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Atlanta Fed projects a shocking 6% GDP growth in the third quarter (3 min read)

The Atlanta Fed believes the US economy is showing stronger growth than expected and moved its GDP estimate for Q3 from 5% to 5.8% earlier this week. If this held up, it’d be the most robust period of economic growth since the end of 2021. Despite the Fed’s effort to tame inflationary pressures with consecutive rate hikes this year, most of the economic data continue to indicate improved retail sales, job additions, and a low unemployment rate. While the economy may remain robust, it's important to note that the quarter's end is still a long way.

Global Yields Reach 15-Year Highs as Rate-Hike Worries Build (4 min read)

Long-term US government bond yields hit their highest levels since 2007 as investors fear the Fed will keep interest rates higher to tackle inflation after the minutes on Wednesday revealed concerns. The US 10-year Treasury yield reached nearly 4.3% while the long-term yields for other countries like the UK and Germany were also higher and to a level not seen since 2008. This trend was driven by the strong US economic data challenging the Fed’s perceived peak rate, prompting the likelihood of either more rate hikes or delays in rate cuts.

Walmart crushing sales while Target gets weaker (5 min read)

Walmart’s Q2 revenue and earnings both surpassed expectations, with store sales increasing 6.4% and online sales by 2.8%. The e-commerce growth was mostly driven by private-label brands and healthcare products. Walmart's wholesale business, Sam's Club US, also saw a 5.5% sales rise. In contrast, competitor Target reported a 5.4% sales drop, citing challenges like rising gas prices, student loan payments, and higher living costs. Walmart expects Q3 sales to grow 3% and raised its full-year guidance, projecting a 4 to 4.5% sales increase.

Foreign investors are giving up on Chinese stocks as capital flows reverse (2 min read)

Foreign investors are losing confidence in Chinese stocks as the country’s recovery continues to stall. Recent economic indicators also show China in a downward spiral, which has led to pessimism. Despite an initial inflow last month after the government promised support, global investors are now selling again. Major stock exchanges in Shanghai and Shenzhen have seen nine straight days of outflows among oversea traders. Some analysts predict that the selling will increase given concerns about China’s economic health.

Validus’ First ETF Turns JEPI Formula on Its Head (2 min read)

Validus Risk Management, a New York-based investment firm, launched an ETF that flips the strategy of JPMorgan Equity Premium Income ETF (JEPI). The Cboe Validus S&P 500 Dynamic PutWrite Index ETF (PUTD) sells put options, unlike JEPI's call options, which aim to hedge risk with income while maximizing the upside. Although PUTD’s expense ratio is nearly twice as much as JEPI, it is also one of the few ETFs, or possibly the first of its kind that seeks to profit in flat markets and capture gains during growth. More about PUTD is available in this article.

Marijuana ETF Folds Amid Uncertainty About Legal Weed (2 min read)

AdvisorShares, a major marijuana ETF manager, is shutting down its AdvisorShares Poseidon Dynamic Cannabis ETF (PSDN) due to regulatory challenges in the industry. The fund’s value dropped 65% in a year alongside other US-listed marijuana ETFs that had seen similar losses. Although nearly half of US states have legalized marijuana use, it's still a classified substance on the federal level so it cannot conduct banking transactions or business across state lines. Experts suggest that changes at the federal level are essential for the industry’s revival.

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