Latest news with #ChristopherWood
Yahoo
29-05-2025
- Business
- Yahoo
Bitcoin ETFs Pull In $9 Billion as Investors Ditch Gold Holdings
(Bloomberg) -- A divergence is emerging in US exchange-traded funds as investors move from gold to its so-called digital counterpart, Bitcoin. NYC Congestion Toll Brings In $216 Million in First Four Months NY Wins Order Against US Funding Freeze in Congestion Fight NY Congestion Pricing Is Likely to Stay Until Year End During Court Case Over the past five weeks, US Bitcoin ETFs have attracted more than $9 billion in inflows, led by BlackRock Inc.'s iShares Bitcoin Trust ETF (IBIT). Meanwhile, gold-backed funds have suffered outflows exceeding $2.8 billion over the same period, according to data compiled by Bloomberg News. While easing trade tensions has cut into demand for traditional havens like gold of late, Bitcoin's perceived status as an alternative store of value is growing — just as concerns over US fiscal stability mount. Bitcoin touched a record high of $111,980 earlier this month, buoyed by favorable regulatory signals — including progress on a stablecoin bill — and rising macroeconomic uncertainty. Gold, while still up more than 25% so far this year, has pulled back from recent peaks, trading roughly $190 below its all-time high. Analysts say the rotation suggests a growing acceptance of Bitcoin as a legitimate portfolio hedge. 'I remain bullish on both gold and Bitcoin,' said Christopher Wood, global equity strategist at Jefferies. 'They remain the best hedges on currency debasement in the G7 world.' Skeptics, though, have warned that Bitcoin's volatility still undermines its status as a true haven. During past macro shocks, like the August unwinding of the yen-funded carry trade, Bitcoin fell sharply along with other risk assets. Others see Bitcoin gaining an edge. 'Bitcoin is more effective against financial system risks due to its decentralised nature,' Geoff Kendrick, global head of digital assets research at Standard Chartered, wrote in a recent note. He contrasted that with gold's stronger performance during geopolitical flare-ups like tariff escalations. Kendrick added that Bitcoin serves as a hedge through two routes: risks tied to the private sector — such as the collapse of Silicon Valley Bank in 2023 — and those tied to government institutions, including concerns over US Treasury stability. 'The recent threat to Fed independence (via Powell's potential replacement) falls squarely into the second category, along with the tariff escalation and broader concerns about US policy credibility,' he said. Adding to its appeal, Bitcoin appears to be shedding its reputation as a tech-adjacent risk asset. 'Over the past month, Bitcoin's intraday correlation with Nasdaq, the dollar, and even gold, has been remarkably low,' said Dilin Wu, research strategist at Pepperstone. 'These shifts suggest Bitcoin may increasingly be viewed as a hedge — or even a non-correlated asset class — rather than just a speculative trade.' The backdrop of fiscal strain is intensifying the debate. Moody's Ratings recently stripped the US of its last triple-A credit grade, citing ballooning deficits and debt. That downgrade brought it in line with Fitch Ratings and S&P Global Ratings, both of which already rate the US below the top tier. Still, gold remains the better performer year-to-date, with gains of about 25%, compared with Bitcoin's 15% rise. Mark Zuckerberg Loves MAGA Now. Will MAGA Ever Love Him Back? YouTube Is Swallowing TV Whole, and It's Coming for the Sitcom Millions of Americans Are Obsessed With This Japanese Barbecue Sauce Inside the First Stargate AI Data Center How Coach Handbags Became a Gen Z Status Symbol ©2025 Bloomberg L.P.
Mint
23-05-2025
- Business
- Mint
Greed & Fear: Jefferies' Chris Wood predicts end of US market dominance, bets on Asia, defence stocks
Global equity landscape is undergoing a paradigm shift, with Jefferies' Christopher Wood anticipating a long-term decline in US market dominance, weakening of the dollar, and a reallocation toward Asian assets and defence plays. In his latest GREED & fear report titled "The End of an Era", Christopher Wood, Global Head of Equity Strategy at Jefferies, declared that the American equity market has likely passed its peak influence. He pointed to the technical breakout of the MSCI All Country World ex-US Index—unchanged since 2007—as strong evidence of this shift. As of December 2024, US stocks accounted for 67.2 percent of the global index, despite representing just 26.4 percent of global GDP in nominal terms and 14.9 percent on a purchasing power parity basis. Wood argued this disparity suggests a structural overvaluation of US equities and foretells a longer-term weakening of the US dollar. He said, 'This is technical confirmation of GREED & fear's continuing base case,' suggesting that the global market cycle is now favouring non-US assets. According to Wood, the dollar's decline is inevitable due to several catalysts. One is political: former President Donald Trump's preference for a weaker dollar and his unpredictability regarding economic policy, particularly tariffs. Another is structural: the unsustainable fiscal path taken by the US government post-Covid. The resulting pressure could lead to financial repression and yield curve control—both of which are bearish for the greenback. He noted, 'The most important reason to assume a long-term weakening of the US dollar is America's extreme fiscal deterioration,' which could result in capital restrictions and currency controls. In stark contrast to the US dollar, Wood projected long-term appreciation for Asian currencies. This, he argued, would be a reversal of the post-Asian Crisis currency devaluation that persisted for three decades. He pointed to the region's strong savings rate, with emerging Asia recording 39 percent of GDP in gross national savings in 2024 compared to just 17.3 percent in the US, as per IMF data. He cited Trump's mercantilist policy stance and the region's financial prudence as core reasons for sustained currency strength across Asia. Wood's bullish stance extended to European equities—particularly defence and banking stocks. With Germany planning to increase its defence spending to 5 percent of GDP, Wood emphasized this as evidence that Europe is 'waking up' to its geopolitical responsibilities. He reaffirmed a long-standing pair trade: long European defence stocks and short American ones. The MSCI Eurozone Aerospace & Defense Index has outperformed its US counterpart by 31 percent since December 2024. GREED & fear continues to advocate holding European banks, citing improved loan growth in countries like Greece and Spain, where credit expansion has resumed after a prolonged downturn. While celebrating the market's recent rebound, Wood warned about the underlying fragility in private equity and credit markets. He noted that the S&P Listed Private Equity Index dropped 27.1 percent during a risk-off period and flagged systemic risks due to the growing bank exposure to non-bank financial institutions (NBFIs). Loans to NBFIs hit USD 1.2 trillion in March 2025—a 20 percent year-on-year jump. He warned that 'private equity and private credit will be the big losers in any US downturn,' with top institutions like Harvard and Yale already attempting to offload billions in PE exposure. Regulatory concerns are also mounting, as the IMF noted over 40 percent of private credit borrowers had negative free cash flow at the end of 2024. Wood also raised concerns about the ongoing AI-driven capex boom in Big Tech. Despite massive spending, he questioned the long-term viability of these investments, calling them potentially a 'misallocation of capital.' He cited decentralized AI alternatives such as Tether's upcoming QVAC platform as potential threats to the current tech hegemony, which he described as "surveillance capitalism." Still, GREED & fear is keeping a hedged position by maintaining a 4 percent allocation in Nvidia, down from 7 percent at the end of 2023. On geopolitical risks, Wood critiqued the Western media's emphasis on ceasefires in Ukraine. He reiterated that Russia remains firm on four conditions for peace: Ukraine's neutrality, cessation of Western arms shipments, recognition of Russian territorial control, and full troop withdrawal by Ukraine. He suggested the US, particularly Trump, holds more leverage over the conflict by controlling funding, rather than military support. Wood's comprehensive outlook is clear: investors should brace for a rebalancing of global equity power away from the US. With American fiscal stability in question, Big Tech potentially overextended, and geopolitical risks on the rise, he advocated a rotation toward Asian currencies, European defence, and select global value plays. His global portfolio reflects this thesis with top holdings in names like Capricorn Metals (Australia), BYD and Tencent (China), Zomato and ICICI Bank (India), TSMC (Taiwan), Petrobras (Brazil), Societe Generale (France), and Freeport-McMoRan (US). His only US tech holding remains Nvidia—a strategic hedge in the unfolding AI arms race. Wood's thesis in GREED & fear: The End of an Era is a clarion call for investors to adapt to the shifting tides of global finance. As the US's market dominance wanes, the next chapter of investment leadership may be written from Asia and Europe. Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
Business Times
09-05-2025
- Business
- Business Times
Hong Kong property prices may bottom as borrowing costs plunge: Jefferies
[HONG KONG] Declining interest rates in Hong Kong are increasing the chances the residential property market bottoms out, according to Jefferies, an investment banking and capital markets firm. The one-month Hong Kong Interbank Offered Rate has plunged 205 basis points in the past four days, potentially bringing relief for a market hammered by high interest rates and slumping prices. Money markets are flushed after the monetary authority sold US$16.6 billion of local currency to stop it from strengthening past its pegged range. 'If the currency cannot appreciate, the upward pressure goes on local asset prices,' Christopher Wood, Jefferies' global head of equity strategy, said in a note Thursday (May 8). 'This has increased the odds that Hong Kong residential property may be on the point of bottoming.' A gauge of home prices from Hong Kong property firm Centaline has dropped about 29 per cent from a peak in August 2021. The number of households in negative equity, meaning their properties are worth less than the loans they took out for the purchase, is the highest since 2003 as of the end of March. The dollar has weakened against most Asian currencies since the US introduced tariffs as investors weigh the risks of the world's largest economy going into recession. To be sure, a gauge of the dollar is up 0.4 per cent this week on hopes of trade deals. While lower Hibor, which serves as a reference rate for mortgages, may ease funding cost pressures for developers and landlords, it could also squeeze profit margins for local banks, according to a separate note by Jefferies analysts Sam Wong and Shujin Chen. 'Hong Kong banks are likely fairly close to, if not already at, an earnings inflection point,' they said. 'Net interest margin pressure persists and non-interest income momentum could fade toward the end of the second quarter and second half of 2025.' BLOOMBERG
Business Times
09-05-2025
- Business
- Business Times
Hong Kong property prices may bottom as borrowing costs plunge
[HONG KONG] Declining interest rates in Hong Kong are increasing the chances the residential property market bottoms out, according to Jefferies, an investment banking and capital markets firm. The one-month Hong Kong Interbank Offered Rate has plunged 205 basis points in the past four days, potentially bringing relief for a market hammered by high interest rates and slumping prices. Money markets are flushed after the monetary authority sold US$16.6 billion of local currency to stop it from strengthening past its pegged range. 'If the currency cannot appreciate, the upward pressure goes on local asset prices,' Christopher Wood, Jefferies' global head of equity strategy, said in a note Thursday (May 8). 'This has increased the odds that Hong Kong residential property may be on the point of bottoming.' A gauge of home prices from Hong Kong property firm Centaline has dropped about 29 per cent from a peak in August 2021. The number of households in negative equity, meaning their properties are worth less than the loans they took out for the purchase, is the highest since 2003 as of the end of March. The dollar has weakened against most Asian currencies since the US introduced tariffs as investors weigh the risks of the world's largest economy going into recession. To be sure, a gauge of the dollar is up 0.4 per cent this week on hopes of trade deals. While lower Hibor, which serves as a reference rate for mortgages, may ease funding cost pressures for developers and landlords, it could also squeeze profit margins for local banks, according to a separate note by Jefferies analysts Sam Wong and Shujin Chen. 'Hong Kong banks are likely fairly close to, if not already at, an earnings inflection point,' they said. 'Net interest margin pressure persists and non-interest income momentum could fade toward the end of the second quarter and second half of 2025.' BLOOMBERG
Business Times
09-05-2025
- Business
- Business Times
Hong Kong property may bottom as borrowing costs drop
[HONG KONG] Declining interest rates in Hong Kong are increasing the chances the residential property market bottoms out, according to Jefferies, an investment banking and capital markets firm. The one-month Hong Kong Interbank Offered Rate has plunged 205 basis points in the past four days, potentially bringing relief for a market hammered by high interest rates and slumping prices. Money markets are flushed after the monetary authority sold US$16.6 billion of local currency to stop it from strengthening past its pegged range. 'If the currency cannot appreciate, the upward pressure goes on local asset prices,' Christopher Wood, Jefferies' global head of equity strategy, said in a note Thursday (May 8). 'This has increased the odds that Hong Kong residential property may be on the point of bottoming.' A gauge of home prices from Hong Kong property firm Centaline's has dropped about 29 per cent from a peak in August 2021. The number of households in negative equity, meaning their properties are worth less than the loans they took out for the purchase, is the highest since 2003 as of the end of March. The dollar has weakened against most Asian currencies since the US introduced tariffs as investors weigh the risks of the world's largest economy going into recession. To be sure, a gauge of the dollar is up 0.4 per cent this week on hopes of trade deals. While lower Hibor, which serves as a reference rate for mortgages, may ease funding cost pressures for developers and landlords, it could also squeeze profit margins for local banks, according to a separate note by Jefferies analysts Sam Wong and Shujin Chen. 'Hong Kong banks are likely fairly close to, if not already at, an earnings inflection point,' they said. 'Net interest margin pressure persists and non-interest income momentum could fade toward the end of the second quarter and second half of 2025.' BLOOMBERG
