We maintain our $180k-$200k bitcoin price target by year-end, says SkyBridge's Anthony Scaramucci
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Business Insider
14 minutes ago
- Business Insider
'Upside down economically': Here's why the housing market probably won't get more affordable if the Fed cuts rates
Don't expect the Fed to rescue the housing market. Markets have their eye on the Fed's likely interest rate cut in September, but Peter Boockvar, the CIO of One Point BFG Wealth Partners, has a two-part thesis as to why housing will stay expensive, even if the Fed trims its benchmark rate. It's a tough time for prospective buyers. The 30-year fixed mortgage rate, the most popular home loan in the US, is hovering around 6.5%. That's down slightly from highs above 7% this year, but still well-above levels seen in the period of 15 years that followed the financial crisis. Here's why afforability might not improve even if the Fed loosens monetary policy, in Boockvar's view: 1. Fed rate cuts won't pull down long-term rates When the Fed cuts rates, it most directly impacts short-term interest rates in the economy. That's unlikely to have a sizable influence over the longer-term rates, Boockvar said, speaking to CNBC on Tuesday. That's important to note because longer-term rates, like the 10-year Treasury yield, are the primary drivers of long-term borrowing costs for consumers. The 10-year bond yield is elevated compared to levels at the start of this year, and it could remain high as investors grow hesitant to pile into long-term government bonds amid mounting deficits and heavy government borrowing. "I think there's a global aversion to taking on long-duration. And long-term interest rates are higher across the world," Boockvar said. "So I think those looking to buy a home should not necessarily bet they're going to get rate relief with the cut in short-term interest rates." 2. Fed rate cuts won't fix the supply problem What's really holding back the market from becoming easier for buyers is supply. The housing market is in dire need of more homes to help bring prices down. Even if mortgage rates edge lower, hotter demand could send prices higher unless the market gets an increase in available supply, Boockvar said. "To really be big picture here, you really need baby boomers to downsize. That is where most of the existing home supply needs to come from," he said. But getting more Americans to move is a challenge. Many homeowners are staying put for two reasons: Mortgage rates are too high. More than 90% of US homeowners with a mortgage have financed at a rate below 6%, according to a 2023 Redfin analysis. Home prices are too high. The median existing home price rose to a record $435,300 in June, according to the National Association of Realtors. But, if home prices were to drop, that would hit homebuilder profits, Boockvar said, suggesting it could potentially limit new housing supply hitting the market. "It's sort of a catch-22 with this industry right now, that's sort of upside down economically," Boockvar added. Forecasters generally aren't very optimistic when it comes to the outlook for housing affordability. Redfin economists expect the median US home sale price to dip 1% by the end of the year, the real estate listings site said in May. Zillow, meanwhile, said in July it expected home values to post a 2% decline by the end of the year.
Yahoo
27 minutes ago
- Yahoo
Options Traders Brace for Big Tech Selloff With ‘Disaster' Puts
(Bloomberg) -- Options traders are increasingly nervous about a plunge in technology stocks in the coming weeks and are grabbing insurance to protect themselves from a wipeout. The tech-heavy Nasdaq 100 Index is up almost 40% since its early April plunge triggered by President Donald Trump's sweeping tariffs. The rally has been propelled by big tech, with the Bloomberg Magnificent 7 Index — which contains the likes of Nvidia Corp., Meta Platforms Inc. and Microsoft Corp. — soaring nearly 50% since its April 8 bottom. Chicago Schools Seeks $1 Billion of Short-Term Debt as Cash Gone A Photographer's Pipe Dream: Capturing New York's Vast Water System A London Apartment Tower With Echoes of Victorian Rail and Ancient Rome Why New York City Has a Fleet of New EVs From a Dead Carmaker Princeton Plans New Budget Cuts as Pressure From Trump Builds The concern, however, is that those gains are hiding areas of weakness lurking beneath the market's surface. And there are potential triggers for a drop coming up, from Federal Reserve's Jackson Hole symposium starting in a few days to Nvidia's earnings next week. Traders are 'less concerned' about a 'normal run-of-the-mill pullback' and seem to be more worried about a repeat of the April selloff, said Jeff Jacobson, head of derivative strategy at 22V Research Group, who thinks a shallower dip is more likely. Traders are buying 'disaster' puts on the Invesco QQQ Trust Series 1 ETF, which tracks the Nasdaq 100 Index, Jacobson said. Put options give investors the right to sell the underlying security at a certain price, and are popular as a way of protecting against a market drop. A measure showing the difference between the cost of hedging against a sharp downturn and a smaller one is at an almost three-year high, Jacobson said. Fears of a bubble are mounting, as tech stocks follow a pattern that is 'surprisingly similar' to the dot-com bubble of the late 1990s, Torsten Slok, chief economist at Apollo Management, wrote in a note to clients on Monday. Meanwhile, Michael Hartnett, chief investment strategist at Bank of America Corp., has been warning of a bubble forming in risk assets since December and predicts that US stocks will drop after the Fed's Jackson Hole symposium ends on Friday. Myriad Risks 'The market's had such a big run,' Jacobson said. 'A myriad of things' could send big tech tumbling. For example, there are worries about the impact of artificial intelligence on software companies, which has helped push Salesforce Inc.'s share price down 27% this year. And the Magnificent 7 rally could come to an end if tariff-driven inflation forces the Fed to curtail interest rate cuts that the market has already priced in. 'It could be a rotation out of those the Mag Seven names into some of the other areas that have lagged,' Jacobson said. 'It could be 'sell the news' when you have Nvidia earnings in the next few weeks. We could even get a 'sell the news' out of Jackson Hole.' The elevated put skew indicates that traders are hedging against a repeat of the tariff tantrum in April, according to Jacobson. He sees that fear as overblown. While the Nasdaq 100 sank more than 20% from its Feb. 9 high to its April 8 low, that kind of move is extremely unusual. Over the last 18 months, the average selloff in the Nasdaq 100 has been around 12.5%, Jacobson said. To bet on a correction in the ETF, Jacobson suggests a number of trades including buying a put ratio spread, in which cost of insuring against a shallower drop is partially funded by selling insurance against a deeper, April-style plunge. Specifically, Jacobson encourages traders to buy $570 puts in QQQ that expire on Oct. 17, and that they fund the trade by selling twice as many $515 puts in QQQ. The trade should make money if the index falls by roughly 2% and no more than 11%, he said. The $515 level is the ETF's 200-day moving average, which he believes will act as a floor in the event of a pullback. Not everyone on Wall Street is convinced that investors should be shorting the best performing of the major US equity indexes over the last decade. JPMorgan Chase & Co. cross-asset strategists, for instance, suggest shorting the small-capitalization Russell 2000 Index and going long the Nasdaq 100. Jacobson, however, is more pessimistic about big tech's immediate future. 'Clearly, there's a possibility, right?' he asked rhetorically. 'You have just a, such a strong concentration in these names. It wouldn't take much.' Foreigners Are Buying US Homes Again While Americans Get Sidelined What Declining Cardboard Box Sales Tell Us About the US Economy Women's Earnings Never Really Recover After They Have Children Americans Are Getting Priced Out of Homeownership at Record Rates Yosemite Employee Fired After Flying Trans Pride Flag ©2025 Bloomberg L.P.
CNBC
44 minutes ago
- CNBC
Crypto stocks tumble on Tuesday as investors go into risk-off mode
Crypto stocks suffered on Tuesday as investors fled tech stocks and riskier corners of the market. Among crypto exchanges, Coinbase and eToro fell more than 5% each, while Robinhood and Bullish both dropped more than 6%. Crypto financial services firm Galaxy Digital dropped 11%. In the burgeoning sector of crypto treasury firms, Strategy lost 7%, SharpLink Gaming slid 8%, Bitmine Immersion slumped 12% and DeFi Development tumbled 15%. Stablecoin issuer Circle lost 5%. Meanwhile, the price of bitcoin pulled back nearly 3% to just over $113,000. Ether was down more than 4% to the $4,100 level, according to Coin Metrics. Investors appeared to rotate out of tech names on Tuesday. The sector had seen a boost last week as traders weighed the prospect of more interest rate cuts. Also, bitcoin touched an intraday all-time high near $125,000 last week. On Tuesday, the Nasdaq Composite was down more than 1%, weighed down by declines in Nvidia and other tech heavyweights. The crypto market tends to be vulnerable to moves in tech stocks due to their growth-oriented investor base, narrative-driven price action, speculative nature and tendency to thrive in low-interest rate environments. This week, investors are watching the Federal Reserve's annual economic symposium in Jackson Hole, Wyo. for clues around what could happen at the central bank's remaining policy meetings this year. If Fed Chair Jerome Powell signals more dovish policy could be ahead, crypto may bounce. "With Powell speaking at Jackson Hole, we typically see profit-taking ahead of his remarks," said Satraj Bambra, CEO of hybrid exchange Rails. "Any time there's communication uncertainty from the Fed, you can generally expect some profit-taking as traders de-risk their positions." Crypto stocks have had a solid run in recent months — thanks to the addition of Coinbase in the benchmark S&P 500 index, the successful IPO of Circle and the GENIUS Act stablecoin framework becoming law. However, investors expect a pullback in August and through the September Fed meeting, where they hope to see central bank policymakers implement rate cuts.
