A version of this story first appeared in CNN Business' Before the Bell newsletter. Not a subscriber? You can sign up right here . You can listen to an audio version of the newsletter by clicking the same link. London (CNN Business) A growing number of investors have come to the conclusion that a recession in the United States is probably looming, fueling a sharp sell-off in stocks and bonds as Wall Street braces for impact. What's happening: A shallow recession late this year or early next year is "becoming the consensus view," David Bianco, DWS chief investment officer for the Americas, told reporters this week. While there's agreement that the Federal Reserve needs to continue to aggressively pull back support for the economy to tamp down decades-high inflation, traders have been increasingly concerned that the central bank could accidentally go too far, triggering a new wave of job losses and throwing growth into reverse. But Fed officials … [Read more...] about Who’s right about a recession — markets or the Fed?
Loom knit market bag
Stock Market Today: The Indian market ended lower after a volatile session on June 29, a day ahead of the monthly expiry with investors also nervous about monthly auto numbers and PMI data to be released later in the week. At close, the 30-pack Sensex lost 0.25 percent, or 134.31 points, to end the day at 53,027, while the broad-based Nifty ended lower by 32.95 points, or 0.21 percent, at 15,799. “Consumer confidence is declining rapidly due to the uncontrolled and constant rise in inflation as India had to bear the double whammy effect of a dampening global equity market and rising crude prices as major suppliers like Saudi are unable to boost the output in the short-term”, said Vinod Nair, Head of Research at Geojit Financial Services. The domestic market, however, was able to recover most of the losses due to a strong movement in index heavyweights, PSUs, metals and oil & gas stocks before squandering some of the gains at the end of the day due to a volatile global … [Read more...] about Taking Stock | Market ends lower in choppy session ahead of expiry, auto and PMI data
Share to Twitter Share to Linkedin It's almost impossible to read anything about the financial markets these days without reading how inflation is weighing on the global economy and markets. The skyrocketing inflation has made it more important than ever to invest with macro conditions in mind. Some may consider Stan Druckenmiller to be one of the greatest macro investors of all time. At the Sohn Investment Conference last week, Stan Druckenmiller of Duquesne Family Office shared the strategy he once used to outperform others significantly during rampant inflation. He also talked about what he's doing now to deal with the current inflationary period. The stock market as a signal for economic conditions Historically, Druckenmiller has often used stock market conditions as signals for what's about to happen in the economy. He explained that he doesn't use the types of signals traditional economists use to predict the economy, like employment, macro … [Read more...] about Here’s How Stan Druckenmiller’s Strategy For Investing In Bear Markets Has Changed
Share to Twitter Share to Linkedin Hedge funds continued to show their worth in May, with those administered by Citco recording only a small drop even as the broader markets continued to plummet. Hedge fund performance improved slightly month over month, although not enough to shift the asset class into the green on a year-to-date basis. Hedge fund performance in May According to Citco's monthly report on hedge fund performance, the funds it administered recorded a total weighted average return of -1.1%, compared to the -2.9% return recorded in April . The firm said performance by strategy and size was again mixed. Unsurprisingly, commodity hedge funds continued to post robust returns due to high commodity prices, recording an average return of 1.1% for May, although they were flat on a median basis. However, global macro funds outperformed commodity funds slightly, recording a weighted average return of 1.2% and a median return of 0.7%. … [Read more...] about Hedge Funds Hold Fairly Steady Amid The May Market Turmoil
Share to Twitter Share to Linkedin Sir John Templeton was a twentieth century American-born British investor, banker and fund manager. He entered the mutual fund market and created the Templeton Growth Fund, which averaged growth over 15% per year for 38 years. He once said, “To buy when others are despondently selling and to sell when others are avidly buying requires the greatest fortitude.” Warren Buffett also once said that it is wise for investors to be “fearful when others are greedy, and greedy when others are fearful.” Easier said than done, I hear you say. How do you keep your head around you when everyone is losing theirs? Thinking contrarian has always been a great strategy and one which I have employed extensively over the years. Naturally, to be honest. Thinking differently to the crowd requires patience, discipline, and very little emotion. These are traits that sometimes have to be wired (or indeed forced) into your brain. Especially when you … [Read more...] about Crashing Stock Markets Can Provide Opportunity For Longer Term Gains. But Do You Have The Stomach For It?
Share to Twitter Share to Linkedin When the Fed meet next week, it’s highly likely in the eyes of the both the bond markets and recent statements from Fed policymakers that rates rise. However, the prospect of a 50bps move that was suggested earlier this year is now largely off the table. However, looking beyond that, the market sees aggressive rate increased in 2022, perhaps more so than before the Ukraine invasion began. Commodity Spike A lot has changed, Russia’s invasion of Ukraine has, in part, pushed global stock markets generally lower and various commodities including energy and, notably, wheat far higher. Inflationary Pressures If anything inflation may increase further for 2022 as higher energy and other prices, if sustained, could feed into many other goods and services. That puts the Fed in a tricky position. Yes, geopolitical tensions may have increased risk and disrupted supply chains. That and higher gas prices hurting consumer’s … [Read more...] about Despite Ukraine, Markets Still See Aggressive Fed Action This Year
Share to Twitter Share to Linkedin January has generally not been kind to investors. Many countries and sectors have lost money for 2022, despite a mild rally very late in the month. Of course, there are exceptions such as energy-related stocks and the Brazilian stock market, but many stocks, countries and sectors are in the red. The market decline has been broad with many fixed income and commodity investments losing money too. Perhaps, in part, because the Fed has signaled plans raise rates relatively aggressively in 2022, with rates expected to increase in March and maybe continue on up for much of 2022. Yet, we are just one month into the year, and though down, many markets aren’t in correction territory currently. Tech Selloff Tech has been among the hardest hit sectors. In tech profits for many firms are expected to come further in the future, rising rates suggests the value of those potential profits may be less in today’s money . For example … [Read more...] about January Shows A Tale Of Two Markets As Tech Gets Hit
Share to Twitter Share to Linkedin Topline MicroStrategy, the data analytics firm helmed by staunch bitcoin bull and former billionaire Michael Saylor, disclosed its first batch of bitcoin purchases since the beginning of the cryptocurrency market's intense sell-off over the past two months, revealing it has yet again doubled down on its commitment to the world's largest cryptocurrency despite investor concern over its position amid the steep drop in prices. Key Facts In a regulatory filing on Thursday, Virginia-based MicroStrategy, which owns more bitcoin than any other corporation in the world, disclosed it purchased approximately 480 bitcoins for $10 million in cash, or $20,817 per coin, between May 3 and Tuesday. The company, which started buying cryptocurrency for its balance sheet in August 2020, says it now holds approximately 129,699 bitcoins, purchased for nearly $4 billion, or an average price of $30,664 per coin—implying the firm's … [Read more...] about Saylor’s MicroStrategy Bought Another $10 Million In Bitcoin As Crypto Markets Lost $900 Billion In Value
- A + A NEW YORK (June 29): US investment-grade corporate bond spreads have breached a key 150 basis point threshold that analysts and investors say could start to disrupt the flow of credit. The figure, which measures the extra yield investors demand to own corporate bonds instead of US Treasuries, is the highest in two years, according to data compiled by Bloomberg . Spreads recovered after the Federal Reserve took the unprecedented step of purchasing corporate bonds to boost liquidity around that time, but are coming under pressure again, amid concerns about a potential recession. While the central bank has so far shown little sign of slowing its pace of interest-rate hikes, spreads are moving toward a point where officials could begin to face pressure over the path of policy tightening, according to Winifred Cisar, global head of credit strategy at CreditSights Inc. “Historically, investment grade spreads tend to trade to 150 basis points, and then break … [Read more...] about Credit markets signal caution as US spreads surge past 150 mark
Minneapolis (CNN Business) The US economy shrank at a slightly faster rate than previously estimated during the first quarter, the Bureau of Economic Analysis said Wednesday. With one quarter of negative economic growth in the books, the data adds to fears that a recession may be looming. Real gross domestic product declined at an annualized rate of 1.6% from January to March, according to the BEA's third and final revisions for the quarter. Previously, the advance estimate released in April showed a contraction of 1.4%. Last month, that was revised to a decrease of 1.5%. The first quarter GDP performance, which the BEA noted includes some unquantified effects from the pandemic and the Omicron variant surge, stood in contrast to the fourth quarter of 2021, when the economy grew at a rate of 6.9% from the prior quarter. Read More The first quarter of 2022, however, marked the start of Russia's invasion of Ukraine, which sent economic … [Read more...] about The US economy shrank 1.6% in the first quarter, adding to recession fears