n\n\n\n

\"The decline yesterday, today, and maybe for the next couple of weeks, is a result of people locking in profits and reconsidering what the narrative is - are rates going down five or six times as it appeared to be at the end of last year?\"<\/em><\/p>\n\n\n\n

\"\"
The Nasdaq Composite kicked off the year with a 1.5% drop pressured by a selloff in the tech sector<\/figcaption><\/figure>\n\n\n\n

The Fed's December meeting minutes are set to be disclosed at 2:00 p.m. ET, potentially providing information regarding the central bank's shift toward reducing interest rates. Although it's widely anticipated that the Fed will keep interest rates unchanged this month, traders have priced in a 65.7% probability of a 25 basis point rate reduction in March, according to CMEGroup's FedWatch tool.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures<\/a><\/p>\n\n\n\n

Central Bank And Inflation<\/h2>\n\n\n\n

Richmond Fed President Thomas Barkin, a voting member in the FOMC's rate-setting committee, said recently that the U.S. central bank is \"making real progress\" towards taming inflation and a soft landing seeming \"increasingly conceivable\". Encouragingly, the American Association of Individual Investors (AAII) Sentiment Survey indicated a surge in optimism among individual investors regarding the short-term outlook for the U.S. stock market, reaching its peak level in more than two and a half years.<\/p>\n\n\n\n

Despite this, JPMorgan Asset Management advises investors to be cautious due to potential recession risks. At the same time, analysts at Soci\u00e9t\u00e9 G\u00e9n\u00e9rale anticipate a turbulent 2024 for U.S. stocks, projecting fluctuations that could involve nearing recent highs, encountering declines, and subsequently rebounding.<\/p>\n\n\n\n

This week will witness a series of labor market data releases, culminating in the government's December employment report on Friday. These reports could significantly influence the forecast for the Fed's interest rate trajectory this year, prompting investors to scrutinize the data. Jeffrey Roach, chief economist at LPL Financial, added<\/a>:<\/p>\n\n\n\n

 \"The job market is cooling and we should see confirmation of that in this Friday\u2019s jobs report\"<\/em><\/p>\n\n\n\n

Following the progress of Wall Street's main indexes seen last year, investors are still optimistic about the prospect of another robust year ahead. This optimism is rooted in the anticipation that a decelerating economy will result in a gentle landing rather than a full-scale recession, especially as the Fed initiates rate cuts in the first half of 2024.<\/p>\n","post_title":"Wall Street's Main Indexes Fell At The Beginning Of 2024 year. Investors Locked In Profits After A Strong 2023 And Wait For The Federal Reserve's Meeting","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-at-the-beginning-of-2024-year-investors-locked-in-profits-after-a-strong-2023-and-wait-for-the-federal-reserves-meeting","to_ping":"","pinged":"","post_modified":"2024-01-06 18:33:13","post_modified_gmt":"2024-01-06 07:33:13","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14888","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14629,"post_author":"15","post_date":"2023-12-15 19:46:11","post_date_gmt":"2023-12-15 08:46:11","post_content":"\n

BlackRock aims to facilitate the participation of Wall Street banks in its potential Bitcoin ETF approval. Recent SEC memo <\/a>detailing a late November meeting involving BlackRock, Nasdaq, and the Commission. During this meeting, they discussed feedback regarding BlackRock's Bitcoin ETF application.<\/p>\n\n\n\n

The proposed approach introduces an innovative method for the redemption of ETF shares. A Bitcoin ETF would enable fund investors to gain exposure to Bitcoin without directly purchasing or storing the cryptocurrency. While the SEC has hesitated to approve such ETFs due to concerns about Bitcoin market manipulation, this new strategy addresses those worries.<\/p>\n\n\n\n

The SEC has yet to decide on BlackRock's iShares Bitcoin Trust (IBTC) application, with the deadline set for January 15. Analysts anticipate a decision will be issued for several spot Bitcoin ETF applications earlier in January.<\/p>\n\n\n\n

See Related:<\/strong><\/em> Fidelity Joins BlackRock\u2019s Push For Ethereum ETF<\/a><\/p>\n\n\n\n

BlackRock ETF Details<\/h2>\n\n\n\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

In January, job growth in the U.S. picked up pace, and wages saw their most significant increase in nearly two years. These are indications of enduring strength in the labor market, potentially complicating the Federal Reserve's plans to begin cutting interest rates in May. Richard Flynn, managing director at Charles Schwab UK, said:<\/p>\n\n\n\n

\"The strong jobs report indicates that demand in the labor market is higher than expected. While lower interest rates would surely be welcomed, it is becoming increasingly clear that markets and the economy are coping well with the high rate environment, so policymakers are perhaps feeling that the need for monetary policy to ease is less urgent.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>Optimism Among Individual Investors About The Short-Term Outlook Of The U.S. Stock Market Rose To Its Highest Level<\/a><\/p>\n\n\n\n

AAII Sentiment Survey<\/h2>\n\n\n\n

Positive information is that the latest American Association of Individual Investors (AAII) Sentiment Survey showed that optimism among individual investors about the short-term outlook for stocks surged again. American Association of Individual Investors (AAII) reported that bullish sentiment, or expectations that stock prices will rise over the next six months, jumped 9.8 percentage points to 49.1%.<\/p>\n\n\n\n

Bullish sentiment has reached an \"unusually high level,\"<\/em> surpassing its historical average of 37.5% for the 13th consecutive week. The last time optimism was higher was on December 21, 2023, at 52.9%. On the other side, bearish sentiment, or expectations that stock prices will fall over the next six months, decreased by 1.6 percentage points to 24.5%. This sentiment remains below its historical average of 31.0% for the 13th consecutive week.<\/p>\n\n\n\n

Simultaneously, approximately 80% of earnings reports are surpassing analysts' expectations. With results available from nearly half of the S&P 500 companies, including major tech-related firms, overall earnings are projected to have risen by 7.8% in the fourth quarter compared to the same period last year.<\/p>\n\n\n\n

In their latest report on equity client flows, BofA Securities equity and quant strategist Jill Carey Hall said that the previous week saw the largest influx of U.S. equity investments in seven weeks, along with the most substantial private client inflows in over a year. Jill Carey Hall added<\/a>:<\/p>\n\n\n\n

\"Private clients were the biggest buyers of equities last week, led by purchases of ETFs and Tech stocks. Institutional clients were also net buyers after large outflows the week prior, while hedge fund clients were net sellers.\"<\/em><\/p>\n\n\n\n

Investors are actively monitoring earnings and forecasts from big companies against the backdrop of high borrowing costs but remarks from the Fed's policymakers through the week, including voting member Cleveland's Loretta Mester, will also be on investors' watch list.<\/p>\n","post_title":"Fed Chair Jerome Powell Pushed Back Firmly Against Market Speculation Of Imminent Rate Cuts. What To Expect In The Days Ahead?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"fed-chair-jerome-powell-pushed-back-firmly-against-market-speculation-of-imminent-rate-cuts-what-to-expect-in-the-days-ahead","to_ping":"","pinged":"","post_modified":"2024-02-07 19:31:25","post_modified_gmt":"2024-02-07 08:31:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15327","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15225,"post_author":"14","post_date":"2024-02-01 16:33:13","post_date_gmt":"2024-02-01 05:33:13","post_content":"\n

Wall Street's main indexes fell as Alphabet's projections for rising AI costs dented most megacap and chip stocks while the Federal Reserve left interest rates unchanged this Wednesday. Google's parent company experienced a 6.1% decline, resulting in a 3.0% drop in the S&P 500 communication services sector. This occurred following its announcement of holiday-season advertising sales falling short of expectations and its projection of increased spending on artificial intelligence.<\/p>\n\n\n\n

Microsoft (Nasdaq: MSFT) also lost 1.3% after forecasting higher costs to develop new artificial intelligence features, which overshadowed its upbeat quarterly results. Despite the optimistic outlook from the tech pioneers regarding customer enthusiasm for their generative AI-powered products, investors grew concerned about escalating development expenses for these innovative features. These mounting costs tempered their hopes for a significant sales surge from the new technology.<\/p>\n\n\n\n

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

These results and forecasts from big tech names, along with Tesla's growth warning last week, have reignited attention on the risks associated with the significant influence of mega-cap companies in the S&P 500 which has hit record highs in recent weeks. Apple, Meta Platforms, and Amazon.com set to report earnings on Thursday, fell over 1% each.<\/p>\n\n\n\n

See Related: New Bitcoin Core Update May Natively Support Apple M1 Chips<\/a><\/p>\n\n\n\n

Revenue Forecast And Increased Projection<\/h2>\n\n\n\n

It is also important to mention that Advanced Micro Devices saw a 3.3% decline as its first-quarter revenue forecast and increased projection for AI processors fell short of expectations. Other chip stocks including Nvidia, Broadcom, and Marvell dropped over 1% each. The attention of investors was also on the Federal Reserve's initial monetary policy decision of the year, and while it was widely anticipated that the Fed would maintain interest rates, many analysts said that the Fed is taking baby steps toward the cutting. Art Hogan, Chief Market Strategist of B.Riley Wealth, said<\/a>:<\/p>\n\n\n\n

\"Not surprisingly, I don't think the Fed wants to show their hand, especially, when they have a couple of months of data to collect before they need to. The good news is we can forget about any more tightening. The bad news is it's 'when', not 'if', they're going to cut rates, and that 'when' has been pushed out to what had been the fringes of consensus.\"<\/em><\/p>\n\n\n\n

Due to this, markets are showing some immediate disappointment as there's no explicit indication of imminent rate cuts. We're seeing an extremely neutral, non-committal statement from the Federal Reserve this Wednesday.<\/p>\n","post_title":"Wall Street's Main Indexes Fell As Alphabet's Projections For Rising AI Costs Dented Most Mega-Cap And Chip Stocks","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-as-alphabets-projections-for-rising-ai-costs-dented-most-mega-cap-and-chip-stocks","to_ping":"","pinged":"","post_modified":"2024-02-01 16:33:21","post_modified_gmt":"2024-02-01 05:33:21","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15225","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15094,"post_author":"18","post_date":"2024-01-26 02:18:51","post_date_gmt":"2024-01-25 15:18:51","post_content":"\n

As we enter the last week of January, whispers on Wall Street suggest a potential tantrum in U.S. short-term financing markets, with the storm possibly hitting as early as March. This could prompt the Federal Reserve to reassess its policies.<\/p>\n\n\n\n

As of now, banking executives are anticipating a series of events that may tighten the screws on short-term financing. The expiration of a Fed lending facility on March 11, coupled with limited adoption of the standing repo facility (SRF), is expected to reduce the available funding sources for banks. Simultaneously, increased demand for liquidity is on the horizon due to substantial U.S. government debt issuance and upcoming tax payments in March and April. Additionally, a move toward faster trade settlement in May could intensify the demand for short-term funding.<\/p>\n\n\n\n

Against this backdrop, the Federal Reserve has been steadily draining cash from the financial system by unwinding pandemic-era support. BNY Mellon strategists estimate a significant decrease in cash parked overnight with the Fed, potentially dropping below $200 billion by May. The overnight reverse repurchase agreements facility could even approach zero by mid-year. This reduction in excess liquidity may expose vulnerabilities in short-term financing markets.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Storm Clouds Gather Over Germany's Financial Horizon<\/a><\/p>\n\n\n\n

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

Spikes In Short Term Financing Markets<\/h2>\n\n\n\n

Sudden spikes in short-term financing markets can threaten financial stability, making it harder and more expensive for firms to secure necessary funds. This situation could expose lenders struggling to stabilize deposits after last year's banking crisis. As the Fed inches closer to its 2% inflation target, the risk of policy error looms large.<\/p>\n\n\n\n

If short-term financing markets experience a meltdown, it could signal the need for the Fed to ease policy. Slowing the pace of quantitative tightening (QT) is seen as a potential response. Despite the central bankers' insistence on needing more data before rate cuts, markets are already pricing in cuts by May.<\/p>\n\n\n\n

As we approach the critical months of March to May, the financial markets are at a crossroads. The potential shake-up in short-term financing markets could signal the Fed to reassess its policies. Market participants and investors must stay vigilant, and prepared for potential shifts in liquidity and policy adjustments. The coming months will \/reveal whether these concerns materialize into a significant market event or remain a contained storm in the financial teacup.<\/p>\n","post_title":"Understanding The Potential Shake-Up In U.S. Short-Term Financing Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"understanding-the-potential-shake-up-in-u-s-short-term-financing-markets","to_ping":"","pinged":"","post_modified":"2024-01-26 20:20:06","post_modified_gmt":"2024-01-26 09:20:06","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15094","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15043,"post_author":"14","post_date":"2024-01-19 05:56:40","post_date_gmt":"2024-01-18 18:56:40","post_content":"\n

Wall Street witnessed a significant stock decline this Wednesday following positive December U.S. retail sales data, which diminished the anticipation of an early initiation of the Federal Reserve's campaign to cut interest rates.<\/p>\n\n\n\n

Retail Sales Report <\/h2>\n\n\n\n

The December retail sales report from the Commerce Department (USRSL=ECI) depicted a robust consumer, responsible for approximately 70% of the U.S. economy. Despite facing the challenges of high inflation and a tight monetary policy, the consumer has shown resilience.<\/p>\n\n\n\n

The data revealed that discounts offered by retailers and a surge in motor vehicle acquisitions contributed to a greater-than-anticipated increase in U.S. retail sales, maintaining the economy on a robust trajectory in 2024. This bolstered the perspective that the Federal Reserve might not reduce interest rates as rapidly as initially anticipated for the current year.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

Anticipations among traders for a 25-basis-point Federal Reserve rate cut in March declined to 55%, down from approximately 60% before the release of the retail sales data. Ryan Detrick, chief market strategist at Carson Group in Omaha, said<\/a>:<\/p>\n\n\n\n

\"We had news that the U.S. consumer continues to be quite healthy, but that has increased anxiety that the Fed\u2019s first rate cut could potentially be pushed to May from March. Yields are also moving higher on the strong retail sales numbers, adding to near-term worries.\"<\/em><\/p>\n\n\n\n

US Stocks And Wall Street<\/h2>\n\n\n\n

It is also important to mention that a decline in U.S. stocks sent Wall Street's<\/a> \"fear gauge\" to a two-month high while JPMorgan analysts predict that the majority of negative consequences stemming from higher interest rates have not materialized yet. On Tuesday, Federal Reserve Governor Christopher Waller also emphasized that the central bank should refrain from hastily reducing interest rates until there is a clear indication that lower inflation is likely to persist.<\/p>\n\n\n\n

At the same time, the escalation of geopolitical uncertainties introduces an additional challenge and heightens the potential for unforeseen risks in both markets and economic performance. Considering these factors, the perspective is likely to stay cautious as long as interest rates remain significantly restrictive and the looming presence of geopolitical risks persists.<\/p>\n","post_title":"Wall Street Weakened As Retail Sales Data Hampers Expectations For A Cut In Interest Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-weakened-as-retail-sales-data-hampers-expectations-for-a-cut-in-interest-rates","to_ping":"","pinged":"","post_modified":"2024-01-19 05:56:51","post_modified_gmt":"2024-01-18 18:56:51","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15043","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14931,"post_author":"18","post_date":"2024-01-10 07:51:17","post_date_gmt":"2024-01-09 20:51:17","post_content":"\n

In a recent survey conducted by the New York Federal Reserve<\/a>, Wall Street's major banks have recalibrated their predictions regarding the Federal Reserve's balance sheet drawdown. This shift suggests that the U.S. central bank might conclude its quantitative tightening (QT) process later than initially anticipated.<\/p>\n\n\n\n

A Change in Perspective<\/h2>\n\n\n\n

Previously, primary dealers\u2014major banks\u2014projected that the QT process would conclude by the third quarter. However, the sentiment has evolved. According to the latest survey taken before the Fed's December 12-13 policy meeting, these banks now foresee the QT process ending in the fourth quarter.<\/p>\n\n\n\n

This adjustment carries significant implications. If these predictions materialize, the Federal Reserve's balance sheet<\/a> will likely shrink to approximately $6.75 trillion, down from its current level of roughly $7.764 trillion. Moreover, banks estimated that the central bank's reverse repo facility would hold $375 billion when QT concludes, a reduction from the anticipated $625 billion as forecasted in October.<\/p>\n\n\n\n

Federal Reserve Strategy<\/h2>\n\n\n\n

The quantitative tightening process has been an integral part of the Federal Reserve's strategy to combat inflation. Alongside rate hikes, the central bank initiated large-scale purchases of Treasury bonds and mortgage-backed securities during the COVID-19 pandemic's onset in 2020. This move led to an expansion of its holdings to approximately $9 trillion by mid-2022. However, since last year, the Fed has been gradually reducing its balance sheet size, although specific guidance on the timeline remains somewhat ambiguous.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

What This Means for the Economy<\/h2>\n\n\n\n

The recalibrated timeline for QT indicates a more prolonged period of balance sheet reduction. As the Federal Reserve continues to navigate its policy decisions, market participants, businesses, and consumers should monitor these developments closely. Changes in the balance sheet size can influence interest rates, liquidity conditions, and overall financial market dynamics.<\/p>\n\n\n\n

A Technical Perspective<\/h2>\n\n\n\n

From a technical standpoint, the Federal Reserve's<\/a> balance sheet management serves as a critical tool in its monetary policy arsenal. The evolving predictions by Wall Street's primary dealers underscore the complexities involved in forecasting economic variables, such as inflation and interest rates.<\/p>\n\n\n\n

As the QT process continues, policymakers and market participants must remain vigilant, considering the potential ramifications for financial stability and economic growth. This dynamic landscape necessitates ongoing analysis and adaptation to ensure that monetary policy objectives align with evolving economic conditions.<\/p>\n","post_title":"Decoding Wall Street's Shift: A Closer Look At Wall Street's Changing Perspective","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"decoding-wall-streets-shift-a-closer-look-at-wall-streets-changing-perspective","to_ping":"","pinged":"","post_modified":"2024-01-10 07:51:25","post_modified_gmt":"2024-01-09 20:51:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14931","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14888,"post_author":"14","post_date":"2024-01-06 18:33:09","post_date_gmt":"2024-01-06 07:33:09","post_content":"\n

Wall Street's main indexes fell at the beginning of the 2024 year as investors locked in profits after a very successful 2023 and are currently waiting for the Federal Reserve's<\/a> meeting that could offer hints on its interest rate path. Ken Polcari, managing partner at Kace Capital Advisors, said:<\/p>\n\n\n\n

\"The decline yesterday, today, and maybe for the next couple of weeks, is a result of people locking in profits and reconsidering what the narrative is - are rates going down five or six times as it appeared to be at the end of last year?\"<\/em><\/p>\n\n\n\n

\"\"
The Nasdaq Composite kicked off the year with a 1.5% drop pressured by a selloff in the tech sector<\/figcaption><\/figure>\n\n\n\n

The Fed's December meeting minutes are set to be disclosed at 2:00 p.m. ET, potentially providing information regarding the central bank's shift toward reducing interest rates. Although it's widely anticipated that the Fed will keep interest rates unchanged this month, traders have priced in a 65.7% probability of a 25 basis point rate reduction in March, according to CMEGroup's FedWatch tool.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures<\/a><\/p>\n\n\n\n

Central Bank And Inflation<\/h2>\n\n\n\n

Richmond Fed President Thomas Barkin, a voting member in the FOMC's rate-setting committee, said recently that the U.S. central bank is \"making real progress\" towards taming inflation and a soft landing seeming \"increasingly conceivable\". Encouragingly, the American Association of Individual Investors (AAII) Sentiment Survey indicated a surge in optimism among individual investors regarding the short-term outlook for the U.S. stock market, reaching its peak level in more than two and a half years.<\/p>\n\n\n\n

Despite this, JPMorgan Asset Management advises investors to be cautious due to potential recession risks. At the same time, analysts at Soci\u00e9t\u00e9 G\u00e9n\u00e9rale anticipate a turbulent 2024 for U.S. stocks, projecting fluctuations that could involve nearing recent highs, encountering declines, and subsequently rebounding.<\/p>\n\n\n\n

This week will witness a series of labor market data releases, culminating in the government's December employment report on Friday. These reports could significantly influence the forecast for the Fed's interest rate trajectory this year, prompting investors to scrutinize the data. Jeffrey Roach, chief economist at LPL Financial, added<\/a>:<\/p>\n\n\n\n

 \"The job market is cooling and we should see confirmation of that in this Friday\u2019s jobs report\"<\/em><\/p>\n\n\n\n

Following the progress of Wall Street's main indexes seen last year, investors are still optimistic about the prospect of another robust year ahead. This optimism is rooted in the anticipation that a decelerating economy will result in a gentle landing rather than a full-scale recession, especially as the Fed initiates rate cuts in the first half of 2024.<\/p>\n","post_title":"Wall Street's Main Indexes Fell At The Beginning Of 2024 year. Investors Locked In Profits After A Strong 2023 And Wait For The Federal Reserve's Meeting","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-at-the-beginning-of-2024-year-investors-locked-in-profits-after-a-strong-2023-and-wait-for-the-federal-reserves-meeting","to_ping":"","pinged":"","post_modified":"2024-01-06 18:33:13","post_modified_gmt":"2024-01-06 07:33:13","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14888","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14629,"post_author":"15","post_date":"2023-12-15 19:46:11","post_date_gmt":"2023-12-15 08:46:11","post_content":"\n

BlackRock aims to facilitate the participation of Wall Street banks in its potential Bitcoin ETF approval. Recent SEC memo <\/a>detailing a late November meeting involving BlackRock, Nasdaq, and the Commission. During this meeting, they discussed feedback regarding BlackRock's Bitcoin ETF application.<\/p>\n\n\n\n

The proposed approach introduces an innovative method for the redemption of ETF shares. A Bitcoin ETF would enable fund investors to gain exposure to Bitcoin without directly purchasing or storing the cryptocurrency. While the SEC has hesitated to approve such ETFs due to concerns about Bitcoin market manipulation, this new strategy addresses those worries.<\/p>\n\n\n\n

The SEC has yet to decide on BlackRock's iShares Bitcoin Trust (IBTC) application, with the deadline set for January 15. Analysts anticipate a decision will be issued for several spot Bitcoin ETF applications earlier in January.<\/p>\n\n\n\n

See Related:<\/strong><\/em> Fidelity Joins BlackRock\u2019s Push For Ethereum ETF<\/a><\/p>\n\n\n\n

BlackRock ETF Details<\/h2>\n\n\n\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n
\"\"
Federal Reserve Chair Jerome Powell emphasized the necessity for additional evidence indicating a sustainable decline in inflation<\/em><\/figcaption><\/figure>\n\n\n\n

In January, job growth in the U.S. picked up pace, and wages saw their most significant increase in nearly two years. These are indications of enduring strength in the labor market, potentially complicating the Federal Reserve's plans to begin cutting interest rates in May. Richard Flynn, managing director at Charles Schwab UK, said:<\/p>\n\n\n\n

\"The strong jobs report indicates that demand in the labor market is higher than expected. While lower interest rates would surely be welcomed, it is becoming increasingly clear that markets and the economy are coping well with the high rate environment, so policymakers are perhaps feeling that the need for monetary policy to ease is less urgent.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>Optimism Among Individual Investors About The Short-Term Outlook Of The U.S. Stock Market Rose To Its Highest Level<\/a><\/p>\n\n\n\n

AAII Sentiment Survey<\/h2>\n\n\n\n

Positive information is that the latest American Association of Individual Investors (AAII) Sentiment Survey showed that optimism among individual investors about the short-term outlook for stocks surged again. American Association of Individual Investors (AAII) reported that bullish sentiment, or expectations that stock prices will rise over the next six months, jumped 9.8 percentage points to 49.1%.<\/p>\n\n\n\n

Bullish sentiment has reached an \"unusually high level,\"<\/em> surpassing its historical average of 37.5% for the 13th consecutive week. The last time optimism was higher was on December 21, 2023, at 52.9%. On the other side, bearish sentiment, or expectations that stock prices will fall over the next six months, decreased by 1.6 percentage points to 24.5%. This sentiment remains below its historical average of 31.0% for the 13th consecutive week.<\/p>\n\n\n\n

Simultaneously, approximately 80% of earnings reports are surpassing analysts' expectations. With results available from nearly half of the S&P 500 companies, including major tech-related firms, overall earnings are projected to have risen by 7.8% in the fourth quarter compared to the same period last year.<\/p>\n\n\n\n

In their latest report on equity client flows, BofA Securities equity and quant strategist Jill Carey Hall said that the previous week saw the largest influx of U.S. equity investments in seven weeks, along with the most substantial private client inflows in over a year. Jill Carey Hall added<\/a>:<\/p>\n\n\n\n

\"Private clients were the biggest buyers of equities last week, led by purchases of ETFs and Tech stocks. Institutional clients were also net buyers after large outflows the week prior, while hedge fund clients were net sellers.\"<\/em><\/p>\n\n\n\n

Investors are actively monitoring earnings and forecasts from big companies against the backdrop of high borrowing costs but remarks from the Fed's policymakers through the week, including voting member Cleveland's Loretta Mester, will also be on investors' watch list.<\/p>\n","post_title":"Fed Chair Jerome Powell Pushed Back Firmly Against Market Speculation Of Imminent Rate Cuts. What To Expect In The Days Ahead?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"fed-chair-jerome-powell-pushed-back-firmly-against-market-speculation-of-imminent-rate-cuts-what-to-expect-in-the-days-ahead","to_ping":"","pinged":"","post_modified":"2024-02-07 19:31:25","post_modified_gmt":"2024-02-07 08:31:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15327","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15225,"post_author":"14","post_date":"2024-02-01 16:33:13","post_date_gmt":"2024-02-01 05:33:13","post_content":"\n

Wall Street's main indexes fell as Alphabet's projections for rising AI costs dented most megacap and chip stocks while the Federal Reserve left interest rates unchanged this Wednesday. Google's parent company experienced a 6.1% decline, resulting in a 3.0% drop in the S&P 500 communication services sector. This occurred following its announcement of holiday-season advertising sales falling short of expectations and its projection of increased spending on artificial intelligence.<\/p>\n\n\n\n

Microsoft (Nasdaq: MSFT) also lost 1.3% after forecasting higher costs to develop new artificial intelligence features, which overshadowed its upbeat quarterly results. Despite the optimistic outlook from the tech pioneers regarding customer enthusiasm for their generative AI-powered products, investors grew concerned about escalating development expenses for these innovative features. These mounting costs tempered their hopes for a significant sales surge from the new technology.<\/p>\n\n\n\n

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

These results and forecasts from big tech names, along with Tesla's growth warning last week, have reignited attention on the risks associated with the significant influence of mega-cap companies in the S&P 500 which has hit record highs in recent weeks. Apple, Meta Platforms, and Amazon.com set to report earnings on Thursday, fell over 1% each.<\/p>\n\n\n\n

See Related: New Bitcoin Core Update May Natively Support Apple M1 Chips<\/a><\/p>\n\n\n\n

Revenue Forecast And Increased Projection<\/h2>\n\n\n\n

It is also important to mention that Advanced Micro Devices saw a 3.3% decline as its first-quarter revenue forecast and increased projection for AI processors fell short of expectations. Other chip stocks including Nvidia, Broadcom, and Marvell dropped over 1% each. The attention of investors was also on the Federal Reserve's initial monetary policy decision of the year, and while it was widely anticipated that the Fed would maintain interest rates, many analysts said that the Fed is taking baby steps toward the cutting. Art Hogan, Chief Market Strategist of B.Riley Wealth, said<\/a>:<\/p>\n\n\n\n

\"Not surprisingly, I don't think the Fed wants to show their hand, especially, when they have a couple of months of data to collect before they need to. The good news is we can forget about any more tightening. The bad news is it's 'when', not 'if', they're going to cut rates, and that 'when' has been pushed out to what had been the fringes of consensus.\"<\/em><\/p>\n\n\n\n

Due to this, markets are showing some immediate disappointment as there's no explicit indication of imminent rate cuts. We're seeing an extremely neutral, non-committal statement from the Federal Reserve this Wednesday.<\/p>\n","post_title":"Wall Street's Main Indexes Fell As Alphabet's Projections For Rising AI Costs Dented Most Mega-Cap And Chip Stocks","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-as-alphabets-projections-for-rising-ai-costs-dented-most-mega-cap-and-chip-stocks","to_ping":"","pinged":"","post_modified":"2024-02-01 16:33:21","post_modified_gmt":"2024-02-01 05:33:21","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15225","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15094,"post_author":"18","post_date":"2024-01-26 02:18:51","post_date_gmt":"2024-01-25 15:18:51","post_content":"\n

As we enter the last week of January, whispers on Wall Street suggest a potential tantrum in U.S. short-term financing markets, with the storm possibly hitting as early as March. This could prompt the Federal Reserve to reassess its policies.<\/p>\n\n\n\n

As of now, banking executives are anticipating a series of events that may tighten the screws on short-term financing. The expiration of a Fed lending facility on March 11, coupled with limited adoption of the standing repo facility (SRF), is expected to reduce the available funding sources for banks. Simultaneously, increased demand for liquidity is on the horizon due to substantial U.S. government debt issuance and upcoming tax payments in March and April. Additionally, a move toward faster trade settlement in May could intensify the demand for short-term funding.<\/p>\n\n\n\n

Against this backdrop, the Federal Reserve has been steadily draining cash from the financial system by unwinding pandemic-era support. BNY Mellon strategists estimate a significant decrease in cash parked overnight with the Fed, potentially dropping below $200 billion by May. The overnight reverse repurchase agreements facility could even approach zero by mid-year. This reduction in excess liquidity may expose vulnerabilities in short-term financing markets.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Storm Clouds Gather Over Germany's Financial Horizon<\/a><\/p>\n\n\n\n

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

Spikes In Short Term Financing Markets<\/h2>\n\n\n\n

Sudden spikes in short-term financing markets can threaten financial stability, making it harder and more expensive for firms to secure necessary funds. This situation could expose lenders struggling to stabilize deposits after last year's banking crisis. As the Fed inches closer to its 2% inflation target, the risk of policy error looms large.<\/p>\n\n\n\n

If short-term financing markets experience a meltdown, it could signal the need for the Fed to ease policy. Slowing the pace of quantitative tightening (QT) is seen as a potential response. Despite the central bankers' insistence on needing more data before rate cuts, markets are already pricing in cuts by May.<\/p>\n\n\n\n

As we approach the critical months of March to May, the financial markets are at a crossroads. The potential shake-up in short-term financing markets could signal the Fed to reassess its policies. Market participants and investors must stay vigilant, and prepared for potential shifts in liquidity and policy adjustments. The coming months will \/reveal whether these concerns materialize into a significant market event or remain a contained storm in the financial teacup.<\/p>\n","post_title":"Understanding The Potential Shake-Up In U.S. Short-Term Financing Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"understanding-the-potential-shake-up-in-u-s-short-term-financing-markets","to_ping":"","pinged":"","post_modified":"2024-01-26 20:20:06","post_modified_gmt":"2024-01-26 09:20:06","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15094","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15043,"post_author":"14","post_date":"2024-01-19 05:56:40","post_date_gmt":"2024-01-18 18:56:40","post_content":"\n

Wall Street witnessed a significant stock decline this Wednesday following positive December U.S. retail sales data, which diminished the anticipation of an early initiation of the Federal Reserve's campaign to cut interest rates.<\/p>\n\n\n\n

Retail Sales Report <\/h2>\n\n\n\n

The December retail sales report from the Commerce Department (USRSL=ECI) depicted a robust consumer, responsible for approximately 70% of the U.S. economy. Despite facing the challenges of high inflation and a tight monetary policy, the consumer has shown resilience.<\/p>\n\n\n\n

The data revealed that discounts offered by retailers and a surge in motor vehicle acquisitions contributed to a greater-than-anticipated increase in U.S. retail sales, maintaining the economy on a robust trajectory in 2024. This bolstered the perspective that the Federal Reserve might not reduce interest rates as rapidly as initially anticipated for the current year.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

Anticipations among traders for a 25-basis-point Federal Reserve rate cut in March declined to 55%, down from approximately 60% before the release of the retail sales data. Ryan Detrick, chief market strategist at Carson Group in Omaha, said<\/a>:<\/p>\n\n\n\n

\"We had news that the U.S. consumer continues to be quite healthy, but that has increased anxiety that the Fed\u2019s first rate cut could potentially be pushed to May from March. Yields are also moving higher on the strong retail sales numbers, adding to near-term worries.\"<\/em><\/p>\n\n\n\n

US Stocks And Wall Street<\/h2>\n\n\n\n

It is also important to mention that a decline in U.S. stocks sent Wall Street's<\/a> \"fear gauge\" to a two-month high while JPMorgan analysts predict that the majority of negative consequences stemming from higher interest rates have not materialized yet. On Tuesday, Federal Reserve Governor Christopher Waller also emphasized that the central bank should refrain from hastily reducing interest rates until there is a clear indication that lower inflation is likely to persist.<\/p>\n\n\n\n

At the same time, the escalation of geopolitical uncertainties introduces an additional challenge and heightens the potential for unforeseen risks in both markets and economic performance. Considering these factors, the perspective is likely to stay cautious as long as interest rates remain significantly restrictive and the looming presence of geopolitical risks persists.<\/p>\n","post_title":"Wall Street Weakened As Retail Sales Data Hampers Expectations For A Cut In Interest Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-weakened-as-retail-sales-data-hampers-expectations-for-a-cut-in-interest-rates","to_ping":"","pinged":"","post_modified":"2024-01-19 05:56:51","post_modified_gmt":"2024-01-18 18:56:51","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15043","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14931,"post_author":"18","post_date":"2024-01-10 07:51:17","post_date_gmt":"2024-01-09 20:51:17","post_content":"\n

In a recent survey conducted by the New York Federal Reserve<\/a>, Wall Street's major banks have recalibrated their predictions regarding the Federal Reserve's balance sheet drawdown. This shift suggests that the U.S. central bank might conclude its quantitative tightening (QT) process later than initially anticipated.<\/p>\n\n\n\n

A Change in Perspective<\/h2>\n\n\n\n

Previously, primary dealers\u2014major banks\u2014projected that the QT process would conclude by the third quarter. However, the sentiment has evolved. According to the latest survey taken before the Fed's December 12-13 policy meeting, these banks now foresee the QT process ending in the fourth quarter.<\/p>\n\n\n\n

This adjustment carries significant implications. If these predictions materialize, the Federal Reserve's balance sheet<\/a> will likely shrink to approximately $6.75 trillion, down from its current level of roughly $7.764 trillion. Moreover, banks estimated that the central bank's reverse repo facility would hold $375 billion when QT concludes, a reduction from the anticipated $625 billion as forecasted in October.<\/p>\n\n\n\n

Federal Reserve Strategy<\/h2>\n\n\n\n

The quantitative tightening process has been an integral part of the Federal Reserve's strategy to combat inflation. Alongside rate hikes, the central bank initiated large-scale purchases of Treasury bonds and mortgage-backed securities during the COVID-19 pandemic's onset in 2020. This move led to an expansion of its holdings to approximately $9 trillion by mid-2022. However, since last year, the Fed has been gradually reducing its balance sheet size, although specific guidance on the timeline remains somewhat ambiguous.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

What This Means for the Economy<\/h2>\n\n\n\n

The recalibrated timeline for QT indicates a more prolonged period of balance sheet reduction. As the Federal Reserve continues to navigate its policy decisions, market participants, businesses, and consumers should monitor these developments closely. Changes in the balance sheet size can influence interest rates, liquidity conditions, and overall financial market dynamics.<\/p>\n\n\n\n

A Technical Perspective<\/h2>\n\n\n\n

From a technical standpoint, the Federal Reserve's<\/a> balance sheet management serves as a critical tool in its monetary policy arsenal. The evolving predictions by Wall Street's primary dealers underscore the complexities involved in forecasting economic variables, such as inflation and interest rates.<\/p>\n\n\n\n

As the QT process continues, policymakers and market participants must remain vigilant, considering the potential ramifications for financial stability and economic growth. This dynamic landscape necessitates ongoing analysis and adaptation to ensure that monetary policy objectives align with evolving economic conditions.<\/p>\n","post_title":"Decoding Wall Street's Shift: A Closer Look At Wall Street's Changing Perspective","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"decoding-wall-streets-shift-a-closer-look-at-wall-streets-changing-perspective","to_ping":"","pinged":"","post_modified":"2024-01-10 07:51:25","post_modified_gmt":"2024-01-09 20:51:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14931","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14888,"post_author":"14","post_date":"2024-01-06 18:33:09","post_date_gmt":"2024-01-06 07:33:09","post_content":"\n

Wall Street's main indexes fell at the beginning of the 2024 year as investors locked in profits after a very successful 2023 and are currently waiting for the Federal Reserve's<\/a> meeting that could offer hints on its interest rate path. Ken Polcari, managing partner at Kace Capital Advisors, said:<\/p>\n\n\n\n

\"The decline yesterday, today, and maybe for the next couple of weeks, is a result of people locking in profits and reconsidering what the narrative is - are rates going down five or six times as it appeared to be at the end of last year?\"<\/em><\/p>\n\n\n\n

\"\"
The Nasdaq Composite kicked off the year with a 1.5% drop pressured by a selloff in the tech sector<\/figcaption><\/figure>\n\n\n\n

The Fed's December meeting minutes are set to be disclosed at 2:00 p.m. ET, potentially providing information regarding the central bank's shift toward reducing interest rates. Although it's widely anticipated that the Fed will keep interest rates unchanged this month, traders have priced in a 65.7% probability of a 25 basis point rate reduction in March, according to CMEGroup's FedWatch tool.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures<\/a><\/p>\n\n\n\n

Central Bank And Inflation<\/h2>\n\n\n\n

Richmond Fed President Thomas Barkin, a voting member in the FOMC's rate-setting committee, said recently that the U.S. central bank is \"making real progress\" towards taming inflation and a soft landing seeming \"increasingly conceivable\". Encouragingly, the American Association of Individual Investors (AAII) Sentiment Survey indicated a surge in optimism among individual investors regarding the short-term outlook for the U.S. stock market, reaching its peak level in more than two and a half years.<\/p>\n\n\n\n

Despite this, JPMorgan Asset Management advises investors to be cautious due to potential recession risks. At the same time, analysts at Soci\u00e9t\u00e9 G\u00e9n\u00e9rale anticipate a turbulent 2024 for U.S. stocks, projecting fluctuations that could involve nearing recent highs, encountering declines, and subsequently rebounding.<\/p>\n\n\n\n

This week will witness a series of labor market data releases, culminating in the government's December employment report on Friday. These reports could significantly influence the forecast for the Fed's interest rate trajectory this year, prompting investors to scrutinize the data. Jeffrey Roach, chief economist at LPL Financial, added<\/a>:<\/p>\n\n\n\n

 \"The job market is cooling and we should see confirmation of that in this Friday\u2019s jobs report\"<\/em><\/p>\n\n\n\n

Following the progress of Wall Street's main indexes seen last year, investors are still optimistic about the prospect of another robust year ahead. This optimism is rooted in the anticipation that a decelerating economy will result in a gentle landing rather than a full-scale recession, especially as the Fed initiates rate cuts in the first half of 2024.<\/p>\n","post_title":"Wall Street's Main Indexes Fell At The Beginning Of 2024 year. Investors Locked In Profits After A Strong 2023 And Wait For The Federal Reserve's Meeting","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-at-the-beginning-of-2024-year-investors-locked-in-profits-after-a-strong-2023-and-wait-for-the-federal-reserves-meeting","to_ping":"","pinged":"","post_modified":"2024-01-06 18:33:13","post_modified_gmt":"2024-01-06 07:33:13","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14888","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14629,"post_author":"15","post_date":"2023-12-15 19:46:11","post_date_gmt":"2023-12-15 08:46:11","post_content":"\n

BlackRock aims to facilitate the participation of Wall Street banks in its potential Bitcoin ETF approval. Recent SEC memo <\/a>detailing a late November meeting involving BlackRock, Nasdaq, and the Commission. During this meeting, they discussed feedback regarding BlackRock's Bitcoin ETF application.<\/p>\n\n\n\n

The proposed approach introduces an innovative method for the redemption of ETF shares. A Bitcoin ETF would enable fund investors to gain exposure to Bitcoin without directly purchasing or storing the cryptocurrency. While the SEC has hesitated to approve such ETFs due to concerns about Bitcoin market manipulation, this new strategy addresses those worries.<\/p>\n\n\n\n

The SEC has yet to decide on BlackRock's iShares Bitcoin Trust (IBTC) application, with the deadline set for January 15. Analysts anticipate a decision will be issued for several spot Bitcoin ETF applications earlier in January.<\/p>\n\n\n\n

See Related:<\/strong><\/em> Fidelity Joins BlackRock\u2019s Push For Ethereum ETF<\/a><\/p>\n\n\n\n

BlackRock ETF Details<\/h2>\n\n\n\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

Wall Street remains under pressure as Treasury yields climb higher, following Federal Reserve Chair Jerome Powell's resolute stance against market speculation of impending rate cuts. In a recent interview, Powell emphasized the necessity for additional evidence indicating a sustainable decline in inflation before considering lowering interest rates, highlighting that the economy's robustness has effectively mitigated recession risks.<\/p>\n\n\n\n

\"\"
Federal Reserve Chair Jerome Powell emphasized the necessity for additional evidence indicating a sustainable decline in inflation<\/em><\/figcaption><\/figure>\n\n\n\n

In January, job growth in the U.S. picked up pace, and wages saw their most significant increase in nearly two years. These are indications of enduring strength in the labor market, potentially complicating the Federal Reserve's plans to begin cutting interest rates in May. Richard Flynn, managing director at Charles Schwab UK, said:<\/p>\n\n\n\n

\"The strong jobs report indicates that demand in the labor market is higher than expected. While lower interest rates would surely be welcomed, it is becoming increasingly clear that markets and the economy are coping well with the high rate environment, so policymakers are perhaps feeling that the need for monetary policy to ease is less urgent.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>Optimism Among Individual Investors About The Short-Term Outlook Of The U.S. Stock Market Rose To Its Highest Level<\/a><\/p>\n\n\n\n

AAII Sentiment Survey<\/h2>\n\n\n\n

Positive information is that the latest American Association of Individual Investors (AAII) Sentiment Survey showed that optimism among individual investors about the short-term outlook for stocks surged again. American Association of Individual Investors (AAII) reported that bullish sentiment, or expectations that stock prices will rise over the next six months, jumped 9.8 percentage points to 49.1%.<\/p>\n\n\n\n

Bullish sentiment has reached an \"unusually high level,\"<\/em> surpassing its historical average of 37.5% for the 13th consecutive week. The last time optimism was higher was on December 21, 2023, at 52.9%. On the other side, bearish sentiment, or expectations that stock prices will fall over the next six months, decreased by 1.6 percentage points to 24.5%. This sentiment remains below its historical average of 31.0% for the 13th consecutive week.<\/p>\n\n\n\n

Simultaneously, approximately 80% of earnings reports are surpassing analysts' expectations. With results available from nearly half of the S&P 500 companies, including major tech-related firms, overall earnings are projected to have risen by 7.8% in the fourth quarter compared to the same period last year.<\/p>\n\n\n\n

In their latest report on equity client flows, BofA Securities equity and quant strategist Jill Carey Hall said that the previous week saw the largest influx of U.S. equity investments in seven weeks, along with the most substantial private client inflows in over a year. Jill Carey Hall added<\/a>:<\/p>\n\n\n\n

\"Private clients were the biggest buyers of equities last week, led by purchases of ETFs and Tech stocks. Institutional clients were also net buyers after large outflows the week prior, while hedge fund clients were net sellers.\"<\/em><\/p>\n\n\n\n

Investors are actively monitoring earnings and forecasts from big companies against the backdrop of high borrowing costs but remarks from the Fed's policymakers through the week, including voting member Cleveland's Loretta Mester, will also be on investors' watch list.<\/p>\n","post_title":"Fed Chair Jerome Powell Pushed Back Firmly Against Market Speculation Of Imminent Rate Cuts. What To Expect In The Days Ahead?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"fed-chair-jerome-powell-pushed-back-firmly-against-market-speculation-of-imminent-rate-cuts-what-to-expect-in-the-days-ahead","to_ping":"","pinged":"","post_modified":"2024-02-07 19:31:25","post_modified_gmt":"2024-02-07 08:31:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15327","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15225,"post_author":"14","post_date":"2024-02-01 16:33:13","post_date_gmt":"2024-02-01 05:33:13","post_content":"\n

Wall Street's main indexes fell as Alphabet's projections for rising AI costs dented most megacap and chip stocks while the Federal Reserve left interest rates unchanged this Wednesday. Google's parent company experienced a 6.1% decline, resulting in a 3.0% drop in the S&P 500 communication services sector. This occurred following its announcement of holiday-season advertising sales falling short of expectations and its projection of increased spending on artificial intelligence.<\/p>\n\n\n\n

Microsoft (Nasdaq: MSFT) also lost 1.3% after forecasting higher costs to develop new artificial intelligence features, which overshadowed its upbeat quarterly results. Despite the optimistic outlook from the tech pioneers regarding customer enthusiasm for their generative AI-powered products, investors grew concerned about escalating development expenses for these innovative features. These mounting costs tempered their hopes for a significant sales surge from the new technology.<\/p>\n\n\n\n

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

These results and forecasts from big tech names, along with Tesla's growth warning last week, have reignited attention on the risks associated with the significant influence of mega-cap companies in the S&P 500 which has hit record highs in recent weeks. Apple, Meta Platforms, and Amazon.com set to report earnings on Thursday, fell over 1% each.<\/p>\n\n\n\n

See Related: New Bitcoin Core Update May Natively Support Apple M1 Chips<\/a><\/p>\n\n\n\n

Revenue Forecast And Increased Projection<\/h2>\n\n\n\n

It is also important to mention that Advanced Micro Devices saw a 3.3% decline as its first-quarter revenue forecast and increased projection for AI processors fell short of expectations. Other chip stocks including Nvidia, Broadcom, and Marvell dropped over 1% each. The attention of investors was also on the Federal Reserve's initial monetary policy decision of the year, and while it was widely anticipated that the Fed would maintain interest rates, many analysts said that the Fed is taking baby steps toward the cutting. Art Hogan, Chief Market Strategist of B.Riley Wealth, said<\/a>:<\/p>\n\n\n\n

\"Not surprisingly, I don't think the Fed wants to show their hand, especially, when they have a couple of months of data to collect before they need to. The good news is we can forget about any more tightening. The bad news is it's 'when', not 'if', they're going to cut rates, and that 'when' has been pushed out to what had been the fringes of consensus.\"<\/em><\/p>\n\n\n\n

Due to this, markets are showing some immediate disappointment as there's no explicit indication of imminent rate cuts. We're seeing an extremely neutral, non-committal statement from the Federal Reserve this Wednesday.<\/p>\n","post_title":"Wall Street's Main Indexes Fell As Alphabet's Projections For Rising AI Costs Dented Most Mega-Cap And Chip Stocks","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-as-alphabets-projections-for-rising-ai-costs-dented-most-mega-cap-and-chip-stocks","to_ping":"","pinged":"","post_modified":"2024-02-01 16:33:21","post_modified_gmt":"2024-02-01 05:33:21","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15225","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15094,"post_author":"18","post_date":"2024-01-26 02:18:51","post_date_gmt":"2024-01-25 15:18:51","post_content":"\n

As we enter the last week of January, whispers on Wall Street suggest a potential tantrum in U.S. short-term financing markets, with the storm possibly hitting as early as March. This could prompt the Federal Reserve to reassess its policies.<\/p>\n\n\n\n

As of now, banking executives are anticipating a series of events that may tighten the screws on short-term financing. The expiration of a Fed lending facility on March 11, coupled with limited adoption of the standing repo facility (SRF), is expected to reduce the available funding sources for banks. Simultaneously, increased demand for liquidity is on the horizon due to substantial U.S. government debt issuance and upcoming tax payments in March and April. Additionally, a move toward faster trade settlement in May could intensify the demand for short-term funding.<\/p>\n\n\n\n

Against this backdrop, the Federal Reserve has been steadily draining cash from the financial system by unwinding pandemic-era support. BNY Mellon strategists estimate a significant decrease in cash parked overnight with the Fed, potentially dropping below $200 billion by May. The overnight reverse repurchase agreements facility could even approach zero by mid-year. This reduction in excess liquidity may expose vulnerabilities in short-term financing markets.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Storm Clouds Gather Over Germany's Financial Horizon<\/a><\/p>\n\n\n\n

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

Spikes In Short Term Financing Markets<\/h2>\n\n\n\n

Sudden spikes in short-term financing markets can threaten financial stability, making it harder and more expensive for firms to secure necessary funds. This situation could expose lenders struggling to stabilize deposits after last year's banking crisis. As the Fed inches closer to its 2% inflation target, the risk of policy error looms large.<\/p>\n\n\n\n

If short-term financing markets experience a meltdown, it could signal the need for the Fed to ease policy. Slowing the pace of quantitative tightening (QT) is seen as a potential response. Despite the central bankers' insistence on needing more data before rate cuts, markets are already pricing in cuts by May.<\/p>\n\n\n\n

As we approach the critical months of March to May, the financial markets are at a crossroads. The potential shake-up in short-term financing markets could signal the Fed to reassess its policies. Market participants and investors must stay vigilant, and prepared for potential shifts in liquidity and policy adjustments. The coming months will \/reveal whether these concerns materialize into a significant market event or remain a contained storm in the financial teacup.<\/p>\n","post_title":"Understanding The Potential Shake-Up In U.S. Short-Term Financing Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"understanding-the-potential-shake-up-in-u-s-short-term-financing-markets","to_ping":"","pinged":"","post_modified":"2024-01-26 20:20:06","post_modified_gmt":"2024-01-26 09:20:06","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15094","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15043,"post_author":"14","post_date":"2024-01-19 05:56:40","post_date_gmt":"2024-01-18 18:56:40","post_content":"\n

Wall Street witnessed a significant stock decline this Wednesday following positive December U.S. retail sales data, which diminished the anticipation of an early initiation of the Federal Reserve's campaign to cut interest rates.<\/p>\n\n\n\n

Retail Sales Report <\/h2>\n\n\n\n

The December retail sales report from the Commerce Department (USRSL=ECI) depicted a robust consumer, responsible for approximately 70% of the U.S. economy. Despite facing the challenges of high inflation and a tight monetary policy, the consumer has shown resilience.<\/p>\n\n\n\n

The data revealed that discounts offered by retailers and a surge in motor vehicle acquisitions contributed to a greater-than-anticipated increase in U.S. retail sales, maintaining the economy on a robust trajectory in 2024. This bolstered the perspective that the Federal Reserve might not reduce interest rates as rapidly as initially anticipated for the current year.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

Anticipations among traders for a 25-basis-point Federal Reserve rate cut in March declined to 55%, down from approximately 60% before the release of the retail sales data. Ryan Detrick, chief market strategist at Carson Group in Omaha, said<\/a>:<\/p>\n\n\n\n

\"We had news that the U.S. consumer continues to be quite healthy, but that has increased anxiety that the Fed\u2019s first rate cut could potentially be pushed to May from March. Yields are also moving higher on the strong retail sales numbers, adding to near-term worries.\"<\/em><\/p>\n\n\n\n

US Stocks And Wall Street<\/h2>\n\n\n\n

It is also important to mention that a decline in U.S. stocks sent Wall Street's<\/a> \"fear gauge\" to a two-month high while JPMorgan analysts predict that the majority of negative consequences stemming from higher interest rates have not materialized yet. On Tuesday, Federal Reserve Governor Christopher Waller also emphasized that the central bank should refrain from hastily reducing interest rates until there is a clear indication that lower inflation is likely to persist.<\/p>\n\n\n\n

At the same time, the escalation of geopolitical uncertainties introduces an additional challenge and heightens the potential for unforeseen risks in both markets and economic performance. Considering these factors, the perspective is likely to stay cautious as long as interest rates remain significantly restrictive and the looming presence of geopolitical risks persists.<\/p>\n","post_title":"Wall Street Weakened As Retail Sales Data Hampers Expectations For A Cut In Interest Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-weakened-as-retail-sales-data-hampers-expectations-for-a-cut-in-interest-rates","to_ping":"","pinged":"","post_modified":"2024-01-19 05:56:51","post_modified_gmt":"2024-01-18 18:56:51","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15043","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14931,"post_author":"18","post_date":"2024-01-10 07:51:17","post_date_gmt":"2024-01-09 20:51:17","post_content":"\n

In a recent survey conducted by the New York Federal Reserve<\/a>, Wall Street's major banks have recalibrated their predictions regarding the Federal Reserve's balance sheet drawdown. This shift suggests that the U.S. central bank might conclude its quantitative tightening (QT) process later than initially anticipated.<\/p>\n\n\n\n

A Change in Perspective<\/h2>\n\n\n\n

Previously, primary dealers\u2014major banks\u2014projected that the QT process would conclude by the third quarter. However, the sentiment has evolved. According to the latest survey taken before the Fed's December 12-13 policy meeting, these banks now foresee the QT process ending in the fourth quarter.<\/p>\n\n\n\n

This adjustment carries significant implications. If these predictions materialize, the Federal Reserve's balance sheet<\/a> will likely shrink to approximately $6.75 trillion, down from its current level of roughly $7.764 trillion. Moreover, banks estimated that the central bank's reverse repo facility would hold $375 billion when QT concludes, a reduction from the anticipated $625 billion as forecasted in October.<\/p>\n\n\n\n

Federal Reserve Strategy<\/h2>\n\n\n\n

The quantitative tightening process has been an integral part of the Federal Reserve's strategy to combat inflation. Alongside rate hikes, the central bank initiated large-scale purchases of Treasury bonds and mortgage-backed securities during the COVID-19 pandemic's onset in 2020. This move led to an expansion of its holdings to approximately $9 trillion by mid-2022. However, since last year, the Fed has been gradually reducing its balance sheet size, although specific guidance on the timeline remains somewhat ambiguous.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

What This Means for the Economy<\/h2>\n\n\n\n

The recalibrated timeline for QT indicates a more prolonged period of balance sheet reduction. As the Federal Reserve continues to navigate its policy decisions, market participants, businesses, and consumers should monitor these developments closely. Changes in the balance sheet size can influence interest rates, liquidity conditions, and overall financial market dynamics.<\/p>\n\n\n\n

A Technical Perspective<\/h2>\n\n\n\n

From a technical standpoint, the Federal Reserve's<\/a> balance sheet management serves as a critical tool in its monetary policy arsenal. The evolving predictions by Wall Street's primary dealers underscore the complexities involved in forecasting economic variables, such as inflation and interest rates.<\/p>\n\n\n\n

As the QT process continues, policymakers and market participants must remain vigilant, considering the potential ramifications for financial stability and economic growth. This dynamic landscape necessitates ongoing analysis and adaptation to ensure that monetary policy objectives align with evolving economic conditions.<\/p>\n","post_title":"Decoding Wall Street's Shift: A Closer Look At Wall Street's Changing Perspective","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"decoding-wall-streets-shift-a-closer-look-at-wall-streets-changing-perspective","to_ping":"","pinged":"","post_modified":"2024-01-10 07:51:25","post_modified_gmt":"2024-01-09 20:51:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14931","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14888,"post_author":"14","post_date":"2024-01-06 18:33:09","post_date_gmt":"2024-01-06 07:33:09","post_content":"\n

Wall Street's main indexes fell at the beginning of the 2024 year as investors locked in profits after a very successful 2023 and are currently waiting for the Federal Reserve's<\/a> meeting that could offer hints on its interest rate path. Ken Polcari, managing partner at Kace Capital Advisors, said:<\/p>\n\n\n\n

\"The decline yesterday, today, and maybe for the next couple of weeks, is a result of people locking in profits and reconsidering what the narrative is - are rates going down five or six times as it appeared to be at the end of last year?\"<\/em><\/p>\n\n\n\n

\"\"
The Nasdaq Composite kicked off the year with a 1.5% drop pressured by a selloff in the tech sector<\/figcaption><\/figure>\n\n\n\n

The Fed's December meeting minutes are set to be disclosed at 2:00 p.m. ET, potentially providing information regarding the central bank's shift toward reducing interest rates. Although it's widely anticipated that the Fed will keep interest rates unchanged this month, traders have priced in a 65.7% probability of a 25 basis point rate reduction in March, according to CMEGroup's FedWatch tool.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures<\/a><\/p>\n\n\n\n

Central Bank And Inflation<\/h2>\n\n\n\n

Richmond Fed President Thomas Barkin, a voting member in the FOMC's rate-setting committee, said recently that the U.S. central bank is \"making real progress\" towards taming inflation and a soft landing seeming \"increasingly conceivable\". Encouragingly, the American Association of Individual Investors (AAII) Sentiment Survey indicated a surge in optimism among individual investors regarding the short-term outlook for the U.S. stock market, reaching its peak level in more than two and a half years.<\/p>\n\n\n\n

Despite this, JPMorgan Asset Management advises investors to be cautious due to potential recession risks. At the same time, analysts at Soci\u00e9t\u00e9 G\u00e9n\u00e9rale anticipate a turbulent 2024 for U.S. stocks, projecting fluctuations that could involve nearing recent highs, encountering declines, and subsequently rebounding.<\/p>\n\n\n\n

This week will witness a series of labor market data releases, culminating in the government's December employment report on Friday. These reports could significantly influence the forecast for the Fed's interest rate trajectory this year, prompting investors to scrutinize the data. Jeffrey Roach, chief economist at LPL Financial, added<\/a>:<\/p>\n\n\n\n

 \"The job market is cooling and we should see confirmation of that in this Friday\u2019s jobs report\"<\/em><\/p>\n\n\n\n

Following the progress of Wall Street's main indexes seen last year, investors are still optimistic about the prospect of another robust year ahead. This optimism is rooted in the anticipation that a decelerating economy will result in a gentle landing rather than a full-scale recession, especially as the Fed initiates rate cuts in the first half of 2024.<\/p>\n","post_title":"Wall Street's Main Indexes Fell At The Beginning Of 2024 year. Investors Locked In Profits After A Strong 2023 And Wait For The Federal Reserve's Meeting","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-at-the-beginning-of-2024-year-investors-locked-in-profits-after-a-strong-2023-and-wait-for-the-federal-reserves-meeting","to_ping":"","pinged":"","post_modified":"2024-01-06 18:33:13","post_modified_gmt":"2024-01-06 07:33:13","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14888","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14629,"post_author":"15","post_date":"2023-12-15 19:46:11","post_date_gmt":"2023-12-15 08:46:11","post_content":"\n

BlackRock aims to facilitate the participation of Wall Street banks in its potential Bitcoin ETF approval. Recent SEC memo <\/a>detailing a late November meeting involving BlackRock, Nasdaq, and the Commission. During this meeting, they discussed feedback regarding BlackRock's Bitcoin ETF application.<\/p>\n\n\n\n

The proposed approach introduces an innovative method for the redemption of ETF shares. A Bitcoin ETF would enable fund investors to gain exposure to Bitcoin without directly purchasing or storing the cryptocurrency. While the SEC has hesitated to approve such ETFs due to concerns about Bitcoin market manipulation, this new strategy addresses those worries.<\/p>\n\n\n\n

The SEC has yet to decide on BlackRock's iShares Bitcoin Trust (IBTC) application, with the deadline set for January 15. Analysts anticipate a decision will be issued for several spot Bitcoin ETF applications earlier in January.<\/p>\n\n\n\n

See Related:<\/strong><\/em> Fidelity Joins BlackRock\u2019s Push For Ethereum ETF<\/a><\/p>\n\n\n\n

BlackRock ETF Details<\/h2>\n\n\n\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

In the grocery aisle, ham prices decreased by 3.1%, whereas egg prices surged by 3.4%. Federal Reserve officials anticipate inflation to retreat to their 2% annual target but January's uptick could pose challenges for a central bank aiming to ease its tightest monetary policy stance in over two decades.<\/p>\n","post_title":"Wall Street's Main Indexes Tumbled As Hot Inflation Data Dampened Early Rate-Cut Hopes","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-tumbled-as-hot-inflation-data-dampened-early-rate-cut-hopes","to_ping":"","pinged":"","post_modified":"2024-02-16 22:01:49","post_modified_gmt":"2024-02-16 11:01:49","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15411","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15327,"post_author":"14","post_date":"2024-02-07 19:31:18","post_date_gmt":"2024-02-07 08:31:18","post_content":"\n

Wall Street remains under pressure as Treasury yields climb higher, following Federal Reserve Chair Jerome Powell's resolute stance against market speculation of impending rate cuts. In a recent interview, Powell emphasized the necessity for additional evidence indicating a sustainable decline in inflation before considering lowering interest rates, highlighting that the economy's robustness has effectively mitigated recession risks.<\/p>\n\n\n\n

\"\"
Federal Reserve Chair Jerome Powell emphasized the necessity for additional evidence indicating a sustainable decline in inflation<\/em><\/figcaption><\/figure>\n\n\n\n

In January, job growth in the U.S. picked up pace, and wages saw their most significant increase in nearly two years. These are indications of enduring strength in the labor market, potentially complicating the Federal Reserve's plans to begin cutting interest rates in May. Richard Flynn, managing director at Charles Schwab UK, said:<\/p>\n\n\n\n

\"The strong jobs report indicates that demand in the labor market is higher than expected. While lower interest rates would surely be welcomed, it is becoming increasingly clear that markets and the economy are coping well with the high rate environment, so policymakers are perhaps feeling that the need for monetary policy to ease is less urgent.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>Optimism Among Individual Investors About The Short-Term Outlook Of The U.S. Stock Market Rose To Its Highest Level<\/a><\/p>\n\n\n\n

AAII Sentiment Survey<\/h2>\n\n\n\n

Positive information is that the latest American Association of Individual Investors (AAII) Sentiment Survey showed that optimism among individual investors about the short-term outlook for stocks surged again. American Association of Individual Investors (AAII) reported that bullish sentiment, or expectations that stock prices will rise over the next six months, jumped 9.8 percentage points to 49.1%.<\/p>\n\n\n\n

Bullish sentiment has reached an \"unusually high level,\"<\/em> surpassing its historical average of 37.5% for the 13th consecutive week. The last time optimism was higher was on December 21, 2023, at 52.9%. On the other side, bearish sentiment, or expectations that stock prices will fall over the next six months, decreased by 1.6 percentage points to 24.5%. This sentiment remains below its historical average of 31.0% for the 13th consecutive week.<\/p>\n\n\n\n

Simultaneously, approximately 80% of earnings reports are surpassing analysts' expectations. With results available from nearly half of the S&P 500 companies, including major tech-related firms, overall earnings are projected to have risen by 7.8% in the fourth quarter compared to the same period last year.<\/p>\n\n\n\n

In their latest report on equity client flows, BofA Securities equity and quant strategist Jill Carey Hall said that the previous week saw the largest influx of U.S. equity investments in seven weeks, along with the most substantial private client inflows in over a year. Jill Carey Hall added<\/a>:<\/p>\n\n\n\n

\"Private clients were the biggest buyers of equities last week, led by purchases of ETFs and Tech stocks. Institutional clients were also net buyers after large outflows the week prior, while hedge fund clients were net sellers.\"<\/em><\/p>\n\n\n\n

Investors are actively monitoring earnings and forecasts from big companies against the backdrop of high borrowing costs but remarks from the Fed's policymakers through the week, including voting member Cleveland's Loretta Mester, will also be on investors' watch list.<\/p>\n","post_title":"Fed Chair Jerome Powell Pushed Back Firmly Against Market Speculation Of Imminent Rate Cuts. What To Expect In The Days Ahead?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"fed-chair-jerome-powell-pushed-back-firmly-against-market-speculation-of-imminent-rate-cuts-what-to-expect-in-the-days-ahead","to_ping":"","pinged":"","post_modified":"2024-02-07 19:31:25","post_modified_gmt":"2024-02-07 08:31:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15327","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15225,"post_author":"14","post_date":"2024-02-01 16:33:13","post_date_gmt":"2024-02-01 05:33:13","post_content":"\n

Wall Street's main indexes fell as Alphabet's projections for rising AI costs dented most megacap and chip stocks while the Federal Reserve left interest rates unchanged this Wednesday. Google's parent company experienced a 6.1% decline, resulting in a 3.0% drop in the S&P 500 communication services sector. This occurred following its announcement of holiday-season advertising sales falling short of expectations and its projection of increased spending on artificial intelligence.<\/p>\n\n\n\n

Microsoft (Nasdaq: MSFT) also lost 1.3% after forecasting higher costs to develop new artificial intelligence features, which overshadowed its upbeat quarterly results. Despite the optimistic outlook from the tech pioneers regarding customer enthusiasm for their generative AI-powered products, investors grew concerned about escalating development expenses for these innovative features. These mounting costs tempered their hopes for a significant sales surge from the new technology.<\/p>\n\n\n\n

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

These results and forecasts from big tech names, along with Tesla's growth warning last week, have reignited attention on the risks associated with the significant influence of mega-cap companies in the S&P 500 which has hit record highs in recent weeks. Apple, Meta Platforms, and Amazon.com set to report earnings on Thursday, fell over 1% each.<\/p>\n\n\n\n

See Related: New Bitcoin Core Update May Natively Support Apple M1 Chips<\/a><\/p>\n\n\n\n

Revenue Forecast And Increased Projection<\/h2>\n\n\n\n

It is also important to mention that Advanced Micro Devices saw a 3.3% decline as its first-quarter revenue forecast and increased projection for AI processors fell short of expectations. Other chip stocks including Nvidia, Broadcom, and Marvell dropped over 1% each. The attention of investors was also on the Federal Reserve's initial monetary policy decision of the year, and while it was widely anticipated that the Fed would maintain interest rates, many analysts said that the Fed is taking baby steps toward the cutting. Art Hogan, Chief Market Strategist of B.Riley Wealth, said<\/a>:<\/p>\n\n\n\n

\"Not surprisingly, I don't think the Fed wants to show their hand, especially, when they have a couple of months of data to collect before they need to. The good news is we can forget about any more tightening. The bad news is it's 'when', not 'if', they're going to cut rates, and that 'when' has been pushed out to what had been the fringes of consensus.\"<\/em><\/p>\n\n\n\n

Due to this, markets are showing some immediate disappointment as there's no explicit indication of imminent rate cuts. We're seeing an extremely neutral, non-committal statement from the Federal Reserve this Wednesday.<\/p>\n","post_title":"Wall Street's Main Indexes Fell As Alphabet's Projections For Rising AI Costs Dented Most Mega-Cap And Chip Stocks","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-as-alphabets-projections-for-rising-ai-costs-dented-most-mega-cap-and-chip-stocks","to_ping":"","pinged":"","post_modified":"2024-02-01 16:33:21","post_modified_gmt":"2024-02-01 05:33:21","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15225","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15094,"post_author":"18","post_date":"2024-01-26 02:18:51","post_date_gmt":"2024-01-25 15:18:51","post_content":"\n

As we enter the last week of January, whispers on Wall Street suggest a potential tantrum in U.S. short-term financing markets, with the storm possibly hitting as early as March. This could prompt the Federal Reserve to reassess its policies.<\/p>\n\n\n\n

As of now, banking executives are anticipating a series of events that may tighten the screws on short-term financing. The expiration of a Fed lending facility on March 11, coupled with limited adoption of the standing repo facility (SRF), is expected to reduce the available funding sources for banks. Simultaneously, increased demand for liquidity is on the horizon due to substantial U.S. government debt issuance and upcoming tax payments in March and April. Additionally, a move toward faster trade settlement in May could intensify the demand for short-term funding.<\/p>\n\n\n\n

Against this backdrop, the Federal Reserve has been steadily draining cash from the financial system by unwinding pandemic-era support. BNY Mellon strategists estimate a significant decrease in cash parked overnight with the Fed, potentially dropping below $200 billion by May. The overnight reverse repurchase agreements facility could even approach zero by mid-year. This reduction in excess liquidity may expose vulnerabilities in short-term financing markets.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Storm Clouds Gather Over Germany's Financial Horizon<\/a><\/p>\n\n\n\n

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

Spikes In Short Term Financing Markets<\/h2>\n\n\n\n

Sudden spikes in short-term financing markets can threaten financial stability, making it harder and more expensive for firms to secure necessary funds. This situation could expose lenders struggling to stabilize deposits after last year's banking crisis. As the Fed inches closer to its 2% inflation target, the risk of policy error looms large.<\/p>\n\n\n\n

If short-term financing markets experience a meltdown, it could signal the need for the Fed to ease policy. Slowing the pace of quantitative tightening (QT) is seen as a potential response. Despite the central bankers' insistence on needing more data before rate cuts, markets are already pricing in cuts by May.<\/p>\n\n\n\n

As we approach the critical months of March to May, the financial markets are at a crossroads. The potential shake-up in short-term financing markets could signal the Fed to reassess its policies. Market participants and investors must stay vigilant, and prepared for potential shifts in liquidity and policy adjustments. The coming months will \/reveal whether these concerns materialize into a significant market event or remain a contained storm in the financial teacup.<\/p>\n","post_title":"Understanding The Potential Shake-Up In U.S. Short-Term Financing Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"understanding-the-potential-shake-up-in-u-s-short-term-financing-markets","to_ping":"","pinged":"","post_modified":"2024-01-26 20:20:06","post_modified_gmt":"2024-01-26 09:20:06","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15094","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15043,"post_author":"14","post_date":"2024-01-19 05:56:40","post_date_gmt":"2024-01-18 18:56:40","post_content":"\n

Wall Street witnessed a significant stock decline this Wednesday following positive December U.S. retail sales data, which diminished the anticipation of an early initiation of the Federal Reserve's campaign to cut interest rates.<\/p>\n\n\n\n

Retail Sales Report <\/h2>\n\n\n\n

The December retail sales report from the Commerce Department (USRSL=ECI) depicted a robust consumer, responsible for approximately 70% of the U.S. economy. Despite facing the challenges of high inflation and a tight monetary policy, the consumer has shown resilience.<\/p>\n\n\n\n

The data revealed that discounts offered by retailers and a surge in motor vehicle acquisitions contributed to a greater-than-anticipated increase in U.S. retail sales, maintaining the economy on a robust trajectory in 2024. This bolstered the perspective that the Federal Reserve might not reduce interest rates as rapidly as initially anticipated for the current year.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

Anticipations among traders for a 25-basis-point Federal Reserve rate cut in March declined to 55%, down from approximately 60% before the release of the retail sales data. Ryan Detrick, chief market strategist at Carson Group in Omaha, said<\/a>:<\/p>\n\n\n\n

\"We had news that the U.S. consumer continues to be quite healthy, but that has increased anxiety that the Fed\u2019s first rate cut could potentially be pushed to May from March. Yields are also moving higher on the strong retail sales numbers, adding to near-term worries.\"<\/em><\/p>\n\n\n\n

US Stocks And Wall Street<\/h2>\n\n\n\n

It is also important to mention that a decline in U.S. stocks sent Wall Street's<\/a> \"fear gauge\" to a two-month high while JPMorgan analysts predict that the majority of negative consequences stemming from higher interest rates have not materialized yet. On Tuesday, Federal Reserve Governor Christopher Waller also emphasized that the central bank should refrain from hastily reducing interest rates until there is a clear indication that lower inflation is likely to persist.<\/p>\n\n\n\n

At the same time, the escalation of geopolitical uncertainties introduces an additional challenge and heightens the potential for unforeseen risks in both markets and economic performance. Considering these factors, the perspective is likely to stay cautious as long as interest rates remain significantly restrictive and the looming presence of geopolitical risks persists.<\/p>\n","post_title":"Wall Street Weakened As Retail Sales Data Hampers Expectations For A Cut In Interest Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-weakened-as-retail-sales-data-hampers-expectations-for-a-cut-in-interest-rates","to_ping":"","pinged":"","post_modified":"2024-01-19 05:56:51","post_modified_gmt":"2024-01-18 18:56:51","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15043","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14931,"post_author":"18","post_date":"2024-01-10 07:51:17","post_date_gmt":"2024-01-09 20:51:17","post_content":"\n

In a recent survey conducted by the New York Federal Reserve<\/a>, Wall Street's major banks have recalibrated their predictions regarding the Federal Reserve's balance sheet drawdown. This shift suggests that the U.S. central bank might conclude its quantitative tightening (QT) process later than initially anticipated.<\/p>\n\n\n\n

A Change in Perspective<\/h2>\n\n\n\n

Previously, primary dealers\u2014major banks\u2014projected that the QT process would conclude by the third quarter. However, the sentiment has evolved. According to the latest survey taken before the Fed's December 12-13 policy meeting, these banks now foresee the QT process ending in the fourth quarter.<\/p>\n\n\n\n

This adjustment carries significant implications. If these predictions materialize, the Federal Reserve's balance sheet<\/a> will likely shrink to approximately $6.75 trillion, down from its current level of roughly $7.764 trillion. Moreover, banks estimated that the central bank's reverse repo facility would hold $375 billion when QT concludes, a reduction from the anticipated $625 billion as forecasted in October.<\/p>\n\n\n\n

Federal Reserve Strategy<\/h2>\n\n\n\n

The quantitative tightening process has been an integral part of the Federal Reserve's strategy to combat inflation. Alongside rate hikes, the central bank initiated large-scale purchases of Treasury bonds and mortgage-backed securities during the COVID-19 pandemic's onset in 2020. This move led to an expansion of its holdings to approximately $9 trillion by mid-2022. However, since last year, the Fed has been gradually reducing its balance sheet size, although specific guidance on the timeline remains somewhat ambiguous.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

What This Means for the Economy<\/h2>\n\n\n\n

The recalibrated timeline for QT indicates a more prolonged period of balance sheet reduction. As the Federal Reserve continues to navigate its policy decisions, market participants, businesses, and consumers should monitor these developments closely. Changes in the balance sheet size can influence interest rates, liquidity conditions, and overall financial market dynamics.<\/p>\n\n\n\n

A Technical Perspective<\/h2>\n\n\n\n

From a technical standpoint, the Federal Reserve's<\/a> balance sheet management serves as a critical tool in its monetary policy arsenal. The evolving predictions by Wall Street's primary dealers underscore the complexities involved in forecasting economic variables, such as inflation and interest rates.<\/p>\n\n\n\n

As the QT process continues, policymakers and market participants must remain vigilant, considering the potential ramifications for financial stability and economic growth. This dynamic landscape necessitates ongoing analysis and adaptation to ensure that monetary policy objectives align with evolving economic conditions.<\/p>\n","post_title":"Decoding Wall Street's Shift: A Closer Look At Wall Street's Changing Perspective","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"decoding-wall-streets-shift-a-closer-look-at-wall-streets-changing-perspective","to_ping":"","pinged":"","post_modified":"2024-01-10 07:51:25","post_modified_gmt":"2024-01-09 20:51:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14931","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14888,"post_author":"14","post_date":"2024-01-06 18:33:09","post_date_gmt":"2024-01-06 07:33:09","post_content":"\n

Wall Street's main indexes fell at the beginning of the 2024 year as investors locked in profits after a very successful 2023 and are currently waiting for the Federal Reserve's<\/a> meeting that could offer hints on its interest rate path. Ken Polcari, managing partner at Kace Capital Advisors, said:<\/p>\n\n\n\n

\"The decline yesterday, today, and maybe for the next couple of weeks, is a result of people locking in profits and reconsidering what the narrative is - are rates going down five or six times as it appeared to be at the end of last year?\"<\/em><\/p>\n\n\n\n

\"\"
The Nasdaq Composite kicked off the year with a 1.5% drop pressured by a selloff in the tech sector<\/figcaption><\/figure>\n\n\n\n

The Fed's December meeting minutes are set to be disclosed at 2:00 p.m. ET, potentially providing information regarding the central bank's shift toward reducing interest rates. Although it's widely anticipated that the Fed will keep interest rates unchanged this month, traders have priced in a 65.7% probability of a 25 basis point rate reduction in March, according to CMEGroup's FedWatch tool.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures<\/a><\/p>\n\n\n\n

Central Bank And Inflation<\/h2>\n\n\n\n

Richmond Fed President Thomas Barkin, a voting member in the FOMC's rate-setting committee, said recently that the U.S. central bank is \"making real progress\" towards taming inflation and a soft landing seeming \"increasingly conceivable\". Encouragingly, the American Association of Individual Investors (AAII) Sentiment Survey indicated a surge in optimism among individual investors regarding the short-term outlook for the U.S. stock market, reaching its peak level in more than two and a half years.<\/p>\n\n\n\n

Despite this, JPMorgan Asset Management advises investors to be cautious due to potential recession risks. At the same time, analysts at Soci\u00e9t\u00e9 G\u00e9n\u00e9rale anticipate a turbulent 2024 for U.S. stocks, projecting fluctuations that could involve nearing recent highs, encountering declines, and subsequently rebounding.<\/p>\n\n\n\n

This week will witness a series of labor market data releases, culminating in the government's December employment report on Friday. These reports could significantly influence the forecast for the Fed's interest rate trajectory this year, prompting investors to scrutinize the data. Jeffrey Roach, chief economist at LPL Financial, added<\/a>:<\/p>\n\n\n\n

 \"The job market is cooling and we should see confirmation of that in this Friday\u2019s jobs report\"<\/em><\/p>\n\n\n\n

Following the progress of Wall Street's main indexes seen last year, investors are still optimistic about the prospect of another robust year ahead. This optimism is rooted in the anticipation that a decelerating economy will result in a gentle landing rather than a full-scale recession, especially as the Fed initiates rate cuts in the first half of 2024.<\/p>\n","post_title":"Wall Street's Main Indexes Fell At The Beginning Of 2024 year. Investors Locked In Profits After A Strong 2023 And Wait For The Federal Reserve's Meeting","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-at-the-beginning-of-2024-year-investors-locked-in-profits-after-a-strong-2023-and-wait-for-the-federal-reserves-meeting","to_ping":"","pinged":"","post_modified":"2024-01-06 18:33:13","post_modified_gmt":"2024-01-06 07:33:13","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14888","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14629,"post_author":"15","post_date":"2023-12-15 19:46:11","post_date_gmt":"2023-12-15 08:46:11","post_content":"\n

BlackRock aims to facilitate the participation of Wall Street banks in its potential Bitcoin ETF approval. Recent SEC memo <\/a>detailing a late November meeting involving BlackRock, Nasdaq, and the Commission. During this meeting, they discussed feedback regarding BlackRock's Bitcoin ETF application.<\/p>\n\n\n\n

The proposed approach introduces an innovative method for the redemption of ETF shares. A Bitcoin ETF would enable fund investors to gain exposure to Bitcoin without directly purchasing or storing the cryptocurrency. While the SEC has hesitated to approve such ETFs due to concerns about Bitcoin market manipulation, this new strategy addresses those worries.<\/p>\n\n\n\n

The SEC has yet to decide on BlackRock's iShares Bitcoin Trust (IBTC) application, with the deadline set for January 15. Analysts anticipate a decision will be issued for several spot Bitcoin ETF applications earlier in January.<\/p>\n\n\n\n

See Related:<\/strong><\/em> Fidelity Joins BlackRock\u2019s Push For Ethereum ETF<\/a><\/p>\n\n\n\n

BlackRock ETF Details<\/h2>\n\n\n\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

Outside of the jump in shelter costs, the rest of the inflation picture was a mixed bag. Prices for used vehicles dropped by 3.4%, while apparel costs decreased by 0.7%, and medical commodities experienced a 0.6% decline. Conversely, electricity costs saw a 1.2% rise, and airline fares increased by 1.4%.<\/p>\n\n\n\n

In the grocery aisle, ham prices decreased by 3.1%, whereas egg prices surged by 3.4%. Federal Reserve officials anticipate inflation to retreat to their 2% annual target but January's uptick could pose challenges for a central bank aiming to ease its tightest monetary policy stance in over two decades.<\/p>\n","post_title":"Wall Street's Main Indexes Tumbled As Hot Inflation Data Dampened Early Rate-Cut Hopes","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-tumbled-as-hot-inflation-data-dampened-early-rate-cut-hopes","to_ping":"","pinged":"","post_modified":"2024-02-16 22:01:49","post_modified_gmt":"2024-02-16 11:01:49","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15411","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15327,"post_author":"14","post_date":"2024-02-07 19:31:18","post_date_gmt":"2024-02-07 08:31:18","post_content":"\n

Wall Street remains under pressure as Treasury yields climb higher, following Federal Reserve Chair Jerome Powell's resolute stance against market speculation of impending rate cuts. In a recent interview, Powell emphasized the necessity for additional evidence indicating a sustainable decline in inflation before considering lowering interest rates, highlighting that the economy's robustness has effectively mitigated recession risks.<\/p>\n\n\n\n

\"\"
Federal Reserve Chair Jerome Powell emphasized the necessity for additional evidence indicating a sustainable decline in inflation<\/em><\/figcaption><\/figure>\n\n\n\n

In January, job growth in the U.S. picked up pace, and wages saw their most significant increase in nearly two years. These are indications of enduring strength in the labor market, potentially complicating the Federal Reserve's plans to begin cutting interest rates in May. Richard Flynn, managing director at Charles Schwab UK, said:<\/p>\n\n\n\n

\"The strong jobs report indicates that demand in the labor market is higher than expected. While lower interest rates would surely be welcomed, it is becoming increasingly clear that markets and the economy are coping well with the high rate environment, so policymakers are perhaps feeling that the need for monetary policy to ease is less urgent.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>Optimism Among Individual Investors About The Short-Term Outlook Of The U.S. Stock Market Rose To Its Highest Level<\/a><\/p>\n\n\n\n

AAII Sentiment Survey<\/h2>\n\n\n\n

Positive information is that the latest American Association of Individual Investors (AAII) Sentiment Survey showed that optimism among individual investors about the short-term outlook for stocks surged again. American Association of Individual Investors (AAII) reported that bullish sentiment, or expectations that stock prices will rise over the next six months, jumped 9.8 percentage points to 49.1%.<\/p>\n\n\n\n

Bullish sentiment has reached an \"unusually high level,\"<\/em> surpassing its historical average of 37.5% for the 13th consecutive week. The last time optimism was higher was on December 21, 2023, at 52.9%. On the other side, bearish sentiment, or expectations that stock prices will fall over the next six months, decreased by 1.6 percentage points to 24.5%. This sentiment remains below its historical average of 31.0% for the 13th consecutive week.<\/p>\n\n\n\n

Simultaneously, approximately 80% of earnings reports are surpassing analysts' expectations. With results available from nearly half of the S&P 500 companies, including major tech-related firms, overall earnings are projected to have risen by 7.8% in the fourth quarter compared to the same period last year.<\/p>\n\n\n\n

In their latest report on equity client flows, BofA Securities equity and quant strategist Jill Carey Hall said that the previous week saw the largest influx of U.S. equity investments in seven weeks, along with the most substantial private client inflows in over a year. Jill Carey Hall added<\/a>:<\/p>\n\n\n\n

\"Private clients were the biggest buyers of equities last week, led by purchases of ETFs and Tech stocks. Institutional clients were also net buyers after large outflows the week prior, while hedge fund clients were net sellers.\"<\/em><\/p>\n\n\n\n

Investors are actively monitoring earnings and forecasts from big companies against the backdrop of high borrowing costs but remarks from the Fed's policymakers through the week, including voting member Cleveland's Loretta Mester, will also be on investors' watch list.<\/p>\n","post_title":"Fed Chair Jerome Powell Pushed Back Firmly Against Market Speculation Of Imminent Rate Cuts. What To Expect In The Days Ahead?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"fed-chair-jerome-powell-pushed-back-firmly-against-market-speculation-of-imminent-rate-cuts-what-to-expect-in-the-days-ahead","to_ping":"","pinged":"","post_modified":"2024-02-07 19:31:25","post_modified_gmt":"2024-02-07 08:31:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15327","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15225,"post_author":"14","post_date":"2024-02-01 16:33:13","post_date_gmt":"2024-02-01 05:33:13","post_content":"\n

Wall Street's main indexes fell as Alphabet's projections for rising AI costs dented most megacap and chip stocks while the Federal Reserve left interest rates unchanged this Wednesday. Google's parent company experienced a 6.1% decline, resulting in a 3.0% drop in the S&P 500 communication services sector. This occurred following its announcement of holiday-season advertising sales falling short of expectations and its projection of increased spending on artificial intelligence.<\/p>\n\n\n\n

Microsoft (Nasdaq: MSFT) also lost 1.3% after forecasting higher costs to develop new artificial intelligence features, which overshadowed its upbeat quarterly results. Despite the optimistic outlook from the tech pioneers regarding customer enthusiasm for their generative AI-powered products, investors grew concerned about escalating development expenses for these innovative features. These mounting costs tempered their hopes for a significant sales surge from the new technology.<\/p>\n\n\n\n

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

These results and forecasts from big tech names, along with Tesla's growth warning last week, have reignited attention on the risks associated with the significant influence of mega-cap companies in the S&P 500 which has hit record highs in recent weeks. Apple, Meta Platforms, and Amazon.com set to report earnings on Thursday, fell over 1% each.<\/p>\n\n\n\n

See Related: New Bitcoin Core Update May Natively Support Apple M1 Chips<\/a><\/p>\n\n\n\n

Revenue Forecast And Increased Projection<\/h2>\n\n\n\n

It is also important to mention that Advanced Micro Devices saw a 3.3% decline as its first-quarter revenue forecast and increased projection for AI processors fell short of expectations. Other chip stocks including Nvidia, Broadcom, and Marvell dropped over 1% each. The attention of investors was also on the Federal Reserve's initial monetary policy decision of the year, and while it was widely anticipated that the Fed would maintain interest rates, many analysts said that the Fed is taking baby steps toward the cutting. Art Hogan, Chief Market Strategist of B.Riley Wealth, said<\/a>:<\/p>\n\n\n\n

\"Not surprisingly, I don't think the Fed wants to show their hand, especially, when they have a couple of months of data to collect before they need to. The good news is we can forget about any more tightening. The bad news is it's 'when', not 'if', they're going to cut rates, and that 'when' has been pushed out to what had been the fringes of consensus.\"<\/em><\/p>\n\n\n\n

Due to this, markets are showing some immediate disappointment as there's no explicit indication of imminent rate cuts. We're seeing an extremely neutral, non-committal statement from the Federal Reserve this Wednesday.<\/p>\n","post_title":"Wall Street's Main Indexes Fell As Alphabet's Projections For Rising AI Costs Dented Most Mega-Cap And Chip Stocks","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-as-alphabets-projections-for-rising-ai-costs-dented-most-mega-cap-and-chip-stocks","to_ping":"","pinged":"","post_modified":"2024-02-01 16:33:21","post_modified_gmt":"2024-02-01 05:33:21","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15225","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15094,"post_author":"18","post_date":"2024-01-26 02:18:51","post_date_gmt":"2024-01-25 15:18:51","post_content":"\n

As we enter the last week of January, whispers on Wall Street suggest a potential tantrum in U.S. short-term financing markets, with the storm possibly hitting as early as March. This could prompt the Federal Reserve to reassess its policies.<\/p>\n\n\n\n

As of now, banking executives are anticipating a series of events that may tighten the screws on short-term financing. The expiration of a Fed lending facility on March 11, coupled with limited adoption of the standing repo facility (SRF), is expected to reduce the available funding sources for banks. Simultaneously, increased demand for liquidity is on the horizon due to substantial U.S. government debt issuance and upcoming tax payments in March and April. Additionally, a move toward faster trade settlement in May could intensify the demand for short-term funding.<\/p>\n\n\n\n

Against this backdrop, the Federal Reserve has been steadily draining cash from the financial system by unwinding pandemic-era support. BNY Mellon strategists estimate a significant decrease in cash parked overnight with the Fed, potentially dropping below $200 billion by May. The overnight reverse repurchase agreements facility could even approach zero by mid-year. This reduction in excess liquidity may expose vulnerabilities in short-term financing markets.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Storm Clouds Gather Over Germany's Financial Horizon<\/a><\/p>\n\n\n\n

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

Spikes In Short Term Financing Markets<\/h2>\n\n\n\n

Sudden spikes in short-term financing markets can threaten financial stability, making it harder and more expensive for firms to secure necessary funds. This situation could expose lenders struggling to stabilize deposits after last year's banking crisis. As the Fed inches closer to its 2% inflation target, the risk of policy error looms large.<\/p>\n\n\n\n

If short-term financing markets experience a meltdown, it could signal the need for the Fed to ease policy. Slowing the pace of quantitative tightening (QT) is seen as a potential response. Despite the central bankers' insistence on needing more data before rate cuts, markets are already pricing in cuts by May.<\/p>\n\n\n\n

As we approach the critical months of March to May, the financial markets are at a crossroads. The potential shake-up in short-term financing markets could signal the Fed to reassess its policies. Market participants and investors must stay vigilant, and prepared for potential shifts in liquidity and policy adjustments. The coming months will \/reveal whether these concerns materialize into a significant market event or remain a contained storm in the financial teacup.<\/p>\n","post_title":"Understanding The Potential Shake-Up In U.S. Short-Term Financing Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"understanding-the-potential-shake-up-in-u-s-short-term-financing-markets","to_ping":"","pinged":"","post_modified":"2024-01-26 20:20:06","post_modified_gmt":"2024-01-26 09:20:06","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15094","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15043,"post_author":"14","post_date":"2024-01-19 05:56:40","post_date_gmt":"2024-01-18 18:56:40","post_content":"\n

Wall Street witnessed a significant stock decline this Wednesday following positive December U.S. retail sales data, which diminished the anticipation of an early initiation of the Federal Reserve's campaign to cut interest rates.<\/p>\n\n\n\n

Retail Sales Report <\/h2>\n\n\n\n

The December retail sales report from the Commerce Department (USRSL=ECI) depicted a robust consumer, responsible for approximately 70% of the U.S. economy. Despite facing the challenges of high inflation and a tight monetary policy, the consumer has shown resilience.<\/p>\n\n\n\n

The data revealed that discounts offered by retailers and a surge in motor vehicle acquisitions contributed to a greater-than-anticipated increase in U.S. retail sales, maintaining the economy on a robust trajectory in 2024. This bolstered the perspective that the Federal Reserve might not reduce interest rates as rapidly as initially anticipated for the current year.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

Anticipations among traders for a 25-basis-point Federal Reserve rate cut in March declined to 55%, down from approximately 60% before the release of the retail sales data. Ryan Detrick, chief market strategist at Carson Group in Omaha, said<\/a>:<\/p>\n\n\n\n

\"We had news that the U.S. consumer continues to be quite healthy, but that has increased anxiety that the Fed\u2019s first rate cut could potentially be pushed to May from March. Yields are also moving higher on the strong retail sales numbers, adding to near-term worries.\"<\/em><\/p>\n\n\n\n

US Stocks And Wall Street<\/h2>\n\n\n\n

It is also important to mention that a decline in U.S. stocks sent Wall Street's<\/a> \"fear gauge\" to a two-month high while JPMorgan analysts predict that the majority of negative consequences stemming from higher interest rates have not materialized yet. On Tuesday, Federal Reserve Governor Christopher Waller also emphasized that the central bank should refrain from hastily reducing interest rates until there is a clear indication that lower inflation is likely to persist.<\/p>\n\n\n\n

At the same time, the escalation of geopolitical uncertainties introduces an additional challenge and heightens the potential for unforeseen risks in both markets and economic performance. Considering these factors, the perspective is likely to stay cautious as long as interest rates remain significantly restrictive and the looming presence of geopolitical risks persists.<\/p>\n","post_title":"Wall Street Weakened As Retail Sales Data Hampers Expectations For A Cut In Interest Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-weakened-as-retail-sales-data-hampers-expectations-for-a-cut-in-interest-rates","to_ping":"","pinged":"","post_modified":"2024-01-19 05:56:51","post_modified_gmt":"2024-01-18 18:56:51","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15043","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14931,"post_author":"18","post_date":"2024-01-10 07:51:17","post_date_gmt":"2024-01-09 20:51:17","post_content":"\n

In a recent survey conducted by the New York Federal Reserve<\/a>, Wall Street's major banks have recalibrated their predictions regarding the Federal Reserve's balance sheet drawdown. This shift suggests that the U.S. central bank might conclude its quantitative tightening (QT) process later than initially anticipated.<\/p>\n\n\n\n

A Change in Perspective<\/h2>\n\n\n\n

Previously, primary dealers\u2014major banks\u2014projected that the QT process would conclude by the third quarter. However, the sentiment has evolved. According to the latest survey taken before the Fed's December 12-13 policy meeting, these banks now foresee the QT process ending in the fourth quarter.<\/p>\n\n\n\n

This adjustment carries significant implications. If these predictions materialize, the Federal Reserve's balance sheet<\/a> will likely shrink to approximately $6.75 trillion, down from its current level of roughly $7.764 trillion. Moreover, banks estimated that the central bank's reverse repo facility would hold $375 billion when QT concludes, a reduction from the anticipated $625 billion as forecasted in October.<\/p>\n\n\n\n

Federal Reserve Strategy<\/h2>\n\n\n\n

The quantitative tightening process has been an integral part of the Federal Reserve's strategy to combat inflation. Alongside rate hikes, the central bank initiated large-scale purchases of Treasury bonds and mortgage-backed securities during the COVID-19 pandemic's onset in 2020. This move led to an expansion of its holdings to approximately $9 trillion by mid-2022. However, since last year, the Fed has been gradually reducing its balance sheet size, although specific guidance on the timeline remains somewhat ambiguous.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

What This Means for the Economy<\/h2>\n\n\n\n

The recalibrated timeline for QT indicates a more prolonged period of balance sheet reduction. As the Federal Reserve continues to navigate its policy decisions, market participants, businesses, and consumers should monitor these developments closely. Changes in the balance sheet size can influence interest rates, liquidity conditions, and overall financial market dynamics.<\/p>\n\n\n\n

A Technical Perspective<\/h2>\n\n\n\n

From a technical standpoint, the Federal Reserve's<\/a> balance sheet management serves as a critical tool in its monetary policy arsenal. The evolving predictions by Wall Street's primary dealers underscore the complexities involved in forecasting economic variables, such as inflation and interest rates.<\/p>\n\n\n\n

As the QT process continues, policymakers and market participants must remain vigilant, considering the potential ramifications for financial stability and economic growth. This dynamic landscape necessitates ongoing analysis and adaptation to ensure that monetary policy objectives align with evolving economic conditions.<\/p>\n","post_title":"Decoding Wall Street's Shift: A Closer Look At Wall Street's Changing Perspective","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"decoding-wall-streets-shift-a-closer-look-at-wall-streets-changing-perspective","to_ping":"","pinged":"","post_modified":"2024-01-10 07:51:25","post_modified_gmt":"2024-01-09 20:51:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14931","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14888,"post_author":"14","post_date":"2024-01-06 18:33:09","post_date_gmt":"2024-01-06 07:33:09","post_content":"\n

Wall Street's main indexes fell at the beginning of the 2024 year as investors locked in profits after a very successful 2023 and are currently waiting for the Federal Reserve's<\/a> meeting that could offer hints on its interest rate path. Ken Polcari, managing partner at Kace Capital Advisors, said:<\/p>\n\n\n\n

\"The decline yesterday, today, and maybe for the next couple of weeks, is a result of people locking in profits and reconsidering what the narrative is - are rates going down five or six times as it appeared to be at the end of last year?\"<\/em><\/p>\n\n\n\n

\"\"
The Nasdaq Composite kicked off the year with a 1.5% drop pressured by a selloff in the tech sector<\/figcaption><\/figure>\n\n\n\n

The Fed's December meeting minutes are set to be disclosed at 2:00 p.m. ET, potentially providing information regarding the central bank's shift toward reducing interest rates. Although it's widely anticipated that the Fed will keep interest rates unchanged this month, traders have priced in a 65.7% probability of a 25 basis point rate reduction in March, according to CMEGroup's FedWatch tool.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures<\/a><\/p>\n\n\n\n

Central Bank And Inflation<\/h2>\n\n\n\n

Richmond Fed President Thomas Barkin, a voting member in the FOMC's rate-setting committee, said recently that the U.S. central bank is \"making real progress\" towards taming inflation and a soft landing seeming \"increasingly conceivable\". Encouragingly, the American Association of Individual Investors (AAII) Sentiment Survey indicated a surge in optimism among individual investors regarding the short-term outlook for the U.S. stock market, reaching its peak level in more than two and a half years.<\/p>\n\n\n\n

Despite this, JPMorgan Asset Management advises investors to be cautious due to potential recession risks. At the same time, analysts at Soci\u00e9t\u00e9 G\u00e9n\u00e9rale anticipate a turbulent 2024 for U.S. stocks, projecting fluctuations that could involve nearing recent highs, encountering declines, and subsequently rebounding.<\/p>\n\n\n\n

This week will witness a series of labor market data releases, culminating in the government's December employment report on Friday. These reports could significantly influence the forecast for the Fed's interest rate trajectory this year, prompting investors to scrutinize the data. Jeffrey Roach, chief economist at LPL Financial, added<\/a>:<\/p>\n\n\n\n

 \"The job market is cooling and we should see confirmation of that in this Friday\u2019s jobs report\"<\/em><\/p>\n\n\n\n

Following the progress of Wall Street's main indexes seen last year, investors are still optimistic about the prospect of another robust year ahead. This optimism is rooted in the anticipation that a decelerating economy will result in a gentle landing rather than a full-scale recession, especially as the Fed initiates rate cuts in the first half of 2024.<\/p>\n","post_title":"Wall Street's Main Indexes Fell At The Beginning Of 2024 year. Investors Locked In Profits After A Strong 2023 And Wait For The Federal Reserve's Meeting","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-at-the-beginning-of-2024-year-investors-locked-in-profits-after-a-strong-2023-and-wait-for-the-federal-reserves-meeting","to_ping":"","pinged":"","post_modified":"2024-01-06 18:33:13","post_modified_gmt":"2024-01-06 07:33:13","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14888","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14629,"post_author":"15","post_date":"2023-12-15 19:46:11","post_date_gmt":"2023-12-15 08:46:11","post_content":"\n

BlackRock aims to facilitate the participation of Wall Street banks in its potential Bitcoin ETF approval. Recent SEC memo <\/a>detailing a late November meeting involving BlackRock, Nasdaq, and the Commission. During this meeting, they discussed feedback regarding BlackRock's Bitcoin ETF application.<\/p>\n\n\n\n

The proposed approach introduces an innovative method for the redemption of ETF shares. A Bitcoin ETF would enable fund investors to gain exposure to Bitcoin without directly purchasing or storing the cryptocurrency. While the SEC has hesitated to approve such ETFs due to concerns about Bitcoin market manipulation, this new strategy addresses those worries.<\/p>\n\n\n\n

The SEC has yet to decide on BlackRock's iShares Bitcoin Trust (IBTC) application, with the deadline set for January 15. Analysts anticipate a decision will be issued for several spot Bitcoin ETF applications earlier in January.<\/p>\n\n\n\n

See Related:<\/strong><\/em> Fidelity Joins BlackRock\u2019s Push For Ethereum ETF<\/a><\/p>\n\n\n\n

BlackRock ETF Details<\/h2>\n\n\n\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

\u201cThe much-anticipated CPI report is a disappointment for those who expected inflation to edge lower allowing the Fed to begin easing rates sooner rather than later. Across the board, numbers were hotter than expected making certain that the Fed will need more data before initiating a rate cutting cycle.\u201d<\/em><\/p>\n\n\n\n

Outside of the jump in shelter costs, the rest of the inflation picture was a mixed bag. Prices for used vehicles dropped by 3.4%, while apparel costs decreased by 0.7%, and medical commodities experienced a 0.6% decline. Conversely, electricity costs saw a 1.2% rise, and airline fares increased by 1.4%.<\/p>\n\n\n\n

In the grocery aisle, ham prices decreased by 3.1%, whereas egg prices surged by 3.4%. Federal Reserve officials anticipate inflation to retreat to their 2% annual target but January's uptick could pose challenges for a central bank aiming to ease its tightest monetary policy stance in over two decades.<\/p>\n","post_title":"Wall Street's Main Indexes Tumbled As Hot Inflation Data Dampened Early Rate-Cut Hopes","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-tumbled-as-hot-inflation-data-dampened-early-rate-cut-hopes","to_ping":"","pinged":"","post_modified":"2024-02-16 22:01:49","post_modified_gmt":"2024-02-16 11:01:49","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15411","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15327,"post_author":"14","post_date":"2024-02-07 19:31:18","post_date_gmt":"2024-02-07 08:31:18","post_content":"\n

Wall Street remains under pressure as Treasury yields climb higher, following Federal Reserve Chair Jerome Powell's resolute stance against market speculation of impending rate cuts. In a recent interview, Powell emphasized the necessity for additional evidence indicating a sustainable decline in inflation before considering lowering interest rates, highlighting that the economy's robustness has effectively mitigated recession risks.<\/p>\n\n\n\n

\"\"
Federal Reserve Chair Jerome Powell emphasized the necessity for additional evidence indicating a sustainable decline in inflation<\/em><\/figcaption><\/figure>\n\n\n\n

In January, job growth in the U.S. picked up pace, and wages saw their most significant increase in nearly two years. These are indications of enduring strength in the labor market, potentially complicating the Federal Reserve's plans to begin cutting interest rates in May. Richard Flynn, managing director at Charles Schwab UK, said:<\/p>\n\n\n\n

\"The strong jobs report indicates that demand in the labor market is higher than expected. While lower interest rates would surely be welcomed, it is becoming increasingly clear that markets and the economy are coping well with the high rate environment, so policymakers are perhaps feeling that the need for monetary policy to ease is less urgent.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>Optimism Among Individual Investors About The Short-Term Outlook Of The U.S. Stock Market Rose To Its Highest Level<\/a><\/p>\n\n\n\n

AAII Sentiment Survey<\/h2>\n\n\n\n

Positive information is that the latest American Association of Individual Investors (AAII) Sentiment Survey showed that optimism among individual investors about the short-term outlook for stocks surged again. American Association of Individual Investors (AAII) reported that bullish sentiment, or expectations that stock prices will rise over the next six months, jumped 9.8 percentage points to 49.1%.<\/p>\n\n\n\n

Bullish sentiment has reached an \"unusually high level,\"<\/em> surpassing its historical average of 37.5% for the 13th consecutive week. The last time optimism was higher was on December 21, 2023, at 52.9%. On the other side, bearish sentiment, or expectations that stock prices will fall over the next six months, decreased by 1.6 percentage points to 24.5%. This sentiment remains below its historical average of 31.0% for the 13th consecutive week.<\/p>\n\n\n\n

Simultaneously, approximately 80% of earnings reports are surpassing analysts' expectations. With results available from nearly half of the S&P 500 companies, including major tech-related firms, overall earnings are projected to have risen by 7.8% in the fourth quarter compared to the same period last year.<\/p>\n\n\n\n

In their latest report on equity client flows, BofA Securities equity and quant strategist Jill Carey Hall said that the previous week saw the largest influx of U.S. equity investments in seven weeks, along with the most substantial private client inflows in over a year. Jill Carey Hall added<\/a>:<\/p>\n\n\n\n

\"Private clients were the biggest buyers of equities last week, led by purchases of ETFs and Tech stocks. Institutional clients were also net buyers after large outflows the week prior, while hedge fund clients were net sellers.\"<\/em><\/p>\n\n\n\n

Investors are actively monitoring earnings and forecasts from big companies against the backdrop of high borrowing costs but remarks from the Fed's policymakers through the week, including voting member Cleveland's Loretta Mester, will also be on investors' watch list.<\/p>\n","post_title":"Fed Chair Jerome Powell Pushed Back Firmly Against Market Speculation Of Imminent Rate Cuts. What To Expect In The Days Ahead?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"fed-chair-jerome-powell-pushed-back-firmly-against-market-speculation-of-imminent-rate-cuts-what-to-expect-in-the-days-ahead","to_ping":"","pinged":"","post_modified":"2024-02-07 19:31:25","post_modified_gmt":"2024-02-07 08:31:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15327","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15225,"post_author":"14","post_date":"2024-02-01 16:33:13","post_date_gmt":"2024-02-01 05:33:13","post_content":"\n

Wall Street's main indexes fell as Alphabet's projections for rising AI costs dented most megacap and chip stocks while the Federal Reserve left interest rates unchanged this Wednesday. Google's parent company experienced a 6.1% decline, resulting in a 3.0% drop in the S&P 500 communication services sector. This occurred following its announcement of holiday-season advertising sales falling short of expectations and its projection of increased spending on artificial intelligence.<\/p>\n\n\n\n

Microsoft (Nasdaq: MSFT) also lost 1.3% after forecasting higher costs to develop new artificial intelligence features, which overshadowed its upbeat quarterly results. Despite the optimistic outlook from the tech pioneers regarding customer enthusiasm for their generative AI-powered products, investors grew concerned about escalating development expenses for these innovative features. These mounting costs tempered their hopes for a significant sales surge from the new technology.<\/p>\n\n\n\n

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

These results and forecasts from big tech names, along with Tesla's growth warning last week, have reignited attention on the risks associated with the significant influence of mega-cap companies in the S&P 500 which has hit record highs in recent weeks. Apple, Meta Platforms, and Amazon.com set to report earnings on Thursday, fell over 1% each.<\/p>\n\n\n\n

See Related: New Bitcoin Core Update May Natively Support Apple M1 Chips<\/a><\/p>\n\n\n\n

Revenue Forecast And Increased Projection<\/h2>\n\n\n\n

It is also important to mention that Advanced Micro Devices saw a 3.3% decline as its first-quarter revenue forecast and increased projection for AI processors fell short of expectations. Other chip stocks including Nvidia, Broadcom, and Marvell dropped over 1% each. The attention of investors was also on the Federal Reserve's initial monetary policy decision of the year, and while it was widely anticipated that the Fed would maintain interest rates, many analysts said that the Fed is taking baby steps toward the cutting. Art Hogan, Chief Market Strategist of B.Riley Wealth, said<\/a>:<\/p>\n\n\n\n

\"Not surprisingly, I don't think the Fed wants to show their hand, especially, when they have a couple of months of data to collect before they need to. The good news is we can forget about any more tightening. The bad news is it's 'when', not 'if', they're going to cut rates, and that 'when' has been pushed out to what had been the fringes of consensus.\"<\/em><\/p>\n\n\n\n

Due to this, markets are showing some immediate disappointment as there's no explicit indication of imminent rate cuts. We're seeing an extremely neutral, non-committal statement from the Federal Reserve this Wednesday.<\/p>\n","post_title":"Wall Street's Main Indexes Fell As Alphabet's Projections For Rising AI Costs Dented Most Mega-Cap And Chip Stocks","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-as-alphabets-projections-for-rising-ai-costs-dented-most-mega-cap-and-chip-stocks","to_ping":"","pinged":"","post_modified":"2024-02-01 16:33:21","post_modified_gmt":"2024-02-01 05:33:21","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15225","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15094,"post_author":"18","post_date":"2024-01-26 02:18:51","post_date_gmt":"2024-01-25 15:18:51","post_content":"\n

As we enter the last week of January, whispers on Wall Street suggest a potential tantrum in U.S. short-term financing markets, with the storm possibly hitting as early as March. This could prompt the Federal Reserve to reassess its policies.<\/p>\n\n\n\n

As of now, banking executives are anticipating a series of events that may tighten the screws on short-term financing. The expiration of a Fed lending facility on March 11, coupled with limited adoption of the standing repo facility (SRF), is expected to reduce the available funding sources for banks. Simultaneously, increased demand for liquidity is on the horizon due to substantial U.S. government debt issuance and upcoming tax payments in March and April. Additionally, a move toward faster trade settlement in May could intensify the demand for short-term funding.<\/p>\n\n\n\n

Against this backdrop, the Federal Reserve has been steadily draining cash from the financial system by unwinding pandemic-era support. BNY Mellon strategists estimate a significant decrease in cash parked overnight with the Fed, potentially dropping below $200 billion by May. The overnight reverse repurchase agreements facility could even approach zero by mid-year. This reduction in excess liquidity may expose vulnerabilities in short-term financing markets.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Storm Clouds Gather Over Germany's Financial Horizon<\/a><\/p>\n\n\n\n

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

Spikes In Short Term Financing Markets<\/h2>\n\n\n\n

Sudden spikes in short-term financing markets can threaten financial stability, making it harder and more expensive for firms to secure necessary funds. This situation could expose lenders struggling to stabilize deposits after last year's banking crisis. As the Fed inches closer to its 2% inflation target, the risk of policy error looms large.<\/p>\n\n\n\n

If short-term financing markets experience a meltdown, it could signal the need for the Fed to ease policy. Slowing the pace of quantitative tightening (QT) is seen as a potential response. Despite the central bankers' insistence on needing more data before rate cuts, markets are already pricing in cuts by May.<\/p>\n\n\n\n

As we approach the critical months of March to May, the financial markets are at a crossroads. The potential shake-up in short-term financing markets could signal the Fed to reassess its policies. Market participants and investors must stay vigilant, and prepared for potential shifts in liquidity and policy adjustments. The coming months will \/reveal whether these concerns materialize into a significant market event or remain a contained storm in the financial teacup.<\/p>\n","post_title":"Understanding The Potential Shake-Up In U.S. Short-Term Financing Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"understanding-the-potential-shake-up-in-u-s-short-term-financing-markets","to_ping":"","pinged":"","post_modified":"2024-01-26 20:20:06","post_modified_gmt":"2024-01-26 09:20:06","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15094","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15043,"post_author":"14","post_date":"2024-01-19 05:56:40","post_date_gmt":"2024-01-18 18:56:40","post_content":"\n

Wall Street witnessed a significant stock decline this Wednesday following positive December U.S. retail sales data, which diminished the anticipation of an early initiation of the Federal Reserve's campaign to cut interest rates.<\/p>\n\n\n\n

Retail Sales Report <\/h2>\n\n\n\n

The December retail sales report from the Commerce Department (USRSL=ECI) depicted a robust consumer, responsible for approximately 70% of the U.S. economy. Despite facing the challenges of high inflation and a tight monetary policy, the consumer has shown resilience.<\/p>\n\n\n\n

The data revealed that discounts offered by retailers and a surge in motor vehicle acquisitions contributed to a greater-than-anticipated increase in U.S. retail sales, maintaining the economy on a robust trajectory in 2024. This bolstered the perspective that the Federal Reserve might not reduce interest rates as rapidly as initially anticipated for the current year.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

Anticipations among traders for a 25-basis-point Federal Reserve rate cut in March declined to 55%, down from approximately 60% before the release of the retail sales data. Ryan Detrick, chief market strategist at Carson Group in Omaha, said<\/a>:<\/p>\n\n\n\n

\"We had news that the U.S. consumer continues to be quite healthy, but that has increased anxiety that the Fed\u2019s first rate cut could potentially be pushed to May from March. Yields are also moving higher on the strong retail sales numbers, adding to near-term worries.\"<\/em><\/p>\n\n\n\n

US Stocks And Wall Street<\/h2>\n\n\n\n

It is also important to mention that a decline in U.S. stocks sent Wall Street's<\/a> \"fear gauge\" to a two-month high while JPMorgan analysts predict that the majority of negative consequences stemming from higher interest rates have not materialized yet. On Tuesday, Federal Reserve Governor Christopher Waller also emphasized that the central bank should refrain from hastily reducing interest rates until there is a clear indication that lower inflation is likely to persist.<\/p>\n\n\n\n

At the same time, the escalation of geopolitical uncertainties introduces an additional challenge and heightens the potential for unforeseen risks in both markets and economic performance. Considering these factors, the perspective is likely to stay cautious as long as interest rates remain significantly restrictive and the looming presence of geopolitical risks persists.<\/p>\n","post_title":"Wall Street Weakened As Retail Sales Data Hampers Expectations For A Cut In Interest Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-weakened-as-retail-sales-data-hampers-expectations-for-a-cut-in-interest-rates","to_ping":"","pinged":"","post_modified":"2024-01-19 05:56:51","post_modified_gmt":"2024-01-18 18:56:51","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15043","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14931,"post_author":"18","post_date":"2024-01-10 07:51:17","post_date_gmt":"2024-01-09 20:51:17","post_content":"\n

In a recent survey conducted by the New York Federal Reserve<\/a>, Wall Street's major banks have recalibrated their predictions regarding the Federal Reserve's balance sheet drawdown. This shift suggests that the U.S. central bank might conclude its quantitative tightening (QT) process later than initially anticipated.<\/p>\n\n\n\n

A Change in Perspective<\/h2>\n\n\n\n

Previously, primary dealers\u2014major banks\u2014projected that the QT process would conclude by the third quarter. However, the sentiment has evolved. According to the latest survey taken before the Fed's December 12-13 policy meeting, these banks now foresee the QT process ending in the fourth quarter.<\/p>\n\n\n\n

This adjustment carries significant implications. If these predictions materialize, the Federal Reserve's balance sheet<\/a> will likely shrink to approximately $6.75 trillion, down from its current level of roughly $7.764 trillion. Moreover, banks estimated that the central bank's reverse repo facility would hold $375 billion when QT concludes, a reduction from the anticipated $625 billion as forecasted in October.<\/p>\n\n\n\n

Federal Reserve Strategy<\/h2>\n\n\n\n

The quantitative tightening process has been an integral part of the Federal Reserve's strategy to combat inflation. Alongside rate hikes, the central bank initiated large-scale purchases of Treasury bonds and mortgage-backed securities during the COVID-19 pandemic's onset in 2020. This move led to an expansion of its holdings to approximately $9 trillion by mid-2022. However, since last year, the Fed has been gradually reducing its balance sheet size, although specific guidance on the timeline remains somewhat ambiguous.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

What This Means for the Economy<\/h2>\n\n\n\n

The recalibrated timeline for QT indicates a more prolonged period of balance sheet reduction. As the Federal Reserve continues to navigate its policy decisions, market participants, businesses, and consumers should monitor these developments closely. Changes in the balance sheet size can influence interest rates, liquidity conditions, and overall financial market dynamics.<\/p>\n\n\n\n

A Technical Perspective<\/h2>\n\n\n\n

From a technical standpoint, the Federal Reserve's<\/a> balance sheet management serves as a critical tool in its monetary policy arsenal. The evolving predictions by Wall Street's primary dealers underscore the complexities involved in forecasting economic variables, such as inflation and interest rates.<\/p>\n\n\n\n

As the QT process continues, policymakers and market participants must remain vigilant, considering the potential ramifications for financial stability and economic growth. This dynamic landscape necessitates ongoing analysis and adaptation to ensure that monetary policy objectives align with evolving economic conditions.<\/p>\n","post_title":"Decoding Wall Street's Shift: A Closer Look At Wall Street's Changing Perspective","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"decoding-wall-streets-shift-a-closer-look-at-wall-streets-changing-perspective","to_ping":"","pinged":"","post_modified":"2024-01-10 07:51:25","post_modified_gmt":"2024-01-09 20:51:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14931","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14888,"post_author":"14","post_date":"2024-01-06 18:33:09","post_date_gmt":"2024-01-06 07:33:09","post_content":"\n

Wall Street's main indexes fell at the beginning of the 2024 year as investors locked in profits after a very successful 2023 and are currently waiting for the Federal Reserve's<\/a> meeting that could offer hints on its interest rate path. Ken Polcari, managing partner at Kace Capital Advisors, said:<\/p>\n\n\n\n

\"The decline yesterday, today, and maybe for the next couple of weeks, is a result of people locking in profits and reconsidering what the narrative is - are rates going down five or six times as it appeared to be at the end of last year?\"<\/em><\/p>\n\n\n\n

\"\"
The Nasdaq Composite kicked off the year with a 1.5% drop pressured by a selloff in the tech sector<\/figcaption><\/figure>\n\n\n\n

The Fed's December meeting minutes are set to be disclosed at 2:00 p.m. ET, potentially providing information regarding the central bank's shift toward reducing interest rates. Although it's widely anticipated that the Fed will keep interest rates unchanged this month, traders have priced in a 65.7% probability of a 25 basis point rate reduction in March, according to CMEGroup's FedWatch tool.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures<\/a><\/p>\n\n\n\n

Central Bank And Inflation<\/h2>\n\n\n\n

Richmond Fed President Thomas Barkin, a voting member in the FOMC's rate-setting committee, said recently that the U.S. central bank is \"making real progress\" towards taming inflation and a soft landing seeming \"increasingly conceivable\". Encouragingly, the American Association of Individual Investors (AAII) Sentiment Survey indicated a surge in optimism among individual investors regarding the short-term outlook for the U.S. stock market, reaching its peak level in more than two and a half years.<\/p>\n\n\n\n

Despite this, JPMorgan Asset Management advises investors to be cautious due to potential recession risks. At the same time, analysts at Soci\u00e9t\u00e9 G\u00e9n\u00e9rale anticipate a turbulent 2024 for U.S. stocks, projecting fluctuations that could involve nearing recent highs, encountering declines, and subsequently rebounding.<\/p>\n\n\n\n

This week will witness a series of labor market data releases, culminating in the government's December employment report on Friday. These reports could significantly influence the forecast for the Fed's interest rate trajectory this year, prompting investors to scrutinize the data. Jeffrey Roach, chief economist at LPL Financial, added<\/a>:<\/p>\n\n\n\n

 \"The job market is cooling and we should see confirmation of that in this Friday\u2019s jobs report\"<\/em><\/p>\n\n\n\n

Following the progress of Wall Street's main indexes seen last year, investors are still optimistic about the prospect of another robust year ahead. This optimism is rooted in the anticipation that a decelerating economy will result in a gentle landing rather than a full-scale recession, especially as the Fed initiates rate cuts in the first half of 2024.<\/p>\n","post_title":"Wall Street's Main Indexes Fell At The Beginning Of 2024 year. Investors Locked In Profits After A Strong 2023 And Wait For The Federal Reserve's Meeting","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-at-the-beginning-of-2024-year-investors-locked-in-profits-after-a-strong-2023-and-wait-for-the-federal-reserves-meeting","to_ping":"","pinged":"","post_modified":"2024-01-06 18:33:13","post_modified_gmt":"2024-01-06 07:33:13","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14888","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14629,"post_author":"15","post_date":"2023-12-15 19:46:11","post_date_gmt":"2023-12-15 08:46:11","post_content":"\n

BlackRock aims to facilitate the participation of Wall Street banks in its potential Bitcoin ETF approval. Recent SEC memo <\/a>detailing a late November meeting involving BlackRock, Nasdaq, and the Commission. During this meeting, they discussed feedback regarding BlackRock's Bitcoin ETF application.<\/p>\n\n\n\n

The proposed approach introduces an innovative method for the redemption of ETF shares. A Bitcoin ETF would enable fund investors to gain exposure to Bitcoin without directly purchasing or storing the cryptocurrency. While the SEC has hesitated to approve such ETFs due to concerns about Bitcoin market manipulation, this new strategy addresses those worries.<\/p>\n\n\n\n

The SEC has yet to decide on BlackRock's iShares Bitcoin Trust (IBTC) application, with the deadline set for January 15. Analysts anticipate a decision will be issued for several spot Bitcoin ETF applications earlier in January.<\/p>\n\n\n\n

See Related:<\/strong><\/em> Fidelity Joins BlackRock\u2019s Push For Ethereum ETF<\/a><\/p>\n\n\n\n

BlackRock ETF Details<\/h2>\n\n\n\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

Following the inflation data release, traders' bets on a 25 basis point rate reduction in May decreased to 38%, down from approximately 58% before the data. Meanwhile, expectations for June remained at 75%, as indicated by the CME FedWatch tool. Quincy Krosby, chief global strategist at LPL Financial said<\/a>:<\/p>\n\n\n\n

\u201cThe much-anticipated CPI report is a disappointment for those who expected inflation to edge lower allowing the Fed to begin easing rates sooner rather than later. Across the board, numbers were hotter than expected making certain that the Fed will need more data before initiating a rate cutting cycle.\u201d<\/em><\/p>\n\n\n\n

Outside of the jump in shelter costs, the rest of the inflation picture was a mixed bag. Prices for used vehicles dropped by 3.4%, while apparel costs decreased by 0.7%, and medical commodities experienced a 0.6% decline. Conversely, electricity costs saw a 1.2% rise, and airline fares increased by 1.4%.<\/p>\n\n\n\n

In the grocery aisle, ham prices decreased by 3.1%, whereas egg prices surged by 3.4%. Federal Reserve officials anticipate inflation to retreat to their 2% annual target but January's uptick could pose challenges for a central bank aiming to ease its tightest monetary policy stance in over two decades.<\/p>\n","post_title":"Wall Street's Main Indexes Tumbled As Hot Inflation Data Dampened Early Rate-Cut Hopes","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-tumbled-as-hot-inflation-data-dampened-early-rate-cut-hopes","to_ping":"","pinged":"","post_modified":"2024-02-16 22:01:49","post_modified_gmt":"2024-02-16 11:01:49","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15411","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15327,"post_author":"14","post_date":"2024-02-07 19:31:18","post_date_gmt":"2024-02-07 08:31:18","post_content":"\n

Wall Street remains under pressure as Treasury yields climb higher, following Federal Reserve Chair Jerome Powell's resolute stance against market speculation of impending rate cuts. In a recent interview, Powell emphasized the necessity for additional evidence indicating a sustainable decline in inflation before considering lowering interest rates, highlighting that the economy's robustness has effectively mitigated recession risks.<\/p>\n\n\n\n

\"\"
Federal Reserve Chair Jerome Powell emphasized the necessity for additional evidence indicating a sustainable decline in inflation<\/em><\/figcaption><\/figure>\n\n\n\n

In January, job growth in the U.S. picked up pace, and wages saw their most significant increase in nearly two years. These are indications of enduring strength in the labor market, potentially complicating the Federal Reserve's plans to begin cutting interest rates in May. Richard Flynn, managing director at Charles Schwab UK, said:<\/p>\n\n\n\n

\"The strong jobs report indicates that demand in the labor market is higher than expected. While lower interest rates would surely be welcomed, it is becoming increasingly clear that markets and the economy are coping well with the high rate environment, so policymakers are perhaps feeling that the need for monetary policy to ease is less urgent.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>Optimism Among Individual Investors About The Short-Term Outlook Of The U.S. Stock Market Rose To Its Highest Level<\/a><\/p>\n\n\n\n

AAII Sentiment Survey<\/h2>\n\n\n\n

Positive information is that the latest American Association of Individual Investors (AAII) Sentiment Survey showed that optimism among individual investors about the short-term outlook for stocks surged again. American Association of Individual Investors (AAII) reported that bullish sentiment, or expectations that stock prices will rise over the next six months, jumped 9.8 percentage points to 49.1%.<\/p>\n\n\n\n

Bullish sentiment has reached an \"unusually high level,\"<\/em> surpassing its historical average of 37.5% for the 13th consecutive week. The last time optimism was higher was on December 21, 2023, at 52.9%. On the other side, bearish sentiment, or expectations that stock prices will fall over the next six months, decreased by 1.6 percentage points to 24.5%. This sentiment remains below its historical average of 31.0% for the 13th consecutive week.<\/p>\n\n\n\n

Simultaneously, approximately 80% of earnings reports are surpassing analysts' expectations. With results available from nearly half of the S&P 500 companies, including major tech-related firms, overall earnings are projected to have risen by 7.8% in the fourth quarter compared to the same period last year.<\/p>\n\n\n\n

In their latest report on equity client flows, BofA Securities equity and quant strategist Jill Carey Hall said that the previous week saw the largest influx of U.S. equity investments in seven weeks, along with the most substantial private client inflows in over a year. Jill Carey Hall added<\/a>:<\/p>\n\n\n\n

\"Private clients were the biggest buyers of equities last week, led by purchases of ETFs and Tech stocks. Institutional clients were also net buyers after large outflows the week prior, while hedge fund clients were net sellers.\"<\/em><\/p>\n\n\n\n

Investors are actively monitoring earnings and forecasts from big companies against the backdrop of high borrowing costs but remarks from the Fed's policymakers through the week, including voting member Cleveland's Loretta Mester, will also be on investors' watch list.<\/p>\n","post_title":"Fed Chair Jerome Powell Pushed Back Firmly Against Market Speculation Of Imminent Rate Cuts. What To Expect In The Days Ahead?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"fed-chair-jerome-powell-pushed-back-firmly-against-market-speculation-of-imminent-rate-cuts-what-to-expect-in-the-days-ahead","to_ping":"","pinged":"","post_modified":"2024-02-07 19:31:25","post_modified_gmt":"2024-02-07 08:31:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15327","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15225,"post_author":"14","post_date":"2024-02-01 16:33:13","post_date_gmt":"2024-02-01 05:33:13","post_content":"\n

Wall Street's main indexes fell as Alphabet's projections for rising AI costs dented most megacap and chip stocks while the Federal Reserve left interest rates unchanged this Wednesday. Google's parent company experienced a 6.1% decline, resulting in a 3.0% drop in the S&P 500 communication services sector. This occurred following its announcement of holiday-season advertising sales falling short of expectations and its projection of increased spending on artificial intelligence.<\/p>\n\n\n\n

Microsoft (Nasdaq: MSFT) also lost 1.3% after forecasting higher costs to develop new artificial intelligence features, which overshadowed its upbeat quarterly results. Despite the optimistic outlook from the tech pioneers regarding customer enthusiasm for their generative AI-powered products, investors grew concerned about escalating development expenses for these innovative features. These mounting costs tempered their hopes for a significant sales surge from the new technology.<\/p>\n\n\n\n

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

These results and forecasts from big tech names, along with Tesla's growth warning last week, have reignited attention on the risks associated with the significant influence of mega-cap companies in the S&P 500 which has hit record highs in recent weeks. Apple, Meta Platforms, and Amazon.com set to report earnings on Thursday, fell over 1% each.<\/p>\n\n\n\n

See Related: New Bitcoin Core Update May Natively Support Apple M1 Chips<\/a><\/p>\n\n\n\n

Revenue Forecast And Increased Projection<\/h2>\n\n\n\n

It is also important to mention that Advanced Micro Devices saw a 3.3% decline as its first-quarter revenue forecast and increased projection for AI processors fell short of expectations. Other chip stocks including Nvidia, Broadcom, and Marvell dropped over 1% each. The attention of investors was also on the Federal Reserve's initial monetary policy decision of the year, and while it was widely anticipated that the Fed would maintain interest rates, many analysts said that the Fed is taking baby steps toward the cutting. Art Hogan, Chief Market Strategist of B.Riley Wealth, said<\/a>:<\/p>\n\n\n\n

\"Not surprisingly, I don't think the Fed wants to show their hand, especially, when they have a couple of months of data to collect before they need to. The good news is we can forget about any more tightening. The bad news is it's 'when', not 'if', they're going to cut rates, and that 'when' has been pushed out to what had been the fringes of consensus.\"<\/em><\/p>\n\n\n\n

Due to this, markets are showing some immediate disappointment as there's no explicit indication of imminent rate cuts. We're seeing an extremely neutral, non-committal statement from the Federal Reserve this Wednesday.<\/p>\n","post_title":"Wall Street's Main Indexes Fell As Alphabet's Projections For Rising AI Costs Dented Most Mega-Cap And Chip Stocks","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-as-alphabets-projections-for-rising-ai-costs-dented-most-mega-cap-and-chip-stocks","to_ping":"","pinged":"","post_modified":"2024-02-01 16:33:21","post_modified_gmt":"2024-02-01 05:33:21","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15225","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15094,"post_author":"18","post_date":"2024-01-26 02:18:51","post_date_gmt":"2024-01-25 15:18:51","post_content":"\n

As we enter the last week of January, whispers on Wall Street suggest a potential tantrum in U.S. short-term financing markets, with the storm possibly hitting as early as March. This could prompt the Federal Reserve to reassess its policies.<\/p>\n\n\n\n

As of now, banking executives are anticipating a series of events that may tighten the screws on short-term financing. The expiration of a Fed lending facility on March 11, coupled with limited adoption of the standing repo facility (SRF), is expected to reduce the available funding sources for banks. Simultaneously, increased demand for liquidity is on the horizon due to substantial U.S. government debt issuance and upcoming tax payments in March and April. Additionally, a move toward faster trade settlement in May could intensify the demand for short-term funding.<\/p>\n\n\n\n

Against this backdrop, the Federal Reserve has been steadily draining cash from the financial system by unwinding pandemic-era support. BNY Mellon strategists estimate a significant decrease in cash parked overnight with the Fed, potentially dropping below $200 billion by May. The overnight reverse repurchase agreements facility could even approach zero by mid-year. This reduction in excess liquidity may expose vulnerabilities in short-term financing markets.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Storm Clouds Gather Over Germany's Financial Horizon<\/a><\/p>\n\n\n\n

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

Spikes In Short Term Financing Markets<\/h2>\n\n\n\n

Sudden spikes in short-term financing markets can threaten financial stability, making it harder and more expensive for firms to secure necessary funds. This situation could expose lenders struggling to stabilize deposits after last year's banking crisis. As the Fed inches closer to its 2% inflation target, the risk of policy error looms large.<\/p>\n\n\n\n

If short-term financing markets experience a meltdown, it could signal the need for the Fed to ease policy. Slowing the pace of quantitative tightening (QT) is seen as a potential response. Despite the central bankers' insistence on needing more data before rate cuts, markets are already pricing in cuts by May.<\/p>\n\n\n\n

As we approach the critical months of March to May, the financial markets are at a crossroads. The potential shake-up in short-term financing markets could signal the Fed to reassess its policies. Market participants and investors must stay vigilant, and prepared for potential shifts in liquidity and policy adjustments. The coming months will \/reveal whether these concerns materialize into a significant market event or remain a contained storm in the financial teacup.<\/p>\n","post_title":"Understanding The Potential Shake-Up In U.S. Short-Term Financing Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"understanding-the-potential-shake-up-in-u-s-short-term-financing-markets","to_ping":"","pinged":"","post_modified":"2024-01-26 20:20:06","post_modified_gmt":"2024-01-26 09:20:06","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15094","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15043,"post_author":"14","post_date":"2024-01-19 05:56:40","post_date_gmt":"2024-01-18 18:56:40","post_content":"\n

Wall Street witnessed a significant stock decline this Wednesday following positive December U.S. retail sales data, which diminished the anticipation of an early initiation of the Federal Reserve's campaign to cut interest rates.<\/p>\n\n\n\n

Retail Sales Report <\/h2>\n\n\n\n

The December retail sales report from the Commerce Department (USRSL=ECI) depicted a robust consumer, responsible for approximately 70% of the U.S. economy. Despite facing the challenges of high inflation and a tight monetary policy, the consumer has shown resilience.<\/p>\n\n\n\n

The data revealed that discounts offered by retailers and a surge in motor vehicle acquisitions contributed to a greater-than-anticipated increase in U.S. retail sales, maintaining the economy on a robust trajectory in 2024. This bolstered the perspective that the Federal Reserve might not reduce interest rates as rapidly as initially anticipated for the current year.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

Anticipations among traders for a 25-basis-point Federal Reserve rate cut in March declined to 55%, down from approximately 60% before the release of the retail sales data. Ryan Detrick, chief market strategist at Carson Group in Omaha, said<\/a>:<\/p>\n\n\n\n

\"We had news that the U.S. consumer continues to be quite healthy, but that has increased anxiety that the Fed\u2019s first rate cut could potentially be pushed to May from March. Yields are also moving higher on the strong retail sales numbers, adding to near-term worries.\"<\/em><\/p>\n\n\n\n

US Stocks And Wall Street<\/h2>\n\n\n\n

It is also important to mention that a decline in U.S. stocks sent Wall Street's<\/a> \"fear gauge\" to a two-month high while JPMorgan analysts predict that the majority of negative consequences stemming from higher interest rates have not materialized yet. On Tuesday, Federal Reserve Governor Christopher Waller also emphasized that the central bank should refrain from hastily reducing interest rates until there is a clear indication that lower inflation is likely to persist.<\/p>\n\n\n\n

At the same time, the escalation of geopolitical uncertainties introduces an additional challenge and heightens the potential for unforeseen risks in both markets and economic performance. Considering these factors, the perspective is likely to stay cautious as long as interest rates remain significantly restrictive and the looming presence of geopolitical risks persists.<\/p>\n","post_title":"Wall Street Weakened As Retail Sales Data Hampers Expectations For A Cut In Interest Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-weakened-as-retail-sales-data-hampers-expectations-for-a-cut-in-interest-rates","to_ping":"","pinged":"","post_modified":"2024-01-19 05:56:51","post_modified_gmt":"2024-01-18 18:56:51","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15043","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14931,"post_author":"18","post_date":"2024-01-10 07:51:17","post_date_gmt":"2024-01-09 20:51:17","post_content":"\n

In a recent survey conducted by the New York Federal Reserve<\/a>, Wall Street's major banks have recalibrated their predictions regarding the Federal Reserve's balance sheet drawdown. This shift suggests that the U.S. central bank might conclude its quantitative tightening (QT) process later than initially anticipated.<\/p>\n\n\n\n

A Change in Perspective<\/h2>\n\n\n\n

Previously, primary dealers\u2014major banks\u2014projected that the QT process would conclude by the third quarter. However, the sentiment has evolved. According to the latest survey taken before the Fed's December 12-13 policy meeting, these banks now foresee the QT process ending in the fourth quarter.<\/p>\n\n\n\n

This adjustment carries significant implications. If these predictions materialize, the Federal Reserve's balance sheet<\/a> will likely shrink to approximately $6.75 trillion, down from its current level of roughly $7.764 trillion. Moreover, banks estimated that the central bank's reverse repo facility would hold $375 billion when QT concludes, a reduction from the anticipated $625 billion as forecasted in October.<\/p>\n\n\n\n

Federal Reserve Strategy<\/h2>\n\n\n\n

The quantitative tightening process has been an integral part of the Federal Reserve's strategy to combat inflation. Alongside rate hikes, the central bank initiated large-scale purchases of Treasury bonds and mortgage-backed securities during the COVID-19 pandemic's onset in 2020. This move led to an expansion of its holdings to approximately $9 trillion by mid-2022. However, since last year, the Fed has been gradually reducing its balance sheet size, although specific guidance on the timeline remains somewhat ambiguous.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

What This Means for the Economy<\/h2>\n\n\n\n

The recalibrated timeline for QT indicates a more prolonged period of balance sheet reduction. As the Federal Reserve continues to navigate its policy decisions, market participants, businesses, and consumers should monitor these developments closely. Changes in the balance sheet size can influence interest rates, liquidity conditions, and overall financial market dynamics.<\/p>\n\n\n\n

A Technical Perspective<\/h2>\n\n\n\n

From a technical standpoint, the Federal Reserve's<\/a> balance sheet management serves as a critical tool in its monetary policy arsenal. The evolving predictions by Wall Street's primary dealers underscore the complexities involved in forecasting economic variables, such as inflation and interest rates.<\/p>\n\n\n\n

As the QT process continues, policymakers and market participants must remain vigilant, considering the potential ramifications for financial stability and economic growth. This dynamic landscape necessitates ongoing analysis and adaptation to ensure that monetary policy objectives align with evolving economic conditions.<\/p>\n","post_title":"Decoding Wall Street's Shift: A Closer Look At Wall Street's Changing Perspective","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"decoding-wall-streets-shift-a-closer-look-at-wall-streets-changing-perspective","to_ping":"","pinged":"","post_modified":"2024-01-10 07:51:25","post_modified_gmt":"2024-01-09 20:51:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14931","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14888,"post_author":"14","post_date":"2024-01-06 18:33:09","post_date_gmt":"2024-01-06 07:33:09","post_content":"\n

Wall Street's main indexes fell at the beginning of the 2024 year as investors locked in profits after a very successful 2023 and are currently waiting for the Federal Reserve's<\/a> meeting that could offer hints on its interest rate path. Ken Polcari, managing partner at Kace Capital Advisors, said:<\/p>\n\n\n\n

\"The decline yesterday, today, and maybe for the next couple of weeks, is a result of people locking in profits and reconsidering what the narrative is - are rates going down five or six times as it appeared to be at the end of last year?\"<\/em><\/p>\n\n\n\n

\"\"
The Nasdaq Composite kicked off the year with a 1.5% drop pressured by a selloff in the tech sector<\/figcaption><\/figure>\n\n\n\n

The Fed's December meeting minutes are set to be disclosed at 2:00 p.m. ET, potentially providing information regarding the central bank's shift toward reducing interest rates. Although it's widely anticipated that the Fed will keep interest rates unchanged this month, traders have priced in a 65.7% probability of a 25 basis point rate reduction in March, according to CMEGroup's FedWatch tool.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures<\/a><\/p>\n\n\n\n

Central Bank And Inflation<\/h2>\n\n\n\n

Richmond Fed President Thomas Barkin, a voting member in the FOMC's rate-setting committee, said recently that the U.S. central bank is \"making real progress\" towards taming inflation and a soft landing seeming \"increasingly conceivable\". Encouragingly, the American Association of Individual Investors (AAII) Sentiment Survey indicated a surge in optimism among individual investors regarding the short-term outlook for the U.S. stock market, reaching its peak level in more than two and a half years.<\/p>\n\n\n\n

Despite this, JPMorgan Asset Management advises investors to be cautious due to potential recession risks. At the same time, analysts at Soci\u00e9t\u00e9 G\u00e9n\u00e9rale anticipate a turbulent 2024 for U.S. stocks, projecting fluctuations that could involve nearing recent highs, encountering declines, and subsequently rebounding.<\/p>\n\n\n\n

This week will witness a series of labor market data releases, culminating in the government's December employment report on Friday. These reports could significantly influence the forecast for the Fed's interest rate trajectory this year, prompting investors to scrutinize the data. Jeffrey Roach, chief economist at LPL Financial, added<\/a>:<\/p>\n\n\n\n

 \"The job market is cooling and we should see confirmation of that in this Friday\u2019s jobs report\"<\/em><\/p>\n\n\n\n

Following the progress of Wall Street's main indexes seen last year, investors are still optimistic about the prospect of another robust year ahead. This optimism is rooted in the anticipation that a decelerating economy will result in a gentle landing rather than a full-scale recession, especially as the Fed initiates rate cuts in the first half of 2024.<\/p>\n","post_title":"Wall Street's Main Indexes Fell At The Beginning Of 2024 year. Investors Locked In Profits After A Strong 2023 And Wait For The Federal Reserve's Meeting","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-at-the-beginning-of-2024-year-investors-locked-in-profits-after-a-strong-2023-and-wait-for-the-federal-reserves-meeting","to_ping":"","pinged":"","post_modified":"2024-01-06 18:33:13","post_modified_gmt":"2024-01-06 07:33:13","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14888","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14629,"post_author":"15","post_date":"2023-12-15 19:46:11","post_date_gmt":"2023-12-15 08:46:11","post_content":"\n

BlackRock aims to facilitate the participation of Wall Street banks in its potential Bitcoin ETF approval. Recent SEC memo <\/a>detailing a late November meeting involving BlackRock, Nasdaq, and the Commission. During this meeting, they discussed feedback regarding BlackRock's Bitcoin ETF application.<\/p>\n\n\n\n

The proposed approach introduces an innovative method for the redemption of ETF shares. A Bitcoin ETF would enable fund investors to gain exposure to Bitcoin without directly purchasing or storing the cryptocurrency. While the SEC has hesitated to approve such ETFs due to concerns about Bitcoin market manipulation, this new strategy addresses those worries.<\/p>\n\n\n\n

The SEC has yet to decide on BlackRock's iShares Bitcoin Trust (IBTC) application, with the deadline set for January 15. Analysts anticipate a decision will be issued for several spot Bitcoin ETF applications earlier in January.<\/p>\n\n\n\n

See Related:<\/strong><\/em> Fidelity Joins BlackRock\u2019s Push For Ethereum ETF<\/a><\/p>\n\n\n\n

BlackRock ETF Details<\/h2>\n\n\n\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

Consequences Of Inflation<\/h2>\n\n\n\n

Following the inflation data release, traders' bets on a 25 basis point rate reduction in May decreased to 38%, down from approximately 58% before the data. Meanwhile, expectations for June remained at 75%, as indicated by the CME FedWatch tool. Quincy Krosby, chief global strategist at LPL Financial said<\/a>:<\/p>\n\n\n\n

\u201cThe much-anticipated CPI report is a disappointment for those who expected inflation to edge lower allowing the Fed to begin easing rates sooner rather than later. Across the board, numbers were hotter than expected making certain that the Fed will need more data before initiating a rate cutting cycle.\u201d<\/em><\/p>\n\n\n\n

Outside of the jump in shelter costs, the rest of the inflation picture was a mixed bag. Prices for used vehicles dropped by 3.4%, while apparel costs decreased by 0.7%, and medical commodities experienced a 0.6% decline. Conversely, electricity costs saw a 1.2% rise, and airline fares increased by 1.4%.<\/p>\n\n\n\n

In the grocery aisle, ham prices decreased by 3.1%, whereas egg prices surged by 3.4%. Federal Reserve officials anticipate inflation to retreat to their 2% annual target but January's uptick could pose challenges for a central bank aiming to ease its tightest monetary policy stance in over two decades.<\/p>\n","post_title":"Wall Street's Main Indexes Tumbled As Hot Inflation Data Dampened Early Rate-Cut Hopes","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-tumbled-as-hot-inflation-data-dampened-early-rate-cut-hopes","to_ping":"","pinged":"","post_modified":"2024-02-16 22:01:49","post_modified_gmt":"2024-02-16 11:01:49","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15411","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15327,"post_author":"14","post_date":"2024-02-07 19:31:18","post_date_gmt":"2024-02-07 08:31:18","post_content":"\n

Wall Street remains under pressure as Treasury yields climb higher, following Federal Reserve Chair Jerome Powell's resolute stance against market speculation of impending rate cuts. In a recent interview, Powell emphasized the necessity for additional evidence indicating a sustainable decline in inflation before considering lowering interest rates, highlighting that the economy's robustness has effectively mitigated recession risks.<\/p>\n\n\n\n

\"\"
Federal Reserve Chair Jerome Powell emphasized the necessity for additional evidence indicating a sustainable decline in inflation<\/em><\/figcaption><\/figure>\n\n\n\n

In January, job growth in the U.S. picked up pace, and wages saw their most significant increase in nearly two years. These are indications of enduring strength in the labor market, potentially complicating the Federal Reserve's plans to begin cutting interest rates in May. Richard Flynn, managing director at Charles Schwab UK, said:<\/p>\n\n\n\n

\"The strong jobs report indicates that demand in the labor market is higher than expected. While lower interest rates would surely be welcomed, it is becoming increasingly clear that markets and the economy are coping well with the high rate environment, so policymakers are perhaps feeling that the need for monetary policy to ease is less urgent.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>Optimism Among Individual Investors About The Short-Term Outlook Of The U.S. Stock Market Rose To Its Highest Level<\/a><\/p>\n\n\n\n

AAII Sentiment Survey<\/h2>\n\n\n\n

Positive information is that the latest American Association of Individual Investors (AAII) Sentiment Survey showed that optimism among individual investors about the short-term outlook for stocks surged again. American Association of Individual Investors (AAII) reported that bullish sentiment, or expectations that stock prices will rise over the next six months, jumped 9.8 percentage points to 49.1%.<\/p>\n\n\n\n

Bullish sentiment has reached an \"unusually high level,\"<\/em> surpassing its historical average of 37.5% for the 13th consecutive week. The last time optimism was higher was on December 21, 2023, at 52.9%. On the other side, bearish sentiment, or expectations that stock prices will fall over the next six months, decreased by 1.6 percentage points to 24.5%. This sentiment remains below its historical average of 31.0% for the 13th consecutive week.<\/p>\n\n\n\n

Simultaneously, approximately 80% of earnings reports are surpassing analysts' expectations. With results available from nearly half of the S&P 500 companies, including major tech-related firms, overall earnings are projected to have risen by 7.8% in the fourth quarter compared to the same period last year.<\/p>\n\n\n\n

In their latest report on equity client flows, BofA Securities equity and quant strategist Jill Carey Hall said that the previous week saw the largest influx of U.S. equity investments in seven weeks, along with the most substantial private client inflows in over a year. Jill Carey Hall added<\/a>:<\/p>\n\n\n\n

\"Private clients were the biggest buyers of equities last week, led by purchases of ETFs and Tech stocks. Institutional clients were also net buyers after large outflows the week prior, while hedge fund clients were net sellers.\"<\/em><\/p>\n\n\n\n

Investors are actively monitoring earnings and forecasts from big companies against the backdrop of high borrowing costs but remarks from the Fed's policymakers through the week, including voting member Cleveland's Loretta Mester, will also be on investors' watch list.<\/p>\n","post_title":"Fed Chair Jerome Powell Pushed Back Firmly Against Market Speculation Of Imminent Rate Cuts. What To Expect In The Days Ahead?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"fed-chair-jerome-powell-pushed-back-firmly-against-market-speculation-of-imminent-rate-cuts-what-to-expect-in-the-days-ahead","to_ping":"","pinged":"","post_modified":"2024-02-07 19:31:25","post_modified_gmt":"2024-02-07 08:31:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15327","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15225,"post_author":"14","post_date":"2024-02-01 16:33:13","post_date_gmt":"2024-02-01 05:33:13","post_content":"\n

Wall Street's main indexes fell as Alphabet's projections for rising AI costs dented most megacap and chip stocks while the Federal Reserve left interest rates unchanged this Wednesday. Google's parent company experienced a 6.1% decline, resulting in a 3.0% drop in the S&P 500 communication services sector. This occurred following its announcement of holiday-season advertising sales falling short of expectations and its projection of increased spending on artificial intelligence.<\/p>\n\n\n\n

Microsoft (Nasdaq: MSFT) also lost 1.3% after forecasting higher costs to develop new artificial intelligence features, which overshadowed its upbeat quarterly results. Despite the optimistic outlook from the tech pioneers regarding customer enthusiasm for their generative AI-powered products, investors grew concerned about escalating development expenses for these innovative features. These mounting costs tempered their hopes for a significant sales surge from the new technology.<\/p>\n\n\n\n

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

These results and forecasts from big tech names, along with Tesla's growth warning last week, have reignited attention on the risks associated with the significant influence of mega-cap companies in the S&P 500 which has hit record highs in recent weeks. Apple, Meta Platforms, and Amazon.com set to report earnings on Thursday, fell over 1% each.<\/p>\n\n\n\n

See Related: New Bitcoin Core Update May Natively Support Apple M1 Chips<\/a><\/p>\n\n\n\n

Revenue Forecast And Increased Projection<\/h2>\n\n\n\n

It is also important to mention that Advanced Micro Devices saw a 3.3% decline as its first-quarter revenue forecast and increased projection for AI processors fell short of expectations. Other chip stocks including Nvidia, Broadcom, and Marvell dropped over 1% each. The attention of investors was also on the Federal Reserve's initial monetary policy decision of the year, and while it was widely anticipated that the Fed would maintain interest rates, many analysts said that the Fed is taking baby steps toward the cutting. Art Hogan, Chief Market Strategist of B.Riley Wealth, said<\/a>:<\/p>\n\n\n\n

\"Not surprisingly, I don't think the Fed wants to show their hand, especially, when they have a couple of months of data to collect before they need to. The good news is we can forget about any more tightening. The bad news is it's 'when', not 'if', they're going to cut rates, and that 'when' has been pushed out to what had been the fringes of consensus.\"<\/em><\/p>\n\n\n\n

Due to this, markets are showing some immediate disappointment as there's no explicit indication of imminent rate cuts. We're seeing an extremely neutral, non-committal statement from the Federal Reserve this Wednesday.<\/p>\n","post_title":"Wall Street's Main Indexes Fell As Alphabet's Projections For Rising AI Costs Dented Most Mega-Cap And Chip Stocks","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-as-alphabets-projections-for-rising-ai-costs-dented-most-mega-cap-and-chip-stocks","to_ping":"","pinged":"","post_modified":"2024-02-01 16:33:21","post_modified_gmt":"2024-02-01 05:33:21","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15225","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15094,"post_author":"18","post_date":"2024-01-26 02:18:51","post_date_gmt":"2024-01-25 15:18:51","post_content":"\n

As we enter the last week of January, whispers on Wall Street suggest a potential tantrum in U.S. short-term financing markets, with the storm possibly hitting as early as March. This could prompt the Federal Reserve to reassess its policies.<\/p>\n\n\n\n

As of now, banking executives are anticipating a series of events that may tighten the screws on short-term financing. The expiration of a Fed lending facility on March 11, coupled with limited adoption of the standing repo facility (SRF), is expected to reduce the available funding sources for banks. Simultaneously, increased demand for liquidity is on the horizon due to substantial U.S. government debt issuance and upcoming tax payments in March and April. Additionally, a move toward faster trade settlement in May could intensify the demand for short-term funding.<\/p>\n\n\n\n

Against this backdrop, the Federal Reserve has been steadily draining cash from the financial system by unwinding pandemic-era support. BNY Mellon strategists estimate a significant decrease in cash parked overnight with the Fed, potentially dropping below $200 billion by May. The overnight reverse repurchase agreements facility could even approach zero by mid-year. This reduction in excess liquidity may expose vulnerabilities in short-term financing markets.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Storm Clouds Gather Over Germany's Financial Horizon<\/a><\/p>\n\n\n\n

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

Spikes In Short Term Financing Markets<\/h2>\n\n\n\n

Sudden spikes in short-term financing markets can threaten financial stability, making it harder and more expensive for firms to secure necessary funds. This situation could expose lenders struggling to stabilize deposits after last year's banking crisis. As the Fed inches closer to its 2% inflation target, the risk of policy error looms large.<\/p>\n\n\n\n

If short-term financing markets experience a meltdown, it could signal the need for the Fed to ease policy. Slowing the pace of quantitative tightening (QT) is seen as a potential response. Despite the central bankers' insistence on needing more data before rate cuts, markets are already pricing in cuts by May.<\/p>\n\n\n\n

As we approach the critical months of March to May, the financial markets are at a crossroads. The potential shake-up in short-term financing markets could signal the Fed to reassess its policies. Market participants and investors must stay vigilant, and prepared for potential shifts in liquidity and policy adjustments. The coming months will \/reveal whether these concerns materialize into a significant market event or remain a contained storm in the financial teacup.<\/p>\n","post_title":"Understanding The Potential Shake-Up In U.S. Short-Term Financing Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"understanding-the-potential-shake-up-in-u-s-short-term-financing-markets","to_ping":"","pinged":"","post_modified":"2024-01-26 20:20:06","post_modified_gmt":"2024-01-26 09:20:06","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15094","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15043,"post_author":"14","post_date":"2024-01-19 05:56:40","post_date_gmt":"2024-01-18 18:56:40","post_content":"\n

Wall Street witnessed a significant stock decline this Wednesday following positive December U.S. retail sales data, which diminished the anticipation of an early initiation of the Federal Reserve's campaign to cut interest rates.<\/p>\n\n\n\n

Retail Sales Report <\/h2>\n\n\n\n

The December retail sales report from the Commerce Department (USRSL=ECI) depicted a robust consumer, responsible for approximately 70% of the U.S. economy. Despite facing the challenges of high inflation and a tight monetary policy, the consumer has shown resilience.<\/p>\n\n\n\n

The data revealed that discounts offered by retailers and a surge in motor vehicle acquisitions contributed to a greater-than-anticipated increase in U.S. retail sales, maintaining the economy on a robust trajectory in 2024. This bolstered the perspective that the Federal Reserve might not reduce interest rates as rapidly as initially anticipated for the current year.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

Anticipations among traders for a 25-basis-point Federal Reserve rate cut in March declined to 55%, down from approximately 60% before the release of the retail sales data. Ryan Detrick, chief market strategist at Carson Group in Omaha, said<\/a>:<\/p>\n\n\n\n

\"We had news that the U.S. consumer continues to be quite healthy, but that has increased anxiety that the Fed\u2019s first rate cut could potentially be pushed to May from March. Yields are also moving higher on the strong retail sales numbers, adding to near-term worries.\"<\/em><\/p>\n\n\n\n

US Stocks And Wall Street<\/h2>\n\n\n\n

It is also important to mention that a decline in U.S. stocks sent Wall Street's<\/a> \"fear gauge\" to a two-month high while JPMorgan analysts predict that the majority of negative consequences stemming from higher interest rates have not materialized yet. On Tuesday, Federal Reserve Governor Christopher Waller also emphasized that the central bank should refrain from hastily reducing interest rates until there is a clear indication that lower inflation is likely to persist.<\/p>\n\n\n\n

At the same time, the escalation of geopolitical uncertainties introduces an additional challenge and heightens the potential for unforeseen risks in both markets and economic performance. Considering these factors, the perspective is likely to stay cautious as long as interest rates remain significantly restrictive and the looming presence of geopolitical risks persists.<\/p>\n","post_title":"Wall Street Weakened As Retail Sales Data Hampers Expectations For A Cut In Interest Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-weakened-as-retail-sales-data-hampers-expectations-for-a-cut-in-interest-rates","to_ping":"","pinged":"","post_modified":"2024-01-19 05:56:51","post_modified_gmt":"2024-01-18 18:56:51","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15043","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14931,"post_author":"18","post_date":"2024-01-10 07:51:17","post_date_gmt":"2024-01-09 20:51:17","post_content":"\n

In a recent survey conducted by the New York Federal Reserve<\/a>, Wall Street's major banks have recalibrated their predictions regarding the Federal Reserve's balance sheet drawdown. This shift suggests that the U.S. central bank might conclude its quantitative tightening (QT) process later than initially anticipated.<\/p>\n\n\n\n

A Change in Perspective<\/h2>\n\n\n\n

Previously, primary dealers\u2014major banks\u2014projected that the QT process would conclude by the third quarter. However, the sentiment has evolved. According to the latest survey taken before the Fed's December 12-13 policy meeting, these banks now foresee the QT process ending in the fourth quarter.<\/p>\n\n\n\n

This adjustment carries significant implications. If these predictions materialize, the Federal Reserve's balance sheet<\/a> will likely shrink to approximately $6.75 trillion, down from its current level of roughly $7.764 trillion. Moreover, banks estimated that the central bank's reverse repo facility would hold $375 billion when QT concludes, a reduction from the anticipated $625 billion as forecasted in October.<\/p>\n\n\n\n

Federal Reserve Strategy<\/h2>\n\n\n\n

The quantitative tightening process has been an integral part of the Federal Reserve's strategy to combat inflation. Alongside rate hikes, the central bank initiated large-scale purchases of Treasury bonds and mortgage-backed securities during the COVID-19 pandemic's onset in 2020. This move led to an expansion of its holdings to approximately $9 trillion by mid-2022. However, since last year, the Fed has been gradually reducing its balance sheet size, although specific guidance on the timeline remains somewhat ambiguous.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

What This Means for the Economy<\/h2>\n\n\n\n

The recalibrated timeline for QT indicates a more prolonged period of balance sheet reduction. As the Federal Reserve continues to navigate its policy decisions, market participants, businesses, and consumers should monitor these developments closely. Changes in the balance sheet size can influence interest rates, liquidity conditions, and overall financial market dynamics.<\/p>\n\n\n\n

A Technical Perspective<\/h2>\n\n\n\n

From a technical standpoint, the Federal Reserve's<\/a> balance sheet management serves as a critical tool in its monetary policy arsenal. The evolving predictions by Wall Street's primary dealers underscore the complexities involved in forecasting economic variables, such as inflation and interest rates.<\/p>\n\n\n\n

As the QT process continues, policymakers and market participants must remain vigilant, considering the potential ramifications for financial stability and economic growth. This dynamic landscape necessitates ongoing analysis and adaptation to ensure that monetary policy objectives align with evolving economic conditions.<\/p>\n","post_title":"Decoding Wall Street's Shift: A Closer Look At Wall Street's Changing Perspective","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"decoding-wall-streets-shift-a-closer-look-at-wall-streets-changing-perspective","to_ping":"","pinged":"","post_modified":"2024-01-10 07:51:25","post_modified_gmt":"2024-01-09 20:51:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14931","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14888,"post_author":"14","post_date":"2024-01-06 18:33:09","post_date_gmt":"2024-01-06 07:33:09","post_content":"\n

Wall Street's main indexes fell at the beginning of the 2024 year as investors locked in profits after a very successful 2023 and are currently waiting for the Federal Reserve's<\/a> meeting that could offer hints on its interest rate path. Ken Polcari, managing partner at Kace Capital Advisors, said:<\/p>\n\n\n\n

\"The decline yesterday, today, and maybe for the next couple of weeks, is a result of people locking in profits and reconsidering what the narrative is - are rates going down five or six times as it appeared to be at the end of last year?\"<\/em><\/p>\n\n\n\n

\"\"
The Nasdaq Composite kicked off the year with a 1.5% drop pressured by a selloff in the tech sector<\/figcaption><\/figure>\n\n\n\n

The Fed's December meeting minutes are set to be disclosed at 2:00 p.m. ET, potentially providing information regarding the central bank's shift toward reducing interest rates. Although it's widely anticipated that the Fed will keep interest rates unchanged this month, traders have priced in a 65.7% probability of a 25 basis point rate reduction in March, according to CMEGroup's FedWatch tool.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures<\/a><\/p>\n\n\n\n

Central Bank And Inflation<\/h2>\n\n\n\n

Richmond Fed President Thomas Barkin, a voting member in the FOMC's rate-setting committee, said recently that the U.S. central bank is \"making real progress\" towards taming inflation and a soft landing seeming \"increasingly conceivable\". Encouragingly, the American Association of Individual Investors (AAII) Sentiment Survey indicated a surge in optimism among individual investors regarding the short-term outlook for the U.S. stock market, reaching its peak level in more than two and a half years.<\/p>\n\n\n\n

Despite this, JPMorgan Asset Management advises investors to be cautious due to potential recession risks. At the same time, analysts at Soci\u00e9t\u00e9 G\u00e9n\u00e9rale anticipate a turbulent 2024 for U.S. stocks, projecting fluctuations that could involve nearing recent highs, encountering declines, and subsequently rebounding.<\/p>\n\n\n\n

This week will witness a series of labor market data releases, culminating in the government's December employment report on Friday. These reports could significantly influence the forecast for the Fed's interest rate trajectory this year, prompting investors to scrutinize the data. Jeffrey Roach, chief economist at LPL Financial, added<\/a>:<\/p>\n\n\n\n

 \"The job market is cooling and we should see confirmation of that in this Friday\u2019s jobs report\"<\/em><\/p>\n\n\n\n

Following the progress of Wall Street's main indexes seen last year, investors are still optimistic about the prospect of another robust year ahead. This optimism is rooted in the anticipation that a decelerating economy will result in a gentle landing rather than a full-scale recession, especially as the Fed initiates rate cuts in the first half of 2024.<\/p>\n","post_title":"Wall Street's Main Indexes Fell At The Beginning Of 2024 year. Investors Locked In Profits After A Strong 2023 And Wait For The Federal Reserve's Meeting","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-at-the-beginning-of-2024-year-investors-locked-in-profits-after-a-strong-2023-and-wait-for-the-federal-reserves-meeting","to_ping":"","pinged":"","post_modified":"2024-01-06 18:33:13","post_modified_gmt":"2024-01-06 07:33:13","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14888","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14629,"post_author":"15","post_date":"2023-12-15 19:46:11","post_date_gmt":"2023-12-15 08:46:11","post_content":"\n

BlackRock aims to facilitate the participation of Wall Street banks in its potential Bitcoin ETF approval. Recent SEC memo <\/a>detailing a late November meeting involving BlackRock, Nasdaq, and the Commission. During this meeting, they discussed feedback regarding BlackRock's Bitcoin ETF application.<\/p>\n\n\n\n

The proposed approach introduces an innovative method for the redemption of ETF shares. A Bitcoin ETF would enable fund investors to gain exposure to Bitcoin without directly purchasing or storing the cryptocurrency. While the SEC has hesitated to approve such ETFs due to concerns about Bitcoin market manipulation, this new strategy addresses those worries.<\/p>\n\n\n\n

The SEC has yet to decide on BlackRock's iShares Bitcoin Trust (IBTC) application, with the deadline set for January 15. Analysts anticipate a decision will be issued for several spot Bitcoin ETF applications earlier in January.<\/p>\n\n\n\n

See Related:<\/strong><\/em> Fidelity Joins BlackRock\u2019s Push For Ethereum ETF<\/a><\/p>\n\n\n\n

BlackRock ETF Details<\/h2>\n\n\n\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

Excluding the volatile food and energy prices, the core CPI surged by 0.4% in January and increased by 3.9% compared to a year ago, remaining unchanged from December. The forecast had anticipated 0.3% and 3.7%, respectively.<\/p>\n\n\n\n

Consequences Of Inflation<\/h2>\n\n\n\n

Following the inflation data release, traders' bets on a 25 basis point rate reduction in May decreased to 38%, down from approximately 58% before the data. Meanwhile, expectations for June remained at 75%, as indicated by the CME FedWatch tool. Quincy Krosby, chief global strategist at LPL Financial said<\/a>:<\/p>\n\n\n\n

\u201cThe much-anticipated CPI report is a disappointment for those who expected inflation to edge lower allowing the Fed to begin easing rates sooner rather than later. Across the board, numbers were hotter than expected making certain that the Fed will need more data before initiating a rate cutting cycle.\u201d<\/em><\/p>\n\n\n\n

Outside of the jump in shelter costs, the rest of the inflation picture was a mixed bag. Prices for used vehicles dropped by 3.4%, while apparel costs decreased by 0.7%, and medical commodities experienced a 0.6% decline. Conversely, electricity costs saw a 1.2% rise, and airline fares increased by 1.4%.<\/p>\n\n\n\n

In the grocery aisle, ham prices decreased by 3.1%, whereas egg prices surged by 3.4%. Federal Reserve officials anticipate inflation to retreat to their 2% annual target but January's uptick could pose challenges for a central bank aiming to ease its tightest monetary policy stance in over two decades.<\/p>\n","post_title":"Wall Street's Main Indexes Tumbled As Hot Inflation Data Dampened Early Rate-Cut Hopes","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-tumbled-as-hot-inflation-data-dampened-early-rate-cut-hopes","to_ping":"","pinged":"","post_modified":"2024-02-16 22:01:49","post_modified_gmt":"2024-02-16 11:01:49","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15411","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15327,"post_author":"14","post_date":"2024-02-07 19:31:18","post_date_gmt":"2024-02-07 08:31:18","post_content":"\n

Wall Street remains under pressure as Treasury yields climb higher, following Federal Reserve Chair Jerome Powell's resolute stance against market speculation of impending rate cuts. In a recent interview, Powell emphasized the necessity for additional evidence indicating a sustainable decline in inflation before considering lowering interest rates, highlighting that the economy's robustness has effectively mitigated recession risks.<\/p>\n\n\n\n

\"\"
Federal Reserve Chair Jerome Powell emphasized the necessity for additional evidence indicating a sustainable decline in inflation<\/em><\/figcaption><\/figure>\n\n\n\n

In January, job growth in the U.S. picked up pace, and wages saw their most significant increase in nearly two years. These are indications of enduring strength in the labor market, potentially complicating the Federal Reserve's plans to begin cutting interest rates in May. Richard Flynn, managing director at Charles Schwab UK, said:<\/p>\n\n\n\n

\"The strong jobs report indicates that demand in the labor market is higher than expected. While lower interest rates would surely be welcomed, it is becoming increasingly clear that markets and the economy are coping well with the high rate environment, so policymakers are perhaps feeling that the need for monetary policy to ease is less urgent.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>Optimism Among Individual Investors About The Short-Term Outlook Of The U.S. Stock Market Rose To Its Highest Level<\/a><\/p>\n\n\n\n

AAII Sentiment Survey<\/h2>\n\n\n\n

Positive information is that the latest American Association of Individual Investors (AAII) Sentiment Survey showed that optimism among individual investors about the short-term outlook for stocks surged again. American Association of Individual Investors (AAII) reported that bullish sentiment, or expectations that stock prices will rise over the next six months, jumped 9.8 percentage points to 49.1%.<\/p>\n\n\n\n

Bullish sentiment has reached an \"unusually high level,\"<\/em> surpassing its historical average of 37.5% for the 13th consecutive week. The last time optimism was higher was on December 21, 2023, at 52.9%. On the other side, bearish sentiment, or expectations that stock prices will fall over the next six months, decreased by 1.6 percentage points to 24.5%. This sentiment remains below its historical average of 31.0% for the 13th consecutive week.<\/p>\n\n\n\n

Simultaneously, approximately 80% of earnings reports are surpassing analysts' expectations. With results available from nearly half of the S&P 500 companies, including major tech-related firms, overall earnings are projected to have risen by 7.8% in the fourth quarter compared to the same period last year.<\/p>\n\n\n\n

In their latest report on equity client flows, BofA Securities equity and quant strategist Jill Carey Hall said that the previous week saw the largest influx of U.S. equity investments in seven weeks, along with the most substantial private client inflows in over a year. Jill Carey Hall added<\/a>:<\/p>\n\n\n\n

\"Private clients were the biggest buyers of equities last week, led by purchases of ETFs and Tech stocks. Institutional clients were also net buyers after large outflows the week prior, while hedge fund clients were net sellers.\"<\/em><\/p>\n\n\n\n

Investors are actively monitoring earnings and forecasts from big companies against the backdrop of high borrowing costs but remarks from the Fed's policymakers through the week, including voting member Cleveland's Loretta Mester, will also be on investors' watch list.<\/p>\n","post_title":"Fed Chair Jerome Powell Pushed Back Firmly Against Market Speculation Of Imminent Rate Cuts. What To Expect In The Days Ahead?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"fed-chair-jerome-powell-pushed-back-firmly-against-market-speculation-of-imminent-rate-cuts-what-to-expect-in-the-days-ahead","to_ping":"","pinged":"","post_modified":"2024-02-07 19:31:25","post_modified_gmt":"2024-02-07 08:31:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15327","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15225,"post_author":"14","post_date":"2024-02-01 16:33:13","post_date_gmt":"2024-02-01 05:33:13","post_content":"\n

Wall Street's main indexes fell as Alphabet's projections for rising AI costs dented most megacap and chip stocks while the Federal Reserve left interest rates unchanged this Wednesday. Google's parent company experienced a 6.1% decline, resulting in a 3.0% drop in the S&P 500 communication services sector. This occurred following its announcement of holiday-season advertising sales falling short of expectations and its projection of increased spending on artificial intelligence.<\/p>\n\n\n\n

Microsoft (Nasdaq: MSFT) also lost 1.3% after forecasting higher costs to develop new artificial intelligence features, which overshadowed its upbeat quarterly results. Despite the optimistic outlook from the tech pioneers regarding customer enthusiasm for their generative AI-powered products, investors grew concerned about escalating development expenses for these innovative features. These mounting costs tempered their hopes for a significant sales surge from the new technology.<\/p>\n\n\n\n

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

These results and forecasts from big tech names, along with Tesla's growth warning last week, have reignited attention on the risks associated with the significant influence of mega-cap companies in the S&P 500 which has hit record highs in recent weeks. Apple, Meta Platforms, and Amazon.com set to report earnings on Thursday, fell over 1% each.<\/p>\n\n\n\n

See Related: New Bitcoin Core Update May Natively Support Apple M1 Chips<\/a><\/p>\n\n\n\n

Revenue Forecast And Increased Projection<\/h2>\n\n\n\n

It is also important to mention that Advanced Micro Devices saw a 3.3% decline as its first-quarter revenue forecast and increased projection for AI processors fell short of expectations. Other chip stocks including Nvidia, Broadcom, and Marvell dropped over 1% each. The attention of investors was also on the Federal Reserve's initial monetary policy decision of the year, and while it was widely anticipated that the Fed would maintain interest rates, many analysts said that the Fed is taking baby steps toward the cutting. Art Hogan, Chief Market Strategist of B.Riley Wealth, said<\/a>:<\/p>\n\n\n\n

\"Not surprisingly, I don't think the Fed wants to show their hand, especially, when they have a couple of months of data to collect before they need to. The good news is we can forget about any more tightening. The bad news is it's 'when', not 'if', they're going to cut rates, and that 'when' has been pushed out to what had been the fringes of consensus.\"<\/em><\/p>\n\n\n\n

Due to this, markets are showing some immediate disappointment as there's no explicit indication of imminent rate cuts. We're seeing an extremely neutral, non-committal statement from the Federal Reserve this Wednesday.<\/p>\n","post_title":"Wall Street's Main Indexes Fell As Alphabet's Projections For Rising AI Costs Dented Most Mega-Cap And Chip Stocks","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-as-alphabets-projections-for-rising-ai-costs-dented-most-mega-cap-and-chip-stocks","to_ping":"","pinged":"","post_modified":"2024-02-01 16:33:21","post_modified_gmt":"2024-02-01 05:33:21","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15225","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15094,"post_author":"18","post_date":"2024-01-26 02:18:51","post_date_gmt":"2024-01-25 15:18:51","post_content":"\n

As we enter the last week of January, whispers on Wall Street suggest a potential tantrum in U.S. short-term financing markets, with the storm possibly hitting as early as March. This could prompt the Federal Reserve to reassess its policies.<\/p>\n\n\n\n

As of now, banking executives are anticipating a series of events that may tighten the screws on short-term financing. The expiration of a Fed lending facility on March 11, coupled with limited adoption of the standing repo facility (SRF), is expected to reduce the available funding sources for banks. Simultaneously, increased demand for liquidity is on the horizon due to substantial U.S. government debt issuance and upcoming tax payments in March and April. Additionally, a move toward faster trade settlement in May could intensify the demand for short-term funding.<\/p>\n\n\n\n

Against this backdrop, the Federal Reserve has been steadily draining cash from the financial system by unwinding pandemic-era support. BNY Mellon strategists estimate a significant decrease in cash parked overnight with the Fed, potentially dropping below $200 billion by May. The overnight reverse repurchase agreements facility could even approach zero by mid-year. This reduction in excess liquidity may expose vulnerabilities in short-term financing markets.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Storm Clouds Gather Over Germany's Financial Horizon<\/a><\/p>\n\n\n\n

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

Spikes In Short Term Financing Markets<\/h2>\n\n\n\n

Sudden spikes in short-term financing markets can threaten financial stability, making it harder and more expensive for firms to secure necessary funds. This situation could expose lenders struggling to stabilize deposits after last year's banking crisis. As the Fed inches closer to its 2% inflation target, the risk of policy error looms large.<\/p>\n\n\n\n

If short-term financing markets experience a meltdown, it could signal the need for the Fed to ease policy. Slowing the pace of quantitative tightening (QT) is seen as a potential response. Despite the central bankers' insistence on needing more data before rate cuts, markets are already pricing in cuts by May.<\/p>\n\n\n\n

As we approach the critical months of March to May, the financial markets are at a crossroads. The potential shake-up in short-term financing markets could signal the Fed to reassess its policies. Market participants and investors must stay vigilant, and prepared for potential shifts in liquidity and policy adjustments. The coming months will \/reveal whether these concerns materialize into a significant market event or remain a contained storm in the financial teacup.<\/p>\n","post_title":"Understanding The Potential Shake-Up In U.S. Short-Term Financing Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"understanding-the-potential-shake-up-in-u-s-short-term-financing-markets","to_ping":"","pinged":"","post_modified":"2024-01-26 20:20:06","post_modified_gmt":"2024-01-26 09:20:06","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15094","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15043,"post_author":"14","post_date":"2024-01-19 05:56:40","post_date_gmt":"2024-01-18 18:56:40","post_content":"\n

Wall Street witnessed a significant stock decline this Wednesday following positive December U.S. retail sales data, which diminished the anticipation of an early initiation of the Federal Reserve's campaign to cut interest rates.<\/p>\n\n\n\n

Retail Sales Report <\/h2>\n\n\n\n

The December retail sales report from the Commerce Department (USRSL=ECI) depicted a robust consumer, responsible for approximately 70% of the U.S. economy. Despite facing the challenges of high inflation and a tight monetary policy, the consumer has shown resilience.<\/p>\n\n\n\n

The data revealed that discounts offered by retailers and a surge in motor vehicle acquisitions contributed to a greater-than-anticipated increase in U.S. retail sales, maintaining the economy on a robust trajectory in 2024. This bolstered the perspective that the Federal Reserve might not reduce interest rates as rapidly as initially anticipated for the current year.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

Anticipations among traders for a 25-basis-point Federal Reserve rate cut in March declined to 55%, down from approximately 60% before the release of the retail sales data. Ryan Detrick, chief market strategist at Carson Group in Omaha, said<\/a>:<\/p>\n\n\n\n

\"We had news that the U.S. consumer continues to be quite healthy, but that has increased anxiety that the Fed\u2019s first rate cut could potentially be pushed to May from March. Yields are also moving higher on the strong retail sales numbers, adding to near-term worries.\"<\/em><\/p>\n\n\n\n

US Stocks And Wall Street<\/h2>\n\n\n\n

It is also important to mention that a decline in U.S. stocks sent Wall Street's<\/a> \"fear gauge\" to a two-month high while JPMorgan analysts predict that the majority of negative consequences stemming from higher interest rates have not materialized yet. On Tuesday, Federal Reserve Governor Christopher Waller also emphasized that the central bank should refrain from hastily reducing interest rates until there is a clear indication that lower inflation is likely to persist.<\/p>\n\n\n\n

At the same time, the escalation of geopolitical uncertainties introduces an additional challenge and heightens the potential for unforeseen risks in both markets and economic performance. Considering these factors, the perspective is likely to stay cautious as long as interest rates remain significantly restrictive and the looming presence of geopolitical risks persists.<\/p>\n","post_title":"Wall Street Weakened As Retail Sales Data Hampers Expectations For A Cut In Interest Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-weakened-as-retail-sales-data-hampers-expectations-for-a-cut-in-interest-rates","to_ping":"","pinged":"","post_modified":"2024-01-19 05:56:51","post_modified_gmt":"2024-01-18 18:56:51","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15043","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14931,"post_author":"18","post_date":"2024-01-10 07:51:17","post_date_gmt":"2024-01-09 20:51:17","post_content":"\n

In a recent survey conducted by the New York Federal Reserve<\/a>, Wall Street's major banks have recalibrated their predictions regarding the Federal Reserve's balance sheet drawdown. This shift suggests that the U.S. central bank might conclude its quantitative tightening (QT) process later than initially anticipated.<\/p>\n\n\n\n

A Change in Perspective<\/h2>\n\n\n\n

Previously, primary dealers\u2014major banks\u2014projected that the QT process would conclude by the third quarter. However, the sentiment has evolved. According to the latest survey taken before the Fed's December 12-13 policy meeting, these banks now foresee the QT process ending in the fourth quarter.<\/p>\n\n\n\n

This adjustment carries significant implications. If these predictions materialize, the Federal Reserve's balance sheet<\/a> will likely shrink to approximately $6.75 trillion, down from its current level of roughly $7.764 trillion. Moreover, banks estimated that the central bank's reverse repo facility would hold $375 billion when QT concludes, a reduction from the anticipated $625 billion as forecasted in October.<\/p>\n\n\n\n

Federal Reserve Strategy<\/h2>\n\n\n\n

The quantitative tightening process has been an integral part of the Federal Reserve's strategy to combat inflation. Alongside rate hikes, the central bank initiated large-scale purchases of Treasury bonds and mortgage-backed securities during the COVID-19 pandemic's onset in 2020. This move led to an expansion of its holdings to approximately $9 trillion by mid-2022. However, since last year, the Fed has been gradually reducing its balance sheet size, although specific guidance on the timeline remains somewhat ambiguous.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

What This Means for the Economy<\/h2>\n\n\n\n

The recalibrated timeline for QT indicates a more prolonged period of balance sheet reduction. As the Federal Reserve continues to navigate its policy decisions, market participants, businesses, and consumers should monitor these developments closely. Changes in the balance sheet size can influence interest rates, liquidity conditions, and overall financial market dynamics.<\/p>\n\n\n\n

A Technical Perspective<\/h2>\n\n\n\n

From a technical standpoint, the Federal Reserve's<\/a> balance sheet management serves as a critical tool in its monetary policy arsenal. The evolving predictions by Wall Street's primary dealers underscore the complexities involved in forecasting economic variables, such as inflation and interest rates.<\/p>\n\n\n\n

As the QT process continues, policymakers and market participants must remain vigilant, considering the potential ramifications for financial stability and economic growth. This dynamic landscape necessitates ongoing analysis and adaptation to ensure that monetary policy objectives align with evolving economic conditions.<\/p>\n","post_title":"Decoding Wall Street's Shift: A Closer Look At Wall Street's Changing Perspective","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"decoding-wall-streets-shift-a-closer-look-at-wall-streets-changing-perspective","to_ping":"","pinged":"","post_modified":"2024-01-10 07:51:25","post_modified_gmt":"2024-01-09 20:51:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14931","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14888,"post_author":"14","post_date":"2024-01-06 18:33:09","post_date_gmt":"2024-01-06 07:33:09","post_content":"\n

Wall Street's main indexes fell at the beginning of the 2024 year as investors locked in profits after a very successful 2023 and are currently waiting for the Federal Reserve's<\/a> meeting that could offer hints on its interest rate path. Ken Polcari, managing partner at Kace Capital Advisors, said:<\/p>\n\n\n\n

\"The decline yesterday, today, and maybe for the next couple of weeks, is a result of people locking in profits and reconsidering what the narrative is - are rates going down five or six times as it appeared to be at the end of last year?\"<\/em><\/p>\n\n\n\n

\"\"
The Nasdaq Composite kicked off the year with a 1.5% drop pressured by a selloff in the tech sector<\/figcaption><\/figure>\n\n\n\n

The Fed's December meeting minutes are set to be disclosed at 2:00 p.m. ET, potentially providing information regarding the central bank's shift toward reducing interest rates. Although it's widely anticipated that the Fed will keep interest rates unchanged this month, traders have priced in a 65.7% probability of a 25 basis point rate reduction in March, according to CMEGroup's FedWatch tool.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures<\/a><\/p>\n\n\n\n

Central Bank And Inflation<\/h2>\n\n\n\n

Richmond Fed President Thomas Barkin, a voting member in the FOMC's rate-setting committee, said recently that the U.S. central bank is \"making real progress\" towards taming inflation and a soft landing seeming \"increasingly conceivable\". Encouragingly, the American Association of Individual Investors (AAII) Sentiment Survey indicated a surge in optimism among individual investors regarding the short-term outlook for the U.S. stock market, reaching its peak level in more than two and a half years.<\/p>\n\n\n\n

Despite this, JPMorgan Asset Management advises investors to be cautious due to potential recession risks. At the same time, analysts at Soci\u00e9t\u00e9 G\u00e9n\u00e9rale anticipate a turbulent 2024 for U.S. stocks, projecting fluctuations that could involve nearing recent highs, encountering declines, and subsequently rebounding.<\/p>\n\n\n\n

This week will witness a series of labor market data releases, culminating in the government's December employment report on Friday. These reports could significantly influence the forecast for the Fed's interest rate trajectory this year, prompting investors to scrutinize the data. Jeffrey Roach, chief economist at LPL Financial, added<\/a>:<\/p>\n\n\n\n

 \"The job market is cooling and we should see confirmation of that in this Friday\u2019s jobs report\"<\/em><\/p>\n\n\n\n

Following the progress of Wall Street's main indexes seen last year, investors are still optimistic about the prospect of another robust year ahead. This optimism is rooted in the anticipation that a decelerating economy will result in a gentle landing rather than a full-scale recession, especially as the Fed initiates rate cuts in the first half of 2024.<\/p>\n","post_title":"Wall Street's Main Indexes Fell At The Beginning Of 2024 year. Investors Locked In Profits After A Strong 2023 And Wait For The Federal Reserve's Meeting","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-at-the-beginning-of-2024-year-investors-locked-in-profits-after-a-strong-2023-and-wait-for-the-federal-reserves-meeting","to_ping":"","pinged":"","post_modified":"2024-01-06 18:33:13","post_modified_gmt":"2024-01-06 07:33:13","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14888","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14629,"post_author":"15","post_date":"2023-12-15 19:46:11","post_date_gmt":"2023-12-15 08:46:11","post_content":"\n

BlackRock aims to facilitate the participation of Wall Street banks in its potential Bitcoin ETF approval. Recent SEC memo <\/a>detailing a late November meeting involving BlackRock, Nasdaq, and the Commission. During this meeting, they discussed feedback regarding BlackRock's Bitcoin ETF application.<\/p>\n\n\n\n

The proposed approach introduces an innovative method for the redemption of ETF shares. A Bitcoin ETF would enable fund investors to gain exposure to Bitcoin without directly purchasing or storing the cryptocurrency. While the SEC has hesitated to approve such ETFs due to concerns about Bitcoin market manipulation, this new strategy addresses those worries.<\/p>\n\n\n\n

The SEC has yet to decide on BlackRock's iShares Bitcoin Trust (IBTC) application, with the deadline set for January 15. Analysts anticipate a decision will be issued for several spot Bitcoin ETF applications earlier in January.<\/p>\n\n\n\n

See Related:<\/strong><\/em> Fidelity Joins BlackRock\u2019s Push For Ethereum ETF<\/a><\/p>\n\n\n\n

BlackRock ETF Details<\/h2>\n\n\n\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

On a 12-month basis, the consumer price index came out to 3.1%, down from 3.4% in December but economists surveyed by Dow Jones had been looking for a monthly increase of 0.2% and an annual gain of 2.9%.<\/p>\n\n\n\n

Excluding the volatile food and energy prices, the core CPI surged by 0.4% in January and increased by 3.9% compared to a year ago, remaining unchanged from December. The forecast had anticipated 0.3% and 3.7%, respectively.<\/p>\n\n\n\n

Consequences Of Inflation<\/h2>\n\n\n\n

Following the inflation data release, traders' bets on a 25 basis point rate reduction in May decreased to 38%, down from approximately 58% before the data. Meanwhile, expectations for June remained at 75%, as indicated by the CME FedWatch tool. Quincy Krosby, chief global strategist at LPL Financial said<\/a>:<\/p>\n\n\n\n

\u201cThe much-anticipated CPI report is a disappointment for those who expected inflation to edge lower allowing the Fed to begin easing rates sooner rather than later. Across the board, numbers were hotter than expected making certain that the Fed will need more data before initiating a rate cutting cycle.\u201d<\/em><\/p>\n\n\n\n

Outside of the jump in shelter costs, the rest of the inflation picture was a mixed bag. Prices for used vehicles dropped by 3.4%, while apparel costs decreased by 0.7%, and medical commodities experienced a 0.6% decline. Conversely, electricity costs saw a 1.2% rise, and airline fares increased by 1.4%.<\/p>\n\n\n\n

In the grocery aisle, ham prices decreased by 3.1%, whereas egg prices surged by 3.4%. Federal Reserve officials anticipate inflation to retreat to their 2% annual target but January's uptick could pose challenges for a central bank aiming to ease its tightest monetary policy stance in over two decades.<\/p>\n","post_title":"Wall Street's Main Indexes Tumbled As Hot Inflation Data Dampened Early Rate-Cut Hopes","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-tumbled-as-hot-inflation-data-dampened-early-rate-cut-hopes","to_ping":"","pinged":"","post_modified":"2024-02-16 22:01:49","post_modified_gmt":"2024-02-16 11:01:49","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15411","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15327,"post_author":"14","post_date":"2024-02-07 19:31:18","post_date_gmt":"2024-02-07 08:31:18","post_content":"\n

Wall Street remains under pressure as Treasury yields climb higher, following Federal Reserve Chair Jerome Powell's resolute stance against market speculation of impending rate cuts. In a recent interview, Powell emphasized the necessity for additional evidence indicating a sustainable decline in inflation before considering lowering interest rates, highlighting that the economy's robustness has effectively mitigated recession risks.<\/p>\n\n\n\n

\"\"
Federal Reserve Chair Jerome Powell emphasized the necessity for additional evidence indicating a sustainable decline in inflation<\/em><\/figcaption><\/figure>\n\n\n\n

In January, job growth in the U.S. picked up pace, and wages saw their most significant increase in nearly two years. These are indications of enduring strength in the labor market, potentially complicating the Federal Reserve's plans to begin cutting interest rates in May. Richard Flynn, managing director at Charles Schwab UK, said:<\/p>\n\n\n\n

\"The strong jobs report indicates that demand in the labor market is higher than expected. While lower interest rates would surely be welcomed, it is becoming increasingly clear that markets and the economy are coping well with the high rate environment, so policymakers are perhaps feeling that the need for monetary policy to ease is less urgent.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>Optimism Among Individual Investors About The Short-Term Outlook Of The U.S. Stock Market Rose To Its Highest Level<\/a><\/p>\n\n\n\n

AAII Sentiment Survey<\/h2>\n\n\n\n

Positive information is that the latest American Association of Individual Investors (AAII) Sentiment Survey showed that optimism among individual investors about the short-term outlook for stocks surged again. American Association of Individual Investors (AAII) reported that bullish sentiment, or expectations that stock prices will rise over the next six months, jumped 9.8 percentage points to 49.1%.<\/p>\n\n\n\n

Bullish sentiment has reached an \"unusually high level,\"<\/em> surpassing its historical average of 37.5% for the 13th consecutive week. The last time optimism was higher was on December 21, 2023, at 52.9%. On the other side, bearish sentiment, or expectations that stock prices will fall over the next six months, decreased by 1.6 percentage points to 24.5%. This sentiment remains below its historical average of 31.0% for the 13th consecutive week.<\/p>\n\n\n\n

Simultaneously, approximately 80% of earnings reports are surpassing analysts' expectations. With results available from nearly half of the S&P 500 companies, including major tech-related firms, overall earnings are projected to have risen by 7.8% in the fourth quarter compared to the same period last year.<\/p>\n\n\n\n

In their latest report on equity client flows, BofA Securities equity and quant strategist Jill Carey Hall said that the previous week saw the largest influx of U.S. equity investments in seven weeks, along with the most substantial private client inflows in over a year. Jill Carey Hall added<\/a>:<\/p>\n\n\n\n

\"Private clients were the biggest buyers of equities last week, led by purchases of ETFs and Tech stocks. Institutional clients were also net buyers after large outflows the week prior, while hedge fund clients were net sellers.\"<\/em><\/p>\n\n\n\n

Investors are actively monitoring earnings and forecasts from big companies against the backdrop of high borrowing costs but remarks from the Fed's policymakers through the week, including voting member Cleveland's Loretta Mester, will also be on investors' watch list.<\/p>\n","post_title":"Fed Chair Jerome Powell Pushed Back Firmly Against Market Speculation Of Imminent Rate Cuts. What To Expect In The Days Ahead?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"fed-chair-jerome-powell-pushed-back-firmly-against-market-speculation-of-imminent-rate-cuts-what-to-expect-in-the-days-ahead","to_ping":"","pinged":"","post_modified":"2024-02-07 19:31:25","post_modified_gmt":"2024-02-07 08:31:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15327","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15225,"post_author":"14","post_date":"2024-02-01 16:33:13","post_date_gmt":"2024-02-01 05:33:13","post_content":"\n

Wall Street's main indexes fell as Alphabet's projections for rising AI costs dented most megacap and chip stocks while the Federal Reserve left interest rates unchanged this Wednesday. Google's parent company experienced a 6.1% decline, resulting in a 3.0% drop in the S&P 500 communication services sector. This occurred following its announcement of holiday-season advertising sales falling short of expectations and its projection of increased spending on artificial intelligence.<\/p>\n\n\n\n

Microsoft (Nasdaq: MSFT) also lost 1.3% after forecasting higher costs to develop new artificial intelligence features, which overshadowed its upbeat quarterly results. Despite the optimistic outlook from the tech pioneers regarding customer enthusiasm for their generative AI-powered products, investors grew concerned about escalating development expenses for these innovative features. These mounting costs tempered their hopes for a significant sales surge from the new technology.<\/p>\n\n\n\n

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

These results and forecasts from big tech names, along with Tesla's growth warning last week, have reignited attention on the risks associated with the significant influence of mega-cap companies in the S&P 500 which has hit record highs in recent weeks. Apple, Meta Platforms, and Amazon.com set to report earnings on Thursday, fell over 1% each.<\/p>\n\n\n\n

See Related: New Bitcoin Core Update May Natively Support Apple M1 Chips<\/a><\/p>\n\n\n\n

Revenue Forecast And Increased Projection<\/h2>\n\n\n\n

It is also important to mention that Advanced Micro Devices saw a 3.3% decline as its first-quarter revenue forecast and increased projection for AI processors fell short of expectations. Other chip stocks including Nvidia, Broadcom, and Marvell dropped over 1% each. The attention of investors was also on the Federal Reserve's initial monetary policy decision of the year, and while it was widely anticipated that the Fed would maintain interest rates, many analysts said that the Fed is taking baby steps toward the cutting. Art Hogan, Chief Market Strategist of B.Riley Wealth, said<\/a>:<\/p>\n\n\n\n

\"Not surprisingly, I don't think the Fed wants to show their hand, especially, when they have a couple of months of data to collect before they need to. The good news is we can forget about any more tightening. The bad news is it's 'when', not 'if', they're going to cut rates, and that 'when' has been pushed out to what had been the fringes of consensus.\"<\/em><\/p>\n\n\n\n

Due to this, markets are showing some immediate disappointment as there's no explicit indication of imminent rate cuts. We're seeing an extremely neutral, non-committal statement from the Federal Reserve this Wednesday.<\/p>\n","post_title":"Wall Street's Main Indexes Fell As Alphabet's Projections For Rising AI Costs Dented Most Mega-Cap And Chip Stocks","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-as-alphabets-projections-for-rising-ai-costs-dented-most-mega-cap-and-chip-stocks","to_ping":"","pinged":"","post_modified":"2024-02-01 16:33:21","post_modified_gmt":"2024-02-01 05:33:21","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15225","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15094,"post_author":"18","post_date":"2024-01-26 02:18:51","post_date_gmt":"2024-01-25 15:18:51","post_content":"\n

As we enter the last week of January, whispers on Wall Street suggest a potential tantrum in U.S. short-term financing markets, with the storm possibly hitting as early as March. This could prompt the Federal Reserve to reassess its policies.<\/p>\n\n\n\n

As of now, banking executives are anticipating a series of events that may tighten the screws on short-term financing. The expiration of a Fed lending facility on March 11, coupled with limited adoption of the standing repo facility (SRF), is expected to reduce the available funding sources for banks. Simultaneously, increased demand for liquidity is on the horizon due to substantial U.S. government debt issuance and upcoming tax payments in March and April. Additionally, a move toward faster trade settlement in May could intensify the demand for short-term funding.<\/p>\n\n\n\n

Against this backdrop, the Federal Reserve has been steadily draining cash from the financial system by unwinding pandemic-era support. BNY Mellon strategists estimate a significant decrease in cash parked overnight with the Fed, potentially dropping below $200 billion by May. The overnight reverse repurchase agreements facility could even approach zero by mid-year. This reduction in excess liquidity may expose vulnerabilities in short-term financing markets.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Storm Clouds Gather Over Germany's Financial Horizon<\/a><\/p>\n\n\n\n

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

Spikes In Short Term Financing Markets<\/h2>\n\n\n\n

Sudden spikes in short-term financing markets can threaten financial stability, making it harder and more expensive for firms to secure necessary funds. This situation could expose lenders struggling to stabilize deposits after last year's banking crisis. As the Fed inches closer to its 2% inflation target, the risk of policy error looms large.<\/p>\n\n\n\n

If short-term financing markets experience a meltdown, it could signal the need for the Fed to ease policy. Slowing the pace of quantitative tightening (QT) is seen as a potential response. Despite the central bankers' insistence on needing more data before rate cuts, markets are already pricing in cuts by May.<\/p>\n\n\n\n

As we approach the critical months of March to May, the financial markets are at a crossroads. The potential shake-up in short-term financing markets could signal the Fed to reassess its policies. Market participants and investors must stay vigilant, and prepared for potential shifts in liquidity and policy adjustments. The coming months will \/reveal whether these concerns materialize into a significant market event or remain a contained storm in the financial teacup.<\/p>\n","post_title":"Understanding The Potential Shake-Up In U.S. Short-Term Financing Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"understanding-the-potential-shake-up-in-u-s-short-term-financing-markets","to_ping":"","pinged":"","post_modified":"2024-01-26 20:20:06","post_modified_gmt":"2024-01-26 09:20:06","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15094","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15043,"post_author":"14","post_date":"2024-01-19 05:56:40","post_date_gmt":"2024-01-18 18:56:40","post_content":"\n

Wall Street witnessed a significant stock decline this Wednesday following positive December U.S. retail sales data, which diminished the anticipation of an early initiation of the Federal Reserve's campaign to cut interest rates.<\/p>\n\n\n\n

Retail Sales Report <\/h2>\n\n\n\n

The December retail sales report from the Commerce Department (USRSL=ECI) depicted a robust consumer, responsible for approximately 70% of the U.S. economy. Despite facing the challenges of high inflation and a tight monetary policy, the consumer has shown resilience.<\/p>\n\n\n\n

The data revealed that discounts offered by retailers and a surge in motor vehicle acquisitions contributed to a greater-than-anticipated increase in U.S. retail sales, maintaining the economy on a robust trajectory in 2024. This bolstered the perspective that the Federal Reserve might not reduce interest rates as rapidly as initially anticipated for the current year.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

Anticipations among traders for a 25-basis-point Federal Reserve rate cut in March declined to 55%, down from approximately 60% before the release of the retail sales data. Ryan Detrick, chief market strategist at Carson Group in Omaha, said<\/a>:<\/p>\n\n\n\n

\"We had news that the U.S. consumer continues to be quite healthy, but that has increased anxiety that the Fed\u2019s first rate cut could potentially be pushed to May from March. Yields are also moving higher on the strong retail sales numbers, adding to near-term worries.\"<\/em><\/p>\n\n\n\n

US Stocks And Wall Street<\/h2>\n\n\n\n

It is also important to mention that a decline in U.S. stocks sent Wall Street's<\/a> \"fear gauge\" to a two-month high while JPMorgan analysts predict that the majority of negative consequences stemming from higher interest rates have not materialized yet. On Tuesday, Federal Reserve Governor Christopher Waller also emphasized that the central bank should refrain from hastily reducing interest rates until there is a clear indication that lower inflation is likely to persist.<\/p>\n\n\n\n

At the same time, the escalation of geopolitical uncertainties introduces an additional challenge and heightens the potential for unforeseen risks in both markets and economic performance. Considering these factors, the perspective is likely to stay cautious as long as interest rates remain significantly restrictive and the looming presence of geopolitical risks persists.<\/p>\n","post_title":"Wall Street Weakened As Retail Sales Data Hampers Expectations For A Cut In Interest Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-weakened-as-retail-sales-data-hampers-expectations-for-a-cut-in-interest-rates","to_ping":"","pinged":"","post_modified":"2024-01-19 05:56:51","post_modified_gmt":"2024-01-18 18:56:51","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15043","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14931,"post_author":"18","post_date":"2024-01-10 07:51:17","post_date_gmt":"2024-01-09 20:51:17","post_content":"\n

In a recent survey conducted by the New York Federal Reserve<\/a>, Wall Street's major banks have recalibrated their predictions regarding the Federal Reserve's balance sheet drawdown. This shift suggests that the U.S. central bank might conclude its quantitative tightening (QT) process later than initially anticipated.<\/p>\n\n\n\n

A Change in Perspective<\/h2>\n\n\n\n

Previously, primary dealers\u2014major banks\u2014projected that the QT process would conclude by the third quarter. However, the sentiment has evolved. According to the latest survey taken before the Fed's December 12-13 policy meeting, these banks now foresee the QT process ending in the fourth quarter.<\/p>\n\n\n\n

This adjustment carries significant implications. If these predictions materialize, the Federal Reserve's balance sheet<\/a> will likely shrink to approximately $6.75 trillion, down from its current level of roughly $7.764 trillion. Moreover, banks estimated that the central bank's reverse repo facility would hold $375 billion when QT concludes, a reduction from the anticipated $625 billion as forecasted in October.<\/p>\n\n\n\n

Federal Reserve Strategy<\/h2>\n\n\n\n

The quantitative tightening process has been an integral part of the Federal Reserve's strategy to combat inflation. Alongside rate hikes, the central bank initiated large-scale purchases of Treasury bonds and mortgage-backed securities during the COVID-19 pandemic's onset in 2020. This move led to an expansion of its holdings to approximately $9 trillion by mid-2022. However, since last year, the Fed has been gradually reducing its balance sheet size, although specific guidance on the timeline remains somewhat ambiguous.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

What This Means for the Economy<\/h2>\n\n\n\n

The recalibrated timeline for QT indicates a more prolonged period of balance sheet reduction. As the Federal Reserve continues to navigate its policy decisions, market participants, businesses, and consumers should monitor these developments closely. Changes in the balance sheet size can influence interest rates, liquidity conditions, and overall financial market dynamics.<\/p>\n\n\n\n

A Technical Perspective<\/h2>\n\n\n\n

From a technical standpoint, the Federal Reserve's<\/a> balance sheet management serves as a critical tool in its monetary policy arsenal. The evolving predictions by Wall Street's primary dealers underscore the complexities involved in forecasting economic variables, such as inflation and interest rates.<\/p>\n\n\n\n

As the QT process continues, policymakers and market participants must remain vigilant, considering the potential ramifications for financial stability and economic growth. This dynamic landscape necessitates ongoing analysis and adaptation to ensure that monetary policy objectives align with evolving economic conditions.<\/p>\n","post_title":"Decoding Wall Street's Shift: A Closer Look At Wall Street's Changing Perspective","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"decoding-wall-streets-shift-a-closer-look-at-wall-streets-changing-perspective","to_ping":"","pinged":"","post_modified":"2024-01-10 07:51:25","post_modified_gmt":"2024-01-09 20:51:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14931","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14888,"post_author":"14","post_date":"2024-01-06 18:33:09","post_date_gmt":"2024-01-06 07:33:09","post_content":"\n

Wall Street's main indexes fell at the beginning of the 2024 year as investors locked in profits after a very successful 2023 and are currently waiting for the Federal Reserve's<\/a> meeting that could offer hints on its interest rate path. Ken Polcari, managing partner at Kace Capital Advisors, said:<\/p>\n\n\n\n

\"The decline yesterday, today, and maybe for the next couple of weeks, is a result of people locking in profits and reconsidering what the narrative is - are rates going down five or six times as it appeared to be at the end of last year?\"<\/em><\/p>\n\n\n\n

\"\"
The Nasdaq Composite kicked off the year with a 1.5% drop pressured by a selloff in the tech sector<\/figcaption><\/figure>\n\n\n\n

The Fed's December meeting minutes are set to be disclosed at 2:00 p.m. ET, potentially providing information regarding the central bank's shift toward reducing interest rates. Although it's widely anticipated that the Fed will keep interest rates unchanged this month, traders have priced in a 65.7% probability of a 25 basis point rate reduction in March, according to CMEGroup's FedWatch tool.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures<\/a><\/p>\n\n\n\n

Central Bank And Inflation<\/h2>\n\n\n\n

Richmond Fed President Thomas Barkin, a voting member in the FOMC's rate-setting committee, said recently that the U.S. central bank is \"making real progress\" towards taming inflation and a soft landing seeming \"increasingly conceivable\". Encouragingly, the American Association of Individual Investors (AAII) Sentiment Survey indicated a surge in optimism among individual investors regarding the short-term outlook for the U.S. stock market, reaching its peak level in more than two and a half years.<\/p>\n\n\n\n

Despite this, JPMorgan Asset Management advises investors to be cautious due to potential recession risks. At the same time, analysts at Soci\u00e9t\u00e9 G\u00e9n\u00e9rale anticipate a turbulent 2024 for U.S. stocks, projecting fluctuations that could involve nearing recent highs, encountering declines, and subsequently rebounding.<\/p>\n\n\n\n

This week will witness a series of labor market data releases, culminating in the government's December employment report on Friday. These reports could significantly influence the forecast for the Fed's interest rate trajectory this year, prompting investors to scrutinize the data. Jeffrey Roach, chief economist at LPL Financial, added<\/a>:<\/p>\n\n\n\n

 \"The job market is cooling and we should see confirmation of that in this Friday\u2019s jobs report\"<\/em><\/p>\n\n\n\n

Following the progress of Wall Street's main indexes seen last year, investors are still optimistic about the prospect of another robust year ahead. This optimism is rooted in the anticipation that a decelerating economy will result in a gentle landing rather than a full-scale recession, especially as the Fed initiates rate cuts in the first half of 2024.<\/p>\n","post_title":"Wall Street's Main Indexes Fell At The Beginning Of 2024 year. Investors Locked In Profits After A Strong 2023 And Wait For The Federal Reserve's Meeting","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-at-the-beginning-of-2024-year-investors-locked-in-profits-after-a-strong-2023-and-wait-for-the-federal-reserves-meeting","to_ping":"","pinged":"","post_modified":"2024-01-06 18:33:13","post_modified_gmt":"2024-01-06 07:33:13","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14888","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14629,"post_author":"15","post_date":"2023-12-15 19:46:11","post_date_gmt":"2023-12-15 08:46:11","post_content":"\n

BlackRock aims to facilitate the participation of Wall Street banks in its potential Bitcoin ETF approval. Recent SEC memo <\/a>detailing a late November meeting involving BlackRock, Nasdaq, and the Commission. During this meeting, they discussed feedback regarding BlackRock's Bitcoin ETF application.<\/p>\n\n\n\n

The proposed approach introduces an innovative method for the redemption of ETF shares. A Bitcoin ETF would enable fund investors to gain exposure to Bitcoin without directly purchasing or storing the cryptocurrency. While the SEC has hesitated to approve such ETFs due to concerns about Bitcoin market manipulation, this new strategy addresses those worries.<\/p>\n\n\n\n

The SEC has yet to decide on BlackRock's iShares Bitcoin Trust (IBTC) application, with the deadline set for January 15. Analysts anticipate a decision will be issued for several spot Bitcoin ETF applications earlier in January.<\/p>\n\n\n\n

See Related:<\/strong><\/em> Fidelity Joins BlackRock\u2019s Push For Ethereum ETF<\/a><\/p>\n\n\n\n

BlackRock ETF Details<\/h2>\n\n\n\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n
\"\"<\/figure>\n\n\n\n

On a 12-month basis, the consumer price index came out to 3.1%, down from 3.4% in December but economists surveyed by Dow Jones had been looking for a monthly increase of 0.2% and an annual gain of 2.9%.<\/p>\n\n\n\n

Excluding the volatile food and energy prices, the core CPI surged by 0.4% in January and increased by 3.9% compared to a year ago, remaining unchanged from December. The forecast had anticipated 0.3% and 3.7%, respectively.<\/p>\n\n\n\n

Consequences Of Inflation<\/h2>\n\n\n\n

Following the inflation data release, traders' bets on a 25 basis point rate reduction in May decreased to 38%, down from approximately 58% before the data. Meanwhile, expectations for June remained at 75%, as indicated by the CME FedWatch tool. Quincy Krosby, chief global strategist at LPL Financial said<\/a>:<\/p>\n\n\n\n

\u201cThe much-anticipated CPI report is a disappointment for those who expected inflation to edge lower allowing the Fed to begin easing rates sooner rather than later. Across the board, numbers were hotter than expected making certain that the Fed will need more data before initiating a rate cutting cycle.\u201d<\/em><\/p>\n\n\n\n

Outside of the jump in shelter costs, the rest of the inflation picture was a mixed bag. Prices for used vehicles dropped by 3.4%, while apparel costs decreased by 0.7%, and medical commodities experienced a 0.6% decline. Conversely, electricity costs saw a 1.2% rise, and airline fares increased by 1.4%.<\/p>\n\n\n\n

In the grocery aisle, ham prices decreased by 3.1%, whereas egg prices surged by 3.4%. Federal Reserve officials anticipate inflation to retreat to their 2% annual target but January's uptick could pose challenges for a central bank aiming to ease its tightest monetary policy stance in over two decades.<\/p>\n","post_title":"Wall Street's Main Indexes Tumbled As Hot Inflation Data Dampened Early Rate-Cut Hopes","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-tumbled-as-hot-inflation-data-dampened-early-rate-cut-hopes","to_ping":"","pinged":"","post_modified":"2024-02-16 22:01:49","post_modified_gmt":"2024-02-16 11:01:49","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15411","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15327,"post_author":"14","post_date":"2024-02-07 19:31:18","post_date_gmt":"2024-02-07 08:31:18","post_content":"\n

Wall Street remains under pressure as Treasury yields climb higher, following Federal Reserve Chair Jerome Powell's resolute stance against market speculation of impending rate cuts. In a recent interview, Powell emphasized the necessity for additional evidence indicating a sustainable decline in inflation before considering lowering interest rates, highlighting that the economy's robustness has effectively mitigated recession risks.<\/p>\n\n\n\n

\"\"
Federal Reserve Chair Jerome Powell emphasized the necessity for additional evidence indicating a sustainable decline in inflation<\/em><\/figcaption><\/figure>\n\n\n\n

In January, job growth in the U.S. picked up pace, and wages saw their most significant increase in nearly two years. These are indications of enduring strength in the labor market, potentially complicating the Federal Reserve's plans to begin cutting interest rates in May. Richard Flynn, managing director at Charles Schwab UK, said:<\/p>\n\n\n\n

\"The strong jobs report indicates that demand in the labor market is higher than expected. While lower interest rates would surely be welcomed, it is becoming increasingly clear that markets and the economy are coping well with the high rate environment, so policymakers are perhaps feeling that the need for monetary policy to ease is less urgent.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>Optimism Among Individual Investors About The Short-Term Outlook Of The U.S. Stock Market Rose To Its Highest Level<\/a><\/p>\n\n\n\n

AAII Sentiment Survey<\/h2>\n\n\n\n

Positive information is that the latest American Association of Individual Investors (AAII) Sentiment Survey showed that optimism among individual investors about the short-term outlook for stocks surged again. American Association of Individual Investors (AAII) reported that bullish sentiment, or expectations that stock prices will rise over the next six months, jumped 9.8 percentage points to 49.1%.<\/p>\n\n\n\n

Bullish sentiment has reached an \"unusually high level,\"<\/em> surpassing its historical average of 37.5% for the 13th consecutive week. The last time optimism was higher was on December 21, 2023, at 52.9%. On the other side, bearish sentiment, or expectations that stock prices will fall over the next six months, decreased by 1.6 percentage points to 24.5%. This sentiment remains below its historical average of 31.0% for the 13th consecutive week.<\/p>\n\n\n\n

Simultaneously, approximately 80% of earnings reports are surpassing analysts' expectations. With results available from nearly half of the S&P 500 companies, including major tech-related firms, overall earnings are projected to have risen by 7.8% in the fourth quarter compared to the same period last year.<\/p>\n\n\n\n

In their latest report on equity client flows, BofA Securities equity and quant strategist Jill Carey Hall said that the previous week saw the largest influx of U.S. equity investments in seven weeks, along with the most substantial private client inflows in over a year. Jill Carey Hall added<\/a>:<\/p>\n\n\n\n

\"Private clients were the biggest buyers of equities last week, led by purchases of ETFs and Tech stocks. Institutional clients were also net buyers after large outflows the week prior, while hedge fund clients were net sellers.\"<\/em><\/p>\n\n\n\n

Investors are actively monitoring earnings and forecasts from big companies against the backdrop of high borrowing costs but remarks from the Fed's policymakers through the week, including voting member Cleveland's Loretta Mester, will also be on investors' watch list.<\/p>\n","post_title":"Fed Chair Jerome Powell Pushed Back Firmly Against Market Speculation Of Imminent Rate Cuts. What To Expect In The Days Ahead?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"fed-chair-jerome-powell-pushed-back-firmly-against-market-speculation-of-imminent-rate-cuts-what-to-expect-in-the-days-ahead","to_ping":"","pinged":"","post_modified":"2024-02-07 19:31:25","post_modified_gmt":"2024-02-07 08:31:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15327","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15225,"post_author":"14","post_date":"2024-02-01 16:33:13","post_date_gmt":"2024-02-01 05:33:13","post_content":"\n

Wall Street's main indexes fell as Alphabet's projections for rising AI costs dented most megacap and chip stocks while the Federal Reserve left interest rates unchanged this Wednesday. Google's parent company experienced a 6.1% decline, resulting in a 3.0% drop in the S&P 500 communication services sector. This occurred following its announcement of holiday-season advertising sales falling short of expectations and its projection of increased spending on artificial intelligence.<\/p>\n\n\n\n

Microsoft (Nasdaq: MSFT) also lost 1.3% after forecasting higher costs to develop new artificial intelligence features, which overshadowed its upbeat quarterly results. Despite the optimistic outlook from the tech pioneers regarding customer enthusiasm for their generative AI-powered products, investors grew concerned about escalating development expenses for these innovative features. These mounting costs tempered their hopes for a significant sales surge from the new technology.<\/p>\n\n\n\n

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

These results and forecasts from big tech names, along with Tesla's growth warning last week, have reignited attention on the risks associated with the significant influence of mega-cap companies in the S&P 500 which has hit record highs in recent weeks. Apple, Meta Platforms, and Amazon.com set to report earnings on Thursday, fell over 1% each.<\/p>\n\n\n\n

See Related: New Bitcoin Core Update May Natively Support Apple M1 Chips<\/a><\/p>\n\n\n\n

Revenue Forecast And Increased Projection<\/h2>\n\n\n\n

It is also important to mention that Advanced Micro Devices saw a 3.3% decline as its first-quarter revenue forecast and increased projection for AI processors fell short of expectations. Other chip stocks including Nvidia, Broadcom, and Marvell dropped over 1% each. The attention of investors was also on the Federal Reserve's initial monetary policy decision of the year, and while it was widely anticipated that the Fed would maintain interest rates, many analysts said that the Fed is taking baby steps toward the cutting. Art Hogan, Chief Market Strategist of B.Riley Wealth, said<\/a>:<\/p>\n\n\n\n

\"Not surprisingly, I don't think the Fed wants to show their hand, especially, when they have a couple of months of data to collect before they need to. The good news is we can forget about any more tightening. The bad news is it's 'when', not 'if', they're going to cut rates, and that 'when' has been pushed out to what had been the fringes of consensus.\"<\/em><\/p>\n\n\n\n

Due to this, markets are showing some immediate disappointment as there's no explicit indication of imminent rate cuts. We're seeing an extremely neutral, non-committal statement from the Federal Reserve this Wednesday.<\/p>\n","post_title":"Wall Street's Main Indexes Fell As Alphabet's Projections For Rising AI Costs Dented Most Mega-Cap And Chip Stocks","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-as-alphabets-projections-for-rising-ai-costs-dented-most-mega-cap-and-chip-stocks","to_ping":"","pinged":"","post_modified":"2024-02-01 16:33:21","post_modified_gmt":"2024-02-01 05:33:21","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15225","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15094,"post_author":"18","post_date":"2024-01-26 02:18:51","post_date_gmt":"2024-01-25 15:18:51","post_content":"\n

As we enter the last week of January, whispers on Wall Street suggest a potential tantrum in U.S. short-term financing markets, with the storm possibly hitting as early as March. This could prompt the Federal Reserve to reassess its policies.<\/p>\n\n\n\n

As of now, banking executives are anticipating a series of events that may tighten the screws on short-term financing. The expiration of a Fed lending facility on March 11, coupled with limited adoption of the standing repo facility (SRF), is expected to reduce the available funding sources for banks. Simultaneously, increased demand for liquidity is on the horizon due to substantial U.S. government debt issuance and upcoming tax payments in March and April. Additionally, a move toward faster trade settlement in May could intensify the demand for short-term funding.<\/p>\n\n\n\n

Against this backdrop, the Federal Reserve has been steadily draining cash from the financial system by unwinding pandemic-era support. BNY Mellon strategists estimate a significant decrease in cash parked overnight with the Fed, potentially dropping below $200 billion by May. The overnight reverse repurchase agreements facility could even approach zero by mid-year. This reduction in excess liquidity may expose vulnerabilities in short-term financing markets.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Storm Clouds Gather Over Germany's Financial Horizon<\/a><\/p>\n\n\n\n

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

Spikes In Short Term Financing Markets<\/h2>\n\n\n\n

Sudden spikes in short-term financing markets can threaten financial stability, making it harder and more expensive for firms to secure necessary funds. This situation could expose lenders struggling to stabilize deposits after last year's banking crisis. As the Fed inches closer to its 2% inflation target, the risk of policy error looms large.<\/p>\n\n\n\n

If short-term financing markets experience a meltdown, it could signal the need for the Fed to ease policy. Slowing the pace of quantitative tightening (QT) is seen as a potential response. Despite the central bankers' insistence on needing more data before rate cuts, markets are already pricing in cuts by May.<\/p>\n\n\n\n

As we approach the critical months of March to May, the financial markets are at a crossroads. The potential shake-up in short-term financing markets could signal the Fed to reassess its policies. Market participants and investors must stay vigilant, and prepared for potential shifts in liquidity and policy adjustments. The coming months will \/reveal whether these concerns materialize into a significant market event or remain a contained storm in the financial teacup.<\/p>\n","post_title":"Understanding The Potential Shake-Up In U.S. Short-Term Financing Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"understanding-the-potential-shake-up-in-u-s-short-term-financing-markets","to_ping":"","pinged":"","post_modified":"2024-01-26 20:20:06","post_modified_gmt":"2024-01-26 09:20:06","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15094","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15043,"post_author":"14","post_date":"2024-01-19 05:56:40","post_date_gmt":"2024-01-18 18:56:40","post_content":"\n

Wall Street witnessed a significant stock decline this Wednesday following positive December U.S. retail sales data, which diminished the anticipation of an early initiation of the Federal Reserve's campaign to cut interest rates.<\/p>\n\n\n\n

Retail Sales Report <\/h2>\n\n\n\n

The December retail sales report from the Commerce Department (USRSL=ECI) depicted a robust consumer, responsible for approximately 70% of the U.S. economy. Despite facing the challenges of high inflation and a tight monetary policy, the consumer has shown resilience.<\/p>\n\n\n\n

The data revealed that discounts offered by retailers and a surge in motor vehicle acquisitions contributed to a greater-than-anticipated increase in U.S. retail sales, maintaining the economy on a robust trajectory in 2024. This bolstered the perspective that the Federal Reserve might not reduce interest rates as rapidly as initially anticipated for the current year.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

Anticipations among traders for a 25-basis-point Federal Reserve rate cut in March declined to 55%, down from approximately 60% before the release of the retail sales data. Ryan Detrick, chief market strategist at Carson Group in Omaha, said<\/a>:<\/p>\n\n\n\n

\"We had news that the U.S. consumer continues to be quite healthy, but that has increased anxiety that the Fed\u2019s first rate cut could potentially be pushed to May from March. Yields are also moving higher on the strong retail sales numbers, adding to near-term worries.\"<\/em><\/p>\n\n\n\n

US Stocks And Wall Street<\/h2>\n\n\n\n

It is also important to mention that a decline in U.S. stocks sent Wall Street's<\/a> \"fear gauge\" to a two-month high while JPMorgan analysts predict that the majority of negative consequences stemming from higher interest rates have not materialized yet. On Tuesday, Federal Reserve Governor Christopher Waller also emphasized that the central bank should refrain from hastily reducing interest rates until there is a clear indication that lower inflation is likely to persist.<\/p>\n\n\n\n

At the same time, the escalation of geopolitical uncertainties introduces an additional challenge and heightens the potential for unforeseen risks in both markets and economic performance. Considering these factors, the perspective is likely to stay cautious as long as interest rates remain significantly restrictive and the looming presence of geopolitical risks persists.<\/p>\n","post_title":"Wall Street Weakened As Retail Sales Data Hampers Expectations For A Cut In Interest Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-weakened-as-retail-sales-data-hampers-expectations-for-a-cut-in-interest-rates","to_ping":"","pinged":"","post_modified":"2024-01-19 05:56:51","post_modified_gmt":"2024-01-18 18:56:51","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15043","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14931,"post_author":"18","post_date":"2024-01-10 07:51:17","post_date_gmt":"2024-01-09 20:51:17","post_content":"\n

In a recent survey conducted by the New York Federal Reserve<\/a>, Wall Street's major banks have recalibrated their predictions regarding the Federal Reserve's balance sheet drawdown. This shift suggests that the U.S. central bank might conclude its quantitative tightening (QT) process later than initially anticipated.<\/p>\n\n\n\n

A Change in Perspective<\/h2>\n\n\n\n

Previously, primary dealers\u2014major banks\u2014projected that the QT process would conclude by the third quarter. However, the sentiment has evolved. According to the latest survey taken before the Fed's December 12-13 policy meeting, these banks now foresee the QT process ending in the fourth quarter.<\/p>\n\n\n\n

This adjustment carries significant implications. If these predictions materialize, the Federal Reserve's balance sheet<\/a> will likely shrink to approximately $6.75 trillion, down from its current level of roughly $7.764 trillion. Moreover, banks estimated that the central bank's reverse repo facility would hold $375 billion when QT concludes, a reduction from the anticipated $625 billion as forecasted in October.<\/p>\n\n\n\n

Federal Reserve Strategy<\/h2>\n\n\n\n

The quantitative tightening process has been an integral part of the Federal Reserve's strategy to combat inflation. Alongside rate hikes, the central bank initiated large-scale purchases of Treasury bonds and mortgage-backed securities during the COVID-19 pandemic's onset in 2020. This move led to an expansion of its holdings to approximately $9 trillion by mid-2022. However, since last year, the Fed has been gradually reducing its balance sheet size, although specific guidance on the timeline remains somewhat ambiguous.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

What This Means for the Economy<\/h2>\n\n\n\n

The recalibrated timeline for QT indicates a more prolonged period of balance sheet reduction. As the Federal Reserve continues to navigate its policy decisions, market participants, businesses, and consumers should monitor these developments closely. Changes in the balance sheet size can influence interest rates, liquidity conditions, and overall financial market dynamics.<\/p>\n\n\n\n

A Technical Perspective<\/h2>\n\n\n\n

From a technical standpoint, the Federal Reserve's<\/a> balance sheet management serves as a critical tool in its monetary policy arsenal. The evolving predictions by Wall Street's primary dealers underscore the complexities involved in forecasting economic variables, such as inflation and interest rates.<\/p>\n\n\n\n

As the QT process continues, policymakers and market participants must remain vigilant, considering the potential ramifications for financial stability and economic growth. This dynamic landscape necessitates ongoing analysis and adaptation to ensure that monetary policy objectives align with evolving economic conditions.<\/p>\n","post_title":"Decoding Wall Street's Shift: A Closer Look At Wall Street's Changing Perspective","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"decoding-wall-streets-shift-a-closer-look-at-wall-streets-changing-perspective","to_ping":"","pinged":"","post_modified":"2024-01-10 07:51:25","post_modified_gmt":"2024-01-09 20:51:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14931","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14888,"post_author":"14","post_date":"2024-01-06 18:33:09","post_date_gmt":"2024-01-06 07:33:09","post_content":"\n

Wall Street's main indexes fell at the beginning of the 2024 year as investors locked in profits after a very successful 2023 and are currently waiting for the Federal Reserve's<\/a> meeting that could offer hints on its interest rate path. Ken Polcari, managing partner at Kace Capital Advisors, said:<\/p>\n\n\n\n

\"The decline yesterday, today, and maybe for the next couple of weeks, is a result of people locking in profits and reconsidering what the narrative is - are rates going down five or six times as it appeared to be at the end of last year?\"<\/em><\/p>\n\n\n\n

\"\"
The Nasdaq Composite kicked off the year with a 1.5% drop pressured by a selloff in the tech sector<\/figcaption><\/figure>\n\n\n\n

The Fed's December meeting minutes are set to be disclosed at 2:00 p.m. ET, potentially providing information regarding the central bank's shift toward reducing interest rates. Although it's widely anticipated that the Fed will keep interest rates unchanged this month, traders have priced in a 65.7% probability of a 25 basis point rate reduction in March, according to CMEGroup's FedWatch tool.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures<\/a><\/p>\n\n\n\n

Central Bank And Inflation<\/h2>\n\n\n\n

Richmond Fed President Thomas Barkin, a voting member in the FOMC's rate-setting committee, said recently that the U.S. central bank is \"making real progress\" towards taming inflation and a soft landing seeming \"increasingly conceivable\". Encouragingly, the American Association of Individual Investors (AAII) Sentiment Survey indicated a surge in optimism among individual investors regarding the short-term outlook for the U.S. stock market, reaching its peak level in more than two and a half years.<\/p>\n\n\n\n

Despite this, JPMorgan Asset Management advises investors to be cautious due to potential recession risks. At the same time, analysts at Soci\u00e9t\u00e9 G\u00e9n\u00e9rale anticipate a turbulent 2024 for U.S. stocks, projecting fluctuations that could involve nearing recent highs, encountering declines, and subsequently rebounding.<\/p>\n\n\n\n

This week will witness a series of labor market data releases, culminating in the government's December employment report on Friday. These reports could significantly influence the forecast for the Fed's interest rate trajectory this year, prompting investors to scrutinize the data. Jeffrey Roach, chief economist at LPL Financial, added<\/a>:<\/p>\n\n\n\n

 \"The job market is cooling and we should see confirmation of that in this Friday\u2019s jobs report\"<\/em><\/p>\n\n\n\n

Following the progress of Wall Street's main indexes seen last year, investors are still optimistic about the prospect of another robust year ahead. This optimism is rooted in the anticipation that a decelerating economy will result in a gentle landing rather than a full-scale recession, especially as the Fed initiates rate cuts in the first half of 2024.<\/p>\n","post_title":"Wall Street's Main Indexes Fell At The Beginning Of 2024 year. Investors Locked In Profits After A Strong 2023 And Wait For The Federal Reserve's Meeting","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-at-the-beginning-of-2024-year-investors-locked-in-profits-after-a-strong-2023-and-wait-for-the-federal-reserves-meeting","to_ping":"","pinged":"","post_modified":"2024-01-06 18:33:13","post_modified_gmt":"2024-01-06 07:33:13","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14888","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14629,"post_author":"15","post_date":"2023-12-15 19:46:11","post_date_gmt":"2023-12-15 08:46:11","post_content":"\n

BlackRock aims to facilitate the participation of Wall Street banks in its potential Bitcoin ETF approval. Recent SEC memo <\/a>detailing a late November meeting involving BlackRock, Nasdaq, and the Commission. During this meeting, they discussed feedback regarding BlackRock's Bitcoin ETF application.<\/p>\n\n\n\n

The proposed approach introduces an innovative method for the redemption of ETF shares. A Bitcoin ETF would enable fund investors to gain exposure to Bitcoin without directly purchasing or storing the cryptocurrency. While the SEC has hesitated to approve such ETFs due to concerns about Bitcoin market manipulation, this new strategy addresses those worries.<\/p>\n\n\n\n

The SEC has yet to decide on BlackRock's iShares Bitcoin Trust (IBTC) application, with the deadline set for January 15. Analysts anticipate a decision will be issued for several spot Bitcoin ETF applications earlier in January.<\/p>\n\n\n\n

See Related:<\/strong><\/em> Fidelity Joins BlackRock\u2019s Push For Ethereum ETF<\/a><\/p>\n\n\n\n

BlackRock ETF Details<\/h2>\n\n\n\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

The consumer price index increased 0.3% in January and it is important to say that shelter prices accounted for much of the rise, climbing 0.6% on the month, contributing more than two-thirds of the headline increase.<\/p>\n\n\n\n

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

On a 12-month basis, the consumer price index came out to 3.1%, down from 3.4% in December but economists surveyed by Dow Jones had been looking for a monthly increase of 0.2% and an annual gain of 2.9%.<\/p>\n\n\n\n

Excluding the volatile food and energy prices, the core CPI surged by 0.4% in January and increased by 3.9% compared to a year ago, remaining unchanged from December. The forecast had anticipated 0.3% and 3.7%, respectively.<\/p>\n\n\n\n

Consequences Of Inflation<\/h2>\n\n\n\n

Following the inflation data release, traders' bets on a 25 basis point rate reduction in May decreased to 38%, down from approximately 58% before the data. Meanwhile, expectations for June remained at 75%, as indicated by the CME FedWatch tool. Quincy Krosby, chief global strategist at LPL Financial said<\/a>:<\/p>\n\n\n\n

\u201cThe much-anticipated CPI report is a disappointment for those who expected inflation to edge lower allowing the Fed to begin easing rates sooner rather than later. Across the board, numbers were hotter than expected making certain that the Fed will need more data before initiating a rate cutting cycle.\u201d<\/em><\/p>\n\n\n\n

Outside of the jump in shelter costs, the rest of the inflation picture was a mixed bag. Prices for used vehicles dropped by 3.4%, while apparel costs decreased by 0.7%, and medical commodities experienced a 0.6% decline. Conversely, electricity costs saw a 1.2% rise, and airline fares increased by 1.4%.<\/p>\n\n\n\n

In the grocery aisle, ham prices decreased by 3.1%, whereas egg prices surged by 3.4%. Federal Reserve officials anticipate inflation to retreat to their 2% annual target but January's uptick could pose challenges for a central bank aiming to ease its tightest monetary policy stance in over two decades.<\/p>\n","post_title":"Wall Street's Main Indexes Tumbled As Hot Inflation Data Dampened Early Rate-Cut Hopes","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-tumbled-as-hot-inflation-data-dampened-early-rate-cut-hopes","to_ping":"","pinged":"","post_modified":"2024-02-16 22:01:49","post_modified_gmt":"2024-02-16 11:01:49","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15411","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15327,"post_author":"14","post_date":"2024-02-07 19:31:18","post_date_gmt":"2024-02-07 08:31:18","post_content":"\n

Wall Street remains under pressure as Treasury yields climb higher, following Federal Reserve Chair Jerome Powell's resolute stance against market speculation of impending rate cuts. In a recent interview, Powell emphasized the necessity for additional evidence indicating a sustainable decline in inflation before considering lowering interest rates, highlighting that the economy's robustness has effectively mitigated recession risks.<\/p>\n\n\n\n

\"\"
Federal Reserve Chair Jerome Powell emphasized the necessity for additional evidence indicating a sustainable decline in inflation<\/em><\/figcaption><\/figure>\n\n\n\n

In January, job growth in the U.S. picked up pace, and wages saw their most significant increase in nearly two years. These are indications of enduring strength in the labor market, potentially complicating the Federal Reserve's plans to begin cutting interest rates in May. Richard Flynn, managing director at Charles Schwab UK, said:<\/p>\n\n\n\n

\"The strong jobs report indicates that demand in the labor market is higher than expected. While lower interest rates would surely be welcomed, it is becoming increasingly clear that markets and the economy are coping well with the high rate environment, so policymakers are perhaps feeling that the need for monetary policy to ease is less urgent.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>Optimism Among Individual Investors About The Short-Term Outlook Of The U.S. Stock Market Rose To Its Highest Level<\/a><\/p>\n\n\n\n

AAII Sentiment Survey<\/h2>\n\n\n\n

Positive information is that the latest American Association of Individual Investors (AAII) Sentiment Survey showed that optimism among individual investors about the short-term outlook for stocks surged again. American Association of Individual Investors (AAII) reported that bullish sentiment, or expectations that stock prices will rise over the next six months, jumped 9.8 percentage points to 49.1%.<\/p>\n\n\n\n

Bullish sentiment has reached an \"unusually high level,\"<\/em> surpassing its historical average of 37.5% for the 13th consecutive week. The last time optimism was higher was on December 21, 2023, at 52.9%. On the other side, bearish sentiment, or expectations that stock prices will fall over the next six months, decreased by 1.6 percentage points to 24.5%. This sentiment remains below its historical average of 31.0% for the 13th consecutive week.<\/p>\n\n\n\n

Simultaneously, approximately 80% of earnings reports are surpassing analysts' expectations. With results available from nearly half of the S&P 500 companies, including major tech-related firms, overall earnings are projected to have risen by 7.8% in the fourth quarter compared to the same period last year.<\/p>\n\n\n\n

In their latest report on equity client flows, BofA Securities equity and quant strategist Jill Carey Hall said that the previous week saw the largest influx of U.S. equity investments in seven weeks, along with the most substantial private client inflows in over a year. Jill Carey Hall added<\/a>:<\/p>\n\n\n\n

\"Private clients were the biggest buyers of equities last week, led by purchases of ETFs and Tech stocks. Institutional clients were also net buyers after large outflows the week prior, while hedge fund clients were net sellers.\"<\/em><\/p>\n\n\n\n

Investors are actively monitoring earnings and forecasts from big companies against the backdrop of high borrowing costs but remarks from the Fed's policymakers through the week, including voting member Cleveland's Loretta Mester, will also be on investors' watch list.<\/p>\n","post_title":"Fed Chair Jerome Powell Pushed Back Firmly Against Market Speculation Of Imminent Rate Cuts. What To Expect In The Days Ahead?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"fed-chair-jerome-powell-pushed-back-firmly-against-market-speculation-of-imminent-rate-cuts-what-to-expect-in-the-days-ahead","to_ping":"","pinged":"","post_modified":"2024-02-07 19:31:25","post_modified_gmt":"2024-02-07 08:31:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15327","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15225,"post_author":"14","post_date":"2024-02-01 16:33:13","post_date_gmt":"2024-02-01 05:33:13","post_content":"\n

Wall Street's main indexes fell as Alphabet's projections for rising AI costs dented most megacap and chip stocks while the Federal Reserve left interest rates unchanged this Wednesday. Google's parent company experienced a 6.1% decline, resulting in a 3.0% drop in the S&P 500 communication services sector. This occurred following its announcement of holiday-season advertising sales falling short of expectations and its projection of increased spending on artificial intelligence.<\/p>\n\n\n\n

Microsoft (Nasdaq: MSFT) also lost 1.3% after forecasting higher costs to develop new artificial intelligence features, which overshadowed its upbeat quarterly results. Despite the optimistic outlook from the tech pioneers regarding customer enthusiasm for their generative AI-powered products, investors grew concerned about escalating development expenses for these innovative features. These mounting costs tempered their hopes for a significant sales surge from the new technology.<\/p>\n\n\n\n

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

These results and forecasts from big tech names, along with Tesla's growth warning last week, have reignited attention on the risks associated with the significant influence of mega-cap companies in the S&P 500 which has hit record highs in recent weeks. Apple, Meta Platforms, and Amazon.com set to report earnings on Thursday, fell over 1% each.<\/p>\n\n\n\n

See Related: New Bitcoin Core Update May Natively Support Apple M1 Chips<\/a><\/p>\n\n\n\n

Revenue Forecast And Increased Projection<\/h2>\n\n\n\n

It is also important to mention that Advanced Micro Devices saw a 3.3% decline as its first-quarter revenue forecast and increased projection for AI processors fell short of expectations. Other chip stocks including Nvidia, Broadcom, and Marvell dropped over 1% each. The attention of investors was also on the Federal Reserve's initial monetary policy decision of the year, and while it was widely anticipated that the Fed would maintain interest rates, many analysts said that the Fed is taking baby steps toward the cutting. Art Hogan, Chief Market Strategist of B.Riley Wealth, said<\/a>:<\/p>\n\n\n\n

\"Not surprisingly, I don't think the Fed wants to show their hand, especially, when they have a couple of months of data to collect before they need to. The good news is we can forget about any more tightening. The bad news is it's 'when', not 'if', they're going to cut rates, and that 'when' has been pushed out to what had been the fringes of consensus.\"<\/em><\/p>\n\n\n\n

Due to this, markets are showing some immediate disappointment as there's no explicit indication of imminent rate cuts. We're seeing an extremely neutral, non-committal statement from the Federal Reserve this Wednesday.<\/p>\n","post_title":"Wall Street's Main Indexes Fell As Alphabet's Projections For Rising AI Costs Dented Most Mega-Cap And Chip Stocks","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-as-alphabets-projections-for-rising-ai-costs-dented-most-mega-cap-and-chip-stocks","to_ping":"","pinged":"","post_modified":"2024-02-01 16:33:21","post_modified_gmt":"2024-02-01 05:33:21","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15225","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15094,"post_author":"18","post_date":"2024-01-26 02:18:51","post_date_gmt":"2024-01-25 15:18:51","post_content":"\n

As we enter the last week of January, whispers on Wall Street suggest a potential tantrum in U.S. short-term financing markets, with the storm possibly hitting as early as March. This could prompt the Federal Reserve to reassess its policies.<\/p>\n\n\n\n

As of now, banking executives are anticipating a series of events that may tighten the screws on short-term financing. The expiration of a Fed lending facility on March 11, coupled with limited adoption of the standing repo facility (SRF), is expected to reduce the available funding sources for banks. Simultaneously, increased demand for liquidity is on the horizon due to substantial U.S. government debt issuance and upcoming tax payments in March and April. Additionally, a move toward faster trade settlement in May could intensify the demand for short-term funding.<\/p>\n\n\n\n

Against this backdrop, the Federal Reserve has been steadily draining cash from the financial system by unwinding pandemic-era support. BNY Mellon strategists estimate a significant decrease in cash parked overnight with the Fed, potentially dropping below $200 billion by May. The overnight reverse repurchase agreements facility could even approach zero by mid-year. This reduction in excess liquidity may expose vulnerabilities in short-term financing markets.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Storm Clouds Gather Over Germany's Financial Horizon<\/a><\/p>\n\n\n\n

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

Spikes In Short Term Financing Markets<\/h2>\n\n\n\n

Sudden spikes in short-term financing markets can threaten financial stability, making it harder and more expensive for firms to secure necessary funds. This situation could expose lenders struggling to stabilize deposits after last year's banking crisis. As the Fed inches closer to its 2% inflation target, the risk of policy error looms large.<\/p>\n\n\n\n

If short-term financing markets experience a meltdown, it could signal the need for the Fed to ease policy. Slowing the pace of quantitative tightening (QT) is seen as a potential response. Despite the central bankers' insistence on needing more data before rate cuts, markets are already pricing in cuts by May.<\/p>\n\n\n\n

As we approach the critical months of March to May, the financial markets are at a crossroads. The potential shake-up in short-term financing markets could signal the Fed to reassess its policies. Market participants and investors must stay vigilant, and prepared for potential shifts in liquidity and policy adjustments. The coming months will \/reveal whether these concerns materialize into a significant market event or remain a contained storm in the financial teacup.<\/p>\n","post_title":"Understanding The Potential Shake-Up In U.S. Short-Term Financing Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"understanding-the-potential-shake-up-in-u-s-short-term-financing-markets","to_ping":"","pinged":"","post_modified":"2024-01-26 20:20:06","post_modified_gmt":"2024-01-26 09:20:06","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15094","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15043,"post_author":"14","post_date":"2024-01-19 05:56:40","post_date_gmt":"2024-01-18 18:56:40","post_content":"\n

Wall Street witnessed a significant stock decline this Wednesday following positive December U.S. retail sales data, which diminished the anticipation of an early initiation of the Federal Reserve's campaign to cut interest rates.<\/p>\n\n\n\n

Retail Sales Report <\/h2>\n\n\n\n

The December retail sales report from the Commerce Department (USRSL=ECI) depicted a robust consumer, responsible for approximately 70% of the U.S. economy. Despite facing the challenges of high inflation and a tight monetary policy, the consumer has shown resilience.<\/p>\n\n\n\n

The data revealed that discounts offered by retailers and a surge in motor vehicle acquisitions contributed to a greater-than-anticipated increase in U.S. retail sales, maintaining the economy on a robust trajectory in 2024. This bolstered the perspective that the Federal Reserve might not reduce interest rates as rapidly as initially anticipated for the current year.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

Anticipations among traders for a 25-basis-point Federal Reserve rate cut in March declined to 55%, down from approximately 60% before the release of the retail sales data. Ryan Detrick, chief market strategist at Carson Group in Omaha, said<\/a>:<\/p>\n\n\n\n

\"We had news that the U.S. consumer continues to be quite healthy, but that has increased anxiety that the Fed\u2019s first rate cut could potentially be pushed to May from March. Yields are also moving higher on the strong retail sales numbers, adding to near-term worries.\"<\/em><\/p>\n\n\n\n

US Stocks And Wall Street<\/h2>\n\n\n\n

It is also important to mention that a decline in U.S. stocks sent Wall Street's<\/a> \"fear gauge\" to a two-month high while JPMorgan analysts predict that the majority of negative consequences stemming from higher interest rates have not materialized yet. On Tuesday, Federal Reserve Governor Christopher Waller also emphasized that the central bank should refrain from hastily reducing interest rates until there is a clear indication that lower inflation is likely to persist.<\/p>\n\n\n\n

At the same time, the escalation of geopolitical uncertainties introduces an additional challenge and heightens the potential for unforeseen risks in both markets and economic performance. Considering these factors, the perspective is likely to stay cautious as long as interest rates remain significantly restrictive and the looming presence of geopolitical risks persists.<\/p>\n","post_title":"Wall Street Weakened As Retail Sales Data Hampers Expectations For A Cut In Interest Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-weakened-as-retail-sales-data-hampers-expectations-for-a-cut-in-interest-rates","to_ping":"","pinged":"","post_modified":"2024-01-19 05:56:51","post_modified_gmt":"2024-01-18 18:56:51","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15043","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14931,"post_author":"18","post_date":"2024-01-10 07:51:17","post_date_gmt":"2024-01-09 20:51:17","post_content":"\n

In a recent survey conducted by the New York Federal Reserve<\/a>, Wall Street's major banks have recalibrated their predictions regarding the Federal Reserve's balance sheet drawdown. This shift suggests that the U.S. central bank might conclude its quantitative tightening (QT) process later than initially anticipated.<\/p>\n\n\n\n

A Change in Perspective<\/h2>\n\n\n\n

Previously, primary dealers\u2014major banks\u2014projected that the QT process would conclude by the third quarter. However, the sentiment has evolved. According to the latest survey taken before the Fed's December 12-13 policy meeting, these banks now foresee the QT process ending in the fourth quarter.<\/p>\n\n\n\n

This adjustment carries significant implications. If these predictions materialize, the Federal Reserve's balance sheet<\/a> will likely shrink to approximately $6.75 trillion, down from its current level of roughly $7.764 trillion. Moreover, banks estimated that the central bank's reverse repo facility would hold $375 billion when QT concludes, a reduction from the anticipated $625 billion as forecasted in October.<\/p>\n\n\n\n

Federal Reserve Strategy<\/h2>\n\n\n\n

The quantitative tightening process has been an integral part of the Federal Reserve's strategy to combat inflation. Alongside rate hikes, the central bank initiated large-scale purchases of Treasury bonds and mortgage-backed securities during the COVID-19 pandemic's onset in 2020. This move led to an expansion of its holdings to approximately $9 trillion by mid-2022. However, since last year, the Fed has been gradually reducing its balance sheet size, although specific guidance on the timeline remains somewhat ambiguous.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

What This Means for the Economy<\/h2>\n\n\n\n

The recalibrated timeline for QT indicates a more prolonged period of balance sheet reduction. As the Federal Reserve continues to navigate its policy decisions, market participants, businesses, and consumers should monitor these developments closely. Changes in the balance sheet size can influence interest rates, liquidity conditions, and overall financial market dynamics.<\/p>\n\n\n\n

A Technical Perspective<\/h2>\n\n\n\n

From a technical standpoint, the Federal Reserve's<\/a> balance sheet management serves as a critical tool in its monetary policy arsenal. The evolving predictions by Wall Street's primary dealers underscore the complexities involved in forecasting economic variables, such as inflation and interest rates.<\/p>\n\n\n\n

As the QT process continues, policymakers and market participants must remain vigilant, considering the potential ramifications for financial stability and economic growth. This dynamic landscape necessitates ongoing analysis and adaptation to ensure that monetary policy objectives align with evolving economic conditions.<\/p>\n","post_title":"Decoding Wall Street's Shift: A Closer Look At Wall Street's Changing Perspective","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"decoding-wall-streets-shift-a-closer-look-at-wall-streets-changing-perspective","to_ping":"","pinged":"","post_modified":"2024-01-10 07:51:25","post_modified_gmt":"2024-01-09 20:51:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14931","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14888,"post_author":"14","post_date":"2024-01-06 18:33:09","post_date_gmt":"2024-01-06 07:33:09","post_content":"\n

Wall Street's main indexes fell at the beginning of the 2024 year as investors locked in profits after a very successful 2023 and are currently waiting for the Federal Reserve's<\/a> meeting that could offer hints on its interest rate path. Ken Polcari, managing partner at Kace Capital Advisors, said:<\/p>\n\n\n\n

\"The decline yesterday, today, and maybe for the next couple of weeks, is a result of people locking in profits and reconsidering what the narrative is - are rates going down five or six times as it appeared to be at the end of last year?\"<\/em><\/p>\n\n\n\n

\"\"
The Nasdaq Composite kicked off the year with a 1.5% drop pressured by a selloff in the tech sector<\/figcaption><\/figure>\n\n\n\n

The Fed's December meeting minutes are set to be disclosed at 2:00 p.m. ET, potentially providing information regarding the central bank's shift toward reducing interest rates. Although it's widely anticipated that the Fed will keep interest rates unchanged this month, traders have priced in a 65.7% probability of a 25 basis point rate reduction in March, according to CMEGroup's FedWatch tool.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures<\/a><\/p>\n\n\n\n

Central Bank And Inflation<\/h2>\n\n\n\n

Richmond Fed President Thomas Barkin, a voting member in the FOMC's rate-setting committee, said recently that the U.S. central bank is \"making real progress\" towards taming inflation and a soft landing seeming \"increasingly conceivable\". Encouragingly, the American Association of Individual Investors (AAII) Sentiment Survey indicated a surge in optimism among individual investors regarding the short-term outlook for the U.S. stock market, reaching its peak level in more than two and a half years.<\/p>\n\n\n\n

Despite this, JPMorgan Asset Management advises investors to be cautious due to potential recession risks. At the same time, analysts at Soci\u00e9t\u00e9 G\u00e9n\u00e9rale anticipate a turbulent 2024 for U.S. stocks, projecting fluctuations that could involve nearing recent highs, encountering declines, and subsequently rebounding.<\/p>\n\n\n\n

This week will witness a series of labor market data releases, culminating in the government's December employment report on Friday. These reports could significantly influence the forecast for the Fed's interest rate trajectory this year, prompting investors to scrutinize the data. Jeffrey Roach, chief economist at LPL Financial, added<\/a>:<\/p>\n\n\n\n

 \"The job market is cooling and we should see confirmation of that in this Friday\u2019s jobs report\"<\/em><\/p>\n\n\n\n

Following the progress of Wall Street's main indexes seen last year, investors are still optimistic about the prospect of another robust year ahead. This optimism is rooted in the anticipation that a decelerating economy will result in a gentle landing rather than a full-scale recession, especially as the Fed initiates rate cuts in the first half of 2024.<\/p>\n","post_title":"Wall Street's Main Indexes Fell At The Beginning Of 2024 year. Investors Locked In Profits After A Strong 2023 And Wait For The Federal Reserve's Meeting","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-at-the-beginning-of-2024-year-investors-locked-in-profits-after-a-strong-2023-and-wait-for-the-federal-reserves-meeting","to_ping":"","pinged":"","post_modified":"2024-01-06 18:33:13","post_modified_gmt":"2024-01-06 07:33:13","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14888","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14629,"post_author":"15","post_date":"2023-12-15 19:46:11","post_date_gmt":"2023-12-15 08:46:11","post_content":"\n

BlackRock aims to facilitate the participation of Wall Street banks in its potential Bitcoin ETF approval. Recent SEC memo <\/a>detailing a late November meeting involving BlackRock, Nasdaq, and the Commission. During this meeting, they discussed feedback regarding BlackRock's Bitcoin ETF application.<\/p>\n\n\n\n

The proposed approach introduces an innovative method for the redemption of ETF shares. A Bitcoin ETF would enable fund investors to gain exposure to Bitcoin without directly purchasing or storing the cryptocurrency. While the SEC has hesitated to approve such ETFs due to concerns about Bitcoin market manipulation, this new strategy addresses those worries.<\/p>\n\n\n\n

The SEC has yet to decide on BlackRock's iShares Bitcoin Trust (IBTC) application, with the deadline set for January 15. Analysts anticipate a decision will be issued for several spot Bitcoin ETF applications earlier in January.<\/p>\n\n\n\n

See Related:<\/strong><\/em> Fidelity Joins BlackRock\u2019s Push For Ethereum ETF<\/a><\/p>\n\n\n\n

BlackRock ETF Details<\/h2>\n\n\n\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

Consumer Price Index<\/h2>\n\n\n\n

The consumer price index increased 0.3% in January and it is important to say that shelter prices accounted for much of the rise, climbing 0.6% on the month, contributing more than two-thirds of the headline increase.<\/p>\n\n\n\n

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

On a 12-month basis, the consumer price index came out to 3.1%, down from 3.4% in December but economists surveyed by Dow Jones had been looking for a monthly increase of 0.2% and an annual gain of 2.9%.<\/p>\n\n\n\n

Excluding the volatile food and energy prices, the core CPI surged by 0.4% in January and increased by 3.9% compared to a year ago, remaining unchanged from December. The forecast had anticipated 0.3% and 3.7%, respectively.<\/p>\n\n\n\n

Consequences Of Inflation<\/h2>\n\n\n\n

Following the inflation data release, traders' bets on a 25 basis point rate reduction in May decreased to 38%, down from approximately 58% before the data. Meanwhile, expectations for June remained at 75%, as indicated by the CME FedWatch tool. Quincy Krosby, chief global strategist at LPL Financial said<\/a>:<\/p>\n\n\n\n

\u201cThe much-anticipated CPI report is a disappointment for those who expected inflation to edge lower allowing the Fed to begin easing rates sooner rather than later. Across the board, numbers were hotter than expected making certain that the Fed will need more data before initiating a rate cutting cycle.\u201d<\/em><\/p>\n\n\n\n

Outside of the jump in shelter costs, the rest of the inflation picture was a mixed bag. Prices for used vehicles dropped by 3.4%, while apparel costs decreased by 0.7%, and medical commodities experienced a 0.6% decline. Conversely, electricity costs saw a 1.2% rise, and airline fares increased by 1.4%.<\/p>\n\n\n\n

In the grocery aisle, ham prices decreased by 3.1%, whereas egg prices surged by 3.4%. Federal Reserve officials anticipate inflation to retreat to their 2% annual target but January's uptick could pose challenges for a central bank aiming to ease its tightest monetary policy stance in over two decades.<\/p>\n","post_title":"Wall Street's Main Indexes Tumbled As Hot Inflation Data Dampened Early Rate-Cut Hopes","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-tumbled-as-hot-inflation-data-dampened-early-rate-cut-hopes","to_ping":"","pinged":"","post_modified":"2024-02-16 22:01:49","post_modified_gmt":"2024-02-16 11:01:49","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15411","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15327,"post_author":"14","post_date":"2024-02-07 19:31:18","post_date_gmt":"2024-02-07 08:31:18","post_content":"\n

Wall Street remains under pressure as Treasury yields climb higher, following Federal Reserve Chair Jerome Powell's resolute stance against market speculation of impending rate cuts. In a recent interview, Powell emphasized the necessity for additional evidence indicating a sustainable decline in inflation before considering lowering interest rates, highlighting that the economy's robustness has effectively mitigated recession risks.<\/p>\n\n\n\n

\"\"
Federal Reserve Chair Jerome Powell emphasized the necessity for additional evidence indicating a sustainable decline in inflation<\/em><\/figcaption><\/figure>\n\n\n\n

In January, job growth in the U.S. picked up pace, and wages saw their most significant increase in nearly two years. These are indications of enduring strength in the labor market, potentially complicating the Federal Reserve's plans to begin cutting interest rates in May. Richard Flynn, managing director at Charles Schwab UK, said:<\/p>\n\n\n\n

\"The strong jobs report indicates that demand in the labor market is higher than expected. While lower interest rates would surely be welcomed, it is becoming increasingly clear that markets and the economy are coping well with the high rate environment, so policymakers are perhaps feeling that the need for monetary policy to ease is less urgent.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>Optimism Among Individual Investors About The Short-Term Outlook Of The U.S. Stock Market Rose To Its Highest Level<\/a><\/p>\n\n\n\n

AAII Sentiment Survey<\/h2>\n\n\n\n

Positive information is that the latest American Association of Individual Investors (AAII) Sentiment Survey showed that optimism among individual investors about the short-term outlook for stocks surged again. American Association of Individual Investors (AAII) reported that bullish sentiment, or expectations that stock prices will rise over the next six months, jumped 9.8 percentage points to 49.1%.<\/p>\n\n\n\n

Bullish sentiment has reached an \"unusually high level,\"<\/em> surpassing its historical average of 37.5% for the 13th consecutive week. The last time optimism was higher was on December 21, 2023, at 52.9%. On the other side, bearish sentiment, or expectations that stock prices will fall over the next six months, decreased by 1.6 percentage points to 24.5%. This sentiment remains below its historical average of 31.0% for the 13th consecutive week.<\/p>\n\n\n\n

Simultaneously, approximately 80% of earnings reports are surpassing analysts' expectations. With results available from nearly half of the S&P 500 companies, including major tech-related firms, overall earnings are projected to have risen by 7.8% in the fourth quarter compared to the same period last year.<\/p>\n\n\n\n

In their latest report on equity client flows, BofA Securities equity and quant strategist Jill Carey Hall said that the previous week saw the largest influx of U.S. equity investments in seven weeks, along with the most substantial private client inflows in over a year. Jill Carey Hall added<\/a>:<\/p>\n\n\n\n

\"Private clients were the biggest buyers of equities last week, led by purchases of ETFs and Tech stocks. Institutional clients were also net buyers after large outflows the week prior, while hedge fund clients were net sellers.\"<\/em><\/p>\n\n\n\n

Investors are actively monitoring earnings and forecasts from big companies against the backdrop of high borrowing costs but remarks from the Fed's policymakers through the week, including voting member Cleveland's Loretta Mester, will also be on investors' watch list.<\/p>\n","post_title":"Fed Chair Jerome Powell Pushed Back Firmly Against Market Speculation Of Imminent Rate Cuts. What To Expect In The Days Ahead?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"fed-chair-jerome-powell-pushed-back-firmly-against-market-speculation-of-imminent-rate-cuts-what-to-expect-in-the-days-ahead","to_ping":"","pinged":"","post_modified":"2024-02-07 19:31:25","post_modified_gmt":"2024-02-07 08:31:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15327","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15225,"post_author":"14","post_date":"2024-02-01 16:33:13","post_date_gmt":"2024-02-01 05:33:13","post_content":"\n

Wall Street's main indexes fell as Alphabet's projections for rising AI costs dented most megacap and chip stocks while the Federal Reserve left interest rates unchanged this Wednesday. Google's parent company experienced a 6.1% decline, resulting in a 3.0% drop in the S&P 500 communication services sector. This occurred following its announcement of holiday-season advertising sales falling short of expectations and its projection of increased spending on artificial intelligence.<\/p>\n\n\n\n

Microsoft (Nasdaq: MSFT) also lost 1.3% after forecasting higher costs to develop new artificial intelligence features, which overshadowed its upbeat quarterly results. Despite the optimistic outlook from the tech pioneers regarding customer enthusiasm for their generative AI-powered products, investors grew concerned about escalating development expenses for these innovative features. These mounting costs tempered their hopes for a significant sales surge from the new technology.<\/p>\n\n\n\n

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

These results and forecasts from big tech names, along with Tesla's growth warning last week, have reignited attention on the risks associated with the significant influence of mega-cap companies in the S&P 500 which has hit record highs in recent weeks. Apple, Meta Platforms, and Amazon.com set to report earnings on Thursday, fell over 1% each.<\/p>\n\n\n\n

See Related: New Bitcoin Core Update May Natively Support Apple M1 Chips<\/a><\/p>\n\n\n\n

Revenue Forecast And Increased Projection<\/h2>\n\n\n\n

It is also important to mention that Advanced Micro Devices saw a 3.3% decline as its first-quarter revenue forecast and increased projection for AI processors fell short of expectations. Other chip stocks including Nvidia, Broadcom, and Marvell dropped over 1% each. The attention of investors was also on the Federal Reserve's initial monetary policy decision of the year, and while it was widely anticipated that the Fed would maintain interest rates, many analysts said that the Fed is taking baby steps toward the cutting. Art Hogan, Chief Market Strategist of B.Riley Wealth, said<\/a>:<\/p>\n\n\n\n

\"Not surprisingly, I don't think the Fed wants to show their hand, especially, when they have a couple of months of data to collect before they need to. The good news is we can forget about any more tightening. The bad news is it's 'when', not 'if', they're going to cut rates, and that 'when' has been pushed out to what had been the fringes of consensus.\"<\/em><\/p>\n\n\n\n

Due to this, markets are showing some immediate disappointment as there's no explicit indication of imminent rate cuts. We're seeing an extremely neutral, non-committal statement from the Federal Reserve this Wednesday.<\/p>\n","post_title":"Wall Street's Main Indexes Fell As Alphabet's Projections For Rising AI Costs Dented Most Mega-Cap And Chip Stocks","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-as-alphabets-projections-for-rising-ai-costs-dented-most-mega-cap-and-chip-stocks","to_ping":"","pinged":"","post_modified":"2024-02-01 16:33:21","post_modified_gmt":"2024-02-01 05:33:21","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15225","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15094,"post_author":"18","post_date":"2024-01-26 02:18:51","post_date_gmt":"2024-01-25 15:18:51","post_content":"\n

As we enter the last week of January, whispers on Wall Street suggest a potential tantrum in U.S. short-term financing markets, with the storm possibly hitting as early as March. This could prompt the Federal Reserve to reassess its policies.<\/p>\n\n\n\n

As of now, banking executives are anticipating a series of events that may tighten the screws on short-term financing. The expiration of a Fed lending facility on March 11, coupled with limited adoption of the standing repo facility (SRF), is expected to reduce the available funding sources for banks. Simultaneously, increased demand for liquidity is on the horizon due to substantial U.S. government debt issuance and upcoming tax payments in March and April. Additionally, a move toward faster trade settlement in May could intensify the demand for short-term funding.<\/p>\n\n\n\n

Against this backdrop, the Federal Reserve has been steadily draining cash from the financial system by unwinding pandemic-era support. BNY Mellon strategists estimate a significant decrease in cash parked overnight with the Fed, potentially dropping below $200 billion by May. The overnight reverse repurchase agreements facility could even approach zero by mid-year. This reduction in excess liquidity may expose vulnerabilities in short-term financing markets.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Storm Clouds Gather Over Germany's Financial Horizon<\/a><\/p>\n\n\n\n

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

Spikes In Short Term Financing Markets<\/h2>\n\n\n\n

Sudden spikes in short-term financing markets can threaten financial stability, making it harder and more expensive for firms to secure necessary funds. This situation could expose lenders struggling to stabilize deposits after last year's banking crisis. As the Fed inches closer to its 2% inflation target, the risk of policy error looms large.<\/p>\n\n\n\n

If short-term financing markets experience a meltdown, it could signal the need for the Fed to ease policy. Slowing the pace of quantitative tightening (QT) is seen as a potential response. Despite the central bankers' insistence on needing more data before rate cuts, markets are already pricing in cuts by May.<\/p>\n\n\n\n

As we approach the critical months of March to May, the financial markets are at a crossroads. The potential shake-up in short-term financing markets could signal the Fed to reassess its policies. Market participants and investors must stay vigilant, and prepared for potential shifts in liquidity and policy adjustments. The coming months will \/reveal whether these concerns materialize into a significant market event or remain a contained storm in the financial teacup.<\/p>\n","post_title":"Understanding The Potential Shake-Up In U.S. Short-Term Financing Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"understanding-the-potential-shake-up-in-u-s-short-term-financing-markets","to_ping":"","pinged":"","post_modified":"2024-01-26 20:20:06","post_modified_gmt":"2024-01-26 09:20:06","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15094","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15043,"post_author":"14","post_date":"2024-01-19 05:56:40","post_date_gmt":"2024-01-18 18:56:40","post_content":"\n

Wall Street witnessed a significant stock decline this Wednesday following positive December U.S. retail sales data, which diminished the anticipation of an early initiation of the Federal Reserve's campaign to cut interest rates.<\/p>\n\n\n\n

Retail Sales Report <\/h2>\n\n\n\n

The December retail sales report from the Commerce Department (USRSL=ECI) depicted a robust consumer, responsible for approximately 70% of the U.S. economy. Despite facing the challenges of high inflation and a tight monetary policy, the consumer has shown resilience.<\/p>\n\n\n\n

The data revealed that discounts offered by retailers and a surge in motor vehicle acquisitions contributed to a greater-than-anticipated increase in U.S. retail sales, maintaining the economy on a robust trajectory in 2024. This bolstered the perspective that the Federal Reserve might not reduce interest rates as rapidly as initially anticipated for the current year.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

Anticipations among traders for a 25-basis-point Federal Reserve rate cut in March declined to 55%, down from approximately 60% before the release of the retail sales data. Ryan Detrick, chief market strategist at Carson Group in Omaha, said<\/a>:<\/p>\n\n\n\n

\"We had news that the U.S. consumer continues to be quite healthy, but that has increased anxiety that the Fed\u2019s first rate cut could potentially be pushed to May from March. Yields are also moving higher on the strong retail sales numbers, adding to near-term worries.\"<\/em><\/p>\n\n\n\n

US Stocks And Wall Street<\/h2>\n\n\n\n

It is also important to mention that a decline in U.S. stocks sent Wall Street's<\/a> \"fear gauge\" to a two-month high while JPMorgan analysts predict that the majority of negative consequences stemming from higher interest rates have not materialized yet. On Tuesday, Federal Reserve Governor Christopher Waller also emphasized that the central bank should refrain from hastily reducing interest rates until there is a clear indication that lower inflation is likely to persist.<\/p>\n\n\n\n

At the same time, the escalation of geopolitical uncertainties introduces an additional challenge and heightens the potential for unforeseen risks in both markets and economic performance. Considering these factors, the perspective is likely to stay cautious as long as interest rates remain significantly restrictive and the looming presence of geopolitical risks persists.<\/p>\n","post_title":"Wall Street Weakened As Retail Sales Data Hampers Expectations For A Cut In Interest Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-weakened-as-retail-sales-data-hampers-expectations-for-a-cut-in-interest-rates","to_ping":"","pinged":"","post_modified":"2024-01-19 05:56:51","post_modified_gmt":"2024-01-18 18:56:51","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15043","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14931,"post_author":"18","post_date":"2024-01-10 07:51:17","post_date_gmt":"2024-01-09 20:51:17","post_content":"\n

In a recent survey conducted by the New York Federal Reserve<\/a>, Wall Street's major banks have recalibrated their predictions regarding the Federal Reserve's balance sheet drawdown. This shift suggests that the U.S. central bank might conclude its quantitative tightening (QT) process later than initially anticipated.<\/p>\n\n\n\n

A Change in Perspective<\/h2>\n\n\n\n

Previously, primary dealers\u2014major banks\u2014projected that the QT process would conclude by the third quarter. However, the sentiment has evolved. According to the latest survey taken before the Fed's December 12-13 policy meeting, these banks now foresee the QT process ending in the fourth quarter.<\/p>\n\n\n\n

This adjustment carries significant implications. If these predictions materialize, the Federal Reserve's balance sheet<\/a> will likely shrink to approximately $6.75 trillion, down from its current level of roughly $7.764 trillion. Moreover, banks estimated that the central bank's reverse repo facility would hold $375 billion when QT concludes, a reduction from the anticipated $625 billion as forecasted in October.<\/p>\n\n\n\n

Federal Reserve Strategy<\/h2>\n\n\n\n

The quantitative tightening process has been an integral part of the Federal Reserve's strategy to combat inflation. Alongside rate hikes, the central bank initiated large-scale purchases of Treasury bonds and mortgage-backed securities during the COVID-19 pandemic's onset in 2020. This move led to an expansion of its holdings to approximately $9 trillion by mid-2022. However, since last year, the Fed has been gradually reducing its balance sheet size, although specific guidance on the timeline remains somewhat ambiguous.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

What This Means for the Economy<\/h2>\n\n\n\n

The recalibrated timeline for QT indicates a more prolonged period of balance sheet reduction. As the Federal Reserve continues to navigate its policy decisions, market participants, businesses, and consumers should monitor these developments closely. Changes in the balance sheet size can influence interest rates, liquidity conditions, and overall financial market dynamics.<\/p>\n\n\n\n

A Technical Perspective<\/h2>\n\n\n\n

From a technical standpoint, the Federal Reserve's<\/a> balance sheet management serves as a critical tool in its monetary policy arsenal. The evolving predictions by Wall Street's primary dealers underscore the complexities involved in forecasting economic variables, such as inflation and interest rates.<\/p>\n\n\n\n

As the QT process continues, policymakers and market participants must remain vigilant, considering the potential ramifications for financial stability and economic growth. This dynamic landscape necessitates ongoing analysis and adaptation to ensure that monetary policy objectives align with evolving economic conditions.<\/p>\n","post_title":"Decoding Wall Street's Shift: A Closer Look At Wall Street's Changing Perspective","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"decoding-wall-streets-shift-a-closer-look-at-wall-streets-changing-perspective","to_ping":"","pinged":"","post_modified":"2024-01-10 07:51:25","post_modified_gmt":"2024-01-09 20:51:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14931","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14888,"post_author":"14","post_date":"2024-01-06 18:33:09","post_date_gmt":"2024-01-06 07:33:09","post_content":"\n

Wall Street's main indexes fell at the beginning of the 2024 year as investors locked in profits after a very successful 2023 and are currently waiting for the Federal Reserve's<\/a> meeting that could offer hints on its interest rate path. Ken Polcari, managing partner at Kace Capital Advisors, said:<\/p>\n\n\n\n

\"The decline yesterday, today, and maybe for the next couple of weeks, is a result of people locking in profits and reconsidering what the narrative is - are rates going down five or six times as it appeared to be at the end of last year?\"<\/em><\/p>\n\n\n\n

\"\"
The Nasdaq Composite kicked off the year with a 1.5% drop pressured by a selloff in the tech sector<\/figcaption><\/figure>\n\n\n\n

The Fed's December meeting minutes are set to be disclosed at 2:00 p.m. ET, potentially providing information regarding the central bank's shift toward reducing interest rates. Although it's widely anticipated that the Fed will keep interest rates unchanged this month, traders have priced in a 65.7% probability of a 25 basis point rate reduction in March, according to CMEGroup's FedWatch tool.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures<\/a><\/p>\n\n\n\n

Central Bank And Inflation<\/h2>\n\n\n\n

Richmond Fed President Thomas Barkin, a voting member in the FOMC's rate-setting committee, said recently that the U.S. central bank is \"making real progress\" towards taming inflation and a soft landing seeming \"increasingly conceivable\". Encouragingly, the American Association of Individual Investors (AAII) Sentiment Survey indicated a surge in optimism among individual investors regarding the short-term outlook for the U.S. stock market, reaching its peak level in more than two and a half years.<\/p>\n\n\n\n

Despite this, JPMorgan Asset Management advises investors to be cautious due to potential recession risks. At the same time, analysts at Soci\u00e9t\u00e9 G\u00e9n\u00e9rale anticipate a turbulent 2024 for U.S. stocks, projecting fluctuations that could involve nearing recent highs, encountering declines, and subsequently rebounding.<\/p>\n\n\n\n

This week will witness a series of labor market data releases, culminating in the government's December employment report on Friday. These reports could significantly influence the forecast for the Fed's interest rate trajectory this year, prompting investors to scrutinize the data. Jeffrey Roach, chief economist at LPL Financial, added<\/a>:<\/p>\n\n\n\n

 \"The job market is cooling and we should see confirmation of that in this Friday\u2019s jobs report\"<\/em><\/p>\n\n\n\n

Following the progress of Wall Street's main indexes seen last year, investors are still optimistic about the prospect of another robust year ahead. This optimism is rooted in the anticipation that a decelerating economy will result in a gentle landing rather than a full-scale recession, especially as the Fed initiates rate cuts in the first half of 2024.<\/p>\n","post_title":"Wall Street's Main Indexes Fell At The Beginning Of 2024 year. Investors Locked In Profits After A Strong 2023 And Wait For The Federal Reserve's Meeting","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-at-the-beginning-of-2024-year-investors-locked-in-profits-after-a-strong-2023-and-wait-for-the-federal-reserves-meeting","to_ping":"","pinged":"","post_modified":"2024-01-06 18:33:13","post_modified_gmt":"2024-01-06 07:33:13","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14888","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14629,"post_author":"15","post_date":"2023-12-15 19:46:11","post_date_gmt":"2023-12-15 08:46:11","post_content":"\n

BlackRock aims to facilitate the participation of Wall Street banks in its potential Bitcoin ETF approval. Recent SEC memo <\/a>detailing a late November meeting involving BlackRock, Nasdaq, and the Commission. During this meeting, they discussed feedback regarding BlackRock's Bitcoin ETF application.<\/p>\n\n\n\n

The proposed approach introduces an innovative method for the redemption of ETF shares. A Bitcoin ETF would enable fund investors to gain exposure to Bitcoin without directly purchasing or storing the cryptocurrency. While the SEC has hesitated to approve such ETFs due to concerns about Bitcoin market manipulation, this new strategy addresses those worries.<\/p>\n\n\n\n

The SEC has yet to decide on BlackRock's iShares Bitcoin Trust (IBTC) application, with the deadline set for January 15. Analysts anticipate a decision will be issued for several spot Bitcoin ETF applications earlier in January.<\/p>\n\n\n\n

See Related:<\/strong><\/em> Fidelity Joins BlackRock\u2019s Push For Ethereum ETF<\/a><\/p>\n\n\n\n

BlackRock ETF Details<\/h2>\n\n\n\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

See Related: <\/em><\/strong>Macro Review Of Economic Data For The United States; CPI, Inflation, Fund Rates<\/a><\/p>\n\n\n\n

Consumer Price Index<\/h2>\n\n\n\n

The consumer price index increased 0.3% in January and it is important to say that shelter prices accounted for much of the rise, climbing 0.6% on the month, contributing more than two-thirds of the headline increase.<\/p>\n\n\n\n

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

On a 12-month basis, the consumer price index came out to 3.1%, down from 3.4% in December but economists surveyed by Dow Jones had been looking for a monthly increase of 0.2% and an annual gain of 2.9%.<\/p>\n\n\n\n

Excluding the volatile food and energy prices, the core CPI surged by 0.4% in January and increased by 3.9% compared to a year ago, remaining unchanged from December. The forecast had anticipated 0.3% and 3.7%, respectively.<\/p>\n\n\n\n

Consequences Of Inflation<\/h2>\n\n\n\n

Following the inflation data release, traders' bets on a 25 basis point rate reduction in May decreased to 38%, down from approximately 58% before the data. Meanwhile, expectations for June remained at 75%, as indicated by the CME FedWatch tool. Quincy Krosby, chief global strategist at LPL Financial said<\/a>:<\/p>\n\n\n\n

\u201cThe much-anticipated CPI report is a disappointment for those who expected inflation to edge lower allowing the Fed to begin easing rates sooner rather than later. Across the board, numbers were hotter than expected making certain that the Fed will need more data before initiating a rate cutting cycle.\u201d<\/em><\/p>\n\n\n\n

Outside of the jump in shelter costs, the rest of the inflation picture was a mixed bag. Prices for used vehicles dropped by 3.4%, while apparel costs decreased by 0.7%, and medical commodities experienced a 0.6% decline. Conversely, electricity costs saw a 1.2% rise, and airline fares increased by 1.4%.<\/p>\n\n\n\n

In the grocery aisle, ham prices decreased by 3.1%, whereas egg prices surged by 3.4%. Federal Reserve officials anticipate inflation to retreat to their 2% annual target but January's uptick could pose challenges for a central bank aiming to ease its tightest monetary policy stance in over two decades.<\/p>\n","post_title":"Wall Street's Main Indexes Tumbled As Hot Inflation Data Dampened Early Rate-Cut Hopes","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-tumbled-as-hot-inflation-data-dampened-early-rate-cut-hopes","to_ping":"","pinged":"","post_modified":"2024-02-16 22:01:49","post_modified_gmt":"2024-02-16 11:01:49","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15411","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15327,"post_author":"14","post_date":"2024-02-07 19:31:18","post_date_gmt":"2024-02-07 08:31:18","post_content":"\n

Wall Street remains under pressure as Treasury yields climb higher, following Federal Reserve Chair Jerome Powell's resolute stance against market speculation of impending rate cuts. In a recent interview, Powell emphasized the necessity for additional evidence indicating a sustainable decline in inflation before considering lowering interest rates, highlighting that the economy's robustness has effectively mitigated recession risks.<\/p>\n\n\n\n

\"\"
Federal Reserve Chair Jerome Powell emphasized the necessity for additional evidence indicating a sustainable decline in inflation<\/em><\/figcaption><\/figure>\n\n\n\n

In January, job growth in the U.S. picked up pace, and wages saw their most significant increase in nearly two years. These are indications of enduring strength in the labor market, potentially complicating the Federal Reserve's plans to begin cutting interest rates in May. Richard Flynn, managing director at Charles Schwab UK, said:<\/p>\n\n\n\n

\"The strong jobs report indicates that demand in the labor market is higher than expected. While lower interest rates would surely be welcomed, it is becoming increasingly clear that markets and the economy are coping well with the high rate environment, so policymakers are perhaps feeling that the need for monetary policy to ease is less urgent.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>Optimism Among Individual Investors About The Short-Term Outlook Of The U.S. Stock Market Rose To Its Highest Level<\/a><\/p>\n\n\n\n

AAII Sentiment Survey<\/h2>\n\n\n\n

Positive information is that the latest American Association of Individual Investors (AAII) Sentiment Survey showed that optimism among individual investors about the short-term outlook for stocks surged again. American Association of Individual Investors (AAII) reported that bullish sentiment, or expectations that stock prices will rise over the next six months, jumped 9.8 percentage points to 49.1%.<\/p>\n\n\n\n

Bullish sentiment has reached an \"unusually high level,\"<\/em> surpassing its historical average of 37.5% for the 13th consecutive week. The last time optimism was higher was on December 21, 2023, at 52.9%. On the other side, bearish sentiment, or expectations that stock prices will fall over the next six months, decreased by 1.6 percentage points to 24.5%. This sentiment remains below its historical average of 31.0% for the 13th consecutive week.<\/p>\n\n\n\n

Simultaneously, approximately 80% of earnings reports are surpassing analysts' expectations. With results available from nearly half of the S&P 500 companies, including major tech-related firms, overall earnings are projected to have risen by 7.8% in the fourth quarter compared to the same period last year.<\/p>\n\n\n\n

In their latest report on equity client flows, BofA Securities equity and quant strategist Jill Carey Hall said that the previous week saw the largest influx of U.S. equity investments in seven weeks, along with the most substantial private client inflows in over a year. Jill Carey Hall added<\/a>:<\/p>\n\n\n\n

\"Private clients were the biggest buyers of equities last week, led by purchases of ETFs and Tech stocks. Institutional clients were also net buyers after large outflows the week prior, while hedge fund clients were net sellers.\"<\/em><\/p>\n\n\n\n

Investors are actively monitoring earnings and forecasts from big companies against the backdrop of high borrowing costs but remarks from the Fed's policymakers through the week, including voting member Cleveland's Loretta Mester, will also be on investors' watch list.<\/p>\n","post_title":"Fed Chair Jerome Powell Pushed Back Firmly Against Market Speculation Of Imminent Rate Cuts. What To Expect In The Days Ahead?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"fed-chair-jerome-powell-pushed-back-firmly-against-market-speculation-of-imminent-rate-cuts-what-to-expect-in-the-days-ahead","to_ping":"","pinged":"","post_modified":"2024-02-07 19:31:25","post_modified_gmt":"2024-02-07 08:31:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15327","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15225,"post_author":"14","post_date":"2024-02-01 16:33:13","post_date_gmt":"2024-02-01 05:33:13","post_content":"\n

Wall Street's main indexes fell as Alphabet's projections for rising AI costs dented most megacap and chip stocks while the Federal Reserve left interest rates unchanged this Wednesday. Google's parent company experienced a 6.1% decline, resulting in a 3.0% drop in the S&P 500 communication services sector. This occurred following its announcement of holiday-season advertising sales falling short of expectations and its projection of increased spending on artificial intelligence.<\/p>\n\n\n\n

Microsoft (Nasdaq: MSFT) also lost 1.3% after forecasting higher costs to develop new artificial intelligence features, which overshadowed its upbeat quarterly results. Despite the optimistic outlook from the tech pioneers regarding customer enthusiasm for their generative AI-powered products, investors grew concerned about escalating development expenses for these innovative features. These mounting costs tempered their hopes for a significant sales surge from the new technology.<\/p>\n\n\n\n

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

These results and forecasts from big tech names, along with Tesla's growth warning last week, have reignited attention on the risks associated with the significant influence of mega-cap companies in the S&P 500 which has hit record highs in recent weeks. Apple, Meta Platforms, and Amazon.com set to report earnings on Thursday, fell over 1% each.<\/p>\n\n\n\n

See Related: New Bitcoin Core Update May Natively Support Apple M1 Chips<\/a><\/p>\n\n\n\n

Revenue Forecast And Increased Projection<\/h2>\n\n\n\n

It is also important to mention that Advanced Micro Devices saw a 3.3% decline as its first-quarter revenue forecast and increased projection for AI processors fell short of expectations. Other chip stocks including Nvidia, Broadcom, and Marvell dropped over 1% each. The attention of investors was also on the Federal Reserve's initial monetary policy decision of the year, and while it was widely anticipated that the Fed would maintain interest rates, many analysts said that the Fed is taking baby steps toward the cutting. Art Hogan, Chief Market Strategist of B.Riley Wealth, said<\/a>:<\/p>\n\n\n\n

\"Not surprisingly, I don't think the Fed wants to show their hand, especially, when they have a couple of months of data to collect before they need to. The good news is we can forget about any more tightening. The bad news is it's 'when', not 'if', they're going to cut rates, and that 'when' has been pushed out to what had been the fringes of consensus.\"<\/em><\/p>\n\n\n\n

Due to this, markets are showing some immediate disappointment as there's no explicit indication of imminent rate cuts. We're seeing an extremely neutral, non-committal statement from the Federal Reserve this Wednesday.<\/p>\n","post_title":"Wall Street's Main Indexes Fell As Alphabet's Projections For Rising AI Costs Dented Most Mega-Cap And Chip Stocks","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-as-alphabets-projections-for-rising-ai-costs-dented-most-mega-cap-and-chip-stocks","to_ping":"","pinged":"","post_modified":"2024-02-01 16:33:21","post_modified_gmt":"2024-02-01 05:33:21","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15225","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15094,"post_author":"18","post_date":"2024-01-26 02:18:51","post_date_gmt":"2024-01-25 15:18:51","post_content":"\n

As we enter the last week of January, whispers on Wall Street suggest a potential tantrum in U.S. short-term financing markets, with the storm possibly hitting as early as March. This could prompt the Federal Reserve to reassess its policies.<\/p>\n\n\n\n

As of now, banking executives are anticipating a series of events that may tighten the screws on short-term financing. The expiration of a Fed lending facility on March 11, coupled with limited adoption of the standing repo facility (SRF), is expected to reduce the available funding sources for banks. Simultaneously, increased demand for liquidity is on the horizon due to substantial U.S. government debt issuance and upcoming tax payments in March and April. Additionally, a move toward faster trade settlement in May could intensify the demand for short-term funding.<\/p>\n\n\n\n

Against this backdrop, the Federal Reserve has been steadily draining cash from the financial system by unwinding pandemic-era support. BNY Mellon strategists estimate a significant decrease in cash parked overnight with the Fed, potentially dropping below $200 billion by May. The overnight reverse repurchase agreements facility could even approach zero by mid-year. This reduction in excess liquidity may expose vulnerabilities in short-term financing markets.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Storm Clouds Gather Over Germany's Financial Horizon<\/a><\/p>\n\n\n\n

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

Spikes In Short Term Financing Markets<\/h2>\n\n\n\n

Sudden spikes in short-term financing markets can threaten financial stability, making it harder and more expensive for firms to secure necessary funds. This situation could expose lenders struggling to stabilize deposits after last year's banking crisis. As the Fed inches closer to its 2% inflation target, the risk of policy error looms large.<\/p>\n\n\n\n

If short-term financing markets experience a meltdown, it could signal the need for the Fed to ease policy. Slowing the pace of quantitative tightening (QT) is seen as a potential response. Despite the central bankers' insistence on needing more data before rate cuts, markets are already pricing in cuts by May.<\/p>\n\n\n\n

As we approach the critical months of March to May, the financial markets are at a crossroads. The potential shake-up in short-term financing markets could signal the Fed to reassess its policies. Market participants and investors must stay vigilant, and prepared for potential shifts in liquidity and policy adjustments. The coming months will \/reveal whether these concerns materialize into a significant market event or remain a contained storm in the financial teacup.<\/p>\n","post_title":"Understanding The Potential Shake-Up In U.S. Short-Term Financing Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"understanding-the-potential-shake-up-in-u-s-short-term-financing-markets","to_ping":"","pinged":"","post_modified":"2024-01-26 20:20:06","post_modified_gmt":"2024-01-26 09:20:06","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15094","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15043,"post_author":"14","post_date":"2024-01-19 05:56:40","post_date_gmt":"2024-01-18 18:56:40","post_content":"\n

Wall Street witnessed a significant stock decline this Wednesday following positive December U.S. retail sales data, which diminished the anticipation of an early initiation of the Federal Reserve's campaign to cut interest rates.<\/p>\n\n\n\n

Retail Sales Report <\/h2>\n\n\n\n

The December retail sales report from the Commerce Department (USRSL=ECI) depicted a robust consumer, responsible for approximately 70% of the U.S. economy. Despite facing the challenges of high inflation and a tight monetary policy, the consumer has shown resilience.<\/p>\n\n\n\n

The data revealed that discounts offered by retailers and a surge in motor vehicle acquisitions contributed to a greater-than-anticipated increase in U.S. retail sales, maintaining the economy on a robust trajectory in 2024. This bolstered the perspective that the Federal Reserve might not reduce interest rates as rapidly as initially anticipated for the current year.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

Anticipations among traders for a 25-basis-point Federal Reserve rate cut in March declined to 55%, down from approximately 60% before the release of the retail sales data. Ryan Detrick, chief market strategist at Carson Group in Omaha, said<\/a>:<\/p>\n\n\n\n

\"We had news that the U.S. consumer continues to be quite healthy, but that has increased anxiety that the Fed\u2019s first rate cut could potentially be pushed to May from March. Yields are also moving higher on the strong retail sales numbers, adding to near-term worries.\"<\/em><\/p>\n\n\n\n

US Stocks And Wall Street<\/h2>\n\n\n\n

It is also important to mention that a decline in U.S. stocks sent Wall Street's<\/a> \"fear gauge\" to a two-month high while JPMorgan analysts predict that the majority of negative consequences stemming from higher interest rates have not materialized yet. On Tuesday, Federal Reserve Governor Christopher Waller also emphasized that the central bank should refrain from hastily reducing interest rates until there is a clear indication that lower inflation is likely to persist.<\/p>\n\n\n\n

At the same time, the escalation of geopolitical uncertainties introduces an additional challenge and heightens the potential for unforeseen risks in both markets and economic performance. Considering these factors, the perspective is likely to stay cautious as long as interest rates remain significantly restrictive and the looming presence of geopolitical risks persists.<\/p>\n","post_title":"Wall Street Weakened As Retail Sales Data Hampers Expectations For A Cut In Interest Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-weakened-as-retail-sales-data-hampers-expectations-for-a-cut-in-interest-rates","to_ping":"","pinged":"","post_modified":"2024-01-19 05:56:51","post_modified_gmt":"2024-01-18 18:56:51","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15043","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14931,"post_author":"18","post_date":"2024-01-10 07:51:17","post_date_gmt":"2024-01-09 20:51:17","post_content":"\n

In a recent survey conducted by the New York Federal Reserve<\/a>, Wall Street's major banks have recalibrated their predictions regarding the Federal Reserve's balance sheet drawdown. This shift suggests that the U.S. central bank might conclude its quantitative tightening (QT) process later than initially anticipated.<\/p>\n\n\n\n

A Change in Perspective<\/h2>\n\n\n\n

Previously, primary dealers\u2014major banks\u2014projected that the QT process would conclude by the third quarter. However, the sentiment has evolved. According to the latest survey taken before the Fed's December 12-13 policy meeting, these banks now foresee the QT process ending in the fourth quarter.<\/p>\n\n\n\n

This adjustment carries significant implications. If these predictions materialize, the Federal Reserve's balance sheet<\/a> will likely shrink to approximately $6.75 trillion, down from its current level of roughly $7.764 trillion. Moreover, banks estimated that the central bank's reverse repo facility would hold $375 billion when QT concludes, a reduction from the anticipated $625 billion as forecasted in October.<\/p>\n\n\n\n

Federal Reserve Strategy<\/h2>\n\n\n\n

The quantitative tightening process has been an integral part of the Federal Reserve's strategy to combat inflation. Alongside rate hikes, the central bank initiated large-scale purchases of Treasury bonds and mortgage-backed securities during the COVID-19 pandemic's onset in 2020. This move led to an expansion of its holdings to approximately $9 trillion by mid-2022. However, since last year, the Fed has been gradually reducing its balance sheet size, although specific guidance on the timeline remains somewhat ambiguous.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

What This Means for the Economy<\/h2>\n\n\n\n

The recalibrated timeline for QT indicates a more prolonged period of balance sheet reduction. As the Federal Reserve continues to navigate its policy decisions, market participants, businesses, and consumers should monitor these developments closely. Changes in the balance sheet size can influence interest rates, liquidity conditions, and overall financial market dynamics.<\/p>\n\n\n\n

A Technical Perspective<\/h2>\n\n\n\n

From a technical standpoint, the Federal Reserve's<\/a> balance sheet management serves as a critical tool in its monetary policy arsenal. The evolving predictions by Wall Street's primary dealers underscore the complexities involved in forecasting economic variables, such as inflation and interest rates.<\/p>\n\n\n\n

As the QT process continues, policymakers and market participants must remain vigilant, considering the potential ramifications for financial stability and economic growth. This dynamic landscape necessitates ongoing analysis and adaptation to ensure that monetary policy objectives align with evolving economic conditions.<\/p>\n","post_title":"Decoding Wall Street's Shift: A Closer Look At Wall Street's Changing Perspective","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"decoding-wall-streets-shift-a-closer-look-at-wall-streets-changing-perspective","to_ping":"","pinged":"","post_modified":"2024-01-10 07:51:25","post_modified_gmt":"2024-01-09 20:51:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14931","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14888,"post_author":"14","post_date":"2024-01-06 18:33:09","post_date_gmt":"2024-01-06 07:33:09","post_content":"\n

Wall Street's main indexes fell at the beginning of the 2024 year as investors locked in profits after a very successful 2023 and are currently waiting for the Federal Reserve's<\/a> meeting that could offer hints on its interest rate path. Ken Polcari, managing partner at Kace Capital Advisors, said:<\/p>\n\n\n\n

\"The decline yesterday, today, and maybe for the next couple of weeks, is a result of people locking in profits and reconsidering what the narrative is - are rates going down five or six times as it appeared to be at the end of last year?\"<\/em><\/p>\n\n\n\n

\"\"
The Nasdaq Composite kicked off the year with a 1.5% drop pressured by a selloff in the tech sector<\/figcaption><\/figure>\n\n\n\n

The Fed's December meeting minutes are set to be disclosed at 2:00 p.m. ET, potentially providing information regarding the central bank's shift toward reducing interest rates. Although it's widely anticipated that the Fed will keep interest rates unchanged this month, traders have priced in a 65.7% probability of a 25 basis point rate reduction in March, according to CMEGroup's FedWatch tool.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures<\/a><\/p>\n\n\n\n

Central Bank And Inflation<\/h2>\n\n\n\n

Richmond Fed President Thomas Barkin, a voting member in the FOMC's rate-setting committee, said recently that the U.S. central bank is \"making real progress\" towards taming inflation and a soft landing seeming \"increasingly conceivable\". Encouragingly, the American Association of Individual Investors (AAII) Sentiment Survey indicated a surge in optimism among individual investors regarding the short-term outlook for the U.S. stock market, reaching its peak level in more than two and a half years.<\/p>\n\n\n\n

Despite this, JPMorgan Asset Management advises investors to be cautious due to potential recession risks. At the same time, analysts at Soci\u00e9t\u00e9 G\u00e9n\u00e9rale anticipate a turbulent 2024 for U.S. stocks, projecting fluctuations that could involve nearing recent highs, encountering declines, and subsequently rebounding.<\/p>\n\n\n\n

This week will witness a series of labor market data releases, culminating in the government's December employment report on Friday. These reports could significantly influence the forecast for the Fed's interest rate trajectory this year, prompting investors to scrutinize the data. Jeffrey Roach, chief economist at LPL Financial, added<\/a>:<\/p>\n\n\n\n

 \"The job market is cooling and we should see confirmation of that in this Friday\u2019s jobs report\"<\/em><\/p>\n\n\n\n

Following the progress of Wall Street's main indexes seen last year, investors are still optimistic about the prospect of another robust year ahead. This optimism is rooted in the anticipation that a decelerating economy will result in a gentle landing rather than a full-scale recession, especially as the Fed initiates rate cuts in the first half of 2024.<\/p>\n","post_title":"Wall Street's Main Indexes Fell At The Beginning Of 2024 year. Investors Locked In Profits After A Strong 2023 And Wait For The Federal Reserve's Meeting","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-at-the-beginning-of-2024-year-investors-locked-in-profits-after-a-strong-2023-and-wait-for-the-federal-reserves-meeting","to_ping":"","pinged":"","post_modified":"2024-01-06 18:33:13","post_modified_gmt":"2024-01-06 07:33:13","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14888","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14629,"post_author":"15","post_date":"2023-12-15 19:46:11","post_date_gmt":"2023-12-15 08:46:11","post_content":"\n

BlackRock aims to facilitate the participation of Wall Street banks in its potential Bitcoin ETF approval. Recent SEC memo <\/a>detailing a late November meeting involving BlackRock, Nasdaq, and the Commission. During this meeting, they discussed feedback regarding BlackRock's Bitcoin ETF application.<\/p>\n\n\n\n

The proposed approach introduces an innovative method for the redemption of ETF shares. A Bitcoin ETF would enable fund investors to gain exposure to Bitcoin without directly purchasing or storing the cryptocurrency. While the SEC has hesitated to approve such ETFs due to concerns about Bitcoin market manipulation, this new strategy addresses those worries.<\/p>\n\n\n\n

The SEC has yet to decide on BlackRock's iShares Bitcoin Trust (IBTC) application, with the deadline set for January 15. Analysts anticipate a decision will be issued for several spot Bitcoin ETF applications earlier in January.<\/p>\n\n\n\n

See Related:<\/strong><\/em> Fidelity Joins BlackRock\u2019s Push For Ethereum ETF<\/a><\/p>\n\n\n\n

BlackRock ETF Details<\/h2>\n\n\n\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

Consumer price growth reaccelerated, with the main headline figures rising at a faster pace than economists forecast and January\u2019s surprisingly strong core CPI print shows the road to durably return to 2% inflation will be bumpy.<\/p>\n\n\n\n

See Related: <\/em><\/strong>Macro Review Of Economic Data For The United States; CPI, Inflation, Fund Rates<\/a><\/p>\n\n\n\n

Consumer Price Index<\/h2>\n\n\n\n

The consumer price index increased 0.3% in January and it is important to say that shelter prices accounted for much of the rise, climbing 0.6% on the month, contributing more than two-thirds of the headline increase.<\/p>\n\n\n\n

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

On a 12-month basis, the consumer price index came out to 3.1%, down from 3.4% in December but economists surveyed by Dow Jones had been looking for a monthly increase of 0.2% and an annual gain of 2.9%.<\/p>\n\n\n\n

Excluding the volatile food and energy prices, the core CPI surged by 0.4% in January and increased by 3.9% compared to a year ago, remaining unchanged from December. The forecast had anticipated 0.3% and 3.7%, respectively.<\/p>\n\n\n\n

Consequences Of Inflation<\/h2>\n\n\n\n

Following the inflation data release, traders' bets on a 25 basis point rate reduction in May decreased to 38%, down from approximately 58% before the data. Meanwhile, expectations for June remained at 75%, as indicated by the CME FedWatch tool. Quincy Krosby, chief global strategist at LPL Financial said<\/a>:<\/p>\n\n\n\n

\u201cThe much-anticipated CPI report is a disappointment for those who expected inflation to edge lower allowing the Fed to begin easing rates sooner rather than later. Across the board, numbers were hotter than expected making certain that the Fed will need more data before initiating a rate cutting cycle.\u201d<\/em><\/p>\n\n\n\n

Outside of the jump in shelter costs, the rest of the inflation picture was a mixed bag. Prices for used vehicles dropped by 3.4%, while apparel costs decreased by 0.7%, and medical commodities experienced a 0.6% decline. Conversely, electricity costs saw a 1.2% rise, and airline fares increased by 1.4%.<\/p>\n\n\n\n

In the grocery aisle, ham prices decreased by 3.1%, whereas egg prices surged by 3.4%. Federal Reserve officials anticipate inflation to retreat to their 2% annual target but January's uptick could pose challenges for a central bank aiming to ease its tightest monetary policy stance in over two decades.<\/p>\n","post_title":"Wall Street's Main Indexes Tumbled As Hot Inflation Data Dampened Early Rate-Cut Hopes","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-tumbled-as-hot-inflation-data-dampened-early-rate-cut-hopes","to_ping":"","pinged":"","post_modified":"2024-02-16 22:01:49","post_modified_gmt":"2024-02-16 11:01:49","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15411","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15327,"post_author":"14","post_date":"2024-02-07 19:31:18","post_date_gmt":"2024-02-07 08:31:18","post_content":"\n

Wall Street remains under pressure as Treasury yields climb higher, following Federal Reserve Chair Jerome Powell's resolute stance against market speculation of impending rate cuts. In a recent interview, Powell emphasized the necessity for additional evidence indicating a sustainable decline in inflation before considering lowering interest rates, highlighting that the economy's robustness has effectively mitigated recession risks.<\/p>\n\n\n\n

\"\"
Federal Reserve Chair Jerome Powell emphasized the necessity for additional evidence indicating a sustainable decline in inflation<\/em><\/figcaption><\/figure>\n\n\n\n

In January, job growth in the U.S. picked up pace, and wages saw their most significant increase in nearly two years. These are indications of enduring strength in the labor market, potentially complicating the Federal Reserve's plans to begin cutting interest rates in May. Richard Flynn, managing director at Charles Schwab UK, said:<\/p>\n\n\n\n

\"The strong jobs report indicates that demand in the labor market is higher than expected. While lower interest rates would surely be welcomed, it is becoming increasingly clear that markets and the economy are coping well with the high rate environment, so policymakers are perhaps feeling that the need for monetary policy to ease is less urgent.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>Optimism Among Individual Investors About The Short-Term Outlook Of The U.S. Stock Market Rose To Its Highest Level<\/a><\/p>\n\n\n\n

AAII Sentiment Survey<\/h2>\n\n\n\n

Positive information is that the latest American Association of Individual Investors (AAII) Sentiment Survey showed that optimism among individual investors about the short-term outlook for stocks surged again. American Association of Individual Investors (AAII) reported that bullish sentiment, or expectations that stock prices will rise over the next six months, jumped 9.8 percentage points to 49.1%.<\/p>\n\n\n\n

Bullish sentiment has reached an \"unusually high level,\"<\/em> surpassing its historical average of 37.5% for the 13th consecutive week. The last time optimism was higher was on December 21, 2023, at 52.9%. On the other side, bearish sentiment, or expectations that stock prices will fall over the next six months, decreased by 1.6 percentage points to 24.5%. This sentiment remains below its historical average of 31.0% for the 13th consecutive week.<\/p>\n\n\n\n

Simultaneously, approximately 80% of earnings reports are surpassing analysts' expectations. With results available from nearly half of the S&P 500 companies, including major tech-related firms, overall earnings are projected to have risen by 7.8% in the fourth quarter compared to the same period last year.<\/p>\n\n\n\n

In their latest report on equity client flows, BofA Securities equity and quant strategist Jill Carey Hall said that the previous week saw the largest influx of U.S. equity investments in seven weeks, along with the most substantial private client inflows in over a year. Jill Carey Hall added<\/a>:<\/p>\n\n\n\n

\"Private clients were the biggest buyers of equities last week, led by purchases of ETFs and Tech stocks. Institutional clients were also net buyers after large outflows the week prior, while hedge fund clients were net sellers.\"<\/em><\/p>\n\n\n\n

Investors are actively monitoring earnings and forecasts from big companies against the backdrop of high borrowing costs but remarks from the Fed's policymakers through the week, including voting member Cleveland's Loretta Mester, will also be on investors' watch list.<\/p>\n","post_title":"Fed Chair Jerome Powell Pushed Back Firmly Against Market Speculation Of Imminent Rate Cuts. What To Expect In The Days Ahead?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"fed-chair-jerome-powell-pushed-back-firmly-against-market-speculation-of-imminent-rate-cuts-what-to-expect-in-the-days-ahead","to_ping":"","pinged":"","post_modified":"2024-02-07 19:31:25","post_modified_gmt":"2024-02-07 08:31:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15327","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15225,"post_author":"14","post_date":"2024-02-01 16:33:13","post_date_gmt":"2024-02-01 05:33:13","post_content":"\n

Wall Street's main indexes fell as Alphabet's projections for rising AI costs dented most megacap and chip stocks while the Federal Reserve left interest rates unchanged this Wednesday. Google's parent company experienced a 6.1% decline, resulting in a 3.0% drop in the S&P 500 communication services sector. This occurred following its announcement of holiday-season advertising sales falling short of expectations and its projection of increased spending on artificial intelligence.<\/p>\n\n\n\n

Microsoft (Nasdaq: MSFT) also lost 1.3% after forecasting higher costs to develop new artificial intelligence features, which overshadowed its upbeat quarterly results. Despite the optimistic outlook from the tech pioneers regarding customer enthusiasm for their generative AI-powered products, investors grew concerned about escalating development expenses for these innovative features. These mounting costs tempered their hopes for a significant sales surge from the new technology.<\/p>\n\n\n\n

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

These results and forecasts from big tech names, along with Tesla's growth warning last week, have reignited attention on the risks associated with the significant influence of mega-cap companies in the S&P 500 which has hit record highs in recent weeks. Apple, Meta Platforms, and Amazon.com set to report earnings on Thursday, fell over 1% each.<\/p>\n\n\n\n

See Related: New Bitcoin Core Update May Natively Support Apple M1 Chips<\/a><\/p>\n\n\n\n

Revenue Forecast And Increased Projection<\/h2>\n\n\n\n

It is also important to mention that Advanced Micro Devices saw a 3.3% decline as its first-quarter revenue forecast and increased projection for AI processors fell short of expectations. Other chip stocks including Nvidia, Broadcom, and Marvell dropped over 1% each. The attention of investors was also on the Federal Reserve's initial monetary policy decision of the year, and while it was widely anticipated that the Fed would maintain interest rates, many analysts said that the Fed is taking baby steps toward the cutting. Art Hogan, Chief Market Strategist of B.Riley Wealth, said<\/a>:<\/p>\n\n\n\n

\"Not surprisingly, I don't think the Fed wants to show their hand, especially, when they have a couple of months of data to collect before they need to. The good news is we can forget about any more tightening. The bad news is it's 'when', not 'if', they're going to cut rates, and that 'when' has been pushed out to what had been the fringes of consensus.\"<\/em><\/p>\n\n\n\n

Due to this, markets are showing some immediate disappointment as there's no explicit indication of imminent rate cuts. We're seeing an extremely neutral, non-committal statement from the Federal Reserve this Wednesday.<\/p>\n","post_title":"Wall Street's Main Indexes Fell As Alphabet's Projections For Rising AI Costs Dented Most Mega-Cap And Chip Stocks","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-as-alphabets-projections-for-rising-ai-costs-dented-most-mega-cap-and-chip-stocks","to_ping":"","pinged":"","post_modified":"2024-02-01 16:33:21","post_modified_gmt":"2024-02-01 05:33:21","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15225","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15094,"post_author":"18","post_date":"2024-01-26 02:18:51","post_date_gmt":"2024-01-25 15:18:51","post_content":"\n

As we enter the last week of January, whispers on Wall Street suggest a potential tantrum in U.S. short-term financing markets, with the storm possibly hitting as early as March. This could prompt the Federal Reserve to reassess its policies.<\/p>\n\n\n\n

As of now, banking executives are anticipating a series of events that may tighten the screws on short-term financing. The expiration of a Fed lending facility on March 11, coupled with limited adoption of the standing repo facility (SRF), is expected to reduce the available funding sources for banks. Simultaneously, increased demand for liquidity is on the horizon due to substantial U.S. government debt issuance and upcoming tax payments in March and April. Additionally, a move toward faster trade settlement in May could intensify the demand for short-term funding.<\/p>\n\n\n\n

Against this backdrop, the Federal Reserve has been steadily draining cash from the financial system by unwinding pandemic-era support. BNY Mellon strategists estimate a significant decrease in cash parked overnight with the Fed, potentially dropping below $200 billion by May. The overnight reverse repurchase agreements facility could even approach zero by mid-year. This reduction in excess liquidity may expose vulnerabilities in short-term financing markets.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Storm Clouds Gather Over Germany's Financial Horizon<\/a><\/p>\n\n\n\n

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

Spikes In Short Term Financing Markets<\/h2>\n\n\n\n

Sudden spikes in short-term financing markets can threaten financial stability, making it harder and more expensive for firms to secure necessary funds. This situation could expose lenders struggling to stabilize deposits after last year's banking crisis. As the Fed inches closer to its 2% inflation target, the risk of policy error looms large.<\/p>\n\n\n\n

If short-term financing markets experience a meltdown, it could signal the need for the Fed to ease policy. Slowing the pace of quantitative tightening (QT) is seen as a potential response. Despite the central bankers' insistence on needing more data before rate cuts, markets are already pricing in cuts by May.<\/p>\n\n\n\n

As we approach the critical months of March to May, the financial markets are at a crossroads. The potential shake-up in short-term financing markets could signal the Fed to reassess its policies. Market participants and investors must stay vigilant, and prepared for potential shifts in liquidity and policy adjustments. The coming months will \/reveal whether these concerns materialize into a significant market event or remain a contained storm in the financial teacup.<\/p>\n","post_title":"Understanding The Potential Shake-Up In U.S. Short-Term Financing Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"understanding-the-potential-shake-up-in-u-s-short-term-financing-markets","to_ping":"","pinged":"","post_modified":"2024-01-26 20:20:06","post_modified_gmt":"2024-01-26 09:20:06","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15094","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15043,"post_author":"14","post_date":"2024-01-19 05:56:40","post_date_gmt":"2024-01-18 18:56:40","post_content":"\n

Wall Street witnessed a significant stock decline this Wednesday following positive December U.S. retail sales data, which diminished the anticipation of an early initiation of the Federal Reserve's campaign to cut interest rates.<\/p>\n\n\n\n

Retail Sales Report <\/h2>\n\n\n\n

The December retail sales report from the Commerce Department (USRSL=ECI) depicted a robust consumer, responsible for approximately 70% of the U.S. economy. Despite facing the challenges of high inflation and a tight monetary policy, the consumer has shown resilience.<\/p>\n\n\n\n

The data revealed that discounts offered by retailers and a surge in motor vehicle acquisitions contributed to a greater-than-anticipated increase in U.S. retail sales, maintaining the economy on a robust trajectory in 2024. This bolstered the perspective that the Federal Reserve might not reduce interest rates as rapidly as initially anticipated for the current year.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

Anticipations among traders for a 25-basis-point Federal Reserve rate cut in March declined to 55%, down from approximately 60% before the release of the retail sales data. Ryan Detrick, chief market strategist at Carson Group in Omaha, said<\/a>:<\/p>\n\n\n\n

\"We had news that the U.S. consumer continues to be quite healthy, but that has increased anxiety that the Fed\u2019s first rate cut could potentially be pushed to May from March. Yields are also moving higher on the strong retail sales numbers, adding to near-term worries.\"<\/em><\/p>\n\n\n\n

US Stocks And Wall Street<\/h2>\n\n\n\n

It is also important to mention that a decline in U.S. stocks sent Wall Street's<\/a> \"fear gauge\" to a two-month high while JPMorgan analysts predict that the majority of negative consequences stemming from higher interest rates have not materialized yet. On Tuesday, Federal Reserve Governor Christopher Waller also emphasized that the central bank should refrain from hastily reducing interest rates until there is a clear indication that lower inflation is likely to persist.<\/p>\n\n\n\n

At the same time, the escalation of geopolitical uncertainties introduces an additional challenge and heightens the potential for unforeseen risks in both markets and economic performance. Considering these factors, the perspective is likely to stay cautious as long as interest rates remain significantly restrictive and the looming presence of geopolitical risks persists.<\/p>\n","post_title":"Wall Street Weakened As Retail Sales Data Hampers Expectations For A Cut In Interest Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-weakened-as-retail-sales-data-hampers-expectations-for-a-cut-in-interest-rates","to_ping":"","pinged":"","post_modified":"2024-01-19 05:56:51","post_modified_gmt":"2024-01-18 18:56:51","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15043","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14931,"post_author":"18","post_date":"2024-01-10 07:51:17","post_date_gmt":"2024-01-09 20:51:17","post_content":"\n

In a recent survey conducted by the New York Federal Reserve<\/a>, Wall Street's major banks have recalibrated their predictions regarding the Federal Reserve's balance sheet drawdown. This shift suggests that the U.S. central bank might conclude its quantitative tightening (QT) process later than initially anticipated.<\/p>\n\n\n\n

A Change in Perspective<\/h2>\n\n\n\n

Previously, primary dealers\u2014major banks\u2014projected that the QT process would conclude by the third quarter. However, the sentiment has evolved. According to the latest survey taken before the Fed's December 12-13 policy meeting, these banks now foresee the QT process ending in the fourth quarter.<\/p>\n\n\n\n

This adjustment carries significant implications. If these predictions materialize, the Federal Reserve's balance sheet<\/a> will likely shrink to approximately $6.75 trillion, down from its current level of roughly $7.764 trillion. Moreover, banks estimated that the central bank's reverse repo facility would hold $375 billion when QT concludes, a reduction from the anticipated $625 billion as forecasted in October.<\/p>\n\n\n\n

Federal Reserve Strategy<\/h2>\n\n\n\n

The quantitative tightening process has been an integral part of the Federal Reserve's strategy to combat inflation. Alongside rate hikes, the central bank initiated large-scale purchases of Treasury bonds and mortgage-backed securities during the COVID-19 pandemic's onset in 2020. This move led to an expansion of its holdings to approximately $9 trillion by mid-2022. However, since last year, the Fed has been gradually reducing its balance sheet size, although specific guidance on the timeline remains somewhat ambiguous.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

What This Means for the Economy<\/h2>\n\n\n\n

The recalibrated timeline for QT indicates a more prolonged period of balance sheet reduction. As the Federal Reserve continues to navigate its policy decisions, market participants, businesses, and consumers should monitor these developments closely. Changes in the balance sheet size can influence interest rates, liquidity conditions, and overall financial market dynamics.<\/p>\n\n\n\n

A Technical Perspective<\/h2>\n\n\n\n

From a technical standpoint, the Federal Reserve's<\/a> balance sheet management serves as a critical tool in its monetary policy arsenal. The evolving predictions by Wall Street's primary dealers underscore the complexities involved in forecasting economic variables, such as inflation and interest rates.<\/p>\n\n\n\n

As the QT process continues, policymakers and market participants must remain vigilant, considering the potential ramifications for financial stability and economic growth. This dynamic landscape necessitates ongoing analysis and adaptation to ensure that monetary policy objectives align with evolving economic conditions.<\/p>\n","post_title":"Decoding Wall Street's Shift: A Closer Look At Wall Street's Changing Perspective","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"decoding-wall-streets-shift-a-closer-look-at-wall-streets-changing-perspective","to_ping":"","pinged":"","post_modified":"2024-01-10 07:51:25","post_modified_gmt":"2024-01-09 20:51:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14931","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14888,"post_author":"14","post_date":"2024-01-06 18:33:09","post_date_gmt":"2024-01-06 07:33:09","post_content":"\n

Wall Street's main indexes fell at the beginning of the 2024 year as investors locked in profits after a very successful 2023 and are currently waiting for the Federal Reserve's<\/a> meeting that could offer hints on its interest rate path. Ken Polcari, managing partner at Kace Capital Advisors, said:<\/p>\n\n\n\n

\"The decline yesterday, today, and maybe for the next couple of weeks, is a result of people locking in profits and reconsidering what the narrative is - are rates going down five or six times as it appeared to be at the end of last year?\"<\/em><\/p>\n\n\n\n

\"\"
The Nasdaq Composite kicked off the year with a 1.5% drop pressured by a selloff in the tech sector<\/figcaption><\/figure>\n\n\n\n

The Fed's December meeting minutes are set to be disclosed at 2:00 p.m. ET, potentially providing information regarding the central bank's shift toward reducing interest rates. Although it's widely anticipated that the Fed will keep interest rates unchanged this month, traders have priced in a 65.7% probability of a 25 basis point rate reduction in March, according to CMEGroup's FedWatch tool.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures<\/a><\/p>\n\n\n\n

Central Bank And Inflation<\/h2>\n\n\n\n

Richmond Fed President Thomas Barkin, a voting member in the FOMC's rate-setting committee, said recently that the U.S. central bank is \"making real progress\" towards taming inflation and a soft landing seeming \"increasingly conceivable\". Encouragingly, the American Association of Individual Investors (AAII) Sentiment Survey indicated a surge in optimism among individual investors regarding the short-term outlook for the U.S. stock market, reaching its peak level in more than two and a half years.<\/p>\n\n\n\n

Despite this, JPMorgan Asset Management advises investors to be cautious due to potential recession risks. At the same time, analysts at Soci\u00e9t\u00e9 G\u00e9n\u00e9rale anticipate a turbulent 2024 for U.S. stocks, projecting fluctuations that could involve nearing recent highs, encountering declines, and subsequently rebounding.<\/p>\n\n\n\n

This week will witness a series of labor market data releases, culminating in the government's December employment report on Friday. These reports could significantly influence the forecast for the Fed's interest rate trajectory this year, prompting investors to scrutinize the data. Jeffrey Roach, chief economist at LPL Financial, added<\/a>:<\/p>\n\n\n\n

 \"The job market is cooling and we should see confirmation of that in this Friday\u2019s jobs report\"<\/em><\/p>\n\n\n\n

Following the progress of Wall Street's main indexes seen last year, investors are still optimistic about the prospect of another robust year ahead. This optimism is rooted in the anticipation that a decelerating economy will result in a gentle landing rather than a full-scale recession, especially as the Fed initiates rate cuts in the first half of 2024.<\/p>\n","post_title":"Wall Street's Main Indexes Fell At The Beginning Of 2024 year. Investors Locked In Profits After A Strong 2023 And Wait For The Federal Reserve's Meeting","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-at-the-beginning-of-2024-year-investors-locked-in-profits-after-a-strong-2023-and-wait-for-the-federal-reserves-meeting","to_ping":"","pinged":"","post_modified":"2024-01-06 18:33:13","post_modified_gmt":"2024-01-06 07:33:13","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14888","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14629,"post_author":"15","post_date":"2023-12-15 19:46:11","post_date_gmt":"2023-12-15 08:46:11","post_content":"\n

BlackRock aims to facilitate the participation of Wall Street banks in its potential Bitcoin ETF approval. Recent SEC memo <\/a>detailing a late November meeting involving BlackRock, Nasdaq, and the Commission. During this meeting, they discussed feedback regarding BlackRock's Bitcoin ETF application.<\/p>\n\n\n\n

The proposed approach introduces an innovative method for the redemption of ETF shares. A Bitcoin ETF would enable fund investors to gain exposure to Bitcoin without directly purchasing or storing the cryptocurrency. While the SEC has hesitated to approve such ETFs due to concerns about Bitcoin market manipulation, this new strategy addresses those worries.<\/p>\n\n\n\n

The SEC has yet to decide on BlackRock's iShares Bitcoin Trust (IBTC) application, with the deadline set for January 15. Analysts anticipate a decision will be issued for several spot Bitcoin ETF applications earlier in January.<\/p>\n\n\n\n

See Related:<\/strong><\/em> Fidelity Joins BlackRock\u2019s Push For Ethereum ETF<\/a><\/p>\n\n\n\n

BlackRock ETF Details<\/h2>\n\n\n\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

\"Some Federal Reserve governors have come out in the last couple of weeks and given various indications that the interest rate cuts expected by the market in the first half of the year may have been premature. Now the CPI data are certainly reaffirming that picture.\"<\/em><\/p>\n\n\n\n

Consumer price growth reaccelerated, with the main headline figures rising at a faster pace than economists forecast and January\u2019s surprisingly strong core CPI print shows the road to durably return to 2% inflation will be bumpy.<\/p>\n\n\n\n

See Related: <\/em><\/strong>Macro Review Of Economic Data For The United States; CPI, Inflation, Fund Rates<\/a><\/p>\n\n\n\n

Consumer Price Index<\/h2>\n\n\n\n

The consumer price index increased 0.3% in January and it is important to say that shelter prices accounted for much of the rise, climbing 0.6% on the month, contributing more than two-thirds of the headline increase.<\/p>\n\n\n\n

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

On a 12-month basis, the consumer price index came out to 3.1%, down from 3.4% in December but economists surveyed by Dow Jones had been looking for a monthly increase of 0.2% and an annual gain of 2.9%.<\/p>\n\n\n\n

Excluding the volatile food and energy prices, the core CPI surged by 0.4% in January and increased by 3.9% compared to a year ago, remaining unchanged from December. The forecast had anticipated 0.3% and 3.7%, respectively.<\/p>\n\n\n\n

Consequences Of Inflation<\/h2>\n\n\n\n

Following the inflation data release, traders' bets on a 25 basis point rate reduction in May decreased to 38%, down from approximately 58% before the data. Meanwhile, expectations for June remained at 75%, as indicated by the CME FedWatch tool. Quincy Krosby, chief global strategist at LPL Financial said<\/a>:<\/p>\n\n\n\n

\u201cThe much-anticipated CPI report is a disappointment for those who expected inflation to edge lower allowing the Fed to begin easing rates sooner rather than later. Across the board, numbers were hotter than expected making certain that the Fed will need more data before initiating a rate cutting cycle.\u201d<\/em><\/p>\n\n\n\n

Outside of the jump in shelter costs, the rest of the inflation picture was a mixed bag. Prices for used vehicles dropped by 3.4%, while apparel costs decreased by 0.7%, and medical commodities experienced a 0.6% decline. Conversely, electricity costs saw a 1.2% rise, and airline fares increased by 1.4%.<\/p>\n\n\n\n

In the grocery aisle, ham prices decreased by 3.1%, whereas egg prices surged by 3.4%. Federal Reserve officials anticipate inflation to retreat to their 2% annual target but January's uptick could pose challenges for a central bank aiming to ease its tightest monetary policy stance in over two decades.<\/p>\n","post_title":"Wall Street's Main Indexes Tumbled As Hot Inflation Data Dampened Early Rate-Cut Hopes","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-tumbled-as-hot-inflation-data-dampened-early-rate-cut-hopes","to_ping":"","pinged":"","post_modified":"2024-02-16 22:01:49","post_modified_gmt":"2024-02-16 11:01:49","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15411","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15327,"post_author":"14","post_date":"2024-02-07 19:31:18","post_date_gmt":"2024-02-07 08:31:18","post_content":"\n

Wall Street remains under pressure as Treasury yields climb higher, following Federal Reserve Chair Jerome Powell's resolute stance against market speculation of impending rate cuts. In a recent interview, Powell emphasized the necessity for additional evidence indicating a sustainable decline in inflation before considering lowering interest rates, highlighting that the economy's robustness has effectively mitigated recession risks.<\/p>\n\n\n\n

\"\"
Federal Reserve Chair Jerome Powell emphasized the necessity for additional evidence indicating a sustainable decline in inflation<\/em><\/figcaption><\/figure>\n\n\n\n

In January, job growth in the U.S. picked up pace, and wages saw their most significant increase in nearly two years. These are indications of enduring strength in the labor market, potentially complicating the Federal Reserve's plans to begin cutting interest rates in May. Richard Flynn, managing director at Charles Schwab UK, said:<\/p>\n\n\n\n

\"The strong jobs report indicates that demand in the labor market is higher than expected. While lower interest rates would surely be welcomed, it is becoming increasingly clear that markets and the economy are coping well with the high rate environment, so policymakers are perhaps feeling that the need for monetary policy to ease is less urgent.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>Optimism Among Individual Investors About The Short-Term Outlook Of The U.S. Stock Market Rose To Its Highest Level<\/a><\/p>\n\n\n\n

AAII Sentiment Survey<\/h2>\n\n\n\n

Positive information is that the latest American Association of Individual Investors (AAII) Sentiment Survey showed that optimism among individual investors about the short-term outlook for stocks surged again. American Association of Individual Investors (AAII) reported that bullish sentiment, or expectations that stock prices will rise over the next six months, jumped 9.8 percentage points to 49.1%.<\/p>\n\n\n\n

Bullish sentiment has reached an \"unusually high level,\"<\/em> surpassing its historical average of 37.5% for the 13th consecutive week. The last time optimism was higher was on December 21, 2023, at 52.9%. On the other side, bearish sentiment, or expectations that stock prices will fall over the next six months, decreased by 1.6 percentage points to 24.5%. This sentiment remains below its historical average of 31.0% for the 13th consecutive week.<\/p>\n\n\n\n

Simultaneously, approximately 80% of earnings reports are surpassing analysts' expectations. With results available from nearly half of the S&P 500 companies, including major tech-related firms, overall earnings are projected to have risen by 7.8% in the fourth quarter compared to the same period last year.<\/p>\n\n\n\n

In their latest report on equity client flows, BofA Securities equity and quant strategist Jill Carey Hall said that the previous week saw the largest influx of U.S. equity investments in seven weeks, along with the most substantial private client inflows in over a year. Jill Carey Hall added<\/a>:<\/p>\n\n\n\n

\"Private clients were the biggest buyers of equities last week, led by purchases of ETFs and Tech stocks. Institutional clients were also net buyers after large outflows the week prior, while hedge fund clients were net sellers.\"<\/em><\/p>\n\n\n\n

Investors are actively monitoring earnings and forecasts from big companies against the backdrop of high borrowing costs but remarks from the Fed's policymakers through the week, including voting member Cleveland's Loretta Mester, will also be on investors' watch list.<\/p>\n","post_title":"Fed Chair Jerome Powell Pushed Back Firmly Against Market Speculation Of Imminent Rate Cuts. What To Expect In The Days Ahead?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"fed-chair-jerome-powell-pushed-back-firmly-against-market-speculation-of-imminent-rate-cuts-what-to-expect-in-the-days-ahead","to_ping":"","pinged":"","post_modified":"2024-02-07 19:31:25","post_modified_gmt":"2024-02-07 08:31:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15327","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15225,"post_author":"14","post_date":"2024-02-01 16:33:13","post_date_gmt":"2024-02-01 05:33:13","post_content":"\n

Wall Street's main indexes fell as Alphabet's projections for rising AI costs dented most megacap and chip stocks while the Federal Reserve left interest rates unchanged this Wednesday. Google's parent company experienced a 6.1% decline, resulting in a 3.0% drop in the S&P 500 communication services sector. This occurred following its announcement of holiday-season advertising sales falling short of expectations and its projection of increased spending on artificial intelligence.<\/p>\n\n\n\n

Microsoft (Nasdaq: MSFT) also lost 1.3% after forecasting higher costs to develop new artificial intelligence features, which overshadowed its upbeat quarterly results. Despite the optimistic outlook from the tech pioneers regarding customer enthusiasm for their generative AI-powered products, investors grew concerned about escalating development expenses for these innovative features. These mounting costs tempered their hopes for a significant sales surge from the new technology.<\/p>\n\n\n\n

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

These results and forecasts from big tech names, along with Tesla's growth warning last week, have reignited attention on the risks associated with the significant influence of mega-cap companies in the S&P 500 which has hit record highs in recent weeks. Apple, Meta Platforms, and Amazon.com set to report earnings on Thursday, fell over 1% each.<\/p>\n\n\n\n

See Related: New Bitcoin Core Update May Natively Support Apple M1 Chips<\/a><\/p>\n\n\n\n

Revenue Forecast And Increased Projection<\/h2>\n\n\n\n

It is also important to mention that Advanced Micro Devices saw a 3.3% decline as its first-quarter revenue forecast and increased projection for AI processors fell short of expectations. Other chip stocks including Nvidia, Broadcom, and Marvell dropped over 1% each. The attention of investors was also on the Federal Reserve's initial monetary policy decision of the year, and while it was widely anticipated that the Fed would maintain interest rates, many analysts said that the Fed is taking baby steps toward the cutting. Art Hogan, Chief Market Strategist of B.Riley Wealth, said<\/a>:<\/p>\n\n\n\n

\"Not surprisingly, I don't think the Fed wants to show their hand, especially, when they have a couple of months of data to collect before they need to. The good news is we can forget about any more tightening. The bad news is it's 'when', not 'if', they're going to cut rates, and that 'when' has been pushed out to what had been the fringes of consensus.\"<\/em><\/p>\n\n\n\n

Due to this, markets are showing some immediate disappointment as there's no explicit indication of imminent rate cuts. We're seeing an extremely neutral, non-committal statement from the Federal Reserve this Wednesday.<\/p>\n","post_title":"Wall Street's Main Indexes Fell As Alphabet's Projections For Rising AI Costs Dented Most Mega-Cap And Chip Stocks","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-as-alphabets-projections-for-rising-ai-costs-dented-most-mega-cap-and-chip-stocks","to_ping":"","pinged":"","post_modified":"2024-02-01 16:33:21","post_modified_gmt":"2024-02-01 05:33:21","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15225","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15094,"post_author":"18","post_date":"2024-01-26 02:18:51","post_date_gmt":"2024-01-25 15:18:51","post_content":"\n

As we enter the last week of January, whispers on Wall Street suggest a potential tantrum in U.S. short-term financing markets, with the storm possibly hitting as early as March. This could prompt the Federal Reserve to reassess its policies.<\/p>\n\n\n\n

As of now, banking executives are anticipating a series of events that may tighten the screws on short-term financing. The expiration of a Fed lending facility on March 11, coupled with limited adoption of the standing repo facility (SRF), is expected to reduce the available funding sources for banks. Simultaneously, increased demand for liquidity is on the horizon due to substantial U.S. government debt issuance and upcoming tax payments in March and April. Additionally, a move toward faster trade settlement in May could intensify the demand for short-term funding.<\/p>\n\n\n\n

Against this backdrop, the Federal Reserve has been steadily draining cash from the financial system by unwinding pandemic-era support. BNY Mellon strategists estimate a significant decrease in cash parked overnight with the Fed, potentially dropping below $200 billion by May. The overnight reverse repurchase agreements facility could even approach zero by mid-year. This reduction in excess liquidity may expose vulnerabilities in short-term financing markets.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Storm Clouds Gather Over Germany's Financial Horizon<\/a><\/p>\n\n\n\n

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

Spikes In Short Term Financing Markets<\/h2>\n\n\n\n

Sudden spikes in short-term financing markets can threaten financial stability, making it harder and more expensive for firms to secure necessary funds. This situation could expose lenders struggling to stabilize deposits after last year's banking crisis. As the Fed inches closer to its 2% inflation target, the risk of policy error looms large.<\/p>\n\n\n\n

If short-term financing markets experience a meltdown, it could signal the need for the Fed to ease policy. Slowing the pace of quantitative tightening (QT) is seen as a potential response. Despite the central bankers' insistence on needing more data before rate cuts, markets are already pricing in cuts by May.<\/p>\n\n\n\n

As we approach the critical months of March to May, the financial markets are at a crossroads. The potential shake-up in short-term financing markets could signal the Fed to reassess its policies. Market participants and investors must stay vigilant, and prepared for potential shifts in liquidity and policy adjustments. The coming months will \/reveal whether these concerns materialize into a significant market event or remain a contained storm in the financial teacup.<\/p>\n","post_title":"Understanding The Potential Shake-Up In U.S. Short-Term Financing Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"understanding-the-potential-shake-up-in-u-s-short-term-financing-markets","to_ping":"","pinged":"","post_modified":"2024-01-26 20:20:06","post_modified_gmt":"2024-01-26 09:20:06","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15094","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15043,"post_author":"14","post_date":"2024-01-19 05:56:40","post_date_gmt":"2024-01-18 18:56:40","post_content":"\n

Wall Street witnessed a significant stock decline this Wednesday following positive December U.S. retail sales data, which diminished the anticipation of an early initiation of the Federal Reserve's campaign to cut interest rates.<\/p>\n\n\n\n

Retail Sales Report <\/h2>\n\n\n\n

The December retail sales report from the Commerce Department (USRSL=ECI) depicted a robust consumer, responsible for approximately 70% of the U.S. economy. Despite facing the challenges of high inflation and a tight monetary policy, the consumer has shown resilience.<\/p>\n\n\n\n

The data revealed that discounts offered by retailers and a surge in motor vehicle acquisitions contributed to a greater-than-anticipated increase in U.S. retail sales, maintaining the economy on a robust trajectory in 2024. This bolstered the perspective that the Federal Reserve might not reduce interest rates as rapidly as initially anticipated for the current year.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

Anticipations among traders for a 25-basis-point Federal Reserve rate cut in March declined to 55%, down from approximately 60% before the release of the retail sales data. Ryan Detrick, chief market strategist at Carson Group in Omaha, said<\/a>:<\/p>\n\n\n\n

\"We had news that the U.S. consumer continues to be quite healthy, but that has increased anxiety that the Fed\u2019s first rate cut could potentially be pushed to May from March. Yields are also moving higher on the strong retail sales numbers, adding to near-term worries.\"<\/em><\/p>\n\n\n\n

US Stocks And Wall Street<\/h2>\n\n\n\n

It is also important to mention that a decline in U.S. stocks sent Wall Street's<\/a> \"fear gauge\" to a two-month high while JPMorgan analysts predict that the majority of negative consequences stemming from higher interest rates have not materialized yet. On Tuesday, Federal Reserve Governor Christopher Waller also emphasized that the central bank should refrain from hastily reducing interest rates until there is a clear indication that lower inflation is likely to persist.<\/p>\n\n\n\n

At the same time, the escalation of geopolitical uncertainties introduces an additional challenge and heightens the potential for unforeseen risks in both markets and economic performance. Considering these factors, the perspective is likely to stay cautious as long as interest rates remain significantly restrictive and the looming presence of geopolitical risks persists.<\/p>\n","post_title":"Wall Street Weakened As Retail Sales Data Hampers Expectations For A Cut In Interest Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-weakened-as-retail-sales-data-hampers-expectations-for-a-cut-in-interest-rates","to_ping":"","pinged":"","post_modified":"2024-01-19 05:56:51","post_modified_gmt":"2024-01-18 18:56:51","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15043","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14931,"post_author":"18","post_date":"2024-01-10 07:51:17","post_date_gmt":"2024-01-09 20:51:17","post_content":"\n

In a recent survey conducted by the New York Federal Reserve<\/a>, Wall Street's major banks have recalibrated their predictions regarding the Federal Reserve's balance sheet drawdown. This shift suggests that the U.S. central bank might conclude its quantitative tightening (QT) process later than initially anticipated.<\/p>\n\n\n\n

A Change in Perspective<\/h2>\n\n\n\n

Previously, primary dealers\u2014major banks\u2014projected that the QT process would conclude by the third quarter. However, the sentiment has evolved. According to the latest survey taken before the Fed's December 12-13 policy meeting, these banks now foresee the QT process ending in the fourth quarter.<\/p>\n\n\n\n

This adjustment carries significant implications. If these predictions materialize, the Federal Reserve's balance sheet<\/a> will likely shrink to approximately $6.75 trillion, down from its current level of roughly $7.764 trillion. Moreover, banks estimated that the central bank's reverse repo facility would hold $375 billion when QT concludes, a reduction from the anticipated $625 billion as forecasted in October.<\/p>\n\n\n\n

Federal Reserve Strategy<\/h2>\n\n\n\n

The quantitative tightening process has been an integral part of the Federal Reserve's strategy to combat inflation. Alongside rate hikes, the central bank initiated large-scale purchases of Treasury bonds and mortgage-backed securities during the COVID-19 pandemic's onset in 2020. This move led to an expansion of its holdings to approximately $9 trillion by mid-2022. However, since last year, the Fed has been gradually reducing its balance sheet size, although specific guidance on the timeline remains somewhat ambiguous.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

What This Means for the Economy<\/h2>\n\n\n\n

The recalibrated timeline for QT indicates a more prolonged period of balance sheet reduction. As the Federal Reserve continues to navigate its policy decisions, market participants, businesses, and consumers should monitor these developments closely. Changes in the balance sheet size can influence interest rates, liquidity conditions, and overall financial market dynamics.<\/p>\n\n\n\n

A Technical Perspective<\/h2>\n\n\n\n

From a technical standpoint, the Federal Reserve's<\/a> balance sheet management serves as a critical tool in its monetary policy arsenal. The evolving predictions by Wall Street's primary dealers underscore the complexities involved in forecasting economic variables, such as inflation and interest rates.<\/p>\n\n\n\n

As the QT process continues, policymakers and market participants must remain vigilant, considering the potential ramifications for financial stability and economic growth. This dynamic landscape necessitates ongoing analysis and adaptation to ensure that monetary policy objectives align with evolving economic conditions.<\/p>\n","post_title":"Decoding Wall Street's Shift: A Closer Look At Wall Street's Changing Perspective","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"decoding-wall-streets-shift-a-closer-look-at-wall-streets-changing-perspective","to_ping":"","pinged":"","post_modified":"2024-01-10 07:51:25","post_modified_gmt":"2024-01-09 20:51:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14931","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14888,"post_author":"14","post_date":"2024-01-06 18:33:09","post_date_gmt":"2024-01-06 07:33:09","post_content":"\n

Wall Street's main indexes fell at the beginning of the 2024 year as investors locked in profits after a very successful 2023 and are currently waiting for the Federal Reserve's<\/a> meeting that could offer hints on its interest rate path. Ken Polcari, managing partner at Kace Capital Advisors, said:<\/p>\n\n\n\n

\"The decline yesterday, today, and maybe for the next couple of weeks, is a result of people locking in profits and reconsidering what the narrative is - are rates going down five or six times as it appeared to be at the end of last year?\"<\/em><\/p>\n\n\n\n

\"\"
The Nasdaq Composite kicked off the year with a 1.5% drop pressured by a selloff in the tech sector<\/figcaption><\/figure>\n\n\n\n

The Fed's December meeting minutes are set to be disclosed at 2:00 p.m. ET, potentially providing information regarding the central bank's shift toward reducing interest rates. Although it's widely anticipated that the Fed will keep interest rates unchanged this month, traders have priced in a 65.7% probability of a 25 basis point rate reduction in March, according to CMEGroup's FedWatch tool.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures<\/a><\/p>\n\n\n\n

Central Bank And Inflation<\/h2>\n\n\n\n

Richmond Fed President Thomas Barkin, a voting member in the FOMC's rate-setting committee, said recently that the U.S. central bank is \"making real progress\" towards taming inflation and a soft landing seeming \"increasingly conceivable\". Encouragingly, the American Association of Individual Investors (AAII) Sentiment Survey indicated a surge in optimism among individual investors regarding the short-term outlook for the U.S. stock market, reaching its peak level in more than two and a half years.<\/p>\n\n\n\n

Despite this, JPMorgan Asset Management advises investors to be cautious due to potential recession risks. At the same time, analysts at Soci\u00e9t\u00e9 G\u00e9n\u00e9rale anticipate a turbulent 2024 for U.S. stocks, projecting fluctuations that could involve nearing recent highs, encountering declines, and subsequently rebounding.<\/p>\n\n\n\n

This week will witness a series of labor market data releases, culminating in the government's December employment report on Friday. These reports could significantly influence the forecast for the Fed's interest rate trajectory this year, prompting investors to scrutinize the data. Jeffrey Roach, chief economist at LPL Financial, added<\/a>:<\/p>\n\n\n\n

 \"The job market is cooling and we should see confirmation of that in this Friday\u2019s jobs report\"<\/em><\/p>\n\n\n\n

Following the progress of Wall Street's main indexes seen last year, investors are still optimistic about the prospect of another robust year ahead. This optimism is rooted in the anticipation that a decelerating economy will result in a gentle landing rather than a full-scale recession, especially as the Fed initiates rate cuts in the first half of 2024.<\/p>\n","post_title":"Wall Street's Main Indexes Fell At The Beginning Of 2024 year. Investors Locked In Profits After A Strong 2023 And Wait For The Federal Reserve's Meeting","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-at-the-beginning-of-2024-year-investors-locked-in-profits-after-a-strong-2023-and-wait-for-the-federal-reserves-meeting","to_ping":"","pinged":"","post_modified":"2024-01-06 18:33:13","post_modified_gmt":"2024-01-06 07:33:13","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14888","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14629,"post_author":"15","post_date":"2023-12-15 19:46:11","post_date_gmt":"2023-12-15 08:46:11","post_content":"\n

BlackRock aims to facilitate the participation of Wall Street banks in its potential Bitcoin ETF approval. Recent SEC memo <\/a>detailing a late November meeting involving BlackRock, Nasdaq, and the Commission. During this meeting, they discussed feedback regarding BlackRock's Bitcoin ETF application.<\/p>\n\n\n\n

The proposed approach introduces an innovative method for the redemption of ETF shares. A Bitcoin ETF would enable fund investors to gain exposure to Bitcoin without directly purchasing or storing the cryptocurrency. While the SEC has hesitated to approve such ETFs due to concerns about Bitcoin market manipulation, this new strategy addresses those worries.<\/p>\n\n\n\n

The SEC has yet to decide on BlackRock's iShares Bitcoin Trust (IBTC) application, with the deadline set for January 15. Analysts anticipate a decision will be issued for several spot Bitcoin ETF applications earlier in January.<\/p>\n\n\n\n

See Related:<\/strong><\/em> Fidelity Joins BlackRock\u2019s Push For Ethereum ETF<\/a><\/p>\n\n\n\n

BlackRock ETF Details<\/h2>\n\n\n\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

Markets have rallied this year on bets that the Fed would start trimming rates in May but a Labor Department report showed U.S. consumer prices increased above forecasts in January amid a surge in the cost of shelter. Bob Elliott, chief investment officer at Unlimited Funds said<\/a>:<\/p>\n\n\n\n

\"Some Federal Reserve governors have come out in the last couple of weeks and given various indications that the interest rate cuts expected by the market in the first half of the year may have been premature. Now the CPI data are certainly reaffirming that picture.\"<\/em><\/p>\n\n\n\n

Consumer price growth reaccelerated, with the main headline figures rising at a faster pace than economists forecast and January\u2019s surprisingly strong core CPI print shows the road to durably return to 2% inflation will be bumpy.<\/p>\n\n\n\n

See Related: <\/em><\/strong>Macro Review Of Economic Data For The United States; CPI, Inflation, Fund Rates<\/a><\/p>\n\n\n\n

Consumer Price Index<\/h2>\n\n\n\n

The consumer price index increased 0.3% in January and it is important to say that shelter prices accounted for much of the rise, climbing 0.6% on the month, contributing more than two-thirds of the headline increase.<\/p>\n\n\n\n

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

On a 12-month basis, the consumer price index came out to 3.1%, down from 3.4% in December but economists surveyed by Dow Jones had been looking for a monthly increase of 0.2% and an annual gain of 2.9%.<\/p>\n\n\n\n

Excluding the volatile food and energy prices, the core CPI surged by 0.4% in January and increased by 3.9% compared to a year ago, remaining unchanged from December. The forecast had anticipated 0.3% and 3.7%, respectively.<\/p>\n\n\n\n

Consequences Of Inflation<\/h2>\n\n\n\n

Following the inflation data release, traders' bets on a 25 basis point rate reduction in May decreased to 38%, down from approximately 58% before the data. Meanwhile, expectations for June remained at 75%, as indicated by the CME FedWatch tool. Quincy Krosby, chief global strategist at LPL Financial said<\/a>:<\/p>\n\n\n\n

\u201cThe much-anticipated CPI report is a disappointment for those who expected inflation to edge lower allowing the Fed to begin easing rates sooner rather than later. Across the board, numbers were hotter than expected making certain that the Fed will need more data before initiating a rate cutting cycle.\u201d<\/em><\/p>\n\n\n\n

Outside of the jump in shelter costs, the rest of the inflation picture was a mixed bag. Prices for used vehicles dropped by 3.4%, while apparel costs decreased by 0.7%, and medical commodities experienced a 0.6% decline. Conversely, electricity costs saw a 1.2% rise, and airline fares increased by 1.4%.<\/p>\n\n\n\n

In the grocery aisle, ham prices decreased by 3.1%, whereas egg prices surged by 3.4%. Federal Reserve officials anticipate inflation to retreat to their 2% annual target but January's uptick could pose challenges for a central bank aiming to ease its tightest monetary policy stance in over two decades.<\/p>\n","post_title":"Wall Street's Main Indexes Tumbled As Hot Inflation Data Dampened Early Rate-Cut Hopes","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-tumbled-as-hot-inflation-data-dampened-early-rate-cut-hopes","to_ping":"","pinged":"","post_modified":"2024-02-16 22:01:49","post_modified_gmt":"2024-02-16 11:01:49","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15411","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15327,"post_author":"14","post_date":"2024-02-07 19:31:18","post_date_gmt":"2024-02-07 08:31:18","post_content":"\n

Wall Street remains under pressure as Treasury yields climb higher, following Federal Reserve Chair Jerome Powell's resolute stance against market speculation of impending rate cuts. In a recent interview, Powell emphasized the necessity for additional evidence indicating a sustainable decline in inflation before considering lowering interest rates, highlighting that the economy's robustness has effectively mitigated recession risks.<\/p>\n\n\n\n

\"\"
Federal Reserve Chair Jerome Powell emphasized the necessity for additional evidence indicating a sustainable decline in inflation<\/em><\/figcaption><\/figure>\n\n\n\n

In January, job growth in the U.S. picked up pace, and wages saw their most significant increase in nearly two years. These are indications of enduring strength in the labor market, potentially complicating the Federal Reserve's plans to begin cutting interest rates in May. Richard Flynn, managing director at Charles Schwab UK, said:<\/p>\n\n\n\n

\"The strong jobs report indicates that demand in the labor market is higher than expected. While lower interest rates would surely be welcomed, it is becoming increasingly clear that markets and the economy are coping well with the high rate environment, so policymakers are perhaps feeling that the need for monetary policy to ease is less urgent.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>Optimism Among Individual Investors About The Short-Term Outlook Of The U.S. Stock Market Rose To Its Highest Level<\/a><\/p>\n\n\n\n

AAII Sentiment Survey<\/h2>\n\n\n\n

Positive information is that the latest American Association of Individual Investors (AAII) Sentiment Survey showed that optimism among individual investors about the short-term outlook for stocks surged again. American Association of Individual Investors (AAII) reported that bullish sentiment, or expectations that stock prices will rise over the next six months, jumped 9.8 percentage points to 49.1%.<\/p>\n\n\n\n

Bullish sentiment has reached an \"unusually high level,\"<\/em> surpassing its historical average of 37.5% for the 13th consecutive week. The last time optimism was higher was on December 21, 2023, at 52.9%. On the other side, bearish sentiment, or expectations that stock prices will fall over the next six months, decreased by 1.6 percentage points to 24.5%. This sentiment remains below its historical average of 31.0% for the 13th consecutive week.<\/p>\n\n\n\n

Simultaneously, approximately 80% of earnings reports are surpassing analysts' expectations. With results available from nearly half of the S&P 500 companies, including major tech-related firms, overall earnings are projected to have risen by 7.8% in the fourth quarter compared to the same period last year.<\/p>\n\n\n\n

In their latest report on equity client flows, BofA Securities equity and quant strategist Jill Carey Hall said that the previous week saw the largest influx of U.S. equity investments in seven weeks, along with the most substantial private client inflows in over a year. Jill Carey Hall added<\/a>:<\/p>\n\n\n\n

\"Private clients were the biggest buyers of equities last week, led by purchases of ETFs and Tech stocks. Institutional clients were also net buyers after large outflows the week prior, while hedge fund clients were net sellers.\"<\/em><\/p>\n\n\n\n

Investors are actively monitoring earnings and forecasts from big companies against the backdrop of high borrowing costs but remarks from the Fed's policymakers through the week, including voting member Cleveland's Loretta Mester, will also be on investors' watch list.<\/p>\n","post_title":"Fed Chair Jerome Powell Pushed Back Firmly Against Market Speculation Of Imminent Rate Cuts. What To Expect In The Days Ahead?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"fed-chair-jerome-powell-pushed-back-firmly-against-market-speculation-of-imminent-rate-cuts-what-to-expect-in-the-days-ahead","to_ping":"","pinged":"","post_modified":"2024-02-07 19:31:25","post_modified_gmt":"2024-02-07 08:31:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15327","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15225,"post_author":"14","post_date":"2024-02-01 16:33:13","post_date_gmt":"2024-02-01 05:33:13","post_content":"\n

Wall Street's main indexes fell as Alphabet's projections for rising AI costs dented most megacap and chip stocks while the Federal Reserve left interest rates unchanged this Wednesday. Google's parent company experienced a 6.1% decline, resulting in a 3.0% drop in the S&P 500 communication services sector. This occurred following its announcement of holiday-season advertising sales falling short of expectations and its projection of increased spending on artificial intelligence.<\/p>\n\n\n\n

Microsoft (Nasdaq: MSFT) also lost 1.3% after forecasting higher costs to develop new artificial intelligence features, which overshadowed its upbeat quarterly results. Despite the optimistic outlook from the tech pioneers regarding customer enthusiasm for their generative AI-powered products, investors grew concerned about escalating development expenses for these innovative features. These mounting costs tempered their hopes for a significant sales surge from the new technology.<\/p>\n\n\n\n

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

These results and forecasts from big tech names, along with Tesla's growth warning last week, have reignited attention on the risks associated with the significant influence of mega-cap companies in the S&P 500 which has hit record highs in recent weeks. Apple, Meta Platforms, and Amazon.com set to report earnings on Thursday, fell over 1% each.<\/p>\n\n\n\n

See Related: New Bitcoin Core Update May Natively Support Apple M1 Chips<\/a><\/p>\n\n\n\n

Revenue Forecast And Increased Projection<\/h2>\n\n\n\n

It is also important to mention that Advanced Micro Devices saw a 3.3% decline as its first-quarter revenue forecast and increased projection for AI processors fell short of expectations. Other chip stocks including Nvidia, Broadcom, and Marvell dropped over 1% each. The attention of investors was also on the Federal Reserve's initial monetary policy decision of the year, and while it was widely anticipated that the Fed would maintain interest rates, many analysts said that the Fed is taking baby steps toward the cutting. Art Hogan, Chief Market Strategist of B.Riley Wealth, said<\/a>:<\/p>\n\n\n\n

\"Not surprisingly, I don't think the Fed wants to show their hand, especially, when they have a couple of months of data to collect before they need to. The good news is we can forget about any more tightening. The bad news is it's 'when', not 'if', they're going to cut rates, and that 'when' has been pushed out to what had been the fringes of consensus.\"<\/em><\/p>\n\n\n\n

Due to this, markets are showing some immediate disappointment as there's no explicit indication of imminent rate cuts. We're seeing an extremely neutral, non-committal statement from the Federal Reserve this Wednesday.<\/p>\n","post_title":"Wall Street's Main Indexes Fell As Alphabet's Projections For Rising AI Costs Dented Most Mega-Cap And Chip Stocks","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-as-alphabets-projections-for-rising-ai-costs-dented-most-mega-cap-and-chip-stocks","to_ping":"","pinged":"","post_modified":"2024-02-01 16:33:21","post_modified_gmt":"2024-02-01 05:33:21","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15225","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15094,"post_author":"18","post_date":"2024-01-26 02:18:51","post_date_gmt":"2024-01-25 15:18:51","post_content":"\n

As we enter the last week of January, whispers on Wall Street suggest a potential tantrum in U.S. short-term financing markets, with the storm possibly hitting as early as March. This could prompt the Federal Reserve to reassess its policies.<\/p>\n\n\n\n

As of now, banking executives are anticipating a series of events that may tighten the screws on short-term financing. The expiration of a Fed lending facility on March 11, coupled with limited adoption of the standing repo facility (SRF), is expected to reduce the available funding sources for banks. Simultaneously, increased demand for liquidity is on the horizon due to substantial U.S. government debt issuance and upcoming tax payments in March and April. Additionally, a move toward faster trade settlement in May could intensify the demand for short-term funding.<\/p>\n\n\n\n

Against this backdrop, the Federal Reserve has been steadily draining cash from the financial system by unwinding pandemic-era support. BNY Mellon strategists estimate a significant decrease in cash parked overnight with the Fed, potentially dropping below $200 billion by May. The overnight reverse repurchase agreements facility could even approach zero by mid-year. This reduction in excess liquidity may expose vulnerabilities in short-term financing markets.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Storm Clouds Gather Over Germany's Financial Horizon<\/a><\/p>\n\n\n\n

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

Spikes In Short Term Financing Markets<\/h2>\n\n\n\n

Sudden spikes in short-term financing markets can threaten financial stability, making it harder and more expensive for firms to secure necessary funds. This situation could expose lenders struggling to stabilize deposits after last year's banking crisis. As the Fed inches closer to its 2% inflation target, the risk of policy error looms large.<\/p>\n\n\n\n

If short-term financing markets experience a meltdown, it could signal the need for the Fed to ease policy. Slowing the pace of quantitative tightening (QT) is seen as a potential response. Despite the central bankers' insistence on needing more data before rate cuts, markets are already pricing in cuts by May.<\/p>\n\n\n\n

As we approach the critical months of March to May, the financial markets are at a crossroads. The potential shake-up in short-term financing markets could signal the Fed to reassess its policies. Market participants and investors must stay vigilant, and prepared for potential shifts in liquidity and policy adjustments. The coming months will \/reveal whether these concerns materialize into a significant market event or remain a contained storm in the financial teacup.<\/p>\n","post_title":"Understanding The Potential Shake-Up In U.S. Short-Term Financing Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"understanding-the-potential-shake-up-in-u-s-short-term-financing-markets","to_ping":"","pinged":"","post_modified":"2024-01-26 20:20:06","post_modified_gmt":"2024-01-26 09:20:06","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15094","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15043,"post_author":"14","post_date":"2024-01-19 05:56:40","post_date_gmt":"2024-01-18 18:56:40","post_content":"\n

Wall Street witnessed a significant stock decline this Wednesday following positive December U.S. retail sales data, which diminished the anticipation of an early initiation of the Federal Reserve's campaign to cut interest rates.<\/p>\n\n\n\n

Retail Sales Report <\/h2>\n\n\n\n

The December retail sales report from the Commerce Department (USRSL=ECI) depicted a robust consumer, responsible for approximately 70% of the U.S. economy. Despite facing the challenges of high inflation and a tight monetary policy, the consumer has shown resilience.<\/p>\n\n\n\n

The data revealed that discounts offered by retailers and a surge in motor vehicle acquisitions contributed to a greater-than-anticipated increase in U.S. retail sales, maintaining the economy on a robust trajectory in 2024. This bolstered the perspective that the Federal Reserve might not reduce interest rates as rapidly as initially anticipated for the current year.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

Anticipations among traders for a 25-basis-point Federal Reserve rate cut in March declined to 55%, down from approximately 60% before the release of the retail sales data. Ryan Detrick, chief market strategist at Carson Group in Omaha, said<\/a>:<\/p>\n\n\n\n

\"We had news that the U.S. consumer continues to be quite healthy, but that has increased anxiety that the Fed\u2019s first rate cut could potentially be pushed to May from March. Yields are also moving higher on the strong retail sales numbers, adding to near-term worries.\"<\/em><\/p>\n\n\n\n

US Stocks And Wall Street<\/h2>\n\n\n\n

It is also important to mention that a decline in U.S. stocks sent Wall Street's<\/a> \"fear gauge\" to a two-month high while JPMorgan analysts predict that the majority of negative consequences stemming from higher interest rates have not materialized yet. On Tuesday, Federal Reserve Governor Christopher Waller also emphasized that the central bank should refrain from hastily reducing interest rates until there is a clear indication that lower inflation is likely to persist.<\/p>\n\n\n\n

At the same time, the escalation of geopolitical uncertainties introduces an additional challenge and heightens the potential for unforeseen risks in both markets and economic performance. Considering these factors, the perspective is likely to stay cautious as long as interest rates remain significantly restrictive and the looming presence of geopolitical risks persists.<\/p>\n","post_title":"Wall Street Weakened As Retail Sales Data Hampers Expectations For A Cut In Interest Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-weakened-as-retail-sales-data-hampers-expectations-for-a-cut-in-interest-rates","to_ping":"","pinged":"","post_modified":"2024-01-19 05:56:51","post_modified_gmt":"2024-01-18 18:56:51","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15043","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14931,"post_author":"18","post_date":"2024-01-10 07:51:17","post_date_gmt":"2024-01-09 20:51:17","post_content":"\n

In a recent survey conducted by the New York Federal Reserve<\/a>, Wall Street's major banks have recalibrated their predictions regarding the Federal Reserve's balance sheet drawdown. This shift suggests that the U.S. central bank might conclude its quantitative tightening (QT) process later than initially anticipated.<\/p>\n\n\n\n

A Change in Perspective<\/h2>\n\n\n\n

Previously, primary dealers\u2014major banks\u2014projected that the QT process would conclude by the third quarter. However, the sentiment has evolved. According to the latest survey taken before the Fed's December 12-13 policy meeting, these banks now foresee the QT process ending in the fourth quarter.<\/p>\n\n\n\n

This adjustment carries significant implications. If these predictions materialize, the Federal Reserve's balance sheet<\/a> will likely shrink to approximately $6.75 trillion, down from its current level of roughly $7.764 trillion. Moreover, banks estimated that the central bank's reverse repo facility would hold $375 billion when QT concludes, a reduction from the anticipated $625 billion as forecasted in October.<\/p>\n\n\n\n

Federal Reserve Strategy<\/h2>\n\n\n\n

The quantitative tightening process has been an integral part of the Federal Reserve's strategy to combat inflation. Alongside rate hikes, the central bank initiated large-scale purchases of Treasury bonds and mortgage-backed securities during the COVID-19 pandemic's onset in 2020. This move led to an expansion of its holdings to approximately $9 trillion by mid-2022. However, since last year, the Fed has been gradually reducing its balance sheet size, although specific guidance on the timeline remains somewhat ambiguous.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

What This Means for the Economy<\/h2>\n\n\n\n

The recalibrated timeline for QT indicates a more prolonged period of balance sheet reduction. As the Federal Reserve continues to navigate its policy decisions, market participants, businesses, and consumers should monitor these developments closely. Changes in the balance sheet size can influence interest rates, liquidity conditions, and overall financial market dynamics.<\/p>\n\n\n\n

A Technical Perspective<\/h2>\n\n\n\n

From a technical standpoint, the Federal Reserve's<\/a> balance sheet management serves as a critical tool in its monetary policy arsenal. The evolving predictions by Wall Street's primary dealers underscore the complexities involved in forecasting economic variables, such as inflation and interest rates.<\/p>\n\n\n\n

As the QT process continues, policymakers and market participants must remain vigilant, considering the potential ramifications for financial stability and economic growth. This dynamic landscape necessitates ongoing analysis and adaptation to ensure that monetary policy objectives align with evolving economic conditions.<\/p>\n","post_title":"Decoding Wall Street's Shift: A Closer Look At Wall Street's Changing Perspective","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"decoding-wall-streets-shift-a-closer-look-at-wall-streets-changing-perspective","to_ping":"","pinged":"","post_modified":"2024-01-10 07:51:25","post_modified_gmt":"2024-01-09 20:51:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14931","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14888,"post_author":"14","post_date":"2024-01-06 18:33:09","post_date_gmt":"2024-01-06 07:33:09","post_content":"\n

Wall Street's main indexes fell at the beginning of the 2024 year as investors locked in profits after a very successful 2023 and are currently waiting for the Federal Reserve's<\/a> meeting that could offer hints on its interest rate path. Ken Polcari, managing partner at Kace Capital Advisors, said:<\/p>\n\n\n\n

\"The decline yesterday, today, and maybe for the next couple of weeks, is a result of people locking in profits and reconsidering what the narrative is - are rates going down five or six times as it appeared to be at the end of last year?\"<\/em><\/p>\n\n\n\n

\"\"
The Nasdaq Composite kicked off the year with a 1.5% drop pressured by a selloff in the tech sector<\/figcaption><\/figure>\n\n\n\n

The Fed's December meeting minutes are set to be disclosed at 2:00 p.m. ET, potentially providing information regarding the central bank's shift toward reducing interest rates. Although it's widely anticipated that the Fed will keep interest rates unchanged this month, traders have priced in a 65.7% probability of a 25 basis point rate reduction in March, according to CMEGroup's FedWatch tool.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures<\/a><\/p>\n\n\n\n

Central Bank And Inflation<\/h2>\n\n\n\n

Richmond Fed President Thomas Barkin, a voting member in the FOMC's rate-setting committee, said recently that the U.S. central bank is \"making real progress\" towards taming inflation and a soft landing seeming \"increasingly conceivable\". Encouragingly, the American Association of Individual Investors (AAII) Sentiment Survey indicated a surge in optimism among individual investors regarding the short-term outlook for the U.S. stock market, reaching its peak level in more than two and a half years.<\/p>\n\n\n\n

Despite this, JPMorgan Asset Management advises investors to be cautious due to potential recession risks. At the same time, analysts at Soci\u00e9t\u00e9 G\u00e9n\u00e9rale anticipate a turbulent 2024 for U.S. stocks, projecting fluctuations that could involve nearing recent highs, encountering declines, and subsequently rebounding.<\/p>\n\n\n\n

This week will witness a series of labor market data releases, culminating in the government's December employment report on Friday. These reports could significantly influence the forecast for the Fed's interest rate trajectory this year, prompting investors to scrutinize the data. Jeffrey Roach, chief economist at LPL Financial, added<\/a>:<\/p>\n\n\n\n

 \"The job market is cooling and we should see confirmation of that in this Friday\u2019s jobs report\"<\/em><\/p>\n\n\n\n

Following the progress of Wall Street's main indexes seen last year, investors are still optimistic about the prospect of another robust year ahead. This optimism is rooted in the anticipation that a decelerating economy will result in a gentle landing rather than a full-scale recession, especially as the Fed initiates rate cuts in the first half of 2024.<\/p>\n","post_title":"Wall Street's Main Indexes Fell At The Beginning Of 2024 year. Investors Locked In Profits After A Strong 2023 And Wait For The Federal Reserve's Meeting","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-at-the-beginning-of-2024-year-investors-locked-in-profits-after-a-strong-2023-and-wait-for-the-federal-reserves-meeting","to_ping":"","pinged":"","post_modified":"2024-01-06 18:33:13","post_modified_gmt":"2024-01-06 07:33:13","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14888","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14629,"post_author":"15","post_date":"2023-12-15 19:46:11","post_date_gmt":"2023-12-15 08:46:11","post_content":"\n

BlackRock aims to facilitate the participation of Wall Street banks in its potential Bitcoin ETF approval. Recent SEC memo <\/a>detailing a late November meeting involving BlackRock, Nasdaq, and the Commission. During this meeting, they discussed feedback regarding BlackRock's Bitcoin ETF application.<\/p>\n\n\n\n

The proposed approach introduces an innovative method for the redemption of ETF shares. A Bitcoin ETF would enable fund investors to gain exposure to Bitcoin without directly purchasing or storing the cryptocurrency. While the SEC has hesitated to approve such ETFs due to concerns about Bitcoin market manipulation, this new strategy addresses those worries.<\/p>\n\n\n\n

The SEC has yet to decide on BlackRock's iShares Bitcoin Trust (IBTC) application, with the deadline set for January 15. Analysts anticipate a decision will be issued for several spot Bitcoin ETF applications earlier in January.<\/p>\n\n\n\n

See Related:<\/strong><\/em> Fidelity Joins BlackRock\u2019s Push For Ethereum ETF<\/a><\/p>\n\n\n\n

BlackRock ETF Details<\/h2>\n\n\n\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
\n

Wall Street's main indexes tumbled on Tuesday following a consumer inflation reading that surpassed expectations, leading to a shift in market sentiment regarding imminent interest rate cuts and driving U.S. Treasury yields upward.<\/p>\n\n\n\n

Markets have rallied this year on bets that the Fed would start trimming rates in May but a Labor Department report showed U.S. consumer prices increased above forecasts in January amid a surge in the cost of shelter. Bob Elliott, chief investment officer at Unlimited Funds said<\/a>:<\/p>\n\n\n\n

\"Some Federal Reserve governors have come out in the last couple of weeks and given various indications that the interest rate cuts expected by the market in the first half of the year may have been premature. Now the CPI data are certainly reaffirming that picture.\"<\/em><\/p>\n\n\n\n

Consumer price growth reaccelerated, with the main headline figures rising at a faster pace than economists forecast and January\u2019s surprisingly strong core CPI print shows the road to durably return to 2% inflation will be bumpy.<\/p>\n\n\n\n

See Related: <\/em><\/strong>Macro Review Of Economic Data For The United States; CPI, Inflation, Fund Rates<\/a><\/p>\n\n\n\n

Consumer Price Index<\/h2>\n\n\n\n

The consumer price index increased 0.3% in January and it is important to say that shelter prices accounted for much of the rise, climbing 0.6% on the month, contributing more than two-thirds of the headline increase.<\/p>\n\n\n\n

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

On a 12-month basis, the consumer price index came out to 3.1%, down from 3.4% in December but economists surveyed by Dow Jones had been looking for a monthly increase of 0.2% and an annual gain of 2.9%.<\/p>\n\n\n\n

Excluding the volatile food and energy prices, the core CPI surged by 0.4% in January and increased by 3.9% compared to a year ago, remaining unchanged from December. The forecast had anticipated 0.3% and 3.7%, respectively.<\/p>\n\n\n\n

Consequences Of Inflation<\/h2>\n\n\n\n

Following the inflation data release, traders' bets on a 25 basis point rate reduction in May decreased to 38%, down from approximately 58% before the data. Meanwhile, expectations for June remained at 75%, as indicated by the CME FedWatch tool. Quincy Krosby, chief global strategist at LPL Financial said<\/a>:<\/p>\n\n\n\n

\u201cThe much-anticipated CPI report is a disappointment for those who expected inflation to edge lower allowing the Fed to begin easing rates sooner rather than later. Across the board, numbers were hotter than expected making certain that the Fed will need more data before initiating a rate cutting cycle.\u201d<\/em><\/p>\n\n\n\n

Outside of the jump in shelter costs, the rest of the inflation picture was a mixed bag. Prices for used vehicles dropped by 3.4%, while apparel costs decreased by 0.7%, and medical commodities experienced a 0.6% decline. Conversely, electricity costs saw a 1.2% rise, and airline fares increased by 1.4%.<\/p>\n\n\n\n

In the grocery aisle, ham prices decreased by 3.1%, whereas egg prices surged by 3.4%. Federal Reserve officials anticipate inflation to retreat to their 2% annual target but January's uptick could pose challenges for a central bank aiming to ease its tightest monetary policy stance in over two decades.<\/p>\n","post_title":"Wall Street's Main Indexes Tumbled As Hot Inflation Data Dampened Early Rate-Cut Hopes","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-tumbled-as-hot-inflation-data-dampened-early-rate-cut-hopes","to_ping":"","pinged":"","post_modified":"2024-02-16 22:01:49","post_modified_gmt":"2024-02-16 11:01:49","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15411","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15327,"post_author":"14","post_date":"2024-02-07 19:31:18","post_date_gmt":"2024-02-07 08:31:18","post_content":"\n

Wall Street remains under pressure as Treasury yields climb higher, following Federal Reserve Chair Jerome Powell's resolute stance against market speculation of impending rate cuts. In a recent interview, Powell emphasized the necessity for additional evidence indicating a sustainable decline in inflation before considering lowering interest rates, highlighting that the economy's robustness has effectively mitigated recession risks.<\/p>\n\n\n\n

\"\"
Federal Reserve Chair Jerome Powell emphasized the necessity for additional evidence indicating a sustainable decline in inflation<\/em><\/figcaption><\/figure>\n\n\n\n

In January, job growth in the U.S. picked up pace, and wages saw their most significant increase in nearly two years. These are indications of enduring strength in the labor market, potentially complicating the Federal Reserve's plans to begin cutting interest rates in May. Richard Flynn, managing director at Charles Schwab UK, said:<\/p>\n\n\n\n

\"The strong jobs report indicates that demand in the labor market is higher than expected. While lower interest rates would surely be welcomed, it is becoming increasingly clear that markets and the economy are coping well with the high rate environment, so policymakers are perhaps feeling that the need for monetary policy to ease is less urgent.\"<\/em><\/p>\n\n\n\n

See Related: <\/em><\/strong>Optimism Among Individual Investors About The Short-Term Outlook Of The U.S. Stock Market Rose To Its Highest Level<\/a><\/p>\n\n\n\n

AAII Sentiment Survey<\/h2>\n\n\n\n

Positive information is that the latest American Association of Individual Investors (AAII) Sentiment Survey showed that optimism among individual investors about the short-term outlook for stocks surged again. American Association of Individual Investors (AAII) reported that bullish sentiment, or expectations that stock prices will rise over the next six months, jumped 9.8 percentage points to 49.1%.<\/p>\n\n\n\n

Bullish sentiment has reached an \"unusually high level,\"<\/em> surpassing its historical average of 37.5% for the 13th consecutive week. The last time optimism was higher was on December 21, 2023, at 52.9%. On the other side, bearish sentiment, or expectations that stock prices will fall over the next six months, decreased by 1.6 percentage points to 24.5%. This sentiment remains below its historical average of 31.0% for the 13th consecutive week.<\/p>\n\n\n\n

Simultaneously, approximately 80% of earnings reports are surpassing analysts' expectations. With results available from nearly half of the S&P 500 companies, including major tech-related firms, overall earnings are projected to have risen by 7.8% in the fourth quarter compared to the same period last year.<\/p>\n\n\n\n

In their latest report on equity client flows, BofA Securities equity and quant strategist Jill Carey Hall said that the previous week saw the largest influx of U.S. equity investments in seven weeks, along with the most substantial private client inflows in over a year. Jill Carey Hall added<\/a>:<\/p>\n\n\n\n

\"Private clients were the biggest buyers of equities last week, led by purchases of ETFs and Tech stocks. Institutional clients were also net buyers after large outflows the week prior, while hedge fund clients were net sellers.\"<\/em><\/p>\n\n\n\n

Investors are actively monitoring earnings and forecasts from big companies against the backdrop of high borrowing costs but remarks from the Fed's policymakers through the week, including voting member Cleveland's Loretta Mester, will also be on investors' watch list.<\/p>\n","post_title":"Fed Chair Jerome Powell Pushed Back Firmly Against Market Speculation Of Imminent Rate Cuts. What To Expect In The Days Ahead?","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"fed-chair-jerome-powell-pushed-back-firmly-against-market-speculation-of-imminent-rate-cuts-what-to-expect-in-the-days-ahead","to_ping":"","pinged":"","post_modified":"2024-02-07 19:31:25","post_modified_gmt":"2024-02-07 08:31:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15327","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15225,"post_author":"14","post_date":"2024-02-01 16:33:13","post_date_gmt":"2024-02-01 05:33:13","post_content":"\n

Wall Street's main indexes fell as Alphabet's projections for rising AI costs dented most megacap and chip stocks while the Federal Reserve left interest rates unchanged this Wednesday. Google's parent company experienced a 6.1% decline, resulting in a 3.0% drop in the S&P 500 communication services sector. This occurred following its announcement of holiday-season advertising sales falling short of expectations and its projection of increased spending on artificial intelligence.<\/p>\n\n\n\n

Microsoft (Nasdaq: MSFT) also lost 1.3% after forecasting higher costs to develop new artificial intelligence features, which overshadowed its upbeat quarterly results. Despite the optimistic outlook from the tech pioneers regarding customer enthusiasm for their generative AI-powered products, investors grew concerned about escalating development expenses for these innovative features. These mounting costs tempered their hopes for a significant sales surge from the new technology.<\/p>\n\n\n\n

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

These results and forecasts from big tech names, along with Tesla's growth warning last week, have reignited attention on the risks associated with the significant influence of mega-cap companies in the S&P 500 which has hit record highs in recent weeks. Apple, Meta Platforms, and Amazon.com set to report earnings on Thursday, fell over 1% each.<\/p>\n\n\n\n

See Related: New Bitcoin Core Update May Natively Support Apple M1 Chips<\/a><\/p>\n\n\n\n

Revenue Forecast And Increased Projection<\/h2>\n\n\n\n

It is also important to mention that Advanced Micro Devices saw a 3.3% decline as its first-quarter revenue forecast and increased projection for AI processors fell short of expectations. Other chip stocks including Nvidia, Broadcom, and Marvell dropped over 1% each. The attention of investors was also on the Federal Reserve's initial monetary policy decision of the year, and while it was widely anticipated that the Fed would maintain interest rates, many analysts said that the Fed is taking baby steps toward the cutting. Art Hogan, Chief Market Strategist of B.Riley Wealth, said<\/a>:<\/p>\n\n\n\n

\"Not surprisingly, I don't think the Fed wants to show their hand, especially, when they have a couple of months of data to collect before they need to. The good news is we can forget about any more tightening. The bad news is it's 'when', not 'if', they're going to cut rates, and that 'when' has been pushed out to what had been the fringes of consensus.\"<\/em><\/p>\n\n\n\n

Due to this, markets are showing some immediate disappointment as there's no explicit indication of imminent rate cuts. We're seeing an extremely neutral, non-committal statement from the Federal Reserve this Wednesday.<\/p>\n","post_title":"Wall Street's Main Indexes Fell As Alphabet's Projections For Rising AI Costs Dented Most Mega-Cap And Chip Stocks","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-as-alphabets-projections-for-rising-ai-costs-dented-most-mega-cap-and-chip-stocks","to_ping":"","pinged":"","post_modified":"2024-02-01 16:33:21","post_modified_gmt":"2024-02-01 05:33:21","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15225","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15094,"post_author":"18","post_date":"2024-01-26 02:18:51","post_date_gmt":"2024-01-25 15:18:51","post_content":"\n

As we enter the last week of January, whispers on Wall Street suggest a potential tantrum in U.S. short-term financing markets, with the storm possibly hitting as early as March. This could prompt the Federal Reserve to reassess its policies.<\/p>\n\n\n\n

As of now, banking executives are anticipating a series of events that may tighten the screws on short-term financing. The expiration of a Fed lending facility on March 11, coupled with limited adoption of the standing repo facility (SRF), is expected to reduce the available funding sources for banks. Simultaneously, increased demand for liquidity is on the horizon due to substantial U.S. government debt issuance and upcoming tax payments in March and April. Additionally, a move toward faster trade settlement in May could intensify the demand for short-term funding.<\/p>\n\n\n\n

Against this backdrop, the Federal Reserve has been steadily draining cash from the financial system by unwinding pandemic-era support. BNY Mellon strategists estimate a significant decrease in cash parked overnight with the Fed, potentially dropping below $200 billion by May. The overnight reverse repurchase agreements facility could even approach zero by mid-year. This reduction in excess liquidity may expose vulnerabilities in short-term financing markets.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Storm Clouds Gather Over Germany's Financial Horizon<\/a><\/p>\n\n\n\n

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

Spikes In Short Term Financing Markets<\/h2>\n\n\n\n

Sudden spikes in short-term financing markets can threaten financial stability, making it harder and more expensive for firms to secure necessary funds. This situation could expose lenders struggling to stabilize deposits after last year's banking crisis. As the Fed inches closer to its 2% inflation target, the risk of policy error looms large.<\/p>\n\n\n\n

If short-term financing markets experience a meltdown, it could signal the need for the Fed to ease policy. Slowing the pace of quantitative tightening (QT) is seen as a potential response. Despite the central bankers' insistence on needing more data before rate cuts, markets are already pricing in cuts by May.<\/p>\n\n\n\n

As we approach the critical months of March to May, the financial markets are at a crossroads. The potential shake-up in short-term financing markets could signal the Fed to reassess its policies. Market participants and investors must stay vigilant, and prepared for potential shifts in liquidity and policy adjustments. The coming months will \/reveal whether these concerns materialize into a significant market event or remain a contained storm in the financial teacup.<\/p>\n","post_title":"Understanding The Potential Shake-Up In U.S. Short-Term Financing Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"understanding-the-potential-shake-up-in-u-s-short-term-financing-markets","to_ping":"","pinged":"","post_modified":"2024-01-26 20:20:06","post_modified_gmt":"2024-01-26 09:20:06","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15094","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":15043,"post_author":"14","post_date":"2024-01-19 05:56:40","post_date_gmt":"2024-01-18 18:56:40","post_content":"\n

Wall Street witnessed a significant stock decline this Wednesday following positive December U.S. retail sales data, which diminished the anticipation of an early initiation of the Federal Reserve's campaign to cut interest rates.<\/p>\n\n\n\n

Retail Sales Report <\/h2>\n\n\n\n

The December retail sales report from the Commerce Department (USRSL=ECI) depicted a robust consumer, responsible for approximately 70% of the U.S. economy. Despite facing the challenges of high inflation and a tight monetary policy, the consumer has shown resilience.<\/p>\n\n\n\n

The data revealed that discounts offered by retailers and a surge in motor vehicle acquisitions contributed to a greater-than-anticipated increase in U.S. retail sales, maintaining the economy on a robust trajectory in 2024. This bolstered the perspective that the Federal Reserve might not reduce interest rates as rapidly as initially anticipated for the current year.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

Anticipations among traders for a 25-basis-point Federal Reserve rate cut in March declined to 55%, down from approximately 60% before the release of the retail sales data. Ryan Detrick, chief market strategist at Carson Group in Omaha, said<\/a>:<\/p>\n\n\n\n

\"We had news that the U.S. consumer continues to be quite healthy, but that has increased anxiety that the Fed\u2019s first rate cut could potentially be pushed to May from March. Yields are also moving higher on the strong retail sales numbers, adding to near-term worries.\"<\/em><\/p>\n\n\n\n

US Stocks And Wall Street<\/h2>\n\n\n\n

It is also important to mention that a decline in U.S. stocks sent Wall Street's<\/a> \"fear gauge\" to a two-month high while JPMorgan analysts predict that the majority of negative consequences stemming from higher interest rates have not materialized yet. On Tuesday, Federal Reserve Governor Christopher Waller also emphasized that the central bank should refrain from hastily reducing interest rates until there is a clear indication that lower inflation is likely to persist.<\/p>\n\n\n\n

At the same time, the escalation of geopolitical uncertainties introduces an additional challenge and heightens the potential for unforeseen risks in both markets and economic performance. Considering these factors, the perspective is likely to stay cautious as long as interest rates remain significantly restrictive and the looming presence of geopolitical risks persists.<\/p>\n","post_title":"Wall Street Weakened As Retail Sales Data Hampers Expectations For A Cut In Interest Rates","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-street-weakened-as-retail-sales-data-hampers-expectations-for-a-cut-in-interest-rates","to_ping":"","pinged":"","post_modified":"2024-01-19 05:56:51","post_modified_gmt":"2024-01-18 18:56:51","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=15043","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14931,"post_author":"18","post_date":"2024-01-10 07:51:17","post_date_gmt":"2024-01-09 20:51:17","post_content":"\n

In a recent survey conducted by the New York Federal Reserve<\/a>, Wall Street's major banks have recalibrated their predictions regarding the Federal Reserve's balance sheet drawdown. This shift suggests that the U.S. central bank might conclude its quantitative tightening (QT) process later than initially anticipated.<\/p>\n\n\n\n

A Change in Perspective<\/h2>\n\n\n\n

Previously, primary dealers\u2014major banks\u2014projected that the QT process would conclude by the third quarter. However, the sentiment has evolved. According to the latest survey taken before the Fed's December 12-13 policy meeting, these banks now foresee the QT process ending in the fourth quarter.<\/p>\n\n\n\n

This adjustment carries significant implications. If these predictions materialize, the Federal Reserve's balance sheet<\/a> will likely shrink to approximately $6.75 trillion, down from its current level of roughly $7.764 trillion. Moreover, banks estimated that the central bank's reverse repo facility would hold $375 billion when QT concludes, a reduction from the anticipated $625 billion as forecasted in October.<\/p>\n\n\n\n

Federal Reserve Strategy<\/h2>\n\n\n\n

The quantitative tightening process has been an integral part of the Federal Reserve's strategy to combat inflation. Alongside rate hikes, the central bank initiated large-scale purchases of Treasury bonds and mortgage-backed securities during the COVID-19 pandemic's onset in 2020. This move led to an expansion of its holdings to approximately $9 trillion by mid-2022. However, since last year, the Fed has been gradually reducing its balance sheet size, although specific guidance on the timeline remains somewhat ambiguous.<\/p>\n\n\n\n

See Related: Wall Street's Main Indexes Fell At The Beginning Of 2024 year<\/a><\/p>\n\n\n\n

What This Means for the Economy<\/h2>\n\n\n\n

The recalibrated timeline for QT indicates a more prolonged period of balance sheet reduction. As the Federal Reserve continues to navigate its policy decisions, market participants, businesses, and consumers should monitor these developments closely. Changes in the balance sheet size can influence interest rates, liquidity conditions, and overall financial market dynamics.<\/p>\n\n\n\n

A Technical Perspective<\/h2>\n\n\n\n

From a technical standpoint, the Federal Reserve's<\/a> balance sheet management serves as a critical tool in its monetary policy arsenal. The evolving predictions by Wall Street's primary dealers underscore the complexities involved in forecasting economic variables, such as inflation and interest rates.<\/p>\n\n\n\n

As the QT process continues, policymakers and market participants must remain vigilant, considering the potential ramifications for financial stability and economic growth. This dynamic landscape necessitates ongoing analysis and adaptation to ensure that monetary policy objectives align with evolving economic conditions.<\/p>\n","post_title":"Decoding Wall Street's Shift: A Closer Look At Wall Street's Changing Perspective","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"decoding-wall-streets-shift-a-closer-look-at-wall-streets-changing-perspective","to_ping":"","pinged":"","post_modified":"2024-01-10 07:51:25","post_modified_gmt":"2024-01-09 20:51:25","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14931","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14888,"post_author":"14","post_date":"2024-01-06 18:33:09","post_date_gmt":"2024-01-06 07:33:09","post_content":"\n

Wall Street's main indexes fell at the beginning of the 2024 year as investors locked in profits after a very successful 2023 and are currently waiting for the Federal Reserve's<\/a> meeting that could offer hints on its interest rate path. Ken Polcari, managing partner at Kace Capital Advisors, said:<\/p>\n\n\n\n

\"The decline yesterday, today, and maybe for the next couple of weeks, is a result of people locking in profits and reconsidering what the narrative is - are rates going down five or six times as it appeared to be at the end of last year?\"<\/em><\/p>\n\n\n\n

\"\"
The Nasdaq Composite kicked off the year with a 1.5% drop pressured by a selloff in the tech sector<\/figcaption><\/figure>\n\n\n\n

The Fed's December meeting minutes are set to be disclosed at 2:00 p.m. ET, potentially providing information regarding the central bank's shift toward reducing interest rates. Although it's widely anticipated that the Fed will keep interest rates unchanged this month, traders have priced in a 65.7% probability of a 25 basis point rate reduction in March, according to CMEGroup's FedWatch tool.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Wall Street's Main Indexes Surged Significantly After The Release Of Lower Than Anticipated Inflation Figures<\/a><\/p>\n\n\n\n

Central Bank And Inflation<\/h2>\n\n\n\n

Richmond Fed President Thomas Barkin, a voting member in the FOMC's rate-setting committee, said recently that the U.S. central bank is \"making real progress\" towards taming inflation and a soft landing seeming \"increasingly conceivable\". Encouragingly, the American Association of Individual Investors (AAII) Sentiment Survey indicated a surge in optimism among individual investors regarding the short-term outlook for the U.S. stock market, reaching its peak level in more than two and a half years.<\/p>\n\n\n\n

Despite this, JPMorgan Asset Management advises investors to be cautious due to potential recession risks. At the same time, analysts at Soci\u00e9t\u00e9 G\u00e9n\u00e9rale anticipate a turbulent 2024 for U.S. stocks, projecting fluctuations that could involve nearing recent highs, encountering declines, and subsequently rebounding.<\/p>\n\n\n\n

This week will witness a series of labor market data releases, culminating in the government's December employment report on Friday. These reports could significantly influence the forecast for the Fed's interest rate trajectory this year, prompting investors to scrutinize the data. Jeffrey Roach, chief economist at LPL Financial, added<\/a>:<\/p>\n\n\n\n

 \"The job market is cooling and we should see confirmation of that in this Friday\u2019s jobs report\"<\/em><\/p>\n\n\n\n

Following the progress of Wall Street's main indexes seen last year, investors are still optimistic about the prospect of another robust year ahead. This optimism is rooted in the anticipation that a decelerating economy will result in a gentle landing rather than a full-scale recession, especially as the Fed initiates rate cuts in the first half of 2024.<\/p>\n","post_title":"Wall Street's Main Indexes Fell At The Beginning Of 2024 year. Investors Locked In Profits After A Strong 2023 And Wait For The Federal Reserve's Meeting","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"wall-streets-main-indexes-fell-at-the-beginning-of-2024-year-investors-locked-in-profits-after-a-strong-2023-and-wait-for-the-federal-reserves-meeting","to_ping":"","pinged":"","post_modified":"2024-01-06 18:33:13","post_modified_gmt":"2024-01-06 07:33:13","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14888","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14629,"post_author":"15","post_date":"2023-12-15 19:46:11","post_date_gmt":"2023-12-15 08:46:11","post_content":"\n

BlackRock aims to facilitate the participation of Wall Street banks in its potential Bitcoin ETF approval. Recent SEC memo <\/a>detailing a late November meeting involving BlackRock, Nasdaq, and the Commission. During this meeting, they discussed feedback regarding BlackRock's Bitcoin ETF application.<\/p>\n\n\n\n

The proposed approach introduces an innovative method for the redemption of ETF shares. A Bitcoin ETF would enable fund investors to gain exposure to Bitcoin without directly purchasing or storing the cryptocurrency. While the SEC has hesitated to approve such ETFs due to concerns about Bitcoin market manipulation, this new strategy addresses those worries.<\/p>\n\n\n\n

The SEC has yet to decide on BlackRock's iShares Bitcoin Trust (IBTC) application, with the deadline set for January 15. Analysts anticipate a decision will be issued for several spot Bitcoin ETF applications earlier in January.<\/p>\n\n\n\n

See Related:<\/strong><\/em> Fidelity Joins BlackRock\u2019s Push For Ethereum ETF<\/a><\/p>\n\n\n\n

BlackRock ETF Details<\/h2>\n\n\n\n

The recent meeting was a follow-up to a previous one on November 20, during which the SEC expressed concerns about BlackRock's<\/a> share redemption model. The initial proposal involved a T+1 settlement, starting with a broker-dealer delivering IBTC shares to a transfer agent. The issuer would then instruct the custodian (Coinbase Custody) to send Bitcoin backing the shares to a crypto market maker, who would close a short Bitcoin position.<\/p>\n\n\n\n

The T+1 redemption process aligns with the SEC's newly approved rules mandating stock and ETF settlements within one business day, effective late May 2024. The updated settlement approach suggested by BlackRock initiates redemption orders with cryptocurrency market makers providing cash to the broker-dealer, streamlining the process before large Wall Street banks (authorized participants) become involved.<\/p>\n\n\n\n

While BlackRock did not provide explicit details, it claimed that this new method enhances resistance to market manipulation, which addresses the SEC's primary concern. It also aims to simplify and harmonize the ecosystem.<\/p>\n\n\n\n

For many major financial institutions, custody of digital assets often involves third-party firms. The revised redemption process would likely encourage more institutional investment in the Bitcoin ETF by making share redemption faster and less risky for these entities that manage substantial assets for clients.<\/p>\n","post_title":"BlackRock Bitcoin ETF's Outline Market Manipulation Control","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"blackrock-bitcoin-etfs-outline-market-manipulation-control","to_ping":"","pinged":"","post_modified":"2023-12-15 19:46:17","post_modified_gmt":"2023-12-15 08:46:17","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14629","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":14305,"post_author":"18","post_date":"2023-11-15 18:17:51","post_date_gmt":"2023-11-15 07:17:51","post_content":"\n

In a rather unforeseen turn of events, Wall Street<\/a> has been sent into a tailspin following the unprecedented cyber hack that targeted the Industrial and Commercial Bank of China's (ICBC) U.S. broker-dealer. The incident, orchestrated by the notorious cybercrime gang Lockbit, exposed shocking vulnerabilities and raised serious concerns about the $26 trillion Treasury market.<\/p>\n\n\n\n

The hack, described as extensive, plunged ICBC's New York-based unit, ICBC Financial Services, into chaos. The magnitude of the attack was such that even the corporate email system collapsed, pushing employees to resort to Google Mail for communication. Sources reveal that the blackout left the brokerage temporarily indebted to BNY Mellon by a staggering $9 billion, significantly exceeding its net capital.<\/p>\n\n\n\n

In a desperate bid to salvage the situation, ICBC's Chinese parent injected a cash lifeline into its U.S. unit, enabling it to settle its debt with BNY Mellon. The ransomware attack, which temporarily crippled ICBC's operations, has now ignited a fiery debate within the financial sector about the resilience of the Treasury market, a linchpin of global finance.<\/p>\n\n\n\n

See Related:<\/em><\/strong> Google Establishes A Hacking Policy Council Among Others; Cybersecurity And Vulnerability Management<\/a><\/p>\n\n\n\n

ICBC, on a mission to recover from the cyber onslaught, has engaged the services of cybersecurity firm MoxFive to fortify its systems. However, the recovery process is anticipated to stretch until Monday, leaving the Wall Street community on edge.<\/p>\n\n\n\n

In an extraordinary move, ICBC urged its clients to suspend business temporarily and reroute trades elsewhere, creating a ripple effect as other market participants scrambled to assess potential exposure. While the full impact of the attack is yet to be unveiled, market insiders predict that it could cast a dark shadow over the regulatory review of the Treasury market, intensifying scrutiny on cyber threats.<\/p>\n\n\n\n

Experts underscore the critical need for broader central clearing to mitigate the risk of a domino effect of defaults. As the financial world grapples with the aftermath of this cyber catastrophe, the incident is poised to take center stage at the upcoming Treasury market conference on November 16.<\/p>\n\n\n\n

ICBC<\/a> Financial Services, a mid-sized player by Wall Street standards, now stands as a cautionary tale of the potential havoc that a cyber-attack can wreak on the intricate machinery of the financial markets. As the company races against time to restore normalcy, Wall Street braces for the unsettling revelations that may follow.<\/p>\n\n\n\n

This unprecedented hack serves as a stark reminder that, in the digital age, even the mighty financial institutions are not immune to the perils of cyber warfare. The aftermath of the ICBC hack is a testament to the fragility of the financial ecosystem, raising questions about the adequacy of current security measures in an era where the stakes have never been higher.<\/p>\n","post_title":"ICBC Hack Reveals Shocking Vulnerability of $26 Trillion Treasury Market","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"icbc-hack-reveals-shocking-vulnerability-of-26-trillion-treasury-market","to_ping":"","pinged":"","post_modified":"2023-11-16 20:05:54","post_modified_gmt":"2023-11-16 09:05:54","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=14305","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"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT

Wall Street

1 2

Most Read

Subscribe To Our Newsletter

By subscribing, you agree with our privacy and terms.

Follow The Distributed

Twitter Instagram Youtube LinkedIn Facebook RSS
ADVERTISEMENT
This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.