Pelosi’s visit to Taiwan rattled investors: On Tuesday, House Speaker Nancy Pelosi’s trip to Taiwan – which was full of geopolitical significance – rattled markets.
US 10-year yields dropped for a fifth day and approached 2.5%, a level last seen in April, before paring the drop. The Japanese yen advanced to the strongest level in nearly two months. Equity markets in China and Hong Kong were the worst performers in Asia as security analysts outlined potential military responses from Beijing. US index futures dipped along with stocks in Europe. Pelosi’s trip is creating a fresh pressure point for investors already dealing with the prospects of a US recession, worldwide rate hikes and surging inflation. The moves so far suggest traders are hedging against tension escalating, with analysts warning of the tailrisk of a conflict between the world’s two largest economies that wreaks havoc on global markets.”1
Labor Market: Unemployment fell to 3.5% in July2, a half century low not seen since early 2020. The labor market added 528,000 jobs in the prior month, which has virtually closed the gap concerning the jobs lost at the onset of the pandemic, and marks a recovery 2+ years in the making. Wage growth continued, with a 0.5% rise in July, as compared to June, and 5.2% rise from a year ago.
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Public markets remain bid despite several Federal Reserve officials clarifying the central bank’s hawkish stance after a comment by Chair Jay Powell was interpreted as suggesting a potential dovish shift in the event of a recession.
Crypto moves. The effect of the “crypto winter” on trading platforms and exchanges may be potential future synergies or acquisitions by large financial institutions. The latest news is BlackRock’s partnership with Coinbase “to make it easier for institutional investors to manage and trade Bitcoin, taking the world’s largest asset manager into a cryptocurrency market hammered by plunging prices and government investigations. Coinbase shares soared on the news.”
CPI numbers. Any marked slowdown from last month’s numbers (9.1% year-over-year for headline, and 5.9% for core) is likely to increase conviction that the United States is entering a period of economic slowdown – if not a “recession.”
Yieldstreet continues to offer private market investment opportunities as investor sentiment appears to be marginally improving, which may bring increased inflows into both public and private markets.
This past week, Yieldstreet launched Short Term Growth Notes Diversified Portfolio III, which will seek to mitigate some of the downside risks associated with owning stocks during volatility, as well as Blockchain Later Stage VC Fund, that will allocate capital to emerging blockchain technology companies and protocols.
1 Source: Bloomberg
2 Source: BLS
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