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☆ Dow surges 748 points as US stocks rally on hopes of less aggressive Fed rate hikes
▼ + stars: | 2022-10-21 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +2 min

US stocks rallied on Friday, boosted by hopes of less aggressive Fed rate hikes. All three indexes ended the day higher, with the Dow climbing over 700 points. The 10-year Treasury edged lower as investors began to slash expectations of a 75 point rate hike in December. All three indexes ended the day sharply higher, with the Dow Jones Industrial Average surging by 750 points. Stocks likely hit a bottom after September's inflation report, according to a note from Carson Group.

☆ It would be a 'real mistake' to assume other countries will avoid UK-like turmoil, and the US must watch its fiscal issues, former Treasury Secretary Larry Summers says
▼ + stars: | 2022-10-21 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +2 min

Other nations could see the same market turmoil that played out in the UK, ex-Treasury Secretary Larry Summers warned. He pointed to the risk of a "doom loop" created by unsustainable deficits and rapidly rising interest rates. "Things can change extraordinarily fast if you lose credibility," Summers said in an interview with Bloomberg TV. Summers also noted liquidity issues in the market which could eventually lead to a situation where there are more sellers than buyers. "The fiscal issues need, sooner or later, to be back on the table in the United States."

☆ US Treasury yields hit post-crisis highs as expectations for more aggressive Fed rate hikes ramp up
▼ + stars: | 2022-10-20 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

US treasury yields touched their highest levels since the Great Recession on Thursday. The rise is fueled by expectations of big rate hikes at the next two Fed policy meetings. Minneapolis Fed President Neel Kashkari warned the terminal fed funds rate could be even higher than expected this week, putting investors on edge. Fed officials will convene on November 1-2 at the next Federal Open Market Committee meeting, where they are widely expected to issue another 75 basis point rate hike. That would be the fourth jumbo increase this year, and would bring the fed funds rate to a range of 3.75%-4.00%.

☆ Markets right now 'lack any sense at all', and nothing will change until the inflation picture becomes clearer, Wells Fargo says
▼ + stars: | 2022-10-20 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

Markets "lack any sense at all," and that won't change until the inflation situation changes, according to Wells Fargo. The bank pointed to the recent volatility in the stock market, which has rebounded on positive earnings reports after plunging earlier this month when inflation clocked in above expectations. "Investors are trying to make sense of the financial markets, which at times, seem to lack any sense at all," global market strategist Scott Wren said in a note on Wednesday. That's a sign rates will likely stay higher for longer – promising more choppiness to the market until inflation shows clear signs of slowing. October inflation data will be released the following week on November 10, making another bout of volatility likely.

☆ European countries are shelling out huge sums to deal with the energy crunch. Economists fear it could spark a new financial crisis.
▼ + stars: | 2022-10-20 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +7 min

A new debt crisis could be looming as European countries throw huge sums of money at the energy crisis. Already, the energy crisis is estimated to have cost Europe around 700 billion euros. Combined with a high debt load, that spells trouble, Boskin says, because debt itself is also inflationary. Additional spending and debt from the energy crisis could result in more stress being exerted on the financial system. "I think a debt crisis could very likely ensue given the vast amounts that [are] being spent as a percentage of GDP.

☆ EU ramps up Russian LNG purchases by 50% this year as Moscow cuts off natural gas pipeline supplies
▼ + stars: | 2022-10-18 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

The EU ramped up its purchases of Russian LNG this year, as Moscow slashes gas supplies via pipeline. Imports of Russian LNG totaled 15 billion cubic meters through September, up 50% from last year. Europe is scrambling to replace slashed pipeline flows through LNG purchases, which have allowed Moscow to pull in hefty amounts of cash. While LNG has helped make up for lost pipeline supplies, it comes with its own complications. LNG differs from pipeline gas in that it is largely imported overseas through tankers, and needs to be regasified before being used for energy.

☆ Billionaire investor Mark Mobius says stocks could stay buoyant amid Fed rate hikes and a possible recession
▼ + stars: | 2022-10-14 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

History shows that stocks can still make gains amid the Federal Reserve's rate hikes, Mark Mobius said. The billionaire investor noted that the key is finding companies that have enough pricing power to weather high inflation. "But there's no question that the Fed could go much much higher, and there could be a lot more pain ahead." Of course, the market is now reacting negatively to the possibility of higher rates. But if you look at the history, you'll find that stock markets were able to do quite well even with high interest rates," Mobius said.

☆ A major US recession is avoidable and this is not a 'gloom and doom scenario,' US Commerce Secretary says
▼ + stars: | 2022-10-14 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +2 min

A major US recession isn't inevitable, US Commerce Secretary Gina Raimondo told Bloomberg TV. Markets are still being rattled with volatility, but this is not a "gloom and doom scenario," she said. "Obviously there is a possibility that we would have a recession… But as I see it, a recession is not inevitable. Certainly, any kind of significant recession is absolutely not inevitable," Raimondo said in an interview with Bloomberg TV on Thursday. "I think we have to be cautious, but this should not be a gloom and doom scenario," Raimondo said.

☆ The risks of a prolonged period of inflation and a global economic downturn are rising, and stocks could fall another 14% by mid-2023, S&P Global says
▼ + stars: | 2022-10-13 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +2 min

The risks of prolonged inflation and a global recession are growing, according to S&P Global in a note. S&P predicted stocks could plunge as much as 14.5% by mid-next year as inflation remains sticky. "Monetary tightening beyond current expectations could lead to a deeper-than expected recession." "The potential for a prolonged period of rising inflation and low economic growth is increasing," S&P Global analysts said in a note on Wednesday. JPMorgan CEO Jamie Dimon predicted last week a recession will hit in six to nine months, and stocks could plunge another 20%.

☆ The Fed will 'probably break something', and more risks may need to be priced in as markets are fragile after an era of low rates and high liquidity, Mohamed El-Erian says
▼ + stars: | 2022-10-13 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

The Fed will "probably break something" trying to bring down inflation, Mohamed El-Erian said. He pointed to the Fed's meeting minutes, which gloss over risks to market liquidity and functioning. "Markets are quite fragile after such a long period of zero interest rates and massive liquidity," he warned. "The Fed is so late, it will probably break something on the way to reducing inflation," El-Erian said. But El-Erian thinks markets need to price in even more risk.

☆ The Fed will keep issuing 75-basis-point hikes until 'something cracks' in the data, former PIMCO chief economist says
▼ + stars: | 2022-10-13 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

The Fed will likely keep hiking rates by 75 basis points until "something cracks" in the economic data, Paul McCulley warned. He pointed to the Fed's watchfulness on the labor market and inflation, suggesting there could be a prolonged tightening cycle ahead. His forecast for Fed rate hikes came shortly after September's inflation clocked in at 8.2%, slightly above expectations of 8.1% while core inflation accelerated to a 40-year-high, dashing the market's hopes for a Fed pivot. The inflation data. He pointed to the Fed's September meeting minutes, where central bankers suggested they would not stop hiking rates until labor market conditions began to ease.

☆ The US economy is 'doing very well' and there aren't signs of instability in financial markets despite intense volatility, Treasury Secretary Janet Yellen says
▼ + stars: | 2022-10-12 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

The US economy is "doing very well" and there aren't signs of instability in financial markets, Janet Yellen said. Yellen pointed to the strong labor market, and added she believed inflation could come down without hammering jobs. "While there's some concern about liquidity in markets, I don't think we've see anything that rises to the level of a serious concern," she said. El-Erian has also warned markets of "unsettling volatility," pointing to turmoil in the bond market. "We really haven't seen signs of financial instability in the United States and our financial markets continue to function well.

☆ A Russian oil price cap will backfire on the global economy and the plan likely influenced OPEC's production cut, Indonesian finance minister says
▼ + stars: | 2022-10-12 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

A price cap on Russian oil could backfire on the global economy, Indonesia's finance minister warned. If a price cap is met with retaliation from Russia, it could result in oil prices being pushed higher. That could have serious consequences for the global economy, Indrawati warned, noting that the fallout from Russia's war in Ukraine was no longer limited to the battlefield. Additionally, a price cap on Russian oil could inspire market intervention for other commodities, Indrawati noted. She added that price cap plans likely influenced OPEC's recent decision to cut oil production by 2 million barrels a day, as officials she's spoken to in Saudi Arabia have expressed concern about the price cap setting a precedent.

☆ The Fed is draining the stock market and even the 'healthy fish' will die, billionaire investor Barry Sternlicht says
▼ + stars: | 2022-10-12 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

The Fed's scramble to hike rates and lower liquidity is draining the stock market, Barry Sternlicht warned. "So you thought the healthy fish would survive and the sick fish would die. But the Fed is draining the entire pond, so everyone's going to die." … So you thought the healthy fish would survive and the sick fish would die. But the Fed is draining the entire pond, so everyone's going to die," he said.

☆ US stocks trade mixed as investors struggle to regain momentum ahead of earnings deluge and inflation data
▼ + stars: | 2022-10-11 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +2 min

US stocks ended mixed Tuesday ahead of a slew of corporate earnings and key inflation data. The S&P 500 notched its fifth straight loss and the Nasdaq dropped more than 1%. Stocks could see another 5% sell-off Thursday if September inflation clocks in above 8.3%, JP Morgan warned. The S&P 500 saw its fifth-day of straight losses. Thursday's inflation report will be a key moment for US stocks, JPMorgan said Tuesday in a note.

☆ The market is flashing signs that a new bottom is forming and stocks could be poised for a fresh rally, Oppenheimer head technical analyst says
▼ + stars: | 2022-10-11 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +2 min

Markets are showing signs that stocks are nearing a bottom, Oppenheimer's Ari Wald said. Wald pointed to resilience in small cap stocks amid a sell-off in the S&P 500. The technical signal is the opposite of what would flash at a market top and means a new rally could be near. But that fallout hasn't been seen in small cap stocks, Wald said in an interview with CNBC on Tuesday – which could be a signal that a new rally is in the cards. Typically at a market top, S&P 500 makes a higher high, small caps make a lower high," he added.

☆ The UK should ditch tax cuts, hike rates, and accept a deeper recession to avoid higher inflation, Mohamed El-Erian says
▼ + stars: | 2022-09-29 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +2 min

The UK needs to ditch its plan to cut taxes and instead hike interest rates immediately, Mohamed El-Erian said. Though aggressive rate hikes could cause a recession, the UK is past the point of hoping for a soft-landing, he warned. While the central bank averted an immediate financial crisis with its intervention, that's the opposite of what it should be doing to lower inflation, El-Erian warned. What we need is for the tax reductions to be withdrawn, we need the Bank of England to act on interest rates," El-Erian said in an interview with BBC on Wednesday. "Without [tax cuts], I would look to the Bank of England to make incredible increases in interest rates and I would accept a much deeper recession," he added.

☆ Open-source data is the future of the climate movement, this nonprofit leader says: 'We need to have the numbers'
▼ + stars: | 2022-09-28 | by ( Marguerite Ward | ) www.businessinsider.com time to read: +3 min

Tim Paradis, senior editor at Insider, spoke with Amali de Alwis of Subak about the climate crisis. Subak is a tech accelerator for climate not-for-profits and a hub for open-source science data. The event was part of Insider's series Climate Heroes 2022: Working Toward Solutions. The event was part of Insider's series Climate Heroes 2022: Working Toward Solutions. The goal is to encourage businesses, governments, and even entrepreneurs to come up with climate solutions using this information.

☆ The 'disorderly' moves in the pound and loss of confidence in UK policy makers is historic, and point to the paradigm shift markets are headed towards, Mohamed El-Erian says
▼ + stars: | 2022-09-28 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

The drop in the pound and the loss of confidence in policy makers is part of a larger paradigm shift, Mohamed El-Erian said. It points to the paradigm shift we're going through and the fragility of markets," he added. El-Erian has previously warned markets of the paradigm shift, pointing to central banks' pivot from quantitative easing to quantitative tightening as inflation continues to climb. To combat the potential for higher inflation, the UK will have to hike interest rates to keep inflation under control. But that could also cause enormous financial pain to households, causing unemployment and floating mortgage rates to skyrocket.

☆ The US economy could be grappling with deflation in the next 6 months, and the Fed could be forced to pivot in the face of demand destruction, ARK Invest's Cathie Wood says
▼ + stars: | 2022-09-27 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +2 min

The US economy could be grappling with deflation in the next six months, Cathie Wood said Tuesday. She warned the Fed could be underestimating demand destruction, meaning future rate hikes won't be necessary. Prices eased slightly to 8.3% in August, but Fed officials have said they will stay vigilant and keep hiking rates until the data shows a meaningful decline. We would not be surprised to see deflation month to month sequentially for a number of months during the next six months," Wood said in an interview with CNBC on Tuesday. She also says inflation already peaked in February, when Personal Consumption Expenditure inflation, the Fed' preferred measure, clocked in at 5.3%.

☆ Wharton professor Jeremy Siegel says the Fed's rate hike campaign is so extreme that recession risk is much higher than risk of the central bank 'waffling' on inflation
▼ + stars: | 2022-09-26 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +2 min

The Fed runs a higher risk of sparking a recession than falling behind on inflation, according to Jeremy Siegel. Markets are now expecting a fed-funds rate of 4.75% in May of next year. That could be overkill, as inflation will continue to fall, Siegel warned. "[It's] so extreme I think the risk of recession is so much higher than waffling on inflation." That's too high, Siegel believes, considering that inflation is already starting to cool.

☆ The 2-year Treasury just touched its highest level since 2007 as aggressive Fed moves send bonds yields soaring
▼ + stars: | 2022-09-23 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

The two-year Treasury yield hit its highest level since 2007 on Friday. The jump in US bond yields follows another aggressive rate hike by the Fed this week. Email address By clicking ‘Sign up’, you agree to receive marketing emails from Insider as well as other partner offers and accept our Terms of Service and Privacy PolicyThe two-year Treasury yield touched its highest level in 15 years on Friday, as aggressive moves by the Federal Reserve send bond yields soaring. The two-year Treasury, which is highly sensitive to economic policy moves, topped 4.2% in trading on Friday, at one point beating a 15-year high of 4.266%. Most of the Treasury yield curve was higher Friday morning.

☆ Investors should brace for 'unsettling volatility' and the S&P 500 is headed back to June lows as dysfunction is growing across markets, Mohamed El-Erian says
▼ + stars: | 2022-09-23 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +2 min

Markets need to brace for "unsettling volatility," Mohamed El-Erian told CNBC on Friday. The top economist predicted the S&P 500 could retest June lows due to signs of dysfunction in US Treasuries and money markets. But you just can't avoid the macro factor right now," he said in an interview on CNBC on Friday, predicting that the S&P 500 was set to retest lows near 3,600. The S&P 500 already made a start downwards since the Fed delivered another 75-basis-point rate hike on Wednesday, when stocks notched their steepest one-day decline since the pandemic. "They can create very unsettling volatility, not just volatility," he said, noting that turmoil in Treasurys is structural and has largely been exposed to the Fed's quantitative easing, which doubled its balance sheet to $8.9 trillion.

☆ Putin's self-sanctioning of Russian energy supplies will be absorbed by Europe, but Moscow will never be able to replace those customers, Kremlin critic Bill Browder says
▼ + stars: | 2022-09-22 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +2 min

Vladimir Putin is only hurting himself by slashing gas supplies to Europe, Russian-American financier Bill Browder said. That's because Europe will be be able to absorb the pain of the energy crisis, but Russia can't easily replace those customers. "But Putin is not going to be able to replace the customers for all the gas he's selling into Europe." He said 90% of Russian gas exports were sold to European customers before Putin ordered the invasion of Ukraine. He's ready to cause himself pain, to cause his enemies pain … This is [sic] the actions of a man who is desperate," he said.

☆ The global economy will be even tougher in 2023 unless central banks can get inflation under control, IMF chief says
▼ + stars: | 2022-09-22 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +2 min

This year's global economic outlook was "gloomy," but it'll get worse in 2023 unless inflation gets under control. IMF chief Kristalina Georgieva said the world's economy would still be recovering from shock after shock next year. Central banks will have no choice but to raise rates, as inflation is the "biggest enemy," she said. That spells trouble for the global economy, Georgieva said, calling painful food and energy price spirals around the globe a "cost of living crisis." Other central banks around the world have "no choice" but to follow suit, Georgieva said, who called inflation was the global economy's "biggest enemy" today.

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