Posts by Deirdre Hughes
Stocks tanked Wedneday morning, with the Dow (^DJI) opening down 350 points. The Nasdaq (^IXIC) and S&P 500 (^GSPC) also plunged out of the gate. The selling was spurred by renewed concerns about Europe and reports of another case of Ebola in the United States.
Yahoo Finance Editor-in-Chief Aaron Task spoke with David Nelson, Chief Strategist at Belpointe Asset Management about what it’s going to take to reverse the downtrend.
Nelson says that in order to have confidence that we’ve seen the bottom in the market, he needs to see a shift in leadership.
So which sectors will revive the bull market?
“We need to see tech, financials and industrials lead the way out of this," he says. "Until that happens, then really, all bets are off.”
Early indications Wendesday suggest others are following a simliar script.
A second healthcare worker in Texas has tested positive for Ebola, officials said Wednesday. The head of the Centers for Disease Control late yesterday admitted the CDC "could have sent a more robust hospital infection control team and been more hands on with the hospital from day one about how this should be managed.”
Yahoo Finance’s Bianna Golodryga spoke with Congressman Tim Ryan, Democrat of Ohio and a member of the powerful House Appropriations and Budget Committees, about the Ebola outbreak and the U.S. response. Congressman Ryan says the United States has been "disinvesting" in critical areas, including healthcare and emergency preparedness for the last decade.
“We’ve been disinvesting in the NIH in the last ten years and the CDC for the last ten years. CDC’s been cut by $500 million in the last few years. NIH has been cut by $400 million in the last few years. And CDC’s money for preparedness is down $1 billion from 2003. So, now all of a sudden we have an issue. You know? We’ve had bridges collapse; we’re sicker than we used to be.”
For Congressman Ryan, that balance could be example for the federal government to follow.
Entrepreneur and author of the new book, “Zero to One: Notes on Startups, or how to Build the Future”, Peter Thiel, makes a strong case against the popular concept of free market capitalism, but he also wouldn’t invest in China due in part to the Communist party’s control and the opaque business environment.
So what does he favor? Monopolies. But only “good monopolies.”
In his book, Thiel explains what he defines as “zero to 1” this way:
“Doing what we already know takes us from 1 to n, adding
more of something familiar. But every time we create something
Don’t invest in China
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The Federal Reserve Wednesday reassured investors that it will hold interest rates near zero for a “considerable time” after it ends the bond-buying program known as quantitative easing in October. In response, the Dow Jones Industrial Average (^DJI) closed at a new record high.
Former Director of the Office of Management and Budget and author of the book, The Great Deformation, David Stockman, has significant concerns about that very policy.
“I’m worried… that we’ve got the greatest bubble created by a central bank in human history,” he told Yahoo Finance.
Behind the madness
In an interview with Yahoo Finance, Stockman blamed Fed policy for creating that madness.
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The world will be watching the latest announcement from the Federal Reserve a little more closely this time around. The added interest is due in part to the internal struggle going on behind the scenes at the Fed between doves like Chair Janet Yellen and her more hawkish colleagues, including Philadelphia Fed president Charles Plosser, who dissented at the last meeting.
If noted economist James Galbraith, professor at The University of Texas at Austin, is correct, there is good reason for the heightened interest and drama surrounding Wednesday’s announcement and press conference. In Professor Galbraith’s view, the Fed may have painted itself into a corner.
“The Fed has a dilemma. It, of course, would like to come off of its present policy stance, but people are accustomed to it and if interest rates go up, you get an inverted yield curve with bad consequences.”
Galbraith points to the global market reaction to comments from Yellen’s predecessor at the Fed, Ben Bernanke, when he signaled in June 2013 that the Fed would begin to wind down its asset-purchase program eventually.
The drumbeat for a U.S.-led war with ISIS is growing louder, and the coalition of countries vowing to destroy the group is growing in number after British aid worker David Haines was beheaded, the latest in a series of brutal murders. Haines’ beheading follows the murders of two American journalists, James Foley and Steven Sotloff.
British Prime Minister David Cameron said his country will do whatever is necessary to combat the Islamic State.
"We have to confront this menace. Step by step, we must drive back, dismantle and ultimately destroy ISIL and what it stands for," said Mr. Cameron. "As this strategy intensifies, we are ready to take whatever steps are necessary to deal with this threat and keep our country safe."
U.S. officials also took to the Sunday talk shows over the weekend to make the case for military action against ISIS.
Secretary of State John Kerry went on CBS’ Face the Nation and emphasized the coalition of countries prepared to strike Iraq and Syria.
Market reaction to escalation
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Congressman Paul Ryan believes he has remedies for immigration, healthcare and the economy. In a wide-ranging interview with Yahoo Finance, the potential presidential candidate and author of the new book, “The Way Forward: Renewing the American Idea,” tells Bianna Golodryga that he has not yet decided whether he’s running for president in 2016, but his strong opinions on a number of domestic and international policies suggest otherwise.
Ryan's remedy for immigration
One of the most contentious issues – and an issue on which Congressman Ryan differs somewhat from some of his Republican colleagues - is immigration. This week, there has been renewed speculation that President Obama could bring immigration back to the fore and possibly take some action in the form of executive orders while Congress is out of town.
"Obamacare will collapse"
Congressman Ryan believes the slowing growth in Medicare spending is due to a “temporary aberration” that will not change the eventual fate of Obamacare.
Headed in the wrong direction
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Deirdre Hughes at Yahoo Finance 4 mths ago
Stock prices fell and oil prices rose Friday after reports that Ukrainian forces attacked a Russian convoy in Ukraine. Fresh concern about geopolitical tensions canceled out earlier gains for stocks, which ended the day mixed after paring much of the earlier steep losses. Before the reports from Ukraine, stocks were higher on signs the economy is improving, but not too quickly. Producer prices rose 0.1% in July, slightly less than the 0.2% economists expected. Consumer confidence, however, missed expectations, according to the Thomson Reuters/University of Michigan Consumer Sentiment Index for August.
‘Consumers are afraid’
One analyst said Walmart's decision not to buy Family Dollar was “the first major failure” of Walmart President and Chief Executive Doug McMillon’s administration. Dollar stores, in general, have been hard hit by the economy, with their bread-and-butter customer seeing slow wage growth and cuts to food stamp programs.
Americans not spending on housing
When Yellen speaks
'He could move the markets'
Deirdre Hughes at Hot Stock Minute 4 mths ago
Argentina has until Wednesday to avoid its second default in 13 years. President Cristina Kirchner’s government and bondholders have been locked in a standoff that took the parties all the way to the U.S. Supreme Court.
Tuesday, representatives of the Argentine government are meeting with a court-appointed mediator in New York for another round of negotiations in a last-ditch effort to resolve a standoff with creditors over debt payments.
If no agreement is reached, Argentina will be in default as of Wednesday. The biggest sticking point so far has been one group of creditors that is refusing to accept $0.30 on the dollar on Argentina’s debt obligation. Argentina claims it cannot afford the $15 billion it faces in potential debt payments.
General consensus is that a deal is not likely. Investors showed their skepticism by dumping Argentine bonds Monday, sending them to a one-month low.
What happens if Argentina defaults?
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Deirdre Hughes at Yahoo Finance 5 mths ago
After several weeks of relative calm to kick off the summer, the markets this past week were awakened by a fresh scare out of Europe and some comments from the Fed. Trading volume and some volatility returned. And that was likely just a preview of what investors can expect in the coming week.
Yahoo Finance’s Jeff Macke says the light volume we’ve seen will show up in the banks’ results. “What we’re going to see is that trading volumes have plummeted,” says Macke. “The trading desks are a nightmare … I want to see how the stocks react. That’s going to be the next big thing that Wall Street obsesses over next week. Whether or not it fundamentally matters or should be a surprise is almost beside the point. It’s going to be the reaction.”
Yellen goes to the hill
Another constant concern for the Fed is the consumer. This coming week will reveal how freely consumers have been spending, and on what, with a report on retail sales for June expected Tuesday morning. Yahoo Finance’s Rick Newman says consumers have shown some strange behavior recently. Namely, spending on big-ticket items, such as cars, but passing up everyday purchases.