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Wall Street opens higher after surging Chinese markets

A currency trader walks near the screen showing the Korea Composite Stock Price Index (KOSPI) at a foreign exchange trading floor in Seoul, South Korea, Wednesday, March 16, 2022. Asian stocks rose on Wednesday as investors awaited a widely expected decision from the United States.  Federal Reserve on interest rate policy.  (AP Photo/Lee ​​Jin-man)

A currency trader walks near the screen showing the Korea Composite Stock Price Index (KOSPI) at a foreign exchange trading floor in Seoul, South Korea, Wednesday, March 16, 2022. Asian stocks rose on Wednesday as investors awaited a widely expected decision from the United States. Federal Reserve on interest rate policy. (AP Photo/Lee ​​Jin-man)

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Wall Street adds to its gains early Wednesday as markets begin to gather hope that there may be better news on the horizon on inflation, the war in Ukraine and other worries that have unsettled investors . The S&P 500 rose 1.5% and the Nasdaq 1.7%. Chinese markets soared overnight after Beijing promised to help that country’s ailing real estate sector and its internet companies. Ukraine’s president made a direct appeal for help to US lawmakers in a speech. Later today, the Federal Reserve is expected to raise interest rates for the first time since 2018.

THIS IS A BREAKING NEWS UPDATE. AP’s previous story follows below.

NEW YORK (AP) — U.S. markets are poised to follow global stocks higher on Wednesday after Chinese leaders pledged increased support for a slowing Chinese economy, as investors awaited the outcome of a Federal Reserve meeting.

Dow Jones industrial futures rose 1.2% and S&P 500 futures gained 1.3% after Hong Kong’s benchmark jumped 9% overnight .

A variety of factors contributed to the latest rally, including comments from Ukrainian President Volodymyr Zelenskyy suggesting there was still reason to be optimistic the talks could still yield a deal with the Russian government.

Yet Russia stepped up its bombardment of the Ukrainian capital and launched new assaults on the port city of Mariupol, making bloody advances on the ground on Wednesday as Zelenskyy prepared to issue a direct appeal for more help in a rare speech by a foreign leader in the United States. Congress.

France’s CAC 40 jumped 3.5%, while Germany’s DAX gained 3.2% and Britain’s FTSE 100 rose 1.4%.

At its policy meeting later on Wednesday, the Fed is expected to raise its short-term policy rate by 0.25 percentage points. This would be the first increase since 2018, pulling it off its all-time high of near zero, and likely the start of a series of increases.

The Fed is trying to slow the economy enough to stem the high inflation that is sweeping the country while avoiding triggering a recession.

Inflation is already at its highest level in generations, and the most recent figures do not include the spike in oil prices after Russia invaded Ukraine. The move comes as central banks around the world prepare to end support for the global economy following the outbreak of the pandemic.

“The reference to ‘rearranging deck chairs on the Titanic’ is not meant to invoke despair. Rather, it is meant to convey a sense of the inevitability of the upcoming Fed tightening cycle,” said Tan Boon Heng of Mizuho Bank in Singapore.

The surge in Hong Kong’s Hang Seng index was a respite from recent selloffs by Chinese tech companies and other pressures that had taken it to six-year lows.

At a Cabinet meeting on Wednesday, officials promised to “reinvigorate the economy” with “support measures” for struggling real estate and other measures, the official Xinhua news agency reported.

At a meeting led by Vice Premier Liu He, President Xi Jinping’s top economic adviser, Cabinet officials called on government agencies to release other “market-friendly” policies, Xinhua said.

He also said talks between Chinese and U.S. regulators on resolving a dispute over rules governing foreign companies listed on U.S. markets had progressed.

The Hang Seng gained 9.1% to 20,087.50. The Shanghai Composite Index added 3.5% to 3,170.71.

Shares of e-commerce giant Alibaba Group Holding jumped 23.6%. Tencent Holdings, operator of popular messaging service WeChat, jumped 23% and live streaming site Kuaishou Technology added 31.4%.

Japan’s benchmark Nikkei 225 rose 1.6% to end at 25,762.01. Australia’s S&P/ASX 200 gained 1.1% to 7,175.20. The South Korean Kospi gained 1.4% to 2,659.23.

Renewed concerns about COVID-19 in some regions along with a long list of other concerns have caused wild hour-to-hour swings in the markets over the past few weeks. The war in Ukraine has pushed up the prices of oil, wheat and other commodities that the region produces. This increases the threat that already high inflation will persist and combine with a potentially stagnant economy.

Benchmark U.S. crude rose 49 cents to $96.93 a barrel in electronic trading on the New York Mercantile Exchange.

A barrel of US crude fell 6.4% to $96.44 on Tuesday. It had briefly topped $130 last week when concerns about supply disruptions due to the war in Ukraine were at their height.

Brent crude, the international price standard, rose 11 cents to $100.02 a barrel.

In other developments, nickel trading was halted again on the London Metal Exchange on Wednesday after briefly recovering from a week-long suspension when the price of the metal soared to over $100,000 a day. tonne. The exchange said it was investigating a “system error” that resulted in a few trades being made below the lower price limit introduced to curb volatility.

Russia is the world’s third largest producer of nickel. Its price and that of many other commodities rose on speculation of possible supply disruptions as Russia faces widening economic sanctions following its invasion of Ukraine.

In currency trading, the US dollar stood at 118.29 Japanese yen, little changed from 118.31 yen. The Euro traded at $1.1002, down from $1.0955 previously.

Starbucks shares rose more than 5% in premarket trading after chairman and chief executive Kevin Johnson announced he would retire next month. The company’s former CEO and founder, Howard Schultz, will replace him on an interim basis.

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AP Business Writer Joe McDonald in Beijing contributed.

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Stocks fall as war overshadows ‘fantastic’ US jobs data

NEW YORK (AP) — Stocks around the world tumble on Friday as not even a gangbuster report on the U.S. labor market can distract Wall Street from its concerns about the war in Ukraine.

The S&P 500 was down 1.7% in morning trade, on higher losses in Europe after a fire at the continent’s largest nuclear power plant caused by bombings raised concerns over the aftermath. . Markets around the world have swung sharply over the past week on concerns about the price swings for oil, wheat and other commodities produced in the region due to the Russian invasion, which which exacerbated the already high inflation in the world.

Treasury yields fell again as investors shifted money into US government bonds in search of safety, and some jitters on Wall Street grew.

All the moves came despite a much stronger-than-expected US jobs report by economists, described as encouraging and even “fantastic”. Hirings by employers last month exceeded expectations by hundreds of thousands of workers, more people returned to the labor market after sitting on the sidelines and employment figures for previous months were revised on the rise.

On the inflation front, worker wage growth was slower last month than economists expected. While this is daunting for workers hoping to keep up with rising grocery prices, for economists and investors it means less risk of the economy heading into what is known as a “wage-wage spiral”. price”. In such a strengthening cycle, higher wages for workers would induce firms to raise their own prices even further.

“The COVID recovery was in full swing in the jobs report,” said Brian Jacobsen, senior investment strategist at Allspring Global Investments.


“The tricky part is the future, not the past,” he said, as crude oil prices rallied above $112 a barrel amid concerns about pressure on oil supplies. because of the Ukrainian war. “Higher fuel and food costs can eat into consumers’ budgets. These high costs can be a boon for oil producers and farmers, but not for everyone. »

Those concerns helped push the Dow Jones Industrial Average down 519 points, or 1.5%, to 33,275 as of 11:05 a.m. EST. The Nasdaq composite was 2.1% lower.

The losses were widespread, with more than 80% of S&P 500 stocks down. Among the few winners were Chevron, Exxon Mobil and other companies that can benefit from higher oil prices. The S&P 500 is on course for its third weekly loss in the past four, and it’s down just over 10% from its all-time high set earlier this year.

In Europe, whose economy is much more closely tied to the conflict due to its dependence on the region’s oil and natural gas, the losses were greater. The French CAC 40 fell 4.2% on Friday, the German DAX lost 3.8% and the FTSE 100 in London fell 2.7%.

Russian forces gained ground, bombing Europe’s largest nuclear power plant and setting a fire early on Friday as they continued their attack on a crucial Ukrainian energy-producing city. But authorities said the fire was safely extinguished. US Energy Secretary Jennifer Granholm tweeted that the reactors at the Zaporizhzhia plant were protected by strong containment structures and were shut down safely.

Trading on the Moscow Stock Exchange, after briefly opening on Monday, remained closed throughout the week. The value of the Russian ruble continues to hover below one penny after plunging about 30% since the middle of last week. It now takes about 104 rubles to get a dollar, compared to less than 75 at the start of the year. The ruble fell as Western governments imposed sanctions that cut off much of Russia’s access to the global financial system.

The price of US oil rose 3.9% to $111.89 a barrel. Brent, the international standard, climbed 4% to $114.93 a barrel.

Amid the rush to safety, the 10-year Treasury yield fell to 1.70% from 1.84% on Thursday night, a big step. It is well below the 2% level it reached last month as expectations of upcoming interest rate hikes by the Federal Reserve to curb inflation were set.

Stocks rallied mid-week after Federal Reserve Chairman Jerome Powell said he favored a more modest increase in interest rates later this month than some investors did. had feared. The Fed is set to hike rates for the first time since 2018, though it has a tightrope walk ahead of it as rates that are too high can choke the economy and trigger a recession.

Powell warned on Thursday that the fighting in Ukraine is likely to further amplify the high inflation that is troubling global economies. Russia is a major oil producer and prices have risen as global supplies are threatened by the conflict.

“For a world that was already struggling with worrying (cost-push) inflation before the invasion of Ukraine, soaring commodity prices due to geopolitical fallout are not just an inconvenience, but rather a threat. constraining economy,” Mizuho Bank said in a comment.

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AP Business Writer Elaine Kurtenbach contributed.

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Wall Street losses rise amid simmering Ukraine crisis

In this photo provided by the New York Stock Exchange, pundit Stephen Naughton works at his post on the trading floor, Tuesday, Feb. 22, 2022. Stocks swung between small gains and losses in morning trading on Wall Street on Tuesday as that tensions escalated in Ukraine during Russia's decision to send forces to the eastern regions of that country.  (Allie Joseph/NYSE via AP)

In this photo provided by the New York Stock Exchange, pundit Stephen Naughton works at his post on the trading floor, Tuesday, Feb. 22, 2022. Stocks swung between small gains and losses in morning trading on Wall Street on Tuesday as that tensions escalated in Ukraine during Russia’s decision to send forces to the eastern regions of that country. (Allie Joseph/NYSE via AP)

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Wall Street losses rose on Wednesday as world leaders waited to see if Russian President Vladimir Putin ordered troops deeper into Ukraine.

The S&P 500 fell 1.8% to an 8-month low, deepening the benchmark’s “correction” to a 10% loss from its recent high. More than 85% of S&P 500 stocks fell as technology companies weighed on the market. index the most.

The tech-heavy Nasdaq fell 2.6%, dragged down by steep losses from Apple and Microsoft. The Dow Jones Industrial Average fell 1.4%.

US Treasury yields rose slightly, as did gold prices.

Wall Street has been watching developments in Ukraine closely, where Russia has been amassing troops for a potential new invasion. Russia has started to evacuate its embassy in Kyiv. He has already sent soldiers to the eastern regions of Ukraine after recognizing the independence of some rebel-held areas.

The United States and Western countries responded with sanctions, and Germany withdrew a document needed to certify Russia’s Nord Stream 2 gas pipeline.

Energy prices have been volatile – Russia is the world’s largest natural gas producer and the third largest oil producer and a military conflict could threaten supplies.

Geopolitical tensions added to investor concerns about rising interest rates. The Federal Reserve is expected to raise interest rates at its next policy meeting in March. In anticipation of higher rates, investors had pulled money out of growth sectors such as technology stocks. The Russian-Ukrainian crisis has exacerbated this tendency to abandon riskier assets.

The latest losses added to Tuesday’s slump and the S&P 500’s slide toward a correction. The index saw its last correction in the spring of 2020, as the pandemic upended the global economy. That correction deepened into a bear market — a decline of 20% or more — as the S&P 500 fell nearly 34% in about a month.

“We are clearly, solidly in corrective territory at this point,” said Randy Frederick, vice president of trading and derivatives at Charles Schwab. “We need some kind of positive news, and there really isn’t much right now.”

The S&P 500 fell 79.26 points to 4,225.50. It is now 11.9% lower than the record level reached on January 3. Shares of some of the largest companies in the index have been hammered by the market slump since the start of the year. Meta, the parent company of Facebook, is down 41.4%, Tesla is down 36.3% and Microsoft is down 16.3%, while Alphabet, the parent company of Apple and Google, is down 12.9%.

Tech stocks led Wednesday’s wide losses. Microsoft and Apple fell 2.6%. The sector has an outsized influence on the S&P 500 due to high valuations of Big Tech companies.

The Dow Jones lost 464.85 points to 33,131.76, while the Nasdaq slipped 344.03 points to 13,037.49. The index is now 18.8% below its peak in November 2021.

Small company stocks also lost ground. The Russell 2000 Index fell 36.08 points, or 1.8%, to 1,944.09.

Retailers and other businesses that rely on direct consumer spending also weighed on the market. Amazon fell 3.6% and Starbucks 3.7%.

US crude oil prices remained volatile, slipping 0.3%, although energy stocks gained ground. Chevron rose 2.4%.

Bond yields rose slightly. The 10-year Treasury yield rose from 1.95% to 1.98% on Tuesday evening.

Wall Street also looks at how companies are handling supply chain issues and higher costs in their latest series of corporate bulletins.

Lowe’s rose 0.2% after raising its profit forecast for the year following a strong financial report in the fourth quarter. Security software maker Palo Alto Networks rose 0.4% after raising its profit forecast on strong cybersecurity demand.

TJX, the parent company of TJ Maxx and Marshalls, fell 4.2% after reporting disappointing fourth-quarter financial results.

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Veiga reported from Los Angeles.

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Stocks and yields fall as swings rattle Wall Street again

A currency trader watches monitors in the <a class=foreign exchange trading room at the KEB Hana Bank headquarters in Seoul, South Korea, Friday, Feb. 11, 2022. Shares were mostly down on Friday in Asia after selling off at Wall Street boosted by news that US inflation jumped 7.5% in January, raising expectations that the Federal Reserve will need to act forcefully to cool the economy by raising interest rates ‘interest. (AP Photo/Ahn Young-joon)” title=”A currency trader watches monitors in the foreign exchange trading room at the KEB Hana Bank headquarters in Seoul, South Korea, Friday, Feb. 11, 2022. Shares were mostly down on Friday in Asia after selling off at Wall Street boosted by news that US inflation jumped 7.5% in January, raising expectations that the Federal Reserve will need to act forcefully to cool the economy by raising interest rates ‘interest. (AP Photo/Ahn Young-joon)” loading=”lazy”/>

A currency trader watches monitors in the foreign exchange trading room at the KEB Hana Bank headquarters in Seoul, South Korea, Friday, Feb. 11, 2022. Shares were mostly down on Friday in Asia after selling off at Wall Street boosted by news that US inflation jumped 7.5% in January, raising expectations that the Federal Reserve will need to act forcefully to cool the economy by raising interest rates ‘interest. (AP Photo/Ahn Young-joon)

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Treasury stocks and yields are down sharply on Wall Street on Friday, as growing worries about an impending Russian invasion of Ukraine add to already elevated market worries about inflation and interest rates.

The S&P 500 was down 1.6% in afternoon trading after the White House encouraged all US citizens to leave Ukraine in the next 24-48 hours ahead of a possible invasion by the Russia.

The shares suddenly fell around 1:30 p.m. Eastern Time, with losses nearly tripling in about half an hour.

At the same time, Treasury yields fell as investors shifted money into bonds in search of safe havens. The 10-year Treasury yield fell to 1.97% from around 2.03% earlier in the afternoon.

Crude oil prices also rose suddenly on fears that the violence could eventually lead to supply disruptions. Brent crude, the international standard, rose 3.4% to $94.55 a barrel, while U.S. crude rose 3.5% to $93.07 a barrel.

For stocks, this is just the latest decline in what has been a tumultuous run. They have fallen since peaking at the start of this year amid fears the Federal Reserve will need to become more aggressive in raising interest rates to contain inflation.

But it’s a sharp turnaround for bonds, which have been steadily rising on expectations that the Fed will raise rates more often and more sharply this year than expected. Just a day earlier, the 10-year Treasury yield topped 2% for the first time since 2019.

In other stock trading, the Dow Jones Industrial Average fell 294 points, or 0.8%, to 34,947 as of 2:18 p.m. Eastern. The Nasdaq fell 2%.

Inflation has been steadily rising over the past year as the economy recovers from the virus pandemic and demand for goods far exceeds supply. The Labor Department said consumer-level prices rose 7.5% last month from a year earlier, which is the highest inflation reading since 1982.

The broader market had gained ground earlier in the week, but the latest inflation report sparked a wave of selling that erased most of the week’s gains. Investors are worried about the impact of the Federal Reserve’s plan to raise interest rates to fight rising inflation. Such moves to raise interest rates could curb inflation, but they would also put downward pressure on all kinds of investments.

Markets will likely remain volatile as the Fed nears a rate hike and investors gauge the impact.

“What we’re going through is likely to continue in the near term,” said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance.

Other economies are also feeling the heat from sharp price increases, with some central banks having already decided to raise interest rates. Others abstain. The central banks of Thailand, Indonesia and India chose this week to keep their key rates unchanged.

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Stocks mixed, yields soar as jobs data boosts rate outlook

A currency trader looks at monitors in front of screens showing the Korea Composite Stock Price Index (KOSPI), left, and the exchange rate between the US dollar and South Korean won in the <a class=foreign exchange trading room of the headquarters of KEB Hana Bank in Seoul, South Korea, Friday, Feb. 4, 2022. Asian stocks were mixed on Friday after a historic drop in the share price of parent Facebook’s stock helped lower d other tech stocks on Wall Street. (AP Photo/Ahn Young-joon)” title=”A currency trader looks at monitors in front of screens showing the Korea Composite Stock Price Index (KOSPI), left, and the exchange rate between the US dollar and South Korean won in the foreign exchange trading room of the headquarters of KEB Hana Bank in Seoul, South Korea, Friday, Feb. 4, 2022. Asian stocks were mixed on Friday after a historic drop in the share price of parent Facebook’s stock helped lower d other tech stocks on Wall Street. (AP Photo/Ahn Young-joon)” loading=”lazy”/>

A currency trader looks at monitors in front of screens showing the Korea Composite Stock Price Index (KOSPI), left, and the exchange rate between the US dollar and South Korean won in the foreign exchange trading room of the headquarters of KEB Hana Bank in Seoul, South Korea, Friday, Feb. 4, 2022. Asian stocks were mixed on Friday after a historic drop in the share price of parent Facebook’s stock helped lower d other tech stocks on Wall Street. (AP Photo/Ahn Young-joon)

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Wall Street ended a rather bullish week for stocks on Friday with a mixed end to major indexes and a surge in Treasury yields after a U.S. jobs report raised investor expectations that the Federal Reserve could soon start raising interest rates sharply.

The S&P 500 settled for a 0.5% gain after swinging between a 0.6% decline and a 1.4% gain. The Dow Jones Industrial Average slipped 0.1% after a last-minute selloff. The Nasdaq composite rose 1.6%. All three indexes posted a weekly gain for the second week in a row.

The latest monthly jobs data was the focus of investors’ concerns. The Labor Department said employers added 467,000 jobs last month, tripling economists’ forecasts. Some economists even expected a loss of jobs amid the spike in coronavirus infections in January due to the omicron variant.

The stronger-than-expected data appears to lock in the Fed’s pivot to fighting inflation by raising rates and taking other actions that would ultimately dampen markets. A 13.5% gain for online retail giant Amazon after the company released a strong earnings report helped lift the S&P 500, although more shares fell than rose in the benchmark index.

“Until you get a clearer picture of what the Fed tightening will be like, you should expect volatility to be similar to what we’ve seen over the past two weeks,” said Matt Stucky, senior portfolio manager at Northwestern Mutual. Richness.

The S&P 500 rose 23.09 points to 4,500.53, while the Dow slipped 21.42 points to 35,089.74. The Nasdaq gained 219.19 points to 14,098.01, while smaller shares of the Russell 2000 rose 11.33 points, or 0.6%, to 2,002.36.

Treasury yields jumped immediately after the release of the jobs report on expectations that the Fed will raise short-term interest rates more aggressively than expected. The two-year yield, which tends to move with expectations for Fed stocks, jumped to its highest level since the start of the pandemic and is more than double what it was two months ago. .

Most people expect the Fed to raise short-term rates next month from their all-time low of near zero, with the only question being how much. Friday’s jobs report now gives investors a nearly 32.7% chance of a 0.50 percentage point increase, instead of the traditional 0.25 point. That’s more than double the probability Wall Street predicted a day earlier, according to CME Group.

Any increase would mark a sharp turnaround from much of the past two years, when ultra-low rates drove up prices for everything from stocks to cryptocurrencies. Bonds paying more interest would mean that investors feel less need to chase such risky returns.

That’s why Wall Street has been so shaky over the past month as investors rush to take action to get ahead of the Fed. On the one hand, higher rates will likely mean that equity investors pay lower prices for every dollar of profit a company produces. On the other hand, stock prices could still remain resilient if these corporate earnings continue to rise.

Stocks considered the most expensive have been hardest hit by the Wall Street reorganization. Much of the focus has been on tech and internet stocks that have soared during the pandemic on expectations that they can continue to grow regardless of the economy.

Even there, uncertainty still reigns as some tech-focused companies reported earnings that continued to beat analysts’ expectations, while others, like Facebook’s parent company, stumbled.

Amazon joined the list of early adopters after announcing stronger results for its latest quarter than analysts expected. Because it’s one of the biggest stocks on Wall Street by market value, its movements have an outsized effect on the S&P 500 and other indexes. The company also set a record for the largest single-day market value gain by a U.S. company, adding $191 billion to its market value, according to FactSet.

Amazon’s big jump in market value came a day after a historic tumble in shares of Facebook’s parent company wiped out more than $230 billion in market value, which was the biggest loss in value ever. day for an American company. Meta fell another 0.3% on Friday.

Facebook’s parent company fell another 0.3% a day after wiping more than $230 billion from its market value, by far the biggest one-day loss in history for a US company.

Snapchat’s parent Snap soared 58.8% and Pinterest gained 11.2% following its own revenue reports.

Ford fell 9.7% and was another of the heaviest weights in the S&P 500 after reporting weaker-than-expected revenue and earnings for the last quarter.

Shortages of computer chips continue to hurt its auto production. These supply chain issues have been at the heart of the high inflation that is tearing the world apart, and price increases at the US consumer level are at an all-time high in nearly 40 years.

This increases the pressure on the Fed to act decisively to bring inflation under control. Wage data in Friday’s jobs report may have ratcheted up the pressure.

The average hourly wage of workers jumped 5.7% in January from a year earlier. This is a faster acceleration from December’s 4.9% rise than economists had expected. While such increases are attractive to workers, higher wages can also fuel longer-lasting inflation than if gasoline or other commodity prices were to rise alone.

With rising expectations for Fed action, the two-year Treasury yield jumped to 1.31% from 1.19% on Thursday night. The 10-year yield jumped to 1.92% from 1.82%.

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AP Business Writer Elaine Kurtenbach contributed. Veiga reported from Los Angeles.

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Asian stocks mixed as profits fuel gains on Wall Street | Economic news

By ELAINE KURTENBACH, AP Business Writer

BANGKOK (AP) — Stocks were mixed in Asia on Thursday as the latest batch of corporate earnings reports kept investors in a buying mood and pushed benchmarks on Wall Street higher.

Markets in China remained closed for the Lunar New Year holiday. Tokyo’s Nikkei 225 lost 1.1% to 27,241.31 while the S&P/ASX 200 fell 0.1% to 7,078.00. Seoul’s Kospi climbed 1.7% to 2,707.82, catching up with earlier gains elsewhere after South Korean markets reopened after the holidays.

US futures fell, with the contract for the S&P 500 down 1%. That of the Dow Jones industrialists fell by 0.1%.

Investors look at the latest round of corporate earnings to gauge the damage rising costs have had on different industries and how companies will weather inflation going forward.

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Most of the companies that reported results for the last three months of 2021 achieved better-than-expected profits and revenues, despite the higher costs they face due to rising inflation.

But investors in Asia were shaken when Facebook’s parent Meta Platforms plunged 22.9% in after-hours trading after its latest quarterly earnings fell short of Wall Street estimates. .

Oil prices fell after major oil-producing countries decided on Wednesday to stick to their plan for a little more oil in the global economy. This will likely keep prices near seven-year highs. The 23-member OPEC+ alliance opted to add 400,000 barrels per day in March.

Benchmark U.S. crude oil fell 55 cents to $87.71 a barrel in electronic trading on the New York Mercantile Exchange. It had gained 6 cents to $88.26 a barrel on Wednesday.

Brent crude, the basis for international oil pricing, fell 43 cents to $89.04 a barrel.

On Wednesday on Wall Street, the S&P 500 rose 0.9% to 4,589.38. The Dow Jones Industrial Average rose 0.6% to 35,629.33 and the Nasdaq added 0.5% to 14,417.55. The indices are on pace for strong gains this week.

Smaller company stocks held up against the broader market rally. The Russell 2000 Index fell 1% to 2,029.52.

Traders pushed up shares of several companies that posted strong quarterly results, which helped boost the market overall. Alphabet, Google’s parent company, jumped 7.5% for the biggest gain in the S&P 500 after saying its digital advertising business propelled a 36% rise in earnings last quarter. Chipmaker Advanced Micro Devices rose 5.1% after reporting surprisingly strong fourth-quarter financial results and giving investors encouraging sales forecasts.

About three-quarters of companies in the benchmark S&P 500 rose, led by communications services and technology stocks. Healthcare companies also accounted for a large share of the gains. Large retailers and other businesses that depend directly on consumer spending have fallen. Amazon slipped 0.4% and Gap fell 3.3%.

Bond yields fell. The 10-year Treasury yield fell to 1.77% from 1.80% on Tuesday evening.

Markets face a variety of threats, including rising inflation, the prospect of higher interest rates, potential conflict in Ukraine, and the continued slowdown of COVID-19 on economic recovery.

With inflation at its highest level in 40 years, rising costs are threatening profit margins and putting pressure on consumer spending. The Federal Reserve intends to raise interest rates in an attempt to rein in price increases. Investors expect the first rate hike in March and at least three more in 2022.

With about 40% of S&P companies having released quarterly results so far this earnings season, about 64% have reported earnings and revenue that beat analyst estimates, according to S&P Global Market Intelligence.

Some failed to meet Wall Street’s expectations.

PayPal fell 24.6%, its worst trading day since splitting from eBay in 2015, after reporting a weak quarter and subdued guidance.

In other trading, the US dollar remained unchanged at 114.43 Japanese yen. The euro was stable at $1.1306.

Copyright 2022 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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Stocks fall on Wall Street as big tech companies slide

A man looks at an electronic bulletin board of a securities firm in Tokyo, Tuesday, Feb. 1, 2022. Asian stocks gained on Tuesday, reflecting broad overnight gains on Wall Street, while trading in China and most other regional markets were closed for Lunar New Vacations year-round.  (AP Photo/Koji Sasahara)

A man looks at an electronic bulletin board of a securities firm in Tokyo, Tuesday, Feb. 1, 2022. Asian stocks gained on Tuesday, reflecting broad overnight gains on Wall Street, while trading in China and most other regional markets were closed for Lunar New Vacations year-round. (AP Photo/Koji Sasahara)

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Stocks fell slightly in morning trading on Wall Street on Tuesday as the market emerges from its worst month since the pandemic began nearly two years ago.

The S&P 500 fell 0.3% at 10:16 a.m. EST. The Dow Jones Industrial Average fell 31 points, or 0.1%, to 35,100 and the Nasdaq fell 0.7%.

Technology stocks occupied the most important place in the market. Apple fell 1.1% and Microsoft 1.3%. The sector has been particularly sensitive to concerns about rising interest rates this year. Higher interest rates tend to make expensive growth stocks, like big tech companies, less attractive to investors.

Industrial stocks made strong gains, led by a 12.3% rise in UPS after the parcel delivery service reported results much better than analysts had expected. Rival FedEx rose 4%.

Banks also gained ground as bond yields rose. The yield on the 10-year Treasury, which is used to set rates on mortgages and many other types of loans, rose to 1.81% from 1.77% on Monday evening. Bank of America rose 1%.

Stocks have fallen so far this year as investors face a long list of threats to economic growth and markets.

The economic recovery is threatened by a persistent rise in inflation which has increased costs for businesses and consumers. The big fear is that higher prices passed on to consumers will eventually cut spending and dampen economic growth.

The Federal Reserve changes its monetary policy and plans to raise interest rates to combat rising inflation, which will affect investments and stock prices. Ultra-low rates and other stimulus helped markets recover from the initial shock of the coronavirus pandemic and then underpinned stunning gains. Investors expect the Fed to start raising interest rates in March, but there is a lot of uncertainty about how far and how quickly the Fed will act throughout the year. .

The virus pandemic is still a lingering threat and each new variant could lead to a surge of cases that threatens businesses and consumer activity.

Investors are looking at the latest set of results, in part to see how inflation, the virus pandemic and other factors affect companies and their operations going forward.

Exxon Mobil rose 5.2% after reporting surprisingly strong fourth-quarter earnings as oil demand continued to improve.

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Asian stocks mixed after Wall Street losses

A woman wearing a face mask walks near a bank in downtown Seoul, South Korea, Monday, Jan. 24, 2022. Asian markets mostly fell on Monday after a selloff gave Wall Street its worst week since the pandemic began in early 2020. (AP Photo/Lee ​​Jin-man)

A woman wearing a face mask walks near a bank in downtown Seoul, South Korea, Monday, Jan. 24, 2022. Asian markets mostly fell on Monday after a selloff gave Wall Street its worst week since the pandemic began in early 2020. (AP Photo/Lee ​​Jin-man)

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Stocks were mixed on Monday in Asia after Wall Street recorded its worst week since the pandemic began in 2020.

Benchmarks fell in Hong Kong, Seoul and Sydney but rose in Tokyo. Shanghai has changed little. US futures were higher.

Investors are increasingly worried about how aggressively the Federal Reserve, which is holding a policy meeting this week, might act to rein in rising inflation.

Historically low interest rates, called quantitative easing, or QE, have helped support the broader market as the economy absorbed a heavy hit from the pandemic in 2020 and then recovered over the past two years.

“The FOMC (Fed) meeting dominates the macro calendar this week and should keep risk sentiment on the tentative side with the end of QE and imminent rate hikes likely to be announced,” said economists Nicholas Mapa and Robert ING’s Carnell in a statement. remark.

Some economists believe the US central bank needs to act faster to curb soaring prices by raising rates. Consumer prices in the United States rose 7% in December from a year earlier, the largest increase in nearly four decades.

Rising costs have also raised fears that consumers will begin to cut back on spending due to continued pressure on their wallets. At the same time, outbreaks of the omicron variant of the coronavirus threaten to slow recovery from the crisis.

Tokyo’s Nikkei 225 index edged up 0.2% to 27,588.37, while Hong Kong’s Hang Seng fell 1% to 24,721.49. In Australia, the S&P/ASX 200 lost 0.5% to 7,139.50 and India’s Sensex fell 1.7% to 58,072.62.

South Korea’s Kospi fell 1.5% to 2,794.26 on the back of a sell-off from big tech companies like Samsung and LG Chemical. The Thai SET lost 0.6%.

The Shanghai Composite Index gained less than 0.1% to 3,524.11.

On Friday, the benchmark S&P 500 fell 1.9% to 4,397.94, down 5.7% for the week in its worst weekly loss since March 2020.

The tech-heavy Nasdaq Composite Index fell 2.7% to 13,768.92. It has fallen for four consecutive weeks and is now more than 10% below its most recent peak, putting it in what Wall Street considers a market correction.

The Dow Jones Industrial Average fell 1.3% to 34,265.37.

Peloton rose 11.7% after the maker of exercise bikes and treadmills said second-quarter revenue would meet previous estimates. The stock fell a day earlier after CNBC reported that Peloton was temporarily halting production of exercise equipment to stem a drop in sales.

With investors expecting the Fed to start raising rates as soon as its March policy meeting, expensive tech stocks and other expensive growth stocks now look relatively less attractive.

Technology and communications stocks were among the market’s biggest drags on Friday. Video streaming service Netflix plunged 21.8% after posting another quarter of disappointing subscriber growth. Disney, which has also been trying to grow its subscriber base for its streaming service, fell 6.9%.

Treasury yields have fallen as investors turn to safer investments. The 10-year Treasury yield was flat Monday at 1.77%.

The Fed’s benchmark short-term interest rate is currently in a range of 0% to 0.25%. Investors now see a nearly 70% chance that the Fed will raise the rate by at least one percentage point by the end of the year, according to the CME Group’s Fed Watch tool.

In other trading, the benchmark U.S. crude oil gained 55 cents to $85.69 a barrel in electronic trading on the New York Mercantile Exchange. It fell 41 cents to $85.14 a barrel on Friday.

Brent crude, the pricing basis for international oils, added 59 cents to $88.48 a barrel.

The US dollar fell from 113.68 yen to 113.82 Japanese yen. The euro slipped to $1.1319 from $1.1346.

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Start Your Week Smart: Sinema, Kohl’s, Pandemic, Wildfire, NFL Playoffs

By AJ Willingham, CNN

Did you know that approximately 40% of American households buy a car each year? It’s quite a statistic, especially since car prices are so high. They are expected to calm down soon, but don’t expect them to return to pre-pandemic levels.

Here’s what else you need to know to Start your week smart.

The weekend that was

• The Arizona Democratic Party executive board said yesterday that it officially censored Senator Kyrsten Sinema for voting in favor of keeping the Senate’s filibuster rules, block Democrats’ suffrage legislation, a key priority for the party.

• Kohl’s retailer received an unsolicited offer of $9 billion yesterday to become private from a consortium backed by an activist investor, according to published sources.

• Federal regulators are considering limit the authorization of certain monoclonal antibody treatments which have not been shown to be effective against Omicron variant of the coronavirus, a source close to the decision-making told CNN.

• Crews fighting a wildfire along the central California coast near the iconic Highway 1 made progress over the weekend to contain the blaze, but dozens of homes remain under evacuation orders.

• The Cincinnati Bengals and San Francisco 49ers both picked up shock wins on field goals as time expired as they both entered their NFL playoff split matchups as than outsiders.

The week ahead

Monday

Monday is the United Nations International Day of Education. Education keeps people out of poverty, protects societies from corruption and inequality, and empowers underserved populations. So go thank an educator for all they do to keep this world afloat.

Wednesday

The Federal Open Market Committee meets for the first time in 2022, and two elements will take priority: inflation and interest rates. The Fed is already planning to raise interest rates later this year and end other emergency measures it has put in place to cushion the economic blow of the pandemic. At the end of this two-day meeting, we may get more information on how this will all play out.

Happy Republic Day to our Indian friends. Republic Day marks the anniversary of the Constitution of India entered into force in 1950.

And Happy Australia Day to all our friends down there enjoying this day to reflect on the diverse history of their beautiful country.

Thusday

Thursday is International Holocaust Remembrance Day, designated by the United Nations General Assembly. It marks the anniversary of the liberation of the Auschwitz-Birkenau concentration camp, and is a time to remember the 6 million Jews and millions of other victims who were killed under the Nazi regime.

Want more than 5 things?

This week on the Sunday edition of the 5 Things podcast, CNN Aviation correspondent Pete Muntean gives us an explanation of 5G and why airlines are so concerned about rolling it out around major airports. listen now!

Pictures of the week

Discover more moving, fascinating and stimulating images of the week which was organized by CNN Photos..

What’s Happening in Entertainment

The Britney controversy is far from over

Britney Spears may be freed from her 13-year guardianship, but more battles are brewing between the pop star and her family. Spears sent a legal cease and desist letter to her younger sister, Jamie Lynn Spears, this week, demanding that she stop talking about her older sister during her book tour for her new memoir, ‘Things I Should Have Said’. Spears’ attorney called the book “inappropriate” and said he made “misleading or outrageous claims about it.” Additionally, a judge recently sided with Spears in an ongoing court battle with her father, Jamie Spears, who has asked his daughter to set aside money from his $60 million estate for cover legal costs, including his own.

Calling all Bridgerton and Downton Abbey fans!

Looking for your next dose of period drama? Set your ceiling for “The Gilded Age” on HBO Max, set in 1880s New York City. Its creator, Julian Fellowes, was also behind “Downton Abbey”, and CNN’s Brian Lowry says “Fellowes and his sprawling cast delivered another sharp look at wealth and class in ancient times, when even those with gold chafed at complex rules.”

What happens in sports

The NFL Divisional Round is happening this week

The Los Angeles Rams play the Tampa Bay Buccaneers at 3:00 p.m. ET today for the chance to face the San Francisco 49ers in the NFC Championship next Sunday.

The Buffalo Bills will face the Kansas City Chiefs at 6:30 p.m. ET today. The winner will face the Cincinnati Bengals in the AFC Championship next Sunday.

(For those uninitiated in the NFL, this weekend’s games are the quarterfinals, and the AFC and NFC are the two league conferences. You’re welcome.)

The Australian Open is on

There have already been a few surprises midway through the fourth round of play. Great Britain’s Emma Raducanu had high hopes after returning to action after winning the US Open last year, but was shot by Danka Kovinić unrated. Meanwhile, Japanese player Taro Daniel pulled off a stunning second-round upset, beating American favorite Andy Murray.

Keep an eye out for the women’s final, which takes place this Friday, and the men’s final, which takes place this Saturday.

It’s quiz time!

Take CNN’s weekly news quiz to see how much you remember from the week that was! So far, 44% of other quiz fans have scored an 8 out of 10 or better this week. How well can you do?

Play with me

Music to make you feel like nobility

Of course, I mentioned “Bridgerton” which made me think of all the great string covers on the show, including the Vitamin String Quartet’s version of Maroon 5’s “Girls Like You.”Click here to listen)

The-CNN-Wire
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Tech and banking stocks drag Wall St to new 2022 low

The 10-year yield “continues to climb painfully, under an increasingly aggressive Federal Reserve,” said Ross Mayfield, investment strategy analyst at Baird. “Until last weekend, I hadn’t seen any speculation of two rate hikes at the March meeting, and now you’re starting to hear that chatter.”

The S&P 500 fell 85.74 points to 4,577.11, the Dow fell 543.34 points to 35,368.47 and the Nasdaq fell 386.86 points to 14,506.90. The indices all hit new lows for the year. The Nasdaq bore the brunt of the losses, shedding 7.3% this month. That puts the index within 2.7% of a correction, Wall Street speaks of when a stock or index falls 10% or more from its last high. The S&P 500 is down nearly 4% for the month after hitting an all-time high on the first trading day of the year.

The latest wave of selling comes as Wall Street tries to predict how much the Fed will raise interest rates and how quickly. The central bank has accelerated its plan to reduce bond purchases and plans to raise interest rates sooner and more often than Wall Street had expected.

The Fed is under pressure to reduce inflation, which surged last month at its fastest pace in nearly 40 years. Meanwhile, the labor market rebounded from last year’s brief but intense coronavirus slump, leaving the unemployment rate at a pandemic low of 3.9% last month, giving the central bank more than leeway to curb the unprecedented support it has provided to the economy. since the pandemic hit.

While higher rates could help stem the high inflation sweeping the world, they would also signal an end to the conditions that have put financial markets in “easy mode” for many investors since the start of 2020.

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Asian stocks mixed after China reports slower growth

A woman wearing a face mask walks past a bank's electronic board showing the Hong Kong stock index in Hong Kong, Monday, Jan. 17, 2022. Stocks were mixed in Asia on Monday after China announced its economy had increased at an annual rate of 8.1%.  in 2021, although growth slowed to half that level in the last quarter.  (AP Photo/Kin Cheung)

A woman wearing a face mask walks past a bank’s electronic board showing the Hong Kong stock index in Hong Kong, Monday, Jan. 17, 2022. Stocks were mixed in Asia on Monday after China announced its economy had increased at an annual rate of 8.1%. in 2021, although growth slowed to half that level in the last quarter. (AP Photo/Kin Cheung)

PA

Stocks were mixed in Asia on Monday after China reported its economy grew at an annual rate of 8.1% in 2021, although growth slowed to half that level in the last quarter.

Tokyo, Shanghai and Sydney rose, while Hong Kong and Seoul fell.

The weakness of the Chinese economy towards the end of 2021 prompts suggestions that Beijing should step in to support growth with interest rate cuts or by injecting money into the economy through spending on public works. .

Shortly before the release of growth data, China’s central bank announced a cut in average lending rates to commercial banks to the lowest level since 2020.

“Economic momentum remains weak amid repeated virus outbreaks and a struggling property sector,” Capital Economics’ Julian Evans-Pritchard said in a commentary. He expects Chinese policymakers to maintain relatively tight limits on loans and control credit growth.

“The bottom line is that policy easing is likely to cushion the economic downturn rather than cause a rebound,” he said.

Slowing activity in China, the region’s largest economy, may dampen growth across the region. Lockdowns and other precautions imposed to combat coronavirus outbreaks can also exacerbate shortages of key parts and components, adding to shipping and supply chain challenges.

The Shanghai Composite Index gained 0.6% to 3,542.74, while Hong Kong’s Hang Seng fell 0.7% to 24,2207.75.

South Korea’s Kospi fell 1.1% to 2,890.10 after North Korea fired two suspected ballistic missiles into the sea early Monday in its fourth weapons launch this month, the report said. South Korean military, with the apparent aim of demonstrating its military might amid paused diplomacy with the United States. and the closing of borders in the event of a pandemic.

In Tokyo, the Nikkei 225 rose 0.7% to 28,333.52 as the government announced machinery orders rose in November as private investment and manufacturing activity improved during a lull in coronavirus outbreaks. coronavirus. Orders from shipbuilders jumped 170%.

Australia’s S&P/ASX 200 climbed 0.3% to 7,417.30.

On Friday, the S&P 500 gained 0.1%, closing at 4,662.85. It surged in the closing minutes of trading after falling around 1% earlier in the day. The tech-heavy Nasdaq posted a 0.6% gain, closing at 14,893.75. The Dow Jones Industrial Average fell 0.6% to 35,911.81.

Small company stocks also rebounded from an early plunge. The Russell 2000 Index rose 0.1% to 2,162.46.

A rally in tech stocks, along with gains in energy and other sectors, helped offset declines in banks and elsewhere in the market at a time when investors were mostly focused on a mix of reports on corporate profits and discouraging retail sales data.

The mixed end capped a choppy week of trading on Wall Street that deepened the market’s slide in January. The benchmark S&P 500, which climbed 26.9% in 2021, is now about 2.8% below the all-time high it hit on Jan. 3.

The Commerce Department reported Friday that retail sales fell 1.9% in December after Americans cut spending in the face of product shortages, rising prices and the appearance of the omicron variant.

It was the latest in a series of economic reports this week that raised concerns about inflation and its impact on businesses and consumer spending.

Rising prices have prompted companies to pass on more costs to consumers. Consumers cut spending in department stores, restaurants and online due to rising prices and supply shortages.

Concerns about persistently rising inflation are also prompting the Federal Reserve to scale back bond purchases and consider raising interest rates sooner and more often than Wall Street expected less than a decade ago. ‘a year.

The 10-year Treasury yield remained stable at 1.79%.

The price of U.S. crude oil rose 46 cents to $84.28 a barrel in electronic trading on the New York Mercantile Exchange. On Friday, it rose 2.1%, helping to lift energy stocks.

Brent crude added 26 cents to $86.32 a barrel.

The US dollar fell from 114.18 yen to 114.49 Japanese yen. The euro remained unchanged at $1.1417.

___

AP Business Writer Joe McDonald in Beijing contributed.

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Fed’s Powell: High Inflation Threatens Labor Market

FILE - Federal Reserve Chairman Jerome Powell speaks during a Senate Banking Committee hearing on Capitol Hill in Washington on Tuesday, November 30, 2021. High inflation is wreaking havoc on American families, acknowledged Powell in remarks to be delivered at a Congressional hearing on Tuesday, Jan. 11, 2022, where he is sure to face some tough questions on the matter.  (AP Photo / Andrew Harnik, file)

FILE – Federal Reserve Chairman Jerome Powell speaks during a Senate Banking Committee hearing on Capitol Hill in Washington on Tuesday, November 30, 2021. High inflation is wreaking havoc on American families, acknowledged Powell in remarks to be delivered at a Congressional hearing on Tuesday, Jan. 11, 2022, where he is sure to face some tough questions on the matter. (AP Photo / Andrew Harnik, file)

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Warning that high inflation could make it more difficult to restore the job market, Federal Reserve Chairman Jerome Powell said on Tuesday that the Fed would raise interest rates faster than it now forecasts if necessary to stem the surge in prices.

With U.S. households pressed by rising costs for food, gasoline, rents, cars and many other items, the Fed is under pressure to curb inflation by raising rates to slow borrowing and debt. expenses. At the same time, the economy has recovered enough that the Fed’s ultra-low interest rate policies are no longer necessary.

“If we need to raise interest rates further over time, we will,” Powell said at a Senate Banking Committee hearing, which is considering his appointment for a second four-year term.

The difficult challenge for Powell if he is confirmed for a new term, as scheduled, was underscored by questions he faced on Tuesday from Democratic and Republican senators. They urged him to raise rates to reduce inflation, but not to raise borrowing costs to the point that the economy fell into recession.

Fed officials have forecast three hikes to their short-term benchmark rate this year, although some economists say they are planning up to four hikes in 2022.

Powell’s appointment is expected to be approved by the committee in the coming weeks and then confirmed by the entire Senate with bipartisan support. At Tuesday’s hearing, he drew most favorable comments from senators on both sides. A Republican first elevated to the presidency by President Donald Trump, Powell has also been credited by many Democrats for sticking to ultra-low rate policies to support quick hiring over the past 18 months.

In his testimony, Powell rejected suggestions by some Democratic senators that the rate hikes would weaken hiring and potentially leave many people, especially low-income people and black Americans, out of work. Fed rate hikes typically increase borrowing costs for many consumer and business loans and have the effect of slowing the economy.

But Powell argued that the rise in inflation, if it persists, also poses a threat to the Fed’s goal of getting almost everyone back to work. Low-income families have been hit particularly hard by soaring inflation, which wiped out the wage increases many enjoyed.

“High inflation is a serious threat to achieving maximum employment,” he said.

The economy, the Fed chairman added, must grow for an extended period to get as many Americans back to work as possible. Controlling inflation before it takes root is necessary to keep the economy expanding, he said. If prices continue to rise, the Fed could be forced to brake much harder by raising interest rates sharply, threatening hiring and growth.

Powell received praise from Democratic Senator from Ohio, Sherrod Brown, chair of the committee, and from Pennsylvania Senator Pat Toomey, the panel’s top Republican.

“The president puts results before partisanship, by reappointing a Federal Reserve chairman from the other political party,” Brown said. “As president, along with President Biden, he has helped us achieve historic economic progress.”

“There is broad bipartisan support for President Powell’s re-appointment,” Toomey added.

Yet Toomey also criticized some of the Fed’s 12 regional banks for staging events dealing with climate change and “so-called racial justice,” which Toomey said went well beyond the Fed’s mandate. . He cited an event, hosted by the Federal Reserve Bank of Boston, in which he said attendees called for police funding.

“The disturbing politicization of the Fed puts its independence and effectiveness at risk,” Toomey said.

And Sen. Richard Shelby, a Republican from Alabama, criticized Powell for the central bank’s initial characterization of the price spikes that began this spring as “transient.”

“I’m worried if the Fed missed the boat to tackle inflation earlier, a lot of us are,” Shelby said. “As a result, the Fed under your leadership has lost a lot of credibility.”

Inflation has hit its highest level in four decades, and on Wednesday the government is expected to announce that consumer prices have jumped 7.1% in the past 12 months, believed to be the largest since 1982.

Powell said the Fed mistakenly expected supply chain bottlenecks driving up the prices of goods such as cars, appliances and furniture to not last as long as they did. did. Once off the hook, the prices of things like used cars, which have skyrocketed over the past year, would come back down, he said.

But for now, these supply chain issues have persisted, and while there are signs of easing, Powell said progress was limited. He noted that many cargo ships remain moored outside the Port of Los Angeles and Long Beach, the largest in the country, awaiting unloading.

The number of people working or looking for work also remains well below pre-pandemic levels, Powell noted. Millions of Americans have taken early retirement or are avoiding their jobs for fear of the coronavirus. The Fed predicted that more of these people would return to the workforce than they did.

The shrinking workforce has forced companies to offer much higher wages to attract and keep employees. Powell said that was not primarily the reason prices are high right now, but it “may be a problem for inflation in the future.”

Economists and former Fed officials fear the Fed is lagging behind inflation. Last Friday’s jobs report for December, which showed a sharp drop in the unemployment rate to a healthy 3.9%, and an unexpected rise in wages, helped fuel those concerns. While lower unemployment and higher wages benefit workers, these trends can potentially fuel higher prices by encouraging more spending.

At the Fed’s last meeting in December, Powell said the central bank was quickly ramping up efforts to tighten credit in a bid to bring inflation under control. The Fed will stop buying billions of dollars in bonds in March, ahead of its previously announced target of doing so in June. These bond purchases were meant to encourage more borrowing and spending by lowering long-term rates.

And the expectation by Fed officials that they will hike short-term rates three times this year marks a radical departure from September, when they were divided over doing it only once.

The flood of new omicron infections will not slow the Fed’s move towards more appropriate policies for the economy to return to normal, Powell said during the hearing, because so far it doesn’t seem not weigh on the economy.

“It is really time for us to move from these pandemic emergency settings to a more normal level,” he added. “It’s a long way to normal from where we are.”

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Stocks soar on Wall Street ahead of Christmas break

A forex trader watches screens showing the Composite Korean Stock Price Index (KOSPI) and the exchange rate between the US dollar and the South Korean won, in the <a class=foreign exchange trading room at KEB Hana headquarters Bank in Seoul, South Korea, Wednesday, December 22, 2021. Asian stock markets followed Wall Street higher on Wednesday after President Joe Biden reassured investors by calling for vaccinations and tests, but no travel restrictions in response to the variant of the omicron coronavirus. (AP Photo / Ahn Young-joon)” title=”A forex trader watches screens showing the Composite Korean Stock Price Index (KOSPI) and the exchange rate between the US dollar and the South Korean won, in the foreign exchange trading room at KEB Hana headquarters Bank in Seoul, South Korea, Wednesday, December 22, 2021. Asian stock markets followed Wall Street higher on Wednesday after President Joe Biden reassured investors by calling for vaccinations and tests, but no travel restrictions in response to the variant of the omicron coronavirus. (AP Photo / Ahn Young-joon)” loading=”lazy”/>

A forex trader watches screens showing the Composite Korean Stock Price Index (KOSPI) and the exchange rate between the US dollar and the South Korean won, in the foreign exchange trading room at KEB Hana headquarters Bank in Seoul, South Korea, Wednesday, December 22, 2021. Asian stock markets followed Wall Street higher on Wednesday after President Joe Biden reassured investors by calling for vaccinations and tests, but no travel restrictions in response to the variant of the omicron coronavirus. (AP Photo / Ahn Young-joon)

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Stocks closed higher on Wall Street on Wednesday, adding to the gains for the week before the Christmas break. The S&P 500 rose 1%, the Nasdaq rose 1.2%, and the Dow Jones Industrial Average rose 0.7%. The Russell 2000, a measure of small business stocks, rose 0.9%. Tech companies and a mix of retailers led the gains. The major indices are still on track for weekly gains after a rally on Tuesday. European and Asian markets also closed higher. The yield on the 10-year Treasury bill fell to 1.46%. US markets will be closed on Friday for Christmas.

THIS IS A CURRENT UPDATE. AP’s previous story follows below.

Stocks rose broadly in afternoon trading on Wall Street on Wednesday, adding to gains in the week before the Christmas holidays.

The S&P 500 was up 0.6% at 2:38 p.m. EST. The Dow Jones Industrial Average rose 176 points, or 0.5%, to 35,670 and the Nasdaq rose 0.6%.

The Russell 2000, a measure of small business stocks, rose 0.4%. The indices were mainly higher in Europe and Asia.

All major US indices are still on track for weekly gains after several turbulent days where stocks rebounded between big losses and solid gains. It’s a shortened week for traders, with US markets closed on Friday for Christmas.

Retailers and other businesses that rely on consumer spending accounted for a significant portion of the gains. They rose following an encouraging report on consumer confidence.

Tesla jumped 6.4% for the biggest gain in the S&P 500 after CEO Elon Musk reportedly said he sold enough shares to meet his goal of selling 10% of his stake in the electric vehicle maker.

Technology and healthcare stocks have also helped lift the market. Microsoft rose 1.1% and Abbott Laboratories rose 2.2%.

Traders increased their shares in cruise lines, hotel operators and other travel-related stocks. Carnival rose 3.6%, Marriott rose 2.7% and Expedia Group rose 2.4%.

Utility and industrial companies have lagged behind the market.

Energy futures rose as the price of US crude oil rose 2.5%.

Bond yields have mostly fallen. The 10-year Treasury yield fell to 1.46% from 1.48% on Tuesday night.

The latest increase in coronavirus cases due to the omicron variant has weighed on markets, along with concerns about rising inflation and its impact on economic growth.

The Commerce Department said on Wednesday that the US economy grew at a rate of 2.3% in the third quarter, slightly better than previously thought. But the prospects of a strong rebound going forward are clouded by the rapid spread of the latest variant of the coronavirus.

“The market is a little uncertain about this (omicron), but seems somewhat convinced it’s not going to turn into another foreclosure,” said Scott Wren, senior global markets strategist at Wells Fargo Investment Institute.

Governments in Asia and Europe have tightened travel controls or pushed back plans to ease restrictions already in place. In the United States, President Joe Biden announced on Tuesday that the government would provide rapid test kits and increase vaccination efforts, but gave no indication of plans for restrictions that could disrupt the economy.

Investors have also been busy moving money between sectors as the end of the year nears, and they are bracing for higher interest rates in 2022. The Federal Reserve has said it will step up. the process of reducing its bond purchases that have helped keep interest rates low and that opens the door to central bank rate hikes in 2022.


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Global stocks drop amid virus concerns and tighter Fed policy

A woman walks past the electronic board of a securities firm in Tokyo on Monday, December 20, 2021. Asian stock markets followed Wall Street lower on Monday amid concerns over the latest variant of the coronavirus and the stricter Federal Reserve policy.  (AP Photo / Koji Sasahara)

A woman walks past the electronic board of a securities firm in Tokyo on Monday, December 20, 2021. Asian stock markets followed Wall Street lower on Monday amid concerns over the latest variant of the coronavirus and the stricter Federal Reserve policy. (AP Photo / Koji Sasahara)

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Global stock markets and Wall Street futures fell on Monday amid concerns over the latest variant of the coronavirus and tighter Federal Reserve policy.

London and Frankfurt opened sharply lower. Shanghai, Tokyo and Hong Kong also fell at the start of a stock market week that will be cut short by Christmas. US benchmark oil fell more than $ 3 a barrel.

The spread of the omicron variant has fueled fears that new restrictions on business and travel could worsen supply chain disruptions and spur inflation.

“Omicron threatens to be the Grinch to steal Christmas,” Mizuho Bank’s Vishnu Varathan said in a report. The market “prefers security to unpleasant surprises”.

In early trading, the FTSE 100 in London fell 1.7% to 7,143.60 and the DAX in Frankfurt fell 2.4% to 15,155.71. The CAC 40 in Paris collapsed 2% to 6,787.68.

On Wall Street, futures on the benchmark S&P 500 and the Dow Jones Industrial Average fell 1.5%.

The S&P fell 1% on Friday as traders pulled money from the table after the Fed said it would fight inflation by speeding up the withdrawal of economic stimulus. The index is 2% below its all-time high and up 23% for the year.

The Dow Jones lost 1.5% and the Nasdaq composite, dominated by technology stocks, slipped 0.1%.

In Asia, the Shanghai Composite Index slipped 1.1% to 3,593.60 after China’s central bank cut a key interest rate. The bank lowered its one-year prime rate to 0.05%, but left the five-year rate and its main policy rate unchanged.

The reduction is a “small step towards easing” monetary policy without changing efforts to reduce real estate debt, Macquarie’s Larry Hu and Xinyu Ji said in a report. Beijing’s use of multiple interest rates “is confusing, drastically reducing the signal” if only one is cut, they said.

The Nikkei 225 in Tokyo lost 2.1% to 27,937.81 and the Hang Seng in Hong Kong lost 1.9% to 22,744.86.

Seoul’s Kospi was down 1.8% to 2,963.00 and Sydney’s S & P-ASX 200 was down 0.2% to 7,292.20

India’s Sensex index opened down 2.3% to 55,811.05. New Zealand won as Southeast Asian markets retreated.

Traders had made an offer to airlines, cruise lines and other travel-related actions in hopes that the spread of omicron would not trigger more travel checks.

Sentiment has turned as the United States and other governments warn omicron is more prevalent than expected, leading to travel restrictions in some areas and the cancellation of public events.

The US government on Sunday warned of a possible wave of “revolutionary infections” as Americans travel for the Christmas and New Year holidays.

Stocks rallied briefly last week, then fell after Fed officials said on Wednesday they may accelerate cuts in bond purchases that inject money into financial markets. This sets the stage for the Fed to start raising interest rates next year.

Also potentially weighing on sentiment, a US senator said on Sunday that he would not support President Joe Biden’s $ 2 trillion infrastructure, social spending and climate plan. Joe Manchin’s announcement may doom the plan’s chances in the equally divided Senate.

Inflation has been a growing concern throughout 2021. Higher raw material costs and supply chain issues have increased overall costs for businesses, which have raised commodity prices to offset the impact. .

Consumers have so far absorbed these price increases, but they face continued pressure from price increases and this could lead to lower spending.

In energy markets, benchmark US crude plunged from $ 3.57 to $ 67.15 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell from $ 1.52 on Friday to $ 70.86. Brent crude, the basis of international oil prices, sank from $ 3.41 to $ 70.11 a barrel in London. It lost $ 1.50 the previous session to $ 73.52 a barrel.

The dollar fell to 113.41 yen from 113.70 yen on Friday. The euro gained $ 1.1261 against $ 1.1251.


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U.S. stock indices tumble after their best weekly gain since February

People walk past the electronic board of a securities firm in Tokyo on Monday, December 13, 2021. (AP Photo / Koji Sasahara)

People walk past the electronic board of a securities firm in Tokyo on Monday, December 13, 2021. (AP Photo / Koji Sasahara)

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Shares fell in the afternoon of trading on Wall Street on Monday into a slow start to the week after the market’s best weekly gain since February.

The S&P 500 fell 0.6% at 2:50 p.m. EST. The Dow Jones Industrial Average lost 228 points, or 0.6%, to 35,744 and the Nasdaq was down 0.9%.

Smaller company stocks have held up less well than the broader market, indicating that investors are concerned about economic growth. The Russell 2000 lost 1.2%.

A wide range of retailers that rely on direct consumer spending have suffered some of the biggest losses. Hanesbrands fell 5.4%.

Automakers and travel-related businesses also fell. Ford fell 3.9% and Carnival fell 5%.

Bond yields have fallen. The 10-year Treasury yield fell to 1.43% from 1.49% on Friday night. This has taken a toll on banks, which rely on higher bond yields to charge more lucrative interest on loans. Capital One fell 2.3%.

Industrial and energy companies have also declined.

Sectors considered less risky, including utilities and manufacturers of household products, held up better than the rest of the market. Healthcare companies have also gained ground.

Several large pharmaceutical companies stood out. Moderna climbed 5.9% for the biggest gain in the S&P 500. Pfizer rose 4.3% on news of the purchase of Arena Pharmaceuticals. Bristol Myers Squibb rose 4.6%.

Harley-Davidson rose 5.8% after announcing it would go public with its electric motorcycle division through a blank check company, valuing the company that has been part of the motorcycle maker for 10 years at $ 1.77 billion.

Investors will be watching several economic reports this week and the Federal Reserve for more information on economic growth as 2021 draws to a close and the world continues to try to rid itself of the impact of COVID-19.

Wall Street will receive an inflation update on Tuesday when the Department of Labor releases its Producer Price Index for November, which shows the impact of inflation on costs for businesses. This report will be particularly important with the Fed meeting on Tuesday and Wednesday.

The persistent rise in inflation prompted the central bank to accelerate its plan to curtail bond purchases which have helped keep interest rates low. Investors will be listening to any statements that add details on the timing of this plan and any clues about the impact it may have on how quickly benchmark interest rates will be raised in 2022.


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Wall Street balks as the Fed announces the end of the party, but is it really? | Economic news

By STAN CHOE, AP Business Writer

NEW YORK (AP) – The job of the Federal Reserve, said its longest-serving chairman, is to “pull the bowl of punch when the party starts”, and that is exactly the message Wall Street has taken from the comments from current president Jerome Powell. this week.

Stock prices fell after Powell said the Fed could end its overwhelming support for financial markets sooner than expected on Wall Street. History suggests, however, that stocks don’t always lose out when the Fed pulls out its aid.

Some economists and investors were already calling for such a move given the strong economic recovery after the brief recession last year and the stubborn persistence of high inflation sweeping the world.

But the S&P 500 fell 1.9% in a day after Powell said the Fed’s monthly bond purchases, which recently started to decline by $ 120 billion, could end months earlier than the June target it had been set for. Added to concerns about the novel coronavirus sweeping the world, this has caused Wall Street’s so-called “fear gauge” to rise sharply.

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Wall Street has reason to be concerned. An early end to the Fed’s bond buying program, which has helped keep long-term interest rates low and thus bolster the economy, would allow the central bank to make the most important decision of start raising short-term interest rates.

These have been stuck at a record low near zero since the start of the pandemic, one of the main reasons the S&P 500 has roughly doubled since hitting a four-year low in March 2020 Low rates are also a main reason many investors have dismissed fears that stock prices have climbed too high, too fast.

An investor who buys a 10-year treasury bill, for example, envisions a return of just 1.44%, without even tracking current inflation levels.

“As long as the 10-year remains below 1.50%, there is no alternative” to buying stocks, said Josh Wein, portfolio manager at Hennessy Funds.

To see how this increased Wall Street, consider what investors pay for every dollar in company profits. The price of the S&P 500 is trading at nearly 24 times the earnings per share its companies have made in the past 12 months, according to FactSet. That’s more expensive than its average price-earnings level over the past two decades of just under $ 18.

But stocks could continue to rise even after the Federal Reserve starts raising interest rates. Usually, such rate hike campaigns occur when the US economy has enough strength to stand up, without the help of the central bank. And that in itself can increase corporate profits, the lifeblood of the stock market.

Since 1983, the S&P 500 has performed positively in the 12 months following the start of a rate hike campaign in six of the seven occurrences, according to BofA Global Research. The average yield was 6.1%.

Widen the time horizon to two years after the first rate hike, and the S&P 500 has consistently had a positive return in all but one case.

Certainly, this exception has a similarity to the current market, according to Savita Subramanian, equity strategist at BofA Securities. The S&P 500 was much more expensive than normal in 1999, in the midst of the dot-com bubble, with S&P 500 prices trading at 30.5 times their earnings.

The all-time high for US stocks to perform when the Fed slows down its bond purchases is not so deep. Indeed, these bond buying programs have only become an integral part of the central bank’s toolkit since the 2008 financial crisis.

Stocks struggled a bit in the summer of 2013 when Fed Chairman Ben Bernanke suggested it could start slowing or cutting its bond purchases. This took investors by surprise, and the ensuing mini-market swoon became known as the “taper tantrum”.

But equities nonetheless quickly returned to the upside. The Fed did not finally raise short-term interest rates until the end of 2015, more than two years after the typed tantrum.

“While some fear that the end of the cut will accelerate the point at which interest rates rise, I don’t think that will happen, although this fear of higher rates adds to market nervousness in the short term,” said David Bahnsen, chief investment officer. Officer at The Bahnsen Group.

Copyright 2021 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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European Stocks and US Futures Improve as Omicron Virus Fear Dulls | Economic news

By JOE McDONALD, AP Business Writer

BEIJING (AP) – European stocks and oil prices rebounded and Wall Street was set to open higher on Monday even as Asian markets fell further, with investors weighing the new variant of the coronavirus, omicron, as the ‘found in more countries and prompting some governments to reimpose travel controls.

The references in London, Frankfurt and Paris had won by noon. Indices in Shanghai, Tokyo and Hong Kong ended lower, although losses were lower than on Friday, triggered by reports that the variant first spotted in South Africa appeared to be spreading around the world .

On Wall Street, the benchmark S&P 500 futures contracts rose 0.9%. Futures contracts for the Dow Jones Industrial Average gained 0.7%.

As health officials rushed to analyze the new variant, traders clung to hopes that it wouldn’t be more serious than other strains of the virus.

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“The potential for a less deadly form of the virus appears to provide some respite from the sense of risk that dominates Friday’s trading,” said Joshua Mahony, senior market analyst at IG. “However, the coming weeks are fraught with dangers for investors.”

The FTSE 100 in London rose 1.2% to 7,122.61. The Frankfurt DAX gained 0.6% to 15,352.00, and the Paris CAC 40 rose 0.8% to 6,797.65.

On Friday, the S&P 500 fell 2.3% for its biggest daily loss since February. The Dow Jones lost 2.5%, while the Nasdaq Composite fell 2.2%.

Investors sold shares of banks, energy and airlines last week and shifted money to bonds and other safe-haven assets.

But this pattern was reversed on Monday. IAG, owner of British Airways and Spanish airline Iberia, jumped 4.2%, while UK low-cost carrier Easyjet rose 3.9%.

In the United States, the travel and energy sectors as well as businesses expected to thrive when the pandemic loosens its grip, such as computer chipmakers and hospitals, were to lead the rebound on Monday with Wall Street’s faith in it. a seemingly reinvigorated emerging global economy.

But in Asia, the Nikkei 225 ended down 1.6% at 28,283.92 after Japan announced it would ban foreigners from entry from Tuesday.

The Shanghai Composite Index lost less than 0.1% to 3,562.70, and the Hong Kong Hang Seng lost 0.9% to 23,852.24.

Seoul’s Kospi was down 0.9% to 2,909.32 and Sydney’s S & P-ASX 200 was down 0.5% to 7,239.80.

The Indian Sensex gained 0.3% to 57,260.58. New Zealand, Singapore and Bangkok fell, while Jakarta advanced.

The World Health Organization has called the omicron “highly transmissible,” but it was not clear if it was more dangerous than previous variants.

Governments have imposed new travel controls, fueling investor fears of possible setbacks in containing the pandemic that has killed more than 5 million people since the first cases in late 2019.

The new variant has been found as far away as Hong Kong, Belgium, Denmark, the Netherlands, Australia, Portugal and Israel. The European Union, the United States and Great Britain have imposed restrictions on travel from Africa. Israel has banned the entry of foreigners and Morocco has suspended all inbound flights for two weeks.

The omicron variant could complicate planning for central banks who decide when and how to withdraw stimulus measures that raise stock prices.

Investors were rocked last week when notes from the Federal Reserve’s October meeting showed officials were prepared to consider raising interest rates earlier than expected in response to higher inflation. The Fed previously said its first rate hike may not come until the end of 2022.

In energy markets, benchmark US crude jumped $ 3.41 to $ 71.45 a barrel in electronic trading on the New York Mercantile Exchange, rebounding from Friday’s $ 10.24 drop. Brent crude jumped $ 3.26 to $ 75.98 a barrel in London.

Also on Monday, the Japanese government announced that retail sales rose 1.1% in October from the previous month. Vehicle sales fell 6.7%.

The dollar rose to 113.60 Japanese yen from 113.19 yen on Friday. The euro fell from $ 1.1319 to $ 1.1291.

Associated Press writer Kelvin Chan contributed to this report from London.

Copyright 2021 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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Falling Turkish Lira Reminds Risks Facing Emerging Markets

The writer is investment director at GAM

On paper, 2021 should have been a great year for emerging market currencies and bonds as global growth recovers from the shocks of Covid-19. But the alarming fall in the Turkish currency this year has shown just how bad things can sometimes go in the emerging market world.

On the emerging market strength checklist are a series of ticks: strong export growth, accommodative monetary policy in large developed economies, rising foreign exchange reserves, and high commodity prices. Still, the JPMorgan Emerging Market Currency Index has fallen 9% this year and yields have risen.

This is due at least in part to the return of the “vigilance” effect in financial markets where countries that deviate from traditional economic orthodoxy or borrow too much pay the price for weak currencies and higher bond yields. students. In large developed economies, these forces are still inactive. This is not the case in emerging markets.

Turkey is the most obvious example after the pound fell 20% over the past two weeks following further rate cuts that have heightened concerns about Ankara’s economic management.

Turkey’s economic fundamentals are in many ways the best in years, but President Recep Tayyip Erdogan’s insistence on interest rate cuts has put pressure on the pound.

In July 2019, Erdogan sacked central bank governor Murat Cetinkaya. The lira appreciated over the next month and at the end of 2019 was pretty much unchanged. When Erdogan repeated action against Naci Agbal in March this year, the pound fell 15% in one day before recovering and has struggled ever since.

But a rate cut last week – the third since September – sent the lira plummeting, hitting 13 per dollar (up from 7.2 on Agbal’s last day in office). The worst day for the pound came after Erdogan reiterated his attachment to his unorthodox views that high interest rates cause inflation.

The case of Turkey is perhaps the most extreme, but there have also been investor uprisings in markets from Brazil to South Africa.

Emerging markets were dragged down by three factors. The first is the strength of the dollar. Emerging markets have always struggled when the US dollar is strong. This makes it more expensive to service the external debt and can stimulate investment outflows.

The second is the Covid. The deployment of the vaccine has been done and has disappeared in developed economies, causing euphoria and then disappointment. Emerging markets went straight to the disappointment. Vaccines took a long time to reach the poorest countries. Even when available, vaccination rates are low.

The third, and arguably the most intractable, is the price emerging markets pay for populist, sometimes unpredictable governments with a relaxed approach to budget spending.

Unlike large developed economies, emerging markets have much less flexibility on the political front. Residents of emerging markets are much more inclined to transfer their savings in foreign currencies and even abroad, resulting in revaluation of bond prices and exchange rates.

Beyond Turkey, longer-term bond yields in emerging markets raise doubts about fiscal sustainability. Brazil’s key rate is 7.75 percent, but 10-year bonds are yielding 12 percent. South Africa’s figures are 3.75 percent and 10 percent. South African bonds have struggled to recoup post-Covid losses as Brazilian investors assume the country is entering one of its periodic phases of rate hikes.

These countries indicate either higher credit risk in a few years or high long-term rates to stem capital flight. Even Russia – with a sovereign balance sheet that would leave most finance ministers green with envy – is paying almost 9% to borrow for 10 years.

These rates appear to be an anomaly in a world where G20 yields are still historically low. It appears that investors who are happy to pay stratospheric valuations for tech stocks or fraud-prone cryptocurrencies suddenly become sober and cautious of poorer countries. Emerging markets rarely get the benefit of the doubt.

This has not been uniform since the Covid outbreak – while emerging markets were sold with everything else in the initial outbreak, a strong rally at the end of last year generated a return of 9 , 6% of the JPMorgan Emerging Market Local Currency Debt Index in the fourth quarter of 2020 and the index hit an all-time high at the start of the year.

To an investor, the current path seems clear: Emerging market assets are cheap, but investments in them are best funded by currencies other than the dollar, and it’s best to stick with countries with governments. responsible.

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Biden to Keep Powell as Fed Chairman, Brainard Becomes Vice Chairman | Economic news

By CHRISTOPHER RUGABER, economic editor of the AP

WASHINGTON (AP) – President Joe Biden on Monday said he was appointing Jerome Powell to a second four-year term as Federal Reserve Chairman, endorsing his handling of the economy through a brutal pandemic recession in which politicians The Fed’s ultra-low rates have helped boost confidence and boost the job market.

Biden also said he would appoint Lael Brainard, the only Democrat on the Fed’s board of governors and the preferred alternative to Powell among many progressives, to the post of Vice President.

His decision strikes a note of continuity and bipartisanship at a time when soaring inflation is weighing on households and increasing the risks for the recovery of the economy. By supporting Powell, a Republican who was elevated to his post by President Donald Trump, Biden dismissed progressives’ complaints that the Fed has weakened banking regulations and has been slow to factor climate change into its oversight. banks.

“When our country suffered a job hemorrhage last year and there was panic in our financial markets, Jay’s consistent and decisive leadership helped stabilize markets and put our economy on the back burner. on track for a solid recovery, ”Biden said, using the Powell nickname.

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In a second term that begins in February, Powell would face a difficult and high-risk balance: inflation has hit a three-decade high, causing hardship for millions of families, darkening the recovery and undermining the tenure of the United States. Fed to keep prices stable. But with the economy still more than 4 million jobs below its pre-pandemic level, the Fed has yet to fulfill its other mandate of maximizing employment.

Next year, the Fed is expected to start raising its benchmark interest rate, with financial markets forecasting at least two increases. If it moves too slowly to raise rates, inflation can accelerate further and force the central bank to take more drastic measures later to bring it under control, potentially causing a recession. Yet if the Fed raises rates too quickly, it could stifle hires and the recovery.

If confirmed, Powell would remain one of the most powerful economic leaders in the world. By raising or lowering its short-term interest rate, the Fed seeks to slow or stimulate growth and hiring, and keep prices stable. His efforts to lead the US economy, the world’s largest, usually have global consequences.

The Fed’s benchmark rate, which has been close to zero since the pandemic hit the economy in March 2020, influences a wide range of borrowing costs for consumers and businesses, including mortgages and cards credit. The Fed also oversees the country’s largest banks.

For months, Powell has been the front-runner to be re-elected, but a vigorous campaign by environmental and public interest groups in favor of Brainard has darkened the picture in recent weeks. Critics, including Senator Elizabeth Warren, D-Massachusetts, have argued that Powell relaxed banking regulations put in place after the 2008-2009 financial crisis.

And two other senators voiced their opposition to Powell last week because they said he was not sufficiently committed to using the Fed’s regulatory tools to fight global warming.

Brainard, meanwhile, has cast 20 dissenting votes against changes to financial rules over the past four years. In March 2020, she opposed a regulatory change that she said would reduce the amount of reserves that big banks had to hold to hedge against losses. She also spoke more forcefully than Powell about ways the Fed can deal with global warming.

Biden sought to allay those concerns. He said Powell had pledged to make climate change “a top priority” and agreed to ensure “that our financial regulations stay ahead of emerging risks.”

“Jay, along with the other members of the Fed board that I will appoint, must ensure that we never again expose our economy and our American families to these kinds of risks,” he said. at the White House, referring to the 2008 financial crisis.

Biden still has the option of filling three other positions on the Fed’s board of governors, including that of vice chairman of oversight, a prominent banking regulatory post. Those positions will be filled in early December, Biden said.

Biden admitted that some Democrats had encouraged him to choose a new Fed chairman, for a “fresh start.” But he said he wanted to go in a different direction.

“We need stability and independence at the Federal Reserve,” he said. “I think broad, bipartisan Fed leadership is important, especially now, in such a politically divided nation.”

Biden praised Powell for his efforts to achieve maximum jobs, but did not press him on inflation, which has become the biggest economic threat to his administration. Biden said the US economy is in the midst of a “historic recovery” which gives the Fed the opportunity “to attack inflation from a position of strength, not of weakness.”

Powell said “we know that high inflation negatively impacts families, especially those who are less able to afford the higher costs of basic necessities, such as food, shelter and transportation.” . He pledged to use the tools of the Fed – mainly by raising interest rates – “to prevent higher inflation from taking hold.”

Powell’s re-appointment is expected to have broad approval by the Senate Banking Committee, and then by the Senate as a whole.

Some liberal Democrats such as Sen. Sherrod Brown of Ohio, chairman of the Banking Committee, have supported Powell, as have moderate Democrats, including Sen. Jon Tester of Montana. He was also endorsed by Sen. Pat Toomey, R-Pa., The leading Republican on the panel, and will likely receive broad support from Republicans.

Wall Street applauded the renomination, with stock prices rising and fear measures easing in the market immediately after the announcement. The S&P 500 is about to close at another record.

The 68-year-old lawyer was appointed to the Fed’s Board of Governors in 2011 by President Barack Obama after a lucrative career in private equity and after holding several positions in the federal government.

Unlike his three immediate predecessors, Powell does not have a doctorate. in economy. Yet he earned generally high marks for handling perhaps the world’s most important financial situation, especially in his response to the coronavirus-induced recession.

Still, soaring inflation forced the Powell Fed to slow down its economic stimulus sooner than expected. At its last meeting in early November, the central bank said it would start cutting its monthly bond purchases by $ 120 billion this month and likely end it by mid-2022. These purchases were aimed at keeping long-term borrowing costs low to stimulate borrowing and spending.

For months, Powell called inflation “transient,” but more recently he admitted that higher prices had persisted longer than expected. At a press conference this month, Powell acknowledged that high inflation could last until the end of summer 2022.

Brainard’s rise to the number 2 position of the Fed follows the key role it played in the Fed’s emergency response to the pandemic recession. She is part of a “troika” of key policy makers that includes Powell and Richard Clarida, whom she will replace as vice president in February.

Brainard was the architect of the Fed’s new policy framework, adopted in August 2020, under which it said it would no longer hike rates simply because the unemployment rate had fallen to a low level that could boost the economy. ‘inflation. Instead, the Fed said it would wait for real evidence of the price hike.

Brainard also played a key role in the Fed redefining its maximum employment target as “broad and inclusive,” taking into account the unemployment rate of blacks and other groups and not just Americans as a whole. political decisions.

She also discussed ways in which the Fed could take climate change into account more directly in banking supervision. Many environmental groups say loans to oil and gas companies, as well as commercial real estate developers, could default and cause significant losses to banks if environmental damage worsens or renewables provide a larger share. of electricity production.

“Climate change,” she said, “is expected to have profound effects on the economy and the financial system, and it is already inflicting damage. “

Associated Press writer Josh Boak contributed.

Copyright 2021 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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3 best dividend-paying stocks you can buy right now

Investors turn to dividend-paying stocks for a reason: they want a reliable income stream. Dividend stocks can be ideal for retirees or other income investors because they regularly provide cash.

Investors have two choices for dividend-paying stocks: high-yielding dividend stocks with higher risk or more reliable dividend-paying stocks that constantly increase payouts. Owl Rock Capital Corporation (NYSE: ORCC), Morgan stanley (NYSE: MS), and Travelers (NYSE: TRV) are all dividend paying stocks that range from riskier high yielding stocks to reliable dividend payers.

Image source: Getty Images.

1. Owl Rock Capital Corporation

Owl Rock Capital offers a stellar 8.5% return, but there are a few things investors need to know about this high-yielding stock. Owl Rock Capital provides loans to middle market businesses and is known as the Business Development Corporation (BDC). A BDC is simply a business that grants loans or purchases shares in private companies in the United States. These companies can help finance businesses that banks may consider too risky.

BDCs have tax rules similar to those of real estate investment trusts (REITs), requiring them to pay 90% of their income in the form of dividends. For this reason, BDCs offer higher dividend yields, but can be riskier investments.

Owl Rock Capital provides loans to mid-market companies or companies with earnings before interest, taxes, depreciation and amortization (EBITDA) of $ 10 million and $ 250 million and annual turnover of 50 to 2 , $ 5 billion. The company believes this space is underserved as large institutional investors are subject to tighter liquidity requirements. As a result, these large institutions lend to large companies, leaving a funding hole for small businesses.

This focus on mid-market companies has paid off, with Owl Rock Capital recording investment income of $ 740 million, up 27.1% from 2020 and 43.4% from 2019. Another key metric for BDCs, called net asset value per share (NAV), came in at $ 14.95, up nearly 2% from the same quarter last year. Growing net asset value is one way of knowing if you’re investing in a strong management team that creates long-term value. While the company’s net asset value declined in 2020 due to low interest rates amid the pandemic, it has moved in the right direction over the past year.

Owl Rock Capital’s high yield is attractive. Nonetheless, investors should be aware of the potential default risks if the economy as a whole were to struggle. As the company invests in mid-market companies, these could be the first to feel the pain of an economic downturn.

Investors should also keep an eye out for rising interest rates, which could affect the repayments of these loans by the companies in its portfolio. Rising rates could also make the stock less attractive if its dividend yield does not rise in line with interest rates. However, given the current strength of the economic recovery and loan markets, Owl Rock Capital appears to be a solid, high yield dividend stock that is worth the risk.

2. Morgan Stanley

Morgan Stanley is another solid dividend paying stock, returning investors nearly 2.7%. This dividend had doubled when its quarterly dividend was announced in June, testifying to the company’s solid financial position.

Morgan Stanley is best known for its investment banking services, which have been excellent this year. In the first nine months of 2021, its investment banking revenue grew 61%, thanks to a solid backdrop of M&A (M&A) and initial public offering (IPO) activity.

Although its investment bank has performed well, what excites me most about the company is how it can thrive in various market conditions. Last year, the company focused on diversifying its revenue streams by acquiring E * Trade and Eaton Vance. By adding the E * Trade platform, Morgan Stanley has added a stream of commission and fee income that can work well with increased market volatility, which tends to increase trading.

The addition of Eaton Vance has boosted the company’s asset management segment, providing it with a steady stream of asset management fees to stabilize its revenue. Over nine months this year, the company’s fees and expenses increased 20%, while its asset management income increased 41% from a year ago.

A key indicator to watch for dividend-paying stocks is the payout ratio. This ratio can give you an idea of ​​the sustainability of a dividend. Usually you want to see a business with a payout rate of 50% or less. Morgan Stanley’s payout ratio is around 15%, giving investors confidence that the company can continue to maintain and increase its dividend. With its diverse business model, Morgan Stanley is well positioned to succeed and deserves a place in any dividend investor’s portfolio.

The mechanic looks at the tablet with a customer.

Image source: Getty Images.

3. Travelers

Travelers is a solid dividend paying stock that pays 2.2% and is committed to increasing dividends – which it has done for 17 consecutive years. Travelers is a property and casualty insurance company that offers several coverage options, including auto insurance, workers’ compensation, and property coverage for individuals, businesses and governments. According to S&P Global Market Intelligence, Travelers was the top commercial insurer in the United States in 2020, and it is the only commercial insurer with a top five position in five major product lines, showing its product line.

This year’s growth has been solid for travelers and can be attributed in part to the context for insurers. Insurance companies have recorded larger claims due to the increase in disaster losses caused by extreme weather and other events in recent years. As a result, insurers must respond by increasing premiums, thereby creating an environment conducive to premium growth. Travelers saw their premiums increase by 5.9% in the first nine months of 2021 compared to last year. In the third quarter, its in-force auto and home insurance coverage hit a record high.

Along with strong revenue growth, you want insurers to maintain good profitability on the policies they write. One measure used by insurance companies is the combined ratio, where a ratio of less than 100% indicates that the company is writing profitable policies. Travelers posted a combined ratio of 97% in the first nine months of this year, and in the past 15 years, Travelers has only seen its combined ratio cross 100% once in 2011.

Travelers’ consistency in profitable underwriting is one of the main reasons the company has increased its dividend payouts for 17 consecutive years. That, along with its 24% payout ratio, puts Travelers in a position to continue paying and increasing its dividend payouts, making it another stellar dividend stock for income investors.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.


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Asian equities on the rise, following the Wall Street rally | Economic news

By YURI KAGEYAMA, AP Business Writer

TOKYO (AP) – Asian stocks were mostly higher on Tuesday after another rally to an all-time high on Wall Street.

Stocks rose broadly, with companies releasing much stronger summer earnings reports than analysts had expected. Historically low interest rates, along with strong corporate earnings growth, have helped the S&P 500 more than double from the low reached in March 2020 at the start of the coronavirus pandemic.

On Monday, the S&P 500 rose 0.5% to 4,566.48, breaking a record set Thursday. The Dow Jones Industrial Average also hit a record high, gaining 0.2% to 35,741.15. The Nasdaq composite rose 0.9% to 15,226.71.

In Tuesday’s session, the Japanese benchmark Nikkei 225 rose 1.8% to close at 29,106.01. The advance was helped by a 2.6% jump in electronics and entertainment Sony Corp., which will report profits later this week. Sony, which has video game and film divisions, saw sales increase as people switched to home entertainment during the pandemic.

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Other big winners included Nippon Telegraph & Telephone, which jumped 5.4% after improving its earnings outlook.

“Sentiments in Asia may largely reflect Wall Street’s outstanding performance overnight, while the COVID-19 situation in China remains under scrutiny with enhanced control measures,” said Yeap Jun Rong, strategist of market at IG in Singapore.

China has reimposed travel restrictions in some areas to tackle virus outbreaks that add to concerns over the slowing economy.

Hong Kong’s Hang Seng fell 0.7% to 25,938.50. The Shanghai Composite Index lost 0.4% to 3,594.52.

South Korea’s Kospi gained 1.0% to 3,050.14 after the government said the economy grew at an annual rate of 4%, according to government data. It was a little lower than expected. But analysts expect consumer spending to pick up as virus cases decline with the progress of the vaccine rollout in the country.

The Australian S & P / ASX 200 lost its earlier gains and remained little changed, advancing less than 0.1% to 7,443.40.

On Wall Street, Tesla hit the biggest gain of the S&P 500 after Hertz announced it would buy 100,000 Model 3 vehicles for its fleet. The landmark deal for the electric vehicle industry pushed Tesla up 12.7%. Because it is one of the most important stocks in the market, its movements have a disproportionate effect on the S&P 500.

So far, companies in the S&P 500 have reported third quarter profits that were nearly 46% higher than a year ago. This allowed the companies in the index to post overall growth of around 32.5%, according to FactSet. This compares to expectations of about 27% growth at the end of the third quarter on September 30.

Several of the market’s most influential stocks are expected to post their own earnings over the coming week. This includes Apple, Microsoft, Amazon, and Google’s parent company, Alphabet. Because these are the four biggest companies on Wall Street in terms of market value, their stock movements have a huge effect on the S&P 500, even more so than Tesla’s.

Moderna rose 7% after reporting encouraging data on the use of its COVID-19 vaccine in children.

Shares of energy companies surged after the price of US oil surpassed $ 85 a barrel in the morning. This is the first time this has happened in about seven years, although the price has come down over the day.

Benchmark US crude fell 16 cents to $ 83.60 a barrel in electronic trading on the New York Mercantile Exchange. It closed Monday at $ 83.76 a barrel.

Brent crude, the basis of international prices, gained 1 cent to $ 85.18 a barrel.

Contrary to previous Federal Reserve comments, Fed Chairman Jerome Powell said on Friday that inflation is expected to remain elevated for much of next year amid erased supply chains and shortages. This could put pressure on the central bank to end the record interest rates it is offering to support markets and the economy.

The central bank is preparing to slow down its monthly bond purchases to keep long-term interest rates low in the near future, but a move in short-term interest rates does not appear imminent.

The 10-year Treasury yield remained stable at 1.63%.

In currency trading, the US dollar rose from 113.71 yen to 113.92 Japanese yen. The euro cost $ 1.1605, compared to $ 1.1611.

Copyright 2021 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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Stock Indices Close Lower as Jobs Data Stirs Uncertainty | News from USA®

By STAN CHOE, DAMIAN J. TROISE and ALEX VEIGA, AP Business Writers

Wall Street closed a wobbly trading day with a large drop in equities on Friday, after a weak employment report raised questions about the Federal Reserve’s timetable to reduce its immense support for markets.

The S&P 500 fell 0.2% after fluctuating between small gains and losses for much of the day. The modest drop ended a three-day winning streak for the benchmark. Despite that, he managed a 0.8% gain for the week, less than half of the index’s loss last week.

The Dow Jones Industrial Average fell 8.69 points, or less than 0.1%, to 34,746.25, while the Nasdaq composite slipped 74.48 points, or 0.5%, to 14,579, 54.

Wall Street reacted with uncertainty and disappointment to the highly anticipated September jobs report. US stocks fluctuated throughout the day, as did Treasury yields.

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The 10-year Treasury yield climbed to 1.60% from 1.57% Thursday night after initially falling to 1.56% immediately after the jobs report was released.

Small business stocks fell more than the overall market. The Russell 2000 Index lost 17 points, or 0.8%, to 2,233.09.

Much of Wall Street assumed that the job market had improved enough that the Fed soon began to cut back on its monthly bond purchases meant to keep interest rates in the long term. Investors had also asked the central bank to start raising short-term interest rates at the end of next year. The current ultra-low interest rates have been one of the main forces pushing stocks to record highs.

But Friday’s jobs report showed employers created just 194,000 jobs last month, well below the 479,000 economists were expecting. Many investors still expect the Fed to stick to its timetable, but the numbers were low enough to at least raise the question of whether it could wait longer to cut its bond purchases or possibly raise short rates. term.

“The lack of jobs is not pretty – there is no way around it,” said Mike Loewengart, managing director of investment strategy at E-Trade Financial, in a statement. “And many may think that will cause the Fed to pause in terms of the reduction strategy. But the jury is out on how the market will interpret the data.”

Below the surface, the numbers don’t offer much clarity. The unemployment rate fell to 4.8% from 5.1%, and the government has revised upward the hiring figures of recent months. But last month’s hires were still the lowest since December 2020. Average wages also rose a little faster than expected compared to August, helping workers but adding to concerns about inflation.

“This gives the Fed a bit more leeway on cutting and tightening in general,” said Cliff Hodge, chief investment officer for Cornerstone Wealth.

Inflation remains a big concern for investors after hitting its highest level in at least a decade, in part due to booming supply chains as the global economy reboots after its pandemic-caused shutdown. These supply chain issues will be a key focus for investors as they review the next round of quarterly corporate financial reports.

“Profit season is really going to be the next catalyst for the market to figure out where to go until the end of the year,” Hodge said.

Rising energy prices also contributed to inflation, and benchmark US crude for November delivery briefly exceeded $ 80 a barrel early Friday. This is the highest the first-month contract for U.S. oil has been since 2014.

This helped push S&P 500 energy stocks up 3.1%, by far the biggest gain among the 11 sectors that make up the index. Exxon Mobil rose 2.8% and Pioneer Natural Resources 4.6%.

About three in five companies on the S&P 500 closed lower, with losses at tech and healthcare companies accounting for much of the decline. Citrix Systems fell 5.7%, while Bristol-Myers Squibb closed down 3%. Only energy stocks and banks recorded gains.

Friday’s choppy trading continues an already volatile run since the S&P 500 set its record on September 2. A rapid rise in interest rates and the prospect of less support from the Fed has forced investors to reassess if stock prices have risen too expensive. Concerns about rising interest rates have also combined with political unrest in Washington, DC.

The S&P 500 had four consecutive days until Tuesday when it alternated between a 1% gain and a 1% loss. In recent days, the market has been more stable amid relief that Congress appears to be delaying at least one disastrous default on US federal debt.

Overseas exchanges closed unevenly on Friday. In Europe, the German DAX lost 0.3% and the French CAC 40 fell 0.6%. London’s FTSE 100 rose 0.2%.

Asian markets were stronger. Japan’s Nikkei 225 rose 1.3%, South Korea’s Kospi added 0.6%, and shares in Shanghai gained 0.7%.

AP Business Writer Joe McDonald contributed.

Copyright 2021 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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Stocks Open Lower As Volatility Hits Wall Street; oil drops

A man wearing a protective mask walks past an electronic board displaying Japan's Nikkei 225 index at a securities firm on Wednesday, October 6, 2021 in Tokyo.  Asian stocks slid in cautious trading on Wednesday, ignoring a rally on Wall Street, with the Tokyo Nikkei 225 index retreating after an open higher.  (AP Photo / Eugene Hoshiko)

A man wearing a protective mask walks past an electronic board displaying Japan’s Nikkei 225 index at a securities firm on Wednesday, October 6, 2021 in Tokyo. Asian stocks slid in cautious trading on Wednesday, ignoring a rally on Wall Street, with Tokyo’s Nikkei 225 index retreating after an open higher. (AP Photo / Eugene Hoshiko)

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Stocks fall on Wall Street as the market experiences a period of volatility. The S&P 500 fell 0.6% on Wednesday morning. The benchmark has alternated gains and losses of over 1% over the previous four days. The Dow Jones Industrial Average slipped 0.5% and the Nasdaq slipped 0.7%. International markets also sold off, with trade in Japan, South Korea, Germany and France all falling by more than 1%. Energy prices retreat after a strong recovery which has helped rekindle inflationary fears among investors. US oil fell 1.6% to $ 77.66 a barrel and natural gas fell 8.1%. The yield on the 10-year Treasury bill fell to 1.51%.

THIS IS A CURRENT UPDATE. AP’s previous story follows below.

Global stocks slid in cautious trading on Wednesday, ignoring a rally on Wall Street led by tech companies and banks that wiped out most of the losses from the previous day’s sell-off.

The French CAC 40 fell 1.9% early in trading to 6,450.56, while the German DAX fell 2.1% to 14,869.63. The UK FTSE 100 lost 1.6% to 6,964.13. The future of Dow industrials fell 0.9% to 33,860.00. S&P 500 futures were down 1.2% to 4,280.00.

Japan’s Nikkei 225 benchmark fell 1.1% to end at 27,528.87 for its eighth consecutive session of losses.

South Korea’s Kospi fell 1.8% to 2,908.31. The Australian S & P / ASX 200 lost 0.6% to 7,206.50. The Hong Kong Hang Seng edged down 0.6% to 23,966.49. The trade was closed in Shanghai for the Chinese national holidays.

Concerns remain in Asia over ongoing coronavirus infections, although hopes are growing that economic activity will be closer to normal later this year, rebounding from the deep downturn in 2020.

“On the risk front, China’s credit problems and contagion risks have certainly not abated, with developer concerns still surfacing. As such, caution has not been thrown to the winds, ”said Tan Boon Heng of the Asia and Oceania Treasury Department at Mizuho Bank in Singapore.

The risk of default by real estate developer China Evergrande Group of defaulting on its debt of more than $ 300 billion has alarmed investors already worried about the slowdown in Chinese growth.

The outlook for Japan, the world’s third-largest economy, remains uncertain. Fitch’s agency maintained a “negative outlook” for Japan, citing “downside risks to the macroeconomic and fiscal outlook from the coronavirus shock.”

Shares fell in New Zealand after its central bank raised interest rates for the first time in more than seven years, removing some of the support it put in place when the coronavirus pandemic began.

The Reserve Bank raised the benchmark rate from a record high of 0.25% to 0.5%. The move came despite a lockdown in Auckland due to a coronavirus outbreak.

The bank said inflation is expected to rise to 4% in the short term before falling to 2% in the medium term.

The market has been choppy for weeks, with inflation worries driving up and down swings for tech companies and the market at large.

Yet Wall Street still expects solid corporate profit growth when the third quarter earnings season kicks off later this month. S&P 500 companies are expected to post a 27.7% increase in profits for the July-September quarter from a year earlier, according to FactSet.

In energy trading, benchmark US crude fell 27 cents to $ 78.66 a barrel in electronic trading on the New York Mercantile Exchange. It gained $ 1.31 to $ 78.93 a barrel on Tuesday.

Brent crude, the international standard, fell 26 cents to $ 82.30 a barrel.

In currency trading, the US dollar rose from 111.45 yen to 111.56 Japanese yen. The euro cost $ 1.1546, compared to $ 1.1601.


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Boris Johnson promises transformed economy for UK

MANCHESTER, England – Declaring Britain will not revert to the ‘broken model’ of the past, Prime Minister Boris Johnson on Wednesday pledged to stage a radical transformation of the country’s economy towards a future defined by highly working people. skilled workers earning higher wages.

Projecting sunny optimism but offering few details, Mr Johnson sketched out a vision for Britain on the cusp of change. He barely mentioned the wave of fuel and food shortages that have plagued the country in recent weeks, calling them mainly the consequence of a rapidly recovering economy in transition.

In a speech to an enthusiastic crowd at his Conservative Party’s annual conference, Mr Johnson said: ultimately structural weaknesses in the UK economy.

It was, Mr Johnson said, “a long overdue change in leadership,” adding: “We are not going back to the same old broken model: low wages, low growth, low skills and low productivity – all of that. enabled, as a system, by uncontrolled immigration.

The Prime Minister devoted much of his speech to his flagship ‘leveling up’ policy, which aims to equalize the disparities between economically disadvantaged areas of northern England and its more prosperous south. As he said, “We have one of the most imbalanced societies and imbalanced economies of all the richest countries.”

But Mr Johnson has offered few concrete policies other than a bonus for math and science teachers in economically struggling areas. His other commitments – improving housing, fighting crime and modernizing transportation networks in northern cities – struck a familiar note.

Mr Johnson has called his program “Build Back Better,” the same slogan President Biden uses for his infrastructure legislation (both passed it around the same time last year). Unlike Mr Biden, the Prime Minister riffed on the line, adapting it to describe the return of beavers to British rivers (“Build Back Beaver”) and beef exports to the United States (“Build Back Burger “).

Blending self-deprecating humor, historical and literary references, gleeful punches against the opposition and a populist call for social issues, Mr Johnson has bolstered his status as the all-round Conservative Party cheerleader.

At one point, the Prime Minister, who has six children with multiple partners, lamented Britain’s relatively small population, despite, he said, all his efforts to strengthen it. In another, he described Labor Party leader Keir Starmer as the captain of a cruise ship that had been hijacked by Somali pirates.

Mr Johnson also appealed to the social and cultural issues that resonate with the Tory base. He has vowed to defend the history of Britain and oppose revisionist interpretations of conservative heroes like Winston Churchill.

And Mr Johnson called on Margaret Thatcher, another of his Tory predecessors, to defend government-imposed tax hikes to offset massive pandemic-related spending. Mrs Thatcher, he said, would not have ignored “this meteorite which has just crashed into public finances”.

Despite all the references to Tory icons, however, Mr Johnson’s speech amounted to a remarkable repudiation of traditional guiding principles and his party’s governance record.

The Conservatives have long been the party of business, but Mr Johnson actually forced companies to break their dependence on a low-wage economy. The Tories have led government since 2010, but Mr Johnson has spoken of the past decade as if another party is in charge.

In the eyes of political analysts, Mr Johnson seemed to be launching something new for the post-pandemic and post-Brexit era: a party that combines the spending and interventionist impulses of the Social Democrats with the anti-immigration instincts of the Brexiteers who are ‘are agitating to leave the European Union in 2016. His party has engaged in “radical and optimistic conservatism”, he said.

Mr Johnson’s rhetorical acrobatics featured a politician who repeatedly succeeded in defying political gravity. His 40-minute speech, in a room reserved for him and filled with party supporters, contrasted with the more discreet, sometimes uncrowded, appearances of his ministers on previous days. It underscored the Prime Minister’s total control over the Conservative Party.

Yet as Britain faces painful adjustments, Mr Johnson faces a convergence of hostile tendencies that could test this high-flying act. Rising food and fuel prices are straining consumers; gasoline shortages have forced motorists to wait hours to refuel.

Mr Johnson described these challenges as growing pains – evidence of an economy waking up from the pandemic and rebuilding itself to reap the benefits of a highly skilled and well-paid future.

For ordinary people, however, the specter of fuel and food shortages in late fall is more like the 1970s, and the time of strikes and price spikes that newspapers have called “the winter of discontent.” “.

Even some members of his own party seemed unconvinced, with influential Tory lawmaker Tom Tugendhat write on twitter that “wage increases are important unless prices are rising faster.” Inflation matters – it’s about what we can afford and how families manage to make ends meet during a tough month. “

Critics also took issue with Mr Johnson’s claim that Brexit had enabled Britain to forge a new submarine alliance with the United States and Australia. Britain has a long-standing intelligence relationship with these countries, and national governments control defense within the European Union.

Mr Johnson has attempted to draw a new line with the opposition Labor Party, which he has described as welcoming unchecked immigration – and the resulting low wages – as Tories seek training and better pay for British workers.

Asked in an interview this week about how Britain would deal with the immediate consequences of an economic transition that could take years, he echoed a phrase made famous by Mrs Thatcher: ‘There is no alternative “.

But Mr Johnson’s comments dramatized the extent of his break with his legacy. The party’s traditional relations with business have been strained because of Brexit, which was opposed by big business that profited from the gigantic European single market. And in recent days, the prime minister has added to the tensions, berating some companies for what he called a failure to invest in their workers.

While even its critics welcome the idea of ​​moving away from a low-wage, low-skill economy, Britons could suffer if government policies cause inflation and interest rates to spike. Much of the fiscal stimulus the government injected into the economy to cushion the blow of the pandemic – including paying most of the salaries of people who had been sent home – have been cut.

Mr Johnson urged people to return to their offices but otherwise ignored cost of living issues. Instead, he celebrated what he described as the unquenchable spirit of the British. It was evident, he said, among the scientists who developed the AstraZeneca vaccine, the National Health Service nurses and Emma Raducanu, the 18-year-old who won the US Open tennis championship on last month.

While those lines drew applause from conservatives in the room, the reaction from businesses across the country has been far more suspicious.

“Businesses face a cumulative crisis in trading conditions as supply chains collapse, prices skyrocket, taxes rise and labor shortages reach new heights,” said the British Chambers of Commerce Managing Director Shevaun Haviland, adding that “the economic recovery is on slippery ground.



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Stocks drop in tech, oil hits highest since 2014

People stand near a bank's electronic board showing the Hong Kong Stock Index on the Hong Kong Stock Exchange in Hong Kong on Monday, October 4, 2021. Asian markets were mixed on Monday, while the benchmark index of Hong Kong lost more than 2% after China property developer struggled Evergrande shares were suspended from trading.  (AP Photo / Vincent Yu)

People stand near a bank’s electronic board showing the Hong Kong Stock Index on the Hong Kong Stock Exchange in Hong Kong on Monday, October 4, 2021. Asian markets were mixed on Monday, while the benchmark index of Hong Kong lost more than 2% after China property developer struggled Evergrande shares were suspended from trading. (AP Photo / Vincent Yu)

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Stocks fell sharply on Monday afternoon as Wall Street just had its worst week since the winter. The price of oil hit a seven-year high as OPEC and allied oil producers stuck to a plan to cautiously increase production even as global demand for crude oil increases.

The S&P 500 fell 1.4% at 12:03 a.m. Eastern time. The Dow Jones Industrial Average lost 363 points, or 1.1%, to 33,962.

Losses in tech stocks pushed the Nasdaq down 2.3%. Apple fell 2.5% and Microsoft 2.4%. The big communications companies have also slipped. Facebook fell 4.7%.

US crude oil prices rose 2.6% and topped $ 77 a barrel for the first time since 2014. OPEC and allied oil-producing countries on Monday decided to maintain their cautious approach to restore oil production. reduced oil during the pandemic, agreeing to add 400,000 barrels per day in November.

Natural gas prices jumped 5.7%. Energy companies have increased along with energy prices. Devon Energy rose 3.9%.

The 10-year Treasury yield fell from 1.47% on Friday to 1.48%. The return was 1.31% on September 20 and the recent surge contributed to the weakness in tech stocks. A rapid rise in interest rates has made it necessary to reassess whether stocks have become too expensive, especially the already expensive tech companies.

Investors are increasingly worried about inflation as oil prices rise and companies continue to face supply issues that drive up their costs and force them to raise prices. Wall Street is also worried about the Federal Reserve’s timing to reduce its bond purchases and its possible decision to raise its benchmark interest rate.

“You really have a lot of reasons for the Band to be trading defensively right now,” said Julian Emanuel, chief equities and derivatives strategist at BTIG. “If you’re not going to see the bond market pick up and yields go down, then you’re likely to see more volatility in stocks,” he said.

Investors are also bracing for the latest round of corporate earnings, which will rise over the coming weeks. They are also closely monitoring economic data for more signals on the pace of the recovery as businesses and consumers continue to grapple with the impact of COVID-19 and the highly contagious delta variant.

Wall Street will get more information on the health of the economy this week. On Tuesday, the Institute for Supply Management will release its service sector index for September. The service sector is the largest part of the economy and its health is a key factor for growth.

The Ministry of Labor will release its employment report for September on Friday. The job market is struggling to fully recover from the damage caused by COVID-19 over a year ago.

Tesla rose 1.5% after the electric vehicle maker reported surprisingly good third quarter deliveries.

In Asia, the Hong Kong benchmark fell more than 2% after shares in struggling real estate developer China Evergrande were suspended. Stocks in most European markets edged up.


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Rising bond yields scare investors, deflate tech stocks

People wearing face masks walk past the electronic board of a bank displaying the Hong Kong stock index in Hong Kong on Tuesday, September 28, 2021. Asian stocks fell mainly on Tuesday as concerns over China rocked the bank. investor optimism after mixed results on Wall Street.  (AP Photo / Kin Cheung)

People wearing face masks walk past the electronic board of a bank displaying the Hong Kong stock index in Hong Kong on Tuesday, September 28, 2021. Asian stocks fell mainly on Tuesday as concerns over China rocked the bank. investor optimism after mixed results on Wall Street. (AP Photo / Kin Cheung)

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Tech companies led a large decline in stocks on Wall Street on Tuesday, accentuating the market’s collapse in September.

The S&P 500 fell 2%, its worst drop since May. The tech-rich Nasdaq fell 2.8%, its biggest drop since March. Descenders outnumbered New York Stock Exchange advances 4 to 1.

The benchmark S&P 500 is down 3.8% since the start of the month and on pace with its first monthly loss since January. The September crisis was an exception to a mostly steady stream of gains so far this year, which has pushed the S&P 500 up 15.9% since the start of 2021.

The sell-off came as a rapid rise in Treasury yields is forcing investors to reassess whether prices have been too high for stocks, especially the more popular ones. The yield on the 10-year Treasury bill, a benchmark for many types of loans, including mortgages, jumped to 1.54%. This is its highest level since the end of June and up from 1.32% a week ago.

Bond yields started rising last week after the Federal Reserve sent the clearest signals yet that the central bank is moving closer to start pulling back the unprecedented support it has provided to the economy throughout throughout the pandemic. The Fed has indicated that it may start raising its benchmark interest rate over the next year and will likely start slashing the pace of its monthly bond purchases before the end of this year.

“This is all taking one of the weights that was keeping returns low and removing it,” said Sameer Samana, senior global markets strategist at Wells Fargo Investment Institute. “This clearly has a big impact on large caps, higher growth, multiple stocks.

Higher yields mean Treasuries pay more interest, causing investors to pay less high prices for stocks and other things that are riskier bets than super-safe US government bonds. . The recent rate hike has hit tech stocks particularly hard, as their prices appear to be more expensive than the rest of the market, relative to their earnings.

There have also been many tech stocks recently offered due to expectations of significant earnings growth in the distant future. When interest rates are low, an investor doesn’t lose much by paying high prices for the stock and waiting years for growth to occur. But when Treasuries pay more in the meantime, investors are less willing.

The S&P 500 lost 90.48 points to 4,352.63. The Dow Jones Industrial Average lost 569.38 points, or 1.6%, to 34,299.99. The blue chip index briefly lost 614 points.

Small business stocks also lost ground. The Russell 2000 Index lost 51.23 points, or 2.2%, to 2,229.78.

This week’s slump for the market is reminiscent of an episode earlier this year when expectations of rising inflation and a stronger economy pushed Treasury yields up sharply. The 10-year rate jumped to nearly 1.75% in March after starting the year around 0.90%. Tech stocks were also hit hard by this slowdown.

Chipmaker Nvidia fell 4.4%, Apple slipped 2.4%, and Microsoft fell 3.6%. The wider tech sector is also facing a global shortage of chips and parts due to the virus pandemic and this could worsen as an electricity crisis in parts of China closes factories.

Communication companies have also weighed on the market. Facebook and Google’s parent company Alphabet each fell 3.7%.

Energy was the only sector in the S&P 500 that was not in the red. Exxon Mobil rose 1% and Schlumberger gained 2.4% for the biggest gain among S&P 500 stocks.

Another lingering concern in the market originating in China is the possible collapse of one of China’s largest real estate developers. Evergrande Group is fighting to avoid default on billions of dollars in debt.

Asian markets were mixed while European markets fell.

Investors faced a turbulent market in September as they tried to assess the progress of the economic recovery and its impact on various industries.

COVID-19 remains a persistent threat and continues to wreak havoc on businesses and consumers. Economic data on consumer spending and the labor market are mixed. US consumer confidence fell for the third consecutive month in September, according to a Conference Board report.

Companies warn that supply chain issues and rising prices could hurt sales and profits. The Federal Reserve has maintained that the rise in inflation is temporary and linked to these supply chain issues as the economy recovers from the pandemic. Investors continue to fear that higher inflation may no longer be permanent, and rising bond yields reflect some of these concerns.

“At the end of the day, the supply chain thesis is really tested and the Fed, businesses and consumers have had to react to some of the realities on the ground,” said Eric Freedman, chief investment officer at US Bank Wealth Management. .


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Stocks end mixed as big tech losses weigh in on the market

People wearing face masks walk past a bank's electronic board displaying the Hong Kong Stock Index on the Hong Kong Stock Exchange in Hong Kong on Monday, September 27, 2021. Asia's share rose on Monday, but skepticism about The region's economic outlook has tempered the recovery amid worries about new waves of COVID-19 outbreaks.  (AP Photo / Vincent Yu)

People wearing face masks walk past a bank’s electronic board displaying the Hong Kong Stock Index on the Hong Kong Stock Exchange in Hong Kong on Monday, September 27, 2021. Asia’s share rose on Monday, but skepticism over The region’s economic outlook has tempered the recovery amid worries about new waves of COVID-19 outbreaks. (AP Photo / Vincent Yu)

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Major Wall Street stock indexes ended mixed on Monday, with losses at tech and healthcare companies outpacing gains elsewhere in the market.

The S&P 500 fell 0.3% after spending much of the day essentially flat. The pullout ended a three-day winning streak for the benchmark, which last week recorded its first weekly gain in three weeks.

The high-tech Nasdaq composite fell 0.5%, while the Dow Jones Industrial Average managed a gain of 0.2%. Smaller company stocks outperformed the market as a whole, pushing the Russell 2000 index up 1.5%.

Bond yields have generally increased. The 10-year Treasury yield rose to 1.49% from 1.46% on Friday night. It was at 1.31% a week ago, as market nervousness prompted investors to move money into bonds, reducing their yield but increasing since Tuesday.

Banks made solid gains on the rise in the 10-year Treasury yield. The yield influences the interest rates on mortgages and other consumer loans, so when it rises, it allows lenders to charge higher rates. Bank of America gained 2.7%.

“The story now is higher bond yields and what areas of the (stock) market are benefiting,” said Willie Delwiche, investment strategist at All Star Charts.

The S&P 500 lost 12.37 points to 4,443.11, the Nasdaq lost 77.73 points to 14,969.97 and the Dow gained 71.37 points to 34,869.37. The Russell 2000 gained 32.93 points to 2,281, a sign that investors are still confident about future economic growth.

Markets have had a turbulent month so far and the S&P 500 is set to lose 1.8% in September, which would mark the first monthly loss since January. Investors have tried to gauge how much room for growth the economy has amid waves of COVID-19 that are dragging down consumer spending and job growth, while inflation remains a concern.

The economic recovery started strong in 2021, but analysts and economists have tempered their forecasts for the rest of the year. In a survey released on Monday, the National Association for Business Economics found that its panel now expects full-year economic growth of 5.6%, down from a forecast for 6.7% growth in the NABE’s previous survey in May. However, economists raised their economic growth forecast for 2022 to 3.5% from a previous forecast of 2.8%.

Consumer spending has been the main driver of the economic recovery and it has been partly held back by the increase in COVID-19 cases due to the highly contagious delta variant. Investors will get a glimpse of how this could continue to play out on Tuesday when the Conference Board releases its Consumer Confidence Index for September.

Wall Street has faced an otherwise quiet period for corporate reporting as companies prepare to release their latest quarterly results in the coming weeks. The next round of corporate statements could give investors a better idea of ​​the real impact of the supply chain and labor disruption on sales and profits.

Microsoft fell 1.7% and Apple fell 1.1% as technology stocks helped push the S&P 500 down. The technology sector, which is disproportionately heavy in the index, fell 1% overall.

Healthcare stocks also weighed on the market. Moderna lost 5% and Abbot Laboratories lost 3.1%.

The benchmark US crude oil price rose 2% and supported gains in energy stocks. Exxon Mobil rose 3%.

Bank stocks reacted to the surge in bond yields. The KBW Bank index rose more than 9% in four days.

The exception on Monday was Wells Fargo, which fell 0.8%. The bank has solved its latest legal headache by agreeing to pay $ 37 million for allegations of overbilling customers using its foreign exchange services.

The bank has been embroiled in numerous scandals over the past few years and still operates under an order from the Federal Reserve that prevents Wells from expanding. Senator Elizabeth Warren of Massachusetts published a letter this month calling for the dissolution of Wells Fargo, citing the bank’s inability to resolve its problems.

European markets edged up while Asian markets were mixed.


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Asian Stocks Extend Losses As China Worries About Darkening Sentiment | Economic news

By YURI KAGEYAMA, AP Business Writer

TOKYO (AP) – Asian stocks fell on Tuesday, Tokyo down 2% as concerns over heavily indebted Chinese real estate developers weighed on sentiment.

On Monday, US stocks posted their biggest drop since May, with the highly technical Nasdaq composite slumping 2.2%.

Markets were closed Tuesday in Taiwan, Shanghai and South Korea.

In Hong Kong, the Hang Seng fell 0.5% to 23,971.73 as sales from real estate developers slowed.

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The Nikkei 225 lost 601.48 points to 29,898.57. The Australian S&P ASX 200 slipped 0.1% to 7,244.80.

Analysts said fears that the damage caused by a real estate crisis in China would spill over into the world were based on memories of past financial crises such as the bursting of the Japanese economic “bubble” or the crisis. subprime mortgages in 2008.

In Japan, this disaster is called the Lehman Crisis for the collapse of Lehman Brothers in 2008 which made the situation worse.

“The whisper is that this could be China’s ‘Lehman moment’. Even with the Chinese markets closing until Wednesday, we are seeing massive sales around the world, ”RaboResearch said.

The S&P 500 fell 1.7% on Monday to 4,357.73, its biggest drop since May. The S&P 500 was emerging from two weeks of losses and is on track for its first monthly decline since January.

The Dow Jones Industrial Average fell 1.8% to 33,970.47. The Nasdaq lost 2.2% to 14,713.90. The Russell 2000 fell 2.4% to 2,182.20.

Tech companies have led the market as a whole to the downside. Apple fell 2.1% and chipmaker Nvidia fell 3.6%.

Airlines were among the few bright spots. American Airlines rose 3% to dominate all S&P 500 winners. Delta Air Lines rose 1.7% and United Airlines added 1.6%.

“What has happened here is that the list of risks has finally become too long to ignore,” said Michael Arone, chief investment strategist at State Street Global Advisors. “There is just a lot of uncertainty at a difficult seasonal time for the markets.”

Concerns about Chinese real estate developers and debt have recently focused on Evergrande, one of China’s largest real estate developers, which appears to be unable to repay its debts.

These real estate companies have been major engines of China’s economy, which is the second largest in the world.

If they fail to repay their debts, the heavy losses suffered by investors who hold their bonds would raise concerns about their financial strength. These bondholders could also be forced to sell other independent investments to raise funds, which could hurt prices in seemingly independent markets.

It’s a product of how global markets have become tightly connected, and it’s a concept the financial world calls “contagion.”

Many analysts say they expect the Chinese government to prevent such a scenario, and that it doesn’t sound like a Lehman-type moment. Still, any hint of uncertainty may be enough to upend Wall Street after the S&P 500 has climbed almost uninterruptedly since October, leaving stocks looking expensive and with less margin for error.

In addition to these concerns, investors are watching to see if the Federal Reserve could ease off on its support for the economy. And heavy government spending to counter the impact of the pandemic has increased the likelihood that Congress will opt for a destructive chicken game before allowing the US Treasury to borrow more money.

The Fed is due to release its latest update on economic policy and interest rates on Wednesday.

In energy trading, benchmark US crude rose 61 cents to $ 70.90 a barrel. Brent crude, the international standard, added 57 cents to $ 74.49 a barrel.

In currency trading, the US dollar added 10 cents to 109.49 Japanese yen. The euro cost $ 1.1740, compared to $ 1.1726.

AP Business Writers Damian J. Troise, Stan Choe and Alex Veiga contributed.

Copyright 2021 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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Should we prepare for a real estate crash in 2021?

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Will there be a real estate crash in 2021? A majority of experts do not think so.

“People say we’re in a real estate bubble, but I don’t think the term real estate bubble is the right description, ”said Tabitha Mazzara, director of operations at mortgage lender MBanc. “A bubble is something that will burst. I see it as a phase. The market is cyclical, and there may be a slight fix, but it won’t be as bad as what we’ve seen In 2008. What is different today than what we saw in 2008 is that the people who are eligible for loans are actually qualified. They are solvent. Were in the situation we are in now because of simple supply and demand.

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Erik Wright of New Horizon Homebuyers has a similar opinion. “Personally, I think the factors influencing our current market are very different from those in 2008,” he said. “I expect the market to start to cool, but this will be more of a plateau than a crash. However, I’m still looking for how I can be prepared in case something serious. would happen and we were experiencing a real estate crash. “

So what should you do if you are planning to move into today’s housing market? What is the answer?

“Trying to prepare for a possible real estate crash is a bit like trying to prepare for a possible house fire, ”said Clay Risher, investment professional and columnist for Nareit, a trade publication for commercial, residential and mortgage real estate investment trusts. “All you can do is tone down risk as much as possible and hope for the best.

Whether you’re looking to stay put, sell, buy (or sell and buy), here are tips from seasoned industry experts to help you avoid the negative effects of a possible real estate crash in the future.

Other options: Buying a Home Is Crazy Right Now – Consider Renting In These 10 Cities To Save Money

Advice for homeowners not looking to sell

If you’re not looking to sell your home, you might be wondering if you should consider refinancing your home to save money over the life of your mortgage. Here’s what industry experts are saying.

“If you already own a house and you don’t plan to sell, you should still refinance now for insanely low rates, allowing you to sit back tight and withstand any storm that hits the market, ”said Dawn Pfaff, president of My State MLS, a national MLS and referral network.

Peter Murray, owner of Murray Steel Buildings, a residential and commercial construction company, supports Pfaff’s opinion. “Even if you bought your house in the years, you should spend time looking at mortgage refinancing rates. The last 12 months have shown mortgage financing rates that are lower than they have ever been. Depending on your financial situation, you may be able to refinance at a rate of around 2.5% -3.5% which could save you tens of thousands of dollars if not more in a 30 year mortgage. This doesn’t hurt to shop around for refinancing quotes – I would recommend looking at least three different providers and comparing prices.

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Tips for homeowners considering selling

Maybe your home has temporarily increased in value due to the current market and you are tempted to sell it now to reap the benefits that will not be available forever. Here’s what the experts are saying.

“If you are planning to sell in the next few years, now is the time; the market is hot, interest rates are low and you will get the best deal for your home, ”Pfaff said.

However, Omer Reiner, licensed real estate agent and president of Florida Cash HomeBuyers, LLC, cautions against Pfaff’s advice:

“If you are a homeowner who is considering selling his property at take advantage of high selling prices, remember that selling high too goes hand in hand with a high buy, ”Reiner said. “It’s better to secure your next life situation before you put your house on the market to avoid getting stuck.

One way to sell your home without having to buy another right away is to rent until the market calms down. In the meantime, consult with a financial advisor and tax professional to find out how best to manage the profits you make from the sale of your home.

Housing Market: 50 Housing Markets Going Wrong

Advice for future home buyers

If you are considering buying a home, Murray recommends avoiding overpaying if possible. “It goes without saying that the accommodation the market is currently extremely competitive, with many homes for sale receive 10 to 25 cash offers, ”he said. “It usually means that you will pay too much in order to remain competitive. If you look at your house dreams, maybe it’s worth paying too much to get your offer accepted, but if it’s not your forever home, paying too much be immediately in the equity hole once the market has finally equalizes.

Eric Jeanette, owner of Dream Home Financing and FHA Lenders has a similar point of view:

“If you are a home buyer, consider waiting to buy,” he said. “Rent for a year and watch the market if you want to buy a house only to see its value drop in a market correction. However, if you are buying a home that you plan to live in for the next 20 years, today’s purchase price really shouldn’t be a concern. Just buy the house you prefer to live in today.

Good to know: States with the highest property taxes

Overbought is risky, and one way to avoid overbought is to follow Pfaff’s advice. She believes that you should create a strict home-buying budget before doing your home shopping and stick to it to avoid financial exhaustion.

While this could mean that you won’t end up buying a home just yet, you still have other options, such as refinancing, leasing, or just staying in your current living situation until the market. stabilizes.

More from GOBankingTaux

Last updated: August 4, 2021

This article originally appeared on GOBankingRates.com: Should You Prepare for a Housing Market Slump in 2021?


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Strong Jobs Report Sends Most Stocks, Bond Yields Higher | News from USA®

By STAN CHOE, DAMIAN J. TROISE and ALEX VEIGA, AP Business Editors

Treasury yields rise on Friday and stock indexes hold close to their all-time highs on Wall Street after a report showed the US labor market is improving broadly.

The S&P 500 rose 0.2%, a day after hitting a new all-time high. The Dow Jones Industrial Average was up 152 points, or 0.4%, at 35,218 at 2:22 p.m. EST, and the Nasdaq composite was down 0.5%.

Every major clue is on track for a weekly gain after slipping last week.

One of the most marked actions has occurred in the bond market, where Treasury yields tend to move with expectations for the economy and inflation. The 10-year Treasury yield climbed to 1.29% from 1.21% Thursday night, recouping all the losses it suffered over the past week.

Political cartoons

Yields surged as economists said Friday’s encouraging jobs report would give the Federal Reserve another boost to cut back on its bond buying program, which tries to boost the economy by maintaining low long-term rates. Economists believe that an announcement by the Fed on a possible slowdown in purchases could come as soon as the end of the month.

Friday’s jobs report showed hiring was stronger than economists had expected, with employers adding 943,000 workers to their payrolls. Average wages also jumped 4% in July from a year earlier, more than economists had expected.

Most stocks on Wall Street rose on the report, with companies with earnings most closely tied to a strong economy leading the way. S&P 500 financials rose 2.1% and materials companies rose 1.4%.

“Now the growth appears to be on pretty solid ground,” said Sameer Samana, senior global markets strategist at the Wells Fargo Investment Institute.

The strong jobs report and expectations of a labor market recovery could prompt investors to look to companies that are ready to take advantage of higher exits and spending, including airlines, retailers, restaurants and other businesses providing in-person services, Samana said.

Better-than-expected economic data has gained momentum in tech stocks, which have been among Wall Street’s biggest winners since the pandemic.

They were the big beneficiaries of the ultra-low interest rates that the Federal Reserve introduced. When bonds earn little interest, investors are willing to pay higher prices for other types of investments, especially stocks of companies that are expected to grow earnings in the distant future.

A rise in interest rates could undermine these stocks, or at least add a headwind that has been largely absent for over a year. A slowdown in bond purchases by the Fed would be the first step towards raising short-term interest rates from their all-time low of near zero.

This is why the Nasdaq struggled more than the other indices on Friday. This is also why the benchmark S&P 500 was only making apathetic movements, even though three out of five stocks within the index were up.

Apple, Microsoft, Nvidia and other tech stocks account for 28% of the S&P 500 in market value, more than double the weight of any of the 10 other sectors that make up the index. That doesn’t even include some big tech-focused companies like Amazon and Tesla.

These five companies were the biggest weightings in the S&P 500.

The S&P 500’s biggest gain came from Corteva, an agricultural company spin-off from DowDuPont. It jumped 8.1% after reporting higher revenues and profits for the last quarter than Wall Street expected.

This has been the norm for this earnings season. Almost 90% of S&P 500 companies told investors how much they earned in the spring, and their profits were about double what they were a year ago.

AP Business Writer Joe McDonald contributed.

Copyright 2021 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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Who wins the stock market standoff?

July 23, 2021

6 minutes to read

This story originally appeared on StockNews

Last week we saw some signs that the market may be ready to go down. Between last Wednesday and Monday’s low, the S&P 500 (SPY) was down 3.5%. Over the past two days, we’ve bounced back and made up for most of those losses. As noted in the previous comments, there is a tussle between the various bullish and bearish forces in the market. On the bearish side, we have a market with weak breadth, concerns about the Delta variant and signs that growth may have peaked. On the bullish side, we have low rates, an expanding economy and expectations of more earnings growth over the next 12 months. So far, this earnings season is also shaping up to be pretty strong, although some companies have published lower-than-expected outlook. In this week’s commentary, we’ll provide an overview of earnings and update our market outlook. Read below to find out more….

(Please enjoy this updated version of my weekly POWR Growth newsletter commentary).

Let’s start by looking at an hourly chart of the S&P 500 over the past month. Clearly, the market rebounded strongly from Monday’s lows and recouped about 2/3 of its losses.

During our webinar and previous comments, we discussed how this could come in the form of a patch or another garden variety dip.

Corrections tend to last for weeks, shifting sentiment from bullish to bearish and resulting in pullbacks of 7-15%. On average, we get about one a year. Troughs are quick withdrawals that are furiously bought.

Despite my belief that conditions were ripe for a correction, this price action is inconsistent with this assumption. In view of this development, I believe it is appropriate to gradually increase our risk exposure in our portfolio.

I’m particularly interested in tech opportunities, as the industry has been largely stable over the past six to nine months, as many names have shown impressive earnings growth during that time.

Winning season

We have often talked about the two main drivers of stock prices – earnings and interest rates.

In normal times, these compensate for each other. If profits rise rapidly, the Fed is likely to have a hawkish bias. Conversely, if companies are making less profit, the Fed is likely to ease the pain by cutting rates assuming they are not constrained by high inflation.

We are in a unique moment because they do not compensate for the moment. In fact, the interest rate picture has turned more bullish due to falling long-term yields, Powell’s conciliatory pullback during his congressional testimony, and the market’s belief that peak inflation is. transient.

Based on the few companies that have made statements and analyst expectations for this quarter, earnings growth will continue at an impressive rate.

Analysts expect second quarter profits to be 61.9% higher than last year. Of course, last year’s profits have been affected by the pandemic. Compared to Q2 2019 EPS for Q2 2021 for the S&P 500, it is expected to be 41% higher.

So far, around 20% of S&P 500 companies have reported. Among this group, 37 companies issued negative EPS forecasts, while 66 issued positive EPS forecasts. If this ratio holds, it would be the highest percentage of companies with positive EPS revisions since 2003.

A concern for many investors has been the S&P 500’s high price-to-earnings (P / E) ratio of 35.1, which is the highest level since the dot-com bubble. The bullish argument would be that this high P / E is justified given the pace of earnings growth. Granted, the market’s futures P / E is much more reasonable at 22.1, which is above its long-term average of 18.5 but not as blatant as the trailing P / E.

Here are some more specific topics that I am following this results season:

  • Impact of higher inflation: So far companies have complained about higher inflation, but there has been no impact in terms of margins or outlook. If the margins start to squeeze because of inflation, that would certainly be a negative development.
  • Buyout Announcements: Earlier we talked about the number of tech stocks that have continued to grow earnings even with their stock prices stable.

The combination of lower long-term returns and a cheaper valuation can lead to increased redemptions.

  • Energy / materials equities: On the one hand, these sectors recorded impressive performances. However, this was in line with the appreciation of the underlying commodity.

This means that there was no multiple extension. For example, VALE’s forward P / E is 5.2. One possibility is that the market thinks that the rise in iron ore prices is transient. So far, producers have behaved as if there was no significant increase in capital expenditure.

Lower CAPEX is part of my bullish thesis for the sector. So, until CAPEX goes up, I’m looking for energy and material stocks to use their profits to buy back stocks, as this could act as a catalyst and make them more attractive to investors.

Summary

Writing helps me clarify and organize my thoughts. Sometimes I come up with new achievements. Either I gain or lose conviction in an idea.

The strong market rebound and relentless price action lead me to conclude that the underlying bullish forces are crushing the bearish factors discussed in the past.

The earnings season is historically strong. The interest rate situation improved for equities with the fall in long rates and inflation expectations.

The next question is whether it will be a thinner lead like the one we’ve had in recent weeks or a wider rally like we’ve had for much of 2020 and beyond. early this year.

Growth stocks have underperformed since mid-February. However, that is changing as I have noticed that many growth stocks have actually hit higher lows than other stocks and sectors. This change in behavior makes me eager to add some high quality growth names.


SPY shares rose $ 1.85 (+ 0.42%) in pre-trade on Friday. Year-to-date, SPY has gained 17.77%, compared to a% increase in the benchmark S&P 500 over the same period.


About the Author: Jaimini Desai

Jaimini Desai has been a financial writer and journalist for almost a decade. Its aim is to help readers identify risks and opportunities in the markets. He is the Chief Growth Strategist for StockNews.com and the publisher of the POWR Growth newsletter. Learn more about Jaimini’s background, as well as links to his most recent articles.

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The post office Who wins the stock market standoff? appeared first on StockNews.com


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Cents of Community: Is It Time to Refinance Your Home Loan?

This monthly column comes from Arlington Community Federal Credit Union as part of their community financial empowerment mission. Credit unions are member-owned, non-profit cooperatives and anyone who lives, works, worship, volunteers, goes to school, or does business in Arlington, Falls Church, Alexandria or the county. of Fairfax is eligible to join ACFCU. *

Your mortgage and home equity products are probably some of your biggest expenses.

With rates low, many people find it a good financial decision to refinance to meet their financial goals. If you’re thinking about refinancing, here are some reasons to contact your financial institution:

  • You are ready to consolidate your mortgage loans: If you got a first mortgage and an equity loan to buy your home, you may be able to refinance the two loans into one and lower your overall monthly payments. Equity loan rates tend to be higher than first mortgage rates, so you can save on the total interest paid over the life of the loan.
  • Cash in rfinance: Use the equity in your home to pay for major expenses like home improvement, college, vacations, or to pay off higher interest credit card debt.
  • Lower rate and lower payments: Refinance at a lower interest rate to reduce monthly payments and the overall amount of interest paid over the life of the loan.
  • Shorten the duration: To build equity faster, reduce the interest paid over the life of the loan. If you’ve owned your home for several years, you can shorten your term and keep roughly the same monthly payment.
  • Change product: Many people refinance from an adjustable rate mortgage (ARM) to a fixed rate product. ARM rates are generally lower and are popular for entering a home for the lowest monthly payment. However, with an ARM loan, your interest rate and the resulting monthly payments fluctuate throughout the life of the loan. Many people choose to refinance a fixed rate mortgage so they don’t have to worry about changing interest rates and payments.

If you are ready to explore refinancing, contact a financial institution. The ACFCU real estate team is here to listen to you and advise you on your best options.

* Equal Housing Loan. Membership eligibility conditions apply. Federal insurance by NCUA.

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How much does a kitchen renovation cost?

Other kitchen renovation costs

In addition to all of the above costs, you’ll also have professional installation fees (around $ 3,900 or 17% of budget, on average) and design fees (around 4% of average budget or $ 920). If you do any work on the doors or windows, it usually comes down to around $ 920.

Your fees will also vary depending on the location of your property and local market prices. According to HomeAdvisor, kitchen renovations are the most expensive in the following cities:

  1. San José, California.
  2. Los Angeles, California.
  3. San Francisco, California.
  4. San Diego, California.
  5. Las Vegas, Nevada.

Ways to cut the costs of your kitchen remodeling project

Choosing low cost, high ROI projects and materials is the best way to get the most out of your kitchen remodeling budget. But there are also other ways.

On cabinets, you can choose to simply repaint rather than refinish or replace. A nice coat of white or gray is a good trendy choice. Adding updated hardware can also give the cabinets a new look for a low price.

Here are some other ways to save money:

  • Consider a self-adhesive tile backsplash: These cost a lot less than traditional tile options and are also easy to install.
  • Discover the stone, granite and marble supply yards: They will often have leftovers from larger projects that you can buy for less.
  • Choose open shelves: You can avoid cabinet costs altogether by going for the very popular open shelving look. You can even use reclaimed or reclaimed wood for the shelves to further reduce costs.
  • Avoid over-rearranging: Avoid smashing walls, moving pipes and wiring, and just moving things generally if you really want to stick to your budget. Focus on cropping the room, without transforming it completely.
  • Minimize permit requirements: Permits can be expensive, especially if you need them for every small project you undertake. Take the time to study the local building code and consider permit requirements when making your renovation plans.

You should also research your home improvement contractor and materials, and use in-store professionals for design and consulting needs. Hiring a professional kitchen designer can cost you anywhere from $ 100 to $ 200 an hour – and you can bet your design will take more than a few hours – especially when you consider the back and forth travel you’ll need.

How to finance a kitchen renovation?

If you don’t have the cash to finance your kitchen remodeling out of pocket, there are plenty of financing options to choose from. On the one hand, you can leverage your home equity using a home equity loan, home equity line of credit (HELOC), or cash refinance loan. If possible, these should be your best choices for financing, as they usually come with lower interest rates than the other options available. You can even leverage the equity you own in another investment property, if needed.

A personal loan or credit card is also a possibility, although you will pay more interest to withdraw it. If you go with a credit card, consider using a cashback card – or at least one that gives you discounts at home improvement stores. This could help you reduce your renovation costs even further. If you choose a personal loan, just be sure to shop around, as rates and terms vary widely from lender to lender.

A quick note here: not all of these financial options will be available to everyone. Your exact financing and loan choices will depend on your credit score, debts and home equity.

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Latest offers from SBI, Bank of Baroda, HDFC, ICICI Bank

Owning the home of your dreams could soon become a reality. India’s major lenders – State Bank of India (SBI), Kotak Mahindra Bank and Axis Bank, Bank of Baroda – recently cut mortgage interest rates to boost demand during the holiday season. In addition to the historically low interest rates, there are tons of offers including discounts on processing fees or special benefits for women buyers to attract home buyers.

“Interest rates on home loans are at their lowest level in 15 years. Coupled with the lowest house prices and additional discounts and offers from developers, there are very real savings to be made on the investment. costliest in life, ”said Santhosh Kumar, vice president – ANAROCK Property Consultants.

Take a look at the mortgage interest rates offered by the different banks:

National Bank of India: State Bank of India, India’s largest lender, now offers interest rates from 6.90% for a home loan up to ??30 lakh and 7% for above ??30 lakh. Borrowers will get an interest concession of 25 basis points on a mortgage greater than ??75 lakh, based on their CIBIL score, the lender said.

“As an extension of its recently announced festive offers, the SBI is offering a concession based on the credit rating of up to 20bp, previously raised by 10bp, for a mortgage greater than ??30 lakhs and less ??2 crore across India, ”the lender said. The same concession would also be applicable for a loan amount of up to ??3 crore in eight metropolitan cities. An additional concession of 5 basis points for all home loans will be granted if applied through YONO, he added. A 5 basis point interest concession will be granted to female borrowers, the bank added.

Kotak Mahindra Bank: Customers can now avail home loans starting at 6.9% per annum this holiday season at Kotak Mahindra Bank. If borrowers from another bank transfer the loan account to Kotak Mahindra Bank, they will be able to save up to ??20 lakh for the transfer of the balance, the bank said. In addition, female applicants can obtain special rates on all loan products.

Bank of Baroda: The state-owned bank on Saturday announced a 15 basis point cut in its mortgage rate indexed to home loans. Mortgage rates at the Bank of Baroda will start at 6.85%, from Sunday.

Union Bank of India: The lender said it reduced its interest rate by 10 basis points for home loans above ??30 lakh. In addition, female borrowers will benefit from an additional reduction of 5 basis points in the interest rate on top of this reduction for such loans. Home loans to Union Bank will start from a 7% interest rate. There will be no processing fees on home loans until Dec. 31, the lender said.

Axis Bank also offers home loans starting at 6.9% per annum. Customers can benefit from home loans starting at 6.9% per annum from HDFC bank. The private lender charges 0.5% of the loan amount as a processing fee. However, the fees are capped at a maximum of ??3000. ICICI Bank offers home loans at 6.95%, up to 7.95%.

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7 people on what Biden’s student debt cancellation would mean to them

Three days after the call for the 2020 presidential race for Joe Biden, Democrats are already discussing the possibility of canceling or reducing student loan debt. Senatorial Minority Leader Chuck Schumer reiterated his support for a proposal to write off up to $ 50,000 in student debt in a recent interview, urging Biden to make the issue a priority in his first 100 days as as president.

Biden pledged to write off $ 10,000 in student debt as part of a coronavirus relief effort during his campaign, and has advocated for debt cancellation for public college or college students and historically black universities that earn up to $ 125,000. This decisive action seems justified, given that our national student loan debt currently stands at over $ 1.5 trillion (for context, that’s almost 20 times what the United States spends. each year for primary and secondary education).

As the student debt crisis continues to hamper future plans and the daily lives of millions of Americans, Vogue spoke to seven young people about how different levels of student debt relief would have a big impact on their lives, and what those lives could look like without the looming threat of bad loans hanging over them.

Alicia, 23: At this point, I will pay off my student loan debt until about age 45, but I accepted it. Everyone is in student loan debt and the whole process is predatory, so why should I feel bad about paying the minimum? I just don’t see the point in scrambling to pay. At this rate, I’ll never be able to buy a house anyway, so what’s the point of having good credit? If I had no loans to repay, I would travel, “stimulate the economy” and live in a nicer apartment. [laughs].

Cassie, 27: Any debt relief that would be meaningful to me would have to start at $ 30,000 and include private debt, with the highest interest rate, and without any income-based repayment options. Programs that only target federal debt leave too many people out and ignore that what is often so overwhelming about student debt is interest rates combined with monthly payment amounts. Private loan companies will never help you without recording interest. A major reduction or elimination of my private student loans (and my federal loans as well, if that was ever on the table) would mean life relief from paycheck to paycheck. That, in turn, would put all kinds of things on the table for my partner and I like having a kid, pursuing long term creative and professional goals, not panicking every time the car needs a little bit. work, and, most importantly, being able to share more wealth and resources in our communities.

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Senators call for help for student loan borrowers excluded from coronavirus relief bill

In the latest coronavirus relief funding package, known as the CARES Act or Phase Three, Congress gave student loan borrowers a break, but sadly, many were left behind. Now a group of senators are trying to help.

When Congress passed phase three of the coronavirus relief program last month, it suspended federal student loan payments, without interest, until October. The Department of Education made the suspension retroactive to March 13e, effectively providing relief to federal student loan borrowers for 7 months. Borrowers who want to make payments can do so and pay off their balance faster without interest. However, millions of borrowers will not receive these benefits for their loans.

This is because the CARES Act only applies to student loans held by the federal government. Many advocates and experts were shocked that the CARES Act excluded borrowers from the old banking system, known as the Federal Family Education Loan Program (FFEL). While some of these loans have been purchased by the Department of Education, most of them are held by commercial lenders or guarantee agencies. According to data from the Department of Education, approximately 7.2 million borrowers have FFEL loans not held by the federal government, totaling nearly $ 170 billion in debt.

The CARES Act relief also does not apply to private student loans. While it was less shocking that Congress chose not to impose the same rules on private lenders, there are millions of student loan borrowers with private loans. According to an analysis by the Institute for College Access and Success (TICAS), 1.1 million undergraduates borrowed private loans in the 2015-2016 academic year alone. And that’s without counting the many borrowers who have taken out private student loans for graduate studies. These loans are already less generous than federal student loans. They may have higher interest rates and are not eligible for federal benefits, such as income-tested repayment or the Public Service Loan forgiveness program (PSLF).

Today, Senator Elizabeth Warren (D-MA), Senator Sherrod Brown (D-OH) and 10 other Democratic senators sent a series of letters to private student loan companies asking for help for these borrowers. “For private student loan borrowers, these economic disruptions will be particularly devastating due to the lack of essential protections, forgiveness programs and repayment options available to federal student loan borrowers,” the senators wrote.

Senators had five requests for these lenders. They demanded that borrowers be allowed to suspend payments without fees or consequences, such as accrued interest, and that the suspension be without consequences for co-signers. Lawmakers urged businesses to end involuntary collections, pay off debt of distressed borrowers, and expand affordable repayment options and loan modification.

According to reports, some private lenders have offered relief to borrowers, at least on an individual basis. However, it is not clear how widespread this relief is and whether it has consequences, such as accrued interest, fees, or negative credit reports.

Warren pushed the Ministry of Education to make payments on behalf of borrowers under the CARES Act, providing a minimum of $ 10,000 debt cancellation, and sees it as an urgent problem.

We need to do all we can during the coronavirus crisis to help people stay afloat financially, get basic necessities and help keep our economy running, ”Senator Warren said in a statement at Forbes. “I’m fighting to cancel student loan debt and get immediate relief for borrowers, but in the meantime lenders should follow the government’s lead and give people with private student loans urgent relief, including suspension.” payments without penalty. ”

Congress is already talking about a Phase Four package and it is likely that student borrowers will remain a part of that conversation. At a minimum, it looks like Congress could provide relief to borrowers on federal student loans held by commercial lenders and guarantee agencies. Other advocates will likely push for more, but many consider it reasonable that all federal student loan borrowers see at least the same relief.

Comprehensive coverage and live updates on the coronavirus

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3 Reasons Why You Shouldn’t Borrow Student Loans Ranger student loan

If you’re preparing to apply to college and don’t have the funds to pay for your full education, you might think that taking out student loans is a necessary evil.

Class of 2017 college graduates who took out student loans borrowed nearly $ 30,000 on average, according to data reported by schools to US News in an annual survey. Total student debt in the United States has now reached $ 1.46 trillion, and that number continues to grow.

But luckily, you don’t have to be a part of this statistic, as there are plenty of alternatives to borrowing money. Here are three reasons why taking out student loans to pay for your education is a bad idea – and what you can do instead.

You will have to pay interest. One of the worst things about student loans is the fact that you’ll always be paying more than what you originally borrowed, thanks to interest. According to a 2017 New America study, the average interest rate on all student loans is 5.8%, but that can vary depending on the type of loan you take out.

With private student loans, interest can vary depending on your credit rating or that of your co-signer and other factors. Federal student loans, on the other hand, have fixed interest rates set by the government. The US Department of Education adjusts interest rates on new federal direct loans annually; the new rates come into effect every July 1 and are fixed for the term of the loan.

While federal student loan interest rates will drop soon, keep in mind that since they fluctuate every year for new loans, it’s not something you have any control over. And while you should exhaust all available federal loans, which come with more flexible repayment options, before considering private loans, remember that you will always end up paying more than you originally borrowed. .

Delay in repaying student loans can lead to defaults and defaults. After you graduate from college, you might find yourself living on a modest income. If you have student loan debt on top of that, it might be a bit difficult to make those monthly payments.

Unfortunately, if you don’t make your payment on time, then your loan becomes delinquent. There is usually a 15-day grace period before borrowers face late fees.

If your loan is more than 90 days past due, your loan officer will report it to the credit bureaus and your credit score will go down.

If the loan is still in arrears after 270 days, then it is in default.

Once your loan is in default, the consequences are many, including the loss of eligibility for additional federal student assistance. Your salary will be garnished, which means your employer may be required to withhold part of your salary and send it to the loan holder to repay the loan. Your lender could sue you. Plus, it can take years for your credit rating to be restored.

Student loans can hurt your debt ratio. Your debt-to-income ratio is, in appearance, the percentage of debt you owe over your income. So the more your income is spent on debt repayment, the higher your debt-to-income ratio will be.

Ideally, this ratio should be less than 36%. If it’s much higher, it could affect your ability to get another loan later. For example, when applying for a home loan, the debt-to-income ratio is one of the main factors that determine eligibility.

So it’s probably not surprising that because of student debt, many recent graduates have ended up delaying important life decisions, like buying a house or a car, getting married, or saving for retirement.

But believe it or not, you don’t have to go into debt to go to college. Here are some alternatives you might want to consider before taking out a student loan.

Apply for a scholarship or grant. The government provides grants based on financial need. And normally that money is yours, which means you don’t have to worry about paying it back like you would with a student loan.

Like a grant, a scholarship does not have to be repaid either. But unlike a grant, eligibility for a scholarship is often based on academic merit rather than financial need. Therefore, if your GPA drops, you could lose your scholarship.

You can get a scholarship through the school you are applying to or through another organization, such as a private company, individual, non-profit organization, religious group, or social organization.

Find out about crowdfunding. With crowdfunding, you can ask family members, friends, parents’ friends, and others to contribute to your college fund.

First decide how much money you want to raise. You can use a crowdfunding platform such as GoFundMe or Indiegogo. Set up a campaign with an honest story about why you need funds. Share your campaign on social media and with your friends and family. If you can get input from a small group of people, it could mean cutting textbook costs or getting help with tuition fees, for example.

Work while you study. Through the federal work-study program, universities offer part-time jobs to students in financial need. Keep in mind, however, that even if you are granted a work-study program, you are not guaranteed a position and you may still have to apply and find a job on your own.

Student loan debt is not a burden you want to have on your shoulders after you graduate. If you have to take out a student loan, at least try to make sure the loan doesn’t exceed your annual salary. So if you expect to make $ 40,000 out of college, depending on your specialty, try to make sure your student loans are $ 40,000 or less.

Do what you can to minimize your student loan debt, and in the future, you’ll be less stressed and be able to spend more money on the things you choose.

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Income Based Repayment Plans Can Help After Student Loan Forbearance

  • Federal student loan payments have been suspended and interest rates set at 0% since March. But, except new legislation, payments and interest will resume after December 31, 2020.
  • If you don’t know how you’ll pay off your loans in January, an income-based repayment plan could help you limit your student loan fees to a percentage of your income and remove balances after 20 or 25 years.
  • To apply, you will need to decide which income-based repayment plan is right for you and submit an application through the Office of Federal Student Aid website.
  • It is also worth noting the disadvantages. Financial planners say these plans can increase balances due to interest and pay you a hefty income tax payment on any canceled balance in the future.
  • Sign up for the Personal Finance Insider email newsletter here »

Federal student loans have been on the minds of many borrowers since March, when payments were suspended and interest rates were set at 0% by the CARES Act. But, these provisions will expire soon as the New Year approaches.

While student loan repayments are expected to resume, the pandemic – and its economic effects – are far from over. Data from the Bureau of Labor Statistics estimates that the unemployment rate this month is 6.9%. If you’ve lost income and are worried about how you’ll make your payments, an income-based repayment plan might be right for you.

An income-based repayment plan could reduce or eliminate your payment

The Income-Based Repayment Plan program is available to federal student loan borrowers whose payments are high relative to their income. While there are several types of income-based repayment plans, they all work in two ways: reducing your payments to a percentage of your income, and eliminating any remaining debt after 20 or 25 years of payments.

“I have seen for some time that student loan balances are so high relative to salaries that nine times out of 10, [an income-driven repayment plan] is a given to most people, ”says Illumint financial planner Kevin Mahoney.

Most plans calculate payments as 10% to 20% of your monthly discretionary income, or the amount left over each month after bills and essentials. However, the payments could be as low as $ 0, depending on your family’s size and income. Income-based repayment is available until your loans are paid off and could provide lasting benefits.

Each plan has a different set of requirements and rules, and it’s a good idea to familiarize yourself with the requirements and eligibility of each plan before you apply. Once you know which plan is best for you, the application is available online through the Office of Federal Student Aid.

Income-based repayment plans have some drawbacks

An income-based repayment plan can help make loans more affordable for some, but not for everyone.

One of the most notable drawbacks of income-driven repayment plans is that they have a long-term cost. Canceled student loans are treated as income and will be reported and taxed as such in the year they are canceled. For some people with high student loan balances, it is important to consider how it will affect you in the future, as you will face what is often referred to as a “tax bomb”.

Financial planners note that income-oriented plans can also increase your total loan balance, as they are now extended to a 20- or 25-year loan. “If people have relatively high balances and decide to go for an income-driven plan, they probably aren’t paying enough on a monthly basis to meet all of the interest,” Mahoney explains. “During this long period of time, the balance may actually increase.”

This is not only in addition to the amount you will have to pay in contingent income tax after surrender, but it can also become part of the principal (the part of the loan that interest is calculated on) if you change plans to the day. ‘to come up.

And this growing balance might not make sense to you if you have a well-paying degree. Financial planner John Bovard of Incline Wealth Advisors in Cincinnati, Ohio, gives the example of a law school graduate he worked with.

“She just assumed it was going to be forgiven [with income-driven repayment]”he said.” Instead of having a 10-year student loan, she now has a 25-year student loan. She was actually paying thousands of dollars in interest more than if she had just kept her original 10-year loan, ”he says.

Although they have drawbacks, they can be useful for those with lower incomes and relatively high student loan repayments. Especially in times of uncertainty and widespread unemployment, an income-focused plan can help you regain control of your monthly budget.

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Guess & Co. Corporation Expands Covid-19 Solutions to

MIAMI, Nov 05, 2020 (GLOBE NEWSWIRE) – As many small businesses continue to struggle with a slower recovery, Guess & Co. Corporation has announced an extension of its Covid-19 solutions to include financing. Guess & Co. Corporation’s Covid-19 financing solutions are ideal for small businesses that generate at least $ 1 million in annual revenue and have been in business for at least 12 months, such as builders, general contractors, sub -treaters, doctor’s offices, dental offices, restaurants, hotels, motels, retailers, manufacturers, salons, transportation services, trucking companies, car dealers, farmers, child care providers, practices lawyers, accounting firms, consulting firms, franchises and many more. Guess & Co. Corporation has established a set of trusted lending partners with the ability to lend over $ 50,000,000 immediately, and as a broker, the company works with these lending partners to immediately obtain financing for its clients. . Loans range from $ 100,000 to $ 2,500,000 for unsecured business financing. The typical loan amount will be the equivalent of 7-10% of a business’s gross annual income. For example, a business generating $ 1,250,000 in annual revenue will generally qualify for an unsecured business loan of $ 125,000. Most loans have terms of 6 to 12 months and require daily or weekly payments. Loans are similar to a business credit card and interest rates can be as high as 6% per month depending on the history of the business. Businesses are licensed even if they have outstanding bank loans. Guess & Co. Corporation has a 99.9% approval rating for its clients. Approvals are generally guaranteed within one business day and loans are funded the day after verification. Customers benefit from a simple, hassle-free process that requires them to submit standard documents such as bank statements and tax returns via email with a two-page request. Unsecured funding can be used for working capital to cover payroll, buy inventory, etc. Unlike the federal government’s Paycheck Protection Program (PPP), the loans provided by the lending partners of Guess & Co. Corporation have no restrictions, the funds can be used for any business purpose.

In addition to unsecured commercial finance, Guess & Co. Corporation offers commercial real estate finance, including refinancing / cashing out owner-occupied commercial properties. Commercial real estate finance loans range from $ 100,000 to $ 40 million. Equipment financing is offered from $ 100,000 to $ 100 million. Accounts receivable funding is available from $ 1 million to $ 10 million. Guess & Co. Corporation also provides specialist financing for high-end diamond dealers and jewelers, ranging from $ 1 million to $ 100 million, which can be provided within days through its lending partners. For clients with art collections, Guess & Co. Corporation will also provide art funding through a trusted lending partner and funding is available up to $ 250 million.

Guess & Co. Corporation provides a “white glove” level service to help clients obtain financing. Senior management oversees a team that works closely with the client to identify the best financing scenario and the client is kept informed. Customers are encouraged to borrow sensibly and responsibly, and the team at Guess & Co. Corporation works with customers to put together a workable repayment plan. Customers are also introduced to other products and services provided by Guess & Co. Corporation which will help them grow their business both in terms of revenue and profitability. “We were tired of reading about businesses that were going bankrupt and we decided to put in place a set of programs to do something and help businesses survive and thrive in these uncertain times,” said Jerry D. Guess, Founder, President and CEO of Guess & Co. Corporation. The company has invested more than $ 250,000 in community outreach efforts to educate businesses on available solutions. More recently, Guess & Co. Corporation has broadcast 60-second radio commercials in select markets across the United States to advertise funding programs available to it through its lending partners. The company has also launched a social media campaign, “No Stimulus, No Problem”. “Our company is trying to let all the businesses know that we are ready to help them, we are really a phone call away and they are a phone call away from having capital when they could really use it. most. Said Michelle Stewart, vice president, president, chief operating officer and chief financial officer of Guess & Co. Corporation. The company’s senior management team also includes Mandy L. Hall, who is Senior Executive Vice President, Chief Executive Officer and Global Managing Director. Ms. Hall is responsible for overseeing client relationships and overseeing the client relations teams who work directly with the company’s clients.

About Guess & Co. Corporation

Guess & Co. Corporation is an emerging global stewardship solutions company with four main business units: energy, healthcare, technology and real estate. The company has more than ten secondary businesses, including commercial loan brokerage, compliance, intelligence, security, commodities, asset management and others. We work in partnership with communities, businesses and governments to improve the well-being of people. Guess & Co. Corporation is a registered contractor with the US government to provide solutions to federal government agencies and members of our company have active top-secret / SCI authorizations. We are based in Miami, Florida with offices in Overland Park, Kansas and Cary, North Carolina. Guess & Co. Corporation was founded in August 2017. The management team of Guess & Co. Corporation has over 50 years of combined experience.

The photos accompanying this announcement are available on:

https://www.globenewswire.com/NewsRoom/AttachmentNg/c8a0e310-7671-4a35-8393-6b4420066ed8

https://www.globenewswire.com/NewsRoom/AttachmentNg/7aab76e9-d0cc-4eec-abb9-befaa94f59a8

https://www.globenewswire.com/NewsRoom/AttachmentNg/02a78cf2-71c9-42f6-9201-c820b762450f

A video accompanying this announcement is available at: https://www.globenewswire.com/NewsRoom/AttachmentNg/42d0d88f-0fec-4755-bf36-949f3720915d


        
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SBA Disaster Loans Available for Linn County Businesses and Storm Damaged People

Low-interest loans are available for businesses, homeowners, and tenants facing storm damage through the US Small Business Administration and the Federal Emergency Response Agency.

Individuals can borrow up to $ 40,000 to replace their personal property and up to $ 200,000 for damage to their home.

For businesses, loans cover up to $ 2 million in damage to property, equipment or inventory. Small businesses and private nonprofits “suffering the negative financial effects of the disaster” can also receive up to $ 2 million for general expenses “until normal operations resume.”

Interest rates vary depending on whether someone has sufficient funds or borrowing capacity elsewhere. An individual without would pay an interest rate of 1.188 percent with no other credit available or 2.375 percent with other credit available.

Businesses would pay 3% interest if credit was not available elsewhere, or 6% if they had other options. Nonprofits pay an interest rate of 2.75% regardless of other credit options.

The deadline for submitting applications is October 19. The application is available on disastreassistance.gov, the FEMA mobile app or by phone at 800-621-3362.

If the loan is not approved, the SBA will often refer people to FEMA’s Other Needs Assistance program.

Comments: (319) 398-8394; john.steppe[email protected]

Governor Kim Reynolds (center) reacts to seeing the damage and reconstruction efforts at Cafe Saint Pio during a visit to small businesses in the Czech village affected by the August 10 echo storm in Cedar Rapids on Tuesday, August 25, 2020. (Andy Abeyta / The Gazette)

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crackdown was vital, but credit unions must expand after coronavirus to fill void

The cost of accessing small personal loans can be extremely high for those who need them the most. Take the UK, where a £ 200 13-week Provident Personal Credit loan costs £ 86 in interest. That’s an equivalent APR of a whopping 1,557.7%.

These offers are available even after the cap on payday loans that the UK introduced five years ago. In the months following the reforms, the Financial Conduct Authority (FCA) reported that the number of loans and the overall amount borrowed fell by 35%. From there the decline continued: there were 5.4 million high cost loans totaling £ 1.3 billion in 2018 with a total repayable amount of £ 2.1 billion; five years earlier there had been 10.3 million loans worth £ 2.5 billion.

Yet it is clear that high cost credit has not completely disappeared and looks set to rise again. Provident, the largest provider of home loans in the UK and Ireland, expects demand to increase when unemployment rises as the UK leave scheme ends. The lender is said to have set aside £ 240million for an increase in defaults.

So what have we learned since the rules changed, and will those who need credit be able to access it in the wake of the pandemic?

To cap or not to cap?

High interest rates are usually justified by the argument that borrowers are more likely to default, having often been turned down elsewhere. Higher rates compensate the lender for a higher risk.

Either way, payday loan companies have gained a reputation for predatory lending, especially after the last financial crisis. UK restrictions set a cap on interest and charges at 0.8% of the principal outstanding per day, and a maximum total cost of 100% of the amount borrowed.

It reflected a global trend. In Germany, for example, the maximum authorized APR is double the market rate as calculated by their financial regulator, [BaFin]. In France, it is 1.33 times the market rate.

The primary intention was to make credit more affordable for vulnerable consumers. This follows clear evidence that most high cost credit clients fall into a low income category, with poor credit history and low financial resilience, which means they may struggle to do well. in the face of financial setbacks.

They often borrow on the basis of convenience and their ability to repay, rather than the cost of the loan. This can lead to financial stress, repeated borrowing and defaults. After all, credit is debt.

High cost credit is tied to low income consumers.
Thin glass

Nonetheless, the debate continues among political experts around the world as to whether caps are the best answer. Proponents say the restrictions have lowered the cost of credit for low-income borrowers, fought over-indebtedness and helped prevent people from being exploited.

Some consumers may no longer have access to credit because suppliers change their business models or exit the market, but many of these people would likely not pass rigorous affordability checks and may already be over-indebted.

Opponents point to the possible unintended consequences. In addition to reduced access to credit, they worry about the potential for more illegal pawn shops and loan companies to introduce fees that circumvent the restrictions.

Influenced by these arguments, Ireland is part of a minority of European countries that favor stronger regulation and supervision rather than caps. For example, high cost warnings in loan advertising became a requirement effective September 1. Although the government is revising its general approach, fears that the restrictions will reduce the supply of credit still seem to be prevailing.

What the evidence says

A 2019 OECD report found that interest rate caps reduced exploitation and over-indebtedness, made short-term loans cheaper, and reduced defaults. However, the OECD cautioned against excluding riskier consumers from formal credit, as they could borrow from lenders in countries with more flexible rules. This happened in the Netherlands, for example.

Likewise, the 2017 FCA review found that UK restrictions had led to cheaper loans and fewer debt problems. And he saw little evidence that consumers were turning to illegal pawn shops. Our own research in 2017 agreed on cheaper loans, but warned that they must be accompanied by measures to make more affordable alternatives available and to help consumers make good credit decisions.

Credit unions are one of the few alternatives, as the FCA has recognized. They aim to build consumers’ financial resilience by lending at affordable rates, encouraging regular savings, and providing education and financial information. This helps to improve the credit records of the borrowers.

There are around 440 credit unions in the UK, with 2 million members and growing. Loans to members topped £ 1.5bn in 2018, surpassing that of high-cost loans.

Currently UK credit unions are allowed to charge up to 42.6% APR, a far cry from the rates allowed for high cost providers. Yet penetration is low relative to the total population, at only around 3.5%. We need to expand the reach of credit unions and enable a greater online presence to support much faster lending decisions.

Fair4All Finance, a government funded organization from dormant accounts, has started helping credit unions build their capacity, but funding is limited and mostly only available in England. An expansion would be valuable.

Woman choosing between different credit cards.
Many people live on endless refinancing.
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Scaling up affordable alternatives has certainly never been more urgent. Provident reports that the number of its customers declined in 2020 after tightening its lending practices, but this could be due to lower consumer spending, as well as increased savings and government support in response. to the COVID-19 pandemic. The picture could be very different a year from now.

Boosting credit unions would also challenge the new generation of digital lenders, who are armed with people’s personal data to entice them to borrow more. This new form of loan will be more prevalent in all socio-economic groups, rather than just a poor person’s problem, and will likely be more difficult to regulate as it will cross international borders. Government support for the pandemic has been essential, but they need to think about the increased demand for loans that is on the way.

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Refinancing an FHA loan to a conventional loan

With interest rates still relatively low, you may be considering refinancing your FHA loan to a conventional loan. This can offer benefits like a lower monthly payment, lower interest overall, and the ability to get rid of FHA mortgage default insurance – but, just because you don’t want to rely on it. a conventional loan that you will qualify for, nor that it’ll make sense in relation to the cost.

Here’s what to consider.

When is the right time to refinance an FHA loan into a conventional loan?

You can refinance an FHA loan to a conventional loan if you meet the minimum requirements for a conventional mortgage, which differ from the FHA requirements. If your credit score has improved to at least 620 since you took out your FHA loan, you may be able to qualify for a conventional loan and one with a more competitive interest rate.

In general, if interest rates have dropped significantly, it makes sense to explore your options, whether it’s refinancing an FHA loan to a conventional loan or keeping your FHA loan and doing an FHA refinance. streamlined.

It’s also important to consider whether the money you save on refinancing would outweigh the closing costs, which can range from 2% to 5% of your new loan balance.

Benefits of refinancing an FHA loan to a conventional loan

One of the main advantages of refinancing an FHA loan to a conventional loan is the ability to eliminate FHA mortgage insurance premiums (MIP).

With a conventional loan, once your balance reaches 80% of your home’s original value, you can cancel private mortgage insurance (PMI). This option does not exist in most cases for FHA loans, so you will continue to pay the premiums unless you refinance to another type of loan.

If you refinance your FHA loan to a conventional loan and still have to pay mortgage insurance due to your level of equity, you may find that the premium now costs more than it cost for your loan. FHA. Refinancing, however, may have reduced your monthly payments enough to make up for it, and the trade-off is that you could eventually cancel out the PMI on the conventional loan.

  • Conventional PMI: 0.58% to 1.85%, based on Urban Institute averages
  • FHA MIP: 0.75% in advance and 0.45% to 1.05% per year

Another benefit of refinancing your FHA loan to a conventional loan is that conventional mortgages allow you to leverage up to 80 percent of your home’s equity through cash refinancing without paying for mortgage insurance. Conventional loans also have higher loan limits, so you can take out a larger amount compared to an FHA loan.

Disadvantages of refinancing from FHA to conventional

In addition to the ability to pay PMI on a conventional loan, refinancing comes with closing costs, which can add up considerably. Before committing to refinancing, do the math to make sure it makes financial sense, both in terms of savings and affordability. Bankrate’s refinance calculator can help.

Alternative FHA loan refinancing

While it is not possible to refinance your FHA loan to a conventional loan, you can still take advantage of lower interest rates by performing an FHA Simplified Refinance. This program offers a faster way to refinance your FHA loan because it eliminates more stringent underwriting, such as the need to check your income and credit or do an appraisal.

To be eligible for FHA Simplified Refinancing, you must meet the following conditions:

  • You have an FHA loan.
  • You’ve made on-time mortgage payments in each of the past six months, and it’s been at least six months since your first payment was due and 210 days since the original loan was closed.
  • Refinancing translates into a “net tangible benefit,” such as lowering your monthly payment or going from a variable rate loan to a fixed rate loan.
  • You are not looking to withdraw money.
  • You can continue to pay for FHA mortgage insurance.

At the end of the line

Even with favorable interest rates, it doesn’t always make sense to refinance an FHA loan to a conventional loan if you don’t qualify, can’t afford closing costs, or both. If you can save money and eliminate mortgage insurance, this strategy might be a good idea. Be sure to carefully consider the pros and cons, estimate your costs, and explore all of your options, including FHA Simplified Refinancing, in order to make the best possible decision for your situation.

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Exclusive: Major US Airlines Consider Government Loans After Grants – Sources

(Reuters) – Several major U.S. airlines are preparing to apply for a $ 25 billion U.S. government loan program this week after winning billions in federal wage subsidies, people familiar with the matter said, as the industry is bracing for a slow recovery from the coronavirus pandemic.

FILE PHOTO: Delta Air Lines passenger jets are parked due to flight cuts made to slow the spread of coronavirus disease (COVID-19), at Birmingham-Shuttlesworth International Airport in Birmingham, Alabama, United States, March 25, 2020. REUTERS / Elijah Nouvelage / File photo

United Airlines Holdings Inc UAL.O, which unlike other major carriers had yet to disclose its allocated payroll relief, said on Wednesday it would receive around $ 3.5 billion in direct subsidies and around $ 1.5 billion loan dollars at low interest rates and issue treasury warrants to buy approximately 4.6 million common stock shares.

While some airlines originally planned to use only the $ 25 billion in federal wage subsidies, there is now a growing realization that the terms of the separate $ 25 billion loan program could be significantly reduced. better than those available in the capital markets, people said.

The Treasury gave its agreement in principle on Tuesday to grant wage aid to airlines but will not release the funds all at once.

He asked airlines to apply by Friday if they want the loan deal to be given priority consideration, according to documents posted on his website, and by April 30 to be assured. If there is money left over, late applicants may receive funds at a later date.

Freight carriers are also facing the same timeline to apply for a $ 4 billion pooled fund.

An airline official told Reuters most airlines had to apply, in part because they would not be required to withdraw the loan until the end of September and because conditions are favorable. Airlines will have to offer collateral such as planes, spare parts and routes in exchange for loans and warrants equivalent to 10% of the loan value.

The expected candidates are added to American Airlines Group Inc. AAL.O, who on Tuesday confirmed plans to apply for a $ 4.75 billion loan before Friday’s deadline for priority review. Alaska Airlines Inc [ALKAIR.UL] also said he would seek $ 1.1 billion in federal loans.

Among other major carriers, Southwest Airlines Co LUV.N will likely apply, while United and Delta Air Lines DAL.N were still considering, people said.

Spirit Airlines Inc SAVE.N is considering applying for the loans, a spokesperson said. The budget carrier said on Tuesday it expected to “agree soon on the terms” of the payroll assistance subsidies.

Airlines shares closed mixed on Wednesday, with American ending up 2.9% and United up 3.1%, while Southwest closed down 5.6% and Delta down 0. 8%.

Large airlines must repay 30% of grant funds provided in the form of 10-year low-interest loans and issue treasury bills equivalent to 10% of the value of the grants.

American, which will issue payday loan warrants for the federal government to buy 13.7 million shares at the closing price of $ 12.51 on April 9, said Wednesday it would also issue warrants. underwriting related to the separate loan of $ 4.75 billion for approximately 38 million shares at the same price as of April 9. The warrants do not have any voting rights, he said.

On the loan application due by April 30, airlines must describe any changes they plan to make to employment levels through the end of the year. Under payroll assistance, airlines are required to retain their workforce until September 30.

Airlines must refrain from paying dividends or repurchasing shares and set limits on executive compensation for up to one year after full loan repayment.

“These are absolutely right things that we have been asked to do and we are certainly not complaining about them,” US chief executive Doug Parker told CNBC on Wednesday.

Reporting by Tracy Rucinski in Chicago and David Shepardson in Washington; Editing by Sonya Hepinstall, Matthew Lewis and Peter Cooney

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How to better manage your personal loans

How to better manage your personal loans

Personal loans make borrowing easier, but it is important to plan for their repayment. (iStock)

Personal loans can be useful to cover a large planned expense, such as a home improvement, or an unforeseen financial emergency that might arise. Navigating the personal loan application process and getting approved is the first step. The second is to create a strategy to pay off what you have borrowed.

Whenever you are considering opening or making any changes to your personal loan, always be sure to do your research. Credible is a great place to start. You can view different personal loan options, compare rates, and more. Click here to learn more about personal loans directly from the experts.

5 tips to help you better manage your personal loans

Here are five tips that can make managing personal loans easier.

  1. Budget for your monthly payments
  2. Keep an eye out for refinancing opportunities
  3. Define your payment schedule
  4. Automate to avoid late payment fees
  5. Beware of prepayment penalties

PERSONAL LOANS: EVERYTHING YOU NEED TO KNOW

1. Budget for your monthly payments

Budgeting can go a long way in the successful management of personal loans. A good time to create a budget is before applying for a personal loan. This way you get an idea of ​​how much you can afford in terms of monthly payments.

With Credible, you can enter your desired loan amount and see if it fits your budget. you will be able view and compare personal loans including interest rates, repayment terms and more based on your credit profile.

HOW TO OBTAIN A PERSONAL LOAN OF $ 100,000

When you already have a personal loan, you can still use budgeting to your advantage. Review your current spending to see how much you have left each month. Then add the monthly payments of your personal loan to this amount.

Yes your monthly loan payments would put you in the red, this is a sign that you will have to cut spending in other areas to stay under budget. If you still have room in your budget, then you can decide whether you want to use that extra money for your loan, send it to savings, or use it to fund other financial goals.

2. Keep an eye out for refinancing opportunities

Refinancing your personal loan might make sense if it gets you a lower interest rate. Lowering your loan rate can save you money on interest and could also lower your monthly payments, which can make budgeting easier.

Taking the time to shop around can help you find the best refinance rates. You can visit Credible to compare loan rate options from several lenders in one place, without affecting your credit score.

Before you refinance, do some basic savings calculations to see how much you could save in interest and how much your new loan payments could be. You can use online personal loan calculator on the internet to estimate your monthly payments.

9 OF THE BEST PERSONAL LOANS IN 2020

3. Define your payment schedule

Some personal lenders may give you a specific due date to make monthly payments. Others may let you choose your loan repayment date.

If you have the option to choose your due date, think about what works best for your budget. If most of your larger bills are due around the first of the month, for example, you might want to schedule your loan payments to be due around the middle of the month.

Being able to choose your due date gives you some flexibility. But if your lender doesn’t offer this, you may have to go back to your budget to figure out how best to allocate your paychecks to cover your payments.

4. Automate to avoid late payment fees

Automating your personal loan payments is convenient and can save you money as well. Putting payments on autopilot means you don’t have to worry about paying on time or triggering late payment fees. You also don’t run the risk of causing damage to your credit score by having late payments on your credit history.

Make monthly personal loan payments automatically can also give another benefit if you are able to get a discount on the interest rate. Some personal loan lenders offer a reduction in the interest rate for signing up for automatic payment. This could make a significant difference in the total interest you pay over the life of the loan.

HOW TO OBTAIN A PERSONAL LOAN DURING CORONAVIRUS

5. Beware of prepayment penalties

If you’ve made a commitment to budgeting, you may be able to prepay your personal loans. Prepaying can save you money in interest over the life of the loan, but it’s important to know if you’ll be penalized for it.

Some personal lenders charge prepayment penalties for prepay loans. This penalty is designed to help the lender offset interest that they will not have to charge. Before paying off your loans for good, read the fine print on your loan documents to see if a prepayment penalty applies.

For more information on personal loans – or if you’re ready to take out another personal loan – visit Credible, which instantly compares personal lenders and rates.

Do’s and don’ts of early repayment of your personal loan

Look carefully for personal loans

If you are considering a personal loan for debt consolidation or any other loan purpose, start with the basics. Compare the loan amounts you could borrow, the interest rates and fees offered by different lenders. Also, consider whether it makes sense to apply for secured loans or unsecured loans, based on your credit history.

Visit an online marketplace like Credible can help you find the right loan option. Once you have done this, you can formulate a plan for managing the personal loans that you decide to take out.

WHAT SHOULD YOU USE A PERSONAL LOAN FOR?

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