Three states, including two big ones for the 2020 election, just set new lows for unemployment

A job recruiter wears a shirt showing all of the Wal-Mart Stores Inc. brands during a career fair at the Sheraton Hotel in Philadelphia, Pennsylvania. At a time when the national unemployment rate is at its lowest in nearly half a century, three states have set all-time records. Vermont’s lowest-in-the-nation 2.2% jobless rate represents a new historic mark for the Green Mountain state, according to a report Friday from the Bureau of Labor Statistics.


A job recruiter wears a shirt showing all of the Wal-Mart Stores Inc. brands during a career fair at the Sheraton Hotel in Philadelphia, Pennsylvania. At a time when the national unemployment rate is at its lowest in nearly half a century, three states have set all-time records. Vermont’s lowest-in-the-nation 2.2% jobless rate represents a new historic mark for the Green Mountain state, according to a report Friday from the Bureau of Labor Statistics.
Three states, including two big ones for the 2020 election, just set new lows for unemployment Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-05-17  Authors: jeff cox
Keywords: news, cnbc, companies, big, statistics, ones, including, showing, set, states, lows, unemployment, election, walmart, wears, shirt, state, stores, 2020, rate


Three states, including two big ones for the 2020 election, just set new lows for unemployment

A job recruiter wears a shirt showing all of the Wal-Mart Stores Inc. brands during a career fair at the Sheraton Hotel in Philadelphia, Pennsylvania.

At a time when the national unemployment rate is at its lowest in nearly half a century, three states have set all-time records.

Vermont’s lowest-in-the-nation 2.2% jobless rate represents a new historic mark for the Green Mountain state, according to a report Friday from the Bureau of Labor Statistics.


Company: cnbc, Activity: cnbc, Date: 2019-05-17  Authors: jeff cox
Keywords: news, cnbc, companies, big, statistics, ones, including, showing, set, states, lows, unemployment, election, walmart, wears, shirt, state, stores, 2020, rate


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China faces possible hit to credit rating if the trade war isn’t resolved

Escalations in its trade dispute with the U.S. not only could dent China’s economy but also impact its credit standing, according to ratings agencies. An accompanying release said the impact of more central bank intervention could impact “the future of [China’s] public debt ratio and China’s rating.” Reductions in credit ratings often translate to higher interest rates for a country’s bonds. The U.S. had a $419.2 billion trade deficit with China in 2018, on $539.5 billion in imports and just $12


Escalations in its trade dispute with the U.S. not only could dent China’s economy but also impact its credit standing, according to ratings agencies. An accompanying release said the impact of more central bank intervention could impact “the future of [China’s] public debt ratio and China’s rating.” Reductions in credit ratings often translate to higher interest rates for a country’s bonds. The U.S. had a $419.2 billion trade deficit with China in 2018, on $539.5 billion in imports and just $12
China faces possible hit to credit rating if the trade war isn’t resolved Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-05-17  Authors: jeff cox
Keywords: news, cnbc, companies, billion, isnt, chinas, tariff, faces, china, ratings, trade, resolved, chinese, hit, impact, possible, tariffs, credit, rating, war


China faces possible hit to credit rating if the trade war isn't resolved

“The tariff war is negative for China especially at a time when its policy makers are battling problems of rising debt and increasing leverage in its economy,” analysts at ratings agency DBRS said in a note. “The economic impact on China of rising tariffs would be broader than just via its trade with the U.S.”

China’s credit remains strong despite a weakening economy and a high-stakes tariff battle it is engaged in with the U.S. However, should the impasse linger on, the damages could become greater and start having some deeper impacts.

Escalations in its trade dispute with the U.S. not only could dent China’s economy but also impact its credit standing, according to ratings agencies.

An accompanying release said the impact of more central bank intervention could impact “the future of [China’s] public debt ratio and China’s rating.”

Reductions in credit ratings often translate to higher interest rates for a country’s bonds. China’s debt is currently equivalent to $5.3 trillion in U.S. dollars, or about 43% of its GDP.

DBRS, the fourth-largest ratings agency in the world, has China rated “A,” which is its third-highest classification. However, it recently changed the outlook to negative as the tariff issues pile up.

“China remains a middle-income country that generally lacks the historic openness, institutional credibility and transparency of the major global financial centers,” the firm said in an earlier note.

Negotiators on both sides say they remain optimistic a deal can be reached, though markets have been focused on the more immediate impacts of existing tariffs and threats of ones to come.

The U.S. this month hiked its tariffs to 25% from 10% on $200 billion of Chinese goods. China retaliated by raising its tariff rate from 10% to 20%-25% on $60 billion of U.S. imports. The U.S. is seeking a number of concessions, particularly focused on opening Chinese markets and halting the theft of intellectual property and forced technology transfers.

Should the U.S. not get what it is seeking, President Donald Trump has threatened to slap tariffs on another $300 billion in Chinese imports. The U.S. had a $419.2 billion trade deficit with China in 2018, on $539.5 billion in imports and just $120.3 billion in exports. The deficit through the first three months of 2019 was just shy of $80 billion.

Other ratings agencies have noted the danger to further intensifying relations.

“An abrupt breakdown in trade talks, if that were to occur, will inject considerable policy uncertainty, increase risk aversion and lead to an abrupt repricing of risk assets globally,” Moody’s analyst Madhavi Bokil said in a note. “In China, increased US tariffs will have a significant negative effect on exports amid an already slowing economy.”

Fitch said China could offset the additional tariffs with more monetary easing, but noted it expects GDP to fall to 6.1% this year from 6.6% in 2018.

Should the U.S. extend its sanctions, that could knock off another half-point from the growth figure, the agency said.

“But if trade tensions eventually lead to blanket U.S. tariffs on all Chinese goods, the potential rating impact could be greater, as it may tempt the authorities to abandon their restrained approach to policy easing, and adopt credit stimulus measures that exacerbate the country’s already significant financial vulnerabilities,” said Brian Coulton, Fitch’s economist.


Company: cnbc, Activity: cnbc, Date: 2019-05-17  Authors: jeff cox
Keywords: news, cnbc, companies, billion, isnt, chinas, tariff, faces, china, ratings, trade, resolved, chinese, hit, impact, possible, tariffs, credit, rating, war


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Fed’s Neel Kashkari says rate hikes ‘were not called for’ and that policy has been ‘too tight’

In an unusually harsh rebuke of central bank actions, Kashkari said the central bank shouldn’t have tightened monetary policy with inflation so low. “In my view, these rate increases were not called for by our symmetric framework,” Kashkari said during a speech in Santa Barbara, California. He based his position on a job market that is still growing even though wage gains are still tame, and inflation is averaging around 1.6%. Even with the low rate, another gauge that includes discouraged worke


In an unusually harsh rebuke of central bank actions, Kashkari said the central bank shouldn’t have tightened monetary policy with inflation so low. “In my view, these rate increases were not called for by our symmetric framework,” Kashkari said during a speech in Santa Barbara, California. He based his position on a job market that is still growing even though wage gains are still tame, and inflation is averaging around 1.6%. Even with the low rate, another gauge that includes discouraged worke
Fed’s Neel Kashkari says rate hikes ‘were not called for’ and that policy has been ‘too tight’ Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-05-16  Authors: jeff cox
Keywords: news, cnbc, companies, inflation, hikes, feds, policy, rates, neel, low, market, job, tight, fed, kashkari, rate, called, target


Fed's Neel Kashkari says rate hikes 'were not called for' and that policy has been 'too tight'

The Federal Reserve erred by raising interest rates during the recovery, part of a policy implementation that misread key signals and threatened to send the economy into recession, Minneapolis Fed President Neel Kashkari said Thursday.

In an unusually harsh rebuke of central bank actions, Kashkari said the central bank shouldn’t have tightened monetary policy with inflation so low. Instead, he said, the policymaking Federal Open Market Committee should be signaling that it will allow inflation to run higher than the 2% target, a move that would send a clear signal that the Fed is serious about stimulating the economy.

The FOMC hiked rates nine times starting in December 2015 as part of an effort to normalize policy following the extreme accommodations made during and after the financial crisis and Great Recession. Those hikes came even as inflation stayed well below the Fed’s goal.

“In my view, these rate increases were not called for by our symmetric framework,” Kashkari said during a speech in Santa Barbara, California.

The remarks came as part of a review the Fed is doing of its framework and the approach it has taken to jolting the economy back to life.

They also jibe closely with sentiments from the White House. President Donald Trump has repeatedly criticized the rate hikes and has said the economy would be much stronger had the Fed backed off.

While acknowledging the aggressive measures the central bank took — bringing its target rate down to near-zero and implementing three rounds of asset purchases that took its balance sheet to $4.5 trillion — Kashkari said the Fed should have kept its foot on the pedal.

He based his position on a job market that is still growing even though wage gains are still tame, and inflation is averaging around 1.6%.

“With inflation somewhat too low and the job market still showing capacity after 10 years, the only reasonable conclusion I can draw is that monetary policy has been too tight in this recovery,” he said.

Kashkari said one of the main problems was that Fed officials didn’t see how low unemployment could go without generating inflation. The current unemployment rate is at 3.6%, the lowest reading in nearly 50 years.

“I believe that we misread the labor market, thinking we were at maximum employment when, in fact, millions of Americans still wanted to work, and fearing that if we hit maximum employment, inflation might suddenly accelerate, and we would then have to raise rates quickly to contain it,” he said.

“The headline unemployment rate has been giving a faulty signal,” he added.

Even with the low rate, another gauge that includes discouraged worker and those holding part-time positions for economic reasons remains at 7.3%, reflective of slack remaining in the job market.

Kashkari said the lesson from the tightening cycle is that the Fed probably will want to be even more aggressive with policy in the next downturn. Evidence of tightening too fast came in the fourth quarter of 2018, when markets feared the Fed would continue raising rates and reducing its balance sheet and sold off aggressively.

“Perhaps we’d have achieved maximum employment already if monetary policy had been more accommodative,’ he said, adding that “by raising rates more quickly than called for by our symmetric framework, we ran the risk of overtightening and causing a recession. Markets signaled this risk with the steep drop in bond yields and equity prices late last year. The FOMC’s quick adjustment to pause further rate hikes was appropriate and, thankfully, seems to have mitigated this risk for now.”

However, he said he fears what may happen next time if the Fed doesn’t do a better job of listening to economic and market signals.

“For our current framework to be effective and credible, we must walk the walk and actually allow inflation to climb modestly above 2 percent in order to demonstrate that we are serious about symmetry,” Kashkari said. “Make-up strategies such as price-level targets offer this attractive feature. But we must honestly ask ourselves: If we felt compelled to raise rates when inflation was below target in this recovery, would we really keep rates low when inflation is above target next time? Count me as skeptical.”


Company: cnbc, Activity: cnbc, Date: 2019-05-16  Authors: jeff cox
Keywords: news, cnbc, companies, inflation, hikes, feds, policy, rates, neel, low, market, job, tight, fed, kashkari, rate, called, target


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The Atlanta Fed’s GDP forecast is sliding, and expectations for rate cuts are surging

A Federal Reserve projection on economic growth just weakened substantially, and expectations for a rate cut over the next eight months got a lot stronger. The Atlanta Fed’s closely watched GDPNow tracker is pointing to a 1.1% gain for the economy in the second quarter, according to a revision posted Wednesday. Disappointing retail sales in April fueled the latest leg down in the Atlanta Fed outlook. The Commerce Department reported Wednesday that sales declined 0.2% for the month against expect


A Federal Reserve projection on economic growth just weakened substantially, and expectations for a rate cut over the next eight months got a lot stronger. The Atlanta Fed’s closely watched GDPNow tracker is pointing to a 1.1% gain for the economy in the second quarter, according to a revision posted Wednesday. Disappointing retail sales in April fueled the latest leg down in the Atlanta Fed outlook. The Commerce Department reported Wednesday that sales declined 0.2% for the month against expect
The Atlanta Fed’s GDP forecast is sliding, and expectations for rate cuts are surging Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-05-15  Authors: jeff cox
Keywords: news, cnbc, companies, substantially, retail, feds, cuts, sliding, watched, weakened, sales, gain, gdp, forecast, expectations, rate, surging, atlanta, months, 02


The Atlanta Fed's GDP forecast is sliding, and expectations for rate cuts are surging

A Federal Reserve projection on economic growth just weakened substantially, and expectations for a rate cut over the next eight months got a lot stronger.

The Atlanta Fed’s closely watched GDPNow tracker is pointing to a 1.1% gain for the economy in the second quarter, according to a revision posted Wednesday. That comes on the back of a strong first three months that saw a 3.2% gain and is substantially lower than CNBC’s Rapid Update survey, which puts the GDP tracking estimate at 2%.

Disappointing retail sales in April fueled the latest leg down in the Atlanta Fed outlook. The Commerce Department reported Wednesday that sales declined 0.2% for the month against expectations of a 0.2% gain. Along with the retail letdown, industrial production fell 0.5% against Wall Street estimates of a 0.1% gain.


Company: cnbc, Activity: cnbc, Date: 2019-05-15  Authors: jeff cox
Keywords: news, cnbc, companies, substantially, retail, feds, cuts, sliding, watched, weakened, sales, gain, gdp, forecast, expectations, rate, surging, atlanta, months, 02


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Trump says if Fed cuts interest rates, US will win trade war: ‘It would be game over, we win!’

President Donald Trump predicted Tuesday that China’s next move in the trade war will be a rate cut, and he pushed the Federal Reserve to follow suit in what he said would lead to a clear victory for the U.S. He said that should the central bank meet a China rate cut with one of its own, that would be “game over, we win!” The White House and Beijing have hit an impasse in their ongoing trade negotiations. Washington is looking for a lowering of barriers into China and for the nation to halt the


President Donald Trump predicted Tuesday that China’s next move in the trade war will be a rate cut, and he pushed the Federal Reserve to follow suit in what he said would lead to a clear victory for the U.S. He said that should the central bank meet a China rate cut with one of its own, that would be “game over, we win!” The White House and Beijing have hit an impasse in their ongoing trade negotiations. Washington is looking for a lowering of barriers into China and for the nation to halt the
Trump says if Fed cuts interest rates, US will win trade war: ‘It would be game over, we win!’ Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-05-14  Authors: jeff cox
Keywords: news, cnbc, companies, war, worth, winthe, trump, latest, cut, rates, fed, rate, trade, interest, china, cuts, president, white, game, washington, win


Trump says if Fed cuts interest rates, US will win trade war: 'It would be game over, we win!'

President Donald Trump predicted Tuesday that China’s next move in the trade war will be a rate cut, and he pushed the Federal Reserve to follow suit in what he said would lead to a clear victory for the U.S.

In a tweet that amounted to the latest salvo in the tariff dispute between the two nations, the president ramped up his pressure on the Fed to ease monetary policy.

He said that should the central bank meet a China rate cut with one of its own, that would be “game over, we win!”

The White House and Beijing have hit an impasse in their ongoing trade negotiations. Washington is looking for a lowering of barriers into China and for the nation to halt the theft of intellectual property. As recent talks stalled, China retaliated against Trump’s latest round of tariffs, announcing plans Monday to slap new levies on $60 billion worth of American goods.


Company: cnbc, Activity: cnbc, Date: 2019-05-14  Authors: jeff cox
Keywords: news, cnbc, companies, war, worth, winthe, trump, latest, cut, rates, fed, rate, trade, interest, china, cuts, president, white, game, washington, win


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China’s ‘self-destructive nuclear option’ in trade war: Selling US Treasury bonds

Consider it China’s nuclear option in the trade war with the U.S. — the ability to start dumping its massive pile of Treasury bonds that could trigger a surge in interest rates and substantially damage the American economy. “It’s a self-destructive nuclear option,” said Robert Tipp, chief investment strategist and head of global bonds for PGIM Fixed Income. Following its myriad disputes with the Trump administration, Russia has largely exited the Treasury market. “They need to do more to counter


Consider it China’s nuclear option in the trade war with the U.S. — the ability to start dumping its massive pile of Treasury bonds that could trigger a surge in interest rates and substantially damage the American economy. “It’s a self-destructive nuclear option,” said Robert Tipp, chief investment strategist and head of global bonds for PGIM Fixed Income. Following its myriad disputes with the Trump administration, Russia has largely exited the Treasury market. “They need to do more to counter
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Company: cnbc, Activity: cnbc, Date: 2019-05-13  Authors: jeff cox
Keywords: news, cnbc, companies, treasurys, china, trillion, chinese, selfdestructive, bonds, treasury, selling, united, market, states, nuclear, option, trade, chinas, war, biggest


China's 'self-destructive nuclear option' in trade war: Selling US Treasury bonds

Consider it China’s nuclear option in the trade war with the U.S. — the ability to start dumping its massive pile of Treasury bonds that could trigger a surge in interest rates and substantially damage the American economy. As the two sides engage in a tit-for-tat tariff exchange, the possibility that China might raise the stakes and stop being the world’s biggest consumer of U.S. debt again reared its imposing head Monday. China currently owns $1.13 trillion in Treasurys, a fraction of the total $22 trillion in U.S. debt outstanding but 17.7% of the various securities held by foreign governments, according to data from the Treasury and the Securities Industry and Financial Markets Association. Should the Chinese decide to walk away or reduce their role in the market, that, at least in theory, could create a substantial dislocation for a country such as the U.S. that relies so much on sovereign entities to buy its paper.

At least for the moment, markets aren’t that worried that China could take such a seemingly drastic step, in large part because the move might not have much upside except to create headlines. “It’s a self-destructive nuclear option,” said Robert Tipp, chief investment strategist and head of global bonds for PGIM Fixed Income. “Maybe it helps them as a bargaining chip, but it’s endangering the value of something they’re deeply involved in.” In fact, the move actually could help the U.S. For one, a Chinese reduction of Treasurys could weaken the dollar and make U.S. multinationals more competitive. For another, Treasury yields would rise and thus cause prices to fall, lowering the value of China’s portfolio. And there’s the question of where China would put its money — all that cash would have to go somewhere, and U.S. bonds are among the highest-yielding in the world when weighed against their relatively low risk. “It still seems like Treasurys are the optimal place for security, flight to quality, capital appreciation etc. Moving around that sum of money seems very challenging now,” said Nick Maroutsos, co-head of global bonds for Janus Henderson. “It’s possible and could happen very gradually over a six- to 12-month period. But calling it and having it happen so quickly is very unlikely.”

‘The biggest weapon they have’

In fact, China already has been pulling back its role in the U.S. bond market. Its holdings have fallen nearly 4% over the past 12 months even as total foreign government ownership of Treasurys has increased by 2.6%. Following its myriad disputes with the Trump administration, Russia has largely exited the Treasury market. Japan, the No. 2 holder of U.S. debt, has increased its holdings slightly over the past 12 months to $1.07 trillion, while Brazil has stepped into the No. 3 position with about $308 billion, thanks to a 12.9% boost during the period. With the U.S. expected to be staring down $1 trillion annual budget deficits in the years to come, a less active Chinese government does generate some fears. “To me, that is the biggest worry. This is really the biggest weapon they have,” said Sung Won Sohn, professor of economics at Loyola Marymount University and president of SS Economics. “They need to do more to counter the United States. So if push comes to shove, that’s what they are going to resort to.”

Because the U.S. imports far more from China than the other way around, China needs additional leverage to fight the tariff battle. While Sohn said shrinking its bond holdings would be a last resort, he sees it as possible if the U.S. decides to enact tariffs on all Chinese imports, which totaled $539.5 billion in 2018. “I have become less and less optimistic and more pessimistic, because this is a trade war but it’s not as much about economics as it is other things,” he said. “In the United States, we view China as an economic predator. China views the United States as a model of Western power trying to humiliate China as in the 18th century. There’s a long, kind of simmering underneath of nationalistic feelings.”

Yields fall amid panic


Company: cnbc, Activity: cnbc, Date: 2019-05-13  Authors: jeff cox
Keywords: news, cnbc, companies, treasurys, china, trillion, chinese, selfdestructive, bonds, treasury, selling, united, market, states, nuclear, option, trade, chinas, war, biggest


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Hedge fund manager David Einhorn unveils two new trades at the Sohn conference

Hedge fund manager David Einhorn discussed two positions his firm has taken, both relating to leasing in the transportation industry. The Greenlight Capital founder and president said Monday at the 24th annual Sohn Investment Conference in New York that his fund has a long position on AerBus and a short on GATX. AerCap is involved in airplane leasing, while GATX is a leader in rail cars. Speaking favorably of both industries, he said the airline sector has some advantages over rail that make Aer


Hedge fund manager David Einhorn discussed two positions his firm has taken, both relating to leasing in the transportation industry. The Greenlight Capital founder and president said Monday at the 24th annual Sohn Investment Conference in New York that his fund has a long position on AerBus and a short on GATX. AerCap is involved in airplane leasing, while GATX is a leader in rail cars. Speaking favorably of both industries, he said the airline sector has some advantages over rail that make Aer
Hedge fund manager David Einhorn unveils two new trades at the Sohn conference Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-05-06  Authors: jeff cox
Keywords: news, cnbc, companies, rail, fund, einhorn, trades, gatx, unveils, aercap, york, hedge, sohn, conference, manager, leasing, wrong, thinks, transportation, david


Hedge fund manager David Einhorn unveils two new trades at the Sohn conference

Hedge fund manager David Einhorn discussed two positions his firm has taken, both relating to leasing in the transportation industry.

The Greenlight Capital founder and president said Monday at the 24th annual Sohn Investment Conference in New York that his fund has a long position on AerBus and a short on GATX. AerCap is involved in airplane leasing, while GATX is a leader in rail cars.

Speaking favorably of both industries, he said the airline sector has some advantages over rail that make AerCap the better choice over GATX, which he thinks could be overvalued.

“Neither has consumer-facing businesses, and both have terrible news. AerCap operates in a growing industry with a favorable outlook,” Einhorn said. “We think the market has it wrong.”


Company: cnbc, Activity: cnbc, Date: 2019-05-06  Authors: jeff cox
Keywords: news, cnbc, companies, rail, fund, einhorn, trades, gatx, unveils, aercap, york, hedge, sohn, conference, manager, leasing, wrong, thinks, transportation, david


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Jeff Gundlach says investors can get rich off interest rate volatility ahead

Bond titan Jeffrey Gundlach isn’t sure which way bond yields are headed, but he does see a good bet that they’ll move a lot. Speaking Monday at the Sohn Conference in New York, the head of DoubleLine Capital said his best suggestion is on volatility in long-term rates. He recommended using the iShares 20+ Year Treasury Bond ETF as a way to execute the trade. In addition to the monetary policy shifts, which now see little chance of a rate hike or cut this year, there are fiscal policy questions.


Bond titan Jeffrey Gundlach isn’t sure which way bond yields are headed, but he does see a good bet that they’ll move a lot. Speaking Monday at the Sohn Conference in New York, the head of DoubleLine Capital said his best suggestion is on volatility in long-term rates. He recommended using the iShares 20+ Year Treasury Bond ETF as a way to execute the trade. In addition to the monetary policy shifts, which now see little chance of a rate hike or cut this year, there are fiscal policy questions.
Jeff Gundlach says investors can get rich off interest rate volatility ahead Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-05-06  Authors: jeff cox
Keywords: news, cnbc, companies, rich, investors, interest, gundlach, way, policy, monetary, rate, ahead, volatility, conference, bond, sohn, etf, york, jeff


Jeff Gundlach says investors can get rich off interest rate volatility ahead

Jeffrey Gundlach speaking at the 24th Annual Sohn Investment Conference in New York on May 6, 2019.

Bond titan Jeffrey Gundlach isn’t sure which way bond yields are headed, but he does see a good bet that they’ll move a lot.

Speaking Monday at the Sohn Conference in New York, the head of DoubleLine Capital said his best suggestion is on volatility in long-term rates. Investors can express the bet through both put and call options at the same strike, or sale, price. Puts give investors the ability to buy, while calls provide the chance to sell.

Landing a number where the rate rises or falls more than the total premium on the option could allow investors to book big profits. Gundlach said 50% to 75% gains over the next 12 months wouldn’t be out of line.

He recommended using the iShares 20+ Year Treasury Bond ETF as a way to execute the trade.

“I think this is an extremely compelling time to do this trade and an extremely important environment where outcomes are so binary,” he said.

Gundlach runs the $50 billion DoubleLine Total Return Bond Fund.

The fund’s five-year performance is among the best in its category, though it has lagged most of its peers in 2019 with a gain of just 2%, according to Morningstar rankings.

Gundlach talked at length about the Federal Reserve and Chairman Jerome Powell, whose fickle moves have made it difficult to know just where monetary policy will be ahead. Gundlach used the term “policy fluid” to describe the state of affairs under the central bank chief.

“The problem is that policy fluidity suggests pretty much anything can happen almost without notice,” he said, pointing to several policy shifts from Powell since October 2018.

In addition to the monetary policy shifts, which now see little chance of a rate hike or cut this year, there are fiscal policy questions. Modern Monetary Theory, which posits that rates should be zero to allow the government to spend on programs that will fix the wealth cap, also is gaining popularity.

“Modern Monetary Theory is not a good idea,” Gundlach said. “It’s not modern, it’s not monetary, and it isn’t much of a theory.”

At the 2018 Sohn conference, Gundlach recommended a long play on SPDR S&P Oil & Gas Exploration & Production ETF and a short on Facebook. Both trades turned out poorly. The explorer ETF has slumped more than 24% over the past year while Facebook, though underperforming the broader market, is still up more than 9%.


Company: cnbc, Activity: cnbc, Date: 2019-05-06  Authors: jeff cox
Keywords: news, cnbc, companies, rich, investors, interest, gundlach, way, policy, monetary, rate, ahead, volatility, conference, bond, sohn, etf, york, jeff


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Jobs surge in April, unemployment rate falls to the lowest since 1969

The U.S. jobs machine kept humming along in April, adding a robust 263,000 new hires while the unemployment rate fell to 3.6%, the lowest in a generation, the Labor Department reported Friday. The unemployment rate for Asians fell sharply, plunging from 3.1% to 2.2%. That brought the labor force participation rate down to 62.8%, exactly where it was a year ago. Those counted as not in the labor force surged by 646,000 to a fresh high of 96.2 million. “Wages may have been slightly tepid this mont


The U.S. jobs machine kept humming along in April, adding a robust 263,000 new hires while the unemployment rate fell to 3.6%, the lowest in a generation, the Labor Department reported Friday. The unemployment rate for Asians fell sharply, plunging from 3.1% to 2.2%. That brought the labor force participation rate down to 62.8%, exactly where it was a year ago. Those counted as not in the labor force surged by 646,000 to a fresh high of 96.2 million. “Wages may have been slightly tepid this mont
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Company: cnbc, Activity: cnbc, Date: 2019-05-03  Authors: jeff cox, yun li
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Jobs surge in April, unemployment rate falls to the lowest since 1969

The U.S. jobs machine kept humming along in April, adding a robust 263,000 new hires while the unemployment rate fell to 3.6%, the lowest in a generation, the Labor Department reported Friday.

Nonfarm payroll growth easily beat Wall Street expectations of 190,000 and a 3.8% jobless rate.

Average hourly earnings growth held at 3.2% over the past year, a notch below Dow Jones estimates of 3.3%. The monthly gain was 0.2%, below the expected 0.3% increase, bringing the average to $27.77. The average work week also dropped 0.1 hours to 34.4 hours.

Unemployment was last this low in December 1969 when it hit 3.5%. At a time when many economists see a tight labor market, big job growth continues as the economic expansion is just a few months away from being the longest in history.

The unemployment rate for Asians fell sharply, plunging from 3.1% to 2.2%.

While last month’s slump in the jobless rate came with strong increase in hiring, it also was helped along by a sharp decline in the labor force of 490,000. That brought the labor force participation rate down to 62.8%, exactly where it was a year ago.

A broader unemployment gauge that includes those who have quit looking for jobs as well as the underemployed held at 7.3%, where it has been since February.

Those counted as not in the labor force surged by 646,000 to a fresh high of 96.2 million.

“Leaving aside month-to-month fluctuations, the labor market is still very strong, adding almost double the number of workers needed to keep pace with new entrants to the labor force in any given month,” said Eric Winograd, AllianceBernstein’s senior economist. “Wages may have been slightly tepid this month relative to expectations but are still growing at just about the highest rate this cycle, and the unemployment rate is at multi-generational lows.”

The level of unemployed people plunged by 387,000 in April, bringing the total level to 5.8 million. However, the ranks of the employed also declined by 103,000, according to the Labor Department’s household survey.

Professional and business services led job creation with 76,000 new positions. Construction added 33,000, bringing to 256,000 the total new jobs created in the field over the past year.

Health care rose by 27,000, bringing its 12-month total to 404,000, while financial positions increased by 12,000, rounding out an increase of 111,000 in the 12-month period thanks largely to growth in real estate and rental and leasing.

Social assistance increased by 26,000, while manufacturing added 4,000.

Retail, whose fortunes have fluctuated in recent months, saw a loss of 12,000 jobs.

Previous months saw net upward revisions, with February going from a scant 33,000 growth to 56,000, though March’s total was reduced to 189,000 from 196,000, for a net gain of 16,000. Year to date, job gains have averaged 205,000 a month.


Company: cnbc, Activity: cnbc, Date: 2019-05-03  Authors: jeff cox, yun li
Keywords: news, cnbc, companies, bringing, force, growth, lowest, unemployment, falls, 1969, jobs, rate, total, labor, months, surge, month


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Fed’s Clarida says economy is ‘in a very good place’ and backs ‘patient’ approach to rates

Federal Reserve Vice Chairman Richard Clarida said Friday the U.S. economy is strong and interest rate policy is an appropriate place to support growth. Speaking at the Hoover Institution Monetary Policy conference at Stanford University, Clarida endorsed the Fed’s recent policy switch to “patience” in terms of implementing future rate hikes, and to data dependence as opposed to being on a preset course. “The U.S. economy is in a very good place,” the central bank official said in prepared remar


Federal Reserve Vice Chairman Richard Clarida said Friday the U.S. economy is strong and interest rate policy is an appropriate place to support growth. Speaking at the Hoover Institution Monetary Policy conference at Stanford University, Clarida endorsed the Fed’s recent policy switch to “patience” in terms of implementing future rate hikes, and to data dependence as opposed to being on a preset course. “The U.S. economy is in a very good place,” the central bank official said in prepared remar
Fed’s Clarida says economy is ‘in a very good place’ and backs ‘patient’ approach to rates Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-05-03  Authors: jeff cox
Keywords: news, cnbc, companies, backs, place, good, feds, unemployment, terms, vice, rates, rate, approach, policy, university, clarida, wages, patient, economy


Fed's Clarida says economy is 'in a very good place' and backs 'patient' approach to rates

Federal Reserve Vice Chairman Richard Clarida said Friday the U.S. economy is strong and interest rate policy is an appropriate place to support growth.

Speaking at the Hoover Institution Monetary Policy conference at Stanford University, Clarida endorsed the Fed’s recent policy switch to “patience” in terms of implementing future rate hikes, and to data dependence as opposed to being on a preset course.

“The U.S. economy is in a very good place,” the central bank official said in prepared remarks. “The unemployment rate is at a 50-year low, real wages are rising in line with productivity, inflationary pressures are muted, and expected inflation is stable.”


Company: cnbc, Activity: cnbc, Date: 2019-05-03  Authors: jeff cox
Keywords: news, cnbc, companies, backs, place, good, feds, unemployment, terms, vice, rates, rate, approach, policy, university, clarida, wages, patient, economy


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