FotografieLink/iStock via Getty Images A lot of the social media and CNBC crowd like to work with quarterly earnings, which is fine, but I’ve always thought that it was too narrow a field: one thing learned doing this weekend post for years is to look at quarterly results, but watch how full-year, calendar, “expected” sector…
Unlock the Editor’s Digest for free Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter. Sweden’s central bank cut interest rates for the first time in eight years as European monetary policymakers diverge from the US to support their economies even if it comes at the expense of their currencies….
Morsa Images By Charlie Choi & Samuel Wilamowsky US housing has weathered surging mortgage rates. Thin inventory and pent-up demand could create opportunity. The US housing market continues to defy traditional notions about rising rates. Across much of the US, prices have been resilient, even as mortgage rates have climbed to 20-year highs. For those…
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…
Justin Paget/DigitalVision via Getty Images In our January earnings review from Two Harbors Investment Corp. (NYSE:TWO) we rated it a Hold, despite the earnings leaving something to be desired. In Q4, interest rates stabilizing were seen as a benefit for the company, vs. rates that were falling and moving rapidly. The yield curve had been…
PM Images Overview The rise of interest rates has left many investors scrambling to find the best deals in the market. Unfortunately, many people in the world are on the wrong side of the cash register; they provide the dividends, interest, and debt for the major corporations in the world and dish out most of…
Editor’s note: Seeking Alpha is proud to welcome Tomas Cverna as a new contributing analyst. You can become one too! Share your best investment idea by submitting your article for review to our editors. Get published, earn money, and unlock exclusive SA Premium access. Click here to find out more » Richard Drury/DigitalVision via Getty…
Gary Yeowell Zions Bancorporation (NASDAQ:ZION) has just released its 1Q24 earnings report, and we think the results speak well for the improving trends of the bank we wrote about last quarter. Pre-provision net revenue beat market expectations slightly due to higher net interest margin and lower expenses. Steady loan growth was recorded, but deposits fell…
RapidEye Motorcar Parts of America, Inc. (NASDAQ:MPAA) primarily manufactures and remanufactures aftermarket automotive parts, and sells diagnostic equipment for alternators and starters with applications in ICE and electric vehicles. In the aftermarket car parts segment, Motorcar Parts of America’s (“MPA”) largest product types are rotating electrical parts, which include alternators and starters, brake related products,…
crbellette The recent expectations for a quick pivot of the Fed’s interest rate policy somewhat cooled down, which reminded me of the attractiveness of floaters. Since my previous coverage on Invesco Variable Rate Investment Grade ETF (NASDAQ:NASDAQ:VRIG), the fund has gained 8.8% on a total return basis, surpassing my expectations by 3.5%. Despite the Fed’s…
Robert Way China’s leading jewelry seller has benefited from spiking gold prices that reached an all-time high after Iran’s drone attack on Israel last week In gold-crazy China, the showroom of Chow Tai Fook Jewelry Group Ltd. (OTCPK:CJEWF, OTCPK:CJEWY, 1929.HK) in Hong Kong’s Central business district is a bit of fantasy land featuring the many…
narvikk Author’s Note This simulation has been done jointly with a U.S. Treasury yield simulation in a way that reflects the correlation among the 12 factors driving yields in each country. For more on the companion U.S. Treasury simulation, please contact the author. Both the Bund and the U.S. Treasury yield simulations impact foreign exchange…
Emir Hoyman/iStock via Getty Images Fundamentals Persistent inflation pressures persisted in March, throwing a wrench in the Federal Reserve’s plans to start lowering interest rates in June and sparking doubts about whether they can do so this year without signs of the economy slowing down. According to the Labor Department’s report on Wednesday, the Consumer…
PM Images By Mehdi Benatiya Andaloussi, Economist, World Economic Outlook Division of the IMF’s Research Department; Nina Biljanovska, Economist, Macro-Financial Division of the Research Department; Alessia De Stefani, Economist, IMF Research Department; and Rui C. Mano, Deputy Division Chief, IMF’s Research Department Effects may be delayed in some countries: if interest rates remain higher for…
Thomas Barwick As explained in Prof. Robert Jarrow’s book cited below, forward rates contain a risk premium above and beyond the market’s expectations for the 3-month forward rate. We document the size of that risk premium in this graph, which shows the zero-coupon yield curve implied by current Treasury prices compared with the annualized compounded…
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…
DNY59 Everyone expects the Federal Reserve to “pivot” – to lower interest rates – primarily because inflation appears to be under control. But the economy and stock market are on an upward trajectory, so they don’t need stimulation. So, the real question becomes “Where should interest rates be now?” History can be our guide. Over…
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…
DNY59 Originally posted on April 02, 2024 By Erik Norland At A Glance After the Bank of Japan cut rates below zero in January 2016, the yen gained 10% against the U.S. dollar The recent hike in interest rates may end up further stimulating, instead of slowing, economic growth On March 18, the Bank of…
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…
JHVEPhoto/iStock Editorial via Getty Images Comerica (NYSE:CMA) shares have rebounded solidly from a year ago as the regional banking industry has worked past the worst of its funding crisis. Still, shares are down 25% over the past five years as its deposit base was hard hit in 2023. Since upgrading shares to a buy in…
Michael M. Santiago Introduction Recently, I have been writing a lot about macroeconomics. This has always been an area of study for me, but shifting my attention away from exchange-traded products (“ETP/s”) has changed my outlook on products I have previously recommended, like the iShares 0-3 Month Treasury Bond ETF (NYSEARCA:SGOV). For those who are…
Justin Sullivan Verizon Communications (NYSE:VZ) is a U.S. based communications company and a giant in the industry. A few months ago, this stock was making 52-week lows and trading at what seemed to be highly irrational levels. The selling pressure seemed to be a culmination of events that took place late last year, which included…
Lemon_tm Gold staged a blinding comeback last week, surging to fresh all-time highs above $2,200 an ounce. The rally, which has added around 10% to gold’s value since mid-February, caught many market watchers off-guard. But for those of us who’ve stuck with the yellow metal through its ups and downs, the price action is the…
Justin Sullivan Investment Thesis A Communication Services’ giant that can’t sustain its current valuation. 1-year performance has been strong with Comcast Corporation (NASDAQ:CMCSA) rallying 22.5% against the S&P 500 (SPX) that returned 28% over the same period. But I think this relatively strong performance is behind the company and the current valuation feels stretched. I…
SB/iStock via Getty Images By SchiffGold The Bank of Japan’s historic move to end the country’s negative interest rate policy after nearly two decades triggered a jolt upward to new all-time highs for gold against the yen. But what are the implications for gold in the medium and longer term? The answer is far from…
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…
Douglas Rissing Investment thesis: The market is currently pricing in Federal Reserve interest rate cuts, with expectations recently boosted by its latest signals. The S&P 500 Index (SP500) is trading at a P/E rate of about 28, whereas historically it has been averaging about 16, which is arguably an indication of rate-cut expectations being baked…
Chip Somodevilla/Getty Images News Introduction The Fed’s Jerome Powell spoke on Wednesday, releasing the March FOMC summary, which can be found here. At the press conference that followed, the opening statement of which can be found here, Powell made several points very clear: We are indeed at peak rates (something I called back in December)…
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…
tadamichi From geopolitics, uneven inflation and economic uncertainty, there’s much for investors to consider in the current market landscape. Beata Caranci, Chief Economist at TD, addresses some of the key financial questions being asked with MoneyTalk’s Kim Parlee. Kim Parlee: Every quarter, TD Economics gets barraged with questions about what is happening with the economy….
Funtap Interest rate sensitive sectors, such as Real Estate Investment Trusts, have felt the weight of high rates in recent quarters. Sam Damiani, Director for Equity Research at TD Cowen, tells MoneyTalk’s Greg Bonnell, why the outlook for REITs would likely improve once those rates start to come down. Transcript Greg Bonnell: Rate-sensitive sectors like…
imaginima Dear readers, Prologis (NYSE:PLD) is a global industrial REIT which needs little introduction. If you live in a major city in the Western world, chances are that you’ve driven past Prologis’ warehouses countless times. The company owns 1.2 Billion sft of space on four continents and in 20 countries and completely dominates the sector…
Houston Chronicle/Hearst Newspapers via Getty Images/Hearst Newspapers via Getty Images Homebuilder stocks have been among the top-performing names in the S&P 500 since the summer of 2022. The SPDR S&P Homebuilders ETF (XHB) has returned nearly 80% in the past 20 months while the iShares U.S. Home Construction ETF (ITB) has almost doubled in that…
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…
SOPA Images/LightRocket via Getty Images Investment Thesis UiPath Inc. (NYSE:PATH) designs software robots to automate repetitive tasks for businesses, improving efficiency and reducing errors. I argue that this stock is still reasonably priced, even though it operates in what’s arguably the hottest sector of the market. As you’ll soon see from my reasoning, I strive…
Anton Petrus/Moment via Getty Images Upstart’s (NASDAQ:UPST) shares crashed 20% after the Fintech start-up presented results for the fourth quarter that beat expectations on both the top and bottom lines. The AI start-up’s revenue forecast for Q1’24 was perceived as weak, however, as it came in below consensus estimates. Since Upstart is a rate-sensitive credit…
Bloomberg/Bloomberg via Getty Images Today, I continue my research among the most compelling dividend companies with another dividend king: Colgate-Palmolive (NYSE:CL). The Federal Reserve’s decision to raise interest rates in the last couple of years has prompted many investors to favor risk-free rate bonds over stock dividends. As rates have approached a stationary level and…
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….
Jeng_Niamwhan/iStock via Getty Images Interest rate speculation continues to wreak havoc across the net lease sector and real estate. Since the sector reached a bottom in October, net lease REITs have rallied as investors remained optimistic that near term rate cuts were a possibility. The sector speculated and priced in interest rate relief in the…
franckreporter Investment briefing With the global risk appetite now showing signs of imminent recovery based on recent market trends, there is potential scope to add beta back into equity portfolios in our estimation. The consumer discretionary sector has led the way along with communications services and utilities so far in Q4 2023 earnings growth for…
deepblue4you Thesis The Invesco Short Term Treasury ETF (NYSEARCA:TBLL) is a fixed income exchange traded fund. The vehicle is based on the ICE U.S. Treasury Short Bond Index and will invest at least 80% of its holdings in the index components. The fund is not a passive replication of said index but takes an active…
deberarr Investment Thesis Mid-America Apartment Communities (NYSE:MAA) is a real estate investment trust (REIT) which operates over 100,000 multifamily rental units in the United States, mainly in the south and southeast. MAA owns units in some of the largest and highest growing markets in the south such as Atlanta, Dallas, Tampa, and Charlotte. MAA is…
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 –…
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…
anilakkus/iStock via Getty Images Markets have been pricing in a U.S. Fed interest rate cut by as early as March. Will the latest stronger-than-expected CPI data alter those expectations? David Sekera, Chief U.S. Market Strategist with Morningstar Research, looks at the likely scenarios and the implications for markets with MoneyTalk’s Greg Bonnell. Greg Bonnell: Let’s…
Dilok Klaisataporn Earlier today, the Bureau of Labor Statistics released the Consumer Price Index for December. The report showed that overall inflation rose by 0.3% in the month of December. If you strip out the volatile food and energy components, core inflation also rose by 0.3%. On a year-over-year basis, core inflation notched down 0.1%…
Juanmonino Investment thesis Our current investment thesis is: U-Haul’s (NYSE:UHAL) diversified revenue stream and strong business model positions it perfectly as a long-term compounder. The company has a strong asset base that is growing rapidly, alongside a market-leading position in the UK. We suspect it can continue to grow at a similar rate to historically…