The Senate just passed the debt ceiling bill. Here’s what happens next (3 min read)
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The US Department of the Treasury is set to resume borrowing following the Senate's approval to suspend the nation's debt limit until January 1, 2025. The Treasury had employed extraordinary measures to delay default, including selling investments and suspending reinvestments. To raise cash quickly, it will auction $15 billion worth of one-day cash management bills. The Treasury's high-interest rates to raise cash could impact the stock market as investors may opt for Treasury bills instead of stocks.

Payrolls rose 339,000 in May, much better than expected in resilient labor market (3 min read)
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The US economy added more jobs than expected in May, with nonfarm payrolls increasing by 339,000, surpassing estimates of 190,000. However, the unemployment rate rose to 3.7% against an estimate of 3.5% due to a decline in self-employment. Average hourly earnings rose by 0.3% for the month, in line with expectations. The markets reacted positively to the report, with major US indexes edging higher. The latest report shows that the US labor market has remained resilient amid inflation and other challenges.

Tesla Stock Hits 4-Month High As Elon Musk's Net Worth Soars (3 min read)

Shares of Tesla jumped 2% on Friday and were up 15% over the last week as investors are optimistic about the company’s partnership with Ford and Musk’s meeting with Chinese leaders. Tesla opening its EV charger to Ford should bring in new revenue and the China visit was critical to its outlook as the country accounts for a fifth of Tesla’s sales. So far this year, Tesla stock has been rising dramatically, bringing Musk’s net worth higher along with it. Despite the rally this year, the stock is still trading far lower than its peak in late 2021.

Why Are Institutional Investors Bullish on Stocks Through 2024? (9 min read)
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A new survey finds that institutional investors are bullish on stocks through 2024, expecting equities to return 5.9% in 2023 with tech and health care leading the way. Despite the current global challenges, investors remain optimistic about equity performance over the next 18 months. Particularly, they favor smart-beta strategies in developed markets and active strategies in emerging markets. Their biggest worries are climate change, war, and cyber-attacks. More on why they are bullish on stocks is available in the article.

Which Factors Are The Top ETF Performers?
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Most factor ETFs have been underperforming in 2023 compared to broad-market ETFs. Factors such as value, momentum, and low volatility, which are designed to improve equity returns, have yet to be delivered as expected. The underperformance can be attributed to the lack of exposure to growth sectors like technology and communication services which led most of the rally this year. However, some factor ETFs linked to growth have been successful. Despite the mixed performance, factor ETFs have seen a surge in assets, surpassing $1 trillion.

Goldman’s Hedge Fund ETF Is Crushing the S&P 500 With AI Bets (3 min read)
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The Goldman Sachs Hedge Industry VIP exchange-traded fund (GVIP), which tracks popular hedge fund picks through AI-driven analysis, rallied over 16% this year, outperforming the S&P 500. The success is largely attributed to its holdings of AI-related stocks that have surged amid the AI craze. Despite its performance, GVIP has experienced outflows and may struggle to attract investors compared to tech funds like QQQ which rallied even harder. Nevertheless, the ETF's success indicates that hedge funds were able to capitalize on the AI boom.

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Thanks,
Thomas

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