|Day's Range||1.7470 - 1.7470|
|52 Week Range||1.4290 - 3.2390|
Investors have long been told that the ideal portfolio should carry 60% of its holdings in equities and 40% in bonds, a mix that provides greater exposure to historically superior stock returns, while also granting the diversification benefits and lower risk of fixed-income investments. “The relationship between asset classes has changed so much that many investors now buy equities not for future growth but for current income, and buy bonds to participate in price rallies,” Harris and Woodard wrote.
Dow sheds more than 250 points after data showed China’s economic growth slowing further in the third quarter and investors awaited more signals from the corporate earnings season about the health of the U.S. economy.
U.S. Treasury yields mostly lower Friday as investors eye developments on Brexit ahead of Parliament’s vote on the weekend.
A speech by Fed’s Clarida, which was later corrected, appeared to suggest the central bank had made a sudden tweak to how it would expand the U.S. central bank’s $3.6 trillion balance sheet.
The strength of the U.S. dollar doesn’t help U.S. companies — but it’s the relatively perkier yields on U.S. government bonds that’s attracting more capital to the country
Federal Reserve Vice Chairman Richard Clarida on Friday said the economy is facing "evident" risks, while inflation remains muted. In a speech in Washington, Clarida didn't say much about what action the central bank may take at its meeting in two weeks in light of the risks and low inflation. He stressed interest-rate policy was not on a preset course and policy makers would make decisions meeting-by-meeting. Officials would assess the risks and will act as appropriate, he added. The Fed has already cut interest rates twice this year "to provide a somewhat more accommodative policy in response to muted inflation pressures and the risks to the outlook," he noted. Clarida's comments represent the last public word from the Fed leadership ahead of the Oct. 29-30 meeting.
Dallas Fed President Robert Kaplan said Friday that he's not sure whether the central bank should cut rates at its meeting at the end of the month. "I'm going into the meeting open-minded, but I'm agnostic at this point on whether we should be taking action at the October meeting," Kaplan said in comments to reporters after a talk in Washington. Kaplan said he had been a strong proponent of the two rate cuts so far this year but now was open to the idea that the central bank could take some time to assess the economy and the stimulus from those two moves. The Dallas Fed president said that businesses were cutting back on plans due to trade uncertainty but haven't taken the next step of actively cutting back on their workforce. Asked about the market pricing in an 85% chance of a cut by the end of October, Kaplan said it was not his job to do what investors expect. Kaplan said that he had penciled in one more rate cut by the end of 2020 but said this could change. There are downside risks to this forecast, he said. Kaplan is not a voting member of the Fed interest-rate committee this year.
The U.S. grew more slowly in September and is likely to remain soft in the months ahead, according to an index that measures the nation’s economic health.
With less than two weeks to go before the U.S. Federal Reserve interest rate decision on October 30, every economic report will take on added importance especially with the manufacturing sector weakening, the labor market showing signs of softening and inflation still coming in below expectations.
Participants who see the recent positive slope of the yield curve as a good new for the economy and pitted against those who fear it signals a hastening recession
The number of unemployed workers who applied for jobless benefits in the second week of October rose slightly, but layoffs nationwide remained near a 50-year low and showed no sign of rising despite a slowdown in the U.S. economy. Initial jobless claims increased by 4,000 to 214,000.
Construction on U.S. new houses fell more than 9% in September, but a recent surge in permits suggests the decline in so-called housing starts is just a brief pause in a real estate market reinvigorated by lower mortgage rates.
Institutional investors are taking more risks because of low interest rates and that’s dangerous for the global economy, the International Monetary Fund said in a new report
U.S. Treasury yields fell Wednesday after a lackluster retail sales data suggest weakness in manufacturing may be spilling over into other areas of the economy.
Home builders are gung-ho again thanks to dramatically lower mortgage rates. A survey of home-builder sentiment surged in October to a 20-month high.
Sales at U.S. retailers fell in September for the first time in seven months as most stores posted lower receipts, signaling that a widely expected slowdown in consumer spending is under way.
Strains in short-term lending markets popped up again on Wednesday as the cost of borrowing funds overnight in return for high-quality collateral, or the repo rate, shot up on Wednesday. Hedge funds and banks use the repo market to finance their balance sheets and trading positions. The overnight repo rate spiked as high as 2.26%, according to one estimate. This compared with the effective fed funds rate, which stood at 1.90% on Oct. 15. The repo rate usually closely tracks the central bank's benchmark interest rate as they both are considered sources of short-term borrowing. Repurchasing agreements of $75 billion by the Federal Reserve was fully taken up for the first time since Sept. 25. Since last month, the central bank has looked to relieve pressures in funding markets by offering regular injections of liquidity and announcing monthly purchases of $60 billion Treasury bills at least through the second quarter.
Fed funds futures markets on Wednesday indicated a 90.3% probability that the Federal Reserve will cut interest rates for a third consecutive meeting when the central bank's interest-rate setting committee gathers Oct. 30 and 31, up from a 73.8% chance Tuesday, according to CME Group data. The move follows a Commerce Department estimate that U.S. retail sales fell in September for the first time in seven months. The yield on the 10-year U.S. Treasury note fell 2.7 basis points to 1.742%, that on the 2-year note fell 3.7 basis points to 1.577%, while the 30-year Treasury Bond yield retreated 0.6 basis point to 2.226%. A monthlong strike at General Motors may have contributed to weaker sales, after it has idled tens of thousands of workers in the Midwest.
What traders could be waiting for is Trump’s response. Will he defy his promise to Chinese President Xi Jinping, or will he remain silent? It’s highly unusual for Trump to remain silent for too long especially when a foreign country threatens the U.S. with “strong countermeasures.”
China’s Foreign Ministry spokesperson has warned of “strong countermeasures” against the U.S. that if it passes three bills aimed at supporting Hong Kong protesters.
One group like Fed Chair Jerome Powell believes the outlook is generally positive. Another believes the U.S. economy needs even easier policy to avoid sinking into a recession. Still a third group believes the Fed has gone far enough or even a little too far in trying to revitalize the economy.