BlackRock's leader Larry Fink notes that Treasury yields could climb to the highest level in over two decades, with inflation prompting a sell-off in the bond market that extends to the stock market.

 

The Chief Executive Officer of the globe's largest asset manager forecasted that the yield on the 10-year US Treasury bond could increase to up to 5.5%, contingent on rising inflation that reduces demand for government debt. This would mark the highest yield on the 10-year Treasury note in about 25 years, as the bond last reached 5.5% in 2000.

 

Yields of such magnitude could unsettle investors because many likely aren't preparing for the potential of increased inflation, Fink observed. He referenced policies from the current administration that could introduce new pricing strains into the economy.

 

"I think it will release all this private capital, and we're going to experience substantial growth," Fink shared with CNBC on the fringes of the World Economic Forum on Thursday. "Simultaneously, some of this will introduce new inflationary pressures. And I do believe that's potentially the threat that the markets might not be considering."

 

He further commented: "There exists a possibility that we might observe the 10-year surpassing 5%, perhaps even reaching 5.5%. That could stun the equity market. It would not be a favorable situation."

 

Fink does not perceive the 10-year yield exceeding 5% as his primary scenario, but he suggested that should it happen, it might likely trigger declines in the stock market, noting that such a scenario could have a "significantly adverse effect" on equities and might "necessitate a reassessment."

 

Bond yields have seen substantial fluctuations over the past year, partly driven by concerns about a resurgence of inflation, which could result in interest rates remaining elevated for a longer period as the Federal Reserve tightens monetary policy to curb prices.

 

Meanwhile, economists have criticized some aspects of President Donald Trump's policies — like his proposal to impose high tariffs on China, Mexico, and Canada — as being inflationary. Trump has refuted such claims, assuring to reduce costs for Americans in his subsequent term.

 

Nonetheless, bond investors have been very responsive to news regarding Trump's trade strategy, with yields spiking earlier in January amid apprehensions of assertive trade policies and a thriving economy. The 10-year neared 5% this month before retreating due to more favorable inflation figures and unexpectedly mild tariff directives on the first day of Trump's term this week.

 

Worries about the national debt have also pressured the bond market. A faction of investors known as bond vigilantes could withdraw from purchasing Treasurys or liquidate their holdings to push the government towards greater fiscal discipline.

 

Fink noted that yields reaching 5% could be a crucial trigger in spurring dialogue around managing the US debt. The federal debt balance reached a historic $36.2 trillion on Thursday.

The challenged Chinese autonomous trucking company TuSimple has now rebranded itself as CreateAI, shifting its focus towards video games and animation, the announcement was made on Thursday.

 

This announcement follows GM's closure of its Cruise robotaxi division this month, marking a phase where the once-thriving self-driving startup industry is starting to eliminate laggards. TuSimple, operating in both U.S. and China markets, faced its own problems, including vehicle safety concerns, a $189 million settlement from a securities fraud lawsuit, and its removal from Nasdaq in February.

 

Over two years after CEO Cheng Lu rejoined the company in this role after being ousted, he now forecasts the business might reach a break-even point by 2026.

 

This optimism is tied to a video game based on popular martial arts novels by Jin Yong, planned for an initial release in that year, according to Cheng. He foresees generating "several hundred million" in revenue by 2027 when the complete version is launched.

 

Prior to its delisting, TuSimple reported a loss of $500,000 during the first three quarters of 2023 and invested $164.4 million in research and development during that time frame.

 

Company co-founder Mo Chen has a "long-standing connection" with the Jin Yong family and initiated work back in 2021 to produce an animated feature based on the novels, as Cheng explained.

 

The company touts its artificial intelligence expertise in developing autonomous driving software as providing a foundation for the development of generative AI, which is the advanced technology powering OpenAI’s ChatGPT, able to create human-like responses to user inputs.

 

In conjunction with the CreateAI rebranding, the company has launched its first significant AI model named Ruyi, an open-source visual work model available on the Hugging Face platform.

 

"Our shareholders clearly recognize the value in this transformation and are eager to progress in this new direction," Cheng expressed. "Both our management team and Board of Directors have received tremendous support from our shareholders." The company is slated to hold its annual shareholder meeting on Friday. Cheng stated the company intends to expand its workforce to around 500 next year, up from the current 300.

 

Co-founder Xiaodi Hou, claiming to be the largest individual shareholder at 29.7%, has openly questioned the shift towards gaming and animation. Hou announced his intention to withhold or oppose support at the shareholders meeting and advocated for the liquidation of the company. He has since launched his own autonomous trucking firm in Houston called Bot Auto, which secured $20 million in funding in September.

 

While still operating under the TuSimple brand, the company announced in August a collaboration with Shanghai Three Body Animation to produce the first animated feature film and video game based on the science fiction novel series "The Three-Body Problem."

 

The company mentioned at the time that it was inaugurating a new business sector dedicated to the creation of generative AI applications for video games and animation.

 

CreateAI anticipates reducing top-tier, known as triple A, game production costs by 70% within the next five to six years, according to Cheng. He did not disclose whether the company is in discussions with gaming giant Tencent.

 

When questioned about the implications of U.S. restrictions, Cheng asserted there were no difficulties, stating the company utilizes a combination of Chinese and non-Chinese cloud computing providers.

 

The U.S., under the Biden administration, has intensified restrictions on Chinese businesses’ access to advanced semiconductors necessary for powering generative AI.

 

The stock market has had a tough week, but it might also be in store for a tough year in 2025.

 

The market is on track for its worst week since March 2023 after the Federal Reserve gave a hawkish forecast for interest rate cuts in 2025. But looking at the market's internals, it's clear that damage had been inflicted well before the Fed's Wednesday meeting—and the signal is a historic indicator of tough times ahead.

 

The number of stocks in S&P 500 that are declining outpaced advancing stocks for 14 consecutive days on Thursday.

 

The advancing/declining data helps measure underlying participation in market moves, and the recent weakness signals that even though the S&P 500 is only off 4% from its record high, there's damage under the hood of the benchmark index.

 

This is evidenced by the equal-weighted S&P 500 index being off 7% from its record high.

 

According to Ed Clissold, chief US strategist at NDR, the 14-day losing streak for the S&P 500's advance-decline line is the worst since October 15, 1978.

 

Clissold said 10-day losing streaks or more in advancing stocks relative to declining stocks can be a bad omen for future stock market returns.

 

While this scenario has only been triggered six times since 1972, it shows lackluster forward returns for the S&P 500. The index has printed an average six-month forward return of 0.1% after these 10-day breadth losing streaks flashed, compared to the typical 4.5% average gain seen during all periods.

 

"Studies with six cases hardly make for a strategy. But market tops have to start somewhere, and many begin with breadth divergences, or popular averages posting gains with few stocks participating," Clissold said.

 

Perhaps more telling for the stock market is whether it can stage a recovery as it heads into one of the most bullish seasonal periods of the year: the Santa Claus trading window.

 

If it can't, that would be telling, according to Clissold.

 

"A lack of a Santa Claus Rally would be concerning not only from a seasonal perspective, but it would allow breadth divergences to deepen," the strategist said.

 

Also concerning to Clissold is investor sentiment, which has flashed signs of extreme optimism since September. According to the research firm's internal crowd sentiment poll, it is in the seventh-longest stretch in the excessive optimism zone, based on data since 1995.

 

"Several surveys have reached what could be unsustainable levels," Clissold said, warning that any reversal in sentiment could be a warning sign for future market returns.

 

Ultimately, continued stock market weakness, especially in the internals, would suggest to Clissold that 2025 won't be as easy as 2024 for investors.

 

"If the stock market cannot rectify recent breadth divergences in the next few weeks, it would suggest our concerns about a more difficult 2025 could come to fruition," the strategist said.

The Financial Industry Regulatory Authority (FINRA) has recently unveiled a series of proposed changes aimed at tightening restrictions on payment for order flow (PFOF) arrangements. PFOF is a practice where brokers receive compensation from market makers or other third parties for routing customer orders to specific trading venues. Although this practice is legal under certain disclosures, critics argue that it may create conflicts of interest that ultimately harm retail investors.

 

Background and Rising Concerns

 

In the past few years, zero-commission trading platforms have proliferated, attracting millions of new retail investors into the stock market and related securities. While these platforms tout “free trading,” they often rely on PFOF agreements to cover costs—making it a lucrative revenue stream. However, investor advocacy groups have questioned whether these deals lead to suboptimal trade executions, effectively costing retail traders more through wider bid-ask spreads.

 

A recent FINRA study highlighted that many retail investors are not fully aware of how PFOF might affect the execution quality of their trades. The lack of consistent transparency has become a focal point for regulators, who are now looking at how best to ensure fair and honest treatment for smaller investors.

 

Key Points of the Proposal

 

1. Higher Disclosure Requirements
   Under the proposed rules, brokers would need to disclose PFOF arrangements in a more standardized and detailed manner. This would include specifying how much revenue they earn from different market makers and how that income could potentially impact trade execution quality.

2. Independent Best Execution Review
   FINRA is also considering mandating an independent third-party review of brokers’ order routing practices. This requirement aims to verify whether brokers are genuinely seeking the best execution for client trades, rather than simply funneling them to the venue that pays the highest PFOF.

3. Limiting PFOF on Certain Securities
   One of the more contentious elements of the proposal involves restricting or outright banning PFOF agreements for certain high-volatility securities or complex derivatives. By doing so, FINRA hopes to mitigate scenarios where brokers have significant financial incentives to route orders in ways that may not align with clients’ best interests.

 

Industry Reaction

 

• Brokerage Firms
  Some major brokerage firms express caution, noting that eliminating or severely restricting PFOF could undermine the zero-commission model, forcing firms to reintroduce direct trading fees. This could make the barrier to entry higher for novice traders.

• Investor Advocates
  Consumer protection groups such as the North American Securities Administrators Association (NASAA) and Better Markets have publicly applauded the proposals, citing long-held concerns that the PFOF model disproportionately impacts small retail investors.

 

Next Steps

 

FINRA has opened a 60-day public comment period for interested parties to weigh in on the proposals. After reviewing feedback, the regulator may adjust its language before submitting the final version to the Securities and Exchange Commission (SEC) for approval. If enacted, these rules could go into effect by late 2025, potentially reshaping the commission-based landscape of retail trading.

Social media platforms have revolutionized how investors learn about and participate in the financial markets. However, this ease of access also brings risks, as unscrupulous individuals peddle fraudulent Forex “signal services” claiming to generate extraordinary returns with minimal risk. Often promoted by self-proclaimed “FX gurus” on Instagram, Telegram, or TikTok, these schemes can cost unwary traders thousands—if not more.

 

Anatomy of a Forex Signal Scam

 

1. Attractive Lifestyle Marketing
   The scammers portray lavish lifestyles, featuring exotic vacations, luxury cars, and designer goods. The message is clear: sign up for their signals, and you too can live like this.

2. Paid Memberships or “VIP Access”
   Victims are encouraged to join exclusive Telegram or Discord groups for a monthly fee, where “trading signals” will be shared. These signals allegedly identify the right currency pairs and timing to buy or sell.

3. Falsified Trade Results
   Often, the scammers post “proof” of enormous profits, but these are doctored images or demo account screenshots presented as real trading accounts.

 

Warning Signs and Precautions

 

• Unrealistic Profit Claims
  Consistent daily returns of 5%–10% or higher are highly suspect in the volatile world of Forex trading. If the profits sound unrealistic, they probably are.

• Lack of Verifiable Track Record
  Legitimate signal providers typically verify their performance via reputable third-party services (e.g., Myfxbook). If results aren’t independently verified, tread carefully.

• High-Pressure Sales Tactics
  Scammers push you to pay for membership quickly, claiming limited slots or time-limited discounts. Legitimate educators rarely rely on such urgency.

 

Bottom Line: If you’re new to Forex trading, invest time in education rather than blindly following unverified “experts” on social media. Always remember that genuine trading success requires proper risk management, discipline, and a legitimate strategy—no silver bullet.

The European Securities and Markets Authority (ESMA) has stepped up its oversight of brokers offering cross-border investment services within the European Union. With more platforms advertising commission-free trading, concerns have risen that some brokers may be inflating other hidden fees to offset their “no-commission” promises. In a joint announcement with national regulators, ESMA outlined a series of measures designed to bring greater transparency and fairness to brokerage commission structures across Europe.

 

The Concern Over Hidden Fees

 

In recent years, the rise of digital trading apps and online brokerage platforms has empowered a new generation of retail investors. While many platforms publicly tout “zero commission” on certain trades, ESMA’s investigation uncovered a range of hidden charges, such as currency conversion mark-ups, inactivity fees, and high withdrawal costs. These fees can sometimes exceed what investors would pay in a straightforward commission model—especially for those who trade less frequently or invest in international markets.

 

Key Provisions in ESMA’s New Guidelines

 

1. Unified Fee Disclosure Template
   ESMA is mandating a single, unified fee disclosure template that all EU-based brokers must use. This standard template will require brokers to itemize the costs of currency conversions, platform fees, and any other service charges. The goal is to make it easier for investors to understand the total cost of trading and to compare fees across different platforms.

2. Limitations on ‘Free Trading’ Claims
   Brokers that market themselves as “commission-free” will be required to highlight any additional charges prominently. This could include disclaimers about currency conversion rates or administrative fees for account transfers. Regulators hope that more transparent advertising will protect inexperienced investors who might be lured by the promise of no upfront commissions but end up paying hidden costs elsewhere.

3. Stricter Penalties for Non-Compliance
   ESMA and national regulators have pledged stricter enforcement actions against brokerage firms failing to meet the new transparency standards. These penalties can range from fines to the suspension of cross-border licenses, depending on the severity and duration of non-compliance. In the past, EU authorities had limited authority to enforce regulations across multiple member states, but this new framework represents a more unified approach.

 

Market Reaction

 

• Investor Protection Groups
  Organizations such as Better Finance and Finance Watch have applauded ESMA’s move, noting that hidden fees often hurt smaller retail investors the most. Clarity in fee structures, they argue, levels the playing field for consumers making critical investment decisions.

• Broker Platforms
  Some brokerage firms have welcomed the guidelines, stating that a universal standard across the EU will provide a more predictable business environment and help weed out unscrupulous competitors. Others, especially smaller platforms operating on thin margins, worry that additional disclosure and compliance requirements could increase operational costs.

 

What’s Next?

 

ESMA’s guidelines are set to be implemented in phases throughout 2025, giving brokers time to adapt their systems and marketing approaches. Investors should keep an eye out for updated disclosure documents from their platforms, which must now clearly outline all fees. If you’re currently using a commission-free trading app, reviewing these upcoming disclosures will be essential to ensure you understand what, if anything, you’re truly paying.

 

Bottom Line

 

The crackdown on excessive commissions and hidden fees across the EU signals a new era of accountability in brokerage services. For everyday investors, these developments mean a clearer, more standardized picture of the costs associated with cross-border investing—ultimately fostering a healthier, more transparent market environment.

Retirement savers, take note: more employers have added a Roth savings option to their workplace 401(k) plans.

 

And, due to a legislative change, it's likely the remaining holdouts will soon offer it, too.

 

About 93% of 401(k) plans offered a Roth account in 2023, according to an annual poll published in December by the Plan Sponsor Council of America, an employer trade group.

 

That's up from 89% in 2022 and 62% a decade ago, according to the survey, which polled more than 700 employers with 401(k) plans of varying size.

 

Roth refers to how retirement savings are taxed.

 

A Roth is an after-tax account: Savers pay tax upfront on their 401(k) contributions but, with some exceptions, don't pay later when they withdraw money.

 

By contrast, pretax savings have been the traditional route for 401(k) plans. Savers get an upfront tax break, deferring their tax bill on investment earnings and contributions until later, when they make withdrawals.

 

It seems like many aren't taking advantage of Roth availability: About 21% of eligible workers made a Roth contribution in 2023, versus 74% who made a pretax contribution, according to PSCA data.

 

Choosing which kind of 401(k) contributions to make — pretax or Roth — largely comes down to your current tax bracket and expectations about your future tax rate, according to financial advisors.

 

You want to choose the one that will keep your tax bill lowest. In short, it's a tax bet.

 

This requires some educated guesswork. For example, many financial advisors recommend Roth accounts for those who are early in their careers, a point at which their tax rate is likely to be lower than in the future, when their salary will almost certainly be higher.

 

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"We always recommend [Roth] for someone who's in a low salary, typically the younger working folks," said Olga Ismail, head of retirement plans consulting at Provenance Wealth Advisors.

 

"It's the lowest tax bracket you're ever going to be in, so why not take advantage of it now if you can?" she said.

 

A Roth 401(k) also provides a unique savings opportunity. Roth individual retirement accounts — Roth IRAs, for short — have a lower annual contribution limit than 401(k)s and have income caps on eligibility. A 401(k) has no income caps.

 

So, a Roth 401(k) lets higher earners access a Roth account directly, and allows all savers to contribute more money to a Roth account than they could otherwise.

 

Financial planners also generally recommend diversifying among pretax and Roth savings. This grants tax flexibility in retirement.

 

For example, strategically withdrawing money from a Roth account for income may keep some retirees from triggering higher premiums for Medicare Part B and Medicare Part D. Those premiums may increase with income — but Roth withdrawals don't count toward taxable income.

 

Also, while many people expect their tax rates to decline in retirement, this isn't always the case.

 

More savers will likely soon have a Roth 401(k) option available to them if they don't already.

 

A 2022 retirement law known as Secure 2.0 will require "catch up" 401(k) contributions to be made to Roth accounts, if the worker's income exceeds $145,000 (indexed to inflation). That rule takes effect in 2026.

 

High earners age 50 or older would be required to contribute any additional savings over the annual 401(k) limit to a Roth account, meaning nearly all 401(k) plans would likely need to offer Roth accounts, Ismail said.

 

Workers can save up to $23,000 in a 401(k) for 2024. Those age 50 and older can save an extra $7,500 in catch-up contributions.

 

"Offering Roth as an option has become a best practice the last few years," and due to the mandate for high earners, "we will continue to see Roth become commonplace," said Hattie Greenan, PSCA's research director.

 

Additionally, Secure 2.0 allows businesses to make an employer 401(k) contribution like a match as Roth savings. About 13% of employers said they would "definitely" add the option, and another 35% said they're still considering it, according to PSCA data.