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Morning Bid: Bonds burn on as China rate cut underwhelms
  + stars: | 2023-08-21 | by ( ) www.reuters.com   time to read: +4 min
A sign is seen outside the 11 Wall St. entrance of the New York Stock Exchange (NYSE) in New York, U.S., March 1, 2021. Although prompted by a deepening property sector bust and worrying economic activity undershoot, China's latest widely expected interest rate cut on Monday was surprisingly small - underscoring concerns that official efforts to shore up the economic malaise are still just piecemeal. The People's Bank of China lowered its one-year lending rate by only 10 basis points to 3.45% - less than the 15bp cut forecast - and it left five-year rates unchanged. UBS became the latest global bank to slash China's annual economic growth forecast for this year - down to 4.8% from 5.2%. Ten-year Treasury yields hovered below last week's highs on Monday, however, and Wall St stock futures were firmer ahead of the open.
Persons: Brendan McDermid, Mike Dolan There's, China's, Xi Jinping, Vladimir Putin, disinflation, Germany's, Crest Nicholson, Mike Dolan, Bernadette Organizations: New York Stock Exchange, REUTERS, People's Bank of, Stock Connect, HK, UBS, Treasury, Federal, Jackson, Wall St, BRICS Summit, Reuters Graphics Reuters, Reuters, Thomson Locations: New York, U.S, China, People's Bank of China, South Africa, Brazil, Russia, India, Ukraine, Wall, Johannesburg
Mortgage rates hit their highest point since 2000
  + stars: | 2023-08-21 | by ( Diana Olick | In Dianaolick | ) www.cnbc.com   time to read: +3 min
Mortgage rates jumped Monday, following a rise in bond yields driven by investors' concerns that high interest rates and inflation will linger longer than expected. The average rate on the popular 30-year fixed mortgage hit 7.48%, the highest level since November 2000, according to Mortgage News Daily. Higher mortgage rates exacerbate the supply situation. The nation's homebuilders have been trying to offset higher mortgage rates by either buying down those rates for short or long terms, or by lowering home prices. Homebuilder sentiment in August, however, dropped sharply, with builders citing higher interest rates as the main reason.
Persons: Matthew Graham Organizations: Mortgage News, Federal Reserve, ARM, Mortgage, Association
All three major U.S stock indices pulled back this week, as earnings season wound down and retail earnings painted a mixed picture of the state of the economy. Looking to next week, we'll be watching how shares of Club name Palo Alto Networks (PANW) open on Monday. With mortgage rates hitting the highest level in over two decades this week, affordability remains a major impediment for the housing market. Earnings : Club name Foot Locker (FL) reports quarterly results Wednesday before the opening bell, while Club holding Nvidia (NVDA) releases after the close that same day. As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade.
Persons: we'll, Locker, Mary Dillon, Lowe's, Jim Cramer's, Jim Cramer, Jim, Kelter Davis Organizations: Nasdaq, Dow Jones, TJX, Walmart, Federal Reserve, U.S, Palo Alto Networks, Palo, Club, Nvidia, Lufax, Baidu, Dick's Sporting, Coty, COTY, Urban Outfitters, Parts, Devices, Sonoma, Body, Abercrombie, Fitch, Autodesk, TD Bank, Royal Bank of Canada, Marvell Technology, Intuit, Nordstrom, Jim Cramer's Charitable, CNBC, Shoppers, Bloomberg, Getty Locations: U.S, China, Friday's, Williams, Burlington, Chicago , Illinois
The week ahead will "revolve around three things," Infrastructure Capital Management CEO Jay Hatfield remarked on the week ahead. "Nvidia's earnings, Nvidia's earnings and, to a lesser degree, Jackson Hole." Nvidia earnings Many investors expect Nvidia will beat expectations for the second quarter when it reports results next Wednesday . More commentary from Jackson Hole If Nvidia is the key microeconomic event next week, Jackson Hole will dominate macroeconomic discussion. Powell delivers his address at the annual central bank forum hosted by the Kansas City Fed next Friday morning.
Persons: Jerome Powell, Jay Hatfield, Jackson, Management's Yung, Yu Ma, Hans Mosesmann, Hatfield, Powell, Ross Mayfield, Ray Farris, Fed Governor Bowman, Michael Bloom Organizations: Federal, Infrastructure Capital Management, Dow, Nasdaq, Treasury, Fitch, Federal Reserve, BMO, Nvidia, Rosenblatt Securities, Infrastructure Capital Management's, Kansas City Fed, Fed, Infrastructure Capital, Credit Suisse, Richmond Fed, Federal Reserve Bank of Chicago, PMI, New, Body, Devices, Autodesk, Chicago, . Kansas City Fed Manufacturing, Intuit, Ulta Locations: , Wyoming, China, Infrastructure Capital Management's Hatfield, Powell, . Kansas, Michigan
Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailCNBC Pro Talks: Top investors Tom Lee and Stephanie Link spot buying opportunitiesWith summer winding down and Wall Street getting back to business, investors are set to see if 2023's surging market will run or stumble for the rest of the year. CNBC Pro assembled two of the best experts in the business to break down the homebuilder trade, energy sector and more. Fundstrat's Tom Lee and Stephanie Link of Hightower Advisors sat down with CNBC's Dominic Chu and shared their best stock picks and outlook.
Persons: Tom Lee, Stephanie Link, Hightower, CNBC's Dominic Chu Organizations: Wall Street, CNBC Pro, Hightower Advisors
I mean they're always kind of cheap, but they're really cheap," Link said. Housing stocks have risen sharply, with the SPDR S & P Homebuilders ETF (XHB) up about 23% over the past year. Both investors agreed that energy stocks could see a similar rally to housing in the years ahead. "I believe what we are seeing with homebuilders is going to happen with energy stocks in two to three years. In addition to energy stocks being cheap, they could also see fundamentals improvement if oil prices continue to rise, Link said.
Persons: Fundstrat, Tom Lee, Stephanie Link, Lee, Warren, Link Organizations: CNBC, Hightower Advisors, Berkshire, Occidental Petroleum, Chevron, Diamondback Energy, Exxon, Devon Energy Locations: Horton, Chevron, homebuilder
REUTERS/Brendan McDermid/File PhotoSummaryCompanies Retail sales data due at 8:30 a.m. ETNvidia gains as UBS, Wells Fargo raise PTFutures down: Dow 0.67%, S&P 0.65%, Nasdaq 0.68%Aug 15 (Reuters) - U.S. stock index futures fell on Tuesday as government bond yields hit fresh highs ahead of July retail sales data that could offer clues on the Federal Reserve's interest rate path. ET (1230 GMT) is expected to show retail sales rose 0.4% last month after climbing 0.2% in June, likely adding to evidence that the U.S. economy remains on a strong footing. Rising Treasury yields have pressured equities after hotter-than-expected producer prices data last week stoked concerns the Fed could keep rates higher for longer than previously anticipated. ET, Dow e-minis were down 238 points, or 0.67%, S&P 500 e-minis were down 29.5 points, or 0.65%, and Nasdaq 100 e-minis were down 104.25 points, or 0.68%.
Persons: Brendan McDermid, Wells, Otunuga, Morgan Stanley, Wells Fargo, Bilibili, Neel Kashkari, Berkshire Hathaway, Warren Buffett's, Horton, Amruta Khandekar, Maju Samuel, Vinay Dwivedi Organizations: New York Stock Exchange, REUTERS, UBS, Wells Fargo, PT, Dow, Nasdaq, Commerce, Treasury, Nvidia, Apple, Alibaba, Minneapolis Federal Reserve Bank, Traders, Fed, Dow e, General Motors, Berkshire, Warren, Thomson Locations: New York City, U.S, United States, China, Beijing, Minneapolis, Warren Buffett's Berkshire, homebuilder D.R
Berkshire Hathaway’s Latest Bet: Homebuilder Stocks
  + stars: | 2023-08-15 | by ( Hannah Miao | ) www.wsj.com   time to read: 1 min
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Persons: Dow Jones Locations: berkshire
[1/2] Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., July 19, 2023. The Commerce Department's report showed retail sales grew 0.7% last month against expectations of a 0.4% rise, suggesting the U.S. economy remains strong. "The retail sales number might indicate that the Fed would continue to raise rates." Home Depot (HD.N) added 1% after the home improvement chain posted a smaller-than-expected drop in quarterly same-store sales and topped profit estimates. Declining issues outnumbered advancers by a 5.29-to-1 ratio on the NYSE and a 2.90-to-1 ratio on the Nasdaq.
Persons: Brendan McDermid, Wells, Fitch, jitters, Peter Andersen, JPMorgan Chase, Zions, Wells Fargo, Bilibili, Berkshire Hathaway, Warren Buffett's, Horton, Amruta Khandekar, Shristi, Shashwat Chauhan, Maju Samuel, Vinay Dwivedi Organizations: New York Stock Exchange, REUTERS, Nvidia, UBS, Wells Fargo, PT U.S, Dow, Nasdaq, U.S, Commerce, Andersen Capital Management, Fed, Federal Reserve, JPMorgan, Bank of America, PacWest Bancorp, Western Alliance Bank, Federal Deposit Insurance, Treasury, Alibaba, Dow Jones, General Motors, Berkshire, Warren, Lennar Corp, NYSE, Thomson Locations: New York City, U.S, Boston, China, Beijing, Warren Buffett's Berkshire, homebuilder D.R
Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailRates are the biggest issue impacting homebuilder sentimentCNBC's Diana Olick joins 'The Exchange' to discuss a drop in builder sentiment, supply and labor shortages in the homebuilding sector, and growth of home builder incentive offerings.
Persons: Diana Olick
Homebuilder sentiment fell six points to 50 in August
  + stars: | 2023-08-15 | 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 EmailHomebuilder sentiment fell six points to 50 in AugustCNBC's Rick Santelli on Diana Olick report on the latest economic data.
Persons: Rick Santelli, Diana Olick
Rising mortgage rates are hitting potential homebuyers hard, and that is taking steam out of the homebuilding market. That is the first decline in seven months and the lowest level since May, when sentiment first rose out of negative territory. Mortgage rates are now holding solidly over 7%, hitting 7.24% Monday, according to Mortgage News Daily. Higher mortgage rates and the decline in buyer activity has more builders using sales incentives once again. The share of builders using all types of incentives, including buying down interest rates, rose to 55% in August from 52% in July.
Persons: Alicia Huey, NAHB, Robert Dietz, NAHB's Organizations: National Association of Home Builders, Mortgage News Locations: Wells Fargo, Birmingham , Alabama, Midwest
Check out the companies making headlines in premarket trading. Discover Financial Services — Shares slipped 6.5% after CEO Roger Hochschild resigned. Turnstone Biologics — Stock in the biotechnology company slipped 2.3% in premarket trading. Earlier on Tuesday, investment firm Piper Sandler initiated coverage of the stock with an overweight rating. Hannon Armstrong Sustainable Infrastructure Capital — The renewable energy investment firm climbed 2.1% after Bank of America upgraded shares to buy.
Persons: Roger Hochschild, John Owen, Turnstone, Piper Sandler, Horton —, Warren, Berkshire Hathaway, Horton, Hannon Armstrong, Phillips, Morgan Stanley, JPMorgan, Fitch, Wells Fargo, Baird, Steel, , Alex Harring, Jesse Pound Organizations: Nvidia Corporation, Discover Financial, Bank of America, Hannon Armstrong Sustainable Infrastructure Capital, Banks, JPMorgan Chase, Citigroup, CNBC, Nvidia, UBS Locations: Taipei, Taiwan, The Texas, Cleveland
Greenlight Capital's David Einhorn said he's getting concerned about the stock market after a strong rally and has added sizable downside protection to his portfolio. Between January and June, the S & P 500 popped 15.9% for its best first half since 2019. Einhorn, 54, believes inflation remains a big risk even though data has suggested easing price pressures. Recent inflation readings have shown a noted deceleration and the tailwind from higher rents is likely to dissipate, causing core inflation to fall further," Einhorn said. "Even so, we believe inflation is stickier and more entrenched than the market is currently appraising."
Persons: Greenlight Capital's David Einhorn, he's, Einhorn, Michael Burry Organizations: CNBC, Green Brick Partners, Nasdaq, Trust, NET
Morgan Stanley economists see a stronger housing market cycle and interest rates being cut in 2024. Luckily, Morgan Stanley strategists think the housing market is finally reaching a turning point. That will mark the end of the current craziness and the beginning of a new housing market cycle. As for the US industries and stocks connected to the housing market, Wilson noted that tomorrow's market will bring about different winners and losers. Higher interest rates mean higher mortgage rates, and higher mortgage rates mean lower demand for mortgages.
Persons: Morgan Stanley, Mike Wilson, Wilson, homebuyers, there's, isn't, Morgan Stanley Wilson Organizations: Housing Locations: homeownership, rentership
HONG KONG, Aug 1 (Reuters) - Shares of debt-laden Chinese property giant Country Garden (2007.HK) fell on Tuesday after it scrapped a share placement to raise $300 million, citing "internal considerations" though bookrunners said the sale was fully covered. Shares and bonds in Country Garden have come under pressure recently due to liquidity concerns, and investors were worried about further contagion in a sector that has already seen many firms default. Country Garden did not immediately respond to a request for comment. At 0220 GMT, shares of Country Garden were down 3.8% to HK$1.52, narrowing losses from 10.8% in early trading. Country Garden had nearly $4.9 billion of bond payments to make over the next 6 months, JP Morgan analysts said in a report last week.
Persons: bookrunners, JP Morgan, Morgan, Clare Jim, Scott Murdoch, Summer, Jacqueline Wong, Kim Coghill, Simon Cameron, Moore Organizations: HK, Mainland Properties, Reuters, Thomson Locations: HONG KONG, HK, Hang
Economist David Rosenberg told Insider that Fed employees laughed at his recession call in 2007. On October 9, 2007, shortly before the global economy plunged into recession, David Rosenberg delivered a presentation to economists and members of the research team at the Federal Reserve detailing why a downturn was coming. The Treasury yield curve is near its most inverted levels since the early 1980s. Here's the spread between the 3-month and 10-year Treasury yields. Then there's The Conference Board's Leading Economic Index, which is in recessionary territory, marked by the red lines below.
Persons: David Rosenberg, Rosenberg, Merrill Lynch, Mr, Louis Organizations: Federal Reserve, North, Conference, Fed, Federal, Rosenberg Research, Treasury, Federal Reserve Bank of St Locations: North American
Five hedge funds shared five trading ideas on global property markets, adding that they cannot reveal trading positions for regulatory reasons. CM REITs are companies that own mortgages of multi-family residential homes as well as commercial real estate loans. Cell phone data Litt bought to research a REIT run by Alexandria Real Estate Equities (ARE.N), showed that buildings which that were supposed to be almost fully occupied were only half full. Alexandria Real Estate responded pointing to public filings which said that it was the advancement of science and related intellectual property in Alexandria’s Labspace buildings, and not employee foot traffic that drove its demand for space. But Litt believes that the shift away from office working will also hurt life and sciences real estate, generally.
Persons: Jonathan Mizrachi, CMBSs, David Amaryan, Ben Hunsaker, Hunsaker, Jonathan Litt, Litt, ANSON, Moez Kassam, Vistry, Kassam, Nell Mackenzie, Dhara Ranasinghe, Alison Williams Organizations: Property, Capital, Beach, Beach Point Capital Management, REITs, Alexandria Real, Reuters, Vistry, Thomson Locations: York, Russia, Russia's, Ukraine, Armenia, Beach Point, Alexandria, Alexandria’s, London, Carolina, New York
CNBC's Jim Cramer knows that executives rarely sound the alarm when something is wrong at their company. Cramer broke down the companies he's watching into categories: Continually good quarter (or continued excellence), first good quarter, last bad quarter, first bad quarter and confusing quarter. Cramer first listed companies that are experiencing "continually good quarters," including homebuilder PulteGroup and paint maker Sherwin-Williams . Cramer said he thinks the company is having its "last bad quarter," which could present a buying opportunity. Cramer pointed to aerospace giant RTX , formerly known as Raytheon Technologies, as a company likely experiencing a "first bad quarter," plagued by an engine recall.
Persons: CNBC's Jim Cramer, Cramer, that's, Sherwin, Williams, Next Cramer, there's Organizations: Federal, Electric, Google, CNBC, Club Charitable Trust, Raytheon Technologies, GE HealthCare
"The major thing that we see now is onshore-traded Country Garden bonds going down," he said. Country Garden is a giant with thousands of projects in nearly 300 Chinese cities. Li Changjiang, the president of Country Garden Services, sold 3.2 million shares of the company last week, reducing his stake to 0.11% from 0.21%. They also cut its price target to HK$0.9 from HK$2.3 and that of Country Garden Services Holdings to HK$6.7 from HK$22. "Distressed Chinese property developers’ bond restructurings can buy them some room," Fitch Ratings said in a report on Monday.
Persons: Longfor, Wanda, Yao Yu, Morgan Stanley, Morgan, Li Changjiang, Fitch, Jason Xue, Tom Westbrook, Clare Jim, Xie Yu, Georgina Lee, Marc Jones, Kim Coghill, Jamie Freed, Barbara Lewis, Christina Fincher Organizations: HK, Dalian, Garden, Country Garden Services, Garden Holdings, Garden Services Holdings, China, Greenland Holdings, Ocean Group, Thomson Locations: SHANGHAI, SYDNEY, China, Hong Kong, Evergrande, Cayman Islands, Shanghai, Sydney, London
Goldman Sachs initiates Amylyx Pharmaceuticals as buy Goldman said it sees an attractive entry point for shares of the biotech company. " Goldman Sachs reiterates Nvidia as buy Goldman said it's standing by its buy rating on Nvidia and that it likes stocks with "room for meaningful positive EPS revisions." UBS downgrades Tesla to neutral from buy UBS said in its downgrade of Tesla that strong growth is already priced in. Goldman Sachs initiates Savers Value Village as buy Goldman said the thrift store operator is a share gainer. Goldman Sachs reiterates ServiceNow as buy Goldman said it sees more upside in shares of ServiceNow as the stock remains a key beneficiary.
Persons: Piper downgrades Estee Lauder, Piper, Baird, Goldman Sachs, Goldman, Wells, Evercore, it's, Stifel, Lam, Tesla, Moffett, Rosenblatt, Raymond James, Becton Dickinson, SLB, Horton, BTIG, Needham, ServiceNow Organizations: Express, Netflix, Amylyx Pharmaceuticals, Bank of America, NTR, RBC, Research, Nvidia, MU, UBS, Semiconductor, Deutsche Bank, Apple, Deutsche, Mac, Med Tech, Schlumberger, Disney, DIS, American Express Locations: China, underperform, ServiceNow
After rising rapidly for most of July, mortgage rates are now back down to their lowest levels in three weeks. "As inflation slows, mortgage rates decreased this week," Sam Khater, Freddie Mac's chief economist, said in a press release. See more mortgage rates on Zillow Real Estate on ZillowMortgage CalculatorUse our free mortgage calculator to see how today's interest rates will affect your monthly payments. 30-Year Fixed Mortgage RatesThis week's average 30-year fixed mortgage rate is 6.78%, according to Freddie Mac. 15-Year Fixed Mortgage RatesThe average 15-year fixed mortgage rate is 6.06% this week, according to Freddie Mac data.
Persons: Freddie Mac, Sam Khater, Freddie Mac's, they'll, you'll Organizations: Zillow, Federal Reserve Locations: today's, Chevron
In this videoShare Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailBig Tech and homebuilder trades getting earnings ‘reality check,’ says investor Peter BoockvarPeter Boockvar, Bleakley Financial Group, Chief Investment Officer, joins 'Fast Money' to talk earnings season, the state of A.I. trades, the strength of the market rally and more.
Persons: , Peter Boockvar Peter Boockvar Organizations: Tech, Bleakley Financial Group, Chief Locations: A.I
US existing home sales fall; annual house price decline slows
  + stars: | 2023-07-20 | by ( ) www.reuters.com   time to read: +2 min
WASHINGTON, July 20 (Reuters) - U.S. existing home sales dropped to a five month-low in June, depressed by a chronic shortage of houses on the market that slowed the pace of decline in annual house prices. Existing home sales fell 3.3% in June to a seasonally adjusted annual rate of 4.16 million units, the lowest level since January, the National Association of Realtors said on Thursday. Economists polled by Reuters had forecast home sales would drop to a rate of 4.20 million units. The median existing house price fell 0.9% from a year earlier to $410,200, the second-highest price ever. The median house price rose 3.5% from May.
Persons: Freddie Mac, Lawrence Yun, Lucia Mutikani, Paul Simao Organizations: National Association of Realtors, Reuters, Federal, Thomson Locations: Midwest, West
Sales are unlikely to recover any time soon, as mortgage rates weigh heavy on affordability. Mortgage rates hung in the mid 6% range during that time and then shot up over 7% at the very end of May. The higher end of the market, however, appears to be recovering. While sales were down across all price points, they were down least at the higher end. Sales are unlikely to rebound soon in the existing home market, but sales of newly built homes are reaping the benefits.
Persons: Lawrence Yun, Yun, DR Horton, Donald Horton Organizations: National Association of Realtors, Realtors
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