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☆ Silicon Valley Bank and inflation complicate the Fed’s next move
▼ + stars: | 2023-03-15 | by ( Phil Rosen | ) www.businessinsider.com time to read: +5 min

Everyday now we've been talking about Silicon Valley Bank — SVB — and I've had to catch myself several times from saying SBF — Sam Bankman-Fried — the guy behind the other big financial collapse in recent months. A) No rate hike at allB) 25 basis pointsC) 50 basis pointsTweet me (@philrosenn) or email me (prosen@insider.com) to let me know. Bank stocks are rising again as nerves calm — though SVB-driven fears are still niggling. Bank of America picked out a batch of financial stocks that offer upside right now amid the chaos. The token soared 15% as the February CPI print fueled more speculation for a smaller rate hike.

☆ Dollar little changed as U.S. inflation data poses quandary for Fed
▼ + stars: | 2023-03-14 | by ( Herbert Lash | ) www.reuters.com time to read: +3 min

The euro edged up 0.09% to $1.0739, but the dollar gained against the safe-haven yen and Swiss franc. Fed funds futures showed the market's risk adverse mood in recent days eased as bets that the Fed would stand pat at its policy meeting March 21-22 declined. The collapse of Silicon Valley Bank and Signature Bank last week suggests greater Fed scrutiny of the banking sector may be in store as credit tightens. Futures priced in perhaps two Fed rate cuts by year's end, with the terminal rate seen at 4.179% in December, down from more than 5% last week. The Japanese yen weakened 0.69% at 134.13 per dollar, while the greenback rose rose 0.15% against the Swiss franc.

There's a big shift in rate expectations," said Marc Chandler, chief market strategist at Bannockburn Global Forex in New York. Goldman Sachs (GS.N), among other big banks, said it no longer expects the Fed to deliver a rate hike at the end of its two-day policy meeting on March 22. "There's been a radical change in interest rate expectations and in that scenario the dollar has weakened," said Niles Christensen, chief analyst at Nordea. The Japanese yen strengthened 1.47% at 133.04 per dollar, while the dollar fell 1.23% against the Swiss franc at 0.910. Earlier, it hit a near one-month high of $1.0737, ahead of the European Central Bank's policy meeting on Thursday.

[1/3] U.S. President Joe Biden delivers remarks on the banking crisis after the collapse of Silicon Valley Bank (SVB) and Signature Bank, in the Roosevelt Room at the White House in Washington, D.C., U.S. March 13, 2023. Germany's Commerzbank (CBKG.DE) fell as much as 12.7%, while Credit Suisse (CSGN.S) hit a new record low after falling more than 15%. Dowding said he did not think that a lot of the issues affecting U.S. banks would be present in European lenders. It said Silicon Valley Bank UK had loans of around 5.5 billion pounds and deposits of around 6.7 billion pounds as of March 10. U.S. banks lost more than $100 billion in stock market value late last week following SVB's failure, while European banks have now lost a similar amount, a Reuters calculation showed.

☆ Wall St Week Ahead: Inflation data on deck for markets hit by worries about Fed, banks
▼ + stars: | 2023-03-10 | by ( Lewis Krauskopf | ) www.reuters.com time to read: +5 min

NEW YORK, March 10 (Reuters) - A critical inflation report next week will test a U.S. stock market already consumed by worries over Federal Reserve hawkishness and potential fallout from the largest bank failure since the financial crisis. A hotter-than-expected consumer price report on Tuesday, however, could reignite fears of jumbo-sized Fed rate hikes like those that rocked markets last year. After a big rebound in January, the benchmark index is now clinging to a 0.6% gain for 2023. The consumer price report is followed the next day by more inflation data, on producer prices. Besides signs of falling inflation, reassurance for investors could come if it became clearer that SVB’s issues were unlikely to spread.

☆ Just like that: Market pricing swings back to quarter-point Fed rate hike
▼ + stars: | 2023-03-10 | by ( Jeff Cox | ) www.cnbc.com time to read: +3 min

A trader works on the floor during morning trading at the New York Stock Exchange (NYSE) on March 10, 2023 in New York City. "In all, the data do not argue for a 50 [basis point] rate hike by the Fed on March 22 despite the strong payroll advance," said Kathy Bostjancic, chief economist at Nationwide. "The Fed can take comfort in the rise in the supply of labor and the easing of upward pressure on wages to maintain a 25 [basis point] rate increase," Bostjancic added. A basis point is 0.01 percentage point. "The move down on 50 basis point odds was hard to separate from the collapse of SVB," said Liz Ann Sonders, chief investment strategist at Charles Schwab.

☆ Cathie Wood's ARK Fund set for worst week since Sept as higher rates loom
▼ + stars: | 2023-03-10 | by ( David Randall | ) www.reuters.com time to read: +2 min

Tesla (TSLA.O), the fund's top holding, is down nearly 11% for the week to date, while online education company 2U Inc (TWOU.O) is down nearly 18% for the week. Overall, the fund is down approximately 10% for the week to date, its worst weekly performance since an 11.1% decline in the week ending Sept. 23, according to Refinitiv data. None of the 27 companies in the fund's portfolio are in positive territory for the week. Higher rates weigh heavily on technology stocks by increasing the cost of borrowing and decreasing the value of expected future profits. "(ARK) is a good barometer of sentiment toward higher risk, higher reward investments.

☆ Asian shares stutter, dollar buoyant as data supports hawkish Powell
▼ + stars: | 2023-03-09 | by ( Stella Qiu | ) www.reuters.com time to read: +5 min

MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) eased 0.2% on Thursday, extending a drop of 1.4% the previous session. S&P 500 futures eased 0.1% and Nasdaq futures were off 0.3%Inflation data out of China showed on Thursday that domestic demand still remained tepid. The U.S. dollar index, measuring the greenback's value against a basket of major peers, hovered close to a three-month top at 105.6. The central bank on Wednesday left its key overnight interest rate on hold, becoming the first major central bank to suspend its monetary tightening campaign. On Thursday, the two-year Treasury yields held close to its 15 year highs at 5.0553%, while the benchmark 10-year yields were steady at 3.9775%.

Ahead of crucial U.S. jobs data on Friday, MSCI's broad index of global stocks (.MIWO00000PUS) fell 0.3%. This view has clashed with market repricing of interest rate expectations and bond market signals that aggressive monetary tightening raises recession risks. "If the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes," Powell said. U.S. Treasury yields continued an ascent on Wednesday, with the two-year yield, which tracks interest rate expectations, briefly touching 5.08% -- its highest level since 2007. After a series of jumbo hikes last year, the Fed raised rates by 25 basis points last month.

Higher rates benefit the dollar by improving its yield and as traders look for safety while global stockmarkets drop. The dollar hit a two-month high against the euro of $1.0524 , extending Tuesday's 1.2% jump. The Australian dollar has weakened for a similar reason as the Reserve Bank of Australia has softened its tone. Having dropped over 2% on Tuesday, the Australian dollar weakened a bit more to hit a four-month low of $0.6568 on Wednesday. China's yuan finished the domestic session at 6.9706 per dollar, the weakest such close since Dec. 29, 2022.

☆ Powell's warning on higher U.S. rates pushes dollar to 3-mth high
▼ + stars: | 2023-03-08 | by ( Tom Westbrook | ) www.reuters.com time to read: +3 min

Higher rates benefit the dollar by improving its yield and as traders look for safety while global stockmarkets drop. The dollar hit a two-month high of $1.0528 to the euro , extending Tuesday's 1.2% jump. The Australian dollar has weakened for a similar reason as the Reserve Bank of Australia has softened its tone. Futures imply U.S. rates peaking above 5.6% and holding higher than 5.5% through 2023. The U.S. dollar index rose 0.2% in Asia trade to a more than three-month high of 105.86.

☆ Asian stocks tumble, dollar gains after hawkish Powell comments
▼ + stars: | 2023-03-08 | by ( Ankur Banerjee | ) www.reuters.com time to read: +4 min

The hawkish comments from Powell sent U.S. stocks sharply lower, with the risk-off mood continuing in Asian trade. Eurostoxx 50 futures were down 0.19%, German DAX futures fell 0.27% and FTSE futures were down 0.27%. After a series of jumbo hikes last year, the Fed raised rates by 25 basis points in its last two meetings. "Powell has essentially opened the door to 50 basis point hike," said Chris Weston, head of research at Pepperstone. Citi strategists said even as-expected payrolls and inflation data could keep the chance of a 50 basis point hike high.

☆ Asian stocks tumble after hawkish Powell comments
▼ + stars: | 2023-03-08 | by ( Ankur Banerjee | ) www.reuters.com time to read: +3 min

SINGAPORE, March 8 (Reuters) - Asian shares fell sharply on Wednesday, while the dollar advanced after hawkish comments from Federal Reserve Chair Jerome Powell raised the possibility of the U.S. central bank returning to large rate hikes to tackle sticky inflation. The Fed will likely need to raise interest rates more than expected in response to recent strong data, Powell said on the first day of his semi-annual, two-day monetary policy testimony before Congress. The hawkish comments from Powell sent U.S. stocks sharply lower, with the risk-off mood continuing in Asian trade. MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) was 1.45% lower, while Australia's S&P/ASX 200 index (.AXJO) fell 0.70%. "Powell has essentially opened the door to 50 basis point hike," said Chris Weston, head of research at Pepperstone.

☆ Powell pushes dollar to three-month high
▼ + stars: | 2023-03-08 | by ( Tom Westbrook | ) www.reuters.com time to read: +3 min

SINGAPORE, March 8 (Reuters) - The dollar was riding high on Wednesday, flung to three-month peaks when Federal Reserve Chair Jerome Powell surprised investors by warning that interest rates might need to go up faster and higher than expected to rein in inflation. Overnight it had shot more than 1.2% higher on the euro, its biggest one-day move in five months. The U.S. dollar index , which measures the dollar against a basket of six major currencies, jumped 1.3% overnight to a three-month peak of 105.65. The blockbuster week of central bank meetings and speakers rolls on later in the day, with the Bank of Canada setting policy and European Central Bank President Christine Lagarde speaking. "If they don't hike, the Canadian dollar will likely fall into a bucket of currencies where the central bank is unwilling to keep up with the Fed."

☆ Jerome Powell isn't winning any popularity contests among investors as markets booed his testimony on Tuesday
▼ + stars: | 2023-03-08 | by ( Phil Rosen | ) www.businessinsider.com time to read: +6 min

If you missed Jerome Powell's remarks from his first day on Capitol Hill yesterday, the TLDR is that more rate hikes are coming because the economy's still running hot. The market response to Powell's testimony was anything but muted. The idea is to eventually lower inflation — which most recently clocked in at 6.4% — but the more rate hikes we see, the greater the risk of a recession. So in short: stocks sold off, bond yields jumped, and traders eyed greater potential for a bigger rate hike this month. "If the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes," Powell said.

☆ Wall St ends sharply lower, Treasury yield inversion widens after Powell remarks
▼ + stars: | 2023-03-07 | by ( Stephen Culp | ) www.reuters.com time to read: +4 min

"It's a pretty classic risk-off day," said Ross Mayfield, investment strategy analyst at Baird in Louisville, Kentucky. MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) closed 0.81% lower, while Japan's Nikkei (.N225) rose 0.25%. Benchmark Treasury yields dipped after Powell's remarks, and the inversion between 2-year and 10-year Treasury yields, a harbinger of potential recession, steepened. Benchmark 10-year notes last rose 4/32 in price to yield 3.9696%, from 3.983% late on Monday. The 30-year bond last rose 18/32 in price to yield 3.8794%, from 3.912% late on Monday.

☆ Wall Street slides, Treasury yield inversion widens after Powell remarks
▼ + stars: | 2023-03-07 | by ( Stephen Culp | ) www.reuters.com time to read: +4 min

REUTERS/Andrew Kelly/File PhotoNEW YORK, March 7 (Reuters) - Wall Street stocks plunged, the greenback surged and Treasury yields dipped on Tuesday as Federal Reserve Chairman Jerome Powell concluded the first day of his semi-annual, two-day monetary policy testimonial before Congress. In a broadly risk-off session, the dollar gained strength and inversion between short- and long-dated Treasury yields touched their widest since 1981 as the testimony reaffirmed the Fed's determination to bring inflation down to its 2% target rate. European shares extended their losses after Powell's prepared remarks fueled rate hike worries. Benchmark Treasury yields dipped after Powell's remarks, and the inversion between 2-year and 10-year Treasury yields, a harbinger of potential recession, hit its steepest differential in over four decades. Benchmark 10-year notes last rose 2/32 in price to yield 3.9754%, from 3.983% late on Monday.

☆ Analysis: U.S. stocks’ early-year rally is melting away as Treasury yields surge
▼ + stars: | 2023-02-22 | by ( David Randall | ) www.reuters.com time to read: +4 min

NEW YORK, Feb 22 (Reuters) - Cracks are widening in an early-year rally in stocks, as rising Treasury yields bolster the allure of bonds and skew equity valuations. Stocks are still sitting on sizeable year-to-date gains, though some of their rally has melted away in recent days. The S&P 500 (.SPX) is down 4.4% from its recent highs, but remains up 4.1% year-to-date. That is a "death zone" that makes the "risk-reward very poor" for stocks, strategist Michael Wilson wrote. To be sure, bullish investors might have history on their side, thanks in part to January’s hefty 6.2% gain for the S&P 500.

☆ Stocks are jumping as investors bet on a 'pivot' away from interest rate hikes. Here's why experts think the path might be much more complicated.
▼ + stars: | 2023-02-09 | by ( Marley Jay | ) www.businessinsider.com time to read: +4 min

Investors hope the Federal Reserve will soon "pause" interest rate hikes and cut them before long. Stocks have been on a roll in early 2023, and one reason is that investors think the Federal Reserve is very close to changing course on interest rates. The more interest rates rise, the more the economy will slow and the more likely a recession becomes. Along similar lines, Bank of America interest rate strategist Ralph Axel told Morningstar in December that he expects "multiple pivots" from the Fed. "A Fed pause is undoubtedly worth some lift to stocks but once again we want to remind readers that both bonds and stocks have rallied already on that conclusion."

☆ I see this year's budding stock rally signaling a different kind of bull market, one that's not so reliant on just a few stocks
▼ + stars: | 2023-01-29 | by ( Jim Cramer | ) www.cnbc.com time to read: +11 min

This nascent bull market started with the peak in interest rates and the dollar back in the fall and then broadened to include bank and semiconductor stocks in 2023. That's right we created FANG a decade ago this week on "Mad Money," and it was a really good call — until it wasn't. The stability of a market that's based, in part, on the assumption of a JPMorgan (JPM) or an American Express or even a Boeing rallying on earnings, seems tidal to me. That's what's happening as we consider the market to be far bigger than any group of a half-dozen stocks. Yes, I am shredding the cynicism and heralding the new bull market, one that's not ignorant of what ails things, but is benignly rotational.

☆ U.S. consumer spending falls; inflation cooling
▼ + stars: | 2023-01-27 | by ( ) www.reuters.com time to read: +2 min

Consumer spending, which accounts for more than two-thirds of U.S. economic activity, dropped 0.2% last month, the Commerce Department said on Friday. Economists polled by Reuters had forecast consumer spending dipping 0.1%. In the 12 months through December, the PCE price index increased 5.0% after advancing 5.5% in November. Excluding the volatile food and energy components, the PCE price index rose 0.3% after climbing 0.2% in November. The so-called core PCE price index rose 4.4% on a year-on-year basis in December after increasing 4.7% in November.

☆ Wall Street extends rally, powered by tech bounce
▼ + stars: | 2023-01-23 | by ( Stephen Culp | ) www.reuters.com time to read: +5 min

All three major stock indexes extended Friday's gains, with the tech-heavy Nasdaq leading the pack, boosted by semiconductor shares (.SOX). Of the 11 major S&P 500 sectors, all but energy (.SPNY) ended green, with tech shares (.SPLRCT) enjoying the largest percentage gain, up 2.3% on the session. The fourth-quarter reporting season has shifted into overdrive, with 57 of the companies in the S&P 500 having posted results. Analysts now see S&P 500 fourth-quarter earnings, on aggregate, dropping 3% year-on-year, nearly twice as steep as the 1.6% annual drop seen at the beginning of the year, per Refinitiv. The S&P 500 posted 11 new 52-week highs and no new lows; the Nasdaq Composite recorded 82 new highs and 19 new lows.

☆ Wall Street surges, powered by tech rebound
▼ + stars: | 2023-01-23 | by ( Stephen Culp | ) www.reuters.com time to read: +4 min

"No one wants to be watching from the sideline with a bunch a cash as the market gets away from them." All 11 major sectors in the S&P 500 were higher, with tech (.SPLRCT) up the most, jumping 2.8%. Fourth-quarter reporting season has shifted into overdrive, with 57 of the companies in the S&P 500 having posted results. Of those, 63% have delivered better than expected earnings, according to Refinitiv. The S&P 500 posted 11 new 52-week highs and no new lows; the Nasdaq Composite recorded 66 new highs and 14 new lows.

☆ U.S. economy losing momentum as retail sales post biggest drop in 12 months
▼ + stars: | 2023-01-18 | by ( Lucia Mutikani | ) www.reuters.com time to read: +7 min

The second straight monthly decrease in retail sales, which are mostly goods, is undercutting production at factories. Retail sales plummeted 1.1% last month, the biggest drop since December 2021. REUTERS/Jeenah Moon 1 2Retail salesMANUFACTURING OUTPUT FALLSExcluding automobiles, gasoline, building materials and food services, retail sales fell 0.7% last month. The weakness in core retail sales is likely to be offset by anticipated gains in services spending. The government reported last week that monthly consumer prices fell for the first time in more than 2-1/2 years in December.

☆ Stocks rise, dollar stumbles after U.S. inflation data
▼ + stars: | 2023-01-12 | by ( Chuck Mikolajczak | ) www.reuters.com time to read: +3 min

[1/3] Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., November 7, 2022. U.S consumer prices fell in December for the first time in more than 2-1/2 years as prices fell for gasoline and other goods, suggesting inflation was on a sustained downward trend. Many market participants are looking for signs of weakness in the labor market as a signal of slowing inflation. On Wall Street, equities were choppy after the data, with the S&P 500 falling as much as 0.8% and then rebounding. Crude prices rose in the wake of the data, getting an additional boost from optimism over China's emergence from its COVID-19 restrictions creating additional demand.

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