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☆ 'Nearing exhaustion': Top strategists warn that weaker consumer spending could cause US stocks to run out of steam — but 22 investments can thrive during a market reversal
▼ + stars: | 2024-03-16 | by ( James Faris | ) www.businessinsider.com time to read: +10 min

Eight economists, investment chiefs, and strategists that Business Insider recently spoke to credited healthier-than-anticipated consumer balance sheets and spending for the continued expansion. "Either that, or they're going to be maxed out — they can't get any more money. They're not going to have any liquidity to be able to continue to do the things they're going to do." He's also sticking with defensive stocks as consumer spending softens, including those in the consumer staples sector like Clorox (CLX) and Procter & Gamble (PG). Real estate is a "hated asset class" that's negatively correlated with interest rates, Sekera said.

Persons: shouldn't, Kevin Gordon, Charles Schwab, they're, Sue Crotty, Ed Clissold, Ned Davis, Clark Bellin, Bellin, David Rosenberg, They're, Rob Swanke, Swanke, Preston Caldwell, Morningstar's, Dave Sekera, Sekera, Christopher Barto, Gordon, Clissold, He's, Morningstar's Sekera, Crotty, Segal Marco Advisors, She's, Barto, that's Organizations: Business, Consumers, Segal Marco, Ned, Ned Davis Research, Commonwealth Financial Network, Nasdaq, Morningstar, Fort Pitt Capital Group, Procter, Gamble, Federal Reserve, Exxon, APA Corp, Duke Energy, Segal, Energy, Healthcare Locations: Devon, Real, NiSource

☆ Nobody's quitting their job anymore. That's a bad sign for workers.
▼ + stars: | 2024-02-04 | by ( George Glover | ) www.businessinsider.com time to read: +4 min

That could be a sign that workers feel less confident about the state of the labor market. AdvertisementFriday's blowout jobs report confirmed the labor market is still holding firm, but one often-ignored statistic could signal a looming slowdown. "The second straight 2.2% quits rate — just below the pre-Covid level — is more important, because it clearly signals slower wage gains." "All that air is coming out of the labor market, even though hiring remains strong." "The job market is steadily returning to its pre-pandemic self," Morningstar's Preston Caldwell said in a research note.

Persons: —, José Torres, Ian Shepherdson, Philipp Carlsson, Szlezak, Optimists, Morningstar's Preston Caldwell Organizations: Service, of Labor Statistics, Macroeconomics, Bureau of Labor Statistics, Boston Consulting Group, Business, eBay, Los Angeles Times

☆ 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

☆ Falling prices may sound good, but deflation can be dangerous. Here’s why
▼ + stars: | 2023-11-18 | by ( Elisabeth Buchwald | ) edition.cnn.com time to read: +3 min

Falling prices of commodities like copper and lumber “negatively impacted” Home Depot’s third-quarter earnings, CEO Ted Decker told investors on the company’s earnings call earlier this week. In particular, they're noticing consumers pushing off bigger-ticket purchases like appliances, which have become cheaper compared to a year ago. But the problem with deflation is that when people begin to expect lower prices in the future, they have little incentive to make purchases right now. In China, however, prices across all goods and services were 0.2% lower in October compared to the same month last year. He also warned that US-based Walmarts could enter “a deflationary environment.”Besides eggs, other cheaper goods include airfares, gasoline, appliances and smartphones.

Persons: Cathie Wood, ”, Ted Decker, Billy Bastek, ” Bastek, Justin Sullivan, Doug McMillon, Preston Caldwell, “ it’s Organizations: New, New York CNN, Tech, ARK Investment Management, Wall Street, Home Depot, Walmart, Morningstar, CNN Locations: New York, United States, China

☆ Buy these 12 high-quality stocks that are up to 42% below their fair market value as Fed rate hikes begin to hit the economy hard, according to Morningstar's chief strategist and economist
▼ + stars: | 2023-11-01 | by ( Laila Maidan | ) www.businessinsider.com time to read: +5 min

The firm estimates fair value based on its projection of a company's future cash flows and the predictability of those flows. The best opportunities are now in value stocks that are trading at about a 22% discount to fair value, Sekara noted. Currently, the real estate sector is the most undervalued sector, with REITs trading at a 26% discount to fair value, Sekara said. Finally, American Tower (AMT), which owns and operates wireless and broadcast communications infrastructure, trades at a 24% discount to fair value. Two other five-star stocks that remain significantly undervalued are AT&T and Verizon, trading at a 35% discount to fair value.

Persons: Morningstar's Preston Caldwell, Caldwell, Dave Sekara, Sekara, Wells Organizations: Treasury, Morningstar, Simon Property Group, Realty Trust, Communications, Verizon, Citigroup, PNC, US Bank

REUTERS/Joshua Roberts Acquire Licensing RightsSept 25 (Reuters) - It's a now-familiar dance: Federal Reserve officials signal to the world that interest rates are not dropping anytime soon. Forecasts published on Wednesday by the U.S. central bank showed that a majority of its policymakers see the Fed's benchmark overnight interest rate ending this year at 5.6%, which implies one more interest rate hike in the next three months. They also now anticipate an end-of-2024 policy rate of at least 5.1%, half a percentage point higher than they projected three months ago. Meanwhile, interest rate futures contracts continue to price in only about a 50% chance of further tightening in 2023, and see a 4.65% policy rate by the end of next year. THE FED'S OWN UNCERTAIN FORECASTSFed policymakers plan to stop raising interest rates once they are convinced inflation is headed down to the central bank's 2% target.

Persons: Joshua Roberts, Preston Caldwell, Jerome Powell, Powell, Morgan Stanley, Ann Saphir, Dan Burns, Paul Simao Organizations: Federal Reserve, REUTERS, Financial, U.S, Fed, Morningstar, Securities, United Auto Workers, Detroit automakers, Reuters, Thomson Locations: Washington , U.S, U.S

☆ US homebuyers are waiting for the Fed to start cutting interest rates. Here's when 9 experts say it's going to happen.
▼ + stars: | 2023-09-18 | 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 nine 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. AdvertisementAdvertisementWhile declining interest rates wouldn't directly cause mortgage rates to fall, the two tend to move in the same direction. AdvertisementAdvertisementFebruaryOn August 31, Preston Caldwell, a Morningstar senior US economist, wrote in a note that he expected the Fed to start cutting interest rates in February.

Persons: Bob Michele, J.P, —, we'll, Preston Caldwell, David Einhorn, Diane Swonk, Andrew Hollenhorst, Goldman Sachs, David Mericle, Simona Mocuta, Jeff Morton Organizations: Federal Reserve, Service, Federal, Bloomberg Television, Morgan Asset, Morningstar, KPMG, Citi, Reuters, State Street Global Advisors, DWS Locations: Wall, Silicon, North America's

That's because the Federal Reserve has been hiking interest rates since March 2022 in an effort to cool inflation. So the question remains: When will we finally see interest rates start to come down? CNBC Select asked three experts to give their take on what lies ahead for interest rates. What we'll coverWhen will interest rates come back down? Existing loans with a variable rate may also start charging less interest as the Fed lowers interest rates.

Persons: Amy Hubble, hasn't, Preston Caldwell, Caldwell, Hubble, Elliot Eisenberg, you'll, it's Organizations: Federal Reserve, CNBC, Federal, Market, Morningstar Research Services, Ally Bank, Navy Federal Credit Union, Jumbo, Navy Federal Credit, PNC Bank, PNC Bank Mortgage, Savings, Axos Bank, FDIC, CNBC Select's, Facebook, Twitter Locations: U.S

☆ Here's where the jobs are for July 2023 — in one chart
▼ + stars: | 2023-08-04 | by ( Jesse Pound | In Jesse-Pound | ) www.cnbc.com time to read: +1 min

The health care and social assistance category grew by 87,100 jobs last month, according to the Labor Department. The labor market added a smaller-than-expected 187,000 jobs in July, but one sector delivered roughly half of that total. Health care and social assistance added more than 70,000 jobs in each of the prior two months as well. Ambulatory care services alone added 35,000 jobs in July. Temporary help employment was a leading indicator of overall employment in the 2001 and 2008 recessions," Caldwell said.

Persons: Preston Caldwell, Caldwell Organizations: Labor Department, Health, Morningstar

☆ A recession may be coming — here's how long it could last, according to economists
▼ + stars: | 2023-04-26 | by ( Annie Nova | ) www.cnbc.com time to read: +1 min

Suriyapong Thongsawang | Moment | Getty ImagesHow long economic recessions lastIn 2021, the committee confirmed that the pandemic downturn lasted just two months, from February 2020 to April 2020, "which makes it the shortest U.S. recession on record." That economic bust was cut short by massive stimulus from the government. Federal Reserve economists are predicting that there will be a mild recession later this year, "with a recovery over the subsequent two years," according to the minutes of the Fed's March 21-22 meeting. Indeed, the longest recession in recent decades was the 2008 financial crisis, which slogged on for 18 months. Cutting rates usually helps the economy rebound from downturns.

☆ The credit crunch is here and it could cripple the economy. Here's what Larry Summers, Nouriel Roubini and 7 other experts have said on the emerging threat.
▼ + stars: | 2023-04-20 | by ( Zinya Salfiti | ) www.businessinsider.com time to read: +6 min

Latest bank lending data suggests the credit crunch "has already started," according to Morgan Stanley strategists. Here's a selection of recent warnings on the emerging threat from experts including Larry Summers, David Solomon, Mike Wilson, Nouriel Roubini and Bill Gross. Apollo Asset Management's Jim Zelter told Bloomberg "it's not a credit crunch" but rather a "transition period" as markets face higher debt costs. "That credit crunch is going to make the likelihood of a recession — a hard landing — much greater than before. "Whether this qualifies as a full-blown 'credit crunch' remains to be seen.

☆ March CPI and the Fed's next steps in its inflation battle: Everything to know
▼ + stars: | 2023-04-12 | by ( Phil Rosen | ) www.businessinsider.com time to read: +5 min

Phil Rosen here — March's inflation report is due at 8:30 a.m. "Super core inflation in the CPI report has shown no signs of abating yet," he wrote in a note. Below, I'm breaking down how the world's largest asset manager expects the inflation story to pan out in the long-run. But BlackRock isn't convinced that strength can continue. These three under-the-radar signals suggest that a US recession isn't as close as you might think.

☆ Here's what the inverted yield curve means for your portfolio
▼ + stars: | 2022-10-31 | by ( Kate Dore | Cfp | ) www.cnbc.com time to read: +1 min

Catherine Yeulet | Getty ImagesWhat the inverted yield curve meansGenerally, longer-term bonds pay more than bonds with shorter maturities. "In normal times, the yield curve slopes upwards," he said. But there's currently a downward sloping curve, also known as an "inverted yield," with the 2-year Treasury paying more than the 10-year Treasury . 'Real economic indicators are going to suffer'While a yield curve inversion is only one signal of a possible recession, it shouldn't be ignored, particularly at the lower end of the curve, experts say. "The yield curve is not perfect, but it does better in general than standard forecasts."

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