Daniel Grizelj/DigitalVision via Getty Images The Federal Reserve has as one of its main tools to manage the rate of inflation the Federal Funds Rate. The purpose of this tool is to either entice borrowers to borrow if they make the interest rate low, or to reduce demand for borrowers if they make the cost…
kelvinjay By James Smith, Chris Turner & Michiel Tukker Three scenarios for Thursday’s Bank of England meeting ING Markets aren’t fully buying the BoE’s new-found optimism Can the Bank of England diverge from the Federal Reserve on rate cuts? Bank officials – including Governor Andrew Bailey – have been not-so-subtly hinting that it can. We…
JillLang I’ve been buying Healthcare Realty Trust (NYSE:HR) in recent weeks as REITs pulled back in response to sticky inflation numbers and comments from the Fed that they’re willing to keep base interest rates higher for longer. HR is an internally managed medical office building (“MOB”) REIT with a 688-property portfolio at the end of…
Klaus Vedfelt/DigitalVision via Getty Images In our last coverage of Ares Commercial Real Estate Corporation (NYSE:ACRE) we gave it a “Sell” rating. What was unusual about our stance is that we did it in the face of a declining stock. Generally, we tend to move our ratings in the opposite direction of the stock price….
Eoneren By James Knightley, Chief International Economist US inflation remains too hot for comfort US core consumer price inflation came in at 0.4% month-on-month, above the 0.3% consensus – only one forecaster predicted such an outcome, so just like last Friday’s jobs report, this is another significant upside surprise that should quash expectations of a…
manassanant pamai Going into 2024, most investors assumed the Federal Reserve would cut interest rates this year. However, over the first quarter, predictions of rate cuts have backed off, stemming from a low unemployment rate and a rebound in some inflationary signals. As a result, the potential benefits of low-risk assets like short-term Treasuries in…
Klaus Vedfelt And wages rose at a good clip too. It was the kind of jobs report we’d expect from an economy that is plugging along just fine, at growth rates that are above the long-run average, powered by consumers outspending inflation with gusto, especially on services, the government spending trillions it borrows hand-over-fist, and…
Win McNamee It seems pretty clear that Jay Powell is not rushing to cut rates. He has spoken twice since the February PCE report, and both times, he has emphasized patience regarding the Fed’s next steps. He has also, to some degree, played down the elevated January and February inflation reports. While the Fed is…
DariaRen iShares 20+ Year Treasury Bond ETF (NASDAQ:TLT) is a popular and highly liquid ETF that invests primarily in U.S. Treasury Bonds. In early 2020, this ETF hit highs of about $180 per share. It now trades for about half that level, at just around $92 per share. Since the portfolio holdings for this ETF…
PM Images The Eaton Vance Floating-Rate Income Trust (NYSE:EFT) is a closed-end fund, or CEF, that income-hungry investors can employ in pursuit of their goals. As is the case with many leveraged loan funds, the Eaton Vance Floating-Rate Income Trust has a very attractive yield of 10.80% right now. Here is how that compares to…
Dilok Klaisataporn There are a lot of questions about Fed policy these days and where things might be headed. Here are some commonly asked questions I’ve been getting lately: 1) Why is the Fed considering a rate cut? At Wednesday’s FOMC meeting the Fed stood by their estimate of 3 rate cuts in 2024. This…
niphon By Seema Shah, Chief Global Strategist To no-one’s surprise, the Federal Open Market Committee (FOMC) chose to keep the benchmark policy rate at 5.25%-5.50% on March 20th. More significantly, the latest dot plot revealed the committee continues to expect 75 basis points of cuts this year. That is despite recent upside inflation surprises as…
Richard Drury Legendary investors Warren Buffett and Peter Lynch have both used versions of the quote: Selling your winners and holding your losers is like cutting the flowers and watering the weeds. This quote is so true and – as a value investor – can be quite difficult for me to apply consistently. If a…
ArLawKa AungTun/iStock via Getty Images Recent History (Real Estate In the Post ZIRP era) REITs have been beaten down by rising interest rates over the past two years. As the ten year reaches a normalized yield, share prices across the industry have been crushed as yields are forced to adjust to an elevating ten year…
awiekupo/iStock via Getty Images Strapped for cash, what now? I have been bullish on Albemarle (NYSE:ALB) at these prices even though it continues to go through a cycle of weakness. I am downgrading this to hold and have reduced my share count while I wait to see if the company can pivot to positive free…
Andrii Yalanskyi Fed Chair Jerome Powell is scheduled to testify in the House today (Wed., Mar. 6), and markets will be all ears on topics that offer guidance on the outlook for interest rate cuts. The current consensus anticipates that the central bank will begin easing policy at the June 12 FOMC meeting. The Fed…
Richard Drury Ares Commercial Real Estate (NYSE:ACRE) announced a 24% dividend cut last week as the company suffers from the fallout in the commercial real estate market. Like other commercial mortgage lenders, the REIT has seen an increase in its reserve for expected credit losses, which impacted Ares Commercial’s P&L negatively in the fourth quarter….
istetiana/Moment via Getty Images By Andrew Prochnow Recent developments suggest that those banking on a March rate cut by the Federal Reserve may need to recalibrate their expectations. The likelihood of a March rate cut diminished significantly in early February following the U.S. Labor Department’s announcement affirming robust hiring in the economy and the unyielding…
ATU Images/The Image Bank via Getty Images Co-produced by Austin Rogers The US economy as a whole might not be in recession, but it is certainly experiencing a “rolling recession” affecting specific industries. One of the most obvious sectors of the economy that is suffering its own mini-recession is the housing market. The ultra-low mortgage…
GOCMEN/iStock via Getty Images When it comes to deciding when to begin cutting key short-term interest rates, it seems to me that the Federal Reserve seems overly fixated on small monthly variations in various inflation indicators rather than paying attention to the dramatic slowdown in the U.S. economy. In my view, they should start cutting…
Kena Betancur Introduction Best Buy (NYSE:BBY) is probably one of the most known electronic retailers in the world. The retailer has been around for decades, and I remember shopping there in my early years in search of the latest electronic gadgets. Although they are known for their tech retail & support, the Geek Squad, they…
Wong Yu Liang/Moment via Getty Images The January CPI came in much hotter than expected. Does this mean the 2024 rate cuts are off the table? Does it mean inflation is about to flare up again? Let’s take a closer look at what’s happening here and where inflation (and interest rates) might be headed this…
ATU Images/The Image Bank via Getty Images Generally speaking, real estate investment trusts, or REITs (VNQ), are well-positioned to continue growing their dividend payments in 2024 and beyond. That’s because: REIT payout ratios are historically low. REIT balance sheets are the strongest they have ever been. Rents keep growing in most property sectors. Since REITs…
Torsten Asmus I’ve covered some of the more important trends impacting bonds and bond ETFs these past few years, as Federal Reserve hikes have led to wild swings in interest rates and broader bond market conditions. Last time I covered these issues for the Vanguard Total Bond Market Index Fund ETF (NASDAQ:BND), nominal rates were…
Richard Drury Transcript Greg Bonnell: Following another red-hot US jobs report, Fed Chair Jerome Powell is once again saying he’s in no rush to cut interest rates. Joining us now to discuss, Chris Whelan, the Senior Canada Rate strategist and Head of Portfolio and ESG strategy at TD Securities. Chris, great to see you again….
J Studios/DigitalVision via Getty Images Right before we entered February, the Fed delivered quite hawkish message relative to what was baked into the cake by the market. While it was not a surprise that there will not be any interest rate cuts now, the commentary on future decisions was not as accommodative as the market…
Nerthuz By James Knightley, Chief International Economist | Padhraic Garvey, CFA, Regional Head of Research, Americas | Chris Turner, Global Head of Markets and Regional Head of Research for UK & CEE Fed caution argues against a March rate cut No change from the Federal Reserve on interest rates (target range kept at 5.25-5.50%) and…
wildpixel There is a great amount of commentary on today’s surprise Q4 earnings miss from New York Community Bancorp, Inc. (NYSE:NYCB) and the massive dividend cut down to $0.05 quarterly. Ouch. Shares tanked 40% premarket. We were asked about it in our investing group premarket, and we discussed with members that we felt while this…
James Andrews/iStock via Getty Images On our last coverage of New York Community Bancorp, Inc. (NYSE:NYCB), the stock was at $9.37, and we suggested that it was good but not “great”. Well, if you are heavily underweight financial stocks, then this is one of the best you can add. If you are patient, the odds…
TimAbramowitz I’ll admit this is a click-bait title. But before you turn away, the actual article is anything “butt.” No really. Let me explain… I’m sure many of you now have flatulence on the mind. In which case, here’s an excerpt from The Definitive Fart Book (1961): “Funny, everybody does it, but nobody wants anybody…
niphon By David Zahn, CFA, FRM, Head of European Fixed Income, Franklin Templeton Fixed Income The European Central Bank left interest rates unchanged, without conveying any urgency to start cutting rates in the next few months. David Zahn, Franklin Templeton Fixed Income’s Head of European Fixed Income, weighs in on the implications for investors –…
DNY59 The BlackRock Income Trust (NYSE:BKT) is a closed-end fund that income-seeking investors can employ as a method of achieving their goals. The fund’s current 8.80% yield certainly appears to render it quite competent in this area, as this is a higher yield than many bond funds possess today. This is especially true because this…
SAUL LOEB/AFP via Getty Images After just over two years, the S&P 500 (SP500) has finally posted a new all-time high. A lot has happened over the period with the market climbing over major headwinds including the post-pandemic hangover, supply chain shortages, a short-lived energy crisis, the start of two wars, 40-year high inflation, and…
CHUNYIP WONG/iStock via Getty Images Thesis Office Properties Income Trust (NASDAQ:OPI) suffered a 37% decline following the announcement of a dividend cut on Jan-11. However, after examining the OPI portfolio, I believe the company has been oversold. Since the onset of COVID, the stock has witnessed a nearly 90% drop in price, driven by concerns…
Justin Sullivan Walgreens Boots Alliance, Inc. (NASDAQ:WBA) announced fiscal first quarter earnings earlier this month. The struggling pharmacy retailer also announced that it was cutting its dividend nearly in half. While the company is projecting earnings decline in 2024, management and analysts are optimistic that a turnaround is coming. Based on the most recent financial…
Andrii Yalanskyi No one likes a dividend cut: They reduce the income stream that many retirees rely on for funding their retirement lifestyle. They often trigger a negative market response, leading to steep stock price declines. This typically adds insult to injury by adding steep capital losses on top of the steep decline in income,…
This article was written by Follow Lawrence Fuller has been managing portfolios for individual investors for 30 years, starting his career at Merrill Lynch in 1993 and working in the same capacity with several other Wall Street firms before realizing his long-term goal of complete independence when he founded Fuller Asset Management. He is the…
joxxxxjo Overview The mostly consolidative week for the US dollar continues. Most of the G10 currencies are +/- about 0.25% today and only a slightly wider range for the week. The odds of a Fed rate cut in March is virtually unchanged on the week at around 75%. The JP Morgan Emerging Market Currency Index…
D-Keine The John Hancock Preferred Income Fund III (NYSE:HPS) is a closed-end fund that specializes in providing its investors with a very high level of current income. The provision in income is something that has become a popular strategy among retirees and others who are dependent on the investments in their portfolio to cover their…
Andrii Yalanskyi/iStock via Getty Images On our last coverage of the healthcare sector, we weighed abrdn World Healthcare Fund (NYSE:THW) (formerly Tekla World Healthcare Fund) and BlackRock Health Sciences Trust (NYSE:BME) against each other and found that there were some glaring issues with chasing the higher-yielding closed-end fund, or CEF. We rated BME a BUY,…
Mario13 By James Knightley Solid employment gains, low unemployment and sticky wages suggest no immediate need for Federal Reserve rate cuts. Nonetheless, the jobs market is cooling and the concentration of employment gains in sectors viewed historically as being lower paid and more part-time raises some concerns. We think the Fed will wait until May…
A staggering 98% member of the PancakeSwap community voted in favour of reducing the CAKE supply by 300 million resulting into a strong surge in the CAKE price. PancakeSwap, a prominent decentralized exchange, has successfully concluded a proposal to reduce the maximum supply of its native token CAKE from 750 million to 450 million, garnering…
carterdayne Investment Thesis BlueLinx Holdings Inc. (NYSE:BXC) is a cyclical company. BXC did not achieve any revenue growth over the 2005 to 2023 peak-to-peak Housing Starts cycle. Nevertheless, the company is fundamentally sound with improving margins and returns. I consider it a cash cow. The Housing Starts currently is at the long-term annual average level….
AleksandarNakic/E+ via Getty Images Out Of The Penalty Box The Toro Company (NYSE:TTC) has been in the penalty box with investors since it badly missed estimates and guided the outlook downward in September, as I noted in my last article. The stock lost 12.7% in one day and traded roughly sideways in a range between…
alexali111/iStock via Getty Images The new dot plot The FOMC meeting held on December 13 was a significant event for the market. In particular, the new dot plot shows the potential investment opportunities in treasury bonds, as I will illustrate via the iShares 20+ Year Treasury Bond ETF (NASDAQ:TLT) in the remainder of this article….
littleclie By Carsten Brzeski, Global Head of Macro Today’s decisions The European Central Bank has kept policy rates unchanged but slightly changed its communication. The policy statement signals that the end of rate hikes is here. The removal of the phrase “inflation is expected to remain too high for too long” is a clear dovish…
Kinwun Lumen Technologies, Inc. (NYSE:LUMN) reached a new debt deal with investors about a month ago which not only caused Lumen’s stock price to drop to new all-time lows but which will further burden the company’s balance sheet. Since asset sales and depressing levels of free cash flow have weighed down Lumen Technologies’ stock to…
Dilok Klaisataporn By Seema Shah, Chief Global Strategist The November Consumer Price Index (CPI) showed that inflation progress stumbled slightly last month. Both headline and core monthly inflation quickened, while the Federal Reserve’s (Fed) favorite supercore inflation measure accelerated to one of the quickest paces this year. Today’s inflation data do not reinforce or justify…
Goldman Sachs brought forward its forecasts for the Fed’s interest rate cut to Q3 2024 from Q4. Goldman Sachs, a world-known investment banking company, revealed its forecasts for the Fed’s interest rate cut. The investment giant believes that it will take place in Q3 2024 while previously it forecasted that it would happen in Q4…
OlenaMykhaylova The Neuberger Berman High Yield Strategies (NYSE:NHS) is a closed-end fund aka CEF that can be employed by investors who are seeking to earn a very high level of income from the assets in their portfolios. The fund’s current 14.46% yield stands as a testament to its ability to provide investors with an income,…