🇺🇸 Land of the bonds

The US Treasury's latest announcement could shake up the bond market | Asia's manufacturing sector was forced to take a break | [Finimize](   TOGETHER WITH   Hi {NAME}, here's what you need to know for November 2nd in 3:14 minutes.   🧰 There's no point paying for the fanciest gizmos and snazziest subscriptions if you don't know how to use them. So join IG for [Mastering Tools for The Modern Trader]( on November 2nd, and find out how to make the most of today's trading tools. [Grab your free ticket]( Today's big stories - The US Treasury cut its borrowing estimate for the current quarter, and that could have a major impact on the bond market - Here’s how to find a fund mix that can elevate your portfolio – [Read Now]( - Fresh data showed that Asia’s manufacturing sector slowed down in October, a symptom of wider problems plaguing the region Spread Thin [Spread Thin] What’s going on here? The US Treasury said it’ll [borrow]( less money than predicted this quarter, but soured the deal with a jumbo forecast for the next one. What does this mean? Every quarter, the Treasury announces how much funding it needs for the upcoming six months. That’s a must-watch reveal for bond investors, because the level of borrowing indicates the amount of US government bonds that will flow into the market. More borrowing, more bonds. And the more bonds issued, the lower their prices and the higher their yields – the return investors expect every year until a bond’s maturity. For this quarter, the Treasury dropped its estimated borrowing by some $70 billion. Mind you, the remaining $776 billion in predicted funding is still the most ever announced in the fourth quarter of the year. And what’s more, the Treasury penciled in a more-than-expected $816 billion for the first quarter of 2024. Why should I care? The bigger picture: Good intentions. The government’s budget deficit – the difference between what it makes in taxes and spends – is only widening, with everything from tax cuts to mounting defense costs to economic stimulus initiatives to blame. While the Treasury has been selling bonds to plug the gap, that move will only add to the US’s eye-wateringly huge debt pile. That, at a time when high interest rates are ramping up payments on debt and worsening the budget deficit. And so a vicious cycle starts: more bonds are sold, more interest is due on them, the worse the deficit gets, and repeat. For markets: Rates, rates, go away. Prices of Treasury bonds have been crushed by high interest rates, which explains why the bonds are on track for an unprecedented third year of losses. And there’s no sign of that changing anytime soon: the Federal Reserve held rates at their 22-year high on Wednesday, while keeping the option of another rate hike on the table. You might also like: [Why Bill Ackman is shorting Treasuries.]( Copy to share story: [( 🙋 [Ask a question](mailto:questions@finimize.com?body=Ask us a question: Where are you writing from? Let us know and we'll mention it when we reply.&noapp=true&subject=Spread Thin&utm_campaign=daily-global-02-11-2023&utm_source=email) Analyst Take Like Port And Stilton: Find Your Perfect Fund And Investment Trust Pairings [Like Port And Stilton: Find Your Perfect Fund And Investment Trust Pairings]( Like serving port with Stilton, [blending the right funds]( can improve the overall flavor of a portfolio. A [companion fund]( can bring a calmer note to a high-octane fund or add some spice to an otherwise dull core holding. So let’s look at some of the most popular funds on the interactive investor platform and find [potentially perfect pairings](. That’s today’s Insight: [caviar and Champagne, lamb and cab, and these funds](. [Read or listen to the Insight here]( SPONSORED BY WINECHAIN Cozy up with a smooth-as-silk investment opportunity Fine wine isn’t just the makings of a luxurious night in. The right bottle can be [one of the most stable and lucrative investments]( you could make, especially if you know just what to buy, where to buy it, and how to properly store it. [WineChain]( takes care of all that admin for you: source, store, ship and sell bottles on the platform, and wipe out the need to go anywhere else. The wines are sourced by top European sommeliers, with many impossible to buy elsewhere. Plus, bottles come with [digital tokens]( that prove their origins and make transactions easier. And to make that glass go down even smoother, you’ll [get 15% cashback](* on your first purchase with WineChain until the end of the month. Bottoms up: [get started today](. [Find Out More]( *[Terms & Conditions apply.]( When you support our sponsors, you support us. Thanks for that. Dry Season [Dry Season] What’s going on here? Manufacturing activity in Asia [shriveled up]( in October, according to data released on Wednesday What does this mean? There are amazing tours of Asia out there: food-themed, city-themed, motorcycle-themed, you name it. But at the moment, a showcase of the region’s economies is proving the most captivating of all. Many Southeast Asian countries saw their economies shrink in October, with industries squeezed by rising costs and lagging orders, according to S&P Global’s manufacturing purchasing managers’ indexes. Japan and South Korea also had little to show off: they scored 48.7 and 49.8 respectively, barely budging from the month before and hanging below the 50-mark that indicates growth. China had no reason to brag either. The world’s second-biggest economy’s start-stop recovery is still making investors nervous, and that stuttering was clear when a private measure of Chinese factory activity dipped unexpectedly. Why should I care? For markets: 99 problems and the government can’t fix one. China’s recent data indicates that the government’s supportive policies are still struggling to buoy up the economy. No wonder: Asia’s usually the powerhouse of manufacturing, but trimmed-down demand from cash-strapped US and Europe has left the region twiddling its thumbs. Thing is, the rest of the world will feel the effects if the globe’s engine runs out of steam – and that’s only looking more likely now that inflation-fueling energy prices are on the rise again. The bigger picture: There’s no solace on the interwebs. Asia’s digital economy is slowing down too, with regular customers watching the pennies and cutting back their spending. Case in point: research from Google, Temasek, and Bain & Co. predicts that the amount of money spent online across the region will tick up by roughly half as much as it did last year – the lowest rate in over five years. Combine that with company targets moving further out of sight, and many sectors are seeing their stocks take a tumble. You might also like: [Emerging market stocks and bonds are on divergent paths.]( Copy to share story: [( 🙋 [Ask a question](mailto:questions@finimize.com?body=Ask us a question: Where are you writing from? Let us know and we'll mention it when we reply.&noapp=true&subject=Dry Season&utm_campaign=daily-global-02-11-2023&utm_source=email) Despite this economic downturn, [retail investors are optimistic](. Yup, [84% of the hardy bunch]( we surveyed are planning to invest more or the same as last quarter, with [67% predicting that global stock markets will be higher]( a year. And women are bringing out the big guns: [42% of female investors]( have between $5,000 and 100,000 to invest in the next year, and more than a third plan to invest over 11% of their monthly income. See, despite being painted as less confident than male investors, the women we surveyed said that wasn't the case. In fact, more than three-quarters are fully confident in [managing their investments themselves](. If you want the rest of the scoop on how retail investors are trading, you can [grab the full report here](. [Read The Report]( 💬 Quote of the day "Why do you have to be a nonconformist like everybody else?" – James Thurber (an American cartoonist, writer, and humorist) [Tweet this]( SPONSORED BY RUFFER Something’s up in the US tech industry [Rampant interest rates]( have forced investors to rebalance their portfolios this year. [Bonds]( received a fresh flush of popularity, while many [stocks]( were cast aside as they could no longer justify their higher risk with equally significant returns. [Major tech companies](, though, have managed to keep inching ahead. That’s not necessarily what you’d expect for stocks when interest rates rise. Ruffer doubts that [artificial intelligence]( is the silver bullet some investors are hoping it will be, at least for now. Instead, the asset manager thinks the move signifies [imminent risks for tech stocks’ future](. You’ll want to know more about what this could mean for the US stock market going forward – it could be big. You can find out by [subscribing to Ruffer’s monthly newsletter, the Green Line.]( [Find Out More]( DisclaimerThe views expressed in this article are not intended as an offer or solicitation for the purchase or sale of any investment or financial instrument, including interests in any of Ruffer’s funds. This financial promotion is issued by Ruffer LLP which is authorised and regulated by the Financial Conduct Authority in the UK and is registered as an investment adviser with the US Securities and Exchange Commission (SEC). Registration with the SEC does not imply a certain level of skill or training. © Ruffer LLP 2023. Registered in England with partnership No OC305288. 80 Victoria Street, London SW1E 5JL. For US institutional investors: securities offered through Ruffer LLC, Member FINRA. Ruffer LLC is doing business as Ruffer North America LLC in New York. [Read the full disclaimer](. When you support our sponsors, you support us. Thanks for that. 🎯 On Our Radar 1. Your gut is your second brain. Here’s how to [heal it](. 2. Theory will only get you so far in the real world. Here's how to [master options trading](.* 3. Thinking makes us rational. This article explains why we believe [overthinking is irrational](. 4. Size up the opportunities. You can [trace the world’s biggest stock indexes]( without paying mammoth prices.* 5. Bye bye, wallet. Now you can [keep your driver’s license on your phone](. When you support our sponsors, you support us. Thanks for that. 🌍 Finimize Live 🥳 Coming Up Soon... 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