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

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


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


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

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

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

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

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

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

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

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

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

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

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

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Company: cnbc, Activity: cnbc, Date: 2019-06-21  Authors: fred imbert
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Here’s what the stock market liked from the Fed

Andrew Harrer | Bloomberg | Getty ImagesThe Fed came very close to promising a rate cut Wednesday, and now markets are focused on a possible July rate cut. “The market liked it now, but it’s important to keep in mind, rate cuts are not a magic wand. She also noted that the Fed’s interest rate forecast, presented in the so-called ‘dot plot,’ also showed the Fed’s rate forecast falling from 2.6% in 2020 to 2.4%, pricing at least one rate cut. Fed officials’ interest rate forecasts are included ano


Andrew Harrer | Bloomberg | Getty ImagesThe Fed came very close to promising a rate cut Wednesday, and now markets are focused on a possible July rate cut. “The market liked it now, but it’s important to keep in mind, rate cuts are not a magic wand. She also noted that the Fed’s interest rate forecast, presented in the so-called ‘dot plot,’ also showed the Fed’s rate forecast falling from 2.6% in 2020 to 2.4%, pricing at least one rate cut. Fed officials’ interest rate forecasts are included ano
Here’s what the stock market liked from the Fed Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-06-19  Authors: patti domm
Keywords: news, cnbc, companies, liked, statement, stock, rate, cuts, markets, feds, cut, heres, market, fed, officials, interest


Here's what the stock market liked from the Fed

Jerome Powell, chairman of the U.S. Federal Reserve, speaks during a news conference following a Federal Open Market Committee meeting in Washington, D.C., on Wednesday, June 19, 2019. Andrew Harrer | Bloomberg | Getty Images

The Fed came very close to promising a rate cut Wednesday, and now markets are focused on a possible July rate cut. “I think they’re fully planning on cutting in July, absent stronger data,” said Ed Keon, QMA chief investment strategist. “The market liked it now, but it’s important to keep in mind, rate cuts are not a magic wand. There is clear evidence of weakening of economic conditions.” The Fed sent a dovish message in its statement, but even more so in its interest rate forecast, released following its two-day meeting Wednesday afternoon. After the statement, stocks and bonds flip-flopped before settling into a pattern, where both markets were bid higher on the prospect of a rate cut. Bond yields, which move opposite price, fell with the biggest decline in the 2-year yield, which closely follows Fed expectations.

The Fed’s rate policy committee left the fed funds target rate range unchanged at 2.25% to 2.50%, while it tweaked some of the language in its statement to suggest it sees more risks to the economy. It also removed the phrasing that it would be “patient,” language it added earlier this year to indicate Fed officials were willing to wait and see more information before making a rate move. Analysts focused on the fact that the Fed’s interest rate projections showed eight of 17 officials are now expecting the Fed will need to cut rates at least once this year. The fed funds futures market Wednesday afternoon moved to price in three quarter-point hikes this year, including 100% odds for a quarter-point hike this summer, according to BMO. “That was the biggest surprise in terms of the dovishness. The market was already heading in fairly dovish and everyone did anticipate them taking out the word ‘patience,'” said Leslie Falconio, senior strategist with UBS Global Wealth Management Chief Investment Office. “It was really the dot plot that came off on the dovish side.” She also noted that the Fed’s interest rate forecast, presented in the so-called ‘dot plot,’ also showed the Fed’s rate forecast falling from 2.6% in 2020 to 2.4%, pricing at least one rate cut. Fed officials’ interest rate forecasts are included anonymously in the dot plot, which literally is a chart. “They’re setting us up for a rate cut, but who knows when,” said Peter Boockvar, chief investment strategist at Bleakley Advisory Group. “If the data weakens, they’ll cut in July. If it stays steady or gets better, they won’t. People should understand if they’re going to cut it’s because the market data got worse. … This is showing the market focus is on the cuts but not on the reason for the cuts.” While the markets took the Fed as dovish and ready to move, some economists stuck with their forecasts for no cuts. “The market reacted dovishly to the June FOMC, in part reacting to 8 dots showing cuts in 2019 and 7 of these indicating 50 [basis points] of cuts,” Citigroup economists wrote. “While the statement and dots keep cuts as early as July squarely on the table, the outcome is very close to our expectations and does not change our base case for no cuts in 2019 — which also remains the base case of a slim majority of Fed officials.” But John Briggs, head of strategy at NatWest Markets, said the Fed should already have cut and that it loses control of the narrative around the rate cut if it waits.


Company: cnbc, Activity: cnbc, Date: 2019-06-19  Authors: patti domm
Keywords: news, cnbc, companies, liked, statement, stock, rate, cuts, markets, feds, cut, heres, market, fed, officials, interest


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Kudlow says the White House is not considering demoting Fed Chair Powell right now

President Donald Trump is not currently considering removing Jerome Powell as head of the Federal Reserve, despite persistent White House criticism of the way the central bank is handling monetary policy, one of the president’s top advisors said. Larry Kudlow, director of the National Economic Council, said Trump is not planning to demote Powell. A Bloomberg News report Tuesday morning said the White House had looked at such a move in February. However, it’s unclear what removing Powell would ac


President Donald Trump is not currently considering removing Jerome Powell as head of the Federal Reserve, despite persistent White House criticism of the way the central bank is handling monetary policy, one of the president’s top advisors said. Larry Kudlow, director of the National Economic Council, said Trump is not planning to demote Powell. A Bloomberg News report Tuesday morning said the White House had looked at such a move in February. However, it’s unclear what removing Powell would ac
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Company: cnbc, Activity: cnbc, Date: 2019-06-18  Authors: jeff cox
Keywords: news, cnbc, companies, kudlow, federal, hikes, trump, removing, chair, house, markets, report, demoting, considering, right, powell, white, fed


Kudlow says the White House is not considering demoting Fed Chair Powell right now

President Donald Trump is not currently considering removing Jerome Powell as head of the Federal Reserve, despite persistent White House criticism of the way the central bank is handling monetary policy, one of the president’s top advisors said.

Larry Kudlow, director of the National Economic Council, said Trump is not planning to demote Powell. A Bloomberg News report Tuesday morning said the White House had looked at such a move in February.

Kudlow refused to confirm or deny the report but said it is no longer relevant.

“It’s a six-month-old story,” he told reporters. “It allegedly happened six months ago and it’s not happening today and therefore I have nothing to say about it. It is what it is.”

Amid multiple reports that Trump is not happy with Powell, the Fed chair himself has pushed back on the notion of him being removed from his post, saying that he can be dismissed only for cause.

Trump has been unhappy with the Fed for raising interest rates. The central bank approved four hikes in 2018, though markets expect up to three cuts by the end of 2019.

However, it’s unclear what removing Powell would accomplish. All of the rate hikes during his tenure were approved with broad-based support from the policymaking Federal Open Market Committee.

WATCH: Markets could drop 10% in a day if Trump demoted Powell, says expert


Company: cnbc, Activity: cnbc, Date: 2019-06-18  Authors: jeff cox
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African swine fever could drive up inflation in emerging markets as pork prices soar

African swine fever, which has already ravaged pig herds in China and pushed up food prices there, could also drive up inflation in the other emerging markets, according to research firm Capital Economics. “The most obvious channel through which this will impact (emerging markets) is via higher inflation,” James Swanston, assistant economist at Capital Economics, wrote in a note last week. That compares with less than 1% in most other emerging markets, and about 3.5% in China, Swanston wrote. Da


African swine fever, which has already ravaged pig herds in China and pushed up food prices there, could also drive up inflation in the other emerging markets, according to research firm Capital Economics. “The most obvious channel through which this will impact (emerging markets) is via higher inflation,” James Swanston, assistant economist at Capital Economics, wrote in a note last week. That compares with less than 1% in most other emerging markets, and about 3.5% in China, Swanston wrote. Da
African swine fever could drive up inflation in emerging markets as pork prices soar Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-06-17  Authors: weizhen tan
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African swine fever could drive up inflation in emerging markets as pork prices soar

A hired hand feeds a sow which recently gave birth to a new litter at the Grand Canal Pig Farm in Jiaxing, in China’s Zhejiang province.

African swine fever, which has already ravaged pig herds in China and pushed up food prices there, could also drive up inflation in the other emerging markets, according to research firm Capital Economics.

Outbreaks of the disease have been detected not just in China, but also in parts of Southeast Asia, Japan, Australia, Poland and Russia.

The Chinese government said in April it had culled more than a million pigs in a bid to control the outbreak, but some experts — such as Rabobank and TS Lombard — estimated that the number of hog culled could be more than 100 million.

“The most obvious channel through which this will impact (emerging markets) is via higher inflation,” James Swanston, assistant economist at Capital Economics, wrote in a note last week.

“If the disease spreads and increases in severity, it would probably make a notable contribution to inflation in parts of Asia … and Eastern Europe,” he said.

He singled out Taiwan, Cambodia, Vietnam, Russia, Poland and Romania, saying that pork is a relatively large part of the consumer price index basket in those countries — at around 2%. That compares with less than 1% in most other emerging markets, and about 3.5% in China, Swanston wrote.

Data from China’s National Bureau of Statistics on Wednesday showed that food prices in the country spiked 7.7% in May compared to a year ago, as pork prices surged 18.2% also in the same period.

The rise in inflation in China “probably has further to run,” while consumer prices in the other emerging markets would also be pushed up — by around 0.3 percentage points — if pork inflation were to rise to 15%, according to Capital Economics.

Recent spikes in prices have caused pork inflation in emerging economies to rise by as high as 15%, Swanston wrote.


Company: cnbc, Activity: cnbc, Date: 2019-06-17  Authors: weizhen tan
Keywords: news, cnbc, companies, swanston, markets, african, wrote, prices, china, rise, capital, fever, soar, emerging, pork, inflation, drive, swine


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How to take advantage of all the uncertainty with the stock market

Investors then exacerbated the losses because they were out of the market for the subsequent recovery. As the stock market swings amid tariff and trade war threats , you might get nervous about the effects on your 401(k) or other investments. “I truly believe it’s not timing the market, but time in the market that counts for increasing wealth, ” says Schultz. “But you have to be invested in the stock market or you won’t benefit.” Just as it’s a sure thing the stock market will decline in value,


Investors then exacerbated the losses because they were out of the market for the subsequent recovery. As the stock market swings amid tariff and trade war threats , you might get nervous about the effects on your 401(k) or other investments. “I truly believe it’s not timing the market, but time in the market that counts for increasing wealth, ” says Schultz. “But you have to be invested in the stock market or you won’t benefit.” Just as it’s a sure thing the stock market will decline in value,
How to take advantage of all the uncertainty with the stock market Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-06-14  Authors: alicia adamczyk
Keywords: news, cnbc, companies, schultz, sp, markets, stock, uncertainty, advantage, sell, points, losses, 401k, market, youre


How to take advantage of all the uncertainty with the stock market

Because the average investor withdrew funds when the market declined last year, they recorded losses of 9.42%, per the report, compared to just 4.38% for the S&P on the whole.

Behavior at the end of 2018 is a striking example. As the market soured in the final months of the year, investors pulled funds to mitigate losses, according to DALBAR’s 2018 Investor Behavior Study , but not nearly enough to avoid the full fall. Investors then exacerbated the losses because they were out of the market for the subsequent recovery.

As the stock market swings amid tariff and trade war threats , you might get nervous about the effects on your 401(k) or other investments. But a shaky market is no reason to stray from your financial plan.

Take the long view

If you’re saving for retirement through a 401(k) or IRA, then you’re investing for the long term. Movements in the market now shouldn’t matter much to you if you’re decades away from taking disbursements.

Some experts warn that a bear market is imminent. Even if that doesn’t turn out to be true — there’s no way to predict what the market will do with 100% accuracy — there will be a downturn eventually. Recognizing that should help you overcome urges to sell when things look bad, because the best thing you can do is to keep investing, Danielle Schultz, a certified financial planner, tells CNBC Make It. Embrace the uncertainty.

“I truly believe it’s not timing the market, but time in the market that counts for increasing wealth, ” says Schultz.

In fact, Schultz says young people should “pray for bad markets.” If you are contributing the same amount of money to a 401(k) or Roth IRA as you were when markets when higher, then you’re getting shares at what is effectively a discount.

“Of course this is terrible for retirees, but generally bad markets early in your career allow you to accumulate more shares at lower prices,” says Schultz. “But you have to be invested in the stock market or you won’t benefit.”

You also don’t want to miss out on the recovery. Just as it’s a sure thing the stock market will decline in value, historically it has always recovered. Take this example, from “Broke Millennial Takes on Investing,” by Erin Lowry:

Investors who stayed the course during the Great Recession were well rewarded in the decade following the crash. The Dow had dropped to 6,547 points in 2009, but it soared to new, prerecession highs by 2018, when it closed at more than 26,000 points. The S&P 500 index quadrupled during the bull run, from its low of 676 points in March 2009 to as high as 2,872 points in January 2018.

If you want a better picture of the true historical gains of the market over time, Schultz recommends looking up what the S&P 500 was on the day you were born, or at the bottom of the recession. Compare that to today for some perspective.

“The long term trend of the market is up, but it’s not steady,” she says.

The best way to avoid the market anxiety is to set up automatic contributions to your 401(k) or IRA, and forget about them. That takes emotion out of the equation when the market moves. Just ask Warren Buffett.

“Don’t watch the market closely, ” Buffett told CNBC in 2016. “If they’re trying to buy and sell stocks, and worry when they go down a little bit … and think they should maybe sell them when they go up, they’re not going to have very good results.”

Don’t miss: Why it’s a great time for millennials to contribute to a Roth IRA

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Company: cnbc, Activity: cnbc, Date: 2019-06-14  Authors: alicia adamczyk
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The Fed won’t cut rates at its June meeting. Here’s why

Federal Reserve Chairman Jerome Powell holds a press conference following a two day Federal Open Market Committee policy meeting in Washington, January 30, 2019. “The Fed is going to look at the data, they’re going to look at what their models say. As things stand currently among Chairman Jerome Powell and his fellow Fed officials, no moves are indicated. He noted the “big divergence” between the market and Fed projections and said, “No cuts this year is hard to believe.” Fed officials have been


Federal Reserve Chairman Jerome Powell holds a press conference following a two day Federal Open Market Committee policy meeting in Washington, January 30, 2019. “The Fed is going to look at the data, they’re going to look at what their models say. As things stand currently among Chairman Jerome Powell and his fellow Fed officials, no moves are indicated. He noted the “big divergence” between the market and Fed projections and said, “No cuts this year is hard to believe.” Fed officials have been
The Fed won’t cut rates at its June meeting. Here’s why Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-06-14  Authors: jeff cox
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The Fed won't cut rates at its June meeting. Here's why

Federal Reserve Chairman Jerome Powell holds a press conference following a two day Federal Open Market Committee policy meeting in Washington, January 30, 2019. Leah Millis | Reuters

With pretty much everyone convinced that the Fed is going to be cutting interest rates at some point this year, the central bank faces one rather pressing question: Why wait? After all, the market already is pricing in at least reductions this year and probably three. Though the Federal Open Market Committee meets next week, there is little expectation of a move then. Not moving next week essentially comes down to three factors, according to Fed watchers: The looming G-20 summit at which the U.S. and China, at least theoretically, could reach a trade agreement; a desire not to be seen as overly influenced by the financial markets and President Donald Trump’s hectoring; and the desire to avoid making December’s rate hike look like a policy mistake.

“They don’t want to be seen as cowing to any sort of pressure, be it political from the White House or from the market,” said Lindsey Piegza, chief economist at Stifel. “The Fed is going to look at the data, they’re going to look at what their models say. To them, it doesn’t matter what the markets say.”

‘No cuts this year is hard to believe’

Wall Street, though, is clamoring for a cut. Futures pricing Friday afternoon in the fed funds market showed a 21% chance of a move at the June 18-19 meeting, down from 30% earlier in the day on some stronger-than-expected economic data. The chance of a July cut remained at 85%, while the market was figuring a 61% probability for three moves in total by the end of the year. As things stand currently among Chairman Jerome Powell and his fellow Fed officials, no moves are indicated. That is likely to change when FOMC members submit their economic projections at the June 18-19 meeting, which include the “dot plot” of individual members’ expectations of where rates are headed over the next few years. “I can’t imagine what they are going to do with the dots,” Jeffrey Gundlach, founder of DoubleLine Capital, said in a webcast Thursday. He noted the “big divergence” between the market and Fed projections and said, “No cuts this year is hard to believe.” In May, Gundlach recommended a straddle options trade that benefited from wide fluctuations in interest rates. The trade recently had netted a 22% gain. Fed officials have been under intense pressure from more than the markets. Trump has been a continuous nemesis to the central bank, most recently repeating his demand for lower rates and saying he’s “not happy with what [Powell has] done” as Fed chair. Along the same lines, the Fed has its credibility to worry about. Trump and a growing number of market participants view the December rate hike — the fourth of the year — as a policy mistake that came amid several pivots and missteps that caused Powell and other officials to change their public statements to assuage investors’ nerves.

‘A verbal intervention’


Company: cnbc, Activity: cnbc, Date: 2019-06-14  Authors: jeff cox
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IPOs are one of the hottest trades of the year, doubling the market’s return

The IPO market keeps getting hotter, but how much more juice is left? IPO unicorns this yearThe Renaissance Capital IPO ETF, a basket of the 60 or so most recent large IPOs, is up 34% this year, more than twice the performance of the S&P 500. “If you’ve got extremely fast growth and a market opportunity, investors are comfortable knowing that profits will come later,” said Matt Kennedy, who analyzes IPOs for Renaissance Capital. Of 64 IPOs that have priced this year, 25 (40%) have priced at the


The IPO market keeps getting hotter, but how much more juice is left? IPO unicorns this yearThe Renaissance Capital IPO ETF, a basket of the 60 or so most recent large IPOs, is up 34% this year, more than twice the performance of the S&P 500. “If you’ve got extremely fast growth and a market opportunity, investors are comfortable knowing that profits will come later,” said Matt Kennedy, who analyzes IPOs for Renaissance Capital. Of 64 IPOs that have priced this year, 25 (40%) have priced at the
IPOs are one of the hottest trades of the year, doubling the market’s return Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-06-13  Authors: bob pisani
Keywords: news, cnbc, companies, markets, return, hottest, growth, large, priced, ipos, trades, doubling, market, range, meat, ipo, fast, renaissance


IPOs are one of the hottest trades of the year, doubling the market's return

Ethan Brown, founder and chief executive officer of Beyond Meat Inc., center, rings the opening bell during the company’s initial public offering (IPO) at the Nasdaq MarketSite in New York, U.S., on Thursday, May 2, 2019.

The IPO market keeps getting hotter, but how much more juice is left? CrowdStrike Holdings, a cybersecurity company that a week ago was discussing going public at $19 to $23 a share, priced at $34 and opened at $63.50.

Pet e-tailer Chewy upsized its IPO ahead of its Friday debut.

They are not alone. In February, IPO watchers were fearful an avalanche of IPOs would cause a crash in the market, but the big tech unicorns have been winners so far.

IPO unicorns this year

The Renaissance Capital IPO ETF, a basket of the 60 or so most recent large IPOs, is up 34% this year, more than twice the performance of the S&P 500.

What’s going on? “If you’ve got extremely fast growth and a market opportunity, investors are comfortable knowing that profits will come later,” said Matt Kennedy, who analyzes IPOs for Renaissance Capital.

Surprisingly, prices are holding up well. Of 64 IPOs that have priced this year, 25 (40%) have priced at the high end of the range or above.

IPO pricings this year (64 IPOs)

Above range: 12

High end: 13

Midpoint: 18

Low end 11

Below range: 10

Source: Renaissance Capital

Kennedy noted that four of these companies — Beyond Meat, Zoom, CrowdStrike and PagerDuty — exhibited similar characteristics: fast growth and a large market opportunity.

Beyond Meat is disrupting the food industry. Zoom is profitable with a large market opportunity with video conferencing. Crowdstrike’s endpoint security business is also growing fast. Pinterest has a somewhat unique niche — not quite social media, more like a discovery play, and priced below its last round of funding.

The lone unicorn disappointments this year: Uber Technologies and Lyft, down 6% and 19% respectively. What do they lack the others have?

Kennedy noted that investors are not impressed with the economics of ride hailing — specifically, the deep losses. In addition, both suffered from valuation issues (neither had a successful publicly traded peer), and both priced well above their last round of funding.

Still, there’s nothing like an up market to boost IPOs. The S&P 500 is up 15% this year. That leaves these names vulnerable should there be a larger market downturn.

And one of the most appealing characteristics of the winners — rapid growth — could quickly turn against them.

“The risk is that they are priced to perfection, so if there is any slowing of growth expectations they will get hit hard,” Kennedy said.


Company: cnbc, Activity: cnbc, Date: 2019-06-13  Authors: bob pisani
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Big Tech is in a ‘serious monopoly moment,’ says House antitrust subcommittee chairman

The House Judiciary investigation into Big Tech aims to look into how to prevent Silicon Valley giants from thwarting competition, David Cicilline, chairman of the antitrust subcommittee, told CNBC on Wednesday. Big tech companies nowadays are facing increasing scrutiny as politicians, both Democrats and Republicans, are beginning to look into their practices and potential hold on the markets. Many of the tech companies have been generally quiet as regulators saber rattle. “I can tell you they d


The House Judiciary investigation into Big Tech aims to look into how to prevent Silicon Valley giants from thwarting competition, David Cicilline, chairman of the antitrust subcommittee, told CNBC on Wednesday. Big tech companies nowadays are facing increasing scrutiny as politicians, both Democrats and Republicans, are beginning to look into their practices and potential hold on the markets. Many of the tech companies have been generally quiet as regulators saber rattle. “I can tell you they d
Big Tech is in a ‘serious monopoly moment,’ says House antitrust subcommittee chairman Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-06-12  Authors: jessica bursztynsky
Keywords: news, cnbc, companies, antitrust, big, companies, tech, working, google, serious, monopoly, subcommittee, facebook, democrats, chairman, investigation, house, markets, moment


Big Tech is in a 'serious monopoly moment,' says House antitrust subcommittee chairman

The House Judiciary investigation into Big Tech aims to look into how to prevent Silicon Valley giants from thwarting competition, David Cicilline, chairman of the antitrust subcommittee, told CNBC on Wednesday.

“These are huge monopolies and we want to make sure we’re doing everything we can to make markets work,” the Rhode Island Democrat said on “Squawk Box.” “These are markets that are not working properly. We’re in this very serious monopoly moment.”

The House antitrust subcommittee held a hearing Tuesday on anti-competitive practices in technology, looking at ways that companies such as Facebook and Alphabet’s Google have changed the news media landscape. “This is the first significant antitrust investigation undertaken by Congress in decades,” Cicilline said at Tuesday’s hearing.

Cicilline and Republican Rep. Doug Collins from Georgia co-sponsored legislation that would allow local news organizations to negotiate with internet platforms.

There’s a “number of big challenges” that are harming consumers, Cicilline said Wednesday on CNBC, including “serious breaches of privacy” and “loss of control of data.”

Facebook has been working to regain user trust after last year’s Cambridge Analytica data misuse scandal, which hit on the heels of the disclosure that Russian operatives used the social network to try to influence the 2016 presidential election.

Referring to Facebook and Google, an Alphabet analyst at CFRA Research, told CNBC earlier Wednesday, “Both of those companies, directly impact the outcomes of elections and things politicians take very personally.” CFRA’s John Freeman said that’s the difference between today’s tech outcry and Microsoft’s clash with the government over its internet browser in the 1990s and early 2000s.

Big tech companies nowadays are facing increasing scrutiny as politicians, both Democrats and Republicans, are beginning to look into their practices and potential hold on the markets. Federal investigations are reportedly underway or being considered by the Justice Department and the Federal Trade Commission.

Meanwhile, state attorneys general on Wednesday plan to meet with FTC officials in Omaha, Nebraska, to talk about consumer protection issues and competition matters as they consider probes. Many of the tech companies have been generally quiet as regulators saber rattle.

Cicilline said his panel’s investigation is not looking into single companies, but it wants to “make sure we’re understanding how markets are working to develop solutions.”

On the Republican side, House Minority Leader Kevin McCarthy said Wednesday on “Squawk Box” that Democrats are trying to “create another utility company” rather than focus on privacy and innovation.

In a CNBC interview Monday, President Donald Trump accused Facebook and Google of colluding with Democrats against him. “I can tell you they discriminate against me,” he added, reiterating a view among conservatives that tech companies are biased against Republicans.

Many of the candidates seeking the Democratic presidential nomination in 2020, including Sens. Bernie Sanders and Elizabeth Warren, are pushing for breaking up major tech companies.

WATCH: House GOP Leader Kevin McCarthy on Big Tech


Company: cnbc, Activity: cnbc, Date: 2019-06-12  Authors: jessica bursztynsky
Keywords: news, cnbc, companies, antitrust, big, companies, tech, working, google, serious, monopoly, subcommittee, facebook, democrats, chairman, investigation, house, markets, moment


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Fed ‘insurance’ rate cuts while the economy is fine usually boost the stock market, history shows

When the central bank cuts interest rates as a preventative measure, U.S. equity markets have historically done very well. J.P. Morgan pointed out three “insurance cut” easing cycles in 1980, 1995 and 1998 that appear to be outliers. The only other time the S&P 500 saw stronger performance following a rate cut was in 1980. The overall trajectory of equity markets following the first Fed rate cut has been predominantly negative. U.S.Treasury have historically rallied, and the curve continued to s


When the central bank cuts interest rates as a preventative measure, U.S. equity markets have historically done very well. J.P. Morgan pointed out three “insurance cut” easing cycles in 1980, 1995 and 1998 that appear to be outliers. The only other time the S&P 500 saw stronger performance following a rate cut was in 1980. The overall trajectory of equity markets following the first Fed rate cut has been predominantly negative. U.S.Treasury have historically rallied, and the curve continued to s
Fed ‘insurance’ rate cuts while the economy is fine usually boost the stock market, history shows Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-06-10  Authors: kate rooney
Keywords: news, cnbc, companies, insurance, history, fed, economy, market, cut, equity, usually, morgan, markets, rate, easing, panigirtzoglou, shows, stock, fine


Fed 'insurance' rate cuts while the economy is fine usually boost the stock market, history shows

When the central bank cuts interest rates as a preventative measure, U.S. equity markets have historically done very well.

So-called “insurance ” rate cuts with a backdrop of strong growth — which happened in 1995 and 1998 — resulted in solid equity market performance, according to analysis by J.P. Morgan. But not all rate cuts are created equal. The stock market reaction depends on the justification for slashing rates.

“If the reason is weakening growth then this is not a good environment for equities overall, especially cyclical sectors, even as defensive and bond like equities do relatively well in such environment,” J.P. Morgan global markets strategist Nikolaos Panigirtzoglou said in a note to clients Monday.

J.P. Morgan pointed out three “insurance cut” easing cycles in 1980, 1995 and 1998 that appear to be outliers. The late 1990s rate cuts were used as insurance against Mexican and Russian default and collapse of hedge fund Long-Term Capital Management at the time, bolstered the equity market. The only other time the S&P 500 saw stronger performance following a rate cut was in 1980. At the time, there was an 8.5% reduction in the Fed funds rate from 20% to 11.5% — a level of monetary easing that is “obviously not possible in the current conjuncture,” Panigirtzoglou said.

The overall trajectory of equity markets following the first Fed rate cut has been predominantly negative. Distinguishing which type of easing cycle 2019 will turn out to be “is the challenge for equity markets going forward,” he said. For now, markets appear to be assuming that Federal Reserve officials’ dovish comments are signs of a preemptive, rather than reactive move.

Investors have been focused on the likelihood of an “insurance” interest-rate cut this year. That would theoretically provide a buffer against any economic weakness caused by an ongoing trade war and tariffs with China.

Weaker employment data last week added to the investors’ hopes of a rate cut. The economy added only 75,000 jobs in May, less than half of what economists had expected. Now that the job market is showing signs of strain, economists and investors now firmly believe the Federal Reserve will move to cut rates this year. The market is now pricing in a 95 percent chance of a quarter-point cut in July, according to BMO rate strategist Jon Hill. The Fed next meets June 18-19 and July 30-31.

On the other hand, if the central bank ends up being “reactive,” markets may not see the same benefits, Panigirtzoglou said. This could play out if the Federal Reserve decides to wait until later in the year, or it proves to be “too late” and the U.S. economy has already entered a weak phase, he said.

“Then the equity market could follow a weak trajectory similar to more typical previous Fed easing cycles rather than the strong trajectory seen during 1995 or 1998,” Panigirtzoglou said.

Other asset classes have mixed reactions. U.S.Treasury have historically rallied, and the curve continued to steepen for up to six months on average after a Fed rate cut. The dollar rallied for up to three months, but eventually tended to give up previous gains, according to the J.P. Morgan analysis.

— CNBC’s Patti Domm and Jeff Cox contributed reporting.


Company: cnbc, Activity: cnbc, Date: 2019-06-10  Authors: kate rooney
Keywords: news, cnbc, companies, insurance, history, fed, economy, market, cut, equity, usually, morgan, markets, rate, easing, panigirtzoglou, shows, stock, fine


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Economists: The Fed ‘isn’t enough’ to offset damage of tariff skirmishes with China and Mexico

A dovish Federal Reserve can use tools such as rate cuts to lessen the damage of America’s tariff skirmishes with China and Mexico, but it is either limited in its effectiveness or in its motivations, two economists told CNBC on Thursday. “The Fed can mitigate some of the adverse effects, but I’m not sure the Fed is inclined to move fast enough or significantly enough to entirely offset the effects of this trade war. All these geopolitical, tariffs, sanctions, trade risks are really damaging to


A dovish Federal Reserve can use tools such as rate cuts to lessen the damage of America’s tariff skirmishes with China and Mexico, but it is either limited in its effectiveness or in its motivations, two economists told CNBC on Thursday. “The Fed can mitigate some of the adverse effects, but I’m not sure the Fed is inclined to move fast enough or significantly enough to entirely offset the effects of this trade war. All these geopolitical, tariffs, sanctions, trade risks are really damaging to
Economists: The Fed ‘isn’t enough’ to offset damage of tariff skirmishes with China and Mexico Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-06-07  Authors: weizhen tan
Keywords: news, cnbc, companies, isnt, fed, tensions, offset, tariffs, damage, trade, china, effects, skirmishes, economists, monetary, mexico, markets, tariff


Economists: The Fed 'isn't enough' to offset damage of tariff skirmishes with China and Mexico

A dovish Federal Reserve can use tools such as rate cuts to lessen the damage of America’s tariff skirmishes with China and Mexico, but it is either limited in its effectiveness or in its motivations, two economists told CNBC on Thursday.

Instead, the U.S. has to resolve those issues at the negotiating table, Nathan Sheets, chief economist at asset manager PGIM Fixed Income, told CNBC at the IIF Spring Membership Meeting in Tokyo.

“The Fed can mitigate some of the adverse effects, but I’m not sure the Fed is inclined to move fast enough or significantly enough to entirely offset the effects of this trade war. I think ultimately the solution or resolution of this has to come at the negotiating table between President (Donald) Trump and President Xi (Jinping), and between the United States and Mexico, ” he said.

“The Fed will do its best given where the economy is, but it would take a dramatic easing of monetary policy for them to fully offset these kinds of effects,” Sheets added.

U.S. Federal Reserve Chairman Jerome Powell had on Tuesday signaled that the central bank was open to easing monetary policy to support the economy, amid increasing expectations for multiple Fed rate cuts this year.

He said the central bank is watching current economic developments and will do what it must to keep the near-record expansion going.

Also speaking to CNBC at the IIF Spring Membership Meeting, Robin Brooks, chief economist at the Institute of International Finance, added: “There are some warning signs … we are worried about (emerging markets). All these geopolitical, tariffs, sanctions, trade risks are really damaging to emerging markets, and a dovish Fed isn’t enough to offset those.”

Markets have been spooked by trade tensions that spread to Mexico last week when Trump announced that the U.S. will impose tariffs on Mexican goods, with more duties to be added until the country takes action on immigration that’s deemed sufficient by the White House.

Meanwhile, U.S. trade tensions with China continue to be unresolved, with rhetoric turning more negative in the past two weeks.

Meanwhile, the International Monetary Fund warned on Wednesday that U.S.-China tariffs — both implemented and proposed — could cut global economic output by 0.5% in 2020. It also lowered its 2019 growth forecast for China to 6.2% from 6.3%.

The IMF has been revising down its projections for global growth in recent quarters as trade tensions and concerns surrounding China have fueled plunges in stock markets and dented corporate earnings.

— CNBC’s Matt Clinch contributed to this report.


Company: cnbc, Activity: cnbc, Date: 2019-06-07  Authors: weizhen tan
Keywords: news, cnbc, companies, isnt, fed, tensions, offset, tariffs, damage, trade, china, effects, skirmishes, economists, monetary, mexico, markets, tariff


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