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Several measures from Friday's jobs report show the labor market is stronger than it's been in decades. But Terrazas pointed to potential concerns in the labor market and for interest rates. "If it's the former, it's just a matter of time before gravity catches up with the labor market," Terrazas said. Overall though, the different robust labor market data suggests the US could maybe avoid a recession as has been the case so far in 2023. Despite potential risks in the job market, Pollak believes there's a possibility that the US continues to avoid a recession.
In theory, that should be welcome news for stocks and other so-called risk assets, which wilted under the barrage of hikes last year. Yet some investors worry this year's 6.5% rebound in the S&P 500 has made equities expensive. Many are also wary that the Fed's rate hikes may precipitate a recession later this year. Stocks fell on Wednesday, with the S&P 500 ending down 0.7%, after the Fed's latest policy decision in which the central bank also raised rates by 25 basis points, as markets expected. Friday's U.S. employment report and next week's consumer price index data may give investors a sense of how deeply the Fed's rate hikes have seeped into the economy.
In theory, that should be welcome news for stocks and other so-called risk assets, which wilted under the barrage of hikes last year. Yet some investors worry this year's 6.5% rebound in the S&P 500 has made equities expensive. Many are also wary that the Fed's rate hikes may precipitate a recession later this year. Stocks fell on Wednesday, with the S&P 500 ending down 0.7%, after the Fed's latest policy decision in which the central bank also raised rates by 25 basis points, as markets expected. Friday's U.S. employment report and next week's consumer price index data may give investors a sense of how deeply the Fed's rate hikes have seeped into the economy.
In this videoShare Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailInvestors should turn to higher-quality fixed income in this volatile market, says Northwestern's Brent SchutteBrent Schutte, chief investment officer at Northwestern Mutual Wealth Management Company, and Adam Crisafulli, Vital Knowledge Media president and founder, join 'Closing Bell: Overtime' to discuss how investors can approach the volatile market after a week of big earnings.
US stocks ended Monday's session mixed, with the Nasdaq trailing rival indexes. Investors returned from the Good Friday break anticipating another Fed rate hike after the March jobs report. Consumer inflation data and the first bank earnings after Silicon Valley Bank's collapse are due this week. But traders were also continuing to price in expectations the Fed will raise interest rates again by 25 basis points, with those odds rising to 71% during the day. Investors, by odds of nearly 70%, are expecting the Fed to raise interest rates by another 25 basis points, to a range of 5%-5.25% at its May 2-3 meeting.
Regulators shut down Silicon Valley Bank on Friday, putting it into FDIC receivership. I think doing nothing would've been negative, but getting involved stops things in their tracks," Wright told Insider. Nancy Tengler, chief executive and chief investment officer, Laffer Tengler Investments"Often what we get from regulators, they close the barn door after the horses are out of the barn," Tengler told Insider. It's not like interest rates haven't been rising for a year. Jamie Cox, managing partner, Harris Financial Group"When the Fed jacks up interest rates 500 basis points in a matter of months, things like SVB happen," Cox told Insider.
I'm senior reporter Phil Rosen, and below I'm sharing my conversation with Northwestern Mutual's chief investment officer, Brent Schutte. He sees the bond market as this year's best recession hedge. Phil Rosen: You said you're expecting a mild and brief recession this year. Brent Schutte: The good news is that the bond market has repriced, and the bond market is a hedge against that recession. BC: I do think earnings will come down this year, and cheaper equities give a margin of safety against that.
Europe's STOXX 600 index (.STOXX) has gained some 17% since the end of the third quarter, versus 11% for the U.S. benchmark S&P 500. MSCI's gauge of global stocks excluding the U.S. has risen more than 20% over that time. The firm last month rotated more into international equities as it increased its overall stock exposure, de Longis said. US vs European stock performanceInternational stocks were recently touted by investor Jeffrey Gundlach of DoubleLine Capital and BofA Global Research, which projected global stocks would "crush" their U.S peers in 2023. Buying international stocks could be a "complement" to the opportunity domestically, said Mona Mahajan, senior investment strategist at Edward Jones.
Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailThe bond market is signaling a recession, says Northwestern Mutual's Brent SchutteMark Zandi, Moody's chief economist, and Brent Schutte, Northwestern Mutual Wealth Management CIO, join 'Squawk on the Street' to discuss wage growth and service price inflation, the weakness in the labor market, and opportunities in the bond market.
Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailWatch CNBC's full interview with Northwestern Mutual's Brent Schutte and JPM's Meera PanditBrent Schutte, Northwestern Mutual Wealth Management CIO, and Meera Pandit, J.P. Morgan Asset Management, join 'Squawk on the Street' to discuss Pandit's take on equity markets, how Schutte sees the markets right now and how Pandit is positioning as an investor.
Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailYou're seeing earnings positivity reflected in stock markets right now, says Northwestern Mutual's SchutteBrent Schutte, Northwestern Mutual Wealth Management CIO, and Meera Pandit, JPMorgan Asset Management, join 'Squawk on the Street' to discuss Pandit's take on equity markets, how Schutte sees the markets right now and how Pandit is positioning as an investor.
Brent Schutte believes that the Fed risks pushing the US economy into a deflationary environment. He shared four asset classes to hedge against the earnings decline that many analysts anticipate. While stubbornly persistent inflation has been top of mind recently for most investors, lately Brent Schutte has been growing increasingly worried about the opposite case — deflation. "2014 to 2020, we all were worried about deflation; that's what everybody wanted to talk about. But once the economy has reached a downturn, Schutte thinks that inflation won't continue to persist.
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