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☆ Red Sea shipping crisis unlikely to lift inflation much, UBS says. Here's why
▼ + stars: | 2024-01-19 | by ( Spencer Kimball | ) www.cnbc.com time to read: +3 min

Inflation is unlikely to rise much in the U.S. as a result of global shipping costs spiking due to militant attacks in the Red Sea, according to UBS. U.S. freight costs have soared 64% since mid-November when Houthi militants in Yemen began to target commercial vessels transiting the Red Sea, according to the bank. "The impact from shipping costs alone to inflation is likely very small," Kapteyn said. But Kapteyn said the Red Sea disruptions will have less of an effect than the supply chain disruptions that helped fuel inflation during the pandemic. The attacks in the Red Sea come as traffic is also restricted through the Panama Canal due to low water levels from a drought.

Persons: Arend Kapteyn, Kapteyn, Good Hope, Goldman Sachs Organizations: UBS, U.S, Daily, Shipping, JPMorgan, Macquarie, Wall Locations: U.S, Red, Yemen, Suez, Bab, Mandeb, Good, Africa, Panama, Iran, Macquarie, Persian, Hormuz, Strait

☆ US homebuyers are waiting for the Fed to start cutting interest rates. Here's when 10 experts say it's going to happen.
▼ + stars: | 2023-11-24 | by ( Jacob Zinkula | ) www.businessinsider.com time to read: +6 min

Mortgage rates could decline if the Federal Reserve cuts interest rates next year. Here are 10 projections from experts on when the Fed's first rate cut will come. While these factors serve as deterrents for prospective buyers, interest rates may not stay this high forever. AdvertisementWhile declining interest rates wouldn't directly cause mortgage rates to fall, the two tend to move in the same direction. FebruaryIn August, Preston Caldwell, a Morningstar senior US economist, wrote in a note that he expected the Fed to start cutting interest rates in February.

Persons: —, Preston Caldwell, Arend Kapteyn, Bhanu Baweja, David Einhorn, Diane Swonk, Andrew Hollenhorst, Goldman Sachs, David Mericle, we'll, Simona Mocuta, Jeff Morton Organizations: Federal Reserve, Service, Federal, Morningstar, UBS, KPMG, Citi, Reuters, State Street Global Advisors, DWS Locations: North America's

☆ Now that inflation is slowing, here's when 10 experts think we'll see a recession
▼ + stars: | 2023-11-16 | by ( Jacob Zinkula | Ayelet Sheffey | ) www.businessinsider.com time to read: +7 min

High interest rates could slow consumer spending and lead to layoffs. Since March 2022, the Federal Reserve has hiked interest rates 10 consecutive times to fight inflation as the country emerged from its pandemic recovery. Here's how experts are feeling about the economy headed into the new year, and whether they think a recession is on the horizon. Some think a recession is likely in 2024Some experts predict high interest rates will take a toll on the economy, making a recession likely sometime next year. AdvertisementOthers think a recession is unlikely in 2024Other experts don't see a recession hitting the US economy in the next year.

Persons: —, Janet Yellen, Jerome Powell, he's, Ken Griffin, we're, Griffin, Arend Kapteyn, Bhanu Baweja, Marc Lasry, Lasry, Rob Arnott, Jeffrey Gundlach, Bill Adams, Raphael Bostic, Brian Moynihan, Goldman Sachs, Jan Hatzius, Goldman, Hatzius Organizations: Service, Federal Reserve, Bloomberg, Citadel, UBS, Capital, National Bureau of Economic Research, CNBC, DoubleLine, Comerica Bank, Atlanta Federal Reserve, UCLA, Bank of America, Reuters Locations: United States, Dallas, Atlanta

☆ U.S. economy could have 'a few negative quarters' next year, UBS' Arend Kapteyn says
▼ + stars: | 2023-11-14 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailU.S. economy could have 'a few negative quarters' next year, UBS' Arend Kapteyn saysArend Kapteyn, global chief economist of the UBS investment bank, discusses the likelihood of a recession in the U.S. and what this means for the Federal Reserve.

Persons: Arend Kapteyn Organizations: U.S, UBS, Federal Reserve Locations: U.S

☆ Recession will hit the US in 2024 – so get ready for massive interest-rate cuts, UBS says
▼ + stars: | 2023-11-14 | by ( George Glover | ) www.businessinsider.com time to read: +3 min

The Federal Reserve will slash interest rates by an eye-popping 275 basis points next year, according to UBS. UBS expects a mid-2024 recession to encourage the central bank to start easing. download the app Email address Sign up By clicking “Sign Up”, you accept our Terms of Service and Privacy Policy . AdvertisementAdvertisementThe US economy will slip into recession next year – and that'll lead to the Federal Reserve bringing in steep interest-rate cuts, according to one top European bank. The Fed's cuts would be "a response to the forecasted US recession in Q2-Q3 2024 and the ongoing slowdown in both headline and core inflation," UBS added.

Persons: That's, —, it's, Arend Kapteyn, Bhanu Baweja, UBS's, Jason Draho Organizations: Federal, UBS, Service, Federal Reserve, Fed

☆ UBS sees a raft of Fed rate cuts next year on the back of a U.S. recession
▼ + stars: | 2023-11-14 | by ( Elliot Smith | ) www.cnbc.com time to read: +4 min

Meanwhile, the bank's economists suggested that "fewer of the supports for growth that enabled 2023 to overcome those obstacles will continue in 2024." Between March 2022 and July 2023, the FOMC enacted a run of 11 rate hikes to take the Fed funds rate from a target range of 0.25-0.5% to 5.25-5.5%. The bank believes this has renewed growth concerns and shows the economy is "not out of the woods yet." watch now"In our view, the private sector looks less insulated from the FOMC's rate hikes next year. Looking ahead, we expect substantially slower growth in 2024, a rising unemployment rate, and meaningful reductions in the federal funds rate, with the target range ending the year between 2.50% and 2.75%."

Persons: Jerome Powell, Evelyn Hockstein, Arend, You've, CNBC's Joumanna Organizations: Federal, Federal Reserve, Reuters UBS, U.S . Federal Reserve, UBS, Labor, CNBC, UBS European Conference Locations: Washington , U.S, U.S, Swiss, Europe

☆ The Fed will start cutting rates this summer as core PCE inflation will drop to 2.1%, says UBS' global chief economist
▼ + stars: | 2023-01-10 | by ( Zahra Tayeb | ) www.businessinsider.com time to read: +3 min

The Fed could start cutting rates as early as this July, according to UBS. The Swiss bank's global chief economist said US core PCE inflation is likely to drop to 2.1% this year, calling for a Fed pivot. The Switzerland-based bank's global chief economist Arend Kapteyn said borrowing costs could start getting cut in July as key inflation measures show signs of cooling. Kapteyn bases the house view on cooling core PCE inflation data. "The difference between the Fed and us is that they think we end the year with a core PCE inflation rate of 3.5%.

☆ UBS says disinflation is on the way — and shares 8 global stocks to play it
▼ + stars: | 2022-11-14 | by ( Ganesh Rao | ) www.cnbc.com time to read: +2 min

After a year of double-digit inflation in many countries, UBS is now forecasting "sharp" disinflation in 2023. The bank screened for stocks it expects to be positively impacted in such an environment. The table below shows two stocks across four regions that UBS says will benefit the most from disinflation. British healthcare companies Genus and Hikma Pharmaceuticals ranked highly among the stocks UBS says will benefit from disinflation in the United Kingdom. "The negative payoff from getting our disinflation call wrong is large," strategists led by Arend Kapteyn warned.

☆ These 33 stocks will benefit the most as inflation finally starts to fall, according to UBS
▼ + stars: | 2022-11-12 | by ( James Faris | ) www.businessinsider.com time to read: +3 min

Both the economy and inflation are set to fall off a cliff, according to the top strategists at UBS. Inflation, which is finally starting to fall as the global economy softens, will drastically decline from here, according to UBS. Lower inflation will be a relief for many companies, but it will especially benefit those stocks in three sectors, according to UBS: communication services, healthcare, and information technology. Communication services and healthcare stocks have outperformed when inflation declines and have shown the least sensitivity to changes in price growth, Kapteyn wrote. 33 stocks that will benefit from lower inflationIn light of these predictions, UBS created a quantitative screen to determine which stocks would fare best as inflation drops.

☆ The S&P 500 could plunge another 16% and won't bottom until the Fed starts to cut interest rates, UBS says
▼ + stars: | 2022-11-08 | by ( George Glover | ) www.businessinsider.com time to read: +3 min

The S&P 500 will fall to 3,200 points before it hits a low in Q2 next year, UBS has forecast. US stocks won't recover until the Federal Reserve starts cutting interest rates, the bank said. "The speed of that pivot will drive every asset class next year," UBS strategists said Monday. The S&P 500 would have to fall 15.9% from its Monday close at 3,806 to reach that low level. Expectations of a Fed pivot could lift the S&P 500 to 3,900 points — a 2.4% gain from its close Monday – by the end of 2023, according to UBS.

☆ UBS says the lows are not in, S&P 500 to fall to 3,200
▼ + stars: | 2022-11-07 | by ( Alex Harring | ) www.cnbc.com time to read: +5 min

This all could give way to a disinflationary environment in which rates are falling, leading to a market bottom and paving the way for a disinflationary environment. That will lift the S & P 500 to 3,900 by the end of 2023, Kapteyn said. Health care and communication services usually perform better than other sectors during declining inflation periods and feel less impact from changes to inflation, he said. With these themes in mind, UBS made a list of U.S. stocks that will be most positively impacted by declining inflation. Currencies and commodities are also expected to move in response to the period of declining inflation.

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