DIRS.INFO The most relevant business & tech news

☆ Europe banks can lose 38% of deposits before having to sell assets at a loss-research
▼ + stars: | 2023-03-29 | by ( ) www.reuters.com time to read: +2 min

MILAN, March 29 (Reuters) - The average European bank could withstand a loss of 38% of its deposits without having to sell at a loss government bond holdings or have a fire sale of illiquid assets, Jefferies analysts said. "Most investor discussions end up at deposit flight risk and the extent to which this can be offset," it added. But investors are worried about the risk that banks may at some point be forced to sell their HTM securities. Jefferies analysed the ability of banks to quickly cover deposit outflows with minimal or no losses, against the level of retail deposits, which comprise 63% of the median bank's deposit base. Following are the results of Jefferies' liquidity analysis:Jefferies liquidity analysis of EMEA banksReporting by Valentina Za and Iain Whithers.

☆ Pet Shop Boys Are Singing the Blues
▼ + stars: | 2023-03-23 | by ( Jinjoo Lee | ) www.wsj.com time to read: +1 min

Pet parents frequently say on surveys that they would rather cut down on their own food than their pets’ kibble. But the reality of steep inflation is starting to bite even the most generous owners. In February, pet food prices were 15.2% above year-ago levels, far exceeding the 10.1% inflation seen for the human food-at-home category, according to data from the U.S. Bureau of Labor Statistics. Year-over-year price increases for pet food started outpacing that for food-at-home starting September, and price increases for the category have proven to be stickier: Grocery inflation peaked at 13.5% in August and has moderated every month. Smucker said on an earnings call last month that its dry cat-food business has seen supply-chain disruptions.

The Fed raised its benchmark overnight interest rate by a quarter of a percentage point on Wednesday, the ninth straight policy meeting that ended with a rise in borrowing costs since the current tightening cycle began in March 2022. "It's really ... a question of not knowing at this point," Powell told reporters after the meeting. This is 12 days ago," that a pair of bank failures reshaped the financial landscape facing the central bank, with potential implications for the real economy and the path of inflation. The U.S. Senate Banking Committee is holding hearings on the bank failures next week. "The challenges facing the (Federal Open Market Committee) today ... take on a particular aura of complexity."

☆ Inflation is proven to be a little stickier than people expected, says Barclays' Venu Krishna
▼ + stars: | 2023-03-15 | 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 EmailInflation is proven to be a little stickier than people expected, says Barclays' Venu KrishnaVenu Krishna, head of US equity strategy with Barclays Investment Bank, and Aditya Bhave, Bank of America senior U.S. and global economist, join 'TechCheck' to discuss their thoughts on the market and the decline in European bank stocks.

☆ Chinese tourists are traveling again — but not the way they used to
▼ + stars: | 2023-03-15 | by ( Karen Gilchrist | ) www.cnbc.com time to read: +5 min

That could mark a significant change in the international travel market, to which Chinese tourists are outsized contributors. In the first half of that year alone, their outbound travel spend surpassed $127.5 billion, a study from Chinese travel booking site Ctrip.com found. Chinese outbound travel is forecast to recover around two-thirds of its pre-pandemic levels in 2023. Leopatrizi | E+ | Getty ImagesBecause of those shortcomings, countries that can accommodate Chinese travelers' shifting needs have emerged as clear winners. Thailand, for instance, offers visas-on-arrival to fully vaccinated Chinese tourists who have travel insurance.

☆ Supercore inflation: Why the Fed suddenly cares about your barbershop and plumbing bills
▼ + stars: | 2023-03-13 | by ( Huileng Tan | ) www.businessinsider.com time to read: +8 min

Hence, supercore inflation equals the inflation of a basket of goods and services, minus the food and energy inflation, and minus the housing inflation. This ultra-focussed lens is what makes the set of prices in the inflation measure "supercore." supercore inflation, "may be the most important category for understanding the future evolution of core inflation," Fed Chair Jerome Powell said in November. "Traditionally, the Fed focused on core inflation because the components were deemed to be less volatile — and by extension, transitory. Not all economists think supercore inflation is all it's hyped up to beBut not all economists are convinced about the focus on supercore inflation.

☆ Silicon Valley's 'greed and avarice' have 'finally come home to roost' in SVB collapse, trader says
▼ + stars: | 2023-03-13 | by ( Natasha Turak | ) www.cnbc.com time to read: +2 min

That news sent its stock price plunging and triggered a panic-induced wave of withdrawals from VCs and other depositors. Within a day, SVB stock had tanked 60% and led to a loss of more than $80 billion in bank shares globally. Some argue that the bank's downfall was due to its leaders' greed for yield: its holdings were disproportionately exposed to long-term interest rates, which are at a 15-year high in an effort to bring down inflation. The increased rates hit the value of SVB's securities, which subsequently damaged depositors' confidence. So, to me, it's the system that's broken, or at least needs to be seriously reviewed here."

☆ This one chart shows the uniqueness of Silicon Valley Bank and how it set itself up to fail
▼ + stars: | 2023-03-12 | by ( Jesse Pound | ) www.cnbc.com time to read: +2 min

Silicon Valley Bank 's status as a key player for venture capital-backed companies in technology and related industries appears to have played a major role in its demise , according to J.P. Morgan Asset Management. The chart below shows how unique Silicon Valley really was...see it (Ticker: SIVB) in the lower right far away from the other regional banks: The concentrated mix of deposits appears to have contributed to a massive bank run . At banks with a higher percentage of retail depositors, there would be less motivation for those depositors to pull out there money even if the bank was in trouble. Federal regulators are exploring options, including a potential sale of SVB , to backstop the uninsured deposits to soothe these fears. The chart shows that there are other banks with low percentages of retail depositors or high levels of loans plus securities, but that Silicon Valley Back was unusually risky on both fronts.

☆ Analysts see a buying opportunity in this financial stock in particular amid SVB-fueled sell-off
▼ + stars: | 2023-03-10 | by ( Hakyung Kim | ) www.cnbc.com time to read: +3 min

Financial services stocks took a spill as SVB Financial Group's distress cued a sell-off in banks, but investors should use the decline to snap up shares of Charles Schwab on the cheap. Charles Schwab shares dipped more than 7% on Friday morning, following a nearly 13% decline during Thursday's trading session. SCHW 5D mountain Significant decline in Charles Schwab shares following SVB Financial's announcement The significant drop in financial services stocks has been fueled by a massive sell-off of tech-focused bank SVB Financial's shares. However, several analysts believe that such fears are overblown and remain bullish on Charles Schwab, saying that the current decline presents a promising entry point into Schwab's shares. UBS has a buy rating on Charles Schwab shares.

☆ The head of investment strategy at BlackRock's $2.2 trillion iShares Americas unit explains why the stock market has already hit its low — and lays out the 5 ways to invest now
▼ + stars: | 2023-03-10 | by ( Lisa Kailai Han | ) www.businessinsider.com time to read: +4 min

But Chaudhuri believes that stocks won't hit their 2022 lows, and that any slowdown will be mild. On the other hand, the US economy has shown signs of strength so far this year, and Chaudhuri believes that when a slowdown finally comes, it'll be both relatively mild and predictable. Within the bond market, Chaudhuri specifically recommends investors use a barbell strategy to gain exposure to both ends of the yield curve. As for the equity market, Chaudhuri said that from a historical perspective, value stocks generally outperform in a macroeconomic regime characterized by higher inflation and rates. Another benefit of value stocks is that they are currently trading more cheaply than their growth counterparts.

☆ Take Five: A macro-packed punch for markets
▼ + stars: | 2023-03-10 | by ( ) www.reuters.com time to read: +5 min

1/ THE PRICE IS RIGHTU.S. inflation data have been pivot points for markets and Tuesday's report will likely be consequential as investors gauge whether the Federal Reserve will return to the jumbo-sized rate hikes that shook markets last year. The European Central Bank has raised rates by 3 percentage points since July to 2.5% and looks set for another half-point increase on Thursday. Austria's central bank chief Robert Holzmann wants half-point rises at each of the next four meetings. Riskier, more fragile emerging markets, especially those with twin deficits, could feel the heaviest punch if the Fed goes all the way to 6%. Emerging markets countries hiking (+) or cutting (-) their policy ratesCompiled by Amanda Cooper; Graphics by Pasit Kongkunakornkul, Kripa Jayaram and Vincent Flasseur; Edited by Shounak DasguptaOur Standards: The Thomson Reuters Trust Principles.

☆ BlackRock says there's a good chance the Fed will have to hike interest rates to 6%, the highest level in 20 years
▼ + stars: | 2023-03-08 | by ( Zinya Salfiti | ) www.businessinsider.com time to read: +3 min

There's a reasonable chance the Fed will hike interest rates to 6% and keep them there, a BlackRock CIO said. Sticky inflation and a strong labor market are factors pushing the Fed to keep hiking, Rick Rieder said. Stocks sold off after Fed Chair Jerome Powell lifted expectations for higher interest rates ahead. Sign up for our newsletter to get the inside scoop on what traders are talking about — delivered daily to your inbox. The Fed has lifted rates from near zero last March to as much as 4.75% today, in a bid to bring inflation down to its target 2% rate.

☆ Stock futures are flat as Wall Street weighs likelihood of higher rate hikes: Live updates
▼ + stars: | 2023-03-08 | by ( Hakyung Kim | ) www.cnbc.com time to read: +1 min

U.S. stock futures were flat on Wednesday night as traders processed fresh job market data and comments from Federal Reserve Chairman Jerome Powell. S&P 500 futures and Nasdaq 100 futures dipped by 0.01% and 0.03%, respectively. During the regular session, the Dow dipped 58.06 points, or 0.18%, marking its second negative session in a row. These mixed results came after new numbers on the job market led investors to believe that higher rate hikes are more likely. "The global economy is more resilient than many realized, which will make inflation stickier and is extending central bankers' terminal rate target.

"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. Republicans focused on whether energy policy was restricting supply and keeping prices higher than needed, and whether restrained federal spending could help the Fed's cause. As of December, officials saw that rate rising to a peak of around 5.1%, a level investors expect may move at least half a percentage point higher now. With a 50-basis-point rate hike now in play, Brown said a strong monthly jobs report on Friday would likely lead to "calls for a 6% terminal rate," nearly a percentage point higher than Fed officials had projected as of December. How much remains unclear, but Powell said the focus will remain more squarely on how inflation behaves.

ET (1500 GMT), with investors awaiting his comments on the Fed's steps aimed at bringing inflation towards its 2% target. Rising bond yields tend to weigh on equity valuations, particularly those of growth and technology stocks, as higher rates reduce the value of future cash flows. Traders see Fed fund rates peaking at 5.46% by September, from the current 4.67%. ET, Dow e-minis were up 12 points, or 0.04%, S&P 500 e-minis were up 5.5 points, or 0.14%, and Nasdaq 100 e-minis were up 29.25 points, or 0.24%. Reporting by Sruthi Shankar and Bansari Mayur Kamdar in Bengaluru Editing by Vinay DwivediOur Standards: The Thomson Reuters Trust Principles.

☆ Australia central bank tempers hawkish outlook after hiking rates to over decade high
▼ + stars: | 2023-03-07 | by ( Stella Qiu | ) www.reuters.com time to read: +4 min

In a dovish step, the central bank dropped a reference to further rate "increases", saying instead that "further tightening" would be needed, suggesting that just one more hike might be enough. Rates have already gone up by a whopping 350 basis points since last May, easily the most aggressive tightening campaign by the central bank in modern history. Speculation was rife that the central bank could temper the forward guidance given recent softer data with unemployment rising, economic growth disappointing and wages not climbing as fast as feared. Gareth Aird, economist at Commonwealth Bank of Australia, sees a risk of the RBA could pause in April. "The reference to assessing 'when' means that the RBA Board has not yet made their mind up around increasing the cash rate in April," Aird said.

☆ Dollar subdued ahead of Powell testimony; Aussie slips
▼ + stars: | 2023-03-07 | by ( Ankur Banerjee | ) www.reuters.com time to read: +3 min

SINGAPORE, March 7 (Reuters) - The U.S. dollar was tentative on Tuesday ahead of testimony by U.S. Federal Reserve chair Jerome Powell, while the Aussie slid after the Reserve Bank of Australia raised its cash rate by 25 basis points but tempered hawkishness in its statement. Meanwhile, the U.S. dollar index , which measures it against six major rivals, fell 0.077% to 104.170, having slipped 0.26% overnight. The Japanese yen was mostly flat at 135.94 to the dollar ahead of the final policy meeting for Bank of Japan Governor Haruhiko Kuroda on Thursday and Friday. Fed funds futures traders are pricing in a 76% probability the Fed will raise rates by 25 basis points at its March meeting. They also expect interest rates to peak at 5.48% in September and still be above 5% at the end of the year.

☆ Dollar subdued ahead of Powell testimony
▼ + stars: | 2023-03-07 | by ( Ankur Banerjee | ) www.reuters.com time to read: +2 min

SINGAPORE, March 7 (Reuters) - The dollar was subdued on Tuesday ahead of testimony by Federal Reserve chair Jerome Powell, which investors will focus on for cues of the path the U.S. central bank is likely to take in tackling sticky inflation. The dollar index , which measures the U.S. currency against six major rivals, was 0.067% higher at 104.31, having skidded 0.26% overnight. The Australian dollar rose 0.01% against the U.S. dollar at $0.673 ahead of the Reserve Bank of Australia's policy decision later in the day where a quarter-percentage point rate hike is widely expected. The Japanese yen weakened 0.15% to 136.14 per dollar ahead of the final policy meeting for Bank of Japan Governor Haruhiko Kuroda on Thursday and Friday. They also expect interest rates to peak at 5.48% in September and still be above 5% at the end of the year.

☆ Bank of America's stock chief warns the S&P 500 could fall another 26% as valuations remain too elevated and decades of market history show half of the criteria for a bottom still aren't being met
▼ + stars: | 2023-03-04 | by ( William Edwards | ) www.businessinsider.com time to read: +6 min

The S&P 500 could fall to as low as 3,000, they said. In a note this week, Wilson said that the S&P 500 remains overvalued relative to history by price-to-earnings and price-to-sales metrics. S&P 500 P/E multiples are 9% above their median while P/Sales multiples are 23% above median," Wilson said. "History implies that for the current level of real rates the S&P 500 multiple is ~2.5x overvalued," the chief market strategist said. Wilson's end-of-year target for the S&P 500 is 3,900, while Krishna and Kolanovic have targets of 3,725 and 4,200, respectively.

☆ US services sector grows steadily; prices stubbornly high
▼ + stars: | 2023-03-03 | by ( Lucia Mutikani | ) www.reuters.com time to read: +6 min

Thirteen services industries, including construction, retail trade, accommodation and food services as well as professional, scientific and technical services, reported growth last month. Overall, the services sector is benefiting from a switch in consumer spending from goods, which are typically bought on credit. ISM services PMISUPPLY SIGNIFICANTLY IMPROVEDThe services sector is now at the center of the fight against inflation as services prices tend to be stickier and less responsive to interest rate increases. A measure of prices paid by services industries for inputs fell to 65.6, the lowest in January 2021, from 67.8 in January. Some economists view the ISM services prices paid gauge as a good predictor of personal consumption expenditures (PCE) inflation.

☆ U.S. equity funds post biggest weekly outflow in eight weeks
▼ + stars: | 2023-03-03 | by ( ) www.reuters.com time to read: +1 min

Refinitiv Lipper data showed investors offloaded a net $12.9 billion worth of U.S. equity funds, booking their biggest weekly disposal since Jan. 4. Fund flows: US equities, bonds and money market fundsMeanwhile, money market funds drew a net $64.86 billion, the biggest weekly inflow in eight weeks, amid a risk-off mood among investors. U.S. large- and mid-cap equity funds faced $6.27 billion and $267 million worth of outflows, while investors drew $1.32 billion out of the small cap funds, snapping a four-week-long buying streak. Fund flows: US equity sector fundsMeanwhile, U.S. bond funds obtained $2.79 billion in inflows after witnessing two weeks of net selling. Investors purchased U.S. short/intermediate government & treasury funds of $4.75 billion, while general domestic taxable fixed-income funds attracted $1.9 billion worth of inflows.

☆ Sticky inflation fuels some of ECB's worst fears
▼ + stars: | 2023-03-02 | by ( Balazs Koranyi | ) www.reuters.com time to read: +4 min

Overall inflation eased a touch to 8.5% last month from 8.6% in January, data on Thursday showed. But nearly all the drop came from lower energy costs, while prices for most other items - including food, services and durable goods - surged again, confirming the worst fears of some ECB policymakers. A jump in underlying inflation - to 5.6% from 5.3% - reinforces already copious evidence that past price rises are filtering down into the broader economy, including via wages. "Core inflation and other measures of underlying inflation were likely to be stickier, with only limited evidence of a stabilisation so far," the ECB said in the accounts of the Feb. 1-2 meeting. "In particular, we upgrade (the rate hike view in) May from 25bp to 50bp, which takes our terminal rate forecast to 3.75% in June."

☆ Eurozone Inflation Eases, but Core Measure Hits Record High
▼ + stars: | 2023-03-02 | by ( Paul Hannon | ) www.wsj.com time to read: 1 min

Eurozone inflation eased in February for the fourth straight month, but a strong pickup in services prices makes it likely that the European Central Bank will continue to raise interest rates in coming months. Despite the overall easing in price rises, inflation accelerated in many of the eurozone’s largest members—including Germany, France and Spain—underlines how difficult a task central bankers face in bringing it back under control. Strikes and labor unrest across the region are pushing wages higher, something that makes inflation stickier.

☆ A year later, the Fed still has a long way to go in the fight against inflation
▼ + stars: | 2023-03-01 | by ( Jeff Cox | ) www.cnbc.com time to read: +9 min

The rate hikes appeared to have quelled some of the inflation surge that inspired the policy tightening. Indeed, Fed officials for months stuck to the narrative that inflation was "transitory" and would abate on its own. Fed Chairman Jerome Powell recently insisted that he and his colleagues are taking "forceful steps" now to bring down inflation. The index most recently showed an annual inflation rate of 6.4%, down from a peak around 9% in the summer of 2022. Citigroup economist Andrew Hollenhorst thinks the Fed could tame key inflation metrics to around 4% by the end of this year.

☆ Dollar advances, Aussie slides as Australia economy slows
▼ + stars: | 2023-03-01 | by ( Rae Wee | ) www.reuters.com time to read: +3 min

Australia's economy grew at the weakest pace in a year last quarter while the country's monthly consumer prices rose less than expected in January, separate data showed on Wednesday. The Aussie slumped in the aftermath of the data to a two-month trough, and was last 0.47% lower at $0.6697. "We see the Fed going to 5.5%, with a growing risk of 6%," said Michael Every, global strategist at Rabobank. Elsewhere, the dollar rose 0.12% against the Japanese yen to 136.38, after having spiked close to 5% against the yen in February, its largest monthly gain since last June. The kiwi fell 0.28% to $0.6167, while the Chinese offshore yuan slipped marginally to 6.9603 per dollar.

Search resuls for: "stickier"

25 mentions found