Adding CORE for Thematic & Fundamental Reasons (Core Strategy Rebalance)
PBOC One-Upping the Fed
This week, China’s central bank initiated what we believe are the first steps in a broader effort to stimulate the economy, which is struggling to meet its annual growth target of around 5%. These new measures are aimed at reviving economic activity and restoring confidence, especially in the real estate and equity markets, both of which are facing significant challenges.
The People’s Bank of China (PBOC) has introduced several initiatives to address these concerns:
Lowering short-term interest rates: The PBOC reduced its seven-day reverse repurchase rate from 1.7% to 1.5%, providing a short-term liquidity boost to the financial system. On Wednesday, they also announced that they would be reducing the medium-term loan facility (1-year policy rate) to 2% from 2.3%, the largest cut since this tool was enacted in 2016. Mortgage rate cuts: In response to the prolonged real estate downturn, mortgage rates on existing housing loans will be reduced, aimed at easing pressure on the housing sector and stimulating home purchases. Reserve requirement ratio (RRR) cut: By lowering the RRR by 0.5 percentage points, banks will be required to hold less in reserves, freeing up liquidity to encourage lending and investment. Stock market support: A ne...Reports you may have missed
Market Lacks Convincing Signs of Market Froth, Major Demand Side Catalyst for CORE (Core Strategy Rebalance)
FROTH OR REPRICING? A heated debate is unfolding among crypto investors: have we just hit a local top, or will the breakout after eight months of consolidation continue higher through year-end? The crypto market has surged rapidly, as we anticipated, but the key question remains—can this rally sustain itself, or is it nearing exhaustion? Anecdotally, we are seeing renewed interest in crypto from casual observers. Friends and family are once...
TRUMP MAINTAINS A SLIGHT EDGE, BUT IT’S ESSENTIALLY A TOSSUP Well, it's here, folks – the moment that markets have been building up towards since January—the general election to decide the next President of the United States. As our clients know, we have been closely tracking polling and prediction market trends over the past several months, and these have served as a key input in our recommendations. Odds for both...
BTC ETFS SEE MASSIVE INFLOWS: IS CRYPTO NATIVE CAPITAL SIDELINED? BTC ETFs saw over $2.2 billion in net inflows across all spot ETFs from Monday through Wednesday of this week—the largest three-day sum of inflows since the products launched in January—bringing the five-day moving average to north of $500 million. This is certainly impressive and speaks to the explosive breakout we have seen this week. Source: Farside Investors, Fundstrat We've...
SOL OUTPERFORMANCE Last week, we highlighted the explosive activity on Solana as DEX volumes surpassed those on Ethereum, leading us to increase SOL's weighting in our Core Strategy. These elevated DEX volumes have persisted through this week, and SOL has dramatically outperformed, breaking out against ETH and gaining ground against BTC—all amid a sharp bond selloff and a rally in the DXY. Source: Artemis Source: TradingView A significant portion of...
