Don’t expect the US and China to make any trade progress at G-20, short seller Carson Block says

Investors shouldn’t get their hopes up for the U.S. and China to make any progress on the trade front at the G-20 summit next week, short seller Carson Block said Friday. The Chinese media seems to be digging in and not softening its tone,” Block, founder of Muddy Waters Research, told CNBC’s “Squawk on the Street. ” Block lived in China for six years and gained recognition by shorting several Chinese stocks, including Sino-Forest. China and the U.S. have been engaged in a trade war for more tha


Investors shouldn’t get their hopes up for the U.S. and China to make any progress on the trade front at the G-20 summit next week, short seller Carson Block said Friday. The Chinese media seems to be digging in and not softening its tone,” Block, founder of Muddy Waters Research, told CNBC’s “Squawk on the Street. ” Block lived in China for six years and gained recognition by shorting several Chinese stocks, including Sino-Forest. China and the U.S. have been engaged in a trade war for more tha
Don’t expect the US and China to make any trade progress at G-20, short seller Carson Block says Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-06-21  Authors: fred imbert
Keywords: news, cnbc, companies, huawei, progress, think, block, trade, china, summit, chinese, countries, g20, short, expect, carson, commercial, seller, dont


Don't expect the US and China to make any trade progress at G-20, short seller Carson Block says

Investors shouldn’t get their hopes up for the U.S. and China to make any progress on the trade front at the G-20 summit next week, short seller Carson Block said Friday.

“I don’t think we’re going to have any rapprochement here. The Chinese media seems to be digging in and not softening its tone,” Block, founder of Muddy Waters Research, told CNBC’s “Squawk on the Street. ” “They’re preparing, I think, for a long geopolitical battle with the West.”

Block lived in China for six years and gained recognition by shorting several Chinese stocks, including Sino-Forest. More recently, he compared Chinese after-school operator Tal Education to Enron.

China and the U.S. have been engaged in a trade war for more than a year. In that time, the two countries have slapped tariffs on billions of dollars worth of each other’s goods, tightening trade conditions and dampening the U.S. economic outlook.

President Donald Trump and his Chinese counterpart, Xi Jinping, are scheduled to meet at next week’s G-20 summit in Japan. The two leaders are expected to discuss trade, with the possibility of reaching an accord.

Still, Block does not expect a deal to be reached. He also said China has figured out how to use the open markets and economies of the West against Western countries through its influence on Chinese companies.

“At the end of the day, there can be no business that is based in mainland China that can be assured of acting independently of the government and just for commercial reasons,” Block said. “Huawei and ZTE built themselves because they were strategic priorities of the Chinese government. When Ericsson and Nokia were laying off employees, Huawei was hiring them in Sweden and Norway not because it was a good commercial decision, but because of the long-term vision” of the Chinese government.

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Company: cnbc, Activity: cnbc, Date: 2019-06-21  Authors: fred imbert
Keywords: news, cnbc, companies, huawei, progress, think, block, trade, china, summit, chinese, countries, g20, short, expect, carson, commercial, seller, dont


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It was a monumental week for markets with major milestones in stocks, bonds, gold and oil

The energy and tech sectors pushed the S&P 500 to its record this week, rising 5.2% and 3.3%, respectively. Gold, meanwhile, surged around 4% and broke above $1,400 per ounce for the first time since 2013. Oil prices, however, left stocks and gold in the dust. The Fed also removed the word “patient” when describing its approach to monetary policy, nodding at the recently weaker economic data. Oil, meanwhile, surged as tensions between Iran and the U.S. flared up this week.


The energy and tech sectors pushed the S&P 500 to its record this week, rising 5.2% and 3.3%, respectively. Gold, meanwhile, surged around 4% and broke above $1,400 per ounce for the first time since 2013. Oil prices, however, left stocks and gold in the dust. The Fed also removed the word “patient” when describing its approach to monetary policy, nodding at the recently weaker economic data. Oil, meanwhile, surged as tensions between Iran and the U.S. flared up this week.
It was a monumental week for markets with major milestones in stocks, bonds, gold and oil Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-06-21  Authors: fred imbert
Keywords: news, cnbc, companies, tensions, gold, bonds, monumental, oil, weekly, sp, markets, monetary, major, policy, milestones, rates, surged, week, stocks


It was a monumental week for markets with major milestones in stocks, bonds, gold and oil

This week was chalk full of milestones on Wall Street as a Federal Reserve meeting and tensions in the Middle East conspired to send shockwaves across financial markets.

The S&P 500 climbed 2.3% this week and reached a new all-time high of 2,964.15 on Friday. The energy and tech sectors pushed the S&P 500 to its record this week, rising 5.2% and 3.3%, respectively.

Gold, meanwhile, surged around 4% and broke above $1,400 per ounce for the first time since 2013. Gold also had its best weekly gain since 2016.

Oil prices, however, left stocks and gold in the dust. West Texas Intermediate futures skyrocketed more than 9% this week, notching its biggest weekly gain since December 2016, when it surged more than 12%.

Treasurys also went through the roof this week, depressing yields. The benchmark 10-year yield hit a low of 1.973% this week, breaking below the key psychological 2% mark for the first time since November 2016.

The dollar, meanwhile, fell 1.3% against a basket of currencies, its biggest weekly drop since 2018. The U.S. currency also traded near its lowest level since March.

The Fed hinted at its monetary policy meeting it could cut rates as soon as July, stating it prepared to “act as appropriate” to sustain the current economic expansion. The Fed also removed the word “patient” when describing its approach to monetary policy, nodding at the recently weaker economic data.

This boosted stocks as lower rates makes it cheaper for companies to borrow money and grow their business or buy back their stock. The Fed’s announcement also boosted gold as lower rates depresses the dollar, making it cheaper for investors outside the U.S. to buy the precious metal.

Oil, meanwhile, surged as tensions between Iran and the U.S. flared up this week. A U.S. drone was shot down in Iranian airspace earlier in the week, stoking worries of potential supply disruptions in the Middle East.

—CNBC’s John Schoen, Gina Francolla and Chris Hayes contributed to this report.

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Company: cnbc, Activity: cnbc, Date: 2019-06-21  Authors: fred imbert
Keywords: news, cnbc, companies, tensions, gold, bonds, monumental, oil, weekly, sp, markets, monetary, major, policy, milestones, rates, surged, week, stocks


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Goldman Sachs cuts Tesla price target

Goldman Sachs slashed its price target on Tesla on Thursday and said it was expecting shares to continue to decline over concerns about demand. “Sustainable demand [is] the key question as shares [are] likely continue to de-rate,” the bank said in a note. Goldman lowered the price target to $158 from $200, which would represent a 30% drop from Tesla’s current levels based on Wednesday’s close of $226.43. “We believe a downward path for shares will resume as it becomes more clear that sustainable


Goldman Sachs slashed its price target on Tesla on Thursday and said it was expecting shares to continue to decline over concerns about demand. “Sustainable demand [is] the key question as shares [are] likely continue to de-rate,” the bank said in a note. Goldman lowered the price target to $158 from $200, which would represent a 30% drop from Tesla’s current levels based on Wednesday’s close of $226.43. “We believe a downward path for shares will resume as it becomes more clear that sustainable
Goldman Sachs cuts Tesla price target Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-06-20  Authors: michael bloom, sam meredith, fred imbert
Keywords: news, cnbc, companies, demand, continue, shares, sachs, model, goldman, sustainable, cuts, question, price, tesla, target


Goldman Sachs cuts Tesla price target

Goldman Sachs slashed its price target on Tesla on Thursday and said it was expecting shares to continue to decline over concerns about demand.

“Sustainable demand [is] the key question as shares [are] likely continue to de-rate,” the bank said in a note. Goldman lowered the price target to $158 from $200, which would represent a 30% drop from Tesla’s current levels based on Wednesday’s close of $226.43.

“We believe that is the largest question for investors to underwrite at this point — what are sustainable demand levels for the Model S, Model X, and Model 3 — and how does that change with the introduction of Model Y production,” Goldman Sachs analyst David Tamberrino said. “We believe a downward path for shares will resume as it becomes more clear that sustainable demand for the company’s current products are below expectations.”

Tesla shares are down 0.81% in premarket trading. The stock is down 30% this year as the company continues to be mired in a myriad controversies. Analysts and investors also continue to mull whether the company will need to raise more capital.


Company: cnbc, Activity: cnbc, Date: 2019-06-20  Authors: michael bloom, sam meredith, fred imbert
Keywords: news, cnbc, companies, demand, continue, shares, sachs, model, goldman, sustainable, cuts, question, price, tesla, target


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One group of stocks has been a surefire winner when the Fed cuts interest rates

Jerome Powell, Chair, Board of Governors of the Federal Reserve speaks during a conference at the Federal Reserve Bank of Chicago on June 4, 2019 in Chicago, Illinois. Many investors believe the Federal Reserve is set to start cutting interest rates, possibly as early as this week. And history shows one group of stocks stands out as an outperformer after the Fed begins cutting. Health care stocks outperform the market by about 7% in the nine months following a rate cut, data compiled by Barclays


Jerome Powell, Chair, Board of Governors of the Federal Reserve speaks during a conference at the Federal Reserve Bank of Chicago on June 4, 2019 in Chicago, Illinois. Many investors believe the Federal Reserve is set to start cutting interest rates, possibly as early as this week. And history shows one group of stocks stands out as an outperformer after the Fed begins cutting. Health care stocks outperform the market by about 7% in the nine months following a rate cut, data compiled by Barclays
One group of stocks has been a surefire winner when the Fed cuts interest rates Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-06-18  Authors: fred imbert
Keywords: news, cnbc, companies, market, federal, rate, surefire, reserve, performance, stocks, shows, winner, fed, cuts, ratecutting, group, interest, rates


One group of stocks has been a surefire winner when the Fed cuts interest rates

Jerome Powell, Chair, Board of Governors of the Federal Reserve speaks during a conference at the Federal Reserve Bank of Chicago on June 4, 2019 in Chicago, Illinois.

Many investors believe the Federal Reserve is set to start cutting interest rates, possibly as early as this week. And history shows one group of stocks stands out as an outperformer after the Fed begins cutting.

Health care stocks outperform the market by about 7% in the nine months following a rate cut, data compiled by Barclays shows. And what makes the group special relative to other groups is its consistency of performance following eases.

The firm ran deep analysis on Fed rate cut cycles and found that overall market performance and performance of most sectors varies depending on why the central bank is cutting rates. Barclays determined there were two types of rate-cutting environments: an economic “soft patch” and a recession. Health care was the only sector that thrived in both those rate-cutting scenarios.


Company: cnbc, Activity: cnbc, Date: 2019-06-18  Authors: fred imbert
Keywords: news, cnbc, companies, market, federal, rate, surefire, reserve, performance, stocks, shows, winner, fed, cuts, ratecutting, group, interest, rates


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Trump on demoting Fed Chair Jerome Powell, day before rate decision: ‘Let’s see what he does’

President Donald Trump, asked if he still wants to demote Federal Reserve Chairman Jerome Powell, told reporters Tuesday, “Let’s see what he does.” Trump’s remarks came a day before the Fed was set to announce its next decision on interest rates. Top White House economic advisor Larry Kudlow told reporters that the Trump administration was not currently considering such a move. The Fed will make a decision on interest rates on Wednesday at 2 p.m. “If you look at what’s going on with the euro, th


President Donald Trump, asked if he still wants to demote Federal Reserve Chairman Jerome Powell, told reporters Tuesday, “Let’s see what he does.” Trump’s remarks came a day before the Fed was set to announce its next decision on interest rates. Top White House economic advisor Larry Kudlow told reporters that the Trump administration was not currently considering such a move. The Fed will make a decision on interest rates on Wednesday at 2 p.m. “If you look at what’s going on with the euro, th
Trump on demoting Fed Chair Jerome Powell, day before rate decision: ‘Let’s see what he does’ Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-06-18  Authors: kevin breuninger fred imbert, kevin breuninger, fred imbert
Keywords: news, cnbc, companies, trump, president, told, does, central, rates, demoting, lets, fed, decision, jerome, day, reporters, interest, powell, white, rate


Trump on demoting Fed Chair Jerome Powell, day before rate decision: 'Let's see what he does'

President Donald Trump, asked if he still wants to demote Federal Reserve Chairman Jerome Powell, told reporters Tuesday, “Let’s see what he does.”

Trump’s remarks came a day before the Fed was set to announce its next decision on interest rates.

The president added that he wants a “level playing field” from the central bank.

Bloomberg News reported Tuesday morning that the White House had looked into demoting Powell in February. Top White House economic advisor Larry Kudlow told reporters that the Trump administration was not currently considering such a move.

The Fed will make a decision on interest rates on Wednesday at 2 p.m. ET, concluding a two-day meeting. The central bank is not expected to make any policy changes, but investors are hoping for the central bank to signal a rate cut as soon as July. Powell will be holding a news conference Wednesday following the decision.

Stocks have rallied this month in part because investors expect the Fed to ease its monetary policy stance. The S&P 500, Dow Jones Industrial Average and Nasdaq Composite are all up more than 6% for June through Tuesday’s close. Traders are pricing in a more than 80% likelihood that the Fed will cut rates next month, according to the CME Group FedWatch tool.

Trump in recent days has pressured the Fed under Powell not to raise rates, claiming that comparatively lower interest rates for the euro give other countries an advantage over the U.S.

This line of attack is not new: Trump has claimed the seven Fed interest rate hikes in 2017 and 2018 — from the near-zero levels that followed the financial crisis — have held back U.S. economic growth.

On Tuesday morning, Trump lashed out at European Central Bank President Mario Draghi for his comments signaling openness to more monetary stimulus in Europe, which could lower the euro’s value compared to the dollar.

Draghi’s comments “immediately dropped the Euro against the Dollar, making it unfairly easier for them to compete against the USA. They have been getting away with this for years, along with China and others,” Trump tweeted.

“If you look at what’s going on with the euro, they have a much diff stance than our folks do,” Trump told reporters outside the White House on Tuesday afternoon. “As you know they did something today that was very dramatic, and frankly, it helped that part of the world.”

“I want to be given a level playing field. And so far I haven’t been,” the president added.

Trump spoke to reporters outside while en route to Orlando, Florida, where he will officially launch his 2020 reelection bid.

–CNBC’s Marc Rod and Jacob Pramuk contributed to this report.


Company: cnbc, Activity: cnbc, Date: 2019-06-18  Authors: kevin breuninger fred imbert, kevin breuninger, fred imbert
Keywords: news, cnbc, companies, trump, president, told, does, central, rates, demoting, lets, fed, decision, jerome, day, reporters, interest, powell, white, rate


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Stocks making the biggest moves midday: Micron, Nvidia, Boeing & more

Pinterest — Pinterest shares rose 3.4% after Wedbush initiated coverage of the social media company with an outperform rating. Boeing — Boeing shares climbed 5.4% after recording its first orders from the Paris Air Show. Las Vegas Sands — The casino operator’s stock rose 5.7% after multiple reports said a stalemate between New York legislators will prevent legislation to legalize mobile sports gambling from passing. G1 Therapeutics — G1 Therapeutics surged 24% after announcing positive trial res


Pinterest — Pinterest shares rose 3.4% after Wedbush initiated coverage of the social media company with an outperform rating. Boeing — Boeing shares climbed 5.4% after recording its first orders from the Paris Air Show. Las Vegas Sands — The casino operator’s stock rose 5.7% after multiple reports said a stalemate between New York legislators will prevent legislation to legalize mobile sports gambling from passing. G1 Therapeutics — G1 Therapeutics surged 24% after announcing positive trial res
Stocks making the biggest moves midday: Micron, Nvidia, Boeing & more Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-06-18  Authors: fred imbert
Keywords: news, cnbc, companies, therapeutics, making, moves, micron, biggest, stocks, boeing, company, social, rose, upgraded, wedbush, nvidia, stock, surged, purchase, shares, midday


Stocks making the biggest moves midday: Micron, Nvidia, Boeing & more

Check out the companies making headlines midday Tuesday:

Micron Technology, Nvidia — Chipmakers surged after President Donald Trump tweeted he and Chinese President Xi Jinping would have an “extended meeting ” at the G-20 summit next week. The tweet boosted hopes that the U.S. and China will reach a trade deal in the near future. Micron and Nvidia were each up more than 5%.

Pinterest — Pinterest shares rose 3.4% after Wedbush initiated coverage of the social media company with an outperform rating. Wedbush said it sees Pinterest as “fundamentally different” from other social media platforms because its users more frequently purchase products and services based on their posts on the platform.

Boeing — Boeing shares climbed 5.4% after recording its first orders from the Paris Air Show. International Airlines Group signed a letter of intent to purchase 200 Boeing 737 Max planes, and Korean Air agreed to buy 20 787 Dreamliners from the airplane maker for $6.3 billion.

Twilio — Twilio rose 1.1% after an analyst at Needham initiated the cloud communications platform provider as a buy. The analyst foresees Twilio’s continued exceptional growth moving forward.

Telephone and Data Systems — Shares of the telecom company surged more than 14.7% after Morgan Stanley upgraded the stock to overweight from equal-weight, citing a compelling valuation relative to its peers.

Las Vegas Sands — The casino operator’s stock rose 5.7% after multiple reports said a stalemate between New York legislators will prevent legislation to legalize mobile sports gambling from passing.

GCP Applied Technologies — Shares of the chemicals company dropped more than 13% after GCP board members said the company’s strategic alternatives review did not produce a “transaction that would provide adequate value to our shareholders.”

G1 Therapeutics — G1 Therapeutics surged 24% after announcing positive trial results for its breast-cancer treatment drug, Trilaciclib. The drug led to a “statistically significant improvement” in the overall survival of women with metastatic triple-negative breast cancer, the company said.

Bank of America — Bank of America shares rose 2.5% after BMO Capital Markets upgraded the bank to outperform from market perform, saying it is undervalued and consensus estimates are too low.

—CNBC’s Mallika Mitra and Marc Rod contributed to this report.


Company: cnbc, Activity: cnbc, Date: 2019-06-18  Authors: fred imbert
Keywords: news, cnbc, companies, therapeutics, making, moves, micron, biggest, stocks, boeing, company, social, rose, upgraded, wedbush, nvidia, stock, surged, purchase, shares, midday


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Pfizer to buy cancer drug developer Array Biopharma for $10.64 billion

The Fed is likely to drop ‘patient’ word this week, economists… The Fed is not likely to make a move on interest rates when it meets this week, but it should clear the way for a rate cut later in the summer. Market Insiderread more


The Fed is likely to drop ‘patient’ word this week, economists… The Fed is not likely to make a move on interest rates when it meets this week, but it should clear the way for a rate cut later in the summer. Market Insiderread more
Pfizer to buy cancer drug developer Array Biopharma for $10.64 billion Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-06-17  Authors: fred imbert, silvia amaro
Keywords: news, cnbc, companies, week, rate, drug, likely, word, rates, patient, biopharma, way, buy, pfizer, developer, fed, array, 1064, billion, cancer, meets, summermarket


Pfizer to buy cancer drug developer Array Biopharma for $10.64 billion

The Fed is likely to drop ‘patient’ word this week, economists…

The Fed is not likely to make a move on interest rates when it meets this week, but it should clear the way for a rate cut later in the summer.

Market Insider

read more


Company: cnbc, Activity: cnbc, Date: 2019-06-17  Authors: fred imbert, silvia amaro
Keywords: news, cnbc, companies, week, rate, drug, likely, word, rates, patient, biopharma, way, buy, pfizer, developer, fed, array, 1064, billion, cancer, meets, summermarket


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Stocks making the biggest moves midday: Sotheby’s, Array BioPharma, PaySign & more

Check out the companies making headlines midday Monday:Sotheby’s — Sotheby’s shares jumped 58.6% on news that European art collector Patrick Drahi planned to acquire the art auction house. Array BioPharma — Array Biopharma surged 57% after Pfizer announced it would acquire the drugmaker for $10.64 billion, or $48 per share. PaySign — Shares of PaySign fell more than 10% on Monday morning after the stock was downgraded to neutral by BTIG. Symantec — Mizuho upgraded Symantec to buy from neutral an


Check out the companies making headlines midday Monday:Sotheby’s — Sotheby’s shares jumped 58.6% on news that European art collector Patrick Drahi planned to acquire the art auction house. Array BioPharma — Array Biopharma surged 57% after Pfizer announced it would acquire the drugmaker for $10.64 billion, or $48 per share. PaySign — Shares of PaySign fell more than 10% on Monday morning after the stock was downgraded to neutral by BTIG. Symantec — Mizuho upgraded Symantec to buy from neutral an
Stocks making the biggest moves midday: Sotheby’s, Array BioPharma, PaySign & more Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-06-17  Authors: fred imbert
Keywords: news, cnbc, companies, share, array, stocks, analyst, biggest, moves, company, midday, shares, symantec, neutral, paysign, downgraded, sothebys, biopharma, stock, upgraded, outperform, making


Stocks making the biggest moves midday: Sotheby's, Array BioPharma, PaySign & more

Andy Warhol’s artwork, ‘Silver Car Crash (Double Disaster)’ is displayed while being auctioned at Sotheby’s on November 13, 2013 in New York City.

Check out the companies making headlines midday Monday:

Sotheby’s — Sotheby’s shares jumped 58.6% on news that European art collector Patrick Drahi planned to acquire the art auction house. Drahi will pay shareholders $57 per share, or $3.7 billion in cash to take the company private. If approved, the deal will return Sotheby’s to private ownership after 31 years as a publicly traded company.

Array BioPharma — Array Biopharma surged 57% after Pfizer announced it would acquire the drugmaker for $10.64 billion, or $48 per share. Shares of Array closed Friday at $29.59 per share.

C&J Energy Services — C&J Energy Services gained 20% after announcing it is merging with oilfield services firm Keane Group. The oil and energy service said the combined company will have an enterprise value of about $1.8 billion. However, law firm Halper Sadeh announced it is investigating whether the merger is fair to C&J shareholders.

PaySign — Shares of PaySign fell more than 10% on Monday morning after the stock was downgraded to neutral by BTIG. The stock is up more than 200% this year. “We view that valuation as a fair refection of PAYS’ visible growth prospects,” BTIG said. “We are moving to the sidelines until either new avenues for growth emerge (potentially via acquisition) or a pullback in its share price creates a better entry point.”

Ashford Hospitality Trust — The real estate company’s stock slid 4.4% after an analyst at DA Davidson downgraded it to neutral from buy. The analyst said Ashford’s recent 50% dividend cut adds to the “near-term uncertainty and industry headwinds” the company faces.

Eventbrite — Shares of ticketing platform Eventbrite rose 5.9% after William Blair initiated coverage of the stock with an outperform rating. Blair believes the stock has dropped too far, writing these levels are “an attractive entry point for long-term investors given the duration of the company’s above-average growth prospects.”

Keurig Dr Pepper — Shares of beverage maker Keurig Dr Pepper rose 4.9% after BMO Capital Markets upgraded the stock to outperform from market perform, citing an attractive valuation relative to its peers.

Mosaic — The largest U.S. producer of potash and phosphate fertilizer climbed more than 4% after Bank of America upgraded it to buy from neutral. The bank highlighted a more constructive outlook for the company’s operations in Brazil.

Disney — The entertainment giant’s stock fell 0.5% an analyst at Imperial Capital downgraded it to in-line from outperform, noting the stock’s 30% tear this year has taken its valuation to “record multiples. ”

Symantec — Mizuho upgraded Symantec to buy from neutral and raised the stock’s price target to $23 per share from $22. The firm says Symantec will be able to “focus on optimizing the business” moving forward. Symantec shares were up 2.1% around $19.76.

Corteva — Shares of the agricultural chemical company gained 3% after Deutsche Bank upgraded it to buy from hold after several company guidance cuts due to heavy rainfall in the Midwest and rising trade tensions.

Dow Inc — Dow fell more than 3% after an analyst at BMO Capital Markets downgraded the chemical company to market perform from outperform. The analyst said this year is “turning out more challenging as global trade issues persist.”

—CNBC’s Jesse Pound, Elizabeth Myong, Mallika Mitra and Marc Rod contributed to this report.


Company: cnbc, Activity: cnbc, Date: 2019-06-17  Authors: fred imbert
Keywords: news, cnbc, companies, share, array, stocks, analyst, biggest, moves, company, midday, shares, symantec, neutral, paysign, downgraded, sothebys, biopharma, stock, upgraded, outperform, making


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A Fed rate cut should boost stocks as long as the economy is experiencing just a ‘soft patch’

Strategists refer to this as an “insurance” rate cut. However, the S&P 500 averages a loss of about 17% when the Fed cuts rates because of what turns out to be a recession. Market expectations for a rate cut in July stood at 84.3% on Monday, according to the CME Group’s FedWatch tool. Traders have also priced in a 51.9% chance of a third rate cut in December. Jim Grant, editor of the Grant’s Interest Rate Observer newsletter, told CNBC’s “Squawk Box ” the Fed will cut rates at this week’s meetin


Strategists refer to this as an “insurance” rate cut. However, the S&P 500 averages a loss of about 17% when the Fed cuts rates because of what turns out to be a recession. Market expectations for a rate cut in July stood at 84.3% on Monday, according to the CME Group’s FedWatch tool. Traders have also priced in a 51.9% chance of a third rate cut in December. Jim Grant, editor of the Grant’s Interest Rate Observer newsletter, told CNBC’s “Squawk Box ” the Fed will cut rates at this week’s meetin
A Fed rate cut should boost stocks as long as the economy is experiencing just a ‘soft patch’ Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-06-17  Authors: fred imbert
Keywords: news, cnbc, companies, cuts, stocks, economy, rates, rate, experiencing, boost, cut, think, market, patch, long, economic, fed, soft, central


A Fed rate cut should boost stocks as long as the economy is experiencing just a 'soft patch'

The Federal Reserve is expected to cut interest rates multiple times this year, but the economic backdrop driving those cuts could have vastly different implications for the stock market, history shows.

And unfortunately for stock investors trying to bet on the outcome, that driver is not always clear when the central bank embarks on a rate-cutting cycle.

“Broad equity index performance after the start of Fed rate cuts depends on whether the economic slowdown was a soft patch or a more severe economic downturn,” wrote Maneesh Deshpande, head of U.S. equity strategy at Barclays, in a note last week.

Data compiled by Barclays shows the S&P 500 rises more than 21% a year after the central bank cuts rates as a hedge against what turns out to be a soft patch in the economy. Strategists refer to this as an “insurance” rate cut.

However, the S&P 500 averages a loss of about 17% when the Fed cuts rates because of what turns out to be a recession.

“The previous two times the Fed cut rates for the first time in 2001 and 2007, we saw stocks eventually get cut in half,” Ryan Detrick, senior market strategist at LPL Financial, said in a post. “But the reality is if you go back further in time, you can also see explosive rallies after that first cut.”

Wall Street will get clues on where the Fed stands on the economy and monetary policy on Wednesday after the central bank concludes a two-day policy meeting. A few economists and investors even think it’s possible the central bank cuts this week. The Fed meeting comes amid worsening economic data and fears that the ongoing U.S.-China trade war is weakening the global economy. But it’s not clear whether it’s a soft patch or not. Barclays’ Deshpande said recent sector performance points to the former.

Manufacturing activity grew at its slowest pace since October 2016 last month. Meanwhile, jobs creation slowed to just 75,000 in May, widely missing expectations. The U.S. economy is also seen as growing by 2.1% in the second quarter, more than a full percentage point below the first quarter.

Meanwhile, China and the U.S. have yet to strike a trade deal. Commerce Secretary Wilbur Ross also said Monday that President Donald Trump would be “perfectly happy ” to slap additional tariffs on Chinese goods.

This has sent expectations of looser monetary policy surging. Market expectations for a rate cut in July stood at 84.3% on Monday, according to the CME Group’s FedWatch tool. Bets for another rate cut in September were at 65%. Traders have also priced in a 51.9% chance of a third rate cut in December.

Some even think the Fed could start cutting rates even earlier. Jim Grant, editor of the Grant’s Interest Rate Observer newsletter, told CNBC’s “Squawk Box ” the Fed will cut rates at this week’s meeting. Diane Swonk, chief economist at Grant Thornton, thinks the Fed should cut rates this week.

But David Lafferty, chief market strategist at Natixis Investment Managers, thinks the market is pricing in too many rate hikes.

“I think the Fed wants to stay on hold, maybe even cut rates once, but I don’t think the Fed wants to go anywhere near what the market is pricing in right now,” Lafferty said. Two or three cuts, “that’s a Fed in full retreat. That is the Fed telling you a recession is coming. If the Fed can stay on hold or even give the market a taste of what it wants, without going into full retreat, that would be supportive for stocks.”

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Company: cnbc, Activity: cnbc, Date: 2019-06-17  Authors: fred imbert
Keywords: news, cnbc, companies, cuts, stocks, economy, rates, rate, experiencing, boost, cut, think, market, patch, long, economic, fed, soft, central


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CEO optimism takes a hit in the second quarter as trade headwinds persist

CEOs became less optimistic about the U.S. economy as the Trump administration ratcheted up trade tensions with key partners, according to the latest Business Roundtable survey. The Business Roundtable’s CEO Economic Outlook Index fell by 5.7 points in the second quarter to 89.5. Capital expenditure plans, CEO plans for hiring and expectations for sales also fell from the previous quarter. But while U.S.-Mexico trade tensions have been quelled for the moment, U.S.-China trade fears remain. To be


CEOs became less optimistic about the U.S. economy as the Trump administration ratcheted up trade tensions with key partners, according to the latest Business Roundtable survey. The Business Roundtable’s CEO Economic Outlook Index fell by 5.7 points in the second quarter to 89.5. Capital expenditure plans, CEO plans for hiring and expectations for sales also fell from the previous quarter. But while U.S.-Mexico trade tensions have been quelled for the moment, U.S.-China trade fears remain. To be
CEO optimism takes a hit in the second quarter as trade headwinds persist Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-06-13  Authors: fred imbert
Keywords: news, cnbc, companies, second, trump, tensions, persist, headwinds, optimism, roundtable, business, hit, trade, plans, quarter, ceo, takes, mexico, china, worth


CEO optimism takes a hit in the second quarter as trade headwinds persist

Police officers are seen in front of a cargo ship with containers at a port in Qingdao, Shandong province, China April 6, 2018.

CEOs became less optimistic about the U.S. economy as the Trump administration ratcheted up trade tensions with key partners, according to the latest Business Roundtable survey.

The Business Roundtable’s CEO Economic Outlook Index fell by 5.7 points in the second quarter to 89.5. It also marked the fifth straight quarter of declining optimism. Capital expenditure plans, CEO plans for hiring and expectations for sales also fell from the previous quarter.

“Business leaders are ready and eager to invest and hire in the United States,” Joshua Bolten, president and CEO of the Business Roundtable, said in a statement. “Yet, the uncertainty over trade policy is making it more difficult for companies to invest and operate confidently.”

Trade tensions have been rising since last year as the Trump administration tries to correct what it feels are unfair trade conditions between the U.S. and other countries. Most noticeably, the U.S. has gone after goods from China and Mexico, two key trade partners.

Late last month, President Donald Trump threatened to impose a 5% levy on all imports from Mexico that eventually could have escalated to 25%. Trump said last week the two countries struck a deal to avoid those tariffs that included Mexico curbing immigration into the U.S. But while U.S.-Mexico trade tensions have been quelled for the moment, U.S.-China trade fears remain.

The U.S. hiked tariffs on $200 billion worth of Chinese goods in May to 25% from 10%. China retaliated by raising levies on $60 billion worth of U.S. imports. Concerns over tighter trade conditions and their impact on the global economy and corporate profits led to a massive sell-off in May. The S&P 500 plunged more 6% last month.

To be sure, the Business Roundtable said the CEO Economic Outlook Index remains above its historical average of 82.6. Hiring and capital investment plans are also above historical levels.

The survey was also conducted between May 16 and June 3, which Bolten called “a turbulent few weeks for U.S. trade relations with China and Mexico.”

J.P. Morgan Chase CEO Jamie Dimon called on lawmakers to “work together to enact policies that will encourage inclusive growth, innovation and opportunity in the United States. That includes investing in infrastructure and workforce training, reforming our immigration system and expanding free and fair trade.”

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Company: cnbc, Activity: cnbc, Date: 2019-06-13  Authors: fred imbert
Keywords: news, cnbc, companies, second, trump, tensions, persist, headwinds, optimism, roundtable, business, hit, trade, plans, quarter, ceo, takes, mexico, china, worth


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