Stock markets slide on 'cocktail of worries'

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BBC News 19 August, 2021 - 09:04am 18 views

When are the Fed minutes released?

The minutes for each regularly scheduled meeting of the Committee ordinarily are made available three weeks after the day of the policy decision and subsequently are published in the Board's Annual Report. federalreserve.govMinutes of the Federal Open Market Committee, July 27-28, 2021

What is taper in stock market?

Understanding Tapering Tapering is the reduction of the rate at which a central bank accumulates new assets on its balance sheet under a policy of QE. Tapering is the first step in the process of either winding down—or completely withdrawing from—a monetary stimulus program that has already been executed. InvestopediaTapering Definition

Chaos continues in Afghanistan as Biden is under pressure

Here's a look at key events and players in the withdrawal of U.S. troops from Afghanistan after nearly 20 years of war.

N.J. Burkett interviews George Washington University Prof Ben Hopkins, one of the foremost scholars here in the US on the topic of Afghanistan and the war.

President Joe Biden told ABC News' George Stephanopoulos that American troop withdrawal from the region by Aug. 31 depends on where they are at with evacuating Americans.

Read full article at BBC News

FOMC Minutes: 'Most' Fed Members See Taper This Year…But 'Several' Still Don't

Investing.com 20 August, 2021 - 08:40am

Coming just a week before the highly-anticipated Jackson Hole Symposium and three weeks (and another strong NFP report) after the most recent FOMC meeting, yesterday’s FOMC minutes always ran the risk of being dated and stale. Still, with the world’s most important central bank on the verge of a significant policy shift, with apparent disagreements within the committee, traders are always keen for more information as they calibrate their expectations for tapering and (eventual) interest rate liftoff.

As it turns out, the minutes only emphasized the central bankers’ uncertainty about the path of the economy and monetary policy heading into 2022. Highlights from the minutes follow:

Taken together, the initial readthrough of the minutes paints a mixed picture: while “most” Fed policymakers are expecting to start tapering this year, there were still “several” who would prefer to wait for next year. Reading between the lines though, the majority of US central bankers appear to be comfortable starting to reduce QE this year as long as there are no major downside shocks to the economy.

Regardless, in the words of noted Fed watcher Tim Duy

As we noted at the top, there were plenty of reasons to believe the minutes wouldn’t be a massive market mover, and that’s exactly what we’ve seen. The market initially read the minutes as more dovish, leading to a quick uptick in indices and gold while Treasury yields and the US dollar dipped. However, those moves quickly reversed.

The focus now shifts to next week’s Jackson Hole Symposium, where traders will closely scrutinize Fed Chairman Powell’s keynote speech for any hints about the timing of a taper announcement.

Fed minutes reveal most FOMC members ready to taper this year Treasuries and VIX jump Oil continues to slide Key EventsFutures contracts on the Dow, S&P, NASDAQ and Russell 2000...

While I’ve been warning for months that the US Federal Reserve (FED) will likely taper its asset purchases much sooner than investors expect, enlightenment struck the...

S&P 500 Futures were down 25 points in the overnight session and crude oil was over 3% lower at $63. 10-year UST yields were about 4bps lower at 1.23%. Other than the Fed...

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Fed fear is back. Investors are getting antsy

CNN 20 August, 2021 - 08:40am

Updated 4:05 PM ET, Thu August 19, 2021

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Stock market news live updates: Stocks edge higher as investors eye lingering virus, Fed policy concerns

Yahoo Finance 20 August, 2021 - 08:31am

The S&P 500 moved slightly higher, though the index was on track to post a weekly decline for the first time in three weeks.

Traders this week have watched a number of market concerns unfold, with infections related to the Delta variant continuing to climb and the Federal Reserve suggesting in its latest meeting minutes that officials believed the economy might recover enough by the end of the year to warrant a shift in their massive asset purchase program. New weekly jobless claims fell more than expected to a fresh pandemic-era low, signaling a notable step forward in the labor market's recovery. 

Meanwhile, corporate earnings results have come in mostly robustly, though many companies have highlighted supply chain constraints and input price increases as potential ongoing headwinds. Manufacturing bellwether Deere (DE) beat estimates for fiscal third-quarter results and raised its full-year profit guidance, but the company noted these results came "while enduring significant supply-chain pressures." FootLocker (FL) also posted results that exceeded estimates Friday morning as more foot traffic returned, though the retailer also highlighted that it continues "to keep a close eye on the business, including temporary store closures and supply chain challenges, and we remain disciplined with expense management."

"There are a lot of risks out there right now. First of all, the market is looking stretched from a valuation perspective. It's continued to make record highs, even amidst some of the volatility that we've seen," Megan Horneman, director of portfolio strategy at Verdence Capital Advisors, told Yahoo Finance. "But we do have some economic concerns right now, just from the supply chain perspective, the inflation perspective. These things are probably going to be a problem for us longer than we had anticipated."

"I think the biggest concern in the equity market would be a taper tantrum," she added. "Interest rates are so stubbornly low. And I think that markets are just waiting there to see if we get some big move higher in interest rates." 

Others suggested the ultimate market reaction to the Fed's eventual tapering announcement and commencement will be short-lived. 

"Given recent Fedspeak, and the upcoming Jackson Hold Symposium and September FOMC meeting, the timing of the Fed's reduction of asset purchases has been a widely discussed topic with many of our clients we speak to seemingly convinced that the stock market will have a tantrum once the tapering is announced," Brian Belski, BMO Capital Markets chief investment strategist, said in a note. 

"For our part, we do not think tapering will cause any sort of prolonged market havoc," he said. "Even when the Fed begins reducing the pace of its bond purchases, the size of its balance sheet will remain very large for quite some time, which should continue to be supportive of U.S. stocks." 

The S&P 500 opened slightly higher Friday morning, pushing into positive territory after futures held lower throughout much of the overnight session. The blue-chip index, however, was still on track to post a weekly decline of more than 1%, as the energy, materials and financials sectors lagged. Investors piled ack into defensive sectors over the past week, and the healthcare, utilities and consumer staples sectors outperformed.

The Dow also opened a tick above the flat line, and the Nasdaq gained. The 10-year Treasury yield was little changed to hover around 1.24%. 

Here's where markets were trading ahead of the opening bell:

S&P 500 futures (ES=F): -21.25 points (-0.48%) at 4,380.25

Dow futures (YM=F): -165.00 points (-0.47%) to 35,653.00

Nasdaq futures (NQ=F): -46.00 points (-0.31%) to 14,882.00

Crude (CL=F): -$0.52 (-0.87%) to $63.17 a barrel

Gold (GC=F): +$3.90 (+0.22%) to $1,787.00 per ounce

10-year Treasury (^TNX): -1.4 bps to yield 1.233%

Here's where markets were trading Thursday evening: 

S&P 500 futures (ES=F): -1.75 points (-0.04%) at 4,403.25

Dow futures (YM=F): +22 points (+0.06%) to 35,840.00

Nasdaq futures (NQ=F): +7.25 points (+0.05%) to 14,935.25

Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck

Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, LinkedIn, YouTube, and reddit

Top news and what to watch in the markets on Friday, August 20, 2021.

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Absent a sharp sell off, Friday will mark the 200th session that the S&P 500 index hasn't produced a drawdown of at least 5% from its recent peak, making the current stretch of equity levitation the longest since 2016, when the market went 404 sessions without falling by at least 5% peak to trough.

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SAN FRANCISCO (Reuters) -Tesla Inc Chief Executive Elon Musk on Thursday said the electric automaker will probably launch a "Tesla Bot" humanoid robot prototype next year, designed for dangerous, repetitive, or boring work that people don't like to do. Speaking at Tesla's AI Day event, the billionaire entrepreneur said the robot, which stands around five foot eight inches tall, would be able to handle jobs from attaching bolts to cars with a wrench, or picking up groceries at stores. The robot would have "profound implications for the economy," Musk said, addressing a labour shortage.

(Bloomberg) -- Stocks rose, led by gains in some of the world’s largest technology companies. The dollar climbed for a fifth day, its longest rally in two months.The S&P 500 trimmed its weekly drop, while the Nasdaq 100 outperformed major benchmarks. Analysts cautioned that options expiring in the U.S. on Friday may fuel volatility. Chinese companies listed in the U.S. are on pace for their longest losing streak in more than a decade after Beijing intensified its regulatory clampdown across vari

Ford Motor Co (NYSE: F) has traded down to its lowest levels since May, but Jim Cramer urged investors not to sell Ford stock. As chip shortage issues continue to impact the automotive industry, Cramer said there are many things that are going well for Ford that investors should pay attention to. See Also: Ford Stock Breaks Critical Level "There are so many things that are going good at Ford including all new models and a decision to no longer lose money in a lot of different places," Cramer sai

Futures fell, signaling further weakness for the market rally. Elon Musk said he'll unveil a humanoid Tesla Bot next year.

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(Reuters) – The S&P 500 edged down in choppy trading on Thursday, with losses in cyclical sectors countering gains in tech shares, as investors took the pulse of the economic rebound and gauged when the Federal Reserve might temper its monetary stimulus.

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This was when institutional investment firms and hedge funds with at least $100 million in assets under management were required to file Form 13F with the Securities and Exchange Commission (SEC). Put simply, a 13F provides a snapshot of what institutional investors and hedge fund managers have been buying and selling over the previous quarter (in this instance, 4/1 through 6/30). Although anything having to do with alternative-power vehicles has seemingly been red-hot for years, billionaires headed for the exit in the second quarter when it came to hydrogen fuel-cell solutions provider Plug Power (NASDAQ: PLUG).

Earlier this week marked the deadline for institutional investment firms, hedge funds, and the ultra-rich to file Form 13F with the Securities and Exchange Commission (SEC). Although it's a dated snapshot that can be at least six weeks old at the time of the SEC filing, it still provides insight into the stocks and trends billionaire money managers might be chasing or shying away from. After poring over 13F data from aggregator WhaleWisdom.com, it became plainly evident that growth stocks were still very much on the minds of billionaire money managers.

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The dangers of continuing with unconventional money policies

Mint 20 August, 2021 - 03:12am

Are “unconventional" monetary policies (UMPs) deployed by the advanced economies a cure worse than the disease? Your columnist has asked this question on numerous occasions in recent years, as it becomes increasingly evident that the harmful side-effects of UMPs, which helped alleviate the worst symptoms of the global financial crisis, are increasingly distorting not only the financial sector but the real economy as well, and causing serious and harmful “spillover" effects on emerging economies such as India.

Raghuram Rajan, former governor of the Reserve Bank of India, has been a well-known critic of UMPs, and, in particular, the damaging effects of the “taper tantrum" of 2013, in which then Federal Reserve Board chairman, Ben Bernanke, had to walk back from plans to taper the large scale asset purchases—commonly called “quantitative easing"—after his remarks that they would begin to taper, touched off a firestorm in international financial markets, and hit emerging economies, including India, especially hard.

Recently, Rajan penned a column (“The Dangers of Endless Quantitative Easing", Project Syndicate, 2 August), in which he weighed-in on the current debate occurring amongst members of the Fed as well as academic, bank and corporate economists on whether it is now high time for the Fed to taper its asset purchases, at present $120 billion per month. Rajan’s view is that supply constraints are now more pertinent than insufficient demand, and excessively accommodative monetary policy runs the risk of stoking inflation, which would have fiscal implications in the medium to longer run, increasing the servicing costs on the large stock of government debt due to interest rates that will eventually have to go up as inflation begins to spike.

On 18 August, speaking to the Financial Times (“Top Fed Official Warns Massive Bond Purchases are Ill-suited for US economy"), Eric Rosengren, president of the Boston Fed, threw his weight behind the Fed board beginning to taper after it meets next month, with the aim of winding down asset purchases altogether by the middle of next year, again citing supply constraints, such as the difficulty employers in the US are encountering finding workers, even as they offer higher wages. Importantly, Rosengren pointed to the harmful effects of asset price appreciation and “undue leverage", as fund managers take on more and excessive risks in the search for yield in a low-interest environment.

Ironically, asset price bubbles fuelled by leverage and low interest rates were the proximate cause of the global financial crisis to begin with, and they are in play once again as a serious side-effect of low interest rates and asset purchases used to combat the effects of the crisis. This is a little like someone suffering insomnia, who then gets hooked on to sleeping pills, and is unable to taper them and ends up taking them for life. Unless the US, and other advanced economies, begin to take seriously the need to pull back from UMPs, this is the situation we may end up in.

It is worth reminding ourselves that debates about monetary policy are not merely an esoteric pastime for central bankers and finance gurus. Rather, excessively loose monetary policy has long-lasting and perverse effects on the real economy, too. One of the most damaging of these side-effects is the increase in wealth and income inequality that has been abetted by low interest rates and asset price inflation.

It is, after all, the already wealthy who have money to invest, and skyrocketing asset prices, everything from property to antique automobiles, boosts their wealth and income. By contrast, lower income households put their money in the bank, where they earn low, almost zero, interest rates that barely keep pace with inflation.

There is more than a little bit of irony in the fact that loose monetary policy, which has received widespread support from left-leaning economists in the US, actually has done more to worsen inequality than the effects, say, of former president Donald Trump’s tax cuts, which were widely criticized for being pro-rich. A recent study, reported on by Bloomberg (“U.S. Wealth Gap Rises with Jackson Hole Coming at the Top", 18 August), documents widening wealth gaps between the top and bottom deciles of US counties. Looking at income from assets, in particular, interest, dividends, and rents, on a per capita basis, the top 10% of counties earned about $20,000 in asset income per person, on average. Meanwhile, in the bottom 10% of counties, that figure was only about $7,500. This has very little to do with the structure of taxation and very much to do with the distorting effects of low interest rates and frothy asset prices.

There are also more conventional dangers that lurk, unless the Fed and other advanced economy central banks get serious about winding down asset purchases and returning policy interest rates to more normal territory and away from near-zero. During the “great moderation", a long period of low inflation that preceded the financial crisis, there was a smug insouciance amongst central bankers and even academic economists that high inflation was a thing of the past. But with inflation now starting to tick up in the US and elsewhere, that smugness may soon evaporate, as Fed officials realize that it is far from easy to put the inflation genie back in the bottle, once it has been uncorked.

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