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watch nowThe auto workers' strike is the latest in a series of labor-management conflicts that economists say could start having significant growth impacts if they persist. So far, the United Auto Workers stoppage has impacted just a small portion of the workforce with limited implications for the broader economy. United Auto Workers (UAW) members on a picket line outside the Stellantis NV Toledo Assembly Complex in Toldeo, Ohio, on Monday, Sept. 18, 2023. August alone saw some 4.1 million labor hours lost this year, the most for a single month since August 2000, according to the Labor Department. Year to date, there have been 7.4 million hours lost, compared to just 636 hours total for the same period in 2022.
Persons: Ian Shepherdson, Emily Elconin, Shepherdson, Doris Dear, John Nacion, Joseph Brusuelas, Brusuelas, Biden, Janet Yellen, CNBC's Sara Eisen Organizations: United Auto Workers, Labor Department statistics, Pantheon, UAW, Stellantis NV, Bloomberg, Getty, Big Three, Ford, GM, Federal Reserve, Labor, Labor Department, HBO, National Union Solidarity, Writers Guild of America, Screen Actors Guild, University of Michigan, RSM, York Fed Locations: Stellantis NV Toledo, Toldeo , Ohio, U.S, New York City, John, Los Angeles, California , Oregon, Washington, York
There's still significant upside potential in the stock market, according to Bank of America. Subramanian observed that long-term profit growth expectations among Wall Street analysts are near record low levels, which signals pervasive pessimism. Typically, when there's such a high level of pessimism towards future corporate profits, the stock market delivers spectacular returns. AdvertisementAdvertisementAnalysts expected the S&P 500 to deliver long-term profit growth of 11% a year ago, while the trailing 5-year level of growth has been 12%. The stock market went on to enter a year-long bear market just a couple months later.
Persons: There's, Savita Subramanian, Bank of America's Savita Subramanian, Subramanian Organizations: Bank of America, Service, Wall Street, Bank of America's, Wall, Energy Locations: Wall, Silicon
Wall Street is becoming more comfortable with the story line that interest rates are set to remain higher for longer, according to BMO Capital Markets. While often thought of as a death knell for equities, BMO's chief investment strategist Brian Belski posits that the prospect of higher interest rates won't entirely upend stock prices. Instead, he says, investors need to be pickier and should eye businesses with less leverage and strong free cash flow. "Nonetheless, not all areas of the market are created equal within the context of higher interest rates," Belski said. CRM YTD mountain Salesforce stock.
Persons: Brian Belski, Belski, San, — CNBC's Michael Bloom Organizations: BMO Capital Markets, Federal, AMD, Adobe, BMO, Chevron Locations: San Ramon , California
Inflation increased 0.6% in August, as gasoline prices rose, pushing the annual pace to 3.7%, the Labor Department reported on Wednesday. “While goods inflation is expected to deflate, though at a slower pace compared to the last few months, we expect services inflation to remain firm,” said Andrew Patterson, senior economist at Vanguard. Inflation has receded the most in the goods sector of the economy but has proved stickier in services. Housing, in particular, has seen prices remain high while energy costs have been volatile. And wages are still growing at around a 4% annual clip, above the level the Fed would like to see to keep inflation at bay.
Persons: , , Andrew Patterson Organizations: Labor Department, Federal Reserve, Vanguard, Housing Locations: Russia
Economists and investors were closely watching the report, which is the last major data release the Fed will receive before its Sept. 19-20 policy meeting. Fed officials have already raised interest rates to a range of 5.25 to 5.5 percent, up sharply from near-zero as recently as March 2022. Policymakers at the Fed want to avoid raising rates by so much that the delayed effects add up to tank economic growth. But they also want to avoid doing too little and allowing inflation to become a lasting feature of the American economy. Central bankers will release a fresh set of economic projections following their meeting next week.
Persons: they’ve, , Sarah House, “ We’re Organizations: Fed Locations: Wells Fargo, Central
Morning Bid: Japan jolt as inflation forks
  + stars: | 2023-09-11 | by ( ) www.reuters.com   time to read: +5 min
A man walks past the headquarters of Bank of Japan in Tokyo, Japan, January 17, 2023. "If we judge that Japan can achieve its inflation target even after ending negative rates, we'll do so," Ueda said. The yen surged 1% against the dollar, knocking the U.S. currency back more generally (.DXY) on the foreign exchange markets. If Japan's does tighten further by yearend, it comes as the Federal Reserve and European Central Bank rate hike campaigns are coming to halt. News of an expected return of headline Chinese consumer price inflation to positive territory last month and above-forecast August lending data helped mainland shares (.CSI300) higher, with the yuan bouncing back from 16-year lows.
Persons: Issei Kato, Mike Dolan, Kazuo Ueda, Ueda, Alibaba, Daniel Zhang, Bank of England policymaker Catherine Mann, Christina Fincher Organizations: Bank of Japan, REUTERS, U.S, Tokyo Stock, Nikkei, Global, Treasury, yearend, Federal Reserve, European Central Bank, ECB, Fed, CPI, OpenAI, Wall Street, SoftBank Group, underwriters, Bank of England, Oracle, Graphics, Graphics Reuters, Thomson, Reuters Locations: Tokyo, Japan, U.S, Hong Kong, Ottawa
Global oil prices backed off the $90 a barrel mark early Wednesday as traders digested the news that Saudi Arabia and Russia would extend their summer production cuts until December. The move is likely to keep U.S. gas prices higher for longer. Many nations joined in putting sanctions on Russian oil when President Vladimir Putin invaded Ukraine in February 2022. But large oil consumers such as China and India continue to buy Russian oil. Rising oil prices will also be a concern for the Federal Reserve as its campaign to tame inflation is finally bearing fruit.
Persons: ” Patrick De Haan, Hurricane Idalia, De Haan, Vladimir Putin Organizations: Labor, Gas, Hurricane, Federal Reserve Locations: Saudi Arabia, Russia, , , China, Ukraine, India, Germany
Back-to-school spending is expected to reach a record-high of $41.5 billion, according to the National Retail Federation's annual survey . The trends suggest certain retailers will fare better than others, with analysts favoring these stocks for back-to-school. According to a Stifel survey, retro basketball styles from Nike were the most popular choice for back-to-school this year. "These retailers have invested significantly in their private label assortments in recent years and continue to grow penetration," Jefferies analysts wrote in an Aug. 28 note. That could be a warning sign for the holidays as many investors look to back-to-school sales to set the tone for the winter season.
Persons: Morgan Stanley, Jefferies, Doug McMillon, Amazon's, Homegoods, Abercrombie —, Abercrombie, Locker, Stifel Organizations: National, Jefferies, Walmart, Target, Costco, Dollar, Ikea, P, Abercrombie, Fitch, American Eagle Outfitters, Barn Holdings, Nordstrom, Nike, FactSet Locations: U.S, Hollister, Thursday's, Banana
An aerial view shows the Central Bank of India building, in Mumbai, India, 28 September, 2022. (Photo by Niharika Kulkarni/NurPhoto via Getty Images)The global economy is set to slow down as inflation remains stickier than expected — but there may be some "pockets of resilience," according to Moody's Investors Service. Diron said the slowdown can be attributed to three factors: higher interest rates that persist, China's slowing growth, as well as financial system stresses. While central banks have managed to steer the global economy and "create a disinflationary trend" by raising interest rates, inflation risks are still a sticking point, she said. "There are still risks out there that inflation could prove stickier ... than currently expected, and that would lead to higher risks for longer and slower growth," explained the managing director.
Persons: Niharika Kulkarni, We're, Marie Diron, Diron Organizations: Central Bank of India, Getty, Moody's Investors Service, CNBC Locations: Mumbai, India, Asia
Moody's says it's expecting a global growth slowdown
  + stars: | 2023-08-31 | 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 EmailMoody's says it's expecting a global growth slowdownMarie Diron, managing director of Moody's Investors Service, says inflation could prove stickier than expected, leading to higher interest rates for longer and slower growth.
Persons: Moody's, it's, Marie Diron Organizations: Moody's Investors Service
3M’s $6 bln earplugs settlement is a little sticky
  + stars: | 2023-08-29 | by ( ) www.reuters.com   time to read: +2 min
A variety of 3M products are pictured at an Orchard Supply Hardware store in Pasadena, California U.S., January 24, 2017. REUTERS/Mario Anzuoni Acquire Licensing RightsNEW YORK, Aug 29 (Reuters Breakingviews) - 3M’s (MMM.N) latest legal settlement includes some curious wrinkles. Moreover, the earplugs agreement is conditioned on 98% participation from what is now roughly 250,000 claimants. The $60 billion company is trying to project the idea it’s getting past its legal entanglements, but the reality is a little stickier. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.
Persons: Mario Anzuoni, Scotchgard, Jeffrey Goldfarb, Mukesh Ambani’s, Didi, Lauren Silva Laughlin, Sharon Lam Organizations: Supply, Pasadena , California U.S, REUTERS, Reuters, Aearo Technologies, X, Thomson Locations: Pasadena , California
As August is known to be, it's been a rough month-to-date for all three of those stock market benchmarks so far. This past week, the overall market was oversold, according to Jim Cramer's trusted S & P Oscillator. After Friday's strong finish, we'll see if the market's oversold condition abates as two major themes play out in the week ahead: Earnings from two Club names — Salesforce (CRM) and Broadcom (AVGO) — and key economic reports ahead of September's Fed meeting. Outside of the labor market and inflation, we'll also get a look at the housing market with the pending home sales on Wednesday. As we heard from fellow Club name Palo Alto Networks (PANW) last week, companies are growing more cautious and more closely scrutinizing large sales deals.
Persons: Jerome Powell's, Powell, it's, Jim Cramer's, Friday's, , It's, we've, we'll, we're, Salesforce, AVGO, We're, Brown, Forman, Campbell Soup, LULU, Jim Cramer, Jim, Angela Weiss Organizations: Nasdaq, Federal, Nvidia, Dow Jones, Broadcom, Fed, Labor, Club, Palo Alto Networks, VMWare, HEICO Corporation, Bank of Montreal, BMO, Bank of Nova, Hewlett Packard Enterprise, HP, PVH Corp, Patterson Companies, Veeva Systems, UBS, Academy Sports, Hormel, Signet Jewelers, Dell Technologies, Jim Cramer's Charitable, CNBC, Traders, New York Stock Exchange, AFP, Getty Locations: Jackson Hole , Wyoming, China, Bank of Nova Scotia, New York City
Despite that, the latest Reuters poll narrowly showed Bank Rate peaking at 5.50%, down from 5.75% predicted in July. All but one of 62 economists in the Aug. 16-23 poll expected Bank Rate to go up 25 basis points to 5.50% next month. The medians showed Bank Rate remaining on hold after September's hike until Q3 next year, though a significant minority - 47% or 29 of 62 economists - estimated a higher peak. That is a flip from a July poll when a slim majority, 51% or 31 of 61 participants, predicted Bank Rate at 5.75% or more by year-end. The wider poll showed inflation averaging 6.8% and 4.7% this quarter and next.
Persons: Luke MacGregor, BoE, James Smith, Simon Wells, Shaloo Shrivastava, Jonathan Cable, Mumal Rathore, Rahul Trivedi, Purujit Arun, Ross Finley, John Stonestreet Organizations: of, REUTERS, Bank of England, Reuters, ING, Reserve, European Central Bank, HSBC, Thomson Locations: of England, London, BRITAIN, BENGALURU, LONDON, Western Europe
US consumers have spent all of their excess savings from the pandemic, according to JPMorgan. The bank highlighted the softening of the consumer as one reason why stocks are poised to continue their decline. In a Thursday note, he said consumers have spent down the entirety of their excess savings from the pandemic, which at one point totaled more than $2 trillion. A softening consumer is just one reason why he is preaching continued caution towards the stock market amid its 5% decline, according to the note. Another headwind for the stock market is the fact that rich valuations make buybacks less attractive for companies when they're funded by debt, he added.
Persons: JPMorgan's Marko Kolanovic, Kolanovic Organizations: JPMorgan, Service Locations: Wall, Silicon, China, Germany
ECB core obsession raises risk of policy mistake
  + stars: | 2023-08-17 | by ( Francesco Guerrera | ) www.reuters.com   time to read: +4 min
Headline inflation in the euro zone has halved in the past nine months and was 5.3% in July. Granted, both headline and core inflation are currently above the ECB’s 2% target. In fact, core tends to follow headline inflation because its narrower composition makes it stickier. That’s because, as the chair of the U.S. Federal Reserve Jerome Powell said recently, headline inflation is “really what the public experiences”. ECB President Christine Lagarde has pledged to be “data-dependent”.
Persons: Wolfgang Rattay, Martin Heidegger, that’s, Joachim Nagel, Germany’s Bundesbank, Klaas Knot, Lucrezia Reichlin, Michele Lenza, Jerome Powell, Christine Lagarde, Klaas, Neil Unmack, Oliver Taslic, Streisand Neto Organizations: European Central Bank, REUTERS, Reuters, ECB, Reuters Graphics Reuters, Financial Times, U.S . Federal, Eurostat, Central, Thomson Locations: Frankfurt, Germany, German, Ukraine
David Einhorn expects stubborn inflation and the Fed to only cut interest rates next year. If inflation sees a resurgence and rates go higher, that could threaten the current bull market, he says. They may be celebrating too soon, hedge fund boss David Einhorn warned in his quarterly letter to investors this week. He viewed the move as bullish for stocks and likely to fuel inflation at the time. "If we were 'bearish' until March and 'neutral' through June, we would now characterizeourselves as 'worried,'" the veteran investor said.
Persons: David Einhorn, he's, ValueWalk, Einhorn, Greenlight Organizations: Fed, Service, Federal Reserve, Silicon Valley Bank, Signature Bank, Treasury Locations: Wall, Silicon
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
Annual consumer price inflation is expected to show a sharp rebound in July to 6.40% from 4.8%, and a slowdown in wholesale price deflation to -2.4% from -4.1%. Investors and the Bank of Japan, meanwhile, will be paying close attention to Japanese inflation data later in the week. Asian stocks have badly underperformed this year, largely due to worries over China which is battling weak growth, deflation, and capital outflows. The MSCI Asia ex-Japan equity index index has now fallen two weeks in a row for the first time since April, and is up only twice in the last eight weeks. Here are key developments that could provide more direction to markets on Monday:- India consumer inflation (July)- India wholesale inflation (July)- Germany wholesale inflation (July)By Jamie McGeever; editing by Diane CraftOur Standards: The Thomson Reuters Trust Principles.
Persons: Aly Song, Jamie McGeever, Diane Craft Organizations: Shanghai Stock Exchange, REUTERS, Tencent, Lenovo, Nasdaq, China's, Bank of Japan, Reuters, Thomson Locations: Pudong, Shanghai, China, New Zealand, Philippines, India, Asia, Japan, Beijing, outflows, Germany
If housing cost pressures start to ease more in the coming months, as many economists expect, then the Federal Reserve is almost certainly done. Headline annual consumer price inflation rose a little less than expected last month to 3.2%, and annual core inflation cooled slightly to 4.7%, as forecast. Reuters ImageReuters ImageShelter inflation is running at a 7.7% annual rate and has been far stickier than policymakers would have liked. But Parsons reckons lag effects will soon be bringing shelter inflation down more quickly. Reuters ImageReuters ImageReuters Image(The opinions expressed here are those of the author, a columnist for Reuters)Reporting by Jamie McGeever; editing by Jonathan OatisOur Standards: The Thomson Reuters Trust Principles.
Persons: Jerome Powell, Brendan McDermid, Jay Parsons, Parsons, Jerome Powell's, Phil Suttle, Julia Coronado, Andreas Steno Larsen, Powell, Jamie McGeever, Jonathan Oatis Organizations: Federal Reserve, New York Stock Exchange, REUTERS, Federal, Fed, Traders, Reuters, CPI, Suttle, Steno Research, Thomson Locations: New York City, U.S, ORLANDO, Florida, materializing
Morning Bid: A sticky inflation situation
  + stars: | 2023-08-10 | by ( ) www.reuters.com   time to read: +5 min
With a relentless set of rate hikes, the Federal Reserve has managed to drive consumer price increases down to 3%, from last June's 9.1%. The Atlanta Fed compiles an index of core sticky consumer prices - goods or services for which the cost changes far more slowly. Reuters GraphicsLine chart with data from the Bureau of Economic Analysis and Federal Reserve shows PCE inflation slowed to 3% year-on-year in June, while core PCE inflation also eased to 4.2%. Chart shows economists polled by Reuters expecting the U.S. consumer price index to have increased 0.2% in July 2023 from the previous month, the same pace as June 2023. * Federal Reserve Bank of Atlanta President Raphael Bostic gives welcome remarks at a webinar, 1500 EDT/1900 GMT.
Persons: Brendan McDermid, Amanda Cooper, they're, Mary Daly, Raphael Bostic, Tomasz Janowski Organizations: New York Stock Exchange, REUTERS, Federal Reserve, American Automobile Association, Federal Reserve Bank, Cleveland, Atlanta Fed, Reuters Graphics, Reuters, Federal Reserve Bank of San Francisco, Yahoo Finance, Federal Reserve Bank of Atlanta, Thomson Locations: New York City, U.S, Manheim
Oil and food prices have jumped in recent weeks, and wages are still growing strongly in some of the world’s biggest economies. The UN global Food Price Index rose in July, notching only the second monthly increase in a year of steady declines. Oil supply cutsGlobal oil prices have shot up in recent weeks. The International Energy Agency has forecast that global oil demand will rise to a record 102 million barrels this year. Rising oil prices have spurred a jump in US gasoline prices, which hit an average of $3.82 a gallon Tuesday.
Persons: ” Randall Kroszner, , Price, Chris Ratcliffe, Richard Bronze, , , unraveled, ” Kroszner, — “, Michelle Bowman Organizations: London CNN, US Federal Reserve, European Central Bank, US Federal Reserve System, University of Chicago Booth School of Business, CNN, UN, Bloomberg, Getty, West Texas Intermediate, International Energy Agency, OPEC, Agriculture Organization, United Nations, Capital Economics, “ Labor, Bank Locations: Ukraine, United States, United Kingdom, Brent, Saudi Arabia, Russia, Moscow
A gentle downtrend in foreign direct investment gave way to a steep drop last quarter and inflows to China slammed to their lowest since records began 25 years ago, raising the prospect that the long-term trend is turning. Sources have told Reuters the Biden administration is likely to adopt new outbound investment restrictions on China in the coming weeks. Japan, the U.S. and Europe have already restricted the sale of high-tech chipmaking tools to Chinese companies while China has hit back by throttling exports of raw materials. To be sure, investment flows often fluctuate and many firms aren't leaving China completely or aren't leaving at all. "A lot of our clients are worried about their exposure to China as a sole country of supply."
Persons: Carlos Barria, Deng Xiaoping, Logan Wright, Biden, John Ramig, Buchalter, Daniel Seeff, Cardigan, Chi Lo, Lee Smith, Baker Donelson, Samuel Shen, Tom Westbrook, Winni Zhou, Jacqueline Wong Organizations: REUTERS, Corporate, China Markets, China's, Administration of Foreign Exchange, Investors, Reuters, Oxford Economics, Ministry of Commerce, Management, Thomson Locations: Pudong, Shanghai, SHANGHAI, SYDNEY, China, Japan, U.S, Europe, Haining, Peru, Hong Kong, Baker, Singapore
LONDON, July 28 (Reuters) - A reappraisal of the dollar could be the next big "pain trade". Dollar jumps as US 2-year yield premium builds vs G7Net short dollar contracts from CFTCBofA chart on fund managers dollar viewSMILEFor the dollar at least, it starts to look less of a one-way rate bet. For those who favour intra-G7 interest rate differentials for guidance, the picture is not much better for dollar bears. But if "soft landings", disinflation and buoyant markets continue to rule the roost, it may be hard work for the outsize "anti-dollar" bet. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.
Persons: There's, BoE, What's, it's, Mike Dolan, Alison Williams Organizations: Federal Reserve, Dow Jones, Treasury, Bank of England, gilts, ECB, Reuters Graphics Reuters, Reuters, Twitter, Thomson Locations: U.S, Japan
Morgan Stanley upgrades Adobe, cites A.I. acceleration
  + stars: | 2023-07-31 | by ( Brian Evans | ) www.cnbc.com   time to read: +1 min
Morgan Stanley thinks Adobe can benefit from artificial intelligence-powered products even more. The bank upgraded Adobe to overweight from equal weight on Monday and hiked its price target to $660 per share from $510. Morgan Stanley's new forecast now implies nearly 25% upside. "Importantly, GenAI products like Firefly coupled with enhancements to flagship applications renew our confidence in a robust product innovation engine at Adobe," Weiss said. Weiss also pointed to the popular Adobe Creative Cloud, which could push the company's earnings-per-share compounded annual growth rate to toward 17% from 2022 to 2025.
Persons: Morgan Stanley, Adobe, Morgan Stanley's, Keith Weiss, Weiss, — CNBC's Michael Bloom Organizations: Adobe
Summary German inflation falls modestly in JulyStronger declines expected starting in SeptemberCore inflation easesBERLIN, July 28 (Reuters) - German inflation fell in July, resuming the decline since the start of the year that was interrupted the previous month due to the base effects in June's data. Although inflation fell in July, economists called the pace of decline sluggish mainly due to the comparison with last year. By comparison, inflation fell to 5.0% in France and it rose to 2.1% in Spain. Italian and euro zone inflation data is due on Monday. Economists polled by Reuters expect euro zone inflation to fall to 5.2% in July from 5.5% in June.
Persons: Ralph Solveen, Thomas Gitzel, Maria Martinez, Miranda Murray, Rachel More, Sharon Singleton Organizations: Union, Analysts, Reuters, European Central Bank, VP Bank Group, ECB, Thomson Locations: BERLIN, France, Spain, Germany
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