Sternlicht Says Housing Is a 'Stuck Pig' Amid Current Rates
"Every day that (Fed Chair) Powell keeps rates this high he creates further shortages in the housing market," Starwood Capital Group Chair and CEO Barry Sternlicht says at The Milken Institute Global Conference in Beverly Hills, California.
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CNBC
31 minutes ago
- CNBC
Bitcoin is primed for a surge to fresh all-time highs above $130,000, according to the charts
Bitcoin made an all-time high in May, retreated approximately 10% in the following nine days, and in just the past three days it traded back near those levels. We hold the iShares Bitcoin ETF (IBIT) in two of our growth-focused portfolios at Inside Edge . With such strong fundamental, macro and technical backdrops, I think it's time to increase the position size for our investors. To start, let's outline three fundamental reasons why bitcoin is reapproaching all-time highs. Strong institutional demand: The adoption of the IBIT ETF has been nothing short of historic, shattering inflow records. IBIT hit $70 billion in assets in 341 days, more than 5 times faster the former record holder SPDR Gold ETF (GLD). Michael Saylor's firm MicroStrategy holds over 500,000 bitcoin and is adding consistently. Macro environment: Despite fears of tariff-driven inflation, U.S. bond yields are steady, paving the way for risk-associated assets (I believe bitcoin is still positively correlated to the growth trade) to move higher. The Fed's next move is still expected to be a decrease in fed funds rates, further fueling the growth trade. The "capped" U.S. rates market and concern of tariff-driven recession is pressuring the U.S. dollar, also a positive for the growth trade. Improving regulatory environment: U.S. legislation and regulation of stablecoins are expected, which increases acceptance of crypto and stable value coins. Corporate demand for bitcoin is also increasing as a Treasury asset. Turning to the technicals, the weekly chart of bitcoin futures shows a clear uptrend since late 2022. What I find interesting about this chart and bitcoin in general is how a volatility indicator known as Average Percent True Range (APTR) behaves around breakouts. APTR is a way to boil down the high-to-low range of a market not in dollar terms but in percent terms. On this chart, we're looking at the 10-week APTR. Put simply, it's the average high-to-low range, converted into a percent over the past 10 weeks. If you did not convert into percentages it would be impossible to compare the range of bitcoin at $100,000 compared to say, when I first bought bitcoin, at $330 per coin. Notice that during consolidations and corrections, APTR line decreases from the upper-range of around 20%-15%. When the correction is about complete, the APTR bottomed at 9% and 7% in the past few years. This set up the next uptrend in price, triggered by a break from resistance and a strong breakout in price. Notice that as bitcoin goes up the average range goes up. This different from the stock market. Usually during corrections in the S & P 500 the VIX goes up . When the market stabilizes and moves higher the VIX move lower. It seems to be oppositive in Bitcoin. So, when you can find a low volatility / range reading that's a possible tell that we're about to move higher. On the weekly chart, we're at a low reading of 8.5% high-to-low range over the past 10 weeks, and we just happen to be testing a resistance ceiling level around $110,000. Moving down to the daily chart, you'll see the same concept applies. Low APTR readings on the daily are in the 4%-3% range over the past 10 trading days. As we're pressing the triple-resistance level of $110,000, I'm thinking buyers are going to blast us through. I have a 100% Fibonacci projection level of $135,000 as our target. As I mentioned, I'm holding IBIT at a 3% position in our Tactical Alpha Growth and a 3.5% in our Active Opportunities Portfolio. I'm looking to increase both of them to above 5%. The breakout in the IBIT chart is around $64 and with the increased position size I would not want to see price move back below $58, which I'll use for a risk-reduction level We offer active portfolio management and regular subscriber updates like the idea presented above. -Todd Gordon, Founder of Inside Edge Capital, LLC DISCLOSURES: Gordon owns IBIT personally and in his wealth management company Inside Edge Capital. All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL'S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
Yahoo
34 minutes ago
- Yahoo
BlackRock portfolio managers 'laser focused' on capturing market opportunities
-- BlackRock analysts said in a note this week that their portfolio managers are "laser focused on how and where to capture opportunities, even as uncertainty abounds" and policymaking continues to disrupt markets. The firm revealed that this was a key takeaway from their recent internal Midyear Forum. U.S. stocks saw a rise last week following news of renewed U.S.-China trade talks and a strong U.S. jobs report. However, BlackRock (NYSE:BLK) notes it's "too soon to tell if tariffs are hurting the labor market." The firm is closely watching U.S. CPI data to determine if tariffs are contributing to inflation, with concerns that "persistent inflation pressure limit[s] how far the Fed can cut rates this year." BlackRock emphasizes that policymaking has become a source of disruption, not stability, with stickier inflation and swelling public debt in the U.S. This has led to reduced room for maneuver for governments and central banks, making the "macro outlook less predictable." Despite this volatility, BlackRock's managers are finding opportunities by "looking through the near-term noise and focusing on the big picture." They agreed that the drivers of top-performing companies' equity gains "have not actually changed much." Among the opportunities, there is a "shared conviction in the AI mega force driving further returns," with Nvidia (NASDAQ:NVDA)'s recent earnings beat cited as an example, despite tariff-related drags. However, they also noted "medium-term regulatory risk and the potential for slower deployment." Energy is another favored sector, with AI driving global energy demand and governments prioritizing "homegrown, reliable power." Related articles BlackRock portfolio managers 'laser focused' on capturing market opportunities Snap to launch consumer smart glasses in 2025, rivaling Meta Bitcoin winter not coming back, says Strategy's Saylor Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
34 minutes ago
- Yahoo
Forget about the Fed's dual mandate—this investment advisor says they've added a third mandate, and won't be cutting rates anytime soon
After running interest rates near zero for a decade and a half, the Federal Reserve has turned cautious and is unlikely to cut anytime soon, according to Jeff Klingelhofer, a managing director and portfolio manager for Aristotle Pacific Capital. That's because the central bank is concerned about social stability and inequality following its brush with record-high inflation—and low rates make inequality worse. Most everyone knows about the Federal Reserve's dual mandate. Set by Congress, the charge for the U.S. central bank is twofold: Create the conditions for stable prices (i.e., low inflation) and maximum employment. (The third mandate—to moderate long-term interest rates—flows naturally out of keeping inflation steady.) Increasingly, though, the third mandate is changing, according to Jeff Klingelhofer, a managing director and portfolio manager for Aristotle Pacific Capital, an investment advisory. And that new task is social cohesion. It's a tough call for an entity that has seemed somewhat battered in recent years, bruised by its failure to catch COVID-era inflation in time and, increasingly, in a fight with the president of the United States, who is pressing on the Fed's nominally independent head to lower interest rates. 'It's out with the old—financial stability—and in with the new: social stability,' Klingelhofer told Fortune. Klingelhofer notes that, before the 2007–2009 Global Financial Crisis, the Fed used to be very proactive in raising interest rates, hiking them well before any sign of inflation. Post-crisis, when unemployment was stubbornly slow to fall, critics accused the Fed of hiking rates too quickly and stymieing the recovery. (The Fed's first rate cut came in late 2015, with unemployment at 5% and the Fed's preferred measure of inflation at just 1%.) Inflation didn't come close to hitting the Fed's 2% target for seven years after the hike. Years later, two Fed governors admitted they got the balance wrong and should have kept rates lower for longer. In 2020, that shifted. The Fed, by keeping rates low, 'learned the biggest wage gains went to the lowest earners,' Klingelhofer said. 'Coming out of COVID, the third mandate was social stability, compression of the wage gap.' But the central bank also got burned with its prediction that inflation would be 'transitory.' That miss, coupled with the fastest and steepest rate-hiking cycle in modern history, has made the central bank loath to move too quickly on cutting rates this time. This shift is evident in the tenor of Chair Jerome Powell's speeches, starting at Jackson Hole, Wyo., in 2022. 'Without price stability, the economy does not work for anyone,' Powell said in 2022, adding that the Fed was 'taking forceful and rapid steps to moderate demand…and to keep inflation expectations anchored.' 'We will keep at it until we are confident the job is done,' he said. That experience has pushed the Fed from proactive to reactive, Klingelhofer said. 'They'll need to see inflation below 2%, and think it'll stay there.' If a recession hits, 'I don't think the Fed will step in as they have in the past,' he added. 'Maybe if it's a deep recession, with high unemployment, and inflation falls below 2% dramatically—maybe.' Historically low interest rates had another effect—they redistributed wealth upward by encouraging asset bubbles. In this way, as a recent body of economic research has shown, low rates have contributed to skyrocketing wealth inequality. Low interest rates tend to juice stock-market appreciation, benefiting the 10% of the population that owns more than 90% of stock, and encourage investors to create novel assets as they chase bigger returns. These benefits accrue most to those who have the biggest financial assets—i.e., the wealthiest—while doing little for the poor. And while low rates encourage higher employment, 'the 1% of Americans who own 40% of all the assets just get tremendous gains before that first job is created for the middle class,' said Christopher Leonard, who criticized the Fed's ultra-low-rate policies in The Lords of Easy Money, a 2022 book describing this dynamic. In this way, he said, the Fed exacerbates the gap between the ultrarich and the rest of us, which he called 'the defining economic dysfunction of our time.' It's another argument against cutting rates, in addition to the risk of reigniting inflation—whose burdens, as Powell repeatedly notes, '[fall] heaviest on those who are least able to bear them.' 'The alchemy of low interest rates is over,' Klingelhofer says. He isn't convinced the Fed has that much influence on rates like the 10-year Treasury, which closely influences mortgage rates. These bonds trade in international markets where investors buy or sell them based on how they perceive the risks of U.S. debt. 'Where should 10-year Treasuries be? With inflation at 3%, and the government running 6%–7% deficits, 4.5% feels roughly correct,' he said. In fact, some economists say the Fed cutting rates would be perceived as a recession indicator—and would have the opposite effect, sending bond yields and interest rates soaring. As Redfin economics research head Chen Zhao told Fortune previously, 'the Fed only controls that one Fed funds rate. Everything else is determined by markets.' This story was originally featured on
