Investors are busy scaling back their expectations for the Federal Reserve’s annual symposium this week, which is normally held in the Wyoming resort of Jackson Hole but has now been moved to an online format because of the rise in COVID infections. With trading already thinned out by vacations, the market for U.S. Treasuries remains jumpy and volatile. Monday trading was mixed, as yield on the benchmark 10-year note veered briefly above 1.28% before returning to the 1.25% of late Friday. Market strategists complained about the thinness of trading and the lack of liquidity in the Treasury market ahead of the Fed symposium. Any hope of a specific announcement on tapering bond purchases evaporated as the Delta variant of the coronavirus gained traction and threatened to dampen economic data. The burst of growth evidenced by the release Monday of the Chicago Fed’s economic activity index—which rose to 0.53 in July from minus 0.01 in June—already seems like ancient history as investors and Fed policymakers look for clues about the coming impact of a renewed surge in infections. Also on Monday, existing home sales rose 1.5% on the year in July after a gain of 1.4% in June, but that indicator, too, may suffer from a pullback as buyers weigh the uncertainty of a prolonged pandemic. Delta Variant—Not Politicals—Driving Safe Haven Flows Political turbulence is having little effect as investors remain laser-focused on how the Fed will react to Delta. The troubled withdrawal of U.S. troops from Afghanistan and immediate Taliban takeover pushed President Joe Biden’s approval ratings into negative territory for the first time, while a rift among House Democrats over spending bills threatened to become a standoff blocking legislation. None of that appears to significantly affect investor behavior as Fed Chairman Jerome Powell—who tends to be dovish in the best of times—is now expected to be very much so while remaining quite vague in his speech Friday. Though it has baffled economists, investors, who have kept Treasury yields low in recent weeks despite signs of a robust recovery, are starting to look prescient. Bitcoin bulls see a silver lining in low Treasury yields, figuring they could prompt investors to buy the cryptocurrency as well as gold in search of higher returns. Still, Monday’s spike encouraged some analysts to forecast higher yields in the months ahead as they expect recovery to continue strong even amid COVID uncertainty. Continued European Economic Growth German 10-year Weekly ChartGerman 10-year Weekly Chart In Europe, government bonds followed a more predictable trajectory as IHS Markit’s Flash Composite Purchasing Manager's Index continued to show growth in August, albeit slightly slower than in July, pushing the yield on Germany’s benchmark 10-year bond up 3 basis points to minus 0.457% at one point. Inflation expectations rose slightly as industrial companies said they had to pay more for inputs and were passing that on to consumers. But European manufacturers are buying into the forecast that these increases are temporary.

Fintech is proving to be one of the most fruitful sectors for venture returns. According to Juniper Research, fintech companies will generate $638bn in revenue in 2024, a 143 percent growth on estimated revenues for 2019. According to a survey by Startup Genome, these are among the top emerging Fintech hubs to watch right now:
1. São Paulo: Brazil has more fintech start-ups than any other Latin American country, and most of them are consolidated in the country’s financial centre, São Paulo. Home to the European Central Bank and more than 200 banks – most of which are foreign – Frankfurt plays an important role in the EU’s financial system.
2. Lithuania: The country has the shortest waiting time for e-money or payment licences in the EU. As such, the World Bank placed Lithuania 14th out of 190 countries in its Ease of Doing Business index in 2019. With the number of fintech firms in Lithuania having doubled between 2016 and 2018, the country appears to be well on its way to becoming a leading fintech hub.
3. Estonia: Estonia is considered to be one of the world’s most advanced digital societies. According to CNBC, 99 percent of its public services are available online and it has stronger broadband than many countries across the developed world.

Investor appetite for Microsoft (NASDAQ:MSFT) stock remains strong. During the past year, every dip has attracted more buyers, pushing the software and infrastructure giant's stock to a new high. Even after a 125% rally since the market crash in March 2020, there are reasons to believe the stock has more upside. The Redmond, Washington-based company last month reported sales and profit that exceeded analyst estimates for a 10th straight quarter, showing that Chief Executive Officer Satya Nadella’s strategy to make Microsoft the largest cloud-computing provider remains on track. Microsoft’s cloud-computing business has contributed massively to the stock’s 425% advance in the past five years—a period in which Nadella also branched out into additional new growth areas. During his tenure, more than $45 billion was spent on acquiring companies, including business social network LinkedIn, video game developers Mojang and Zenimax, and the code-storage service GitHub. These bets have largely paid off. Microsoft's Intelligent Cloud segment accounted for 33.8% of the company’s 2020 revenue, making it the largest of the technology behemoth's major business lines for the first time. As well, the unit was up from 31% in 2019. Last year, the division showed revenue growth of 24%, compared with the 13% growth in Productivity and Business Processes, and the 6% growth of Microsoft’s More Personal Computing unit. In addition, the pandemic has further accelerated MSFT growth. Millions of workers and students stuck at home during lockdowns used the company’s meeting software Teams to remain in touch and connected. As well, large corporate clients accelerated their shift to the cloud, while younger retail customers bought Xbox gaming subscriptions. More Upside In Store Still, the relentless rally over the past five years likely raises a question in investors’ minds: Is MSFT stock too expensive to buy? Most analysts believe that the relatively expensive share price appropriately reflects expectations for the company’s growth. In a note to its clients yesterday, Goldman Sachs reiterated its buy call for Microsoft, saying the bank sees more upside in the stock after the tech giant announced a price increase for Microsoft 365. Its note said: “We believe the recent announcement underscores the company’s strong competitive positioning and long-term pricing power, particularly with respect to Commercial Office 365, which represented ~18% of total revenue in FY21.” In its first “substantive” cost change since launching Office 365 a decade ago, Microsoft said in a blog post last week that the price for its 365 Business Basic plan will jump 20% to $6 per user, while the high-end version of the suite will see a bump to $36 per user from $32. Microsoft justified the move by highlighting three key areas where its products have advanced: communication and collaboration, security and compliance, and AI and automation. The company also announced it’s adding unlimited dial-in capabilities for Teams, to allow users to join in to meetings from virtually any device regardless of location. Just like Goldman Sachs, Mizuho Bank also reiterated its buy for MSFT. In a note to clients, the Japanese lender raised its price target on the stock to $350 from $325, saying the Microsoft 365 price hike will have a “significant” effect in FY23 and beyond. These bullish sentiments are also reflected in Investing.com's consensus price target for the stock. Of 36 analysts polled, 34 have an “outperform” rating for Microsoft, with about a 9% upside from its current price. Bottom Line Shares of Microsoft, after a powerful rally this year, have indeed become expensive. But in our view, the stock isn’t overvalued. The current share price of $304.65 as of Monday's close, takes into consideration Microsoft’s success in both the short- and longer-term. In addition, Microsoft pays a healthy dividend of $2.24 annually that continues growing steadily. That makes owning the stock even more attractive.