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The Japan Carry Trade, Explained.

Right now markets are imploding.

Japan’s Nikkei just had the worst day since 1987, falling as much as 12.4% – that’s basically their entire market – before recovering to a mild 7% loss.

This was after two days of 5% declines. Here at home, the Nasdaq composite fell over 3.4% and the S&P500 tumbled 3%. So what’s happening?

You can read more on the matter here.

What’s going on?

• Delta and CrowdStrike at Odds Over July Outage Responsibility (theDeepDive)

• Pandemic Shifted US Jobs Out of Big Cities Into Smaller Metros (Bloomberg)

• Fed Unlikely to Make Emergency Rate Cut Despite Market Pressure (theDeepDive)

• WHO to convene emergency committee on mpox outbreak in Congo (Globe)

• No sign of U.S. recession in freight demand, CEO of shipping giant Maersk says (CNBC)

• Reddit Beats Estimates In Q2 2024 As Massive User Growth Fuels 54% Revenue Spike (theDeepDive)

• Romania Cuts Rates Again in Surprise Move After Market Rout (Bloomberg)

• X Sues Advertisers Over Alleged Boycott (theDeepDive)

• Yen dives as BOJ plays down chance of hikes, soothing markets (Reuters)

What’s the latest?

• Mortgage: Mortgage interest rates dropped to their lowest level since May 2023, leading to a 6.9% increase in total mortgage applications. The average rate for 30-year fixed-rate mortgages fell to 6.55% from 6.82%. Refinance applications surged 16% for the week, while purchase applications rose 1% but remained 11% lower than the same week last year.

• US Population Growth: From the pandemic's start to mid-2023, the US Hispanic population grew by 3.2 million, comprising 91% of the total 3.4 million population increase. The White population declined by 2.1 million, and the youth population dropped by 1.6 million. By 2030, 44% of the US population will be nonwhite, and over half by 2050. California and New York lost 1.2 million residents, with most states experiencing a decline in youth populations.

• Meta: Meta Platforms Inc. issued bonds in up to five parts, including a 40-year security yielding 1.55 points above Treasuries, following strong Q2 sales boosted by AI investments. About 15 companies aimed to sell investment-grade bonds Wednesday, capitalizing on favorable conditions with average high-grade yields at 5.06% after Monday's market volatility.

• Oil Rally: Oil prices rose over 1%, with West Texas Intermediate trading above $74 a barrel, following a recent slump to seven-month lows. The increase was driven by a recovery in global markets and concerns over potential geopolitical conflicts, including a possible Iranian strike on Israel. Crude inventories in the US increased by 176,000 barrels last week, while traders remain cautious about demand in China and the US, as well as potential OPEC+ supply additions.

• Yen: The yen fell 2.5% to 147.94 per dollar after BOJ Deputy Governor Shinichi Uchida dismissed near-term rate hike chances. This eased market concerns following last week's unexpected BOJ rate hike. The US dollar index rose 0.15% to 103.13. The yen's decline boosted carry trade currencies, with the Australian dollar up 0.64% to $0.6561.

Investment opportunities explained

The stock market and stuff

• Amid Market Volatility, Robinhood Halts Overnight Trading Due to Partner Issues (theDeepDive)

• Glencore to keep coal assets and stick with London listing (Reuters)

• SoftBank unveils $3.4 billion buyback amid pressure from investors (Reuters)

• Bitcoin and Ether Tumble Amid Recession Fears (theDeepDive)

In the juniors

• Cybersecurity Boom: Abnormal Security Closes Funding At 25x Revenue Valuation (theDeepDive)

• Seabridge Gold Advancing Drill Program at 3 Aces; Drilling Continues to Confirm Exploration Model and Expand Targets (JMN)

• New Low: High Times Sued by Investors (theDeepDive)

FULL DISCLOSURE: Power Nickel is a client of Canacom Group, the parent company of The Deep Dive. Canacom Group is currently long the equity of Power Nickel. The author has been compensated to cover Power Nickel on The Deep Dive, with The Deep Dive having full editorial control. Not a recommendation to buy or sell. We may buy or sell securities in the company at any time. Always do additional research and consult a professional before purchasing a security.