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 should give equities a boost, sinking interest rates also means some of the sweetest deals rewarding steady savers are coming to an end.

Over the past few years, high-yield savings accounts and other cash equivalents, such as money market funds, offered investors an 

: You could earn a steady 5% return in cash without the risk that comes with volatile equities. That meant crypto bros and day traders had to come to terms with the fact that their cautious peers were making more from sitting in a basic savings account than they were refreshing FinTwit every 30 seconds.

But now, with interest on high-yield accounts poised to fall as the Fed cuts rates, the tables are turning. While rates won’t all come crashing down at once, the juice from cash accounts has probably already been squeezed, which means it’s time to figure out where to invest next.

High-yield savings accounts are a great way to protect your rainy day fund from inflation, and financial advisors across the board recommend keeping about 

 of living expenses in cash. If you’re saving for a big expense that’s still a few years away, such as a down payment for a home, for example, the pros say that funds are 

For the long run, right now is the perfect time to lock in longer-term yields from investments like Treasury bonds, according to analysts, in order to secure rates before the Fed announces cuts on Wednesday.

But while it’s tempting to park your hard-earned money in the safety of fixed income, remember that being too afraid of risk can be almost as harmful as taking on 

 risk. Cash returns are about to fall back down to earth, and staying on the sidelines means you might miss out on the power of compounding interest in the stock market.

“In addition to managing cash flows for short-term expenses, investors should hold a portfolio that aims to meet their financial objectives over a lifetime,” explained Solita Marcelli, CIO Americas at UBS, in a note today. “The focus, in our view, is to produce consistent growth and income to ensure that their lifetime spending needs will be met, even if there is a stretch of volatility or poor market returns.”

While your portfolio is yours to design, be aware that in the years to come, you won’t be earning the same risk-free returns in cash that you’ve recently enjoyed. While stocks are volatile, they pack a punch over time. So dive back into equities, the water is warm.—

Cash yields have been sky high, but that will change soon

With the Fed cutting interest rates this week, yields on cash will drop in the weeks ahead.

The cash cow has been put out to pasture

Who knew that exchange-traded funds (ETFs), those traditionally passive, slow-moving investment vehicles, could drum up so much excitement?

The historic launch of several spot bitcoin ETFs earlier this year is certainly a 

, but asset managers are banking that investors will have an appetite for the second most popular cryptocurrency—ethereum—as well.

, rolled out by firms including Grayscale, BlackRock, and Fidelity, started trading today. Ninety minutes into trading, the ETFs had already collectively accrued over $360 million 

, according to Bloomberg data posted by analyst Eric Balchunas.

Here’s the lineup of new ethereum ETFs, their ticker symbols, and their corresponding fees:

iShares Ethereum Trust (ETHA), Fee: 0.25%

Grayscale Ethereum Trust (ETHE), Fee: 2.5%

Grayscale Ethereum Mini Trust (ETH), Fee: 0.15%

21Shares Core Ethereum ETF (CETH), Fee: 0.21%

Fidelity Ethereum Fund (FETH), Fee: 0.25%

Invesco Galaxy Ethereum ETF (QETH), Fee: 0.25%

Ethereum rose just under 1% on Tuesday, and is up over 50% year to date.

The funds finally hit the market after years of regulatory back-and-forth with the Securities and Exchange Commission ever since VanEck filed for the first fund in 2021. After the SEC 

 in January, the door was finally cracked open for spot crypto products. But the agency didn’t grant full approval to ethereum ETFs until yesterday, even though the funds won partial approval in a surprising SEC decision in May.

Even the most bullish acknowledge that ethereum doesn’t have quite the same street cred as bitcoin. While bitcoin’s value proposition as “digital gold” is relatively straightforward, ethereum’s appeal as a “technology asset” is a little less obvious to non-crypto experts.

But analysts still forecast a higher influx of assets compared to your average ETF launch. Bloomberg ETF analysts Eric Balchunas and James Seyffart project BlackRock and Fidelity will take in the lion's share of assets, and wrote in a recent note that the funds were likely to bring in about 20% of the assets that spot bitcoin ETFs did in their first year, or somewhere in the ballpark of $5 to $6 billion total.

For reference, the largest spot bitcoin ETF, the 

over $22 billion in assets under management

And others in the industry are hoping that investors will warm up to the pitch of ethereum as a technological platform.

“If Bitcoin is digital gold, then perhaps its best to describe ethereum like Apple, as it is a platform, almost like an app store, but for open finance,” explained co-founder of VC firm Framework Ventures Vance Spencer, which invests in ethereum application firms, in a written comment. “Just like how tech investors might purchase a basket of FAANG stocks, I think many investors will soon seek new types of crypto exposure beyond bitcoin ETFs, and the launch of the Ethereum ETF will kickstart that trend.”

One aspect of the asset management world has made its mark on these products already—fee competition. ETFs have historically fostered a highly cutthroat fee environment, as huge firms like BlackRock and Vanguard consistently cut their fees to razor-thin margins, undercutting more expensive funds.

A number of firms, including Bitwise, BlackRock, and Invesco, are offering 

 for the first few months of trading, meaning you can get in on the fun for free (for now).—

Ethereum ETFs went live today

The SEC has approved the next batch of crypto ETFs, which began trading this morning.

The ethereum floodgates are officially open

The first half of the year has been a smash hit for the stock market, with all large-cap indexes repeatedly 

. But investors are now asking themselves the age-old question: How long can the good times keep rolling?

While nobody has a crystal ball, top Wall Street analysts have some ideas about how things will play out across the markets over the next six months.

“The first six months of the year may have felt like a roller coaster to some investors,” explained Chief Investment Officer Americas at UBS Solita Marcelli in a recent note about his second-half outlook. “But market performance has justified staying invested and underscored the merits of diversification.”

Morgan Stanley Strategist Serena Tang seconded that opinion. “Moderate growth, disinflation, rate cuts, and supportive flows and fundamentals make for a good set-up for risk assets in 2H24,” Tang wrote in a global mid-year outlook.

And if history is any indication, stocks will keep going up through the end of the year. “Since 1990, there have been 10 occasions where the S&P 500 index has achieved a return greater than 10% at midyear. In each instance, the index produced a positive return in the second half of the year, averaging a 10.8% return over the next six months and 14.2% over the next 12 months,” wrote Chief Investment Officer for Comerica Wealth Management John Lynch in a note yesterday.

Even though we here at Brew Markets may seem omniscient and all-knowing, we still defer to the experts for investment ideas. Here is what they say you should consider adding to your portfolio in the second half of 2024:

Morningstar analyst Dsavid Sekera warned that AI stocks could be 

 sectors as value alternatives. “While a rising tide can lift overvalued AI stocks even further into overvalued territory in the short term, in the future we think long-term investors will be better off paring down positions in growth and core stocks, which are becoming overextended, and reinvesting those proceeds into value stocks, which trade at an attractive margin of safety.”

UBS’s Marcelli pointed to global equities as a way for investors to diversify amid geopolitical instability. “We continue to see a supportive backdrop for global equities, and expect discount factors to decline as inflation normalizes and central banks embark on an easing cycle. Aside from AI beneficiaries, we see quality growth opportunities in 

, and companies that can reinvest their earnings at returns consistently above their weighted-average cost of capital.”

“At current valuations, small caps have certainly discounted a significant amount of potential bad news and therefore represent an attractive opportunity,” wrote Glenmede Investment Management Portfolio Manager Jordan Irving. He pointed specifically to 

 as his picks within small caps, and recommends companies that “are generating significant operating cash flows and are using that cash to retire debt, return cash to shareholders through dividends/share buybacks, and pursue strategic M&A.”

We think credit markets will continue to face challenges in delivering returns exceeding yields on the 3 month t-bill, until the Fed starts cutting rates or spreads widen or both,” wrote Bank of America’s credit strategist Oleg Melentyev in a recent forward-looking note. “We advocate an 

, just as we have done most of this year.”

What else should you keep an eye on in the second half of 2024?

Spot ethereum ETFs are likely to hit the market this year. “Everyone wants to know how much spot ether exchange-traded products will attract in net flows. My answer: $15 billion in their first 18 months,” wrote Matt Hougan, the chief investment officer of Bitwise, in a 

 “We also see gold as an attractive geopolitical hedge and portfolio diversifier, and rate the metal as most preferred,” wrote Marcelli. A team of Morgan Stanley analysts led by Tang pointed to 

 as investments with room to run. “Toward year-end, good demand and a tightening balance drive copper, while tailwinds from falling rates and strong physical demand keep gold supported, and summer tightness lifts Brent prices.”

As the year has progressed and the market has continued to run higher, numerous Wall Street firms have raised their 

 this summer. The leader of the bulls is Evercore’s Julian Emanuel, who raised his year-end prediction to 6,000 in June. Goldman Sachs analyst David Kostin also upped his target from 5,200 to 5,600 last month. 

Even Morgan Stanley’s Mike Wilson, a notorious bear, raised his target to 5,400 in late May, a significant jump from his previous 4,500 forecast. Now, JPMorgan’s Dubravko Lakos-Bujas has the 

 of 4,200, which he set way back in November.

Wherever the market winds up, the rest of 2024 is sure to be a wild ride—but Brew Markets will be here to help you understand every twist and turn along the way.—

a graphic of a cartoon man walking on a stock market chart

The second half of the year should bring more stock market gains.

Wall Street pros break down how to invest in the second half of 2024.

What to expect when you’re expecting volatility

Super-charge your industry know-how with insights, tools, and tips from our team

Resources

We’re halfway through 2024, and what a year it has been for the stock market. Every major large-cap stock index rose through the first six months of the year, driven largely by tech gains powered by 

The S&P 500 gained 15% since January, and hit an impressive 31 all-time highs so far this year, topping out at 5487 in late June. The Nasdaq is up about 18%, and the stodgy, largely tech-free Dow has risen a less-impressive 3.83%.

 on their backs. Nvidia, Microsoft, Apple, Google, and Amazon made up 62% of the equal-weighted S&P 500’s return year to date, according to Goldman Sachs analyst David Kostin.

 in the first half of the year thanks to its ties to the AI trade, propelling the sector up about 9%. Real estate fared the worst, sinking 2% in the first half, according to Kostin.

The best performers of the first half year were 

, which surpassed a market cap of $3 billion after rising about 155% since January; and 

, which rose 125% year to date thanks to its position as a key electricity supplier to AI datacenters.

The worst performers of the year were Walgreens Boots Alliance, which tanked 52% after a recent terrible earnings report; Lululemon Athletica, which is down 42% thanks in no small part to the resignation of its longtime chief product officer; and Intel, which fell 38% after apparently missing the AI boat.

Heading into the year, investors had hoped that the Federal Reserve would deliver up to six rate cuts—but their 

 by inflation, which remained sticky into the first quarter of the year, pushing bond yields even higher.

Only the most recent PCE readings have shown that 

. Now, most economists predict one rate cut coming in September.

In spite of inflation hanging around, investors are feeling good about the market’s performance at halftime. However, 

 throughout the second quarter illustrates that the market’s growth could be dangerously focused on the tech sector. The equal-weight S&P 500, which doesn’t place as much emphasis on the huge market caps of the tech behemoths, is only up 4% this year—a steep underperformance compared to its market cap-weighted cousin.

“The AI story has continued, yet signs of weakening economic activity helped drive down market interest rates in the second quarter,” explained Chief Investment Officer of Comerica Wealth Mangement John Lynch in a recent note. “This propelled stocks higher, leaving investors to ponder the sustainability of valuations.”

What else do investors need to know besides Nvidia is still Nvidia-ing?

The S&P 500 gained 10.8% in the first quarter, 

while only gaining 4.6% in the second quarter of the year. The AI momentum 

 over the second quarter, causing a tech selloff.

The small-cap Russell 2000 only gained 1.7% over the first half, and was down 3.3% in the second quarter of this year, as 

. Bitcoin has gained about 47% year to date after novel spot bitcoin exchange traded funds were approved in mid-January. The 

 up with it as well, with the digital asset rising about 50% year to date as it prepares to get its own ETFs.

. “The Bloomberg Aggregate Index had fallen more than 3.5% between the start of the year and mid-April as investors began pricing out the overly optimistic expectations for Fed rate cuts in 2024,” wrote Lynch.

 and supply shortages plague the oil market. 

 22% this year, outpacing gold and copper, which both gained about 13% through the first six months of the year. All three commodities have benefited from the market’s focus on AI and electrification, but silver has outperformed thanks to strong demand from China.

There hasn’t been a dull moment in 2024 yet, and no doubt the second half will have plenty of excitement in store for us as well. —

The stock market soared in the first half of 2024

Each large cap index hit an all-time high in the first six months of this year. 

Halftime report 

Mark Reeth

On October 31, 2008, a mysterious figure known only as Satoshi Nakamoto wrote 

 477 times in the 16 years since that fateful day Nakamoto revealed his idea for a new online payment system, yet here we are: staring at a six-figure price point for the king of cryptocurrency.

But the road to get here has been long and winding, with shifting public opinion, angry political rhetoric, and a piece of NFT artwork called 

For the uninitiated, the curious, or the nostalgic, here’s a short & sweet timeline of bitcoin’s rise to $100,000.

The Genesis Block, an undeniably cool name for the first block on bitcoin’s blockchain, was released on January 3, 2009. Hardly anyone noticed, and the nascent crypto wallowed at around $0.10 per bitcoin for well over a year.

There it would stay until October 2010, when only the nerdiest of techies began to understand the potential of a decentralized payment system. Bitcoin climbed to $0.20, then $0.30 by the end of the year. It wasn’t until February 2011 that the crypto broke above $1.00 for the first time (probably when you should’ve bought it).

Although a niche audience of devotees was slowly but surely coalescing around crypto, it wasn’t until 2013 that bitcoin really began to gain attention.

Bitcoin experienced its first true bubble that year, rising from $20 in January to $230 in April, then plunging back down to under $70. But by November, it rose to a high of $1,200, ending the year at just over $800.

2013 was also a pivotal year for bitcoin’s usage. That was the year the FBI shut down Silk Road, where bitcoin, due to its untraceable nature, was 

 for illicit transactions. That reputation would haunt bitcoin in the years to come, partially leading to the Chinese government 

banning banks from transacting in bitcoin

The cryptocurrency industry was still figuring out how to work, with crypto exchanges popping up and dropping off the map seemingly daily. 2014 was highlighted by a multimillion-dollar hack of crypto exchange Mt. Gox—the effects of which 

Attacks like the one against Mt. Gox would happen regularly, with targets like bitcoin exchanges Bitstamp and BTC-e. But it was also a year of hope, with both PayPal and Microsoft allowing bitcoin payments on their respective platforms for the very first time. It also saw 

the debut of bitcoin’s closest competitor

Bitcoin spent most of 2015 consolidating higher slowly but surely. 2016 was more of the same, with bitcoin climbing from $445 at the beginning of the year to $936 by the end.

Bitcoin began that year a hair above $1,000. But by December, the price had skyrocketed to above $19,000.

During the months between, bitcoin entered the public consciousness in a major way. Headlines touting “bitcoin millionaires” caught plenty of attention from retail investors who wanted in on the action, while crypto coders decided bitcoin shouldn’t be the only game in town. The debut of many Initial Coin Offerings (ICO’s) featuring new, weird, 

 injected the booming industry with over $2 billion in funding as everyday investors dove in headfirst.

Financial regulators took notice as well. Some, like then-IMF Managing Director Christine Lagarde, wrote that digital currencies could very well be 

 for cryptocurrencies to be available to the broader investing public.

But everyone saw an opportunity for profit. Plenty of 

 came on line, while bitcoin futures began trading on the Chicago Board Options Exchange in December.

However, the next few years made it seem like bitcoin’s heyday was behind it. Bitcoin occasionally enjoyed a pop, particularly in the summer of 2019, but the OG crypto fell lower and lower until the last time it was reasonably affordable: March 2020.

With lockdowns in place and traders’ pockets filled with stimulus checks, retail investors sought entertainment where they could. They found it in bitcoin, sending the cryptocurrency soaring from $5,182 in March 2020 all the way to $28,868 by the end of the year.

2021 was even wilder—Bitcoin rose as high as $63,500 in April, dropped as far as $29,800 in July, and regained all that lost ground to hit $67,500 in November.

Forget “crypto millionaires”—the world was introduced to 

Bitcoin surged on its promise as a hedge against currency debasement due to the influx of liquidity by central banks around the globe. But many called that thesis into question, such as Warren Buffett, who famously stated that bitcoin “

Throughout it all, investors looked for new ways to invest in crypto. That took many different forms, from the rising popularity of 

Institutions sought out ways to cash in as well. El Salvador famously 

, and BlackRock became one of the first major Wall Street firms to 

2021 was a euphoric high for bitcoin, with celebrities as esteemed as Paris Hilton 

2022, however, was a terrible low. The “crypto winter” set in with fury, squelching crypto hopes and pushing the price of bitcoin down to $15,886 by November.

The problems seemed to be coming from all angles. Inflation was rising stateside, forcing the Federal Reserve to raise interest rates, curtailing both liquidity and risk appetite among investors. In China, the linchpin of the global crypto mining industry, the government moved to shutter mining operations.

Most problems, however, came from the crypto industry itself. Several cryptocurrencies that had flown higher in the last year suddenly collapsed in on themselves, such as 

But the biggest domino to fall that year was 

. The implosion of one of the most-trusted names in the crypto world sent shockwaves across the industry and spurred on a massive sell-off. Founder Sam Bankman-Fried would be convicted of fraud and sentenced to 25 years in prison, while bitcoin sank to just above $16,500 by the end of 2022.

Bitcoin spent most of 2023 gaining ground thanks to a higher appetite for risk from investors eager to profit from the AI boom. The crypto ended the year a bit above $42,100, and would enter this year on a hot streak.

2024 got off to a great start for bitcoin, with the SEC finally 

. That allowed a surge of investing inflows that powered bitcoin higher, and investor enthusiasm was only heightened by the debut of 

Bitcoin rose as high as $73,000 in March, but spent the summer selling off before election season began in full. Republican candidate Donald Trump’s promises of a looser regulatory environment for all cryptocurrencies spurred a speculative buying spree that rose to a fever pitch on his election victory.

Since the conclusion of the US presidential election in early November, bitcoin has soared over 45% higher to just above $100,000.

As for where bitcoin goes from here, only time will tell.

A brief history of bitcoin

Wondering how bitcoin became the crypto king?

The day reserved for expressing gratitude and spending time with your family is finally upon us.

But let’s be real: Sometimes you leave Thanksgiving dinner grateful for the other 364 days you don’t have to explain to your aunt why you’re 

 single, or sit through your cousin’s explanation of why dogecoin is the future of currency, or listen to your uncle lay out his latest multi-level marketing scheme.

If there’s one thing your extended family loves more than your grandmother’s award-winning cranberry sauce, it’s throwing intrusive questions at you with such fervor and lack of personal boundaries that you have no choice but to salute their zeal.

Evading personal questions with economic answers

Here’s one tactic to survive the day: Steer the conversation toward your vast market knowledge and away from the state of your love life.

To help, the experts at Bank of America have drafted a plan to navigate your relatives' most pressing economic questions—with answers so robust your mom won’t be able to get a word in edgewise to ask you when she’s getting grandchildren.

"I love having all of you over, but food seems so expensive these days. Why do these economists keep saying inflation is down?"

"’Inflation’ usually refers to the increase in prices over the last year. Prices have increased a lot since 2019, but not much over the last year,” Bank of America economists wrote in a recent note.

Even though the Federal Reserve slashed rates in September and 

, shoppers everywhere are still feeling the burden of high prices. Big box retailers are cutting prices to woo back customers, but some, like Walmart, 

 might force them to raise prices once again.

"Okay, but with such high prices, how come we haven't had a recession? Is it only a matter of time?"

BofA economists suggest tackling this one with:

 “Robust real income growth and fiscal support are among the factors that have kept the economy strong. 2025 should be another solid year.”

 a soft landing—keeping inflation down and still lowering interest rates, all while avoiding a recession. It helped that income has risen more quickly than inflation over the last two years, and that many Americans locked in cheap mortgage rates back when interest rates were still low.

Bank of America economists believe that there’s more good ahead than bad. “Real income growth should remain positive, household balance sheets are in good shape, and the rise in labor productivity should yield stronger wage and GDP growth than in the prior expansion.”

"I'm looking to buy a place but everything is so expensive. And mortgage rates aren't really going down either. When will this change?"

 “Mortgage rates should decrease a little next year, but probably not too far below 6%. Housing affordability is likely to remain a problem.”

 since September. But while they are expected to decline over the next few quarters, housing prices are still rising. There has been some good news though: Sales of new homes 

—their first annual increase in three years.

Wow! How have you developed all of this amazing expertise? You sound like a business school professor!

 I read Brew Markets every day! You, too, can master the markets by subscribing at 

Surviving Thanksgiving with financial answers

Need answers to your relatives' pressing finance questions? Bank of America can help.

A Thanksgiving guide to awkward questions

After enduring nonstop ads, aggressive texts begging for “just another $5,” and a news cycle involving a bear carcass, American voters are nearing the finish line.

But what does a new presidential administration mean for your portfolio?

Broadly speaking, analysts believe that a Kamala Harris presidency would boost sectors like clean energy, homebuilders, and healthcare. Meanwhile, a second Donald Trump administration would lead to gains in industries like cryptocurrency, financials, small caps, and energy.

The “Trump trade” may sound like a game involving 

 collection, but it’s actually a strategy that involves investing based on what sectors are set to gain in his administration.

Here are the specific stocks that could enjoy gains under 

A more relaxed regulatory environment could boost financials like 

Trump is pro fossil fuels, which could lead to gains for US oil companies like 

Trump has cozied up to bitcoin bros, and promised to make the US the “crypto capital of the planet,” which would translate to good news for 

” would mean investing in a completely different set of stocks.

A Democratic administration promises more investment in renewable energy, according to UBS, boosting stocks like 

Companies that have exposure to China, such as 

 from Harris bolstering Obamacare and Medicaid enrollment.

 should do well, given Harris’s policies to assist homebuyers.

Of course, trading based on the election is not an exact science. Politics is just one minor factor among many, such as macroeconomic data, corporate earnings, and a slew of other unpredictable factors that influence markets.

 With the election coming down to razor-thin margins, the results could take days to finalize—likely leading to 

But analysts are quick to point out that the stock market has consistently gone up through different political administrations—meaning that, in the long run, staying diversified and invested through political turmoil is a winning strategy.—

How to invest in the presidential election

Which stocks will rise if Trump wins? Which stocks will rise if Harris wins?

That’s my presidential portfolio

Time flies when geopolitical turmoil, contentious elections, and interest rate cuts keep investors awake at night.

The fourth quarter of 2024 is upon us, and earnings season officially began with big banks JP Morgan and Wells Fargo announcing their latest numbers on Friday (quick recap: They were pretty good).

More announcements are coming in fast and furious this week, but before we dive into the nitty gritty of which stocks are set to pop this earnings season and which are poised to drop, it might be helpful to take a step back and look at the big picture.

Broadly, this quarter’s earnings are expected to be what the pros would call “meh.”

, compared to the historical average, Wall Street analysts have lowered their earnings per share (EPS) expectations heading into this quarter more than usual. While the 5-year average decrease in Q3 EPS estimates runs at 3.3%, this year analysts cut their estimates by 3.9%

That’s not to say this will be a terrible quarter. FactSet also noted that the S&P 500 as a whole should see a 4.2% increase in earnings compared to the same quarter a year ago. However, that’s slower than the 11% year over year earnings growth that the S&P 500 enjoyed in the second quarter.

Resources

Our Picks

The cash cow has been put out to pasture

The ethereum floodgates are officially open

What to expect when you’re expecting volatility

Recent Resources

A brief history of bitcoin

A Thanksgiving guide to awkward questions

That’s my presidential portfolio

What to watch this earnings season

Under-the-radar overperformers

The home stretch

How to invest in interest rate cuts

Powell is pulling a Greenspan

The cash cow has been put out to pasture

Energize your portfolio

Halftime report

Making sense of market moves