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☆ Fed ratcheting up rate hikes is market's biggest risk right now, says BMO's Yung-Yu Ma
▼ + stars: | 2023-07-10 | 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 EmailFed ratcheting up rate hikes is market's biggest risk right now, says BMO's Yung-Yu MaYung-Yu Ma, BMO Wealth Management CIO, joins 'Squawk on the Street' to discuss the land mines ahead for the economy in the second half of the year, what we've learned about the credit situation in the economy, and more.

Persons: BMO's Yung, Yu Ma Yung, Yu Ma, we've Organizations: BMO Wealth Management

The overhaul would require the largest banks to increase their holdings of capital — cash and other readily available assets that can be used to absorb losses in times of trouble. Mr. Barr predicted that his tweaks would be “equivalent to requiring the largest banks hold an additional two percentage points of capital,” if they are implemented. “The beauty of capital is that it doesn’t care about the source of the loss,” Mr. Barr said in his speech previewing the proposed changes. If the Fed Board votes to institute them, their implementations will involve transition time. But the sweeping set of changes that he set out meaningfully tweak both how banks police their own risks and are overseen by government regulators.

Persons: Michael S, Barr, ratcheting, Mr Organizations: Federal, Monday Locations: ”

☆ Gold heads for fourth weekly loss on calls for more rate hikes
▼ + stars: | 2023-07-07 | by ( ) www.cnbc.com time to read: +2 min

Gold bars and gold coins of different sizes lie in a safe on a table at the precious metal dealer Pro Aurum. Gold prices on Friday were on track for a fourth consecutive weekly loss as recent U.S. jobs data and hawkish comments from Federal Reserve policymakers strengthened bets for higher-for-longer interest rates, weighing on non-yielding bullion. Spot gold was flat at $1,910.20 per ounce by 0240 GMT, but down 0.5% for the week. "A resilient and tight U.S. jobs market effectively strengthens the case for the Fed to keep pushing the benchmark interest rate higher. Right now, it's all about interest rates and a guessing game about where the terminal rate setting will land," said Tim Waterer, chief market analyst at KCM Trade.

Persons: Tim Waterer, Waterer, Lorie Logan, Janet Yellen's Organizations: Aurum, Federal Reserve, Fed, KCM, Fed Bank of Dallas, Treasury, Palladium Locations: Janet Yellen's Beijing

☆ Explainer: Why U.S. labor unions are gaining leverage in contract talks with big employers
▼ + stars: | 2023-07-05 | by ( Aishwarya Nair | ) www.reuters.com time to read: +3 min

July 5 (Reuters) - U.S. union workers are finding more solid footing during contract negotiations with employers as a tight labor market allows employees to flex more bargaining power. Airline pilots, railroad employees, dockworkers, and others have pushed for higher pay and better benefits, rebuffing offers from companies that in some contracts appeared significant. The two on Wednesday accused each other of walking away from negotiations over a new contract. WHAT ARE SOME NOTABLE UPCOMING CONTRACT NEGOTIATIONS? Among U.S. airlines, Southwest Airlines (LUV.N) is yet to reach an agreement with its pilots union.

Persons: Joe Biden, Aishwarya Nair, Sriraj Organizations: Airline, United Parcel Service, Teamsters Union, Congress, Unions, United Auto Workers ', UAW, Detroit, Stellantis, General Motors Co, Ford Motor, U.S, Southwest Airlines, Southwest Airlines Pilots Association, Thomson Locations: Washington, Bengaluru

July 5 (Reuters) - A look at the day ahead in Asian markets from Jamie McGeever, financial markets columnist. Traders will also have Japanese, Australian and Indian services PMIs to digest, as well as the latest inflation data from Thailand and the Philippines, and can expect trading volume to return to more normal levels after the July 4 U.S. holiday. Service sector activity, however, has held up reasonably well and has expanded every month this year, according to the PMI data. This comes ahead of a planned visit to Beijing by U.S. Treasury Secretary Janet Yellen this week. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

Persons: Jamie McGeever, Janet Yellen, Alistair Bell Organizations: Service, PMI, U.S, Treasury, Reserve Bank of Australia, PMIs, Thomson, Reuters Locations: U.S, Thailand, Philippines, Beijing, Tokyo, Japan, China, India, Australia

☆ Dangerous Heat and Heavy Wildfire Smoke March Across North America
▼ + stars: | 2023-06-29 | by ( Somini Sengupta | ) www.nytimes.com time to read: +1 min

A treacherous one-two punch of heat and fire, aggravated by the burning of oil and gas, scorched a large swath of North America on Thursday, killing at least 15 people in the United States in recent days, sickening countless others, closing schools and testing basic services that remain unprepared for the new perils of summer. In the United States, a heat dome stretched from Texas to Florida all the way up to the tip of Missouri, ratcheting up the heat index — a combination of temperature and humidity — to above 110 degrees Fahrenheit in some places. Temperatures were projected to climb 15 to 20 degrees above normal in much of the region through the weekend. And in coming days, a new heat dome was expected to form over California. Sacramento and the San Joaquin Valley, a region where thousands of farm workers labor outdoors for hours, are under excessive heat warnings, the Weather Service said.

Persons: it’s, ratcheting Organizations: California ., San, Weather Service Locations: North America, United States, Texas, Florida, Missouri, California, California . Sacramento, San Joaquin Valley

☆ Stellantis puts Michigan plants in 'critical status' ahead of union talks
▼ + stars: | 2023-06-28 | by ( Bianca Flowers | ) www.reuters.com time to read: +2 min

Stellantis told workers at both facilites the plants will be in “critical status” from July 5 through October 2. In the past, automakers have built up inventory of their most popular vehicles ahead of the UAW contract deadline and possible strike action. Headed into this year’s talks, Detroit automakers had lean inventories compared to the past. Production cuts forced by semiconductor shortages and efforts by all three Detroit automakers to keep prices high mean they have thinner cushions going into the fall. Formal contract negotiations between the Detroit Three automakers and UAW leaders are set to begin on July 13.

Persons: Stellantis, Warren, Shawn Fain, Fain Organizations: Jefferson, Reuters, United Auto Workers, UAW, Warren, General Motors, Ford, Detroit, Detroit Three Locations: Michigan, “, Belvidere , Ill

☆ Analysis: Weight loss drug candidates multiply, spurring hopes of better outcomes, lower costs
▼ + stars: | 2023-06-27 | by ( Deena Beasley | ) www.reuters.com time to read: +5 min

More than 40% of Americans are obese, according to the U.S. Centers for Disease Control and Prevention, and demand is strong for treatments to reduce body weight as well as maintain weight loss. The company said it would continue to develop its twice-daily weight loss drug candidate. Structure Therapeutics (GPCR.O) is developing oral obesity drugs that it says are simpler to manufacture than the current injectables. "We define weight loss quality as the percentage of weight loss attributed to fat loss," said Versanis Chief Scientific Officer Lloyd Klickstein. "With diets, bariatric surgery, incretin drugs or other weight loss drugs, two-thirds to three-quarters of the weight loss is fat, but one-quarter to one-third is lean."

Persons: Robert Gabbay, Eli Lilly, Lilly's, Wegovy, Mico Guevarra, Lilly, Jeff Emmick, Ray Stevens, Boehringer Ingelheim, Versanis, Lloyd Klickstein, Chaguturu, Deena Beasley, Michele Gershberg, Jamie Freed Organizations: DIEGO, Novo Nordisk's, American Diabetes Association, Novo, U.S . Centers for Disease Control, ADA, Pfizer, Therapeutics, Zealand Pharma, Novartis, CVS Health, Aetna, Thomson Locations: San Diego, GLP

☆ Goldman Sachs faces big writedown on CEO David Solomon’s ill-fated GreenSky deal
▼ + stars: | 2023-06-23 | by ( Hugh Son | ) www.cnbc.com time to read: +1 min

Goldman Sachs CEO David Solomon speaks during the 2023 Forbes Iconoclast Summit at Pier 60 on June 12, 2023 in New York City. Goldman Sachs is likely to take a large write-down for its 2021 acquisition of fintech lender GreenSky after seeking to unload the business, CNBC has learned. Bids for the installment loan business are coming in well below what Goldman had hoped for, according to people with knowledge of the sale process. Under CEO David Solomon, Goldman bought Atlanta-based GreenSky for $2.24 billion to help accelerate its push into consumer finance. "Everybody's been coming in low, and the Goldman team keeps pushing back, pounding the table about the value of it," said one of the bidders.

Persons: Goldman Sachs, David Solomon, Goldman, Solomon, Warburg Pincus, Everybody's Organizations: Forbes, CNBC, KKR, Apollo Global Management, Sixth Street Partners, Synchrony Bank, Goldman Locations: New York City, Atlanta

☆ Bank of England surprises with 50 basis point rate hike to tackle persistent inflation
▼ + stars: | 2023-06-22 | by ( Elliot Smith | ) www.cnbc.com time to read: +3 min

A passageway near the Bank of England (BOE) in the City of London, U.K., on Thursday, March 18, 2021. Hollie Adams | Bloomberg | Getty ImagesLONDON — The Bank of England on Thursday surprised markets with a 50 basis point hike to interest rates, its 13th consecutive increase as policymakers grapple with persistently high inflation. The Monetary Policy Committee voted 7-2 in favor of the half percentage point increase, which takes the bank's base rate to 5%. The move defied market expectations, which had priced in around a 60% chance of a 25 basis point hike. The MPC said that the high number of fixed-rate mortgages means that the full impact of the increase in the Bank Rate so far "will not be felt for some time."

Persons: BOE, Hollie Adams, Sterling, —, we've, Andrew Bailey, Joseph Little, Little Organizations: Bank of England, City of, Bloomberg, Getty, Monetary, MPC, Bank, HSBC Asset Management Locations: City, City of London

Beijing CNN —US Secretary of State Antony Blinken sat down with China’s top diplomat on the final day of a high stakes visit to Beijing aimed at stabilizing relations, with all eyes on whether Washington’s envoy will meet Chinese leader Xi Jinping later in the day. Blinken and China’s top diplomatic counterpart Wang Yi began talks Monday morning, posing for photos at Beijing’s Diaoyutai State Guesthouse before heading into closed door discussions. Whether Blinken also meets with Xi will be a key indicator of China’s interest in taking steps to rebuild that rapport. “Profound differences” between the US and China, however, were also clear during the meeting, the official added. While Qin holds the title of foreign minister, he wields less power than Wang, who directs China’s foreign policy through his position among the party’s core leadership.

Persons: Antony Blinken, Xi Jinping, Wang Yi, Blinken’s, Qin Gang, Blinken, Xi, “, Qin, ”, Wang, ” Blinken’s, Joe Biden, China’s Xi, –, Nancy Pelosi Organizations: Beijing CNN —, Chinese Foreign, United, United States ’, State Department, Communist Party, senior State Department, US Locations: Beijing, loggerheads, China, Moscow, Washington, United States, Taiwan, Bali

But coupled with the anticipated path of inflation, those projections actually indicate monetary policy will grow more restrictive through 2024 on a "real" or inflation-adjusted basis. It's a nuance undergirding why the Fed sees inflation continuing to fall through next year and unemployment rise despite expected lower interest rates. And in fact, that seems to be what many on the Fed intend: A real policy rate of interest that gradually tightens next year even as the "nominal" rate printed in its policy statement declines. Reuters Graphics Reuters GraphicsREAL VS NOMINALUnder the median projections provided this week, monetary policy actually grows slightly more restrictive next year. By the end of 2024 that spread actually widens to 2%, as the interest rate declines but the rate of inflation falls more sharply.

Persons: Jerome Powell nodded, We're, Howard Schneider, Dan Burns, Andrea Ricci Organizations: . Federal, U.S, Reuters Graphics Reuters, Silicon Valley Bank, Thomson Locations: Silicon

☆ What the Fed Rate ‘Pause’ Means for Your Money
▼ + stars: | 2023-06-14 | by ( Steve Garmhausen | ) www.wsj.com time to read: +6 min

By Steve GarmhausenFor months consumers have watched interest rates steadily climb. “This is the Fed just kind of waiting and seeing,” says investment adviser Brian Frank, in Key Biscayne, Fla.What does the Fed ‘pause’ mean? While no one knows where interest rates are headed, here is how to prepare yourself for three basic scenarios. If the Fed pulls away the football, stock prices could retreat. In that case, folks with higher mortgage rates can eventually refinance.

Persons: Steve Garmhausen, ”, Brian Frank, you’ve, Jon Foster, “, can’t, Frank, you’ll Organizations: Federal Reserve, Fed, won’t, Nasdaq Locations: Key Biscayne, Fla, Los Angeles

☆ Americans haven’t been this optimistic about inflation in two years
▼ + stars: | 2023-06-12 | by ( Alicia Wallace | ) edition.cnn.com time to read: +2 min

Minneapolis CNN —Americans are optimistic about inflation being lower in the coming months; however, their future outlooks — for price hikes as well as their own finances — are a little more clouded. Consumers’ near-term inflation expectations fell in May to their lowest level in two years, according to new survey data released Monday by the Federal Reserve Bank of New York. Additionally, inflation expectations for three and five years from now increased from the month before, according to the New York Fed’s monthly Survey of Consumer Expectations, which measures expectations and behaviors over time for a rotating panel of 1,300 individuals. Since peaking at a 40-year high last June, inflation has cooled considerably but still remains above the Federal Reserve’s target of 2%. Fed Chair Jerome Powell has expressed concern about the possibility of sustained wage gains putting upward pressure on inflation.

Persons: Price, Jerome Powell Organizations: Minneapolis CNN, Federal Reserve Bank of New, York, Consumer, Fed, Labor Statistics Locations: Minneapolis, Federal Reserve Bank of New York

☆ Used car prices are falling as sales soften amid high interest rates
▼ + stars: | 2023-06-07 | by ( Michael Wayland | ) www.cnbc.com time to read: +2 min

DETROIT – Wholesale used vehicle prices reached their lowest level of the year in May, as sales fell amid high interest rates and inflated retail prices. The declines in sales and wholesale prices signal the used vehicle market is weakening, according to Cox. Used vehicle prices have increasingly become a barometer for inflation since early last year when the Biden administration blamed the market for rising inflation rates. The costs and scarcity of inventory led consumers to the used vehicle market, boosting those prices as well. Continued declines could help bring used vehicle pricing down for consumers, since retail prices traditionally follow changes in wholesale prices.

Persons: Chris Frey, Cox, That's, Biden Organizations: DETROIT –, Cox Automotive, U.S Locations: Glendale , California, DETROIT

☆ Aussie housing dip over, prices to rebound into next year on rate view
▼ + stars: | 2023-06-01 | by ( Vivek Mishra | ) www.reuters.com time to read: +3 min

Summary poll dataBENGALURU, June 1 (Reuters) - Australia's housing market outlook has improved significantly, with home prices expected to on average stagnate this year compared to the near double-digit fall predicted three months ago, according to a Reuters poll of housing analysts. They were then forecast to rise 4.5% in 2024, almost twice the expected rate from the previous poll. While ANZ and Westpac forecast no growth this year, CBA expected a 3.0% rise and NAB predicted a 4.0% decline in prices. "We are almost at the top of the RBA's hiking cycle, which means the headwind on property prices from rates ratcheting higher has largely run its course." (For other stories from the Reuters quarterly housing market polls:)Reporting by Vivek Mishra; Polling by Sujith Pai and Veronica Khongwir; Editing by Hari Kishan, Ross FinleyOur Standards: The Thomson Reuters Trust Principles.

Persons: Adelaide Timbrell, Gareth Aird, Shane Oliver, Vivek Mishra, Sujith Pai, Veronica Khongwir, Hari Kishan, Ross Finley Organizations: Bank of Australia, ANZ, Westpac, CBA, NAB, Economics, AMP, Thomson Locations: BENGALURU, New Zealand

☆ How inflation and higher interest rates have reshaped car buying for many Americans
▼ + stars: | 2023-06-01 | by ( Michael Wayland | ) www.cnbc.com time to read: +1 min

The Federal Reserve's battle to taper inflation by ratcheting up interest rates is limiting who can afford to purchase a new or used vehicle. The rate hikes have many Americans lowering their buying expectations, opting for used vehicles over new, or fixing their current car or truck instead of purchasing a replacement. "We continue to see subprime buyers squeezed out of the auto market by the Fed repeatedly moving rates higher. At various points in 2018, subprime buyers made up more than 14% of new vehicle sales, while deep subprime buyers made up close to 10% of the market, according to Cox. This year, subprime buyers account for roughly 6% of new vehicle sales and deep subprime account for less than 2%, Cox reports.

Persons: Cox, Jonathan Smoke Organizations: Subaru, Cox Automotive, Fed Locations: Colma , California

☆ China's industrial profits tumble 18% in April as demand sputters
▼ + stars: | 2023-05-27 | by ( ) www.cnbc.com time to read: +4 min

Profits at China's industrial firms slumped in the first four months of 2023, official data showed on Saturday, as companies continued to struggle with margin pressures and soft demand amid a faltering economic recovery. In April alone, industrial firms posted a 18.2% drop in profit year-on-year, according to the NBS, which only occasionally gives monthly figures. Chinese companies are struggling with both weak demand at home and softening demand in the country's major export markets. Earlier this month, Premier Li Qiang vowed more targeted measures to expand domestic demand and stabilize external demand in an effort to promote a sustained economic rebound. Industrial profit numbers cover firms with annual revenues of at least 20 million yuan ($2.89 million) from their main operations.

☆ China industrial profits tumble 18% in April as demand sputters
▼ + stars: | 2023-05-27 | by ( ) www.reuters.com time to read: +4 min

BEIJING, May 27 (Reuters) - Profits at China's industrial firms slumped in the first four months of 2023, official data showed on Saturday, as companies continued to struggle with margin pressures and soft demand amid a faltering economic recovery. In April alone, industrial firms posted a 18.2% drop in profit year-on-year, according to the NBS, which only occasionally gives monthly figures. Chinese companies are struggling with both weak demand at home and softening demand in the country's major export markets. Earlier this month, Premier Li Qiang vowed more targeted measures to expand domestic demand and stabilise external demand in an effort to promote a sustained economic rebound. Industrial profit numbers cover firms with annual revenues of at least 20 million yuan ($2.89 million) from their main operations.

☆ ‘Greedflation’ loosens its grip on food retailers
▼ + stars: | 2023-05-24 | by ( Aimee Donnellan | ) www.reuters.com time to read: +4 min

Big food manufacturers like Kraft Heinz (KHC.O) and Unilever (ULVR.L) are ratcheting down the price rises they have been inflicting onto supermarket chains. If food retailers can convince cash-strapped customers to skimp less and pay more, their profit margins will finally start growing. Last week, the country’s food retailers opened negotiations on prices with manufacturers like Coca-Cola (KO.N) and Unilever as food inflation surged to over 15% in March. Food manufacturers can certainly do more. Meanwhile, food inflation remained high at 19.1% in April versus 19.2% in March.

☆ Economists: US can weather ongoing crises, but recession remains on the table
▼ + stars: | 2023-05-22 | by ( Alicia Wallace | ) edition.cnn.com time to read: +3 min

In February, the majority of economists said a downturn could start in the first half of the year; now, that’s shifted to the third quarter or later. There was, however, greater consensus on inflation, the Federal Reserve’s rate-hiking counterattack, banking turmoil and debt ceiling uncertainty. “A majority of panelists believes breaching the debt ceiling will not bring on a global financial crisis unless an impasse persists for several weeks. Most respondents believe de-dollarization is not a threat over the foreseeable future.”More than half (55%) of surveyed economists believe the debt ceiling will be raised, 42% believe the debt ceiling will be suspended, while 3% believe the United States will default on its debts. The economists surveyed expect interest rates to remain elevated through the rest of the year, and nearly half expect that the Fed will start cutting rates in the first quarter of next year.

☆ Factbox: Imran Khan's arrest adds to Pakistan's economic, political challenges
▼ + stars: | 2023-05-09 | by ( Gibran Naiyyar Peshimam | ) www.reuters.com time to read: +2 min

May 9 (Reuters) - The arrest of former Pakistan Prime Minister Imran Khan and the call from his party for nationwide protests present another blow to the nuclear-armed country struggling with an economic crisis. The South Asian nation of 220 million people is running out of dollars, inflation is running at over 36% and an expected IMF bailout has been delayed by months. POLITICAL PRESSUREKhan, arrested for alleged corruption and ousted as prime minister last year, had been ratcheting up pressure on the government through a sustained political campaign as he vied to return to power. Authorities had made several attempts to arrest Khan since March, which had resulted in clashes between his supporters and law enforcement personnel. Khan's arrest came a day after the military issued a rare statement denouncing him for making allegations against a serving officer.

Washington CNN —Democrats on the Senate Judiciary Committee have asked Harlan Crow, the GOP megadonor and friend of Clarence Thomas whose gifts to the Supreme Court justice have prompted fresh criticism about the ethical standards of the nation’s highest court, for more information about the expenditures. The letters also state that the recent revelations come amid a lack of American confidence in the Supreme Court, pointing to recent polling. Thomas had not financially disclosed the hospitality from or the deal with the Texas billionaire. Democrats have vowed to keep investigating the ethics of the nation’s highest court, and Chief Justice John Roberts declined an invitation to testify at a hearing on Supreme Court ethics. Speaking to CNN’s Jake Tapper on Sunday, Senate Judiciary Chairman Dick Durbin said “everything is on the table” as the panel scrutinizes new ethics concerns around Thomas.

☆ Elite investors overseeing trillions warned the crowd at Milken about a looming US credit crunch. Here's how 2 of them say they're planning to capitalize.
▼ + stars: | 2023-05-01 | by ( James Faris | Akin Oyedele | ) www.businessinsider.com time to read: +3 min

Leaders of major asset management firms discussed the prospect of a credit crunch at the 2023 Milken Global Conference. They shared how they're planning to capitalize on the dislocations that arise. The tighter environment was top of mind during an economics panel at the 2023 Milken Global Conference, with multiple participants warning of an impending credit crunch. "The commercial real estate sector in particular, which was 50%-plus from the regional banking system, is definitely going to be limited." Hunt also discussed how PGIM is planning to react to a credit crunch: by continuing as normal and trying to absorb more market share from traditional banks.

☆ Australia's home prices rise again in sign of market bottom
▼ + stars: | 2023-05-01 | by ( ) www.reuters.com time to read: +2 min

SYDNEY, May 1 (Reuters) - Australian home prices rose for a second straight month in April, in a further signal that the nation's property market may have hit a floor ahead of a central bank rate decision on Tuesday. Figures from property consultant CoreLogic released on Monday showed prices nationally rose 0.5% in April from March, when values were up 0.6%, indicating Australian home prices may have bottomed out after slumping 9.1% from May 2022 to February. We now expect home prices to rise by 3% in 2023 and forecast a further increase of 5% in 2024." Shane Oliver, chief economist at AMP, also no longer expects a top-to-bottom fall of 15-20% in housing prices, citing "a far worse property demand and supply imbalance" with immigration levels surging and supply remaining tight. PropTrack data on Monday showed that home prices rose 0.14% in April, bringing the cumulative increase this year to 0.75%.

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