Chinese Savers Turn to Stocks as Traditional Investment Returns Fade

The U.S. personal consumption expenditures price index for August comes out Friday. The Federal Reserve will hope the report shows headline inflation is either in line or below economists' forecast of 2.8% for the year. Any higher, and investors might start worrying that the Fed's quarter-point cut last week was premature and could allow inflation to sink its claws into the economy again.

Indeed, the yields on the 10-year and 30-year Treasurys rose following the rate cut — rather counterintuitively, since they tend to follow the direction in which interest rates move. Of course, there are other factors that influence yields, such as the level of government debt and fiscal policy. Hence, movement by Treasurys could suggest that the bond market was not convinced the current economic situation in the U.S. warrants a cut.

The stock market, however, seemed to have brushed off those concerns. On Friday, the S&P 500 and Dow Jones Industrial Average closed at another record. Moreover, all three major U.S. indexes had a strong showing for the week, with the Nasdaq Composite climbing 2.2%.Hindsight clarifies decisions. It grants one the power to gloat, "I told you so," or inflict an embarrassment that will keep one awake at 2 a.m. Fingers crossed that, for the Fed, hindsight is 2.8%/2.8%.

What you need to know today

Trump and Xi talk TikTok deal Friday. The U.S. and China said progress was made even though no agreement was reached. The White House on Saturday added that the U.S. will mostly "control" the app; on Sunday, Trump said the Murdochs will likely be involved in the deal.An annual $100,000 fee for U.S. H-1B visas. Trump announced Friday a plan to impose a hefty fee on passes. The H-1B visas are largely issued to foreign workers in specialized fields — and Big Tech companies are scrambling to manage any fallout.

South Korea could face a crisis because of U.S. investment. That's according to President Lee Jae Myung, who told Reuters on Friday that without a currency swap, a $350 billion investment in the U.S. — part of the countries' trade deal — could rock South Korea's economy.U.S. stocks notched a winning week. All major U.S. indexes posted strong gains last week. On Friday, the S&P 500 and Dow Jones Industrial Average recorded new all-time highs. Europe's Stoxx 600 index lost 0.16%.Watch the Fed's preferred inflation gauge. The personal consumption expenditures price index comes out Friday. If it shows that prices are rising faster than expected, the rate-cut mood in markets might take a turn quickly.

And finally...

From shopping carts to superchips: Alibaba rediscovers edge with bold billion-dollar AI pivotAfter helping shape the early years of Chinese e-commerce, followed by years of management missteps, Alibaba is betting big on artificial intelligence as it takes on a new era.More than 100 billion yuan has already gone into AI infrastructure and research in the past year, said Wei Sun, principal analyst at Counterpoint Research.

Source: CNBC

Key points:

Panic, confusion and anger reigned as workers on H-1B visas fromIndiaandChinawere forced to abandon travel plans and rush back to theU.S.after PresidentDonald Trumpimposed new visa fees, in line with his wide-rangingimmigrationcrackdown.Tech companies and banks sent urgent memos to employees, advising them to return before a deadline of 12:01 a.m. EDT on Sunday (0401 GMT), and telling them not to leave the country.A White House official on Saturday clarified that the order applied only to new applicants and not holders of existing visas or those seeking renewals, addressing some of the confusion over who would be affected.

But Trump's proclamation a day before had already set off alarm bells in Silicon Valley.

RUSH BACK TO U.S.

Fearing they would not be allowed back once the new rule took effect, several Indian nationals at San Francisco airport said they cut short vacations.“It is a situation where we had to choose between family and staying here," said an engineer at a large tech company whose wife had been on an Emirates flight from San Francisco to Dubai that was scheduled to depart at 5:05 p.m. local time on Friday (0005 GMT on Saturday)The flight was delayed by more than three hours after several Indian passengers who received news of the order or memos from their employers demanded to deplane, said the person who spoke on condition of anonymity. At least five passengers were eventually allowed off, the engineer said.

A video of the incident was circulating on social media, showing a few people leaving the plane. Reuters could not independently verify the veracity of the video.The engineer's wife, also an H-1B visa holder, chose to head to India to care for her sick mother."It's quite tragic. We have built a life here,” he told Reuters.On the popular Chinese social media app Rednote, people on H-1B visas shared their experiences of having to rush back to the U.S. - in some cases just hours after landing in China or another country.

"My feelings are a mix of disappointment, sadness, and frustration," said one woman in a post with a user handle "Emily's Life in NY."The woman said she had boarded a United Airlines flight from New York to Paris, and it started taxiing, but after some back-and-forth with the airline the captain agreed to return to the gate to let her off the aircraft.Feeling what she described to Reuters as "shaken," she canceled her trip to France, abandoning plans with friends, including some who were flying in from China, after she received a letter from her company’s lawyers asking employees abroad to return to the U.S.

Companies including Microsoft, Amazon, Alphabetand Goldman Sachswere among those that sent urgent emails to their employees with travel advisories.Amazon gave guidance to staff on Saturday, after clarity emerged on who would be impacted, that no action was required for staff currently holding H-1B visas, according to a source who had viewed an internal portal. Amazon did not immediately respond to a request for comment outside business hours.

As of Sunday, some of the panic had dissipated, said IBMVice Chairman Gary Cohn, on CBS’s "Face the Nation" program."I think it caused a panic over the weekend because people weren't sure what was going on with the existing H-1B visas," said Cohn. "It's been cleaned up over the weekend, so at this point, there's not a panic in the system."

Cohn praised the move as ultimately good for the economy.

"I actually think this is a good idea, if you understand the H-1B visa program in the United States," Cohn said. "Historically, it has been a lottery system."The new policy also drew support from NetflixChairman Reed Hastings, who said in a social media post it will eliminate the need for the lottery and provide more certainty for those who get the H-1B visas.

Netflix was not immediately available for comment.

TRUMP'S U-TURN ON H-1B

Since taking office in January, Trump has kicked off a wide-ranging immigration crackdown, including moves to limit some forms of legal immigration.This step to reshape the H-1B visa program represents his administration's most visible effort yet to rework temporary employment visas and underscores what critics have said is a protectionist agenda.It is a U-turn from Trump's earlier stance when he sided with one-time ally and TeslaCEOElon Muskin a public dispute over the use of the H-1B visa, saying he fully backed the program for foreign tech workers even though it was opposed by some of his supporters.

Trump administration officials say the visa allows companies to suppress wages, and curbing it opens more jobs for U.S. tech workers. Supporters of the program argue that it brings in highly skilled workers essential to filling talent gaps and keeping firms competitive.In the hours following Trump's proclamation, social media was flooded with debate on the scope of the order and dismay at what many saw as a move that dimmed the United States' allure as a work destination.An anonymous user on Rednote said that their life was like that of an "H-1B slave." The person cut short a holiday in Tokyo to rush back to the U.S., describing it as "a real-life 'Fast & Furious' return to the U.S.," a reference to the hit Hollywood film series about street racing.

Trump's H-1B proclamation read: "Some employers, using practices now widely adopted by entire sectors, have abused the H-1B statute and its regulations to artificially suppress wages, resulting in a disadvantageous labor market for American citizens."The secretary of Homeland Security, Kristi Noem, could exempt petitioners from the fee at her discretion, the proclamation said.Commerce Secretary Howard Lutnick said on Friday that companies would have to pay $100,000 per year for H-1B worker visas.

However, White House spokesperson Karoline Leavitt said in a post on X on Saturday that this was not an annual fee, only a one-time fee that applied to each petition.A Nvidiaengineer, who has lived in the U.S. for 10 years, told Reuters at the San Francisco airport that he had been vacationing in Japan with his wife and infant when he rushed to reschedule his return flight after hearing the news.

"It feels surreal," he said. "Everything is changing in an instant."

Source: TradingView

Key points:

Oil prices inched up on Monday supported by geopolitical tension in Europe and the Middle East, although the prospect of more oil supply and concern about the impact of trade tariffs on global fuel demand weighed.

Brent crude futures (LCoc1) rose 28 cents, or 0.42%, to $66.96 a barrel by 0118 GMT while U.S. West Texas Intermediate crudewas at $62.88 a barrel, up 20 cents, or 0.32%.

"Reports over the weekend that Russia was threatening over the Polish border has provided traders with a timely reminder of the ongoing risks to European energy security from the north east," said Michael McCarthy, CEO of investment platform Moomoo Australia and New Zealand.

Polish and allied aircraft were deployed early on Saturday to ensure the safety of Polish airspace after Russia launched airstrikes targeting western Ukraine near the border with Poland, armed forces of the NATO-member country said.

The deployment came after three Russian military jets violated NATO Estonia's airspace for 12 minutes on Friday, while on Sunday, Germany's air force reported that a Russian military plane entered neutral airspace over the Baltic Sea.

The United Nations Security Council is due to meet on Monday over Estonia's accusation that Russian fighter jets violated its airspace, diplomats said.

In recent weeks, Ukraine stepped up drone attacks on Russia's energy infrastructure, hitting terminals and refineries, while U.S. President Donald Trump has urged the European Union to halt Russian oil and gas purchases.

In the Middle East news, four Western nations recognised Palestinian state, prompting a furious response from Israel and adding to jitters in the key oil-producing region.

Brent and WTI settled down more than 1% on Friday to mark a slight decline last week as worries about large supplies and declining demand outweighed expectations that the year's first interest-rate cut by the U.S. Federal Reserve would trigger more consumption.

"There are underpinning assumptions about the market outlook that encompass increased supply from the USA, OPEC+ and now Russia in response to a significant decline in oil revenues," McCarthy said.

Iraq has increased oil exports following the gradual unwinding of voluntary production cuts under an OPEC+ agreement, the country's state oil marketer SOMO said on Sunday.

Iraq's oil exports averaged 3.38 million barrels per day in August, according to the oil ministry. SOMO expects September's average exports to range from 3.4 million to 3.45 million bpd.

Source: TradingView

The cryptocurrency market is buzzing with significant news today as Bitcoin (BTC) has experienced a notable Bitcoin price drop, falling below the critical $115,000 mark. According to real-time market monitoring by Bitcoin World, BTC is currently trading at $114,985.48 on the Binance USDT market. This movement has naturally sparked discussions among investors and enthusiasts alike, prompting questions about the underlying causes and potential future implications for the world’s leading digital asset.

What Triggered This Latest Bitcoin Price Drop Below $115,000?

The sudden dip in Bitcoin’s value is a key event that demands attention. While specific catalysts can often be complex and multi-faceted, several factors typically contribute to such market movements. A fall below a psychological or technical support level like $115,000 can often accelerate selling pressure as automated trading systems and wary investors react. This particular Bitcoin price drop reflects a shift in immediate market sentiment, moving from optimism to caution.

Understanding the immediate triggers is crucial for investors. Market analysts often point to a combination of global economic indicators, shifts in investor confidence, or even large-scale sell-offs by significant holders, often referred to as ‘whales.’ These elements collectively shape the volatile landscape of cryptocurrency trading, making rapid price changes a common, albeit often unsettling, occurrence.

Exploring the Broader Market Context: Why Does Bitcoin Fluctuate?

Bitcoin’s journey has always been marked by volatility. Its price action is influenced by a diverse range of internal and external factors. For instance, macroeconomic news, such as inflation reports or interest rate decisions from central banks, can have a ripple effect on risk assets like cryptocurrencies. Regulatory developments around the globe also play a pivotal role; news of stricter regulations or outright bans in certain regions can significantly impact investor sentiment and trigger a Bitcoin price drop.

Moreover, the crypto market is still relatively young and less liquid compared to traditional financial markets. This characteristic means that even moderately sized trades can sometimes have a disproportionate effect on price, especially during periods of low trading volume. Technical indicators, such as a breach of key support levels, can also signal further downward momentum, encouraging more sellers to enter the market.

Navigating the Current Bitcoin Price Drop: A Guide for Investors

When faced with a significant market movement like this Bitcoin price drop, investors often wonder how to proceed. It’s a natural reaction to feel concern, but panic selling is rarely the optimal strategy. Instead, adopting a measured and informed approach can help mitigate risks and potentially identify opportunities.

Here are some actionable insights for navigating such market conditions:

What Does This Mean for Bitcoin’s Future Trajectory?

While the immediate Bitcoin price drop below $115,000 is a significant headline, it’s essential to view it within the broader context of Bitcoin’s journey. The cryptocurrency market is dynamic, characterized by cycles of expansion and contraction. Many analysts believe that such corrections are a healthy part of a maturing market, flushing out excessive speculation and paving the way for more sustainable growth.

The resilience of the Bitcoin network, its growing adoption, and its fundamental value proposition as a decentralized digital asset remain strong. While short-term fluctuations can be unsettling, the long-term narrative for Bitcoin often focuses on its scarcity, security, and potential as a hedge against traditional financial systems. Investors should therefore focus on these foundational aspects rather than getting overly fixated on daily price swings.

In conclusion, the recent Bitcoin price drop below $115,000 is a noteworthy event in the volatile world of cryptocurrency. While it highlights the inherent risks of digital asset investing, it also underscores the importance of informed decision-making, strategic planning, and a long-term perspective. Staying educated and avoiding impulsive reactions are paramount for navigating these market shifts successfully. The crypto journey is often a rollercoaster, and understanding its dynamics is key to a smoother ride.

Frequently Asked Questions (FAQs)

Q1: What is the current trading price of Bitcoin after this fall?A1: As reported, Bitcoin (BTC) is currently trading around $114,985.48 on platforms like Binance USDT, having fallen below the $115,000 mark.

Q2: What are the primary reasons for a sudden Bitcoin price drop?A2: A sudden Bitcoin price drop can be attributed to various factors including macroeconomic concerns, regulatory news, significant whale sell-offs, technical breaches of support levels, and overall shifts in market sentiment.

Q3: Is it a good time to buy Bitcoin when its price falls?A3: This depends on individual investment strategy and risk tolerance. Some investors view a price drop as a ‘buy the dip’ opportunity, while others prefer to wait for market stabilization. Dollar-Cost Averaging (DCA) is a popular strategy during such times.

Q4: How can investors protect their investments during cryptocurrency volatility?A4: Key strategies include thorough research, setting clear investment goals, practicing dollar-cost averaging, diversifying portfolios, and never investing more than you can afford to lose. Avoiding emotional decisions is also crucial.

Q5: What is the long-term outlook for Bitcoin after such market corrections?A5: Historically, Bitcoin has demonstrated resilience, recovering from numerous corrections to achieve new highs. Many long-term investors and analysts maintain a positive outlook, focusing on Bitcoin’s fundamental value proposition and increasing global adoption, despite short-term volatility.

Source: CryptoSlate

Major central banks’ unconvincing mix of policy cuts and pauses last week shows they are struggling to regain the global rates narrative. Amid the uncertainty, relative value opportunities are emerging.As expected, the U.S. Federal Reserve last week lowered interest rates by 25 basis points, giving the markets what was priced in, but disappointing in providing forward guidance.Overall, the sense is that the Fed lacked solid conviction behind its decision, reflecting a wide dispersion in the views of the Federal Open Market Committee members on the economy and how best to manage a weakening labor market and above-target inflation.

Clearly the Fed is playing catch-up to other major central banks that have moved earlier and more aggressively in their monetary policy easing. But as we move through this more uncertain period for policy, we see attractive relative value opportunities emerging in the global rates market, a development our portfolios are well positioned for going into the final quarter of the year and 2026.

Opportunity Amid Uncertainty

One of the most attractive opportunities we see is the relative value dislocation between U.S. and European rates markets, driven by the disparity between the current policy levels of the Fed, BoE and European Central Bank.The ECB held its key interest rate at 2% on September 11—half the level the policy rate was at last year—in contrast to the Fed’s current 4 – 4.25% range, and the BoE’s 4%.

While the ECB has held rates unchanged since June, we expect another cut to come before the end of this year, which would create opportunities across several eurozone countries and curves.More broadly, we are also seeing interesting dynamics in the rates markets of the U.K., Canada and Japan.

Outlook for the Fed

Even though the Fed is playing catch-up, it has clearly indicated it is in an easing cycle, which we anticipate will deliver three additional cuts between now and early 2026, with a neutral rate settling around the 3.25 – 3.75% range.

However, big questions remain about the path to the neutral rate level.

Indeed, disparity is wider in views on this among the FOMC members, evidenced by the updated 2025 “dot plot” chart, on which each member records their view of the appropriate interest rate for the end of the year.Seven of the 19 members expect no more rate cuts this year, and another two expect just one. The median expectation conceals a split committee, which included one member who thinks the fed funds rate should fall by 1.25 percentage points this year. This view was clearly from the committee’s newest member, Stephen Miran. He was the only dissenter – calling for a larger cut – while previous dissenters, governors Christopher Waller and Michelle Bowman, joined the majority this time for a smaller cut.

Regarding the neutral rate, we think the Miran dissent and dot-plot projection could act as a precursor of what the next Fed Chair delivers in 2026.

Wait-and-See in Action

With the Fed and the BoC easing last week, the BoE and BoJ instead held interest rates unchanged, mirroring the ECB’s decision earlier this month.The ECB has a constructive view on eurozone growth, jobs and inflation, but remains watchful of inflation and cautioned that higher tariffs and increased global competition would impact growth for the rest of the year.

In contrast, stubbornly elevated inflation and lackluster growth are more acute challenges for the U.K., forcing the BoE to hold its key rate at 4%. By the end of the year, we expect another cut to come.Importantly, the central bank is also to dial back its annual quantitative tightening program—selling down its government bond holdings—from £100 billion to £70 billion to curb rising gilt yields. However, cash sales are set to increase to £21 billion from £13 billion due to the fall in passive quantitative tightening.

For the BoJ, which is in gradual tightening mode, it held rates at 0.5% in a contested vote and announced it would start selling its cache of exchange-traded funds (current market value of about $4.2 billion equivalent) and real estate investment trusts to support its efforts in monetary policy normalization.The two dissents on the BoJ’s policy committee were the largest since Governor Ueda took office, indicating growing pressure on the bank to raise rates this year.Despite some uncertainty about the path of rates due to the potential impact of tariffs, we are expecting the BoJ to raise rates by the end of the year.

Looking to 2026

After being in the background for much of the past year as markets wrestled with the economic consequences of fiscal and trade policy issues, monetary policy has come back to the forefront as the rate-cutting cycle under the Fed gets underway again.Fiscal concerns are not going away and will likely come back into sharp focus, potentially causing some further turbulence at the long end of the rates market. But in the near term, central bank policy seems to be the main force holding sway over markets.

Despite some uncertainty around the pace and extent of easing in the U.S. and across other major economies as central banks deal with labor market and inflation challenges, we expect monetary loosening to continue, creating attractive relative value opportunities across global rates markets in the remainder of this year and into 2026.

Source: Neuberger Berman

Hong Kong International Airport is weighing grounding all passenger flights for 36 hours, the longest in recent history, as the Asian financial hub braces for one of its strongest super typhoons in years, according to people familiar with the matter.Airport and aviation officials plan to halt all flights from as early as 6 p.m. local time on Tuesday through 6 a.m. on Thursday as Super Typhoon Ragasa bears down, the people said, asking not to be identified discussing confidential information.

A formal announcement is expected Monday, according to the people. The Hong Kong Observatory plans to hoist its first precautionary signal for the storm around noon.The Airport Authority Hong Kong and the Civil Aviation Department didn’t immediately respond to requests for comment.Hong Kong was last battered by a super typhoon in September 2023, when Saola, classed as one of Hong Kong’s strongest-ever storms, halted flight operations for all airlines for 20 hours. In July, storm Wipha forced most airport services to pause for 13 hours.

The city’s airport shutdown underscores the risks Ragasa poses to Hong Kong’s densely-packed 7.5 million residents and its economy. The storm has already intensified into a super typhoon, packing sustained winds of 143 miles (230 kilometers) per hour near its core, equivalent to a Category 4 hurricane, according to the Hong Kong Observatory.On average, the airport handles 1,100 flights and 190,000 passengers a day, serving 58 million travelers in the 12 months through August. Cathay Pacific Airways Ltd., whose share of flights in and out of Hong Kong International Airport is 45%, faces an outsized impact.

Cathay Pacific said in a message on its website that it is waiving ticket change fees so travelers can rearrange trips more easily. Other local airlines have also waived penalties for travel between Sept. 23 to 25.By shutting the airport, officials are also aiming to avoid a repeat of Typhoon Koinu in October 2023, when more than 10,000 travelers were stranded overnight after that storm caught authorities off guard. Airlines are currently planning to reschedule long-haul flights to mitigate disruptions, while short-haul services leaving Tuesday may not return immediately, the people familiar said.

Aircraft not in use will be flown out of Hong Kong to avoid damage from debris. A limited number of cargo flights could resume late Wednesday, though no decision has been finalized, the people added.Ragasa — a Filipino word for rapid or fast motion — was located in the Luzon Strait roughly 1,100 kilometers southeast of Hong Kong as of Monday morning. Government work and classes in metropolitan Manila and in nearly 30 provinces across the Philippines were suspended on Monday due to forecasts of heavy rain.

Its current trajectory puts it on course to swipe Hong Kong, and make landfall some time Wednesday over Guangdong province, the observatory says.

Source: Bloomberg Europe