Good morning. This is Bloomberg Daybreak Europe. I'm Tom Mackenzie in London.These are the stories that set your agenda. US Secretary of State Marco Rubio hails tremendous progress in talks with Ukraine as President Trump pressures the country to strike a controversial deal with Russia. Oil in flux as traders weigh the prospects of a Ukraine Russia peace agreement.Stocks in Asia advance alongside European and US futures as investors increase bets on a Fed rate cuts next month. Plus, BHP backs off the world' ...

Core Insights - Residential REITs have faced significant challenges in 2025 despite ongoing Federal Reserve rate cuts and expectations for further easing in 2026, which typically would boost demand for defensive alternatives [1] Group 1: Market Conditions - The ongoing Federal Reserve rate cuts are expected to continue into 2026, which could increase demand for defensive investment alternatives [1] - The performance of residential REITs has been notably poor in 2025, indicating a challenging market environment for this sector [1] Group 2: Investment Strategies - The investment approach discussed includes a focus on fundamental long-term perspectives, particularly in REITs, preferred stocks, and high-yield bonds [1] - The strategy also involves combining long stock positions with covered calls and cash secured puts, reflecting a tactical approach to managing investments [1]

Market Sentiment and Macroeconomic Factors - The crypto market is likely approaching a bottom, with value emerging and stabilization observed in market drivers [1] - Macroeconomic shifts, particularly changes in US policy outlook and concerns about the labor and credit markets, have weighed on crypto [2][3] - A "jittery" crypto market exists due to concerns around a perceived 4-year cycle, though this perception may be misguided [4][5] - Crypto is no longer an isolated ecosystem; it's a $4 trillion mid-size alternatives asset class correlated to the broader economy [8] Institutional Investment and Market Structure - Misperception exists that digital asset treasuries are selling off crypto due to price drops; however, there has been virtually no selling by these vehicles [12] - Progress on market structure legislation in the US Senate is a potential positive catalyst for driving institutional investment [14][15] - Investors should focus on ETF flows as a barometer for shorter-term market sentiment; stabilization in these flows could confirm a bottom [16][17] Portfolio Diversification - Crypto, like other commodity markets, exhibits some beta to broader equity market moves and Fed policy, but also marches to its own drummer, offering diversification benefits [9] - Incorporating crypto into a diversified portfolio is still seen as beneficial for the longer term, despite recent market moves [10]

Core Viewpoint - Cleveland Fed President Beth Hammack has expressed opposition to further Fed rate cuts, citing concerns over prolonged elevated inflation and potential risks in financial markets [1][2][3]. Group 1: Impact of Rate Cuts - Hammack indicated that additional rate cuts could support risky lending practices and inflate asset valuations, potentially leading to a more severe economic downturn in the future [3][4]. - The Fed has already implemented two 25 basis point cuts this year to stabilize the labor market, but Hammack cautioned that this could heighten financial stability risks [4][5]. Group 2: Inflation Concerns - Hammack warned that lowering interest rates further could exacerbate inflation, which is currently at 3%, significantly above the Fed's 2% target [6][7]. - Other Fed officials, including Governor Michael Barr and President Jeff Schmid, have echoed similar concerns regarding the risks of rising inflation and the need for caution in monetary policy [6][7]. Group 3: Decision-Making Dilemma - The Federal Open Market Committee (FOMC) is facing a dilemma regarding its dual mandate of managing inflation and supporting the labor market as it considers the possibility of another rate cut in December [5][8]. - Recent economic outlooks suggest that many Fed officials believe it may be appropriate to maintain the current target range for interest rates for the remainder of the year [5].

Recently, we saw some market pullback driven by fears of an AI bubble and delayed Fed rate cuts. Some argued that we are already in an AI bubble and it'sI'm specialized in fundamental equity research, global macro strategy, and top-down portfolio construction. I'm a senior analyst at a multi-strategy hedge fund with 7 years of experience. I graduated from UCLA with a degree of Business Economics and UMich Ross School of Business with a Master of Accounting. My articles primarily focus on company fundamental ...

Market Sentiment - Risk-off sentiment has intensified in Asian trading, with Bitcoin (BTC) briefly falling below $90,000 for the first time in seven months, stabilizing near $91,000, marking a 4.5% drop over 24 hours [1] - Major alternative cryptocurrencies like XRP, BNB, and SOL also experienced declines, although they outperformed Bitcoin [1] Federal Reserve Influence - Experts attribute Bitcoin's significant monthly decline to diminishing expectations of a December Federal Reserve interest-rate cut, with the probability of a cut dropping from approximately 70% to 42% in about a week [2][3] - The shift in expectations was influenced by Fed Chair Jerome Powell's comments, leading investors to reassess individual FOMC member preferences, indicating that a rate cut was not a consensus view [3] Treasury Market Insights - Data from ING indicates an increase in open interest for bullish U.S. Treasury bond options, suggesting traders are betting on higher prices and lower yields [3] - This sentiment implies expectations of weaker U.S. economic data, which could revive hopes for quicker Fed rate cuts [4] Dollar and Crypto Market Dynamics - The current outlook for Bitcoin bulls may signal a potential turning point, as declining yields and a softer dollar have historically supported crypto rebounds [4] - The U.S. dollar index remains strong, with potential to retest the August 1 swing high of 100.25, which could impact risk assets, including Bitcoin [5]

分组1 - The stock market is entering a week filled with significant earnings reports and economic data, following a week of volatility where all major indexes ended in the red, particularly the Nasdaq Composite which fell nearly 2% [1][2] - Nvidia's third-quarter earnings report is anticipated to be a major event, with analysts expecting revenue to reach approximately $54 billion, an increase from $46.7 billion in the previous quarter [4][5] - Nvidia is viewed as a key indicator for the AI sector, and there are high expectations for strong earnings and guidance, especially after CEO Jensen Huang announced $500 billion in orders for 2025 and 2026 [5][6] 分组2 - Major retailers such as Home Depot, Target, and Walmart are also set to report their third-quarter earnings this week, contributing to the overall market focus [6] - The September jobs report is scheduled for release on Thursday, providing crucial insights into the labor market from two months prior, which is expected to influence market assessments regarding future Fed rate cuts [9][10] - Investors are particularly eager for the jobs data as it has been absent since the government operations were halted in October, making this release critical for evaluating economic conditions heading into 2026 [10]

Market Overview - Recent volatility in key Wall Street indices has raised concerns among investors regarding the pace of Federal Reserve rate cuts and high valuations of major technology stocks, particularly Nvidia [1][8] - The Nasdaq index ended higher, while the S&P 500 and Dow Jones Industrial Average experienced slight declines, with the S&P 500 down 0.05% and the Dow down 0.65% [8][9] - For the week, the S&P 500 rose 0.1%, the Dow increased by 0.3%, and the Nasdaq fell by 0.5% [8] Nvidia's Upcoming Earnings - Nvidia is set to report its quarterly results on November 19, 2025, which is anticipated to be a significant event for investors focused on the AI sector [4][8] - Analysts suggest that if Nvidia's results disappoint, the stock may face significant selling pressure, although there may be quick buying interest to stabilize the price [4][8] Federal Reserve Rate Cut Expectations - Expectations for a Federal Reserve rate cut in December have diminished, with the probability of a 25-basis-point cut dropping to under 50% from 67% the previous week [6][9] - Kansas City Fed President Jeffrey Schmid expressed concerns about persistent inflation, indicating potential dissent at the Fed's December meeting if a rate cut is proposed [7][9] Other Company Movements - UnitedHealth Group's stock declined by 3.2%, and Visa's stock fell by 1.8%, contributing to the downward pressure on the Dow [4][9] - Walmart's stock edged down 0.2% following the announcement of CEO Doug McMillon's retirement in January, which was unexpected and had initially caused a drop of 3.6% [5][9]

Core Viewpoint - Boise Cascade Company (NYSE:BCC) is facing challenges due to its connection to the housing market, which is currently underperforming. The company is considered too leveraged to a specific segment of the market, making it less favorable compared to larger home improvement retailers, especially in the context of potential Federal Reserve rate cuts [1]. Group 1: Company Overview - Boise Cascade Company manufactures engineered wood products and plywood, and distributes building materials such as lumber, siding, roofing, and millwork [2]. - Third Avenue Management has initiated new positions in Boise Cascade Company, indicating interest in the building materials distributor and manufacturer [2].

Core Insights - Bitcoin's price has dropped 6.55% in the last 24 hours, currently trading just above $95,000, marking its lowest point since May [1] - Over the past month, Bitcoin has lost approximately 20% of its value, driven by uncertainty regarding Federal Reserve interest rate cuts and a selloff in tech and crypto stocks [2][6] Federal Reserve Rate Cuts - The Federal Reserve is expected to announce its decision on interest rates next month, with three potential outcomes: increase, hold, or cut rates [3] - Recent market sentiment has shifted, with only a 50% chance perceived for a rate cut in December, down from a 90% chance earlier in November, contributing to Bitcoin's decline [6] Tech and Crypto Stock Selloff - Bitcoin is categorized as a risk asset, and its price volatility is mirrored in the performance of tech stocks, particularly those in the AI sector [7] - Major tech stocks experienced significant declines, which may lead investors to withdraw from cryptocurrencies in favor of safer investments [8] Bitcoin's Yearly Performance - Bitcoin started the year above $94,000, peaked at over $126,000 in October, but has since faced a steady decline, currently up only about 2.8% for the year [10][12]