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    Federal Reserve Chairman Jerome Powell attends the House Financial Services Committee hearing on Capitol Hill in Washington, U.S., September 30, 2021.Al Drago | Reuters Expect more tough talk from the Federal Reserve, as it considers winding down its bond program sooner-than-expected. Based on comments from a number of Fed officials, market pros now expect the central bank to discuss at the Dec. 14 and 15 meeting whether they should move even faster to end their quantitative easing program. "They're going to accelerate tapering in December, and it now looks like growth could easily cross 6% and could approach 7% in the fourth quarter," said Diane Swonk, chief economist at Grant Thornton. "The economy is strong and hot. It's not a bad thing. It's a boom. You can't escape it. The Fed has to adjust." Even if it doesn't decide to cut back on more bond purchases in December, the Fed's tone should sound much more hawkish than it has previously in the post-pandemic era.A tougher FedFed officials announced after their early November meeting that they would begin to slow the...
    NEW YORK (AP) — Things look great across most financial markets, with everything from stocks to Bitcoin near record highs. That’s not the case in the market often seen as the most steady and sober of them all: government bonds. In the bond market, yield can be thought of as what an investor demands to be paid for loaning Uncle Sam money. Normally, the longer it takes to get paid back, the more an investor wants to be paid. But now, the gap between yields of longer-term and shorter-term Treasurys is shrinking. It sounds wonky, but such action has historically been a warning signal that the bond market sees potentially tougher economic times ahead. When such movements get extreme enough, they’ve been a somewhat reliable predictor of recessions in the past. The bond market is not close to that extreme level, to be sure. Market watchers are also split on whether the reasons behind the movements are merely technical and thus easy to dismiss or indicative of something more troubling. Still, they’re sharp enough that they’re worth watching, particularly...
    VIDEO3:3703:37The Fed will start tapering bond purchases later this monthNews Videos The Federal Reserve on Wednesday said it will start tapering bond purchases later this month. The process will involve a $15 billion monthly reduction from the current $120 billion a month the Fed is currently buying. Fed Chairman Jerome Powell explained the decision after the meeting. "Today, the FOMC kept interest rates near zero and in light of the progress the economy has made toward our goals decided to begin reducing the pace of asset purchases. With these actions, monetary policy will continue to provide strong support to the economic recovery." Michael Kushma, chief investment officer of global fixed income at Morgan Stanley Investment Management, says markets should get greater direction from the Fed at the next meeting. "I think the comments so far have been spot on. ... Tapering needs to get done. The hawks on the FOMC have been correct in asking and thinking about wanting a faster taper — they got a faster taper. They pre-announced December. Get it over with, get it done, give us...
    Hong Kong (CNN Business)Beijing is making one thing clear to the country's embattled property developers: Pay your debts. All of them. Two major economic and finance agencies on Tuesday called on companies in "key industries" to redeem the principal and interest on their overseas bonds, according to a government statement. Regulators from the National Development and Reform Commission — the country's top economic planner — and the State Administration of Foreign Exchange delivered the message to companies in a meeting on Tuesday. They did not say which firms were in attendance. But the timing is notable: Just days ago, property giant Evergrande paid $83.5 million worth of overdue interest on a dollar-denominated bond that was due last month, just as a 30-day grace period was about to expire. (Evergrande didn't comment publicly on the payment, but it was reported in Chinese state media.) Evergrande and these Chinese real estate developers are already in troubleGetting seriousRead MoreThe Evergrande payment suggested that the developer is getting serious about meeting its debt obligations with overseas bondholders.Previously, the company had been silent on...
    VIDEO2:0302:03David Herro weighs in on the sectors he believes will deliver strong returnsClosing Bell U.S. stock futures were steady in overnight trading on Monday following a rise in bond yields that pressured growth pockets of the market. Dow futures fell just 4 points. S&P 500 futures were flat % and Nasdaq 100 futures fell 0.1%. On Monday, a rise in Treasury yields left the major averages mixed. The 10-year Treasury yield rose on economic optimism and inflation fears, briefly topping 1.5% on Monday, its highest level since June. The Dow Jones Industrial Average on Monday gained 71 points, helped by a 5.1% gain in Dow Inc. The S&P 500 fell 0.3%. The Nasdaq Composite was the relative underperformer, dipping 0.5%, as the drop in bond prices pressured growth names. Microsoft, Amazon, Apple and Google-parent Alphabet all closed lower. "The stock market increasingly indicates that the U.S. economy has entered another reopening cycle," said Jim Paulsen, chief investment strategist for Leuthold Group. The small-cap benchmark Russell 2000 rallied 1.5% on Monday. "A Covid-led resurgence in economic activity may well worsen supply chain...
    U.S. Treasury yields bounced higher on Monday morning, continuing their upward momentum from last week as the Federal Reserve moves closer to easing off its pandemic-era policies. The yield on the benchmark 10-year Treasury note climbed above the key 1.5% level in early trading, at one point rising above 1.51%. The yield was up by 1.7 basis points to 1.478% at 10:00 a.m. ET. The yield on the 30-year Treasury bond rose about 1.4 basis points to 2%. Both measures are trading near their highest levels in roughly three months. Yields move inversely to prices and 1 basis point is equal to 0.01%.Treasurys Treasury yields moved higher last week after the Fed hinted that it may soon taper its asset purchasing program. Additionally, a rising number of Fed officials now see a rate hike in 2022, according to projections released by the central bank last week. "I think the big untold story of last week is the move in yields, which was pretty consistent across the board, and the bond market is starting to smell something that the equity market...
    VIDEO2:3702:37Three experts react to the Fed's announcement on taperingTrading Nation The Federal Reserve left rates unchanged again on Wednesday but said a taper "may soon be warranted" if the economy continues to progress. Three experts discuss the decision. Liz Young, head of investment strategy at SoFi, predicts the Fed's taper will be slow and steady. "The evolution is happening, but it's happening very, very slowly ... Even if they taper at the speed that we're expecting, they're still buying a lot of bonds through the first half of 2022, so it's not as if suddenly the liquidity is going to leave the system or leave the picture. There's still a lot of liquidity that they're putting in. As for the market action, I think before we got the announcement, it was interesting to see that the 10-year yield had fallen and equities were up strongly. So at broad brush, you could assume that the market was expecting a dovish statement, but if you pulled back the cover a little bit and looked at what sectors were actually driving, it was...
    Chinese real estate giant Evergrande has struck a deal to settle interest payments, calming fears the firm could default leading to global financial chaos. The crisis-hit company had debts of more than $300billion but it has negotiated an agreement with bondholders, while China's central bank has pumped more money into the banking system. The indebted firm is heavily linked to China's broader economy and fears of contagion have kept global stock and bond markets on tenterhooks, similar to the Lehman Brothers collapse in 2008. The announcement caused global markets to rally, with the FTSE 100 up 0.9 per cent and the Shanghai market up 0.4 per cent, although there remain doubts about the long-term health of the company.  Evergrande has admitted facing 'tremendous pressure' as it tackles its mammoth debt pile, and has warned that it may not be able to meet its liabilities. Chinese real estate giant Evergrande has struck a deal to settle interest payments, calming fears the firm could default, sparking global financial chaos Yet founder Xu Jiayin, a billionaire once counted as Asia's richest man,...
    London (CNN Business)Six weeks ago, the Federal Reserve was sending signals that it was time to start backing away from crisis-era support for the US economy."It's not clear to me that we're really doing anything useful here," St. Louis Federal Reserve Bank President James Bullard said on Aug. 10 of the Fed's $120 billion in monthly bond purchases.Dallas Fed President Robert Kaplan agreed. "What I don't want to do is keeping running at this speed for too long, and then we're going to have to take more aggressive action down the road," he told CNBC around the same time. Heres why the Fed wont announce tapering this weekBut the picture has changed since then, and when the Fed makes its latest policy announcement on Wednesday, it's expected to reiterate that for now, at least, it's sitting tight."A no change decision at the upcoming [Fed] meeting looks a foregone conclusion," ING strategists wrote in a recent note to clients, pointing to Chair Jerome Powell's remarks at the Jackson Hole symposium last month, which indicated that the central bank is not in...
    A customer pushes her shopping cart through the aisles at a Walmart store in the Porter Ranch section of Los Angeles.Kevork Djansezian | Reuters Tuesday's report of the consumer price index could set the tone for markets ahead of next week's Federal Reserve meeting, particularly if it is hotter-than-expected. The CPI is expected to be up 0.4% in August when it is released at 8:30 a.m. ET, according to the consensus estimate of Dow Jones. On a year-over-year basis, CPI would then be up 5.4%, the same pace it was in July. Excluding food and energy, CPI is expected to rise 0.3% or 4.2% year-over-year, according to estimates. Inflation data has been coming in stronger-than-expected, raising concerns that it may be more persistent than Fed officials believe it to be. The Fed meets next Tuesday and Wednesday, and is widely expected to discuss tapering its bond program but not formally announce its plans until later in the year. But some market pros say another warning about rising inflation could speed the Fed's timetable even though August's employment report was weaker-than...
    VIDEO0:5400:54Market bull Tom Lee sees the S&P 500 jumping more than 100 points this monthTrading Nation Longtime market bull Tom Lee is predicting a profitable period for investors in September. According to Lee, the S&P 500 is positioned to surge more than 100 points this month. However, he warns the positive momentum has an expiration date. "We could have a really strong rally in September," the Fundstrat Global Advisors' co-founder and head of research told CNBC's "Trading Nation" on Friday. "We didn't think there was a window for a 10% correction for most of 2021. The window where we think you could start to have potentially a 10% pullback is October." Lee attributes the vulnerability to growing fiscal and monetary policy risks — as well as uncertainty surrounding the pandemic and flu season. "We get that much closer to tapering," the CNBC contributor said. "That's really when the debt ceiling rhetoric comes back, and if there are going to be concerns about the debt ceiling, the bond market could panic." When there's upheaval in the bond market, it typically spills...
    . videos The Spanish Stock Market turns around and falls 0.2% at noon Madrid, Aug 24 (.) .- The IBEX 35, the main index of the Spanish Stock Exchange, which had opened the session to the upside, has turned around and fell by 0.23% at noon, thus moving away from the level of 9,000 points, which has been exceeded in some moments. In a day without clear references, the selective was left 21 points at noon, weighed down by banks and electricity companies, and stood at 8,947. So far this year it has advanced by 10.8%. The largest decreases corresponded to Endesa (1.6%), BBVA (1.3%), Iberdrola (1.2%), Red Eléctrica (1.1%), Banco Sabadell (1%) and Santander (0.8%). On the contrary, the most pronounced increases were for tourist values ​​and renewable energy companies. Meliá earned 3.9%; Solaria and IAG, 2.7%; PharmaMar, 2.2%; and Siemens Gamesa, 2.1%. In the rest of Europe, falls predominate. Paris fell 0.3% and Milan and London 0.2%, while Frankfurt rose 0.2%. Following the publication yesterday of the Purchasing Managers Indices (PMI), which show a slowdown in the rate...
    By Karen Brettell NEW YORK, Aug 20 (.) – U.S. Treasury yields rose on Friday but ended the week with a loss as concerns about the spread of COVID-19 variants and growing market volatility The stock market boosted the demand for safe haven assets. * The spread of the Delta variant has raised fears that economic normalization will slow down and many workers are likely to continue working from home. * “There will probably be slower growth, the economic numbers will be somewhat weaker over time,” said Tom di Galoma, Managing Director of Seaport Global Holdings. * At the same time, “stock market volatility has been much higher recently … August, especially the last two weeks, is a very strong season for lower returns, so that’s another factor.” added. * The yield on the 10-year bond rose 2 basis points to 1.260%, and remains below the 1.283% of last week. In early August, the benchmark return fell to 1.127%, a low since February. * Negotiations were volatile, with many traders and investors out for the summer break. * “Today’s selling...
    LONDON, Aug 20 (.) – Investors dumped cash to put money to work in equity and bond funds in the week through Wednesday, and stock markets posted their biggest revenue volumes in nine weeks, BofA said on Friday in a note sent to clients. Stock funds raised $ 23.9 billion, while bond funds brought in $ 12.6 billion, according to the BofA report, which cited data from EPFR. This came at the expense of cash, which suffered weekly outflows of $ 4.5 billion. Among fixed income assets, investment grade bond funds enjoyed inflows for the 23rd consecutive week, earning $ 7.8 billion, while emerging market debt posted its first income in four weeks of $ 200 million. . In stocks, US stocks raised $ 12.8 billion, while emerging market funds posted the largest inflows since April, with $ 4.3 billion. Meanwhile, Japan’s stock portfolios lost $ 900 million. The data was collected before the release of the Federal Reserve’s July meeting minutes sent the market down, as the prospect of stimulus curtailment compounded nervousness over the Delta variant of the...
    People walk past the Federal Reserve building on March 19, 2021 in Washington, DC.Olivier Douliery | AFP | Getty Images The Federal Reserve has been preparing the markets for the onset of its first policy tightening moves since the beginning of pandemic, and investors have begun preparing for the change. Tapering, as it has become known, is likely to start in the coming months, almost certainly before the end of the year. That means the Fed will start reducing the amount of bonds it buys. The central bank has been purchasing at least $120 billion a month in an effort to drive down longer-term interest rates and spur economic growth. Recent public comments and media reports, including one Monday on CNBC, indicate that the purchases likely will trickle lower until they stop altogether sometime later in 2022. Those purchases have become a pillar of both the stock and bond markets, and markets have started to adjust. Investors will be watching for more clues about monetary policy when the Federal Open Market Committee releases minutes from its July meeting at 2...
    By Karen Pierog CHICAGO, U.S., Aug 13 (.) – Deteriorating consumer confidence accelerated the decline in U.S. Treasury yields on Friday, amid low trading volume as the market looked to the Federal Reserve and the next data for signs that could raise rates. * The return of the 10-year benchmark papers, which hit a session low of 1.293%, dropped 6.7 basis points to 1.3001%, or about 17 basis points over a six-month low of 1.127% that it touched on August 4. * The University of Michigan said its preliminary consumer sentiment index fell to 70.2 in the first half of the month, from a final reading of 81.2 in July. It was its lowest level since 2011 and one of its six steepest crashes in the last 50 years of polling. * Economists polled by . expected the index to remain unchanged at 81.2. * The big drop in confidence, combined with poor market liquidity and concerns about the Delta variant of the coronavirus, helped drive Treasury yields down, according to Ben Jeffery, US rate strategist at BMO Capital Markets....
    In this article MORNA_Carina | iStock | Getty ImagesBonds are typically thought of as the safer part of an investors' portfolio — a form of protection when the stock market gets unruly. Yet as inflation becomes a growing concern, that form of security is looking a little wobbly. "One of the single greatest concerns to bondholders is inflation," said certified financial planner Andy Mardock, founder and president of ViviFi Planning in Bend, Oregon, and a member of the National Association of Personal Financial Advisors. The reason for that is simple, he said. When you buy a bond, you're lending a company or the government your money in exchange for a promised fixed rate of return, which is based, in part, on expectations of inflation. If those expectations are exceeded — in other words, if inflation picks up more than anticipated — that agreed upon return becomes less attractive. "If you lend money for 2% interest per year but inflation turns out to be 3%, the end result is a loss of 1% in terms of what you can buy with...
    CNBC's Jim Cramer said Thursday investors should keep a long-term focus on the U.S. economic recovery despite near-term concerns about a rise in coronavirus cases associated with the delta variant. "Don't let all these worries freak you out," the "Mad Money" host said. "All the people who refuse to get vaccinated, they're a major problem for the country, but I'm betting they won't do that much damage to the stock market." Cramer labeled the country's current increase in Covid infections "the great American snag" and said it's caused some investors to be concerned about a slowdown in economic growth. That's a major reason why bond yields have fallen this month to "ridiculously low levels," he said. The benchmark 10-year Treasury yield traded at 1.277% Thursday evening, having stood at almost 1.5% to begin July. Delta variant fears also catalyzed the three-day decline in the S&P 500 that began last week and was punctuated by Monday's aggressive sell-off across Wall Street, Cramer said. All three major U.S. stock indexes finished in the green Thursday. "Now here's the good news: ... The...
    A man wearing a protective face mask walks by 14 Wall Street in the financial district of New York, November 19, 2020.Shannon Stapleton | Reuters A volatile environment for government bonds is reflecting a highly uncertain future for the U.S. economy, pointing to both slower growth and stubborn inflation. After a burst higher earlier this year that scared markets, Treasury yields have fallen back sharply as investors have switched their focus from worries about price increases to the potential that the rapid burst in post-pandemic activity could start to slow down. In the 1970s, the mix of higher prices and lower growth was called "stagflation," a pejorative that has garnered little attention since then as inflation has remained tame over the past few decades. However, the word is coming up more and more these days as the growth picture gets cloudier. "The market is trading on the stagflation theme," said Aneta Markowska, chief financial economist at Jefferies. "There's the idea that these price increases are going to cause demand destruction, cause a policy mistake and ultimately that slows growth." For...
    Signage illuminated at the China Huarong Asset Management Co. headquarters on Financial Street in Beijing, China, on Wednesday, May 19, 2021.Yan Cong | Bloomberg | Getty Images BEIJING — Weak spots are emerging in China's growing debt pile. National debt levels have climbed to nearly four times of GDP, while an increasing number of corporate bonds have defaulted in the last 18 months. Although the latest defaults represent a fraction of China's $13 trillion onshore bond market, some high-profile cases have rattled investors since the common perception has been that the Chinese government will not let state-supported firms fail. The case of Chinese bad debt manager Huarong has also spooked investors, causing a market rout this year when the firm failed to file its earnings in time and its U.S. dollar-denominated bonds plunged.VIDEO4:0304:03Is China too risky for investors?Fast MoneyAnalysts said cases like these signal how the state's so-called implicit guarantee is changing as the government tries to improve the bond market's quality — weeding out the weaker firms, and allowing for some differentiation within the industry. As China's growth slows,...
    VIDEO3:1503:15Jim Cramer reacts to Tuesday's rebound in stocksMad Money with Jim Cramer CNBC's Jim Cramer said the bond market gave stocks a reprieve on Tuesday, but corporate earnings will dictate if stocks can continue to snap back from the worst trading day this year. "It's the actual sales and earnings numbers from the companies reporting right now that will determine if this move's got staying power, even if the bond market throws us a curveball," the "Mad Money" host said after the major averages rallied hard on Tuesday. "When a company surprises to the upside … it's mighty hard to keep that stock down," he said. The Dow Jones Industrial Average jumped almost 550 points, one of the biggest single-day gains it made this year. The 30-stock index plummeted more than 700 points the day before as bond yields dropped and fears spread of a Covid-19 resurgence. The S&P 500 and Nasdaq Composite also both shot up more than 1.5%. U.S. Treasury yields also rose during the session as the 10-year Treasury yield bounced from a five-month low it...
    U.S. stocks tumbled out of the gate Monday amid deepening investor pessimism over rising COVID-19 infections that could knock the economy off its recovery from the coronavirus pandemic. The Dow fell nearly 470 points moments after the opening bell Monday, to about 34,218, while both the S&P 500-stock index and the tech-heavy Nasdaq composite were down about 1.3%. Overseas, France's CAC 40 shed 2.6% in midday trading, while Germany's DAX was down 2.8%. Britain's FTSE 100 dipped 2.5%. Experts are saying Indonesia has become a new epicenter for the pandemic as outbreaks worsen across Southeast Asia. Meanwhile, some athletes have tested positive for COVID at Tokyo's Olympic Village, with the Games due to open Friday. "The more transmissible delta variant is delaying the recovery for the {Asia's] economies and pushing them further into the doldrums," said Venkateswaran Lavanya, at Mizuho Bank in Singapore. Delta variant hammering developing countries 02:24 In Japan, the vaccine rollout came later than in other developed nations and has stagnated lately. Japan is totally dependent so far on imported vaccines and just one in five...
    New York (CNN Business)The Dow and S&P 500 are both up about 15% in 2021 and are each about a percent away from their all-time highs. But as Friday's market sell-off showed, investors remain extremely nervous about the market. The CNN Business Fear & Greed Index, which looks at seven different measures of market sentiment, is showing signs of Extreme Fear. Four of the seven indicators are in bearish territory. Demand for safe haven bonds is picking up. That's pushed the benchmark 10-year Treasury yield all the way down to 1.3%, compared to a level above 1.75% as recently as March. Investors are also buying more put options, contracts that give them the right to sell stocks and other assets at a specific price. The number of companies with stocks hitting new 52-week lows versus highs is increasing, and trading volume for stocks that are falling is also outpacing volume for stocks that are climbing. But the solid gains for the FAANGs of Big Tech have helped lift the broader market in spite of this. Read MoreA little bit of...
    People walk along Wall Street in the rain on July 08, 2021 in New York City.Spencer Platt | Getty Images The bond market is defying Wall Street forecasters, as long-term Treasury yields continue to head lower despite a strong economy and rising inflation. A decline in bond yields, which move opposite price, can be a sign of expectations for a weaker economy. But strategists say it's not just slower growth concerns that's driving the move. Momentum and positioning are also playing a role, as are some technical factors. "It's confounding," said Michael Schumacher, director of rates strategy at Wells Fargo. "You've got some number of big players who for various reasons are pretty comfortable with the thought that economic growth is, I would not say weak, but not as spectacular as some people expected." The most closely watched U.S. interest rate metric — the 10-year Treasury note yield — again skidded below 1.3% Thursday, a level where it last traded in February, prior to last week. It was at 1.32% Friday. The surprise and swift decline is being blamed on...
    Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., July 13, 2021.Brendan McDermid | Reuters Junk bonds aren't so junky anymore, with a strong fundamental backdrop helping to underpin what traditionally has been one of the riskiest sections of the financial markets. Yields in the $10.6 trillion space for the lowest-grade bonds in terms of quality are around historic lows after a tumultuous year that saw corporate America face down the Covid-19 pandemic and come out on the other side with balance sheets looking extraordinarily strong. Bond yields decline as prices rise; the two have an inverse relationship to each other. Most recently, the junk bond sector collectively was yielding 3.97%, according to the ICE Bank of America High-Yield index. That's up from a record low 3.89% Monday. In March 2020, during the worst of the pandemic volatility, the yield was at 9.2%. This is the first time in history that the collective yield for junk has been below the rate of inflation as measured by the consumer price index, which rose...
    Federal Reserve Chairman Jerome Powell speaks at a virtual news conference in Tiskilwa, Illinois, on Dec. 16, 2020.Daniel Acker | Bloomberg | Getty Images Merriam-Webster's Dictionary defines "transitory" as "of brief duration," while Oxford Languages defines it even more simply: "not permanent." It would appear the bond market views inflation as "transitory," as measured by the recent plunge in 10-year Treasury yields. Last week, the yield slipped as low as 1.25% — slumping to its lowest levels since February. We're seeing global yields fall, as well, suggesting a few things: Inflation has peaked. The rate of economic growth has peaked at home and abroad, as well. Investors, of all stripes, foreign and domestic, are offsetting their exposure to global equities by purchasing high quality Treasuries to provide ballast in their portfolios. The spread of the Covid delta variant may slow global economic growth if it continues unchecked among the unvaccinated. It's really not that hard to understand why yields are falling. Peak inflation alone is already a good enough reason to own bonds or some Treasury bond proxy. Both five-...
    New York (CNN Business)Wall Street is sharply in the green Friday, on course for new record highs as stocks rebound from the prior session's selloff.On Thursday, concerns about the spread of the Delta variant of Covid-19, along with wonkiness in the bond market, where the 10-year US Treasury yield fell to its lowest rate since February, weighed on the market and knocked stocks off their record highs.And even though the Delta variant continues to be a threat to the newly reopened economy, the market seemed to have brushed off its worries on Friday.The Dow (INDU) climbed 1.2%, or some 425 points, around midday, while the S&P 500 (SPX) was up 1%. The Nasdaq Composite (COMP) rose 0.8%.All three indexes are on track to reach new all-time highs.Read MoreIn the bond market, the reversal from Thursday's trend is also playing out: The 10-year Treasury yield bounced back to 1.35% around midday."Like a game of seesaw, the falling bond market appeared to give stocks a boost early Friday," wrote TD Ameritrade chief market strategist JJ Kinahan in a blog post.Still, US investors...
    VIDEO6:4106:41The most important charts in the bond market, according to tradersTrading Nation It's been a rocky week for stocks as falling yields raised fears the global economic recovery from the pandemic will come in fits and starts. On Thursday, the 10-year yield touched 1.25%, its lowest level since February. The S&P 500 is set to close out the week barely positive. CNBC's "Trading Nation" asked two technicians to cut through the noise and share the chart that explains the market dynamics in play right now. Bill Baruch, president of Blue Line Capital, is watching the Federal Reserve. "It's most important to highlight the Fed's balance sheet, not the massive expansion we've seen over the last decade, but really the Fed's balance sheet over just this year," Baruch said Thursday. "They're buying debt, and ultimately, what you're seeing is as you're underpinning the Treasury complex you're suppressing yields."Zoom In IconArrows pointing outwardsMeanwhile, the Fed at its June meeting revised up inflation expectations for the year, giving the impression it will taper the balance sheet sooner rather than later. But, Baruch says...
    VIDEO2:4102:41Dow drops as investors worry about economic growth—Three experts on their market outlookTrading Nation U.S. stocks hit a wall Thursday as concerns around the global economic recovery resurfaced. One driver behind the Dow's more than 300-point sell-off may have been Japan's announcement that it would bar spectators from the Olympic Games in Tokyo amid a resurgence of Covid-19 cases. Market analysts, including CNBC's Jim Cramer, were split on where markets go next. Here's what three of them said Thursday: Cramer, the host of CNBC's "Mad Money," expressed concern about the spread of the delta variant, now the dominant strain of coronavirus in the United States: "When the government said no spectators, the market took a hit like you wouldn't believe. And that's delta for us. Because people recognize that this thing's coming ... and we have whole states that are anti-vax." Gabriela Santos, global market strategist at J.P. Morgan Asset Management, expected the market to find its footing in the intermediate term: "I think we have some very unique dynamics happening for certain assets, and then even where there is...
    New York (CNN Business)Worries about inflation are yesterday's news. Investors suddenly have renewed fears about another spike in Covid-19 cases -- and what that means for the global economy's still fragile recovery.Just look at the bond market. Nervous traders are buying US 10-year Treasuries hand over fist, pushing their yields to under 1.3% — the lowest rate for long-term bonds since February."Bond yields had hit a closing high of 1.74% at the end of March and many believed that the yield...would hit 2% by the end of 2021 but yields have since executed a sharp turnaround," Chris Zaccarelli, chief investment officer for Independent Advisor Alliance, said in a report Thursday. Bond prices and yields move in opposite directions. So the big drop in yields is a clear sign that investors are scooping up Treasuries because US government debt is still viewed as being one of the safest and most stable bets on the planet. And now it's also an indication of just how nervous investors are. Read MoreVolatility is back with a vengeanceNot coincidentally, the VIX (VIX), a measure of...
    Traders on the floor of the New York Stock Exchange.Source: NYSE The quiet holiday week ahead could hold some fireworks for investors if the Fed reveals its thinking on its bond buying program. The four-day trading week could see stocks drift along with indexes at record levels, after stocks gained in the past week. The closely watched 10-year Treasury yield held under 1.5%, a positive for tech which outperformed with a more than 2.9% gain for the week. There are very few economic reports of note, aside from ISM services data on Tuesday. But the Fed's minutes from its last meeting will be released Wednesday afternoon, and there is potential for the market to learn more about the central bank's behind-the-scenes discussions on winding down its quantitative easing program. "Our base case is that rates drift higher, but in order to that get that move higher you need a catalyst to get there," said Brian Daingerfield, head of G10 FX strategy Americas, U.S. strategy at NatWest Markets. "Either the Fed has to move forward aggressively on tapering, or you have...
    Hero Images | Getty Images Many investors already know about the tax benefits of municipal bonds — also known as muni bonds or "munis." Now these assets have also become popular among those who want to have an impact on climate and social change. In addition to tax savings and relatively low risk, muni bonds may be attractive to those seeking funds in areas such as renewable energy, clean water, low-carbon transportation or infrastructure. The muni bond market increased by $474 billion in 2020, with $27.6 billion issued for green, social or sustainable bonds, more than double the numbers from 2019, according to S&P Global Ratings.    More from FA Playbook:Here's a look at other stories impacting the financial advisor business. 'Thematic investing' has skyrocketed. How to capitalize on the trend 'Investor alpha' is the most important financial strategy for 2021 Here are 5 lessons the pandemic taught this financial advisor "We expect growth in the green bond market to also be driven by a renewed focus on climate change and the aging state of the nation's infrastructure," said...
    In this article .SPXVIDEO4:1604:16Take your foot off the accelerator in the next month, says Renaissance Macro's deGraafClosing BellStocks are expected to move higher in the second half of the year, propelled by strong earnings gains and super-charged economic growth. The market's gains, however, are not expected to be as robust as in the first half, when indexes jumped by double digits and set multiple all-time highs. Strategists caution there are risks of a pullback, though they have been warning of that for awhile, and the market has continued to power higher. "Strong growth, strong earnings, low interest rates, a bond market that's been lulled to sleep. The bond yields aren't really reacting to inflation news," Bank of America head of global economic research Ethan Harris said. "[Fed Chairman Jerome] Powell has done a good job of calming the waves in the bond market, so this is Goldilocks for equities." But there are a few risks strategists are watching out for in the latter half 2021. One is the potential for choppy trading when the Federal Reserve begins to discuss slowing...
    Federal Reserve Chair Jerome Powell speaks during a Senate Banking Committee hearing on Capitol Hill, Washington, December 1, 2020.Al Drago | Pool | Reuters The Federal Reserve unleashed a huge repositioning in global financial markets, as investors reacted to a world where the U.S. central bank is no longer guaranteeing its policies will be dovish — or easy. The dollar surged the most in a year over a two-day period against a basket of currencies. Stocks were mixed around the world on Thursday, as were bond markets. Many commodities sold off. The Nasdaq Composite was higher, while the S&P 500 and Dow Jones Industrial Average slid. Tech gained, and cyclical stocks fell. The central bank delivered a strong message Wednesday when Fed Chairman Jerome Powell said officials have discussed tapering bond buying and would at some point decide to begin the process of slowing the purchases. At the same time, Fed officials added two rate hikes to their 2023 forecast, where there were none before. "It's the end of peak dovishness," Bleakley Global Advisors chief investment officer Peter Boockvar said....
    Traders on the floor of the New York Stock Exchange.Source: NYSE The Federal Reserve, which has played a big part in confusing the markets, may be helping to clear things up. What happened to the argument that inflation would blow up bond yields? So far, it has been wrong.  With bond yields lower, not higher, the bond market is signaling it's more worried about weaker growth, not inflation. And the Fed is the cause of that.Apoplectic investors: What's going on?VIDEO5:2705:27Inflation data will dictate Fed policy going forward: Jeremy SiegelHalftime ReportA lot of apoplectic investors are twisting themselves into pretzels these days, trying to understand what's going on in the markets. Inflation hawks are having a tough time explaining why, now that the Fed has finally upgraded its inflation expectations, bond yields have been dropping. "Now we have a Fed that really wants to encourage it [inflation]," rate watcher Jim Grant said on CNBC recently. "So, we are doing in public policy what we have never done before, and in these circumstances, the chairman of the Federal Reserve is kind of...
    Traders on the floor of the New York Stock Exchange.Source: NYSE Inflation is likely temporary, and trades built around it being longer term are now the most overdone in the market, according to Bank of America's June Global Fund Manager Survey. The closely watched gauge of professional investors indicates that Wall Street is in line with the Federal Reserve's view that recent price pressures will lighten up as the year goes on and eventually recede to normal levels. Some 73% of respondents said they see inflation as "transitory," while just 23% say it is permanent. The survey covers 224 panelists with $667 billion under management, and it ran from June 4 to June 10. The poll covers a gamut of investor issues, from where the economy and markets are heading to how much cash portfolio managers are holding and which trades they see as most overdone.VIDEO6:0406:04Some inflation is transitory, some isn't, says trader Stephanie LinkHalftime ReportOn that last point, investors view commodities as the most-crowded trade, replacing last month's leader bitcoin. Commodities generally attract big cash when inflation fears are...
    VIDEO0:5500:55Reopening trades will sell-off, David Rosenberg predictsTrading Nation Economist David Rosenberg believes the bond market is getting inflation right and yields shouldn't trade at higher levels. His reasoning: Inflation as a temporary phenomenon caused by enormous pent-up demand and supply chain issues connected to the coronavirus pandemic. "The numbers have been shocking to the upside, no doubt about it. But it's pretty easily explainable," the Rosenberg Research president told CNBC's "Trading Nation" on Friday. "I don't understand why people want to superimpose these last couple of months into the future." So far, the bond market is shrugging off inflation. The benchmark 10-year Treasury Note yield hit its lowest level since March 3 on Friday and closed at 1.45%. The yield is off 7% over the last week and down almost 11% over the past month. Sliding yields have been on Rosenberg's radar for months. In late February on "Trading Nation," Rosenberg called the bond market "radically oversold" and predicted the 10-year yield would retreat to 1%. At the time, the yield was around 1.5%. "There is just so much noise...
    New York (CNN Business)There is a gigantic disconnect between Main Street and Wall Street when it comes to inflation. Something's got to give.The US government reported last week that consumer prices, excluding food and energy, rose at their fastest clip since 1992 in May. Sherwin-Williams (SHW) is lifting the price of paint, one of many companies that's responding to higher commodities costs.Food prices are also surging. Chipotle (CMG) just raised prices. So did Campbell Soup (CPB). And the chief financial officer of restaurant and arcade chain Dave & Buster's (PLAY) said during a recent earnings call with analysts that he expects a 6% to 8% increase in food costs for 2021 due to higher chicken, beef and dairy prices.Wages are rising too, especially for workers in the retail, leisure and hospitality sectors that are returning to jobs as the economy reopens. That adds to inflationary pressures, because some companies will choose to hike prices in order to maintain profits.Read MoreLabor shortages aren't helping.The CEO of online pet retailer Chewy (CHWY) wrote in a letter to shareholders after its latest earnings...
    Don’t miss these top money and investing features: Don’t be fooled — inflation is a big risk for stock market investors. Here’s how to prepare The S&P 500 now is top-heavy in 5 big tech stocks but that alone won’t end this bull market Stock investors have come to a fork in the road — and their options are limited How GameStop, AMC and other meme stocks are in control of market volatility How to invest: Getting started with investing These money and investing stories, popular with MarketWatch readers over the past week, can help you prepare your portfolio for a period of higher inflation — transitory or not. Sign up here to get MarketWatch’s best mutual funds and ETF stories emailed to you weekly! INVESTING NEWS & TRENDSIs inflation going higher or lower? We checked with the model that has the best record The inflation report for May has major implications for the stock market.Is inflation going higher or lower? We checked with the model that has the...
    A General Motors assembly worker loads engine block castings on to the assembly line at the GM Romulus Powertrain plant in Romulus, Michigan, U.S. August 21, 2019.Rebecca Cook | Reuters Job growth in May is expected to be more than double the pace of April, with hiring picking up in pandemic hit sectors like retail and restaurants but also more broadly across the economy. Economists expect 671,000 jobs were added in May, up from 266,000 payrolls in April, about a quarter of what was expected, according to Dow Jones. The unemployment rate is expected to slip to 5.9% from 6.1% in April. Average hourly wages are expected to increase by 0.2%. The monthly employment report could be important in setting the stage for the Federal Reserve's June meeting, where some strategists believe there's a chance the central bank could signal how close it is to discussing tapering its bond buying program. While jobs data has been weaker than anticipated, market pros have been watching hotter than expected inflation data as a sign that the Fed may have to react...
    In this article PEP AAPL So-called green bonds have become more popular in recent years, and this fast-growing segment of the $128.3 trillion global bond market could grow even more. When an issuer sells a green bond, they're making a nonbinding commitment to earmark the sale's proceeds for environmentally friendly projects. That could include renewable energy projects, constructing energy efficient buildings or making investments in clean water or transportation. Green bonds fall under the wider umbrella of sustainable bonds, which include fixed-income instruments whose proceeds are set aside for social or sustainability projects. Big household names such as Apple and PepsiCo are diving into this space. A handful of massive banks and governments around the world are also issuing sustainable bonds, including China, Russia and the European Union. This may be contributing to the space's rapid growth. A report from Moody's said new sustainable bond issuance may top $650 billion in 2021. That would represent a 32% jump from 2020. Watch the video above to learn more about how green bonds work, how issuers can be held...
    In this article VTI VUSB VIDEO4:2004:20Market's third-largest ETF turns 20. What its issuer sees ahead for stocksETF EdgeThe market's third-largest exchange-traded fund just turned 20. Vanguard's Total Stock Market ETF (VTI), a market-cap-weighted basket of small, mid and large-cap stocks with neutral coverage, is now two decades old. It's a testament to the firm's first-ever ETF, which brought lower costs, better benchmark tracking and the idea that ETFs could be stable investment vehicles to the industry, Vanguard's Rich Powers told CNBC on Monday. "More investors are using ETFs as a strategic asset allocation, and I think we brought that concept to the fore," Powers, Vanguard's head of ETF and index product management, said on CNBC's "ETF Edge." Though that low-cost fund is still seeing inflows — with $1.2 trillion in total net assets as of last month — investors are also clamoring after one of Vanguard's newer products. The Vanguard Ultra-Short Bond ETF (VUSB) has accrued around $500 million in assets in the six weeks since its launch last month. It's the firm's first actively managed fixed-income ETF, and...
    New York (CNN Business)US stocks tumbled out of the gate Tuesday as investors grow increasingly concerned about raw material price spikes, shortages and inflation.Prices are rising all over the place as commodities, shipping costs and more related categories become more expensive.Even though the shortages and global supply issues have been lurking in plain sight for months, these worries are really weighing on stocks Tuesday.The price jumps affect broader measures of inflation, which in turn could force the Federal Reserve to change its monetary policy stance sooner than expected. For now, the central bank's interest rates are ultra-low and it buys billions of dollars worth of assets every month. But eventually that will change, and a prolonged increase in inflation could bring about that shift.So far, Fed Chairman Jerome Powell has been steadfast in his view that it's too early to talk about policy changes as both labor market improvements and higher inflation over the medium term would have to happen first. Yet investors are still worried.Read MoreTech stocks are hit hardest by the inflation fears.The Nasdaq Composite (COMP) opened 2.1%...
    A help wanted sign is posted at a taco stand in Solana Beach, California.Mike Blake | Reuters The much-weaker-than-expected April jobs report reinforces the Federal Reserve's easy policy stance, but some strategists still expect the central bank to signal in the next couple of months that it will slow down its bond buying. Economists had expected 1 million jobs were added last month, so the government's report of just 266,000 was a gut punch to the view that the economy is rebounding in a smooth upward trajectory. The anticipation for a big jobs number also had put the spotlight on the Fed's easing programs. Stock futures rose and Treasury yields immediately fell after the report. But the 10-year Treasury yield, after falling to about 1.49% turned around to trade at 1.55%. The 5-year also fell but it stayed near its low. Yields move opposite bond prices. At last check, stocks remained higher in afternoon trading with the Dow up about 150 points. "I'm wondering if bonds are selling off a little as it just reinforces [Fed Chair Jerome] Powell wanting...
    VIDEO2:1702:17One fixed income executive's look at the high-yield bond marketETF Edge Are high-yield bond funds worth the risk? In a low-interest rate environment where traditionally higher-yielding investments are paying out a historically meager 3.5%, many investors and advisors are grappling with that question. One one side of the trade is industry giant Vanguard, whose global head of fixed income, John Hollyer, told CNBC's "ETF Edge" on Monday that the environment remains supportive for high-yield investments. "The fundamentals for high-yield issuers are quite good," said Hollyer, also a principal at the firm. "We have an economy that's reopening. We have very strong fiscal policy. We have very supportive monetary policy. That makes a good environment for corporate borrowers." While investors should set realistic expectations in terms of returns — somewhere in the 3.5% to 4% range — that payout should stay consistent through the near to intermediate term, Hollyer said. "Until inflation is demonstrably above 2% for an extended period like 12 months and employment has neared full employment across many different subsectors of workers, the Fed is going to hold...
    (Bloomberg) – The green financial revolution risks crowding out emerging markets, including some of the world’s most vulnerable nations to climate change. There is too much emphasis on developed market standards for defining emerging bond rules, according to a report by London’s Imperial College Business School, based on interviews with more than 40 global banks and asset managers. Emerging nations and companies with the worst environmental situations are those that most need capital for the transition. However, they will find it increasingly difficult to attract the necessary funding, he said. “The current green bond system is designed by and for developed markets, and it cannot just be applied to emerging markets,” said Jonathan Amacker, one of the principal researchers and former fund manager. “It is more important that an emerging market issuer has realistic and ambitious transition goals and frameworks, not that it fits into a one-size-fits-all system.” While some emerging market countries like Indonesia and Egypt have sold green bonds, Europe has so far dominated in a market that is now worth more than $ 1 trillion. However, even...
    The transition to a green economy is a reality, and this means that companies in the renewable energy sector such as Audax They are the protagonists of this change, that investments in the green economy and clean energies are a commitment of the EU and that this represents a business and growth opportunity for Audax Renovables. We are in a key sector for economic recovery and this is demonstrated by the fact that this is a priority sector in the European recovery funds and a factor of change from an economy based on fossil fuels to an electrified economy, where we are a comprehensive energy generation 100% renewable, we have made a turn in our strategy by focusing our efforts and resources on the 100% renewable energy generation activity and we are also finalizing a new strategic plan that will be announced shortly to the market. With a organic and inorganic growth culture, our acquisition policy is contingent on an increase in value, otherwise the acquisition is meaningless. Regarding our short / medium term catalysts, the fulfillment of our generation...
    Opening with falls on Wall Street in the session on Tuesday. The cuts come after tech stocks have been hit by rising bond yields. The Dow Jones falls 0.12% to 33,130.05 points; the S&P 500, 0.27%, to 3,959.97 points, and the Nasdaq, 0.46%, to 13,000.12 points. The US Treasury 2/10 year yield spread widens to the largest difference since July 2015. The yield on the 2-year US sovereign bond is 0.15%, while the 10-year bond is 1.7563%. In this sense, the prospects for additional fiscal stimulus and faster deployment of vaccines have been responsible for this. rebound in bond yields (+ 2.39%) above the 1.77% mark, its highest level since January 2020. Today, developments in the equity and bond markets will be back in the limelight, and President Biden’s stimulus package is expected to be announced tomorrow. For his part, Christopher Waller, a member of the Fed, said yesterday that “the body must continue to be independent of decisions on interest rates and inflation policy. Cooperation between the Treasury and the Fed is indispensable in a...
    Wall Street anticipates a session in the red starring the rebound of the ten-year bond Futures down on Wall Street. Those of the Dow Jones fall 0.10% and lose the 33,000 points surpassed yesterday; those of the S&P 500 cut more than 0.30% and those of the Nasdaq, 0.70%. The cuts come after tech stocks have been hit by rising bond yields. The 2/10-year US Treasury yield spread widens to the largest difference since July 2015. The yield on the 2-year US sovereign bond is at 0.15%, while the 10-year yield spread is 0.15%. found at 1.7563%. In this sense, the prospects for additional fiscal stimulus and faster deployment of vaccines have been responsible for this. rebound in bond yields (+ 2.39%) above the 1.77% mark, its highest level since January 2020. Today, developments in the equity and bond markets will be back in the spotlight, and President Biden’s stimulus package is expected to be announced tomorrow. For his part, Christopher Waller, a member of the Fed, said yesterday that “the body must continue to be independent of decisions...
    Madrid, Mar 30 (EFE) .- The main European stock markets have opened the session higher, although with moderate rises, after the historical maximum registered on Monday by the Dow Jones. Minutes after the opening, Madrid gained 0.8%; London, 0.7%; Paris, 0.6%; and Frankfurt and Milan, 0.5%. Previously, in Tokyo, the Nikkei had closed 0.16% higher. On Monday, on Wall Street, the Dow Jones rose 0.3% and hit a new all-time high. In contrast, the S&P 500 was down 0.09% and the Nasdaq down 0.6%. According to the analysts of Renta4Banco, investors will be aware today of the advanced inflation data in several European countries and the evolution of confidence in the euro area and the US, without losing sight of the situation of the Archegos Capital fund Management and its impact on the market. In the debt market, returns are picking up again. The interest on the German bond, considered the safest, rises (becomes less negative) and stands at -0.294%. The US bond, the one that worries investors the most, tightens again and is approaching 1.75%. In the oil market,...