Market Update
Wall Street sold off its stocks deeper on Monday over fears for the health of the economy in the US. The Dow Jones Industrial Average (^DJI) collapsed more than 1,000 points. The Nasdaq Composite (^IXIC) declined over 3.4%, and the S&P 500 (^GSPC) sank nearly 3% in its worst start to any month since 2002.
The CBOE Volatility Index (^VIX), Wall Street's "fear gauge," hit its highest level since early days of the COVID-19 pandemic before paring back its gains. Treasury yields declined, with the benchmark 10-year Treasury yield (^TNX) remaining around 3.8%. Global equities sold off hard following Friday's weak U.S. jobs report, further fueling concerns about the economy and whether the Federal Reserve had waited too long to cut interest rates. Almost all bets are on the Fed cutting rates by 0.5% by its September meeting, according to the CME FedWatch tool.
The selling took a big bite out of the biggest stocks. Apple was down around 5% during the sell-off and following reports that Berkshire Hathaway slashed its stake in the company in half. Nvidia fell over 6%, and Tesla lost more than 4%.
It wasn't just equities—the cryptocurrency markets took a beating, too, with Bitcoin dropping over 10% to just about $54,000.
The sell-off went global, with the reaction in Asian markets being the same. Japan's Nikkei 225 (^N225) lost the most ever in a single day, falling over 12% in response to a surprise interest rate hike from the Bank of Japan.
The steep climb of the Japanese yen against the U.S. dollar incited heavy selling as speculators who had borrowed at near-0% interest rates in Japan to buy U.S. risk assets liquidated their holdings.
The U.S. market is entering a quieter week of data and earnings. With the jobs market still front and center, Thursday's weekly unemployment claims will be watched closely.
Investment Strategies
The key, during sharp market sell-offs, is to not panic. Investing is a long-term exercise—decades, not days. It's normal for markets to correct, as this resets stock prices to set up future gains.
Classic Safety Bets:
Dividend Stocks: Generally excel in down markets.
Low-Volatility Stocks: Cut losses and avoid panic selling. Consider investing in a broad dividend growth ETF or low-volatility ETF for diversification.
Alternative Investments
When one thinks about investments, traditional, rather volatile markets come to mind—stock and bond markets, basically driven by macroeconomic events. A very beautiful, lesser-known alternative is music royalties. Music royalties can provide uncorrelated yield and passive income. On Royalty Exchange, you can sign up in just a few minutes for an investor account and start making offers on listings that include some of the biggest hit songs of the past few decades that are making super consistent revenue.
The Perfect Asset For Today's Market
This music catalog includes "Cater 2 U," performed by the legendary late 90's and early 2000's R&B group Destiny's Child.
In the past five years, this catalog has returned an 11.1% Compound Annual Growth Rate, which puts it above the 75th percentile of all song and royalty catalogs Royalty Exchange has reviewed. With a Dollar Age of 19.05, it ensures a safe, reliable revenue stream since all of the songs have generated royalties continuously for quite some time already. The revenue is even growing as you'll see below thanks to a resurgence of older songs being consumed on streaming platforms by both older and younger audiences discovering them for the first time as well as social media platforms like TikTok and Instagram increasing their popularity.
Artist & Song Information:
"Cater 2 U": This single was released on 14 June 2005 from their final studio album Destiny Fulfilled. The song was a huge commercial success, peaking at No. 3 on the Billboard Hot 100 and No. 1 on the Billboard Hot R&B/Hip-Hop Songs chart. It was certified Gold by the RIAA and nominated for Best R&B Performance by a Duo or Group with Vocals at the 48th Annual Grammy Awards.
Revenue Breakdown:
Streaming Mechanical Income: It increased by 22.26% over five years. Its contribution to the total earnings remained quite substantial at 34.57%.
Streaming Synchronization: With the primary sources from YouTube and then Apple Music and TikTok, it contributed on average 36.49% to the total earnings and grew 4.42% year on year.
Performance Revenue: This recorded a very appreciable annual growth of 32.85%, with the fifth year really shooting through the roof, contributing to the overall earnings by 21.92%.
Streaming remains the largest source of income overall, accounting for 57% over the last 12 months and 63% in total.
The legendary status of the group and solo members, including Beyoncé, are some of the drivers for this catalog's growth during the streaming era. The increasing pattern of consumption habits by consumers makes this an asset that shall continue generating returns for many years to come. Royalties from music represent an excellent alternative investment instrument, which has a negative correlation with the broader financial markets. Sign up today on Royalty Exchange to get started earning money from the biggest hits of yesterday and today!
