DIRS.INFO The most relevant business & tech news

☆ The US is heading towards stagflation, which would be terrible news for stocks, JPMorgan says
▼ + stars: | 2024-02-21 | by ( Yuheng Zhan | ) www.businessinsider.com time to read: +2 min

JPMorgan warned that today's economic situation could shift towards 1970s-era stagflation, characterized by high inflation and low growth. Such a situation would drive investors away from stocks towards fixed-income assets offering higher returns. JPMorgan says current geopolitical tensions have parallels to the 1970s and could similarly drive inflation. AdvertisementThe US economy is at risk of tilting towards stagflation, or a period marked by low growth and persistently high inflation, which would prompt investors to favor stocks over bonds, says JPMorgan. An uncertain geopolitical environment, combined with high interest rates, would likely reduce liquidity, JPMorgan said.

Persons: —, JPMorgan, JPMorgan Chase, Jamie Dimon Organizations: JPMorgan, Service Locations: Vietnam, Israel, Ukraine, China

☆ 'Black Swan' author Nassim Taleb says the US is heading for a debt 'death spiral'
▼ + stars: | 2024-01-30 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +4 min

The US is headed for a debt "death spiral" if politicians don't rein in spending, Nassim Taleb said. "The Black Swan" author said debt troubles will continue if Congress can't"A debt spiral is like a death spiral," Taleb said at an event on Monday. AdvertisementThe US is facing a "death spiral" as a result of its mounting debt and the inability of politicians to confront the issue, according to "The Black Swan" author Nassim Taleb. In fact, rising debt in the US is a "white swan," Taleb said, and is an event that poses an obvious risk to markets versus a "black swan" event, which can occur without much warning. "A debt spiral is like a death spiral," he added.

Persons: Nassim Taleb, Swan, Taleb, —, Per, Goldman Sachs Organizations: Service, Per Bloomberg, Universa Investments, Fed, Investors Locations: West, Congress

☆ How the Red Sea crisis could clobber the global economy
▼ + stars: | 2024-01-10 | by ( Hanna Ziady | ) edition.cnn.com time to read: +9 min

The Suez Canal accounts for 10-15% of world trade, which includes oil exports, and for 30% of global container shipping volumes. Maersk CEO Vincent Clerc told the Financial Times Thursday that re-establishing safe passage through the Red Sea could take “months.” “It could potentially have quite significant consequences on global (economic) growth,” he added. Ikea has warned of shipment delays and potential shortages of certain products due to disruption in the Red Sea. Some ocean carriers that ordinarily transit through the Panama Canal had rerouted to the Suez Canal before the attacks in the Red Sea escalated, according to logistics company C.H. Matthew Burgess, vice-president of global ocean services at the firm, said global shipping capacity would be constrained for a while yet.

Persons: Joe Biden, Vincent Clerc, Germany’s, Mohamed, El Erian, ” Simon MacAdam, Lily Millard, Ben May, Good Hope, ”, ” It’s, Abercrombie &, Nathan Howard, “, ” Philip Damas, —, Judah Levine, Levine, Eric Thayer, Carolina Klint, Marsh McLennan, Robinson, Matthew Burgess, we’ve, Gene Seroka, Burgess, C.H Organizations: London CNN, British, Energy, World Bank, Maersk, MSC, Lloyd, CMA CGM, Financial Times, Global, Germany’s Kiel Institute, Allianz, Bank, Capital Economics, Oxford Economics, European Automobile Manufacturers ’ Association, Ikea, CNN, Abercrombie, Abercrombie & Fitch, Bloomberg, Getty, Drewry Supply Chain Advisors, Marsh, United, Port Locations: Iran, Crocs, Suez, Yemen, Gaza, Germany, Brent, Gulf, Oman, South Africa, Germany’s Kiel, Red, Israel, Good, Europe, ”, China, Asia, Los Angeles, United States, Panama, Rotterdam, of Los Angeles, of New York, New Jersey

☆ 'It's all clear' on inflation, and the Fed could cut rates as soon as March, Wharton professor Jeremy Siegel says
▼ + stars: | 2023-11-16 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

He predicted central bankers could begin cutting interest rates as soon as March. The Wharton professor thinks the US could risk a recession if the Fed doesn't dial back interest rates soon. AdvertisementThe battle against high inflation is just about over, and that could give the Federal Reserve the green light to soon start cutting interest rates soon, according to Wharton professor Jeremy Siegel. AdvertisementThe Fed has raised short-term interest rates 525 basis points over the past year, which Siegel previously warned could trigger a recession. Central bankers have a bigger risk now of dialing back interest rates too late, he suggested, as the economy is already showing signs of slowing down.

Persons: Jeremy Siegel, Wharton, —, Siegel, Powell, Goldman Sachs Organizations: Service, Federal Reserve, CNBC, Treasury, Bank of America

☆ The Fed's next move will be to cut rates as the drop in inflation was a 'gamechanger,' former PIMCO chief economist says
▼ + stars: | 2023-11-14 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

The Fed's next rate move will be to cut rates, former PIMCO chief economist Paul McCulley said. Some forecasters say the Fed will slash interest rates by nearly three percentage points next year. Most significant is the "crack" in shelter inflation, McCulley said, which rose 6.7% year-over-year in October. AdvertisementInvestors will debate over when the Fed will cut rates, he added, though most are expecting the first rate cut to happen sometime next year. Some economists, though, have cautioned that the Fed risks easing interest rates prematurely, which could eventually lead to a resurgence in inflation down the line.

Persons: Paul McCulley, McCulley, —, That's, we've, Mohamed El Organizations: Service, CNBC, UBS, Fed

☆ The Fed and war in the Middle East are the 2 things that could push the US economy into a recession, 'Dr. Doom' economist Nouriel Roubini says
▼ + stars: | 2023-11-02 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

The US economy still faces two risks that could push it into a recession, Nouriel Roubini warned. AdvertisementAdvertisementThe US is facing two risks that could push the economy into a recession, according to economist Nouriel Roubini. That will cause the Fed to push interest rates higher, a move that could overtighten financial conditions and push the US into a recession, Roubini warned. Meanwhile, bond yields could plunge as investors flock to safe-haven assets like US Treasurys, Roubini warned. Other economists have also warned of recession risks, despite the resilience of the economy and the stock market so far this year.

Persons: Roubini, Doom, —, Nouriel Roubini Organizations: Service, Fox Business, Fed, Societe Generale Locations: Israel, Iran

☆ Stagflation and a possible world war: Here's how to trade it, according to one hedge fund manager
▼ + stars: | 2023-11-01 | by ( Amala Balakrishner | ) www.cnbc.com time to read: +3 min

Livermore Partners is a long/short special situations hedge fund with a focus on energy, financials and industrials. The hedge fund manager named French fashion house Louis Vuitton and Italian sports car manufacturer Ferrari as the "best and brightest of the market." Although high rates mean banks earn more interest from borrowers, they can also mean higher loan losses as customers struggle with the economic environment. The U.S. Federal Reserve put a pause on hikes in September, after raising rates to a 22-year high. "Banks I think are just still going to be in for a world of hurt on a go-forward basis," the hedge fund manager said.

Persons: David Neuhauser, Neuhauser, CNBC's, Brent, Louis Vuitton, Aston, Banks Organizations: Livermore Partners, Hamas, Ferrari, Aston Martin, Burberry, U.S . Federal Reserve Locations: Israel, British

☆ Markets are on board with the Fed's ‘higher for longer’ policy, CNBC survey shows
▼ + stars: | 2023-10-31 | by ( Steve Liesman | ) www.cnbc.com time to read: +3 min

As recently as the summer, respondents had forecast rate cuts in the beginning of next year. The change can also be seen in the outlook for the fed funds rate, the central bank's benchmark for short-term lending costs. It's now forecast on average to end 2024 at 4.6%, assuming about 75 basis points of rate cuts. In June, the year-end 2024 funds rate was forecast at 3.8%, which assumed 125 basis points of cuts. Some 60% of respondents see the Fed hitting its inflation target in 2025 or sometime after that, and 19% don't believe the Fed will ever get there.

Persons: Jerome, Powell, Peter Boockvar, Robert Brusca, Troy Ludtka Organizations: CNBC, Survey, Federal Reserve, Bleakley Financial, Fed, Nikko Securities

Member of the ECB governing council and Governor of the Bank of Greece, Yannis Stournaras talks during an interview with Reuters in Athens, Greece, October 11, 2023. In the interview, Greece's central bank governor also warned about the risk of stagflation from a prolonged war in the Middle East and spoke against increasing the amount of reserves that banks must hold. He countered calls by some of his colleagues for an early end to the ECB's last surviving bond-buying scheme, saying the central bank may need that firepower in a geopolitical environment fraught with risks. The ECB all but stopped buying bonds last year after a sudden surge in inflation forced it to unwind a decade of stimulus policies. "For the moment I see no reason why we should tighten monetary policy now because increasing the minimum requirements will imply monetary policy tightening," Stournaras said.

Persons: Yannis Stournaras, Louisa Gouliamaki, Rome, ECB policymaker Yannis Stournaras, Stournaras, Francesco Canepa, Mark Potter Organizations: Bank of Greece, Reuters, REUTERS, European Central Bank, ECB policymaker, ECB, Investors, European Commission, Thomson Locations: Athens, Greece, ATHENS, Israel, Palestine, Italy, Rome

☆ The IMF warns of bond market risks amid fears of a Silicon Valley Bank repeat
▼ + stars: | 2023-10-10 | by ( Filip De Mott | ) www.businessinsider.com time to read: +3 min

The IMF warned of bond market risks amid fears of a Silicon Valley Bank repeat. Sharp rises in bond yields could pose a risk to banking portfolios, as happened earlier this year. NEW LOOK Sign up to get the inside scoop on today’s biggest stories in markets, tech, and business — delivered daily. AdvertisementAdvertisementThe sharp rise in Treasury bond yields provoked warnings from the International Monetary Fund, which called on regulators to increase their financial markets oversight. In March, Silicon Valley Bank was forced to sell its bond holdings at a major loss, sparking a flight in deposits that triggered its collapse along with other lenders.

Persons: Tobias Adrian, Sharp, —, Adrian, Michael Barr Organizations: Financial Times, Service, International Monetary Fund, Silicon Valley Bank, Federal Reserve, American Bankers Association Locations: Silicon Valley, China, Europe, United States

☆ The stock market's report card one year since the bottom of the 2022 bear market
▼ + stars: | 2023-10-07 | by ( Michael Santoli | ) www.cnbc.com time to read: +7 min

A report card for the stock market as it approaches one year since the October 2022 bottom of the mini-bear market would probably read, "Good effort, shows perseverance, needs improvement." The equal-weight S & P 500 is up less than 12% from its low. The median stock in the index is up between 3% and 4% over the past 12 months. All four times since 1979, the S & P 500 and Russell 2000 were both higher in the fourth quarter. The S & P 500 is now at 17.7-times 12-month forward profit forecasts, according to FactSet, down from almost 20 in late July.

Persons: Doug Ramsey, Russell, Stephen Suttmeier, Jurrien Timmer, Stocks Organizations: Leuthold, Nasdaq, Bank of America, Fidelity Investments, Fed, Federal Reserve, Deutsche, Treasury

☆ Is it time to worry about stagflation?
▼ + stars: | 2023-08-10 | by ( Elisabeth Buchwald | ) edition.cnn.com time to read: +8 min

CNN —For the past two years, economists have been worrying about the risks of high inflation rates. But far less attention has been given to inflation’s sibling: stagflation. Stagflation is the combination of high inflation and a slowing economy. The current state of stagflation: Last year, then-World Bank President David Malpass warned that stagflation risks were high because of supply chain disruptions stemming from lockdowns in China and bans on Russian oil. What’s happening now: The risk of stagflation varies significantly across different regions of the globe.

Persons: Stagflation, David Malpass, Janet Yellen, ”, Lan Ha, stagflation, Andrew Kenningham, “, That’s, ” Kenningham, ” Ha, Ha, Parija Kavilanz, don’t, Dallin Hatch, Biden, Joe Biden, Trump, Matt Egan, It’s Organizations: CNN Business, Bell, CNN, Federal, World Bank, Euromonitor, Capital Economics, Bank of England’s, National Institute of Economic, Social Research, Trump Locations: Israel, lockdowns, China, Europe, Germany, Ukraine, Saudi Arabia

☆ A pair of fund managers who've beaten 97% of competitors in the last 15 years share 4 top investments to score safe, solid returns in a market driven by speculative AI stocks
▼ + stars: | 2023-07-13 | by ( James Faris | ) www.businessinsider.com time to read: +5 min

Here are four investments to make right now with stocks at risk of giving up their gains. "When we see windows of market distress, we tend to have a range of different opportunities to deploy that cash," McLennan said. If foreign currencies continue to strengthen relative to the dollar, the fund managers think international stocks could take off. Perhaps that's why, of their four favorite investments to make right now, three are international stocks. All three of the stocks McLennan and Brooker are most bullish on are all trading at discounts despite being leaders in their fields and having strong leadership teams, they said.

Persons: Matt McLennan, Kimball Brooker, McLennan, it's, Morningstar, Brooker, there's, they're, Wednesday's, Goldman Sachs, they'll, They've Organizations: Eagle Global Fund, Federal, McLennan

Nominal wage growth is the strongest in two years, economic growth is weak, and these stagflationary pressures are being sustained by persistently low productivity. This lifted the two-year yield some 43 basis points (bps) above the 10-year yield, the most inverted yield curve since 2008. The longer end of the UK yield curve is feeling the squeeze too, with the UK-German 10-year yield spread widening above 200 bps. But traders are now pricing in a peak BoE terminal rate of 5.75% early next year, above the implied Fed peak of around 5.375% later this year. That's another 125 bps of rate hikes on top of the 440 bps of tightening already delivered in the last 18 months.

Persons: BoE, Liz Truss, That's, Sterling, stagflation, Paul Johnson, Jamie McGeever, Jamie Freed Organizations: Bank of England's, Federal Reserve, Deutsche Bank, International Monetary Fund, Institute for Fiscal, HSBC, Reuters, Thomson Locations: ORLANDO, Florida, Britain, U.S, Canada, Japan, United States

☆ Goldman Sachs COO warns of 'mini stagflationary' scenario where sticky inflation eats away at economic growth
▼ + stars: | 2023-06-09 | by ( Zahra Tayeb | ) www.businessinsider.com time to read: +2 min

Brace for a "mini stagflation" scenario where sticky inflation eats away at US economic growth, Goldman Sachs' COO said. "That's not going to be called a recession, but it's not going to feel great," John Waldron said at the Bloomberg Invest conference. While the US economy may avoid a recession, inflation remains of key concern, he said. "If you want to paint a more cautious picture, you would say we might have a mini stagflationary scenario. Waldron added "the persistence of inflation in the system" on the supply side is what's being felt by the Wall Street bank's corporate clients.

Persons: Brace, Goldman Sachs, That's, it's, John Waldron, —, that's, Stagflation, Waldron, you've Organizations: Bloomberg Invest, Service, Fed, ECB, Federal Reserve Locations: New York

☆ Sterling falls as cracks appear in Britain's job market
▼ + stars: | 2023-05-16 | by ( ) www.reuters.com time to read: +2 min

Sterling fell by as much as 0.52% against the dollar to a session low of $1.2466, and by as much as 0.4% against the euro . Right now, the derivatives market shows traders believe UK rates will peak at 4.80% in November, down from 4.86% a day ago. Tuesday's data showed pay growth - which is at the heart of the BoE's debate about whether to raise interest rates further - remained strong by historical standards. That said, with inflation at 10.1%, pay growth in real terms is still deeply negative and close to its weakest in years. Markets are attaching a 68% chance that the BoE will raise rates by a quarter of a point to 4.75% and a 32% chance of no change.

☆ Dollar notches biggest weekly rise since February
▼ + stars: | 2023-05-12 | by ( ) www.cnbc.com time to read: +3 min

The U.S. dollar rose against the euro and sterling on Friday, and notched its biggest weekly gain since February, as investors shifted to safe havens after consumer sentiment data fueled concern about the U.S. debt ceiling and monetary policy. A University of Michigan survey on Friday showed May U.S. consumer sentiment slumped to a six-month low on worries that political dispute over raising the federal government's borrowing cap could trigger a recession. "Rate differentials are continuing to tilt in the dollar's favor," said Karl Schamotta, chief market strategist of Corpay in Toronto. Recent data showing a slowing economy has boosted the case that the Fed will pause hiking rates at its June meeting. That left the dollar index up 0.63% at 102.70, notching a weekly gain of 1.4% — its biggest weekly rise since February.

☆ Asia shares inch higher, U.S. inflation test looms
▼ + stars: | 2023-05-08 | by ( Wayne Cole | ) www.reuters.com time to read: +4 min

"The survey should point to further broad-based tightening in bank lending standards," said Bruce Kasman, head of economic research at JPMorgan. "Though our analysis suggests that the impact of a credit tightening against an otherwise healthy backdrop tends to be limited." S&P 500 futures and Nasdaq futures were both off 0.1%, after jumping on Friday in the wake of Apple's (AAPL.O) upbeat results. The dollar stood at 135.19 yen , with the euro at 148.93 and not far from its recent 15-year peak of 151.55. Brent was last up 3 cents at $75.33 a barrel, while U.S. crude added 5 cents to $71.39 per barrel.

☆ The US and China are on a collision course that will worsen the geopolitical economic depression, 'Dr. Doom' economist Nouriel Roubini warns
▼ + stars: | 2023-05-04 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +2 min

The US and China are on a collision course that's set to worsen a "geopolitical depression," Nouriel Roubini said. Roubini previously said a geopolitical depression will have far-reaching economic and financial consequences. "Fragmentation and decoupling are becoming the new normal, the two countries remain on a collision course, and a dangerous deepening of the ongoing 'geopolitical depression' is all but inevitable." In a column in February, Roubini warned the world has entered a geopolitical depression that will have far-reaching economic and financial consequences. "In particular, a hot war between major powers is now more likely within the next decade," Roubini wrote in February.

☆ GDP report points to dreaded stagflation, but these stocks can still work in this environment
▼ + stars: | 2023-04-27 | by ( John Melloy | ) www.cnbc.com time to read: +2 min

Investors may want to position themselves for a stagflationary environment after Thursday's gross domestic product reading for the first quarter showed lackluster economic growth and high inflation. First-quarter growth came in at a 1.1% annualized pace, much slower than the 2% growth expected by economists polled by Dow Jones. Stagflation is an economic condition the U.S. experienced in the 1970s, characterized by slow economic growth and elevated inflation, along with high unemployment. The one ingredient missing today is the high unemployment, but mounting layoffs are raising fears that will change soon too. But it's a reasonable bet that certain stocks with pricing power and resilient revenue sources could outperform in this kind of environment.

☆ Stockmarket rise helps SNB post Q1 profit of 26.9 bln Swiss francs
▼ + stars: | 2023-04-27 | by ( ) www.reuters.com time to read: +2 min

The bank made a profit of 24.2 billion francs from its foreign currency positions and 4.3 billion from an increase in the value of the gold it holds. The result will come as a relief to the SNB, which posted a loss of 132.5 billion francs for 2022 overall, the biggest in its 115-year history. In the latest results, the SNB's foreign currency gains were derived from interest of 2.5 billion francs paid on the bonds it holds and 900 million francs in dividends from its stock portfolio. Its also reported a valuation increase of 8.5 billion francs on its massive bond holdings while its equities holdings, which include stakes in most large U.S. companies, increased by 14.7 billion francs in value, the SNB said. Still, the central bank will have been relieved from a monetary policy perspective, UBS economist Alessandro Bee said.

☆ US March CPI comes in on the cool side
▼ + stars: | 2023-04-12 | by ( ) www.reuters.com time to read: +5 min

Year to date, the CPI increased 5.0%, the smallest 12-month gain since May 2021. "The data was a little bit better than what was expected, so that tells me that the bond market is saying that the probability of this next rate hike has decreased just a little bit." "The other number that's important is the PPI number that comes out this week. That will probably change a little bit today as people digest this data, maybe even within the next half an hour or so." It weakens the argument for a pause.”“Futures are going up based on the topline number, that’s what markets are focusing on.”“Inflation is cooling down.

☆ A credit crunch is coming for the US that'll tip the economy into recession, 'Dr. Doom' economist Nouriel Roubini warns
▼ + stars: | 2023-04-11 | by ( Zahra Tayeb | ) www.businessinsider.com time to read: +3 min

"Dr. Doom" economist Nouriel Roubini said a sure-fire credit crunch will tip the US into recession. "That credit crunch is going to make the likelihood of a recession, a hard landing, much greater than before," he said. And therefore we're going to have a credit crunch," Roubini said. "That credit crunch is going to make the likelihood of a recession — a hard landing — much greater than before. So we're facing a serious credit crunch for a good chunk of the US banking system," he said.

Solari wasn't the only American to veer wildly between frugality and all-out spending sprees during the pandemic. In particular, younger people — Gen Z and millennials — have seen the early parts of their careers and critical years of their financial lives defined by the shifting sands of the pandemic economy. The strange pandemic-savings paradoxThe pandemic recession did not actually mean people had no money. The Fed found that the top quartile of earners added nearly $1.5 trillion to their savings through spending reductions, even as the pandemic consumed millennials and Gen Z's savings. If the mantra of the pandemic recession was giving everyday Americans money, the reaction is now to yank that back.

☆ US stocks face a 50% crash, a 'crypto apocalypse' is coming, and the economy is entering a 'doom loop.' Here are the 10 wildest predictions over the past quarter.
▼ + stars: | 2023-04-10 | by ( Zahra Tayeb | ) www.businessinsider.com time to read: +6 min

From stocks to commercial real estate, several parts of financial markets are on shaky ground. Here are the 10 wildest predictions about asset prices and the economy over the past quarter. Grantham said the prices of stocks, bonds, real estate, fine art, and other investments surged to unsustainable highs during the COVID-19 pandemic. Crypto: an 'apocalypse' is coming for digital assets"Dr. Doom" economist Nouriel Roubini isn't hopeful about the crypto industry. "I think it will spread into commercial real estate as banks become more reluctant to lend," Cooperman said.

Search resuls for: "stagflationary"

25 mentions found