News

BlockBeats News, May 29th. According to CME FedWatch Tool data, the market's expectations for interest rate cuts this year have been almost entirely erased, with some even contemplating a potential 75 basis point rate hike. Currently, the probability of the Fed holding rates steady through the end of 2026 is 51.9%. The probability of a cumulative 25 basis point rate cut throughout the year is only 0.5%, while the probabilities of a cumulative 25 basis point rate hike, 50 basis point rate hike, and 75 basis point rate hike are 37.3%, 9.3%, and 1%, respectively. Furthermore, the probability of a 25 basis point rate cut at the next Fed meeting in June is 1.1%.

BlockBeats News, May 28th, S3 Partners' latest data shows that the total short interest in the U.S. and Canadian stock markets has surged by nearly $100 billion since the end of April, reaching $2.13 trillion, hitting the highest level on record since 2010. Meanwhile, Goldman Sachs, the primary broker data, shows that the median short interest as a percentage of market capitalization of S&P 500 index components has climbed to 3%, the highest level since the end of 2011. The Goldman Sachs trading team pointed out that this extreme positioning implies that the next stage of the market's upside momentum may no longer be led by large-cap tech stocks but by a short squeeze-induced rally — especially in sectors that are out of favor and heavily shorted, where the risk of a reversal continues to build. Bearish bets have spread from the information technology sector to various other sectors such as industrials, financials, and energy, with a high concentration of shorts in defensive sectors: the median short interest in the healthcare sector has reached nearly a 30-year peak, while the utilities and consumer staples sectors are approaching historical highs. Goldman Sachs warns that the "right tail risk" in these sectors is significantly increasing. The current sentiment in the U.S. stock market has significantly improved since March, and money has begun to rotate: hedge funds bought into the non-essential consumer goods sector at the fastest pace in two months last week, while the net exposure to consumer staples saw the fastest decline in over five years. Research firm Wolfe Research believes that if geopolitical tensions ease, equally weighted allocations to sectors like non-essential consumer goods, technology, and industrials are expected to benefit further.

Glonghui, May 28 — Website development company Wix announced it will lay off about 20% of its workforce. The layoff decision is mainly driven by two factors: the continuing appreciation of the Israeli shekel against the US dollar, and the rapid advances in artificial intelligence technology. In an open letter, Wix co-founder and CEO Avishai Abrahami wrote: In the past few quarters, exchange rate fluctuations have been significant. Since most of the company's teams are based in Israel, costs such as salaries are calculated in shekels, while revenues are mainly in US dollars. The ongoing changes in exchange rates have placed considerable pressure on the company's operations. Additionally, Wix pointed out that artificial intelligence is profoundly altering the business models of technology companies. Abrahami described this shift as the most significant change in the way businesses are built since the invention of modern programming languages in the 1970s.