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☆ Bank of England hikes rates by 25 basis points, no longer sees recession
▼ + stars: | 2023-05-11 | by ( Elliot Smith | ) www.cnbc.com time to read: +5 min

A passageway near the Bank of England (BOE) in the City of London, U.K., on Thursday, March 18, 2021. LONDON — The Bank of England on Thursday hiked interest rates by 25 basis points and revised its economic projections to now exclude the possibility of a U.K. recession this year. The Monetary Policy Committee voted 7-2 in favor of the quarter-point increase to take the main bank rate from 4.25% to 4.5%, as the bank reiterated its commitment to taming stubbornly high inflation. "In the context of resilient economic activity, we think there is a good chance of the Bank Rate peaking at 5% by the August meeting. "As rates moves deeper into restrictive territory and credit conditions tighten, a policy-induced recession becomes almost inevitable."

"We've got this window of low taxes here," said certified financial planner Dan Galli, owner at Daniel J. Galli & Associates in Norwell, Massachusetts. Former President Donald Trump's signature tax overhaul temporarily shifted individual income tax brackets by reducing the rates and applicable income levels. "It's a fascinating time to look at how you want to blend or sequence your income in retirement," Galli added. If you're 59½ or older, you can start taking withdrawals from pre-tax retirement plans without incurring a penalty. While you'll still owe regular income taxes, those rates may be lower through 2025, he said.

☆ $70 billion Los Angeles retirement plan says higher rates may 'change everything' and portfolio moves are coming
▼ + stars: | 2023-04-19 | by ( Eric Rosenbaum | ) www.cnbc.com time to read: +6 min

A year into the most significant period of Federal Reserve rate hikes in decades, you might think investors had already cemented their investment portfolio strategies for a higher interest rate world. According to LACERA's 2022 annual report, its investments were split between roughly $24 billion in public equities, $19 billion in bonds, $13 billion in private equity, $6 billion in real estate, $4 billion in hedge funds and $1 billion in real assets. Last year was the first in the prior three fiscal years that the pension fund's investment portfolio lost money. By contrast, investment returns of 25.2% in 2021 were far ahead of the 7% percent, which LACERA attributed to the strong performance from global equity and private equity assets. A shift to more fixed income among top investors will flow through to the "whole economy," Grabel said.

March saw six interest rate hikes across eight meetings by central banks overseeing the 10 most heavily traded currencies. This follows six interest rate hikes delivering 250 bps of uplift across six meetings by G10 central banks in February. "By clearly separating financial and price stability goals and tools, major central banks carried on with rate hikes through the tumult." However, the world's top central banks are openly contemplating an early end to their rate hikes, not least because of the recent financial turmoil. This compares with February, when 13 emerging central banks met and only four hiked by a total of 175 bps.

☆ Sentiment indicators have been at extremes, but investors don't seem in any hurry to take advantage of it
▼ + stars: | 2023-03-28 | by ( Bob Pisani | ) www.cnbc.com time to read: +3 min

Sentiment indicators have been at extremes, but investors don't seem in any hurry to take advantage of it. That is a good thing: sentiment indicators are mostly useful at extremes, and when sentiment gets this pessimistic it is usually associated with at least short-term market bottoms. This morning, for example, Lori Calvasina at RBC Capital Markets also pointed out that many sentiment indicators were at extremes. In theory, this is good news: she notes that when sentiment gets this bad, the S & P 500 is up 15% on average over the next 12 months. Other sentiment indicators are also at extremes.

☆ Markets are getting their Fed call wrong, and the central bank isn't poised to cut rates anytime soon, BlackRock says
▼ + stars: | 2023-03-28 | by ( Carla Mozée | ) www.businessinsider.com time to read: +4 min

Markets are wrong in thinking the Fed will cut interest rates this year, according to BlackRock. Rate cuts are unlikely while inflation is sticky and the Fed signals bank stress won't deter it from tightening. "The Fed and other central banks made clear banking troubles would not stop them from further tightening," said Li. This month, the European Central Bank, the Bank of England, and the Swiss National Bank all raised their respective rates by 0.5%. "That damage is now front and center – central banks are finally forced to confront it," said Li.

☆ As banking sector confidence falters, central banks called on to do more
▼ + stars: | 2023-03-26 | by ( Davide Barbuscia | ) www.reuters.com time to read: +4 min

NEW YORK, March 26 (Reuters) - Some investors and analysts are calling for more coordinated interventions from central banks to restore financial stability, as they fear that tumult in the global banking sector will continue amid rising interest rates. On Friday, shares of Deutsche Bank (DBKGn.DE) plunged amid concerns that regulators and central banks have yet to contain the worst shock to the banking sector since the 2008 global financial crisis. Global central banks including the Federal Reserve have recently taken measures to enhance the provision of liquidity through the standing U.S. dollar swap line arrangements. "The issue with European banks and big U.S. banks at the moment is confidence. Meanwhile, overall deposits in the banking sector have declined by almost $600 billion since the Fed began to raise interest rates last year, the biggest banking sector deposit outflow on record, noted Torsten Slok, chief economist at Apollo Global Management.

☆ BlackRock Investment Institute downgrades credit, favors short-term bonds for income
▼ + stars: | 2023-03-20 | by ( ) www.reuters.com time to read: +1 min

March 20 (Reuters) - BlackRock Investment Institute said on Monday it was downgrading credit and preferred short-term bonds for income, with strategists pointing to financial cracks from rapid interest rate hikes. We overweight veryshort-term government paper for income and prefer emerging markets," BlackRock Investment Institute strategists wrote in a weekly note to clients. BlackRock Investment Institute is an arm of U.S.-based investment firm BlackRock that provides proprietary investment research. BlackRock Investment Institute said it expects the Fed to raise interest rates on Wednesday. Interest rate futures show 73% odds that the U.S. central bank will raise its benchmark overnight interest rate by 25 basis points, with 27% odds of no hike, according to CME Group's FedWatch tool.

☆ Relief rally on bank rescue lifts riskier currencies; dollar slips
▼ + stars: | 2023-03-17 | by ( Rae Wee | ) www.reuters.com time to read: +4 min

The Aussie jumped 0.76% to $0.6708 in Asia trade on Friday, while the kiwi rose 0.69% to $0.6239. The move followed Credit Suisse's (CSGN.S) announcement earlier on Thursday that it would borrow up to $54 billion from the Swiss National Bank, after the central bank threw a financial lifeline to the embattled Swiss lender. Earlier in the week, the Swissie had plunged the most against the dollar in a day since 2015. It was last 0.56% higher at 133.01 per dollar, on track to rise more than 1% for the week. Reporting by Rae Wee; Editing by Bradley Perrett and Christopher CushingOur Standards: The Thomson Reuters Trust Principles.

☆ Dollar slips as banks rescue makes room for relief rally
▼ + stars: | 2023-03-17 | by ( Rae Wee | ) www.reuters.com time to read: +3 min

ECB policymakers sought to reassure investors that euro zone banks were resilient and that if anything, the move to higher rates should bolster their margins. The euro's reaction to the decision was fairly muted, though it managed to eke out a 0.3% gain on Thursday. Earlier in the week, the Swissie had plunged the most against the dollar in a day since 2015. The Japanese yen remained elevated, and was last roughly 0.3% higher at 133.30 per dollar. "The turmoil in the banking sector is complicating the outlook for Fed policy, but the impact may be more nuanced than the Fed simply reversing course," said Philip Marey, senior U.S. strategist at Rabobank.

NEW YORK, March 13 (Reuters) - Credit risk indicators flashed red on Monday, as investors worried about contagion risks across corporate debt markets after the collapse of Silicon Valley Bank (SVB) and New York's Signature Bank in the space of 72 hours. Investment grade credit spreads, which indicate the premium investors demand to hold corporate bonds over safer government debt securities, have also been widening. The BlackRock Investment Institute said that after recently trimming its 'overweight' recommendation for investment grade credit, it was reassessing its view due to tighter financial conditions. In money markets, a closely watched indicator of credit risk in the U.S. banking system edged up on Monday. Other banks with California exposure were taking the brunt of the sell-off in the debt capital markets, he added.

☆ 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.

☆ Morning Bid: Don't fight central banks
▼ + stars: | 2023-03-07 | by ( ) www.reuters.com time to read: +3 min

A look at the day ahead in European and global markets from Anshuman DagaJudging by the improved mood in global equity markets, investors are once again having a go at central banks. Will Powell be able to send a decisive message to markets about the future pace of interest rate increases? Fed, ECB and BoE 'terminal rates' riseThe European Central Bank has already raised rates to 2.5%, a 3 percentage point increase since July and essentially promised another half a percentage point increase on March 16. Strategists at BlackRock Investment Institute expect the trend to end as recent data pushes the European Central Bank to raise rates and keep them higher for longer. And Schroders' analysts are in the camp of those who expect interest rates to be kept on hold by the ECB from March.

☆ US stocks will soon beat European peers again as hotter inflation means the region is heading into more aggressive rate hikes, BlackRock says
▼ + stars: | 2023-03-07 | by ( Carla Mozée | ) www.businessinsider.com time to read: +3 min

The S&P 500 this year has gained about 5% while German and French stocks are up in the 14% area. Good news on the economy means the European Central Bank (ECB) needs to hike rates more to cool inflation," wrote Wei Li, global chief investment strategist at BlackRock Investment Institute. "The ECB faces a stark trade-off between pushing up unemployment or living with persistent inflation," wrote Li. Market pricing indicates rates will peak around 3.9% compared with expectations of 3.2% in February, with fewer rate cuts expected next year. We're underweight European stocks but like the financial, energy, healthcare and consumer discretionary sectors," said Li.

☆ Stock pickers reckon it's time to move on from central banks
▼ + stars: | 2023-03-06 | by ( Naomi Rovnick | ) www.reuters.com time to read: +5 min

LONDON, March 6 (Reuters) - Stock market investors are calling time on the idea that the Federal Reserve, and other major central banks, have their back. The Nasdaq (.IXIC) is still up about 12% year-to-date and a sub-index of European tech stocks has gained 15% (.SX8P). A Reuters poll of 300 global asset managers last month showed 70% of those surveyed believed these so-called value stocks would outperform this year. Another sign investors are turning towards value shares is the reduced premium they are paying for growth stocks. "Central banks will keep rates high."

That has pushed 10-year bond yields across the euro area to levels last seen during the bloc's 2011-2012 debt crisis , . "Equity markets appear expensive when considering the possibility of prolonged higher rates." Patrick Saner, head of macro strategy at Swiss Re, added that rising government bond yields also made risk assets relatively less attractive. And while government bonds were seen vulnerable to further selling, higher yields are still viewed as a buying opportunity. "In sovereign markets now, 10-year German bond yields are north of 2.70%.

☆ Tesla, tech and travel stocks have ginormous gains this year
▼ + stars: | 2023-02-28 | by ( Paul R. La Monica | ) edition.cnn.com time to read: +3 min

Beaten-up travel stocks have also enjoyed solid gains this year, as investors bet that the worst-case fears of an imminent recession may turn out to be for naught and consumers catch up on missed travel. Some fear this ferocious rebound in consumer and tech stocks may be happening too quickly. “That means there are broader opportunities outside of tech and growth stocks and more in the value and small cap sectors.”Growth stocks, and tech in particular, make more sense as investments if the Fed were set to start slashing interest rates. Add all that up and it could mean that the recent rebound for Tesla, big techs and media firms and other consumer stocks could be short-lived. “Inflation and interest rate uncertainty means we continue to believe value stocks, including the global energy sector, will outperform growth stocks,” Haefele said.

☆ You can now make more money holding cash than a traditional stock-bond portfolio
▼ + stars: | 2023-02-28 | by ( Morgan Chittum | ) www.businessinsider.com time to read: +2 min

Investors aren't making as much money on the classic 60/40 strategy as holding short-term bonds. The mix of US equities and debt yields 5.07%, while yields on the six-month US Treasury hit 5.16% on Tuesday. Cash holdings haven't paid out more than the 60/40 portfolio since 2001. Meanwhile, returns on short-term Treasury bills are also sensitive to increases in the fed funds rate and climb alongside the benchmark. In 2023, the 60/40 strategy has given investors 2.7% after tumbling 17% last year, its biggest decline since 2008.

☆ The best fixed income deals for investors as interest rates surge higher
▼ + stars: | 2023-02-28 | by ( Michelle Fox | ) www.cnbc.com time to read: +4 min

Investors searching for income were buoyed by the move higher in the 10-year Treasury yield, but there are also some other opportunities to bring in some cash. "They can blend A with AA and AAA and you can get better yields," Weinberg explained. In fact, a good signal to buy munis is when their yields are at least 85% of corresponding Treasury yields, he said. Investors can also buy municipal bond funds to get exposure to the market. Investors can also get exposure through a diversified exchange traded fund, such as the iShares iBoxx $ Investment Grade Corporate Bond ETF .

☆ The 'everything' bull market is over now that inflation has gone from no problem to a big problem, BlackRock strategist says
▼ + stars: | 2023-02-28 | by ( Zinya Salfiti | ) www.businessinsider.com time to read: +3 min

Investors can't rely on a bull market to keep lifting asset prices any more, BlackRock's Ben Powell said. Inflation has gone from being no problem to a big problem, the strategist told Bloomberg TV. "We can't just be levered long everything — the 'everything' bull market sadly is over," said Powell, chief APAC strategist at the BlackRock Investment Institute. The outcome of that supply problem is higher inflation, he argued, and it has important implications for investors making portfolio decisions. "The big point being — sorry for this — but it's going to be harder, because inflation has gone from being no problem to a big problem," he added.

☆ Investors should pile into short-term bonds as markets wake up to the reality that the Fed is going to stay aggressive, BlackRock says
▼ + stars: | 2023-02-24 | by ( Morgan Chittum | ) www.businessinsider.com time to read: +2 min

Investors may want to look to short-term bonds as stocks sell off amid fears of a hawkish Fed, per BlackRock. US 2-year treasury yields jumped near 15-year highs this week as equities retreated. Traders are assessing hotter-than-expected Core PCE data released on Friday. US 2-year Treasury yield jumped near 15-year highs of 4.9% this week as investors placed bets on more rate hikes by the Fed. Core PCE increased 0.6% from a month earlier, the most since June.

☆ BlackRock shares a 2-part stock-trading strategy for an expected downturn in stocks as the Fed forces the economy into a recession with higher rates
▼ + stars: | 2023-02-22 | by ( William Edwards | ) www.businessinsider.com time to read: +4 min

With inflation still elevated, a strong economy means the Fed will push on the gas pedal more. To avoid the resulting downturn, invest in short-term Treasurys and emerging market stocks, the firm says. Eventually, that will weigh on economic growth and hurt stocks, BlackRock said in a commentary on Tuesday. The Vanguard Short-Term Treasury ETF (VGSH) and the Schwab Short-Term U.S. Treasury ETF (SCHO) are two vehicles for gaining exposure to short-term government bonds. The iShares MSCI Emerging Markets ETF (EEM) and the SPDR Portfolio Emerging Markets ETF (SPEM) offer exposure to emerging-market stocks.

☆ Here's why Florida pulled $2 billion out of Blackrock's ESG fund
▼ + stars: | 2023-02-22 | by ( ) www.cnbc.com time to read: 1 min

In this videoShare Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailHere's why Florida pulled $2 billion out of Blackrock's ESG fundJimmy Patronis, Florida CFO, joins 'Squawk Box' to discuss the growing anti-ESG movement, how much money the state pulled from the Blackrock investment and more.

☆ BlackRock "overweights" short-term Treasuries as inflation lingers
▼ + stars: | 2023-02-21 | by ( ) www.reuters.com time to read: +1 min

Feb 21 (Reuters) - BlackRock Investment Institute raised U.S. short-term government bonds to "overweight" on Tuesday, saying investors were realizing the U.S. Federal Reserve may have to become more aggressive in its campaign to subdue inflation. BlackRock said it was boosting its allocation of Treasuries on its six- to 12-month horizon to take advantage of higher yields. BlackRock also said it was going "overweight" on emerging markets stocks - a bet on China's economic restart following pandemic lockdowns. "Credit spreads have tightened sharply along with stocks pushing higher, reducing their relative attraction. We remainmoderately overweight and still think highly rated companies will weather a mild recession well given stronger balance sheetscompared with before the pandemic," BlackRock said.

☆ Dollar climbs on higher rate expectations, Aussie slides on jobs shock
▼ + stars: | 2023-02-16 | by ( Rae Wee | ) www.reuters.com time to read: +3 min

"Overall, some weakness indicated by the report ... probably caused markets to pare back some of the interest rate rises pencilled in for the RBA rate hikes." Meanwhile, U.S. retail sales rebounded sharply in January after two straight monthly declines, driven by purchases of motor vehicles and other goods, the U.S. Commerce Department said on Wednesday. There's very strong labour market data coming through, and the consumers are well supported," said Jarrod Kerr, chief economist at Kiwibank. The retail sales data came just a day after U.S. figures showed inflation slowing but still sticky. This added to signs that further hefty BoE interest rate hikes are unlikely.

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