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This is a big week for macro markets around the world. Yesterday the Fed cut 50 bps, today the ECB held interest rates, and tomorrow, I expect, the Bank of Japan will raise.

The Federal Reserve’s 2022-23 hiking cycle will be remembered for the highly unusual series of four consecutive 75 basis points interest rate increases. The cutting cycle initiated yesterday will be remembered for the highly unusual start of a 50 basis move. Both will be seen as indications of this central bank being late in its policy reactions.

Yesterday’s market reaction after the Fed cut 50 bps was a gap up, as expected, this was followed by the market needing time to digest what happened and mostly ended in the red. Stocks failed to hold on to gains due to commentary from Chair Powell that confirmed A) he thought the neutral rate was much higher than it was pre-pandemic and B) the committee did not discuss ending [fake] QT anytime soon. The former indicates the Fed may be reluctant to cut faster than the fresh Dot Plot indicates — which would be disappointing to current market pricing — due to the risk of reigniting inflation. But as I write this now, the futures market is shooting higher to new all-time highs. Nothing is keeping this market suppressed, this market wants to go higher!

What’s going on in the pond?

Yesterday I perched up high and quacked about the issues surrounding our government’s debt burden, a summary of my thoughts. If you want to check it out, click here. Today I will re-aim my focus back to the wonderful world of ETFs.

BTC Inflows:

On Tuesday, the Spot Bitcoin ETF saw $186.8M inflow!

8 months after launch. Fidelity Bitcoin ETF now > $ 10 billion in assets, iShares Bitcoin ETF over $ 21 billion. Spot BTC ETFs = top 4 ETF launches of 2024. WOW!

U.S. Bitcoin ETF flows by day, 4 consecutive net positive days.

BlackRock just put out a nine-page white paper that makes the case for Bitcoin ETF as a "unique diversifier" that can hedge against fiscal, monetary, and geopolitical risks, including a section called "Bitcoin's path to $1 trillion market cap." Read the whole thing here.

Volatility unlike anything else:

Tuttle just re-broke the volatility barrier today with the launch of 2x and -2x $MSTR ETFs, which will leapfrog Defiance's 1.75x MSTR (which has been an instant hit). This new ETF is expected to deliver volatility estimated to be about 15x that of SPX.

Market Flows

Looking at notional #ETF flows to monitor sector rotations within US Equities: currently, the sectors experiencing the largest inflows compared to their averages include Large Cap and Mid Cap, while outflows are being seen in Financials and Utilities.

• Check out the ETF Tools Page

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Life is rich,

_{- Addison}

DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell assets or make financial decisions. Please be careful and do your own research.