Interest Rates
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Cathie Wood Warns of Market Correction, Dismisses AI Bubble
Ark Invest CEO Cathie Wood, at Saudi Arabia’s FII, addressed concerns about an AI bubble. While not predicting a full bubble, she anticipates a potential “reality check” for AI valuations as interest rates shift. She believes algorithm-driven trading could trigger a market correction as rates rise. Wood argues AI’s long-term potential outweighs these short-term risks, seeing enterprise AI adoption as a gradual process requiring organizational restructuring. Her view contrasts with institutions like the IMF, which have warned of a potential AI bubble.
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Tech Megacaps Lose $770 Billion in Value, Dragging Nasdaq to Biggest Drop Since April
A sharp tech stock sell-off caused the Nasdaq to plunge, wiping out $770 billion in market cap. Rising interest rates, inflation fears, and economic growth concerns fueled the downturn, impacting FAANG stocks, cloud computing firms, and semiconductor manufacturers. Analysts cite rising Treasury yields and a hawkish Federal Reserve as key catalysts. While long-term tech fundamentals remain strong, macroeconomic uncertainty and supply chain issues persist, leaving the sector’s near-term outlook uncertain. Upcoming earnings season and Fed policy will be crucial.
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The Hanover Announces Pricing of $500 Million Senior Notes Offering
The Hanover Insurance Group (THG) announced the pricing of a $500 million offering of 5.50% senior, unsecured notes maturing in 2035. Net proceeds will be used to retire higher-yielding debt, including the 7.625% Senior Notes due October 2025 and the 4.500% Senior Notes due April 2026, with the remainder for general corporate purposes. Goldman Sachs, J.P. Morgan, and Morgan Stanley are joint book-running managers. The offering, under an existing SEC shelf registration, aims to manage the balance sheet and potentially free up capital.
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ACRES Commercial Realty Corp. Announces Quarterly Cash Dividend for Preferred Stock
ACRES Commercial Realty Corp. announced cash dividends for its preferred stock, signaling confidence in the market. Series C shareholders will receive $0.6379156 per share, with a variable rate tied to Term SOFR, while Series D shareholders will receive $0.4921875 per share. Both dividends are payable July 30, 2025, to shareholders of record as of July 1, 2025. ACRES focuses on commercial real estate lending and investment.
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Major Chinese Banks Launch First Deposit Rate Cut of the Year: Will Savers Finally Opt to Spend?
Major Chinese banks ICBC, CCB, and CMB implemented their first 2025 deposit rate cuts, reducing short-term rates (e.g., 3-month to 0.65%, 1-year to 0.95%) and steepening the yield curve inversion with 5-year rates dropping to 1.30%. The coordinated cuts, shrinking 3-year and 5-year deposit returns by 25-32%, reflect deliberate financial repression to dismantle China’s savings culture. While aiming to spur consumption through eroded real returns, analysts question whether decades-old thrift habits can be overturned amid tightened alternative investment options.
