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UBS Asset Management’s Kevin Zhao plans to buy US Treasuries during the holiday season, anticipating that President-elect Trump’s policies will negatively impact economic growth. Despite a market trend of selling off Treasuries, Zhao believes yields will rise to 4.6% before year-end, and he is adjusting his strategy to capitalize on potential market volatility. He argues that the benefits of tax cuts are being overestimated and may not materialize until 2026.
US stocks rebounded on Friday as inflation data indicated a slowdown in price increases for November, with the Dow Jones up 0.8%, S&P 500 rising 0.7%, and Nasdaq gaining 0.6%. The core Personal Consumption Expenditures index showed monthly deceleration, although inflation remains above the Fed's 2% target. Concerns over a potential government shutdown and tariff threats from Trump weighed on global markets, while Novo Nordisk's shares plummeted 20% following disappointing trial results for its obesity drug.
Bitcoin dipped to $92,000 amid a significant leverage flush, with the cryptocurrency down 1.5% on the day. Analysts noted this pullback, which mirrors past corrections, presents an optimal re-accumulation opportunity, despite a total liquidation of $1.4 billion across the crypto market.The recent cooler PCE inflation data provided some relief, with inflation coming in at 2.4%, slightly below expectations. This has led to a modest increase in market expectations for future Federal Reserve policy adjustments.
A potential government shutdown just before Christmas could disrupt holiday travel, leading to longer airport wait times due to increased TSA staff absences. However, mail deliveries and Social Security payments would continue unaffected, as the Postal Service operates independently and Social Security is a mandatory program. Stock markets may react with short-term volatility, but historically, shutdowns have had minimal lasting effects on equity performance.
Bitcoin is currently trading between $96,000 and $98,000, supported by significant buying activity from over 1.16 million BTC held in wallets. Despite a recent drop below $100,000 due to a hawkish stance from the Federal Reserve, 86% of holders remain profitable, with many continuing to accumulate BTC. Analysts warn that if Bitcoin falls below $96,000, it could drop to $90,000, while a bullish target of $110,000 remains in sight.
Bitcoin's price experienced significant volatility, dropping from an all-time high of over $108,000 to around $92,000 following the FOMC meeting, where Chairman Jerome Powell hinted at a slowdown in rate cuts due to rising inflation. This led to a market-wide sell-off, with nearly $700 million withdrawn from financial vehicles and over $1.3 billion in liquidations across the crypto market. Altcoins also suffered, with Ethereum down nearly 15% and DOGE plummeting 25%, raising concerns about the sustainability of the current bull run.
The Parliamentary Commission of Inquiry's report on Credit Suisse's collapse highlights years of mismanagement and calls for stronger regulations for systemically important banks. Reactions from political and business leaders emphasize the need for effective oversight, with some advocating for a "Lex UBS" to manage the risks posed by the newly formed mega-bank. The Federal Council acknowledges the report's findings and plans to incorporate them into future regulatory frameworks.
Bitcoin's price has fallen below $100,000, prompting increased discussions about "buying the dip" as investor sentiment shifts amid a broader market downturn. The Federal Reserve's recent interest rate cut and mixed economic forecasts have contributed to this volatility, with altcoins like Ethereum and Solana also experiencing declines. Despite the overall market slump, some assets like Movement and Zerebro have shown significant gains, while global search interest in cryptocurrencies continues to wane.
Bitcoin is poised for a significant price surge, potentially reaching $500,000, as nation-states and corporations explore it as a strategic reserve amid a looming supply shock. The U.S. is considering establishing a Bitcoin reserve, with a proposed executive order to purchase BTC using $21 billion from the Exchange Stabilization Fund, while countries like the UAE are reportedly accumulating large amounts of Bitcoin. As global adoption increases, the dilemma of holding versus selling Bitcoin intensifies, with its current price around $95,513.26.
Business circles have reacted cautiously to the findings of the Parliamentary Commission of Inquiry into the Credit Suisse collapse, which holds former managers accountable while recommending enhanced regulatory measures. The Swiss Bankers Association and economiesuisse urge against excessive regulation, advocating for improved liquidity support for systemically important banks and cautioning against penalizing UBS, the buyer of Credit Suisse. Finma acknowledges the criticisms but refrains from labeling them as serious shortcomings, while also welcoming proposals for increased powers to enforce regulations effectively.
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