After a stretch of wildly positive economic surprises, the latest US retail sales data felt like more of a mixed bag: the top-line number missed forecasts and, partially in response, stocks drifted aimlessly between losses and modest gains.
Maybe it’s something about the dog days of summer — the record heat in the last few weeks has made everyone a little delirious — but the July-August period is proving particularly popular for “pivot” rallies in US financial markets.
Everyone can stop all the hand-wringing over the “over-concentration” of the Nasdaq 100: The index provider is doing something about it, as expected, in a sign that the system is working as intended after all.
The cognoscenti may have been too quick to declare the end of the Great Resignation.
Markets are inherently forward-looking, but they’re not clairvoyant. Securities prices tend to reflect some well-founded assumptions about the immediate future and then a whole bunch of wild guesswork about the medium to long term.
There’s a mantra in markets that you’re not supposed to “fight” the Federal Reserve. Policymakers fight inflation by tightening “financial conditions,” and broad market rallies tend to work against that objective.
The US economy keeps surprising the doomsayers, and Tuesday’s data is just latest the example.
In life as in markets, there will always be macro folks and micro folks, each tending to believe that their approach is better than the other.
The US core consumer price index — which excludes volatile food and energy prices — rose 0.4% in May from a month earlier, extending its streak of moderately bad inflation readings of roughly that size to six. On a three-month annualized basis, core CPI has been around 5% since November.
Disagreement is bubbling up at the Federal Reserve as dueling growth and inflation risks pull policymakers in different directions. If you think the debate seems fiery now, just wait until the third quarter, when recession may be at the nation’s doorstep.
The US office market faces a tough road ahead. Corporate tenants are considering scaling back, higher interest rates are hurting valuations and many property owners face looming debt maturities that they may struggle to refinance.
A year into its fight against inflation, the Federal Reserve could — just maybe — be done raising its policy rate. History shows that monetary policy pauses mark great buying opportunities for US stocks, but there are several key caveats to bear in mind this time.
There’s a price to be paid for being early in investing even if you get the broader story right, as US stock market bears are learning the hard way.
Investors, economists and journalists have been talking incessantly about recession for the better part of the past year, and they’re all tired of it.
A bad earnings season just might be good for stocks.
The inflation story took a turn for the better on Thursday when the government reported that the consumer price index fell 0.1% from a month earlier.
Ever so subtly, the high interest rates of the past year have started to separate the viable businesses from the ones sustained by cheap money.
Wall Street’s stock market soothsayers weren’t entirely wrong about 2022. In fact, S&P 500 Index earnings are on pace to match the consensus forecasts that analysts submitted about a year ago. Stock prices, however, are another story.
The battle against inflation is far from over, but markets can’t be blamed for rushing to judgment after an unequivocally positive consumer price index report Tuesday.
The corporate debt market is still doing its part to keep America out of a recession.
The US housing market is in an uneasy state of equilibrium.
If the last few weeks are any guide, the coveted soft landing for the economy may be coming into view.
Federal Reserve policymakers believe that inflation expectations are self-fulfilling prophecies, and they’re dead set on preventing them from moving materially higher.
The nation’s inflation problem is far from solved, and the Federal Reserve remains committed to keeping short-term interest rates elevated. But longer-term government bonds may finally be worth a second look after some 14 months of carnage.
For much of the past year, interest rate doves have been eager to make excuses for inflation, blaming obscure methodological quirks in the US’s consumer price index for a stretch of concerning reports.
The latest bear-market rally in US stocks has brought investors off the sidelines and provided a welcome reprieve from three quarters of gloom. But traders now need to ask themselves whether the risks continue to justify the potential returns.
Overall, Wall Street has made only modest downward adjustments to earnings outlooks this year. For all the recession hysteria, consensus earnings forecasts for 2023 are a meager 2% below where they started the year.
The US corporate earnings season could prove to be half decent, but don’t expect the market to celebrate.
The credit-market bears may well be vindicated if the US enters a recession in the next year, but it’s too early to go full-scale Armageddon with predictions about corporate bond spreads.
Would you rather buy a risk-free long-term Treasury bond yielding more than 3.5% or take your chances in the stock market? The jury is apparently still out among investors...
Wall Street analysts have trimmed their overly optimistic earnings estimates slightly in recent months, but they’re still nowhere close to acknowledging the threat of a recession.
Peak bond-issuance week is in the books, and high-grade corporate bond deals are hanging tough in the face of recession fears and surging risk-free rates, a trend that appears to be extending into the second week of September.
Americans have driven up their credit balances at a record pace this year.
First, seniors are clearly struggling from the rapid increase in prices. About half of older Americans said they had to spend emergency savings in the past 12 months...
Corporate junk bonds in the US are paying investors a paltry premium for the risk of holding them into a looming recession.
Summer was supposed to be a period of relative inactivity in markets, and it seemed as though A-Team traders were free to go about their vacation plans without fear of missing out on significant developments.
Federal Reserve policy makers don’t have an explicit target for US stocks or consumer borrowing costs, but they know something’s off when they see it, and there’s a chance that now is one of those times.
Home price appreciation is slowing fast across the country under the weight of higher mortgage rates, with typical property values even falling month-over-month in about a fifth of major metro areas in July.
The tight labor market probably didn’t get the US into this inflationary mess, but it is part of the reason that it’s going to be so hard to get out of it.
The latest signs of life from corporate bond issuers sure don’t signal a market that’s in a recession.
Federal Reserve policy makers like to claim they are “data dependent” when it comes to monetary policy decisions, but this month they have run out of consequential economic releases on the calendar to change their minds.
Commodities can make for great trades, but they are often lousy investments.
US corporate bonds are posting one of their worst selloffs since the financial crisis and could deteriorate further if recession predictions prove accurate.
As the latest report showed, predictions of the economy’s imminent demise have been greatly exaggerated.
Federal Reserve Chair Jerome Powell sounds as committed as ever to crushing the worst inflation in 40 years. But the economy is shifting under him.
Rarely have market prognosticators disagreed by such a broad margin on the path forward for inflation and the Federal Reserve’s efforts to fight it.
Some 162 companies in the S&P 500 Index received target price reductions Thursday compared with only 62 increases, according to Bloomberg data. The difference marked one of the sharpest swings in analyst sentiment in the 11 years of the series.
The seasonally adjusted median home sale price jumped 3.6% in April from March, the biggest increase in Zillow data dating to 2012. Inventory is starting to rise slightly, but it’s still so low that it’s vastly outstripped by demand, fueling housing appreciation.
The latest US inflation report should be a reality check for Wall Street, but many investors are still wearing rose-colored glasses. Bond yields ticked slightly higher Wednesday after the Labor Department reported that consumer prices rose more than forecast last month, but they are still nowhere near reflecting the monetary policy path it may take to rein in inflation.
The threat of U.S. stagflation has investors treating supermarkets and other consumer staples companies like the high-flying tech stocks of yesteryear. The shares have trounced their consumer discretionary peers by the widest margin in two decades, and the outperformance probably has room to continue.
