25 June 2024 – The Fund Society

The yuan’s status as a global currency might be gaining ground. But top CEOs see more hurdles to clear

For China’s yuan to be used more globally, the currency needs more “applications” such as stocks and bonds, Bonnie Chan, CEO of Hong Kong Exchanges and Clearing Limited, said on a panel Tuesday. “We’re not just going to hold on to a bunch of RMB and put it into this bank account,” she said. Fred Hu, founder, chairman and CEO of Primavera Capital, said on the same panel Tuesday that the internationalization of the yuan is probably going to take longer than many expect, despite increased statements from Beijing. A bank employee count China’s renminbi (RMB) or yuan notes next to U.S. dollar notes at a Kasikornbank in Bangkok, Thailand, January 26, 2023. Athit Perawongmetha | Reuters

DALIAN, China — For China’s yuan to be used more globally, the currency needs more “applications” such as for stocks and bonds, Bonnie Chan, CEO of Hong Kong Exchanges and Clearing Limited, said on a panel Tuesday.

Beijing has long touted its ambitions for increasing global use of the Chinese yuan — also known as the “renminbi” or “RMB” — in an international financial market where the U.S. dollar is the dominant currency. U.S. sanctions on Russia have also increased the pressure on some countries to have alternatives to the greenback.

Chan, speaking during the World Economic Forum’s “Summer Davos” meeting in Dalian, China, noted that people hold a currency for trade, or, more importantly, as a store of wealth.

“We’re not just going to hold on to a bunch of RMB and put it into this bank account,” she said. “You want to have bonds, you want to have equities, etc.”

“One of our strategic imperatives [has] been changed to make sure that we continue to produce more RMB-denominated security products,” Chan said, “so that investors around the world can actually see more applications of the RMB and be able to use those as the medium to store wealth in the form of the RMB.”

Last year, the HKEX announced a “Dual-Counter” program that allows investors to trade Hong Kong-listed securities in Hong Kong dollars or Chinese yuan.

In a significant step toward internationalization of the yuan, the International Monetary Fund in 2015 announced that it would add the yuan to its basket of reserve currencies

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Mapped: Median Income by State in 2024

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June 25, 2024 Graphics/Design:

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Median Income by State in 2024, Adjusted for Cost of Living

This was originally posted on our Voronoi app. Download the app for free on iOS or Android and discover incredible data-driven charts from a variety of trusted sources.

To gain insight into the U.S. economy, we’ve visualized the median income by state, as of May 2024. These figures come from WalletHub, which sourced income data from the U.S. Census Bureau and adjusted it for cost of living according to the Cost of Living Index (COLI).

ℹ️ Median income refers to the income level at the midpoint of the income distribution within each state. Using California as an example, half of the state’s households earn more than $124,000, while the other half earn less (after cost of living adjustments). Data and Key Takeaways

All of the numbers we used to create this graphic are listed in the table below.

RankStateMedian Annual Income
(adjusted for cost of living) 1DC$162,265 2Hawaii$141,832 3Massachusetts$127,760 4Maryland$124,693 5California$123,988 6New Jersey$117,847 7Connecticut$114,156 8Alaska$113,934 9New Hampshire$110,205 10Rhode Island$104,252 11Washington$103,748 12Colorado$97,301 13New York$91,366 14Oregon$91,100 15Utah$89,786 16Vermont$89,695 17Virginia$89,393 18Delaware$87,173 19Minnesota$86,364 20Nevada$80,366 21North Dakota$79,874 22Maine$79,800 23Illinois$78,304 24Wyoming$76,307 25Pennsylvania$74,711 26Arizona$74,375 27Wisconsin$72,602 28Nebraska$72,384 29Texas$70,513 30Idaho$70,041 31South Dakota$69,266 32Iowa$68,974 33Montana$68,937 34Florida$68,818 35Kansas$68,489 36Georgia$66,612 37Indiana$64,170 38North Carolina$63,025 39South Carolina$62,909 40Michigan$62,446 41Ohio$61,904 42Missouri$59,715 43Tennessee$59,077 44New Mexico$58,911 45Oklahoma$57,215 46Louisiana$56,282 47Kentucky$55,629 48Alabama$55,480 49West Virginia$52,719 50Arkansas$51,032 51Mississippi$46,880

The Cost of Living Index, published by the Council for Community and Economic Research (C2ER), was established in 1968, and allows for consistent place-to-place cost comparisons.

The index considers six categories of spending: groceries, housing, utilities,

Charted: How Leverage Multiplies Stock Returns

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June 25, 2024 Graphics & Design

Swipe between images to see how leverage works for both long and short ETFs.

Charted: How Leverage Multiplies Stock Returns

Have you ever wondered how to increase your stock exposure? Beyond simply investing a higher amount, using leverage is an opportunity to multiply your returns.

This graphic, from GraniteShares, shows hypothetical examples of how leveraged ETFs can affect your returns compared to regular stock trades.

How Does Leverage Work?

If you have a strong belief that a company’s stock price will go up or down, single-stock leveraged ETFs can help you increase your short-term exposure. The ETFs aim to multiply a stock’s daily price changes by a certain percentage before fees and expenses.

Long ETFs

Single-stock long ETFs are useful if you think the stock will gain value. Here’s a hypothetical example of how a $100 trade might perform over a single day for two scenarios:

The stock experienced a 5% gain The stock experienced a 5% loss

We’ve compared a regular stock trade to a 2x long ETF, which aims to multiply a stock’s daily price changes by 200% in the same direction as the stock’s movement.

Stock Daily Price MovementEnding Value of Initial $100 Stock Trade2x Long ETF Daily Price MovementEnding Value of Initial $100 2x Long ETF Trade +5%$105+10%$110 -5%$95-10%$90

When the stock gains 5%, the leverage of the 2x long ETF aims to double that gain for a daily return of 10%. On the flip side, if the stock goes down by 5%, the 2x long ETF could create a 10% loss for the investor.

Advertisement Short ETFs

If you think a stock will lose value, single-stock short ETFs can be useful. Here’s a hypothetical example of how a $100 trade might perform over a single day for the same two scenarios.

We’ve compared a regular stock trade to a 2x short ETF, which aims to multiply a stock’s daily price changes by 200% in the opposite direction from the stock’s movement.

Stock Daily Price MovementEnding Value of Initial $100 Stock

etf GraniteShares Investor Education leverage long short

Housing market to remain ‘stuck’ until at least 2026, Bank of America says

The housing market is unlikely to recover for several years and affordability won’t get any better unless a recession hits, according to Bank of America economists. In a mostly pessimistic outlook on the sector, the bank sees a variety of factors lining up against both a major improvement in sales and a drop in prices that would bring younger buyers back into the market. Among them are pandemic-related factors that saw a rush of buyers come into the market around 2020 and 2021, driving a dramatic spike in sales and coinciding with an inflation burst that goosed interest rates to their highest level since the turn of the 21st century. Sales have largely been on a downtrend since, outside of a spike earlier this year amid unrealized hopes that the Federal Reserve would be cutting interest rates aggressively. “The US housing market is stuck, and we are not convinced it will become unstuck anytime soon,” Bank of America economist Michael Gapen and others said in a Monday note. “After a surge in housing activity during the pandemic, it has since retreated and stabilized. We view the forces that have reduced affordability, created a lock-in effect for homeowners, and limited housing activity will remain in place through our forecast horizon,” he added. The affordability situation won’t change “without a recession,” Gapen wrote. In some respects, the housing market is a victim of its own success: Buyers swarmed in after Covid hit, taking advantage of mortgage rates around 3% and even less. Now, with 30-year rates still hovering around 7%, the “lock-in effect” has meant that owners can’t afford to sell into a market where they will pay rates more than double when they bought their homes. That has dampened sales but not prices , with little relief expected anytime soon as Fed officials have doused hopes for significant policy easing anytime soon, and as supply levels remain constrained. “We think it could take 6 to 8 years for the lock-in effect (dearth of transactions in existing homes) to go away,” Gapen said. “The wide gap between current mortgage rates and effective mortgage rates means most homeowners are unwilling to move unless forced.” Indeed, existing home sales have plummeted since early 2021 when they were at a seasonally adjusted annual rate of 6.6 million, according to the National Association of

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The Most Popular Stocks in Hedge Fund Portfolios

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June 25, 2024 Article/Editing: Graphics/Design:

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The Most Popular Stocks in Hedge Fund Portfolios

This was originally posted on our Voronoi app. Download the app for free on iOS or Android and discover incredible data-driven charts from a variety of trusted sources.

In 2023, hedge funds managed over $4 trillion in assets, hitting a record high.

While the industry saw tepid returns over much of the last decade, it has seen a resurgence in interest amid a rising rate environment. Often, hedge funds cater to an investor base of pension funds, high-net worth investors, and university endowments.

The above graphic shows the most popular hedge fund investments, based on 13F filings via WhaleWisdom.

The Top Hedge Fund Investments

Overall, Microsoft stands as the most popular company, with 874 hedge funds holding the stock.

As the megacap ramps up its AI offerings, it is capturing significant interest from hedge funds. In 2024, Microsoft shares are up over 20% as of June 24, sitting near all-time highs. Like Microsoft, a substantial share of hedge funds hold big tech stocks such as Amazon, Alphabet, and Nvidia.

Here are the most commonly held stocks in hedge fund portfolios as of the first quarter of 2024:

RankCompanyShare of Hedge Funds
Holding the StockNumber of Hedge Funds
Holding the Stock 1Microsoft44%874 2Amazon42%835 3Alphabet Class A38%745 4Apple36%714 5Meta36%710 6Nvidia34%675 7Alphabet Class C32%631 8Visa31%617 9JPMorgan Chase & Co29%570 10Berkshire Hathaway
Class B28%564 11Mastercard26%521 12UnitedHealth Group26%518 13Johnson & Johnson26%517 14ExxonMobil Corp25%499 15Eli Lilly & Co.25%498 Advertisement

Ranking in fourth is Apple, with 36% of hedge funds investing in the company.

On a net basis, hedge funds added over 26 million shares of Apple to their portfolios over the quarter, the highest among the group. Hedge funds are increasingly warming up to the stock ahead of Apple introducing AI enhancements to its iPhones this year or in 2025.

By contrast, hedge funds made the greatest reductions in Nvidia and Alphabet on a net basis. Michael Burry’s Scion Asset Management LLC was among the hedge funds

alphabet apple berkshire hathaw hedge funds Markets Meta microsoft nvidia partner scion asset management visa

Cricket can’t move stock markets

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Stocks making the biggest moves midday: SolarEdge Technologies, Pool Corp., Carnival and more

Check out the companies making headlines in midday trading: SolarEdge Technologies — Shares of the company tumbled more than 20% following the announcement that it will offer $300 million worth of convertible notes due 2029. The company also revealed in a U.S. Securities and Exchange Commission filing on Monday that a customer won’t be able to pay about $11.4 million that it owes after filing for bankruptcy. Pool Corp . — The stock plunged more than 7% after the company updated its earnings guidance for the full year on Monday after the bell. The wholesale pool supplies distributor expects full-year earnings between $11.04 and $11.44 per share. This is lower than its prior guidance of between $13.19 and $14.19 per share and below FactSet’s consensus estimate of $13.05. Pentair and Leslie’s fell in sympathy following the revision, declining about 6% each. Carnival — Shares added nearly 8% after the cruise company posted a second-quarter earnings and revenue beat. Carnival reported profit of 11 cents per share, excluding items, on revenue of $5.78 billion, while analysts surveyed by LSEG had expected a loss of 2 cents per share on revenue of $5.68 billion. Carnival also offered strong third-quarter and full-year outlooks. Sea Limited — U.S. shares of the Singapore-based consumer internet stock retreated 3.2% on the heels of a JPMorgan downgrade to neutral from overweight. The bank said Sea could be hurt by more competition. Penn Entertainment — The casino operator and online gambling platform’s stock fell 5% after Raymond James downgraded it to market perform from outperform. The firm believes its current valuation is “appropriate” and sees upside being capped around $20 a share. The stock has surged more than 14% in one month. Airbus — The stock was down more than 9% in France after the company announced it was slashing its financial targets for 2024. Airbus said Monday that it is expecting lower earnings and fewer commercial aircraft to be delivered this year. Nvidia — Shares of the chipmaker moved 5% higher after falling more than 6% in the previous session. Its sell-off on Monday marked its biggest one-day slide since April 19. Enovix — Shares of the advanced silicon battery company surged more than 38% after it agreed to deliver silicon batteries and packs for a mixed reality headset. Enovix will receive a one-time payment

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Visualized: The Price of Carbon Around the World in 2024

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June 25, 2024 Article & Editing Graphics & Design Visualized: The Price of Carbon Around the World

Only 1% of global emissions are priced high enough to meet the Paris Agreement’s temperature target in 2024.

This chart, created in partnership with the National Public Utilities Council, shows carbon prices around the world using data from the World Bank.

Let’s start by looking at what carbon pricing is and how it works.

What Is Carbon Pricing?

Carbon pricing is an environmental strategy aimed at reducing greenhouse gas emissions by assigning a monetary cost to carbon emissions.

The most common types of carbon pricing are emissions trading systems (ETS) and carbon taxes. The former sets an overall emission limit and allocates permits for trading, whereas the latter imposes a fee on emissions to increase their cost and incentivize reductions.

According to the World Bank, Finland and Poland were the first countries to implement a federal carbon price in 1990. The most recent countries, on the other hand, were Australia, Hungary, and Indonesia, implementing carbon pricing in 2023.

Carbon Prices, By Region

In 2017, the Carbon Pricing Leadership Coalition suggested that carbon prices should range from $50–100/tCO2 by 2030 to meet the Paris Climate Agreement’s temperature goal.

Fast forward to 2024, the global average carbon price is $32/tCO2—$18 short of the minimum that is needed in six years.

Carbon pricing varies significantly across different regions. Europe and Central Asia have the highest number of pricing initiatives out of any other world region, with an average price of $50/tCO2.

In the U.S. and Canada, the average price is slightly lower at $48 per ton, with 16 initiatives in place. North America’s approach is characterized by both federal and state/provincial systems, including notable schemes like Canada’s federal carbon pricing and the Regional Greenhouse Gas Initiative in the United States.

RegionAverage Carbon PriceNumber of Initiatives Europe & Central Asia$5026 U.S. & Canada$4816 Latin America & Caribbean$2411 East Asia & Pacific$1118 Africa$101

The European Union’s ETS system was introduced in 2005. The initiative led to a 16% decrease in covered emissions between 2022 and 2023 and generated $47 billion. Several EU member countries have also implemented their own carbon pricing mechanisms to address sectors outside the EU ETS’s scope or to generate

Carbon price CARBON PRICING carbon tax Green greenhouse gas emissions Motive Power partner

ISSB Takes Reins on Transition Reporting

Chair Emmanuel Faber reflects on two years of rapid standard-setting progress at this year’s IFRS conference, as NBIM chief compliance officer warns against “regulatory soup”.

The IFRS Foundation’s International Sustainability Standards Board (ISSB) will continue to push for cohesion across the sustainability reporting space, as it extends its reach to transition plan disclosures and deepens partnerships with other standard-setting bodies. “It’s critical that there is one way of doing [transition plans] disclosure and not 20…

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