Posts by Michael Santoli

  • Obama's foreign policy 'pivot' toward Asia is incomplete: Ian Bremmer

    Michael Santoli at Yahoo Finance 9 hrs ago

    President Obama entered the White House six years ago promising to reorient U.S. foreign policy priorities toward Asia from Europe and the Middle East.

    His administration has been criticized for failing to follow through on this “pivot,” as civil wars in the Middle East and Russia’s incursion into Ukraine commanded greater focus than a largely stable Asian continent.

    Yet Ian Bremmer, founder and president of the Eurasia Group political-risk consulting firm, says Obama’s efforts in Asia – and with a rising China specifically -- have been somewhat productive, at least in terms of economic relations.

    “I would argue that Obama’s Asia policy has been probably one of his more effective policies – certainly more than Russia, the Middle East and Europe,” says Bremmer in the attached video.

    As one major point of progress, he singles out the president’s firm backing of the Trans-Pacific Partnership trade agreement against opposition both from some Republicans and prominent members of his own party.

     

     

     

  • Stocks listen to the Fed, but obey the bond market

    Michael Santoli at Yahoo Finance 11 hrs ago

    There’s really not much to worry about. When the big expected thing happens, whenever that is, it will be fully expected, and we should all be able to handle it without much trouble.

    That’s been the message from a couple of richly credentialed central bankers in the past day or so, as they try to reassure investors that by the time the Federal Reserve starts snugging up interest rates, the move will be well telegraphed and will occur for the right reasons.

    Fed Vice Chair Stanley Fischer gently chided investors for placing too much emphasis on the first rate boost, whenever it comes, because it will be merely the first tiny step on a long trip back to normal for monetary policy.

    Ben Bernanke overnight sounded a similar note to audience in South Korea, saying that the first hike will be good news because it means the U.S. economy is doing better, and he added that he sees no real extremes in real estate or financial market behavior at the moment.

  • Rents are rising, but don't expect broad inflation to surge: Merrill economist

    Michael Santoli at Yahoo Finance 5 days ago

    The rent is getting steep and gas prices are climbing again. But broad price inflation is still tame, and is unlikely to squeeze consumers or upend financial markets any time soon.

    That’s the take by Bank of America Merrill Lynch senior U.S. economist Michael Hanson, who points out in the attached video that while “core” inflation is “firming, it is still at very low levels.”

    Gains in shelter costs, including rents, led the core measure of consumer prices – which excludes food and energy products - to a 0.3% increase in April, slightly above forecasts. That lifted the annual gain in the core Consumer Price Index to 1.8%. Overall CPI arrived as expectedat 0.1%.

    Hanson points out that the 0.3% rise in core CPI even overstated the move, as it was rounded up from slightly more than 0.25%.

    Fed Chair Janet Yellen has said that inflation doesn’t need to get above 2% before the Fed tightens, but that policy makers must be reasonably confident inflation is headed there prior to a “liftoff” in rates.

    Which at least could mean that savings at the mall can help Americans cover those rising rents.

     

  • In a quiet stock market, whispers of an M&A wave

    Michael Santoli at Yahoo Finance 5 days ago

    The market reveals its true character in quiet moments. When the price moves are gentle, trading volume is muted and the news slate is light, the flow of investor money offers subtle clues about the market’s best guesses and fondest hopes about the near future.

    Thursday was such a day, as the S&P 500 (^GSPC) made a now-typical grudging, low-drama shuffle to a new all-time high, rising less than one-quarter of a percent as measures of expected volatility sank ahead of the holiday weekend.

    One valid critique of the recent rally has been its narrowness, with a relative few stocks driving things. Yet a look at the stocks that did manage to scale new heights on this day shows what the market is fixated on – and in this case, it seems that corporate deal making is animating the action below the surface.

  • Stock market rally lacks a certain style

    Michael Santoli at Yahoo Finance 6 days ago

    For the stock market, simply climbing to an all-time high isn’t impressive enough for some critics. Style points matter too – and right now the arbiters of style find the look of this rally to be just a bit off.

    First, though, the positive parts: When the S&P 500 (^GSPC) clicked to its record-high close set earlier this week, it was accompanied by fresh highs in financial and technology stocks. This was the hallmark of bull markets past, the money dealers and computing names leading the way. Yet that’s about where the applause ends and the nitpicking starts.

    Several groupings of stocks deemed significant for the underlying health of a market move are conspicuously lagging. Let’s take the complaints in turn:

  • Would you trust a robot to manage your money?

    Michael Santoli at Yahoo Finance 7 days ago

    Would you trust a robot to manage your money?

    More and more investors are turning to so-called "robo-advisors," or automated investment services, which use proprietary software programs to determine how investors should best allocate their investments.  Using an online questionnaire, investors share information online such as their age, risk tolerance, and investment goals, and receive an investment plan tailored to their needs.

    The programs offer big savings over traditional investment services, but is this the right way to plan your investments?

    Naureen Hassan, head of Charles Schwab’s robo-advisory service Intelligent Portfolios, says “there hasn’t been a specific target, like a millennial or a boomer. Our clients have ranged from 18 into their 80’s.  It’s anybody who’s comfortable with technology and wants help in an automated and easy way to manage their money.”

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  • Silicon Valley banks on Bitcoin as a way to overtake Wall Street

    Michael Santoli at Yahoo Finance 7 days ago

    If you asked most people through history their biggest complaint about money, most would say they just don’t have enough of it.

    But there have long been small factions dissatisfied with the dominant forms of money, which sought a more secure, private, efficient means of storing wealth and paying for things.

    The digital currency Bitcoin emerged from these desires, enabled by pervasive access to the Internet and alarm over the failures of central banks and private financial institutions in the credit bust of the late 2000s.

    Nathaniel Popper, a New York Times reporter who covers the interplay of finance and technology, has now detailed Bitcoin’s rise through the story of the quixotic utopians and mercenary opportunists who helped develop it in his new book, “Digital Gold: Bitcoin and the Inside Story of the Misfits and Millionaires Trying to Reinvent Money.”

    As Popper notes in the attached video, privacy advocates had led the quest for “a new money for the Internet Age” since the 1990s, uneasy with the permanent traces left by electronic transactions and suspicious of the banks and governments that controlled the creation and flow of money.

  • What if data Fed is watching is not 'dependable'?

    Michael Santoli at Yahoo Finance 7 days ago

    Federal Reserve policy makers have emphasized for many months that the timing of its first interest-rate boost in nine years will be “data dependent.” But what if the data are not as dependable as we thought?

    This afternoon, the minutes from the Fed’s April meeting will be released, detailing the deliberations of the policy committee following a surprisingly weak first quarter and downbeat March employment report. This unexpected downshifting of first-quarter growth once again encouraged investors to push off the chances of a rate hike my mid-year.

    Yet in recent weeks there has been a movement to question whether there is some statistical quirk behind what seems like an annual ritual of soft first-quarter economic performance in the U.S. After some academic economists started raising questions, the San Francisco Fed this week lent some weight to the ideathat the standard seasonal-adjustment factors applied to the raw GDP data might unfairly penalize the first calculations of economic growth.

  • Will the markets' May-September romance turn rocky?

    Michael Santoli at Yahoo Finance 9 days ago

    The markets are caught up in a May-September romance.

    As the back half of May unfolds, a large majority of Wall Street play callers are projecting that September will be when the Federal Reserve finally will be able and willing to begin lifting short-term rates off the zero mark. And investors, for now, seem pretty blissful about this scenario.

    Stocks were coaxed to a new all-time high for a brief moment late last week. And bonds have calmed down after a couple of weeks when yields scrambled higher. By the Wall Street Journal’s latest survey, some 73% of economists say September will bring the Fed’s “liftoff” rate hike, with 12% pegging June or July and the remaining 15% expecting nothing until the fourth quarter or beyond. Yet there’s a bit of a gap between what people are saying and how they’re behaving – not so unusual, perhaps, for May-September romances.

  • Investors skip trendy 'fast casual' chains, flock to old fast-food stocks

    Michael Santoli at Yahoo Finance 12 days ago

    Forget the “casual” part — Wall Street right now just wants its food fast, and no need to make it organic or healthy.

    “Fast casual” became the trendy buzz phrase for new restaurant stocks a couple of years ago, as young, regional chains curried the favor of investors looking for “the next Chipotle.”

    What Chipotle Mexican Grill Inc. (CMG) did for Mexican food – using fresh, organic ingredients and making food to order – Noodles & Co. (NDLS) promised to do for pasta and Asian noodles, El Pollo Loco Holdings Inc. (LOCO) for rotisserie chicken, The Habit Restaurants Inc. (HABT) for burgers and Zoe’s Kitchen Inc. (ZOES) for Mediterranean fare.

    Each of these upstarts completed an initial public offering between June 2013 and November 2014, and each was greeted by voracious investor demand that drove their stocks up between 60% and 104% on their first day of trading.