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Another common worry among investors is the risk that elevated interest rates pose to the labor market and overall economy. AdvertisementThat difference is that prior cycles have been driven by lending, Elliott said. Lending growth fueled economic expansions and drops in lending led to economic contractions. He said it can act as a hedge against the Fed cutting rates too early with the economy still strong. AdvertisementInvestors can gain exposure to gold through funds like the SPDR Gold Shares (GLD) and the iShares Gold Trust (IAU).
Persons: St, Louis, Bob Elliott, Elliott, Louis Fed, It's Organizations: Service, Unlimited Funds, Bridgewater Associates, Federal Reserve, Treasury, Trust
Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailMarkets have embraced that the Fed is no longer raising rates: Wealth Enhancement's YoshiokaAyako Yoshioka, Wealth Enhancement Group senior portfolio manager, joins 'Squawk on the Street' to discuss his investing focus, how the steepening of the yield curve will impact regionals, and more.
Organizations: Markets, Group
Stubbornly high inflation and a wobbly jobs market are combining to pose an ominous threat to the U.S. economy, Bank of America chief market strategist Michael Hartnett warned. The result is a narrative of "macro shifting from Q4/Q1 'Goldilocks' to Q1/Q2 'Stagflation,'" Hartnett said in his weekly "Flow Show" note to clients dated Thursday. As Hartnett indicated, the U.S. closed 2023 with the labor market looking strong and GDP posting a solid 3.2% gain. On the jobs market, while nonfarm payrolls have risen strongly , household employment actually is down by about 900,000 since November and full-time jobs have declined by nearly 1.8 million. The Fed is "implicitly ... tolerating higher inflation" as way to inflate the debt away, a condition that means "weaker policy credibility = weaker currency … why crypto & gold [are] at all-time highs."
Persons: Michael Hartnett, Hartnett, Stagflation, nonfarm, specter, That's Organizations: Bank of America, Federal Reserve, New, Fed, U.S ., Atlanta Fed, Nasdaq Locations: U.S
If you think chocolate prices this Valentine's Day were more expensive than usual, it's not you. Year to date, futures contracts are up nearly 27%, with cocoa prices rising in six of the past seven weeks. Here's a breakdown of what's driving cocoa prices higher and how it impacts the investment case around two major chocolate stocks. Doshi thinks cocoa prices could sell off about 20%, taking them to around $4,500 to $4,800 per ton. In an interview with CNBC last week, he underscored the rising cocoa price outlook as the key driver for his lower rating.
Persons: Humza Hussain, El, Aakash Doshi, Doshi, Bernstein, Bruno Monteyne, … There's, Mondelez, Alexia Howard, Hershey, Michele Buck, Bernstein's Howard, Howard, I'd, Bryan Spillane, Morgan Stanley, Pamela Kaufman, Bank of America's Spillane Organizations: Asset Management, CNBC, Hershey, Citi, 2H, Street, Bank of America, Bank of, Cadbury Locations: Mondelez, El Niño, Ghana, Ivory, Nigeria, Europe
Just days after delivering a stellar quarter, Microsoft CEO Satya Nadella was on a whirlwind speaking tour throughout India. The Indian market also represents a largely untapped market that will diversify revenue streams. Over the summer, India became Amazon's first market in Asia to launch its dedicated virtual cargo airline , dubbed Amazon Air. As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio.
Persons: Satya Nadella, Morgan Stanley, Chetan Ahya, Ahya, Bernstein, Nadella, Zev Fima, Fima, Tim Cook, Amazon, Sundar Pichai, Jim Cramer's, Jim Cramer, Jim Organizations: Microsoft, Apple, country's Ministry, Skill Development, Entrepreneurship, Club, Foxconn Technology, Media, Amazon, Walmart, Web Services, Google, CNBC Locations: India, Mumbai, Bengaluru, New Delhi, China, Asia, United States, Chennai, Puna, Hyderabad, Tamil Nadu, India's, Gujarat
Shanker also raised his price target to $80 from $75, suggesting nearly 34% downside from Friday's close. — Spencer Kimball 8:16 a.m.: Loop Capital upgrades Corteva, touts growth acceleration in 2025 Corteva's stronger-than-expected 2024 full-year guidance will jumpstart a period of strong growth, according to Loop Capital. The firm upgraded the agricultural chemicals company to buy from hold and increased its price target to $65 from $57. Analyst Jay Sole upgraded Urban to neutral from sell and upped his 12-month price target by $20 to $41. Kaufman's $183 price target indicates roughly 6.3% downside for shares, which have fallen more than 18% over the past year.
Persons: headwinds, Morgan Stanley downgrades XPO, Morgan Stanley, Ravi, Shanker, — Michelle Fox, Julien Dumoulin, Smith, Duke's, — Spencer Kimball, Chris Kapsch, Kapsch, Brian Evans, Cassie Chan, they'll, Chan, , Jay Sole, URBN, Sole, Urban's, — Pia Singh, Filippo Falorni, Falorni, Hershey, Stanley, Pamela Kaufman, Kaufman's, Hershey's, Kaufman, Graham Doyle, Doyle, Piper Sandler, David Amsellem, Amsellem, Amsellam, Christopher Horvers, Jan, Horvers, Fred Imbert, Dan Levy, Levy Organizations: CNBC, Barclays, Automotive, JPMorgan, Corp, Bank of America, Bank of America downgrades Duke Energy, Duke Energy, Duke, Wall, America, UBS, Urban Outfitters, Free People, Urban, Citi, PepsiCo, Citi Research, Pepsi, Hershey, GE Healthcare Technologies, UBS GE Healthcare Technologies, Pharmaceutical, Teva Pharmaceutical, Federal, Barclays downgrades Rivian, Rivian Automotive, North American EV Locations: Bank of America downgrades, GEHC, David Amsellem U.S
Dollar gains before inflation data, bitcoin slips
  + stars: | 2024-01-09 | by ( ) www.cnbc.com   time to read: +3 min
The dollar rose against the euro and yen on Tuesday as traders awaited inflation data on Thursday for clues on when the Federal Reserve is likely to cut rates. But Fed expectations are likely to continue to drive dollar moves. The release on Thursday of the consumer price inflation report for December will be the main piece of economic data this week. If the data confirms that inflation is continuing to moderate it could boost expectations for a March rate cut, though if it comes in above expectations it could also reverse some of that pricing. The U.S. dollar index , which measures the greenback against a basket of six currencies, was last up 0.33% at 102.55.
Persons: Bipan Rai, Kamal Sharma, steepening, Sharma Organizations: Federal Reserve, Securities and Exchange, CIBC Capital Markets, Bank of America, Fed, U.S, Bank of Japan, Investment Locations: North American, Toronto, U.S, Asia, Bitcoin
COVID), and active funds are hugging their benchmarks," Subramanian wrote in a note about her 2024 outlook. "We're bullish not because we expect the Fed to cut, but because of what the Fed has accomplished," Subramanian wrote. BMO Capital MarketsBofA analysts are calling for slower inflation, better profit margins, and improved efficiency, Subramanian wrote. BMO is less optimistic about energy stocks since they've lagged behind oil prices in the last year. Consumer discretionary is a strong bet if interest rate hikes are over and consumers keep spending, Subramanian wrote.
Persons: Brian Belski, Belski, Savita Subramanian, Subramanian, Bank of America BMO's Belski, he's, boomers, BofA Organizations: Bank of America, BMO Capital Markets, Business, BMO, Federal Reserve, " Bank of, Energy, BMO isn't Locations: Ukraine, Israel
Right now, it's up 7.7% year-over-year and continues to rise, prompting Kantrowitz to say it's a "huge red flag for me." Still, while the unemployment rate is up to 3.9% from its 3.4% low earlier this year, unemployment claims have not spiked meaningfully. Piper Sandler"Regarding employment – I see enough data that has me convinced that we are at the very onset of a recession right now," Kantrowitz said. If the unemployment rate continues to tick upward, even slightly, it will likely trigger the Sahm rule mentioned above. Plenty of market onlookers see a recession in 2024, including DoubleLine Capital CEO Jeffery Gundlach and Citadel founder Ken Griffin.
Persons: Piper Sandler's Michael Kantrowitz, Kantrowitz, Piper Sandler, Sahm's, It's, Claudia Sahm, Jon Wolfenbarger, Wolfenbarger, Jeffery Gundlach, Ken Griffin, Goldman Sachs, Jan Hatzius, Brian Moynihan Organizations: Federal, Business, Institute for Supply Management's, Investor, Federal Reserve, National Federal, Independent, Treasury, Conference, DoubleLine Capital, Citadel, Bank of America
The US economy added just 150,000 jobs, under the expected 180,000, and the unemployment rate rose to 3.9%, now 0.5% higher than its low earlier this year. Federal Reserve Bank of St. Louis/Bullandbearprofits.comSecond, the inverted yield curve is starting to steepen. An inverted yield curve has been an extremely reliable recession indicator over the last several decades. Bullandbearprofits.com"Proven leading indicators show that the unemployment rate is likely to start rising materially soon. Piper SandlerIn addition to the yield curve and employment indicators above, other recession indicators continue to point to a downturn ahead.
Persons: Jon Wolfenbarger, Merril Lynch, Wolfenbarger, Louis, bode, Piper Sandler's Michael Kantrowitz, Piper Sandler, Societe Generale's Albert Edwards, Edwards Organizations: JPMorgan, Federal Reserve Bank of St, National Federation of Independent, Fed, Bank of America, Societe Generale's, Generale, Edwards . Societe Generale Locations: lockstep, Edwards .
Demand for US bonds from foreign buyers will remain strong, according to Goldman Sachs. Goldman said it expects a solid appetite from foreigners for US bonds even as Japan phases out its yield curve control policy. AdvertisementAdvertisementForeign buyers will continue to have a strong appetite for US bonds, even as Japan begins to phase out its yield curve control policy, according to Goldman Sachs. Meanwhile, the US corporate bond yields are currently just below 6%, compared to just under 1% for Japanese corporate bonds. And any selling pressure in the US bond market by foreign investors would have to be driven by a confluence of different factors.
Persons: Goldman Sachs, Goldman, , that's Organizations: Service Locations: Japan
And some banks think the Bank of England may be the latest to paper over the QT cracks as soon as this week. Already, there's been some awkward shuffling of feet around a process that was meant to be just balance sheet plumbing. The Federal Reserve may be further away from dealing with the QT issue head on. Deutsche Bank's UK strategists agree and think "the bar for a shift in QT policy is lower heading into yearend." Deutsche argues the BoE could either skew gilt sales shorter or agree to sell evenly based on current market valuations.
Persons: there's, BOE, BoE, BofA, Deutsche, Mike Dolan, Lisa Shumaker Organizations: Bank of England, European Central Bank, Federal, . Treasury, Bank, Treasury, Bank of America, Deutsche Bank's, Reuters Graphics Reuters, Reuters, Thomson Locations: Treasuries, yearend
Speaking at this week's global finance meeting in Riyadh, HSBC boss Noel Quinn warned of a potential "tipping point on fiscal deficits" for a number of countries across the world. And some analysts fear the uncertainty of next year's funding crush is filtering out the steepening yield curve via the term premium. Term premium at highest in 8 yearsReuters GraphicsCBO long-term US debt and deficit projections'DOOM LOOP'? That's spooky enough, until you start to factor in the recent yield spike and or a return of the term premium to 60-year averages of 150 bp. Tipping point or not, there's a danger the market is starting crystallise the problem it fears most.
Persons: Sukree, Noel Quinn, it's, that's, Stephen Jen, Jen, Goldman Sachs, Jeremy Hunt, Mike Dolan Organizations: HSBC, New York Fed, Federal Reserve, Fed, JPMorgan, Treasury, CBO, Moody's, Reuters Graphics Reuters, Reuters, Thomson Locations: Kasikornbank, Bangkok, Riyadh, U.S, Washington, Europe, Italy
REUTERS/Issei Kato/File photo Acquire Licensing RightsOct 26 (Reuters) - A look at the day ahead in Asian markets from Jamie McGeever, financial markets columnist. Asian markets on Thursday are set to open on the defensive, with sentiment battered by one of the biggest selloffs of the year in U.S. tech stocks and a renewed spike in longer-dated U.S. Treasury bond yields the day before. The fog of uncertainty descended further over China's embattled property sector after it was reported on Wednesday that China's largest private lender Country Garden has defaulted on a U.S. dollar bond for the first time. But the broader tone in Asia on Thursday will be set by another decline in U.S. stocks and bonds. The global market moves represented a familiar pattern since the flare-up in Middle East violence nearly three weeks ago - higher bond yields, a 'bear steepening' of the U.S. yield curve, a stronger dollar, and higher oil and gold prices.
Persons: Issei Kato, Jamie McGeever, Michele Bullock's, Bullock, Josie Kao Organizations: U.S, REUTERS, Treasury, Reserve Bank of Australia, Central Bank, Thomson, Reuters Locations: Tokyo, Japan, Singapore, Asia, East, Korean, Korea
A passerby walks past an electric monitor displaying recent movements of various stock prices outside a bank in Tokyo, Japan, March 22, 2023. The U.S. 10-year yield has shot up 35 basis points this week, on track for its biggest weekly rise in over a decade. The 2s/10s yield curve has steepened 27 basis points, which would be the biggest weekly steepening move since March. The 10-year yield rose as high as 4.996%, a level not seen since July 2007. On the economic data front, data are expected to show Japan's annual core inflation rate was 2.7% in September, cooling from 3.1% in August.
Persons: Issei KatoFile, Jamie McGeever, Kazuo Ueda, Jerome Powell, Ueda, Josie Kao Organizations: REUTERS, Bank of Japan, People's Bank of, Federal, Netflix, Thomson, Reuters Locations: Tokyo, Japan, Treasuries, Malaysia, Hong Kong, China, People's Bank of China, Asia, U.S, Hill, East
Small-cap stocks were on investors' radar last week. The Russell 2000 index turned in five straight days of gains for the first time since mid-July, according to CNBC analysis. "We're in consumer staples stocks and Russell 2000 stocks," said Niles, adding that Pepsi is the fourth-largest holding in his Satori Fund's consumer staples basket. Both Citi and Morningstar said small-cap stocks now look cheaper than the broader market. How to play small-caps One of the more popular ways to invest in small-cap stocks is through the iShares Russell 2000 ETF (IWM).
Persons: Russell, Dan Niles, CNBC's, Niles, David Bailin, Morningstar, Davidson, — CNBC's Michelle Fox, Fred Imbert Organizations: CNBC, Russell, Pepsi, Citi, Citi Global Wealth's, Morningstar Equity Research, Ionis Pharmaceuticals, Screen CNBC Pro Locations: Israel, Gaza
Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailWe could see more steepening of the yield cure, says Neuberger Berman's Erik KnutzenErik Knutzen, Neuberger Berman multi-asset CIO, joins 'Squawk Box' to discuss the latest market trends, the Fed' rate hike campaign, Treasury yields outlook, impact of potential government shutdown, and more.
Persons: Neuberger Berman's Erik Knutzen Erik Knutzen, Neuberger Berman
This bank just hiked its 1-year CD rate to a fresh high
  + stars: | 2023-10-09 | by ( Darla Mercado | Cfp | ) www.cnbc.com   time to read: +2 min
Stashing money in safe assets is paying off — and another bank has just hiked the yield it pays on a 1-year certificate of deposit. LendingClub bumped the annual percentage yield on its 1-year CD to 5.65%, an increase of 15 basis points. That places LendingClub's 1-year CD some 55 basis points above the median CD peer rate, according to an analysis by Stephens, and it makes the bank's offering the top-paying CD within Stephens' coverage. "Following the market now anticipating a higher for longer rate cycle, we've seen a reversal of the CD rate cuts initiated in September by a few of our online banks," he said. The upside of buying a CD is you get to lock in your rate for the duration of the time you hold the instrument.
Persons: LendingClub, Stephens, Vincent Caintic, Caintic, Banks, — CNBC's Michael Bloom Organizations: Investors, Federal Deposit Insurance Corporation
A steepening yield curve is when the spread between long- and short-term bond yields widens. Either the long-term yield rises faster than the short-term yield - a bear steepener - or the short-term yield is falling more - a bull steepener. Bear steepenings of the benchmark two-year/10-year U.S. Treasury yield curve, when the curve is inverted, are rare. In some ways, a positive-sloping yield curve is the natural order of things. Graff reckons the bear steepening is almost over and the curve will struggle to get past -20 bps.
Persons: Warren Pies, Dario Perkins, Lombard's Perkins, Bond, Bill Gross, Goldman Sachs, Tom Graff, Graff, Jamie McGeever, Andrew Heavens Organizations: Treasury, 3Fourteen Research, TS Lombard, Federal Reserve, Reuters, Thomson Locations: ORLANDO, Florida, London reckons
ADP: Employers Add Paltry 89,000 Jobs in September
  + stars: | 2023-10-04 | by ( Tim Smart | Oct. | At A.M. | ) www.usnews.com   time to read: +3 min
Employers added only 89,000 jobs in September, well below expectations, private payroll firm ADP said on Wednesday. "We are seeing a steepening decline in jobs this month," said Nela Richardson, chief economist at ADP. The report is the second to come this week on the health of the job market. On Tuesday, the Labor Department issued its report on job openings for August, with a surprising 9.6 million jobs available. While the job market has slowed in 2023, it still remains tight by historical standards.
Persons: Nela Richardson, , Lightcast, Rachel Sederberg, Julia Pollak, José Torres Organizations: ADP, Federal Reserve, Labor Department, Interactive Brokers
Minneapolis CNN —US employers in the private sector added an estimated 89,000 jobs in September, a much lower total than expected and a potential indication of a sharp pullback in the labor market, payroll processor ADP reported Wednesday. The September tally landed well below economists’ estimates for 153,000 jobs added, as well as August’s upwardly revised total of 180,000 jobs added. While ADP’s tabulations don’t always correlate with the official federal jobs report — due out Friday — it’s sometimes viewed as a proxy for overall hiring activity, which has been gradually easing. “We’ve seen other times when we’ve had a relatively weak private sector number sandwiched between two stronger months,” Richardson said during a call with reporters. The BLS is set to release the all-important monthly jobs report for September at 8:30am ET on Friday.
Persons: , Nela Richardson, tabulations, it’s, We’ve, we’ve, ” Richardson, Ian Shepherdson, ” Shepherdson Organizations: Minneapolis CNN, ADP, , of Labor Statistics, Labor Locations: Minneapolis
REUTERS/Issei Kato/File Photo Acquire Licensing RightsOct 5 (Reuters) - A look at the day ahead in Asian markets from Jamie McGeever, financial markets columnist. Global currency volatility on Wednesday spiked to its highest since May, a day after U.S. Treasury market volatility also jumped to a five-month high. And although U.S. yields fell across the board, yield curve steepening continued as the 30-year yield pierced 5.00%. Japanese assets, meanwhile, will also be sensitive to possible Bank of Japan activity in the domestic government bond or currency markets on Thursday. An esoteric corner of Japanese markets - yen cross-currency basis - is at levels consistent with previous bouts of volatility.
Persons: Issei Kato, Jamie McGeever, Josie Kao Organizations: U.S, REUTERS, Treasury, of, Bank of Japan, FX, Japan's Nikkei, PMI, Thomson, Reuters Locations: Tokyo, Japan, South Korea, Philippines, Thailand, Taiwan, Singapore, U.S, of Japan, Bank, India, Australia
Futures tied to the Dow Jones Industrial Average slid 57 points, or 0.2%. Stocks were aided by a retreat in Treasury yields. The rate on the 10-year Treasury note slipped from highs last seen in 2007 after payroll processing firm ADP said that private job growth totaled 89,000 for September. The spread between the 2-year and 10-year Treasury yields ended Wednesday at about 31 basis points. The 2- and 10-year yield curve has been inverted since March 2022 – meaning short-term Treasury rates are higher than long-term rates.
Persons: Clorox, FactSet, I've, Liz Young, Stocks, Dow Jones, Young, Yun Li Organizations: New York Stock Exchange, Dow Jones, Nasdaq, Dow Locations: New York City . U.S
Private payroll growth tailed off sharply in September, according to an ADP report Wednesday that provides a counterweight to other signs that the labor market is still running strong. The payroll processing firm said job growth totaled just 89,000 for the month, down from an upwardly revised 180,000 in August and below the 160,000 estimate from economists polled by Dow Jones. Economists estimate non-farm payrolls increased by 170,000 in September, down from a 187,000 increase in August, according to Dow Jones. The report comes a day after the Labor Department said job openings unexpectedly rose sharply in August. ADP said job growth was strongest at companies with fewer than 50 employees, a sector that added 95,000 positions.
Persons: Dow Jones, Job, Nela Richardson Organizations: Federal Reserve, ADP, Labor Department, Labor Locations: New Brighton , Minnesota
Morning Bid: This Fed's not for turning
  + stars: | 2023-10-03 | by ( ) www.reuters.com   time to read: +5 min
The U.S. Federal Reserve building is pictured in Washington, March 18, 2008. That thought was echoed by Cleveland Fed chief Loretta Mester, who said: "I suspect we may well need to raise the fed funds rate once more this year." Either way, this is not the sound of a Fed who thinks the inflation battle is won. Fed hawkishness, however, has kept futures markets pricing a 50-50 chance of another quarter point rate hike to the 5.50-5.75% range by year-end. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.
Persons: Jason Reed, Mike Dolan, they've, Michelle Bowman, Loretta Mester, Michael Barr, hawkishness, Raphael Bostic, Susan Fenton Organizations: U.S . Federal, REUTERS, Reserve, Cleveland Fed, Institute, Supply, Bank of Japan, Reserve Bank of Australia, Big Tech, Atlanta Federal Reserve, Treasury, McCormick, PMI, Reuters, Thomson Locations: Washington, U.S
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