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Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailThis is the worst fixed-income year in the history of bonds, says JP Morgan's Phil CamporealeLiz Ann Sonders, Charles Schwab chief investment strategist, and Phil Camporeale, JPMorgan Asset Management portfolio manager, join 'Squawk on the Street' to discuss assessing the terminal rate, fixed income versus equities, and financial conditions in 2023.
But messaging from Fed officials this week has brought Wall Street back down to earth. Tech layoffs don’t mean impending recessionA series of high-profile layoffs have rattled Big Tech this month. The series of high-profile layoff announcements prompted fears that the labor market was weakening and that a recession could be around the corner. Those fears aren’t unwarranted: The Federal Reserve is actively working to slow economic growth and tighten financial conditions to rebalance the white-hot labor market. “The main problem in the labor market is still that labor demand is too strong, not too weak,” they concluded.
Earnings have been strong: So far, S&P 500 earnings growth has been better than expected. We also saw solid earnings from Apple (AAPL) and record profits from oil giants Chevron (CVX) and Exxon Mobil (XOM). Companies are beating earnings estimates for the third quarter by 1.8% in aggregate, according to FactSet data. More than 50 S&P 500 companies have lowered earnings per share expectations for the fourth quarter, according to FactSet data. Fourth quarter earnings per share predictions have been revised down by 4.3% since October 1, according to Bank of America analysts.
Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailU.S. Fed is very clear that it wants to see a series of 'lower lows' on inflation data: StrategistLiz Ann Sonders of Charles Schwab says the U.S. Federal Reserve is still far from moving to "pivot mode" and there needs to be more than one better than expected print.
Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailWhen the Fed gets to a terminal rate it's likely to stay there, says Charles Schwab’s Liz Ann SondersRitholtz’s Josh Brown and Charles Schwab’s Liz Ann Sonders join 'Closing Bell: Overtime' to discuss the latest Fed rate hike and what it means for investors and the markets.
In this videoShare Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailQualcomm beats revenue, lowers 2023 first quarter guidance over demand weakness from China lockdownsCNBC's Kristina Partsinevelos joins 'Closing Bell: Overtime' to report on Qualcomm's earnings. Ritholtz’s Josh Brown and Charles Schwab’s Liz Ann Sonders react.
Mark Haefele said this week that he doesn't see a sustained rally in stocks. Stocks went on a face-ripping rally on Thursday, with the S&P 500 rising more than 4.2% after market open. In stocks, Haefele said these include defensive — or recession-proof — areas of the market like the consumer staples and healthcare sectors. He also said he likes UK value stocks, and value stocks around the world, with inflation and rates still elevated. Finally in stocks, Haefele is still bullish on the energy sector because of OPEC's recently-announced production cuts and what they should do to keep crude prices higher.
Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailA 75 basis point hike by U.S. Fed in November is probably 'the best bet,' says strategistLiz Ann Sonders of Charles Schwab, however, says that when it comes to what the U.S. Federal Reserve will do in December, "it's just guessing at this point."
But Emanuel sees the chance for a 17% to 20% rally in the S & P 500. The S & P 500 was down about 0.9% for the week, as of Friday afternoon, and it was hovering just above 3,600. S & P 500 earnings are expected to grow by 3.6% for the third quarter, based on actual reports and estimates, according to Refinitiv. Without the boost from more than doubling profits from energy companies, S & P earnings would decline by 3.1%. Week ahead calendar Monday Earnings: Bank of America , Bank of NY Mellon, Charles Schwab 8:30 a.m.
Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailReversals in dollar and bonds may have sparked rally, says Charles Schwab's Liz Ann SondersCharles Schwab Chief Investment Strategist, Liz Ann Sonders, joins 'Closing Bell' to discuss short-term triggers for the equity market, where to look for signs of stability, and informing purchases with risk-tolerance.
Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailInvesting is not about getting in and out at moments in time, says Schwab's Liz Ann SondersLiz Ann Sonders, Charles Schwab chief investment strategist, joins 'Closing Bell' to discuss short-term triggers for the equity market, where to look for signs of stability, and informing purchases with risk-tolerance.
Another hotter-than-expected inflation report puts pressure on the Federal Reserve to raise interest rates even more aggressively, but that also could tip the economy into a recession. Stocks declined and Treasury yields rose, after September's consumer price index showed inflation running at a 0.4% pace. In the futures market, traders bet the Fed would drive its fed funds to near 5% by next April, up from 4.65% on Wednesday. The terminal rate is the end rate where the Fed would stop its hiking for this cycle. Fed officials have been emphasizing that once they finish raising rates, they intend to hold them there to continue the fight against inflation.
New York CNN Business —The back-to-back huge market rallies last week may seem like a distant memory to investors now that stocks have slid for the past four days. The S&P 500 and Nasdaq both hit new 52-week lows on Tuesday before turning higher, and the Dow is not far from a 52-week low either. That included three instances from late 2008 when market volatility was at a peak during the Global Financial Crisis. The S&P 500 was up nearly 15% one year following massive back-to-back rallies, compared to normal historical gains of just 9%. But it’s also worth noting that the S&P 500 is still slightly higher than where it closed on September 30, despite the recent losses.
The unemployment rate was 3.5% versus the forecast of 3.7% as the labor force participation rate edged lower to 62.3% and the size of the labor force decreased by 57,000. "Obviously, the market is not happy, but the market is not happy in general these days." "This puts the nail in the coffin for another 75 [basis point rate increase] in November," said Jeffrey Roach, chief economist at LPL Financial. A basis point is 0.01 percentage point. Hiring at the state and local level is highly seasonal, so the decline points to a report that otherwise was largely in line with expectations and shows a resilient jobs market.
But a surprising drop in the unemployment rate and another boost in worker wages sent a clear message to markets that more giant interest rate hikes are on the way. Everybody who seems to want a job is getting a job," said Ron Hetrick, senior economist at labor force data provider Lightcast. "But we've been getting into a situation where our low unemployment rate has absolutely been a significant driver of our inflation." A series of central bank rate increases has been aimed at reducing demand and thus loosening up a labor market where there are still 1.7 open jobs for every available worker. It all makes the inflation fight look ongoing, even with a slowdown in payroll growth.
Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailSmall-cap stocks still need a quality filter, says Charles Schwab's Liz Ann SondersCharles Schwab's Chief Investment Strategist Liz Ann Sonders joins 'Closing Bell' to share her thoughts on small-cap stocks, central bank interventions, and re-rating of earnings.
Stock futures inched lower in overnight trading Wednesday after the Dow Jones Industrial Average staged a comeback off its lowest level for the year. Futures tied to the Dow Jones slipped 49 points, or 0.16%, while S&P 500 and Nasdaq 100 futures shed 0.19% and 0.26%, respectively. It marked a stark shift from the aggressive tightening campaign many global central banks have undertaken to cope with surging inflation. The Nasdaq Composite is leading the monthly losses, down about 6.5%, while the Dow and S&P are on pace to close 5.8% and 5.9% lower, respectively. The S&P is on pace for its third negative quarter in a row for the first time since its six-quarter negative streak that ended the first quarter of 2009.
Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailThe Fed is taking its queue from lagging indicators, says Schwab's Liz Ann SondersLiz Ann Sonders, Charles Schwab chief investment strategist, and Jonathan Golub, Credit Suisse chief U.S. equity strategist, to discuss their expectations for the September Fed meeting, the timeline for Fed tightening, and investment strategies for equity and credit markets.
Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailWatch CNBC's full interview with Credit Suisse's Jonathan Golub and Charles Schwab's Liz Ann SondersLiz Ann Sonders, Charles Schwab chief investment strategist, and Jonathan Golub, Credit Suisse chief U.S. equity strategist, to talk expectations for the September Fed meeting, the timeline for Fed tightening, and investment strategies for equity and credit markets.
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