GMO’s $8 Billion Fund Beats S&P 500 Even Without Nvidia, Tesla
Jeremy Grantham is a famous bubble hunter, quick to point out speculative excess on Wall Street and beyond.
Voters Are Right to Complain About Inflation
Against the odds, the Federal Reserve’s effort to guide the US economy to a soft landing — reducing inflation without causing a recession — seems to be working.
Bitcoin Is Earning Its Place in a Balanced Portfolio
It should be no surprise that Bitcoin sold for over $44,000 this week, more than double its March 13 price. Going back to 2014, it has taken the cryptocurrency an average of nine months and 21 days to double; the milestone came 28 days early this time.
AI Is Likely to Create More Jobs Than It Kills
Artificial intelligence holds far-reaching consequences for modern economies. Many of the jobs we are asked to do will change; a lot of them might disappear altogether.
BofA’s Hartnett Says Bonds Rally May Drag on Stocks in Early ‘24
Stock markets will suffer in the first quarter of 2024 as a rally in bonds would signal sputtering economic growth, according to Bank of America Corp.’s Michael Hartnett.
Bank Stocks Are Cheap But Credit Risks Keep Analysts Wary
A tough year for banks has left shares cheap, but Wall Street analysts are still hesitant to declare it’s all-clear for the sector as concerns over credit markets loom.
Bond Traders to Face a Reality Check With Friday’s Jobs Report
Bond traders who powered a ferocious rally in the $26 trillion US Treasury market are about to find out if they’ve gotten ahead of themselves.
Have the Fed’s Rate Increases Meant Nothing?
Early last year, critics — and there were many — said the Fed was woefully behind the curve on inflation, and that the only way it could win the battle was to push the economy into a damaging recession by raising interest rates very high, very fast.
Options Trading Is Rigged Against Average Investors
Would you gamble your life savings on a few hands of blackjack? Probably not.
Frustrated Homebuyers Are About to Catch a Break
Homebuyers have suffered some severe whiplash in recent months. After all, when mortgage rates hit 8% in late October, it was reasonable to think the housing market would stay on ice throughout the winter.
Global Bond Rally Stalls as BOJ Hike Bets Meets US Jobs Caution
The sizzling global bond rally stalled on Thursday ahead of a key US jobs report, with a slump in Japanese debt adding to the nerves of Treasury traders already fretting that yields had dropped too far.
Beaten-Down Stocks Get Some Revenge After Big Tech’s 2023 Rally
Stock investors are turning to roughed-up corners of the market from small caps to value shares as they seek out bargains with the S&P 500 Index riding a five-week winning streak and soaring almost 9% since the start of November.
Bond Gains Renew as Drumbeat to Friday’s Jobs Report Intensifies
The Treasuries market took another leg higher on Wednesday, as a slowdown in private-sector job creation further encouraged traders to bet on US interest-rate cuts ahead of broad labor-market data due Friday.
US Mortgage Rate Drops to Four-Month Low, Boosting Refinancing
US mortgage rates fell to the lowest level in almost four months last week, spurring the biggest demand for refinancing since February.
Constitutional or Not, Wealth Taxes Are Bad Economics
The US Supreme Court heard arguments on Tuesday over a dispute over a $14,279 tax bill — and the slightly more consequential question of what counts as income under the federal tax code, a definition the Biden administration would like to expand.
Bitcoin Hype Will Clash With the Rolex Recession
“BUY BTC.” The logo stamped on this week’s leaked version of the Grand Theft Auto VI trailer, depicting a faux glamorous world of speedboats, supercars and “shoot-em-ups,” was well timed.
The Murky Uses of India’s Private Credit Funds
There are plenty of high-performing private investment vehicles in India, but it’s the few that are being set up for dubious purposes that may bring harsher regulatory scrutiny to the country’s most rapidly expanding asset class.
Wall Street Quants Join Chatbot Boom as AI Gold Rush Intensifies
Jesse Livermore scanned trendlines. Warren Buffett sought a margin of safety. Peter Lynch bet on growth rates. In the long history of markets, trading systems and investment formulas hold an honored place.
Apollo CEO Says It’s Getting Harder to Beat Public Markets
Apollo Global Management Inc.’s Marc Rowan said it’s getting harder for active managers to beat indexes in public markets and that it is easier for investors to find alpha in private markets.
MetLife Downplays Concern Over Commercial Real Estate
MetLife Inc., the biggest US life insurer, downplayed concerns about the faltering commercial real estate market amid signs that occupancy is starting to recover.
Treasury Yields Resume Slide on Latest Sign Labor Market Cooling
Treasury yields resumed their downward slide — with the benchmark 10-year note’s falling to the lowest level since Sept. 1 — after the latest sign of labor-market cooling bolstered bets that a Federal Reserve shift to policy easing isn’t far off.
‘No Bears Left’ Is Worrying Refrain Coming From Wall Street
The message coming from Wall Street is that investor optimism is running dangerously high.
Taiwan’s Big China ETF Bust Shows Extent of Financial Decoupling
Taiwan’s economic and financial decoupling from China has deepened with the near-collapse of what was once the world’s largest Chinese bond exchange-traded fund market.
We’ll Soon See If New Fed Defenses Work Against Money Mayhem
Big central banks are going to keep shrinking their balance sheets next year, pulling money out of the financial system, even if the fight against inflation looks to be won and interest rate cuts begin.
Private Credit Titans Win the Incentive Fee Lottery
The $1.6 trillion private credit market is enjoying a “golden moment,” in the words of one Blackstone Inc. executive, as banks retreat from risky lending and investors flock to funds offering double-digit returns on corporate loans.
Home Prices Are Historically High Next to Rents. Don’t Panic.
Market rents in the US are, depending on which measure you look at, either rising slowly or falling outright. Home purchase prices, after a slight dip last year, are climbing again.
Bill Gross Recession Bet Has Minted Millions From Bond Rally
One of the big winners from the sudden furious rally in the US bond market: Bill Gross.
McKinsey Sees AI Adding Up to $340 Billion to Wall Street Profit
Banks using generative artificial intelligence tools could boost their earnings by as much as $340 billion annually through increased productivity, according to consultants hoping to help the industry adapt in this fast-moving area.
India Boosts Emerging Market ETFs as US Yields Dip, Dollar Falls
India is once again leading flows into US exchange-traded funds tracking emerging markets, boosting one of the most popular trades in 2023 as declining US yields and a weakening dollar turn investors toward assets in the developing world.
Stifel Sees S&P 500 Delivering Little Returns Into Early 2030s
Don’t look to US stocks for big gains next year — or for at least the next decade. That’s the bold take from Stifel Nicolaus & Co.’s Barry Bannister, one of a few Wall Street strategists who predicted the rally in the first half of 2023.
Did Markets Go Too Far, Too Fast Is Debate to Dominate December
December’s whipsaw opening shows investors may be concerned November’s epic rallies went too far, too fast in anticipating a near-perfect soft landing for the economy.
Private Credit Won't Cause the Next Financial Crisis
The rapid rise of funds that make loans directly to buyout deals and other highly indebted companies — known as private credit — is among the hottest topics in finance.
OpenAI’s Q* Is Alarming for a Different Reason
When news stories emerged last week that OpenAI had been working on a new AI model called Q* (pronounced “q star”), some suggested this was a major step toward powerful, humanlike artificial intelligence that could one day go rogue.
Trading Corporate Bonds Is Still More Art Than Science
Two years ago, the Journal of Finance — the most prestigious journal in the field — retracted a published paper because of data errors, either the first or second withdrawal ever by a top-three finance journal.
Nvidia Insiders Unload Shares After 220% AI Rally
While corporate insiders are increasingly betting on shares of their own firms, bosses at the S&P 500’s best-performing company are cashing in.
Yield Hunt Is Finally Back On for Buyers in Emerging Markets
Across Wall Street, analysts and investors had cheered 2023 as the year of emerging markets, only to be burned by a relentless climb in US Treasury yields. Now, as the Federal Reserve looks set to end its most aggressive monetary tightening campaign in a generation, they’re at it again.
Morgan Stanley’s Wilson Says December to Be Rocky for Stocks
US stocks are headed for a rocky end to the year after rallying in November as bond yields fluctuate, according to Morgan Stanley’s Michael Wilson.
Should You Buy Bitcoin? All You Need to Know After Token Hits $40,000
Bitcoin has jumped more than 140% this year to outstrip other investments like stocks and gold, and optimism for further gains is high.
Bond Market Euphoria Shifts to Debate Over How Low Fed Will Need to Go
A torrid bond market rally shows traders are convinced the Federal Reserve’s rate-rising cycle is over. The debate now turns to when central bankers start cutting, and by how much.
Regional-Bank Debt Is a Bargain to Buyers Betting Worst is Over
Money managers including Invesco Ltd. and Loop Capital Asset Management are bullish on regional-bank bonds, wagering that the debt will perform better than the broader market as fears about funding costs settle down.
Biggest Blowout in Bonds Since the 1980s Sparks Everything Rally
In a year in which little has gone right in the US bond market, November turned out to be a month for the record books.
Powell Brushes Off Rate-Cut Bets as Fed Moves Carefully
Federal Reserve Chair Jerome Powell pushed back against Wall Street’s growing expectations of interest-rate cuts in the first half of 2024, saying the committee will move cautiously with borrowing costs at a 22-year high but retain the option to hike further.
JPMorgan Sees Sky-High Rates Reviving Short-Term Muni Deals
Decades-high interest rates are poised to revive interest in a little-used corner of the municipal-bond market: variable rate deals.
OpenAI Exposes the Clash of Governing Money and Mission
OpenAI’s power brokers seem to have decided that the quickest fix for last week’s dysfunction is to borrow a page from corporate America’s playbook by adding some establishment figures to its board.
Uncertainty Looms Over a November to Remember
November will be etched in the memories of investors as a remarkable month.
Blue-Chip Spreads Rally as Investors Bet Fed is Done Hiking
Risk premiums on US investment-grade corporate bonds have narrowed to the tightest level in nearly two years on expectations that the Federal Reserve has reached the peak of its monetary-tightening cycle.
Billionaire Heirs Have a How-to-Spend-It Problem
“Let me tell you about the very rich. They are different from you and me.” F. Scott Fitzgerald could have added that they are also generationally different from each other.
Bond Traders Schooled on Central Banking 101
On Wall Street and in the financial media, many of us make our living by attempting to say “smart stuff” about the Federal Reserve. Unfortunately in some cases, that creates an incentive to make central banking out to be more complicated than it is.
Bandaged Up OpenAI Faces a Tougher Task Now
“I have never been more excited about the future,” wrote Sam Altman, the reinstated chief executive officer of OpenAI, to his subordinates on Wednesday, in a statement formally announcing his return and the rebuilding of the company’s fractured board.
Charlie Munger and the Fading Art of the Second Banana
Charlie Munger, the longtime vice chairman of Berkshire Hathaway Inc., who died on Tuesday at the age of 99, will be exalted for many things in the coming days.
Citadel and Its Peers Are Piling Into the Same Trades. Regulators Are Taking Notice
Even Ken Griffin is a little worried. Multimanager funds like Griffin’s Citadel have come to dominate the hedge fund industry, riding a steady run of outperformance to oversee more than $1 trillion, including a healthy dose of leverage.
Munis Haven’t Rallied So Much in a Month Since Paul Volcker Ran the Fed
The last time the municipal bond market rallied so much, it was Paul Volcker — and not Jerome Powell — who was winning a war on inflation.
JPMorgan’s S&P 500 Outlook for 2024 Is Grimmest on Wall Street
As a rush of Wall Street strategists call for all-time highs in US stocks in the year ahead, JPMorgan Chase & Co. stands apart, releasing the gloomiest forecast so far among its peers.
The Charlie Munger Principles to Invest and Live By
Among his many contributions, Munger was a prolific armchair philosopher, whose speeches and interviews included hundreds — maybe thousands — of nuggets about how to invest and live well.
Unhappy American Consumers Will Welcome a Slower Economy
The unhappiness of American consumers despite rapid job and economic growth in the past few years is a hotly debated topic. Is it inflation? High borrowing costs for homes and automobiles? Crowded airports and packed airplanes?
A Hard Rain’s A-Gonna Fall on Hedge Funds
Now that inflation is finally decelerating, regulators are increasingly turning their focus to financial stability.
What If Lending to Your Own Buyout Gets Sticky?
The private equity industry’s push into credit is so well advanced that no one bats an eyelid when the same buyout firm is invested in the debt and equity of the same portfolio company.
What We Need to Talk About When We Talk About AI
Ever since Alan Turing’s “imitation game,” we’ve been acutely aware of the importance of measuring the capabilities of computers against our own miraculous brains.
Global Bonds Surge Toward Best Month Since 2008 Financial Crisis
Global bonds are soaring at the fastest pace since the 2008 financial crisis.
US Steps After SVB Likely Spurred Bond-Fund Outflows, Study Says
US regulators’ swift action in March to ring-fence the banking sector after the collapse of Silicon Valley Bank might have had an unintended consequence of driving cash out of bond funds, by enhancing the appeal of deposits.
Bitcoin Retakes $38,000 While Rate Cut Expectations Increase
Bitcoin climbed back above $38,000 on Tuesday amid optimism the US central bank may be closer to lowering borrowing costs if inflation continues to decline.
The $7 Trillion ETF Boom Gets Blamed Again for Dumb Stock Moves
It’s the latest critique of the passive-investing boom: Fresh academic research claims that the relentless flood of index-chasing cash on Wall Street is distorting stock prices and causing extreme market moves.
Adyen-Led Fintech Comeback Faces Wall of Worries
The rebound in Adyen NV and its European fintech peers this month has been notable, but investors should brace for a bumpy road ahead.
Electric Vehicle Subsidy Junkies Can’t Get Higher
BMW AG Chief Executive Officer Oliver Zipse was incredulous when asked this month whether the German premium carmaker would respond to a brutal price war in electric vehicles by cutting production.
How Argentina Could Still Convert to the Dollar
Javier Milei was elected president of Argentina on the strength of a radical promise: that he would replace the highly inflationary Argentine peso with the stable US dollar.
China Is a Rich Country. It Can No Longer Cry Poor on Climate
At the time of the first major climate change conference, in Rio de Janeiro in 1992, China was one of the least developed nations. Its per capita income was below Haiti, Niger and Pakistan.
Economists May Have Been Flying Blind All Along
The pandemic upended many of the things we thought we knew about the economy. Even now, economists struggle to answer such fundamental questions as whether Americans are better off financially.
Virtual Cash Will Survive the Crypto Winter
When the crypto bubble was on the rise, it prompted governments to step up development of their own form of electronic cash, known as central bank digital currencies. Now that enthusiasm for crypto has waned, will CBDCs fade away, too?
Sharp US Stock Rally Is Running Out of Steam, Citi Strategists Say
The rally that led the S&P 500 to one of its best November gains in a century is now running out of steam, according to Citigroup Inc. strategists.
BlackRock Unveils Path to Unleashing $4 Trillion Investment Boom
Researchers working inside a unit of BlackRock Inc. estimate that a reform of public financial institutions could free up as much as $4 trillion in additional investment to help emerging markets tackle the fallout of climate change.
Goldman Says Sharp Drop in Volatility Is Opportunity for Hedging
The recent sharp pullback in volatility as year-end approaches creates hedging opportunities given the cloudy outlook for equities, according to Goldman Sachs Group Inc. strategists.
Meme-Stock ETF Shuts After Failing to Attract Day Traders
If investors needed another sign the heyday for meme stocks has passed, an exchange-traded fund designed to ride the pandemic-era rise of retail traders is shuttering after just two years.
Wall Street’s $300 Billion Middleman Rides Model-Portfolio Boom
Brooks Friederich is a little-known figure in the world of investment advisory, even among the Wall Street cognoscenti. Yet every year, the 39-year-old — and his Berwyn, Pennsylvania-based employer Envestnet — helps steer billions of dollars into tailor-made strategies for financial advisers, part of what’s known as the model-portfolio boom.
How to Fix a $2.2 Trillion FX Risk After 50 Years of Trying
It’s finally time to move on from a $2.2 trillion problem by burying Bankhaus Herstatt — a half-century after its collapse.
Is a Hedge Fund More Than Its Founder?
Is a hedge fund anything without its founder? Another batch of well-known hedge fund managers have sold out or moved to liquidate portfolios this month. Their legacies as entrepreneurs underscore the challenges of building a firm that outgrows the key risk-taker.
Private Equity's Bubble Vintage May Fizzle
Private equity firms that spent hundreds of billions of dollars on acquisitions at the top of the market risk a nasty hangover.
‘AI Blowback’ Angst Grips ESG Investors Who Bet Big on Tech
ESG fund managers who turned to big tech as a low-carbon, high-return bet are growing increasingly anxious over the sector’s experimentation with artificial intelligence.
Bond Market’s Dramatic Recovery Is Seen as Opening Act for Broader Revival
The world’s biggest bond market has clawed its way back after spending chunks of 2023 underwater. Now many US debt watchers see the pathway clearing for a real revival.
Billions Wiped Out as Stock-Safety Trade on Wall Street Misfires
Reeling from a bear market last year, beaten-up investors decided to send more than $60 billion to exchange-traded funds focusing on dividends.
Wall Street Throws Caution to the Wind to Keep Up With Stock Rally
It’s the major casualty of November’s sizzling stock rally: Investor caution.
Bond Traders Boost US Recession Bets as Growth Falters
Treasury investors are turning increasingly skeptical the Federal Reserve will deliver a soft landing for the US economy next year, elevating concern of a looming recession over the risks posed by inflation and a swelling budget deficit.
US Consumer Year-Ahead Inflation Expectations Rise Further
US short-term inflation expectations climbed to a seven-month high in November and longer-run price views remained at levels not seen since 2011.
Fed Minutes Show Unity on Cautious Approach to Future Rate Hikes
Federal Reserve policymakers at their most recent meeting united around a strategy to “proceed carefully” on future interest-rate moves and base any further tightening on progress toward their inflation goal.
Annuities Are Back in Fashion, But Are They Safe?
Every time interest rates go up there is a flurry of demand for a product that has been around at least since the Roman Empire — annuities. The insurance industry has already seen rapid growth in annuity sales since 2021 and if rates remain at or move above current levels, demand seems poised to explode.
Goldman Alums Set Up Matchmaking Platform for Private Credit
Two former Goldman Sachs Group Inc. bankers want to take the $1.6 trillion private credit revolution from Wall Street to Main Street.
Cathie Wood’s Ark Pares Holdings of Top Pick Bitcoin Trust
While Cathie Wood has been touting her bullish stance on Bitcoin in recent months, her firm ARK Investment Management actually cut holdings in the Grayscale Bitcoin Trust.
Struggling Cities Face More Pain From AI Boom
Artificial intelligence is likely to transform our world in many ways, but one that hasn’t received much attention is the technology’s looming impact on real estate. As AI becomes an essential component of both business and daily life, the value of places where those who work on AI want to live will rise, provided these locales have reasonable infrastructure.
Is a Hedge Fund-Style Investment Right for You?
Former Bridgewater Associates LP executive Bob Elliott’s plan for exchange-traded funds that employ hedge fund strategies has sharpened the debate about whether retail investors should have access to such approaches.
US Pensions to Gorge on Corporate Bonds as Funding Levels Soar
A quirk in retirement fund accounting is making corporate pensions look particularly flush now, giving them more incentive to cut risk by dumping equities and buying bonds.
Altman Returns as OpenAI CEO in Chaotic Win for Microsoft
Sam Altman will return to lead OpenAI less than five days after he was pushed out of one of the world’s most valuable startups, setting off a shock back-and-forth drama that transfixed Silicon Valley and the global AI industry.
Nvidia Fails to Satisfy Lofty Investor Expectations for AI Boom
Nvidia Corp. investors gave a cool reaction to its latest quarterly report, which blew past average analysts’ estimates but failed to satisfy the loftier expectations of shareholders who have bet heavily on an artificial intelligence boom.
Grayscale’s Bitcoin Win Is Still Only Half the Battle
News that a Washington DC Court of Appeals ruled in favor of Grayscale Investments LLC over the Securities and Exchange Commission has ignited hope that a Bitcoin exchange-traded fund will soon be available. Bitcoin prices jumped.
Who Needs a Bitcoin ETF? Actually, the SEC Does
Should the US Securities and Exchange Commission approve an exchange-traded fund focused on the spot market for Bitcoin? The question has yet again gained relevance, thanks to the District of Columbia Court of Appeals, which last week reversed the SEC’s decision to reject a Bitcoin ETF proposed by Grayscale Investments.
Inflation Could Come Back When You Least Expect It
The latest inflation report, showing that price increases slowed in October, suggests that the US just might get the “immaculate disinflation” that everyone is hoping for: Inflation will fall to its pre-pandemic levels and remain there, and the US will avoid a recession. Allow me to make the pessimist’s case that we are not out of the woods yet.
Wood’s Ark, 21Shares Unveil Fee on Pending Spot Bitcoin ETF
Cathie Wood’s ARK Investment Management and digital-asset firm 21Shares just became the first major applicant in the US spot Bitcoin ETF race to list a fee on their planned offering.
If You're in Cash, You Risk Missing Out, Bond Managers of $2.5 Trillion Say
For investors stashing record sums in cash, US bond managers overseeing a combined $2.5 trillion have a bit of advice: It’s time to put that money to work.
Li Ka-shing-Backed WeLab Launches Digital Bank in Indonesia
WeLab Ltd., backed by investors including billionaire Li Ka-shing and Astra International, a unit of Jardine Matheson, is launching a digital bank in Indonesia to tap the young and fast-growing economy.
Alibaba Shock Move Casts Fresh Pall Over China Tech
The shocking decision by Alibaba Group Holding Ltd. to cancel the spinoff of its cloud division is offering a fresh reason for investors to sell China tech stocks in an earnings season yielding mixed results.
Microsoft Ends Weekend of OpenAI Drama With Coup of Its Own
After three days of high drama at the world’s most closely watched startup, which many compared to a coup, Microsoft Corp. capped the weekend with one of its own: The software giant hired ousted OpenAI chief Sam Altman.
A Guide to the AI Safety Debate After Sam Altman’s Ouster
When it comes to artificial intelligence, one of the most commonly debated issues in the technology community is safety — so much so that it has helped lead to the ouster of OpenAI's co-founder Sam Altman, according to Bloomberg News.
Federal Reserve Officials Talk Too Much
There was a time, not so long ago when the Federal Reserve said very little about its policies; its leaders did their utmost to obfuscate rather than clarify. Those days are long gone.
Cathie Wood and Walmart Aren’t Speaking the Same Deflation Language
The deflationistas have been working themselves into a tizzy since Walmart Inc. Chief Executive Officer Doug McMillon warned of a period of declining prices at the big-box retailer in the months to come.
Bonds’ Best Month Since March Faces ‘Sanity Check’ in Auction
The Treasury market’s nascent rally is facing its next big test: a bond auction that will help gauge whether investors are confident 2023’s selloff is over once and for all.
Lasting Recovery in Small Caps Still Elusive as Debt Costs Bite
The powerful rally in small-cap stocks looks like yet another false start rather than a lasting recovery.
Bitcoin ETF Hype Has Wall Street Eyeing $100 Billion Crypto Potential
It’s touted as crypto’s big breakthrough on Wall Street: The imminent arrival of Bitcoin exchange-traded funds that will kick open digital-currency investing to the institutional and retail masses.
Echoes of Bitcoin’s 2021 Record Run Emerge in the Derivatives Market
A burst of activity in Bitcoin derivatives has evoked memories of the period in late 2021 when the token surged to an all-time high.
Treasuries Suffer First Outflows Since 2021 in September Rout
The savage sell-off that hit Treasuries in prior months was driven by concerns a buyers’ strike had hit the $26 trillion bond market. It’s now confirmed: at least one set of investors headed for the exits back in September.
Dear Miami, Taking Wall Street From NYC Won’t Be Easy
For the past decade, South Florida’s politicians and development officials have fanned dreams — which long felt like delusions — of the region reinventing itself as some sort of “Wall Street South.”
US Treasury Market Is Resilient Despite ‘Shocks,’ Official Says
The Treasury Department’s top domestic finance official said the US government debt market has functioned well during a year of outsized interest-rate volatility, a regional banking crisis and the recent hack of the world’s largest bank.
BofA’s Hartnett Says Sell ‘Epic’ Stock Rally as Risks Linger
Investors should offload risky assets after recent gains as technical and macroeconomic headwinds are building, according to Bank of America Corp.’s Michael Hartnett.
The Case for Two Fed Rate Cuts in Early 2024 Is Building
Now that there’s a growing consensus that the Federal Reserve is done raising interest rates — a shift I predicted last month — it’s time to ponder when policymakers will consider cutting rates and by how much.
‘Prime Is Fine’ in Real Estate. Except When It’s Not
A charismatic entrepreneur pulls in wealthy investors to amass a portfolio of some of the finest prime real estate. Banks and bondholders are persuaded to provide the leverage. What could possibly go wrong?
A $100 Billion ETF Flood Offers Little Solace to Active Managers
At first blush, a record $100 billion flood into actively managed exchange-traded funds this year raises a tantalizing prospect: A revival of stock picking even as only Big Tech names outperform the market. Yet, a look under the hood of popular ETFs shows the boom is almost entirely taking place in passive-looking trades.
New US Home Construction Increased Unexpectedly in October
New US home construction unexpectedly picked up in October, indicating builders continue to benefit from a limited supply in the resale market.
Big Tech’s $2 Trillion Rally Saves Nasdaq From Correction
Investors were given plenty of opportunities to fret about the outlook for technology giants this earnings season. Instead, they doubled down on a strategy that has worked all year: piling into the biggest stocks
Rent Hikes of 2021 and 2022 to Boost CPI Into 2026
Inflation is edging back toward pre-pandemic rates in the US, but rent inflation still has a long way to go. To put it into numbers, the all-items consumer price index was just 3.2% higher in October than a year earlier, but the rent of primary residence index was up 7.2%.
Fintechs Push Mexico Interest Rates to 15% in Battle for Savers
Just a week after Brazil’s Nu Holdings Ltd announced a yield of 15% on its high-yield savings accounts in Mexico, Argentina’s Ualá is raising its own by three percentage points to 15%.
Bitcoin Flirts With $38,000 as Spot ETF Hopes Encourage Bull Run
Bitcoin was in sight of $38,000, a level last seen in May 2022, amid an ongoing rally spurred by expectations of fresh demand for the token from exchange-traded funds.
Goldman’s Kostin Latest on Wall Street to See 2024 Stock Gains
The S&P 500 Index will keep rallying next year and should come close to its record high hit in early 2022, say strategists at Goldman Sachs Group Inc., becoming the latest Wall Street bank to come out with a bullish call.
America’s Top 1% Don’t Make as Much as You Might Think
Can a single self-published paper really refute decades of work by three famous economists? If the paper is the modestly titled “Income Inequality in the United States: Using Tax Data to Measure Long-Term Trends,” then the answer — with qualifications — is yes.
Ken Griffin’s Warning Looms Over Inflation Celebration
On Wall Street, there’s always a lot of excitement around the latest inflation report. Tuesday’s better-than-expected number was an extreme example — bond yields plummeted and stocks surged.
How America Can Get Its Debt Back Under Control
With its $33.7 trillion debt and trillion-dollar budget deficit, the US’s deteriorating fiscal situation is impossible to ignore. To simply balance the budget, a 29% across-the-board cut in spending would be necessary, even if the tax cuts enacted by the Trump administration are allowed to expire at the end of 2025.
Stocks and Bonds Rally as Traders Bet That Fed Hikes Are Done
Professional traders entered November wagering Jerome Powell’s campaign to tame inflation was a long way from being won. Now they’re being forced into risky bets that the battle is over.
Meta Has More Wall Street Fans Than Ever as Rally Nears 300%
For Meta Platforms Inc. bulls, the biggest one-day stock wipeout in history is a fading sight in the rear-view mirror.
Seismic Day for Treasuries Fuels Bets Fed to Slash Rates in 2024
A normal day for markets became something extraordinary after a hotly anticipated report on US inflation gave traders the greenlight to declare that the Federal Reserve’s most aggressive interest-rate hiking cycle in decades is over.
The Job Market Slowdown Is Getting Hard to Ignore
It’s important not to gloss over this reality because a number of signs point to a continuing deterioration so long as the Federal Reserve keeps interest rates at a level that restrains the economy.
Annuities Should Be Boring, Not a Systemic Threat
Every year, millions of Americans send their hard-earned money to life insurance companies, in return for a promise that it will grow and provide them with regular income in old age.
US Companies Opting to Refinance 2024 Debt Face Profit Hit as Higher Rates Bite
Some of the largest US companies face billions of dollars in additional interest costs and hits to their profit if they refinance their 2024 maturities at current rates, with a third of them lacking the cash to repay upcoming debt.
Yellen Says She Disagrees With Moody’s Negative Outlook on US
US Treasury Secretary Janet Yellen said she disagrees with Moody’s Investors Service’s shift to a negative outlook on the country’s Aaa credit rating, expressing confidence in the economy and in Treasuries as a safe asset.
‘Tidal Wave’ of AI Spending to Power Tech Bull Market, Wedbush Says
The promise of artificial intelligence to rewire large swaths of the American economy supercharged tech shares for most of the year before the fever broke this fall. But investors would be remiss in thinking AI’s power to juice returns is over.
Retirement Savers Are Getting Ripped Off
Where is the line between selling a financial product and providing investment advice? That question is at the heart of a debate over a new proposal that aims to protect Americans’ retirement savings.
Morgan Stanley Sees Bullish Opportunities for US Assets in 2024
Morgan Stanley’s strategists see US stocks and bonds outperforming their emerging markets peers next year, according to a note to clients.
A $20 Billion Week Marks Market Reopening for EM Bond Sales
Emerging-market borrowers are piling back into global bond markets, selling about $20 billion in dollar notes in just a few days, all too aware that the window of opportunity may snap shut as suddenly as it opened.
Buying Junk Bonds Is the Top Contrarian Trade for 2024
Worries about an economic downturn aren’t enough to dissuade market participants from being bullish on risky debt as their top contrarian trade, according to the latest Bloomberg Markets Live Pulse survey.
Wall Street Warns of Risks in Push to Rein In Home-Loan Banks
A push by US regulators to rein in the Federal Home Loan Banks risks casting broad ripples through the US financial system, increasing costs to banks by pulling a major force from the nation’s funding markets.
Microsoft Record Leads $1.5 Trillion Nasdaq Surge
Wall Street’s so-called Magnificent Seven has been living up to its name again, but none more so than Microsoft Corp.
Individual Investors Pull Most Cash From US Stocks in Two Years
Individual investors who had been behind the stock market rally this year pulled more money from US equities in October than they have in any month over the past two years.
Nvidia Is Looking Cheap to Some as 220% Rally Stalls
Nvidia bulls are starting to throw around an adjective rarely used for a stock that’s more than tripled in less than a year: cheap.
S&P 500’s Busted Winning Streak Was a Mirage Anyway
The bond market giveth and the bond market taketh away. The S&P 500 Index closed in the red Thursday, blowing its widely-hyped chance at a nine-day winning streak, which would have been its best run since 2004.
What Is the Goal of the 60/40 Portfolio?
I am not a fan of one-size-fits-all financial strategies. Yes, I see the value of making investment as simple as possible, but the right balance of risk and reward is a personal decision, and the most common strategies are either arbitrary or agnostic about crucial details.
Universities Shouldn’t Be Punished for Betting on Private Equity
Moody’s Investors Service recently released a report bluntly entitled, “Private equity exposure increases credit risk for universities with limited wealth.”
El-Erian Says Credit Risk Will Replace Interest-Rate Risk as 2024’s ‘Big Fear’
Credit risk will replace interest-rate risk as the market’s “big fear” next year, according to Mohamed El-Erian.
Powell Says Fed to Be Careful, Won’t Hesitate to Hike If Needed
Federal Reserve Chair Jerome Powell said the US central bank will continue to move carefully but won’t hesitate to tighten policy further if appropriate.
‘Dark Matter’ Bond Metric Mesmerizes Wall Street and Washington
It’s the buzz word on Wall Street and in the hallways of the Federal Reserve and Treasury Department. It’s blamed for triggering bond selloffs, shifts in debt auctions and interest-rate policy.
Citi Sees Risk to US Stock Rally After Investors Lock In Profits
The S&P 500’s best week in a year was driven by investors locking in profits on bearish bets, suggesting little room for further gains, according to Citigroup Inc. strategists.
Fed Needs to Forget About Inflation and Focus on Jobs
The inflation scare is barely behind us, and it is already time for the Federal Reserve to focus on recession risks. The recent trajectory of job growth means policymakers can no longer rule out unemployment snowballing in 2024, which should force a shift in how they think about managing their dual mandate.
Ex-Cantor Executives Start Lending Platform for Anticipated Spot Bitcoin ETFs
Several ex-Cantor Fitzgerald executives started a crypto lending platform with the expectation that it will serve operators of spot Bitcoin exchange-traded funds once they gain US regulatory approval.
Powell Urges Fed Economists to Be Flexible on Forecast Methods
Federal Reserve Chair Jerome Powell said the central bank must be willing to think beyond the complex mathematical simulations it traditionally uses to forecast the economy.
As Banking Goes Digital, Finance Apps Are Still Too Risky
For years, Americans have been giving their banking data to financial apps such as Venmo, YNAB and Rocket Mortgage. And for years, banks have been trying to figure out how to deal with the security risks. A new proposal from the Consumer Financial Protection Bureau suggests a better way.
Why My Recession Rule Could Go Wrong This Time
Alarm bells sounded Friday when we learned that the US unemployment rate rose to 3.9% for October, well above the 50-year low of 3.4% that it hit earlier in the year. The latest reading is still very low, so what’s with the doomsayers telling us a recession has arrived?
Buffett’s $157 Billion Cash Pile Isn’t an Ominous Sign
Everything in the world is relative, including Warren Buffett’s cash position.
US 30-Year Mortgage Rate Tumbles by Most in More Than a Year
The average 30-year mortgage rate plunged last week by the most in more than a year, helping generate the biggest advance in home purchase applications since early June.
Hoisington’s Hunt Says the Bond Rally Is Just Getting Started
Hoisington Investment Management Co. was pummeled by its bullish stance on US bonds in recent years, driving its Treasury fund to some of the industry’s biggest losses as the Federal Reserve’s rate hikes sent prices tumbling.
BlackRock’s $100 Billion Model Makers Are Betting on Megacaps
The team responsible for assembling BlackRock Inc.’s model portfolios is favoring the stock market’s largest companies, potentially unleashing a flood of billions of dollars into technology shares.
UBS Made a Fast Start in Butchering Credit Suisse
Sergio Ermotti promised ruthlessness in reshaping Credit Suisse Group AG, and the chief executive officer of UBS Group AG has been true to his word.
Druckenmiller Mistakes the US Treasury for a Hedge Fund
Billionaire Stan Druckenmiller isn’t letting up on his criticism of US Treasury Secretary Janet Yellen. Druckenmiller says Yellen committed an epic mistake by failing to meaningfully term out America’s debt when rates were ultra-low — a missed opportunity he’s characterized as “the biggest blunder in the history of the Treasury.”
PayPal Rival Fintech Adyen Faces Investor Confidence Test
For years, Dutch payments fintech Adyen NV’s founders and management ran things their own way, thanks to some blowout growth.
S&P 500 Nears Its Next Roadblock After the Best Week in a Year
The S&P 500 Index’s best week in a year has brought the broad equities benchmark to a decisive point where stocks can make a significant break higher or find their gains capped.
Record-Setting Push Into Both Ends of Yield Curve Set to Pay Off
A record flood of cash has poured into opposite ends of the US Treasury yield curve this year, seeking either to seize on the highest short-term interest payments in over two decades or profit from a long-bond rally once rates finally peaked.
Please Don’t Call Inflation Anxiety Delusional
Many commentators are struck by the disconnect between the US economy’s impressive performance of late and the dismal popular view of the very same economy.
The Price of Money Is Going Up, and It’s Not Only Because of the Fed
What’s the most important price in the global economy? The price of oil? The price of semiconductors? The price of a Big Mac? More important than any of these is the price of money. For more than three decades it was falling.
Bond Market Has Fighting Chance to Avoid Historic Losing Streak
A prospect that might have seemed unthinkable just a couple short weeks ago is coming into view for bond traders: The potential for US Treasuries to post an annual gain for the first time since 2020.
Winner-Take-All Rally Spurs Big Distortion Among S&P 500 Members
The S&P 500’s pitch is simple. Own it and get exposure to the biggest of the big among US firms. Lately, it’s gotten harder to maintain that point of distinction.
China Foreign Investment Gauge Turns Negative For First Time
A measure of foreign investment into China turned negative for the first time since records began in 1998, highlighting how foreign companies are pulling money out of the country due to geopolitical tensions and higher interest rates elsewhere.
US Jobs Data Show Broad Cooling After Run of Surprise Strength
US job growth slowed in October by more than expected and the unemployment rate rose to an almost two-year high of 3.9%, indicating that employers’ strong demand for workers is beginning to cool.
Cathie Wood Says Bitcoin Is ‘Digital Gold’ as Deflation Hedge
Cathie Wood says she would unambiguously wager on Bitcoin — rather than gold or cash — to safeguard against the possibility of deflation in the coming decade.
Fed Pause ‘Really Good Time’ to Buy Stocks, Capital Group Says
Capital Group is seeing an opportunity for investors to load up on global equities after the Federal Reserve held rates on Wednesday, signaling an end to its aggressive tightening cycle.
The Tech Gold Rush Is Over. Where’s the Next One?
I remember the exact moment in 2007 when I knew the financial industry was headed for a reckoning. There was no data point that tipped me off, no great insight about the housing market.
Bond Selloff Is Close to Over as Fed Nears End of Hiking Cycle
The selloff in US debt appears close to being over as the Federal Reserve nears winding up its most aggressive rate hikes in a generation.
Treasury Bond Bears Look Ready to Hibernate
Yields on 10-year Treasury notes plummeted 20 basis points on Wednesday, the most since the banking crisis in March. For all the macroeconomic news of the day, it was hard to pinpoint exactly what changed so meaningfully from one trading session to the next.
AI Hangover Weighs On Chipmaker Shares Even With Solid Results
Signs of recovery in smartphone and computer demand have yet to provide the next tailwind for chip stocks as they languish below the heights of this year’s artificial intelligence rally.
Investor Fears of 'Zombies' Create Bubble in Companies With High Cash Flow
Companies with healthy balance sheets are some of the best performing stocks this year, and their shares could keep rising, according to Piper Sandler & Co. strategists led by Michael Kantrowitz.
American Workers Are the Economy’s True Unsung Heroes
The US economy just enjoyed its strongest quarterly growth outside of the pandemic era since 2014, expanding at a 4.9% annualized rate in the three months ended Sept. 30.
Sorry, Gen Z, But Economic Anxiety Isn’t Going Away
Less than a third of Gen Z feels financially secure while just more than half feels “very or extremely worried about not having enough money,” according to a recent study by consulting firm EY. “Welcome, the water’s warm!” says every American millennial.
The Federal Reserve’s Pause Could Go Terribly Wrong
The US Federal Reserve thinks it can take a break. As Fed officials see it, they need only sit back and wait while the monetary tightening they’ve already done gradually takes hold, slowing the economy and pushing inflation back down to the central bank’s 2% target.
Social Security Is Nearing A Crisis
Washington seems determined to ignore the country’s rapidly worsening fiscal picture, but sooner or later policymakers will be forced to pay attention. When they do, they’ll find that changes to Social Security are unavoidable.
Bitcoin Proxy MicroStrategy Questions Own ‘Premium’ With ETFs Looming
MicroStrategy Inc. Chairman Michael Saylor’s strategy of buying Bitcoin may be coming into question as the advent of exchange-traded funds holding the largest cryptocurrency appears imminent.
US Slows Pace of Increase in Quarterly Long-Term Debt Sales
The US Treasury increased its planned sales of longer-term securities by slightly less than most major dealers expected in its quarterly debt-issuance plan, in a move that signals officials may be concerned about the surge in yields over the past several months.
A Strong Safety Net Helps the Whole US Economy
The typical American is a lot richer now than they were just before the pandemic — and this improvement is at least partially due to government support for families and businesses in 2020 and 2021.
Goldman’s Oppenheimer Says US Stocks’ Outperformance Set to End
The significant outperformance of US stocks over the last decade is unlikely to repeat over the coming 10 years, according to Goldman Sachs Group Inc.’s chief global equity strategist.
Rising Small Business Bankruptcies Are a Red Herring
Small businesses account for close to half of US private sector employment, so there’s always considerable focus on their prospects, especially during periods of rising interest rates and contracting credit.
US Employment Costs Increase 1.1% on a Pickup in Wage Growth
US employment costs unexpectedly accelerated in the third quarter, heightening concerns that a strong labor market risks keeping inflation above the Federal Reserve’s target.
Credit Strength Is Baffling Fed Watchers Ahead of Rate Decision
To have a shot at taming inflation, the Federal Reserve is intent on tightening financial conditions across the economy. But they haven’t made much of a dent in corporate America yet.
US Cuts Quarterly Borrowing Target to $776 Billion, Still Record
The US Treasury reduced its estimate for federal borrowing for the current quarter thanks to stronger-than-expected revenues, offering some relief for investors concerned about the rapidly widening fiscal deficit.
Wall Street Cuts S&P 500 Expectations as Geopolitical Risk Rises
A Federal Reserve pause, seasonal tailwinds, an earnings-led rally. Many of the reasons that got Wall Street strategists increasingly bullish coming into the end of the year now look like wishful thinking.
A Two-Speed Electric Car Market Is Heading for a Crash
The world’s auto industry is accelerating in two directions at once. Unless those contradictions are resolved, carmakers risk running themselves off the road.
New Laws to Regulate AI Would Be Premature
All of a sudden there is a flurry of activity around artificial intelligence policy. President Joe Biden is scheduled to issue an executive order on the topic today. An AI safety summit is being held in the UK later this week. And last week, the US Senate held a closed-door forum on research and development in AI.
High-Grade Bond Market Kicks Off Busiest Day Since Labor Day
US blue-chip companies unleashed a wave of bond sales on Monday as borrowers look to sell new debt in a week jam-packed with bond auctions, central bank meetings and fresh economic data.
Quants With $23 Trillion See AI Takeover Even as They Hold Back
The financial world’s computer-loving crowd is preparing for the dawn of a new AI-powered era — but that doesn’t mean they’re ready to fully embrace the technology just yet.
Goldman Lifts US, Global Long-Term Growth Forecasts on AI Boost
Goldman Sachs Group Inc. lifted its long-term growth estimates for the US and many other major economies as generative artificial intelligence is set to boost productivity over the next decade.
Amazon’s New AI Will Make Its Junk Problem Even Worse
Of all the negative articles written about Amazon.com Inc. through the years, one piece in particular stung the company more than most. Claiming that Amazon’s aggressive pursuit of growth had come at the expense of a good shopping experience for its customers, New York magazine this January criticized what it called “The Junkification of Amazon.”
Are Stocks a Better Buy or Bonds With Treasuries at 5%?
The yield on 10-year Treasuries went above 5% last week for the first time since July 2007, when the first Transformers movie was topping the box office and the Dow Jones Industrial Average surpassed 14,000 for the first time in history.
Treasury Rout Lures M&G to Buy More as US Stocks Seen Too Risky
US stocks carry too much risk and buying Treasuries will pay off, according to M&G Plc as the $402 billion fund house navigates the brutal selloff in global markets.
Bitcoin Faces Reality Check if ETF Launches Spark ‘Sell-the-News’ Pivot
Bitcoin has jumped on bets that the first US exchange-traded funds investing directly in the token are set to be approved. The question now is whether an actual green light for the products would spur some profit-taking.
Amazon Strong Results Point Toward Boost for Cloud Business
Amazon.com Inc. Chief Executive Officer Andy Jassy gave investors much of what they wanted this earnings season: robust sales and profit growth along with a hint that the cloud division earnings machine is regaining momentum.
How Low Can It Go? Getting to the Bottom of the Nasdaq Selloff
Momentum has turned in tech stocks and investors awakening from dreams of artificial-intelligence nirvana are back to a less grandiose concern: When will the selling stop?
Why No Recession Yet? Thank the US Consumer
US consumers have kept buying these things despite high inflation and the contractionary policy of the Federal Reserve, and they deserve thanks not only for the recession that still has not come, but for the fast pace of recent economic growth.
The US Needs More Housing. Americans Don’t Want to Build It.
You won’t find this term in any serious economics textbook, but the only clinical way to describe the US housing market is bananas. Affordability is at record lows and mortgage rates are the highest since 2000.
Morgan Stanley’s Ted Pick Says Investment Banking to Lead Next Cycle
Morgan Stanley’s incoming chief executive officer, Ted Pick, said investment banking will lead the next business cycle, and that hiring for that business will help the firm compete with rivals.
S&P 500 Teeters on Brink of Correction as Technicals Break Down
The rout in US stocks has brought the S&P 500 Index to a crucial inflection point. It’s teetering near a correction after breaching 4,200 for the first time since May — a key technical level that may point to a longer-term selloff.
With Yields Above 5%, Some Investors Say It's Safe to Start Buying Bonds Again
Embattled debt investors like the look of 5% Treasury yields as they weigh the risk-versus-reward scales for the world’s biggest bond market.
Amazon’s $400 Billion Rally Hinges on Cloud Results
Amazon.com Inc.’s run as one of the best stocks this year will likely come down to the performance of a single business line: cloud computing.
Bonds as Diversifiers Aren’t Dead — Just Dormant
Before we get carried away anew with declarations about how “the investing world is forever changing,” it’s worth remembering how fluid the relationship has proved over the past couple of years — and how another twist is always just around the corner.
US Economy Grew at a 4.9% Pace Last Quarter, Fastest Since 2021
The US economy grew at the fastest pace in nearly two years last quarter, fueled by a surge in consumer spending.
Banks Put Bond-Sale Spree on Pause as Market Volatility Ramps Up
Banks are taking a cautious approach in the investment-grade bond market amid some of the wildest swings in Treasuries in recent memory, waiting for pockets of calm to emerge as they seek to borrow before US officials can raise interest rates or tighten regulations further.
For Industrials, the Promised New Era Is On Hold
Maybe this time isn’t all that different for industrial companies. In a normal economic cycle, consumer-facing manufacturers feel the effects of a slowdown first, followed by industrial operations that can convert bookings into sales relatively quickly.
America Is Flirting With Fiscal Breakdown
In the fiscal year that just ended, the US government borrowed $1.7 trillion, more than 6% of gross domestic product. Bear in mind, that was with an economy running hot, with high inflation and more than full employment.
Muni-Bond Yields Have Finally Climbed Enough to Entice Buyers
Municipal-bond yields at the highest in more than a decade are spurring optimism on the part of investment managers, who have been dealing with persistent fund outflows this year as the market has struggled along with the rest of fixed income.
Bond Market’s ‘Vicious Cycle’ Risk Puts Spotlight on Fed’s QT
The worst selloff of longer-term Treasuries in more than four decades is putting a spotlight on the market’s biggest missing buyer: the Federal Reserve.
Stock Pickers Face Mixed Bag From First Big Tech Earnings
The lockstep moves that have gripped the US stock market this month look set to end — at least for a day. A slew of big tech earnings reports sent shares in heavyweights Microsoft Corp. and Alphabet Inc. careening in opposite directions.
What the Federal Funds Rate Isn’t Telling You
Lately, Federal Reserve officials have been paying greater attention to financial conditions – that is, to the influence that market phenomena such as stock prices, bond yields and housing prices have on economic activity, above and beyond the effect of the short-term interest rates that the central bank controls directly.
What Economists Got Wrong About the Great Recession
What do we know, and not know, about macroeconomics? My co-author and I are currently revising our economics textbook — one of our decisions is to emphasize the Great Recession and the pandemic over the Great Depression — so I might be expected to have an answer to this question.
The Charts Revealing Treasuries Switching to Headache From Haven
Wild swings in the “world’s safest asset” are once again acting as a driver for volatility across global markets.
A Major Driver of US Equities in the Past Decade Is Fading Fast
Corporate America’s spending on share buybacks, a driver of the US stock market rally for over a decade, is slowing in the face of higher-for-longer interest rates and an uncertain economic backdrop.
New Age for Treasuries Means 6% Yield Isn’t ‘Out of the Picture’
On Monday, the 10-year Treasury yield climbed over 5%, a 16-year high. It’s a level few would have predicted during the long run of rock-bottom interest rates that followed the Great Financial Crisis.
The Fed Pivot That Turbulent Treasuries Need
Greater stability in US Treasuries is needed for the smooth functioning of other segments of the financial market, housing and the economy more broadly, both in America and beyond.
Housing Prices Are High — and Potentially Illusory
Many aspects of the economy are still being buffeted by the ripples from the pandemic, which makes precedents hard to apply, and should make everyone cautious as to their judgments. Housing market data is also, inevitably, reported with a lag.
A Shrinking $1.3 Trillion Securities Market Is Bad News for the Economy
For a fleeting moment this month, investment bankers in leveraged finance — the lucrative lending that oils the wheels of M&A and feeds the $1.3 trillion market for collateralized loan obligations — had rare cause for cheer.
Morgan Stanley’s Wilson Says Profit Estimates Are Too High
The odds of a year-end rally in US stocks are fading as investors face a multitude of risks from elevated profit estimates to the Federal Reserve’s policy tightening, according to Morgan Stanley’s Michael Wilson.
Bitcoin History Supports Bulls After 10% Weekly Jump on ETF Speculation
A Bitcoin rally fueled by optimism about fresh demand from exchange-traded funds may have further to run if history is any guide.
Nvidia Dip-Buyers Burned by US Chip Battle With China
Investors who snapped up shares of Nvidia Corp. at the bottom of last month’s swoon got a harsh reminder of the multiple forces pushing and pulling on the chipmaker’s business prospects.
Bitcoin Climbs Back Above $30,000 Before Latest Grayscale Ruling
Bitcoin topped $30,000 for the second time this week on growing expectations that another favorable court action raises the likelihood that an exchange-traded fund holding the cryptocurrency will finally be approved.
Tesla Valuation Looks Unsustainable to Wall Street Analysts
Tesla Inc.’s price cuts this year show customers are no longer willing to pay a premium for its vehicles. That raises a key question on Wall Street: Does its lofty stock-market valuation make sense anymore?
BofA Sees Near-Term Stock Rally as Signal Flashes Contrarian Buy
Investor positioning in stocks has become so bearish that it’s triggered a “contrarian buy signal” in a custom Bank of America Corp. indicator, setting up the asset class for a short-term rally, according to strategist Michael Hartnett.
How to Keep the Treasuries Market Functioning
The $25.8 trillion market for US Treasury debt is like the circulatory system for the world’s financial markets — everything else relies on it. In recent years blockages have occasionally formed, and central banks have had to step in to restore the money flow.
The US Housing Market Is Now Completely Broken
For the first time since the Federal Reserve started raising interest rates, every part of the housing market is now poised to worsen.
US Weighs Leaning on Banks to Curb Hedge Fund Leveraged Trading
Top US regulators are zeroing in on dangers posed by highly leveraged hedge fund trades, and considering options to rein in risks to the broader financial system.
New ETFs Riding Tesla’s Famous Volatility Arrive on Wall Street
Exchange-traded funds offering investors betting on or against Tesla Inc. two times the returns of the volatile stock launched Thursday, after what seemed like a long-shot bid at winning regulatory approval.
Treasury Loss? You’re Also Paid Back in Depreciating Dollars
Selloffs in Treasuries are compounded by the real loss in the purchasing power of the dollars they are denominated in.
The Tyranny of ESG Has Run Its Course
In 2021, almost two-thirds of respondents said they considered environmental, social and governance (ESG) factors when investing. In 2022, that number was 60%, and this year it’s 53%, according to the annual ESG Attitudes Survey from the Association of Investment Companies.
There's a Good Reason Why Wall Street Is Overpaying Bankers
Few are saying it out loud, but it seems plenty of investment banking leaders think a big rebound in dealmaking and fundraising is around the corner.
JPMorgan Says 60/40 Portfolio Far From Dead, Set to Trounce Cash
The popular 60/40 portfolio isn’t dead, and in fact is a significantly more compelling investment than cash over the coming decade, according to JPMorgan Asset Management.
Bitcoin-ETF Watchers Circle Friday as Next Key Date in Approval Race
Those closely following the quest for an exchange-traded fund that would hold Bitcoin have Friday circled on their calendars.
The Fed Still Has a Lot of Quantitative Tightening to Do
The US Federal Reserve’s efforts to quell inflation have sent long-term interest rates to their highest level in a generation, putting a lot of stress on banks, companies and anyone looking to finance a new home.
Stop Worrying That AI Will Cause the Market to Crash
According to Gary Gensler, chair of the SEC, a market crash caused by artificial intelligence is “nearly unavoidable.” Like many other regulators, he has called for new regulations on AI to prevent such dire scenarios.
US Economic Data Keep Coming In Stronger and Defying Forecasts
US retail sales exceeded all forecasts and industrial production strengthened last month, fresh evidence of a resilient American consumer whose spending is helping stabilize manufacturing.
Wall Street Worries Over Swelling US Debt Put Fed in Tight Spot
The Federal Reserve faces potential policy pitfalls ahead as it wrestles with how to respond to investor angst about the US government’s $33.5 trillion mountain of debt.
Treasury Liquidity Mostly in Line With Volatility, Fed Economist Says
Treasury-market liquidity has mostly righted itself since the dislocations caused by the several regional bank failures in March, according to a Federal Reserve Bank of New York economist.
SEC’s New Hedge Fund Rules Lack an Accountant’s Precision
The Securities and Exchange Commission recently announced new rules for hedge funds to report on equity short positions. There’s nothing terrible in the rules, but they will impose pointless costs on investors, mainly because they were written by lawyers rather than accountants.
Marks or Ackman? Who You Gonna Trust?
Howard Marks, the legendary credit investor and Oaktree Capital Management co-founder, has historically taken a humble approach to investing: the macro future is essentially unknowable, so active investors should focus on the small-picture things where they can gain an informational advantage.
US Stocks Are Ripe for Earnings-Led Rally as Rates Angst Settles
A robust earnings season could be all it takes to fuel a year-end rally on Wall Street, eclipsing recent jitters from geopolitical tensions.
Bitcoin’s 10% Jump to $30,000 Hints at Trader ‘Playbook’ for ETF Launches
A brief 10% surge in Bitcoin gave traders a glimpse into the possible impact of a looming US Securities & Exchange Commission decision on whether to allow exchange-traded funds that invest directly in the cryptocurrency.
Goldman Traders Help Counter Real Estate Hits, Stagnant M&A
Goldman Sachs Group Inc. reported trading revenue that beat analysts’ estimates while a second straight quarter of real estate write downs dragged profit lower.
JPMorgan and Citi Pass Pain to Hedge Fund Shorts
JPMorgan Chase & Co. Chief Executive Jamie Dimon calls it “over-earning,” but his isn’t the only bank that still hasn’t felt much pain from loan losses or rising deposit costs
The Federal Deficit Matters Now More Than Ever
A decade ago, the US was deep into a misguided elite-driven freakout about the federal budget deficit. Back then, inflation was low, interest rates were low, and unemployment was high.
Wall Street Strategists Sound Alarm on Worsening Profit Outlook
The outlook for earnings is weakening and could remain subdued, according to strategists from Morgan Stanley to JPMorgan Chase & Co.
End of Corporate America’s Profit Recession Comes With Concerns
Investors are growing more confident that a year-long slump in profits for Corporate America is about to end. Yet a fragile economic outlook, wary consumers and the highest interest rates in 16 years mean any relief for stocks could be short-lived.
US Housing Affordability Worsens to New Record Low on High Rates
US housing affordability worsened to a fresh record low in August as Americans continue to bend under the weight of soaring mortgage rates and sticky prices.
Bank Stocks Need More Than Solid Earnings to Draw Wary Investors
When US banks kick off the third-quarter earnings season Friday, it will mark the first in a long line of hurdles the group needs to clear in order to assuage investor fears.
Amazon Prime Day Flashes Warning for Retailers
Amazon.com Inc. crowed over this week’s Prime Day sales, boasting that the two-day discount promotion “outpaced” last year’s event. Such a flashy description suggests the unofficial kickoff to the holiday season has set up the broader retail industry for a bright few months.
US Consumer Inflation Expectations Jump to a Five-Month High
US consumers’ year-ahead inflation expectations rose sharply in early October, driving a steep deterioration in Americans' views of their finances as well as sentiment.
The US Economy Is Dynamic Again, But Will It Last?
The pandemic changed many things about the economy — how we work, where we work and who we work with, for starters — but one of the most striking trends has been a big uptick in entrepreneurship.
US Mortgage Rates Rise for a Fifth Week, Topping 7.5%
Mortgage rates in the US rose for the fifth week in a row, topping 7.5% for the first time in more than two decades.
Options Are the Hottest Trade on Wall Street
Crypto may have grabbed headlines last year, but the talk on Wall Street these days is all about options.
Hurting From Rate Hikes? The Fed Looks as If It’s Finally Done
Market pricing, verbal cues from Federal Reserve members and the likely evolution of the economic data over the next couple of months all point in the same direction — the central bank is likely done raising interest rates.
How AI Will Remake the Rules of International Trade
When it comes to international trade and investment, AI will create some obvious winners and losers. It’s the second-order effects that may prove more interesting.
What Recession? It’s Looking Increasingly Unlikely
The few remaining signs that the US economy is headed for a recession are vanishing before our eyes.
Elite Wall Street Firms Are Surrendering to $7 Trillion ETF Boom
Getting John Beatson to pick stocks for you used to require a cool $25 million or thereabouts. Thanks to the newest trend in money management, these days it’s more like $25.
Amazon Strategy Could Unlock $100 Billion in Revenue
Amazon.com Inc.’s next big thing might be lurking in the expensive supply chain apparatus that’s helped transform its e-commerce business into a juggernaut.
The SEC Risks Being Ensnared in Its WhatsApp Trap
“Very strict enforcement” is a euphemism used by the American Automobile Association to warn motorists of places where even minor traffic violations will likely be caught and punished with heavy fines.
It’s Easy to Get Mixed Up Over Mortgage Risks
Most voters aren’t going to get hot under the collar about battles in Washington, DC, over bank capital requirements, but they definitely relate to stories about home loans becoming more expensive or less available. That doesn’t mean debate is straightforward, especially once each side starts throwing numbers around.
Stock Market Can’t Ignore Impact of Rates on Earnings This Season
Stock markets that have refused to buckle under the highest yields since 2007 face a new test. Third-quarter results will shine a light on how much those rates are already hitting profits — and what they’ll do to lofty equity valuations.
Wall Street’s Paper Bond Losses Rear Head Again as Yields Rise
After investment losses tore through the US financial system this year, a fresh slump in bank stocks shows some investors fear the problem — which at its most extreme claimed a handful of lenders — hasn’t gone away.
Housing Groups, Mortgage Lenders Urge Powell to Halt Fed Hikes
Three major housing-industry lobby groups called on Federal Reserve Chair Jerome Powell to refrain from raising interest rates any further and to pledge against selling mortgage bonds unless real estate financing stabilizes.
Goldin Took Women’s Careers From Economic Sideshow to Mainstream
Economics is still a male-dominated profession. Among full professors, only 1 out of every 8 is a woman. Among assistant professors, women are a little less than 1 in 3, similar to their share of undergraduate economics majors.
Rout in 10-Year Treasury Notes Is No Wild Aberration
What everyone wants to know now is how much further the selloff will go and how long it will last. I can venture a few educated guesses based on history.
A Hot Options Trade Is Muting Wall Street’s Famous Fear Gauge
For two decades, Amy Wu Silverman has tracked fear and greed across Wall Street by keeping a close eye on the twists and turns in the Cboe Volatility Index.
Hedging Power of Treasuries Tested by Recent Bond Selloff
Even as stocks rallied back during the monetary panic last week, big disruptions in the world of Treasuries threaten fresh pain for a host of hedging strategies on Wall Street.
Musk May Face Someone Else Who’s Ready for a Cage Fight
Denied the dubious spectacle of a cage match between Elon Musk and Mark Zuckerberg, the world may yet be treated to a contest pitting the Tesla chief executive against an underdog from Indiana.
Lending Risk Is Growing Under the Radar
When Congress voted in 2018 to give regional banks a break from stiffer post-crisis capital rules, it created a two-tier banking system in the US.
Deepening Bond Rout Has BlackRock, Columbia Favoring Short End
Bond investors are coalescing around a segment of the Treasuries market that offers a measure of protection from this year’s brutal rout and also positions them for the recession that some still anticipate.
Yield Surge to Hit US Growth But Still No Recession, Goldman Says
Goldman Sachs Group Inc. economists said the surge in US Treasury yields to historically high levels over the last several weeks will crimp economic growth and sow financial risks, though the bank is still not calling for a recession.
Finance CEOs Who Have Stuck It Out for 11 Years Are Eyeing Exit
Executive search firms are anticipating an uptick in resignations as the average tenure of America’s top finance chiefs grows to the longest of any sector, and those who may have delayed leaving to provide stability through the Covid-19 pandemic look to exit.
Treasuries Tumble With US Payroll Growth Blowing Past Estimates
The bond market’s selloff accelerated after a surge in US hiring raised expectations that the Federal Reserve will need to raise interest rates again this year.
US Hiring Surges, Bolstering Case for Another Fed Rate Hike
US employment unexpectedly surged in September by the most since the start of the year, illustrating a durable labor market and bolstering the case for another Federal Reserve interest-rate hike.
US Higher Education Needs a Revolution. What’s Holding It Back?
When the revolution in higher education finally arrives, how will we know? I have a simple metric: When universities change how they measure faculty work time.
New Construction Torpedoed Austin Rents. Is Miami Next?
South Florida has a reputation as a leading indicator of housing market trouble, so the Cassandras are understandably watching the region closely these days.
Wild Week for Bond Market Spurs Record Trading Frenzy in ETFs
Bill Gross is right: bond ETF activity has been frenzied in the grip of Wall Street turmoil.
EM Rebound Fizzles as US Jobs Data Ruin What’s Left of Bull Case
Emerging-market currencies erased their Friday gains and were poised for a third week of declines as a stronger-than-expected US jobs report underscored global interest rates could remain higher for longer.
The 5% Bond Market Means Pain Is Heading Everyone’s Way
Not so long ago, families, businesses and governments were effectively living in a world of free money.
The US Economy Might Be Stuck in Purgatory for a While
Economists, policymakers and politicians are used to there being two variables that serve as a scorecard for how the public feels about the economy — unemployment and inflation. A year ago, when inflation was at 40-year highs, public unhappiness made sense.
Three Myths About the Bond Market
For the last 40 years, interest rates have gone pretty much one way: down. In the last 18 months, however, rates have crept up, and many are worried they will stay high.
Long Bonds’ Historic 46% Meltdown Rivals Burst of Dot-Com Bubble
Losses on longer-dated Treasuries are beginning to rival some of the most notorious market meltdowns in US history.
Bulls Bet Megacap Stocks Primed For Buyback Boost
Bulls hoping the Nasdaq 100’s best day since August is the start of a meaningful rebound may be about to get a boost from a long-standing ally: tech companies themselves.
Fed’s Bid to Avoid Recession Tested by Yields Nearing 20-Year Highs
The Federal Reserve may be putting its hoped-for soft landing of the economy at risk by tacitly accepting a run-up in long-term interest rates to the highest levels since 2007.
There’s No Such Thing as a Cautious Portfolio Anymore
If you go to a financial adviser to chat about investments, here’s how your first meeting will probably go: They will ask you about your attitude to risk. How much money are you prepared to lose?
Bond Vigilantes Risk Breaking the Markets
The queue of soothsayers warning of impending doom is lengthening; growing concern about US domestic politics as well as the global economic backdrop risks sparking a full-blown market rout.
Investors Find Little Reason to Buy Stocks as Rates Fears Spread
It’s getting bleak for equity bulls hoping for a reprieve from the US stock market’s “higher-for-longer” tantrum.
Five Charts Showing How 5% US Yield Would Cause Turmoil in Markets
As global financial markets reel under the possibility of 5% benchmark Treasury yields, the question on investors’ minds: how much worse could it get?
Lina Khan Is Wrong About Amazon
Why exactly is Federal Trade Commission Chair Lina Khan antagonizing Amazon.com Inc., of all companies?
Private Equity Indigestion Relief Is Meant to Hurt
Helping an investor cash out of a gummed-up buyout fund used to be a niche business. Now it’s mainstream. So-called secondary funds, which offer to buy unwanted private equity holdings, have become widely accepted.
UBS Executive Calls For a Retrofit Revolution in Real Estate
Real estate investors need to allocate considerably more resources to climate-proofing old buildings rather than erecting new structures, to keep up with net zero regulations and avoid being saddled with stranded assets.
Morgan Stanley Sees Rates Risk to Stocks. Bank of America Says Not So Much
A pair of Wall Street’s most prominent US equity strategists are at odds about whether stocks can extend this year’s rally against the reality that interest rates will remain higher for longer.
New ETF Boom Defies Saturation Warnings in $7 Trillion Industry
Money-management firms launched new exchange-traded funds at a rapid pace last month, shaking off fears that the $7 trillion industry is already overrun with low-cost investment vehicles.
Manhattan’s Offices Are Empty. Tokyo Is Adding New Space.
Offices in many of the world’s major cities are struggling to find workers to occupy them. The trend of remote working, triggered by the pandemic, is costing Manhattan “$12 billion a year,” “devastating America’s cities” and “killing London.”
Why Central Banks Will Soon Lend to Hedge Funds
Hedge funds are in regulators’ sights again. Their risk-taking with borrowed money must be better monitored and will sometimes have to be limited, the head of a global group of supervisors told the Financial Times last week.
Market Stress Rises Over Wild Week Ahead Even Without a Shutdown
Investors have shown few signs of panic during a stock market slump that’s pushed the S&P 500 Index into its first losing quarter in a year. But beneath the surface, signs of stress are emerging that go far beyond the just averted US government shutdown.
Severe Crash Is Coming for US Office Properties, Investors Say
Office prices in the US are due for a crash, and the commercial real estate market faces at least another nine months of declines, according to Bloomberg’s latest Markets Live Pulse survey.
The Bull Case for Emerging Markets in 2023 Is Finally Shattering
The third quarter was a story of dashed hopes in emerging markets, with the unraveling of some of the most profitable trades in the asset class.
Bitcoin Is Ending September With First Quarterly Loss This Year
As September comes to a close, Bitcoin is poised to end the quarter on a down note in its first quarterly decline this year.
Wall Street Echoes Fed’s View on Growth, Higher-for-Longer Rates
Wall Street economists are growing more upbeat about US economic growth while acknowledging that it may require interest rates to stay higher for longer, in line with recent projections by the Federal Reserve.
Once Unthinkable Bond Yields Are Now the New Normal for Markets
It was the week that bond markets finally seemed to grasp what central bankers have been warning all year: higher interest rates are here to stay.
The Geography of Working From Home Begins to Shift Again
The Oakland Hills Public Use Microdata Area, or PUMA (a Census Bureau designation that I’ll explain in a moment), in Oakland, California, contains some of the most appealing urban neighborhoods in the US.
Millennials, Keep Your Avocado Toast and Ditch the Dream House
Avocado toast, hard seltzers, and Instagrammable vacations are not the reasons millennials and our Gen Z compatriots have failed to scrimp, save and budget our way into home ownership.
Megacap Slump Is Testing Apple’s Safe-Haven Status
The Fed-induced selloff in technology stocks has traders dusting off their turmoil playbooks. Trouble is, one of the most popular strategies isn’t working: hiding out in Apple Inc.
House Omits Ukraine Funding for Now in Measure to Avert Shutdown
Lawmakers in the US House omitted further aid to Ukraine from a proposal that would keep the government open, signaling that support for funding its fight against the Russian invasion is getting harder.
Make Student Loans Work for Students
Amid the debate over student loans — President Joe Biden’s administration tried and failed to forgive some of the debt, which starts accruing interest this month after a three-year pause — a crucial question has often been overlooked: Who benefits the most from student loans? It’s not necessarily the students.
Jamie Dimon’s 7% Rates May Come Even Without the Fed's Help
The Federal Reserve’s hawks have been back on the speaking circuit,and markets are abuzz that rates may have to move higher than previously expected. Someone apparently just took out a big short position premised on the chances that rates markets underestimate the odds of an increase in November.
Puerto Rico Is Being Far Too Generous With Rich Investors
Since 2012, Puerto Rico has offered investors — primarily mainland Americans — one of the most attractive deals in the world: move to the commonwealth and pay no taxes on interest, dividends or capital gains, all while living on a balmy and culturally vibrant Caribbean island without having to surrender US citizenship.
Powell Can’t Ignore the Elephant in the Room Forever
For all the importance of China’s subpar recovery, the country's woes are notably absent from the plethora of projections and commentary that flow from the Federal Reserve these days. Judging from recent remarks, there's either no problem or nothing sufficiently grave to prod Chair Jay Powell to hint at switching gears. Give it time.
Mark Zuckerberg Manages to Turn His Frown Upside Down
In what has been a hugely disruptive year for social media, Zuckerberg seems to be coming out on top — and enjoying it.
This Year’s Hottest Tech IPO May Be a Transportation Firm
Share debuts among technology companies haven’t inspired confidence this year, with two of the largest offerings sliding below their listing prices within the first week. The next big deal may reignite interest in IPOs because of a unique set of traits.
US Core PCE Prices Post Smallest Monthly Rise Since Late 2020
The Federal Reserve’s preferred measure of underlying inflation rose at the slowest monthly pace since late 2020, helping to lay the groundwork for policymakers to forgo an interest-rate hike at their next meeting.
JPMorgan Manager Behind Biggest Active ETF Debuts Fund
The JPMorgan Asset Management money manager at the helm of the largest active exchange-traded fund in the $7.2 trillion industry is coming to market with another equity strategy geared toward investors bracing for a period of uncertainty.
Russia Plans Near Zero Diesel Exports Next Month After Ban
Russia plans to reduce diesel exports from its key western ports to almost nothing next month after the government banned overseas sales to tame surging prices at home.
Where Are All the Private Equity Bankruptcies?
Few companies have felt the shock from soaring interest rates as much as those owned by private equity. But thanks to surprisingly resilient earnings and their deep-pocketed owners’ talent for financial engineering most are avoiding disaster.
Private Fund Investors Don’t Need the SEC’s Help
If a teacher, electrician or autoworker buys a stock or a share in a mutual fund, the Securities and Exchange Commission aims to ensure they’re investing on a level playing field.
Risks Are Growing of a Double-Dip ‘Vibecession’
The US may be heading back into a “vibecession” — a condition in which consumer confidence and other economic “vibes” decline so much that they threaten to become self-fulfilling prophecies and drag the economy down with them.
Goldman’s Rubner Sees Deeper Stock Losses in a ‘No Rules Market’
The two-month selloff in US stocks threatens to intensify as options dealers on Wall Street and fast-money traders both turn against the market.
Missing ‘Gold Standard’ Economic Data Will Test Alternatives in US Shutdown
The imminent US government shutdown that threatens to delay the publication of key economic data will test policymakers’ and investors’ trust in a range of less-regarded third-party indicators.
Bitcoin's Refuge Appeal Being Touted Again With Shutdown Prospects Rising
The increasing prospects of a US federal government shutdown has some Bitcoin advocates predicting a rally similar to one that happened in response to the regional bank crisis earlier this year.
S&P 500 Options Quirk Mints Billions, Stirring Manipulation Talk
The fate of stock options with a face value of trillions of dollars is being influenced by unusual trading activity in the S&P 500 outside regular market hours, new research has found.
Treasury ‘Term Premium’ Gauge Positive for First Time Since 2021
A key measure of how much bond investors are compensated for holding long-term debt turned positive for the first time since June 2021, reflecting steep increases in longer-maturity Treasury yields.
Transparency Is the Cure for High Hospital Prices
If you are tiring of the green energy revolution and can’t quite get on board with the mission to Mars, yet still would like to join a worthy cause with the potential to transform millions of lives, allow me to make a recommendation: transparent hospital pricing.
Use the Estate Tax to Finance Early Childhood Education
So, here’s an idea: Dedicate the revenue collected from the estate tax into a trust fund that finances early childhood education, spanning childcare to preschool.
Automakers, It Won’t Hurt to Share That Buyback Bounty
Stock buybacks are the perfect target for the United Auto Workers. The freest of free cash flow, they may as well be a billboard saying: “So many dollars, we don’t know what to do with them!”
US Government Shutdown’s Economic Risks Grow the Longer It Lasts
A US government shutdown would have a cascading economic effect, beginning mildly and deepening over time as millions of workers go without salary, private contractors aren’t paid and consumer uncertainty grows over Washington’s dysfunction.
Tech Stocks That Drove Market Rally Are Now Down 10%
This stock market rally in the first half of 2023 was built on the back of technology stocks, as investors bet on a resilient US consumer and hype surrounding artificial intelligence to keep the shares soaring.
Wall Street Bets on High-Yielding Cash Deals in Fresh Blow to Stocks
The stock market is buckling under the weight of a simple equation: cash earns more than equities.
Amazon Makes a Shrewd Move in the AI Arms Race
On Monday, Amazon.com Inc. made a move it hopes can turn around the perception it had fallen behind in the AI arms race.
US Government Needs a Youth Movement. A Shutdown Won’t Help.
One of the longer-term consequences of the looming government shutdown isn’t getting the attention it deserves: The youngest potential recruits are receiving yet another reminder of the challenges of public service, and at a time when they are desperately needed.
Gensler Reminds Hedge Funds He's Still Sheriff of Wall Street
The chair of the Securities and Exchanges Commission has asked staffers to pore over thousands of messages collected from investment firms as part of its probe into industry use of WhatsApp and other non-official messaging channels, according to Reuters.
Nvidia’s Worst Month in a Year Is a Gift For Bulls
Investors that missed out on this year’s dizzying rally in Nvidia Corp. have an attractive entry point this month.
Hedge Funds Cut Stock Leverage at Fastest Pace Since 2020 Crash
As the cross-asset sell-off engulfed Wall Street last week, hedge funds ramped up their bets against stocks while one measure of their market positioning plunged the most since the March 2020 crash.
Bond Traders Roiled by Fed See US Shutdown as Next Big Wild Card
To judge by recent history, a US government shutdown won’t be a huge event for the bond market. If anything, it could even provide a little short-term relief, since Treasuries usually rally when investors need somewhere to hide.
High-Frequency Traders Want Low-Frequency Radio Waves
A group of high-frequency traders, market makers and service providers calling themselves the Shortwave Modernization Coalition has asked the Federal Communications Commission for access to the shortwave band of the radio spectrum, seeking to shave crucial milliseconds off the transmission of data between major financial sectors.
Ackman Doubles Down on Bond Short That’s Still Flawed
Some seven weeks ago, hedge fund investor Bill Ackman laid out his rationale for shorting long-term US bonds, and I took exception.
Bond Market Faces Quandary After Fed Signals It’s Almost Done
Bond investors face the crucial decision of just how much risk to take in Treasuries with 10-year yields at the highest in more than a decade and the Federal Reserve signaling it’s almost done raising rates.
Morgan Stanley’s Wilson Sees Risks Rising for US Consumer Stocks
Consumer stocks, one of the brightest corners of the market this year, are about to lose their shine as risks build for the sector, according to Morgan Stanley’s Michael Wilson.
Stocks Flash Recession Warning as Trouble Spreads to Industrials
US small-cap and industrial stocks are dropping, typically signals of a recession, but in a year where equities have already beaten expectations some investors are dismissing the moves as little more than noise — for now.
Fed’s Cook Sees Signs of AI Improving US Labor Productivity
Federal Reserve Governor Lisa Cook said the use of artificial intelligence in the economy presents many unanswered questions for policymakers though there is some evidence that it could improve labor productivity.
Wall Street Strategists Turn Ever Bullish Just as Stocks Slump
Call it another case of bad timing for Wall Street strategists. The group, historically known to have a bullish bent, spent most of this year saying US stocks would end lower in 2023. Instead, the S&P 500 Index rallied 16% in the first half.
Treasury Buyback Plan Will Boost Market Resilience, US Debt Official Says
The resilience of the world’s biggest bond market is top priority as US debt officials prepare to start buying back government debt, according to Josh Frost, the Treasury Department’s assistant secretary for financial markets.
Another Yield High as US 10-Year Jumps Above Key 4.5% Level in Post-Fed Bond Rout
Treasury 10-year yields rose above 4.5% for the first time since 2007 as a more hawkish Federal Reserve adds to concern the bonds face a toxic mix of large US fiscal deficits and persistent inflation.
Did Powell Just Stamp Out Bankers’ Green Shoots?
Investment bankers were finally starting to believe in the green shoots of capital-markets activity this month, but the Federal Reserve might now have crushed them under hawkish boots.
Private Equity Won’t Diversify Your Portfolio
Low interest rates can lead people to rationalize all sorts of bad ideas: investing in companies that will never make a profit, financing share buybacks with debt, spending billions on terrible streaming content, to name a few.
Stocks Sink Most in Six Months After Recent Runup in Treasury Yields
A bad week on Wall Street turned dismal Thursday after the relentless surge in Treasury yields sapped demand for risk assets. In the end, US stocks suffered the biggest drop in six months as investors recalibrate for a world where rates sit at levels not seen in a generation.
Nvidia CEO Touts India as Major AI Market in Bid to Hedge China Risks
During a five-day tour of India earlier this month, Nvidia Corp. Chief Executive Officer Jensen Huang visited four cities, dined with tech executives and researchers, took numerous selfies, and sat for a one-on-one conversation with Prime Minister Narendra Modi about the AI sector.
Cathie Wood’s Ark Buys Rize ETF in Big Bet on European Growth
Cathie Wood’s Ark Investment Management has acquired a fellow exchange-traded fund issuer in its biggest push yet into Europe’s nascent market for trend-driven investing.
More Labor Strife Is Coming to the US Economy
Labor strikes aren’t cheap. Equipment sits idle. Supply chains get gummed up. Workers lose wages, shareholders lose profits, governments lose tax revenue. All these effects can have an adverse impact on economic growth, employment and inflation.
Fed’s Debate About ‘Neutral’ Is Mostly an Exercise
The Federal Reserve’s internal debate about the “neutral” real rate of interest is heating up.
Bond Traders See Yields Marching Higher After September Fed Meeting
Bond traders are bracing for Treasury yields to keep pushing higher after the Federal Reserve signaled it’s likely to hold interest rates at lofty levels well into next year.
Amazon Debuts Generative AI Alexa, New Smart Glasses and TV Sticks
Amazon.com Inc. made a pitch to keep Alexa relevant in the age of generative artificial intelligence, promising a set of features that will make the software more conversational.
BlackRock, State Street Among Money Managers Closing ESG Funds
BlackRock Inc. and other money managers spent years rolling out sustainable funds, seeking to capitalize on surging interest in ESG investing. Now they’re abandoning an increasing number of those products in the US amid political backlash and investor scrutiny.
Barr’s Battle Over US Bank Capital Rules Looks Lonely
Banks are never fans of tougher regulation, but they really don’t like the overhaul of US capital rules proposed at the end of July by the Federal Reserve and other finance authorities. Lenders and their lobbyists have come out fighting.
Inflation or Recession? CEOs Will Decide Next Month
Consumers might still be benefiting from inflation pressures abating, but the same is no longer true for corporations.
Treasury Yields at Highest Levels Since 2007 on Price Concerns
US five- and 10-year yields rose to the highest levels since 2007 after hotter-than-anticipated inflation data in Canada and rising oil prices added to global concerns about resurgent price pressures.
Big Seven Face Test on How Far Rally Can Run
Investors have had a lot thrown at them this year: more Federal Reserve tightening, a regional banking crisis, and geopolitical turmoil. And yet US stock indexes are on track for a stellar year.
Only Fund Beating Nasdaq Long-Term Is Defying Stock-Picking Odds
For active managers, the math is stark. Out of thousands of mutual funds, literally only one beat the Nasdaq 100 over the last five, 10 and 15 years. It did so by boiling down stock picks to about two dozen companies and riding almost all of them to gains.
Bond Mountaineers Easily Scale the Maturity Wall
These days, high-yield US bonds yield just 378 basis points over Treasuries, more than 2 percentage points below the 2022 high and close to the narrowest gap since the Federal Reserve started raising interest rates last year.
Will the Fed Start Believing in a Soft Landing?
Can the Federal Reserve engineer a soft landing, in which it defeats excessive inflation without tipping the US economy into recession? This week, Fed officials will offer important clues as to whether that’s achievable.
Sub-50 Cent Price on Treasury Bond Underscores Investor Pain
Fifty cents on the dollar is a very low price in the world of bonds. In most cases, it signals that investors believe the seller of the debt is in such financial distress that it could default.
S&P 500 Marks 100 Days Without 1.5% Drop, First Time Since 2018
US stocks continued their slog through the end of summer, but the S&P 500 Index just notched a resiliency milestone not seen in five years.
The Most Popular Options Trade Turns a $1 Investment Into a $1,000 Stock Bet
There’s an invisible force driving the most popular options trade of the year — one that gives Wall Street pros and day traders alike the power to turn a $1 investment into a $1,000 stock bet.
Bidenomics Is Having an Unusual Effect on Deficits
Economists are playing a game of “can-you-top-this this,” seeing who can ramp up their US economic growth forecasts the most.
Dalio’s Shakespearean Turn Is a Sign of the Times
Playing Shakespeare’s King Lear is the crowning ambition for some actors, but in 2023 we’re seeing superstar hedge fund managers Daniel Och and Ray Dalio trying out for the role in real life.
Fed’s Higher-for-Longer Mantra Has Doubters in Bond Market
Amid signs the bond market has bought into the Federal Reserve keeping interest rates higher for longer, a cohort of investors is placing bets on the economy hitting a wall — and a sharp policy reversal in short order.
Wall Street Comes to Grips With How Wrong It’s Been in 2023
Stock-market strategists who were largely wrong about this year’s rally are finally starting to come to face their mistake, raising year-end targets for the S&P 500 Index.
Bond Market at Risk of Third Annual Loss Needs a Dot-Plot Rescue
Federal Reserve policymakers’ updated forecasts for their benchmark interest rate, due Wednesday, are looming as a key potential decider for a US Treasuries market at risk of a third straight year of losses.
Ray Dalio Says He Doesn’t Want to Hold Bonds, Cash ‘Is Good’
Bridgewater Associates LP founder Ray Dalio said he doesn’t want to own bonds and prefers cash, highlighting difficulties investors face as global central banks try to manage inflation.
BofA’s Hartnett Says Equity Inflows Surge on Soft Landing Hopes
Equity funds saw the biggest weekly inflow in 18 months amid growing investor confidence the US economy is headed for a soft landing, according to Bank of America Corp.
Cathie Wood, Boaz Weinstein Among Winners From Bitcoin Fund Bet
A host of Wall Street funds have minted profits riding the recent crypto fever after Grayscale Investments LLC snagged a big win over America’s top financial watchdog in its bid to create a US Bitcoin ETF.
Fed Is Likely to Shy Away From Calling Interest-Rate Peak Next Week
Federal Reserve Chairman Jerome Powell and his colleagues are likely to shy away from signaling that they’re done raising interest rates when they meet next week.
Tom Wolfe and the Birth of the Quant Revolution
Watching the new Tom Wolfe documentary, Radical Wolfe, I was reminded of the key role the author and journalist played in the development of quantitative finance.
Why Are Consumers Still So Gloomy? Blame Covid.
Americans are downbeat about the economy, even as inflation rates rapidly decline back toward more normal levels, the unemployment rate has held below 4% for the longest stretch since the late 1960s and economists race to raise their growth forecasts.
Fed Seen Signaling One More Hike and Pushing Out 2024 Rate Cuts
A resilient US economy will prompt the Federal Reserve to pencil in one more interest-rate hike this year and stay at the peak level next year for longer than previously expected, according to economists surveyed by Bloomberg News.
A $4 Trillion ‘Triple Witching’ Event Endangers Stock Market Calm
All week, stock traders have shrugged off everything from hot inflation data in the US to another recession-threatening hike in interest rates over in Europe.
Dow Industrials Paying Price for Leaving Out Amazon and Alphabet
For a lesson in the pitfalls of market timing, consider the Dow Jones Industrial Average, whose refusal of admission to Alphabet Inc. and Amazon.com Inc. has gone from a blessing to a curse in the space of a year.
The Future of Unions Looks Very Different
The labor movement is having a moment. In a tight employment market, there is money to be had — or profits to be more generously shared — and workers have gotten some big wins recently. Even reality TV stars and NFL running backs are getting into it.
What Shifting Stock-Bond Correlations Mean for Your Money
A recent paper analyzing the correlation between stock and bond returns going back to 1875 suggests the relationship of the past quarter century is shifting in an uncertain inflationary environment. The results might stimulate some investors to rethink their portfolio allocations.
Emerging Markets Boosted by Interventions as Rate Fears Grow
Expectations of central-bank interventions are helping to steady emerging-market currencies, even as traders adjust to a higher-for-longer regime for developed market interest rates.
The Bond Market Has Never Sounded Recession Alarms for This Long
The US bond market hasn’t flashed recession warnings so consistently for so long in at least six decades.
Zero-Day Options Boom Is Spilling Into $7.4 Trillion ETF Market
This year’s hottest options trade has found its way into the $7.4 trillion ETF arena for the first time, in the latest push by the financial industry to tap booming demand for stock investments with an income stream.
A Huge Lithium Discovery That Economists Were Expecting
When I first read about the discovery of a vast new deposit of lithium in a volcanic crater along the Nevada-Oregon border, I can’t say that I was surprised.
Two Odes to Elon Musk’s Genius Need a Grain of Salt
This week saw the release of another ode to the genius of Elon Musk, gushingly accepting his pronouncements at face value. Also, Walter Isaacson published a book about him.
New CLO Managers Eye $1.3 Trillion Market, Betting on Return
A flurry of hedge funds, direct lenders and others are expecting a revival of the $1.3 trillion collateralized loan obligation market — and they want to be ready to reap the benefits when it happens.
US Core CPI Picks Up, Keeping Another Fed Hike in Play This Year
Underlying US inflation ran at a faster-than-expected monthly pace in August, leaving the door open for additional interest-rate hikes from the Federal Reserve.
US Is Looking to Offload Nearly $13 Billion of MBS Seized From SVB and Signature
The US government has been looking at ways to offload nearly $13 billion of mortgage bonds it amassed from failed lenders Silicon Valley Bank and Signature Bank, according to people with knowledge of the transactions.
Worried About the American Consumer? Don’t Be.
Arguably, the biggest question about the US economy right now is whether consumers can maintain their pace of spending. Student loan payments resume in October.
Mergers Will Lead to a Better Banking Industry
For banks in 2023, one message is coming through clearly: Scale is good.
Morgan Stanley Sees Dojo Boosting Tesla’s Value by $500 Billion
Tesla Inc.’s Dojo supercomputer may add as much as $500 billion to the company’s market value through faster adoption of robotaxis and network services, according to Morgan Stanley.
Treasury Bills Yielding 5% Are a Big Hit With Retail Investors
Everyone — from moms and pops to corporate treasurers and the mega asset managers — is piling in, won over by a unique opportunity: To lock in a 5% yield, and protect themselves from uncertainty over the US economy.
BofA Survey Shows ‘Dramatic Shift’ Toward High-Flying US Stocks
Concern over China’s sputtering economy has created a “dramatic shift” in investors’ equity allocation — a rush toward the US and an exodus from emerging markets, Bank of America’s latest global fund manager survey showed.
Bigger Financial Cushions Won’t Solve Banks’ Woes
US banking regulators are back to their old tricks. In the wake of a crisis — this time the March demise of a handful of regional banks — they want banks to fund themselves with more loss-absorbing equity capital.
Fed’s ‘Last Mile’ of Inflation Fight Will Be No Cakewalk
All eyes this week will be on the release of the US consumer price index for August on Wednesday, especially after the sharp reduction in inflation from 9.1% in June 2022 to just more than 3% in July.
Morgan Stanley ‘Last Bull Standing’ on Treasuries as Peers Shift
Morgan Stanley has pushed back against Treasury bears, saying investors should buy US sovereign debt as markets may be too optimistic over the prospect of a soft-landing for the economy.
ETF Investors Pour Cash Into EM’s Non-China Growth Engines
Traders in the $325 billion industry for emerging-market exchange-traded funds are shifting cash toward strategies that focus on brighter spots in the developing world as China’s economy stumbles.
Fear of Stock Market Dive Creeps Back as Hedging Costs Climb
The S&P 500 Index’s surprise 16% rally this year is rewarding traders who bought in early and punishing those who’ve remained skeptical. But fear of a downturn remains.
China Is Being Left Out by a Record Number of New EM Stock Funds
Launches of emerging-market equity funds that exclude China have already reached a record annual high in 2023, as investor concerns grow over weak returns as well as the risks of investing in the nation.
Apple Risks Getting Overtaken by Bigger AI Players, Needham Says
Apple Inc. is by far the world’s largest company, but the trend toward artificial intelligence is poised to upend the power rankings on Wall Street, according to Needham.
Blackstone Says Private Credit Is Coming for Asset-Based Debt
Private credit lenders are just getting started in the world of consumer and asset based finance, according to Rob Camacho, Blackstone Inc.’s co-head of asset based finance within the firm’s Structured Finance Group.
Dollar’s Relentless Rally Set for a Boost From Higher Oil Prices
Surging oil prices are set to power the next leg of the dollar rally, as the US economy benefits from its rise as an energy exporter.
Widening Wealth and Inequality Gaps Have Limits
A staff report from the Federal Reserve Bank of New York titled “Capital Management and Wealth Inequality” comes to some remarkable Marxist conclusions.
Despite Political Pressure, the Fed Should Hold Firm
Two essential questions are facing the US economy right now: whether the Federal Reserve’s next change in its policy rate will be a cut or an increase, and whether the central bank’s inflation target of 2% needs to change.
Wall Street’s Biggest Bear Ditches Call for 11% S&P Drop in 2023
One of Wall Street’s biggest stock-market pessimists dialed back his bearish forecast for the S&P 500 Index.
BofA’s Hartnett Says Higher-for-Longer Rates Set to Hurt Stocks
The rising threat of interest rates staying higher for longer is likely to dent prospects of a soft landing for the US economy and drive a selloff in stocks over the next two months, according to Bank of America Corp. strategists.
Barclays Has Much at Stake in the Fintech Future
Barclays Plc is trying to work out how to make the best of its payments business in its quest to increase the appeal of its shares. One option is selling a stake in the unit that handles card transactions for shopkeepers and other businesses, Bloomberg News reports.
Cities Need People, People Need Homes. Both Must Wait.
There’s a growing consensus that we need more housing and less office space as cities move forward with plans to transform themselves in a post-pandemic world.
Traders Unfazed as Soft-Landing Calls Stoke Bets on Market Calm
As soft-landing calls engulf Wall Street, traders are betting that a market calm will endure across investing strategies — despite the latest selloff in US stocks and bonds.
Regional Banks May Need to Sell $63 Billion in Bonds Under Rule
US regional banks may need to raise significant amounts of additional debt to comply with new regulatory requirements, but the extra capital might not be enough to prevent future failures, according to research published Wednesday.
21Shares and Cathie Wood’s ARK File for First US Spot-Ether ETF
Crypto exchange-traded-products issuer 21Shares and Cathie Wood’s ARK Investment Management are seeking to offer the first US ETF that invests directly in Ether.
Fed Can’t Disregard Another Inflation Head Fake
Reported inflation has been improving for months, but Federal Reserve policymakers are still understandably worried that it’s a head fake — perhaps none more than Governor Christopher Waller, who has repeatedly referenced the risk of being hoodwinked by the data.
Who Needs a Bitcoin ETF? Actually the SEC Does.
Should the US Securities and Exchange Commission approve an exchange-traded fund focused on the spot market for Bitcoin? The question has yet again gained relevance, thanks to the District of Columbia Court of Appeals, which last week reversed the SEC’s decision to reject a Bitcoin ETF proposed by Grayscale Investments.
Crypto Market-Making Profit Margins Sink 30% in ‘Wake-Up Call’
Market making in digital tokens used to be a font of outsized profitability. The picture today is very different as costs jump and investors avoid a crypto sector scarred by a $2 trillion rout.
Quant Firm Man Numeric Aims to Go 100% Electronic for Credit Trades By 2025
An electronic trading revolution is finally coming to corporate bonds, years after reaching other financial markets.
Fed’s Debt Runoff Is ‘Painless’ at $1 Trillion Mark, With Bigger Test Ahead
The Federal Reserve has now offloaded about $1 trillion of its bond holdings since it began working down its bloated balance sheet last year, with no sign of the kinds of strains in financial markets that spooked policymakers the last time they oversaw such a program.
The AI Hype Has Subsided, But the Revolution Continues
We seem to be in what I can only call an “AI lull.” The initial excitement about ChatGPT, which started in January, has receded. Google searches for ChatGPT peaked in April and are now down significantly, as is customer engagement with ChatGPT.
Summer’s End Is Ushering In a Recessionary Chill
When future economic historians write of our times, the thrust will be that it was a time of transition.
Vanguard Sees EM High Grade Debt as ‘Rainy Day’ Bet Amid US Risk
Investment grade bonds from select emerging market sovereigns are solid defensive bets if the US slips into recession and China’s economy worsens, according to Vanguard Asset Services.
Nvidia’s Rally Is Going to Show Traders What a Market Bubble Looks Like, Rob Arnott Says
For years now, stock traders have been getting so rich betting big companies will get even bigger that they’ve forgotten what a bubble looks like. They’re going to find out thanks to Nvidia Corp.
Fed’s Bostic Says US Faces a ‘Shaking Out’ on Refinanced Debts
Federal Reserve Bank of Atlanta President Raphael Bostic said the US economy faces a period of some disruption as debts are refinanced at significantly higher interest rates, putting some pressure on both financial institutions and the government.
US Payrolls Rise by More Than Forecast While Wage Growth Cools
US hiring picked up in August and wage growth slowed, offering a mixed picture of both resilience and moderation in the labor market.
Paging Dr. GPT? Tech Investors Bet AI Finally Poised to Transform Health Care
Top venture firms are betting that rapid advances in artificial intelligence and the public fascination with ChatGPT will help tech startups to transform healthcare after years of Silicon Valley struggling to move the needle in the industry.
Pimco Taps Battered Mortgage Bonds as Credit Gets Expensive
Investors looking for extra yield are driving corporate bonds to some of their tightest valuations of the year, pushing money managers including Pacific Investment Management Co. toward mortgage debt that looks much cheaper.
UBS’s Biggest Win? Escaping Credit Suisse’s Stigma
UBS Group AG faced two big questions about its emergency rescue of Credit Suisse Group AG: How much profit would it make on the bargain deal? And would the distractions or taint of taking over the failing bank hurt its own business?
Weird, Yes, But Housing Really Needs a Slower Economy
The hope for the US resale housing market a year ago was that inflation would peak, interest rates would fall, and lower mortgage rates would help unfreeze the buying and selling of existing homes. That hasn't happened.
The US, Allies See Opportunity and Risk in China’s Slowing Economy
In China’s current economic travails, US and other Group of Seven nations increasingly see evidence of deep-seated structural problems that ultimately will strengthen the West’s hand against a weakening geopolitical competitor.
Active ETFs Cash In on Corporate Reform in Japan
Actively managed exchange-trade funds are set to launch in Tokyo next week, with one asset manager focusing its strategy on corporate Japan’s effort to elevate shareholder returns.
SEC Defers Decisions on Fidelity, BlackRock Bitcoin ETFs
The US Securities and Exchange Commission delayed making a decision again on whether to approve the first US exchange-traded fund that invests directly in Bitcoin, disappointing advocates just days after a court ruling viewed by many as clearing a path for the long-awaited product.
Gutsy Tesla ETF Wants to Time Bets on Famously Volatile Shares
Shares of Tesla Inc. are famously among the most-volatile in the market, but one exchange-traded fund issuer reckons it can time its bets on the electric-vehicle maker to amplify gains and cushion declines.
IPO Drought Is Ending, But Don’t Expect a Deluge
The US market for initial public offerings is finally reopening after the sleepiest stretch in 32 years. Grocery delivery business Instacart, data automation provider Klaviyo and semiconductor designer Arm Holdings Ltd. all filed to go public last week.
A Mammoth Industry Hidden by Private-Label Chips
A global surge in demand and subsequent shortage of key industrial components has turned companies like Nvidia Corp., Taiwan Semiconductor Manufacturing Co. and ASML Holding NV into hugely influential names.
Credit Card Debt at $1 Trillion Is a Sign of Consumer Strength
US household finances have reached a milestone by accumulating $1 trillion in credit card debt, which comes with an average interest rate of 20.6%.
Wall Street Prepares for $15 Billion Spree of Risky Buyout Debt
A $15.4 billion wave of debt is set to sweep over leveraged finance markets in September as Wall Street banks rush to lure in yield-hungry investors.
The Ides of Goldman Sachs and the Fate of David Solomon
The New York Times, Wall Street Journal, New York Magazine and The Economist have all piled on, questioning Solomon’s performance in his day job as chief executive officer of Goldman Sachs Group Inc.
Grayscale’s Bitcoin Win Is Still Only Half the Battle
News that a Washington DC Court of Appeals ruled in favor of Grayscale Investments LLC over the Securities and Exchange Commission has ignited hope that a Bitcoin exchange-traded fund will soon be available. Bitcoin prices jumped.
Sure, Consumers' Savings Are Down, But So Is Their Debt
Even with elevated consumer prices and high borrowing costs, Americans continue to spend at a solid clip, complicating the Federal Reserve’s efforts to tame inflation.
Most US College Grads Say Trade Skills Bring Better Job Security
With electricians, plumbers and other professionals in high demand, many Americans fresh out of university are questioning whether their expensive education was worth it.
Bitcoin ETF Deadlines Loom Again for SEC Ahead of Labor Day Weekend
The journey to a potential Bitcoin ETF has so far been long and arduous. But some key decisions in the race are likely coming this week as crypto faithful await to see how things play out this time.
Wall Street Reels From Painful August as Winning Trades Go Sour
The world’s most powerful central bankers have vowed in unison to keep interest rates higher for longer if necessary to tame inflation.
Fusion Research Shouldn’t Be a Nuclear Weapons Side Hustle
If humanity survives for thousands more years, our primary energy source could very likely be nuclear fusion. It’s clean, the fuel is inexhaustible and cheap, and there’s no risk of a meltdown.
Fed’s Job Would Be Easier With Smarter Fiscal Policy
Federal Reserve Chair Jerome Powell briskly dispensed with the idea of raising the central bank’s inflation target in his speech at the Jackson Hole conference last week. But the idea isn’t going away.
Just How Unaffordable Is the US Housing Market?
You hear a lot these days how unaffordable housing has become in the US. One way to think about affordability is to look at home prices relative to household incomes.
Student Loan Payments Restart Will Dent US Housing Market, Survey Finds
The resumption of US student-loan payments in the coming weeks will deal a significant and lasting blow to the housing market, according to a new survey of real estate professionals.
Bitcoin’s Dirty History Offers a Lesson for AI’s Future
Surging interest in artificial intelligence systems will add further strain to global electricity grids with the potential to rival the massive energy consumption of Bitcoin. Thankfully, the premier cryptocurrency has shown us a way to mitigate the impact.
Banks Need More Capital, Not a New Rulebook
At 1,087 pages, a recent proposal to change capital rules would surely make life more complicated for big US banks. But will it make them safer?
Treasuries Woo Buyers as Juicy Yields Offset Powell Warning
Beaten-down US Treasuries are proving irresistible to some investors even after Federal Reserve Chair Jerome Powell said he’s ready to raise interest rates again to choke off inflation.
Traders Have S&P 500 Comebacks Fading at Historic Pace
Surprised that the S&P 500 swung into the green Friday? Don’t worry. Just wait. It’ll fall again after the next opening bell.
Powell Signals Fed Will Raise Rates If Needed, Keep Them High
Federal Reserve Chair Jerome Powell said the US central bank is prepared to raise interest rates further if needed and intends to keep borrowing costs high until inflation is on a convincing path toward the Fed’s 2% target.
Bond Market Losses Are Finally Over, Unless Yields Blow Past 6%
As brutal as it’s been for US bond investors, the math is finally turning in their favor.
AI Won’t Save Tech Stocks From Trouble, BofA’s Hartnett Says
Technology stocks are in trouble, with the buzz around artificial intelligence set to be overshadowed by the effects of higher-for-longer interest rates, according to Bank of America Corp. strategists.
Powell Signals Further Hikes Will Come If Needed
Federal Reserve Chair Jerome Powell signaled the US central bank is prepared to raise interest rates further if needed and keep borrowing costs high until inflation is on a convincing path toward the Fed’s 2% target.
Nvidia Market Reaction Shows US Rally Is Over, Morgan Stanley’s Wilson Says
The drop in US stocks on Thursday despite a bumper report from Nvidia Corp. shows the rally this year is “exhausted” and portends more declines to come, according to Morgan Stanley’s Michael Wilson.
The Dollar Is the Fortress China Struggles to Breach
If this is what a bad year for the dollar looks like, I'll take it. Widespread predictions of a significant retreat after a bumper 2022 haven't come to pass.
Stock Funds Can Be Difficult to Compare. Try This.
The holy grail of stock investing is buying great companies on the cheap. Stock picker Peter Lynch plied a variation of that strategy to fame and fortune in the 1980s using his so-called PEG ratio.
Vanguard Wannabe Faces SEC Battle to Mimic Tax-Slashing Funds
Vanguard Group’s best-of-both-worlds stranglehold over the money-management industry is facing a new kind of challenger.
Bond Traders Are Obsessing Over This Gauge Before Jackson Hole
An abstract interest-rate metric is dominating discussions across trading desks ahead of the Jackson Hole symposium, with investors wondering if Federal Reserve Chair Jerome Powell will weigh in, and bracing for further declines in US Treasuries if he does.
Retail Traders Are Driving Up to 40% of Zero-Day Options Boom
Day traders are far more active in the booming world of zero-day stock options than Wall Street realizes, according to the exchange at the center of the frenzy.
Powell Has Already Hinted at Where He Stands on ‘Neutral’
Central bankers generally believe in an abstract phenomenon known as the neutral real rate of interest, or r-star. It’s the inflation-adjusted rate that should prevail when the economy is balanced with price increases subdued and the labor market healthy.
The Secret to Earning $1 Billion by Doing Nothing
Until recently, I thought rising interest rates were — on balance — bad for businesses. In fact, many big companies are benefiting from the fastest rate-hiking cycle in decades, at least in purely financial terms.
Bond Buyers Haven’t Had It This Good Since the Financial Crisis
The prospect of global interest rates remaining higher for longer is tipping the case for many investors to switch into bonds from stocks.
Bank of America Disputes Goldman Logic on Zero-Day Option Threat to Stocks
The heated debate on the threat posed by the boom in stock derivatives that expire within 24 hours is pitting two of Wall Street’s biggest banks against each other.
Can Oxford and Cambridge Save Harvard From ChatGPT?
Artificial intelligence (AI) is capable not just of disrupting higher education but of blowing it apart. The march of the smart machines is already well advanced. AI can easily pass standardized tests such as the GMAT (Graduate Management Admission Test) and the GRE (Graduate Record Examination) required by graduate schools.
Fanuc’s Road to Redemption Runs Through India (and the Fed)
The Japanese factory automation and robot maker last month lowered its full-year operating income forecast by 24% because of a sharp slowdown in China and high inventories that could linger into next year. Its shares were quickly dumped and have continued to slide.
Nvidia Earnings Are High-Stakes Event for AI-Crazed Markets
Big Tech’s earnings season is wrapping up with a bang: Nvidia Corp., at the center of the artificial intelligence frenzy, is reporting results that could set the tone for global stock markets for the rest of the year.
Vanguard’s Tax-Busting Fund Design Is Getting Its Latest Revamp
Vanguard Group has famously stood apart in the money-management world with its popular mutual funds offering the liquid ETF wrapper.
Investors Say They’ll Stick With Gold as Fed Cycle Nears End
Gold isn’t losing its allure, according to a dozen money managers who all told Bloomberg News they expect to maintain or raise their exposure to the precious metal in the coming 12 months.
Treasury Yields Hit Highest Since 2007 on Elevated Rate Fears
The US bond-market selloff resumed Monday, driving 10-year yields to a 16-year high, as the persistently resilient economy has investors positioning for interest rates to remain elevated even after the Federal Reserve winds up its hikes.
Market Digests $1 Trillion Jump in T-Bill Supply Without Hiccup
The government has issued an eye-watering $1 trillion in Treasury bills since the debt ceiling was suspended in early June. So far, the market hasn’t batted an eye.
A BRICS Common Currency Is Still a Pipe Dream
Paul O’Neill, a former US Treasury secretary, said that if America ever dropped the strong-dollar policy, he would hire a brass band at Yankee Stadium to mark the proclamation.
Kashkari Saw Higher Bond Yields Coming. So Why the Hysteria?
Yields on 10-year Treasury notes have spent 18 sessions trading above 4% this year, but some doomsayers are ready to declare a permanent shift to a higher-yield regime. They attribute it to factors such as demographics, the looming clean-energy transition and large government deficits. And sure, that could be.
Goodbye to the Bull Market for US Treasury Bonds
Who knew that the subject of US Treasury bond yields could inspire such passion? When, in late June, I argued that they were likely to move considerably higher than the then-prevailing 3.75%, I attracted some vehement pushback.
Fed Can’t Celebrate Yet as Investors Expect Rates, Inflation to Remain Elevated
If they’d been offered today’s economy a year ago – with inflation downgraded from emergency to mere headache, still-low unemployment, and growth that’s slowed without stalling – the world’s top central bankers would’ve taken it like a shot.
Americans Say Government Can Do More to Ease Student-Loan Crisis
A pair of polls suggest that student debt will be a key issue for millions of Americans this fall, when monthly bills resume and borrowers can’t lean on President Joe Biden’s forgiveness plan after the nation’s top court tossed it out.
Bruised Stocks Face Week Full of Tests, From Nvidia to Powell
Equity traders reeling from the market’s worst stretch since February face some pivotal events in the days ahead, and a closely watched speech by Federal Reserve Chair Jerome Powell may not even be the biggest test of all.
Bond Bulls at JPMorgan, Allianz Double Down on a Bet Gone Bad
Convinced a recession in the US was near, some of the world’s most prominent money managers loaded up on government bonds this year in a bold bet that would atone for the punishing losses suffered in 2022.
The US Economy Can't Sustain Its Red-Hot Pace, Right?
Halfway through the third quarter, the economy is looking surprisingly strong. A tracker from the Atlanta branch of the Federal Reserve has real gross domestic product growth, based on the limited data we've gotten so far, tracking at 5.8%, which would be the fastest for a non-pandemic quarter in 20 years.
Is a Hedge Fund-Style Investment Right for You?
Former Bridgewater Associates LP executive Bob Elliott’s plan for exchange-traded funds that employ hedge fund strategies has sharpened the debate about whether retail investors should have access to such approaches.
Argentina’s Future Is With the Dollar
Argentina’s leading presidential candidate, Javier Milei, has some unorthodox ideas about policy (he wants to abolish central banks), politics (he is libertarian) and pets (he has five cloned dogs). One of his proposals, however, is simple common sense: dollarizing Argentina’s economy.
European Banks Aren't Helping Your Savings
European banks are rightly being criticized for failing to pass on interest-rate increases to customers. But is it any wonder they’re so unafraid of losing business? Compared to their US counterparts, European financial institutions often face less competition from alternative cash-like investments.
BofA’s Warning of a ‘5% World’ Sinks in With Yields Pushing Higher
All around the world, bond traders are finally coming to the realization that the rock-bottom yields of recent history might be gone for good.
Options Are All the Rage in Stocks With $2 Trillion Deadline Looming
The fresh boom in stock options that expire within 24 hours has grabbed all the attention on Wall Street trading desks — spurring a Goldman Sachs Group Inc. warning that the activity is fueling the recent market selloff.
Crypto Enthusiasts Stoked by Bitcoin-ETF Hype Shrug Off Ether-Fund Push
Ether-futures ETFs could be coming to the US soon, but the cryptocurrency market doesn’t seem to care.
Wealthy Americans Are Anxious About the Economy, Too
It’s curious: Even as America’s economic trends are improving, Americans’ economic anxieties are worsening — including those of many who have no apparent reason to be worried. Not only are there are polls and statistics that illustrate the point, but there are also anecdotes, lots of anecdotes.
UPS Drivers Deliver a Message to the Federal Reserve
Signs of slowing price pressures and wage growth have generated a lot of excitement about a soft landing for the US economy, where inflation glides back toward 2% without a painful recession.
Fed Saw ‘Significant’ Inflation Risk That May Merit More Hikes
Federal Reserve officials at their policy meeting in July largely remained concerned that inflation would fail to recede and that further interest-rate increases would be needed. At the same time, cracks in that consensus were also becoming more apparent.
Goldman Sachs Blames Zero-Day Options for Fueling S&P 500 Selloff
Look closely at the contours of Tuesday’s tumble in the S&P 500 and fingerprints of a new market force come into focus.
Ex-Bridgewater Executive to Launch Eight Hedge-Fund Style ETFs
Former Bridgewater Associates LP executive Bob Elliott is expanding his firm’s ETF lineup with a variety of hedge fund-like strategies.
The China Surprise We Should Have Seen Coming
In a year of unpleasant surprises from China's economy, here's a development we should have foreseen: The central bank lowered interest rates. With growth disappointing and prices declining, Tuesday's easing from the People's Bank of China ought to have been a no-brainer.
AI Won’t Supercharge the US Economy
It is a radical suggestion, no doubt, but some analysts predict that AI might enable the US economy to achieve an annual growth rate of 30%.
Investors Least Bearish on Stocks Since Pre-Fed Hikes, BofA Says
Investors are the least pessimistic on stocks since February of last year, before the Federal Reserve began one of the most aggressive tightening cycles in decades, according to Bank of America Corp.’s latest global survey of fund managers.
JPMorgan, Western AM See Treasury Gains Even as Bonds Swoon
JPMorgan Chase & Co. and Western Asset Management are among those saying this month’s jump in bond yields represents a buying opportunity, given central banks are getting close to the end of their rate-hike cycles.
Quant-Momentum ETF Is Getting Crushed Even as Stocks Shoot Up
The largest exchange-traded fund focused on high-flying stocks has been losing its edge.
Biggest Treasury ETF Sees Largest Exodus Since 2020 Meltdown
Investors are bailing out of the biggest exchange-traded fund devoted to Treasuries at the fastest pace since markets were hammered during the early months of the pandemic.
Companies That Offer Unlimited Vacations Will Outperform S&P 500, Investors Say
Is unlimited paid time off good for a company's stock price? Most investors think so, according to the latest Markets Live Pulse survey.
Zero-Day Options Cement Presence in Reversal-Ridden Stock Market
The craze for fast-expiring options is ramping to unprecedented heights in a stock market that has lately been given to severe intraday moves. It’s probably not a coincidence.
How Prosperous Is America? Ask UPS Drivers
By the end of the five-year deal that the United Parcel Service and its drivers just agreed to, full-time drivers will make about $170,000 a year, counting healthcare coverage and other benefits. That’s up from $145,000 currently.
Corporate Failure Is a Valuable Asset That’s Hard to Protect
The fraction of enterprise value of large US companies represented by tangible assets — things like real estate and inventory — has fallen from 50% to 20% over the past 15 years.
Beating Inflation Might Still Need Higher Rates
Unpacking the details of last week’s consumer price index report, the news was good: Inflationary pressure continues to slowly subside, while an economic “soft landing” — in which the Federal Reserve is able to stabilize prices without causing a recession — is starting to look more realistic.
No, Small Banks Aren’t Holding the Bag on Half-Empty Towers
One of the scarier financial factoids making the rounds this year is that local and regional banks hold 70% of US commercial real estate debt.
How the Fed Got Drawn Into the Shadows
Bankers are warning that tougher capital rules being proposed by the Federal Reserve and other US regulators will push more risks out of well-regulated lenders and into markets.
Emerging Bonds Disrupt Playbook by Rallying as Treasuries Swoon
The old playbook of selling emerging-market bonds when Treasury yields spike is being upended by the positive dynamics favoring developing-nation debt.
Bond Market Sees No End to Tumult as Fed Casts a Hawkish Shadow
Across Wall Street, there’s growing relief that the Federal Reserve — at long last — may be done raising interest rates. But that doesn’t mean turbulence in the bond market will soon become a thing of the past.
More Bitcoin ETF Decisions Are Already Looming After SEC Declines to Rule
Bitcoin ETF candidates got another dose of disappointment when US regulators on Friday punted on making a decision on such a product. But the next time they hear from them might be just a few weeks away.
To Bring Back the Office, Bring Back Lunch
It has been nearly two years since corporate America reopened, and employers are still struggling to get people back into the office. Just ask Jamie Dimon, CEO of JP Morgan Chase, who has been pushing for in-office work, yet 30% of his workers remain hybrid and he continues to face pushback.
Market Is Mispricing Impact of Biden’s Inflation Reduction Act, Goldman Says
Analysts at Goldman Sachs Group Inc. say that a number of key green sectors remain meaningfully underpriced.
Emerging Markets Cap Week of Selling Everything With China Link
Investors hammered Chinese assets and those of developing nations relying on its sustained growth a day after US President Joe Biden described the country’s economic woes as a “ticking time bomb.”
Good News on Inflation Comes With an Asterisk
With that, the economy would avoid a recession, interest rates would fall in an orderly fashion, stocks would build on their already impressive gains, and highly levered corporate exposures would be normalized methodically.
Housing Is Fed's Secret Weapon in Battle Against Inflation
The consumer price index report for July showed the smallest back-to-back monthly increase in two years. This is welcome news in the battle to tame inflation but the even better news was buried deep in the report.
Fed Seen Pausing in September After Tame Core-Inflation Report
Federal Reserve policymakers are increasingly likely to leave interest rates unchanged at their next meeting in September after fresh data showed further signs of cooling inflation.
A Week of 1% Moves on the S&P 500 Could Trigger Forced Selling
It could take just a 1% move in the S&P 500 — up or down — every day for a week for the rally in US stocks to come under significant pressure.
Hedge Fund Alum George Noble Shutters New ETF After 59% Plunge
Hedge-fund veteran George Noble’s foray into the exchange-traded fund industry has come to a quick, and painful, end.
Income Ladder Is Difficult to Climb for US Metro Areas
In 1949, the list of the country’s most affluent metropolitan areas was dominated by Midwestern industrial cities.
RIP, Recession. Is It Time to Worry About Inflation Again?
In the spring of 2022, the US economy went through an abrupt shift as consumer spending moved from goods to services. Travel boomed. Retailers slumped. Warehouses overflowed with inventory no one wanted to buy, and factories and the freight industry went through a recessionary adjustment.
Rising Productivity Will Finally Tame Inflation
The latest monthly US jobs report showed a moderation in employment growth, bolstering hopes that the Federal Reserve can stop raising interest rates. Not so fast, say the monetary policy hawks such as former Treasury Secretary Larry Summers.
Treasury Yields Bump Up Risks for Asia Stocks as AI Rally Cools
Inflation concerns are threatening to keep US Treasury yields higher for longer, worsening a slide in Asia stocks as investors sell chip shares after their recent rally.
Wall Street Falls Hard for Once-Unloved 20-Year Treasury Bonds
Bond investors who have repeatedly gotten burned buying 20-year Treasuries since the US government reintroduced them in 2020 appear willing to conclude that this time will be different.
US Core CPI Posts Smallest Back-to-Back Increases in Two Years
A key measure of US consumer prices rose only modestly for a second month, bolstering hopes that the Federal Reserve can tame inflation without sparking a recession.