Bruce Lee Said:
Source: Seek Wiser
Bank of England declares independence from the US Fed ->
BoE's Bailey pushed back against a slower rate cutting cycle for the UK: “Quite a lot of the market movements of late appear to have been US-originated. Inflation dynamics here are different to inflation dynamics in the US. (It’s a) very different sort of situation in terms of our economies.” Percentage odds of a June cut were similar for the BOE and Fed at the start of the quarter, but now the market sees a wide gap. Source: Jeffrey Kleintop, Bloomberg
Retail investors have bought over $5 billion of leveraged equity ETFs in the last 12 months, the most since 2022.
This marks a $3 billion increase on a 1-month rolling sum basis in just a few months. Since the October 2023 low, retail investors have been piling into leveraged ETFs. However, a similar pattern was seen in 2021 and early 2022 after which retail experienced significant losses. The average retail investor portfolio drawdown from the 2022 peak was 35% and took 1.5 years to recover. Retail risk appetite is near record highs. Source: FT, The Kobeissi Letter
Shocking stat of the day by The Kobeissi Letter:
US net interest payments as a percentage of federal revenues are set to reach 34% by 2054. This means that ONE THIRD of all government revenue would be spent only to service the national debt. Over the past 8 years, the percentage has already doubled to ~15% and is at its highest in 3 decades. Meanwhile, nominal annualized interest payments have crossed above $1 trillion for the first time ever. We could see $1.6 trillion in annual interest expense by the end of the year if the Fed leaves rates steady. The US government needs lower interest rates more than anyone - i.e Fiscal policy leads monetary policy. Source: The Kobeissi Letter, Peter G.Peterson
Who needs Mag 7 if one can buy utilities stocks?
Source: Michel A.Arouet
8 of the 10 biggest winning stocks in 2020 have lost value since the end of that year including Tesla $TSLA
Source: Barchart, FT
Charted: 30 Years of Central Bank Gold Demand
by Elements / Visual Capitalist
Believe it or not, utilities $XLU is now the best performing SP500 ETFsince the start of the year (+13.4%).
Technology $XLV is in the second half of the ranking (+5.4%). So what's going on? Utilities has been on a run as we are reaching the 2nd derivative of the AI trade. Investment bankers are pushing new AI baskets and many of them include some Utilities stocks. Source: Mike Zaccardi
