Latest news with #financial markets
Yahoo
a day ago
- Business
- Yahoo
Even SEC's Hester ‘Crypto Mom' Peirce says tokenised stocks are securities
You can wrap equities in code, call 'em tokenised, and stuff them into smart contracts, but in the eyes of US regulators, they're still securities. That's according to SEC Commissioner Hester Peirce. In a letter released on Wednesday, she opined that slapping traditional assets onto a distributed ledger doesn't change their legal DNA. 'As powerful as blockchain technology is,' she wrote, 'it does not have the magical abilities to transform the nature of the underlying asset.' 'Tokenised securities are still securities.' Peirce's comments come amid the backdrop of a mini boom in tokenised equities that crypto market maker Wintermute says could be the 'next major drive of onchain adoption.' 'Still securities' While blockchain technology might decentralise access to financial assets, it doesn't do away with the longstanding legal framework that governs financial markets, Peirce wrote. And if you're trading securities, even shiny digital ones like tokenised stocks, you're stepping onto the turf governed by the nearly century-old Securities Exchange Act. Peirce said market participants must recognise the many complexities associated with tokenised securities, warning that tokens may fall under different regulatory buckets based on how they are structured or used. Some tokens may represent actual ownership of the underlying security, while others could be legally distinct and qualify as restricted instruments like security-based swaps, she wrote. Tokenised stocks goldrush Her comments may throw some cold water on those excited about a slew of companies launching tokenised stocks services. Most of those have, so far, been launched in Europe. Those include fintech giant Robinhood, which debuted trading for tokenised US stocks in June. Meanwhile, crypto exchange Kraken has partnered with Backed to launch a similar offering that allows users to trade tokenised stocks, called xStocks, on the Solana and BNB blockchains. But things are brewing Stateside, too. Coinbase has applied to the SEC for approval to let users trade tokenised stocks on its platform, while Ondo Finance has acquired Oasis Pro, an SEC-registered broker. Although Peirce's views aren't official SEC policy, they could be a strong signal of how the regulator might treat tokenised equities, especially as her pro-industry stance has earned her the nickname 'Crypto Mom.' Osato Avan-Nomayo is our Nigeria-based DeFi correspondent. He covers DeFi and tech. Got a tip? Please contact him at osato@
Yahoo
2 days ago
- Automotive
- Yahoo
Markets rally after Trump announces tariff deal with Japan
Financial markets around the world have rallied after Donald Trump announced a trade deal with Japan and speculation that a similar deal would soon be reached with the European Union. . Share prices rose sharply in Tokyo, where the Nikkei index of leading Japanese companies increased by 3.5%. European markets followed, with the FTSE 100 gaining 0.4% to close at a fresh record high of 9,061. US markets posted further gains after opening in New York, with the Dow Jones rising by almost 1% and the S&P 500 by 0.5%. They were boosted by reports that the EU and US were closing in on a deal similar to the one the US struck with Japan, a 15% tariff on European imports. The EU is weighing €100bn (£87bn, $118bn) worth of tariffs on US imports if Trump does not agree a trade deal by the end of next week. Shares in Japanese carmakers rallied sharply. Shares in Toyota, the world's biggest carmaker, surged by more than 14% and there were gains for Honda, Mazda and Subaru. London-based companies with the highest exposures to US tariffs – including GSK, AstraZeneca and Diageo – were among the biggest risers on the FTSE 100. Interactive Russ Mould, investment director at the stockbroker AJ Bell, said: 'News of a trade agreement between the US and Japan is fostering optimism among investors that further deals might be reached before punishing tariffs come into force.' Under the deal announced by the US president late on Tuesday, Japanese imports to the US will incur a 15% tariff, compared with the 25% level Trump had threatened to impose from 1 August. The levy, paid by US importers, remains above the 10% 'baseline' global tariff that had been imposed by Washington while the two countries negotiated. The Japanese car industry, which accounts for 8% of jobs in the country, had been reeling from the threat of a 25% tariff on shipments to the US market. Vehicles and automotive parts account for more than a quarter of all Japanese exports to the US. Trump claimed that the deal would open the Japanese market to US products including cars, trucks, rice and certain agricultural products, many of which had proved to be a sticking point in negotiations. The deal with Japan followed an agreement with the UK in May, as the first major country to reach a deal with the White House, which included limiting an increase in US tariffs on most British goods to 10%. Financial markets were thrown into a tailspin on 2 April by Trump's 'liberation day' tariff announcement, when he unveiled blanket levies of 10% and higher individual rates of up to 50% on dozens of markets, including those of economic allies and rivals alike. Trump paused the higher tariff rates for 90 days to allow for negotiations with trading partners after a dramatic sell-off in the US bond market. The markets staged a recovery, as investors bet that Washington would ultimately back down from the toughest measures. Interactive Investors latched on the president's reluctance to see through extreme threats by betting that 'Trump always chickens out', or Taco for short, in a Wall Street maxim influencing trading decisions. Economists said the deal with Japan, which is the world's fourth-largest economy and is the US's fourth-largest import market, could be a prelude to further progress in negotiations with other big trading partners, including the EU. Shares in EU carmakers rallied on Wednesday, with Volkswagen up by more than 5% as traders bet the US-Japan deal could be a blueprint for an agreement between Washington and Brussels. Trump has set a deadline of 1 August for reaching a deal with the EU and other trading partners. Washington struck a deal with the Philippines on Tuesday, while the US Treasury secretary, Scott Bessent, has said talks would resume with China next week, ahead of the 12 August deadline Trump has set for a tariff agreement with the world's second-largest economy. However, investors warned that the tariff rates on US imports were higher under the deals than they were before Trump entered the White House, increasing inflationary pressures for American households and rattling global supply chains. 'Why are the markets jubilant this morning? Because even a higher tariff is preferable to continued uncertainty,' said George Lagarias, chief economist at the financial services company Forvis Mazars. 'But this is hardly a catalyst for long-term optimism. If the deal with Japan is the standard by which the negotiation with the EU will go, then investors and businesses should begin to price in a deterioration of the macroeconomic backdrop.' The Japanese prime minister, Shigeru Ishiba, said the deal was 'precisely the result of my consistent advocacy and strong lobbying of the US since I proposed 'investment over tariffs' to President Trump at our White House summit in February'. Ishiba denied reports that he planned to announce his resignation after his coalition lost its upper house majority this week. 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
2 days ago
- Business
- Yahoo
S&P 500 sector breakdown: Cyclical vs. defensive
Yahoo Finance Markets and Data Editor Jared Blikre, who also hosts of Yahoo Finance's Stocks in Translation podcast, outlines what investors need to know about cyclical and defensive sectors. Catch more Stocks in Translation here, with new episodes every Tuesday and Thursday. To watch more expert insights and analysis on the latest market action, check out more Market Catalysts here. The industrial sector is up over 30% off of those April 8th lows, while healthcare has barely budged. On today's episode of Stocks in Translation, we are taking a look at cyclicals versus defensive sectors. And first, let's define cyclical sectors. It is those sectors or industries whose sales and profits swell in economic expansions and shrink in recessions, making their stocks swing more than the broader market. And a few examples here. We have consumer discretionary, that's the stuff that you want to buy as opposed to the stuff that you have to buy. We have industrials, materials, financials, so think the big banks there, tech, and I'll come back to that in a second, communication services, which is kind of an odd category, and real estate. So let's get back to tech there. Some have argued that tech should be in a class of its own. And also with the push towards recurring revenues, a lot of its profits and sales are a lot more steady than they used to be. But especially at the upper end of the scale where you have the mega caps, a lot of those have become quasi-defensive in nature. So it's kind of, uh, there's some gray area there. And then communication services, well, that houses Alphabet, Meta, Verizon, Netflix. And sometimes there's some of those, uh, telecommunication stocks, those are defensive as well. So let's get into the defensive sector definition. These are industries whose demand stays steady in booms or busts so that earnings and share prices move less with the economy. So they're a little bit more stable there. So we're, instead of consumer discretionary, we have consumer staples. That's the stuff that you need to buy, healthcare, utilities, and energy. Energy is an interesting one because it's almost countercyclical, but it is defensive in nature. It tends to outperform when the Fed is doing certain things in the business cycle. Beyond the scope of this conversation, but for here we're going to classify it as defensive. This leads to the next chart, which is really jaw-dropping. This comes from Todd Sohn over at Strategas ETF Research. I call him the ETF whisperer. And this shows you all the defensive sectors combined versus two stocks, Nvidia plus Microsoft, how much they are taking up in the S&P 500. So let's do, uh, the defensive. I'm going to trace these sectors out first. They started at 40% in 1990, and then since the early 2000s, they have just drifted down. They are only at 20% today. Then you take the Microsoft and Nvidia combo, and Nvidia only came to market in the late 1990s. And it was kind of steady down here, but really took off in the teen in the teens in the area of the fangs and all that. And we have seen that climb to 15%. So two stocks are now approaching the entire value of all the defensive sectors. And it just shows you how much investors have come to really rely on those cyclical names. Now, I'm going to show you a chart since the April 8th lows. This shows you ETF flows into cyclicals versus defensives. And in white here, we have cyclicals, and then in green, it's defensives. And what I want to show you, first, both of these went down. Now, the April 8th low was a low. So stock prices were heading up from there, but ETF buyers across the spectrum did not buy that. And then in terms of the defensive, we saw a little bit of a bounce, but then they resumed their downward trend. And we can see that they have shown, or have not gotten really a lot of love since those April 8th lows. Now, you contrast that with consumer cyclicals, and they found a bottom into the end of April, and they have now climbed all the way up here, sitting at about $2 billion versus about four or five billion dollars of outflows for those defensives. So a pretty stark contrast that we're seeing there. Now, I want to show you the S&P 500 in white here versus something I call relative, well, that's called relative strength. It is consumer discretionary divided by consumer staples. So XLY, I'm using as a proxy for, uh, consumer discretionary, and then XLP is a proxy for consumer staples. You can see the S&P in white there, but I'm going to trace out what happened in this ratio of XLY to XLP, and you can see it got really interesting as of late. Let me just show you. The area before the pandemic, we had that ratio consolidating. Meanwhile, the S&P 500 was hitting record highs, but then a precipitous drop, and then we saw a huge, huge rebound in cyclicals. And then after the bear market of 2022 right here, we got a rebound to massively new highs in the S&P 500, but the ratio XLY to XLP was only able to get to that prior peak right here. And I'm going to clear the annotations and show you that even though the S&P 500 has reached record highs recently, XLY to XLP has, uh, kind of stayed there below its, uh, recent highs. And I think this kind of ties into the argument that we have seen narrow breadth in this S&P 500 rally, which is not a sell sign, but it is a yellow warning flag, uh, going forward. So wrapping it up here, tune into Stocks and Translation podcast for more jargon-busting deep dives, new episodes. You can find them on Tuesdays and Thursdays on Yahoo Finance's website or wherever you find your podcasts. Related Videos Stocks rise, Texas Instruments falls, Alphabet & Tesla earnings Hilton's upbeat Q2 earnings: Why this analyst is still Neutral US equities lead 2025 ETF flows: A closer look at global trends Hasbro Q2 beat, MARA to raise $850M, Otis issues weak guidance 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
The Guardian
2 days ago
- Automotive
- The Guardian
Financial markets rally after Trump announces tariff deal with Japan
Financial markets around the world have rallied after Donald Trump announced a trade deal with Japan to minimise the level of tariffs imposed on Japanese goods imported into the US. Share prices rose sharply in Tokyo, where the Nikkei index of leading Japanese companies increased by 3.5%. European markets followed, with the FTSE 100 gaining 0.5% to hit a record high. US markets were expected to post further gains on opening later on Wednesday. Shares in Japanese carmakers rallied sharply. Shares in Toyota, the world's biggest carmaker, surged by more than 14% while there were also sharp gains for Honda, Mazda and Subaru. London-based companies with the highest exposures to US tariffs – including GSK, AstraZeneca and Diageo – were among the biggest risers on the FTSE 100. 'News of a trade agreement between the US and Japan is fostering optimism among investors that further deals might be reached before punishing tariffs come into force,' said Russ Mould, the investment director at the stockbroker AJ Bell. Under the deal announced late on Tuesday, Japanese imports to the US will incur a 15% tariff, a reduction on the 25% level Trump had threatened to impose from 1 August. The levy, paid by US importers, remains above the 10% 'baseline' global tariff, which had been imposed by Washington while the two countries negotiated. The Japanese car industry – which accounts for 8% of jobs in Japan – had been left reeling by the threat of a 25% tariff on shipments to the US market. Vehicles and automotive parts account for more than a quarter of all Japanese exports to the US. Trump claimed the deal would open the Japanese market to US products including cars, trucks, rice and certain agricultural products – many of which had proved to be a sticking point in negotiations. The deal with Japan followed an agreement with the UK in May as the first major country to reach a deal with the White House, which included limiting an increase in US tariffs on most British goods to 10%. Financial markets were thrown into a tailspin by Trump's 2 April 'liberation day' tariff announcement, after the US president unveiled blanket levies of 10% and higher individual rates of up to 50% on dozens of markets – including those of economic allies and rivals alike. After Trump paused the higher tariff rates for 90 days to allow for negotiations with trading partners after a dramatic sell-off in the US bond market. The markets staged a recovery, as investors bet that Washington would ultimately back down from the toughest measures. Investors latched on the president's reluctance to see through extreme threats by betting that 'Trump Always Chickens Out', or Taco for short, in a Wall Street maxim influencing trading decisions. Economists said the deal with Japan, which is the world's fourth-largest economy and is the US's fourth-largest import market, could be the prelude to further progress in negotiations with other big trading partners including the EU. Shares in EU carmakers rallied on Wednesday, with Volkswagen up by more than 5% as traders bet the US-Japan deal could be a blueprint for an agreement between Washington and Brussels. Trump has set a deadline of 1 August for reaching a deal with the EU and other trading partners. Sign up to Business Today Get set for the working day – we'll point you to all the business news and analysis you need every morning after newsletter promotion Washington also struck a deal with the Philippines on Tuesday, while the US Treasury secretary, Scott Bessent, has said talks would resume with China next week before the 12 August deadline Trump has set for a tariff agreement with the world's second-largest economy. However, investors warned that the tariff rates on US imports were higher under the deals than they were before Trump entered the White House – fuelling inflationary pressures for American households and rattling global supply chains. 'Why are the markets jubilant this morning? Because even a higher tariff is preferable to continued uncertainty,' said George Lagarias, the chief economist at the financial services company Forvis Mazars. 'But this is hardly a catalyst for long-term optimism. If the deal with Japan is the standard by which the negotiation with the EU will go, then investors and businesses should begin to price in a deterioration of the macroeconomic backdrop.' The Japanese prime minister, Shigeru Ishiba, said the deal was 'precisely the result of my consistent advocacy and strong lobbying of the US since I proposed 'investment over tariffs' to President Trump at our White House summit in February'. Ishiba denied reports he planned to announce his resignation after his coalition lost its upper house majority this week.
Daily Mail
4 days ago
- Business
- Daily Mail
BREAKING NEWS Major blow for millions of Aussies with a mortgage - as Reserve Bank boss makes a grim admission
The Reserve Bank has declared it's in no rush to cut interest rates after surprising financial markets this month by keeping them on hold. The minutes of that July 8 meeting, released on Tuesday, have revealed the RBA's monetary policy board was worried about cutting rates again too soon, on the back of relief in February and May. 'They believed that lowering the cash rate a third time within the space of four meetings would be unlikely to be consistent with the strategy of easing monetary policy in a cautious and gradual manner to achieve the board's inflation and full employment objectives,' it said. 'While the flow of recent data had been broadly in line with earlier forecasts, they judged that some data had been slightly stronger than expected.' The RBA this month kept rates on hold at 3.85 per cent, surprising economists at the Big Four banks and financial markets, which had regarded relief as a 97 per cent chance. The experts had expected a July 8 cut after monthly headline inflation data for May showed the consumer price index falling to just 2.1 per cent, putting it on the low side of the Reserve Bank's two to three per cent target. They had ruled out the RBA waiting until August 12 following the late July release of June quarter inflation data. The Reserve Bank's July meeting minutes also expressed concern about headline inflation increasing from late 2025 following the expiry of $75 quarterly electricity rebates in December. 'Looking ahead, headline inflation was expected to pick up temporarily to around the top of the target range in late 2025 and remain there in 2026, reflecting the currently legislated unwinding of government energy subsidies to households,' it said.
