Trail 145 — Blink Free
Markets Update by Aashish Singh
Business Update by Sylvia Lo
Financial markets are fascinating. They are constantly evolving, they follow no predetermined path and much like humans, their behaviour at times is completely irrational. Every day their movements are thoroughly analysed, yet their next steps are a complete mystery. They follow a random walk and therein lies their beauty. Each week I briefly recap a few stories that captured my interest.
If you enjoy reading this content, please consider subscribing.
Global stock market fervour continues to take indices worldwide to fresh highs. Year-end targets keep getting revised upwards as the market seems in a rush to get there and then some. Retail investors are a strong driving force through equity asset managers who see inflows consistently growing. As avenues to invest are limited, the prices continue to go higher.
Political uncertainty did not manage to shake investor confidence. From Trumps re-election bid in the US, to Starmer’s landslide victory in the UK, to Le Pens far right party looking set to seize control of Parliament and Modi’s re-election without majority votes in India — Mr. Market didn’t even blink an eye.
Treasury yields also slid as some of the Trump trade rally reversed amidst growing signs of the US economy slowing down. Fresh data showed the highest unemployment rate since late 2021 joining other figures illustrating weaker economic growth. June consumer price index — data out next week, is projected to come in lower and towards the Fed goal, further supporting the decline in yields. The Dollar weakened as a weekly gain primarily a result of the demand picking up in the West on summer travel. Cross asset volatility is overall still very subdued. Powell in his Congressional testimony is likely to say that the Federal Reserve will need further confirmation that inflation is slowing before they’re able to cut interest rates, though that too will do little to dampen sentiment.
Elsewhere, China yields picked up as PBOC stepped in to halt a record-breaking bond rally, though the longer-term trend of declining yields will continue as support to the ailing economy is maintained. Bitcoin continues to remain an outlier to the global risk-on rally affected by idiosyncratic factors. While those maybe true, it has served well in the past to be a forebearer of risk sentiment souring and slipping below the 200-day moving average is significant. However small that possibility may seem in the current market, it’s important not to lose sight that this rally has led stocks well past overbought levels. An interesting quarter ahead.
Untroubled
Investor resilience was on display again in a week in which high election drama couldn’t keep the S&P 500 from doing what it’s done in nine of the last 11 weeks: go up, this time in all sessions. Even markets that initially lurched on President Joe Biden’s debate travails, such as Treasuries, calmed appreciably as economic data bolstered the case for rate cuts.
PBOC Readies Bazooka
China’s central bank took the next step toward selling government bonds to cool a record-breaking rally, saying it now has “hundreds of billions” of yuan at its disposal through agreements with lenders.
After months of investor speculation about its intentions, the People’s Bank of China disclosed the clearest outline yet of its unprecedented plans in a statement to Bloomberg News on Friday.
Bitcoin’s Fall
Bitcoin fell for a fourth consecutive trading session, reaching the lowest since February, on concerns about potential selling by governments, creditors of a failed exchange and beleaguered crypto miners.
The original digital asset fell as much as 8% to $53,602, before paring the decline by about half. Most cryptocurrencies fell broadly even as stock markets advanced, highlighting the array of challenges facing the industry.
In The World of Business
This week, a report reveals that 79% of U.S. employees struggle to maintain focus, with interruptions from colleagues and digital notifications being major culprits, highlighting a broader issue within workplace culture that prioritises the appearance of productivity over genuine efficiency.
Zoom’s bid to stay relevant, is evolving beyond video meetings to become an AI-first collaboration platform, focusing on innovative productivity tools.
Rishi Sunak’s departure as UK Prime Minister opens numerous lucrative financial opportunities, leveraging his substantial wealth and experience in finance, with potential for high-demand advisory roles and profitable speaking engagements.
Attention Deficit
It’s not just you struggling to stay focused during your 9-to-5. According to a recent report from workplace and productivity analytics platform Insightful, a staggering 79% of U.S. employees can’t maintain focus on work tasks for a full hour without getting distracted, and 59% can’t even manage 30 minutes. The primary culprits? Surprisingly, it’s not just smartphones — though they play a significant role — but also interruptions from colleagues, accounting for over 70% of distractions, alongside workplace apps like Microsoft Teams and Slack, email notifications, and frequent meetings.
These distractions are taking a heavy toll on productivity. This issue points to a broader problem within workplace culture, which often values the appearance of productivity over genuine efficiency. Annie Dean of Atlassian’s Team Anywhere highlights this, noting that the current system inadvertently steals attention and hinders effective work, leading to an estimated 25 billion lost work hours among Fortune 500 companies.
Gloria Mark, a professor at the University of California, Irvine, argues that attention spans have been shrinking for decades. The average attention span on a screen has dropped from two and a half minutes in 2004 to just 47 seconds today. This decline is exacerbated by increased job expectations, the pressure of multitasking, and the overwhelming influx of digital communication.
Beyond Video Meetings
When the COVID pandemic thrust the corporate world online, Zoom quickly became synonymous with video meetings, revolutionising how we connect remotely. But now, the $19 billion video-calling giant aims to reshape its identity beyond the realm of virtual meetings. “We’re so much more than just video meetings,” says Graeme Geddes, Zoom’s chief growth officer. Emphasising innovation, Geddes reveale that Zoom seeks to be known as an AI-first collaboration platform, expanding its toolkit far beyond video calls to include various productivity and engagement tools.
In its quest to evolve, Zoom has introduced Zoom Workplace, offering a suite of tools tailored for hybrid work environments, such as virtual whiteboards and flexible workplace reservation technology. Additionally, the acquisition of Workvivo — a platform akin to Slack but with a Facebook-like interface — underscores Zoom’s broader ambitions. Acknowledging the surge in return-to-office mandates and intensifying competition, Zoom is doubling down on AI-driven innovations. Zoom’s vision includes the development of “digital twins” or deepfake avatars to attend meetings on behalf of users, illustrating its determination to redefine collaboration in an increasingly AI-driven world.
Sunak Leaves №10
It’s official. Rishi Sunak is no longer the prime minister of the U.K. His departure has been anticipated ever since he stepped in to stabilise the government after the tumultuous tenure of Liz Truss in the autumn of 2022. Despite the challenges faced during his time in office, Sunak departure marks not just the end of a political chapter but the beginning of what could be a financially rewarding next phase.
While his prime ministerial salary of £80,000, combined with his MP salary of £91,346, provided a substantial income, it pales in comparison to his previous earnings in the finance sector. Before his political career, Sunak worked as a successful banker, accumulating significant wealth, including nearly £1.8 million in capital gains last year alone. His time at the hedge fund TCI saw him and his colleagues share a £100 million pot, thanks to a profitable bet during the prelude to the global financial crisis.
Looking ahead, Sunak has numerous options. He could return to the finance world, where his expertise would be in high demand, or follow the path of other former prime ministers by engaging in lucrative speaking engagements. Additionally, Sunak’s considerable family wealth, primarily from his wife Akshata Murty’s holdings in the Indian IT company Infosys, ensures that he is financially secure even without pursuing further employment. As he transitions from public service, Sunak is poised to enjoy the same multi million-dollar corporate opportunities that many of his predecessors have embraced.
Until next week
