Goldman, BNY team up to launch tokens tied to money market funds
Investors can now buy and sell money market fund shares on BNY's LiquidityDirect platform, with a digital record of those shares created on Goldman's blockchain system, the two financial giants said on Wednesday.
The move marks an early step toward modernizing the infrastructure that underpins most of the financial ecosystem. If adopted broadly, it could make it easier and faster for institutional investors to use these assets as collateral and reduce trade settlement times.
BlackRock (BLK.N), opens new tab, BNY Investments Dreyfus, Federated Hermes, Fidelity Investments and Goldman Sachs Asset Management are among the companies participating in the initial rollout.
Though a subject of debate, tokenization's potential to drastically reshape the investing landscape has drawn strong interest.
In January, Apollo (APO.N), opens new tabteamed up, opens new tab with Securitize to launch a feeder fund that would channel capital from crypto-native investors into its global credit fund.
The moves coincide with surging optimism in the crypto industry, which has rallied in recent months and gained fresh momentum after the Genius Act passed earlier this month.
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Telegraph
3 hours ago
- Telegraph
The experts are being proved wrong about the Trump economy
Here is a tale of two economies. One is the US, which, like some kind of levitational trick performed by an Indian swami, seems to defy gravity, together with almost anything else that is thrown at it. Hardly anyone thought the US economy could withstand the post-pandemic surge in interest rates from virtually zero all the way up to 5.33pc without inducing a recession, yet here we are nearly two years after the Federal Funds Rate hit its peak, and there is still little sign of a significant downturn. Similarly with Trump's tariff threats. Most economists thought they would be as damaging to the US as those they targeted, with rising inflation undermining household spending, but thus far apparently not. It's true that Trump's protectionism is proving less severe than initially threatened, but the tariffs are still substantial by historical standards – slightly bigger, for instance, than the infamous Smoot-Hawley tariffs of the Great Depression. The same might be said of the crackdown on immigration. Without a constant infusion of migrant labour, crops would be left unharvested and fruit would rot on the tree, it was widely said. Similarly, the entire low-wage economy, from meatpacking to Uber drivers, would grind to a halt. No doubt instances of these afflictions can be found, but in aggregate there's little sign of the much anticipated damage in the wider economic data. It may be that all these matters are on a long fuse. It is still early days, and a slowdown may be just around the corner. Goldman Sachs, for one, has been steadily reducing its forecast of US growth for this year, and at the last count was down to just 1.1pc, with a high risk of outright recession. But Goldman's gloom is not reflected in the stock market, which continues to hit new records. To date at least, the economic establishment has been largely wrong-footed, prompting Trump to gleefully declare that 'the Fake News and Experts were wrong again. Tariffs are making our country BOOM'. The situation is similar in some respects to the economic debate that surrounded Brexit here in the UK. Once the immediate shock of the vote to leave the EU had worn off, the economy carried on much as before; the more gory predictions of serious economic harm turned out to be ill-founded. The big lesson, perhaps, is that abrupt changes in trade policy are not as significant as imagined in fundamentally shifting the dial in large and diverse advanced economies with high dependence on service-based industries. The other country in my tale of two economies is the UK, which has indeed slowed markedly, and may even have contracted in the second quarter. As it is, the economy shrunk by 0.3pc in April, and again by 0.1pc in May, according to initial ONS estimates. Here in Britain, the problem is almost entirely self-inflicted. Despite an autumn Budget which in overall terms was strongly expansionary, the decision to raise employer National Insurance contributions and other forms of business taxation has dealt a hammer-blow to business confidence. In anticipation of harder times to come, consumer confidence has also sagged. Meanwhile, rising concern over how the Labour Government might seek to fill a ballooning shortfall in the public finances is causing capital flight and other forms of precautionary behaviour among the asset-rich. Nobody can say that Rachel Reeves, the Chancellor, wasn't warned about the likely counterproductive effects of her tax raid. More tax threatens to spawn less tax. Shortly after the last Budget, she told business leaders that she would not be coming back with more tax rises and more borrowing. It is now abundantly clear that she will be. That she is unlikely to be able to keep that promise has no doubt instructed her more recent refusal to rule out wealth taxes as a way of filling the fiscal hole. She is wary of further tying her hands. Yet her ambivalence has served only to heighten anxiety among those who might be targeted, further fuelling evasive action. Even if she eventually does nothing, failure to rule out further wealth taxes has already inflicted considerable damage. All this against a backdrop of still elevated inflation, which at the last count remained stubbornly adrift of target at 3.6pc, slightly up on the month before. This is unlikely to deter the Bank of England's Monetary Policy Committee from further trimming interest rates at its meeting next week. Even so, the combination of nil growth with still-higher-than-acceptable inflation is proving particularly awkward for policymakers. The Bank is under no obligation to help the Government through an economic mire which is almost entirely of its own making. Back in the US, there are two main reasons that the economy is continuing to hold up relatively well. One is the continuation of massive fiscal stimulus. This is in fact just an extension of the Biden-era stimulus, only done in a different way – via the tax side of the ledger rather than the spending side. Trump has taken to blaming Biden for any slight hiccup in progress, but in truth it may be the other way around: that the economy is continuing to enjoy the tail-end of the Biden boom. The other major prop is all the excitement around artificial intelligence (AI). This has prompted record levels of investment by Silicon Valley in data centres, supercomputing and other aspects of the developing technology. It's a bubble, undoubtedly, which also helps explain continued buoyancy in the stock market, sustained as it is by the surge in AI valuations. But for now, the music plays on, and as Tim Congdon of the Institute of International Monetary Research points out, the monetary indicators support the idea of continued growth. This might be further enhanced by plans to ease back on so-called Basel III capital controls, encouraging banks to load up with US Treasuries and further expand credit provision. Combined with what is already a plainly unsustainable fiscal trajectory, it might be thought an accident waiting to happen, and no doubt it is. But today is not that day. In any case, the idea that the US economy is careering towards some kind of Trump-induced recession – brought about by a combination of protectionism and policy uncertainty – is proving to be not quite right. In fact, the economy is showing a remarkable degree of resilience to the president's iconoclasm, and actually might in some ways be benefiting from it. Thanks in part to the revenue raised from tariffs, the Federal budget actually slipped into surplus in June. Even if something of an anomaly, it nonetheless makes you think. Sadly, the same cannot be said of the UK, where the economy is becalmed even as government borrowing continues to swell ever higher.
Reuters
3 hours ago
- Reuters
Retail replaces 'smart money' as Wall Street rocket fuel
ORLANDO, Florida, July 29 (Reuters) - Retail investors are often late to Wall Street parties, only catching the rally once it's established and "smart money" is looking for the exit. But that doesn't appear to be the case this time around. Flow and survey data show that – far from playing catch-up – retail investors are a key force behind the latest U.S. equity whoosh that has been lifting the S&P 500 and Nasdaq to new highs on a near-daily basis. Retail investor participation as a share of total S&P 500 flow last week reached 12.63%, according to calculations by Goldman Sachs analysts. That's the highest share since February and well above the recent average, as retail participation has rarely exceeded 13% in the last few years, their figures show. Retail investors have been the "primary" driver of the current rally, Barclays equity strategists suggest, pouring more than $50 billion into global stocks over the last month. And their enthusiasm for equities is continuing to build, while institutional participation remains "muted", Barclays strategists note. "Re-risking seems to be the priority for small investors as improved sentiment into 2Q25 earnings, resilient macro data and Fed cut speculation combine to outweigh still-lingering tariff threats and deficit concerns," they wrote last week. This optimism was underscored in Morgan Stanley's latest quarterly survey of retail investors published last week. It shows 62% of those polled are now bullish U.S. equities, and 66% reckon the U.S. market will rise by the end of the quarter. These are both the highest levels since the survey was launched two and a half years ago. This surge in retail activity could be a positive development. At a basic level, broader participation and democratization of the market is to be welcomed. And some analysts reckon the retail investor community has matured since 2021 when the "meme stock" frenzy spilled over into the wider market. But current retail trading still includes some of this highly speculative, often options-related meme stock activity, with the main targets this time around being heavily shorted names like Krispy Kreme, GoPro and Kohl's. Indeed, Bank of America analysts note, "zero-day to expiry" options that are popular with retail investors recently accounted for more than 60% of all S&P 500 options trading activity. And the longer the rally continues, the more fears of a major correction that crushes the retail community are bound to grow. These fears are not unwarranted. The latest figures from the Financial Industry Regulatory Authority (FINRA) show that margin debt in U.S. stocks has crossed the $1 trillion mark for the first time. This represents both retail and institutional investors' activity, but according to JP Morgan analysts, the retail cohort is predominantly responsible for the rise. Of course, investors' margin debt would be expected to rise over time in line with inflation and the underlying equity indices, particularly in a bull market. But some analysts still consider rising margin debt a sign of market froth or outright over-exuberance. On top of all this, retail investors may soon get a helping hand from Washington. A series of what Bank of America analysts call "financial regulation policy-easing" measures are being lined up that will facilitate retail investors' trading in equities and other less-liquid markets. For example, the Trump administration is drawing up an executive order to allow retail investors to add private equity into 401(k) retirement funds. Media reports also suggest FINRA is considering proposals to ease the "Pattern Day Trading Rule" – which was set up to limit highly speculative trading practices – by slashing investors' minimum margin account balance requirements to $2,000 from $25,000 currently. Of course, with deregulation comes higher risk and lower protection for investors. But for now, retail investors are in the driver's seat and enjoying the ride. (The opinions expressed here are those of the author, a columnist for Reuters)
Reuters
4 hours ago
- Reuters
JetBlue posts smaller-than-expected loss as U.S. demand recovers
July 29 (Reuters) - JetBlue Airways (JBLU.O), opens new tab on Tuesday posted an adjusted loss for the second quarter that was smaller than Wall Street expectations, helped by cost cutting measures and recovering demand for travel in the U.S. Shares of the carrier were up nearly 3% in premarket trading. Over the past month, larger peers Delta (DAL.N), opens new tab and United (UAL.O), opens new tab have signaled that bookings are starting to stabilize, though at lower-than-expected levels, pointing to an uneven recovery. In April, JetBlue joined several major airlines in pulling its 2025 financial forecast, citing uncertainty tied to the Trump administration's sweeping tariff policies and federal spending cuts that weighed on consumer travel. "Demand for air travel improved as the quarter progressed, resulting in significant strength for bookings within 14-days of travel, as well as for peak travel periods," said Marty St. George, JetBlue's president, adding that the momentum continued into July. However, the carrier said it expects third-quarter revenue per available seat mile (RASM), an industry metric commonly known as unit revenue and a proxy for pricing power, to decline between 2% and 6%. It also reinstated its 2025 unit cost forecast and expects it to rise between 5% and 7%. The New York-based airline said unit revenue during the second quarter - a proxy for pricing power - declined 1.5%, which exceeded previous guidance. The carrier reported an adjusted loss of 16 cents per share for the quarter ended June 30, compared to analysts' estimate of a loss of 33 cents apiece. Operating revenue was $2.18 billion. Analysts, on average, were expecting $2.28 billion, as per data compiled by LSEG. The carrier said it expects to return to growth in 2026 in part due to an improved impact from ongoing inspections of RTX's (RTX.N), opens new tab Pratt & Whitney Geared Turbofan engines. The company now expects fewer than 10 grounded aircraft in 2025 down from mid-to-high teens.
