Posts by Deirdre Hughes
- Deirdre Hughes at Yahoo Finance4 days ago
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.
- Deirdre Hughes at Yahoo Finance5 days ago
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.
- Deirdre Hughes at Yahoo Finance6 days ago
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.
- Deirdre Hughes at Yahoo Finance25 days ago
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.
- Deirdre Hughes at Yahoo Finance1 mth 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’
- Deirdre Hughes at Hot Stock Minute1 mth 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.
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.
ESPN has announced it will launch a “Tiger-only” channel for next week’s British Open from Royal Liverpool in England. Seems like a brilliant move, considering the lackluster ratings for the first two majors of the season and the Players Championship, all of which were missing Tiger while he recovered from back surgery. Weekend ratings for this year’s Masters – missing Tiger Woods and Phil Mickelson - were the lowest since 1957, according to Sports Media Watch. The U.S. Open saw a 46% decline from the previous year and ratings for the final round of the Players Championship were down 54% from last year.
So will ESPN3’s Tiger feed make up for the lost time viewers have had with Tiger so far this year or will it just siphon more viewers away from the main broadcast?
California this week mandated a minimum wage of at least $9 an hour, making it the third state to do so, and several more plan to follow suit. President Obama has called for Congress to raise the federal minimum wage to $10.10 an hour, but that proposal has not and is not likely to gain any traction in Washington. Why? Because there are many - like CKE Restaurants CEO Andy Puzder - who argue that "artificially” raising the minimum wage when it’s not justified by economic growth is actually detrimental to workers and the economy.
“When there’s a demand for labor, the cost of labor goes up. When there’s no demand for labor, it goes down and you can’t solve that problem by having the government artificially mandate a wage increase when there’s no economic growth to support that,” says Puzder. “What businesses do is they increase their prices and they move to automation so you have less jobs.”
Happy 4th of July, Wall Street. Now, brace for turbulence. Market watcher and political strategist Greg Valliere of Potomac Research Group says the chance the market will hit some “air pockets” in the second half of the year is rising.
Stocks have been on a tear in the first sixth months of the year, with the S&P repeatedly hitting new record highs and Dow 17,000 in the conversation. And by most, if not all, accounts the economy is now expanding, despite a sharp decline in first quarter GDP. More recent evidence – including strong reports on manufacturing activity and private sector job growth – points to accelerating economic growth. Valliere believes the 2.9% decline in GDP in the first quarter is “ancient history” and the economy is on track for stronger growth in the next three quarters. “I think we’re now going into a new glide path: 3% to 3-1/2% GDP,” he says. And “we had better, because I think stocks are priced for 3% to 3-1/2% GDP. I think that’s already in the market.”
Valliere says that while the fundamentals of the economy still look strong, there are three big potential trouble spots the markets will need to keep a close watch on in the second half of the year.