The Daily Editor

The US market showed astonishing resilience supported by tech stocks, even while exposed to the double headwinds of rising interest rates and high oil prices. However, behind the scenes, the escalating situation in the Middle East, the stalemate in US-China trade negotiations, and serious power and cost issues shaking the AI development field are rapidly emerging.

 » Read more about: [US Stock Flash: 9/25] Stocks are resilient despite the double whammy of high interest rates and oil prices! What are the tech-led battles and the 'unexpected dark clouds …  »

Good morning. This is Reiji Kamiya.

Today, let’s look at **’What you need to know this morning’ + ‘one investment tip’** together.

In yesterday’s morning paper, we saw the trend of
strong economy
↓
caution over rate hikes
↓
rising interest rates
↓
headwinds for stocks
.

 » Read more about: Crude oil to $107. Why interest rates rose due to Middle East tensions and US stocks struggled [Learn investing in 2 minutes every morning] | September 25  »

By STAN CHOE, AP Business Writer

NEW YORK (AP) — After whipping through a couple sudden reversals, stocks ended a shaky day of trading on Wall Street Thursday roughly where they began.

The S&P 500 finished nearly flat and edged down by less than 0.1% following several turns between losses and gains.

 » Read more about: A shaky day for oil prices and the bond market leaves US stocks not far from where they started  »

 » Read more about: Why UiPath (PATH) Stock Is Down Today  »

 » Read more about: 31 of 46 flexi-cap mutual funds delivered positive 1-year returns despite market fall: Check the schemes in red  »

The Federal Reserve Board is requesting public comment on two proposals related to establishing a regulatory framework for the payment stablecoin issuers it supervises under the GENIUS Act, it said in a Thursday (Sept. 24) press release.

 » Read more about: Fed Proposes Stablecoin Reserve and Capital Rules Under GENIUS Act  »

In September, the central banks of the United States and Japan raised interest rates in the same week.

According to the textbook, if Japanese interest rates rise, the yen should be bought, leading to a stronger yen. However, in reality, the yen weakened further.

How did the AI investment team,

 » Read more about: The US and Japan raised interest rates in the same week, yet the yen weakened. Here is how the AI investment team interpreted the reason.  »

“I switched to bonds because stocks were scary, but the valuation has dropped.”

What you need if you feel this way is not a prediction of the next interest rate. What you need is a procedure to align the date you will use your money, the loss you can tolerate, the currency,

 » Read more about: An Era Where 'Safe Assets' Fall Due to Rising Interest Rates—A 7-Step Decision Table for Bond Investing to Protect 1 Million Yen  »

 » Read more about: S&P 500, Dow, Nasdaq Futures Ease As Treasury Yields Continue To Spike — ORCL, META, AKAM, GOOGL, MGM In Focus  »

Introduction

When explaining hedged foreign bond funds, the phrase “currency hedge costs are roughly equal to the interest rate differential between Japan and the U.S.” is widely used. It is concise and sounds plausible. It is not entirely wrong, either. I acknowledge the convenience of this explanation.

However, there are questions that cannot be answered with this explanation alone.

 » Read more about: Currency Hedge Costs Do Not Equal 'Interest Rate Differentials'—The Structural Divergence Created by Spot-Forward Spreads and Basis  »