Worried US investors remain in “bad news is good news” mode because they want to see interest rates fall. And they want to get what they want, as shown by the inverse yield curve.
Two-year US Treasuries
TMUBMUSD02Y,
yielded 4.22% early Friday, while the 10-year Treasury note
TMUBMUSD10Y,
reached 3.56%. Lower long-term interest rates mean investors expect to profit as a slowing economy prompts the Federal Reserve to change policy and push interest rates down. Bond prices move in the opposite direction and long-term prices are more sensitive.
The 10-year yield has fallen from 3.88% at the end of 2022, as economic data flows back the view that Inflation is slowing down.
The Fed’s main policy tool is the short-term federal funds rate, which will range between 0% and 0.25% by the end of 2021. The target range increased by 25 basis points in March, followed by 50. basis points in May, then 75 basis points after each of the next four policy meetings through the end of November, then the pace slowed and increased by 50 basis points in December.
And now, the consensus among economists polled by The Wall Street Journal is that the Federal Open Market Committee will slow its pace to 0.25% on Wednesday, following its drag policy meeting. the next two days. But what could be more important is What Federal Reserve Chairman Jerome Powell said after the policy announcementas explained by Greg Robb.
Some economists believe the US has fallen into a recessionas reported by Jeffry Bartash.
More on the Fed and economic developments:
Not so fast – tech investors may be playing chicken with the Fed
Action check:
The Invesco QQQ Trust is down 26% since the end of 2021, but it’s up 10% until 2023.
Datasets
Through Thursday, Invesco QQQ Trust
QQQ,
track the Nasdaq-100 Index
NDX,
(The 100 Largest Non-Financial Stocks in the Full Nasdaq Composite Index
CALCULATOR,
) grew 10% in 2023, after falling 33% in 2022, with dividends reinvested.
Some professional investors believe that the market turned to tech stocks too soonas William Watts explains.
Than: Jeremy Grantham says ‘easiest leg’ of stock market bubblerst has ended. Here’s what’s next.
Intel’s shock
Investors, analysts, and even company executives can’t predict when Intel will see brighter days.
beautiful pictures
Shares of Intel
INTC,
was up 14% for 2023 through January 26, but that was before the chipmaker reported fourth-quarter results that were much worse than analysts expected and beat news. that’s as bad as a bleak outlook for the first quarter.
Therese Poletti says Intel’s 2022 performance is worst in over 20 yearsbecause the company’s executives could not indicate when the company’s decline in revenue could be reversed.
Let’s look at things Intel dividend math before the fourth quarter results do not inspire confidence that it can sustain its payout with a yield of around 5%. The current dividend amounts to $6 billion a year in payouts, while analysts predict the company’s free cash flow will be negative in 2023 and 2024.
During the company’s earnings conference call late January 26, Cowen analyst Matthew Ramsay asked about the “safety” of the dividend and whether the payout is “a sacrosanct thing.” ” or not. Intel CFO David Zinser’s response was slick: “I just want to say that, board, management, we take a very disciplined approach to capital allocation strategy and we will continue to do so. continues to be committed to extreme caution in how we allocate capital to owners, and we are committed to maintaining a competitive dividend,” according to a transcript provided by FactSet.
Continue reading: ‘It’s not an earnings release, it’s a crime scene.’ Analysts and social media react to Intel’s bad quarter
Learn more about tech earnings, with a tip
Microsoft’s stock price movement after hours on Jan. 24 underscored the importance of listening to the company’s earnings report.
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If you’re watching a company closely, you should listen to the earnings conference call after the company reports its quarterly results.
Microsoft shares initially edged higher after the company reported quarterly earnings on January 24th. But the action was reversed once the company’s executives start talking about developments in its cloud business during a follow-up call with analysts.
Bear case for stocks
According to Jeffrey Bierman, technical factors suggest we are still in a bear market for stocks.
Getty Images / iStockphoto
Jeffrey Bierman, a stock trader with decades of experience, shares his views on why are we still in a bear market for stocks in a Q&A with Michael Sincerely. The following two sections are consistent with his market thesis.
Maybe investors should still think about value stocks
“Value dominates in bear markets and growth dominates in bull markets,” Bierman said.
In 2022, benchmark S&P 500
SPX,
fell 18.1%, while the S&P 500 Growth Index fell 29% and the S&P 500 Value Index fell just 5%, all with dividends reinvested, according to FactSet.
Value stocks – those of mature companies, growing more slowly but steadily, trading relatively low compared to earnings expectations – can continue to be a haven for unconvinced investors. believe in a massive US protest.
Bill Nygren, co-manager of the Oakmark Foundation
OAKMX,
share five stock selection tactics and six value stock options with Michael Brush.
How about some investment income?
Bierman also said investors should look to generate income during bear markets. “If you can get 4% on a bond that is half as risky as the S&P 500, you should buy the bond because of its guaranteed yield and lower volatility,” he said.
What if you wanted to generate more income than possible with Treasury bonds while simultaneously pursuing long-term growth in the stock market? This is an exchange-traded fund with a high monthly dividend designed to be less volatile than the S&P 500.
MarketWatch metrics — Housing by the numbers
Market tracking metrics is a new column that can show you how to use data when making financial decisions. This week Katie Marriner shared data from the National Association of Home Builders showing how many people are “out of priceof the mortgage market as home prices rise.
Will house prices drop where you live?
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Home sales tumbled last year, but prices didn’t, in part because so many people with locked down low-interest mortgages knew better than to budge. But now, Fannie Mae has raised her estimate for home price declines in 2023 and 2024. In an interview with Aarthi Swaminathan, Fannie chief economist Doug Duncan surveys markets and stocks. Be on the lookout for signs that could indicate a drop in house prices in your city.
‘Absolutely no money’
Suze Orman.
Getty Images for WICT
It can be difficult to put some concepts into words, but Suze Orman summed up many people’s financial prospects in a CNBC interview this week: “Most of America today has absolutely no money, if you look at it,” she said, citing the study. by SecureSave, a company she co-founded.
According to a survey by SecureSave, two-thirds of Americans won’t be able to pay a $400 emergency bill. You may not be part of two-thirds, but this information can be helpful in your own discussions about personal finance with family and friends.
While, this is what Orman is doing with his money.
How to get a divorce?
If you are getting divorced, it will be much easier if both parties work together to ease the financial pain.
Getty Images / iStockphoto
The emotional impact of a divorce can be devastating, but the financial complications can drive you crazy. Beth Pinsker look at all financial aspects need to be considered when making a large split.
The upcoming attraction from Kimberly-Clark will make you “breath”
Kimberly-Clark makes Huggies and has many other well-known consumer brands. The company hopes to bring something new to the dressing table in the second half of 2023.
Getty Images for Huggies
Kimberly clark
KMB,
manufactures Scott bath towels, Huggies diapers and has many other well-known brands of consumer products, including Kleenex and Depend. The company has disappointed investors with its 2023 guidance, but CEO Michael Hsu is excited about a new product release in the second half of the year. I’m speechless on a conference call with analysts on January 25.
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