### Summary
The S&P 500 returns over the last one, five, and ten years are only slightly above their long-term averages, suggesting that the stock market is not unanchored from reality. However, the performance of long-term US Treasuries has been poor, with even 10-year Treasuries resulting in losses over the last five years. Slower economic growth may be on the horizon, but it remains uncertain whether it will be enough to bring down inflation rates.
### Facts
- The S&P 500 returns over the last one, five, and ten years are only slightly above their long-term averages.
- The performance of long-term US Treasuries has been weak, resulting in losses for investors even after accounting for coupon payments.
- Slower economic growth may be on the horizon, but it remains uncertain if it will bring down inflation rates.
- The nature of the stock market rally suggests that investors are still searching for buying opportunities rather than thinking about selling.
- Energy, industrials, and financials have become favored sectors, while technology stocks have started to decline.
- The Chinese economy is struggling, with retail sales and industrial production growth slowing down.
- The Federal Reserve has expressed concerns about inflation but also noted downside risks to the economy.
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Short-term holders of Bitcoin are currently experiencing unrealized losses, with 88.3% of their supply underwater, leading to increased selling pressure in the market and potential liquidation by these holders.
The market anticipates a 100 basis point interest rate cut by the Federal Reserve in 2024, with US 10-year yields falling and Fed funds futures indicating a lower path ahead of the Jackson Hole symposium, as US services PMI disappoints and US retailer Foot Locker warns on the consumer.
Bitcoin has fallen below $26,000 as investors react to concerns about inflation and the possibility of higher interest rates, while other cryptocurrencies experience modest losses.
The Federal Reserve is losing its power to influence the US economy, according to Wall Street economist Richard Koo, potentially requiring higher interest rates to drive inflation down and leading to a selloff in stocks and bonds.
The U.S. dollar rebounded from previous losses as investors awaited labor market data for clues on the Federal Reserve's policy path.
The Bank of England's losses on bonds purchased to support the UK economy post-financial crisis are expected to be significantly higher than projected, reaching around £48.7 billion for the current fiscal year, due to rising interest rates and falling bond values.
Bitcoin's price dropped below $26,000 as the approval of a Bitcoin ETF was further delayed by the SEC, reversing the bullish gains from the Grayscale court decision earlier in the week. The crypto market also experienced a decline, with Ethereum's price going down by 3.5% and the overall market cap losing $11.2 billion. However, Maker and Toncoin managed to resist the bearish trend with positive gains. The global macroeconomic landscape also added to the uncertainty, as key economic data raised doubts about a potential interest rate hike.
Bitcoin and major tokens have experienced losses as the U.S. Securities and Exchange Commission (SEC) delays key ETF decisions, dampening hopes of a long-term recovery.
Bitcoin (BTC) continues to experience losses as the "Grayscale hype" disappears and selling pressure remains strong, with predictions of further downside to around $23,000 and a potential relief rally topping out at $27,200, while U.S. dollar strength adds to the pressure on BTC price.
The 10-year Treasury bond is on course for a third consecutive year of losses, which is unprecedented in 250 years of U.S. history, as the bond's return stands at negative 0.3% so far in 2023 after significant declines in the past two years, due to factors such as rising inflation and interest rate hikes by the Federal Reserve.
The Federal Reserve has sold about $1 trillion of its bond holdings without causing strains in financial markets, as part of its balance sheet reduction program.
The yield on the 10-year Treasury note is predicted to decrease significantly for the remainder of this year and in 2024, as economists anticipate the Federal Reserve to loosen its monetary policy and inflation to fall.
Bitcoin and the overall digital asset market have seen a significant decline, with Bitcoin dropping to its lowest price in three months at $25,048, attributed to failed crypto exchange FTX seeking approval to liquidate $3.4 billion in various digital assets.
Bitcoin, Ethereum, and other cryptocurrencies have been experiencing a steady decline in prices due to concerns from the Federal Reserve, leading to warnings of a potential price crash, although some analysts remain hopeful for improvement.
Kyle Bass predicts that the US banking industry will suffer losses of hundreds of billions of dollars due to exposure to the office market, representing a 10% hit to US banking equity, while industrial and multi-family sectors will remain strong.
US banks are experiencing significant deposit outflows, with total bank deposits plunging by over $70 billion in a week, the lowest levels since May, leading to concerns about the ongoing regional banking crisis; meanwhile, US commercial banks have also suffered significant losses in deposits, with 60% of deposits moving to higher-yielding money market funds, and the balance of unrealized losses on securities at commercial banks rising to $558 billion in Q2; to address these issues, the Federal Reserve has reached an all-time high of $107.8 billion in its banking loan facility to provide funding to distressed banks.
Cryptocurrency prices remained stable as inflation in the U.S. surpassed economists' expectations, with Bitcoin trading at around $26,100 and Ethereum experiencing a slight dip of 0.5%. The Federal Reserve will consider this report, among other factors, for its upcoming interest rate announcement on September 20. While inflation has decreased since June, it still exceeds the Fed's target of 2% annually. Core inflation, excluding volatile food and energy costs, decreased to 4.3% in August compared to July's 4.7%.
Bitcoin and other cryptocurrencies advanced on Friday, but a key technical indicator suggests that losses are likely coming.
US stock futures rise as investors await Fed decision on rates; US debt rises to $33 trillion as government shutdown looms; Federal Reserve expected to pause rate hikes; Impact of government shutdown, autoworkers strike, and rising oil prices on the economy; Biden reshapes the Federal Reserve.
Markets on Wall Street are expected to open with losses after the Federal Reserve suggests it may not cut interest rates next year by as much as previously thought, leading to a decline in futures for the S&P 500 and Dow Jones Industrial Average; uncertainty surrounding inflationary indicators and high rates is a major concern for traders moving forward.
Credit card company losses in the US are increasing at their fastest pace in nearly 30 years, driven by rising consumer debt and delinquencies, with losses projected to peak in late 2024 or early 2025, according to Goldman Sachs.
The stock market ended the week with significant losses after the Fed's hawkish stance on monetary policy, and investors will be paying close attention to speeches from FOMC members, particularly Federal Reserve Chair Jerome Powell's perspective on the economy and policy; upcoming economic data, including the Consumer Confidence Index, Q2 2023 GDP Growth, and August's Core Personal Consumption Expenditures, will heavily influence the Fed's rate decisions.
US stocks are set for their worst monthly loss of 2023 as bond yields surge on fears of higher interest rates from the Federal Reserve.
Bitcoin's positive monthly return may be at risk due to a possible federal government shutdown, as the cryptocurrency faces a modest pullback, while other digital assets outperform the market.
The U.S. economy is experiencing turbulence, as inflation rates rise and U.S. Treasuries lose value, leading to concerns about whether Bitcoin and risk-on assets will be negatively impacted by higher interest rates and a cooling monetary policy.
Bitcoin's price has fallen in the third quarter of 2023, but a positive monthly close in September suggests a potential recovery, and altcoins are also showing signs of strength, with Bitcoin's relief rally potentially reaching $28,000.
The federal debt, which has reached over $33 trillion and is increasing, is predicted to cause a crisis in the near future, leading to high inflation, lower profits for companies, and potential stock market problems, highlighting the importance of diversifying investments.
The S&P 500 closed out the quarter with a 3.6% loss, attributed to factors such as rising interest rates, a slowing housing market, and businesses preparing for tough times, resulting in a slow decline in stocks. Additionally, the resumption of student loan payments and expectations of more rate hikes from the Federal Reserve are expected to impact consumer spending power and business cutbacks. However, as the year comes to an end, traders and investors may look forward to 2024 for possible rate cuts and a return of strength in the market.
The U.S. stock market had a relatively flat performance in the third quarter, with stocks falling 3.2% from where they started, while energy stocks had a strong rally and real estate stocks crumbled; the bond market experienced losses, and unless there is a sudden change in the outlook, it is on track for its third straight year of losses; value stocks outperformed growth stocks, and dividend strategies held up better than the broader market; the Fed maintained its higher-for-longer stance on interest rates, contributing to volatility in the bond market; and major cryptocurrencies, such as Bitcoin and Ethereum, ended the quarter down approximately 12%.
Bitcoin (BTC) fell below $28,000 due to profit-taking and changing on-chain metrics, dampening price rises, while other cryptocurrencies also experienced losses.
The Federal Reserve's shift towards higher interest rates is causing significant turmoil in financial markets, with major averages falling and Treasury yields reaching their highest levels in 16 years, resulting in increased costs of capital for companies and potential challenges for banks and consumers.
US stocks fell as investors worried about the impact of higher interest rates, with the Dow down nearly 1.5% and the S&P 500 and Nasdaq indexes also dropping. Concerns about the Federal Reserve's policy and its effect on the housing market and potential recession led to the market decline.
The sell-off in Treasury bonds with maturities of 10 years or more, which has caused yields to soar, is surpassing some of the most severe market downturns in history, with losses of 46% and 53% since March 2020, comparable to stock-market losses during the dot-com bubble burst and the 2008 financial crisis.
The Federal Reserve is expected to continue reducing its bond holdings despite the recent surge in bond yields, as key measures of volatility and liquidity in the bond market are not indicating a significant risk, and higher credit costs align with the central bank's goal of restraining growth and lowering inflation.
In the past year, America's four largest banks have lost hundreds of billions of dollars in deposits, with approximately 30% of the total exiting JPMorgan, Bank of America, Wells Fargo, and Citi, indicating a decline in trust in the banking system and a potential mass consolidation of regional banks in the US.
Despite the ongoing bear market in Treasury bonds, certain sectors of the fixed-income market, such as bank loans, short-term junk bonds, and floating-rate notes, are performing well in 2023, offering some protection from the losses in long-term Treasuries, which have slumped 46% since March 2020. The future performance of long-dated bonds depends on the Federal Reserve's monetary policy and the resilience of the economy.
Bitcoin could potentially drop by more than 46% if there is a recession caused by the Federal Reserve's actions, according to crypto analyst Nicholas Merten.
The gold market has experienced nine consecutive days of losses, its longest losing streak in seven years, due to surging bond yields, but rising bond yields also pose significant risks for the economy, creating potential for short-term challenges and a potential breakdown in the U.S. dollar's international appeal.
The US stock market experienced losses in the third quarter, driven by rising US Treasury yields, leading to a surge in the US dollar and a hostile environment for gold and silver; the fourth quarter may see a continuation of this trend if US yields continue to rise.
Bitcoin registered a loss of 11.1% in the third quarter of the year, defying recent positive developments in the crypto space, but there is hope for a recovery in the historically strong fourth quarter.
Treasury debt losses over the past three years have resulted in the worst bear market for the U.S. in its nearly 250-year history, with long-duration Treasury yields reaching their highest levels in over 16 years, putting pressure on U.S. stocks.
Billionaire investor Ray Dalio believes that central banks around the world, including the Federal Reserve, are losing money due to the high-interest rate environment and will eventually have to resort to money printing to cover their losses.
China has suffered economic losses of $42 billion over the first nine months of 2023 due to natural disasters, including torrential rains, landslides, hailstorms, and typhoons, which have caused deaths, massive flooding, and crop damage.
The U.S. economy is facing risks in 2024 as inflation remains high and interest rates are historically high, leading to concerns about a potential recession; however, the Federal Reserve is optimistic about achieving a soft landing and maintaining economic growth. Economists are divided on whether the Fed's measures will be effective in avoiding a severe recession, and investors are advised to proceed cautiously in their financial decisions.
