To The Moon

#Safety Hunting ETFs for US Debt Ceiling Crisis#

1. According to BBC news：

President Joe Biden and Republican leaders have expressed cautious optimism that a deal to raise the US debt ceiling is within reach, following emergency talks at the White House.

But House of Representatives Speaker Kevin McCarthy told reporters the two sides are still far apart.

The standoff has forced Mr Biden to cut short a foreign trip.

Without a deal, the US could enter a calamitous default on its $31.4tr (£25tr) debt as soon as 1 June.

2. Any Impact？

Reaching the debt ceiling would mean the US government is unable to borrow any more money.

This means the government would no longer be able to pay the salaries of federal and military employees. Social Security cheques - payments that millions of pensioners in the US rely on - would stop.

Every so often the US Congress votes to raise or suspend the ceiling so it can borrow more.

A default - which would be a first in US history - could shatter trust in America's political ability to pay its bills.

Experts have warned it could also see the US spiral into recession and trigger a rise in unemployment.

Treasury Secretary Janet Yellen said at an event on Tuesday that "a US default would generate an economic and financial catastrophe".

The last time the US was approaching a default, back in 2011, lawmakers struck a deal hours before the deadline.

That standoff led to a downgrade in the US credit rating, sent the stock market plummeting and increased the government's borrowing costs.

The US debt ceiling has been raised, extended or revised 78 times since 1960.

3. A Simply ETFs Guide/Safety Hunting ETFs

However, the market is anxious on the US default US default could trigger recession, ETF investors spent last week hunting for safety.

Unconvinced that elevated yields and cut prices represented a buying opportunity, European investors pulled $$138m from the iShares $Treasury Bond 0-1yr UCITS ETF (IB01) and $102m from the Invesco US Treasury Bond UCITS ETF (TRES) over the past week, according to data from ETFLogic, with the latter being 33.9% weighted to bonds with less than three years to maturity.

Even more drastic was US investors pulling a sizable $1.8bn from the $iShares Short Treasury Bond ETF(SHV)$ during the same period.

On the reverse side of the trade, continued uncertainty saw gold maintain a near all-time-high price of $2,020 an ounce on Monday. While investors are mindful of US default risk, the more likely outcome of the debt ceiling being raised means more US dollar-denominated debt issuance, strengthening the precious metal’s case as a store of value.

Reflecting this, the $ISHARES PHYSICAL GOLD ETC(IGLN.UK)$ booked $498m inflows while the $INVESCO PHYSICAL GOLD ETC(SGLD.UK)$ welcomed $168m net new assets.

Last week, we shared four directions worth for defensive hedge.

🎁 🎁 4 Directions of Stocks & ETFs to Plan Invest During Reccession

And according to asset amount and liquidity, below are some TOP Tire ETFs from Dividend, bond, gold, consumer staples, healthcare, and utility sectors. （Full Chart at the bottom）

Source from https://etfdb.com/，as of May 16th

The Benefits Tips of ETFs Strategy:

• ETF investment is simple, just judge the trend of the corresponding index

• ETF's management fees and trading fees are low

• ETF is a passive portfolio management, less affected by individual companies, which can effectively reduce the risks brought by individual companies.

If you are going to hedge some risk by ETFs, welcome to do more research on ETFs top holdings and expense ratios.

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