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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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Book creator

Idealism, greed, lies and the creation of the first big cryptocurrency craze

Laura Shin is a crypto journalist, host of the unleashed podcast and former editor of Forbes. Below, she shares 5 key insights from her new book, Cryptopians: Idealism, Greed, Lies, and the Creation of the First Big Cryptocurrency Craze. Listen to the audio version – read by Laura herself – in the Next Big Idea app.

1. Power shifts from business people to coders.

My book tells the story of Ethereum, the second largest crypto asset by market cap. The initial group of eight co-founders consisted of programmers and business people. During the first months, tensions rose between developers (or “devs”) and businessmen. In the end, the developers prevailed.

In contrast, when crypto was just a thing, a Coinbase co-founder, Fred Ehrsam, said that when he was a programmer at Goldman Sachs, he was basically considered a computer scientist. Business people stood before him, barking orders with one foot on his desk.

Wall Street was once seen as the center of power, but in recent decades that has shifted to Silicon Valley. And with the rise of crypto, it left Silicon Valley and went global. News reports have reported that we regularly see Silicon Valley executives jump ship to work in crypto.

I have sources who have gone from nothing to billionaires in the space of a few years, in places as diverse and unexpected as the Philippines, India and Brazil. They are just programmers who have learned blockchain coding, so they don’t need to work for a corporation to make a lot of money, nor do they need to be near the Bay Area. They sit in front of their laptop and do everything from home.

2. Power shifts from centralized actors to decentralized organizations.

Bitcoin is notable for reaching a market capitalization of around $1 trillion without a CEO, board, or hiring employees. This is all possible thanks to the incentive design of Bitcoin the activeand Bitcoin the network. People using the bitcoin software enter a contest approximately every 10 minutes to win new bitcoins minted by the software. For them, it looks like a chance to make money, while the Bitcoin network benefits from increased security as more computers on the network means it is more difficult for a single entity to take control of Bitcoin. This approach is more original than hiring an IT department and offering them salaries and stock options.

“These DAOs, or small democracies, are a far cry from startups or traditional businesses. Decisions are made collectively and loot is shared among all token holders.

Bitcoin was the first example of a decentralized organization (meaning there’s no need for business people to run it), but my book focuses on Ethereum, which is a platform for creating everything type of decentralized application: loan protocols, social clubs, exchange protocols, granting organizations, groups of people trying to buy things like a Wu-Tang Clan album, and more. Ethereum is like an App Store allowing developers to build and upload decentralized apps, all without a CEO, board, or legal contract.

These groups are called CAD, which stands for Decentralized Autonomous Organizations. You can think of them as small democracies. Some people only work for DAOs by submitting proposals to them and then doing the work if a proposal is approved. Many DAOs have their own tokens, called governance tokens, which function as a vote on submitted proposals. DAOs can have thousands of members, or they can be small groups of friends who invest in crypto or NFTs together. These DAOs, or small democracies, are a far cry from startups or traditional businesses. Decisions are made collectively and loot is shared among all token holders.

3. Even in technology, politics and personalities matter.

A popular tool on Ethereum are software called smart contracts. These are automated software that (like chat bots) will spit out various transactions, based on your input. They have often been described as financial vending machines.

It may look like sterile software, impervious to human influence. However, a fundamental tension is that programmers believe they are building what they like to call “trustless technologies,” but time and time again the personalities involved (and their clashes) affect the course of events. Even these so-called machines, which interact with larger markets, are subject to manipulation by actors behind the scenes.

“How people treat others can have a profound impact on the development of so-called trustless systems.”

For example, there was one particular developer who was instrumental in the architecture of Ethereum. He was brilliant, but also arrogant and was quick to point out the mistakes of others. After being kicked out of the Ethereum Foundation, he continued his competitive pursuits by writing blog posts that dissed the foundation’s software. Years later, he raised around $145 million worth of ether for a new project, but due to a flaw in the wallet he and his team designed to store that money, $90 million of those funds were frozen – unusable. Ethereum could did something to try to free up the money, but after his years of sowing ill will among the devs, they weren’t keen on helping him at all.

The crypto and blockchain crowd loves to dream of a world where trusting imperfect humans is not necessary, and financial transactions can be secured with the right code. But how people treat others can have a profound impact on the development of so-called trustless systems.

4. Reputation is worth more than money.

When I published my book, I was able to announce who was behind the biggest ether theft never– an amount of about 11 billion dollars today – due to peculiarities around How? ‘Or’ What the hacker stole the money. He was linked to a venture capital fund called DAO, and there were delays in any withdrawals. This person had ample time and opportunity to return the funds, and prior to the hack, the suspect contacted the creators to report flaws in the decentralized venture capital fund. These are the exact flaws that later made it extremely difficult to fix the hack without simply erasing the existence of the DAO, thus proving its concerns.

If the suspect had instead hacked it, but then come forward and said he would return the money after making his point, then the community would have considered him a hero. Indeed, there are now security researchers who are famous for identifying faulty code and saving the money before it can be hacked. Also, since it’s visible on the blockchain that the money was stolen, he couldn’t do much with it anyway.

“Because it’s visible on the blockchain that the money was stolen, there wasn’t much he could do with it anyway.”

One of the creators of DAO discovered the suspect’s identity, and said it was a shame for him that he hadn’t done anything to rectify the situation: “He really fucked the doggie. Reputation is worth far more than money.

5. Use good judgment with your business partners.

My book starts with the main character, the creator of Ethereum, Vitalik Buterin, who has an idea for a new type of blockchain. He wrote a white paper and emailed it to 13 friends in November 2013, the day bitcoin first broke through the price of $1,000. It was a heady time in bitcoin. Almost overnight, the high price created a number of bitcoin millionaires. When people saw the potential of Ethereum, they realized it could turn them into Ether millionaires too. So the initial group of co-founders and colleagues working on Ethereum were a mix of idealists and opportunists with dollar signs in their eyes.

Over the next few years, Buterin found himself in one crisis after another. He struggled to see ulterior motives, struggling to distinguish between opportunists and good people without selfish intentions. Also, he had trouble telling people no, which led to multiple instances in which he was rejected by those with stronger, more greedy personalities. After years of learning, he finally found a group of true friends who weren’t attached to him because of how he could benefit them. He began to understand how not standing up for himself and his principles could harm others and Ethereum.

While Ethereum managed to make a big impact on the world despite the drama and backstabbing of its early years, Buterin would have saved himself a lot of heartache and stress if he had learned, early on, to fix limits.

To listen to the audio version read by author Laura Shin, download the Next Big Idea app today:

Hear key insights in the next big idea app

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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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Writer market

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.

political cartoons

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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Writer market

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)

PA

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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Book creator

Another mix of “Wordle” applications occurs, but this time the recipient of undue rewards reinforces his goodwill

from speech department

This post was written before today’s news that the NY Times bought Wordle. It will be interesting to see if suddenly “IP issues” start to become more important to the NY Times than they were to the original developer…

Just a week ago we discussed how a man got scammed wordleBrowser Brain style game whose creator insists on being free and non-monetized. In this case, Zach Shakked copied the game with only minor additional features and released it as an app with the same name, wordle, only to find out that the entire internet decided it was a slap in the face and helped get the app pulled from the Apple and Google stores. It was a story about how a bad actor was dealt with without anyone having to go through IP or legal avenues.

Well here we go again with another unaffiliated wordle the app siphons off money from people who think they’re getting the browser game in an app…only this time the recipient of that undue income accrues a ton of goodwill by not being a fool about it.

As spotted by GR+, Josh Wardle’s Wordle has led billions of confused (hello!) gamers to accidentally download a five-year-old app with the same name onto their mobile devices. The result being, the creator of the other Wordle ended up receiving nearly 200,000 downloads within a few days. More than he had received in total in the previous five years. And in turn, generating a whole bunch of ad revenue for him.

Steven Cravotta created this app five years ago as a teenager, almost strictly to practice his coding skills. When he woke up the other day to suddenly find ad revenue coming from the since forgotten app, he didn’t just sit down and start counting all the dollar signs floating in front of his eyes. Instead, he started tweeting how weird it all was and how much he wished the media would do a better job of differentiating between wordle browser game and all wordle mobile app.

If you follow this tweet thread all the way through, you’ll notice a few things. Cravotta spends a lot of time pointing out how bizarre this all is. Then he mentions that he is reaching out to wordle creator Josh Wardle to find out what his favorite charity is so he can donate all that money to the cause of his choice. The two apparently talked and landed on Boost! West Oakland, an organization that empowers young people in Oakland, California through school tutoring. And, while he was at it, he pointed out that his most recent and professional apps are available.

In other words, he acted reasonably and humanely, acknowledging that it was a bunch of confused people accidentally downloading his game. As a result, just when the internet kicked in, what a jerk the wordle a copycat seemed to be, as did he and a bunch of mass media sites reporting on how human and awesome Cravotta is. This drives more people to its current applications.

Sometimes a little public reaction is all you need, rather than worrying about IP.

Thanks for reading this Techdirt post. With so much competing for everyone’s attention these days, we really appreciate your giving us your time. We work hard every day to deliver quality content to our community.

Techdirt is one of the few media that is still truly independent. We don’t have a giant corporation behind us, and we rely heavily on our community to support us, at a time when advertisers are less and less interested in sponsoring small independent sites – especially a site like ours that doesn’t does not want to throw punches in its reporting and analysis.

While other websites have resorted to paywalls, registration requirements and increasingly annoying/intrusive advertisements, we have always kept Techdirt open and accessible to everyone. But to continue to do so, we need your support. We offer our readers a variety of ways to support us, from direct donations to special subscriptions and cool products – and every little bit counts. Thank you.

–The Techdirt team

Filed Under: charity, confusion, human, intellectual property, josh wardle, steven cravatta, wordle

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Writer market

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)

PA

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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Writer market

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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Writer market

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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Reading and writing

Richard Clarida quits Fed early after new transaction questions

Richard H. Clarida, vice chairman of the Federal Reserve, announced Monday that he would resign from his post two weeks earlier than expected. Although he didn’t give a reason, he had come under scrutiny for transactions he made in 2020 as the central bank was on the verge of saving financial markets.

“With my statutory term as governor expiring on January 31, 2022, I am writing to inform you that I intend to resign from the board of directors on January 14, 2022”, wrote Mr. Clarida in a letter to the president. . Biden that the Fed released on Monday.

The New York Times reported last week that Mr Clarida corrected his financial information for 2020 at the end of December. Ethics experts said one of his updated transactions raised questions – he sold an equity fund on February 24 before buying it back on February 27, just before the Fed chairman announced. on February 28 that the central bank was ready to help the markets and the economy.

His first statements had only noted the purchase of the equity fund, which the Fed had described in its name as a planned portfolio rebalancing. But the rapid move out and back of stocks called that explanation into question, some experts said, and the buyout could have put Mr. Clarida in a position to benefit as the Fed reassured markets.

Neither the Fed nor Mr. Clarida provided a new explanation for the transactions, although the Fed’s ethics office noted in the updated record that they always appeared to be in compliance with conflict of interest laws.

Mr Clarida’s updated disclosure garnered widespread media coverage and the attention of lawmakers. Massachusetts Senator Elizabeth Warren called on the Fed on Monday to release more information on the transactions of senior Fed officials in light of the news.

The amended disclosure and the rush of attention came at an inopportune time for Jerome H. Powell, the Fed chairman, who was reappointed to his post by Mr. Biden. He is due to appear Tuesday at a confirmation hearing before the Senate Banking Committee.

Ms Warren sits on the banking committee, so Mr Powell is always pretty sure he is wondering why some Fed officials traded so actively as the markets turned and the Fed staged a huge bailout at the start of the pandemic.

“The whole story of rebalancing, which just collapses over the fact that it sold and then bought,” said Simon Johnson, an economist at the Massachusetts Institute of Technology. “If you’re President Powell, you don’t want your reconfirmation hearing to focus on that. “

Mr Powell and his colleagues have revamped the central bank’s ethical guidelines in recent months – issuing plans in October to revise them and prevent many types of financial activity, including trading in times of turmoil. He can point out that this shows how seriously the Fed has taken the issue.

Mr Clarida’s resignation is the latest development in a months-long trade scandal that has involved senior officials and prompted high-profile departures at the Fed.

Financial information released in late 2021 showed Robert S. Kaplan, the former chairman of the Federal Reserve Bank of Dallas, had made large transactions in individual stocks, while Eric S. Rosengren, the former president of the Boston Fed, had traded real estate securities. These measures prompted an immediate and intense reaction from lawmakers, ethics experts and former Fed employees.

Fed officials actively rescued a wide range of markets in 2020. In March and April, they cut rates to zero, bought mortgage and government bonds en masse, and implemented debt bailouts. businesses and municipalities.

The concern is that continuing to process the affected securities for their own portfolios throughout the year could have given managers the opportunity to benefit from their insider knowledge.

Mr. Kaplan resigned in September, citing the scandal; Mr Rosengren resigned simultaneously, citing health concerns.

Mr. Clarida’s term was to end at the end of this month because his seat as governor was expiring. Bloomberg News first reported on his purchase of equity funds – which was visible before he corrected the disclosure – in October.

Although Mr Clarida did not address the trade issues in his resignation letter, he referred to them indirectly during a speech late last year.

“I have always fulfilled honorably and with integrity of public service obligations,” he said. said in mid-October.

the The Fed’s government watchdog investigating those responsible for transactions made in 2020 and Ms Warren has requested an investigation from the Securities and Exchange Commission. The SEC does not comment on whether such investigations are ongoing.

Mr. Clarida has served as Vice President since 2018, and during that time he has been a close associate of Mr. Powell’s and a valued Second-in-Command. His speeches were closely watched by Wall Street for the political signals they often offered, and he was praised for his skills as a clear and careful communicator.

He also led a campaign to revamp the Fed’s policy-making framework to make it more jobs-oriented and better suited to the challenges of the modern economic age, a hallmark of the Fed’s first term. Mr. Powell.

“I will miss his wise advice and vital ideas,” said Mr. Powell in a statement announcing the early departure of Mr. Clarida.

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Book creator

28 Row, a new app for female academics and influencers


Tumi Adeyoju, 20, graduated in public health from the University of Houston. But when she’s not in class or studying, she runs a fashion, lifestyle and beauty blog – a business that she hopes to turn into a business.

Like many of her generation, Adeyoju dreams of becoming an influencer: a catch-all for anyone who makes money posting about products on social media. There are still some obstacles. First: Ms. Adeyoju has just over 700 Instagram followers. Many influencer marketing platforms, where content creators connect with brands, require a minimum number of thousands of followers to be admitted.

In November, a mutual friend told him about 28 Row, a new app that didn’t have this requirement. All she needed was a .edu email address.

The app is meant to be a place for female students to connect around common interests, and for many of them, the influence of social media is significant. Ms. Adeyoju said in a phone interview that 28 Row “really introduced me to a lot of new faces, a lot of diversity when it comes to influencers and content creators.”

Nowadays, all kinds of resources are devoted to influencing activities – not only sites where creators and brands can negotiate relationships, but also life coaching services and networks focused on pay equity in the industry. ‘industry. What sets 28 Row apart is its user base: the network is specifically aimed at female students.

Cindy Krupp and Janie Karas, the founders of 28 Row, knew from the start that they wanted to focus on the students. In 2018, they recruited 20 college influencers and put them in touch with several brands popular with young women: Elf Cosmetics, H&M and Monday Haircare. The company’s influencer marketing platform has gone live one year later.

“Brands are dying to reach this demographic,” said Ms. Krupp, a public relations veteran, in a Zoom interview. (Ms. Karas started as an assistant at Krupp Group, the communications agency Ms. Krupp founded in 2005.) “It is very laborious to look at them, find them and build the network. And I think a lot of brands want access but don’t have the infrastructure to put together a team to find that network.

Ms Krupp, 48, and Ms Karas, 28, were inspired to create a social app after members of the influencer network requested to be logged in in a group chat.

They talked about everything from ‘The Bachelor’ to ‘What do you wear for the most formal? “” Ms. Krupp said. “We really had this “aha!” Moment it was built to be something different from where we were then.

The app, which became widely available in September, has around 1,500 members. Not all are budding influencers, although many are. Members who are part of the 28 Row influencer network are called “social butterflies”; on the app, each of them has a star next to their username.

Megan Parmelee, 25, who joined the 28 Row influencer network, said what makes it different from other influencer platforms is the opportunity to meet like-minded people.

“It’s a lot of people coming together for a common purpose and with a common goal, and it’s just to bask in this social media arena that is the world of content creation,” Ms. Parmelee said, a graduate student. in the Medical Assistant program at Clarkson University in Potsdam, NY

I joined because I want to grow my network, ”she added,“ and it’s just nice to be able to share what I’ve learned along the way.. “

Christian Hughes, a professor of marketing at the University of Notre Dame who focuses on digital media, said new apps like 28 Row could help users cope with the “trials and tribulations” of life online.

“Influencers are really the subject of constant speculation and observation, of trolls and a lot of negativity,” she said. “And there are a lot of things that indicate social media can harm mental health.” Dr Hughes was referring to documents published by the Wall Street Journal it revealed how well Facebook was aware of Instagram’s negative effects on teenage girls. “I think it will give these women a bit more support,” she said. “At least I hope he can give her a lot more support.”

Ms Karas and Ms Krupp said they are working to ensure that 28 Row fosters an inclusive and positive community.

Female students as a whole, Ms. Karas said, need a safe space away from mainstream social platforms. “They need a safe place to support and uplift each other,” she said.


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Writer market

Asian Stocks Mix as Omicron Concerns Market Optimism | Economic news


By YURI KAGEYAMA, AP Business Writer

TOKYO (AP) – Asian stocks were mixed on Tuesday, as optimism sparked by a Wall Street rally was dampened by concerns about the potential impact of the omicron variant of the coronavirus.

Japan’s benchmark Nikkei 225 jumped nearly 1.0% to 28,960.31 in morning trading. South Korea’s Kospi gained 0.1% to 3,002.72. The Hong Kong Hang Seng fell 0.1% to 23,201.42, while the Shanghai Composite was down 0.2% to 3,610.32. The business was closed in Australia for Boxing Day.

Much of Asia has yet to see an increase in omicron variant infections already occurring in other parts of the world, but experts warn the region is unlikely to be spared.

Japan has yet to see such a wave of new cases. Many areas are teeming with year-end shoppers, and many events are held with spectators, although most people wear masks.

Political cartoons

New daily cases in Japan have totaled around 200 as of late. So far, there have been relatively few COVID-related deaths, with some past days having none. Still, analysts have warned that uncertainties lie ahead.

“The record rallies are a little too optimistic,” said Vishnu Varathan of Mizuho Bank, pointing to a large number of omicron cases in Europe and the United States.

Tech companies led US stocks higher on Monday, extending the recent market rally and pushing the S&P 500 to yet another all-time high.

Wall Street kicked off the last week of a record year for the stock market with mostly muted trading as investors returned from the Christmas holidays and several foreign markets remained closed.

The S&P 500 rose 1.4% to 4,791.19, its fourth consecutive gain. The benchmark index, which capped a week shortened by the holidays with a record Thursday, is on the way to end the year with a gain of 27.6%. It has reached 69 all-time highs so far this year.

The Dow Jones Industrial Average rose 1% to 36,302.38 and the tech-savvy Nasdaq rose 1.4% to 15,871.26.

Major indices posted weekly gains last week as fears faded over the potential impact of the omicron COVID-19 variant. However, much is still unclear about omicron, which is spreading rapidly and causing a return to pandemic restrictions in some locations.

Small business shares also rose. The Russell 2000 Index gained 0.9% to 2,261.46.

Trading is expected to be calm but potentially volatile this week, as the omicron coronavirus variant continues to spread rapidly in the United States and abroad. However, most of the major investors have closed their positions for 2021 and are expected to hold on until next week.

Airlines shares closed lower following the announcement of the pandemic-related cancellations. Delta Air Lines fell 0.8% and United Airlines slipped 0.6%.

Shares of cruise lines also fell. Norwegian Cruise Line slipped 2.6% for one of the S&P 500’s biggest drops. Carnival fell 1.2% and Royal Caribbean fell 1.3%.

Authorities in many countries have doubled their vaccination efforts as omicron outbreaks complicate efforts to avoid further closures while hospitals remain under pressure from delta-variant infections.

In energy trading, benchmark US crude rose 27 cents to $ 75.84 from $ 75.57 a barrel in electronic trading on the New York Mercantile Exchange. He earned $ 1.78 Monday to $ 75.57.

Brent crude, the international standard, rose 27 cents to $ 78.87 a barrel.

In currency trading, the US dollar slipped to $ 114.86 from $ 114.87. The euro cost $ 1.1325, compared to $ 1.1327.

AP business writer 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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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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Asian Stocks Rise After Biden and Xi Hold Video Summit | Economic news


By JOE McDONALD, AP Business Writer

BEIJING (AP) – Asian stock markets rose on Tuesday after President Joe Biden and China’s Xi Jinping held a summit meeting via video link.

Shanghai, Tokyo and Hong Kong, which constitute the bulk of the region’s market value, rose. Seoul and Sydney declined.

Wall Street’s benchmark S&P 500 fell less than 0.1% as houseware makers rose and healthcare stocks fell.

Biden told Xi their goal should be to make sure the competition “does not come into conflict.” The two leaders met amid tensions over trade, technology, human rights, Hong Kong and Taiwan. Xi said he was ready to “build consensus” and said the two sides should improve communication.

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The meeting “will dominate the coming session,” although White House officials have “tempered expectations of any meaningful progress,” ActivTrades’ Anderson Alves said in a report.

The Shanghai Composite Index rose 0.3% to 3,543.46 and the Tokyo Nikkei 225 added less than 0.1% to 29,783.18. The Hang Seng in Hong Kong was up 1% to 25,658.04.

The Kospi in Seoul lost 0.2% to 2,994.40 while the S & P-ASX 200 in Sydney lost 0.8% to 7,413.20.

India’s Sensex index opened 0.3% lower at 60,522.38. New Zealand and Singapore fell while Jakarta and Bangkok advanced.

On Wall Street, the S&P 500 fell to 4,682.80. The Dow Jones Industrial Average fell less than 0.1% to 36,087.45. The Nasdaq lost less than 0.1% to 15,853.85.

Investors no longer focus on the latest corporate earnings towards the economic issues that will determine growth through 2022. This includes supply chain issues and rising inflation.

Investors will be watching for any signs that inflation is hampering business operations or consumer spending. Companies have raised prices to pass on higher material costs. Consumers have taken it in stride, but analysts fear they will start cutting spending.

Investors are also waiting to see if Biden decides to appoint Federal Reserve Chairman Jerome Powell for a new term as head of the US central bank.

Also on Tuesday, the Commerce Department was due to report on retail sales in the United States.

Chinese data released on Monday showed retail sales growth in October weakened from the previous month, weakened by anti-coronavirus restrictions and consumer unease over a wave of epidemics.

In energy markets, benchmark US crude rose 54 cents to $ 81.42 per barrel in electronic trading on the New York Mercantile Exchange. The contract advanced 9 cents on Monday to $ 80.88. Brent crude, used as the price base for international oils, added 66 cents to $ 82.71 a barrel in London. It fell 12 cents the previous session to $ 82.05 a barrel.

The dollar rose to 114.15 yen from 114.09 yen on Monday. The euro fell to $ 1.1381 from $ 1.1386.

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


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Fed to start restricting economic aid as inflation risk increases


FILE - In this file photo from September 30, 2021, Federal Reserve Chairman Jerome Powell testifies during a House Financial Services Committee hearing on Capitol Hill in Washington.  Powell says the tangled supply chains and shortages that have plagued the U.S. economy since this summer have worsened and will likely keep inflation high next year.  (Sarah Silbiger / Pool Photo via AP, File)

FILE – In this file photo from September 30, 2021, Federal Reserve Chairman Jerome Powell testifies during a House Financial Services Committee hearing on Capitol Hill in Washington. Powell says the tangled supply chains and shortages that have plagued the U.S. economy since this summer have worsened and will likely keep inflation high next year. (Sarah Silbiger / Pool Photo via AP, File)

PA

With inflation at its highest level in three decades, the Federal Reserve is expected to start this week reducing the extraordinary stimulus it has given to the economy since the pandemic recession hit early last year, a a process that could prove to be a risky balancing act.

President Jerome Powell has signaled that the Fed will announce after its policy meeting on Wednesday that it will start cutting its $ 120 billion in monthly bond purchases as early as this month. These purchases aim to keep long-term loan rates low to encourage borrowing and spending.

Once the Fed ends its bond purchases by mid-2022, then it will turn to a more difficult decision: when to raise its short-term benchmark rate to zero, where it has been since. that COVID-19 hammered the economy in March 2020. Raising this rate, which affects many consumer and business loans, would aim to ensure that inflation does not run out of control. But that would carry the risk of discouraging spending and undermining the labor market and the economy before they regain full health.

“We don’t have a roadmap for what we’re going through,” said Diane Swonk, chief economist at Grant Thornton. Powell must “walk a tightrope” in supporting the recovery without “turning a deaf ear to inflation”.

In this uncertain backdrop, President Joe Biden has yet to announce whether he will reappoint Powell for another four-year term as Fed chairman. Powell’s current term expires in early February, but previous presidents have typically announced such decisions in late summer or early fall.

Biden is expected to offer Powell a second term despite complaints from progressive groups that the president has increased risks to the financial system by easing banking regulations and is not sufficiently committed to considering the economic threats of climate change in the Fed monitoring of businesses. Powell is admired on Wall Street and in most economic circles and has been praised for guiding the economy through the recession, in part thanks to an array of emergency loan programs from the Fed.

The Fed’s likely decision this week to cut bond purchases comes as high inflation disrupts the U.S. economy for much longer than Powell and many other officials initially anticipated. Consumer demand for healthy spending has been met with clogged ports, closed factories and labor shortages that have driven up prices for automobiles, furniture, food, building materials. and household products.

On Friday, the government said prices jumped 4.4% in September from the previous year – the fastest 12-month increase since 1991. There was, however, a sign that inflation could fall: excluding the volatile food and energy categories, prices rose only 0.2% from August to September. This was down a tenth from the previous month’s increase and well below the 0.6% jump in May.

Yet wages and salaries rose the most during the July-September period in at least 20 years, according to a separate report on Friday. This suggests that workers are increasingly able to demand higher wages from companies that are desperate to fill an almost record number of open jobs. Large wage increases can drive inflation up if companies raise prices to cover higher costs.

As inflation escalates, the labor market has not returned to full force. The unemployment rate was 4.8% in September, above its pre-pandemic level of 3.5%. And about 5 million fewer people have jobs now than before the pandemic. Many Americans have not yet stepped off the sidelines to look for work, some of them because they still fear the virus or cannot find or afford child care, others because they have decided to take early retirement.

Powell has said he would like the labor market to show further improvement before the Fed starts raising its short-term key rate. Economists expect him to use the press conference following the Fed’s meeting on Wednesday to point out, as he has done before, that the start of the Fed’s reduction in bond purchases will not begin. does not mean that a rate hike is near.

“I think it’s time to gradually cut back, and I don’t think it’s time to raise rates,” he said about a week ago.

The minutes from the last Fed meeting indicate that the central bank will likely reduce its monthly purchases of Treasury bonds and mortgages by $ 15 billion per month. By cutting bond purchases so quickly, the Fed would have the possibility of raising rates by the second half of 2022.

That doesn’t mean it will. At its last meeting, about half of the Fed’s policymakers predicted that the first rate hike would take place in late 2022, with the other half projecting 2023 or later. The timing of any rate hike will, however, depend on whether inflation is still high and whether the Fed believes the job market is back to full health.

Earlier in the pandemic, Powell had spoken optimistically to help restore the unemployment rate to its pre-COVID level, when it hit a low of 3.5% in 50 years. More recently, however, he and other officials have expressed doubts about the ability of the labor market to fully recover.

It is far from clear if or when the several million Americans who have left the workforce will return. Among the newly unemployed are those who live or work in places, such as inner cities of large urban centers, where jobs may never fully return. If many people have indeed given up on the job market for good, the Fed might decide it can assess sooner than it otherwise would.

“They must now think that the workforce has changed structurally,” said Steve Friedman, economist at asset manager MacKay Shields and a former senior executive at the New York Fed.

However, the risk is that the Fed will end up raising rates too soon. Supply bottlenecks could ease in the coming months. If the Fed were to raise rates at the same time, it could depress spending and weaken the economy just as its supply problems recede.

“We could easily see that demand is slowing just as supply is increasing,” said Randal Quarles, a member of the Fed’s Board of Governors, in a recent speech. “In the worst-case scenario, we could reduce the incentives to return to supply, leading to a prolonged period of sluggish activity.


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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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Writer market

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)

PA

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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Writer market

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)

PA

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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Book creator

How Bosses Should Write Books


VSSENIOR LEADERS are not, of course, the most natural writers in the world. They do not reach the top without a laser ambition, a trait that rarely leads to literary reflection. To be successful, they must murder their outspokenness and master the corporate twaddle instead. They don’t need fame or fortune – the main reasons writers go through the agonies they go through. And when they write, as one commercial editor admits, you often “cry for the trees.” Just think of Jack Welch’s tribute to great leadership (ie his own) called “Winning”. His first pearl of wisdom is: “Winning in business is great, because when businesses win, people prosper and grow. “

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It is therefore with apprehension that Schumpeter celebrates the blossoming of a genre that would thrill most book lovers: the CEO memory. It is true that it has its drawbacks. The perpetrators are mostly white, male, and middle class. They are neither Hemingway nor Dostoyevsky. There is no sex, no drugs and only average rock ‘n’ roll. And they can afford the best niggers, so it’s hard to say how much their work is anyway.

That said, the genre has many benefits, especially when the writers are the founders of successful businesses who by definition have mastered the art of telling a good story. He recently made his way with the books of Phil Knight, who co-founded Nike, in 2016 and Stephen Schwarzman, co-creator of Blackstone, in 2019. His latest addition is “Play Nice but Win”, the story of the way of which Michael Dell builds the computer a company named after him that would eventually change the way computers were made and sold. Ignore the title of Boy Scout. The book is sour, funny, biting, and quick. He’s also blessed with a central cast villain: Carl Icahn, activist investor and publicity dog, whose sparring with Mr. Dell gives the story some bite.

Additionally, for those interested in business, these accounts provide a first place to observe some of the great dilemmas of recent decades: staying private or going public; give priority to shareholders or stakeholders; construction hardware or software. In a world of unreadable business books and overpriced business schools, it’s worth taking CEO briefs seriously. If nothing else, they help expose what most so called business gurus are wrong.

The first trait the books celebrate is competitiveness. Memories bristle with it. These are not win-win businesses created to make the world a better place. Business, as Mr. Knight puts it, is a “war without bullets”, fought one sale at a time, which someone must inevitably lose. In 1988, when Mr. Dell was 23 and Compaq was his biggest rival, he placed a billboard outside his headquarters in Houston, Texas with an arrow pointing west. to Austin, where his own four-year-old business was based. “158 miles on occasion,” one reads. In “Shoe Dog”, the former boss of Nike writes about the importance of being the first in China to gain an advantage over your competitors. “What a hit that would be,” he wrote. “A billion people. Of them. Billion. Feet.”

The second factor is how character affects business. In most of these books, the personality is overshadowed by bloodless abstractions: visions, stories, missions. In reality, businesses are built by people with strengths and weaknesses of flesh and blood. Of course, all entrepreneurs strive for success. But part of Mr. Dell’s genius lay in the realization that his triumph would come to complement his arrogant young self with older colorful statesmen who understood the pitfalls of building a lightning-speed business. . Mr. Knight’s laconic sidekick was Jeff Johnson, an eccentric so enthusiastic about selling sneakers that he wrote endless letters to his exasperated boss. He never got an answer, but the affection between the two helped make Nike what it is. A cast of Wall Street characters light up Mr. Schwarzman’s book. One of the most memorable is Bear Stearns boss Jimmy Cayne, who stubbornly refused to write a check that years later could have saved the bank from collapse.

Third, the franchise. Be honest about both failure and success. Starting a business always comes with what Schwarzman calls “the moment of desperation”: when you think you are a master of the universe, but no one else is. In Mr. Knight’s case, it was the word his banker said that crossed his mind as he slammed his pillow at night: “fairness,” that is, hard cash that he needed to inject into his business. He didn’t. For Mr. Dell, it was the frustration to have Mr. Icahn, a master of soundbite, accusing him of grossly underestimating Dell when he tried to deprive him in 2013. He did. equates to being “hit in the face with a dab”.

Finally, the context. The books all channel the cacophony that surrounds businesses, coming from employees, customers, competitors, lenders, investors and regulators. It makes it so difficult to stay focused on success. When Dell went temporarily private in 2013, Dell silently bids farewell to “legions of whiners, backyard drivers, curbside experts, rearview mirror thinkers and second guessers.” Mr. Knight takes issue with what he calls the “bland and generic banner” of the company itself. “What we were doing seemed so much more. Each new day brought 50 new problems, 50 tough decisions… and we were always keenly aware that a thoughtless move, a bad decision, could be the end.

Over to you, Jeff Bezos

The allure of self-glorification remains. Mr. Schwarzman ends his book with name drop pages. Mr. Dell falls into the piety of doing good for the world. Refreshingly, Mr. Knight, who later in his life studied creative writing, wraps up before his tale turns into a boring tale of Nike’s success. And the genre has room to develop. Soon the middle-aged tech barons of the West Coast will be eager to tell their story. The world can wince less if the CEO the scribes remember the four VSs: competitiveness, character, openness and context. And if they need a nigger, remember the business hackers who, unlike superstar bosses, work in the dark. â– 

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This article appeared in the Business section of the print edition under the headline “How Bosses Should Write Books”


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Bond liquidation is a warning to the Fed


The writer is president of Queens’ College Cambridge and advisor to Allianz and Gramercy

The combination of extremely low and relatively stable US government bond yields has baffled many market watchers for some time now, also challenging traditional economic analyzes.

This has made the rise in yields over the past two weeks particularly noticeable, raising interesting questions for markets, policies and therefore the global economy.

It is customary to characterize benchmark US government bond yields as the most important market indicator in the world. Traditionally, they have signaled expectations for growth and inflation in the world’s most powerful economy. They have served as the basis for pricing in many other markets around the world.

Breaking with a long history, these benchmark measures have been decoupled in recent years from economic developments and prospects. Their long-standing correlations with other financial assets, including stocks, have collapsed.

And their information content has become distorted and less valuable. Coming out of the 2008 global financial crisis, this was attributed to excess global savings which put continued downward pressure on yields.

Over time, however, it became clear that the main driver was the abundant and predictable purchase of government bonds by the world’s most powerful central banks as part of quantitative easing programs, particularly the Reserve. federal government and the European Central Bank.

The power of central banks to intervene in market prices should never be underestimated.

The trillions of dollars in bonds bought by the Fed and the ECB have distorted the usual two-sided markets and encouraged many to buy a whole range of assets far beyond what they normally would on a fundamentals basis.

After all, what could be more reassuring than a central bank with a fully functioning printing press, willing and able to buy assets at non-commercial levels. Such purchases legitimize past private sector investments and provide assurance that there will be buyers willing to buy assets for those who need to sell to reposition portfolios.

This is a device that encourages the private sector to “anticipate” central bank purchases at prices traditionally considered unattractive. No wonder even those who are convinced of a fundamental valuation error have been reluctant to switch to the other side of a bond market dominated by central banks.

While these factors remain in play, yields have slowly but steadily increased over the past two weeks, from 1.30% for the 10-year bond to 1.50%.

With global growth prospects dampening somewhat due to the Delta variant of Covid-19, the drivers have been a mixture of mounting inflationary pressures and mounting signs that central banks will struggle to sustain the era of ” Infinite QE ”- meaning infinitely ultra loose financial conditions. Signs in recent days have included statements from the Bank of England and higher rates in Norway, adding to moves in some developing countries.

The more interest rate volatility increases, the greater the risk of an upward gap in yields, given that we are starting from a combination of very low yields and extremely one-sided market positioning. The larger the gap, the greater the threat to market functioning and financial stability, and the greater the risk of stagflation – the combination of rising inflation and low economic growth.

Like a bullet submerged deep in water, a combination of market crash and political error could result in an increase in returns that would be difficult for many to manage.

Importantly, this does not mean that central banks, and the Fed in particular, should delay what should have already started – that is, embark on reducing what, oddly enough, is the same level of monthly asset purchases ($ 120 billion) than at the height of the Covid-19 emergency 18 months ago.

On the contrary, the longer the Fed waits, the more markets will question its understanding of ongoing inflationary pressures, and the greater the risk of disorderly market adjustments undermining a recovery that must be strong, inclusive and sustainable.

For their part, investors should recognize that the enormous beneficial impact on asset prices of a prolonged clampdown on central bank returns comes with a consequent possibility of collateral damage and unintended consequences. Indeed, they only have to see how difficult it has become to find the kind of reliable diversifiers that help underpin the old portfolio mix of return potential and risk mitigation.

Not covered – Markets, finance and strong opinion

Robert Armstrong dissects the most important market trends and explains how the best minds on Wall Street are reacting to them. Sign up here to receive the newsletter directly to your inbox every day of the week


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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)

PA

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)

PA

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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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.

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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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