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☆ Morning Bid: Banks rescued, rates recoil, stress builds
▼ + stars: | 2023-03-13 | by ( ) www.reuters.com time to read: +5 min

Early last week as much as a half point rate hike was almost fully priced. Now back as low as 4.8%, the implied peak Fed rate for the cycle has plummeted almost a full percentage point over that time. Goldman Sachs now says it no longer expects the Fed to raise rates on March 21-22. The Federal Reserve also made it easier for banks to borrow from it in emergencies. More broadly, the implications for Fed monetary policy caused most ructions and complicated overall index direction that's torn between bank losses and the repricing of rates.

☆ Oil prices fall 2% in choppy trade as banking fears rattle markets
▼ + stars: | 2023-03-13 | by ( ) www.cnbc.com time to read: +2 min

Oil prices fell over 2% in volatile trading on Monday as the collapse of Silicon Valley Bank roiled equities markets and raised fears of a fresh financial crisis, but a recovery in Chinese demand provided support. Brent crude futures settled down $2.01, or 2.4%, to $80.77. U.S. West Texas Intermediate crude futures (WTI) dropped $1.88, or 2.5%, to $74.80 a barrel. Worries about further Fed monetary tightening have been exacerbated by high U.S. crude oil inventories. Crude oil production in the seven biggest U.S. shale basins is expected to rise in April to its highest since December 2019, the Energy Information Administration said.

☆ This is what cost basis means when buying stocks — and why we (usually) don't violate it
▼ + stars: | 2023-02-09 | by ( Zev Fima | ) www.cnbc.com time to read: +7 min

You'll often hear Jim Cramer say that we don't want to violate our cost basis when adding to one of our Club positions. When Jim says that our discipline forbids us from "violating our cost basis," he means we want every new buy in a stock we own to be below the weighted average cost basis. As a result, each new buy should serve to reduce the overall weighted average cost basis of the position. Most brokerage tools calculate this for you, usually in the "cost" column or "cost basis" column in the dashboard. We don't get hung up on how that might affect cost basis because the reason for selling takes precedence.

The Act states the Fed should conduct monetary policy "so as to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates." On that basis, the average core PCE inflation rate since 2010 is exactly 2.0% - even after the recent scare and with the monthly rate ebbing again fast. At 1.25%, real 10-year yields - measured by market inflation expectations rather than prevailing inflation - are far above sub-zero post-pandemic troughs and are also some of the highest in over a decade. And hence the cat and mouse game between Fedspeak and market pricing - rather than a material change to investors' assumption that the Fed is nearly done. U.S. Fed has missed the mark on inflationThe opinions expressed here are those of the author, a columnist for Reuters.

☆ Gulf shares start new year in upbeat mood, Egypt outperforms
▼ + stars: | 2023-01-02 | by ( Shamsuddin Mohd | ) www.reuters.com time to read: +3 min

Jan 2 (Reuters) - Most major Gulf equities got off to a good 2023 start on Monday, with Egypt outperforming regional peers, as investors shrugged off concerns about a potential recession, crude oil demand and the U.S. Fed hiking rates further. Crude prices, which are highly correlated with Gulf financial markets, swung wildly in 2022 and are expected to remain under pressure in 2023. Abu Dhabi's index (.FTFADGI) advanced 0.4% on Monday, bolstered by a 0.6% increase in the country's largest lender First Abu Dhabi Bank (FAB.AD). The Qatari index last year posted its first annual loss since 2017, dropping 8.1% in 2022. Outside the Gulf, Egypt's blue-chip index (.EGX30) closed 2.5% higher, with Commercial International Bank Egypt (COMI.CA) climbing 3.1% while Abu Qir Fertilizers And Chemical Industries (ABUK.CA) was up 5.2%.

That came on the heels of last week's report that October consumer prices rose less than anticipated, and Fed officials have signaled they are likely done with the three-quarter-point rate increases approved at the central bank's last four meetings. "Tech companies may have over-extrapolated the rapid growth they experienced during the pandemic and are now correcting for over-hiring," the Goldman economists wrote. Job growth through October remained strong but was moderating from its pre-pandemic highs, and Fed officials said they saw some initial signs that wage growth was beginning to cool. Curbing demand is one aim of Fed rate increases that have come at the fastest pace in 40 years on the expectation that less consumption will translate into less inflation. "You'd actually expect more competitive pressure to start bringing those costs down," Fed Vice Chair Lael Brainard said Monday at a Bloomberg event.

☆ Why corporate leaders like Mark Zuckerberg, Jack Dorsey, and Evan Spiegel are all apologizing for the massive layoffs at their companies
▼ + stars: | 2022-11-15 | by ( Sarah Belle Lin | ) www.businessinsider.com time to read: +10 min

Since the pandemic, the largest tech layoffs have been at Meta, Getir, Booking.com, Twitter, Uber, Better.com., Peloton, and Groupon, Layoffs.fyi data show. Now companies in tech are reversing some of the huge hiring that they did in the past couple of years, Lee said. Mark Zuckerberg, MetaFacebook CEO Mark Zuckerberg speaks about "News Tab" at the Paley Center, in New York on October 25, 2019. In the memo he wrote: "Many people predicted this would be a permanent acceleration that would continue even after the pandemic ended. Jack Dorsey, ex-CEO TwitterTwitter CEO Jack Dorsey testifies before the House Energy and Commerce Committee in Washington, DC, in 2018.

☆ An increase in Q3 real GDP will still not impact Fed monetary policies
▼ + stars: | 2022-10-27 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailAn increase in Q3 real GDP will still not impact the Fed's monetary policiesTomas Philipson, Former Acting Chairman of the Council of Economic Advisers, joins Worldwide Exchange to discuss his expectations for the latest GDP print.

But to fully understand why rising bond yields make stocks less attractive, we need to look at what those yields mean in the real world and why they move. Why should we care about bond yields Bond yields, which move inversely to bond prices, have been going up in the current environment because inflation is bad for bonds and we've got tons of inflation. Doing so provides us with an earnings yield. Flip that and we get 1/20 or a 5% earnings yield. Now, an investor may have been happy to receive a 5% earnings yield when the risk-free yield was 1%.

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