The Swiss National Bank reported a solid six-month profit, as gains from the global stock-market rally and a weaker franc offset the drop in value of its gold holdings.
The SNB earned 25.2 billion francs ($31.2 billion) from January through June, it said in a statement on Friday. That brings a year-end payout to the Swiss government back into focus after the first quarter resulted in a small loss. Source: Bloomberg
The Dow Jones Industrial Average closed 1,153.18 points lower, or 2.19%, for its worst decline since April 2025
Stocks tumbled for a myriad of reasons Wednesday, but mostly because the bond market signaled the Federal Reserve could be falling behind on the inflation fight as the central bank chose to keep interest rates unchanged. The S&P 500 slid 1.52%. The Nasdaq Composite fell 1.74% to 24,442.94, ending the session more than 10% off its all-time high. The Fed kept to the sidelines in its latest rate decision, and the bond market responded with the 10-year Treasury yield jumping 7 basis points to above 4.67%. The 30-year Treasury yield soared 10 basis points to above 5.2%, hitting its highest level since 2007. Three officials wanted a hike, but the Fed still stood pat on rates. And Fed Chairman Kevin Warsh’s tough talk failed to convince the bond market.
NDR's latest assessment suggests the market may be underestimating the risk of a near-term Fed rate hike.
Their view is that several Fed governors remain concerned about inflation and are reluctant to ease policy too soon, fearing it could undermine the Fed's inflation-fighting credibility. In other words, preserving credibility may take priority over delivering the rate cuts markets are expecting. Source: NDR
The futures market is now pricing 1.5 Fed rate hikes by year-end
Source: Hedgeye, Bloomberg
U.S. debt has been growing much faster than the economy for over two decades
Since 2000, U.S. debt has compounded at 7.7% annually, far outpacing nominal GDP (~4.5%) and the 10-year Treasury yield (~4%). Meanwhile, gold supply has expanded by only about 1.5% per year. For central banks, the contrast is striking: one asset becomes increasingly abundant as debt issuance accelerates, while the other remains structurally scarce. That helps explain why many central banks have been steadily increasing their gold holdings in recent years. Source: Lukas Ekwueme @ekwufinance
China's gold purchases are ACCELERATING:
China's central bank acquired +15 tonnes of gold in June, the largest monthly purchase in at least 2.5 years. This also marks the 20th consecutive monthly addition. Year-to-date, the country has increased its gold reserves by a total of +40 tonnes. This lifts China's total gold reserves to a record 2,346 tonnes, or 9% of its total FX reserves, near an all-time high. China is extremely bullish on gold. Source: Global Markets Investor
Are France, Italy & Belgium heading into a debt crisis ???
Government interest expenditures (as a & of GDP) is forecasted to explode in the coming years. There are only two options left for them: 1. They cut spending and implement business friendly pro-growth policies 2. They will face a debt crisis. The first Euro crisis was about hundreds of billions, the next one will be about trillions Which one will it be? Source: Michel A.Arouet
🚨 Very interesting note by Eric Balchunas: Has the US stock market become "too important to fail"?
More than 55% of Americans now own stocks, the highest participation rate in the world. With new retirement programs bringing millions more investors into the market, Wall Street is becoming deeply intertwined with household wealth, retirement security, and even politics. The implication is profound: future policymakers may face overwhelming pressure to prevent prolonged bear markets. Some believe that, in the next major crisis, the Federal Reserve could even follow Japan and China by purchasing equity ETFs to stabilize markets. Whether or not that happens, one thing is clear: the growing financialization of the US economy is reshaping how investors think about downside risk—and may help explain why markets continue to recover so quickly after every sell-off. Source: Eric Balchunas, Bloomberg
