etfs

Investing in mutual funds and ETFs is a fundamental part of long-term investing. In addition, when comparing ETFs to individual stocks, they are typically seen as safer investments since they are more diversified. Many of these funds aim to track specific indexes. Two examples of this are VOO which seeks to track the S&P 500 Index, and QQQ, which follows the NASDAQ 100 index. However, it can be hard to figure out which might be a better investment. Below is a comparison of these two popular funds to help you reach a decision. VOO vs. QQQ: Issuer When it comes to VOO vs. QQQ from an issuer standpoint, you're dealing with two very large firms. VOO is issued by Vanguard, the largest issuer of mutual funds globally. They are also the second-largest issuer of ETFs. So, needless to say, you don't become that large without knowing what you're doing. QQQ is issued by Invesco, another large and well-known issuer of mutual funds and ETFs. With more than $1.6 trillion in managed assets, it’s safe to say investing with an Invesco fund is a pretty safe bet. VOO vs. QQQ: Underlying Index Followed As mentioned early, VOO aims to track the S&P 500 Index. The S&P 500 Index seeks to track the 500 leading publicly traded US companies. Market capitalization is the primary criterion for a company to be included in the S&P 500 Index fund, but it is not the only criterion. QQQ aims to follow the NASDAQ 100 Index. The NASDAQ 100 Index includes 100 of the largest domestic and international non-financial companies based on market capitalization listed on the Nasdaq Stock Market. VOO vs. QQQ: Expense Ratios Expense ratios can be vital information when deciding what fund to invest in. Even a tiny difference can become thousands of dollars over the course of investing in a fund for 10 to 20 years. Essentially, with managed funds, there are expenses that go along with it. These expenses could be salaries to pay analysts or portfolio managers, management fees, rent for office space, and many others. Many funds will pass some or all these expenses on to you, the investor. The amount passed to you is shown as the expense ratio. When looking at VOO and QQQ, there is a stark difference in their expense ratios. While VOO maintains a meager 0.03% ratio, QQQ has a much higher ratio of 0.2%. For QQQ, that's more than six times that of VOO, which can add up to a lot of money paid to the fund over the long term. VOO vs. QQQ: Minimum Initial Investments Minimum initial investments (MII) will vary per fund and firm. The minimum initial investment only applies when you initially invest in a fund. Many funds require $100 - $5000 or more for your first investment. After that, you are free to invest any amount you wish on subsequent investments with the same fund. VOO’s current MII is the asking price of one share on that trading day. To give you an idea, as of writing this, VOO stands at roughly $387 per share. QQQ, however, has no minimum initial investment. QQQ is currently sitting at a share price of about $320, but you can essentially invest $1. VOO vs. QQQ: Net Assets and Holdings Comparing VOO vs. QQQ, each fund's top ten holdings are identical; see below. The main difference here is that while holding the same funds, VOO has roughly 24.7% of its $1.3 trillion ($321.1. billion) total assets in these stocks. In comparison, VOO holds about 29.5% of its $808.8 billion in the top ten holdings, roughly $238.6 billion. VOO vs. QQQ Top Holdings: Although tracking different indexes, VOO and QQQ have similar holdings in their top 10. Seven of the top holds are the same with: Apple (AAPL) Microsoft (MSFT) Amazon (AMZN) Tesla (TSLA) Alphabet Class A and C (QQQ holds both, while VOO does not) NVIDIA (NVDA) Meta (FB) QQQ rounds out its top 10 with Costco (COST) and PepsiCo (PEP), while VOO holds UnitedHealth Group (UNH), Johnson & Johnson (JNJ), and Berkshire Hathaway (BRK.A, BRK.B). While sharing similar stocks as their top 10, the amount invested in each varies slightly. VOO vs QQQ: Compositions One of the areas in which the VOO vs. QQQ comparison will differ is the fund composition. As mentioned earlier, VOO aims to track the S&P 500 Index, while QQQ seeks to track the NASDAQ 100 Index. As you might imagine, the number of stocks held in each is very different. QQQ currently has 102 different stocks. There are about 507 stocks in VOO, mostly large-cap and geared toward growth. Fewer stocks could generally be more volatile when there is more market volatility. VOO vs. QQQ: Overall Performance Of course, what most investors will put at the top of their criteria when determining which fund to invest in will be the performance! When looking at the performance of both VOO and QQQ, they both have very similar returns to the indexes they aim to track. Even though we say they have similar top 10 holdings, QQQ's returns over the past 1, 5, and 10 years have been much higher. It should be noted that NASDAQ tends to hold more Technology and tech-related stocks, a booming market sector over the past decade. QQQ Performance: VOO Performance: It should still be noted that the return over each fund's lifespan is better for VOO. It could also be a less volatile fund with more stocks being held meaning it is probably more diversified. VOO vs QQQ: Which is better? When making any investment, it comes down to your comfort level. The significant factor in VOO vs. QQQ is the performance, with QQQ winning out during the tech boom era. However, overall, VOO has had better long-term returns. VOO also has a much lower expense ratio, which should not be taken lightly as QQQ will need to continue outperforming VOO significantly to make up for its fees. VOO also holds more stocks, probably making it a less volatile fund to invest in. VOO vs. QQQ: Final Thoughts Both funds are backed by large asset managers in Vanguard and Invesco. Either ETF would make good additions to an investor's portfolio. While QQQ has better recent performance, the tech boom could be over since technology stocks are struggling in 2022, and the expense ratio is higher. On the other hand, VOO has better long-term total returns and would probably be less volatile. It can also serve as a core holding in some version of the Bogleheads 3-Fund portfolio. In the end, both have strengths and weaknesses. You'll need to determine which better fits your investment style and needs. Disclosure: None Author Bio: The author is the founder of the Dividend Power site. He is a self-taught investor and blogger on dividend growth stocks and financial independence. Some of his writings can be found on Seeking Alpha, TalkMarkets, ValueWalk, The Money Show, Forbes, Yahoo Finance, FXMag, and leading financial blogs. He also works as a part-time freelance equity analyst with a leading newsletter on dividend stocks. He was recently in the top 100 and 1.0% (81st out of over 9,459) of financial bloggers as tracked by TipRanks (an independent analyst tracking site) for his articles on Seeking Alpha. Disclaimer: The author is not a licensed or registered investment adviser or broker/dealer. He is not providing you with individual investment advice. Please consult with a licensed investment professional before you invest your money. 

"War, war never changes" - one popular science fiction universe began with this slogan. It seems particularly relevant now in the face of Russia's armed assault on Ukraine. Without delving into geopolitics, we decided to analyse the effectiveness of investments in armaments companies. iShares U.S. Aerospace & Defence ETF One way could be to invest in passive funds that give exposure to the sector, and an example of such a fund could be the iShares U.S. Aerospace & Defence ETF (ITA). The official website states that it gives exposure to US companies that manufacture commercial and military aircraft and other defence equipment.  The company with the largest stake in this fund is RAYTHEON TECHNOLOGIES CORP (RaytheonTec). In terms of revenue and market capitalisation, it is one of the world's major aerospace and defence manufacturers. It accounts for 21% of the total portfolio value. The average price-to-earnings P/E ratio for this fund is 22.9, which could be interpreted as the first sign of overvaluation. Does this mean that the market is now pricing in an extension of the conflict?  Source: Conotoxia MT5, ITA, Weekly Aerospace & Defence companies The previously mentioned RAYTHEON TECHNOLOGIES CORP (RaytheonTec) is one of the largest intelligence providers to the United States. It also manufactures aircraft engines, avionics, aerostructures, cyber security, guided missiles, air defence systems, satellites and drones. The company is also a large military contractor, receiving a significant portion of its revenue from the US government.  Revenue for the company does not appear to have increased significantly since the start of the conflict in eastern Europe. Growth has been 4.5% year-on-year and operating profits have increased by 10% year-on-year in the period. Analysts assume an increase in its earnings in the coming quarters, as the Forward P/E price-to-future earnings ratio is 18.52 (the current P/E is 32.38), which could mean it is potentially undervalued. Source: Conotoxia MT5, RaytheonTec, Daily Lockheed Martin Corporation (Lockheed) is the second company to operate in four business segments: aeronautics, missiles and fire control, rotary and mission systems, and space. Revenues are currently up 3.46% year-on-year, while operating profits are down 5.88% year-on-year. The Forward P/E price-to-future earnings ratio was 17.8 against a current value of 22.06. The company appears to have a similar situation to the one described earlier, but may have less potential for growth.  The last company we will look at is Northop Grumman Corporation (Northop), which is involved in aerospace and defence technology. Being, it seems, one of the most undervalued relative to its sector, currently achieving a P/E ratio of 14.91. When compared to the Forward P/E of 21.73, this company may offer one of the greatest growth potentials for the sector. The manufacturer's revenues (including drones) grew by 2.88% year-on-year, while operating profits in the period fell by 19% year-on-year.  Source: Conotoxia MT5, Northrop, Daily   Grzegorz Dróżdż, Junior Market Analyst of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75,21% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Source: Conotoxia.com

As 2022 winds down, David Mann, Head of ETF Product & Capital Markets, assesses how the industry and his predictions for the year fared amid a turbulent market environment. Rising Inflation. Crypto winter. Double-digit declines in many equity and fixed income indexes. I suppose it would have been nice for me to have mentioned any of those in my 2022 predictions column. But in my defense, this is an exchange-traded funds (ETF) blog, and thus macro calls on rates or broad index levels will usually not be found here. Rest assured, the ETF machine keeps chugging along. Despite negative returns for the top 20 ETFs (by assets) for 2022, US ETF net inflows still stand at nearly $600 billion (through December 12, 2022).1 Those inflows lag last year’s pace somewhat but are still impressive given these challenging market conditions. As to how those flows impacted my grades, read on: Prediction #1: Mutual fund-to-ETF conversions will continue to gain traction Rating: B+ As I have mentioned repeatedly in this blog over the years, there are real benefits to the ETF structure, and some investors might value some qualities far more than others. The long-term investor might value tax-efficiency more than the short-term investor who values intraday liquidity. An institutional investor might value daily transparency for portfolio analysis more than a retail investor buying 100 shares. The $600 billion of inflows in 2022 once again demonstrates that investors love ETFs. I thought we would see a continued trend of mutual funds looking to join the ETF party. In 2021, I counted 16 mutual funds that converted to ETFs with combined assets under management (AUM) of around $37 billion2 and predicted that number would double in 2022. I wasn’t too far off! For 2022, I count 20 new funds with total assets (including those converted in 2021) of $63 billion,3 not to mention many other asset managers who have announced their intentions to convert. The converted assets did not quite reach my stretch prediction of $100 billion, but the doubling of both funds and assets was almost spot-on. I think a B+ is merited.   Prediction #2: Global supply chain woes to again shine light on international equity investing Rating: B- There are a couple of elements to this prediction worth discussing. The first is regarding global supply chain concerns and whether they have been resolved. My completely unscientific process of typing “supply chain issues” into a search engine leads me to confidently state that this is still an ongoing issue, especially given the current state of affairs with China and Russia. Since supply chain woes have not disappeared entirely, that part of the prediction is on target. As for international investing through ETFs, I previously wrote a column about how both the underlying local equities as well as the strength of the local currency in relation to the US dollar drove returns. For 2022, I predicted significant dispersion among ETFs that provide exposure to international equity markets. While some single-country ETFs have fared much better than others (for example, ETFs that hold Mexican equities are up around 20% over those that own Japanese stocks4), I was expecting more. I do not take using the word “significant” lightly, and thus am lowering my grade to a B-. Prediction #3: Environmental, social and governance (ESG)/sustainable ETFs will exceed $200 billion AUM Rating: D- In hindsight, I probably should have included European ETF assets in this prediction! To recap where we were a year ago with sustainable ETF assets, there were $38 billion of inflows and $126 billion in assets. I predicted that we would easily beat those 2021 numbers and end at over $200 billion. Well, I was WAY off on this one as there were only $2 billion of inflows, and because of the market selloff, assets are down to around $100 billion.5 The premise for my prediction was straightforward as I speculated (incorrectly) that investors could add value by adding an ESG element to their broad market and/or active exposure. What I did not expect was the extent of the backlash against ESG investing to the point that many states are now enacting ESG bans. I typically avoid wading into political waters, but I think that [redacted] in the coming months. In summary, I really need to sharpen my pencil, as this was my worst year in quite some time! Stay tuned for 2023 predictions coming soon! Endnotes Source: Bloomberg as of 12/13/22. Sources: NYSE Arca, NASDAQ and CBOE. Sources: New York Stock Exchange, Chicago Board Options Exchange, NASDAQ, as of 12/15/22. Source: Bloomberg as of 12/13/22. Source: Morningstar.   WHAT ARE THE RISKS? All investments involve risks, including possible loss of principal. The value of investments can go down as well as up, and investors may not get back the full amount invested. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. For actively managed ETFs, there is no guarantee that the manager’s investment decisions will produce the desired results. ETFs trade like stocks, fluctuate in market value and may trade above or below the ETF’s net asset value. Brokerage commissions and ETF expenses will reduce returns. ETF shares may be bought or sold throughout the day at their market price on the exchange on which they are listed. However, there can be no guarantee that an active trading market for ETF shares will be developed or maintained or that their listing will continue or remain unchanged. While the shares of ETFs are tradable on secondary markets, they may not readily trade in all market conditions and may trade at significant discounts in periods of market stress. Source: ETF 2022 year-end report card: The grades are in! | Franklin Templeton

B2Broker is continuing to broaden its suite of liquidity services and solutions for the Forex and crypto markets with the addition of Non-Deliverable Forwards (NDFs). This new offering gives businesses an even wider variety of asset options as well as more effective risk management capabilities.   B2Broker delivers liquidity in all major asset classes with this launch. The company's liquidity now covers the following: Rolling Spot FX & Precious Metals Equity Indices Energies Commodities Crypto Derivatives/CFDs Single Stocks/CFDs ETFs NDFs    With the new expansion of services, B2Broker is firmly positioned to lead the industry in its commitment to meeting the needs of all its clients' liquidity requirements.   What are NDFs? NDFs are financial instruments used for hedging against the risk associated with currency exchange rate fluctuation. Through an NDF, both parties in a transaction agree on an exchange rate for their desired currencies before the actual transfer takes place. The difference between the agreed rate and the prevailing market exchange rate is settled in cash at a later date.  NDFs are useful for companies to manage risk in developing countries where it may not be possible or practical to use local currency forwards. It is a cost-effective way of hedging against possible losses from international business deals.   NDFs Supported by B2Broker B2Broker now gives their clients access to a wide variety of NDF currencies, giving them the option of hedging currency risk in a broad range of emerging markets. B2Broker's NFD currency pairs include: USD/BRL USD/CLP USD/COP USD/IDR USD/INR USD/KRW USD/TWD   Benefits of B2Broker's Liquidity Offer B2Broker has structured NDFs as Contracts For Difference (CFDs), providing clients with remarkable flexibility and convenience. While conventional NDFs typically have a settlement period of T+30, B2Broker clients can seamlessly receive their settlements on the next business day as CFD contracts. This advancement eliminates client settlement risks and expedites the process, ensuring efficiency and peace of mind. B2Broker provides its clients with highly competitive commission rates, focusing on delivering superior service to both institutional and retail brokers.     B2Broker Lowers Margin Requirements on 10 Crypto CFDs B2Broker has halved the margin requirement on selected Crypto CFD pairs, lowering it from 20% to 10%: BNB/USD DSH/USD TRX/USD XMR/USD ZEC/USD SOL/USD DOT/USD LNK/USD AVA/USD ATM/USD   Updated Prime of Prime Institutional Liquidity Offer B2Broker has enhanced its PoP institutional liquidity packages by adding Prime Margin Account connections such as OneZero, PrimeXM, and Centroid. Clients can enjoy the benefits of an STP / DMA (A book) trading ecosystem with precise market execution and full transparency, all while benefiting from monthly minimum liquidity fees against traded volume. Moreover, B2Broker ensures a seamless onboarding process, setting up the Prime Margin Account free of charge and also providing 24/7 technical support to ensure that the brokerage operation runs smoothly at all times.     About B2Broker B2Broker is the premier provider of technology and liquidity for brokerages and exchanges. With its suite of services, B2Broker gives clients access to 800+ trading instruments across 8 asset classes, empowering businesses with effective liquidity capabilities to offer traders favorable conditions and top-tier execution. B2Broker is committed to staying ahead of the curve and continually updating its products and offerings in order to provide its customers with the best possible solutions.

Gold is traditionally seen by investors as a hedge against inflation. However, it is not inflation that drives the XAU/USD quotes, but recession. In the spring, the precious metal confidently rose towards historical highs amid expectations of an impending downturn in the U.S. economy. However, a stable labor market and positive macroeconomic indicators suggested a soft landing. This led to a collapse in the price of gold during the summer. As autumn approaches, the cooling economy is once again translating into its rise. Disappointing statistics from the U.S. are a reason to buy gold. The weaker the data, the less likely the Federal Reserve will implement its June forecast and raise the federal funds rate to 5.75%. Regardless of how much Fed Chairman Jerome Powell argues otherwise in Jackson Hole.   Furthermore, once a tightening monetary policy cycle ends, a dovish pivot usually follows. Monetary expansion creates a favorable environment for XAU/USD. Dynamics of the federal funds rate and gold     In this respect, the sharp decline in consumer confidence from the Conference Board in August and the continued peak in job vacancies and layoffs in the U.S. labor market in June are alarming signs for the U.S. economy and great news for gold enthusiasts. The chances of the Fed raising borrowing costs in 2023 have once again dropped below 50%, which adversely affected the dollar and allowed XAU/USD to counterattack. In essence, asset managers who reduced their net short positions on precious metals to their lowest levels since mid-March were mistaken. Aswere investors who withdrew money from ETFs for 13 weeks in a row. They were betting on the highest yield of U.S. Treasury bonds in over a decade. However, as soon as the U.S. macro data began to deteriorate, U.S. debt market rates declined, and XAU/USD quotes went up.   Dynamics of market expectations on the Federal Reserve rate   What's next? Gradual cooling of the labor market, a sharp reduction in excess savings, and mortgage rates rising above 7% paint a picture of new cracks in the U.S. economy. The tightening of the Fed's monetary policy occurs with a temporary lag. The more time that passes since the beginning of the cycle, the more painful the monetary restriction will be. Under such circumstances, recession risks will increase again.   In the end, the markets will return to the original conditions that existed in the spring and pushed gold to $2,075 per ounce. However, there is another scenario. The U.S. economy will continue to pleasantly surprise; the likelihood of forming a new inflation peak increases, as do the chances of raising the federal funds rate to 5.75%. Technically, on the daily chart of the precious metal, there is a "Double Bottom" pattern. Thanks to this, gold broke above the EMA and has the opportunity to continue its rally towards the fair value of $1,962 per ounce. As long as prices hold above $1,929, traders should focus on buying.    

Gold gains after data fuels hopes of a Fed pause Gold prices are moving higher following the latest batch of softer-than-expected US economic data, which has caused investors to trim bets on a Federal Reserve hike next month.   US economic data in focus Ten-year Treasury yields have continued to decline after recently hitting levels last seen in 2007, after US data releases this week signalled that the US economy is cooling, easing pressure on the Federal Reserve to continue raising rates. US inflation in July was in line with expectations, second-quarter economic growth was revised lower, and private payrolls increased less than expected in August. This followed data released earlier this week that showed job openings have fallen to their lowest level since early 2021. Focus will now turn to the headline US labour market report which is due later today. The latest data releases have lowered expectations that the Fed will raise interest rates this year. The central bank hiked rates by 25 basis points at its July meeting as economic data was strong. Both higher rates and yields are typically negative for non-interest-bearing gold.   Gold holds above $1,900/oz Gold has been unable to break the $2,000 level since mid-May     Federal Reserve Chair Jerome Powell said at the Jackson Hole conference last week that the Fed plans to keep policy restrictive until it is confident that inflation is steadily moving down toward its target. We will need to keep a close eye on US data releases in the coming weeks, which could shed more light on what the Fed may do. We believe gold will remain volatile in the near term given the implications of the uncertainty of persistent inflation on the US economy, and its trajectory will be influenced by US economic data in the coming weeks. We believe the threat of further action from the Fed will continue to keep the lid on gold prices for now.   ETFs continue to see outflows The rebound in gold prices has failed to draw buying interest from investors in exchange-traded funds or the Comex futures market. Gold ETF positioning, typically a strong driver of price direction, has been falling with holdings tumbling for a third month in August.   Hedge funds turn more bearish on gold   Hedge funds and other large speculators have also reduced their net long positions in gold, according to the latest CFTC data for the week ending 22 August. Net long positions in gold fell by 44.75% to 79.9 tonnes, equivalent to 25,695 contracts. Open interest decreased to 581,386 contracts from 598,932 contracts. Outright long positions declined by 7.33% or 28.5 tonnes, to 360.1 tonnes or 115,766 contracts. Short positions rose by 14.89% to 280.2 tonnes or 90,071 contracts          

In this Outlook, our chief focus is on the current market impact of the AI theme across markets and around the world. But Steen’s introductory piece also argues that market participants are making a mistake in believing that the current market cycle will play out like previous ones, as inflation is set to stay higher for longer than the market anticipates, which will eventually register as an enormous surprise, given that yield curves in most markets are pricing significant eventual policy easing starting early next year and a glide path to a soft landing. The complacency surrounding that disinflationary and soft-landing scenario have kept long yield anchored and allowed equity markets, and particularly AI-linked names, to inflate perilously. Also on the AI theme that has dominated focus over the last quarter: Equity strategist Peter Garnry argues that the emergence of advanced AI systems such as GPT-4 from OpenAI is by far the most surprising event this year, a phenomenon that has turned everything on its head. Further, he writes that the AI-hyped rally has pushed the US equity market to new extremes, even as the benefits and risks of this new technology are hotly debated. He predicts that we risk seeing US and China engaging in an AI arms race. Our Greater China strategist, Redmond Wong, points to the challenges China faces in the field of generative AI as it navigates a global order of fragmentation. The success of generative AI breakthroughs in the US, coupled with limited computing power and geopolitical tensions, has threatened to break down China’s virtuous cycle of technology application, productivity enhancement and growth. Macro strategist Charu Chanana highlights Japan’s expertise in semiconductor manufacturing and robotic integration, suggesting these could be the foundation of a very strong presence in AI. She notes that Japanese equities and artificial intelligence combine the two most powerful market themes of this year. Cryptocurrency analyst Mads Eberhardt notes that AI fever has stolen the spotlight from blockchain technology and the cryptocurrency market generally, pushing the space further into speculative no man’s land. Despite the contrasting performance between crypto and AI-linked assets, there are striking similarities, especially the risk of bubble-like dynamics. Investment Coach Hans Oudshoorn outlines in his piece how investors can gain exposure to AI via ETFs that provide considerable diversification, but still noting the risks from valuations that have become very elevated in places. In addition to the AI focus, this report also delves into the outlook across major asset classes: In currencies, FX strategist John Hardy notes that USD shorts could be set for a vicious reality check if the US economy remains resilient and core inflation remains sticky, possibly engaging both sides of the "USD smile" that drive USD strength: the Fed remaining on the warpath and market turmoil.  John notes that the stakes are even higher for the Japanese yen if the longer yields of the major sovereign yield curves have to price in a new economic acceleration, as the BoJ will have to eventually capitulate on its yield-curve-control policy. In commodities, commodity strategist Ole Hansen suggests that the commodity sector looks set to start the third quarter on a firmer footing after months of weakness saw a partial reversal during June. Ole notes that strong gains were at times driven by a weaker US dollar, but specific developments in each sector also weighed. Most concerning for is the risk of higher food prices into the autumn, as several key growing regions battle with hot and dry weather conditions sparked by the first El Niño weather pattern in years. Fixed income strategist Althea Spinozzi argues that central banks face a troubling dilemma: if they really want to get ahead of inflation, they will need to burst asset bubbles created by a decade of quantitative easing (QE) and trigger a recession. But she asks whether they are willing to take policy tightening that far and ever win the inflation fight.

In this Outlook, our chief focus is on the current market impact of the AI theme across markets and around the world. But Steen’s introductory piece also argues that market participants are making a mistake in believing that the current market cycle will play out like previous ones, as inflation is set to stay higher for longer than the market anticipates, which will eventually register as an enormous surprise, given that yield curves in most markets are pricing significant eventual policy easing starting early next year and a glide path to a soft landing. The complacency surrounding that disinflationary and soft-landing scenario have kept long yield anchored and allowed equity markets, and particularly AI-linked names, to inflate perilously. Also on the AI theme that has dominated focus over the last quarter: Equity strategist Peter Garnry argues that the emergence of advanced AI systems such as GPT-4 from OpenAI is by far the most surprising event this year, a phenomenon that has turned everything on its head. Further, he writes that the AI-hyped rally has pushed the US equity market to new extremes, even as the benefits and risks of this new technology are hotly debated. He predicts that we risk seeing US and China engaging in an AI arms race. Our Greater China strategist, Redmond Wong, points to the challenges China faces in the field of generative AI as it navigates a global order of fragmentation. The success of generative AI breakthroughs in the US, coupled with limited computing power and geopolitical tensions, has threatened to break down China’s virtuous cycle of technology application, productivity enhancement and growth. Macro strategist Charu Chanana highlights Japan’s expertise in semiconductor manufacturing and robotic integration, suggesting these could be the foundation of a very strong presence in AI. She notes that Japanese equities and artificial intelligence combine the two most powerful market themes of this year. Cryptocurrency analyst Mads Eberhardt notes that AI fever has stolen the spotlight from blockchain technology and the cryptocurrency market generally, pushing the space further into speculative no man’s land. Despite the contrasting performance between crypto and AI-linked assets, there are striking similarities, especially the risk of bubble-like dynamics. Investment Coach Hans Oudshoorn outlines in his piece how investors can gain exposure to AI via ETFs that provide considerable diversification, but still noting the risks from valuations that have become very elevated in places. In addition to the AI focus, this report also delves into the outlook across major asset classes: In currencies, FX strategist John Hardy notes that USD shorts could be set for a vicious reality check if the US economy remains resilient and core inflation remains sticky, possibly engaging both sides of the "USD smile" that drive USD strength: the Fed remaining on the warpath and market turmoil.  John notes that the stakes are even higher for the Japanese yen if the longer yields of the major sovereign yield curves have to price in a new economic acceleration, as the BoJ will have to eventually capitulate on its yield-curve-control policy. In commodities, commodity strategist Ole Hansen suggests that the commodity sector looks set to start the third quarter on a firmer footing after months of weakness saw a partial reversal during June. Ole notes that strong gains were at times driven by a weaker US dollar, but specific developments in each sector also weighed. Most concerning for is the risk of higher food prices into the autumn, as several key growing regions battle with hot and dry weather conditions sparked by the first El Niño weather pattern in years. Fixed income strategist Althea Spinozzi argues that central banks face a troubling dilemma: if they really want to get ahead of inflation, they will need to burst asset bubbles created by a decade of quantitative easing (QE) and trigger a recession. But she asks whether they are willing to take policy tightening that far and ever win the inflation fight.

A host of opportunities in Japan’s AI potential The potential for innovation adds to the other tailwinds that are lining up for Japanese equities and brings a host of additional investment opportunities in Japan. Below is an inspiration list for your reference. Chip manufacturers and testing: Advantest, Kyocera, Renesas, Lasertec, Shibaura Mechatronics, Screen Holdings, Tokyo Electron, Tokyo Seimitsu Automation manufacturers: SMC Corp, Omron, Yaskawa, Keyence, FANUC AI-integrated products: Sony, Nintendo, Nikon, Hitachi, Kawasaki, Mitsubishi, Toshiba AI-driven services: Appier, Change Holdings, NTT Data Corp, AI Inside, Advanced Media ETFs: Global X Japan Semiconductor ETF, Global X Japan Robotics & AI ETF Risks to the view While the potential for Japan to gain a competitive edge in manufacturing is immense, there will likely be a hesitancy from companies looking to diversify their supply chains outside China, given the weak labour supply and rising wage pressures in Japan. The reshoring among Japanese companies could also remain limited to production of higher-end products on a smaller scale. A weak yen also means a high cost of imports of raw materials for companies looking to move production to Japan. On the contrary, a sharp appreciation in the yen could reduce the demand for Japan-made consumer electronics and other products. Meanwhile, recent sharp gains in semiconductor stocks could also mean that the expectations of technology advancement have already been priced in. Smoothing of US-China tensions could slow down or reverse the realignment of global supply chains. Japan has also announced some curbs on exports of semiconductor chips, which could impact earnings of key Japanese chip companies. In addition, any AI-related advancements could be interrupted by regulation risks or energy supply constraints.

XTB is the most popular Polish broker and one of the most recognized investment providers in Europe. It offers its clients more than 4,000 financial instruments, and users have a dedicated xStation platform at their disposal.  You can safely open an account with XTB using this link.   From the article you will learn:  What is XTB? How to open a brokerage account?  Why should you consider setting up an XTB demo account?  What is the xStation platform and what functionalities does it have?  How to withdraw funds from XTB? XTB - what is it? Who is the forex broker XTB? History of the establishment of XTB. Since when available XTB shares? XTB is an investment company and a global provider of products and technologies that enable the trading of financial instruments. Due to its status, it is subject to numerous regulations. XTB is under the supervision of institutions such as the Polish Financial Supervision Authority (KNF), the UK Financial Conduct Authority (FCA) and the international International Financial Services Commission (IFSC). XTB was founded in 2002, and 3 years later received permission from the FSC to provide brokerage services, which covered all financial instruments. Since 2007, the company began expanding abroad, opening branches in other countries in the region. XTB shares have been available since 2016, at which time the company debuted on the Warsaw Stock Exchange. What is the minimum deposit at XTB? How much does an account with XTB cost? How long does verification take? The minimum deposit is otherwise known as the amount that must be paid in order to use the functionality of a brokerage account. It allows you to purchase financial instruments.  XTB does not specify the minimum deposit that can be deposited into the account. What does this mean? The broker gives you the opportunity to start trading in the market starting from minimum rates. It is enough to deposit any amount to access the account. What's more, you can top up your deposit at any time with an amount that is deemed appropriate by the trader. Opening an account with XTB is completely free. However, it is worth noting that the bank may charge a commission for making a deposit, which should be checked in advance. The investor gains access to 4,000 instruments, including stocks from major financial markets. Most popular products at XTB: What are the most popular financial instruments at XTB? On the xStation platform and mobile app, XTB provides a "Hot" tab, which lists the most popular financial instruments. These are pairs of currencies, cryptocurrencies or stocks that are most popular with investors at any given time. Most of them are volatile, but some remain on the list for weeks, such as the USD/PLN pair. What is a demo account at XTB? Differences between demo and real at XTB XTB demo account allows you to check the functionality of the broker's system. It is also an important part of education, which allows you to manage virtual funds on a trial basis. The user has access to the market, but his decisions do not result in an actual loss or profit.  The most important difference between a demo and real account at XTB is the deposit. In the case of the former, it is not necessary to deposit funds, as only virtual capital is traded. The situation is different in the case of the real account, where the investor pays a deposit and then makes real decisions that may involve a loss of money. A demo account is therefore intended for anyone who wants to start their adventure with financial markets, but does not feel confident enough to risk losing their own money. Access to trial software is also a chance to protect yourself from making mistakes and to test new investment strategies. A demo account at XTB is commitment-free and free to set up. All you need to do is provide basic data to start trial trading. How to open an account with XTB? 5 useful tips for getting started To open an account, it's a good idea to prepare in advance and reserve at least 30 minutes to complete all the formalities.  Prepare your ID, driver's license or a receipt to prove your address.  Make sure you have a scanner or document scanning app. XTB requires scans to be uploaded, which allows for faster user verification.   Be prepared to fill out the online form.  Make sure you have a stable internet connection. Write down the number and email address for a dedicated help desk. This will allow you to get advice and guidance at every stage of registration (22-201-95-70 and e-mail: sales@xtb.pl).   Following the advice given will make setting up an account with XTB go quickly and smoothly. Investment account at XTB step by step. How to start investing at XTB? The very process of setting up an account at XTB does not take more than 30 minutes.  How to open an account at XTB? Follow the whole process with us step by step!  Go to the main page of XTB.com, then click on the "Open an account" tab.  You will be redirected to a subpage that requires you to enter your email address and accept the most important consents. You will be asked to set a password, which will be necessary to log into the account. It must meet a number of requirements, which can be found in the image below. As the registration panel shows, this is already 30% of the entire registration process. In the next step, you will need to provide personal information (first name, middle name, last name, phone number, date of birth, country of birth, citizenship) and fill out a statement of FATCA and CRS status. Confirmation of identity. XTB requires you to send a scan of your ID card or other proof of identity.  Completion of the knowledge test. The questions are basic and concern financial and investment topics. They are mainly issues related to CFDs and ETFs.  Personal form. The broker asks about the assets we have (annual income, value of savings), the amount of deposit we want to deposit or experience in the market. Checking the required consents. These are mainly the Master Agreement for the Provision of Brokerage Services, the Risk Declaration, the Order Execution Policy, the KID, and a certificate that you are not a politician or a politician's immediate family.  Once all the documents have been approved and the data verified, you can proceed to deposit funds in your XTB account. As an alternative to scans of documents, you can opt for video verification.  What is xStation? When is it worth downloading the application? xStation desktop or web version? The xStation platform is fully developed by the XTB team. Access to it is made available to the broker's clients. It is available in several versions, and can be operated on a laptop, desktop, tablet or phone. The speed of order execution on the xStation platform averages 85 milliseconds. Presenting the proprietary platform, XTB points to unique features that include: Statistics. They allow you to analyze the effectiveness of your decisions, market behavior or the average duration of transactions. Based on the collected information, you can draw conclusions and improve your performance.  News. XTB gives you access to key events from the macroeconomic calendar. Readings and indicators are provided in real time.  Calendar. Updated on a regular basis with the most relevant events that affect market movements.  Calculator. Useful for investing, thanks to it there is no need to calculate the value of a transaction or spread.  In addition, the user has access to indicators that examine sentiment in the supported markets.   XTB - what is worth investing in? What financial instruments does the most popular broker offer? Forex. There are 48 currency pairs available to investors, and forex trading takes place 24 hours a day, 7 days a week Indexes. Index CFDs at XTB include more than 20 proposals from major markets, including the US. Rolls are visible on charts, leverage is available. Commodities at XTB. This is a total of more than 20 instruments, including the most popular metals (gold, silver, platinum).  Stocks. There are more than 3,000 shares of companies from 16 markets. The minimum investment is PLN 10/EUR/USD. Commission 0% up to the indicated turnover (EUR 100 thousand per month) ETF-y. Można wybierać spoÅ›ród 300 najpopularniejszych funduszy na caÅ‚ym Å›wiecie.  Kryptowaluty. Ponad 50 CFD na krypto, w tym BTC. Dźwignia 1:2.      XTB - How to buy shares? How to enable Polish shares in a brokerage account? In order to buy shares, you must first log into your account and go to the Investor's Room. Later, you need to select a specific market and then open a position. Defensive orders are available, including Stop Loss or Take Profit.  Access to Polish stocks can be enabled by logging into the XTB Investor Room. Then select "My Accounts" and check "Enable CFDs and PL stocks."   FAQ How to withdraw money? How long does it take to withdraw money at XTB? How long does the transfer to XTB go? How long do I have to wait for a withdrawal from XTB?  You can withdraw funds by going to the Investor's Room. As the broker indicates on the official site, deposits are transferred to the bank around the clock, after 3 hours of placing an instruction. Importantly, cancellation of the instruction is possible right up to this moment. The instruction itself by the bank is processed by the next business day. For this reason, the withdrawal time in PLN should not exceed 1 business day. In the case of foreign currencies, such as USD or EUR, you should wait 2-3 days until the funds are in your account.  As for depositing to XTB, you should choose one of the payment methods.  Bank transfer. Credit cards. E-payments.  Express transfers are the fastest way to fund your account, the money is delivered immediately. XTB does not charge for transfer from PayPal and BlueCash.  The broker notes that it does not cover currency conversion differences if deposits are made in foreign currency. XTB - how to delete an account? XTB - how to delete an account?  To terminate the contract, and thus remove the account on XTB, you need to send a resignation to support@xtb.pl. Importantly, the request can be written in any form, but it must be clearly stated that the customer wants to delete the account. The request must be sent from a registered e-mail address.  XTB reviews. Is it worth choosing XTB? Check the latest comments, add your comment about XTB  Customers recommend opening an account with XTB. The interface is easy to use. In addition, the broker guarantees access to a wide range of financial instruments, including stocks from Poland, the United States, the United Kingdom or Germany.  The argument often cited by the broker's clients is also the series of daily webinars and XTB's educational tab. Cyclical opinions and recommendations from analysts make it easier to make investment decisions.  "Overall the broker as ok, cheap, I have never had any problems either with the application or with making transactions. The big minus - the lack of 2FA, which keeps me from holding large investments there. XTB when do you plan to implement 2FA? A lot of people complain about it, and these days 2FA is standard. Already even the archaic PKO Treasury Bonds portal has been implementing 2FA since October, and at your place there is silence on the subject." - Luke comments on the TrustPilot portal.

The Commodities Feed: Oil trades softer Crude oil has been softer amid some optimism around the Israel-Hamas conflict. Speculators trimmed their net longs last week as supply risks in the Middle East have eased for now.   Energy: Oil edges lower ICE Brent opened lower this morning with prices hovering around US$81.5/bbl on reports of easing worries over the Israel-Hamas conflict. Recent reports suggest that Iran held talks in recent days in Beirut, including with senior officials from Hamas to explore a diplomatic solution. Meanwhile, trading volumes were relatively subdued as the Chinese markets have been closed for the Lunar New Year Holidays. As for the calendar this week, market participants will await the release of the monthly reports from both OPEC and the International Energy Agency for further indications of supply and demand. Meanwhile, weekly data from Baker Hughes shows that the number of US oil rigs remained unchanged over the last week, with the total oil rig count standing at 499, whilst gas rigs rose by four, taking the total rig count (oil & and gas combined) to 623 for the week ended 9 February 2024. US oil rigs have remained quite flat since the start of the year and the volatility in oil prices could weigh on further rig additions over the coming weeks. The latest positioning data from CFTC shows that speculators decreased their net long position in NYMEX WTI by 55,265 lots after reporting two consecutive weeks of increases, leaving them with net longs of 94,963 lots as of 6 February 2024. Similarly, money managers decreased their net longs in ICE Brent by 23,060 lots over the last week, leaving them with a net long position of 238,356 lots as of last Tuesday. TTF prices fell over 3% this morning and extended the declines for a third straight session as mild weather and strong import flows indicate that the region will end the winter season with comfortable storage levels. Recent data from Gas Infrastructure Europe shows that the EU storage levels currently stand at 67.8% of storage capacity compared to the five-year average of around 58%. Subdued economic activity along with warmer-than-average temperatures have allowed the region to restock, which is keeping gas prices under pressure Metals: Lead exchange inventories rise Recent LME data shows that exchange inventories for lead reported inflows of 6,250 tonnes (the biggest daily addition for the year) for a ninth straight session to 150,675 tonnes as of Friday, the highest since October 2017. The majority of the inflows were reported from warehouses in Singapore. Meanwhile, on-warrant stocks extended additions for a fifteenth consecutive session and rose by 6,250 tonnes to 132,950 tonnes at the end of last week. However, the cash/3m for lead stood at a backwardation of US$10.2/t as of Friday, compared to a backwardation of US$1.25/t a day earlier. As for nickel, Norilsk nickel maintained its 2024 supply surplus expectations for the global nickel market that it made at the end of November last year. The group expects the nickel market to encounter a surplus of 190kt this year, primarily due to an increased supply of low-grade nickel in Indonesia. Meanwhile, it is estimated that the drastic drop in nickel prices has forced some of the projects to shut down, which might decrease production and eventually reduce the market surplus slightly. Norilsk Nickel estimates a market surplus of over 250kt in 2023. Meanwhile, the latest positioning data from the CFTC shows that managed money net longs in COMEX gold increased by 10,615 lots (after reporting declines for four straight weeks) to 82,591 lots as of 6 February 2024. The move higher was driven by falling gross shorts by 6,376 lots. Among other precious metals, speculators flipped to a net short of silver (after remaining net long in the previous week) as short positions outnumbered long positions by 4,784 lots over the last reporting week. Meanwhile, speculators increased their net shorts of copper by 17,224 lots to 20,5554 lots over the last reporting week. The move was driven by rising gross shorts by 13,620 lots to 71,999 lots.