JP Morgan sees a slowdown coming, with economy growing at less than 2 percent in 2019

JP Morgan economists expect economic growth to slow down in 2019, to a pace of 1.9 percent for the year. The economist say the slow down from a “boomy” 3.1 percent in year-over-year fourth quarter growth will come as fiscal, monetary and trade policy get less supportive or more restrictive. The economists expect wage growth to pick up with the continued tightening in the labor market. They expect housing investment, sensitive to higher rates, to decline into 2019, but the housing weakness should


JP Morgan economists expect economic growth to slow down in 2019, to a pace of 1.9 percent for the year. The economist say the slow down from a “boomy” 3.1 percent in year-over-year fourth quarter growth will come as fiscal, monetary and trade policy get less supportive or more restrictive. The economists expect wage growth to pick up with the continued tightening in the labor market. They expect housing investment, sensitive to higher rates, to decline into 2019, but the housing weakness should
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Company: cnbc, Activity: cnbc, Date: 2018-11-20  Authors: patti domm, frederic j brown, afp, getty images
Keywords: news, cnbc, companies, housing, economy, economists, tax, 2019, growth, morgan, rate, policy, sees, coming, fed, consumer, slowdown, expect, jp, growing, quarter


JP Morgan sees a slowdown coming, with economy growing at less than 2 percent in 2019

JP Morgan economists expect economic growth to slow down in 2019, to a pace of 1.9 percent for the year.

The economist say the slow down from a “boomy” 3.1 percent in year-over-year fourth quarter growth will come as fiscal, monetary and trade policy get less supportive or more restrictive.

But even with slower growth, wages will continue to rise as the labor market tightens.

“We see the Fed needing to exert modest restraint on growth, hiking four times to 3.25 to 3.50 by year-end,” said the economists. The Fed’s current forecast is for three interest rate hikes next year, and one more this year, in December.

The economists expect that growth will hold above 2 percent in the first and second quarter, at 2.2 and 2 percent respectively, before falling to 1.7 percent in the third quarter and 1.5 percent in the fourth quarter. The economy last grew at less than 2 percent in the first quarter of 2017.

Boosted by tax cuts and stimulus, the economy’s growth picked up to a peak of 4.2 percent in the second quarter, 2018 and was growing at 2.5 percent in the fourth quarter, according to JP Morgan’s forecast.

The economists said monetary policy, supporting growth for a decade, will move closer to a neutral position, and fiscal policy will be supportive in 2019 but less than in 2018.

“Trade policy thus far has been only a minor nuisance, but we expect that tariffs will become a more noticeable drag on growth in 2019,” they wrote.

The U.S. consumer benefited in 2018 from a tax cut amounting to roughly $120 billion, they noted.

“Next year, if 25% tariffs go through on Chinese imports, that would amount to a tax increase of over $100 billion, much of which would fall on the consumer,” they noted. They expect the impact to be either absorbed through currency adjustments or in the margins of both Chinese and U.S. producers.

Businesses will also be impacted, after the tax windfall in 2018. “Tax reform lowered corporation’s after-tax cost of capital, but some of that benefit may be slowly eroded next year as longer-term interests rates move higher,” they wrote.

The economists expect wage growth to pick up with the continued tightening in the labor market.

They said there is a potential for a profit margin squeeze, as businesses attempt to pass on some cost pressures.

Inflation should grow at a pace of 2.3 percent, as measured by core PCE, and the drop in energy prices and stronger dollar should keep goods inflation in check. But tariffs could create some inflationary pressure and account for 0.2 percnet of the expected acceleration of in inflation in 2019.

That scenario should keep the Fed hiking once a quarter, and bring the fed funds rate to 3.25 to 3.50 percent at the end of the year, slightly above the neutral rate of about 3 percent, they noted.

The Fed could raise rates fewer times if there is risk from the global economy, or if the dollar strengthens significantly.

The economists said consumer balance sheets remain healthy and consumer spending should continue to grow but not as fast as in the last two years. They expect housing investment, sensitive to higher rates, to decline into 2019, but the housing weakness should be very different than when the housing bubble burst in 2006 to 2008. Housing activity should pick up once the drag from rate increases fades, they wrote.

On Monday, Goldman Sachs economists also forecast slower growth for the year, with an average 1.75 percent in the second half.


Company: cnbc, Activity: cnbc, Date: 2018-11-20  Authors: patti domm, frederic j brown, afp, getty images
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Fed doesn’t seem in as much of a rush to raise interest rates as stocks plunge

In the past several days, the markets have become convinced Fed officials are intentionally signaling that they could pause from raising interest rates next year. Hill said New York Fed President John Williams comments Monday that the Fed was raising rates “somewhat” also sounded a bit more dovish. At the same time, investors are jumping into the safety of Treasurys, driving interest rates lower. Rissmiller has been forecasting the Fed will only be able to raise interest rates twice next year, a


In the past several days, the markets have become convinced Fed officials are intentionally signaling that they could pause from raising interest rates next year. Hill said New York Fed President John Williams comments Monday that the Fed was raising rates “somewhat” also sounded a bit more dovish. At the same time, investors are jumping into the safety of Treasurys, driving interest rates lower. Rissmiller has been forecasting the Fed will only be able to raise interest rates twice next year, a
Fed doesn’t seem in as much of a rush to raise interest rates as stocks plunge Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2018-11-19  Authors: patti domm, andrew harrer, bloomberg, getty images
Keywords: news, cnbc, companies, rate, rates, fed, markets, rush, officials, raise, doesnt, stocks, economy, prices, hikes, interest, bit, plunge


Fed doesn't seem in as much of a rush to raise interest rates as stocks plunge

In the past several days, the markets have become convinced Fed officials are intentionally signaling that they could pause from raising interest rates next year.

The recent speeches from several officials have been interpreted as being more dovish, even if the officials haven’t strayed much from their core message — that the Fed is on a gradual rate hiking path, that the U.S. economy is in good shape, inflation is steady and the Fed remains dependent on economic data.

But the market also is interpreting a new tone in the words of these Fed officials, who seem to be more seriously looking beyond the strong U.S. economy to an environment where stock prices have been falling and credit spreads are widening.

Fed Chairman Jerome Powell, for instance, noted on Wednesday that there’s been “a gradual chipping away” at global growth and what happens internationally matters. The same point was made Friday by Fed Vice Chair Richard Clarida, who told CNBC that the global economy deserves attention, and it looks like it’s slowing.

“There’s a bit of a walk back in progress,” said Don Rissmiller, chief economist at Strategas Research. “I’m sure they’re looking at financial conditions.”

The market’s interpretation of the recent comments is in sharp contract to the response to Powell’s Oct. 3 commentthat the Fed is still a long way from neutral. That comment was interpreted to mean the Fed was confidently moving forward with the rate hikes it has already forecast for 2019, and possibly adding more.

Now, the markets still expect the Fed to go through with a rate hike at its December meeting, but the three more hikes anticipated for next year are in doubt.

Jon Hill, U.S. rate strategist at BMO, said since Nov. 9, the fed funds futures market has reduced its expectations for rate hikes next year to just 1.4 hikes from 2.2.

“”Clarida sounds a bit more dovish, but he didn’t say anything remarkable,” said Hill. “To price out almost an entire hike in a week just because [they] acknowledge overseas matters seems a bit too aggressive.”

Hill said New York Fed President John Williams comments Monday that the Fed was raising rates “somewhat” also sounded a bit more dovish. Williams added that it’s “really in the context of a very strong economy and obviously we’re not on a preset course,” according to a Bloomberg report.

Financial conditions are clearly worsening, with the S&P 500 down 7.5 percent since the end of September, and the spreads on corporate credit widening, meaning the market is pricing it at increasingly lower prices [and higher yields], relative to Treasurys. Prices move in the opposite direction of yields.

At the same time, investors are jumping into the safety of Treasurys, driving interest rates lower. The 10-year is now yielding 3.05 percent, the lowest since Oct. 3, the day Powell made his hawkish comments.

Rissmiller has been forecasting the Fed will only be able to raise interest rates twice next year, as some others also expect. He said the neutral rate, or the interest rate level where the Fed is no longer stimulating the economy or trying to slow it down, is probably closer to 2.5 percent. The Fed funds target range is currently at 2 percent to 2.25 percent.

“I just don’t see the rush. Why snatch defeat from the jaws of victory. They are succeeding here. They can remain in a rate hike cycle,” said Rissmiller.

But on the other extreme, Goldman Sachs economists expect the Fed to raise interest rates four times next year, and they note that inflation could jump more than expected.


Company: cnbc, Activity: cnbc, Date: 2018-11-19  Authors: patti domm, andrew harrer, bloomberg, getty images
Keywords: news, cnbc, companies, rate, rates, fed, markets, rush, officials, raise, doesnt, stocks, economy, prices, hikes, interest, bit, plunge


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GE was once America’s most valuable company. Today it is fighting junk-bond status.

GE’s stock market value has slipped to just below $70 billion, about $300 billion less than where it was in 2005, when it was last America’s most valuable company, according to S&P Dow Jones Indices. GE stock fell more than 2 percent and was trading below $8 Friday. GE stock has cratered to levels it reached during the financial crisis. To me, GE was a single A-rated name that may or may not end up high yield for completely idiosyncratic reasons,” Mikkelsen said. He expects to see the corporate


GE’s stock market value has slipped to just below $70 billion, about $300 billion less than where it was in 2005, when it was last America’s most valuable company, according to S&P Dow Jones Indices. GE stock fell more than 2 percent and was trading below $8 Friday. GE stock has cratered to levels it reached during the financial crisis. To me, GE was a single A-rated name that may or may not end up high yield for completely idiosyncratic reasons,” Mikkelsen said. He expects to see the corporate
GE was once America’s most valuable company. Today it is fighting junk-bond status. Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2018-11-16  Authors: patti domm, simon dawson, bloomberg, getty images
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GE was once America's most valuable company. Today it is fighting junk-bond status.

Once-mighty General Electric is fighting to stay off the junk heap.

GE’s stock has become a sliver of its former self, and its bonds are now trading as if they are already junk-rated. That puts pressure on new CEO Larry Culp to quickly raise cash and cut debt to keep its debt rating from falling further to sub-investment grade junk status, otherwise known as high-yield.

“When the market begins to price you to junk status, you have a very limited time to clear that up before you become junk,” said Thomas Tzitzouris, director and head of fixed income research at Strategas. “Whether their plan is viable or not, they’re running out of time.”

Tzitzouris said GE is not even close to becoming high-yield rated yet, but it will have to prove it deserves to stay investment grade. The company’s goal is to regain its A rating after S&P cut it to BBB-plus last month. But should GE become a ‘fallen angel,’ its debt service costs would rise and it would face a new round of selling pressure on both its stock and bonds.

GE’s stock market value has slipped to just below $70 billion, about $300 billion less than where it was in 2005, when it was last America’s most valuable company, according to S&P Dow Jones Indices.

Six weeks ago, Culp replaced John Flannery, who was viewed as too slow at fixing what ailed the conglomerate after he took over from long time CEO Jeff Immelt. Culp was once CEO of Danaher Corp., a science and technology conglomerate

This week GE moved to sell $3.7 billion of its stake in oil field services company Baker Hughes. On Friday, GE took another step toward its previous announced planned $25 billion reduction in GE Capital assets with the sale of its $1.5 billion healthcare equipment finance portfolio to TIAA Bank.

But GE needs to continue to show results and too many questions remain, strategists say.

Goldman Sachs equity analysts Friday cut their target on GE shares to $9 from $12, and said they do not “see GE as inexpensive given its leverage profile… and tail risk associated with GE Capital.”

GE stock fell more than 2 percent and was trading below $8 Friday. Goldman analysts said it is still unclear how much of a capital infusion GE Capital will need. They said the funding gap could be as much as $20 billion through 2020, which could be filled by asset sales and an equity infusion from its parent.

The Goldman analysts also said GE’s power business sales continue to decline, and they expect 2019 to be another down year.

These are the type of doubts swirling around both GE’s stock and debt.

“What investors generally don’t like is uncertainty and lack of direction. We’re transitioning through that period right now,” Jonathan Duensing, director investment grade corporate debt at Amundi Pioneer. “The more clarity and the more action the management team can deliver on, that will start to really repair the situation, not only for the business itself but from a confidence standpoint. A lot of this is because investors’ confidence has been shaken.”

Culp said, in an interview this week, that he feels the “urgency” to reduce the company’s leverage and will do so through asset sales. He said there could be a possible IPO of the company’s health care business.

“We have no higher priority right now than bringing those leverage levels down,” Culp said Monday in an interview on “Squawk on the Street” with CNBC’s David Faber.

GE has about $115 billion in debt, which it easily built up when it was one of just a few blue chips with a coveted triple-A standing. But GE lost that crown in 2009. The company has a mix of debt, and has access to $40 billion in revolving credit lines.

Once beloved for its healthy dividend and earnings consistency, GE found it no longer could afford the quarterly payout and recently reduced it to just a penny to free up cash. GE stock has cratered to levels it reached during the financial crisis. On top of that, the SEC has been investigating its accounting, including the $22 billion non-cash charge it took in the third quarter related to acquisitions in its power business.

GE’s ripples were felt across the bond market this week, and its woes are one reason for the jump in spreads in corporate and high-yield debt. Investment grade spreads widened out by about 10 basis points and high yield by about 40 through Thursday.

“The big fear in the market all year has been that you have a lot of very large BBB rated structures and eventually some of these could be downgraded into high yield. Then comes GE. GE obviously is an ongoing story but now recently they actually got downgraded to BBB. GE is a very large BBB rated structure and it’s pricing like high yield,” said Hans Mikkelsen, head of high grade credit structure at Bank of American Merrill Lynch. Mikkelsen said he’s not an expert on GE but the market views it as having downgrade risk.

A big credit sliding into the junk bond world would pressure yields in that market and trigger forced selling in the downgraded credit.

“Is this the beginning of a downgrade to high yield? My view is no. This is not that story. To me, GE was a single A-rated name that may or may not end up high yield for completely idiosyncratic reasons,” Mikkelsen said.

Mikkelsen said other factors were also moving the market this week, including the steep drop in oil, and the turbulence in bonds of PG&E, the California utility which said earlier this week its insurance may not cover its potential liabilities related to fires. He expects to see the corporate debt market stabilize and firm up into year end.

GE BBB-plus senior debt is now three steps above junk, and it is also part of the largest BBB tier in the $5 trillion investment grade debt market. Half the investment grade market is now rated BBB, another concern in the market.

Mikkelsen said GE has about $50 billion in debt that is BBB rated, which is equal to about 0.8 percent of the investment grade market but would be 3.9 percent of the roughly $1.2 trillion high yield market. It is 1.5 percent of BBBs.

“Our view is that GE is small enough, and the story sufficiently idiosyncratic, to leave other large BBB capital structures relatively little affected as this story plays out,” Mikkelsen noted.

But strategists say GE has to clarify where it is going. In the interview, Culp said the troubled power business was close to bottoming.

Duensing also said GE is not representative of trouble for the BBB tier of the market. “It’s not a BBB thing. This is a company that has been struggling to manage their overall business platforms from an operational standpoint, and now it’s in a situation where it’s not only impacting the equity price, it’s impacting the debt spreads because credit agencies moved on the credit rating and investors have lost confidence,” he said. “That’s a more specific issue.”

But still, GE is a big new member of the BBB ranks, at a time when interest rates are rising and investors are concerned about where potential problems may be found in the next economic downturn.


Company: cnbc, Activity: cnbc, Date: 2018-11-16  Authors: patti domm, simon dawson, bloomberg, getty images
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Trump trade war with China could disrupt traditional Thanksgiving rally

As stocks enter the short Thanksgiving holiday week, investors looking for any signs of a market comeback are paying close attention to trade developments with China. According to the Stock Trader’s Almanac, the Dow was up in the week before Thanksgiving 19 of the past 24 years. Since 1988, the Almanac says, the Dow was higher Wednesday and Friday of Thanksgiving week 18 of 29 times. Positive trade developments could be a catalyst that could snap the stock market out of its funk and ignite a yea


As stocks enter the short Thanksgiving holiday week, investors looking for any signs of a market comeback are paying close attention to trade developments with China. According to the Stock Trader’s Almanac, the Dow was up in the week before Thanksgiving 19 of the past 24 years. Since 1988, the Almanac says, the Dow was higher Wednesday and Friday of Thanksgiving week 18 of 29 times. Positive trade developments could be a catalyst that could snap the stock market out of its funk and ignite a yea
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Keywords: news, cnbc, companies, china, higher, war, traditional, rally, week, view, thanksgiving, disrupt, stock, trump, signs, positive, trade, market, stocks


Trump trade war with China could disrupt traditional Thanksgiving rally

As stocks enter the short Thanksgiving holiday week, investors looking for any signs of a market comeback are paying close attention to trade developments with China.

President Donald Trump gave the market a boost Friday when he said he was hopeful the U.S. and China would strike a deal on trade, a major focus for stocks. But White House officials later downplayed his comments and said there were no signs of a deal coming soon.

Stocks closed with gains in the S&P 500 and Dow on Friday and a slight loss in the Nasdaq. But the past week was the first negative week in three, with the S&P down 1.6 percent, and Nasdaq off more than 2 percent as tech took a pounding and Apple lost more than 5 percent on the week.

“Everyone knows the 800-pound gorilla in terms of risk is the meeting between Trump and Xi,” said Julian Emanuel, chief equities and derivative strategist at BTIG. The market has been hanging on every development ahead of Trump’s meeting with China President Xi Jinping at the G-20, which begins at the end of the month.

In the week ahead, Wednesday brings durable goods, consumer sentiment and existing home sales data. Retailers continue to report earnings, with Target, TJX, Best Buy and Kohl’s all expected Tuesday.

More often than not the Thanksgiving week is a good time for stocks, but strategists have also been warning the market could retest the October lows before heading higher. According to the Stock Trader’s Almanac, the Dow was up in the week before Thanksgiving 19 of the past 24 years. Since 1988, the Almanac says, the Dow was higher Wednesday and Friday of Thanksgiving week 18 of 29 times.

Strategists had been expecting the post-midterm election period to be a positive for stocks, with the market heading higher in the fourth quarter. But with the recent turbulence, the midterm pattern and even a Santa rally have been in doubt.

“We have been thinking of this basically as the typical 10 percent plus correction that we’ve seen numerous times since the bull market started in 2009. There is literally nothing we have seen over the last seven or eight weeks that would lead us to believe otherwise,” said Emanuel. “The correction started with the uncomfortableness of rates rising too fast, similar to February, and then in the middle of the stock market turn down, it flipped to extreme growth fear. In our view, neither point of view is warranted.”

Emanuel said it may also be a positive that the Fed has slightly changed its tone to sound more dovish. He said that was his perception when Fed Chairman Jerome Powell spoke Thursday and indicated that positive growth overseas is important. The markets have been concerned about global growth being impacted by falling commodities prices, the higher dollar and trade friction.

Positive trade developments could be a catalyst that could snap the stock market out of its funk and ignite a year-end rally, but strategists also say a negative outcome could keep the market under pressure.

CFRA investment strategist Lindsey Bell said “we see the trade dispute with China as the single most concerning issue facing the market near-term.”

“Not much may come from the [Trump-Xi] meeting, which the market may be able to absorb, but a lack of a trade deal or an escalation of the current situation without a plan for resolution by year end could result in an ugly start to 2019 for global equities as well as the U.S.,” Bell wrote.

Some strategists believe there could be some signs of progress made at the Argentina G-20, but Trump may still raise tariffs to 25 percent in January and put tariffs on more goods.

Emanuel said even just signs of potential progress would be a positive. “The president is sensitive to the stock market as a reflection of how people are judging his performance. He looks at the weakness of the several weeks with probably as much, if not more, concern than the average investor, given all the headwinds he’s going to face politically, given the fact you now have a divided government,” said Emanuel. “If we’re right, there’s going to be some sort of progress you can point to. The market will rally well in advance [of the meeting.]”

Barclays economists Friday said in a note that they see more signs of a possible U.S.-China agreement, as the dialogue between the two countries has become more productive ahead of the G-20.

“The potential outline of an agreement: A smaller trade deficit and increased market access in exchange for tariff relief. In our view, a ‘framework agreement’ at the G20 could include commitments by the Chinese to purchase more US exports — primarily in agriculture and aircraft — and steps to increase openness to the Chinese economy for US services companies,” they wrote.


Company: cnbc, Activity: cnbc, Date: 2018-11-16  Authors: patti domm, thomas peter-pool, getty images news, getty images
Keywords: news, cnbc, companies, china, higher, war, traditional, rally, week, view, thanksgiving, disrupt, stock, trump, signs, positive, trade, market, stocks


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Natural gas prices plunge 18 percent in a second wild day of trading

Volatile natural gas prices plummeted 18 percent, reversing nearly all of Wednesday’s sharp gains, after U.S. inventories showed a slight increase in supply. Gas supply is at a 15-year low for this time of year; at the same time, cold weather has driven strong early heating demand. Natural gas prices surged more than 18 percent Wednesday, as panicky buyers reacted to new weather reports showing a colder forecast amid concerns the U.S. has too little gas in storage. Natural gas is still 30 percen


Volatile natural gas prices plummeted 18 percent, reversing nearly all of Wednesday’s sharp gains, after U.S. inventories showed a slight increase in supply. Gas supply is at a 15-year low for this time of year; at the same time, cold weather has driven strong early heating demand. Natural gas prices surged more than 18 percent Wednesday, as panicky buyers reacted to new weather reports showing a colder forecast amid concerns the U.S. has too little gas in storage. Natural gas is still 30 percen
Natural gas prices plunge 18 percent in a second wild day of trading Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2018-11-15  Authors: patti domm, getty images
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Natural gas prices plunge 18 percent in a second wild day of trading

Volatile natural gas prices plummeted 18 percent, reversing nearly all of Wednesday’s sharp gains, after U.S. inventories showed a slight increase in supply.

Selling was already underway even before the 10:30 a.m ET report from the Energy Information Administration showed natural gas supplies rose by 39 billion cubic feet. S&P Global Platts reported analysts expected 38 billion cubic feet.

Total gas in storage now stands at 3.247 trillion cubic feet, but is still 15 percent below the 5-year average and 14 percent below last year. Gas supply is at a 15-year low for this time of year; at the same time, cold weather has driven strong early heating demand.

Natural gas prices surged more than 18 percent Wednesday, as panicky buyers reacted to new weather reports showing a colder forecast amid concerns the U.S. has too little gas in storage. Futures were trading at about $3.98 per mmBtu Thursday, after reaching $4.83 the day earlier.

Wednesday’s move higher set the stage for the big decline, as analysts said much of the buying appeared to be traders who were caught on the wrong side of the trade and forced to react to a short squeeze.

“It was a total short squeeze. It was an epic blow off top yesterday. We had record volume in the contracts, and it was clearly a squeeze or forced liquidation,” said John Kilduff, partner with Again Capital.

Natural gas is still 30 percent higher in November, and more cold forecasts could send it higher again.

“There’s still a bullish looking chart, but this recent parabolic move higher had to be processed and really retraced for the market to normalize,” said Kilduff. He said gas prices could fall to support at $4 and then return to the $3.50 per mmBtu level, unless another cold wave is expected.

“You’re going to need another round of weather for it to try to scale those heights again,” said Kilduff.


Company: cnbc, Activity: cnbc, Date: 2018-11-15  Authors: patti domm, getty images
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Natural gas prices rocket higher on cold weather forecast, jumping as much 20 percent

“This looks like a capitulation move today, but if cold weather really takes off, the skies the limit,” said Meisel. As forecasts have been adjusted for colder temperatures, natural gas prices have been on a tear, and are now up 49 percent since the start of November. The U.S. is the world’s largest producer of natural gas, and gas prices have been tame in recent years. Gas prices were last above $4 per mmBtu in 2014, the year of the extreme cold weather, known as the ‘polar vortex.’ The U.S.exp


“This looks like a capitulation move today, but if cold weather really takes off, the skies the limit,” said Meisel. As forecasts have been adjusted for colder temperatures, natural gas prices have been on a tear, and are now up 49 percent since the start of November. The U.S. is the world’s largest producer of natural gas, and gas prices have been tame in recent years. Gas prices were last above $4 per mmBtu in 2014, the year of the extreme cold weather, known as the ‘polar vortex.’ The U.S.exp
Natural gas prices rocket higher on cold weather forecast, jumping as much 20 percent Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2018-11-14  Authors: patti domm, daniel acker, bloomberg, getty images
Keywords: news, cnbc, companies, volatile, 20, gas, prices, weather, storage, natural, jumping, winter, theres, higher, forecast, rocket, week, cold


Natural gas prices rocket higher on cold weather forecast, jumping as much 20 percent

Source: Bespoke Weather Services/Tropical Tidbits

Meisel said the price could get to $7 yo $8 per mmBtus, if the months of December and January are very cold. “This looks like a capitulation move today, but if cold weather really takes off, the skies the limit,” said Meisel.

As forecasts have been adjusted for colder temperatures, natural gas prices have been on a tear, and are now up 49 percent since the start of November. Government data last week showed the amount of natural gas in U.S. storage facilities rose by 65 billion cubic feet to 3.208 trillion cubic feet, 15 percent below the year-ago level and 16 percent below the five-year average. That was also the lowest amount of gas in storage during a first week of November, since 2003.

“It looks like more of a short squeeze than anything else. There’s more cold weather on the horizon. A couple of the weather forecasts strengthened,” said John Kilduff, partner with Again Capital. “Any kind of cold weather blast early season like this is going to cause anxiety and concerns about really tight supply as we get deeper into the winter.” Kilduff said the December futures traded about 160,00 contracts by about 9:30 a.m. ET, about a third higher than normal.

Mark Fisher, MBF Asset Management CEO, tied the volatile morning trading to the unwind of a popular hedge fund strategy.

“What’s happened is you had a tremendous number of macro funds that…for years have been basically buying oil, selling natural gas, and traders have done tremendously well, and in no short period of time this trades has imploded, and I’m sure there’s a ton of people getting margin called out of that trade. They’re being forced to buy nat gas and sell crude oil, and that has added to this new debacle in energy,” said Fisher in an interview on “Squawk Box.”

The U.S. is the world’s largest producer of natural gas, and gas prices have been tame in recent years. Gas prices were last above $4 per mmBtu in 2014, the year of the extreme cold weather, known as the ‘polar vortex.’

“The March, April spread is blown out almost as much as the front [month futures contract,” said Gene McGillian of Tradition Energy. “That suggests the market got flat footed. In terms of what coit th e march aprlil spriead is blown out almost as much as the front. that suggests the market got flat footed…We haven’t seen this typ fo price strength since the polar vortex and that came on the heels of bitter cold in the winter of 2013/14,” said McGillian. “Here it is the middle of November and we have an explosive situation primarily with extremely low storage levels and a remind of what demand can gbe with a longt cold witner. That has created a volatile cocktail in the market.”

Analysts said gas in storage fell as hot weather lingered into October, resulting in higher air conditioning use. Unlike other years, there was no break between air conditioning and heating use.

Some analysts say U.S. exports are adding to the storage shortfall. The U.S.exports gas in the form of liquified natural gas on ships as well as via pipeline, to Mexico.


Company: cnbc, Activity: cnbc, Date: 2018-11-14  Authors: patti domm, daniel acker, bloomberg, getty images
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Pound rebounds against the dollar as Theresa May secures support for Brexit deal

The British pound rebounded from its lows of the day on Wednesday after Prime Minister Theresa May said she had obtained enough support for her proposed Brexit deal to move forward. “I firmly believe that the draft withdrawal agreement was the best that could be negotiated,” May told reporters in London. “But the collective decision by Cabinet was that the government should agree the draft withdrawal agreement and the outlying political declaration.” The deal reportedly keeps the UK within the c


The British pound rebounded from its lows of the day on Wednesday after Prime Minister Theresa May said she had obtained enough support for her proposed Brexit deal to move forward. “I firmly believe that the draft withdrawal agreement was the best that could be negotiated,” May told reporters in London. “But the collective decision by Cabinet was that the government should agree the draft withdrawal agreement and the outlying political declaration.” The deal reportedly keeps the UK within the c
Pound rebounds against the dollar as Theresa May secures support for Brexit deal Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2018-11-14  Authors: fred imbert, patti domm
Keywords: news, cnbc, companies, reported, brexit, theresa, support, uk, day, withdrawal, secures, statement, union, deal, dollar, draft, pound, bbc, rebounds


Pound rebounds against the dollar as Theresa May secures support for Brexit deal

The British pound rebounded from its lows of the day on Wednesday after Prime Minister Theresa May said she had obtained enough support for her proposed Brexit deal to move forward.

Sterling traded 0.2 percent higher at $1.2999 as of 2:22 p.m. ET after breaking below $1.29 earlier in the day.

“I firmly believe that the draft withdrawal agreement was the best that could be negotiated,” May told reporters in London. “The choices before us were difficult,” May added. “But the collective decision by Cabinet was that the government should agree the draft withdrawal agreement and the outlying political declaration.”

“This is a decisive step which enables us to move on and finalize the deal in the days ahead,” May said.

The deal reportedly keeps the UK within the customs union of the EU for an unspecific amount of time. The draft deal also includes commitments over UK citizens’ rights after Brexit and a proposed 21-month transition period after Britain’s departure on March 2019, the BBC reported Wednesday.

The pound first started falling earlier in the day after the UK police minister said May would not deliver a statement to the media regarding the country’s divorce from the European Union. The currency quickly recovered those losses after the BBC and Sky News reported that May would in fact deliver a short statement on the matter later in the day.

But the currency later fell to its lows of the day after a BBC correspondent reported that UK officials are considering a “no confidence” vote on Thursday as “Brexiteer anger” rises.

—CNBC’s Holly Ellyatt contributed to this report.

WATCH: Next steps for Brexit


Company: cnbc, Activity: cnbc, Date: 2018-11-14  Authors: fred imbert, patti domm
Keywords: news, cnbc, companies, reported, brexit, theresa, support, uk, day, withdrawal, secures, statement, union, deal, dollar, draft, pound, bbc, rebounds


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Stock market charts point to more trouble ahead: Small cap stocks close to ‘death cross’

The 200-day moving average is just what it sounds like — a rolling average of closing prices for the last 200 sessions. In the case of the S&P 500, the 200-day is 2,762, and the S&P continued to trade below it on Tuesday. “The S&P hit a high of 2,754 and instead of reclaiming the moving average it turned into resistance,” said Redler. Apple, for instance, closed below its 200-day moving average Tuesday and has been struggling to hold on to that level in afternoon trading. Other tech and momentum


The 200-day moving average is just what it sounds like — a rolling average of closing prices for the last 200 sessions. In the case of the S&P 500, the 200-day is 2,762, and the S&P continued to trade below it on Tuesday. “The S&P hit a high of 2,754 and instead of reclaiming the moving average it turned into resistance,” said Redler. Apple, for instance, closed below its 200-day moving average Tuesday and has been struggling to hold on to that level in afternoon trading. Other tech and momentum
Stock market charts point to more trouble ahead: Small cap stocks close to ‘death cross’ Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2018-11-13  Authors: patti domm, gina francolla, brendan mcdermid
Keywords: news, cnbc, companies, sp, going, week, market, sloping, trouble, cross, small, stock, moving, 200day, average, support, point, later, death, stocks, charts, close


Stock market charts point to more trouble ahead: Small cap stocks close to 'death cross'

As for the S&P, Bespoke studied its history of dips below the 200-day moving average going back to 1928, and said unlike when it fell below in October, the S&P’s latest move is below a moving average that is sloping lower.

“A common characteristic of bull markets is that equities often find support at upward sloping 200-DMAs, while a common bear market trend is that equities run into resistance at their downward sloping 200-DMAs,” according to Bespoke.

The 200-day moving average is just what it sounds like — a rolling average of closing prices for the last 200 sessions. A move below it is sometimes seen as a sign of a trend change. In the case of the S&P 500, the 200-day is 2,762, and the S&P continued to trade below it on Tuesday.

Bespoke said historically the S&P has been positive one week and one year after falling below a downward sloping 200-day moving average, but gains in the year later averaged just a small 1.7 percent gain, compared to an average return for all years of closer to 8 percent.

But the S&P’s performance was negative on average a month later, three months later and also six months later, according to Bespoke.

“The S&P hit a high of 2,754 and instead of reclaiming the moving average it turned into resistance,” said Redler. “Instead of buying dips, investors are selling rallies.”

Source: Bespoke

Tech has also been tested. Apple, for instance, closed below its 200-day moving average Tuesday and has been struggling to hold on to that level in afternoon trading. Apple ended Tuesday down 1 percent at $192.23, below the 200-day at $193.37 per share.

“We’ll see in the next day or two if the 200-day can be reclaimed or not. If not it’ll be an indicator that demand isn’t there, and it will give us clues of lower prices to come, later this week or early next week. The next big support is closer to $180,” said Redler.

“If they’re not buying Apple, which is growth and value, they’re not going to be in a rush to buy anything higher,” said Redler.

Apple’s ability to quickly regain the moving average is also seen as a test for other tech names and even the broader market, since it is so widely held. Other tech and momentum names, like Amazon, Netflix and Alphabet, also broke or are challenging their 200-day moving averages.

“At the sector level, Technology’s weakness remains consistent with market leadership breaking in the late stages of a broader correction. Despite Monday’s weakness, and as noted here last week, many bellwether names are holding/testing key support levels defined by rising 200-dma’s. We expect the recent lows to hold and support rebounds into year-end,” writes Robert Sluymer, Fundstrat technical analyst.

How the market resolves these chart patterns could decide how stocks trade into the end of the year. The fourth quarter had widely been expected to be a positive period for stocks, with the midterm election now past and the market looking forward to a typically strong seasonal time for stocks.

“In the overall sell off going back to October, we broke the bull market uptrend, dating back to 2016, but beneath the surface, there was probably some pretty damaging breakdown at the stock level,” said Ari Wald, technical analyst at Oppenheimer. “We think this is a change in trend…We think we’re in the process of moving from up to sideways within this range bound formation.”

Wald said the market is “base building.” “Yesterday’s weakness was part of that. We’re of the view we could still see a move to the upper end of the range ahead of what could be a more difficult 2019,” said Wald. “Any sign of strength is going to make some bigger divergences. At this point, you could make the case we We think 2019 is setting up to be a reset year. At that point, you could make the case we go from sideways to down.”


Company: cnbc, Activity: cnbc, Date: 2018-11-13  Authors: patti domm, gina francolla, brendan mcdermid
Keywords: news, cnbc, companies, sp, going, week, market, sloping, trouble, cross, small, stock, moving, 200day, average, support, point, later, death, stocks, charts, close


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There’s something behind this market sell-off that no one is talking about: The strong dollar

Stocks investors are spooked about a lot of things, and the strong dollar biting into earnings growth is now one of them. As the dollar rose, the Dow Jones Industrial Average lost 602 points to 25,387, and the S&P 500 was down nearly 2 percent to 2,726. The question is whether the U.S. economy can withstand a slowdown in global growth, and I don’t think it can in the long run.” Marc Chandler, chief market strategist at Bannockburn Global Forex, said the dollar in recent sessions has been getting


Stocks investors are spooked about a lot of things, and the strong dollar biting into earnings growth is now one of them. As the dollar rose, the Dow Jones Industrial Average lost 602 points to 25,387, and the S&P 500 was down nearly 2 percent to 2,726. The question is whether the U.S. economy can withstand a slowdown in global growth, and I don’t think it can in the long run.” Marc Chandler, chief market strategist at Bannockburn Global Forex, said the dollar in recent sessions has been getting
There’s something behind this market sell-off that no one is talking about: The strong dollar Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2018-11-12  Authors: patti domm, osman orsal
Keywords: news, cnbc, companies, higher, quarter, theres, trade, talking, sp, selloff, growth, global, market, 500, strong, earnings, dollar


There's something behind this market sell-off that no one is talking about: The strong dollar

Stocks investors are spooked about a lot of things, and the strong dollar biting into earnings growth is now one of them.

The dollar index, which measures the greenback versus a basket of other currencies, jumped 0.7 percent on Monday to 97.58, a 17-month high. As the dollar rose, the Dow Jones Industrial Average lost 602 points to 25,387, and the S&P 500 was down nearly 2 percent to 2,726.

The dollar’s strength Monday was largely attributed to weakness in the British pound and euro because of negative Brexit news and concerns about Italy’s budget. But the dollar has also been rising on trade war concerns, rising U.S. interest rates and weaker growth rates outside the U.S.

“It could be a challenge for the stock market in the fact that about 40 percent of the S&P 500 earnings are generated from outside the United States,” said Michael Arone, chief investment strategist at State Street Global Advisors. “As the dollar strengthens, that has certainly created risk to those earnings. Another thing that could be a risk is, as the global economy has been slowing this year, the rising dollar poses a problem for many countries outside the U.S., and that has contributed to the slowdown in growth. The question is whether the U.S. economy can withstand a slowdown in global growth, and I don’t think it can in the long run.”

Marc Chandler, chief market strategist at Bannockburn Global Forex, said the dollar in recent sessions has been getting a boost from the Fed. After last week’s meeting, the Fed’s statement indicated a rate hike is coming in December and several more could be in store for next year.

“Broadly, the dollar is at its best levels of the year,” said Chandler. “We just got done with earnings season, and many people are afraid earnings peaked, and the stronger dollar just adds to that.”

Peter Boockvar, chief investment officer at Bleakley Advisory Group, said margins appear to have peaked at a record 10 percent level for the S&P 500 in the third quarter. Third quarter profits were 28 percent higher for the S&P 500, according to Thomson Reuters. Fourth quarter profits are expected to grow about 18 percent.

Boockvar said the decline in Apple after a key supplier reported slower orders was one catalyst for Monday’s decline in stocks. The market was also still reacting to Friday comments from White House trade advisor Peter Navarro, who said any trade deal will be on President Donald Trump’s terms.

But the dollar was also a factor since it plays into a theme of peaking earnings that the market has been worried about.

“It’s another clip to earnings,” said Boockvar, adding the market was already anxious about higher interest rates. “You’ve had low wages. That’s reversing. Now you get clipped via higher costs from tariffs, higher transportation costs, and you throw in the stronger dollar. You can make a strong argument that the third quarter was the peak for profit margins.”

Boockvar said corporate profit margins peaked at lower levels in the last cycles. They topped out at a high of 9.5 percent in the mid-2000s, and at 7.75 percent in the early 2000s, he said.

“[The dollar] was certainly a factor all through the third-quarter earnings for multinationals. We hear as an excuse that it was the stronger dollar, and the dollar is still below where it was in 2016, even with all these rate hikes,” said Boockvar. “I’m not going to believe the dollar is going to run away, but it is a likely factor here.” Among the companies complaining about dollar headwinds last quarter were Apple and FANG names like Alphabet, he said.


Company: cnbc, Activity: cnbc, Date: 2018-11-12  Authors: patti domm, osman orsal
Keywords: news, cnbc, companies, higher, quarter, theres, trade, talking, sp, selloff, growth, global, market, 500, strong, earnings, dollar


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Apple’s breakdown could mean the stock market retests the October low, chart analysts fear

Stocks are at a turning point, and it could be Apple and other technology names that help decide whether the market revisits October lows. If Apple goes past $190, and goes into the $180s, you’re talking about a retest of the lows,” said Scott Redler, partner with T3Live.com. Strategist said investors have not shown enough fear, and there’s been no true capitulation in the sell off. “Excluding today, the bounce from the 29th to Friday, this 8 percent move was not accompanied by resounding intern


Stocks are at a turning point, and it could be Apple and other technology names that help decide whether the market revisits October lows. If Apple goes past $190, and goes into the $180s, you’re talking about a retest of the lows,” said Scott Redler, partner with T3Live.com. Strategist said investors have not shown enough fear, and there’s been no true capitulation in the sell off. “Excluding today, the bounce from the 29th to Friday, this 8 percent move was not accompanied by resounding intern
Apple’s breakdown could mean the stock market retests the October low, chart analysts fear Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2018-11-12  Authors: patti domm, getty images
Keywords: news, cnbc, companies, stock, theres, mean, retest, retests, low, thing, apple, talking, sp, fear, chart, apples, 2700, breakdown, market, technical, lows, analysts


Apple's breakdown could mean the stock market retests the October low, chart analysts fear

Stocks are at a turning point, and it could be Apple and other technology names that help decide whether the market revisits October lows.

The S&P 500 was down about 2 percent Monday, at 2,726, and technical analysts say it needs to hold a level just above 2,700 or it could drop about 100 points to test recent lows. The S&P touched an intraday low of 2,603 on Oct. 29.

“If the market is going to show commitment to the recent rally, then 2,700 holds, and if 2,700 doesn’t hold, everyone and their mother is going to be talking about a retest of 2,603, and one thing to watch is Apple. If Apple goes past $190, and goes into the $180s, you’re talking about a retest of the lows,” said Scott Redler, partner with T3Live.com.

The S&P 500 also fell back below its 200-day moving average of 2762, a signal to some strategists the longer term trend could really be changing.

Strategist said investors have not shown enough fear, and there’s been no true capitulation in the sell off. “Excluding today, the bounce from the 29th to Friday, this 8 percent move was not accompanied by resounding internals. That left us a little uncomfortable,” said Todd Sohn, technical analyst at Strategas Research. “I think there’s a debate here, a possibility [the lows] are in play.” But he said the market could also retest the February low of 2,530.

“The other thing is when you look at risk appetite, it hasn’t been there. Staples, utiltites and REITs are leading,” he said.


Company: cnbc, Activity: cnbc, Date: 2018-11-12  Authors: patti domm, getty images
Keywords: news, cnbc, companies, stock, theres, mean, retest, retests, low, thing, apple, talking, sp, fear, chart, apples, 2700, breakdown, market, technical, lows, analysts


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