Rate hike announcement

- A + A (June 28): European Central Bank (ECB) president Christine Lagarde affirmed plans for an initial quarter-point increase in interest rates in July but said policymakers are ready to step up action to tackle record inflation if warranted. Speaking at the ECB’s annual retreat in Sintra, Portugal, Lagarde offered reassurances that a new anti-crisis instrument yet to be announced won’t stand in the way of tackling the fastest surge in consumer prices since the euro was introduced. Her remarks underline the ECB’s base case for normalising monetary policy as some officials float the idea of moving more aggressively. Governing Council member Martins Kazaks said earlier on Tuesday (June 28) that “front-loading” hikes, including a possible larger move next month, could be reasonable. Traders brought forward bets on rate increases, but only see a 25% chance of a half-point hike in July. “There are clearly conditions in which gradualism would not be appropriate,” … [Read more...] about Lagarde vows nimble ECB policy as July hike plan proceeds

Shares of Morgan Stanley ( MS ) climbed after the bank announced plans for stock dividends and buybacks . Morgan Stanley shares rose over 3% after the company increased its dividend and announced a $20 billion stock buyback. Goldman Sachs, Bank of America, and Wells Fargo also boosted their dividends. Goldman had one of the largest dividend increases, with a 25% hike to $2.50 per share. Bank of America’s increase came to 5%, while Morgan Stanley raised its dividend by 20%. JPMorgan and Citigroup both held the line on their dividends, and said that increasingly stringent capital requirements forced the firms to keep them unchanged. JPMorgan did announce a new $30 billion stock buyback plan that began back in May. "It is notable that JPMorgan and Citi did not increase their dividends given that they are much more cautious about the health of U.S. consumers than other banks, and even though they have ample capital to sustain a downturn, they still think it is prudent to be … [Read more...] about Big Banks Announce Dividend Plans

If you're looking for capitulation in 2022, it's in the bond market. And that tells you that investors' confidence in the global economy is very low. Inside the stock market, it's all about defense. Defensive stocks, which include big healthcare companies and dividend-paying value stocks, have been driving the gains. An index of global defensive stocks put together by Goldman Sachs, which is heavy in healthcare giants, has climbed to more than an 18-month high relative to the MSCI AC World Index. Inside the U.S., the defensive ETF ticker DEF has been outperforming the Spider ETF SPY all last week and all year. For market watchers, this feels a whole lot like a recession trade. While investors in the capital markets are battening the hatches for a recession, money in the private markets is also drying up. The value of venture capital deals in the U.S. dropped more than 25% in the second quarter to just $1 trillion, according to Dealogic . M&A activity in the United States … [Read more...] about What the Business Cycle is Telling us About a Recession

Share to Twitter Share to Linkedin Topline High-profile stock picker Cathie Wood conceded to being wrong about the duration of high inflation that's contributed to her fund's steep decline this year while doubling down on her belief that the economy has fallen into a recession—defying a vast majority of experts noting a recession is unlikely this year despite growing odds of one next year. Key Facts “We think we are in a recession,” Wood, the founder and CEO of New York City's Ark Invest, said on CNBC's Squawk Box Tuesday, noting that excess inventory driving up costs and leading to wider-than-expected profit shortfalls for corporations like Walmart and Target is a "big problem" facing the economy. Wood first declared the U.S. had fallen into a recession last week, warning on Twitter that massive inventories (often viewed as a leading indicator for demand) have the potential to unwind and hurt growth for the rest of the year, as consumer … [Read more...] about Cathie Wood Claims Economy Already In A Recession—Warns Inflation And Inventories Pose ‘Big Problem’

- A + A SINTRA/FRANKFURT (June 27): The European Central Bank (ECB) will activate the bond-purchasing firepower it has earmarked as a first line of defence against a possible debt-market crisis on Friday (July 1), according to President Christine Lagarde. Applying "flexibility" to how reinvestments from the ECB's €1.7 trillion (US$1.8 trillion) pandemic bond-buying portfolio are allocated is aimed at curbing unwarranted turmoil in government bonds as interest rates are lifted from record lows to curb unprecedented inflation. Net buying under a separate asset-purchase programme is also set to end on Friday — potentially exposing some of the eurozone's more-indebted nations to speculative attacks by investors. "We have decided to apply this flexibility in reinvesting redemptions coming due in the PEPP portfolio as of July 1," Lagarde said on Tuesday in a speech in Sintra, Portugal, where the ECB is holding its annual retreat. "We will ensure that the orderly … [Read more...] about ECB to activate first line of defence in bond market on July 1

- A + A CHICAGO (June 28): In a year that has seen widespread selling of technology stocks and long-time market leaders fall into bear territory, the woes of Netflix Inc stand alone. The video-streaming company has plummeted 69% this year, abandoned by both investors and analysts as back-to-back disappointing quarterly reports raised concerns about user trends in an industry that’s becoming more competitive and losing its pandemic-related tailwinds. The drop is the most of any Nasdaq 100 or S&P 500 component, and much worse than the former index’s 26% decline. The growth outlook has weakened to the point that Netflix has cut hundreds of jobs and changed its tune on two longstanding principles: it is cracking down on password sharing, and will introduce an ad-based subscriber tier to the platform. That’s on top of a backdrop where high inflation has pushed the Federal Reserve to hike rates sharply, sparking recession fuels and fueling a rotation out of tech. … [Read more...] about The number of Netflix bulls is dwindling

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) This week, Russia defaulted on its foreign debt for the first time since the Bolshevik revolution after it failed to pay interest on two bonds during a 30-day grace period that expired Sunday. But to put the event in context, we don't need to go as far back as 1918. Instead, we can look to 1998 . That's the year Russia defaulted on ruble-denominated bonds, triggering a "Moscow meltdown" that infected markets around the globe. Quick rewind: In August 1998 , following years of upheaval after the fall of the Soviet Union, the Russian government defaulted on its local debt and devalued the ruble. The move sparked chaos in Russia, driving up inflation, causing an economic contraction and triggering bank … [Read more...] about Russia’s last default sparked a crisis. This time is different

- A + A SINGAPORE (June 28): When Canadian expat Michelle went to renew the lease on her three-story house in Singapore in May, her landlord wanted to raise the rent by almost 40%. Michelle tried to negotiate but the owner wouldn’t budge on the S$10,000 (US$7,200) a month asking price. She’s moving her family into a three-bedroom apartment next month. “I took what I could get,” said Michelle, who asked not to use her full name on concern it may impact her business in the city-state. There’s “a lot of greed at the moment.” Rents are skyrocketing in Singapore, particularly in the prime accommodation favored by expatriate residents, as surging demand from locals and newer arrivals collides with pandemic-induced delays in supply. Rental prices for the private properties leased by expats are rising on average by 20% to 40%, according to 10 real estate agents interviewed by Bloomberg , though some landlords are even asking for double the previous rent. The island’s … [Read more...] about Singapore’s surging rents shock expats and encourage scammers

The resignation of Glossier CEO Emily Weiss inspired another wave of obituaries for young, female founders. Nevertheless, they persist—and refuse to be put on glass pedestals again. I n October 2021, Rent the Runway cofounder Jennifer Hyman took her 12-year-old subscription fashion company public at a $1.7 billion valuation, valuing her 5.1% stake at nearly $49 million. The 41-year-old CEO was one of only about 25 American women in history to go public with a company she had founded. But Rent the Runway’s IPO was even more unusual for not only having a female founder but also a female CFO and a female COO. Hyman celebrated the moment on a flowery Nasdaq podium surrounded by the key women on her team, her two daughters and a shower of pink confetti. But for all the femininity on stage, there is one word that Hyman would not use to mark the moment: “Girlboss.” “We've created a false narrative because we looked at two or three examples of women who were building businesses … [Read more...] about Why Female Entrepreneurs Welcome The End Of The Girlboss Era—Once And For All