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☆ Tax refunds are getting smaller, and fit into the picture of a slowing economy
▼ + stars: | 2023-04-12 | by ( Eric Rosenbaum | ) www.cnbc.com time to read: +8 min

But as pandemic-related tailwinds run their course, another example becoming a thing of the recent past is bigger than typical tax refunds. "Earlier in the quarter, we were seeing taxes, your tax refunds higher year-over-year, during the last probably five or six weeks we've seen that decline. As pandemic-era benefits and tax credit wane, the tax refund data factors into the broader economic picture and the consumer as a source of strength. watch nowAll spending, not just retail spending, will be impacted by lower tax refunds, and that will continue into next quarter. The smaller tax refunds should not be a surprise to businesses — the data has been mounting over the past four to six weeks.

☆ World stocks hope for Fed pause, dollar stalls
▼ + stars: | 2023-04-11 | by ( Herbert Lash | ) www.reuters.com time to read: +6 min

Gold climbed back up above the key $2,000 per ounce level as the dollar came off Monday's peak, while oil prices rose despite Chinese inflation data pointing to persistently weak demand. Investors are eagerly awaiting U.S. consumer prices data on Wednesday and producer prices on Thursday. The consumer price index is expected to show core inflation rose 0.4% on a monthly basis (USCPF=ECI) and 5.6% year-over-year (USCPFY=ECI) in March, according to a Reuters poll of economists. The dollar fell after a strong U.S. jobs report for March showed a resilient labor market, adding to expectations of another Fed rate hike. The dollar index fell 0.244%, with the euro up 0.41% to $1.0904 and the yen weakening 0.12% at 133.78 per dollar.

☆ Dollar dips ahead of inflation data due Wednesday
▼ + stars: | 2023-04-11 | by ( Karen Brettell | ) www.reuters.com time to read: +3 min

NEW YORK, April 11 (Reuters) - The dollar fell on Tuesday as investors waited on inflation data for further signs of whether price pressures are ebbing and what it means for further Federal Reserve interest rate hikes. Consumer price data on Wednesday is expected to show headline inflation rose by 0.2% in March, while core inflation rose 0.4%. (USCPI=ECI), (USCPF=ECI)"A lot of traders are focused on this inflation data," said Edward Moya, senior market analyst at OANDA in New York. Strong jobs data for March have added to expectations that the U.S. central bank will complete one more rate hike. European bond yields rose sharply on Tuesday, catching up after the break.

In its latest Global Financial Stability Report, the IMF said global financial stability risks had increased "rapidly" in the six months since its previous assessment when it was already touting hazards as being "significantly skewed" to the downside. The IMF said the bank failures "have been a powerful reminder" of the challenges wrought by tighter monetary policy - and the more stringent financial conditions it generated - and the buildup in vulnerabilities since the global financial crisis more than a decade ago. Problems at U.S. regional banks grew last year, as rapidly rising interest rates slashed the value of some banks' holdings in long-term assets such as home loans and government bonds. Going forward, regional banks could face greater scrutiny with respect to their holdings and funding structures, the IMF cautioned. Even still, authorities should be more prepared to deal with financial instability, the IMF recommended, including by strengthening their bank resolution regimes.

☆ IMF chief economist: stability risks should not deter central bank inflation fight
▼ + stars: | 2023-04-11 | by ( ) www.reuters.com time to read: +4 min

WASHINGTON, April 11 (Reuters) - Central banks should not halt their fight against inflation because of financial stability risks, which look "very much contained," International Monetary Fund chief economist Pierre-Olivier Gourinchas told Reuters. Gourinchas said most large central banks, including the Federal Reserve, the European Central Bank and the Bank of England, are already near the peak of their rate hike cycles. SEPARATE TRACKSInstead, authorities should contain stability risks with tools used after the failures of Silicon Valley Bank and Signature Bank, such as central bank lending facilities and other backstops, which would free up monetary policy to stay focused on bringing inflation down. "And in my sense, if they're expecting that because they think the Fed or central banks should take into consideration financial stability arguments...we're not there," Gourinchas said. This could lead to an adjustment of yields on longer-term securities upwards as market expectations become more "realigned with what the central banks are communicating."

☆ This Friday could hold the key to our bank stocks and the direction of the market for weeks
▼ + stars: | 2023-04-11 | by ( Zev Fima | ) www.cnbc.com time to read: +8 min

How the banks deliver could set the market tone in the coming weeks. Jim said Monday that such a pause could spark a big stock market rally while keeping rates high enough for banks to make money. How these dynamics play out will factor into the Fed's next rate move — and as a result, market sentiment. Since deposit levels directly contribute to a bank's ability to make loans, it's not surprising that commercial bank lending declined in recent weeks. To be sure, Wells is a traditional bank that must deal with short-term deposit and lending gyrations.

☆ The market isn't cheap but cyclicals are very attractive, says Ariel Investments' Charles Bobrinskoy
▼ + stars: | 2023-04-11 | 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 EmailThe market isn't cheap but cyclicals are very attractive, says Ariel Investments' Charles BobrinskoyCharles Bobrinskoy, vice chairman of Ariel Investments, joins 'The Exchange' to discuss potential May rate hikes, tightening on bank lending, and investment opportunities in cyclicals and consumer discretionary stocks.

☆ IMF chief economist: Severe downside growth risk from bank lending tightening
▼ + stars: | 2023-04-11 | 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 EmailIMF chief economist: Severe downside growth risk from bank lending tighteningPierre-Olivier Gourinchas, chief economist at the International Monetary Fund, speaks to CNBC's Joumanna Bercetche on inflation, the global growth forecast and why he doesn't see risks from a wage price spiral.

☆ Watch CNBC's full interview with Ariel Investments' Charles Bobrinskoy
▼ + stars: | 2023-04-11 | 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 EmailWatch CNBC's full interview with Ariel Investments' Charles BobrinskoyCharles Bobrinskoy, vice chairman of Ariel Investments, joins 'The Exchange' to discuss potential May rate hikes, tightening on bank lending, and investment opportunities in cyclicals and consumer discretionary stocks.

☆ Yellen to push development bank evolution at spring meetings
▼ + stars: | 2023-04-10 | by ( David Lawder | ) www.reuters.com time to read: +2 min

WASHINGTON, April 10 (Reuters) - U.S. Treasury Secretary Janet Yellen on Wednesday will host a roundtable discussion on further steps to evolve the World Bank and other development lenders to tackle climate change and other global crises beyond a $5 billion annual World Bank lending expansion, the Treasury said. The discussion on the sidelines of the World Bank and International Monetary Fund Spring Meetings will bring together finance ministers from major shareholders and borrowing countries that will cover "ways to maintain momentum to evolve the multilateral development banks to better meet current challenges," the Treasury said in a statement. The World Bank has proposed balance sheet changes that would quickly allow it to lend an additional $50 billion over 10 years while maintaining its top-tier AAA credit rating, a step that bank shareholders are widely expected to adopt this week. Shambaugh said it was important to fix the banks' operational structure and incentives and ensure effective use of funds, noting that some of the development banks had "considerable room" on their balance sheets. The official said Yellen was hoping to lay out another roadmap to make more progress on the banks' operational models and financial capacity.

☆ Yellen to push next steps for development bank evolution at spring meetings
▼ + stars: | 2023-04-10 | by ( David Lawder | ) www.reuters.com time to read: +2 min

WASHINGTON, April 10 (Reuters) - U.S. Treasury Secretary Janet Yellen on Wednesday will host a roundtable discussion on further steps to evolve the World Bank and other development lenders to tackle climate change and other global crises beyond a $5 billion annual World Bank lending expansion, the Treasury said. The World Bank has proposed balance sheet changes that would quickly allow it to lend an additional $50 billion over 10 years while maintaining its top-tier AAA credit rating, a step widely expected to be adopted by bank shareholders this week. A U.S. Treasury official called the move a "downpayment" on the reforms for the World Bank and other multilateral development banks, an early opportunity "to get the process rolling." "We will continue to push for more reforms in the operational model," the official said. The official said Yellen was hoping to lay out another roadmap to make more progress on the banks' operational model and financial capacity.

☆ Dollar gains on Fed rate hike bets, yen dips on Ueda comments
▼ + stars: | 2023-04-10 | by ( Karen Brettell | ) www.reuters.com time to read: +2 min

The dollar index was last up 0.67% against a basket of currencies at 102.68, the highest since April 3. The latest Fed data shows that commercial and industrial loans at commercial banks dropped to $2.756 trillion in the week ending March 29, from $2.824 trillion in the week ending March 15. Fed funds futures traders are currently pricing in a 70% probability that the Fed will hike rates by an additional 25 basis points at its May 2-3 meeting. The greenback was last up 1.00% at 133.45 yen , the highest since April 3. ========================================================Currency bid prices at 9:44AM (1344 GMT)Reporting by Karen Brettell; Editing by Kirsten DonovanOur Standards: The Thomson Reuters Trust Principles.

But overall bank credit has been stalled at about $17.5 trillion since January. The response - less lending, tighter credit standards and higher interest on loans - was already taking shape. Hard data on bank lending and credit will come into play, augmenting topline statistics like unemployment and inflation that the Fed is focused on. Reuters GraphicsSENTIMENT WEAKENINGThe survey of large and small banks asks high-level questions - Are lending standards tighter or looser? A Dallas Fed bank conditions survey, conducted in late March after the two bank failures, indicated lending standards in that Fed regional bank's district have kept tightening, with loan demand falling.

☆ Factbox: Possible next steps for BOJ policy under new governor
▼ + stars: | 2023-04-10 | by ( Leika Kihara | ) www.reuters.com time to read: +4 min

ABANDON YIELD TARGETA leadership transition gives the new governor a chance to overhaul his predecessor's policy. Ueda has said YCC was unsuited for minor fine-tuning, suggesting that he could abandon the 10-year yield cap and shift to a policy solely targeting short-term interest rates. One idea would be to widen the band set around the 10-year yield target, now set at 50 basis points on either side. When the BOJ shifted to YCC from a policy targeting the pace of money printing, it used a thorough analysis of its policy framework to justify the shift. Any such move would likely be accompanied by, or come well after, the end of the 10-year yield target.

☆ Premarket stocks: What markets are watching after digesting the US jobs data
▼ + stars: | 2023-04-10 | by ( Nicole Goodkind | ) edition.cnn.com time to read: +9 min

While inflation has come down and other economic data point to a cooling economy, the labor market has remained remarkably resilient. The labor market is cooling but not rapidly or significantly, and further rate hikes can’t be ruled out. More trouble for commercial real estateA few weeks ago, Before the Bell wrote about big problems brewing in the $20 trillion commercial real estate industry. In a worst-case scenario, anxiety about bank lending to commercial real estate could spiral, prompting customers to yank their deposits. The proportion of commercial office mortgages where borrowers are behind with payments is rising, according to Trepp, which provides data on commercial real estate.

☆ Bank of America shares 12 charts that show that the economy is about to enter a full-blown recession
▼ + stars: | 2023-04-10 | by ( Matthew Fox | ) www.businessinsider.com time to read: +5 min

There are growing signs the US economy is about to enter a full-blown recession, said Bank of America. The bank cited worrying signs in manufacturing and the jobs market, and said investors aren't paying attention to the risks. But so far, no recession has materialized as the jobs market and consumer spending have remained fairly resilient. Model is driven by Asian exports, global PMIs, China financial conditions, US yield curve," BofA said. Steepening yield curve often precedes a recessionBank of America"US Treasury 2-year/10-year yield curve flattens and inverts in anticipation of recession.

☆ American offices are half-empty. That could be the next big risk for banks
▼ + stars: | 2023-04-10 | by ( Julia Horowitz | ) edition.cnn.com time to read: +9 min

“I’m more concerned than I’ve been in a long time,” said Matt Anderson, managing director at Trepp, which provides data on commercial real estate. About $270 billion in commercial real estate loans held by banks will come due in 2023, according to Trepp. Questions about the health of banks with sizable exposures to commercial real estate loans cause customers to pull deposits. That forces lenders to demand repayment — exacerbating the sector’s downturn and further damaging the banks’ financial position. The likeliest outcome is thought to be an uptick in defaults and reduced access to funding for the commercial real estate industry.

☆ An earnings recession plagues investors' minds as reporting season approaches
▼ + stars: | 2023-04-10 | by ( Bob Pisani | ) www.cnbc.com time to read: +3 min

There may not be a recession yet, but there is certainly an earnings recession. What Treasury yields are saying Treasury yields resumed falling last week in response to the weaker data. Earnings season Speaking of earnings, first quarter earnings season start this week, with earnings for the S & P 500 expected to decline 5.2%, according to Refinitiv. That's an earnings recession. You have to go back to Q1-Q3 of 2020 to see three consecutive quarters of earnings decline.

☆ Cramer asks: Is the Fed attuned to data or dogma?
▼ + stars: | 2023-04-09 | by ( Jim Cramer | ) www.cnbc.com time to read: +4 min

That includes commercial bank deposits by $64 billion, north of the $250,000 insurance threshold, or simply money into Treasurys and money funds. If the Fed doesn't pivot it would not mean that the entire stock market would go down. The stock market is definitely not a referendum on small business growth. It's an intriguing set-up, one that could produce a quick drop — and then a roar if the Fed's attuned to its data, not just its dogma. As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade.

☆ Shadow banks: The other financial firms worrying investors and regulators
▼ + stars: | 2023-04-06 | by ( Anna Cooban | ) edition.cnn.com time to read: +7 min

London CNN —The International Monetary Fund warned this week of “vulnerabilities” among so-called non-bank financial institutions, saying global financial stability could hinge on their resilience. The term encompasses financial firms, other than banks, that provide all manner of financial services, including lending to households and businesses. The sector has grown strongly since the global financial crisis in 2008, with its asset base expanding by 7% a year on average, according to FSB data. Non-banks that provide credit are known as “shadow banks,” although the term is often used imprecisely to mean all non-banks. Shadow banks now make up about 14% of the world’s financial assets and, like many non-banks, operate without the same level of regulatory oversight and transparency as banks.

☆ Stingy bank lending forcing clients to use private creditors, says Canyon Partners' Joshua Friedman
▼ + stars: | 2023-04-05 | 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 EmailStingy bank lending forcing clients to use private creditors, says Canyon Partners' Joshua FriedmanJoshua Friedman, co-founder at Canyon Partners, joins 'Squawk on the Street' to discuss the health of the banking system, opportunities for non-bank institutions to make loans, softening demand in the real estate sector.

☆ The commercial real estate market is showing some cracks
▼ + stars: | 2023-04-05 | by ( Phil Rosen | ) www.businessinsider.com time to read: +5 min

But before we get too intergalactic, this morning we're stopping off in the commercial real estate space. In the wake of March's bank tumult, commercial real estate has frequently been noted as the next domino to fall — and one corner of the market is already showing signs of stress. A few things to remember:Higher interest rates have made it more expensive for both American households and large commercial real estate owners to buy or refinance property. Small and medium-sized banks hold 80% of US commercial real estate debt outstanding. What are the biggest risks, in your view, facing the commercial real estate market for the second quarter of 2023?

☆ The spiraling banking crisis is leaving traders divided, Jim Cramer says
▼ + stars: | 2023-04-04 | by ( Rohan Goswami | ) www.cnbc.com time to read: +2 min

watch nowThe spiraling banking crisis has prompted concerns about liquidity, credit and defaults, CNBC's Jim Cramer said Tuesday, and is leaving traders split. That represents an opportunity to buy into economically sensitive stocks, Cramer argued, because it suggests the Fed is nearly done tightening rate hikes. DefensiveCramer said the second set, defensive traders, are wrong because just a few weeks ago the defensive pharma and packaged goods names were being "pummeled" because they were perceived as too defensive. "It's ridiculous," Cramer said, that those traders think the outlook is much improved. How about sizable layoffs and a big juicy earnings surprise, something that it seems incapable of delivering," Cramer said.

☆ US manufacturing sector weakest in nearly three years in March -ISM
▼ + stars: | 2023-04-03 | by ( ) www.reuters.com time to read: +3 min

The Institute for Supply Management (ISM) said on Monday that its manufacturing PMI fell to 46.3 last month, the lowest reading since May 2020, from 47.7 in February. It was the fifth straight month that the PMI remained below the 50 threshold, which indicates contraction in manufacturing. Reports last month also showed orders for capital goods excluding aircraft eking out a small gain in February as did manufacturing output. But it noted that manufacturing depending on bank credit also "tend to have larger firms that other things equal will have an easier time finding alternative sources of capital." The ISM survey's forward-looking new orders sub-index fell to 44.3 last month from 47.0 in February.

☆ US bank deposit outflows decelerated in second week after SVB collapse
▼ + stars: | 2023-04-01 | by ( ) www.reuters.com time to read: +3 min

Data released on Friday by the Federal Reserve showed the $125.7 billion drop in deposits at all U.S. banks in the week ended March 22 was roughly $50 billion less than the record $174.5 billion outflows in the first week after the collapses of Silicon Valley Bank and Signature Bank (SBNY.O). Revisions to the prior week's data showed deposit outflows in that first week of bank sector turmoil was almost double the $98.4 billion initially estimated. Deposits at small U.S. banks edged up to $5.386 trillion in the week ending March 22 from $5.381 trillion the prior week. Deposits at the largest 25 banks by assets, meanwhile, fell to $10.65 trillion from $10.74 trillion. Deposit outflows from foreign banks with U.S. operations accounted for the remainder of the week's decline.

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