A crazy last 24 hours has put the market inches away from a record: Here’s what happened

Several market moving events unfolded between the close of U.S. stock markets on Wednesday and the open on Thursday. As a result, the Dow Jones Industrial Average and the S&P 500 both came close to record highs on Thursday. The tariffs are set to increase to 30% from 25% on about $250 billion worth of Chinese goods. ECB lowers ratesOn Thursday morning the European Central Bank (ECB) announced a cut to its deposit rates by 10 basis points, to negative 0.5%. The Consumer Price Index, which is used


Several market moving events unfolded between the close of U.S. stock markets on Wednesday and the open on Thursday. As a result, the Dow Jones Industrial Average and the S&P 500 both came close to record highs on Thursday. The tariffs are set to increase to 30% from 25% on about $250 billion worth of Chinese goods. ECB lowers ratesOn Thursday morning the European Central Bank (ECB) announced a cut to its deposit rates by 10 basis points, to negative 0.5%. The Consumer Price Index, which is used
A crazy last 24 hours has put the market inches away from a record: Here’s what happened Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-09-12  Authors: michael sheetz
Keywords: news, cnbc, companies, away, announced, increase, president, market, vice, hours, inches, crazy, stock, rose, record, inflation, heres, tariffs, happened, ecb, investors


A crazy last 24 hours has put the market inches away from a record: Here's what happened

Several market moving events unfolded between the close of U.S. stock markets on Wednesday and the open on Thursday. As a result, the Dow Jones Industrial Average and the S&P 500 both came close to record highs on Thursday. Here’s what investors need to know.

Delayed tariffs

Stock futures climbed Wednesday evening after President Donald Trump announced he would be delaying the planned increase of tariffs on Chinese goods by 15 days, as a “gesture of good will.” The tariffs are set to increase to 30% from 25% on about $250 billion worth of Chinese goods. Treasury Secretary Steven Mnuchin told CNBC on Thursday morning that the president “could do a deal any time” with China but won’t until “it’s a good deal.” “The president delayed it because of a request from the vice premier,” Mnuchin added. He clarified that China’s Vice Premier Liu He made the request because Oct. 1 is the 70th anniversary of the establishment of the People’s Republic of China and said raising the tariffs on that day “caused them grave concern on the symbolism.”

ECB lowers rates

On Thursday morning the European Central Bank (ECB) announced a cut to its deposit rates by 10 basis points, to negative 0.5%. The ECB also announced a substantial bond-buying program of 20 billion euros per month, as a part of its quantitative easing (QE) initiative. The Euro initially fell to its lowest level against the dollar in nearly two weeks but later rebounded, sitting at around $1.104, as foreign exchange investors remain uneasy about whether the ECB’s policies will successfully increase inflation. Additionally, bond yields in the Euro zone dropped, with Germany’s benchmark 10-year bond yield falling to negative 0.64%. Investors were pleased the ECB was trying quantitative easing again, hoping the new program would give the global economy a jolt.

Tame inflation

About an hour before U.S. stock markets opened on Thursday, the Labor Department reported that consumer prices slowed last month. The Consumer Price Index, which is used as a measure of inflation, rose only slightly in August. However, the core CPI measurement rose to 2.4% year-over-year – the highest level since 2008. The tame inflation was likely to keep the Federal Reserve on track to cut interest rates next week.

Stock indexes near all time highs


Company: cnbc, Activity: cnbc, Date: 2019-09-12  Authors: michael sheetz
Keywords: news, cnbc, companies, away, announced, increase, president, market, vice, hours, inches, crazy, stock, rose, record, inflation, heres, tariffs, happened, ecb, investors


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Tech investor Bill Gurley says IPOs have put Silicon Valley on ‘bad end of a bad joke for about four decades’

Bill Gurley of venture capital firm Benchmark says that when it comes to IPOs, investment banks have been getting the better of tech companies and start-up investors for a long time. In a discussion on CNBC’s “Halftime Report” on Tuesday, Gurley, whose firm is a big investor in Uber and WeWork, said the direct listing approach taken by Spotify and Slack is a model that more companies should consider. In a direct listing, companies don’t use banks to distribute and price new shares, but rather op


Bill Gurley of venture capital firm Benchmark says that when it comes to IPOs, investment banks have been getting the better of tech companies and start-up investors for a long time. In a discussion on CNBC’s “Halftime Report” on Tuesday, Gurley, whose firm is a big investor in Uber and WeWork, said the direct listing approach taken by Spotify and Slack is a model that more companies should consider. In a direct listing, companies don’t use banks to distribute and price new shares, but rather op
Tech investor Bill Gurley says IPOs have put Silicon Valley on ‘bad end of a bad joke for about four decades’ Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-09-12  Authors: annie palmer
Keywords: news, cnbc, companies, companies, investors, silicon, investor, end, ipos, bad, banks, listing, direct, tech, valley, decades, gurley, ipo, joke


Tech investor Bill Gurley says IPOs have put Silicon Valley on 'bad end of a bad joke for about four decades'

Bill Gurley of venture capital firm Benchmark says that when it comes to IPOs, investment banks have been getting the better of tech companies and start-up investors for a long time.

In a discussion on CNBC’s “Halftime Report” on Tuesday, Gurley, whose firm is a big investor in Uber and WeWork, said the direct listing approach taken by Spotify and Slack is a model that more companies should consider. In a direct listing, companies don’t use banks to distribute and price new shares, but rather open up the public market to stock owned by existing stakeholders.

“I think Silicon Valley has been on the bad end of a bad joke for about four decades now, in terms of the way the traditional IPO process works,” Gurley said. “The more I study and contrast it with direct listings, the more I realize that.”

Gurley pointed to research from Jay Ritter, an IPO expert and business professor at the University of Florida, which shows that top investment banks like Goldman Sachs, Morgan Stanley and Jefferies continue to underprice IPOs, meaning companies are giving away upside to new investors. Based on Ritter’s data, he estimates that Silicon Valley companies have handed over more than $170 billion as a result of underpricing.


Company: cnbc, Activity: cnbc, Date: 2019-09-12  Authors: annie palmer
Keywords: news, cnbc, companies, companies, investors, silicon, investor, end, ipos, bad, banks, listing, direct, tech, valley, decades, gurley, ipo, joke


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China to scrap foreign investment quotas to attract more money into its stock, bond markets

Investors watch the electronic board at a stock exchange hall on February 11, 2019 in Chengdu, Sichuan Province of China. China’s foreign exchange regulator said on Tuesday that it had decided to scrap quota restrictions on two major inbound investment schemes, as a weakening yuan and rising outflows prompt Beijing to seek to attract more foreign capital. It said the move would “make it much more convenient for overseas investors to participate in China’s domestic financial markets, making China


Investors watch the electronic board at a stock exchange hall on February 11, 2019 in Chengdu, Sichuan Province of China. China’s foreign exchange regulator said on Tuesday that it had decided to scrap quota restrictions on two major inbound investment schemes, as a weakening yuan and rising outflows prompt Beijing to seek to attract more foreign capital. It said the move would “make it much more convenient for overseas investors to participate in China’s domestic financial markets, making China
China to scrap foreign investment quotas to attract more money into its stock, bond markets Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-09-11
Keywords: news, cnbc, companies, quotas, yuan, capital, bond, investment, money, stock, attract, markets, qfii, china, investors, overseas, outflows, scrap, foreign, exchange, chinas


China to scrap foreign investment quotas to attract more money into its stock, bond markets

Investors watch the electronic board at a stock exchange hall on February 11, 2019 in Chengdu, Sichuan Province of China.

China’s foreign exchange regulator said on Tuesday that it had decided to scrap quota restrictions on two major inbound investment schemes, as a weakening yuan and rising outflows prompt Beijing to seek to attract more foreign capital.

While underlining China’s thirst for overseas funding as its economy slows amid a debilitating trade war with the United States, the move also appears largely symbolic, as two-thirds of the existing quotas remain unused.

China’s State Administration of Foreign Exchange (SAFE) would remove quotas on the dollar-dominated qualified foreign institutional investor (QFII) scheme and its yuan-denominated sibling, RQFII, it said in a statement on its website.

It said the move would “make it much more convenient for overseas investors to participate in China’s domestic financial markets, making China’s bond and stock markets more broadly accepted by international markets.”

The removal of quotas comes amid an escalating Sino-U.S. trade war that threatens growth in the world’s second-biggest economy.

Beijing hopes that foreign capital inflows could help to offset rising outflows and lend support to its yuan, which has dropped to its lowest levels against the U.S. dollar since the onset of the global financial crisis in 2008.

Inflows could also help bolster China’s balance of payments, as some analysts fear the country is slipping dangerously towards twin deficits in its fiscal and current accounts.

The removal “is a clear signal that policymakers want to encourage capital inflows,” wrote Win Thin, Global Head of Currency Strategy at Brown Brothers Harriman.

“The corollary is that they are still very worried about capital outflows and so will make sure to avoid any steps that might increase them,” he said.

China in January doubled the QFII quota to $300 billion, but only $111.4 billion of the limit had been used by foreign investors by the end of August.

China’s securities regulator also published draft rules earlier this year that would combine the QFII and RQFII programmes while also simplifying access for overseas investors.


Company: cnbc, Activity: cnbc, Date: 2019-09-11
Keywords: news, cnbc, companies, quotas, yuan, capital, bond, investment, money, stock, attract, markets, qfii, china, investors, overseas, outflows, scrap, foreign, exchange, chinas


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Stocks in Asia mixed as investors await ECB interest rate decision; Apple suppliers mostly jump

Shares in Asia were mixed on Wednesday as investors awaited the European central bank’s interest rate decision later in the week. Mainland Chinese shares were lower on the day, with the Shenzhen component declining 0.935% to about 1,671.54 and the Shenzhen composite down 1.12% to 9,853.72. Meanwhile, Hong Kong’s Hang Seng index rose 1.51%, as of its final hour of trading. Elsewhere in Japan, the Nikkei 225 rose 0.96% to close at 21,597.76 while the Topix index gained 1.65% on the day to 1,583.66


Shares in Asia were mixed on Wednesday as investors awaited the European central bank’s interest rate decision later in the week. Mainland Chinese shares were lower on the day, with the Shenzhen component declining 0.935% to about 1,671.54 and the Shenzhen composite down 1.12% to 9,853.72. Meanwhile, Hong Kong’s Hang Seng index rose 1.51%, as of its final hour of trading. Elsewhere in Japan, the Nikkei 225 rose 0.96% to close at 21,597.76 while the Topix index gained 1.65% on the day to 1,583.66
Stocks in Asia mixed as investors await ECB interest rate decision; Apple suppliers mostly jump Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-09-11  Authors: eustance huang
Keywords: news, cnbc, companies, stocks, decision, tariffs, shares, rose, asia, index, ecb, shenzhen, investors, rate, day, south, china, mixed, suppliers, interest, jump, await, composite


Stocks in Asia mixed as investors await ECB interest rate decision; Apple suppliers mostly jump

Shares in Asia were mixed on Wednesday as investors awaited the European central bank’s interest rate decision later in the week.

Mainland Chinese shares were lower on the day, with the Shenzhen component declining 0.935% to about 1,671.54 and the Shenzhen composite down 1.12% to 9,853.72. The Shanghai composite slipped 0.41% to around 3,008.81. Meanwhile, Hong Kong’s Hang Seng index rose 1.51%, as of its final hour of trading.

Elsewhere in Japan, the Nikkei 225 rose 0.96% to close at 21,597.76 while the Topix index gained 1.65% on the day to 1,583.66. South Korea’s Kospi closed 0.84% higher at 2,049.20. Over in Australia, the S&P/ASX 200 advanced 0.36% to end its trading day at 6,638.00.

Overall, the MSCI Asia ex-Japan index rose 0.64%.

On the trade front, China’s Ministry of Finance announced that 16 American products will be exempted from additional tariffs. On Tuesday, the South China Morning Post reported that China has offered to increase U.S. agricultural purchases in exchange for a delay in tariffs and easing of a supply ban against telecommunications giant Huawei Technologies.


Company: cnbc, Activity: cnbc, Date: 2019-09-11  Authors: eustance huang
Keywords: news, cnbc, companies, stocks, decision, tariffs, shares, rose, asia, index, ecb, shenzhen, investors, rate, day, south, china, mixed, suppliers, interest, jump, await, composite


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US Treasury yields tick higher as investors await key central bank meetings

US companies are canceling investment into China at a faster… The latest Amcham survey shows that some U.S. firms in China are speeding up their move away from the mainland as increasing tariffs bite. China Economyread more


US companies are canceling investment into China at a faster… The latest Amcham survey shows that some U.S. firms in China are speeding up their move away from the mainland as increasing tariffs bite. China Economyread more
US Treasury yields tick higher as investors await key central bank meetings Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-09-11  Authors: sam meredith
Keywords: news, cnbc, companies, central, mainland, bank, latest, speeding, increasing, survey, meetings, firms, china, yields, treasury, shows, await, key, tariffs, tick, investors, investment, higher


US Treasury yields tick higher as investors await key central bank meetings

US companies are canceling investment into China at a faster…

The latest Amcham survey shows that some U.S. firms in China are speeding up their move away from the mainland as increasing tariffs bite.

China Economy

read more


Company: cnbc, Activity: cnbc, Date: 2019-09-11  Authors: sam meredith
Keywords: news, cnbc, companies, central, mainland, bank, latest, speeding, increasing, survey, meetings, firms, china, yields, treasury, shows, await, key, tariffs, tick, investors, investment, higher


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There’s a sudden transformation taking place in the stock market and it’s unnerving some investors

The S&P 500 closed little changed for the session, but value stocks — those with low multiples and stable fundamentals — significantly outperformed their growth counterparts. The iShares Edge MSCI USA Value Factor ETF (VLUE) jumped 1.8% on Monday while the iShares Edge MSCI USA Momentum Factor ETF (MTUM) dropped 1.7%. The value fund rose again Tuesday, trading 0.5% higher while the momentum fund dropped another 1.3%. The momentum fund was also headed for its third straight decline. This shift is


The S&P 500 closed little changed for the session, but value stocks — those with low multiples and stable fundamentals — significantly outperformed their growth counterparts. The iShares Edge MSCI USA Value Factor ETF (VLUE) jumped 1.8% on Monday while the iShares Edge MSCI USA Momentum Factor ETF (MTUM) dropped 1.7%. The value fund rose again Tuesday, trading 0.5% higher while the momentum fund dropped another 1.3%. The momentum fund was also headed for its third straight decline. This shift is
There’s a sudden transformation taking place in the stock market and it’s unnerving some investors Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-09-10  Authors: fred imbert
Keywords: news, cnbc, companies, stock, relative, transformation, place, fund, sudden, stocks, outperformed, unnerving, theres, msci, momentum, ishares, investors, value, market, usa, taking


There's a sudden transformation taking place in the stock market and it's unnerving some investors

The market got turned upside down Monday in rapid fashion underneath the surface and some investors think it may be a warning signal.

The S&P 500 closed little changed for the session, but value stocks — those with low multiples and stable fundamentals — significantly outperformed their growth counterparts. The iShares Edge MSCI USA Value Factor ETF (VLUE) jumped 1.8% on Monday while the iShares Edge MSCI USA Momentum Factor ETF (MTUM) dropped 1.7%. Data compiled by Bespoke Investment Group showed this was momentum’s worst daily performance relative to value since its inception in early 2013.

The value fund rose again Tuesday, trading 0.5% higher while the momentum fund dropped another 1.3%. The momentum fund was also headed for its third straight decline.

This shift is unnerving to investors because momentum stocks, those defined by their large growth expectations relative to the broader market, have outperformed value names in recent years. A rotation away from these stocks could result in a downturn for the broader market.


Company: cnbc, Activity: cnbc, Date: 2019-09-10  Authors: fred imbert
Keywords: news, cnbc, companies, stock, relative, transformation, place, fund, sudden, stocks, outperformed, unnerving, theres, msci, momentum, ishares, investors, value, market, usa, taking


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Regular investors are cut out of a major financial market and the SEC chief wants to change that

Clayton addressed what he called the “two segments” in capital markets: the public markets, and private ones, including private equity and venture capital investments. “Twenty-five years ago, the public markets dominated the private markets in virtually every measure,” he said. “Today, in many measures, the private markets outpace the public markets, including in aggregate size.” He expressed concern that the Main Street investor for the most part does not have access to private markets, noting


Clayton addressed what he called the “two segments” in capital markets: the public markets, and private ones, including private equity and venture capital investments. “Twenty-five years ago, the public markets dominated the private markets in virtually every measure,” he said. “Today, in many measures, the private markets outpace the public markets, including in aggregate size.” He expressed concern that the Main Street investor for the most part does not have access to private markets, noting
Regular investors are cut out of a major financial market and the SEC chief wants to change that Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-09-10  Authors: bob pisani, cnbc staff
Keywords: news, cnbc, companies, financial, wants, private, street, major, sec, regular, markets, public, main, access, capital, chief, investors, change, market, investing, cut


Regular investors are cut out of a major financial market and the SEC chief wants to change that

The head of the SEC says more needs to be done to make it easier for companies to go public and that his office is taking a “fresh look” at allowing Main Street investors access to the private capital markets.

In a speech to the Economic Club of New York on Monday, SEC Chairman Jay Clayton said the lack of more IPOs and the inability of most of the Main Street investing public to access private markets was a “growing concern.”

Clayton addressed what he called the “two segments” in capital markets: the public markets, and private ones, including private equity and venture capital investments.

“Twenty-five years ago, the public markets dominated the private markets in virtually every measure,” he said. “Today, in many measures, the private markets outpace the public markets, including in aggregate size.”

More from Invest in You:

SEC Chair Jay Clayton’s top investing tips: Compounding, diversification and take free money

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There’s a retirement crisis in America where most will be unable to afford a ‘solid life’

Clayton wants to make the public capital markets (IPOs) more attractive for companies, and expand opportunities for Main Street investors to participate in the private markets. The SEC, Clayton says, is making efforts to modernize financial disclosure rules and to recognize that one size does not fit all, permitting what he calls “scaled disclosures.”

He expressed concern that the Main Street investor for the most part does not have access to private markets, noting that the cost of including individual investors in private offerings is “high.”

Clayton said he wants to take a “fresh look” at initiatives to expand access to the private markets while at the same time providing “appropriate investor protections.”

Clayton addressed several other issues in his speech, in the follow-up Q & A, and in a separate interview on CNBC:


Company: cnbc, Activity: cnbc, Date: 2019-09-10  Authors: bob pisani, cnbc staff
Keywords: news, cnbc, companies, financial, wants, private, street, major, sec, regular, markets, public, main, access, capital, chief, investors, change, market, investing, cut


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Investors see less gloom, dump winners and buy economically sensitive stocks

Interest rates have been rising for the same reason, and some investors are betting that Treasury yields may have bottomed for now. “You had everyone piling into the software names because they were a great place to hide during the trade war. In August, Treasury yields hit record and multi-year lows, with the the 10-year yield, as low as 1.42% on Sept. 3, was at 1.64% Tuesday. The momentum trade and the defensive trade is unwinding,” said Hogan. The prices have been bottoming for probably two or


Interest rates have been rising for the same reason, and some investors are betting that Treasury yields may have bottomed for now. “You had everyone piling into the software names because they were a great place to hide during the trade war. In August, Treasury yields hit record and multi-year lows, with the the 10-year yield, as low as 1.42% on Sept. 3, was at 1.64% Tuesday. The momentum trade and the defensive trade is unwinding,” said Hogan. The prices have been bottoming for probably two or
Investors see less gloom, dump winners and buy economically sensitive stocks Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-09-10  Authors: patti domm
Keywords: news, cnbc, companies, trade, buy, market, momentum, dump, sensitive, rates, longer, stocks, winners, growth, 10year, yields, treasury, economically, investors, gloom


Investors see less gloom, dump winners and buy economically sensitive stocks

Traders and financial professionals work on the floor of the New York Stock Exchange (NYSE) at the opening bell on August 15, 2019 in New York City.

Sentiment has shifted in part because of signs of improvement in the trade talks between the U.S. and China. Interest rates have been rising for the same reason, and some investors are betting that Treasury yields may have bottomed for now.

The cheapest stocks, those with the lowest price-to-earnings ratios were snapped up, while many of the most expensive companies, or those with the highest price to earnings ratios, were being sold.

There’s a shift underway in the stock market that may be signalling that some investors believe there was way too much pessimism on Wall Street this summer, and the stocks that do better in an improving economy are the ones to buy for now.

“You had everyone piling into the software names because they were a great place to hide during the trade war. Now they are talking about making some strides,” said Christian Fromhertz, CEO of The Tribeca Trade Group.

“Again, people are not optimistic for the most part on them getting anything done, but as headlines come out … there is a mad rush out of the safety areas of the market.”

Art Cashin, director of floor operations at UBS, said the move away from pricier stocks has the may be an asset reallocation trade. “It may be as simple as taking profits on things that move and investing in others, hoping we’d get closer to a trade deal,” he said. “That may be part of what you’re seeing.”

According to a study by CNBC’s Chris Hayes, the 50 stocks in the S&P 500 with the highest forward P/Es, meaning the most expensive, were down an average 0.8% Tuesday afternoon, with 64% trading lower. The 50 stocks in the index with the lowest P/Es, or the relatively cheapest, rose an average 2.3%, and 90% were trading higher Tuesday.

Art Hogan, chief market strategist at National Securities, said a move out of growth into value appears to be tied as well to the idea that for now, interest rates have bottomed. In August, Treasury yields hit record and multi-year lows, with the the 10-year yield, as low as 1.42% on Sept. 3, was at 1.64% Tuesday.

“All the stuff in the middle has started to outperform. The momentum trade and the defensive trade is unwinding,” said Hogan. “It feels like it’s been triggered because yields have bottomed. That low on the U.S. 10-year feels like an overshoot.”

The Treasury market was flashing dire warnings this summer, when the yield curve inverted at the same time there were few signs of hopefulness around the trade talks. An inversion, in this case in the 2-year and 10-year yields, is when the rates on a shorter duration security rises above a longer dated one, in this case the 10-year note. The curve is no longer inverted, but an inversion can be a reliable recession warning.

“With a low growth, weaker economic backdrop, there are two types of names you want to own. One is secular growth, which is less cyclical, like Mastercard or Microsoft,” said Robert Sluymer, technical strategist at Fundstrat. “As soon as rates start to stabilize, the valuations around them can be ratcheted down pretty quickly.”

Traders have been following the action in iShares Edge MSCI USA Momentum Factor MTUM, down for a third day after hitting a high last week. The ETF was off 1.7%, and is down about 3.5% this week alone.

“I think secular growth is still longer term leadership, but there’s a rotation away from a lot of the bond proxies to the cyclical side of the market. A lot of those cyclicals, whether it’s Caterpillar or Eaton, they peaked at the end of 2017 and beginning of 2018,” said Sluymer. “They’ve been declining ever since. The prices have been bottoming for probably two or three months, but those longer term momentum indicators are turning positive. We would recommend trimming bond proxies and adding to cyclicals.”


Company: cnbc, Activity: cnbc, Date: 2019-09-10  Authors: patti domm
Keywords: news, cnbc, companies, trade, buy, market, momentum, dump, sensitive, rates, longer, stocks, winners, growth, 10year, yields, treasury, economically, investors, gloom


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‘We can’t really buy into’ the bond yield bounce, says Wells Fargo rate strategist

Don’t get too bullish on the bond yield bounce. So says Wells Fargo Global Head of Rate Strategy Michael Schumacher, who warned investors on Thursday not to look at the recent rally in U.S. Treasury yields through rose-colored glasses. “We can’t really buy into it,” he said on CNBC’s “Futures Now” amid a broad-based rally in both stocks and bond yields that followed an agreement between U.S. and Chinese trade officials to restart negotiations in October. Those worrisome factors have led to extre


Don’t get too bullish on the bond yield bounce. So says Wells Fargo Global Head of Rate Strategy Michael Schumacher, who warned investors on Thursday not to look at the recent rally in U.S. Treasury yields through rose-colored glasses. “We can’t really buy into it,” he said on CNBC’s “Futures Now” amid a broad-based rally in both stocks and bond yields that followed an agreement between U.S. and Chinese trade officials to restart negotiations in October. Those worrisome factors have led to extre
‘We can’t really buy into’ the bond yield bounce, says Wells Fargo rate strategist Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-09-07  Authors: lizzy gurdus
Keywords: news, cnbc, companies, wells, cant, bounce, schumacher, trade, right, investors, yield, strategist, factors, fargo, yields, bond, rate, trillion, treasury, really, buy


'We can't really buy into' the bond yield bounce, says Wells Fargo rate strategist

Don’t get too bullish on the bond yield bounce.

So says Wells Fargo Global Head of Rate Strategy Michael Schumacher, who warned investors on Thursday not to look at the recent rally in U.S. Treasury yields through rose-colored glasses.

“We can’t really buy into it,” he said on CNBC’s “Futures Now” amid a broad-based rally in both stocks and bond yields that followed an agreement between U.S. and Chinese trade officials to restart negotiations in October.

“We think about all the catalysts out there: trade, Brexit, Hong Kong,” Schumacher said, adding that while U.S.-China trade headlines turned notably positive on Thursday, they didn’t convince him that we were any closer to an immediate resolution.

“Is it in Donald Trump’s interests right now to try and strike a deal? Probably not, most likely not until early next year. What about the Chinese government? We’re not so confident there’s a deal coming there, either,” he said. “The way we look at it is, yeah, there’s a brief period of good news right now, but you’ve got so many choppy factors out there.”

Those worrisome factors have led to extremely depressed bond yields, particularly on the U.S. 10-year Treasury note. Bond yields move inversely to bond prices, which means as yields have plummeted, bond prices have skyrocketed.

“If you think about [bonds] fundamentally right now, we’d say they are overvalued today,” Schumacher said.

But with $17 trillion of sovereign debt and $1 trillion of corporate debt now trading at negative yields, it’s getting tougher for investors to know where to turn, the strategist acknowledged.

“What kind of saver, what sort of investor, wants to get a negative real yield?” he said. ” Now, the comeback to that is, ‘OK, we get it, but it’s not really a fundamental market right now.’ … Trade is dominating. Brexit’s important. Hong Kong is out there. Until these factors calm down a fair bit, the fundamentals simply don’t matter that much.”

As such, Schumacher predicted the 10-year would “bounce around” for the rest of 2019, in line with the market’s recent volatility.

And, for investors, very short-maturity Treasurys — of 1-year duration or less — is the best place to wait out the roller-coaster ride, he said in a Thursday phone call with CNBC.

Bonds continued their climb late Thursday.

Disclaimer


Company: cnbc, Activity: cnbc, Date: 2019-09-07  Authors: lizzy gurdus
Keywords: news, cnbc, companies, wells, cant, bounce, schumacher, trade, right, investors, yield, strategist, factors, fargo, yields, bond, rate, trillion, treasury, really, buy


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From trash to cash: These investors have made a killing by betting on a waste management company

Christopher Warner and Ozo Jaculewicz helped build one of the top-performing funds of 2019 with an unconventional bet: Waste Connections. Waste Connections, a waste management company based in Canada, has the largest weight in the Wells Fargo Asset Management Discovery fund (WFDAX), which is managed by Warner and Jaculewicz. “We’re growth managers but we like a balanced portfolio so we can do well in different market environments.” The fund, Young noted, posted a 20% loss in the fourth quarter o


Christopher Warner and Ozo Jaculewicz helped build one of the top-performing funds of 2019 with an unconventional bet: Waste Connections. Waste Connections, a waste management company based in Canada, has the largest weight in the Wells Fargo Asset Management Discovery fund (WFDAX), which is managed by Warner and Jaculewicz. “We’re growth managers but we like a balanced portfolio so we can do well in different market environments.” The fund, Young noted, posted a 20% loss in the fourth quarter o
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Company: cnbc, Activity: cnbc, Date: 2019-09-07  Authors: fred imbert
Keywords: news, cnbc, companies, cash, company, investors, funds, trash, managers, warner, betting, waste, fund, young, market, morningstar, killing, management, portfolio, way


From trash to cash: These investors have made a killing by betting on a waste management company

Christopher Warner and Ozo Jaculewicz helped build one of the top-performing funds of 2019 with an unconventional bet: Waste Connections.

Waste Connections, a waste management company based in Canada, has the largest weight in the Wells Fargo Asset Management Discovery fund (WFDAX), which is managed by Warner and Jaculewicz. Their bet on Waste Connections panned out, with the stock gaining 23% this year. It has also led to massive gains for the fund’s investors in 2019.

The four-star rated fund is up 34.9% this year and is outperforming 97% of the funds in its category, according to Morningstar. The fund — which has $2.6 billion in assets — has also been on fire relative to the S&P 500, which is up 18.7% in 2019.

“The way we manage the portfolio and the way we think about things is we like balance and sales,” said Warner, one of the fund’s co-managers. “We’re growth managers but we like a balanced portfolio so we can do well in different market environments.”

Connor Young, an analyst at Morningstar, said that while the fund is a top performer, it has been vulnerable to big pullbacks in the market given its tilt towards high-growth companies. The fund, Young noted, posted a 20% loss in the fourth quarter of 2018 amid a sharp market downturn.

“But at their core, these are talented and experienced managers who … continue to carry out a proven approach that has delivered strong long-term results at this fund,” Young said.


Company: cnbc, Activity: cnbc, Date: 2019-09-07  Authors: fred imbert
Keywords: news, cnbc, companies, cash, company, investors, funds, trash, managers, warner, betting, waste, fund, young, market, morningstar, killing, management, portfolio, way


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