WallStreet

The United States is bracing for a major wave of debt issuance. If the debt ceiling is lifted, the U.S. Treasury could issue up to $1 trillion in new government bonds during the second half of 2025. Markets are already on alert, and traders on Wall Street are closely watching the potential impact.
🔹 Most of this issuance will be in short-term instruments – especially Treasury bills maturing in one year or less. While these can be issued quickly, they also challenge market demand due to the sheer volume.

Trump's Fiscal Plan Driving the Deficit Higher
President Donald Trump is pushing a major tax and spending package through Congress. According to the Congressional Budget Office, the plan would increase the federal deficit by $2.8 trillion over the next decade. While the bill may support the economy in the short term, it will also require additional government borrowing – adding further pressure on debt issuance.
Treasury Secretary Scott Bessent said the Senate could vote on the bill as early as Friday, with the House expected to follow. The key event hanging over the debate is the so-called "X-date" – the point when the U.S. government runs out of borrowing capacity under the current ceiling. That date is projected between July and August.

Massive Bond Supply Could Shake Markets – $1 Trillion Incoming
According to Mark Cabana of Bank of America, a "sharp acceleration" in bond supply is imminent. He predicts that as much as $700 billion could flood markets just in August and September. A similar forecast came from Gennady Goldberg of TD Securities.
Repo rates could initially dip due to oversupply. However, if demand doesn't keep pace, rates could spike rapidly – especially in the 2-to-7-year maturity range.
Longer-term bonds (10–30 years) are unlikely to see major changes. In fact, Goldberg expects a possible reduction in long-end issuance, while the Treasury focuses on short and mid-term bonds like 2-, 3-, 5-, and 7-year notes.

Cash Is Available – But Will It Flow Into Treasuries?
Money market funds, which now hold a record $7.4 trillion in assets, could theoretically absorb the new debt. But many of these funds have already started shifting away from government debt in favor of private repo trades that offer higher returns.
So, while liquidity exists, it may not go into Treasuries. This mismatch in supply and demand could pose a major risk – just as the government prepares its largest bond issuance in years.

What’s Next?
It all comes down to timing. If Congress lifts the debt ceiling in time and demand holds up, the market might absorb the shock. If not, bond traders are in for a rough ride.

#WallStreet , #bond #market , #TRUMP , #economy

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,,The information and views presented in this article are intended solely for educational purposes and should not be taken as investment advice in any situation. The content of these pages should not be regarded as financial, investment, or any other form of advice. We caution that investing in cryptocurrencies can be risky and may lead to financial losses.“

Behind closed doors in the U.S. Congress, a key battle is underway over who will benefit from tax relief in the coming years. A new spending package backed by former President Donald Trump and his Republican allies includes a controversial provision: offering $10.7 billion in tax breaks to private credit funds.
However, this provision was removed from the Senate version of the bill – at least for now.

📉 Tax Relief for Funds, Cuts for Ordinary Americans?
Senator Elizabeth Warren has sharply criticized the proposal, accusing Trump’s team of prioritizing the wealthy over working Americans:
"This is what armies of lobbyists and endless political donations get you: massive tax breaks at the expense of healthcare, education, and food aid for American families. Private credit firms don’t need tax cuts – working people do."

The plan coincides with proposed cuts to Medicaid and SNAP (Supplemental Nutrition Assistance Program). Critics argue that low-income families would bear the brunt of the cost.

📊 Trump’s Bill Would Add Trillions to the National Debt
The Congressional Budget Office (CBO) warned that the proposed tax cuts would increase the U.S. national debt by $2.4 trillion by 2034, with little positive impact on economic growth.
Brandon DeBot from NYU's Tax Law Center summed it up: "This bill takes from the bottom and gives to the top."

🏦 BDC Funds Are Booming – And Want More
Private credit funds, or BDCs (business development companies), have seen a surge in popularity. In 2024 alone, they attracted nearly $44 billion in new capital, a 70% increase compared to last year. Their appeal? High yields and steady cash flows.
Advocates claim tax relief would unlock more capital and help BDCs achieve similar tax treatment to real estate investment trusts (REITs). They point to a precedent from 2017, when REITs won favorable treatment during corporate tax reform by arguing they were unfairly penalized as "pass-through" entities.

⚖️ Blocked in the Senate. But Is This the End?
Though the Senate Finance Committee dropped the provision, lobbying efforts are ongoing. Supporters are reportedly preparing a streamlined version of the proposal to increase its chances of passage.
Some Republicans argue that the tax cuts are needed to boost capital formation amid high interest rates. But opponents warn this is another move toward a tax system that favors the rich — at the expense of the rest of society.

#TRUMP , #USPolitics , #USCongress , #ElizabethWarren , #WallStreet

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Notice:
,,The information and views presented in this article are intended solely for educational purposes and should not be taken as investment advice in any situation. The content of these pages should not be regarded as financial, investment, or any other form of advice. We caution that investing in cryptocurrencies can be risky and may lead to financial losses.“

Investment firm ARK Invest, led by renowned investor Cathie Wood, has once again capitalized on the explosive growth of Circle shares—known for backing the USDC stablecoin—by selling off a significant portion of its holdings. With this third round of selling, ARK has now secured profits totaling $243 million.

According to the latest portfolio disclosures dated June 20, ARK sold 609,175 shares of Circle (CRCL) across three of its ETFs:

🔹 ARK Innovation ETF (ARKK) sold 490,549 shares

🔹 ARK Next Generation Internet ETF (ARKW) sold 75,018 shares

🔹 ARK Fintech Innovation ETF (ARKF) sold 43,608 shares

The total value of the recent sale was $146.2 million, and the timing aligned perfectly with a 20.4% surge in Circle’s share price on the same day. This follows earlier sales on June 16 and 17 worth $52 million and $45 million, respectively.
📈 Since its IPO, Circle's stock price has skyrocketed from an initial $31 to around $240, marking a gain of over 400%. While ARK is cashing in on gains, it remains a major shareholder, now holding over 3.2 million shares, down from the original 4.5 million acquired shortly after the IPO.
The largest investor in Circle remains the IDG-Accel China Capital Fund II, holding 23.3 million shares.
💼 With the recent rally, ARK Invest’s stake in Circle is now worth approximately $779 million, making it one of the top holdings in ARK’s portfolio alongside giants like Tesla (TSLA) and Robinhood (HOOD).

#CathieWood , #ArkInvest , #stockmarket , #WallStreet , #etf

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Wall Street’s fear gauge, the Vix, hits a near four-year low, reflecting investor confidence in the Federal Reserve’s inflation control.The Vix’s drop to 12.4 from over 20 in October suggests reduced market volatility and aligns with the S&P 500’s best month since July 2022.Analysts caution that the current market calm might lead to future instability, with expectations of increased volatility ahead.
In a significant financial development, Wall Street’s “fear gauge,” the Vix, has recently seen a dramatic fall to near four-year lows, signaling a major shift in investor sentiment.
This decline in the Vix, which measures expected volatility in the S&P 500 index, reflects growing investor confidence that the Federal Reserve can successfully curb inflation without triggering a recession.
This newfound optimism is a stark contrast to the heightened concerns that dominated financial markets in the latter part of the previous year.
The Vix Indicator and Investor Confidence
The Vix, which often referred to as Wall Street’s fear gauge, plunged to 12.4 this week, marking its lowest point since November 2019. This drop from over 20 in late October signifies a substantial shift in market outlook.
The gauge ended the week slightly higher at 12.6 but still represents a significant decrease in market volatility expectations. This decrease coincides with the S&P 500 index recording its best month since July 2022, buoyed by a greater-than-anticipated fall in US inflation to 3.2% in October.
Investors’ rising optimism is underpinned by a belief that the Federal Reserve will start reducing interest rates in early 2024. Jim Tierney, head of US growth investments at AllianceBernstein, encapsulated this sentiment, noting a growing confidence in the Federal Reserve’s ability to achieve a ‘soft landing’ for the economy.
Risks in Tranquil Markets
Despite the apparent tranquility in the markets, analysts caution against complacency. Historically, calm markets can breed instability as investors increase their equity holdings and leverage.
This concern is echoed in the prices of long-term options contracts, which suggest that this period of low volatility might be short-lived, with expectations of higher volatility in the coming year and beyond.
The JPMorgan team of US equity and quantitative strategists pointed out that the current low volatility is unusual given the backdrop of high interest rates, weakening economic data, and heightened geopolitical tensions.
They attributed this anomaly to a delayed impact of rising rates on economic growth and a surge in popularity of short-dated stock options, which the Vix doesn’t capture.
Moreover, the market is yet to fully appreciate the risks associated with the shift from 15 years of ultra-low interest rates. These risks include potential impacts on commercial real estate, rising bankruptcies, and credit delinquencies.
JPMorgan analysts warn of ‘unknown unknowns’ that could emerge as the economic environment continues to evolve. The recent dive in Wall Street’s fear gauge highlights a complex scenario in the financial markets.
On one hand, there is growing optimism about the Federal Reserve’s handling of inflation and its ability to prevent an economic downturn. On the other, there are underlying risks and uncertainties that could disrupt this calm. Investors and analysts alike are keeping a watchful eye on various economic indicators to gauge the future trajectory of the market.
As the Federal Reserve continues its delicate balancing act, the financial markets are poised at a critical juncture, with potential implications for both short-term trading and long-term economic stability.
#wallstreet $BTC

#WallStreet is eyeing significant upside for Strategy's stock as its #bitcoin reserves near 500,000 BTC. According to recent reports, Strategy has fully embraced its position as a bitcoin treasury company, and this move is being met with bullish sentiment from Wall Street. The company's year-to-date BTC #yield of 74.3% is a measure it uses to assess the performance of its bitcoin strategy, and it has bested its previous high of 47.3% in 2021.

The news of Strategy's growing bitcoin reserves has sparked interest among investors, with many institutional holders increasing their stakes in the company. The number of institutional holders with at least $100 million AUM has jumped significantly, and the total reported value of these holdings has reached $15.3 billion. This influx of investment is a testament to the growing confidence in Strategy's ability to navigate the cryptocurrency #market and capitalize on the potential upside of bitcoin.

As the cryptocurrency market continues to evolve, it will be interesting to see how Strategy's stock performs in relation to the price of bitcoin. With US spot Bitcoin #ETF s surpassing 500,000 BTC in cumulative net inflows and BlackRock's spot ETF approaching the $50 billion AUM mark, there are certainly opportunities for growth and investment in the space. However, there are also potential risks to consider, such as profit-taking and significant sell walls that can hinder rallies. As we move forward into 2025, it will be important for investors to stay informed and adapt to changing market conditions in order to make informed decisions about their investments in Strategy and other cryptocurrency-related assets.
$BTC