The Federal Reserve will make its latest interest rates decision on Wednesday, in what is shaping up to be a consequential week for Bitcoin. Analysts are widely expecting that the central bank’s chair Jerome Powell will unveil another 0.25 percentage point reduction — to a range of between 3.75% and 4%. And given that the Fed previously signaled that it is pencilling in two further rate cuts for 2025, we’re expecting to see a repeat performance in December too. Generally speaking, lower interest rates a ...

Core Viewpoint - U.S. President Donald Trump criticized the Federal Reserve and its chairman Jerome Powell for not cutting interest rates promptly [1] Group 1 - President Trump expressed dissatisfaction with the Federal Reserve's delay in interest rate cuts [1]

Short-term bonds can offer income, flexibility, and stability in a diversified portfolio. This episode of Market Sense explores how short-term bonds have performed in the current economic environment, especially with more rate cuts on the table. A Fidelity bond fund manager will also discuss how inflation, tariffs, and Fed policy are shaping bond market dynamics. Topics covered: • Interest rate cuts • Bonds & short-term bonds • Tariffs, Government debt, and Fed Independence • Active vs. Passive 00:00 Introd ...

Market Overview - The U.S. stock market is reaching record highs, with the S&P 500 up 0.4%, the Dow Jones Industrial Average up 265 points (0.6%), and the Nasdaq composite up 1% [1] - The bond market is experiencing modest movements as investors await key events, including the Federal Reserve's interest rate announcement and earnings reports from major companies [2] Company Performance - United Parcel Service (UPS) shares increased by 7.5% after reporting stronger-than-expected profit and revenue, along with a positive forecast for the holiday shipping season [3] - PayPal's stock rose 6.9% following a better-than-expected profit report and the announcement of a quarterly dividend for shareholders, as well as a new payment deal with OpenAI's ChatGPT [4] - Skyworks Solutions saw an 8.1% increase in stock price after announcing a merger with Qorvo in a cash-and-stock deal valued at $22 billion, with Skyworks shareholders set to own approximately 63% of the combined entity [4] - Royal Caribbean's stock fell 8.7% despite reporting stronger profits, as revenue fell short of expectations due to bad weather and the temporary closure of a destination [5] - D.R. Horton experienced a 3.3% decline in stock price after reporting weaker-than-expected profits, citing challenges for homebuyers and cautious consumer sentiment [6] - Amazon's stock rose 1.5% after announcing a reduction of about 14,000 corporate jobs (approximately 4% of its workforce) to increase spending on artificial intelligence while cutting costs [7] Economic Indicators - The Federal Reserve is expected to announce a third interest rate cut at its final meeting of the year, which is crucial for the stock market that has rallied on these expectations [8] - Fed officials have indicated a potential continuation of rate cuts into next year, although they may need to adjust if inflation rises significantly [9] - The yield on the 10-year Treasury eased to 3.98% from 4.01% [9] International Markets - International stock markets showed mixed results, with Japan's Nikkei 225 down 0.6% and South Korea's Kospi down 0.8% [10] Commodity Market - Gold prices have struggled after reaching nearly $4,400 per ounce last week, now dropping below $4,000 per ounce, with a year-to-date gain of approximately 50% [11]

Market Overview - Global shares are mostly lower as investors await the outcome of a planned meeting between President Trump and China's top leader [1] - In Europe, the CAC 40 slipped 0.1% to 8,228.81, Germany's DAX fell 0.2% to 24,270.20, and Britain's FTSE 100 was nearly unchanged at 9,656.76 [2] - In Asia, Hong Kong's Hang Seng dropped 0.3% to 26,346.14, and the Shanghai Composite index lost 0.2% to 3,988.22 after briefly surpassing 4,000 [2] Trade Relations - Trump anticipates forging another trade agreement with Chinese President Xi Jinping during their meeting at a Pacific Rim summit in South Korea, which could alleviate trade tensions affecting global markets [3] - Japan's Prime Minister Takaichi is reaffirming the security alliance with the U.S. and committing to increased investments and imports from the U.S. [5] Economic Indicators - South Korea's Kospi shed 0.8% to 4,010.41 despite strong quarterly economic growth driven by consumption, investments, and exports [6] - The Federal Reserve is expected to continue cutting interest rates to support the slowing job market, with a likely quarter-point cut anticipated in the upcoming announcement [7] Corporate Earnings Expectations - There is optimism that U.S. companies will report solid profit growth, with major firms like Alphabet, Meta Platforms, Microsoft, Amazon, and Apple set to announce their results this week [9] Currency Movements - The U.S. dollar decreased to 151.78 Japanese yen from 152.88 yen, while the euro rose to $1.1655 from $1.1645 [10]

Core Insights - Digital asset investment products experienced inflows of $921 million last week, driven by renewed optimism regarding U.S. interest rate cuts, which has revived investor interest in crypto-linked funds [1] - The inflows occurred amidst a backdrop of volatility and uncertainty in U.S. fiscal policy, particularly during the ongoing government shutdown [1] - Consumer price index data came in lower than expected, bolstering hopes for continued easing by the Federal Reserve, with trading volumes in exchange-traded products (ETPs) reaching $39 billion, significantly above the year-to-date weekly average of $28 billion [2] Investor Sentiment - A significant majority of users on the prediction market platform Myriad anticipate a 25 basis points rate cut in October, with only a 19% chance of two rate changes by the Fed in 2025 [3] - CoinShares' head of research noted a long-term shift in investor behavior, with diversification now being the primary reason for investing in crypto ETFs, contrasting with five years ago when speculation was the main driver [4] - The percentage of Bitcoin investors holding for over 150 days has increased from 50% in 2018 to 75% today, indicating a shift towards a longer-term investment outlook [4] Market Dynamics - Investors are increasingly responsive to economic data such as CPI and payrolls, viewing Bitcoin more as a store of value or monetary asset [5] - The correlation between Bitcoin and traditional assets like bonds and equities varies significantly, influenced by monetary policy stances [5] - The U.S. led regional inflows with $843 million, while Germany recorded strong inflows of $502 million; however, Switzerland saw outflows of $359 million attributed to asset transfers rather than active selling [6] Regional Activity - Smaller markets like Hong Kong experienced limited activity, with only $11.23 million in outflows from one Bitcoin ETF, while a single Ethereum ETF saw inflows of $1.1 million [7]

Core Insights - October has shown significant volatility, yet major indexes are positioned for healthy monthly gains as November approaches [1] - The construction sector has emerged as a strong performer, with several companies showing promising returns for November [2] Company Performance - Builders FirstSource, Inc (NYSE:BLDR) leads with an average November return of 14.2%, having finished higher every year for the past decade [3][4] - Ametek (AME) follows with an average return of 8.6%, while Pultegroup (PHM) ranks third with a 7.7% average return [4] - The construction sector accounts for 16% of the top 25 S&P 500 performers for November, indicating strong sector performance [4] Market Trends - Construction companies are reportedly placing bulk orders for spring building materials during the slow season, benefiting from lower material costs [4] - Builders FirstSource has recovered from a two-year low of $102.60 and is now above breakeven for the quarter, with support seen around the $120 mark [5] - Recent economic data, including a lighter-than-expected consumer price index (CPI), has left investors optimistic about potential interest rate cuts, positively impacting the homebuilding sector [6]

Core Insights - Opendoor Technologies (NASDAQ:OPEN) stock experienced a significant increase of over 13%, closing at $7.97 per share, marking its first notable rise in a month ahead of anticipated interest rate cuts [1] - The stock's previous peak of $10.87 per share in mid-September was driven by meme stock activity rather than company fundamentals, leading to a subsequent decline as market sentiment shifted [2][3] - The recent rise in stock price was supported by increased trading volume exceeding 200 million shares, indicating participation from both retail and institutional investors, alongside modest improvements in housing figures [5] Market Context - The Federal Open Market Committee is expected to lower the federal funds rate by 25 basis points, establishing a new range of 3.75% to 4%, which would be the second consecutive cut [6] - Lower interest rates are projected to directly impact the housing market, with the average 30-year fixed mortgage rate potentially falling to 6% or below, resulting in significant savings for borrowers [7] - Current homeowner loans with rates under 4% from the pandemic period may limit available inventory, but easier rates could incentivize some homeowners to sell, potentially increasing national supply [8]

Market Overview - The cryptocurrency market capitalization has increased by 3.3%, now at $3.99 trillion, with 90 of the top 100 coins appreciating over the past 24 hours [1][2] - Total crypto trading volume is reported at $160 billion [1] Top Performers - Bitcoin (BTC) has risen by 3.4%, currently trading at $115,583 [2][3] - Ethereum (ETH) shows the highest increase at 6.1%, now priced at $4,194 [2][3] - Dogecoin (DOGE) follows with a 4.8% rise, trading at $0.2061 [3] Notable Movements - XRP recorded the smallest rise at 0.2%, trading at $2.63 [4] - Among the top 100 coins, 90 are up, with Pi Network (PI) and Zcash (ZEC) leading with increases of 28.4% and 16.2%, respectively [4] - Aster (ASTER) experienced the largest decline at 9.2%, now priced at $1.07 [4] Market Sentiment and Influences - The recent market increase coincides with a rise in equities and risk appetite, attributed to easing US-China trade tensions [5] - Investor focus is shifting towards key policy meetings and expected interest rate cuts by the US Federal Reserve [5] Industry Insights - Industry insiders suggest that softer US CPI data may positively impact the crypto market, reducing the carrying cost of Bitcoin in a lower-rate environment [6]

Market Outlook - The current market sentiment is characterized by complacency, but a meltup is considered more likely than a drop, with a bullish scenario having a 50-55% probability [2][4] - The S&P 500 is projected to reach 7,000 by the end of the year and potentially 7,700 by the end of next year, with a meltup scenario suggesting a rise above 7,000 [5][4] Economic Indicators - Recent inflation numbers have been cooler than expected, contributing to a positive market outlook [1] - The economy has shown resilience, with real GDP growth exceeding 3% in the last two quarters, indicating strong economic performance despite labor market issues [9][10] Interest Rates and Employment - Anticipated rate cuts by the Federal Reserve are viewed as unnecessary, as they may not significantly stimulate demand or job creation [6][7] - Labor market challenges are attributed to supply-side issues, including immigration and the retirement of baby boomers, rather than a lack of demand [10][9] Trade and Tariffs - The administration is reportedly rushing to finalize trade deals before potential Supreme Court rulings on tariffs, which could impact market stability [15][18] - A significant amount of revenue from tariffs, estimated between $350 billion to $450 billion, could lead to complications in the bond market if companies seek refunds [19]