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☆ Sterling plunges to all-time low as fiscal plan spurs investor exodus
▼ + stars: | 2022-09-26 | by ( Kevin Buckland | ) www.reuters.com time to read: +3 min

Sterling tumbled as low as $1.0327, an all-time nadir, and last traded 3.34% weaker at $1.0490. A former top Japanese currency official said Monday that policymakers likely won't try to defend a certain level, such as the 145 mark, but only conduct any further operations to smooth volatility. read moreThe dollar index was 0.76% higher at 114, and earlier reached 114.58 for the first time since May 2002. Fellow commodity currency the Canadian dollar reached a fresh trough at C$1.3625 per greenback, its weakest since July 2020. China's offshore yuan slid to a new low of 7.1630 per dollar, its weakest level since May 2020.

☆ Gold hits 2½-year low as dollar stands tall
▼ + stars: | 2022-09-26 | by ( ) www.cnbc.com time to read: +1 min

A five hundred gram gold bar, left, and a a one kilogram gold bar, produced by Swiss manufacturer Argor Hebaeus SA, in Budapest, Hungary. Gold prices fell to a new 2½-year low on Monday, weighed down by a sturdy dollar and prospects of further interest rate hikes by the U.S. Federal Reserve to bring down inflation. Gold prices have fallen more than 20% since scaling above the key $2,000 per-ounce mark in March. Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.31% to 947.23 tons on Friday. Spot silver fell 0.8% to $18.68 per ounce, platinum rose 0.7% to $860.13, and palladium gained 0.4% to $2,076.10.

☆ The conditions needed for a stock market bottom are forming as investors get overly bearish, JPMorgan says
▼ + stars: | 2022-09-26 | by ( Matthew Fox | ) www.businessinsider.com time to read: +3 min

Conditions are forming that suggest a stock market bottom could be near, JPMorgan's Marko Kolanovic said. To Kolanovic's point, investors are growing increasingly bearish on the stock market. AAII's most recent investor sentiment survey showed just 17.7% of its respondents were bullish on the direction of stock prices over the next six months. But overly bearish sentiment readings rarely (if ever) serve as a catalyst that will launch stock prices higher. That would help drive another tactical bounce in growth stocks, according to the note, and could ultimately end the significant drop in the stock market.

☆ The Fed's rate hike was just the beginning as banks around the world adjust policy - but the uncertainty doesn't mean the market can't rally.
▼ + stars: | 2022-09-23 | by ( Phil Rosen | ) www.businessinsider.com time to read: +6 min

The Federal Reserve's Wednesday rate hike was just the beginning of the world's fight against inflation. A smattering of other central banks have followed suit, while some others took a different course. For now, pain fueled by central banks is likely to continue. The Fed's 75 basis-point rate hike on Wednesday was the first of many such moves this week as the policymakers globally confront surging prices. Three investing experts explained how to adjust your portfolio to benefit from the Fed's rate hike and rising inflation.

☆ Fundstrat's Tom Lee is sticking with his bullish year-end stock market forecast even as yields soar and equities plunge amid sticky inflation
▼ + stars: | 2022-09-23 | by ( Matthew Fox | ) www.businessinsider.com time to read: +3 min

Plunging stock prices, soaring interest rates, and sticky inflation are not enough to change Fundstrat's conviction on the market. Fundstrat's Tom Lee outlined why he still expects a year-end stock market rally in a Friday note. "Fed could do far less tightening as the market is doing Fed's work," he argued. Yet Fundstrat's Tom Lee remains resolute in his view that the stock market will soar into year-end. That commentary has led investors to expect even more rate hikes going into 2023, with a terminal fed funds rate of 4.6%.

☆ RBI to raise rates again, slim majority of economists expect 50 bps hike: Reuters poll
▼ + stars: | 2022-09-23 | by ( Arsh Tushar Mogre | ) www.reuters.com time to read: +4 min

A Reserve Bank of India (RBI) logo is seen at the gate of its office in New Delhi, India, November 9, 2018. The RBI has lagged many of its global peers, despite inflation sticking above the top end of its target range of 2-6% all year. Register now for FREE unlimited access to Reuters.com RegisterIn the latest Reuters poll, economists were split five ways on what the RBI will do at its next meeting. Slightly over half, 26 of 51, said the RBI would go for a 50 basis point hike, taking the repo rate to 5.90%. Economists expected growth to average 6.2% and 6.5% over the next two years, the poll showed.

☆ Analysis: Japan is chasing its tail on yen intervention
▼ + stars: | 2022-09-23 | by ( Vidya Ranganathan | ) www.reuters.com time to read: +4 min

Banknotes of Japanese yen are seen in this illustration picture taken September 22, 2022. Thursday's sudden burst of yen-buying intervention by Japanese authorities -- the first instance since 1998 - caused a large 6 yen move between 140 and 146 in the dollar-yen exchange rate . U.S. policy rates are now 3 percentage points higher than Japan's. Governor Haruhiko Kuroda made clear that policy won't change, and even the yen the BOJ is buying as part of intervention will be replaced. while the boj intervened heavily between april and june 1998, the yen didn't trough until September.

☆ Yen propped up after intervention, dollar powers through
▼ + stars: | 2022-09-23 | by ( Rae Wee | ) www.reuters.com time to read: +3 min

Banknotes of Japanese yen are seen in this illustration picture taken September 22, 2022. The yen was up about 0.1% to 142.24 per dollar in early Asian trade, though trading was thin with Japan on a public holiday. The yen rallied more than 1% and hit a session-low of 140.31 on Thursday, on news Japan had bought yen to defend its battered currency. "My sense is that the law of diminishing returns will set in, as far as intervention is concerned." The benchmark 10-year Treasury yields hit an 11-year high of 3.718% overnight, while two-year yields remained well above 4% and last stood at 4.1223%.

A trader works on the trading floor at the New York Stock Exchange (NYSE) in Manhattan, New York City, U.S., September 13, 2022. Goldman Sachs cut its year-end 2022 target for the benchmark S&P 500 index (.SPX) by about 16% to 3,600 points, a 4.2% decline from current levels. read moreThe CBOE volatility index (.VIX), also known as Wall Street's fear gauge, rose to 28.72 points. Meanwhile, Fed Chair Jerome Powell is set to give opening remarks on the transition to the post-pandemic economy at an event at 2 p.m. On the data front, investors will closely monitor flash reading on business activity data from S&P Global at 09:45 am ET.

☆ China's yuan tumbles near key threshold as dollar strength increases on aggressive Fed policy
▼ + stars: | 2022-09-23 | by ( Phil Rosen | ) www.businessinsider.com time to read: +2 min

The onshore yuan weakened 0.58% against the dollar Friday to 7.1193, Bloomberg data shows. China's currency neared the lower limit of its daily trading band, while the dollar climbed thanks to a hawkish Fed. The yuan joined other top global currencies lower as the dollar continued to strengthen amid the Federal Reserve's hawkish rate-hike campaign. Earlier in September, the offshore yuan dipped below the psychological threshold of 7 per dollar, which marked its weakest level since July 2020. Japan moved Thursday to defend the yen's value by dumping dollars, and India has been rapidly drawing down its currency reserves to bolster the rupee.

☆ European stock index futures drop 1.5% after hawkish Fed signal
▼ + stars: | 2022-09-22 | by ( ) www.reuters.com time to read: +1 min

Register now for FREE unlimited access to Reuters.com RegisterThe German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, September 21, 2022. REUTERS/StaffSept 22 (Reuters) - European stock index futures tumbled on Thursday as the U.S. Federal Reserve delivered another super-sized interest rate hike and signalled more increases in its fight against stubbornly high inflation. The EURO STOXX 50 index futures and Germany's DAX futures lost 1.5% each, as of 0606 GMT, taking cues from Wall Street overnight. read moreMeanwhile, European Central Bank board member Isabel Schnabel said interest rates need to keep going up as inflation is still far too high, even as the euro zone faces an economic downturn. read moreLondon's FTSE 100 index futures dropped 0.9% ahead of what will likely be the Bank of England's second large interest rate hike later in the day.

☆ Stocks could struggle as investors read the Fed's message to mean a recession is more likely
▼ + stars: | 2022-09-22 | by ( Patti Domm | In | ) www.cnbc.com time to read: +5 min

Lerner said investors should also realize that higher rates in the bond market could pressure stocks as investors look for attractive yield elsewhere. Sam Stovall, chief investment strategist at CFRA, said the more hawkish Fed does not mean the market will keep from rallying in the fourth quarter. The fourth quarter in a mid-term election year is often positive, after stocks crater in September and early October in the typical seasonal pattern. Stovall said he is less enthusiastic about a fourth quarter rally, but it could still happen. "I'm not giving up on a fourth quarter rally, but it might start with a lower case 'r'," he said.

☆ How the Fed's tough talk translates into lower earnings and more pain for stock prices
▼ + stars: | 2022-09-22 | by ( Bob Pisani | ) www.cnbc.com time to read: +3 min

Both metrics for determining future stock prices (earnings estimates and the market multiple) could now move in a very wide "band". A wide range of outcomes implies more uncertainty, more volatility. For example, what is the right earnings estimate for the next twelve months for the S & P 500? "S & P 500 EPS estimates will likely be coming down at increasing rates in the weeks ahead," Nick Raich, who tracks corporate earnings at Earnings Scout, told me. 232 x 17 = 3,944 for the S & P 500, more than 150 points above where it is now.

☆ Gold falls 1% on surging dollar, hawkish Fed
▼ + stars: | 2022-09-22 | by ( ) www.cnbc.com time to read: +2 min

A five hundred gram gold bar, left, and a a one kilogram gold bar, produced by Swiss manufacturer Argor Hebaeus SA, in Budapest, Hungary. Gold prices fell 1% on Thursday, as the U.S. dollar rallied and the Federal Reserve flagged more large rate hikes, diminishing the zero-yielding metal's appeal. Gold prices fell 1% on Thursday, as the U.S. dollar rallied and the Federal Reserve flagged more large rate hikes, diminishing the zero-yielding metal's appeal. "Gold will remain vulnerable to selling pressure if inflation does not continue to ease, but it could start to stabilize now." The dollar rallied to a new two-decade high, making the greenback-priced metal more expensive for buyers holding other currencies.

☆ Lumber falls after mortgage rates solidify their move above 6% amid hawkish Fed rate hikes
▼ + stars: | 2022-09-22 | by ( Matthew Fox | ) www.businessinsider.com time to read: +3 min

Lumber prices extended their 2-day decline to 10% after the Fed hiked interest rates by 75 basis points on Wednesday. The aggressive interest rate hike from the Fed helped solidify the recent surge in mortgage rates to above 6%. "The lumber market continues to be in a state of overall malaise as buyers anticipate lower overall demand going forward," Sherwood Lumber told Insider. The surge in mortgage rates have taken a significant bite out of home sales, which has in-turn led to price cuts and has dented homebuilder sentiment. "The lumber market continues to be in a state of overall malaise as buyers anticipate lower overall demand going forward.

☆ 3 takeaways from Wednesday’s ‘Morning Meeting’ – We’re watching the Fed and firms with pricing power
▼ + stars: | 2022-09-21 | by ( Krystal Hur | ) www.cnbc.com time to read: +3 min

Every weekday the CNBC Investing Club with Jim Cramer holds a "Morning Meeting" livestream at 10:20 a.m. We're letting our stocks run on Fed day Companies with pricing power are winners here Quick mentions: CSCO, NVDA, QCOM, MRVL, CRM 1. Companies with pricing power are winners here In this high-inflation environment, we believe companies that have the power to set prices, instead of taking them down, will be the winners. Jim says Abbvie (ABBV) has pricing power, citing JPMorgan's note on Tuesday stating it sees an "attractive setup for shares" into 2023. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER .

☆ Aggressive Fed hikes rates another 75 bp, surprising no one
▼ + stars: | 2022-09-21 | by ( ) www.reuters.com time to read: +8 min

So this is a pretty hawkish 75 basis point increase when it comes to how the text reads." What it's telling us is that the Fed is expecting to rates to continue to move higher into 2023." There's a camp that says whatever the Fed guides to has typically been the floor and not the ceiling. This communication is basically signaling that the Fed's going to continue to be aggressive and remain hawkish. Not only did the Fed hike another unusually large 75 bps today, it is basically saying it will do it again in November.

☆ Explainer: What's inside China's toolbox to rein in excess yuan weakness?
▼ + stars: | 2022-09-21 | by ( ) www.reuters.com time to read: +4 min

The local currency also looks set for the biggest annual loss since 1994, when China unified official and market exchange rates. The rapid yuan declines prompted the People's Bank of China (PBOC) to lower the amount of foreign exchange financial institutions must hold as reserves to rein in weakness. The PBOC has been setting firmer-than-expected daily yuan midpoint fixings since late August to prevent excess yuan weakness, as the onshore spot yuan can only trade in a 2% narrow range around the midpoint. The central bank adjusted the methodology a few times before suspending it in October 2020. "The yuan exchange rate level itself is not the most important, the nature of the issue is whether China's cross-border capital flows remain stable," said Zhong Zhengsheng, chief economist at Ping An Securities.

The rate hikes are the sharpest since the last time the Fed, under Paul Volcker's leadership, battled super-high inflation in the 1980s. But the projections do show Americans are in for some pain ahead as the Fed works to end inflation and prevent what Powell says would otherwise be even worse outcomes. By the end of 2024 policymakers see inflation at 2.3%, and easing to its 2% target by the end of 2025. Historically once the unemployment rate rises by half a percentage point, it continues to rise another point or two, if not more. Wednesday's projections show Fed policymakers have also become more pessimistic about the outlook for economic growth.

☆ There's one number that could be key to how markets trade right after the Fed meets
▼ + stars: | 2022-09-21 | by ( Patti Domm | In | ) www.cnbc.com time to read: +6 min

(A basis point equals 0.01 of a percent) Besides the rate hike, the market is intently focused on the terminal rate. Expectations for the Fed's terminal rate also soared. Before the August CPI report, the futures market was pricing in a terminal rate at just about 4% for next April. In the futures market, "the terminal rate went up 40 basis points in 24 hours," he said. But NatWest Markets expects the Fed could indeed have a terminal rate of 5%.

☆ The Fed just raised interest rates by another 0.75%, putting Main Street economy 'dangerously close' to edge of lending cliff
▼ + stars: | 2022-09-21 | by ( Eric Rosenbaum | ) www.cnbc.com time to read: +12 min

"From a credit perspective, people are getting more cognizant about increasing interest cost, and that the Fed will keep interest rates at 4-4.50%," Arora said. "The expectation is, in the short term, SBA loans will adjust up and non-SBA loans are shorter tenure," he said. SBA loan guaranty waiver endingAnother cost that is suddenly influencing the SBA loan decision is the end of a waiver this month on SBA loan guaranty fees that are traditionally charged to borrowers so that in the event of a default, the SBA pays the portion of the loan that was guaranteed. When he started in small business lending back in 1998, business loans reached as high as 12% to 12.5%. And with a peak Fed rate level of 4% or higher reached by late this year, that is where SBA loan rates are heading.

☆ Higher rates are leaving investors around the world with nowhere to hide
▼ + stars: | 2022-09-20 | by ( Michael Santoli | ) www.cnbc.com time to read: +3 min

This is the daily notebook of Mike Santoli, CNBC's senior markets commentator, with ideas about trends, stocks and market statistics. Once again, nothing happening now is incompatible with this being a prolonged, messy bottoming effort longer term. Are equities still "too expensive" with bond yields here, the 10-year neat 3.5%? The S & P index, maybe, at 16.5x, with some cross-asset models saying it should be one or two multiple points cheaper. VIX getting puffed up 24 hours ahead of the Fed decision, near 27, mechanical stuff.

☆ Top manager Vanguard bullish on U.S. Treasuries as Fed's hikes near peak
▼ + stars: | 2022-09-19 | by ( Davide Barbuscia | ) www.reuters.com time to read: +4 min

REUTERS/Brendan McDermidNEW YORK, Sept 19 (Reuters) - Vanguard, the world’s second-largest asset manager, believes U.S. Treasuries are near the end of a painful decline even as prices tumble to fresh multi-year lows, a senior portfolio manager at the firm told Reuters. Markets broadly expect the central bank to raise rates by another 75 basis points on Wednesday after already delivering 225 basis points in tightening this year. "If you're positioning for that, you obviously want to be tilted more defensively ... And that by definition means you're leaning more towards Treasuries." Fed funds futures' traders expect interest rates to keep climbing to a high of around 4.4% next March, over 200 basis points higher than the current benchmark overnight interest rate. At the same time, the income earned from higher yields can also help blunt losses if bond prices fall further than expected, he said.

☆ Oversold conditions are starting to emerge for stocks ahead of the Fed's decision
▼ + stars: | 2022-09-19 | by ( Michael Santoli | ) www.cnbc.com time to read: +3 min

This is the daily notebook of Mike Santoli, CNBC's senior markets commentator, with ideas about trends, stocks and market statistics. Last week's decline after the hot consumer price index report pushed off the perceived moment of a Fed truce took the S & P 500 below the 3,900 area bulls were hoping would hold. The 2-year Treasury yield pushing 4% is rippling across asset classes, reflecting the combined inflation backdrop and anticipated Fed response. Some equity-valuation models tied strictly to this yield suggest the S & P 500 forward price-earnings "should" be more like 13x-14x rather than the current 16.5x. It's a crude instrument for gauging fair value but has largely been in tune with valuation trends in recent years.

☆ Three reasons why JPMorgan’s Kolanovic believes market downside is limited from here
▼ + stars: | 2022-09-19 | by ( Yun Li | ) www.cnbc.com time to read: +2 min

JPMorgan's Marko Kolanovic believes the market sell-off won't get much worse than this as Wall Street's top strategist found three big reasons to stay optimistic. Still, Kolanovic, one of the biggest bulls on Wall Street, reassured his clients that downside should be limited because of resilient earnings, low positioning and anchored inflation expectations. Kolanovic gained a wide following after correctly calling the March 2020 market bottom and the subsequent rebound during the pandemic. The strategist believes that high inflation and robust nominal GDP growth are cushioning nominal earnings growth in an environment of low real growth. Meanwhile, retail and institutional investors are poised to add back equities after being underweight for a few months, Kolanovic said.

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