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Inflation’s Wild Ride
  + stars: | 2024-06-26 | by ( Jeanna Smialek | Karl Russell | Lazaro Gamio | ) www.nytimes.com   time to read: +4 min
Coming into and through 2019, the economy was strong and the Consumer Price Index, a key measure of inflation, was low. For some, that seemed like a bad thing — economists worried that chronically low inflation could increase the risk of future economic stagnation. The Personal Consumption Expenditures index, a slightly delayed price measure that the Fed uses for its 2 percent inflation target, similarly fell. Within a few months, inflation began to pick up. Price jumps began to moderate even in service categories, which made economists hope that the deceleration might be the real deal.
Persons: , Biden, Donald J, Trump, Price, ” Jerome H, Powell, ” Mr Organizations: Fed, Consumer, Federal Locations: Covid, Ukraine, blowups
Ten active major-league starting pitchers have won a Cy Young Award — and nine of them have spent time on the injured list in 2024. The issue is not only the health of the modern starting pitcher, but the role those starters play in the sport these days. “You’ve got to get the starting pitcher back. But has the starting pitcher crisis risen to that level? If you’re a dominating starting pitcher in this era, it probably means you throw harder than the average pitcher.
Persons: Tom Seaver, Steve Carlton, Sandy Koufax, Bob Gibson, Pedro Martinez, Randy Johnson, , Cy Young, Baltimore’s Corbin Burnes, Yu Darvish, Justin Steele, , Max Scherzer, “ You’ve, Patrick Mahomes, isn’t, that’s, weren’t, here’s, It’s, they’d, you’re, they’re, David Ortiz, Scherzer, Justin Verlander, Adam Wainwright, they’ve, , North America aren’t, I’ve, you’ve, ” Scherzer, Corbin Burnes, Patrick Smith, Rob Manfred, we’re, “ You’re, wouldn’t, it’s, “ that’s, He’s, Manfred, Eamonn Dalton, Conrad Williams , Jr, Matthew Grimes Jr Organizations: Cy, Wrigley, San Diego Padres, Chicago Cubs, Cubs, Padres, Major League Baseball, Texas Rangers, NFL, Athletic, MLB, American League, of Fame, didn’t, Atlantic League, Red Sox, National League, North America, Orioles, Newsday, Getty Images, Atlanta Braves, Getty
First-quarter earnings season is just getting started, but investors may want to keep a close eye on a group of stocks at risk of a profit "blowup," according to Wolfe Research. The basket includes stocks that show up most often in the firm's short screens and filters companies based on earnings quality with 0 the worst and 100 the best. Tesla scores a 2 on Wolfe Research's earnings quality scale, showing up six times on the firm's short screens. Wolfe Research named Pinterest as another short idea, saying it was on four of the firm's short screens. Both stocks appear on four of the firm's short screens and have earnings quality scores in the 20s.
Persons: Morgan Stanley, Wolfe, Tesla, J.M Smucker Organizations: Wolfe Research, Bank of America, Elon, Rivian Automotive, Walgreens Boots Alliance, Juniper Networks, L3Harris Technologies Locations: China, Irvine , California
There are some names this upcoming earnings season investors may want to steer clear from, according to Wolfe Research. As the season gets started, Wolfe Research advised clients to stay away from companies with a low earnings quality score. "We expect low quality stocks to underperform again starting in 2024," chief investment strategist Chris Senyek wrote Wednesday. The firm has a basket of low earnings quality names that can help investors "avoid potential blow-ups in the portfolio." C3.ai also made Wolfe's list with an earnings quality rating of 1.
Persons: underperform, Chris Senyek, Tesla, Elon Musk, Levi Strauss, — CNBC's Michael Bloom Organizations: Wolfe Research, JPMorgan Chase, Bank of America, Citigroup, FactSet, Hasbro
James Gorman, chairman and chief executive of Morgan Stanley, speaks during the Global Financial Leader's Investment Summit in Hong Kong, China, on Tuesday, Nov. 7, 2023. The de-facto central bank of the Chinese territory is this week holding its global finance summit for a second year in a row. Photographer: Lam Yik/Bloomberg via Getty ImagesSINGAPORE — Morgan Stanley Chairman and CEO James Gorman said his firm will be able to cope with "any form" that new banking regulations end up taking, but added he expects some watering down before the final rules are confirmed. U.S. regulators on Tuesday defended their plans for a sweeping set of proposed changes to banks' capital requirements, speaking in front of the U.S. Senate Banking Committee. These proposed changes in the U.S. seek to incorporate parts of international banking regulations known as Basel III, which was agreed to after the 2008 crisis and has taken years to roll out.
Persons: James Gorman, Morgan Stanley, Lam Yik, Getty Images SINGAPORE — Morgan Stanley, it's, Gorman, Morgan, I've Organizations: Financial, Investment, Bloomberg, Getty Images SINGAPORE, U.S . Senate Banking Committee, Basel III, CNBC, Pacific, Federal Reserve, Fed Locations: Hong Kong, China, U.S, Basel, , Morgan Stanley's, Asia, Singapore, New York
With Interest Rates Up, Get Ready for Financial Drama
  + stars: | 2023-10-26 | by ( Jonathan Weil | ) www.wsj.com   time to read: 1 min
Depositors lined up for a fourth day to withdraw money from Old Court Savings and Loan in Baltimore in 1985 amid that decade’s S&L crisis. Photo: Bettmann Archive/Getty ImagesInterest rates have soared. Can financial blowups be far behind? The yield on 10-year Treasury notes topped 5% this week for the first time since 2007. While not high by historical standards, it is a big move from less than 1%, where it was for most of 2020.
Organizations: Old, Savings, Loan Locations: Baltimore
Founders say VCs are increasingly demanding detailed data and visibility into their startups before considering a deal. But some in the industry say that for early stage startups, a reliance on data can create an illusion of certainty. Half a dozen early stage startup founders tell Insider that gone are the days when a good idea and flashy pitch deck were enough to close a deal. He described it as looking for "the golden playbook for investing in early stage startups." For his part Hasan says that when speaking to potential investors, he views an obsession with financials and data as a red flag.
Persons: Miguel Guerrero, Guerrero, He's, Fahad Hassan, Hasan, Keyvan Firouzi, Firouzi, Jason Calacanis, it's, Dorothee Grant, Avante Price, James Cham, Cham, Hassan Organizations: IRL, Activant, Stanford, Carta, Investors, Bloomberg Beta Locations: New York
(Photo by SAUL LOEB / AFP) (Photo by SAUL LOEB/AFP via Getty Images)U.S. regulators on Thursday unveiled a sweeping set of proposed changes to banks' capital requirements to address evolving international standards and the recent regional banking crisis. The changes will broadly raise the level of capital that banks need to maintain against possible losses, depending on each firm's risk profile, the agencies said. While the heightened requirements apply to all banks with at least $100 billion in assets, the changes are expected to impact the biggest and most complex banks the most, they said. "Improvements in risk sensitivity and consistency introduced by the proposal are estimated to result in an aggregate 16% increase in common equity tier 1 capital requirements," the regulators said in a fact sheet. Tier 1 common capital levels measure an institution's presumed financial strength and its buffer against recessions or trading blowups.
Persons: Michael Barr, Martin Gruenberg, SAUL LOEB, Long Organizations: Federal Reserve, Federal Deposit Insurance Corporation, Banking, Urban Affairs, Capitol, AFP, Getty Images, Federal Deposit Insurance Corp, Basel III Locations: Washington , DC, Basel
"Our quarterly earnings quality (EQ) score is an objective way to identify potential accounting related short ideas and as a risk tool to avoid potential blow-ups in the portfolio," Senyek said. CNBC pulled six stocks from the Wolfe list across a range of sectors. Rivian made the list with an earnings quality score of just 3. Shockwave Medical , meanwhile, fits on the Wolfe list due to issues pertaining to cash flow constraints and research and development amortization. In consumer staples, Dick's Sporting Goods is on the Wolfe list with a rating of 9 out of 100.
Persons: Wolfe, Chris Senyek, Senyek, Rivian, Morgan Stanley, Dick's, — CNBC's Michael Bloom Organizations: CNBC, FactSet, Shockwave, ShockWave, Centers, Medicare, Medicaid Services, Sporting Goods, Lucid
Then, a deep dive into MrBeast and what his YouTube empire says about the future of the internet. Reddit came along and said, oh, we need to protect Reddit from the rise of these large language models. So I don’t think they’re totally out of the woods. But I don’t think people would say it was a golden age for how safe the platforms fell to use. But I want to challenge you on this, because I don’t necessarily think that it’s a bad thing if we have past peak trust and safety.
Persons: kevin roose, you’ve, casey newton, casey newton Yes, I’ve, there’s, kevin roose I’m, Kevin Roose, ” casey newton, Casey Newton, Casey, Reddit, casey newton Right, roose, Steve Huffman, you’re, Kevin, It’s, They’re, casey newton Well, they’ve, we’re, Huffman, , Redditors, We’ve, Everyone’s, we’ve, I’m, let’s, Sam Walton, Max, kevin roose Hey, kevin roose Oh, kevin roose Max Read, MrBeast, it’s, Jimmy Donaldson, He’s, Willy Wonka, he’s, somethings, haven’t, kevin roose We’ll, We’ll, kevin roose She’s, she’s, kevin roose MrBeast, Jeremiah, jeremiah howard, Jeremiah Howard who’s, Jimmy, Burger, You’re, Stefan Molyneux, PewDiePie, Paul, Let’s, Raman, kevin roose It’s, MrBeast financials, doesn’t, Logan Paul, they’re, Vincent Miller, Jon Hamm’s, Matthew Weiner’s, kevin roose Max, Will, Max Read, ” kevin roose, casey newton Max, Robert F Kennedy, COVID, Kennedy, Instagram, Connor Roy, Marjorie Taylor Greene, Robert F Kennedy Jr, Elon, Donald Trump, We’re, Jim Jordan, kevin roose Totally, Alex Jones, casey newton Totally, Kate Kalanick, Trump, Tucker Carlson, aren’t, — casey newton, hasn’t, Rachel Cohn, Jen Poyante, Caitlin Love, Alyssa Moxley, Dan Powell, Elisheba Ittoop, Marion Lozano, Sofia Lanman, Rowan Niemisto, Paula Szuchman, Tam, Nell Gallogly, Kate LoPresi, Jeffrey Miranda Organizations: The New York Times, Twitter, YouTube, Lamborghini, Netflix, Walmart, News, Producers, Meta, Instagram, COVID, Democratic, Washington Post, Apple, Republicans, Facebook, 4chan, Republican Party, Trump, Fox News, Stanford, Davis Locations: Hawaii, Reddit, Greenville , North Carolina, hysterics, New Jersey, New York, Greenville, North Carolina, Central, United States, Bay, San Francisco, Stanford
Budrul Chukrut | Lightrocket | Getty ImagesAt midnight on Tuesday, the moderators of the Reddit community r/Gaming decided to go dark. "We're talking hundreds of thousands of volunteers putting in hours a day to keep the site safe, entertaining and enjoyable for community members. As a private company, Reddit doesn't have to disclose its financials or provide revenue and profit projections. "You have a lot of people, both professionals and general community members, who are running the numbers on this," Croach said. Jacqueline Sheeran, known as "MCHammerCurls," is the head moderator of r/Fitness, which has more than 10 million members.
Persons: Budrul, Dacvak, Slack, weren't, Croach, Reddit, Christian Selig, Selig, Steve Huffman, Huffman, Horacio Villalobos, subreddits, they're, , David DeWald, subreddit, Shane McCarthy, McCarthy, Meepster23, ModCoord, Omar, Jacqueline Sheeran, Sarah Gilbert, Gilbert, Huffman's, RamsesThePigeon, that's, there's Organizations: Lightrocket, Reddit, CNBC, Facebook, Twitter, YouTube, Google, Amazon, Yahoo, Microsoft, Corbis, NBC, Wall, NBC News, Cornell University, school's Citizens, Technology Locations: U.S, Lisbon, Portugal
Reddit CEO Steve Huffman thinks the site's mods are too powerful. So a politician needs to be elected, and a business owner can be fired by its shareholders," he told NBC. Reddit mods hold a lot of power, and many believe it has been earned due to the amount of unpaid labor they put into the site. He told NBC it was "really important" to ensure "protests, now or in the future, are actually representative of their communities." Huffman told NBC there was no set timeline for his proposed changes.
Persons: Steve Huffman, subreddits, Reddit, Christian Selig, Huffman, We've Organizations: NBC, Ars Technica, University of Minnesota Twin Cities, Northwestern University Locations: Reddit
The Reddit blackout shows no signs of stopping
  + stars: | 2023-06-14 | by ( Brian Fung | ) edition.cnn.com   time to read: +3 min
CNN —A widespread Reddit blackout affecting some of the site’s largest communities has continued into its third day with no signs of stopping, as a number of groups on the site vowed to remain closed off indefinitely to protest changes to the platform’s data policies. The blackout includes popular forums such as r/aww, r/videos and r/music, each of which claims more than 25 million subscribers on the platform. For Reddit, the stakes are also high to grow revenue, as the company reportedly looks to go public later this year. Huffman reportedly dismissed the blackout in a leaked internal memo obtained by The Verge. As of Wednesday morning, many groups participating in the blackout had lifted their self-imposed restrictions.
Persons: didn’t, Reddit, Steve Huffman, ” Huffman, Elon Musk, Huffman Organizations: CNN Locations: Reddit
Reddit's CEO is warning employees not to wear branded gear in public as users stage a mass revolt. "Like all blowups on Reddit, this one will pass as well," Huffman told employees. In an internal memo obtained by The Verge, Huffman told employees to "please be mindful" of wearing Reddit gear. The developer of Apollo, a hugely popular third-party app, said the changes would cost them millions and force them to shut down. The loss of third-party apps would force users onto the official Reddit app, where they'd have to deal with advertisements.
Persons: Steve Huffman shrugged, Huffman, Steve Huffman, Reddit, they'd, hasn't Organizations: Morning, Wall Street Journal
It was one the president deployed once again behind closed doors at the White House. With Memorial Day on the horizon, senior White House officials said protecting veterans’ benefits was a top priority. They also knew it was a sensitive issue for Republicans’ politically, especially as House Republicans parried White House allegations about cuts to veterans’ services. White House officials would engage in conversations where their Republican counterparts would outline a potential resolution on issues. For months, White House officials hoped – and to some degree based on past battles, expected – Senate Republican Leader Mitch McConnell would engage in finding a resolution.
Persons: Joe Biden, Biden, , ” Biden, Kevin McCarthy, simmered, Steve Ricchetti, Louisa Terrell, Shalanda Young, reticence, Biden didn’t, McCarthy, ’ carveouts, Republicans ’, Republicans parried, ” Terrell, , ” Young, Jeff Zients, , would’ve, that’s, ” Zients, ” Ricchetti, Patrick McHenry, Young, Michael Linden, Ricchetti, McCarthy’s, Mitch McConnell, Terrell, McHenry, Garret Graves, Graves, Dan Meyer, they’ve, “ There’s, you’re, cleaver Organizations: CNN, Resolute, Legislative, White, Republican, FBI, Republicans, Internal Revenue Service, SNAP, Congressional, Office, Progressive, Young, White House, GOP, Biden, Republican Rep, Congress, dropoff, Air Force Academy Locations: Washington, Garret Graves of Louisiana, McHenry, Louisiana, Ukraine, Colorado
“She’s well respected by both sides,” McCarthy said of the former longtime House Appropriations Committee staffer, according to White House officials. “Asking me about the communication (with the White House) implies there was communication,” one House Democrat said. For the White House negotiators, that meant late nights and early mornings. The White House negotiators left Capitol Hill abruptly and for hours, it was unclear when the conversations would resume. Quietly, White House negotiators had never actually stopped talking to their Republican counterparts.
Persons: Joe Biden, Kevin McCarthy, McCarthy, , “ You’ve, ” Rep, Patrick McHenry, Biden, Steve Ricchetti, Shalanda Young, Louisa Terrell, ” McCarthy, James S, Alex Wong, Young, Garret Graves, ” Graves, Graves, Tom Cole of, ” Cole, White, Jeff Zients, McHenry, , Chuck Schumer, Hakeem Jeffries, Ricchetti, , ” Terrell, Dan Meyer, , apprised, decamping, , Anna Moneymaker, nonstarters, ” McHenry, McHenry –, , Susan Walsh, businesslike, Biden’s, Eisenhower, Zients, Jose Luis Magana, Young –, Louisianans –, Jim Clyburn, Clyburn, Annie Kuster, ” Kuster, wasn’t, ” Young Organizations: CNN, White, , Republican, Legislative, Young, Management, Brady, Capitol, White House, GOP, McCarthy’s, Pennsylvania, Capitol Hill, U.S, Biden, Democrat, Democratic, Republicans, Building, Air Force, West Executive, LSU Tigers, South Carolina Democrat, New Democrat Coalition, Democrats Locations: Irish, Washington , DC, Louisiana, Tom Cole of Oklahoma, McHenry, Hiroshima, Japan, Washington
To be sure, the April inflation data hit the UK debt market like a thunderbolt. While the headline consumer price inflation rate dropped to 8.7% from 10.1% in March, as energy prices ebbed, that was still far higher than forecast and core inflation rates hit their highest in 31 years at just under 7%. And a chief concern for many households is ongoing annual food price inflation still near 20%. Sterling and real yield spreadsNew UK gilt shock? Using 5-year real yields from the index-linked bond market, that premium jumped almost 40bp this week to its highest since last October.
Morning Bid: Hike and hold, bank angst and Apple
  + stars: | 2023-05-04 | by ( ) www.reuters.com   time to read: +5 min
As the Fed delivered what markets assume will be the last rate hike of a brutal 13-month, 500-basis-point tightening cycle, further aftershocks from the March bank blowups reverberated in the background. And given they had advance knowledge of next week's quarterly loan survey before Wednesday's rate decision, it suggests the bigger picture they see remains somewhat equivocal. Norway's central bank raised interest rates as expected and signalled more to come. Events to watch for on Thursday:* European Central Bank policy decision, statement and news conference* U.S. first quarter unit labor costs and productivity, April layoffs, March trade balance, weekly jobless claims. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.
A Commodity Futures Trading Commission official said Tuesday that she hopes to find a "path forward" in the regulator's legal battle with crypto exchange Binance, noting that no decision has been taken yet on whether to settle the case or take it to court. Kristin N. Johnson, commissioner at the CFTC, said that the regulator has been in conversations with Binance to address its concerns about the company's conduct. And I want to say that typically, in the context of any litigation, we are always ready to have conversations and typically even ahead of the litigation," Johnson said in an interview with CNBC's Arjun Kharpal Tuesday. "As of the moment, we can conclude that there is not an immediate path forward," she added. Her comments mark a rare statement on the Binance suit to media since the CFTC first announced it was suing the company on Mar.
LONDON, April 20 (Reuters) - Major U.S. crypto exchange Coinbase Global Inc (COIN.O) has said it has secured a licence to operate in Bermuda, as part of a wider push to expand globally. Coinbase CEO Brian Armstrong said on Tuesday that crypto firms will develop in "offshore" havens unless the U.S. and UK create "clarity about regulation" for crypto. Coinbase is planning to launch a crypto derivatives exchange in Bermuda as soon as next week, Fortune reported on Wednesday, citing a person close to the company. In March, derivatives trading volumes on major exchanges hit some $2.8 trillion, according to London researcher CCData, versus spot trading volumes of just over $1 trillion. Crypto firms say they need clarity about regulations, but Gensler has said that crypto markets "suffer from a lack of regulatory compliance, not a lack of regulatory clarity".
Some banks are rolling out the welcome mat for cryptocurrency firms that found themselves in need of banking services after the downfall of two big crypto-friendly lenders, Signature Bank and Silvergate Capital Corp.As crypto companies have scrambled to establish new bank relationships, industry executives say they have received a positive reception from regional banks such as Customers Bancorp ., based in West Reading, Pa., and Fifth Third Bancorp , based in Cincinnati.
Goldman Sachs said in a research note Thursday the recent energy sector pullback should be viewed as a reason to buy since that strategy has worked well since late 2020. West Texas Intermediate crude and energy stocks have been under intense pressure in recent weeks on the back of heightened recession fears. Based on that criteria, Goldman has Pioneer Natural Resources (PXD) on its "Americas Conviction List" with a buy rating. Recognizing the ups-and-downs of owning energy stocks, we still believe they should be part of any diversified portfolio. As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade.
Stocks have risen as investors conclude that authorities will prevent a bank crisis from spreading. He says that tighter credit conditions and the economy will weaken, and stocks look expensive. While bank stocks are still down, the rest of the market is collectively higher since the crisis started. But even if that's true, Morgan Stanley says investors are far too optimistic right now. In short, Wilson wrote that investors who see conditions in markets right now as positive for stocks, especially for tech, are making a mistake.
The good news: Banks were willing to go to the Fed for help, and the central bank was willing and able to comply. Programs such as the BTFP can have that stigma, too, but in this case the Fed made its conditions a bit easier than the discount window. The BTFP also pays par value on securities offered in exchange for cash, while the discount window uses market value. "The discount window takes everything. "We have seen the largest uptake of the discount window in history.
Even though reading anything with certainty from such volatile prices is difficult right now, the runes of the bond market suggest unfolding banking stress will suppress inflation anyway - regardless of further central bank action. "That would be very much in line with what the central banks want." U.S. equivalents were steadier about 2.5%, but five-year "breakeven" inflation rates from the index-linked market fell to 2.3%. To be fair to central bank policymakers, their own early warning systems - such as the ECB's Composite Indicator of Systemic Stress - don't yet show any more pressure on the system than they did during last year's tightening. Armed with Thursday's trial run from the ECB, the Fed and BoE will now have to make that judgment next week.
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