Sudden departure of India’s central bank chief raises questions

The sudden departure of India’s central bank governor Urjit Patel on Monday has raised a number of questions about the Reserve Bank of India’s ongoing struggles. Patel was reportedly criticized by the government for the central bank’s relentless push to clean up India’s banking sector. Patel’s resignation comes less than three years after his predecessor Raghuram Rajan was not confirmed for a second term as central bank governor in 2016, likely due to growing tensions between him and India’s gov


The sudden departure of India’s central bank governor Urjit Patel on Monday has raised a number of questions about the Reserve Bank of India’s ongoing struggles. Patel was reportedly criticized by the government for the central bank’s relentless push to clean up India’s banking sector. Patel’s resignation comes less than three years after his predecessor Raghuram Rajan was not confirmed for a second term as central bank governor in 2016, likely due to growing tensions between him and India’s gov
Sudden departure of India’s central bank chief raises questions Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2018-12-10  Authors: seema mody, dhiraj singh, bloomberg, getty images
Keywords: news, cnbc, companies, sudden, raises, questions, indias, modi, senior, chief, rbi, policy, say, investors, departure, bank, central, india


Sudden departure of India's central bank chief raises questions

The sudden departure of India’s central bank governor Urjit Patel on Monday has raised a number of questions about the Reserve Bank of India’s ongoing struggles.

The primary focus for investors is whether Patel resigned due to growing pressure from India’s government to lower rates and conduct looser monetary policy as the countdown to next year’s general election kicks off. Patel was reportedly criticized by the government for the central bank’s relentless push to clean up India’s banking sector.

“Investors’ concerns over the independence of the RBI are now higher than ever, but it is unlikely that the government will name another figure with a reputation for independence to lead the Bank,” said Sasha Riser-Kositsky, a senior analyst at Eurasia Group.

Patel’s resignation comes less than three years after his predecessor Raghuram Rajan was not confirmed for a second term as central bank governor in 2016, likely due to growing tensions between him and India’s government.

“Investor confidence will be roiled due to this (losing two independently minded central bank governors within one term is not a great image for foreign investors),” said Akhil Bery, a senior research associate in McLarty Associates’ India & South Asia practice.

Experts say the timing of Patel’s departure from his post as central bank governor comes at a challenging time for two reasons.

India’s government lead by Prime Minister Narendra Modi is facing reelection next year. One factor that helped Modi in 2014 was the backing of investors who supported his pro-business policies. However analysts say Patel’s departure could have an impact on Modi’s image.

On Tuesday, results from four state elections in India will shed light on whether Modi is losing support from his base ahead of the national election in April 2019.

At same time, India is trying to attract new investors and companies while also fending off competition from China. Analysts say any uncertainty in India’s governance of monetary policy could be a setback.

Alyssa Ayres, a senior fellow at the Council on Foreign Relations and author of “Our Time Has Come: How India is Making Its Place in the World,” told CNBC over email: “The widely-discussed allegation that the Modi government is pushing for greater authority over the RBI and diminishing its traditional independence is further cause for concern. The Indian economy has done well with an RBI that functions independently and through its own economic, not political, decisions. It should be allowed to continue without political interference.”

The next monetary policy meeting in India is set for Friday.


Company: cnbc, Activity: cnbc, Date: 2018-12-10  Authors: seema mody, dhiraj singh, bloomberg, getty images
Keywords: news, cnbc, companies, sudden, raises, questions, indias, modi, senior, chief, rbi, policy, say, investors, departure, bank, central, india


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Act on climate change or risk global financial instability, $32 trillion investor alliance warns

More than four hundred investors have urged governments to act on climate change or risk the stability of their financial systems. Lobby group The Investor Agenda (IA) issued a statement on Monday on behalf of 415 global investors, who collectively manage $32 trillion. The Paris Agreement was drafted in 2015 and set out targets to help international economies work towards reducing carbon emissions. Signatories of Monday’s statement agreed that lawmakers needed to address climate change “with urg


More than four hundred investors have urged governments to act on climate change or risk the stability of their financial systems. Lobby group The Investor Agenda (IA) issued a statement on Monday on behalf of 415 global investors, who collectively manage $32 trillion. The Paris Agreement was drafted in 2015 and set out targets to help international economies work towards reducing carbon emissions. Signatories of Monday’s statement agreed that lawmakers needed to address climate change “with urg
Act on climate change or risk global financial instability, $32 trillion investor alliance warns Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2018-12-10  Authors: chloe taylor, kacper pempel, the ocean cleanup
Keywords: news, cnbc, companies, global, paris, statement, group, alliance, warns, investor, work, instability, risk, climate, trillion, financial, investors, governments, change, agreement


Act on climate change or risk global financial instability, $32 trillion investor alliance warns

More than four hundred investors have urged governments to act on climate change or risk the stability of their financial systems.

Lobby group The Investor Agenda (IA) issued a statement on Monday on behalf of 415 global investors, who collectively manage $32 trillion.

The statement called on world governments to step up their efforts on achieving the goals of the Paris Agreement and commit to improve climate-related financial reporting. The IA also urged leaders to drive investment into low-carbon energy by taking action such as phasing out coal worldwide.

The Paris Agreement was drafted in 2015 and set out targets to help international economies work towards reducing carbon emissions.

Signatories of Monday’s statement agreed that lawmakers needed to address climate change “with urgency,” and warned that failing to act would create significant risks for the global economy, financial system and society.

“It is vital for our long-term planning and asset allocation decisions that governments work closely with investors to incorporate Paris-aligned climate scenarios into their policy frameworks,” the cohort said.

“The countries and companies that lead in implementing the Paris Agreement and enacting strong climate policies will see significant economic benefits and attract increased investment that will create jobs in industries of the future.”

The investors behind the statement include some of the world’s biggest insurers, pension funds and asset managers. A statement was originally drawn up in July but was reissued this week with backing from a record number of signatories, in conjunction with the COP24 summit on climate change in Katowice, Poland.

The Investor Group on Climate Change, whose members manage around $2 trillion in Australia and New Zealand, was one of the organisations driving support for the statement. CEO Emma Herd said in a statement in July that Group of 20 (G-20) leaders needed to set policies that provided investors with certainty to fund a secure and affordable low-emissions energy system.


Company: cnbc, Activity: cnbc, Date: 2018-12-10  Authors: chloe taylor, kacper pempel, the ocean cleanup
Keywords: news, cnbc, companies, global, paris, statement, group, alliance, warns, investor, work, instability, risk, climate, trillion, financial, investors, governments, change, agreement


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Cramer: Buy shares in cloud plays Salesforce, Splunk, VMware, Workday on downturns

When the stock market sells off, CNBC’s Jim Cramer always advises searching for stocks that have been dragged down with the broader market despite the strength of their underlying businesses. The last time the market endured a major sell-off, those stocks ended up being the “cloud kings,” Cramer’s group of top-quality plays in the cloud-computing software space. But now that Powell has seemingly reversed course and many of the cloud kings have reported much better-than-expected earnings results,


When the stock market sells off, CNBC’s Jim Cramer always advises searching for stocks that have been dragged down with the broader market despite the strength of their underlying businesses. The last time the market endured a major sell-off, those stocks ended up being the “cloud kings,” Cramer’s group of top-quality plays in the cloud-computing software space. But now that Powell has seemingly reversed course and many of the cloud kings have reported much better-than-expected earnings results,
Cramer: Buy shares in cloud plays Salesforce, Splunk, VMware, Workday on downturns Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2018-12-07  Authors: elizabeth gurdus
Keywords: news, cnbc, companies, stock, cramer, workday, plays, revenue, stocks, buy, investors, vmware, cloud, market, salesforce, know, downturns, earnings, kings, shares, splunk


Cramer: Buy shares in cloud plays Salesforce, Splunk, VMware, Workday on downturns

When the stock market sells off, CNBC’s Jim Cramer always advises searching for stocks that have been dragged down with the broader market despite the strength of their underlying businesses.

The last time the market endured a major sell-off, those stocks ended up being the “cloud kings,” Cramer’s group of top-quality plays in the cloud-computing software space.

But lately, investors have been wary of buying shares in the cloud stocks, and for good reason: in October, the group got crushed after Federal Reserve Chairman Jerome Powell signaled an aggressive interest rate hike agenda that could have spelled trouble for high-growth areas of the market.

But now that Powell has seemingly reversed course and many of the cloud kings have reported much better-than-expected earnings results, Cramer said the outlook is brighter than people initially thought.

“[The] cloud stocks pulled back hard today, [but] … we know that business is just fine because — in fact, maybe better than fine — because we just heard from the companies,” the “Mad Money” host said.

“Now that the group’s getting hit again, I’m thinking Salesforce, which my charitable trust owns, … Splunk, which is in our bullpen, VMware and Workday, four cloud companies that we know — because they just reported — are in great shape,” he continued.

Cramer began with Salesforce’s earnings report. Last Tuesday, the enterprise-facing cloud giant issued what its CEO cast as one of its most successful reports, topping earnings and revenue expectations and impressing Wall Street.

Splunk followed suit on Thursday with a top- and bottom-line estimate beat and 40 percent year-over-year revenue growth. Management raised its full-year revenue guidance and its outlook for 2019.

“[Splunk’s] stock took off last Friday. However, it’s quickly been giving back some of those gains,” Cramer told investors. “At $105, I think Splunk is a good bet, although I’d like it even more at lower levels, which you’re probably going to get … because this market is very volatile.”

VMware, which has transformed itself into a cloud infrastructure play in recent years, also delivered strong earnings, beating analysts’ expectations, raising its full-year earnings guidance and revealing a healthy revenue growth forecast for the year ahead.

“The slowest and steadiest of the cloud kings,” VMware is a good pick for investors concerned that the other cloud plays are too volatile, Cramer said.

Workday, a company that helps businesses streamline their human resources, payroll, expense management and procurement operations using the cloud, also had a blowout quarter. A major billings beat, faster revenue growth and earnings that were double what analysts expected sent its stock soaring.

“Here’s the bottom line: the last time we had a huge, marketwide sell-off, the cloud kings got crushed. But you know what? It turned out to be an amazing buying opportunity because the fundamentals were still going strong,” Cramer said.

This time should prove no different, the “Mad Money” host said, but investors shouldn’t buy “all at once,” he said. “It’s too crazy out there, too volatile. But when these stocks get hammered, they do actually become very attractive investments.”


Company: cnbc, Activity: cnbc, Date: 2018-12-07  Authors: elizabeth gurdus
Keywords: news, cnbc, companies, stock, cramer, workday, plays, revenue, stocks, buy, investors, vmware, cloud, market, salesforce, know, downturns, earnings, kings, shares, splunk


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If the Fed doesn’t raise rates this month, the market could panic, Cramer says

The Federal Reserve could cause “panic” on Wall Street if it reneges on its widely anticipated December interest rate hike, CNBC’s Jim Cramer said Friday. “Because he’s promised a rate hike, [Fed Chair Jerome Powell] risks stirring a wave of fear if he doesn’t tighten,” Cramer said as stocks fell on weaker-than-expected jobs results and trade worries. “It would be wrong to tighten, but if he doesn’t give us a full quarter-point rate hike, it will cause a panic,” the “Mad Money” host said. In fai


The Federal Reserve could cause “panic” on Wall Street if it reneges on its widely anticipated December interest rate hike, CNBC’s Jim Cramer said Friday. “Because he’s promised a rate hike, [Fed Chair Jerome Powell] risks stirring a wave of fear if he doesn’t tighten,” Cramer said as stocks fell on weaker-than-expected jobs results and trade worries. “It would be wrong to tighten, but if he doesn’t give us a full quarter-point rate hike, it will cause a panic,” the “Mad Money” host said. In fai
If the Fed doesn’t raise rates this month, the market could panic, Cramer says Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2018-12-07  Authors: elizabeth gurdus
Keywords: news, cnbc, companies, rates, month, doesnt, cramer, wrong, fed, raise, trade, investors, interest, market, tighten, panic, rate, hike


If the Fed doesn't raise rates this month, the market could panic, Cramer says

The Federal Reserve could cause “panic” on Wall Street if it reneges on its widely anticipated December interest rate hike, CNBC’s Jim Cramer said Friday.

“Because he’s promised a rate hike, [Fed Chair Jerome Powell] risks stirring a wave of fear if he doesn’t tighten,” Cramer said as stocks fell on weaker-than-expected jobs results and trade worries. “Investors will start presuming that something must be wrong, very wrong, that things are worse than they thought.”

But even if the central bank decides that it’s worth taking a more data-dependent approach after the weaker jobs data, its chief has put himself in a difficult position with his recent statements, Cramer said.

“No one wants the Fed to tighten going into a slowdown, especially when we might be in a tariff war around the globe. People want the Fed to be flexible. Thanks to his previous comments, though, Powell’s in a lose-lose situation,” he said, pointing to Powell’s remarksthat interest rates were “just below” where they should be.

“It would be wrong to tighten, but if he doesn’t give us a full quarter-point rate hike, it will cause a panic,” the “Mad Money” host said. “I hate to say it, Mr. Powell, but, here goes: I told you so.”

In fairness, Cramer said he “totally” understood why the Fed would raise interest rates this month, citing still-strong Purchasing Managers’ Index reports, healthy retail sales and close-to-full employment.

“The fact is, though, the economy’s slowing and the stock market sure shows it. […] That’s why it’s so skittish,” he explained. The major averages have endured drastic intraday swings this week as investors fretted about a host of economic pressures, including but not limited to the U.S.-China trade dispute.

Earlier this week, a “yield curve inversion” between the three- and the five-year Treasury yields also set off warning bells on Wall Street and spurred a sharp sell-off in stocks.

“Maybe a creative Fed chief could square that circle by holding off on a rate hike, but maybe selling some of the long-term bonds that they’ve been sitting on since the financial crisis — a different kind of tightening that would fix the inverted yield curve situation,” Cramer said. “Although, … ideally, you don’t want any tightening and the Fed would simply sit tight.”

All things considered — including the S&P 500 index turning negative for the year — investors should prepare for more market swings in the coming weeks, the “Mad Money” host warned.

“I think we’re going to have to slog through these volatility sessions for a bit, as there are all sorts of difficult crosscurrents here” including U.S.-China trade relations and the weakness in shares of stock market bellwether Apple, he said.

“And, of course, an errant Federal Reserve that’s backed itself into a corner when it comes to the next rate hike,” he added. “Get used to these crosscurrents, because this is the new normal, at least for now.”


Company: cnbc, Activity: cnbc, Date: 2018-12-07  Authors: elizabeth gurdus
Keywords: news, cnbc, companies, rates, month, doesnt, cramer, wrong, fed, raise, trade, investors, interest, market, tighten, panic, rate, hike


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Start-up that uses A.I. to detect phone fraudsters with ‘99.995%’ accuracy raises $90 million

Security start-up Pindrop has raised $90 million from investors including Vitruvian Partners and Goldman Sachs. The seven-year-old firm, which uses artificial intelligence (AI) technology to detect fraudulent phone calls, said Wednesday that it would use the latest funding to boost its European expansion plans. Atlanta, Georgia-based Pindrop uses machine-learning technology that is fed large amounts of data to learn the difference between a legitimate and fraudulent phone call. Currently, it ana


Security start-up Pindrop has raised $90 million from investors including Vitruvian Partners and Goldman Sachs. The seven-year-old firm, which uses artificial intelligence (AI) technology to detect fraudulent phone calls, said Wednesday that it would use the latest funding to boost its European expansion plans. Atlanta, Georgia-based Pindrop uses machine-learning technology that is fed large amounts of data to learn the difference between a legitimate and fraudulent phone call. Currently, it ana
Start-up that uses A.I. to detect phone fraudsters with ‘99.995%’ accuracy raises $90 million Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2018-12-05  Authors: ryan browne
Keywords: news, cnbc, companies, phone, accuracy, detect, 99995, startup, ai, officer, fraudulent, calls, technology, raises, investors, million, uses, pindrop, fraudsters, goldman


Start-up that uses A.I. to detect phone fraudsters with '99.995%' accuracy raises $90 million

Security start-up Pindrop has raised $90 million from investors including Vitruvian Partners and Goldman Sachs.

The seven-year-old firm, which uses artificial intelligence (AI) technology to detect fraudulent phone calls, said Wednesday that it would use the latest funding to boost its European expansion plans.

Vitruvian, a European private equity firm that has invested in the likes of Just Eat and Farfetch, led the funding round, while Goldman Sachs and Singapore’s corporate investment arm EDBI were among new investors that backed the deal.

The company is also backed by Google parent Alphabet, Citigroup and Silicon Valley venture capital stalwart Andreessen Horowitz.

Atlanta, Georgia-based Pindrop uses machine-learning technology that is fed large amounts of data to learn the difference between a legitimate and fraudulent phone call.

Pindrop says its tech can analyze 1,380 features of a voice from a phone call to help identify information such as the caller’s location and what type of phone they’re using, creating what it calls a “phoneprint.” Currently, it analyzes about 650 million calls a year, and expects that number to increase to 1.1 billion by the end of 2018.

Vijay Balasubramaniyan, Pindrop’s co-founder, chief executive officer and chief technology officer, said the firm’s accuracy when it comes to detecting fraudulent phone calls is around “99.995 percent,” adding that it has caught roughly $350 million worth of fraud attempts this year alone.


Company: cnbc, Activity: cnbc, Date: 2018-12-05  Authors: ryan browne
Keywords: news, cnbc, companies, phone, accuracy, detect, 99995, startup, ai, officer, fraudulent, calls, technology, raises, investors, million, uses, pindrop, fraudsters, goldman


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Warren Buffett on the biggest puzzle for investors: Intrinsic value

The concept of intrinsic value came up earlier this year when Buffett made the decision to change his trigger for buying back Berkshire shares from a quantifiable discount to the company’s book value (1.2 times book value) to a discount to intrinsic value. In moving back to monitoring intrinsic value, Buffett invoked the method also used by J.P. Morgan CEO Jamie Dimon. So no one should be making rash decisions, and Buffett reminds the fearful that the stock market is there to serve investors, no


The concept of intrinsic value came up earlier this year when Buffett made the decision to change his trigger for buying back Berkshire shares from a quantifiable discount to the company’s book value (1.2 times book value) to a discount to intrinsic value. In moving back to monitoring intrinsic value, Buffett invoked the method also used by J.P. Morgan CEO Jamie Dimon. So no one should be making rash decisions, and Buffett reminds the fearful that the stock market is there to serve investors, no
Warren Buffett on the biggest puzzle for investors: Intrinsic value Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2018-12-05  Authors: eric rosenbaum, eric francis, getty images, shironosov, source, jason warnick
Keywords: news, cnbc, companies, meeting, biggest, valuation, warren, annual, stock, value, intrinsic, investors, buffett, market, puzzle, discount, buying


Warren Buffett on the biggest puzzle for investors: Intrinsic value

The concept of intrinsic value came up earlier this year when Buffett made the decision to change his trigger for buying back Berkshire shares from a quantifiable discount to the company’s book value (1.2 times book value) to a discount to intrinsic value. In moving back to monitoring intrinsic value, Buffett invoked the method also used by J.P. Morgan CEO Jamie Dimon.

As buybacks across the corporate sector continue to reach new records, it becomes more questionable whether all of these companies are basing their share repurchases on a valuation metric that uncovers a discount in a stock’s trading price to intrinsic value — or are just buying back stock to keep shareholders happy and prop up earnings. Jamie Dimon said on Tuesday at a Goldman Sachs conference that buying back stock when market prices are high is not a wise idea, and companies should be reinvesting in the business instead.

Now the issue of valuation isn’t limited to buyback analysis. As many sectors within the S&P 500, including one of Buffett’s favorites (banking) are in correction, every investor should be questioning the value of what they own in their stock portfolio.

Buffett recently bought $4 billion worth of J.P. Morgan, a bank stock that has since entered a correction, and if he performed his analysis right, he might be buying more of it now. So no one should be making rash decisions, and Buffett reminds the fearful that the stock market is there to serve investors, not instruct them (echoing Ben Graham’s maxim).

But having conviction in the staying power of your market bets becomes much more difficult when everything stops going up in unison. As Buffett famously wrote in an early ’90s annual letter and said at the 1994 shareholder meeting, “You don’t find out who has been swimming naked until the tide goes out.”

Over the years, in annual Berkshire Hathaway shareholder meeting Q&As and in annual letters, Buffett has made clear — if in a roundabout way — just how difficult a concept intrinsic value is to explain. At the 1998 meeting, Buffett described it as “the present value of the stream of cash that’s going to be generated by any financial asset between now and doomsday. And that’s easy to say and impossible to figure.”

Maybe that is why he has written that “what counts for most people in investing is not how much they know, but rather how realistically they define what they don’t know.” That may also explain why he added, “An investor needs to do very few things right as long as he or she avoids big mistakes.”


Company: cnbc, Activity: cnbc, Date: 2018-12-05  Authors: eric rosenbaum, eric francis, getty images, shironosov, source, jason warnick
Keywords: news, cnbc, companies, meeting, biggest, valuation, warren, annual, stock, value, intrinsic, investors, buffett, market, puzzle, discount, buying


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Big-money investors see the bull market ending in 2019

Institutional investors have been preparing for the end of the bull market for several years, David Goodsell, executive director of the Natixis Center for Investor Insight, said in an interview. “The market is catching up to what they’ve been thinking about. While caution arises over the U.S., 48 percent of institutional investors say the best emerging market opportunity will come in the Asia Pacific region. The S&P 500 has risen 305 percent since the bear market bottom of March 2009, but has sh


Institutional investors have been preparing for the end of the bull market for several years, David Goodsell, executive director of the Natixis Center for Investor Insight, said in an interview. “The market is catching up to what they’ve been thinking about. While caution arises over the U.S., 48 percent of institutional investors say the best emerging market opportunity will come in the Asia Pacific region. The S&P 500 has risen 305 percent since the bear market bottom of March 2009, but has sh
Big-money investors see the bull market ending in 2019 Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2018-12-05  Authors: jeff cox, kai pfaffenbach
Keywords: news, cnbc, companies, likely, 2019, survey, bull, tightening, ending, geopolitical, investors, market, come, volatility, theyve, bigmoney, trade, subramanian


Big-money investors see the bull market ending in 2019

Managers also indicated they are increasing their share to active strategies and away from the passive approach that has been gaining popularity so much in what had been a low-volatility environment.

Institutional investors have been preparing for the end of the bull market for several years, David Goodsell, executive director of the Natixis Center for Investor Insight, said in an interview.

“The market is catching up to what they’ve been thinking about. I think they’ve been positioned for this for quite a while,” he said. “For the most part they’re staying put, except U.S. equities.”

While caution arises over the U.S., 48 percent of institutional investors say the best emerging market opportunity will come in the Asia Pacific region.

The results come amid a skittish atmosphere on Wall Street.

The S&P 500 has risen 305 percent since the bear market bottom of March 2009, but has showed persistent signs of fatigue this year. A barrage of geopolitical threats, from a nuclear North Korea to contentious Brexit negotiations, political upheaval at home, rising interest rates and a brewing U.S.-China trade war have disrupted the market this year and left it barely positive in the final month of trading.

The Federal Reserve, in a paper issued a week ago, warned that a “particularly large” slide in stock prices could come if some of the same risks cited in the survey materialize.

Bank of America Merrill Lynch strategists said they head into 2019 bearish on stocks, bonds and the U.S. dollar, and bullish on commodities and cash.

“With wildcards everywhere (trade, geopolitics, deficits, protectionism), we have decided to focus on the macro scenarios that seem most likely and most relevant for equity market performance: (1) more Fed tightening, and (2) an upward bias to volatility,” Savita Subramanian, BofAML’s equity and quant strategist, said in a research note.

The firm has a 2,900 target for the S&P 500, which actually represents 7.5 percent upside from the current level. But Subramanian noted that “we believe the peak in equities is likely before the end of 2019.”

Respondents to the Natixis survey say the biggest negative impacts to performance are likely to be geopolitical tensions (77 percent), trade disputes (74 percent) and central bank tightening (65 percent). The top portfolio risks are interest rates (56 percent), volatility spikes (52 percent) and regulations (32 percent).

Results also showed that 67 percent are worried they are taking on too much risk, though 75 percent said they are willing to underperform their benchmarks in order to protect against market downside.

Institutions see debt as the biggest threat to financial stability, followed by asset bubbles and a geopolitical crisis.


Company: cnbc, Activity: cnbc, Date: 2018-12-05  Authors: jeff cox, kai pfaffenbach
Keywords: news, cnbc, companies, likely, 2019, survey, bull, tightening, ending, geopolitical, investors, market, come, volatility, theyve, bigmoney, trade, subramanian


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Why investors near retirement should fear the big yield curve inversion

A normal curve with the two-year offering a lower yield than the 10-year is fundamental to how banks make money. Banks borrow short term at lower interest rates so that they can make long-term loans to borrowers at higher interest rates. The difference between those two interest rates, the positive spread, is their profit. There are a few important caveats: In a longer-range chart going back to 1962, there has never been a recession that wasn’t preceded by an inversion of the yield curve. Also i


A normal curve with the two-year offering a lower yield than the 10-year is fundamental to how banks make money. Banks borrow short term at lower interest rates so that they can make long-term loans to borrowers at higher interest rates. The difference between those two interest rates, the positive spread, is their profit. There are a few important caveats: In a longer-range chart going back to 1962, there has never been a recession that wasn’t preceded by an inversion of the yield curve. Also i
Why investors near retirement should fear the big yield curve inversion Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2018-12-05  Authors: mitch goldberg, guest contributor, scott olson, getty images, zinkevych, istock, blend images – hill street studios, brand x pictures, daniel grill, roger wright
Keywords: news, cnbc, companies, twoyear, curve, inversion, loans, big, fear, rates, making, interest, banks, treasury, investors, near, yield, market, retirement


Why investors near retirement should fear the big yield curve inversion

A normal curve with the two-year offering a lower yield than the 10-year is fundamental to how banks make money. Banks borrow short term at lower interest rates so that they can make long-term loans to borrowers at higher interest rates. The difference between those two interest rates, the positive spread, is their profit. If a bank is borrowing short term at a higher interest rate and making loans to borrowers at a lower interest rate, the difference is a negative spread.

In this interest-rate environment, banks would lose money by making loans. Not necessarily on all loans, but it does make some loans unfeasible and some less profitable, forcing banks to cut back on making loans, thereby choking off the access to credit markets that businesses need to grow.

This helps explain why bank stocks entered a correction on Tuesday. But the news is bad for all businesses.

More from Fixed Income Strategies:

Investors avoid emerging markets due to currency volatility

What to do with an old 401(k)? Very little

Save for retirement … even without an employer 401(k)

When it becomes harder for businesses to borrow, many companies cancel or delay projects and hiring. Weaker enterprises go out of business because they lose access to credit, which in turn causes layoffs. When this happens, it takes about a year, on average, for the U.S. economy to slip into a recession.

Many market pundits say that the history lessons from a flattening or negative yield curve is not relevant in today’s world of massive central bank intervention, encouraging foreign investors to scoop up long-term U.S. treasuries because their home-country government bond yields are much lower.

But to believe that “it’s different this time” means you’d have to believe that the bank-sector math in the above example stopped working. Last I checked, banks still borrow at short-term rates and lend at long-term rates, as long as it is profitable. In other words, central bank-induced market distortions do not change the basics of the banker’s math I described above.

There are a few important caveats: In a longer-range chart going back to 1962, there has never been a recession that wasn’t preceded by an inversion of the yield curve. Yet it doesn’t happen overnight. In fact, stocks have risen in the 18 months after an inversion, though after that all bets are off. Also important: This is a market stat that specifically refers to an inversion between the two-year Treasury and 10-year Treasury bond.

It looks more like that is going to occur, but it still has not happened. On Tuesday the 10-year was at 2.9 percent, still above short-term rates, if not by much — the two-year was at 2.8 percent. On Tuesday it was the five-year Treasury that slipped below the two-year and three-year bonds. In the last three recessions, the curve of the three-year and five-year had inverted an average 26.3 months before the recession.


Company: cnbc, Activity: cnbc, Date: 2018-12-05  Authors: mitch goldberg, guest contributor, scott olson, getty images, zinkevych, istock, blend images – hill street studios, brand x pictures, daniel grill, roger wright
Keywords: news, cnbc, companies, twoyear, curve, inversion, loans, big, fear, rates, making, interest, banks, treasury, investors, near, yield, market, retirement


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Can markets have a jolly festive season?

Santa’s performance for the Dow Jones Industrial Average has been fairly reliable over the past five years, with investors rewarded in every year except 2015. But in each of the years when Santa delivered the goods, the market was already trending higher — 2015, the exception, saw a weaker market so Santa stayed away. The Dow pattern in 2018 is also lower but with jagged highs and lows, leaving some nervousness about whether investors will be left empty-handed. There is no doubt it will take a b


Santa’s performance for the Dow Jones Industrial Average has been fairly reliable over the past five years, with investors rewarded in every year except 2015. But in each of the years when Santa delivered the goods, the market was already trending higher — 2015, the exception, saw a weaker market so Santa stayed away. The Dow pattern in 2018 is also lower but with jagged highs and lows, leaving some nervousness about whether investors will be left empty-handed. There is no doubt it will take a b
Can markets have a jolly festive season? Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2018-12-04  Authors: karen tso, brendan mcdermid
Keywords: news, cnbc, companies, rally, lows, investors, points, season, festive, dow, markets, higher, index, christmas, santa, market, jolly


Can markets have a jolly festive season?

It’s December and time to deck the halls with boughs of holly, or in CNBC’s case, the business channel with chatter of a potential Santa Claus rally and 2019 fortunes.

Santa’s performance for the Dow Jones Industrial Average has been fairly reliable over the past five years, with investors rewarded in every year except 2015. But in each of the years when Santa delivered the goods, the market was already trending higher — 2015, the exception, saw a weaker market so Santa stayed away.

The Dow pattern in 2018 is also lower but with jagged highs and lows, leaving some nervousness about whether investors will be left empty-handed.

There is no doubt it will take a big bag of quadruple points for the Dow to rally to 26,950 points, the October high. But it is not impossible that a dose of Christmas magic will be sprinkled on the index given the erratic trade we’ve witnessed.

Federal Reserve Chairman Jerome Powell played his role last week, transforming from Christmas Grinch to peaceful dove when he said U.S. interest rates were closing in on neutral levels. Powell’s olive branch may have encouraged the Dow to bid farewell to recent lows, but is it enough to sweep the index 11-percent higher in one month, or more than 2600 points from its lows, to reclaim the highs?

Tactically, many are open to the prospect.

“The market fall in the last six weeks has discounted many of next year’s problems. A bit of good news or just an absence of bad news ‎could drive over-sold markets higher,” said David Miller, executive director of Quilter Cheviot Investment Management.


Company: cnbc, Activity: cnbc, Date: 2018-12-04  Authors: karen tso, brendan mcdermid
Keywords: news, cnbc, companies, rally, lows, investors, points, season, festive, dow, markets, higher, index, christmas, santa, market, jolly


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Shell sets emissions targets, plans to link them to executive pay

Oil and gas major Shell has announced plans for carbon emissions targets linked to remuneration. As an “interim step,” the firm said it would aim to reduce its net carbon footprint by around 20 percent by 2035. The business added that it would, as part of a revised remuneration policy, “incorporate a link between energy transition and long-term remuneration.” “Meeting the challenge of tackling climate change requires unprecedented collaboration and this is demonstrated by our engagements with in


Oil and gas major Shell has announced plans for carbon emissions targets linked to remuneration. As an “interim step,” the firm said it would aim to reduce its net carbon footprint by around 20 percent by 2035. The business added that it would, as part of a revised remuneration policy, “incorporate a link between energy transition and long-term remuneration.” “Meeting the challenge of tackling climate change requires unprecedented collaboration and this is demonstrated by our engagements with in
Shell sets emissions targets, plans to link them to executive pay Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2018-12-03  Authors: anmar frangoul, carl court, afp, getty images
Keywords: news, cnbc, companies, shell, footprint, carbon, plans, executive, pay, transition, energy, investors, engagement, link, net, sets, statement, emissions, gas, targets


Shell sets emissions targets, plans to link them to executive pay

Oil and gas major Shell has announced plans for carbon emissions targets linked to remuneration.

Shell’s announcement was made Monday at the start of the COP24 climate talks in Katowice, Poland.

In a joint statement with a leadership group of institutional investors on behalf of Climate Action 100+, the Anglo-Dutch business said it aimed to cut its net carbon footprint by around 50 percent by 2050. As an “interim step,” the firm said it would aim to reduce its net carbon footprint by around 20 percent by 2035.

The business added that it would, as part of a revised remuneration policy, “incorporate a link between energy transition and long-term remuneration.” This will be subject to a shareholder vote at its 2020 Annual General Meeting.

“Meeting the challenge of tackling climate change requires unprecedented collaboration and this is demonstrated by our engagements with investors,” Shell CEO Ben van Beurden said in a statement. “We are taking important steps towards turning our net carbon footprint ambition into reality by setting shorter-term targets.”

Climate Action 100+ is a five-year global initiative, led by investors, with over $32 trillion in assets under management.

Its goal is to engage “systemically important greenhouse gas emitters” and other businesses that have opportunities to “drive the clean energy transition and help achieve the goals of the Paris Agreement.”

Under the terms of the Paris Agreement, which was reached at the end of 2015, world leaders have committed to making sure global warming stays “well below” 2 degrees Celsius above pre-industrial levels. They have also agreed to pursue efforts to limit the temperature rise to 1.5 degrees Celsius.

Investor engagement with Shell was led by Robeco and the Church of England Pensions Board.

“This joint statement is the first of its kind, sets a benchmark for the rest of the oil and gas sector and shows the benefit of engagement — aligning institutional investors’ long-term interests with Shell’s desire to be at the forefront of the energy transition,” Adam Matthews, director of ethics and engagement at the Church of England Pensions Board, said.


Company: cnbc, Activity: cnbc, Date: 2018-12-03  Authors: anmar frangoul, carl court, afp, getty images
Keywords: news, cnbc, companies, shell, footprint, carbon, plans, executive, pay, transition, energy, investors, engagement, link, net, sets, statement, emissions, gas, targets


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