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Investors should focus on stocks with strong balance sheets as these companies tend to be more resilient against high interest rates, according to Goldman Sachs. Bond yields have been surging lately as the Federal Reserve signaled higher rates for longer in its inflation fight. Higher rates make it more expensive to borrow, and they effectively lower the present value of any future earnings. Stocks with strong balance sheets have outperformed those with weak ones by 4 percentage points since the start of September, Goldman said. Meanwhile, investors are rotating away from stocks perceived to be vulnerable to the higher rate backdrop, including those with levered balance sheets, Goldman said.
Persons: Goldman Sachs, David Kostin, Goldman, Kostin, CNBC's Michael Bloom Organizations: Federal Reserve, Companies, Big Tech, Netflix, Nvidia, Colgate, Palmolive, Costco, American Airlines, Caesars Entertainment, Delta Air Lines
Bill Ackman, Pershing Square Capital Management CEO, speaking at the Delivering Alpha conference in NYC on Sept. 28th, 2023. Pershing Square's Bill Ackman revealed Monday he covered his bet against long-term Treasurys, believing that investors may increasingly buy bonds as a safe haven because of growing geopolitical risks, the latest of which being the Israel-Hamas war. The 30-year Treasury yield has risen more than 80 basis points since the end of August, making Ackman's bet profitable. Bond prices move inversely to yields, so Ackman's bet against bonds was, in effect, a gamble on higher rates. The 30-year Treasury yield fell 6 basis points to 5.01% on Monday after Ackman's comments.
Persons: Bill Ackman, Pershing, Ackman, Ackman's Organizations: Pershing, Capital Management, Delivering Alpha, Treasury Locations: Israel
Despite high prices and mortgage rates, they said homeownership will pay off for many people in the long-run. Many Americans have been left wondering when — if ever — the time will be right for them to enter the housing market. "Many homeowners first bought their home when interest rates were high — the 50-year average rate on a mortgage is 7.8%," he said. Even if cuts to interest rates cause mortgage rates to fall, they're unlikely to return to the near-zero levels they were in 2022. If and when mortgage rates fall, Yun said that some homeowners who have been eager to move — but have been reluctant to give up their low interest rates — will likely decide to sell.
Persons: homeownership, , Andy Walden, homebuyers, Jerome Powell, Alex Wong, Daryl Fairweather, Redfin's, Lawrence Yun, Yun, Selma Hepp, Connolly, Mott aren’t, David Meyer, Redfin's Fairweather, Fairweather, There's, there's, Jenna Stauffer, Hepp, Meyer Organizations: Service, National Association of Realtors, ICE Mortgage Technology, CNBC, Federal Reserve, Reserve, CoreLogic, Brigade, Homeowners, International Realty Locations: Washington , DC
Cryptocurrencies are on the rise again, helped by optimism surrounding the possible introduction of a spot bitcoin ETF. But no matter how strong this rally gets, it won't convince one of the industry's biggest critics — Warren Buffett. Bitcoin surged 10% over the past week, at one point briefly topping $30,000, as hopes grew that a spot bitcoin ETF will soon be approved. But whether a bitcoin ETF soon becomes reality or not, it won't alter the Oracle of Omaha's thesis on cryptocurrencies, which is that they are highly speculative, non-productive assets. Buffett, who once famously called bitcoin "probably rat poison squared," has compared the bitcoin phenomenon to the tulip bulb mania in the Netherlands in the early 1600s .
Persons: — Warren Buffett, Bitcoin, Buffett, It's, Buck Rogers, Charlie Munger, Munger, bitcoin Organizations: CNBC, Berkshire Locations: Netherlands, Berkshire, U.S, United States, bitcoins
Why now is actually a good time to buy a house
  + stars: | 2023-10-21 | by ( Jennifer Sor | ) www.businessinsider.com   time to read: +5 min
And yet, there's an argument to be made for getting in now if you can find something, even amid 20-year high mortgage rates and stubbornly high prices. Mortgage rates at 8% have sidelined a good portion of the competition. High mortgage rates are the new normalThat message doesn't appear to be getting through to prospective homebuyers, who have made themselves scarce as mortgage rates have continued their steady rise in 2023. AdvertisementAdvertisementFairweather sees mortgage rates staying where they are until the Fed begins to cut rates in mid-2024. That could cause mortgage rates to ease around 100 basis-points next year, dropping as low as 7%.
Persons: , Barbara Corcoran, don't, Lawrence Yun, Daryl Fairweather, Fairweather Organizations: Service, Corcoran, National Association of Realtors, Federal Reserve
watch nowToday's housing market is a toxic mix of high mortgage rates, high prices, tight supply and strangely strong pent-up demand — and it's scaring off buyers and sellers alike. Now the popular 30-year fixed mortgage rate is at 8%, the highest in decades, making things even tougher. The result was record-low mortgage rates for two solid years. That, ironically, made the housing market even more expensive. They have little desire to trade the 3% rate they currently have for an 8% mortgage rate on a new purchase.
Persons: Matthew Graham, MND's Graham, He's, Lisa Resch, What's, Lawrence Yun, Yun Organizations: Mortgage News, Federal Reserve, National Association of Realtors, Compass, Washington , D.C, NAR, Buyers Locations: Washington ,, Florida, Tampa, Jacksonville, Orlando, Houston , Texas, Memphis , Tennessee, homebuilders, Horton
Adobe logo is seen on smartphone in this illustration taken June 13, 2022. REUTERS/Dado Ruvic/Illustration Acquire Licensing RightsCompanies Adobe Inc FollowFigma Inc FollowBRUSSELS, Oct 20 (Reuters) - European Union antitrust regulators have resumed their investigation into Photoshop maker Adobe's (ADBE.O) $20 billion bid for cloud-based designer platform Figma, setting a Feb. 5 deadline for their decision, a European Commission filing showed on Friday. The EU watchdog stopped the clock last month while waiting for requested information from the companies. Adobe will likely have to provide remedies to address such concerns before it can secure regulatory approval for the deal. Reporting by Foo Yun Chee; editing by Jason NeelyOur Standards: The Thomson Reuters Trust Principles.
Persons: Dado Ruvic, Foo Yun Chee, Jason Neely Organizations: REUTERS, Union, EU, Adobe, Thomson
Regional banks suffered a steep sell-off Friday after a number of weak quarterly earnings reports highlighting the negative impact from higher interest rates soured investor sentiment toward the industry. Regions Financial, a Birmingham, Alabama-based lender, posted a 6.5% decline in net interest income compared with the previous quarter. NII is the difference between interest banks earn on loans and what they pay out on deposits. As interest rates rise, lenders are pressured to pay more to keep depositors. Higher rates could lead to more losses on banks' bond portfolios and contribute to funding pressures as institutions are forced to pay higher rates for deposits.
Organizations: Comerica Bank, Regions, Federal, Comerica, Third Bancorp, CNBC Locations: Torrance , California, Birmingham , Alabama, NII, Dallas, Cincinnati
It’s no longer “higher for longer,” said Steve Sosnick, chief strategist at Interactive Brokers, it’s just “high for long.”What’s happening: 10-year Treasury yields are flirting with 5% for the first time since 2007, before the global financial crisis. It also means more expensive mortgage rates. Mortgage rates tend to track the yield on 10-year US Treasuries. When Treasury yields go up, so do mortgage rates; when they go down, mortgage rates tend to follow. Fed officials, including Powell, have indicated that rates could be high enough to help lower inflation towards their target goal of 2%.
Persons: , Steve Sosnick, Rob Almeida, Powell, they’re, Jerome Powell, Paul McCartney, Darrell Cronk, Anna Bahney, , ” Lawrence Yun, Snapchat isn’t, Snapchat, Clare Duffy, Evan Spiegel Organizations: CNN Business, Bell, New York CNN, Federal Reserve, Interactive, MFS Investment Management, US Treasury, Treasury, Economic, of New, Financial, , National Association of Realtors, NAR, Twitter Locations: New York, Ukraine, of New York, Wells Fargo, Northeast, Midwest, South, homeownership
US existing home sales drop to 13-year low in September
  + stars: | 2023-10-19 | by ( ) www.reuters.com   time to read: +3 min
REUTERS/Sarah Silbiger/File Photo Acquire Licensing RightsWASHINGTON, Oct 19 (Reuters) - U.S. existing home sales dropped to a 13-year low in September as surging mortgage rates and tight supply combined to reduce affordability for many first-time buyers. Existing home sales fell 2.0% last month to a seasonally adjusted annual rate of 3.96 million units, the lowest level since October 2010, the National Association of Realtors said on Thursday. Economists polled by Reuters had forecast home sales slipping to a rate of 3.89 million units. "Higher mortgage rates are really hampering activity." At September's sales pace, it would take 3.4 months to exhaust the current inventory of existing homes, up from 3.2 months a year ago.
Persons: Sarah Silbiger, Lawrence Yun, Lucia Mutikani, Andrea Ricci Organizations: REUTERS, Rights, National Association of Realtors, Reuters, Mortgage, Association, Federal Reserve, Thomson Locations: Washington , U.S, Midwest, West, U.S
Companies Pfizer Inc FollowSeagen Inc FollowBRUSSELS, Oct 19 (Reuters) - U.S. pharmaceutical company Pfizer (PFE.N) gained unconditional EU antitrust approval on Thursday for its proposed $43 billion acquisition of cancer drug maker Seagen (SGEN.O). Pfizer announced the deal in March, its largest purchase in a string of recent acquisitions thanks to a once-in-a-lifetime cash windfall from its COVID-19 vaccine and treatment. The European Commission said the deal would not significantly reduce competition in the 27-country European Union nor would it have a negative impact on prices. "The proposed merger would not raise competition concerns," the EU antitrust watchdog said in a statement. Washington-based Seagen is a pioneer of antibody-drug conjugates, which work like "guided missiles" designed to destroy cancer while sparing healthy cells.
Persons: Foo Yun Chee Organizations: Pfizer, European Commission, Thomson Locations: Union, Washington
The logo of Hitachi is seen at an office building in Zurich, Switzerland September 10, 2020. Hitachi submitted its offer to sell its mainline signalling business in France and Germany to the European Commission last month. The EU competition watchdog and Hitachi declined to comment. The UK's competition agency cleared the deal this month after Hitachi pledged to sell its mainline signalling business in the United Kingdom, France, and Germany. ($1 = 0.9478 euros)Reporting by Foo Yun Chee; editing by Mark Potter and Jason NeelyOur Standards: The Thomson Reuters Trust Principles.
Persons: Arnd, Foo Yun Chee, Mark Potter, Jason Neely Organizations: Hitachi, REUTERS, Companies Hitachi Ltd, Thales, Follow BRUSSELS, European, EU, Thomson Locations: Zurich, Switzerland, France, Germany, United Kingdom
Morgan Stanley hiked its rating on Netflix following the streaming giant's stellar earnings report, seeing the shares potentially rising 20% on strong revenue growth. The Wall Street firm's analyst Benjamin Swinburne upgraded Netflix to overweight from equal weight Thursday, while raising his 12-month price target to $475. Netflix's subscriber growth was driven by a password-sharing crackdown efforts and interest in its new ad-supported tier. The analyst's bull case for Netflix in the most optimistic scenario calls for a $550 price target, or 40% upside. For the bear case, the analyst sees Netflix shares falling as low as $300, or 25% downside.
Persons: Morgan Stanley, Benjamin Swinburne, Swinburne, Netflix Morgan Stanley, Netflix's, CNBC's Michael Bloom Organizations: Netflix Locations: U.S
The median price for existing homes — which include single-family homes, townhomes, condominiums and co-ops — was $394,300 last month. That was up 2.8% from a year ago and marked the third consecutive month of year-over-year price increases, setting a record high price for homes in September. Low inventory and high prices contributed to sales of existing homes dropping 2% from August to September to a seasonally adjusted annual rate of 3.96 million units, just above analysts’ expectations. More than 90% of homeowners with a mortgage have rates at 6% or lower, according to ICE Mortgage Technology, which recently acquired mortgage data provider Black Knight. Part of this, of course, is because buyers with the means are working to avoid high mortgage rates by purchasing in cash.
Persons: , ” Lawrence Yun, , Yun Organizations: DC CNN —, National Association of Realtors, NAR, Federal, , ICE Mortgage Technology, Black, Homeowners Locations: Washington, Northeast, Midwest, South, homeownership
Sales rose in the Northeast but fell elsewhere, although sales were down year to year throughout the country. Sales are now running at an annual rate of 3.96 million, down 15.4% from 4.68 million a year ago. On Tuesday, the Census Bureau reported that retail sales rose by 0.7%, more than twice what had been expected, as consumers flocked to eating and dining establishments and shopped more online. Among middle-income households, 25% plan to spend more, while 16% of low-income households will increase holiday spending. “Despite a lot of the negativity you see everywhere, consumers seem pretty resilient,” Rose says.
Persons: , Lawrence Yun, LEI, Justyna, Monica, TransUnion, Mark Rose, ” Rose Organizations: National Association of Realtors, Federal, Conference, The Conference Board, , The, Board, Federal Reserve Bank, Atlanta’s, Census Bureau, Labor Department
This is the slowest sales pace since October 2010, during the Great Recession, when the market was in the midst of a foreclosure crisis. As a comparison, just two years ago, when mortgage rates hovered around 3%, home sales were running at a 6.6 million pace. Adding to higher mortgage rates, the median price of a home sold in September was $394,300, up 2.8% year over year. That's because there is more supply at the higher price points and because higher-end buyers can often use cash. Mortgage demand is now at the lowest level since 1995, according to the Mortgage Bankers Association.
Persons: Lawrence Yun, Danielle Hale Organizations: National Association of Realtors, Mortgage News, Federal, Mortgage, Association
Treasury yields rose on Thursday, with the 10-year rate pushing closer to the key 5% level as investors awaited remarks from Federal Reserve Chairman Jerome Powell. The yield on the 10-year Treasury jumped 6 basis points to 4.96%. It had touched as high as 4.98% earlier in the session, trading at levels last seen in 2007 after first crossing the 4.9% mark on Wednesday. The 2-year Treasury yield was last 2 basis points higher at 5.23%, hovering at levels last seen in 2006. A New York Fed calculation indicates that the term premium is around its highest level since May 2021.
Persons: Jerome Powell, Ian Lyngen, Benjamin Jeffery Organizations: Federal, Treasury, BMO, Fed, New Locations: New York
[1/2] EU flag and Meta logo are seen in this illustration taken, May 22, 2023. REUTERS/Dado Ruvic/Illustration/File photo Acquire Licensing RightsBRUSSELS, Oct 19 (Reuters) - Meta (META.O) and TikTok have been given a week by the European Commission to provide details on measures taken to counter the spread of terrorist, violent content and hate speech on their platforms, a week after Elon Musk's X was told to do the same. The Commission can open investigations into the companies if it is not satisfied with their responses. "Meta must provide the requested information to the Commission by 25 October 2023 for questions related to the crisis response and by 8 November 2023 on the protection of the integrity of elections," the Commission said. Writing by Foo Yun Chee Editing by Mark PotterOur Standards: The Thomson Reuters Trust Principles.
Persons: Dado Ruvic, Elon Musk's X, Foo Yun, Mark Potter Organizations: EU, REUTERS, Rights, European Commission, Digital Services, Thomson Locations: Rights BRUSSELS, Israel
“Clearly, the story of limited inventory and rising and rising mortgage rates continues to hinder the home sales market,” said Lawrence Yun, the NAR’s chief economist. Political Cartoons View All 1211 ImagesYun also said he expects mortgage rates will ease by next spring. Mortgage rates have been climbing along with the 10-year Treasury yield, which lenders use as a guide to pricing loans. That amounts to just a 3.4-month supply, going by the current sales pace. The combination of higher mortgage rates and rising prices has particularly hurt first-time homebuyers who don't have any home equity to put toward their down payment.
Persons: That’s, , , Lawrence Yun, Yun, Freddie Mac Organizations: ANGELES, National Association of Realtors, Sales, Treasury, U.S, Homes, NAR Locations: U.S
Late Tuesday, the company posted third-quarter results that fell short of Wall Street's expectations on the top and bottom lines. The company posted third-quarter adjusted earnings of $1.55 per share on adjusted revenue of $1.14 billion. Abbott posted earnings of $1.14 per share, excluding items, beating analysts' estimates by 4 cents a share, according to FactSet. It posted revenue of $2.69 billion, which was not immediately comparable to consensus estimates. It posted revenue of $771.0 million, lower than the consensus estimate of $784.3 million, according to FactSet.
Persons: Morgan Stanley, . Hunt, Gamble — Procter, LSEG, Abbott, Michael Happe, , Yun Li, Sarah Min, Tanaya, Hakyung Kim, Pia Singh Organizations: United Airlines —, United Airlines, Nvidia, U.S, Citi, Devices, Marvell Technology, Hunt Transport Services, LSEG, Interactive, Procter, Gamble, Abbott, Financial, Citizens Financial, State, FactSet, Winnebago Industries, Winnebago, Bancorp, U.S . Bancorp, Bank of America Locations: Tel Aviv, Israel, China, LSEG, Albemarle —
Starboard Value's Jeff Smith on Tuesday presented his newest investment ideas across different industries. "If management can successfully execute on a margin improvement plan, we believe GoDaddy shareholders will be meaningfully rewarded," he said. GoDaddy shares are up only about 1% this year, significantly underperforming the broader market. "If management can successfully execute on a margin improvement plan, we believe GoDaddy shareholders will be meaningfully rewarded," he said. GoDaddy shares are up only about 1% this year, significantly underperforming the broader market.
Persons: Jeff Smith, Smith, Dow Jones, Fortrea, Jeffrey Smith, David Paul Morris Organizations: 13D, News Corp, Dow, Group, Bloomberg, Getty Locations: New York City, Australia
Pfizer — Shares rallied 3.61% following an upgrade by Jeffries to buy from hold. The firm sees an attractive buying opportunity after Pfizer cut its full-year guidance last week on slumping vaccine sales. Alignment Healthcare — Shares soared 17.22% after being upgraded to strong buy from outperform by Raymond James. Tal Education — The education technology stock popped 6.73% after UBS upgraded shares to a buy rating, citing an attractive valuation and tailwinds from Tal Education's nonacademic tutoring business. Greenbrier — Shares of the transportation services company gained 3.81% Monday morning after Susquehanna upgraded the stock to a positive rating.
Persons: Dow, Lululemon, Jeffries, Novavax, Raymond James, Morgan Stanley, Jim Ratcliffe, Sheikh Jassim bin Hamad al Thani, Glazer, Tal Education's, Charles Schwab —, Schwab, Albemarle —, Albemarle, Bascome, Henry Schein —, Yun Li, Fred Imbert, Hakyung Kim, Samantha Subin, Alex Harring, Pia Singh, Lisa Han Organizations: Dow Jones Indices, Activision, Microsoft, Pfizer —, Pfizer, Moderna, News Corp, Reuters, Street, Street Journal, Systems, Manchester United, Tal Education, UBS, Liontown, Greenbrier —, Susquehanna Locations: BioNTech, Greenbrier
Ark Invest's Cathie Wood said Monday that her innovation darlings are poised to lead the market once bonds start to rally and push down interest rates. The widely followed investor has been betting on stronger-than-expected deflationary forces, which could eventually bring down bond yields. The innovation fund has suffered a big investor exodus this year, with $773 million in total outflows, according to FactSet. Wood said it was due to investors taking some chips off the table after the fund's strong rally. The investor continues to be bullish on the artificial intelligence boom, believing it is an antidote to inflation and a big driver of productivity .
Persons: Cathie Wood, Wood Organizations: Innovation, Nasdaq Locations: FactSet
The Republic of the Marshall Islands (RMI) is one of three sprawling but sparsely populated nations that have U.S. ties governed by so-called Compacts of Free Association (COFAs), under which Washington is responsible for their defense and provides economic assistance, while gaining exclusive military access to strategic swathes of ocean. Yun told Reuters he planned to sign the COFA deal with RMI Foreign Minister Jack Adding in Honolulu, Hawaii, at 2 p.m. local time (0000 GMT Tuesday). Analysts and former officials had blamed a delay in finalizing the Marshall Islands COFA on U.S. State Department lawyers wanting to control how new funds were spent and objecting to their being earmarked to address the nuclear legacy, fearing this could lay the U.S. open to more claims. A person familiar with the deal said all current federal programs, including education programs and the U.S. Reporting by David Brunnstrom and Michael Martina; Editing by Sandra MalerOur Standards: The Thomson Reuters Trust Principles.
Persons: Joe Biden, Louis Mapou, Hu'akavemeiliku Siaosi, Surangel Whipps, Kausea Natano, Joseph Yun, Biden, Yun, Jack, David Kabua, David Brunnstrom, Michael Martina, Sandra Maler Organizations: U.S ., Country, New, Tonga's, Tuvalu's, United, Reuters, The, Marshall, Free Association, Washington, Northern, RMI, RMI Foreign, U.S . Congress, . State Department, U.S, U.S . Postal Service, Thomson Locations: U.S, Federated States, Micronesia's, WASHINGTON, United States, Marshall, Pacific, The Republic, China, Northern Pacific, Palau, Micronesia, Washington, Honolulu , Hawaii, Kwajalein
The Republic of the Marshall Islands (RMI) is one of three sprawling but sparsely populated nations that have U.S. ties governed by so-called Compacts of Free Association (COFAs), under which Washington is responsible for their defense and provides economic assistance, while gaining exclusive military access to strategic swathes of ocean. Yun said he signed the agreement with RMI Foreign Minister Jack Ading in Honolulu, Hawaii, at a ceremony also attended by Marshallese President David Kabua. Analysts and former officials had blamed a delay in finalizing the Marshall Islands COFA on U.S. State Department lawyers wanting to control how new funds were spent and objecting to their being earmarked to address the nuclear legacy, fearing this could lay the U.S. open to more claims. A person familiar with the deal said all current federal programs, including education programs and the U.S. Reporting by David Brunnstrom and Michael Martina; Editing by Sandra Maler and Raju GopalakrishnanOur Standards: The Thomson Reuters Trust Principles.
Persons: Joe Biden, Louis Mapou, Hu'akavemeiliku Siaosi, Surangel Whipps, Kausea Natano, Joseph Yun, Biden, Yun, Jack Ading, David Kabua, David Brunnstrom, Michael Martina, Sandra Maler, Raju Gopalakrishnan Organizations: U.S ., Country, New, Tonga's, Tuvalu's, United, Marshall, Reuters, The, Free Association, Washington, Northern, RMI, RMI Foreign, U.S, Congress, . State Department, U.S . Postal Service, U.S . Congress, Thomson Locations: U.S, Federated States, Micronesia's, WASHINGTON, United States, The Republic, China, Northern Pacific, Palau, Micronesia, Washington, Honolulu , Hawaii, Marshall, Kwajalein
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