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The United States government isn’t holding back when it comes to Big Tech, and <keyword id="19902762" type="General" weightage="20" keywordseo="Google" source="keywords" meta.keywordsubtype="org" meta.entityname="Google" meta.hostid="261" meta.entityid="Google">Google</keyword> is squarely in its sights. After years of concern over the tech giant’s grip on the digital world, the US Justice Department (DOJ) has made a bold demand: sell your Chrome browser. The move comes amid two high-stakes antitrust trials that accuse Google of monopolistic practices. So, what’s at the heart of the government’s case, and why is Chrome a key piece of the puzzle? Let’s break it down. <h3 style="line-height:1.38;margin-top:14.0pt;margin-bottom:4.0pt;">Search, Chrome, and monopoly madness</h3>In one corner, we have the DOJ versus Google in a trial in Washington, D.C., where a judge has already ruled that Google’s search business operates as an illegal monopoly. The DOJ argues that Google’s dominance in search, bolstered by its Chrome browser, gives the company an unfair advantage, effectively locking in users and advertisers. To remedy this, the DOJ has proposed that Google sell off Chrome entirely. This drastic move, they argue, could level the playing field and restore competition to a market where Google currently reigns supreme. <h3 style="line-height:1.38;margin-top:14.0pt;margin-bottom:4.0pt;">The ad tech tug-of-war</h3>Meanwhile, in Virginia, a second trial focuses on Google’s grip on the ad tech market — the engine behind the ads you see while browsing. The government alleges that Google’s trio of advertising software products effectively monopolises the ad tech ecosystem. Publishers like News Corp and Gannett claim they’re stuck using Google’s ad tools to survive. DOJ lawyer Aaron Teitelbaum summed it up bluntly: “Google is once, twice, three times a monopolist.” The DOJ accuses Google of using its financial clout to buy out rivals and control the auction systems that determine which ads appear online. This, they say, allows Google to charge advertisers more while paying publishers less. The government wants Google to divest parts of its ad tech business to dismantle this stranglehold. <h3 style="line-height:1.38;margin-top:14.0pt;margin-bottom:4.0pt;">Google fights back</h3>Unsurprisingly, Google has a different story. The tech giant calls the government’s arguments an attempt to pick “winners and losers” in an already competitive market. “The law simply does not support what the plaintiffs are arguing in this case,” said Google’s lawyer Karen Dunn. Google also argues that the ad tech market isn’t as straightforward as the DOJ claims. The company points out that ads appear across multiple platforms — search engines, social media, and apps — and Google doesn’t dominate all of them. In fact, it says rivals like Meta, Amazon, and TikTok are gaining ground. Dunn warned that forcing Google to sell parts of its business or work with competitors would essentially amount to government interference. “This is central planning,” she said, urging the court to reject the DOJ’s proposals. <h3 style="line-height:1.38;margin-top:14.0pt;margin-bottom:4.0pt;">What’s at stake?</h3>If the court rules against Google, the implications could be seismic. The DOJ’s proposals — selling Chrome or divesting parts of Google’s ad business — would fundamentally reshape how the company operates. But don’t expect a resolution anytime soon. Presiding Judge Leonie Brinkema is expected to issue her opinion swiftly, but any decision will almost certainly be appealed, dragging the case potentially to the US Supreme Court. Even then, the question of enforcement remains murky. While the Biden administration is eager to rein in Big Tech, future administrations could change course. Whether Google will ultimately be forced to sell Chrome or parts of its ad tech business is up to the courts — and potentially years of appeals. For now, the trials highlight a growing unease with the power of tech giants like Google. For Google, the stakes couldn’t be higher. For the rest of us, these decisions will shape the future of the internet as we know it. Stay tuned — this battle is far from over.

Why does the US want Google to sell its Chrome browser?

In the grand scheme of the 2024 election, cryptocurrency is not a big deal. It ranks extremely low on the list of priorities for most voters, if it even registers at all. Crypto isn't really a big deal in the broader financial system either. And yet it's playing a big role in politics, including at the very top of the ticket.Crypto corporations have <a target="_blank" href="https://www.businessinsider.com/crypto-bitcoin-election-spending-kamala-harris-donald-trump-2024-8">dumped some $119 million into this year's federal elections</a>, more than any other industry. Crypto-backed groups have worked against Democratic figures such as Sen. Katie Porter and Rep. Jamaal Bowman, both of whom lost their primaries, and now they're backing Sen. Sherrod Brown's Republican opponent in Ohio, Bernie Moreno, <a target="_blank" href="https://www.rollingstone.com/politics/politics-features/sherrod-brown-crypto-bernie-moreno-millions-1235102478/">to the tune of some $30 million</a>. Through super PACs, crypto money is flowing to downballot candidates on both sides of the aisle. The groups have largely steered clear of the presidential race, but both candidates have taken notice of crypto's influence. Former President Donald Trump has been <a target="_blank" href="https://www.businessinsider.com/trump-bitcoin-stance-2024-7">courting crypto-focused voters</a> and is <a target="_blank" href="https://www.businessinsider.com/trump-crypto-partners-chase-herro-zachary-folkman-lawsuits-jail-debt-2024-9">trying to launch some sort of digital-asset venture</a> of his own. Vice President Kamala Harris is paying lip service to crypto, too. If you can't beat the crypto bros, join 'em, or at least give them a wink and a nod.Trump and Harris have different reasons to try to attract the crypto community — donors, voters, the fact that the former president likes anyone who flatters him, etc.To some extent, it's a "might as well"-type situation. Except for the people who really care about crypto, nobody actually cares about crypto, so being nice about it is basically free. And in a race with a razor-thin margin, everything counts — including, maybe, the vote of some dogecoin-loving guy in a crucial Wisconsin county or an extra few thousand dollars from a tech donor who had been sitting on the sidelines.Trump has not always been a fan of crypto. Back in 2021, he said it seemed like a scam and described it as a "<a target="_blank" href="https://www.foxbusiness.com/politics/crypto-potentially-a-disaster-waiting-to-happen-trump">disaster waiting to happen</a>." On the 2024 campaign trail, however, <a target="_blank" href="https://www.businessinsider.com/donald-trump-going-for-crypto-bro-vote-world-liberty-financial-2024-9">Trump has been happy to embrace the community</a>. This summer he appeared at a bitcoin conference in Nashville, where he vowed to make the United States the "crypto capital of the planet" and told the audience to "have fun" with their bitcoin and the other things they were playing with. He also attended an accompanying fundraiser, where tickets maxed out at $844,600.Big names in the arena, such as Marc Andreessen and Ben Horowitz of Andreessen Horowitz and Cameron and Tyler Winklevoss of Gemini and Facebook fame, have thrown their support behind Trump. He's made all sorts of promises about crypto, including that he'd create a "strategic national bitcoin stockpile" and that under his watch, crypto rules would be written by people who "love" the industry rather than "hate" it. So why the flip-flop? For one thing, crypto is sort of a natural fit for Trump. It has a libertarian and freedom-focused bent that aligns more naturally with the GOP, even though Trump is far from a libertarian. Its fans/users/investors are disproportionately young men, a constituency whose vote the Republican nominee is courting. There's donor money to be had here, and his campaign knows it. Not to mention that Trump has long been into <a target="_blank" href="https://www.businessinsider.com/trump-products-that-disappeared-list-2018-4">weird</a>, <a target="_blank" href="https://www.businessinsider.com/donald-trump-university-professor-stephen-gilpin-2018-4">sketchy</a> business ventures, and while not all crypto projects are scams, there does seem to be a lot of them."With Trump, you always have to view almost everything he does through the transactional lens," said Adam Kovacevich, the founder and CEO of Chamber of Progress, a left-leaning tech-industry coalition.All of Trump's courting of the crypto industry is possible because Democrats left open an opportunity for him to pounce. President Joe Biden's administration — namely Gary Gensler, the chair of the Securities and Exchange Commission — has <a target="_blank" href="https://markets.businessinsider.com/news/currencies/gary-gensler-sec-cryptocurrencies-bitcoin-ftx-binance-roundup-views-2023-9">taken an antagonistic stance toward crypto</a>. Others in Biden's orbit, such as Lina Khan, the chair of the Federal Trade Commission, have been <a target="_blank" href="https://www.businessinsider.com/ftc-chair-lina-khan-60-minutes-americans-privacy-big-tech-2024-9">quite tough in their approach to the tech industry</a> more broadly. It left a bad taste in the mouths of a lot of powerful people in Silicon Valley and venture capital. That's given Trump a way to make inroads and, in turn, rake in some donor support."There's no question that Trump and the Trump campaign were absolutely using crypto as a wedge against Biden because Biden had historically been pretty down on crypto," said Sheila Warren, the CEO of the Crypto Council for Innovation, an advocacy group.You can tell that the Trump camp thinks this is a good issue. When I reached out for comment, Brian Hughes, a senior advisor to the campaign, sent over a statement describing "crypto innovators and others in the technology sector" as "under attack" by Harris and the Democrats and arguing that no presidential candidate "has been more supportive of the crypto community" than Trump. The campaign also sent a litany of articles about various criticisms of crypto from left-leaning senators including Elizabeth Warren, Jon Tester, and Bernie Sanders. The Harris campaign declined to comment on the record.Trump's interest in crypto isn't just political; it's personal — as in his personal finances. The billionaire-ish businessman has disclosed that he <a target="_blank" href="https://www.businessinsider.com/trump-called-crypto-scam-now-owns-million-ethereum-disclosure-bitcoin-2024-8">owns over $1 million worth of ether</a>. In September, he unveiled his own crypto venture, World Liberty Financial. The details remain pretty scant, but some of his kids are into it, including his youngest son, Barron. It's fair to have some skepticism about what it will do, how it will work, and whether it's legitimate. It's fair to have the same questions about Trump's entire crypto pivot, too."His original approach on crypto was a common-sense recognition that it was a pyramid scheme, and it's thrown out to the wind because it's been convenient to do so," said Robert Weissman, a copresident of Public Citizen, a consumer advocacy group. "But to the extent he's able to look at something cleanly when he did, he thought it was a scam. Now he's embraced it as his scam."Harris' advance into crypto on the campaign trail has been subtler — and more recent — than Trump's. She's not about to tattoo "I &lt;3 BTC" on her forearm or anything; she's just telling the guys (it's almost all guys) who did that that she's open to chat.The vice president's camp has reportedly been making overtures to the crypto industry for weeks, undertaking the endeavor pretty quickly after Biden dropped out of the race and she became the presumptive nominee. A <a target="_blank" href="https://www.ft.com/content/1a4c5066-9cc0-4849-993b-06a28022ad66">July report from the Financial Times</a> said her advisors had begun approaching companies to try to "reset" the relationship with the industry and put out feelers about meeting with firms such as Coinbase and Circle. A <a target="_blank" href="https://www.politico.com/news/2024/07/26/kamala-harris-donald-trump-crypto-00171365">Politico report</a> from about the same time described crypto advocates as hopeful about Harris, given that she's from California, a tech-heavy state.In early August, volunteers organized a Crypto4Harris town hall that was attended by Senate Majority Leader Chuck Schumer, Gov. Jared Polis of Colorado, the Wall Street financier Anthony Scaramucci, and the billionaire investor Mark Cuban. Ron Conway, a Democratic megadonor and venture capitalist who stopped supporting crypto super PACs after they began spending against Sherrod Brown, has been optimistic about Harris. In July, he called for the tech community to unite behind Harris and defeat Trump. "I have known Kamala for decades," he wrote, "and she's been a fighter, a leader, and an advocate for the tech ecosystem since the day we met."The campaign's outreach inspired some cautious enthusiasm in the crypto community, but there's a difference between a candidate's surrogates saying something and the candidate saying it themselves, which is what some in the industry were waiting for.In late September, Harris addressed crypto directly at a weekend Wall Street fundraiser in New York, where she said her administration would "encourage innovative technologies like AI and digital assets while protecting our consumers and investors." A few days later, she reiterated her support in a speech on the economy, saying the US would remain dominant in "AI, quantum computing, blockchain, and other emerging technologies." She's <a target="_blank" href="https://www.semafor.com/article/09/26/2024/harris-escalates-her-courtship-of-crypto">reportedly dispatched aides</a> to do more outreach. One way to read Harris' efforts is as a sort of olive branch to the tech community, a signal to Silicon Valley, venture capital, and startups that she's not aligned with the <a target="_blank" class="" href="https://www.businessinsider.com/donald-trump-vcs-in-silicon-valley-2024-7">Biden administration's hard-nosed approach to tech</a>. It makes it easier for donors who were hesitant to support her to finally throw in, and her openness to conversation puts some tech minds at ease. It's about crypto, but it's also more than that. By coupling mentions of digital assets and blockchain with AI, Harris weaves it into her broader economic message about innovation and entrepreneurship."The Biden administration has been so hostile to crypto that the main challenge for the Harris campaign has been to say in a clear and credible way that they recognize that and they want to depart from that strategy," said Rachael Horwitz, the chief marketing officer at Haun Ventures, a venture-capital firm. "It's a big hill to climb because so much trust has been lost." Horwitz added that before Harris' late-September remarks, "there were only campaign surrogates asking the industry to take their word for it that behind the scenes she is more pro-tech and pro-innovation than Biden."To be sure, Harris hasn't spoken at length about crypto, and what she has said is quite vague and generic. It's a stance a lot of policymakers hold — yes, we want to foster innovation, and yes, we want to protect consumers in the process.While Molly White, a crypto researcher and critic, described Harris' recent statements about crypto as "middle of the road," she said she thought the crypto industry was "definitely taking an optimistic view."Ultimately the question is not only what will the candidates say but what will they do.Horwitz said she saw this as "a longer-term issue that goes beyond statements during a campaign where action is the only real path to signaling to founders and the venture community that whomever is president believes that blockchain technology is here to stay and America should lead."Crypto is not going to decide the 2024 election; issues like abortion and immigration and the economy and overall vibes are going to do that. But the industry has <a target="_blank" class="" href="https://www.businessinsider.com/china-bitcoin-mines-american-electricity-china-crypto-ban-energy-crisis-2024-9">amassed some significant financial power </a>that it's clearly willing to wield politically, and that can be tough for politicians to ignore. It's got some sway in the political discourse, too, as prominent crypto figures weigh in on the race and deploy their donations accordingly."There's a grand narrative of crypto of the industry spending a ton of money and shifting the center of gravity on crypto policy, including by making it something that politicians feel they have to talk about, when it's really overall pretty unimportant and not something on anybody's radar," Weissman said.A statistic crypto boosters typically deploy is that about one in five Americans have owned crypto, the argument being that that ownership will affect their votes. It's a dubious claim — just because you have $50 in bitcoin doesn't mean it's determining what you do in November. There isn't a huge block of crypto voters up for grabs. But given how close the race is, a light appeal probably doesn't hurt any candidate. Trump is clearly targeting young men, and crypto is a thing they like. The problem is that young men generally aren't rushing to the polls. "Are they winnable? Sure. Are they going to vote? Who the heck knows," said Dan Cassino, a professor of government and politics at Fairleigh Dickinson University who researches polling and masculinity. "Getting people under 25, under 30 to vote is hard for any campaign. But getting especially men under 30 to vote, no one even bothers."The crypto industry doesn't mind the attention it's getting from policymakers. It helps crypto executives get meetings on Capitol Hill to try to craft favorable legislation. It gets them the ears of lawmakers who might ultimately decide how their companies are regulated and by whom. At the presidential level, there are some appointees that the crypto and tech industries would very much like to be out — Gensler at the SEC, Khan at the FTC."It's very clear from a lot of the reporting that Harris has gotten an earful from people in the business community about Gensler and crypto and about Lina Khan and the FTC," Kovacevich, at the Chamber of Progress, said.Crypto companies, like most businesses, don't really want to make partisan enemies. To get things done in Washington, it's a good idea to have friends on both sides of the aisle, even if not everyone is a bestie."Crypto is purple," Warren, from the Crypto Council for Innovation, said.What Harris or Trump will actually do on crypto is unclear, but that's not really the point right now. The point is to make nice with tech and try to win in November.<a target="_blank" href="https://www.businessinsider.com/author/emily-stewart">Emily Stewart</a> is a senior correspondent at Business Insider, writing about business and the economy.

Why Trump and Kamala are both courting the crypto-bro vote

<ul class="summary-list"><li>Stocks, crypto, and other assets have been hammered by market turmoil in recent days.</li><li>Recession fears, the Japanese yen, valuations, and the Fed's next move fueled the chaos.</li></ul>Stock markets have been rocked by fresh recession fears, dour corporate earnings, and foreign monetary policy in recent days. Investors seem to have regained their composure, but experts warn the chaos may not be over.<h2 id="00588599-62c0-47bd-9f8f-05157d606cd5">What happened?</h2>The S&amp;P 500 tanked 8% from its July 16 peak to trade below 5,200 points at Wednesday's close. The tech-heavy Nasdaq Composite has tumbled 13% over the same period, while bitcoin and ether have plunged 16% and 31% respectively since late July to revisit their February lows.Nvidia, the microchip maker that has become the <a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/apple-nvidia-stocks-down-magnificent-seven-tech-markets-crash-2024-8">star stock</a> of the artificial intelligence craze, has crashed 30% from an intraday peak of $141 on June 20 to $99 at Wednesday's close. The sell-off slashed its market value from over $3.2 trillion to below $2.5 trillion.The market rout reflects several headwinds converging to spook investors:<ol><li>Friday's <a target="_blank" class="" href="https://www.businessinsider.com/jobs-report-labor-market-hiring-layoffs-quits-recession-sahm-rule-2024-8">jobs report</a> showed the US economy added fewer jobs than expected, and unemployment ticked up to 4.3% — its highest level since October 2021. The news stoked concern on Wall Street that growth is slowing and company profits could suffer.</li><li>The Bank of Japan declared on July 31 that it would hike its benchmark interest rate in a bid to head off inflation and shore up its currency, and expected to further tighten its monetary policy. The announcement hammered Japanese stocks and fueled a global market sell-off, as investors rushed to unwind "carry trades" centered on borrowing cheaply in Japan and investing the funds in higher-yielding assets overseas. The central bank <a target="_blank" class="" href="https://www.businessinsider.com/market-crash-japan-central-bank-boj-cools-interest-rate-hike-2024-8">backtracked</a> on Wednesday, saying it wouldn't hike rates further for now.</li><li>A combination of rock-bottom US interest rates since the financial crisis, and historic amounts of government spending during and after the pandemic, drove the value of stocks, real estate, cryptocurrencies, and other risk assets to record highs. But the Federal Reserve has hiked rates from nearly zero to north of 5% since early 2022, boosting the relative appeal of safe assets like savings accounts and government bonds, and making it more costly for companies to borrow money to fuel growth. The Fed has held off on cutting rates as inflation remains well above its 2% target, which has <a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/stock-market-crash-fed-rate-cuts-economy-recssion-inflation-powell-2024-8">maintained pressure</a> on the economy.</li><li>Other factors include investor skepticism around the huge amounts of money being invested in AI with minimal payback so far; worries about the health of Big Tech after Tesla's earnings nearly halved last quarter and Google-owner Alphabet reported slower advertising growth; and Warren Buffett's Berkshire Hathaway revealing over the weekend that it <a target="_blank" class="" href="https://www.businessinsider.com/berkshire-hathaway-apple-stake-second-quarter-earnings-report-2024-8">slashed its monster Apple stake</a> last quarter.</li></ol><h2 id="f81e59c4-08a8-414e-85f7-70daa54cd1ab">More pain to come?</h2>US stock futures were little moved ahead of Thursday's open, suggesting nerves have settled on Wall Street. But several experts have warned there could be more trouble ahead."The stock market looks like it is finally starting to correct," reads one subhead in the latest research note from <a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/stock-market-crash-ai-stocks-bubble-recession-prediction-economy-outlook-2024-8">Paul Dietrich</a>, the chief investment strategist at B. Riley Wealth Portfolio Advisers. He attributed the "massive stock market sell-off" to "fears of a looming US recession" stoked by worsening economic data, and warned the S&amp;P 500 could eventually crash 40% from its recent highs.Analysts have also <a target="_blank" class="" href="https://markets.businessinsider.com/news/currencies/stock-markets-meltdown-china-yuan-carry-trade-turmoil-japan-yen-2024-8">cautioned</a> the Chinese yuan could follow the Japanese yen in disrupting global markets.Other experts aren't so worried. In a recent note, Fundstrat's Tom Lee <a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/stock-market-outlook-vix-increase-decline-growth-scare-tom-lee-2024-8">pointed</a> to a sharp decline in Wall Street's "fear gauge" as reassuring. "VIX falling from 66 to 27 is a positive sign and further sign this is a 'growth scare' with the worst likely behind us."Nobody knows for sure where markets are headed next, with Wall Street split over whether the US economy is <a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/us-economy-interest-rate-cuts-coming-crash-landing-unemployment-data-2024-8">solid or crumbling</a>, <a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/stock-market-crash-ai-stocks-bubble-recession-prediction-economy-outlook-2024-8">whether the AI boom is a bubble</a>, and whether the Fed will <a target="_blank" class="" href="https://www.businessinsider.com/fed-rate-cuts-recession-outlook-economy-job-market-interest-rates-2024-8">start cutting rates</a> in the next few weeks.But trading in recent days shows that even, and perhaps especially, the highest-flying assets are vulnerable to bad news and investor jitters.

Market mayhem has calmed down. Here's what went down — and why more chaos may be coming.

<ul class="summary-list"><li>Economist Steve Hanke still thinks the US is on track for a recession early next year.</li><li>That's due to a recent contraction in the money supply, which preceded past downturns, he told NYSE TV Live.</li></ul>The US economy is still likely to slow into a <a target="_blank" class="" href="https://www.businessinsider.com/recession-outlook-hard-landing-economy-inflation-job-market-signal-slowdown-2024-8">recession</a> next year — and Trump's election victory may have just made the economic outlook even more challenging, according to top economist <a target="_blank" class="" href="https://www.businessinsider.com/recession-outlook-hard-landing-economy-inflation-fed-rates-steve-hanke-2024-7">Steve Hanke</a>.The Johns Hopkins professor, who's warned of a coming downturn for months, said he was sticking to his 2025 recession call in an <a target="_blank" class="" href="https://www.youtube.com/watch?v=XTxY-QAj9_Q">interview with NYSE TV Live</a> on Friday. That's mainly due to a concerning trend in the <a target="_blank" class="" href="https://www.businessinsider.com/money-supply-recession-unemployment-inflation-us-economy-outlook-jeremy-siegel-2023-12">money supply</a>, he said, referring to the total volume of money flowing around markets and the economy.M2, one class of the money supply, shrank from mid-2022 to March 2024, according to Federal Reserve data. That's a rare trend that's only happened four times over the last century, and has ended in a recession in every instance, Hanke said.The M2 money supply started to re-expand this year, rising 2.47% year-per-year at the end of September. But that rate remains well-below the 6% growth Hanke thinks is needed to maintain inflation at the Fed's target rate — a sign, in his view, that the economy is growing too slowly."My view is that the economy is going to continue to slow down and probably will experience a recession next year," Hanke said."The fuel for the economy, to make it simple, is the money supply. And what's going on in the money supply? And if you get significant changes in it, you get significant changes in nominal GDP," he later added.Trump's protectionist economic policies also impose a "big negative" for the economy, Hanke said.Economists say some aspects of Trump's agenda, like his plan to levy steep <a target="_blank" class="" href="https://www.businessinsider.com/trump-tariffs-how-shoppers-and-small-businesses-are-stocking-up-2024-11">tariffs</a> on US imports, are expected to boost <a target="_blank" class="" href="https://www.businessinsider.com/trumps-tariffs-chips-could-create-more-american-jobs-increase-prices-2024-11">economic growth</a>, something that would challenge Hanke's recession outlook. Also, the policies are seen by some as <a target="_blank" class="" href="https://www.businessinsider.com/trump-tariffs-higher-inflation-fed-interest-rates-taxes-mortgage-rates-2024-11,">inflationary</a>, which complicates the deflation piece of Hanke's argument.But, if tariffs raise costs for consumers, that could actually backfire on the US economy, Hanke said, as higher prices could lead consumers to demand fewer goods."It's very clear. If you put tariffs on imports, it's like putting a sales tax on those imports. And if you put a sales tax on something, what happens? People don't demand as much of it," he added.Trump has pushed back on the idea that his economic plan would be inflationary, and has maintained that his policies will actually lower prices for Americans. He implemented tariffs during his first term as president without a significant inflation increase, but economists note that his tariff plans this time around are far more wide-reaching, explaining the difference in inflation forecasts.Most forecasters, though, still anticipate a soft-landing for the US economy, with <a target="_blank" class="" href="https://www.businessinsider.com/inflation-october-cpi-consumer-price-index-federal-reserve-interest-rates-2024-11">inflation</a> trending closer to the Fed's target rate, while <a target="_blank" class="" href="https://www.businessinsider.com/gdp-gross-domestic-product-third-quarter-economy-2024-10">economic growth</a> has remained solid. Consumer prices rose 2.6% on a yearly basis in October, slightly hotter than last month's levels, but on par with expectations. Real <a target="_blank" class="" href="https://www.businessinsider.com/category/gdp">GDP</a>, meanwhile, is estimated to grow at a 2.5% clip over the fourth quarter, according to the Atlanta Fed's latest GDPNow reading.

Why one veteran economist is doubling down on his 2025 recession call after Trump's victory

<ul class="summary-list"><li>September's payrolls report exceeded expectations, but economists see weak gains for October.</li><li>Even with lower expectations, a poor print could reset the market's narrative around a soft landing.</li></ul>The narrative around ongoing labor-market strength revived with <a target="_blank" class="" href="https://www.businessinsider.com/september-jobs-report-unemployment-rate-nonfarm-payroll-growth-federal-reserve-2024-10">September's payrolls report</a>, which topped economists' expectations by over 100,000 jobs. But that could change on Friday, when the Bureau of Labor Statistics releases new jobs data.Expectations for October's headline payrolls number are already relatively low at around 110,000-120,000. Economists and investors are discounting the impact that Hurricanes Milton and Helene and the ongoing strike at Boeing are likely to have on the jobs numbers.Even after accounting for these extraordinary events, however, some experts say a weak number below that consensus could counter the prevailing narrative that rapid Fed rate cuts slowed inflation without tipping the economy into recessionary territory — a so-called soft landing."If you get 50,000 or less, even with those potential disruptions, that does bring back some concerns about a slowdown," Tom Essaye, the founder of Sevens Report Research, told Business Insider. "Also, it really counters this idea that there's going to be no landing, that the economy's just not going to slow at all. So I think it would move markets."Ben McMillan, the CIO of IDX Advisors, said the same about a jobs print well-below consensus, especially given how much investor sentiment about a soft landing has shifted to the upside in the last month."This could be a situation where many investors say to themselves, 'Alright, maybe the economy is not as robust as we thought,' things could be more prone to slowing down, and therefore investors revise their risk-on outlook appropriately," McMillan told Business Insider.Goldman Sachs estimates that the hurricanes will lower the number of jobs added by 40,000-50,000, meaning a potential jobs print of 200,000 would, in theory, be reduced to 150,000-160,000. Pantheon Macroeconomics says the impact is likely to be closer to 25,000 jobs. For the strikes at Boeing and other firms, the Bureau of Labor Statistics itself estimates that they'll <a target="_blank" href="https://www.bls.gov/ces/publications/strike-report.htm">reduce job gains by 44,000</a>.But while various surveys of economists show muted expectations for October, some warn there's a chance that job gains could be lower than the 110,000-120,000 consensus. Goldman is just under that with a 95,000 prediction, while Comerica is much lower at 30,000. Former Fed economist Claudia Sahm thinks the print could even be negative.A print of under 100,000 would be the first since 2020.The hurricanes and strikes, however, make it unclear where the threshold of worry is for investors in a significant miss to the downside. Michael Cuggino, the president and portfolio manager of the Permanent Portfolio Family of Funds, told Business Insider on Monday that investors might be quick to disregard a poor number due to the temporary factors listed above. Plus, they may even cheer on the chance of larger rate cuts from the Federal Reserve, he said.Bill Adams, the chief economist at Comerica, said in a note this week that while his expectations are very low, investors shouldn't jump to conclusions."The October jobs report will likely show a severe but short-lived hit from hurricanes Helene and Milton," Adams said. "The report will tell us little about the economy's trend."The headline number for October isn't the only part of the report that could reset expectations, however. According to Renaissance Macro Research Chief Economist Neil Dutta, there is some evidence that September's 254,000 jobs added could be creating a false sense of confidence in the strength of the economy.For one, response rates to the BLS payrolls survey have been extraordinarily low this year, meaning revisions in subsequent months have been larger, he said.<div type="image" title="bls jobs report response rate" height="781" width="1067" msid="114788147" hostid="261" sizebytes="27070"></div>And while there's no guaranteeing what will happen with September's data, 75% of revisions over the last 12 months have been negative, according to economist David Rosenberg. Rosenberg said in an October 9 note that ADP's payrolls report is a more reliable survey to follow, and the firm's estimate of jobs added in September was 143,000.Another sign that September's jobs numbers may have been overstated is that other employment indicators haven't started to trend upwards.<div type="image" title="pmi employment indicators" height="791" width="1075" msid="114788152" hostid="261" sizebytes="29558"></div>"There's really not much evidence that the labor market's meaningfully inflected higher in September," Dutta said in an October 28 video. "If you look at the PMI data, the employment components in both the manufacturing and [services] PMIs remain below 50."

Why the October jobs report on Friday could sink the market's soft-landing narrative

<ul class="summary-list"><li>Residents say it's becoming a lot harder to enjoy living in Florida. </li><li>Among the pandemic's hottest markets, the Sunshine State is increasingly expensive, hot, and crowded. </li></ul>Cindy, a 50-year-old small-business owner who's lived in Florida for most of her life, says she and her husband are starting to sour on life in the Sunshine state. The summers are extremely <a target="_blank" class="" href="https://www.businessinsider.com/moving-to-north-carolina-from-florida-climate-crisis-2023-8">hot and muggy</a>, prices have climbed, and the crowds have gotten worse, she said. Cindy noted that the commute from her suburban area to downtown Tampa has more than doubled over the past few years.Now, with most of their adult children out of the house, she and her husband are seriously considering packing their bags and moving out of state. More than likely, they'll be gone within the next 10 years, she said, adding that her business was one of the last remaining things that kept her tied to the area."It's funny. I know most people retire to Florida, but we're hoping to retire away from Florida," she told Business Insider.Cindy's experience isn't actually all that unique. <a target="_blank" href="https://www.businessinsider.com/why-are-people-moving-florida-home-prices-cost-of-living-2023-12">Florida was one of the epicenters</a> of the pandemic's great migration, but while crowds of people are trying to settle into places like Orlando, Tampa, and Jacksonville, many Floridians want to <a target="_blank" class="" href="https://www.businessinsider.com/moving-to-leaving-florida-reasons-home-prices-affordability-weather-2023-11">dump their homes</a> and get out.The exodus is mainly being driven by higher housing costs, a higher cost of living, and souring attitudes toward the influx of people who moved to Florida in recent years. Those factors combined are making daily life in the state way more difficult, current and former Florida residents said.While 730,000 people moved to Florida during 2021 and 2022, nearly half a million people left, according to US Census data.The state, meanwhile, just lost its status as the most moved-to region this year, according to an <a target="_blank" class="" href="https://www.pods.com/blog/moving-trends">analysis</a> conducted by the Florida-based moving service PODS. South Florida, in particular, ranked among the regions people were most keen to move out of, the report said.Waning enthusiasm for the state is evident in housing activity, which has fallen from its pandemic highs. The number of homes for sale in Florida has soared 42% compared to levels last year, according to <a target="_blank" href="https://www.redfin.com/state/Florida/housing-market">Redfin</a>.Many people looking to sell add that they're looking to leave the county, or possibly move out of state, according to Rafael Corrales, a Redfin agent based in Miami.Buyers are also getting cold feet. In Orlando, Jacksonville, and Tampa — three metros that boomed during the pandemic — 21% of <a target="_blank" class="" href="https://www.businessinsider.com/florida-housing-market-outlook-nightmare-home-prices-mortgage-rates-affordability-2024-7">home purchase agreements fell through</a> in June, Redfin data shows."They're just being a little more cautious now," Corrales said, pointing to affordability concerns. "There's issues that were normally acceptable for a buyer, they're no longer acceptable anymore because it's money and it's a lot of money."Kevin, a 36-year-old software engineer, is among the sellers who recently left. He and his wife traded their life in St. Pete, Florida to move to Seattle about a year ago. They have no regrets, and never plan on moving back to the state, he told BI."If you would have called me five years ago, I would have vastly different answers to this," Kevin said. "The cost of living hadn't gone up and just the past five, six years, it's gotten crazy down there. I used to love Florida five years ago. I never imagined leaving Florida, but things have changed."<h2 id="14bd5ed1-f1a4-44dc-b8cb-afc8c6739964">Temperature change</h2>Attitudes appear to be different than even just a few years ago, when pandemic transplants altered the state's reputation as more than just America's biggest retirement destination. Bill McBride notes that booms and busts are part of the housing cycle, and the housing forecaster thinks some areas of Florida could see an exodus of people in the coming decade.While people were likely attracted to Florida for its balmy weather and cheaper housing relative to expensive cities like New York, homeowners in the state are feeling exhausted by extreme weather, which is pushing up the cost of homeowners insurance and homeowner association fees, McBride told BI.More than three quarters of homeowners in Florida said their <a target="_blank" class="" href="https://www.redfin.com/news/home-insurance-survey-report-2024/">home insurance premiums have risen</a> in the past year, according to a Redfin survey. <a target="_blank" class="" href="https://www.businessinsider.com/real-estate-prices-drop-florida-texas-violent-weather-insurance-costs-2024-8">Property insurance costs in the state are rising at the fastest pace</a> in 20 years, according to Capital Economics.According to Cindy, her home insurance costs around $8,000 a year. That's actually better than the state average, with the typical household paying over $10,000 for home insurance in 2023, according to data from <a target="_blank" class="" href="https://insurify.com/homeowners-insurance/florida/#:~:text=The%20average%20home%20insurance%20cost%20for%20Florida,include%20Travelers%2C%20Nationwide%2C%20and%20Security%20First%20Insurance.">Insurify</a>."It's insane. It's craziness how much more we're paying for homeowners' insurance, and I think that's pretty common across the whole state right now. Everyone is having issues with that," she said.The cost of living has also risen, in part due to rising housing costs and more people living in the city. Consumer prices in the Miami, Fort Lauderdale, and West Palm Beach areas of Florida are <a target="_blank" class="" href="https://fred.stlouisfed.org/series/CUURA320SA0">up around 30%</a> since February 2020, according to the Bureau of Labor Statistics. Prices in Tampa, St. Petersburg, and Clearwater areas, meanwhile, are <a target="_blank" class="" href="https://fred.stlouisfed.org/series/CUUSA321SA0">up 25% since the pandemic</a>.Home prices have accounted for a big portion of that increase. The median home in <a target="_blank" class="" href="https://www.redfin.com/state/Florida/housing-market">Florida</a> now costs $409,700, up by about 55% from the median house price recorded in February 2023, Redfin data shows."I think one of the main draws of Florida has always been that it's cheaper," Darryl Fairweather, the chief economist of Redfin, said, pointing to the wave of newcomers who flooded in from high-cost areas, like New York and Washington DC."Eventually the affordability just becomes so bad that people can't put up with it anymore."The hoards of people who moved to Florida during the pandemic are part of the problem, Kevin and Cindy said, describing a more tense political climate and increased violence in some areas.Florida saw an increase in most types of offenses in 2023 compared to the prior year. Simple assaults shot up 66% compared to 2021, while aggravated assaults jumped 65%, according to data from the <a target="_blank" class="" href="https://www.fdle.state.fl.us/CJAB/FIBRS">Florida Department of Law Enforcement</a>."So it was probably 2020 that I was like, yeah, time to go get out of here," Kevin said.Florida will probably still be attractive to some older people, who are flush with cash and are not as concerned by the increasing frequency of extreme weather events, McBride and Fairweather say.But for the most part, McBride expects people to begin turning away from and also leaving the Sunshine State. Some communities near Florida's coastline could become "ghost towns" in as soon as 50 years, he speculated, as climate change will make them uninhabitable.The state probably won't be considered a retirement haven by the time millennials exit the workforce, Fairweather added."Will it still attract people? I think so," McBride said. "[But] I wouldn't live there."

Why people are souring on one of the country's hottest housing markets     

<ul class="summary-list"><li>Ed Yardeni challenged Goldman Sachs' prediction of weak stock market returns in coming years.</li><li>Goldman forecasts 3% annual returns for the S&amp;P 500 over the next decade, but Yardeni says it could be closer to 11%.</li></ul><a target="_blank" class="" href="https://markets.businessinsider.com/stocks/gs-stock">Goldman Sachs'</a> prediction of a decade of low returns is way too conservative, according to market veteran Ed Yardeni.Goldman <a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/stock-market-outlook-sp500-future-returns-decade-forecast-goldman-sachs-2024-10">issued a 10-year outlook for the stock market</a> earlier this week, suggesting that the S&amp;P 500 will deliver average annual returns of just 3%, with a potential range of between -1% and 7%.That prediction didn't sit well with Yardeni, who <a target="_blank" class="" href="https://www.businessinsider.com/economy-roaring-20s-rapid-growth-stock-market-analysis-ed-yardeni-2024-1">has been arguing</a> for the past two years that the stock market is set up for a Roaring 20s-like boom due to <a target="_blank" class="" href="https://www.businessinsider.com/employee-productivity-booming-workers-jobs-ai-stock-market-gdp-2024-3">the ongoing rise in productivity.</a>"In our opinion, even Goldman's optimistic scenario might not be optimistic enough," Yardeni said in a note on Tuesday.Yardeni said with the US economy growing at a 3% clip year-over-year, combined with inflation moderating to about 2%, stock market returns should be closer to 11% on an average annualized basis over the next decade."It's hard to imaging that the total return of the S&amp;P 500 would be only 3% in the future given the returns just from the compounding of reinvested dividends," Yardeni said.The bulk of Goldman's bearish long-term thesis on the stock market hinges on the fact that there is a high level of concentration in just a handful of stocks.But that's warranted based on the fundamentals, Yardeni said."While the Information Technology and Communication Services sectors together now make up about 40% of the overall S&amp;P 500, around the same as at the peak of the dotcom bubble, their companies are much more fundamentally sound today than back then," he said.Yardeni explained that these two sectors represent more than a third of the <a target="_blank" class="" href="https://markets.businessinsider.com/index/s&amp;p_500">S&amp;P 500's</a> earnings power, compared to less than a quarter of the index's earnings at the peak of the dot-com bubble in 2000.Additionally, the definition of a technology company has been warped as technology is pervasive across all sectors, and that's helping drive a boom in productivity, which should support economic growth while keeping inflation in check.Overall, if current trends persist, Yardeni sees a scenario in which the Roaring 20s stock market boom extends into the next decade, which would turn Goldman's conservative outlook upside down."A looming lost decade for US stocks is unlikely if earnings and dividends continue to grow at solid paces, boosted by higher profit margins thanks to better technology-led productivity growth," Yardeni said.

Why Goldman Sachs' prediction of a lost decade for stocks is wrong, according to a market vet

<ul class="summary-list"><li>An acceleration of US economic growth is a major risk for investors, says economist Steven Blitz.</li><li>Blitz warns a "no landing" scenario could lead to inflation rebound and Fed rate hikes.</li></ul>An acceleration of economic growth in the US might be the stock market's worst-case scenario, according to GlobalData TS Lombard chief economist Steven Blitz. While that may sound counterintuitive, as a recession would also not be great for stocks, Blitz wrote in a note on Tuesday that the "no landing" scenario is a big risk as it could lead to a fresh spike in inflation and an about-face by the Federal Reserve. "What has now become the biggest risk in the Fed's cut and aggressive guidance, and the one markets are not pricing - that there is no landing at all," Blitz said.Blitz is concerned that the Fed will keep interest rates too low for too long, leading to a hot economy and making inflation once again Wall Street's biggest worry."The Fed will not get the funds rate down to 3%, but the terminal rate for this round will nevertheless end up too low and be kept there for too long. Inflation subsequently rebounds and the Fed is back raising rates sooner than anyone expects," Blitz said.That would be a wake-up call for investors, especially as the "Goldilocks" dream of a soft landing in the economy becomes the consensus on Wall Street.According to Blitz, the Fed funds rate should settle at around 4%, a full percentage point above the long-term projections of numerous Fed members, because the economy is still showing remarkable resilience."One cannot ignore that in the face of higher real rates versus pre-Covid, the economy has stayed strong and employment full," Blitz said.The Atlanta Fed's GDPNow estimate for third-quarter GDP growth is 2.9%, imports on a year-over-year basis are seeing an uptick, and more containers are "riding the rails" in a positive sign for economic health, Blitz observed.None of those signals suggests that the Fed needs to follow through with aggressive interest rate cuts <a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/stock-market-today-dow-record-high-rate-cut-hopes-rise-2024-9">like the futures market is currently projecting,</a> he said.The CME's FedWatch Tool is pricing 75 basis points of interest rate cuts before year-end, in addition to <a target="_blank" class="" href="https://www.businessinsider.com/fed-cuts-interest-rates-how-much-september-fomc-powell-inflation-2024-9">the Fed's 50 basis point rate cut last week.</a>"Running a too-low real funds rate, which this Fed is apt to do, consequently risks a much higher inflation outcome than they are assuming," Blitz warned.The potential Fed policy mistake that Blitz is so worried about would mirror the 1960s, according to the note, which helped fuel a painful decade ahead of high inflation and poor stock market returns.

Why a jump in economic growth could be the stock market's nightmare scenario

<ul class="summary-list"><li>The stock market is in shambles on Friday, with all three major indexes falling more than 2%.</li><li>Investors are digesting a series of weaker-than-expected data points and questioning the Fed.</li></ul>The US stock market has plunged into chaos as investors digest a streak of negative economic data and disappointing mega-cap-tech earnings.All three major US indexes were down more than 2% at 12 p.m. in New York, with tech and small-cap shares taking the biggest hit. The moves continued a market-wide skid that started on Thursday. The <a target="_blank" class="" href="https://markets.businessinsider.com/index/s&amp;p_500">S&amp;P 500</a> has now slid 4% in just two days, while the tech-heavy <a target="_blank" class="" href="https://markets.businessinsider.com/index/nasdaq_composite">Nasdaq Composite</a> is down 5% over the period and flirting with correction territory.The sell-off began gathering momentum on Thursday amid a slew of weak data points. Jobless claims climbed near a <a target="_blank" class="" href="https://www.reuters.com/business/us-weekly-jobless-claims-rise-11-month-high-2024-08-01/">one-year high</a>, while manufacturing data came in <a target="_blank" class="" href="https://www.reuters.com/markets/us/us-manufacturing-gauge-drops-eight-month-low-2024-08-01/">well below estimates</a>. Investors became even more discouraged after Thursday's closing bell after disappointing earnings reports from <a target="_blank" class="" href="https://www.businessinsider.com/amazon-stock-amzn-quarterly-earnings-call-report-live-updates-2024-7">Amazon</a> and <a target="_blank" class="" href="https://markets.businessinsider.com/stocks/intc-stock">Intel</a>. Amazon missed its second-quarter sales forecast and issued light guidance for the third quarter. Intel, meanwhile, announced plans to cut 15,000 workers and gave a dismal growth forecast. Its stock plunged as much as 30%, the biggest single-day decline since at least 1982.Stock futures were already deeply in the red on Friday morning. Then investors really seemed to throw in the towel after the <a target="_blank" class="" href="https://www.businessinsider.com/stock-market-today-july-jobs-report-nonfarm-payrolls-unemployment-increase-2024-8">jobs report</a>. The economy added 61,000 fewer jobs than expected in July, and unemployment unexpectedly spiked to 4.3%, triggering a widely followed recession indicator called the <a target="_blank" class="" href="https://www.businessinsider.com/sahm-rule-recession-indicator-fed-rate-cuts-labor-unemployment-contraction-2024-6">Sahm Rule</a>.The sell-off seems to be signaling a shift in how investors are interpreting weak economic data. Months ago, signs of a slowing economy would bolster expectations for Fed rate cuts, which are seen as rocket fuel for stocks.But with a cut now being priced in with certainty in September, investors are wondering whether the economy is weakening too rapidly."<a target="_blank" class="" href="https://www.businessinsider.com/economy-bad-good-news-stock-market-inflation-recession-fed-2024-3">Bad news is no longer good news</a> for stocks," John Lynch, the chief investment officer at Comerica Wealth Management, said in a statement on Friday. "Pressure will escalate on the Federal Reserve as market interest rates will continue the attempt to force their hand."Some are even questioning whether the Fed miscalculated and made a mistake with its path of rate cuts."Oh dear, has the Fed made a policy mistake? The labor market's slowdown is now materializing with more clarity," Seema Shah, the chief global strategist at Principal Asset Management said, noting that job gains have dropped below levels typical of a "solid economy."She added: "A September rate cut is in the bag and the Fed will be hoping they haven't, once again, been too slow to act."New York Fed economists are pricing in <a target="_blank" class="" href="https://www.newyorkfed.org/medialibrary/media/research/capital_markets/Prob_Rec.pdf">56% chance the economy could enter a recession</a> by June of next year.Meanwhile, rate-cut forecasts on Wall Street have gotten far more dovish over the past few days. Bets on a 50 basis-point rate reduction in September have jumped to 75%, according to the <a target="_blank" class="" href="https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html">CME FedWatch tool</a>. That's way up from the 12% odds from a week ago. Basically, the consensus has shifted from a 25-basis-point move to 50 in a matter of days."This is further proof that the economy is slowing, which has many worried the Fed is now firmly behind the eight ball," Ryan Detrick, the Carson Group's chief market strategist, said in a note. "It is becoming clear that the Fed should be more worried about the economy than inflation, which is increasing the chances of a 50-basis-point cut in September."

Why the stock market is going berserk today

<div type="image" title="For the unversed, trading in futures and options can be akin to setting their hard-earned money on fire" height="900" width="1200" msid="114064202" hostid="261" caption="&amp;lt;p&amp;gt;For the unversed, trading in futures and options can be akin to setting their hard-earned money on fire&amp;lt;/p&amp;gt;"></div> Once upon a time, there thrived a wild, wild land. Here, it was all about super high monetary stakes, lightning-fast trade deals, and bucketloads of money shifting hands every single second. This wilderness lured millions of individuals with the promise of super duper high returns. But, at what cost? Welcome to the unforgiving, ultra-risky wild west of <keyword id="19991165" type="General" weightage="20" keywordseo="Indian-equity-markets" source="keywords">Indian equity markets</keyword> called the <keyword id="145718" type="General" weightage="100" keywordseo="Futures-and-Options" source="Orion">futures and options</keyword>. Here, everyone seems to just fly right through the bright red-flagged warnings of financial risks to earn even a fraction of these promised returns. Most burn themselves in the process, but carry on nevertheless, as if nothing ever happened. <h2>Chasing the cloudy profits</h2>The data conclusively proves that every 9 out of 10 individuals only lost their hard-earned money in this land. But hey, what do the numbers know? Some hide their losses out of shame, some out of fear. The proponents, meanwhile, proudly boast unusually high returns on their investments, some open social media channels while others encourage their friends and family to take the plunge. Naturally, news of this unstoppable and humongous en-masse migration to the F&amp;O (futures and options) town has reached sheriff <keyword id="19901201" type="General" weightage="20" keywordseo="SEBI" source="keywords" meta.keywordsubtype="org" meta.entityname="SEBI" meta.hostid="261" meta.entityid="SEBI">SEBI</keyword>, galvanising them into action. After all, it was time to put a leash on this madness and save the common man. The inhabitants of this town doubled in the last 2 years, from 51 lakh in FY22 to 96 lakh in FY24—99.8% of whom were small and mid-income traders. But profits? Well, that's a different, rather completely absent story. <h2>Que Sera Sera, much?</h2>A recent report by SEBI (Securities and Exchange Board of India) that studied profits and losses made by traders in the equity derivatives segment between FY22-24 exposed the mad mania of futures and options trading in India, especially since the pandemic. Per the report, 91.1% of individual traders, or about 73 lakh traders had only lost money trading in futures and options in FY24. Between FY 22-24, over 1 crore traders, or about 92.8% of individual traders, had lost Rs 2 lakh each. But once bitten, twice shy? Well, not in this case. More than 75% of individuals, who had only made losses trading in F&amp;O in FY22 and FY23, continued to trade vigorously in FY24 as well, without any changes in the bottom line, which remained deep in red and negative. So, then all these traders must be uber-rich, with tons of cash and not much care to spare? Nope. 76% of traders in the F&amp;O space in FY24 had an annual income of less than Rs 5 lakh. 2 years ago, their share stood at 71%. And their choice of poison? Options! In FY24, 60% of traders made losses trading in futures, but a whopping 91.5% burnt their funds trading in options. Mind you, futures are riskier than options. With futures, which require significant capital investment, the buyer and seller both are contractually bound to adhere to the pre-determined strike price of the futures or options contract, irrespective of whether the prevailing prices are higher or lower (and thus, resulting in losses for either the buyer or seller). With options, since this adherence ain't necessary, individuals end up taking debt to take highly leveraged positions while trading here. <h2>Scale of the explosion</h2>Anyone who trades even infrequently will tell you that a demat account is the mitochondria or powerhouse of the trading cell. As of August 2024, India had over 17.1 crore <keyword id="20957284" type="General" weightage="20" keywordseo="demat-accounts" source="keywords">demat accounts</keyword>, which are a prerequisite for trading in the markets. India is the 9th biggest country in the world, in terms of total demat accounts. Did you know that our demat accounts are at par with the entire population of Bangladesh? Talk about scale! Just 4 years ago, in March 2020, this number was a mere 4 crore. Naturally, the total F&amp;O turnover on both <keyword id="20004725" type="General" weightage="20" keywordseo="NSE" source="keywords" meta.keywordsubtype="org" meta.entityname="NSE" meta.hostid="261" meta.entityid="NSE">NSE</keyword> and BSE has hit the roof, and also broken it. As of October 4, 2024, the total futures and options turnover on NSE stood at a massive Rs 4,78,27,27,750.30 crore. Good luck counting the thousands! <table style="border-width: initial; border-style: none;" class="redcator-table-advance"></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Year </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Total Turnover (Both Futures and Options) (In Rs Crore) </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">2020-21 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">64,36,03,951.51 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">2021-22 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">1,69,52,33,134.47 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">2022-23 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">3,82,23,26,468.06 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">2023-24 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">7,99,27,67,152.43 </td></tr></tbody><tbody></tbody><tbody></tbody><tbody></tbody></table>Source : NSE Another metric that underlines the meteoric growth of trading in India is the collection of STT or <keyword id="20930760" type="General" weightage="20" keywordseo="Securities-Transaction-Tax" source="keywords">Securities Transaction Tax</keyword>. As of September 2024, India's STT mop-up had gone past Rs 26,000 crore. Traders have to pay STT whenever they buy or sell any security in the market. So, more trading brings in more STT, and hence, more revenue for the government, so they're not really complaining. After all, this is certainly what they'd call enviable growth. As of August 2023, our STT collection stood at about Rs 21,599 crores. And in FY20-21, India's STT collection had been Rs 16,000 crore. If only our salaries also managed to grow at this rate! <h2>So, what's happening?</h2>Two things. One, it's the big bulls who are raking in all the moolah. And it's the younger lot (those aged under 30) who are propping them up for this. In FY24, 43% of individual traders in the market were less than 30 years of age. In just one year, this number has swelled by 12 percentage points from just 31% of individual traders. But who says ageing is bad? Wrinkles and silver hair seemingly have a propensity of incurring lesser losses in the market. In FY24, only 79% of traders aged above 60 years made losses, as compared to 93% of those aged below 30. Small and mid-income traders, which make up 98% of the total trader base, witnessed average losses per person of Rs 65,000 and Rs 1.5 lakh in FY24 in futures and options, respectively. The winner here? Clearly, the big bulls, who declared an annual income of over Rs 1 crore, ended up with average profits of Rs 96,000 per person this year. <h2>What’s the sheriff up to?</h2>The government has finally swung into action, hiking the STT rate for F&amp;O during this year’s budget. Effective October 1, 2024, the STT on futures stands at 0.02%, up from 0.0125%. For options, it was upped to 0.1% versus 0.0625% previously. Small margins, but huge impact oncoming. Says Puneet Sharma- CEO and Fund Manager at Whitespace Alpha, “SEBI aims to enhance market stability while safeguarding investor interests, reflecting the regulator's intent to balance risk management with market participation”. But this might come with its own share of challenges, too. “Stricter norms around leverage, transparency, and capital adequacy could limit the ability of investors to determine their own risk appetite, thereby stifling innovation in trading strategies. Over-regulation in an environment that thrives on strategic flexibility and creativity could dampen the market’s dynamism, affecting India's competitiveness in the global derivatives landscape”, he observes. SEBI recently came out with a set of guidelines that aim to thwart <keyword id="19972907" type="General" weightage="20" keywordseo="retail-investors" source="keywords">retail investors</keyword>' participation in futures and options and hinder them from taking undue risks. Here's a quick recap of what's to come for the residents of the F&amp;O town Margin Requirements: To battle the high volatility and chaos which is generally seen on expiry days(i.e the last mandated date, post which an option becomes invalid), SEBI will put in place an extreme loss margin (ELM) of 2% for all open short options on the day of expiry. Translation? Traders will need to pony up more cash upfront, leaving them with fewer funds to take on risky bets. It ain't a choice: No more of one expiry every single day! Going ahead, an exchange like BSE or NSE will just be able to offer weekly expiries, that too, only on one benchmark index, as opposed to an entire buffet it currently offers. At present, NSE offers weekly options contracts for its financial index, bank and midcap indices. But say goodbye to this, and hello to derivatives on only 1 index per exchange. Raising the bar: Effective November 30, 2024, the minimum contract value for index derivatives will be upped to Rs 15 lakh, from the present Rs 5-10 lakh. The hope is that by making it ultra-expensive to enter these trades, investors will be dissuaded from taking on risky trades. Pay upfront: Starting February 2025, those trading in options will have to pay the entire options premium upfront, even before their trades are executed. This is because options generally carry very high leverage, and paying a significant sum upfront can force traders to think twice. Invigilation Pro Max: Starting April 1 2025, to make sure that the number of positions for equity index derivatives does not slyly slip over the mandated limit, especially on expiry days when trade volumes are huge, the exchanges will have to take a minimum of 4 position snapshots randomly. The question is, will these injections of sobriety be enough to calm down the steroid-fed bull of the futures and options market in India? Well, only time and market turnover will tell! For more insights into the financial markets and business news, stay tuned to our site and social media handles. And don’t forget to subscribe to Business Insider India’s newsletters for your weekly dose of Simply Put! Disclaimer: The content on this website is for informational purposes only and should not be construed as investment advice. We recommend readers consult certified, qualified and registered advisors for professional and personalised financial advice.

SIMPLY PUT: SEBI is on a mission to take on the wild, wild west of futures and options in India. Here’s why, what, and how

<ul><li>Stocks soared Friday after a light April jobs report gave investors hope of a rate cut sooner than later.</li><li>Expectations have been pushed out in recent weeks following a series of hot economic data.</li><li>The US economy added 175,000 jobs last month, below expectations of 238,000.</li></ul>US stocks soared Friday after a light April jobs report sent bond yields tumbling and increased the chances of an interest-rate cut from the Federal Reserve later this year.The <a href="https://www.businessinsider.com/labor-market-april-unemployment-rate-job-growth-wages-2024-5">US economy added 175,000 jobs in April,</a> well below economists' forecast of 238,000 jobs and far short of the 303,000 added in March. Meanwhile, the unemployment rate ticked higher, to 3.9% from 3.8%.The light jobs report should give the Fed more flexibility in speeding up the timing of rate cuts, and bond yields fell significantly with that sentiment in mind. The 10-year Treasury note dropped 10 basis points to 4.48%. Investors have been closely watching economic data — and the Fed's reaction to it — for signs of when the central bank will lower interest rates. In recent weeks, expectations for cuts have been pushed out as data has come in hot. The market is in a situation where negative economic news is positive for risk assets such as stocks."The April jobs report was just what the market ordered," Russell Price, the chief economist at Ameriprise, wrote in a client note. "Job growth was solid and well distributed, but the pace eased considerably relative to the first quarter's surprisingly strong gains."Friday's jobs report was the "first material 'downside surprise' in over two years," Key Wealth's chief investment officer, George Mateyo, added in comments to Business Insider. "Yet the weakness was not so weak to suggest that the labor market is rolling over. It was a slowdown that the Fed and many market participants have been wanting for some time."Also helping boost stocks Friday was <a href="https://www.businessinsider.com/apple">Apple</a>, which surged about 7% after <a href="https://www.businessinsider.com/apple-stock-aapl-quarterly-earnings-call-report-live-updates-2024-5">it reported a better-than-feared second-quarter earnings report.</a> The iPhone maker also launched a historic $110 billion stock-buyback program and increased its quarterly dividend by 4%, which was cheered by investors.Here's where US indexes stood at 10:30 a.m. on Friday: <ul><li><a href="https://markets.businessinsider.com/index/s&amp;p_500?utm_source=markets&amp;utm_medium=ingest%3Futm_source%3Dmarkets&amp;utm_medium=ingest&amp;utm_medium=ingest&amp;utm_source=markets">S&amp;P 500</a>: 5,109.27, up 0.9%</li><li><a href="https://markets.businessinsider.com/index/dow_jones?utm_source=markets&amp;utm_medium=ingest%3Futm_source%3Dmarkets&amp;utm_medium=ingest&amp;utm_medium=ingest&amp;utm_source=markets">Dow Jones Industrial Average</a>: 38,576.90, up 0.9% (352 points)</li><li><a href="https://markets.businessinsider.com/index/nasdaq_composite?utm_source=markets&amp;utm_medium=ingest%3Futm_source%3Dmarkets&amp;utm_medium=ingest&amp;utm_medium=ingest&amp;utm_source=markets">Nasdaq composite</a>: 16,098.73, up 1.6%</li></ul>Here's what else was going on Friday: <ul><li><a href="https://www.businessinsider.com/apple-stock-aapl-quarterly-earnings-call-report-live-updates-2024-5">Here's a breakdown of Apple's second-quarter earnings report</a> and comments from the company's earnings call.</li><li><a href="https://markets.businessinsider.com/news/stocks/recession-outlook-stock-bull-market-bubble-stagflation-bank-of-america-2024-5">The stock market's bull run will end in either a bubble or a recession</a>, the Bank of America strategist Michael Hartnett said.</li><li><a href="https://markets.businessinsider.com/news/stocks/apple-record-stock-buyback-bigger-boeing-airbnb-chipotle-market-cap-2024-5">Apple's $110 billion stock-buyback program is worth more than the total value of companies</a> including Boeing, Chipotle, and Airbnb.</li><li><a href="https://www.businessinsider.com/housing-market-home-prices-mortgage-interest-affordability-crisis-janet-yellen-2024-5">Treasury Secretary Janet Yellen voiced concerns to Congress about the difficulty of buying a starter home in America</a>.</li></ul>In commodities, bonds, and crypto: <ul><li><a href="https://markets.businessinsider.com/commodities/oil-price">West Texas Intermediate</a> crude oil dropped 0.08% to $78.89 a barrel. <a href="https://markets.businessinsider.com/commodities/oil-price">Brent crude</a>, the international benchmark, rose 0.11% to $83.76 a barrel.</li><li><a href="https://markets.businessinsider.com/commodities/gold-price">Gold</a> edged higher by 0.06% to $2,311.20 an ounce. </li><li>The 10-year Treasury yield fell 10 basis points to 4.48%.</li><li><a href="https://markets.businessinsider.com/currencies/btc-usd">Bitcoin</a> jumped 3.49% to $61,148.</li></ul>

Why Wall Street is so happy to see the job market slowing down

<ul class="summary-list"><li>US stocks traded slightly lower as investors pressed pause on the rally to record highs.</li><li>The S&amp;P 500 and Dow Jones hit record highs on Thursday after the Federal Reserve's 50 basis point rate cut.</li></ul>US stocks traded sightly lower on Friday as investors pressed pause on the ongoing rally to record highs.The muted trading activity on Friday followed Thursday's trading session, which saw the S&amp;P 500 and Dow Jones Industrial Average indexes leap to record highs, while the Nasdaq 100 surged nearly 3%.Those gains were sparked by the Federal Reserve's Wednesday interest rate cut of 50 basis points, the first rate cut in over four years. For a lot of investors, the Fed's dovish move suggests that a soft landing for the US economy is within reach, with markets clinging to Fed Chair Jerome Powell's characterization of the economy and the labor market as being a good place. "We continue to believe a soft landing is the most likely economic scenario which makes the current environment most comparable to the mid-1990s,"BMO's Brian Belski said in a note on Thursday.According to NYSE senior market strategist Michael Reinking, Friday could see heavy trading activity due to a surge in option expirations.The so-called triple witching day occurs when there is a simultaneous expiration of stock options, index options, and index futures contracts. It occurs on the third Fridays of March, June, September, and December every year, and sees heavy trading and a potential burst of volatility. "Today is triple witch expiration and the S&amp;P quarterly index rebalances which is typically one of the heaviest volume days of the year, primarily occurring in the closing auction. If the market starts to trend and break strikes this could add to the momentum," Reinking said in a note on Friday.Here's where US indexes stood shortly after the 9:30 a.m. opening bell on Friday:<ul><li><a target="_blank" href="https://markets.businessinsider.com/index/s&amp;p_500?utm_source=markets&amp;utm_medium=ingest%3Futm_source%3Dmarkets&amp;utm_medium=ingest&amp;utm_medium=ingest&amp;utm_source=markets">S&amp;P 500</a>: 5,705.86, down 0.14%</li><li><a target="_blank" href="https://markets.businessinsider.com/index/dow_jones?utm_source=markets&amp;utm_medium=ingest%3Futm_source%3Dmarkets&amp;utm_medium=ingest&amp;utm_medium=ingest&amp;utm_source=markets">Dow Jones Industrial Average</a>: 41,984.29, down 0.08% (-34.30 points)</li><li><a target="_blank" href="https://markets.businessinsider.com/index/nasdaq_composite?utm_source=markets&amp;utm_medium=ingest%3Futm_source%3Dmarkets&amp;utm_medium=ingest&amp;utm_medium=ingest&amp;utm_source=markets">Nasdaq composite</a>: 17,991.88, down 0.12%</li></ul>Here's what else is going on:<ul><li><a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/djt-stock-price-record-low-donald-trump-lockup-expiration-sell-2024-9">Trump Media stock plunged to a record low as the lockup period for insiders expires, giving them clearance to sell shares.</a></li><li><a target="_blank" class="" href="https://www.businessinsider.com/home-depot-lowes-stock-fed-rate-cut-benefit-2024-9">Home Depot and Lowe's are already seeing the benefits from the Fed's first interest rate cut.</a></li><li><a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/interest-rates-fed-cuts-recession-us-economy-outlook-1995-2024-9">The Federal Reserve is following its 1995 playbook, which is great news for both the stock market and economy.</a></li></ul>In commodities, bonds, and crypto:<ul><li><a target="_blank" href="https://markets.businessinsider.com/commodities/oil-price">West Texas Intermediate</a> crude oil decreased 0.46% to $70.83 a barrel. <a target="_blank" href="https://markets.businessinsider.com/commodities/oil-price">Brent crude</a>, the international benchmark, dropped 0.55% to $74.47 a barrel.</li><li><a target="_blank" href="https://markets.businessinsider.com/commodities/gold-price">Gold</a> was up 0.89% to $2,637.80 an ounce.</li><li>The 10-year Treasury yield was higher by 3 basis points at 3.746%.</li><li><a target="_blank" href="https://markets.businessinsider.com/currencies/btc-usd">Bitcoin</a> was down 0.02% to $62,948.</li></ul>

Stock market today: Indexes edge down as traders hit pause after rally to record highs

<ul class="summary-list"><li>US stocks traded mostly flat as investors looked toward Nvidia's earnings report due after the close.</li><li>Markets are eyeing another earnings beat, but there's also caution around chip delays. </li></ul>US stocks inched lower on Wednesday as traders awaited the upcoming <a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/nvidia-earnings-preview-stock-price-artificial-intelligence-ai-investing-blackwell-2024-8#:~:text=It%20models%20%2428.5%20billion%20in,billion%20upside%20to%20consensus%20outlooks.&amp;text=However%2C%20Citi%20noted%20that%20Nvidia's,weigh%20on%20the%20firm's%20performance.">Nvidia earnings report</a>. All three benchmark indexes dipped slightly in the red, while <a target="_blank" class="" href="https://markets.businessinsider.com/stocks/nvda-stock">Nvidia</a> shares traded 1% higher.Expectations are high for the chipmaker, with investors looking for another earnings beat and solid clues about how the massive investment in AI is working out for Nvidia's customers. The firm's results have the potential to fuel a major swing in the market, with Goldman Sachs noting on Tuesday that the report could spark a $300 billion swing for Nvidia's stock based on options pricing this week. The stock is already trading close to record highs, adding to the risk that a small miss on expectations could spur a big move down. "For equities, all attention is now on Nvidia's earnings release tonight, which has helped to drive significant moves recent quarters," Deutsche Bank strategists said in a note Wednesday morning. "Bear in mind that Nvidia's share price is already up +159% on a YTD basis, making it the top performer in the entire S&amp;P 500, and it has risen by more than +1000% since its low in October 2022."Traders are also waiting on comments from Atlanta Fed President Raphael Bostic, who's scheduled to speak after the closing bell. His remarks could provide more guidance on the path of Fed rate cuts this year, with investors pricing in as many as 150 basis points worth of cuts by year-end, according to the <a target="_blank" class="" href="https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html">CME FedWatch tool</a>.Here's where US indexes stood shortly after the opening bell on Monday:<ul><li><a target="_blank" href="https://markets.businessinsider.com/index/s&amp;p_500?utm_source=markets&amp;utm_medium=ingest%3Futm_source%3Dmarkets&amp;utm_medium=ingest&amp;utm_medium=ingest&amp;utm_source=markets">S&amp;P 500</a>: 5,623.67, down 0.04%</li><li><a target="_blank" href="https://markets.businessinsider.com/index/dow_jones?utm_source=markets&amp;utm_medium=ingest%3Futm_source%3Dmarkets&amp;utm_medium=ingest&amp;utm_medium=ingest&amp;utm_source=markets">Dow Jones Industrial Average</a>: 41,252.06, down 0.01% (-1.56 points)</li><li><a target="_blank" href="https://markets.businessinsider.com/index/nasdaq_composite?utm_source=markets&amp;utm_medium=ingest%3Futm_source%3Dmarkets&amp;utm_medium=ingest&amp;utm_medium=ingest&amp;utm_source=markets">Nasdaq composite</a>: 17,748.91, down 0.07%</li></ul>Here's what else is going on today:<ul><li><a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/nvidia-stock-300-billion-market-value-swing-q2-earnings-options-2024-8">Nvidia's earnings report could spark a $300 billion swing in the stock</a>, Goldman Sachs said.</li><li><a target="_blank" class="" href="https://markets.businessinsider.com/news/currencies/bitcoin-millionaires-crypto-rally-cryptocurrency-etf-billionaires-sec-ethereum-wealth-2024-8">The number of bitcoin millionaires has soared 111% over the last year</a>.</li></ul>In commodities, bonds, and crypto:<ul><li><a target="_blank" href="https://markets.businessinsider.com/commodities/oil-price">West Texas Intermediate</a> crude oil slipped 1.02% to $74.75 a barrel. <a target="_blank" href="https://markets.businessinsider.com/commodities/oil-price">Brent crude</a>, the international benchmark, dipped 0.92% to $77.93 a barrel.</li><li><a target="_blank" href="https://markets.businessinsider.com/commodities/gold-price">Gold</a> moved lower 0.9% to $2,502.25 an ounce.</li><li>The 10-year Treasury yield was flat at 3.825%.</li><li><a target="_blank" href="https://markets.businessinsider.com/currencies/btc-usd">Bitcoin</a> dropped 4% to $59,827.</li></ul>

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