Fundstrat Global Advisors managing partner Tom Lee thinks the U.S. Federal Reserve is done raising its benchmark interest rate. In a new interview with CNBC, Lee says that’s he optimistic about the market and inflation numbers. “I think [last week’s] CPI (consumer price index) report kind of shows that inflation’s on a glide path lower. The […]
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Hedge fund veteran Tom Lee remains bullish on the stock market despite its corrective moves to start the month of August. In a new CNBC interview, the Fundstrat Global Advisors’ managing partner says this his company believes that equities are likely in the process of carving a bottom for the month. Lee says that a […]
The post $5,500,000,000,000 in Cash Waiting To Be Pulled In To Stock Market, Says Fundstrat’s Tom Lee appeared first on The Daily Hodl.
CNBC personality Jim Cramer believes that a downturn is no longer a threat to the US economy as some of the top companies trading on the stock market put in strong performances. In a new episode of CNBC’s Mad Money, Cramer says that the stock market still looks strong even after witnessing a pullback on […]
The post Recession No Longer in Sight As Stock Market Witnesses ‘Incredible’ Bull Market, Says CNBC Analyst Jim Cramer appeared first on The Daily Hodl.
Hedge fund veteran Tom Lee says the stock market is trading above its fair value and could witness an abrupt correction. In a new CNBC interview, the managing partner of Fundstrat Global Advisors says the stock market is flashing a bearish signal after rallying nearly 20% within four months. While Lee says a market pullback […]
The post Fundstrat’s Tom Lee Issues Stock Market Alert, Says Equities Now Overbought and Vulnerable to Bad News Stories appeared first on The Daily Hodl.
After warning investors of a major market shift in November 2021, billionaire Chamath Palihapitya says that the stock market is already in the process of carving a long-term bottom. In a new episode of the All-In Podcast, the venture capitalist says that the stock market is gearing up for a burst to the upside. According […]
The post After Nailing 2021 Market Crash, Billionaire Chamath Palihapitiya Says Stocks Primed To Go ‘Materially Higher’ appeared first on The Daily Hodl.
A JPMorgan Chase analyst believes the stock market may soon witness the departure of billions of dollars in capital following its fierce rally since March. JPMorgan strategist Nikolaos Panigirtzoglou says he believes institutional investors are preparing to rebalance their portfolios to satisfy their allocation targets, reports Bloomberg. Institutions around the world invest in a variety […]
The post Imminent $150,000,000,000 Stock Sell-Off Likely, Says JPMorgan Chase Strategist appeared first on The Daily Hodl.
Financial titan Bank of America (BofA) says money market funds just witnessed a deluge of more than half a trillion dollars worth of capital. According to a recent BofA investor note, money market funds have attracted $756 billion in investments this year amid the lingering banking crisis and the Federal Reserve’s aggressive rate hikes, per […]
The post US Banking Crisis Triggers $756,000,000,000 Flood of Capital Into Cash Funds: Report appeared first on The Daily Hodl.
Crypto critic and economics professor Nouriel Roubini is warning that the markets are in for a big shock this year. In a new interview with Bloomberg Television, the economist known as “Dr. Doom” says that inflation is going to prove a lot harder to bring down than the central banks currently expect, and they will […]
The post Bitcoin Critic Nouriel Roubini Warns of Complacency in Stock Market, Says Big Surprise Coming This Year appeared first on The Daily Hodl.
The "Oracle of Omaha" has increased Berkshire Hathaway's cash holdings by $2 billion in Q1, signaling his decreasing confidence in risk-assets.
Warren Buffett moving into cash suggests that he's bracing for a possible collapse in risk-on asset prices. With Bitcoin (BTC) up 70% year-to-date and correlated with equities, should BTC investors also prepare for a potential stock market crash?
Warren Buffett's Berkshire Hathaway dumped $13.30 billion worth of equities and increased exposure in cash and U.S. Treasuries in Q1, its latest quarterly earnings report shows. Meanwhile, it channeled $4.4 billion toward purchasing its own stock and $2.9 billion on the shares of other publicly-traded companies.
The market considers Berkshire Hathaway's performance as a key indicator to gauge the U.S. economy's health, given the firm's holdings range from American railroad to electric utilities and retail businesses.
But the 92-year old investor, who has credited the U.S. economy's growth for the success of Berkshire Hathaway in the past, is no longer optimistic.
“The majority of our businesses will report lower earnings this year than last year,” Buffett said last weekend at an event. The “incredible period” for the US economy has been coming to an end over the past six months, he added.
Berkshire raised its cash reserves by $2 billion to $130.60 billion in Q1/2023, the highest level since the end of 2021 when equities entered a bear cycle. Moreover, the firm holds a vast amount of its cash in short-term Treasury bills and bank deposits thanks to higher interest rates near 5%.
In other words, Buffett is preparing for a potential stock market crash, particularly as the U.S. banking crisis continues to unfold (e.g. PacWest Bancorp and Western Alliance Bancorp) .
The increasing possibility of a global recession also risks putting downside pressure on Bitcoin, whose 100-week correlation with the Nasdaq reached its highest level of about 0.42%.
Moreover, Bloomberg Intelligence analyst Mike McGlone expects that BTC price would likely be the leading indicator for a stock crash.
"Bitcoin could pace declines for risk assets — If the worst isn't over for risk assets, Bitcoin may lead the way lower," noted McGlone, adding:
"Bitcoin is up about 70% in 2023 to May 2 vs. 20% for the stock index, and those are maybe bounces within broader bear markets. The Fed [is] still tightening in May, and [is] more inclined to stay the course unless risk assets fall to ease inflation, may portend a lose-lose."
In the short term, there are little expectations from the U.S. consumer price index report on May 10 about easing inflation in April. According to Bloomberg’s survey, economists expect core CPI to remain unchanged at around 5%, meaning more rate hikes ahead.
On the other hand, a big drop in inflation will likely prompt the Fed to consider pausing or even slashing interest rates in an extreme case scenario.
Currently, Fed funds futures' data suggests that at least five rate cuts between May 2023 and January 2024 are likely — something which may pour cold water on Buffett's risk-off strategy.
Bitcoin's price has declined roughly 6% over the past week, trading for as low as $27,350 on May 9.
Notably, this has pulled BTC's price the below its 50-day exponential moving average (50-day EMA; the red wave) near $27,950.
Bitcoin bears are now eyeing $27,000 as the next downside target based on the level's recent history.
A decisive break below the $27,000 support, primarily in the event of further rate hikes, could then pull down BTC/USD down to its 200-day EMA (the blue wave) near $24,600. In other words, a 10% drop by June.
Conversely, a rebound from $27,000 increases the possibility of BTC price retesting $30,000 as resistance, and to resume the uptrend of the last few months.
Related: Analysts at odds over Fed, US debt ceiling impact on Bitcoin price
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
The U.S. Federal Reserve, in conjunction with the Federal Open Market Committee (FOMC), announced on Wednesday that the central bank would raise the federal funds rate by 25 basis points (bps), as was widely expected by the market. This marks the tenth consecutive occasion in which the Fed has raised interest rates since the initial […]