Dow falls 170 points, snaps 3-day winning streak

The major indexes fell to their session lows in the final minutes of the trading session as Treasury yields declined as well. Netflix shares pulled back 3.4%. Bank shares such as Citigroup, Bank of America and J.P. Morgan Chase all traded lower as Treasury yields pulled back. The benchmark 10-year yield fell about 5 basis points on Tuesday, or 0.05 percentage points, to 1.54%. Equities rose sharply on Monday — with the Dow rallying nearly 250 points — as bond yields paused their recent and sizab


The major indexes fell to their session lows in the final minutes of the trading session as Treasury yields declined as well. Netflix shares pulled back 3.4%. Bank shares such as Citigroup, Bank of America and J.P. Morgan Chase all traded lower as Treasury yields pulled back. The benchmark 10-year yield fell about 5 basis points on Tuesday, or 0.05 percentage points, to 1.54%. Equities rose sharply on Monday — with the Dow rallying nearly 250 points — as bond yields paused their recent and sizab
Dow falls 170 points, snaps 3-day winning streak Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-20  Authors: fred imbert
Keywords: news, cnbc, companies, treasury, pulled, 3day, falls, snaps, winning, streak, yields, economy, shares, session, dow, recession, 170, points, fell


Dow falls 170 points, snaps 3-day winning streak

The Dow Jones Industrial Average fell for the first time in four sessions on Tuesday, paring some of the strong gains from the previous session as recession fears lingered.

The 30-stock index closed 173.35 points lower, or 0.7%, at 25,962.44. The S&P 500 pulled back 0.8% to end the day at 2,900.51. The Nasdaq Composite slid 0.7% to 7,948.56. The major indexes fell to their session lows in the final minutes of the trading session as Treasury yields declined as well.

Home Depot helped keep losses in check. Shares of the home improvement retailer rose 4.4% on better-than-expected earnings. However, Home Depot warned tariffs could hit consumer spending and cut its full-year revenue outlook.

Still, the Dow has recovered a large chunk of its 800-point drop from Wednesday while the S&P 500 and Nasdaq have also regained some of their losses from that day.

“When you’re on a roller coaster, the only thing you can be sure of is you’ll end up back where you started,” said Brian Nick, chief investment strategist at Nuveen, noting the market is back where it was a year ago. “We haven’t gone much of anywhere because the economy is moving ahead, but the trade war is setting up these intermittent potholes and the global economy keeps slowing in the background.”

Chip stocks, which are sensitive to trade news, contributed to Tuesday’s decline. Micron Technology and Advanced Micro Devices dipped 1.7% and 2.4%, respectively. Netflix shares pulled back 3.4%.

Bank shares such as Citigroup, Bank of America and J.P. Morgan Chase all traded lower as Treasury yields pulled back. The benchmark 10-year yield fell about 5 basis points on Tuesday, or 0.05 percentage points, to 1.54%.

“I think yields moving down, just kind of got them going. For the past two weeks whenever yields move down, stocks move down,” said Art Cashin, director of NYSE floor operations at UBS.

Equities rose sharply on Monday — with the Dow rallying nearly 250 points — as bond yields paused their recent and sizable decline, temporarily easing ongoing recession fears.

The White House stepped in the ongoing debate over whether the U.S. economy will soon enter into recession mode, highlighting the strength in the U.S. economy.


Company: cnbc, Activity: cnbc, Date: 2019-08-20  Authors: fred imbert
Keywords: news, cnbc, companies, treasury, pulled, 3day, falls, snaps, winning, streak, yields, economy, shares, session, dow, recession, 170, points, fell


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US Treasury yields climb as recession fears ease

The yield on the 30-year Treasury bond, which hit new all-time lows last week, was also higher at 2.078%. On Saturday, China’s central bank unveiled a key interest rate reform to help drive borrowing costs lower for companies. U.S. central bank officials cut interest rates in July and indicated at the time that they’d be open to future easing if warranted. To be sure, investors see about a 74% chance of a quarter-point rate cut next month. A spell of weaker-than-expected data, agitation in U.S.-


The yield on the 30-year Treasury bond, which hit new all-time lows last week, was also higher at 2.078%. On Saturday, China’s central bank unveiled a key interest rate reform to help drive borrowing costs lower for companies. U.S. central bank officials cut interest rates in July and indicated at the time that they’d be open to future easing if warranted. To be sure, investors see about a 74% chance of a quarter-point rate cut next month. A spell of weaker-than-expected data, agitation in U.S.-
US Treasury yields climb as recession fears ease Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-19  Authors: thomas franck
Keywords: news, cnbc, companies, ease, climb, yields, yield, investors, rate, points, central, fears, recession, week, cut, interest, treasury


US Treasury yields climb as recession fears ease

U.S. government debt yields climbed on Monday as a more positive market and economic outlook goaded investors back into riskier assets.

The yield on the benchmark 10-year Treasury note rose 6 basis points to 1.6% while the rate on Treasurys maturing in two years rose 4 basis points to 1.519%. The yield on the 30-year Treasury bond, which hit new all-time lows last week, was also higher at 2.078%.

The spread between the 2-year Treasury yield and that of the 10-year inverted in intraday trading on Wednesday for the first time in over a decade, a sign many consider a reliable recession indicator. That portion of the yield curve steepened on Monday and was last seen positive at 8 basis points.

Market focus is largely attuned to global central banks, as hopes of more stimulus from major economies such as China and Germany soothed investors’ concerns about a global economic downturn.

The Commerce Department was preparing to extend the length of a license that has allowed Huawei to continue business with the U.S. companies to service existing customers despite the White House’s concerns over national security, according to report from the Wall Street Journal and Reuters.

Huawei’s business in the U.S. is one of the most contentious points in the ongoing trade war with China.

On Saturday, China’s central bank unveiled a key interest rate reform to help drive borrowing costs lower for companies.

Meanwhile, market participants are likely to closely monitor the Federal Reserve’s Jackson Hole symposium this week in order to get greater clarity on the future path of interest rates. U.S. central bank officials cut interest rates in July and indicated at the time that they’d be open to future easing if warranted.

To be sure, investors see about a 74% chance of a quarter-point rate cut next month.

A spell of weaker-than-expected data, agitation in U.S.-China trade relations and elevated recession fears sent Treasury yields tumbling to multiyear lows last week. For his part, however, President Donald Trump said Sunday he doesn’t see a recession on the horizon in the U.S. after a volatile week for markets.

“I don’t think we’re having a recession,” Trump told reporters. “We’re doing tremendously well. Our consumers are rich. I gave a tremendous tax cut and they’re loaded up with money.”


Company: cnbc, Activity: cnbc, Date: 2019-08-19  Authors: thomas franck
Keywords: news, cnbc, companies, ease, climb, yields, yield, investors, rate, points, central, fears, recession, week, cut, interest, treasury


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US Treasury yields climb as recession fears ease

The yield on the 30-year Treasury bond, which hit new all-time lows last week, was also higher at 2.078%. On Saturday, China’s central bank unveiled a key interest rate reform to help drive borrowing costs lower for companies. U.S. central bank officials cut interest rates in July and indicated at the time that they’d be open to future easing if warranted. To be sure, investors see about a 74% chance of a quarter-point rate cut next month. A spell of weaker-than-expected data, agitation in U.S.-


The yield on the 30-year Treasury bond, which hit new all-time lows last week, was also higher at 2.078%. On Saturday, China’s central bank unveiled a key interest rate reform to help drive borrowing costs lower for companies. U.S. central bank officials cut interest rates in July and indicated at the time that they’d be open to future easing if warranted. To be sure, investors see about a 74% chance of a quarter-point rate cut next month. A spell of weaker-than-expected data, agitation in U.S.-
US Treasury yields climb as recession fears ease Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-19  Authors: thomas franck
Keywords: news, cnbc, companies, ease, climb, yields, yield, investors, rate, points, central, fears, recession, week, cut, interest, treasury


US Treasury yields climb as recession fears ease

U.S. government debt yields climbed on Monday as a more positive market and economic outlook goaded investors back into riskier assets.

The yield on the benchmark 10-year Treasury note rose 6 basis points to 1.6% while the rate on Treasurys maturing in two years rose 4 basis points to 1.519%. The yield on the 30-year Treasury bond, which hit new all-time lows last week, was also higher at 2.078%.

The spread between the 2-year Treasury yield and that of the 10-year inverted in intraday trading on Wednesday for the first time in over a decade, a sign many consider a reliable recession indicator. That portion of the yield curve steepened on Monday and was last seen positive at 8 basis points.

Market focus is largely attuned to global central banks, as hopes of more stimulus from major economies such as China and Germany soothed investors’ concerns about a global economic downturn.

The Commerce Department was preparing to extend the length of a license that has allowed Huawei to continue business with the U.S. companies to service existing customers despite the White House’s concerns over national security, according to report from the Wall Street Journal and Reuters.

Huawei’s business in the U.S. is one of the most contentious points in the ongoing trade war with China.

On Saturday, China’s central bank unveiled a key interest rate reform to help drive borrowing costs lower for companies.

Meanwhile, market participants are likely to closely monitor the Federal Reserve’s Jackson Hole symposium this week in order to get greater clarity on the future path of interest rates. U.S. central bank officials cut interest rates in July and indicated at the time that they’d be open to future easing if warranted.

To be sure, investors see about a 74% chance of a quarter-point rate cut next month.

A spell of weaker-than-expected data, agitation in U.S.-China trade relations and elevated recession fears sent Treasury yields tumbling to multiyear lows last week. For his part, however, President Donald Trump said Sunday he doesn’t see a recession on the horizon in the U.S. after a volatile week for markets.

“I don’t think we’re having a recession,” Trump told reporters. “We’re doing tremendously well. Our consumers are rich. I gave a tremendous tax cut and they’re loaded up with money.”


Company: cnbc, Activity: cnbc, Date: 2019-08-19  Authors: thomas franck
Keywords: news, cnbc, companies, ease, climb, yields, yield, investors, rate, points, central, fears, recession, week, cut, interest, treasury


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Caution is warranted but US ‘should avoid a recession,’ economists say

The U.S. and global economy should avoid a recession in 2020, with a combination of strong retail sales, potential monetary policy easing and service sector robustness expected to mitigate slowing growth, according to several leading economists. However, underlying factors across major economies indicate that recession fears may be overblown, economists have suggested. A note from UBS Global CIO Mark Haefele on Monday said this reinforces belief that the U.S. economy should avoid a recession. “T


The U.S. and global economy should avoid a recession in 2020, with a combination of strong retail sales, potential monetary policy easing and service sector robustness expected to mitigate slowing growth, according to several leading economists. However, underlying factors across major economies indicate that recession fears may be overblown, economists have suggested. A note from UBS Global CIO Mark Haefele on Monday said this reinforces belief that the U.S. economy should avoid a recession. “T
Caution is warranted but US ‘should avoid a recession,’ economists say Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-19  Authors: elliot smith
Keywords: news, cnbc, companies, trade, yields, say, suggested, yield, economists, warranted, caution, economy, avoid, recession, global, rates, ubs, growth


Caution is warranted but US 'should avoid a recession,' economists say

The U.S. and global economy should avoid a recession in 2020, with a combination of strong retail sales, potential monetary policy easing and service sector robustness expected to mitigate slowing growth, according to several leading economists. A choppy week for global markets last week saw a substantial sell-off in equities, while the bond market spooked investors as the U.S. 10-year/2-year Treasury yield curve inverted, an event widely seen as a warning sign of recession. Meanwhile, the German economy contracted while eurozone GDP (gross domestic product) growth halved to 0.2% for the second quarter. However, underlying factors across major economies indicate that recession fears may be overblown, economists have suggested. Over the weekend, German finance minister Olaf Scholz indicated that Europe’s largest economy would be willing to take fiscal measures if a recession loomed, shifting the government’s tone. Meanwhile, the People’s Bank of China announced a program of interest rate reform aimed at stimulating an economy reeling from the impact of the trade war.

U.S. consumers to the rescue

Strong retail sales figures for July suggested that U.S. consumers are continuing to prop up the economy, partially offsetting the drag on business confidence from the U.S.-China trade conflict. Sales climbed 0.7% month-on-month in July, a fifth successive increase, reiterating the American consumer’s role in providing lifeblood to the economy. A note from UBS Global CIO Mark Haefele on Monday said this reinforces belief that the U.S. economy should avoid a recession. Assuming no trade war escalation, UBS has assigned just a 25% chance that the U.S. economy will contract for two consecutive quarters in 2020. “But despite the strength of the consumer side of the U.S. economy, we do expect falling business activity to pull U.S. growth below trend, forcing the Fed to cut rates more than we had previously expected,” Haefele added.

However, latest data showed that factory output fell by 0.4% in July, while manufacturing output has now contracted in five of the past seven months, mirroring a broader slowdown worldwide led by China and Germany. What’s more, a swift resolution to the trade war remains unlikely, Haefele suggested, meaning business investment will remain subdued globally, delaying an expected pick-up in growth which had been anticipated for the second half of 2018. UBS now expects U.S. economic growth of around 1.8%, below trend, in 2020. “So, while we don’t believe a recession is looming, and we remain cautiously positive on global equities, we now expect a longer period of lower rates,” the note said, adding that UBS now expects the U.S. Federal Reserve to cut rates by 25 basis points three more times – in September, December and March.

Robust underlying factors

HSBC Global Asset Management has also played down the risk of recession, both stateside and globally, retaining a pro-risk stance in its multi-asset portfolios. Global co-CIO Joseph Little highlighted on Monday that equity markets have performed well year-to-date, despite this month’s sell-off. He added that the “valuation gap between equities and relatively expensive bonds continues to increase,” but advocated a more cautious short-term approach given the downside risks to growth. “The global economy is in a difficult place, but investor pessimism could be overdone. Looking at the growth outlook, US activity is being buttressed by a solid labor market,” Little said. “Meanwhile, the recent weakness in euro zone data has been driven mainly by a large downturn in the industrial sector.” While there is no clear indication of a turnaround here, the services sector remains robust, offsetting the impact of dwindling industrial performance.

Furthermore, muted global inflation trends have kept the door ajar for further monetary policy easing, and Little suggested that alongside an expected further Fed rate cut and a stimulus package from the European Central Bank (ECB) this year, fiscal policy could also play an increasingly important role. For instance, the U.K. government has signaled a large program of spending and tax cuts, while Germany has now indicated that it is prepared to deploy fiscal stimulus should its economy continue to lag. With regards to bond yields, which touched all-time lows across Europe last week, Little said there is no precedent for an inversion at such low government bond yields, but “yield curves have to invert further before they reach the levels that have preceded previous recessions.” An inverted yield curve is generally considered a recession predictor. When short-term yields climb over longer-dated yields, it shows that borrowing costs in the shorter-term are more than the longer term. In these cases, businesses could find it more expensive to expand their operations. Meanwhile, consumer borrowing could also fall, thus leading to lesser consumer spending in the economy. All of these could lead to a subsequent contraction in the economy and a rise in unemployment.

New all-time highs for equities in 2020

While respecting the historical significance of the U.S. yield curve inversion in preceding recessions, J.P. Morgan equity strategists led by Mislav Matejka highlighted a number of variables which at present are inconsistent with such events. “Typically, the curve inversion is a sign that real policy rates have become too high; lending conditions are tightening and banks are beginning to restrict access to credit; high yield credit spreads are worsening; and the labor market has started to deteriorate,” Matejka said in a note on Monday. “This time around, high yield spreads are well behaved, real rates are not much above zero, and claims remain resilient.”


Company: cnbc, Activity: cnbc, Date: 2019-08-19  Authors: elliot smith
Keywords: news, cnbc, companies, trade, yields, say, suggested, yield, economists, warranted, caution, economy, avoid, recession, global, rates, ubs, growth


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White House official denies administration is looking at a payroll tax cut

President Donald Trump during a cabinet meeting at the White House July 16, 2019 in Washington, DC. Top White House officials have started to float a payroll tax cut as a potential means to stem an economic downturn, The Washington Post reported Monday. A White House official later pushed back on the report in a statement to CNBC. The Trump administration has not yet decided whether to push Congress to pass a temporary payroll tax cut, according to the newspaper. Rep. John Larson, D-Conn., has p


President Donald Trump during a cabinet meeting at the White House July 16, 2019 in Washington, DC. Top White House officials have started to float a payroll tax cut as a potential means to stem an economic downturn, The Washington Post reported Monday. A White House official later pushed back on the report in a statement to CNBC. The Trump administration has not yet decided whether to push Congress to pass a temporary payroll tax cut, according to the newspaper. Rep. John Larson, D-Conn., has p
White House official denies administration is looking at a payroll tax cut Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-19  Authors: jacob pramuk
Keywords: news, cnbc, companies, tax, report, trump, house, official, administration, looking, president, post, democrats, white, recession, denies, payroll, cut


White House official denies administration is looking at a payroll tax cut

President Donald Trump during a cabinet meeting at the White House July 16, 2019 in Washington, DC.

Top White House officials have started to float a payroll tax cut as a potential means to stem an economic downturn, The Washington Post reported Monday.

A White House official later pushed back on the report in a statement to CNBC.

“As Larry Kudlow said yesterday, more tax cuts for the American people are certainly on the table, but cutting payroll taxes is not something under consideration at this time,” the official said.

The report comes as President Donald Trump in recent days has lashed out over media reports about growing recession fears. He has hammered into the Federal Reserve and claimed concerns about a slowdown are fueled by Democrats and a sympathetic media ahead of his 2020 reelection bid. (The bond market flashed a reliable signal of a potential recession last week).

“Our Economy is very strong, despite the horrendous lack of vision by [Chair] Jay Powell and the Fed, but the Democrats are trying to ‘will’ the Economy to be bad for purposes of the 2020 Election,” the president wrote in a tweet Monday.

The Trump administration has not yet decided whether to push Congress to pass a temporary payroll tax cut, according to the newspaper. Still, the talks show the officials around Trump have worried about the possibility of a slowdown.

It is doubtful the Democratic-controlled House would even pass a payroll tax. The 6.2% tax helps to fund Medicare and Social Security, two massive programs Democrats have repeatedly warned against altering.

Rep. John Larson, D-Conn., has proposed a plan to raise the payroll tax to keep Social Security solvent.

A survey cited by the Post found nearly 3 out of 4 economists predict a recession by 2021.

Read the full Post report here.

Subscribe to CNBC on YouTube.


Company: cnbc, Activity: cnbc, Date: 2019-08-19  Authors: jacob pramuk
Keywords: news, cnbc, companies, tax, report, trump, house, official, administration, looking, president, post, democrats, white, recession, denies, payroll, cut


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‘Everything seems like a trap now’ — Cramer warns about mixed signals in the stock market

Investors should be careful not to buy or sell stocks based on last week’s brief inversion of the yield curve in the bond market, CNBC’s Jim Cramer warned on Monday. “Everything seems like a trap now,” Cramer said on CNBC’s “Squawk Box.” “It was a trap to sell off the inverted, and now they have to go buy back on the uninverted. Over the weekend, White House trade advisor Peter Navarro played down Wednesday’s inversion, saying technically it was more flat than inverted. Cramer said he hears more


Investors should be careful not to buy or sell stocks based on last week’s brief inversion of the yield curve in the bond market, CNBC’s Jim Cramer warned on Monday. “Everything seems like a trap now,” Cramer said on CNBC’s “Squawk Box.” “It was a trap to sell off the inverted, and now they have to go buy back on the uninverted. Over the weekend, White House trade advisor Peter Navarro played down Wednesday’s inversion, saying technically it was more flat than inverted. Cramer said he hears more
‘Everything seems like a trap now’ — Cramer warns about mixed signals in the stock market Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-19  Authors: matthew j belvedere
Keywords: news, cnbc, companies, trade, sell, market, yield, warns, inversion, inverted, mixed, stock, recession, wednesdays, signals, cramer, uninverted, stocks, trap


'Everything seems like a trap now' — Cramer warns about mixed signals in the stock market

Investors should be careful not to buy or sell stocks based on last week’s brief inversion of the yield curve in the bond market, CNBC’s Jim Cramer warned on Monday.

Cramer was skeptical about buying the Dow Jones Industrial Average’s 300-point advance at the open on Wall Street, which was playing out against the backdrop of continuing bond yield stabilization.

“Everything seems like a trap now,” Cramer said on CNBC’s “Squawk Box.” “It was a trap to sell off the inverted, and now they have to go buy back on the uninverted. What happens if we get inverted again?”

Last Wednesday, stocks tanked after the 10-year Treasury yield briefly inverted and dipped below the 2-year for the first time since before the 2008 financial crisis and subsequent Great Recession.

Such a move preceded every recession over the past 50 years.

“The idea that we uninverted the yield curve is something that lasts for, who knows, like an hour,” the “Mad Money” host said, facetiously, arguing against reading too much into the inversion theory.

Over the weekend, White House trade advisor Peter Navarro played down Wednesday’s inversion, saying technically it was more flat than inverted. For a true inversion, he argued, the spread would need to have been much larger. President Donald Trump said he does not see a recession on the horizon.

If the Dow were to hold on to its early gains by Monday’s close, it would erase all of Wednesday’s 800-point sell-off, the worst single-session of the year.

Cramer said he understands why investors might be suspicious of the economy, given the track record of inversions as recession indicators and the concerns about global economic growth due to the U.S.-China trade war.

Cramer said he hears more doom and gloom in the media than he does from companies. “I do feel like things are worse when I listen to people talk, than reality,” he said.


Company: cnbc, Activity: cnbc, Date: 2019-08-19  Authors: matthew j belvedere
Keywords: news, cnbc, companies, trade, sell, market, yield, warns, inversion, inverted, mixed, stock, recession, wednesdays, signals, cramer, uninverted, stocks, trap


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Fitness spending is flying high, but a recession could hit boutique brands first

As quickly as retail storefronts are disappearing, specialty fitness studios are appearing. There are now more fitness options than ever — from big box gyms, to boutique studios, to streaming classes and even virtual reality workouts. So it’s no surprise that more people than ever are spending more than ever on fitness. Small, specialized fitness studios with ever increasing price tags. The company has grown more than 40% in the just the last year, with studios now in 10 countries.


As quickly as retail storefronts are disappearing, specialty fitness studios are appearing. There are now more fitness options than ever — from big box gyms, to boutique studios, to streaming classes and even virtual reality workouts. So it’s no surprise that more people than ever are spending more than ever on fitness. Small, specialized fitness studios with ever increasing price tags. The company has grown more than 40% in the just the last year, with studios now in 10 countries.
Fitness spending is flying high, but a recession could hit boutique brands first Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-19  Authors: diana olick
Keywords: news, cnbc, companies, fitness, spending, grown, workouts, million, hit, health, brands, studios, boutique, company, high, recession, flying, bootcamp, zengo


Fitness spending is flying high, but a recession could hit boutique brands first

As quickly as retail storefronts are disappearing, specialty fitness studios are appearing.

There are now more fitness options than ever — from big box gyms, to boutique studios, to streaming classes and even virtual reality workouts. So it’s no surprise that more people than ever are spending more than ever on fitness.

A record 71.5 million consumers used close to 40,000 for-profit health clubs in 2018, according to the International Health, Racquet & Sportsclub Association. The number of individual members totaled 62.5 million, up 2.6% from 2017.

The biggest growth sector is boutique. Small, specialized fitness studios with ever increasing price tags. Names like Barry’s Bootcamp, SoulCycle, Orange Theory, Zengo, Pure Barre, [solidcore], Club Pilates, Shadowbox and PlateFit.

Barry’s Bootcamp alone has grown from 20 studios to 60 in the past five years and plans to open 100 globally in the next five years. The company has grown more than 40% in the just the last year, with studios now in 10 countries.

Boutique brands are booming because they have become a go-to social destination.

“It’s not necessarily the fitness aspect, but a fitness activity that’s replaced your standard happy hour,” said Kristen Geil, editor-in-chief of A SweatLife, a health and wellness media company that recently surveyed its largely millennial readership about fitness trends.

“About 78% of our respondents were more likely to try a new workout with a friend.”


Company: cnbc, Activity: cnbc, Date: 2019-08-19  Authors: diana olick
Keywords: news, cnbc, companies, fitness, spending, grown, workouts, million, hit, health, brands, studios, boutique, company, high, recession, flying, bootcamp, zengo


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Buy Amazon and Chewy, but sell Netflix if there’s a recession, Nomura Instinet says

The continued growth of digital services should give some technology and digital media companies the ability to outperform during a recession, but not every stock is well-positioned, according to analysts at Nomura Instinet. While e-commerce sales growth slowed during the great financial crisis, the digital companies gained market share from traditional retailers. “Amazon is also well-positioned as a general-purpose retailer,” the analysts wrote, while noting Nomura doesn’t officially cover the


The continued growth of digital services should give some technology and digital media companies the ability to outperform during a recession, but not every stock is well-positioned, according to analysts at Nomura Instinet. While e-commerce sales growth slowed during the great financial crisis, the digital companies gained market share from traditional retailers. “Amazon is also well-positioned as a general-purpose retailer,” the analysts wrote, while noting Nomura doesn’t officially cover the
Buy Amazon and Chewy, but sell Netflix if there’s a recession, Nomura Instinet says Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-19  Authors: jesse pound
Keywords: news, cnbc, companies, nomura, ecommerce, instinet, sell, netflix, companies, advertising, markets, market, buy, theres, recession, chewy, digital, analysts, media, amazon


Buy Amazon and Chewy, but sell Netflix if there's a recession, Nomura Instinet says

Signage for Chewy is seen on the trading floor ahead of their IPO at the New York Stock Exchange, June 14, 2019.

The continued growth of digital services should give some technology and digital media companies the ability to outperform during a recession, but not every stock is well-positioned, according to analysts at Nomura Instinet.

Fears of a recession in the U.S. rose last week when the main yield curve inverted, a historically reliable indicator of a slowdown. The action in the bond market, combined with continued trade uncertainty and stagnant economies around the globe, has led some economists and financiers to consider a recession in the next year or two.

The tech and digital media sectors have large exposure to advertising and discretionary consumer spending, two areas that are seen as high risk during hard economic times.

However, Nomura analyst Mark Kelley and two colleagues said in a client note Monday that e-commerce companies and those with strong digital advertising businesses should see secular tailwinds that make them winners during a downturn.

The analysts said e-commerce stocks were the “best to own in such an environment,” singling out Amazon and pet retailer Chewy, the latter because demand for pet products has shown resilience during recessions. While e-commerce sales growth slowed during the great financial crisis, the digital companies gained market share from traditional retailers.

“Amazon is also well-positioned as a general-purpose retailer,” the analysts wrote, while noting Nomura doesn’t officially cover the stock.

“We would expect this trend to continue in a future downturn, continuing the decline of legacy brick-and-mortar retailers that have suffered in the ‘retail apocalypse’ in favor of more nimble and online-focused marketplaces. We expect larger e-commerce platforms and niche retailers whose end markets are less discretionary to outperform,” the analysts said.

Advertising also took a big hit during the last recession, but digital advertising, which only accounted for about 15% of total ad budgets at the time, held up better than the industry as a whole. Though digital advertising is a much bigger market now, the analysts believe the digital side should still lift companies such as Alphabet and Facebook.

“We believe the continued transition to digital advertising should equate to digital advertising budgets holding up much better than legacy formats,” the analysts said.

Not every technology and media company can count on the strength of digital markets to bolster them during a downturn, the analysts said, pointing to video game companies as one industry that could be hit hard.

“We would be cautious regarding cash-flow-negative companies, such as Snap and Netflix, and those companies exposed to cyclical or discretionary end markets, such as ANGI Homeservices and the Interactive Entertainment sector, ” the analysts said.


Company: cnbc, Activity: cnbc, Date: 2019-08-19  Authors: jesse pound
Keywords: news, cnbc, companies, nomura, ecommerce, instinet, sell, netflix, companies, advertising, markets, market, buy, theres, recession, chewy, digital, analysts, media, amazon


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White House pushes back against recession fears, defends trade war

“I don’t think we’re having a recession,” Trump told reporters. The bond market flashed a signal Wednesday that is normally interpreted as a sign a recession is on the horizon. The executives said the consumer was doing well, but could do even better if issues such as the China-U.S. trade war were resolved, this person said. Both Kudlow and Navarro strongly defended Trump’s trade war with China. Navarro said the U.S. was winning the trade war and dismissed arguments that Americans were shoulderi


“I don’t think we’re having a recession,” Trump told reporters. The bond market flashed a signal Wednesday that is normally interpreted as a sign a recession is on the horizon. The executives said the consumer was doing well, but could do even better if issues such as the China-U.S. trade war were resolved, this person said. Both Kudlow and Navarro strongly defended Trump’s trade war with China. Navarro said the U.S. was winning the trade war and dismissed arguments that Americans were shoulderi
White House pushes back against recession fears, defends trade war Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-18  Authors: spencer kimball
Keywords: news, cnbc, companies, trade, defends, war, kudlow, economic, market, tariffs, pushes, president, trump, white, recession, fears, house, china


White House pushes back against recession fears, defends trade war

U.S. President Donald Trump speaks with Larry Kudlow, director of the U.S. National Economic Council, right, in the Roosevelt Room of the White House in Washington, D.C.

President Donald Trump said Sunday he doesn’t see a recession on the horizon after a volatile week for markets.

“I don’t think we’re having a recession,” Trump told reporters. “We’re doing tremendously well. Our consumers are rich. I gave a tremendous tax cut and they’re loaded up with money.”

The bond market flashed a signal Wednesday that is normally interpreted as a sign a recession is on the horizon. The yield on the 10-year Treasury note briefly broke below the rate for the 2-year. The Dow Jones Industrial Average dropped 800 points or about 3% as the bond market spooked investors.

The president called the heads of J.P. Morgan Chase, Bank of America and Citigroup as the stock market tanked Wednesday, according to people with knowledge of the situation. Trump asked the executives for a read on the health of the U.S. consumer, according to one of the people.

The executives said the consumer was doing well, but could do even better if issues such as the China-U.S. trade war were resolved, this person said.

Trump’s top economic advisor Larry Kudlow said Sunday strong retail sales and low unemployment were signs the economy remained strong.

“I think we’re in pretty good shape,” Kudlow said. A gauge of U.S. manufacturing, however, recently fell to its lowest reading since 2009 as demand weakened and managers slowed hiring.

White House trade advisor Peter Navarro disputed that the yield curve had inverted. He said the curve was flat and claimed this is a sign that foreign capital is flowing into the U.S., which is bidding up bond prices on the long end and bidding down yields.

“In this case, the flat curve is actually the result of a very strong Trump economy,” he said.

Both Kudlow and Navarro strongly defended Trump’s trade war with China. Earlier this month, the president said he would impose 10% tariffs on $300 billion of imports from China.

However, Trump decided to postpone some tariffs until Dec. 15 out of concern that it could impact the holiday shopping season, which seemed to contradict past administration statements that China was shouldering the burden.

Trump reiterated his stance Sunday: “China is eating the tariffs — at least so far,” he said.

Navarro said the U.S. was winning the trade war and dismissed arguments that Americans were shouldering the burden, despite mounting complaints from American farmers, who broadly support Trump, that the trade war is hurting them.

Kudlow, for his part, said the U.S. is locked in a battle with Beijing over technology.

“We are in a kind of technological war with China, and we cannot let them steal our family jewels which is the heart of the American economic growth miracle,” he said.

— CNBC’s Hugh Son contributed to this report


Company: cnbc, Activity: cnbc, Date: 2019-08-18  Authors: spencer kimball
Keywords: news, cnbc, companies, trade, defends, war, kudlow, economic, market, tariffs, pushes, president, trump, white, recession, fears, house, china


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Oil rises as US retail sales ease recession fears

Crude oil prices rose on Friday following two days of declines, buoyed after data showing an increase in retail sales in the U.S. helped dampen concerns about a recession in the world’s biggest economy. U.S. crude was up 65 cents, or 1.2%, at $55.12 a barrel, having dropped 1.4% the previous session and 3.3% on Wednesday. An inverted Treasury yield curve is historically a reliable predictor of looming recessions. In July, OPEC+ agreed to extend oil output cuts until March 2020 to prop up prices.


Crude oil prices rose on Friday following two days of declines, buoyed after data showing an increase in retail sales in the U.S. helped dampen concerns about a recession in the world’s biggest economy. U.S. crude was up 65 cents, or 1.2%, at $55.12 a barrel, having dropped 1.4% the previous session and 3.3% on Wednesday. An inverted Treasury yield curve is historically a reliable predictor of looming recessions. In July, OPEC+ agreed to extend oil output cuts until March 2020 to prop up prices.
Oil rises as US retail sales ease recession fears Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-16
Keywords: news, cnbc, companies, output, economic, oil, cuts, treasury, fears, sales, data, crude, opec, weakening, ease, rises, yield, recession, retail


Oil rises as US retail sales ease recession fears

Crude oil prices rose on Friday following two days of declines, buoyed after data showing an increase in retail sales in the U.S. helped dampen concerns about a recession in the world’s biggest economy.

Brent crude was up 52 cents, or 0.9%, at $58.75 a barrel at 0352 GMT, after falling 2.1% on Thursday and 3% the previous day.

U.S. crude was up 65 cents, or 1.2%, at $55.12 a barrel, having dropped 1.4% the previous session and 3.3% on Wednesday.

U.S. retail sales rose 0.7% in July as consumers bought a range of goods even as they cut back on motor vehicle purchases, according to data that came a day after a key part of the U.S. Treasury yield curve inverted for the first time since June 2007 prompting a sell-off in stocks and crude oil.

An inverted Treasury yield curve is historically a reliable predictor of looming recessions.

“The rebound has a corrective look about it on thin volumes, rather than a beachhead for an impending rebound,” said Jeffrey Halley, senior market analyst at OANDA. “Overall, U.S. data continues to be a bright spot in a dark economic universe.”

Gains are likely to be capped after a week of data releases including a surprise drop in industrial output growth in China to a more than 17-year low, along with a fall in exports that sent Germany’s economy into reverse in the second quarter.

“The broader story around global economic growth has been a weak one, or a weakening one and expectations (are for) further weakening,” Phin Ziebell, senior economist at National Australia Bank, said by phone.

The price of Brent is still up nearly 10% this year thanks to supply cuts led by the Organization of the Petroleum Exporting Countries (OPEC) and allies such as Russia, a group known as OPEC+. In July, OPEC+ agreed to extend oil output cuts until March 2020 to prop up prices.

“At what point will further output cuts be needed at the back end of this year from OPEC and Russia to keep things going the way they are?” Zeibell said, given the broader economic outlook.

A Saudi official on Aug. 8 indicated more steps may be coming, saying “Saudi Arabia is committed to do whatever it takes to keep the market balanced next year.”

But the efforts of OPEC+ have been outweighed by worries about the global economy amid the U.S.-China trade dispute and uncertainty over Brexit, as well as rising U.S. stockpiles of crude and higher output of U.S. shale oil.


Company: cnbc, Activity: cnbc, Date: 2019-08-16
Keywords: news, cnbc, companies, output, economic, oil, cuts, treasury, fears, sales, data, crude, opec, weakening, ease, rises, yield, recession, retail


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