It’s possible the US economy is not ‘late cycle’ but rather just recharging

The idea that we are late in the economic and financial-market cycle is one that even most Wall Street bulls won’t dispute. Huge parts of the economy have run out of sync, at separate speeds. What about the yield curve? Whatever the answers, Jason Hunter, technical strategist at JP Morgan, notes that stocks have tended to have some of their strongest runs after an inversion, late in a cycle. “The longer-term bull cycles persisted for nearly two years after the initial [Treasury] curve inversion


The idea that we are late in the economic and financial-market cycle is one that even most Wall Street bulls won’t dispute.
Huge parts of the economy have run out of sync, at separate speeds.
What about the yield curve?
Whatever the answers, Jason Hunter, technical strategist at JP Morgan, notes that stocks have tended to have some of their strongest runs after an inversion, late in a cycle.
“The longer-term bull cycles persisted for nearly two years after the initial [Treasury] curve inversion
It’s possible the US economy is not ‘late cycle’ but rather just recharging Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-12-07  Authors: michael santoli
Keywords: news, cnbc, companies, curve, economy, late, fed, cycles, cycle, past, levels, recharging, inversion, possible, yield, treasury


It's possible the US economy is not 'late cycle' but rather just recharging

(This story is part of the Weekend Brief edition of the Evening Brief newsletter. To sign up for CNBC’s Evening Brief, click here.) The idea that we are late in the economic and financial-market cycle is one that even most Wall Street bulls won’t dispute. After all, when the economic expansion surpasses a decade to become the longest ever and the S&P 500 has delivered a compounded return of nearly 18% a year since March 2009, how can the cycle not be considered pretty mature? Yet it’s not quite that simple. Huge parts of the economy have run out of sync, at separate speeds. Some indicators have a decidedly “good as it gets” look, others retain a mid-cycle profile — and a few even resemble early parts of a recovery than the end. Friday’s unexpectedly strong November job gain above 200,000 reflects this debate, suggesting we are not at “full employment” even this deep into an expansion. And the market itself has stalled and retrenched several times along the way, keeping risk appetites tethered and purging or preventing excesses. In the “late-cycle” category we find several broad, trending data readings: Unemployment rate and jobless claims at a 50-year low; consumer confidence hit a cycle peak and has flattened out; and the broad index of leading economic indicators has slipped from very high levels. Auto sales peaked a few years ago. Corporate debt levels are near extremes, profit margins have retreated from historic highs and equity valuations are certainly full and in line with the latter phases of prior bull markets. But corporate-credit conditions are sturdy, and households have simply not loaded up on debt this cycle, in a long period of enforced and then voluntary sobriety after the massive credit boom and bust that culminated in 2008. This leaves consumers in good shape. And the housing market, a drag on growth for years after the crash, has now perked up and is feeding off supply-demand dynamics that are more typical of an early-cycle environment.

What about the yield curve?

The summertime inversion of the Treasury yield curve — in which longer-term bond yields slip below short-term rates after the Federal Reserve has been tightening policy for a while — crystallized the debate on the cycle’s effective age. Such an inversion, in the past, has started the countdown to a recession — but sometimes with a lag as long as two years. This indicator has been translated into a recession-probability gauge one year ahead by the New York Fed. Source: New York Fed It has turned lower since late summer as the yield curve has returned to its “normal” shape, but only in the 1960s has it ever climbed above 30% and fallen back to tame levels well ahead of any recession. Have there even been enough cycles for this pattern to qualify as a statistically reliable “rule?” Do the extremely low absolute level of rates now (similar to the ’60s) change the interpretation? Was the inversion too shallow and short-lived to serve as a proper signal? Whatever the answers, Jason Hunter, technical strategist at JP Morgan, notes that stocks have tended to have some of their strongest runs after an inversion, late in a cycle. “The longer-term bull cycles persisted for nearly two years after the initial [Treasury] curve inversion during the past three business cycles, with the majority of the late-cycle rally acceleration phases unfolding within the year after curve inversion.” The S&P on average has gained more than 20% over less than two years in the past four episodes before peaking. One way to view the summer tumult is as the third severe “growth scare” of this expansion, following those of 2011-12 and 2015-16. Both brought with them nasty 15-20% equity downturns, new lows in Treasury yields and forced central banks to become more accommodative. The Fed has referred to its shift from rate-hiking last year to three cuts this year as a “mid-cycle adjustment,” which would leave it on hold for now and summons happy memories of prior such Fed-enabled “soft landings.”

‘Still upside’ for stocks


Company: cnbc, Activity: cnbc, Date: 2019-12-07  Authors: michael santoli
Keywords: news, cnbc, companies, curve, economy, late, fed, cycles, cycle, past, levels, recharging, inversion, possible, yield, treasury


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Biden says Trump’s pressure on the Federal Reserve is an abuse of power

President Donald Trump’s attacks on the Federal Reserve and its chairman, Jerome Powell, are an abuse of power and represent a “big mistake” for the administration, 2020 Democratic presidential front-runner Joe Biden said in an interview with CNBC. “I’m not going to get into the personalities, but I do say this: The president should not be trying to pressure the Fed,” Biden said in the interview with John Harwood. It’s a big mistake. A big mistake, and I would not do that,” the former vice presi


President Donald Trump’s attacks on the Federal Reserve and its chairman, Jerome Powell, are an abuse of power and represent a “big mistake” for the administration, 2020 Democratic presidential front-runner Joe Biden said in an interview with CNBC.
“I’m not going to get into the personalities, but I do say this: The president should not be trying to pressure the Fed,” Biden said in the interview with John Harwood.
It’s a big mistake.
A big mistake, and I would not do that,” the former vice presi
Biden says Trump’s pressure on the Federal Reserve is an abuse of power Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-12-06  Authors: thomas franck
Keywords: news, cnbc, companies, federal, reserve, fed, interview, abuse, criticism, way, presidents, president, biden, power, big, mistake, trumps, pressure


Biden says Trump's pressure on the Federal Reserve is an abuse of power

President Donald Trump’s attacks on the Federal Reserve and its chairman, Jerome Powell, are an abuse of power and represent a “big mistake” for the administration, 2020 Democratic presidential front-runner Joe Biden said in an interview with CNBC.

“I’m not going to get into the personalities, but I do say this: The president should not be trying to pressure the Fed,” Biden said in the interview with John Harwood. “That’s supposed to be an independent entity out here. It’s just like how he pressures the military and intervenes in the chain of command.”

“It’s his way of abusing power across the board. It’s a big mistake. A big mistake, and I would not do that,” the former vice president added.

Powell has stressed the importance of the Fed’s independence from political influence throughout his tenure, almost always in response to the president’s criticisms.

Though other presidents have tried to coerce the Fed into accommodative monetary policy in the past, prior criticism by presidents has been less personal and less frequent. Trump has been outspoken in his criticism of the Fed for nearly two years.


Company: cnbc, Activity: cnbc, Date: 2019-12-06  Authors: thomas franck
Keywords: news, cnbc, companies, federal, reserve, fed, interview, abuse, criticism, way, presidents, president, biden, power, big, mistake, trumps, pressure


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Blowout jobs report means Fed may sound even less likely to move on interest rates

November’s surprisingly strong jobs report makes it less likely the Fed will move to cut interest rates, and it could sound even more hawkish when it meets next week. A so-called hawkish Fed is one that is more likely to move to tighten policy than make it looser by cutting interest rates or taking other measures. Stocks jumped and bond yields initially rose after the jobs report was released. Swonk said the jobs report showed the impact from trade, and that will be an important topic for the Fe


November’s surprisingly strong jobs report makes it less likely the Fed will move to cut interest rates, and it could sound even more hawkish when it meets next week.
A so-called hawkish Fed is one that is more likely to move to tighten policy than make it looser by cutting interest rates or taking other measures.
Stocks jumped and bond yields initially rose after the jobs report was released.
Swonk said the jobs report showed the impact from trade, and that will be an important topic for the Fe
Blowout jobs report means Fed may sound even less likely to move on interest rates Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-12-06  Authors: patti domm
Keywords: news, cnbc, companies, blowout, meeting, means, likely, market, fed, trade, sound, cut, rates, think, interest, report, jobs


Blowout jobs report means Fed may sound even less likely to move on interest rates

A hiring sign is displayed in a business window along a shopping street in lower Manhattan on July 05, 2019 in New York City.

November’s surprisingly strong jobs report makes it less likely the Fed will move to cut interest rates, and it could sound even more hawkish when it meets next week.

A so-called hawkish Fed is one that is more likely to move to tighten policy than make it looser by cutting interest rates or taking other measures. After three cuts this year, the Fed has signaled a neutral stance, where it is on hold but watching economic data.

The 266,000 jobs added in November is an important number since it defies expectations, at least for one month, that the labor market is slowing down. The report was much better than the 187,000 jobs expected by economists.

The end of the GM strike helped inflate the number, with 41,300 jobs added in motor vehicles and parts, but the overall gain in payrolls was still about 100,000 better than expected by many economists. Manufacturing gained 54,000 overall.

“The bottom line is the labor market is cooking. It clearly says the Fed should not do anything more. The Fed can now sit back on the shelf, not have to worry about having to be pestered about lower rates,” said Ward McCarthy, chief financial economist at Jefferies.

Stocks jumped and bond yields initially rose after the jobs report was released. The fed funds futures market moved to erase one rate cut that was priced in for next year, and the market was pricing just about 20 basis points of one quarter point cut in morning trading, according to Michael Schumacher, director of rates at Wells Fargo Securities.

“The Fed was made more of a sideshow with this number,” said Schumacher. “You think back to [Fed Chairman Jerome] Powell’s comments of the last month or two. It seems to me he doesn’t want to cut again. This takes away a little more impetus to cut.”

The focus of the market in the week ahead is likely to be more riveted on trade than the Fed, because of President Donald Trump’s looming Dec. 15 deadline on $156 billion in new tariffs on China, if there’s no trade deal.

Strategists expect the Fed to leave its economic forecasts and interest rate outlook little changed when it releases new projections after its Wednesday meeting. The Fed has emphasized that it is on hold as long as the economy continues to show a moderate pace of growth and low inflation.

“They’re pretty comfortable where things are at, and as long as we get a trade truce, they’re fine,” said Diane Swonk, chief economist at Grant Thornton. “There were people who wanted to sound a lot more hawkish at that last meeting. They did get two dissenters not wanting to cut rates further and many presidents going into the meeting saying we didn’t need an additional cut.”

Swonk said the jobs report showed the impact from trade, and that will be an important topic for the Fed. The gain in manufacturing, an area hit by trade wars, is still lagging, with most of the gains coming from the GM workers.

“Forty percent of the gains were in health care and leisure and hospitality, with food services driving it. Anything not affected by trade is holding up,” she said, but she added that retail is weak as online retail continues to take jobs from brick-and-mortar stores.

Ian Lyngen, head of fixed income strategy at BMO, said while it is unlikely, the strong jobs report has raised the question of whether the Fed would actually consider raising interest rates next year.

“I still think they cannot hike as long as the labor market is strong and growth is okay, but they don’t have inflation,” said Lyngen. “Inflation is a bigger deal to this Fed than what’s going on in a very tight labor market.”

Swonk said the Fed is still more likely to move to cut than raise interest rates.

“I think they will wait and see. I think much depends now whether the tariffs are rolled back. The biggest issue for the Fed is do we get more of a detente in the trade war that allows them to firmly stand on the sidelines,” Swonk said.

John Briggs, NatWest Markets head of strategy, said traders were already expecting a hawkish Fed at the meeting next week because they had expected no change in the Fed’s rate cut forecast. Now, the strong jobs number could make the Fed’s tone sound even more so, when Powell briefs the media after the meeting Wednesday afternoon.

“We expect a good holiday season, and the job market just continues to power ahead and support the consumer,” said Briggs. “That’s been the story of 2019, and we’re finishing with the same theme — weak manufacturing and a resilient consumer.” Powell should reinforce that message.


Company: cnbc, Activity: cnbc, Date: 2019-12-06  Authors: patti domm
Keywords: news, cnbc, companies, blowout, meeting, means, likely, market, fed, trade, sound, cut, rates, think, interest, report, jobs


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What Trump does before trade deadline is the ‘wild card’ that will drive markets in the week ahead

Just in the past week, Trump said he would put new tariffs on Brazil, Argentina and France. He rattled markets when he said he could wait until after the election for a trade deal with China. If there’s no China deal, that could beat up stocks, send Treasury yields lower and send investors into other safe havens. Economic reports in the coming week include CPI inflation Wednesday, which could be an important input for the Fed. Fed aheadThe Fed has moved to the sidelines and says it is monitoring


Just in the past week, Trump said he would put new tariffs on Brazil, Argentina and France.
He rattled markets when he said he could wait until after the election for a trade deal with China.
If there’s no China deal, that could beat up stocks, send Treasury yields lower and send investors into other safe havens.
Economic reports in the coming week include CPI inflation Wednesday, which could be an important input for the Fed.
Fed aheadThe Fed has moved to the sidelines and says it is monitoring
What Trump does before trade deadline is the ‘wild card’ that will drive markets in the week ahead Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-12-06  Authors: patti domm
Keywords: news, cnbc, companies, trump, wild, markets, fed, deadline, tariffs, does, week, thats, deal, going, drive, trade, card, ahead, inflation, think, market, china


What Trump does before trade deadline is the 'wild card' that will drive markets in the week ahead

China’s President Xi Jinping (L) and US President Donald Trump attend a welcome ceremony at the Great Hall of the People in Beijing on November 9, 2017. AFP Contributor | AFP | Getty Images

The Trump administration’s Dec. 15 deadline for new tariffs on China looms large, and while most strategists expect them to be delayed while talks continue, they don’t rule out the unexpected. “That’s the biggest thing in the room next week. I don’t think he’s going to raise them. I think they’ll find a reason,” said James Pauslen, chief investment strategist at Leuthold Group. But Paulsen said President Donald Trump’s unpredictable nature makes it really impossible to tell what will happen as the deadline nears. “He’s the one off you’re never sure about. It’s not just tariffs. It could be damn near anything,” Paulsen said. “I think he goes out of his way to be a wild card.” Just in the past week, Trump said he would put new tariffs on Brazil, Argentina and France. He rattled markets when he said he could wait until after the election for a trade deal with China. Once dubbing himself “tariff man,” Trump reminded markets that he sees tariffs as a way of getting what he wants from an opponent, and traders were reminded tariffs may be around for a long time. Trade certainly could be the most important event for markets in the week ahead, which also includes a Fed interest rate decision Wednesday and the U.K.’s election that could set the course for Brexit. If there’s no China deal, that could beat up stocks, send Treasury yields lower and send investors into other safe havens. When Fed officials meet this week, they are not expected to change interest rates, but they are likely to discuss whether they believe their repo operations to drive liquidity in the short-term funding market are running smoothly, ahead of year end. Economic reports in the coming week include CPI inflation Wednesday, which could be an important input for the Fed.

Punt, but no deal

As of Friday, the White House did not appear any closer to striking a deal with China, though officials say talks are going fine. Back in August, Trump said if there is no deal, Dec. 15 is the date for a new wave of tariffs on $156 billion in Chinese goods, including cell phones, toys and lap top computers. Dan Clifton, head of policy research at Strategas, said it seems like a low probability there will be a deal in the coming week. “What the market is focused on right now is whether there’s going to be tariffs that to into effect on Dec. 15, or not. It’s being rated pretty binary,” said Clifton. “I think what’s happening here and the actions by China overnight looks like we’re setting up for a kick.” China removed some tariffs from U.S. agricultural products Friday, and administration officials have been talking about discussions going fine. Clifton said if tariffs are put on hold, it’s unclear for how long. “Those are going to be larger questions that have to be answered. This is really now about politics. Is it a better idea for the president to cut a deal without major structural reforms, or should he walk away? That’s the larger debate that has to happen after Dec. 15,” Clifton said. “I’m getting worried that some in the administration… they’re leaning toward no deal category.” Clifton said Trump’s approval rating falls when the trade wars heat up, so that may motivate him to complete the deal with China even if he doesn’t get everything he wants. Michael Schumacher, director of rates strategy at Wells Fargo, said his base case is for a trade deal to be signed in the next couple of months, but even so, he said he can’t entirely rule out another outcome. It would make sense for tariffs to be put on hold while talks continue. “The tweeter-in-chief controls that one, ” said Schumacher. “That’s anybody’s guess…I wouldn’t be at all surprised if he suspends it for a few weeks. If he doesn’t, that’s a pretty unpleasant result. That’s risk off. That’s pretty clear.” Because the next group of tariffs would be on consumer goods, economists fear they could hit the economy through the consumer, the strongest and largest engine behind economic growth.

Fed ahead

The Fed has moved to the sidelines and says it is monitoring economic data before deciding its next move. Friday’s strong November jobs report, with 266,000 jobs added, reinforces the Fed’s decision to move to neutral for now. So the most important headlines from its meeting this week could be about the repo market, basically the plumbing for the financial system where financial institutions fund themselves. Interest rates in that somewhat obscure market spiked in September. Market pros said the issue was a cash crunch in the short term lending market, made better when the Fed started repo operations. The Fed now has multiple operations running over year end, and Schumacher said it has latitude to do more. Strategists expect there to be more pressure on the repo market as banks rein in operations to spruce up their balance sheets at year end. “No one is going to come to the Fed and say you did too much in the year-end funding,” said Schumacher. “If repo happens to spike somewhat on one day, the Fed is going to hammer it the next day.” Paulsen said the markets will be attuned to this week’s inflation numbers. Consumer inflation, the CPI is reported on Wednesday and producer prices are Thursday. A pickup in inflation of any significance is one thing that could pull the Fed from the sidelines, and prod it to consider a rate hike. “I think the inflation reports might start to get a little attention. Given the jobs numbers, the employment rate, growth picking up a little bit and a better tone in manufacturing. I do think if you get some hot CPI number, I don’t know if the Fed can ignore it,” he said. “Core CPI is 2.3%.” He said it would get noticed if it jumped to 2.5% or better. The Fed’s inflation target is 2% but its preferred measure is the PCE inflation, and that remains under 2%. Stocks were sharply higher Friday but ended the past week flattish. The S&P 500 was slightly higher, up 0.2% at 3,145, and the Dow was down 0.1% at 28,015. The Nasdaq was 0.1% lower, ending the week at 8,656.

Week ahead calendar


Company: cnbc, Activity: cnbc, Date: 2019-12-06  Authors: patti domm
Keywords: news, cnbc, companies, trump, wild, markets, fed, deadline, tariffs, does, week, thats, deal, going, drive, trade, card, ahead, inflation, think, market, china


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November jobs report proves Fed was right to cut interest rates, former top official says

The strong November jobs report released Friday is evidence that the Federal Reserve has set interest rates correctly, former top Federal Reserve official Donald Kohn told CNBC. The Fed has cut interest rates three times this year, the most recent of which came in October, and lowered its benchmark funds rate by 25 basis points to a range of 1.5% to 1.75%. Fed Chairman Jerome Powell indicated then that the central bank was likely pausing its period of monetary easing. It’s doing great all by its


The strong November jobs report released Friday is evidence that the Federal Reserve has set interest rates correctly, former top Federal Reserve official Donald Kohn told CNBC.
The Fed has cut interest rates three times this year, the most recent of which came in October, and lowered its benchmark funds rate by 25 basis points to a range of 1.5% to 1.75%.
Fed Chairman Jerome Powell indicated then that the central bank was likely pausing its period of monetary easing.
It’s doing great all by its
November jobs report proves Fed was right to cut interest rates, former top official says Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-12-06  Authors: kevin stankiewicz
Keywords: news, cnbc, companies, fed, vice, official, chairman, interest, cut, federal, proves, right, report, rates, economy, reserve, jobs, market, kohn


November jobs report proves Fed was right to cut interest rates, former top official says

The strong November jobs report released Friday is evidence that the Federal Reserve has set interest rates correctly, former top Federal Reserve official Donald Kohn told CNBC.

“If anything it reinforces their judgment that they’ve got policy in a good place … to support the continued good growth in the economy with very contained inflation,” Kohn, a former vice chairman of the Federal Reserve Board, said Friday on “Closing Bell.”

The Labor Department reported Friday that the U.S. economy added 266,000 jobs last month, significantly eclipsing estimates of 187,000 from economists polled by Dow Jones. The unemployment rate dropped back to 3.5%, equaling a mark earlier this year that was, at the time, the lowest since 1969.

The Fed has cut interest rates three times this year, the most recent of which came in October, and lowered its benchmark funds rate by 25 basis points to a range of 1.5% to 1.75%.

Fed Chairman Jerome Powell indicated then that the central bank was likely pausing its period of monetary easing. Fed officials have generally described the U.S. economy as strong, powered by robust consumer spending, despite external pressures such as the U.S.-China trade war and uncertainty around the United Kingdom’s departure from the European Union.

President Donald Trump, however, has continued to criticize Powell’s handling of interest rates, arguing that the Fed should lower them further to make the U.S. more competitive in a global market where some countries have negative rates.

Trump appointed Powell to lead the Fed, whose Federal Open Market Committee meets next week. It is widely expected to leave rates unchanged.

“They certainly don’t need to ease to help the labor market. It’s doing great all by itself,” said Kohn, who was vice chairman between 2006 and 2010.

Assuming no major economic event, Kohn said he expects the Fed to keep interest rates steady for the next year, arguing that would keep the economy in “decent shape.” If anything, he said, the next adjustment to rates would more likely be raising them by 25 basis points if inflation begins to pick up.

But, Kohn said, “Right now it looks like it’s a ways away.”


Company: cnbc, Activity: cnbc, Date: 2019-12-06  Authors: kevin stankiewicz
Keywords: news, cnbc, companies, fed, vice, official, chairman, interest, cut, federal, proves, right, report, rates, economy, reserve, jobs, market, kohn


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Trump says he will restore tariffs on Brazil, Argentina metal imports

U.S. President Donald Trump said on Monday that he will immediately restore tariffs on U.S. steel and aluminum imports from Brazil and Argentina. “Brazil and Argentina have been presiding over a massive devaluation of their currencies, which is not good for our farmers. Therefore, effective immediately, I will restore the Tariffs on all Steel & Aluminum that is shipped into the U.S. from those countries,” Trump said in a tweet. Trump also urged the Federal Reserve to prevent countries from gaini


U.S. President Donald Trump said on Monday that he will immediately restore tariffs on U.S. steel and aluminum imports from Brazil and Argentina.
“Brazil and Argentina have been presiding over a massive devaluation of their currencies, which is not good for our farmers.
Therefore, effective immediately, I will restore the Tariffs on all Steel & Aluminum that is shipped into the U.S. from those countries,” Trump said in a tweet.
Trump also urged the Federal Reserve to prevent countries from gaini
Trump says he will restore tariffs on Brazil, Argentina metal imports Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-12-02  Authors: kevin breuninger
Keywords: news, cnbc, companies, immediately, imports, restore, countries, rates, argentina, urged, steel, fed, brazil, reserve, tariffs, trump, metal


Trump says he will restore tariffs on Brazil, Argentina metal imports

U.S. President Donald Trump said on Monday that he will immediately restore tariffs on U.S. steel and aluminum imports from Brazil and Argentina.

“Brazil and Argentina have been presiding over a massive devaluation of their currencies, which is not good for our farmers. Therefore, effective immediately, I will restore the Tariffs on all Steel & Aluminum that is shipped into the U.S. from those countries,” Trump said in a tweet.

Trump also urged the Federal Reserve to prevent countries from gaining an economic advantage by devaluing their currencies.

“The Federal Reserve should likewise act so that countries, of which there are many, no longer take advantage of our strong dollar,” Trump tweeted

“Lower Rates & Loosen – Fed!,” he said.

Trump has repeatedly urged the Fed to lower rates to below zero, arguing that negative rates in Europe and elsewhere give those countries a competitive advantage.

However, Fed policymakers have been reluctant to take the unorthodox policy steps tried by other global central banks. The U.S. central bank’s policymaking committee holds its next meeting on Dec. 10-11.


Company: cnbc, Activity: cnbc, Date: 2019-12-02  Authors: kevin breuninger
Keywords: news, cnbc, companies, immediately, imports, restore, countries, rates, argentina, urged, steel, fed, brazil, reserve, tariffs, trump, metal


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A simple investment strategy is offering its best return in 26 years

Investors who took a simple portfolio split between bonds and equities in 2019 have enjoyed the best returns in more than a quarter of a century, according to Pictet Asset Management. Luca Paolini, chief strategist at Pictet Asset Management, told CNBC’s Squawkbox Europe Friday that a simple 50/50 equity-bond portfolio has done remarkably well in 2019. As late as January, Goldman Sachs was predicting that the Fed would raise interest rates four times this year. Instead, and to the delight of the


Investors who took a simple portfolio split between bonds and equities in 2019 have enjoyed the best returns in more than a quarter of a century, according to Pictet Asset Management.
Luca Paolini, chief strategist at Pictet Asset Management, told CNBC’s Squawkbox Europe Friday that a simple 50/50 equity-bond portfolio has done remarkably well in 2019.
As late as January, Goldman Sachs was predicting that the Fed would raise interest rates four times this year.
Instead, and to the delight of the
A simple investment strategy is offering its best return in 26 years Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-11-29  Authors: david reid
Keywords: news, cnbc, companies, split, investment, trade, simple, returns, rates, times, bonds, trick, war, best, fed, strategy, offering, return


A simple investment strategy is offering its best return in 26 years

Investors who took a simple portfolio split between bonds and equities in 2019 have enjoyed the best returns in more than a quarter of a century, according to Pictet Asset Management.

Market sentiment at the beginning of this year was shaky, with several analysts betting that rising U.S. interest rates and a withdrawal of central bank stimulus would negatively affect assets.

But the S&P 500 stock index in 2019 has offered gains exceeding 25% so far this year, while at the same time bonds have offered solid returns as trade war fears saw investors seeking safety.

Luca Paolini, chief strategist at Pictet Asset Management, told CNBC’s Squawkbox Europe Friday that a simple 50/50 equity-bond portfolio has done remarkably well in 2019.

“I think what is surprising though is that if you are a global investor and you put 50% in equities and 50% bonds this year, you made 16% — it’s the best year since ’93,” he said.

Paolini said a year ago all the talk was that a global recession, low business confidence and trade war negativity would press up against a Federal Reserve that needed to take the heat out of a peaking U.S. economy.

As late as January, Goldman Sachs was predicting that the Fed would raise interest rates four times this year. Instead, and to the delight of the White House, the central bank actually cut rates three times, offering a big boost to markets.

“Nobody expected the Fed to cut three times. Everybody expected the Fed to hike rates. It as a massive change in the monetary policy,” said Paolini, who warned that the Fed is going to be unable to repeat the trick in 2020.

“We are left with not much upside, apart from a potential recovery in growth,” he warned.

Paolini said that 2019’s 50-50 equity-bond strategy is a trick unlikely to be repeated soon, saying Pictet’s latest analysis shows a negative return for the split over a five-year outlook.


Company: cnbc, Activity: cnbc, Date: 2019-11-29  Authors: david reid
Keywords: news, cnbc, companies, split, investment, trade, simple, returns, rates, times, bonds, trick, war, best, fed, strategy, offering, return


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Fed: Higher retail costs attributable to tariffs

Fed: Higher retail costs attributable to tariffsCNBC’s Steve Liesman breaks down what the latest Beige Book says about the economy and means for the markets.


Fed: Higher retail costs attributable to tariffsCNBC’s Steve Liesman breaks down what the latest Beige Book says about the economy and means for the markets.
Fed: Higher retail costs attributable to tariffs Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-11-27
Keywords: news, cnbc, companies, tariffscnbcs, markets, costs, economy, steve, retail, latest, means, liesman, fed, attributable, tariffs, higher


Fed: Higher retail costs attributable to tariffs

Fed: Higher retail costs attributable to tariffs

CNBC’s Steve Liesman breaks down what the latest Beige Book says about the economy and means for the markets.


Company: cnbc, Activity: cnbc, Date: 2019-11-27
Keywords: news, cnbc, companies, tariffscnbcs, markets, costs, economy, steve, retail, latest, means, liesman, fed, attributable, tariffs, higher


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US economy growing modestly, labor market still tight, according to Fed’s Beige Book report

“Outlooks generally remained positive with some contacts expecting the current pace of growth to continue into next year,” the Fed said in its “Beige Book” report. Several Fed districts reported “relatively strong job gains” in professional and technical services as well as in health care. The picture was more mixed for manufacturing, with some districts noting rising headcounts while others said employment remained stable. One district reported layoffs. Most districts reported stable-to-moderat


“Outlooks generally remained positive with some contacts expecting the current pace of growth to continue into next year,” the Fed said in its “Beige Book” report.
Several Fed districts reported “relatively strong job gains” in professional and technical services as well as in health care.
The picture was more mixed for manufacturing, with some districts noting rising headcounts while others said employment remained stable.
One district reported layoffs.
Most districts reported stable-to-moderat
US economy growing modestly, labor market still tight, according to Fed’s Beige Book report Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-11-27  Authors: fred imbert
Keywords: news, cnbc, companies, tight, report, labor, market, feds, book, beige, contacts, growing, district, economy, reported, employment, country, fed, growth, modestly, districts, remained, prices


US economy growing modestly, labor market still tight, according to Fed's Beige Book report

The U.S. economy expanded modestly from October to mid-November and the outlook for growth was generally positive while labor markets remained tight across the country, the Federal Reserve said in a report on Wednesday.

The latest temperature check of the economy, gathered from the central bank’s discussions with business contacts around the country, also said prices had increased at a modest pace.

“Outlooks generally remained positive with some contacts expecting the current pace of growth to continue into next year,” the Fed said in its “Beige Book” report.

Several Fed districts reported “relatively strong job gains” in professional and technical services as well as in health care. The picture was more mixed for manufacturing, with some districts noting rising headcounts while others said employment remained stable. One district reported layoffs.

Overall, employment continued to rise, even as tight labor markets across the country made it difficult for employers to find the workers they needed. Some contacts said their inability to fill vacancies was constraining business growth.

For example, two employment agencies in the New York district said “almost all job candidates” already are employed and are not interested in changing positions at this time of year.

Agricultural conditions were largely unchanged and remained strained by weather and low crop prices. In the Fed’s Richmond district, farmers have been hesitant to invest in land or equipment.

Parts of the Atlanta district also experienced drought conditions.

The U.S.-China trade war, now in its 16th month, has dragged on economic growth. U.S. manufacturing activity has softened and business investment has cooled as firms delay making decisions due to the uncertainty over tariffs.

Retailers mentioned higher costs, with contacts in some districts attributing the rises to tariffs, the Fed said. Some firms said they were limited in their ability to raise prices, while others were more able to pass on the costs.

Most districts reported stable-to-moderately growing consumer spending, with several districts reporting increases in auto sales and tourism, the Fed said.

However, some areas reported pockets of weakness. Retailers in the St. Louis district said the outlook for future economic conditions had turned pessimistic and that sales have been the same or slightly lower than last year. Attendance at Broadway shows in New York City dropped off during the first half of November and ticket prices were slightly lower than a year ago.


Company: cnbc, Activity: cnbc, Date: 2019-11-27  Authors: fred imbert
Keywords: news, cnbc, companies, tight, report, labor, market, feds, book, beige, contacts, growing, district, economy, reported, employment, country, fed, growth, modestly, districts, remained, prices


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US futures point to higher open

U.S. stock index futures were slightly higher Tuesday morning. ET, Dow futures rose 20 points, indicating a positive open of more than 14 points. Futures on the S&P and Nasdaq were both seen marginally higher. On the data front, advanced economic indicators for October and the Philadelphia Fed non-manufacturing index for November will be released at 8:30 a.m. The latest monthly Richmond Fed survey and Dallas Fed services data will be published at around 10:00 a.m.


U.S. stock index futures were slightly higher Tuesday morning.
ET, Dow futures rose 20 points, indicating a positive open of more than 14 points.
Futures on the S&P and Nasdaq were both seen marginally higher.
On the data front, advanced economic indicators for October and the Philadelphia Fed non-manufacturing index for November will be released at 8:30 a.m.
The latest monthly Richmond Fed survey and Dallas Fed services data will be published at around 10:00 a.m.
US futures point to higher open Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-11-26  Authors: silvia amaro
Keywords: news, cnbc, companies, futures, index, slightly, sides, data, fed, open, points, issues, higher, china, point


US futures point to higher open

U.S. stock index futures were slightly higher Tuesday morning.

At around 01:38 a.m. ET, Dow futures rose 20 points, indicating a positive open of more than 14 points. Futures on the S&P and Nasdaq were both seen marginally higher.

Investors continue to closely monitor the long-running dispute between China and the U.S. over trade. China’s ministry of commerce said Monday that the leaders of China and the U.S. spoke over the phone.

“Both sides discussed resolving core issues of common concern, reached consensus on how to resolve related problems (and) agreed to stay in contact over remaining issues for a phase one agreement,” the Chinese-language statement said, according to a CNBC translation.

It is yet unclear if both sides will be reaching a compromise before December 15, when new U.S. tariffs on Chinese goods are set to kick in.

On the data front, advanced economic indicators for October and the Philadelphia Fed non-manufacturing index for November will be released at 8:30 a.m. ET.

The S&P CoreLogic Case-Shiller U.S. National Home Price Index (HPI) for September, new home sales for October and consumer confidence figures for November will follow slightly later in the session.

The latest monthly Richmond Fed survey and Dallas Fed services data will be published at around 10:00 a.m. ET.

In corporate news, Best Buy, Dollar Tree, Autodesk and Dell will be reporting Tuesday.


Company: cnbc, Activity: cnbc, Date: 2019-11-26  Authors: silvia amaro
Keywords: news, cnbc, companies, futures, index, slightly, sides, data, fed, open, points, issues, higher, china, point


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