U.S. stocks fell today (SPY -0.1%), weighed down by a dip in retailers, as investors stepped back from a recent rally fueled by optimism that President-elect Donald Trump will invigorate economic growth. U.S. consumer spending increased modestly as household income failed to rise, suggesting the economy slowed in the fourth quarter.
NEW YORK (Reuters) - U.S. stocks fell on Thursday, weighed down by a dip in retailers, as investors stepped back from a recent rally fueled by optimism that President-elect Donald Trump will invigorate economic growth.
WASHINGTON (Reuters) - A federal judge said on Thursday that Volkswagen AG has reached an agreement in principle to provide "substantial compensation" to the owners of about 80,000 3.0-liter polluting diesel vehicles, a key hurdle to resolve the German automaker's emissions scandal.
WASHINGTON (Reuters) - U.S. consumer spending increased modestly in November as household income failed to rise for the first time in nine months, suggesting the economy slowed in the fourth quarter after growing briskly in the prior period.
PARIS (Reuters) - Europe's Airbus signed a firm contract on Thursday to sell 100 jets to IranAir, completing a return by Western plane giants and paving the way for deliveries to start next month, a year after sanctions against Iran were lifted.
WASHINGTON (Reuters) - U.S. antitrust enforcers are poised to approve health care company Abbott Laboratories' purchase of medical device maker St. Jude Medical Inc , two sources knowledgeable about the deal said on Thursday.
WASHINGTON (Reuters) - Billionaire investor Carl Icahn targeted environmental and banking regulations on Thursday as big drags on U.S. corporate investment and said revamping them would be a top priority in his role as adviser to President-elect Donald Trump.
Look at these god damned retail stocks. They're crashing I tell ya, crashing!
But no one really cares anymore. Investors know the risks associated with hiking rates into a weak economy, but are consciously choosing to ignore said risks in order to partake in the grand experiment of a centrally planned global economy. We need slave labor, lots of it, and plenty of open borders.
In spite of the most important part of the U.S. economy getting nailed today, after November's consumer spending came in must less than expected, the Dow is hardly down. Everything is just meh.
Incidentally, President elect Trump will have his hands full come January 20th, specifically with a central bank whose stated goal is now to hedge against any fiscal stimulus he enacts in office. Janet Yellen just wants to fight inflation. There's nothing political about it, naturally.
Since election night, the 10yr bond yield has risen from 1.75% to 2.55% on the premise of stronger than expected American GDP under Trump. Pray tell me, how will this occur is the Fed continues to hike rates into a very meek consumer spending environment, one hampered by rising oil prices rigged by OPEC?
Submitted by Jeffrey Snider via Alhambra Investment Partners,
At one point in time not all that long ago, basic economics (small "e") ruled central banking. There was really no other choice, as out of necessity bred change and understanding. The English were perhaps first in that lead, as the Empire with greatest economic and financial reach. It is interesting what we take for granted today as if it had been intellectually settled for all human history, but in the revolutionary times of the 19th century they still struggled to understand what would be considered a modern economy.
Bank and money panics were nothing new, of course, nor were asset bubbles. For the first time, however, money and economy seemed to be more and more intertwined. In the agrarian roots of any economy, there was no business cycle to speak of. Widespread unemployment was a new development, with competing ideals setting out in all directions to explain it, and, if possible, eliminate it. At one end was people like Karl Marx and Friedrich Engels who thought they could do away with the business cycle by doing away with business; at the other end were those who sought out money and its role in revolution, industrial as well as social.
Walter Bagehot was one such researcher who in 1873 published Lombard Street: A Description of the Money Market. Written in part as a response to widespread panic in 1866, it is the first to have issued what was once central banking's great dictum: lend freely on good collateral at high interest rates. Bagehot never wrote those words, but his meaning resonated and still does. In 2014 when former Federal Reserve Chairman Paul Volcker called for a new Bre ...
One of the recurring comments about the "Trumpflation" rally, which has sent US stock markets to constant record highs and pushed the Dow Jones just shy of 20,000 has been that there is virtually nobody selling. According to a poll released today by Reuters, which surveyed 45 fund managers and CIOs around the globe, investors' equity holdings rose to six-month highs in December on bets that buying at all time highs would mean selling even higher.
"Be ready to buy dips," Trevor Greetham, head of multi-asset at Royal London Asset Management, told Reuters however that has proven difficult in the past two months as there have been largely no dips to buy. As Carl Icahn lamented earlier on CNBC, "nobody is selling."
However, according to a new analysis from Credit Suisse, a "seller" may emerge, and a very determined one at that.
In a report by the Swiss Bank's Victor Lin, pension funds that rebalance monthly and quarterly would need to sell $38 billion of U.S. equities in coming days to rebalance to prior asset allocation levels.
While regular readers are well aware, there has been a massive capital shift out of global bonds and into stocks in the 4th quarter, leading ironically to a mirror image result: while the value of global stocks has risen by $3 trillion since the US election according to Deutsche Bank, the value of debt has declined by an identical amount.
But while Mark-To- Market values of key asset holdings in pension portfolios have shifted violently, pensions have specific quotas to adhere to, which in this case means selling winners and buying losers to return to their mandat ...
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