DIRS.INFO The most relevant business & tech news

☆ Wall Street’s Recession Warning Is Flashing. Some Wonder if it’s Wrong.
▼ + stars: | 2023-07-12 | by ( Joe Rennison | More About Joe Rennison | ) www.nytimes.com time to read: +1 min

Some investors believe that a recession warning that has been flashing on Wall Street for the past several months is wrong and that the Federal Reserve will be able to tame inflation and still escape a deep downturn. The signal — called the yield curve — began suggesting last year that the economy was headed for a slump. Typically, investors expect to be paid more interest for lending for longer periods of time, creating an upward sloping curve. The inversion suggests that investors expect interest rates over time will fall from their current high level. And that usually only happens when the economy needs propping up and the Fed decides to help by lowering interest rates.

Organizations: Federal Reserve, Fed

Friday’s fresh labor market data probably offered little to dissuade them from raising interest rates at their meeting later this month. The June data is the last payrolls report officials will receive before the central bank’s July 25-26 meeting. It underscored many of the labor market themes that have been present for months: While job growth is gradually slowing, wage growth remains abnormally quick and the unemployment rate is very low at 3.6 percent. Investors widely expect the Fed to raise rates at their July meeting, and Friday’s data only reinforced that prediction. But several policymakers have been clear that even as the pace moderates, they still expect to raise interest rates further.

Persons: ” Lorie K, Logan, ” Organizations: Fed, Federal Reserve Bank of Dallas, ” Fed

☆ Wall St. Foresees a Rosy 6 Months. Corporate America Isn’t So Sure.
▼ + stars: | 2023-06-30 | by ( Joe Rennison | J. Edward Moreno | ) www.nytimes.com time to read: +1 min

Stubbornly high inflation, a debt ceiling brawl, a brief banking crisis and the prospect of even higher interest rates: The past six months brought much to unsettle even the most optimistic investor. Investors have welcomed data showing that the economy remains on more solid footing than was expected at the start of the year. Inflation is easing, albeit more slowly than forecast, and policymakers have signaled that they expect interest rates will soon reach their peak. The more time that has passed without investors’ worst fears being realized, the more optimistic they have become. “We anticipated more damage,” said Kristina Hooper, chief global market strategist at the fund manager Invesco.

Persons: “, ”, Kristina Hooper, Invesco Organizations: Federal Reserve

☆ The End of LIBOR Is (Finally) Here
▼ + stars: | 2023-06-30 | by ( Joe Rennison | ) www.nytimes.com time to read: +2 min

The arduous, decade-long process to end the financial system’s reliance on a tarnished interest-rate benchmark, which once underpinned trillions of dollars in contracts across the globe, is almost over. From next week, the rate, known as the London Interbank Offered Rate, or LIBOR for short, will cease to be published. LIBOR is a collective term for dozens of rates, denominated in different currencies, intended to reflect how much it costs banks to borrow from one another. In the end, roughly $10 billion in fines were meted out across the financial industry over accusations of LIBOR rigging, which led to efforts to move away from the tainted benchmark. “There are still issues, but it’s remarkable that LIBOR will go out with more of a whimper than a bang.

Persons: LIBOR, ”, Mark Cabana Organizations: London, Barclays, Bank of America Locations: LIBOR, British

☆ Stock Market Rally on Pause as Investors Take Cue from the Fed
▼ + stars: | 2023-06-23 | by ( Joe Rennison | ) www.nytimes.com time to read: +1 min

This week, stock investors also paused for reflection, putting the recent rally on hold until the outlook becomes clearer. The S&P 500 is headed for its first weekly decline since early May, which would end the index’s longest streak of gains since 2021. Even after a slump on Friday, this week’s fall is set to shave off just 1 percent from those gains. Stocks of smaller companies more exposed to the risk of a slump in the U.S. economy fell further. Jerome H. Powell, the Fed chair, said during congressional testimony on Thursday that “the data will tell us what to do” on future rate increases.

Persons: Russell, Jerome H, Powell Organizations: Federal Reserve, Wall, Fed Locations: U.S

☆ Market Rally Intensifies Debate Over What Will Come Next
▼ + stars: | 2023-06-16 | by ( Joe Rennison | ) www.nytimes.com time to read: +1 min

Stock markets are on a tear, and investors face a tricky question: Will this rally last? The S&P 500 index is on track for its fifth consecutive week of gains, its longest winning streak since the fall of 2021. Many investors feared that the Fed’s series of interest rate increases would push the country into a more severe downturn. But the S&P 500 is roughly 17 percent higher than a year ago, almost 24 percent above its low in October, and just 8 percent away from a record. Others warn that the recent rise could be a bear market rally — a short-lived stretch of optimism within a longer-running trend downward.

Persons: It’s Organizations: Federal Reserve

☆ Federal Reserve Meeting Fed Leaves Rates Unchanged: Live Updates
▼ + stars: | 2023-06-14 | by ( Jeanna Smialek | Joe Rennison | ) www.nytimes.com time to read: +7 min

Credit card rates are closely linked to the Federal Reserve’s actions, which means consumers have seen those rates rise over the past year. After raising interest rates 10 times over the past 15 months, the Federal Reserve is expected to take a break on Wednesday and hold rates steady. The Federal Reserve has already raised its benchmark rate, the federal funds rate, to a range of 5 to 5.25 percent to rein in inflation, which is showing signs of slowing. Used-car rates were even higher: The average loan carried a 11 percent rate in May, up from 8.2 percent a year earlier. Home-equity lines of credit and adjustable-rate mortgages — which each carry variable interest rates — generally rise within two billing cycles after a change in the Fed’s rates.

Persons: ”, Anna N’Jie, Bankrate.com, Matt Schulz, Jonathan Smoke, Edmunds.com, that’s, —, Freddie Mac, Ken Tumin, DepositAccounts.com Organizations: Federal Reserve, Fed, Re, LendingTree, Cox Automotive, Treasury, Savings Vehicles Savers, Consumers, DepositAccounts.com Locations: San Francisco .

☆ Fed Expected to Pause Rate Increases: Live Updates
▼ + stars: | 2023-06-14 | by ( Jeanna Smialek | Joe Rennison | ) www.nytimes.com time to read: +7 min

The Federal Reserve has already raised its benchmark rate, the federal funds rate, to a range of 5 to 5.25 percent to rein in inflation, which is showing signs of slowing. The average credit card rate was 20.44 percent as of June 3, according to Bankrate.com, up from around 16 percent in March last year, when the Fed began its series of rate increases. The average rate on new car loans was 7.1 percent in May, according to Edmunds.com, up from 5.1 percent last year. Used-car rates were even higher: The average loan carried a 11 percent rate in May, up from 8.2 percent a year earlier. The average rate for an identical loan was 5.23 percent the same week in 2022.

The fresh data offer the latest evidence that the Fed’s push to control rapid price increases is beginning to work. Investors have been betting that Fed officials will leave rates unchanged at their meeting this week, breaking their long streak of increases. Even so, many investors continue to expect that Fed officials will restart rate increases in July. That “core” price index rose 5.3 percent in May compared with a year earlier. And price increases for goods excluding motor vehicles remained positive, instead of subtracting from inflation as some economists have been expecting.

Persons: “, ” Laura Rosner, Warburton, Airfares, Ms, Rosner, Jerome H, Powell Organizations: Federal Reserve, Fed, Mortgage, Association

☆ Stocks Climb on Inflation Data, Moving Further Into a Bull Market
▼ + stars: | 2023-06-13 | by ( Joe Rennison | ) www.nytimes.com time to read: +1 min

Stocks on Wall Street pushed further into bull market territory in early trading on Tuesday, climbing after new data showed inflation continues to slow. The Consumer Price Index for May was initially read by investors as moderate enough to ensure the Federal Reserve will hold off on another interest rate increase this week. The S&P 500 has climbed more than 20 percent from that 2022 low, a gain that by many definitions breaches the threshold for a bull market, a marker of a new phase of exuberance in the markets. Slowing inflation is seen by investors and economists as limiting the need for the Federal Reserve to keep increasing interest rates, which have raised borrowing costs for consumers and companies and weighed on the broader stock market. Some policymakers had already suggested the Fed might not raise rates again this month, and after the latest inflation data, the likelihood of an increase was close to wiped out.

Organizations: Index, Reserve, Federal Reserve

☆ A $1 Trillion Borrowing Binge Looms After Debt Limit Standoff
▼ + stars: | 2023-06-07 | by ( Alan Rappeport | Joe Rennison | ) www.nytimes.com time to read: +1 min

The United States narrowly avoided a default when President Biden signed legislation on Saturday that allowed the Treasury Department, which was perilously close to running out of cash, permission to borrow more money to pay the nation’s bills. Now, the Treasury is starting to build up its reserves and the coming borrowing binge could present complications that rattle the economy. The government is expected to borrow around $1 trillion by the end of September, according to estimates by multiple banks. That steady state of borrowing is set to pull cash from banks and other lenders into Treasury securities, draining money from the financial system and amplifying the pressure on already stressed regional lenders. To lure investors to lend such huge amounts to the government, the Treasury faces rising interest costs.

Persons: Biden Organizations: United, Treasury Department, Treasury, Federal Reserve Locations: United States

☆ Is the Bear Market Over? It Depends.
▼ + stars: | 2023-06-05 | by ( Joe Rennison | ) www.nytimes.com time to read: +1 min

The S&P 500 fell into a bear market — which is defined as a decline of 20 percent or more from an index’s high — in June of that year, and continued to slide until hitting a low in October. The terms “bull” and “bear" are shorthand for excitement or fear among investors about the prospects for public companies. But while investors tend to agree on how to mark the start of a bear market, there’s less consensus on how to define the start of a bull market, especially when the concerns that initially dragged stocks lower still linger. One rule of thumb is that a new bull market is confirmed when an index sets a new high after rising from a bear-market low. By that measure, the S&P 500 is still more than 10 percent short.

Persons: Dow Organizations: Dow Jones Indices

☆ Companies Push Prices Higher, Protecting Profits but Adding to Inflation
▼ + stars: | 2023-05-30 | by ( Talmon Joseph Smith | Joe Rennison | ) www.nytimes.com time to read: +1 min

PepsiCo is not alone in continuing to raise prices. “Everybody knew that the war in Ukraine was inflationary, that grain prices were going up, blah, blah, blah. The Producer Price Index, which measures the prices businesses pay for goods and services before they are sold to consumers, reached a high of 11.7 percent last spring. That rate has plunged to 2.3 percent for the 12 months through April. The price of carbonated drinks rose nearly 12 percent in April, over the previous 12 months.

☆ Debt Ceiling Crisis: How a Default Could Unfold
▼ + stars: | 2023-05-26 | by ( Joe Rennison | Alan Rappeport | ) www.nytimes.com time to read: +1 min

The United States is inching closer to calamity, as lawmakers continue to spar over what it will take to raise the country’s $31.4 trillion debt limit. Such a situation would be unprecedented, so it’s difficult to say with certainty how it would play out. But it’s not the first time investors and policymakers have had to contemplate “what if?” and they’ve been busy updating their plans for how they think things may play out this time. While negotiators appear to be moving toward an agreement, time is short. There is no certainty that the debt limit will be lifted before June 5, when the Treasury now estimates the government will run out of cash to pay all of its bills on time, a moment known as the “X-date.”

☆ JetBlue-American Partnership Struck Down by Federal Judge
▼ + stars: | 2023-05-19 | by ( Niraj Chokshi | Joe Rennison | ) www.nytimes.com time to read: +1 min

A federal judge has blocked a partnership between American Airlines and JetBlue Airways at airports in New York and Boston, writing in a ruling published on Friday that the alliance would hurt competition and raise fares. The decision is a big victory for the Justice Department, which under President Biden has sought to enforce antitrust laws more aggressively. The judge ruled that collaboration between the airlines, known as the Northeast Alliance, must end. The Justice Department had said the partnership reduced competition and would cost travelers hundreds of millions of dollars a year if it remained in place. The airlines had argued that the partnership provides consumers with more flying options.

☆ Powell Says Inflation Remains Too High
▼ + stars: | 2023-05-19 | by ( Alan Rappeport | Joe Rennison | ) www.nytimes.com time to read: 1 min

Jerome H. Powell, the Federal Reserve chair, said on Friday that inflation continues to be “far above” the central bank’s target but said policymakers “haven’t made any decisions” about whether to raise rates at their next meeting in June. The comments, made at the Fed’s annual Thomas Laubach Research Conference, came as businesses and investors around the world are trying to gauge whether the Fed is preparing to pause its campaign to raise borrowing costs amid signs that inflation is easing and the U.S. economy is cooling. Mr. Powell did not offer a clear signal on the path of interest rates, but said the Fed remains committed to bringing inflation closer to the central bank’s 2 percent target. “The data continues to support the committee’s view that bringing inflation down will take some time,” Mr. Powell said.

☆ What Would Happen if the U.S. Defaulted on Its Debt
▼ + stars: | 2023-05-18 | by ( Joe Rennison | ) www.nytimes.com time to read: +1 min

The U.S. debt limit has been reached and the Treasury Department is finding ways to save cash. After it runs out of maneuvers, what once seemed unfathomable could become reality: The United States defaults. The far-reaching effects are hard to fully predict: from shock waves in financial markets to bankruptcies, recession and potentially irreversible damage to the nation’s long-held role at the center of the global economy. The probability of a default remains low, at least based on opposing lawmakers’ assurances that a deal will be done to raise or suspend the debt limit and the long odds implied by trading in certain financial markets. “We are sailing into uncharted waters,” said Andy Sparks, head of portfolio management research at MSCI, which creates indexes that track a wide range of financial assets, including in the Treasury market.

☆ How Wall Street Is Preparing for a Debt Ceiling Showdown
▼ + stars: | 2023-05-09 | by ( Joe Rennison | ) www.nytimes.com time to read: +1 min

If the federal government defaults on its debt, the effects could be disastrous, threatening to undermine the role of the United States at the heart of global finance and tip its economy into recession. The precise day when the government would run out of cash, known as the X-date, is unknown, which also complicates trading decisions for investors. It could come as soon as June 1, according to recent comments from Treasury Secretary Janet L. Yellen. “What you are seeing is a consensus view that we will not cross through the X-date,” said Ralph Axel, an interest rate strategist at Bank of America. “At the moment that remains a low probability event that is hard to price.”

☆ Bank Stocks Bounce as Investors Rethink Economic Outlook
▼ + stars: | 2023-05-05 | by ( Joe Rennison | ) www.nytimes.com time to read: 1 min

A group of regional bank stocks that came under severe pressure on Thursday, stoking fears of a spiraling banking crisis, surged on Friday, at least partially alleviating those worries. The rebound came as the market was also bolstered by data on hiring deemed strong enough to soften concerns about a recession without prompting the Federal Reserve to tighten the screws on the economy further. PacWest soared nearly 80 percent, after falling over 50 percent on Thursday. Western Alliance’s share price rose more than 30 percent, also recouping a chunk of its drop the day before. The relief rally helped to lift the broader market, with the S&P 500 up 1.5 percent heading into the afternoon.

A cluster of regional banks scrambled on Thursday to convince the public of their financial soundness, even as their stock prices plunged and investors took bets on which might be the next to fall. PacWest and Western Alliance were in the eye of the storm, despite the companies’ protestations that their finances were solid. PacWest’s shares lost 50 percent of their value on Thursday and Western Alliance fell 38 percent. They are also much smaller than Silicon Valley Bank and First Republic, which each had about $200 billion in assets when they collapsed. PacWest, based in Los Angeles, has about $40 billion in assets, and Western Alliance, with headquarters in Phoenix, has $65 billion in assets.

☆ Markets Sink on Fears About Banks and Weaker Economic Outlook
▼ + stars: | 2023-05-02 | by ( Joe Rennison | ) www.nytimes.com time to read: +1 min

Stocks slumped on Tuesday, as fears for the health of the financial sector after the collapse of First Republic Bank collided with broader anxiety over signs of a weakening economy. PacWest lost a third of its value in the first hour of trading, it’s worst single-day drop since the height of the bank turmoil in March. Western Alliance sank nearly 20 percent, while Comerica and Zions bank both suffered double-digit percentage declines. Oil prices fell sharply, too, as the prospects of an economic downturn would likely cut energy demand. The price of a barrel of Brent crude, the international benchmark, dropped to around $76, close to its lowest level for the year.

☆ Markets Shrug Off First Republic Failure
▼ + stars: | 2023-05-01 | by ( Joe Rennison | ) www.nytimes.com time to read: +1 min

The failure of First Republic Bank over the weekend barely dented financial markets on Monday, as investors shrugged off the latest bank failure to focus instead on corporate profits and the next big decision on interest rates from the Federal Reserve this week. The S&P 500 nudged higher in early trading, after the Federal Deposit Insurance Corporation’s early morning decision to take the ailing regional lender First Republic under its control and immediately sell it to JPMorgan Chase at a subsidized price. After dropping 75 percent last week, First Republic’s stock price had continued to slump overnight Sunday until trading was eventually halted early Monday morning at around $2 per share. However, investors dismissed any concerns around contagion from First Republic’s woes. A rally on Monday morning added to gains for the S&P 500 last week, when concern over the fate of First Republic reignited.

☆ First Republic’s Shares Slide as Its Fate Remains Uncertain
▼ + stars: | 2023-04-28 | by ( Joe Rennison | ) www.nytimes.com time to read: +1 min

Shares of First Republic Bank resumed their punishing slide on Friday, adding to a string of losses this week that have come as doubts over the future of the regional lender intensified. The company’s stock price had dropped about 40 percent by midafternoon to $3.79 per share, on track for a drop of more than 70 percent since Monday. Those banks were seized by regulators after depositors rushed, in a span of just a few days, to pull their money as they worried about their long-term viability. Though it was also seen as a bank in trouble, First Republic won brief respite when 11 of the largest U.S. banks came together to inject $30 billion of deposits into the lender. But the precariousness of its situation came back into focus this week when it reported earnings results and told investors that it had seen the outflow of more than $100 billion in deposits since mid March.

☆ Dour Earnings Loom Over Wall St. as a Slowing Economy Bites
▼ + stars: | 2023-04-13 | by ( Joe Rennison | ) www.nytimes.com time to read: +1 min

As the country’s largest companies prepare to report their results for the start of the year — offering a view into how the economy is faring as a banking shock reverberates — they’re already warning investors to brace themselves. That would be the second consecutive quarterly decline, and the biggest since a severe — though brief — slump in the early days of the coronavirus pandemic in 2020. At the start of the year, the consensus was that profits would be roughly in line with the first quarter of 2022. But since then, continuing worries about inflation followed by a flare-up in the banking sector in March have soured the outlook. Businesses have also told investors to dial down their expectations, with 78 companies in the S&P 500 offering guidance about their results that is below the average Wall Street estimate.

☆ The bond market is signaling concern over the economy, says The New York Times' Joe Rennison
▼ + stars: | 2023-03-24 | 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 EmailThe bond market is signaling concern over the economy, says The New York Times' Joe RennisonBen White of Politico, The New York Times' Joe Rennison and former acting chairman of the Council of Economic Advisors Tyler Goodspeed, join CNBC's Brian Sullivan and 'Last Call' to discuss money being pulled from U.S. banks and whether Deutsche Bank is in trouble.

Search resuls for: "Joe Rennison"

25 mentions found