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The Pragmatic Investor is a unique weekly newsletter that covers the latest macroeconomic events. It takes the most recent developments in markets and turns them into actionable investment ideas using fundamental and technical analysis. It also covers major Indexes around the world, Commodities, Bitcoin, and select equities. Give it a try today!

A US Recession Is Coming, Or Is It? (4 min read)

Despite predictions of a US recession, the expected downturn has yet to come, causing a debate between bulls and bears. Aggressive rate hikes and inverted yield curves are among the key indicators hinting at a recession. But, money injections and government stimulus packages like the “Inflation Reduction Act” have kept the economy afloat. If the government pulls back on the spending, it may trigger the economic downfall many had anticipated. However, until then, the “no recession” view is likely to continue to support the bullish case.

China slashed its holdings of US Treasurys to a 14-year low (2 min read)

China has reduced its holdings of US Treasuries to a 14-year low, cutting $103 billion or 11% in June. This marks the third consecutive month of reduction and is likely related to the ongoing tensions with the US. The move also aligns with China’s de-dollarization strategy, chipping away at the dollar's role in global trade. As US bond prices continue to fall from the concerns about the Fed’s rate hikes, China's actions seem to add fuel to this trend. Many experts predict China will continue to reduce its holding on US debts in the coming months.

VinFast plunges after spectacular market debut (2 min read)

VinFast, the Vietnamese EV maker who had a strong debut last week has lost its steam after just two days, erasing most of its initial gains. On its first day of trading, the stock closed at $37 and was worth more than GM, Ford, or Rivian. However, it sharply fell in the following days to trade lower than its IPO price at around $20 and continued to decline. Despite VinFast’s ambition to take on Tesla, it has yet to turn a profit, and its initial US shipments faced negative reviews. The company also only delivered significantly less vehicles in Q1 than its competitors.

Evergrande files for US bankruptcy protection as China economic fears mount (4 min read)

Evergrande Group, China’s second-largest property developer, has filed for US bankruptcy protection as part of a massive debt restructuring due to China's worsening property crisis. This indicates that the company has failed its restructuring negotiation with creditors after more than a year. Since Evergrande ran into trouble, a string of Chinese developers has defaulted on their offshore debts which have deepened China’s property sector meltdown. This also came amid foreign investors selling Chinese stocks over concerns about the country's economic downturn.

Global X Launches New ETF Focused on Free Cash Flow (4 min read)

Free cash flow (FCF) is a new rising trend to use as a key metric for performance. It first sparked into popularity in 2016 with the success of the Pacer US Cash Cows 100 ETF (COWZ). Global X launched a similar ETF last month called the Global X U.S. Cash Flow Kings 100 ETF (FLOW) which centers around strong FCF in US companies. FLOW tracks an index that selects the top 100 holdings by FCF yield, aiming to align profitability and investment factors like quality and value. More detail about this new ETF is available in the article.

SEC Set to Greenlight Ether-Futures ETFs (2 min read)

The SEC is reportedly set to approve the first US-listed ETF based on Ether futures contracts, marking a significant development for crypto ETFs. Several firms, including Volatility Shares, Bitwise, Roundhill, and ProShares, have applied to launch these ETFs. While the SEC has previously refused ETFs directly linked to cryptocurrencies, it has permitted funds that use futures contracts. The approval of the first Ether futures contracts ETF in the US could come as soon as October this year.

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Thanks,
Thomas

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