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What Happens if the US Defaults on its Debt? (10 min read)
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The US federal government reached its $31.38 trillion debt ceiling on January 19 this year and has resorted to extraordinary measures to fund its operations. If Congress does not raise the debt limit by June 1, the US may run out of money. While it is very likely that Congress will cut a last-minute deal to avoid defaults, understanding its potential effects is essential. This article goes in-depth on what happens when the US defaults on its debts and how it can impact your investments.

JPMorgan Asset Says Markets Are Right to Bet on US Rate Cuts (3 min read)
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JPMorgan Asset Management sees a US recession coming and expects the Fed to lower interest rates by Q3 due to slowing growth. They believe the market is correct in anticipating rate cuts as inflation is high and a recession is needed to bring it down. JPMorgan said they favor Treasuries as a hedge against a slowdown and sees potential for US 10-year yields to dip below 2.5% in a deep downturn. Long-term Treasuries in other markets, including Europe, are also becoming more attractive to them.

OpenAI CEO in "historic" move calls for regulation before Congress (2 min read)

OpenAI CEO Sam Altman testified before a US Senate hearing this week and emphasized the need for government regulation of AI. Issues raised by lawmakers include election misinformation, job disruption, language limitations, copyright, harmful content, and impersonation. Altman proposed a government agency for licensing AI systems above a certain capability threshold. IBM’s chief privacy officer who was also at the hearing said it’s important to regulate risks as well and not the technology itself.

Berkshire Hathaway Reworks Banking Bets Amid Sector Turmoil (2 min read)

Warren Buffett's Berkshire Hathaway made changes to its financial-sector investments, exiting US Bancorp and Bank of New York Mellon while adding a position in Capital One Financial. This move follows Buffett's recent public statement expressing reduced interest in the sector due to bank failures and liquidity concerns. Berkshire also made adjustments to its exposure to industrial firms and reduced its stake in Taiwan Semiconductor Manufacturing due to geopolitical risk.

Investors Wonder How Long Volatility Will Stay Muted (2 min read)
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The Cboe Volatility Index (VIX) is an important indicator for the stock market. A VIX of 16 suggests a 1% daily change in the S&P 500. It typically stays between 10-17 during calm periods but spiked during the pandemic. However, it recently closed at around 17, its lowest point in over a year, raising questions about market stability. For investors anticipating a spike in volatility soon, this article highlighted several ETFs that can profit from the rise or fall of the VIX.

Long Term Treasury ETFs Explained (5 min read)

A long-term Treasury ETF is an exchange-traded fund primarily investing in US Treasury securities with maturities of 10 years or more. They are often seen as a safer investment during recessions or economic slowdowns, which is a concern looming over the markets currently. This article explains how these ETFs work with examples, how they are taxed, and the pros and cons of investing in them.

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Thanks,
Thomas

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