The Department of Government Efficiency (DOGE) boosts Dogecoin’s popularity

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Discover how Donald Trump’s new Department of Government Efficiency (DOGE) impacts the meme coin Dogecoin.

Donald Trump has officially announced a new governmental body named the Department of Government Efficiency (DOGE). The acronym, bearing a striking resemblance to the popular cryptocurrency Dogecoin, is no coincidence. This unexpected move highlights a growing trend where politics and meme culture intertwine, and the implications are worth exploring. Let’s dive into the political strategy behind this, its cultural significance, and its impact on the crypto market.

Meme politics meets cryptocurrency

Donald Trump and Elon Musk are no strangers to leveraging meme culture for attention and engagement. The creation of DOGE underscores how political leaders increasingly adopt internet-savvy strategies to resonate with younger, tech-savvy audiences.

Publications like the Harvard Business Review and Politico have examined this phenomenon, often called “meme politics.” By incorporating humour and recognisable symbols, leaders like Trump and Musk create a sense of belonging, particularly among non-conformist communities. The naming of DOGE—deliberately referencing the crypto world’s most iconic meme coin—perfectly aligns with this approach.

Why Dogecoin?

Dogecoin (DOGE), originally created as a joke, has evolved into a symbol of decentralisation and rebellion against traditional financial systems. With a market capitalisation exceeding $50 billion, Dogecoin recently outpaced legacy corporations like Ford in market value.

Trump and Musk’s decision to link their initiative to Dogecoin is not merely symbolic but strategic. The meme coin represents an opportunity to connect with a decentralised, grassroots movement that aligns with their political narratives’ ethos.

The Department of Government Efficiency: a radical vision

The Department of Government Efficiency, affectionately nicknamed DOGE, is more than a playful acronym. According to sources like The Washington Post, the department aims to reduce bureaucracy, slash public sector inefficiencies, and optimise government spending.

This initiative was spearheaded by Trump and Elon Musk, who had long advocated for “lean governance,” as reported by Bloomberg. Joining them is Vivek Ramaswamy, known for his success with Roivant Sciences, a biotech company celebrated for its resource-efficient strategies. Trump has likened this endeavour to a “Manhattan Project” for bureaucracy, underscoring the scale and urgency of the reform.

Dogecoin’s price surge: a familiar pattern

The announcement of DOGE has already significantly impacted Dogecoin’s value. Within days, its price doubled, climbing from $0.20 to over $0.40. This isn’t the first time Dogecoin has reacted to Musk’s or Trump’s activities. Previous instances include Musk’s tweets or the temporary rebranding of X (formerly Twitter) with Dogecoin’s logo.

Dogecoin, now ranked sixth by market capitalisation among cryptocurrencies, continues to gain momentum from this high-profile endorsement.

The future of DOGE and Dogecoin

Dogecoin’s rise reflects how politics and cryptocurrency are becoming increasingly interconnected. With Trump and Musk driving this narrative, it’s worth asking how far Dogecoin can go.

Stay tuned as DOGE, the department and the cryptocurrency, continues to make waves in politics and markets.

Bull Market and Altseason in Crypto: How to Navigate and Maximise Potential

Bull Market and Crypto Altseason: How to Manage Them

What is a Bull Market and Altseason?

Navigating a crypto bull market and altseason can be both exhilarating and challenging for investors. Historically, these cycles have presented significant opportunities, but managing these favourable moments isn’t easy. This guide offers practical strategies to help you approach the bull market and altseason, helping you avoid common pitfalls driven by emotions such as greed and unchecked optimism.

Before diving in, note that while we reference historical data, past events may not replicate exactly in future cycles.

When do Bull Markets and altseasons begin?

Determining when a bull market or an altseason begins takes a lot of work. Typically, each cycle starts with Bitcoin’s price moving upwards, sparking widespread predictions. However, understanding the timing of a market cycle is often more valuable than chasing arbitrary price targets.

Key indicators to monitor include Bitcoin dominance, which reflects BTC’s market weight relative to other cryptos, and the ETH/BTC ratio, which compares Bitcoin’s performance to Ethereum. Another essential metric is the time elapsed since the last Bitcoin halving event, which often correlates with shifts in market phases.

The crypto market cycle and the role of Bitcoin halving

The crypto market cycle is closely tied to Bitcoin’s halving events, which occur approximately every four years. Halving halves the mining rewards, effectively reducing BTC’s supply growth. Each halving has historically set off a new cycle, usually lasting about 1,000 days. Peaks generally occur a year after the previous all-time high (ATH).

Bitcoin’s market cycles usually follow this structure:

  • Bull Market: A prolonged upward trend, with BTC leading initially.
  • Altseason: Often a sub-phase within a bull market where alternative cryptocurrencies, or “altcoins,” outperform Bitcoin.

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Key phases of a Bull Market

Everyone now knows that we are in a bull market. The price of BTC has just surpassed $90,000 and seems poised to continue rising. However, let’s take a look—drawing on historical data—at the main phases of past bullish cycles.

Phase 1: Bitcoin takes the lead

At the beginning of a bull market, Bitcoin typically absorbs the majority of new liquidity entering the market. Other cryptocurrencies, including Ethereum, often need help keeping up with Bitcoin’s explosive gains.

Phase 2: Ethereum gains momentum

Once Bitcoin’s price stabilises or reaches a local peak, liquidity matures into Ethereum. This marks the beginning of Ethereum’s outperformance relative to Bitcoin, often accompanied by gains in promising altcoins.

Phase 3: altseason begins

As Ethereum gains traction, confidence in higher-cap altcoins rises, igniting altseason. In recent cycles, altcoins with lower market capitalisations have experienced significant price increases during this period, driven by a renewed interest in diversifying beyond Bitcoin and Ethereum.

During the last bull market, the undisputed standouts were Solana (SOL), which rose by +1,200% from May to November 2021, and Avalanche (AVAX), which increased by +1,500% from June to December 2021.

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Phase 4: altseason peaks

The end of altseason often coincides with high-risk, explosive price movements in smaller, less established cryptocurrencies. This period is high in FOMO (fear of missing out) and requires caution. Once prices start to decline, it may signal the end of the bull market, and holding riskier assets can lead to substantial losses.

Why Ethereum often lags behind Bitcoin early in the cycle

Ethereum’s initial lag behind Bitcoin has become even more pronounced in recent cycles. This disparity is largely due to Bitcoin’s status as the most established and “safer” asset within the crypto space. During the early stages of a bull market, investors typically favour Bitcoin over altcoins, including Ethereum. This preference has been amplified with the launch of Bitcoin spot ETFs by major investment funds, enhancing Bitcoin’s appeal as a lower-risk investment.

A concept called “capital rotation” explains this pattern: initially, liquidity flows into Bitcoin, and as Bitcoin stabilises, investors begin to allocate funds to Ethereum and, later, other altcoins. For this reason, tracking Bitcoin dominance and the ETH/BTC ratio is crucial, as they often provide early signals of altseason onset.

Historical Timeline of Market Cycles

Examining the timing of previous cycles is helpful for effectively managing a bull market and all seasons. While exact patterns don’t repeat, they can offer valuable insights into potential timelines.

2017 Bull Market

  • Halving Date: 11 July 2016, BTC price at $650.
  • First ATH Post-Halving: 225 days later, on 21 February 2017, at $1,115.
  • Peak ATH: 297 days after halving, on 15 December 2017, at $19,000.
  • Overall Return: Approximately +2,800% from ATH to ATH.

2020 Bull Market

  • Halving Date: 11 May 2020, BTC price at $9,000.
  • First ATH Post-Halving: 216 days later, on 13 December 2020, at $19,200.
  • Peak ATH: 330 days post-halving, on 8 November 2021, at $69,000.
  • Overall Return: +259% from ATH to ATH.

2024 Bull Market

  • Halving Date: 22 April 2024, BTC price around $65,000.
  • First ATH Post-Halving: 195 days later, on 5 November 2024, BTC reached $80,000.
  • Speculative Projection: Bitcoin might reach the peak ATH for this cycle around September 2025 if history repeats.

Ethereum’s Timeline

Ethereum, launched in 2015, has less historical data, but in the previous bull market, it exceeded its ATH from January 2018 to January 2021. If the pattern holds, Ethereum could reach a new ATH soon.

Conclusion 

A disciplined approach to timing and strategy can be a significant advantage during bull markets and altseasons. Remember that while the crypto market tends to follow cyclical patterns, these cycles don’t guarantee identical outcomes. Tracking market indicators like Bitcoin dominance and the ETH/BTC ratio can be instrumental in spotting the onset of altseason. However, as the end of the cycle nears, it’s essential to reassess exposure to high-risk assets to avoid potential losses when the market reverses.

Stay mindful of these cycles, adapt strategies accordingly, and remember to balance optimism with caution.


Donald Trump wins the 2024 election: a look at the new U.S. president’s agenda

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Donald Trump is the new president of the United States

Donald Trump won the 2024 presidential election and returned to the White House. His decisive victory reflects a clear shift in American priorities, with voters drawn to his tough stance on immigration, expansive economic policies, and a more isolationist foreign policy. Trump will officially take office in January 2025, ready to lead with a strengthened Republican majority in Congress. Here’s a closer look at his win and what his administration could mean for America’s future.

How did Donald Trump win the presidency?

The U.S. electoral system is indirect, meaning American citizens do not elect the president directly. Instead, each state appoints a set of “electors” based on population. With 538 total electors nationwide, a candidate needs a majority—at least 270—to win.

In the U.S., most states operate under a “winner-takes-all” rule, meaning that the candidate who receives the majority of votes in a state claims all its electors (with Maine and Nebraska as exceptions). Key swing states—including Arizona, Georgia, Michigan, Nevada, North Carolina, Pennsylvania, and Wisconsin—played a critical role in Trump’s victory. Traditionally unpredictable, these states were ultimately decisive in the election outcome.

The role of swing states in Trump’s victory

Until election night, polling showed a close race, with neither candidate emerging as a clear frontrunner. However, in the early morning, Trump claimed enough swing states to clinch victory. With its 19 electoral votes, Pennsylvania was particularly important, where Trump won by a slim 2% margin. He also secured North Carolina with 51% and Georgia with 50.7%.

Currently, as votes are still being counted in a few remaining states, Trump has a solid lead with 266 electoral votes to Kamala Harris’s 219. He is also leading in other key states, meaning a Trump presidency is almost certain.

Key policies in Donald Trump’s agenda: immigration, economy, and foreign affairs

Now that Trump is set to lead, his platform promises significant changes. Americans voted for a shift in direction, so what does Trump’s agenda entail? His policies have been designed to appeal to a conservative base and are likely to have a broad impact given the Republican majority in Congress. This means he will have substantial freedom to enact his plans, both economically and socially.

Immigration: tighter policies and enforcement

Trump has pledged to take strong action on immigration, a top concern for 61% of Americans. His rhetoric on the campaign trail has been strict, portraying immigrants as a source of crime and economic burden. Trump’s vice president, J.D. Vance, has even suggested that the administration could pursue one of the largest deportation plans in recent history. This policy could lead to a major crackdown on immigration, though Trump will need to consider constitutional protections.

Economy: protectionist policies and crypto-friendly initiatives

On the economic front, Trump has promised protectionist policies, including tariffs aimed at reducing dependence on foreign goods, particularly from China. His approach could lead to what some experts call a “trade war,” potentially impacting international markets and raising prices domestically, which could further strain inflation rates.

Trump’s stance on cryptocurrencies, particularly Bitcoin, has drawn attention. His administration has hinted at using U.S.-held Bitcoin reserves to bolster the national economy and supporting BTC mining in the U.S. The initial market reaction has been positive, with Bitcoin surging to an all-time high of $75,000 following the election news. Some states, like Florida, have already supported Bitcoin, proposing to include it in public pension funds. Other areas, like Michigan and Wisconsin, have begun to invest in Bitcoin ETFs.

Foreign policy: a shift toward isolationism

Regarding international relations, Trump’s foreign policy is expected to take an isolationist approach. He has indicated that he may scale back economic support to Ukraine, potentially destabilising U.S. relations with NATO allies. During Biden’s presidency, the U.S. gave Ukraine approximately $174 billion in aid. Trump’s stance could mean a significant shift, reducing American involvement in global conflicts and focusing on domestic priorities instead.

Trump’s administration has also signalled support for Israel in the Middle East but may reduce the scope of U.S. involvement. His approach could reshape U.S. alliances, especially in Europe, where many countries rely on U.S. support for strategic stability.

What’s next for Trump’s America?

As Donald Trump prepares to re-enter the White House, America is set for substantial changes. His policies on immigration, the economy, and foreign relations reflect a bold vision aimed at strengthening U.S. interests and security, albeit with potential challenges in terms of international diplomacy and market stability.


Stay updated on the latest in U.S. politics and policy changes with Young Platform, where expert insights keep you informed about key developments in America and beyond.


The Fed cut interest rates by 25 basis points

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The FED meeting on 7 November: the US central bank cut rates by 25 basis points. Discover the impact on markets and future rate expectations

The Federal Reserve met on 7 November 2024 to decide on interest rates. Since the FOMC did not meet in October, what happened after the 50 basis point cut in September? Could the combination of Donald Trump’s victory and the reduction in the cost of money further boost the price of Bitcoin?

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Economic indicators are influencing Fed decisions.

Before analysing what happened at the 7 November 2024 FED meeting, it is good to list the economic indicators that the US central bank assesses before deciding on interest rates.

One of the main objectives of the Fed’s monetary policy is to contain inflation. When prices rise excessively, the central bank raises interest rates to curb and stabilise demand. From August to October, the consumer price index (CPI), the main indicator used to estimate inflation, fell 50 basis points to an annual rate of 2.4 %, down from 2.9 %. 

This slowdown in inflation was made possible by the restrictive monetary policies implemented by most Western countries in the past two years. Since, today, the situation seems to be under control, central banks are proceeding with progressive interest rate cuts in order to stimulate the economy after having previously cooled it down.

Employment and, thus, the health of the labour market also plays an important role in the Fed’s decisions. In recent months, the unemployment rate has been stable at around 4.2%, but if it had risen, it would have been necessary to intervene with a tighter plan of interest rate cuts. However, since this did not happen, the Fed could, and probably will, proceed gradually.

Finally, when the Fed decides on interest rates, it also considers Gross Domestic Product (GDP). Excessively fast economic growth may fuel inflation, while weak growth may suggest the need for economic stimulus, such as rate cuts. In October, economic growth in the US slowed, and the Fed responded with a 25 basis point rate cut.

Has the election of Donald Trump affected rates?

The election of Donald Trump did not affect the Federal Reserve’s November meeting, whose decision was in line with expectations on interest rates. Some experts thought that the FED might leave rates unchanged given the new US president’s willingness to apply tariffs on goods from abroad, particularly from China, which might raise inflation again in the future.

However, the majority still expected a 25 basis point cut, which, in fact, happened. Polymarket, the crypto world’s leading prediction market, effectively summarised the consensus view, which, as with the presidential election, guessed correctly.

Gregory Daco, Chief Economist of Ernest Young, one of the world’s leading consulting firms, was also of this view, stating on Wednesday: “Declining inflation and wage and productivity growth should favour a gradual recalibration of the Fed’s monetary policy with a 25 basis point rate cut after the election.”

November 2024 FED meeting: the impact on the market

It is very difficult to estimate the possible impact of the rate cut at the Fed’s meeting on 7 November 2024, mainly because it comes after the two most important days of the year. Wednesday saw the conclusion of the US elections, in which Donald Trump emerged as the winner, who will return to Capitol Hill after the Democratic interlude of the last four years.

Had Kamala Harris won, the situation would probably have been different. Still, the Republicans in power from January onwards will be the ones who have also won a majority in Congress. What has happened and all the promises associated with a new Trump mandate have caused the price of major assets, especially Bitcoin and Tesla shares, to explode upwards. Less than twenty minutes after the opening of the markets, spot ETFs on Bitcoin recorded $1 billion in volume, while on the day of 7 November, the absolute record of capital inflows was $1.38 billion.

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However, the last word has yet to be said. Regarding the crypto world, what happened this week seems to have rekindled the bull market, which was abruptly interrupted in April after the all-time highs (ATH) were reached—historical highs which, again, have been updated in recent hours. Analysing the stock market, one can see that the main indices, above all, the S&P 500 and NASDAQ, have been recording bullish price movements at a very sustained pace for quite some time.

In short, the million-dollar question related to the FED meeting on 7 November is one: will the interest rate cut make the markets rise further, especially Bitcoin? Or will the major assets slow down after the bull run of the last few days?

What Will Happen to the Stock Market in Q4 2024?

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How is the stock market faring, and what can we expect in Q4 2024? An analysis based on BlackRock’s quarterly report

BlackRock’s latest quarterly report on the stock market opens with a thought-provoking quote from Tony DeSpirito, the Global Chief Investment Officer: “The economy is not the stock market. And that’s good news.” This line suggests that the stock market may not necessarily follow suit even if the real economy slows down. Here, we break down BlackRock’s outlook for the stock market over the final quarter of 2024.

Stock Market: General Observations

The fourth quarter of 2024 promises to be a dynamic period for both the stock market and cryptocurrencies. BlackRock analysts predict that risk assets may experience heightened volatility, driven primarily by the upcoming U.S. elections and central banks’ potential rate cuts, especially by the Federal Reserve (Fed). Overall, BlackRock’s experts anticipate that rate cuts could bolster the stock market and create fresh investment opportunities.

However, the third quarter of 2024 was also marked by significant volatility, largely due to concerns over economic deceleration and recession risks. The Fed’s seemingly delayed response to these issues has added to market uncertainties. Despite these challenges, BlackRock’s report underscores that the fundamentals of the stock market have remained strong.

Two Sides of Volatility

The report delves into the topic of volatility, a critical factor in understanding the stock market’s outlook for the months ahead. BlackRock’s analysts remind us that while investor sentiment can move markets in the short term, fundamentals ultimately prevail over time. Investors should therefore stay focused on long-term value creation, even if the coming months bring sharp price swings.

Tony DeSpirito elaborates on the benefits of volatility with four key insights:

  1. Volatility can be advantageous: Market corrections allow investors to increase their exposure to high-quality assets, particularly when these price drops stem from sentiment-driven events that don’t alter the asset’s underlying fundamentals. By taking advantage of dips, investors may strengthen their portfolios.
  2. Volatility is normal: The stock market has always relied on its ups and downs to recover from major downturns, such as the 2008 financial crisis. BlackRock expects a similar scenario in the coming months, with peaks in volatility likely due to the Fed’s decisions.
  3. Market corrections are common: Over the past 35 years, the S&P 500 has experienced 20 corrections of over 10%, yet it has delivered an average annual return of +14%. The takeaway is clear: investing with a long-term perspective can help investors ride out market fluctuations effectively.
  4. Higher volatility can yield better returns: BlackRock’s data show that periods of increased volatility often lead to superior returns when the Volatility Index (VIX) remains below 12 points and six-month returns for the S&P 500 average around 5%. However, when the VIX hits 29 or higher, these returns jump to 16%. In short, volatility can drive short-term returns.

U.S. Elections and Their Impact on the Stock Market

The November U.S. elections are another major event that could influence the stock market this quarter. BlackRock has analysed how previous elections have affected stock performance, concluding that while election results often cause immediate price swings, the longer-term effects tend to be muted. Since 1996, only two out of seven elections have triggered post-election volatility lasting more than eleven months.

BlackRock’s message is clear: even during times of political uncertainty, investors should maintain a long-term view. History shows that the market has overcome many challenges since 1974, from presidential resignations to stagflation, the 1987 crash, the dot-com bubble, the 2008 crisis, and COVID-19. Patience, it seems, remains an invaluable virtue in the world of investing.

The Impact of Fed Rate Cuts

BlackRock’s report also explores the potential impact of Fed rate cuts on the stock market. The analysis confirms that stock markets tend to perform well when rates are reduced, especially if these cuts do not coincide with a recession. Historically, large-cap stocks have typically outperformed smaller-cap stocks for up to three years following the first rate cut.

When broken down by sector, the report shows that healthcare and consumer goods stocks tend to experience above-average growth in the year following an initial rate cut. This insight could benefit investors seeking defensive exposure in an uncertain environment.

And What About the Crypto Market?

In recent months, BlackRock and its CEO, Larry Fink, have shown a growing interest in cryptocurrency. BlackRock’s latest report highlights Bitcoin’s unique potential as a portfolio diversifier. Unlike traditional stock market assets, Bitcoin is largely uncorrelated with equities, which can provide additional resilience to a portfolio. Bitcoin’s rallies tend to be more explosive, offering investors a high-growth asset option with its own distinctive cycle.

Thanks to its secure, immutable blockchain technology, Bitcoin is viewed as a reliable store of value. Its Proof of Work system ensures that thousands of nodes and miners verify each transaction, providing unmatched security. This immutability and transparency set Bitcoin apart, cementing its position as a unique alternative asset for long-term investors.

Conclusion

The fourth quarter of 2024 presents both challenges and opportunities for the stock market. Investors can expect volatility to continue with the upcoming U.S. elections, potential rate cuts by the Fed, and ongoing global economic shifts. However, BlackRock’s analysis suggests that a long-term perspective and focus on fundamentals can help investors make the most of these market conditions.

Download the Young Platform app for more insights on the stock market and how to navigate Q4. Stay informed with our weekly updates and make smart choices for your portfolio in the dynamic investing world.


Bitcoin Rises on China’s Economic Stimulus and ETF Inflows

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Bitcoin’s price surges on Chinese economic stimulus measures and strong ETF inflows. What’s next for Bitcoin this October?

Bitcoin has recently shown a surprising upturn, closing September with an impressive 8% increase. This performance defies the usual trend, as September is typically a weak month for the cryptocurrency. The drivers behind this growth are strong ETF inflows and significant liquidity injections from China, which have sparked optimism across global markets.

China Injects Capital and Cuts Repo Rates

Last Wednesday, China’s central bank announced a reduction in its interbank lending rates (repo rate) from 1.95% to 1.85%, complemented by a $10 billion liquidity injection and a 50-basis-point cut in the required reserve ratio (RRR) for banks. This move appears to be part of a larger economic stimulus package aimed at revitalising the economy with an anticipated ¥1 trillion (around $150 billion) in increased credit availability for banks.

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This intervention seeks to counteract key economic challenges, including deflation driven by low consumer demand, a struggling real estate market, and high public debt. The effects have been immediate, with Asian stock indices like Hong Kong’s Hang Seng and Shanghai’s SSE surging 14% and 20%, respectively, since Thursday. This positive momentum also boosted the U.S. and crypto markets, although Bitcoin and other major cryptocurrencies have since eased, with BTC down by about 3% today.

China’s liquidity boost not only lifted Asian financial markets but also generated optimism among global investors. The repo rate cut and other measures are expected to increase the global money supply, with many analysts speculating that a portion of this liquidity may flow into riskier assets, including stocks and cryptocurrencies, in the coming weeks.

Impact on Investor Sentiment and Bitcoin’s Price

Bitcoin’s recent price surge is also tied to rising inflows into Bitcoin ETFs, further strengthening investor confidence. Last Friday, ETF inflows reached nearly $500 million, a level not seen since July. This significant capital flow into Bitcoin funds suggests renewed market optimism after prolonged stagnation.

Ethereum has also shown promising signs, with ETF inflows totalling $150 million over the past four trading days. This uptick comes after two challenging months for Ethereum ETFs, hinting at a potential shift in sentiment for the broader crypto market.

Will October Bring Renewed Momentum?

Despite minor pullbacks over the past 24 hours, optimism persists across markets. As we enter October, a historically bullish month for Bitcoin (often dubbed “Uptober”), will this mark the beginning of a sustained uptrend after over six months of sideways movement?Download the Young Platform app to stay updated on Bitcoin’s market dynamics and the global economic factors influencing cryptocurrency prices. Follow our weekly updates to stay ahead in the world of crypto investing.


Two principles that every investor should know, according to J.P. Morgan

What is the state of the financial markets today? What are the principles to be observed when investing intelligently? Here is what emerged from J.P. Morgan’s latest report

What should an investor know today to be called ‘smart’? Last week, the S&P 500, the world’s largest stock market index of America’s 500 most capitalised companies, reached a new all-time high, its 46th of this year.

However, although major asset prices tend to be bullish in the long run, steering the markets is still a complicated business. Here are two principles an intelligent investor should know today.

The state of the market

First, however, it may be useful to analyse the state of the stock market. Results in 2024 were decidedly positive because most listed companies exceeded growth expectations. More than three-quarters of the companies exceeded expectations by 6.8% in aggregate. However, a few exceptions came from what many believe to be the most promising sector soon: artificial intelligence. For example, ASML, a leading Dutch semiconductor supply chain company, put pressure on chip stocks on Tuesday after missing earnings and revising its sales forecast 2025.

On the other hand, regarding the bond source, US government bond yields fluctuated throughout last week, then stabilised after releasing two important macroeconomic data: retail sales and unemployment benefit claims. Consequently, the current situation makes us cautiously optimistic about the FOMC meeting on 7 November 2024, after the committee still needs to meet in October. Will the FED and its chairman Jerome Powell cut interest rates again, as happened in September? 

How can we not mention the US elections, scheduled for Tuesday, November 5? It is certainly important to follow what will happen, but it is not fundamental, as we will see by analysing two cardinal principles of the intelligent investor that we have extrapolated from the latest J.P. Morgan report.

Smart investing: the hygiene of your portfolio

The first crucial principle for J.P. Morgan to invest intelligently is portfolio hygiene. This term indicates the identification of clear objectives and the creation and maintenance of a long-term plan, all accompanied by regular ‘check-ups’. What does this mean from a practical point of view? 

To understand this, we can extrapolate an example from the current market situation. Last week, we celebrated the second birthday of the current bull market, at least as far as the stock market is concerned. On 12 October 2022, the S&P 500 touched a low at 3,577 and has since recorded +60%. Although very positive for investors, this upward movement has certainly unbalanced the allocations of those who diversify between different types of assets, e.g., stocks and bonds. Therefore, if one’s strategy provides for it, it may be time to rebalance and stick to one’s plan.

For example, if we look at a 60/40 type portfolio (60% invested in stocks of the S&P 500 and 40% in US bonds), we see that it has had a total return of about 27% over the past year. Without rebalancing, the same portfolio would now be overweighted in stocks at 64% and underweighted in bonds at 36%, given the difference in return between the two asset classes. According to J.P. Morgan, a smart investor periodically takes the time to analyse their financial situation and make adjustments according to their strategy. 

However, the preceding is not mandatory. If your strategy involves periodic investments, perhaps through recurring purchases, but does not involve periodic rebalancing, you can safely proceed without changing allocations. Consider extending your current approach to another innovative and promising market: cryptocurrencies. 

Understand the risks, but prepare for the opportunities

The second principle of the ‘smart’ investor identified by J.P. Morgan ties in with what was specified at the end of the previous paragraph. In a market often influenced in the short term by macroeconomic and political news and events, it is important to look to the long-term and sound fundamentals

Some topics that we have often discussed on our blog, such as the upcoming US presidential election, geopolitical turmoil in the Middle East and monetary policy decisions by central banks, may cause unease or arouse fear. However, they mustn’t affect one’s long-term strategy in any way. In the investment world and when trading in the markets, it is crucial to focus on knowledge, data, and tangible and concrete variables rather than unknowns.

In support of this thesis, J.P. Morgan presents some historical data, which shows that markets tend to rise regardless of the winner (or winner) of presidential elections. The same argument can also be applied to conflicts and central banks’ decisions on interest rates. Since 1950, there have been 18 elections in the US and ten changes in the White House between Democrats and Republicans. Over these 74 years, US GDP growth has averaged 3.2% per year, while that of the S&P 500 has averaged 9.4%. In short, an investor, if intelligent, should take the ball when he starts to doubt his investment strategy due to news or unexpected events and use the moment to re-examine his objectives, plan, and the time horizon of his investments.

In conclusion, according to J.P. Morgan, an intelligent investor does not change his strategy depending on the news or looming events. On the contrary, he constantly monitors the situation but only acts according to his plan and objectives.

Samsung’s investments in crypto

Samsung's investments in the crypto world

Samsung’s investments in the crypto world followed the announcement that it has invested in the crypto company Startale Labs, which is working on Sony-owned Ethereum Layer 2. 

It’s happening! Large ‘traditional’ technology companies are entering the crypto world with a ‘leg up’, as demonstrated by Sony’s announcement last week. The entertainment giant presented Soneium, an Ethereum Layer 2 developed in collaboration with blockchain company Startale Labs, to the public, which also attracted the interest and capital of Samsung.

Unlike Sony, however, South Korea has been exploring the world of cryptocurrencies for several years through its venture capital fund, Samsung Next. This is why it may be curious to analyse Samsung’s investments in the crypto world. How does the company finance the start-ups? If you follow the sector with interest, you will know some of them!

  • Axie Infinity

SamsungNext believed in one of the most popular Web3 games in the crypto world and participated in the $152 million (Series B) funding round by Sky Mavis, the software house behind the game’s development.

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Axie Infinity and its development team raised around $315 million in investments in six rounds.

  • Sui (SUI)

The blockchain created by Meta’s team of former employees certainly attracted a lot of attention in its early months. The depth of its early employees and the technological premise have enabled this blockchain company to raise large amounts of capital and re-enter the crypto companies in which Samsung has invested.

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The technology giant acquired shares in Sui in December 2021, during the blockchain company’s first funding round (series A).

  • Alchemy

Alchemy is one of the most popular developer platforms in the crypto world, as it offers developers everything they need to develop decentralised applications (dapp). It is not as popular as the projects mentioned above precisely because it is dedicated to the so-called builders, those who are in charge of building the blockchain protocols we use.

The investments attracted by this crypto company, in which Samsung also participated, show that Alchemy is a Web3 institution. It has raised a total of approximately USD 560 million and is valued at more than USD 10 billion. The top names that have participated in several rounds also include Andreessen Horowitz (a16z), Coinbase Venture, and Pantera Capital.

  • Yuga Labs

The Web3 company that released the NFT collection ‘Bored Ape Yacht Club’ (BAYC) has also received capital from Samsung, perhaps because the South Korean company wants to keep up and aims to fit into entertainment 3.0. Samsung contributed to this NFT company in March 2022, during Yuga Labs’ only funding round, through which it raised USD 450 million.

At that time, the Bored Apes of BAYC were at the height of their success. The minimum price for a single non-fungible token was around 100 Ethereum, more than $300,000. Today, however, the collection and the entire NFT market have shrunk dramatically, and it is possible to buy a Bored Apes for about 10 ETH, less than $30,000 at today’s price.

  • The Sandbox

Even though this segment of the crypto world has not been doing well lately, the world’s most popular metaverse has attracted more than $100 million in investments in the past year. 

See the SAND chart!

At the height of its success (November 2021), The Sandbox closed a USD 93 million funding round in which SamsungNext and LG Technology Ventures, the fund owned by one of the Korean company’s main competitors, also participated. 

These are just a small part of Samsung’s investments in the crypto world. Also worth mentioning are LayerZero, a leading blockchain interoperability protocol; SuperRare, an NFT marketplace dedicated to digital art; and Messari, a widely used database and intelligence network for the crypto world. Now, after its commitment to Startale Labs, Samsung’s Web3 investment season is starting up again. Keep following us so you don’t miss the next one!

ECB meeting September 2024: decisions and outlook

ECB September 2024 meeting: interest rate forecasts

What will the ECB decide at its meeting on 12 September? Will it cut rates by 25 basis points as planned, or will it, surprisingly, leave them unchanged?

What are the forecasts for the next ECB meeting in September 2024? With only a few days to go before the meeting scheduled for the 12th of the month, speculation about a possible interest rate cut is taking centre stage. At its last meeting in July, the European Central Bank had left them unchanged at 4.25% after the June cut. While deposit rates are stuck at 3.75%.

Since then, new scenarios have emerged, in particular a drastic drop in inflation, at least according to the preliminary figure, from 2.6 % to 2.2 %. Moreover, the Federal Reserve, the central bank of the United States, is ready to cut rates for the first time since 2022. What will happen? Lagarde’s press conference will clarify all doubts.

ECB meeting September 2024: interest rate cut forecasts

The most credible forecasts on the ECB meeting in September 2024 and the European Central Bank’s interest rate cut tell us we will likely see a 25 basis point cut. This intervention would be justified by the slowdown in inflation, which is now very close to the 2% target, but also by the worrying downturn in growth. If this is the case, it would be the second cut in the cost of money this year after the June cut.

The European macroeconomic landscape

To explore the matter further, we can quote Carsten Brzeski, global head of macroeconomics at ING, who said on the occasion of the release of the latest inflation figures: ‘With the latest Eurozone inflation figures, a rate cut at the European Central Bank meeting has become almost a done deal’.

Therefore, economists suggest two factors to consider, especially in view of the upcoming ECB meeting in September: the slowdown in inflation and the worrying situation of growth indicators.

For example, the eurozone’s gross domestic product (GDP) grew by only 0.2% in the second quarter of 2024, a downward revision from the previous estimate of 0.3%. At the ECB meeting, there will also be time to review the macroeconomic projections since they were revised in June. 

At that time, annual economic growth in the Eurozone was forecast at 0.9% in 2024, with a further strengthening to 1.4% in 2025 and 1.6% in 2026. Inflation, on the other hand, was expected to decline from 5.4 % in 2023 to 2.5 % in 2024, 2.2 % in 2025 and 1.9 % in 2026.

We continue with the Pacific Investment Management Company (PIMCO) forecast, which believes that the ECB will cut the deposit rate by 25 basis points from 3.75 % to 3.5 % at its meeting on 12 September 2024. The US firm believes that the Governing Council will provide much guidance beyond September and expects it to reiterate a data-dependent strategy.

How many interest rate cuts can we expect in the coming months?

In the current scenario, despite the drastic drop in inflation, leading industry experts continue to expect two interest rate cuts for 2024, both of 25 basis points. Fidelity, a US investment fund that also owns an ETF on Bitcoin, is of this opinion. If Fidelity’s predictions come true, the deposit rate will stand at 3.25% by the end of the year. By 2025, however, three more cuts are expected, bringing interest rates to 3% and the deposit rate to 2.50%.

DWS Group, one of the world’s leading asset managers, is more or less of the same mind: in 2025, rates will be reduced by 25 basis points every quarter until they reach 2.50% in September 2025.

Ulrike Kastens, Senior Analyst at DWS, stated in an interview on 5 September that the ECB Governing Council will want to avoid lowering interest rates too quickly to prevent inflation from rising again. According to Kastens, the elements in favour of a further interest rate cut in October would mainly be two:

  •  a larger drop in growth than expected;
  •  a larger interest rate cut by the Federal Reserve than expected, expecting a reduction of 25 basis points.

Bastian Freitag, an executive at the Franco-British investment bank Rothschild & Co, does not agree. He expects a plan of regular cuts of 25 basis points from September to December and further quarterly reductions in 2025.

What can we expect at the next ECB meeting in September? Will the predictions on the new interest rate cut come true? How will the Federal Reserve behave at its meeting on September 17 and 18?

How did the debate between Kamala Harris and Donald Trump go? Things to know

How did the debate between Kamala Harris and Donald Trump go?

On 10 September, Kamala Harris and Donald Trump held the long-awaited official debate for the November presidential election. Who came out on top?

On 5 November, US voters will go to the polls to elect the next president. Initially planned as a rematch of the 2020 election, this election was turned upside down in July when President Joe Biden decided to end his campaign and endorsed Vice President Kamala Harris. The big question now is: will the result mean a second term for Donald Trump or the first woman president of the United States?

Harris vs Trump: the debate and the effect on the campaign

10 September marked a very important moment in the presidential election race for both candidates, especially for Kamala Harris, who took the opportunity to introduce herself to Americans as the new leader of the Democratic Party after the resignation of Joe Biden. Harris addressed all Americans still undecided about voting, taking the stage determined to represent the ‘face of change’ and show a ‘new way forward’ for all Americans. On the other hand, Trump maintained his style, emphasising the strong positions that distinguish him and criticising his rival’s lack of pragmatism. 

Harris vs Trump: a heated confrontation on crucial issues

The debate, held in Philadelphia and moderated by David Muir, saw the two candidates address topics of great relevance to voters: the economy, inflation, immigration and abortion. Harris tried to position herself as the middle-class candidate, accusing Trump of being the ‘champion of the billionaires’. At the same time, Trump portrayed Harris as a left-wing extremist who lacks the experience needed to govern.

Kamala Harris had a slower start but managed to carbonise and put Trump on the spot on sensitive issues, such as his popularity among world leaders and judicial troubles. She tried to present herself as a pragmatic and decisive leader, ready to confront international and domestic challenges, such as foreign and social policy issues.

On the other hand, Donald Trump maintained his usual provocative style, trying to discredit his opponent with personal attacks and repeated references to Joe Biden’s tenure, which he described as a failure. Despite his tendency to respond to provocations, Trump has tried to avoid excessively personal attacks while maintaining a harsh tone, especially on immigration, an issue on which he has a lead in the polls.

Taylor Swift’s endorsement and the ‘Spin Room’

One of the most talked about moments of the evening was Taylor Swift‘s endorsement of Harris. The pop star, very influential on social media, endorsed the Democratic candidate with a message to her fans, emphasising her support for Harris. This could have a significant impact, especially among younger voters.

Both camps declared victory in the ‘spin room’ after the debate. Trump’s allies tried to downplay the damage caused by some of his controversial statements, such as when he claimed that Haitian immigrants steal and eat pets in Ohio, a claim immediately denied by the moderator.

Who won the debate?

Regarding immediate reactions, Harris has consolidated his position, standing up to Trump and not giving in to his provocations. Trump appeared confident but was challenged on sensitive points, such as his judicial troubles and popularity among world leaders. 

However, both candidates have offered few concrete details about their programmes, leaving many voters questioning the United States’ political future. It is, therefore, too early to assess the impact on the polls, which may better indicate whether there will be any change in electoral preferences in the coming days. Indeed, the seven states with the most significant polling stations – Wisconsin, Pennsylvania, Nevada, North Carolina, Michigan, Georgia and Arizona – will play a key role.

These seven states can, in turn, be divided into three different territorial categories. Pennsylvania, Michigan and Wisconsin, all located north of the Canadian border, represent the most industrial part of the country. North Carolina and Georgia, on the other hand, are located south of Washington, while Nevada and Arizona are the most important in the Western United States. 

Who is leading in the polls?

In the months before Biden’s retirement, polls consistently showed him trailing Donald Trump. Although Harris initially struggled to improve those percentages, his campaign began to gain ground. Currently, at national polls, Kamala Harris leads by three percentage points

This figure, however, matters relatively, as it does not consider the different values of the key or swing states with a higher number of seats, which we listed earlier. If we analyse the question with these preferences in mind, we see that Donald Trump and Kamala Harris are, essentially, on par. For example, in Pens, Harris has 48% of the preferences while Trump has 47%, and the same percentage in Georgia. Conversely, Trump is ahead in Arizona (48%) against 47% for Harris.

National polling averages give a good idea of the candidates’ general popularity but do not necessarily accurately reflect the possible outcome of the election. The outcome will depend on a handful of swing states, such as Pennsylvania, Michigan, and Wisconsin, which historically swing between the two parties.

Who is winning in the swing states?

The polls are very tight in the seven key states, including Pennsylvania, which is crucial for electoral victory. Pennsylvania, in particular, has the most electoral votes among the swing states, making it decisive.

Michigan and Wisconsin, once Democratic strongholds, passed to Trump in 2016, but Biden won them back in 2020. Except for North Carolina, Joe Biden had won favour in six of these seven states. If Harris can maintain these gains, he will be well on his way to winning the election. On the other hand, Trump will have to make up ground in these key states to secure the votes needed to reach the 270 large voters required for victory.

In other words, Kamala Harris and Donald Trump are unlikely to travel to Los Angeles (California) or New York, and if they do, the only purpose of their visits will be to collect money. They will most likely go to Phoenix (Arizona), Milwaukee (Wisconsin), or Atlanta (Georgia).

The role of funding 

One element that underlines the importance of swing states compared to those considered ‘normal’ is the amount of money the parties spend on promoting their programmes. In August, for television commercials in Pennsylvania, the two politicians spent about 40 million dollars each, in Georgia almost 20, and in Arizona more than 10.

Finally, we can briefly analyse the issues that will play a vital role in the US elections in November, mainly from an ideological and demographic perspective. For instance, Donald Trump had won a considerable slice of the African-American electorate, which may return to voting Dem after Kamala Harris takes the field. At the same time, however, many South American immigrants who are now citizens of Western states might prefer Trump’s approach to immigration because they have become, over time, strongly conservative on this issue.

Conclusion

The debate between Kamala Harris and Donald Trump gave American citizens a taste of the dynamics that will characterise this presidential race. Harris seems to have a slight lead in the polls, but the road to the White House is far from secure. In the coming days, the political landscape will continue to evolve, and voters in the swing states will have the final say on who will lead the country.