THE DAILY NEWS

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Re: THE DAILY NEWS

Post by thelivyjr » Thu Apr 08, 2021 1:40 p

CNBC

"China’s central bank warns of financial risks, including potential defaults"


Evelyn Cheng @chengevelyn

Published Thu, Apr 1 2021

Key Points

* China’s central bank warned on Thursday of financial risks in the country that have accumulated over the years, as well as shocks from overseas uncertainties.
   
* The detailed comments mark the latest warning from high-level officials in China in recent weeks about domestic market risks.


BEIJING — China’s central bank warned on Thursday of financial risks in the country that have accumulated over the years, as well as shocks from overseas uncertainties.

These risks include “oscillation” in the stock and fixed income markets and potential bond defaults in real estate companies, said Zou Lan, director of the People’s Bank of China’s financial markets department.


The detailed comments mark the latest warning from high-level officials in China in recent weeks about domestic market risks.

The Shanghai composite is little changed for the year, while the S&P 500 has climbed more than 5%

The coronavirus pandemic and high volatility in international capital flows have also shocked the domestic financial market, Zou told reporters.

Risk of defaults is ‘rather high’

“The stock, bond and commodities markets face oscillation risks,” he said, according to a CNBC translation of his Mandarin-language remarks.

“A small number of large-scale enterprise groups are still in a period of risks being exposed, middle and low-quality enterprises still face financing difficulties, and the risk of default is rather high.”

Zou added that pressure from rising house prices in some “hot” cities is relatively large, and the potential of debt default and other risks among highly leveraged medium-sized and small real estate businesses is worth watching.

The Chinese government announced last month it will target GDP growth of over 6% this year.

Many economists said the conservative target gives policymakers the ability to address long-term problems such as a buildup of debt.

China’s debt-to-GDP ratio rose to 285% as of the end of the third quarter of 2020, up from an average of 251% between 2016 to 2019, according to a report from Allianz, citing analysis from its subsidiary Euler Hermes.

Among signs that authorities have started to get serious about domestic risks, some state-owned enterprises defaulted on their debt last year — very rare for companies that investors believed had implicit government support.

But in the housing market, Beijing has struggled to limit speculation.

New home prices rose by their fastest rate in five months in February, according to Reuters.


Officials from the People’s Bank of China at Thursday’s press conference maintained that monetary policy would remain stable and supportive.

Zou did not give specific details on how the financial risks he mentioned would be addressed.

Data also provided by Reuters

https://www.cnbc.com/2021/04/01/chinas- ... lainternal

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Re: THE DAILY NEWS

Post by thelivyjr » Thu Apr 08, 2021 1:40 p

CNBC

"Morgan Stanley dumped $5 billion in Archegos’ stocks the night before massive fire sale hit rivals"


Hugh Son @hugh_son

Published Tue, Apr 6 2021

Key Points

* Morgan Stanley sold about $5 billion in shares from Archegos’ doomed bets to a small group of hedge funds late Thursday, March 25, according to people who requested anonymity to speak frankly about the transaction.
   
* Morgan Stanley had the consent of Archegos, run by former Tiger Management analyst Bill Hwang, to shop around its stock late Thursday, these people said. The bank offered the shares at a discount, telling the hedge funds that they were part of a margin call that could prevent the collapse of an unnamed client.

* But the investment bank had information it didn’t share with the stock buyers: The basket of shares it was selling was merely the opening salvo of an unprecedented wave of sales by Morgan Stanley and five other investment banks starting the very next day.


The night before the Archegos Capital story burst into public view late last month, the fund’s biggest prime broker quietly unloaded some of its risky positions to hedge funds, people with knowledge of the trades told CNBC.

Morgan Stanley sold about $5 billion in shares from Archegos’ doomed bets on U.S. media and Chinese tech names to a small group of hedge funds late Thursday, March 25, according to the people, who requested anonymity to speak frankly about the transaction.


It’s a previously unreported detail that shows the extraordinary steps some banks took to protect themselves from incurring losses from a client’s meltdown.

The moves benefited Morgan Stanley, the world’s biggest equities trading shop, and its shareholders.

While the bank escaped from the episode without material losses, other firms were less fortunate.

Credit Suisse said Tuesday that it took a $4.7 billion hit after unwinding losing Archegos positions; the firm also cut its dividend and halted share buybacks.

Morgan Stanley had the consent of Archegos, run by former Tiger Management analyst Bill Hwang, to shop around its stock late Thursday, these people said.

The bank offered the shares at a discount, telling the hedge funds that they were part of a margin call that could prevent the collapse of an unnamed client.

But the investment bank had information it didn’t share with the stock buyers: The basket of shares it was selling, comprised of eight or so names including Baidu and Tencent Music, was merely the opening salvo of an unprecedented wave of tens of billions of dollars in sales by Morgan Stanley and other investment banks starting the very next day.

Some of the clients felt betrayed by Morgan Stanley because they didn’t receive that crucial context, according to one of the people familiar with the trades.

The hedge funds learned later in press reports that Hwang and his prime brokers convened Thursday night to attempt an orderly unwind of his positions, a difficult task considering the risk that word would get out.

That means that at least some bankers at Morgan Stanley knew the extent of the selling that was likely and that Hwang’s firm was unlikely to be saved, these people contend.

That knowledge helped Morgan Stanley and rival Goldman Sachs avoid losses because the firms quickly disposed of shares tied to Archegos.


Morgan Stanley and Goldman declined to comment for this article.

Morgan Stanley was the biggest holder of the top ten stocks traded by Archegos at the end of 2020 with about $18 billion in positions overall, according to an analysis of filings by market participants.

Credit Suisse was the second most exposed with about $10 billion, these sources noted.

That means that Morgan Stanley could’ve faced roughly $10 billion in losses had it not acted quickly.

“I think it was an ‘oh s---’ moment where Morgan was looking at potentially $10 billion in losses on their book alone, and they had to move risk fast,” the person with knowledge said.

While Goldman’s sale of $10.5 billion in Archegos-related stock on Friday, March 26 was widely reported after the bank blasted emails to a broad list of clients, Morgan Stanley’s move the night before went unreported until now because the bank dealt with fewer than a half-dozen hedge funds, allowing the transactions to remain hidden.

The clients, a subgenre of hedge funds sometimes dubbed “equity capital markets strategies,” typically don’t have views on the merits of individual stocks.

Instead, they’ll purchase blocks of stock from big prime brokers like Morgan Stanley and others when the discount is deep enough, usually to unwind the trades over time.

After Morgan Stanley and Goldman sold the first blocks of shares with the consent of Archegos, the floodgates opened.


Prime brokers including Morgan Stanley and Credit Suisse then exercised their rights under default, seizing the firm’s collateral and selling off positions on Friday, according to the sources.

In a wild session for stocks on that Friday in late March came another twist: Some of the hedge fund investors who had participated in the Thursday sales also bought more stock from Goldman, which came later to market at prices that were 5% to 20% below the Morgan Stanley sales.

While these positions were deeply underwater that day, several names including Baidu and Tencent rebounded, allowing hedge funds to unload positions for a profit.

“It was a gigantic clusterf--- of five different banks trying to unwind billions of dollars at risk at the same time, not talking to each other, trading at wherever prices were advantageous to themselves,” one industry source said.

Morgan Stanley largely exited its Archegos positions by Friday, March 26 with the exception of one holding: 45 million shares of ViacomCBS, which it shopped to clients on Sunday, according to the people.

The bank’s delayed disposal of Viacom shares has sparked questions and speculation that it held onto the stock because it wanted a secondary offering run by Morgan Stanley the week before to close.

Despite leaving some of its hedge fund clients feeling less-than-thrilled, Morgan Stanley isn’t likely to lose them over the Archegos episode, the people said.

That’s because the funds want access to shares of hot initial public offerings that Morgan Stanley, as the top banker to the U.S. tech industry, can dole out, they said.

Data also provided by Reuters

https://www.cnbc.com/2021/04/06/morgan- ... -sale.html

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Re: THE DAILY NEWS

Post by thelivyjr » Thu Apr 08, 2021 1:40 p

REUTERS

"TREASURIES OUTLOOK-U.S. yields tumble as early Fed hike views seen too ambitious"


By Gertrude Chavez-Dreyfuss

April 6, 2021

* U.S. 5-, 7-, 10-, 30-year fall to one-week lows

* Buying by overseas investors support Treasuries -fund manager

* Eurodollar futures price in 3 Fed hikes by end-2023

* U.S. 2/10 yield curve flattens


NEW YORK, Reuters (April 6) - U.S. Treasury yields fell on Tuesday, led by the so-called belly of the curve, on investor views that market pricing based on an earlier-than-expected tightening by the Federal Reserve was too aggressive.

Market participants also said there was some support for Treasuries from overseas buyers, particularly Japanese investors after the end of their fiscal year on March 31.

Japanese investors, ahead of the fiscal year-end, typically sell U.S. assets such as Treasuries and repatriate those proceeds back to their home country to enhance their balance sheets.

U.S. 5-year notes led the decline in yields, falling seven basis points to 0.872% after hitting 14-month highs on Monday.

Seven-year yields also fell, down seven basis points as well, at 1.332%.

U.S. 10-year and 30-year yields fell to more than one-week lows, while those on the 20-year dropped to a two-week trough.

Movements in U.S. 5-year note yields typically reflect the market’s interest rate expectations, analysts said.

At its March policy meeting, the Fed made it abundantly clear that it does not expect to raise interest rates until 2024.

However, eurodollar futures, the most liquid interest rate market, late on Tuesday, still has almost fully priced in a Fed hike by December 2022, and two more rate increases in 2023 in the wake of March’s blockbuster U.S. non-farm payrolls and a U.S. services index hitting an all-time high.

“I think the Fed will stick to what they said."

"The Fed tells us that they’re not going to raise rates and they’re going to let inflation overshoot,” said Don Ellenberger, senior portfolio manager at Federated Hermes.

He added that the Fed cannot raise rates in a panic reaction to an inflation overshoot, or it will lose its credibility.

TD Securities and Barclays, following Friday’s jobs number, have both recommended buying 5-year notes, citing a market mispricing of rate expectations.

“The bar for the Fed to hike rates remains high as the Fed needs to see an inflation overshoot and an inclusive labor market recovery,” said TD’s research note.

“This would require substantial labor market improvement over a longer period in our view."

"In addition, given the need for the Fed to complete tapering before hiking rates, which can take the better part of a year, we think the market is overpriced for a risk of an early Fed hike,” TD added.

In afternoon trading, the U.S. 10-year Treasury yield was last down at 1.68%, from 1.72% on Monday.

U.S. 30-year yields were down at 2.347%, from Monday’s 2.363%.

On the short end of the curve, U.S. 2-year yields slipped to 0.164%, from 0.174% on Monday.

“Longer term, we’re going to see rates continue to grind higher."

"I wouldn’t be surprised if we see 2.25%-2.50% in the 10-year by the end of the year just from a fundamental standpoint,” said Federated’s Ellenberger.

The yield curve flattened on Tuesday after tightening the previous session.

The spread between U.S. 2-year and 10-year yields slid to 149.50 basis points.

(Reporting by Gertrude Chavez-Dreyfuss; Editing by Dan Grebler and Nick Zieminski)

https://www.reuters.com/article/usa-bon ... SL1N2LZ2H1

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Re: THE DAILY NEWS

Post by thelivyjr » Thu Apr 08, 2021 1:40 p

REUTERS

"S&P 500 slips but closes near record level"


By Chuck Mikolajczak

April 6, 2021

NEW YORK (Reuters) -The S&P 500 slipped on Tuesday but stayed near closing record highs posted in consecutive sessions, as investors weighed more strong U.S. economic data against nervousness about upcoming quarterly earnings reports.

U.S. job openings rose in February to a two-year high while hiring picked up.

The data came on the heels of Friday’s strong payrolls report and a report on Monday showing activity in the service sector climbed to a record high in March.

The International Monetary Fund raised its global growth forecast to 6% this year from 5.5%, a rate not seen since the 1970s.

But with an upcoming earnings season expected to show S&P profit growth of 24.2% from a year earlier, according to Refintiv data, investors may be waiting to see how strong the results will actually be.

“The big unanswered question is how open the economy is right now and how many people are out there,” said Stephen Massocca, Senior Vice President at Wedbush Securities in San Francisco.

“These security prices are reflecting an anticipation that the economy is going to get back to normal sooner rather than later and it is not exactly clear where we are in that process.”

The Dow Jones Industrial Average fell 96.95 points, or 0.29%, to 33,430.24, the S&P 500 lost 3.97 points, or 0.10%, to 4,073.94 and the Nasdaq Composite dropped 7.21 points, or 0.05%, to 13,698.38.

The dip came a day after a rally sent the Dow and the S&P 500 to record highs.

Investors were assessing the staying power of gains in economically sensitive sectors such as industrials and materials that have been leading the charge higher.

Shares of many economically sensitive companies are classified as value stocks.

But growth, which includes many stocks in the technology and communication services sectors, has shown signs of life.

Large U.S. fiscal and monetary stimulus measures and a swift rollout of vaccines have pushed the S&P 500 and Dow to record levels, with the CBOE volatility index retreating to pre-pandemic lows.

Still, some investors remained worried about the possibility of rising inflation and proposals for higher taxes.

In addition, other countries continue to have difficulty containing the coronavirus.
Canadian Prime Minister Justin Trudeau said on Tuesday the country is facing a very serious third wave.

Snap Inc jumped 5.12% after Atlantic Equities upgraded its rating on the photo-messaging app owner’s shares to “overweight” from “neutral”.

Norwegian Cruise Line Holdings Ltd added 4.61% as it said it would begin sailing outside the United States from the Caribbean and Greek Isles in July, restarting trips after a year-long hiatus brought on by the pandemic.

Volume on U.S. exchanges was 9.65 billion shares, compared with the 12.39 billion average for the full session over the last 20 trading days.

Advancing issues outnumbered declining ones on the NYSE by a 1.54-to-1 ratio; on Nasdaq, a 1.05-to-1 ratio favored decliners.

The S&P 500 posted 67 new 52-week highs and no new lows; the Nasdaq Composite recorded 126 new highs and 23 new lows.

Reporting by Chuck Mikolajczak; Editing by David Gregorio

https://www.reuters.com/article/us-usa- ... SKBN2BT1BD

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Re: THE DAILY NEWS

Post by thelivyjr » Thu Apr 08, 2021 1:40 p

REUTERS

"U.S. job openings jump to two-year high in boost to labor market"


By Lucia Mutikani

April 6, 2021

WASHINGTON (Reuters) - U.S. job openings rose to a two-year high in February while hiring picked up as strengthening domestic demand amid increased COVID-19 vaccinations and additional pandemic aid from the government boost companies’ needs for more workers.

The Labor Department’s monthly Job Openings and Labor Turnover Survey, or JOLTS report, on Tuesday was the latest indication that the labor market had turned the corner after shedding jobs in December as the nation buckled under a fresh wave of COVID-19 infections and depleted government relief.

“Labor demand should continue to heat up as companies brace for a post-pandemic burst in pent-up demand,” said Lydia Boussour, lead U.S. economist at Oxford Economics in New York.

Job openings, a measure of labor demand, increased 268,000 to 7.4 million as of the last day of February.

That was the highest level since January 2019 and pushed job openings 5.1% above their pre-pandemic level.

The second straight monthly rise in vacancies lifted the jobs openings rate to a record 4.9% from 4.7% in January.

There were an additional 233,000 job openings in the health care and social assistance industry.

Vacancies in the accommodation and food services sector, one of the industries hardest hit by the pandemic, increased by 104,000 jobs.

Arts, entertainment and recreation job openings rose 56,000.

But vacancies decreased in state and local government education as well as educational services and information.

Economists polled by Reuters had forecast job openings would rise to 6.995 million in February.

The report followed on the heels of news on Friday that the economy added 916,000 jobs in March, the most in seven months.

The labor market is being boosted by an acceleration in the pace of COVID-19 vaccinations and the White House’s recently passed $1.9 trillion pandemic relief package, which is sending additional $1,400 checks to qualified households and fresh funding for businesses.

Demand for labor could increase further as more services businesses reopen.

The U.S. Centers for Disease Control and Prevention said on Friday fully vaccinated people could safely travel at “low risk.”

An Institute for Supply Management survey on Monday showed services businesses reporting they “have recalled everyone put on waivers and made new hires” and had “additional employees added to service the needs of new customers at new locations.”

STIFF COMPETITION

In February, hiring rose 273,000, the largest gain in nine months, to 5.7 million.

That boosted the hiring rate to 4.0% from 3.8% in January.

Hiring was led by the accommodation and food services industries, which increased by 220,000 jobs.

But hiring decreased in state and local government education.

Hiring still has a long way to go, with employment 8.4 million jobs below its peak in February 2020.

“The labor market continues to improve but remains a long way from what the Federal Reserve would describe as the conditions to restore maximum employment,” said John Ryding, chief economic advisor at Brean Capital in New York.

The U.S. central bank has signaled it would maintain its ultra-easy monetary policy stance for a while to allow complete healing.

With unemployment well above pre-pandemic levels, competition for jobs remains tough.

There were 1.4 unemployed people for every open job in February, well above 0.82 on the eve of the first wave of the pandemic lockdowns 12 months ago.

“This means employers will have an easier time hiring, but job seekers still don’t have the bargaining power they did prior to the pandemic,” said Nick Bunker, director of research at Indeed Hiring Lab.

Layoffs increased to 1.8 million from 1.7 million in January amid job cuts in the finance and insurance industry.

The layoffs rate was unchanged at 1.2%.

Risks remain to the brightening labor market outlook.

“New strains of the virus and unwillingness to abide by health recommendations could extend the impact of the pandemic on the economy,” said Sophia Koropeckyj, a senior economist at Moody’s Analytics in West Chester, Pennsylvania.

“In addition, the severity of the downturn, which closed many business, means that many industries will not bounce back immediately.”

The number of people voluntarily quitting their jobs rose to 3.4 million from 3.3 million in January.

The quits rate was unchanged at 2.3%.

The quits rate is normally viewed by policymakers and economists as a measure of job market confidence.

But the pandemic has forced millions of women to drop out of the labor force mostly because of problems related to child care, with many schools still only offering online learning.

Reporting by Lucia Mutikani; Editing by Paul Simao

https://www.reuters.com/article/us-usa- ... SKBN2BT1TY

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Re: THE DAILY NEWS

Post by thelivyjr » Thu Apr 08, 2021 1:40 p

RIGZONE

"Oil Prices Close Higher As USA Reopening Intensifies"


by Bloomberg | Andres Guerra Luz & Alex Longley

Wednesday, April 07, 2021

(Bloomberg) -- Oil edged higher alongside broader markets as reopening efforts gained traction in the U.S. and helped ease concerns over virus-related setbacks elsewhere.

Futures in New York gained for a second straight session after choppy trading on Wednesday.

New York City beaches will open for Memorial Day weekend, highlighting the progress major cities in the world’s largest oil consuming country are making toward a complete reopening.

At the same time, even though domestic gasoline stockpiles rose more than 4 million barrels last week amid a surge in imports, a gauge for demand of the fuel continued its upward trend.

The Energy Information Administration report also showed crude inventories fell for a second week, bringing stockpiles to a five-week low.

“It’s a battle for whether we’ll get a full summer driving season,” said John Kilduff, a partner at Again Capital LLC.

“It’s going to be a close call, but there’s a bias in favor of there being one given the pace of vaccine rollouts.”

U.S. benchmark crude futures have been stuck in a roughly $4-a-barrel range since the middle of March as fresh lockdowns in Europe offset stronger demand in the U.S. and China.

The four-week average for gasoline supplied in the U.S. -- a proxy for consumption -- ticked up to the highest since September, the EIA report showed.

The gauge has increased for each of the past six weeks.

“The U.S. has been making really good Covid progress, while challenges remain in Europe surrounding the vaccine rollout and the spike in cases,” said Brian Kessens, a portfolio manager at Tortoise, a firm that manages roughly $8 billion in energy-related assets.

“If there’s a silver lining, Europe from a lockdown perspective is likely being more aggressive now so that the summer does look that much brighter.”

Prices

West Texas Intermediate for May delivery rose 44 cents to settle at $59.77 a barrel.

Brent for June settlement gained 42 cents to end the session at $63.16 a barrel.

The spread between Nymex gasoline futures against WTI crude slumped back below $23 a barrel after the EIA report, with refineries running at the highest capacity since March 2020 and the U.S. importing the most gasoline since May 2019.

Oil prices also found support late in the session as U.S. equities staged a comeback from session lows.

Minutes from the latest Federal Reserve meeting show officials see some time before conditions would be met for scaling back its massive asset-purchase campaign.

Investors are also watching for developments on AstraZeneca Plc’s Covid-19 vaccine, with the U.K. now advising those under the age of 30 to be offered an alternative shot if available.

“Oil demand is expected to recover further from the second part of 2021, but these expectations are based on the assumption that enough people will be vaccinated by then to justify the return to normality,” said Louise Dickson, an oil markets analyst at Rystad Energy AS.

“The oil market recovery could lose speed, resulting in 2021 demand ending as much as 1 million barrels per day lower than where it would under a smooth vaccine rollout.”

Related News

An Iranian-flagged vessel was attacked in the Red Sea, Iran’s Foreign Ministry said, on the same day Tehran and world powers met to discuss restoring the 2015 nuclear deal.

Royal Dutch Shell Plc said it expects to make the first profit from pumping oil since the start of the pandemic.

The company also said its Pernis refinery is repairing a unit struck by lightning.

Passenger car traffic in Poland was down 19% versus two years ago in the week ended April 4, compared with smaller gaps of 16% and 12% in the two prior weeks, according to data from automatic measurement stations on highways and motorways.

--With assistance from Sheela Tobben and Jeffrey Bair.

https://www.rigzone.com/news/wire/oil_p ... 5-article/

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Re: THE DAILY NEWS

Post by thelivyjr » Thu Apr 08, 2021 1:40 p

CNBC

"Fed’s Brainard says the economy is improving but is still ‘far from’ where it needs to be"


Jeff Cox @JEFF.COX.7528 @JEFFCOXCNBCCOM

PUBLISHED WED, APR 7 2021

KEY POINTS

* Fed Governor Lael Brainard noted the “brighter outlook” for the U.S. economy but said growth is still well below the central bank’s goals.

* The Fed on Wednesday released minutes from the March meeting indicating that forecasts for higher growth and inflation alone won’t be enough to move policy.

* “We’re going to have to actually see that in the data,” Brainard told CNBC.


Federal Reserve Governor Lael Brainard said Wednesday that while the U.S. economic outlook has “brightened considerably,” it remains well away from the central bank’s goals.

“Brighter outlook, but of course our monetary policy forward guidance is premised on outcomes not the outlook, and so it is going to be some time before both employment and inflation have achieved the kinds of outcomes that are in that forward guidance,” Brainard said on CNBC’s “Closing Bell.”


She spoke shortly after the Fed released minutes from the March Federal Open Market Committee meeting, during which officials voted unanimously to hold short-term borrowing rates near zero and to continue buying at least $120 billion of bonds each month.

Along with unchanged policy, FOMC members raised their forecasts for employment and inflation.

But the minutes reflected Brainard’s comments that the economy still needs more improvement before it gets close to the Fed’s goals of full employment and sustained inflation above 2%.

“The forecast is considerably better outcomes both on growth as well as on employment and inflation,” Brainard said.

“But again, that’s an outlook."

"We’re going to have to actually see that in the data."

"When you look at the data, we are still far from our maximum employment goal.”

Unemployment fell to 6% in March as the economy added 916,000 jobs, well ahead of economists’ expectations.

Inflation is edging higher though the 1.6% level for March was still well below the Fed’s target.

The central bank has said it will allow inflation to run somewhat above 2% for a period of time in the interest of achieving full employment that is inclusive along income, racial and gender lines.

Over the past several months, the market has been pricing in both higher inflation and stronger economic growth, but Fed officials say they will maintain ultra-easy policy put in place in the early days of the Covid-19 crisis.

The minutes indicated that Fed officials have little concern over inflation despite rising longer-duration government bond yields, and Brainard reiterated the view that any near-term price pressures probably won’t last.

“It’s really important to recognize that these are transitory, and following those transitory pressures associated with reopening, it’s more likely that the entrenched dynamics that we’ve seen for well over a decade will take over,” she said.


https://www.cnbc.com/2021/04/07/feds-br ... to-be.html

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Re: THE DAILY NEWS

Post by thelivyjr » Thu Apr 08, 2021 1:40 p

CNBC

"Fed officials say easy policy will stay in place until economic ‘outcomes’ are achieved"


Jeff Cox @JEFF.COX.7528 @JEFFCOXCNBCCOM

PUBLISHED WED, APR 7 2021

KEY POINTS

* The Federal Reserve released minutes from its March meeting during which it kept accommodative policy in place.

* Reiterating a recent policy switch, officials at the meeting said policy will only be changed once outcomes are achieved and won’t be adjusted based on forecasts.


Federal Reserve officials indicated at their last meeting that easy policy will stay in place until it produces stronger employment and inflation, and won’t be adjusted based merely on forecasts.

The Federal Open Market Committee on Wednesday released minutes from the March 16-17 meeting as investors looked for indications about where policy may be heading in the future.

The meeting summary indicated that while officials saw the economy gaining substantially, they see much more progress needed before ultra-easy policy changes.

Members said the $120 billion a month in bond purchases “were providing substantial support to the economy.”

“Participants noted that it would likely be some time until substantial further progress toward the Committee’s maximum-employment and price-stability goals would be realized and that, consistent with the Committee’s outcome-based guidance, asset purchases would continue at least at the current pace until then.”

The adherence to “outcome-based guidance” is a pledge that the Fed will wait until the economy shows “substantial further progress” toward the dual goals of full employment and inflation that runs around 2%.


The guidance is a shift in policy for the central bank, in which it previously would adjust policy in anticipation of inflation.

The minutes said members agreed that changes in policy “should be based primarily on observed outcomes rather than forecasts.”

Markets reacted little to the news, though some questioned whether the Fed needs to continue its historically accommodative policy stance.

While the policy was adopted to deal with the uncertainty of the Covid-19 crisis, continued economic gains and progress in fighting the pandemic through vaccines makes it “difficult to understand how policy is properly calibrated now,” wrote Bob Miller, head of Americas fundamental fixed income at asset management giant BlackRock.

“The same emergency stance remains despite the absence of emergency conditions.”


At the meeting, the Fed’s policymaking arm voted to keep short-term borrowing rates anchored near zero and to continue buying at least $120 billion in bonds each month.

The market will get plenty of notice before the committee makes any changes, the minutes said.

“A number of participants highlighted the importance of the Committee clearly communicating its assessment of progress toward its longer-run goals well in advance of the time when it could be judged substantial enough to warrant a change in the pace of asset purchases,” the summary said.

“The timing of such communications would depend on the evolution of the economy and the pace of progress toward the Committee’s goals.”


In addition, the committee raised its outlook for economic growth and inflation ahead.

The median outlook for GDP in 2021 went to 6.5%, a big upgrade from the 4.2% expectation in the December projections.

Officials also indicated that the unemployment rate could fall to 4.5% by the end of the year and inflation could run to 2.2%, slightly above the Fed’s traditional 2% target.

Though inflation shows up 64 times in the minutes, Fed officials indicated little concern that it might become a problem anytime soon.

One notion in the minutes said that inflation forecasts were right around where FOMC members expected.

During a meeting with the media a few hours before the minutes were released, Chicago Fed President Charles Evans said it would take “months and months” of higher inflation “before I’m even going to have an opinion on whether this is sustainable or not.”


Heading into the March FOMC meeting, some market experts had been expecting the Fed might at least alter the duration of the bonds it has been buying to tamp down a sharp rise this year in longer-dated Treasury yields.

However, Chairman Jerome Powell and other central bank leaders have said they view the rise in rates as a reflection of stronger growth expectations rather than uncomfortable inflation pressure.

https://www.cnbc.com/2021/04/07/federal ... ting-.html

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Re: THE DAILY NEWS

Post by thelivyjr » Thu Apr 08, 2021 1:40 p

CNBC

"Hospitals are seeing more young adults with severe Covid symptoms, CDC says"


Rich Mendez @RICHMENDEZCNBC

PUBLISHED WED, APR 7 2021

KEY POINTS

* CDC Director Dr. Rochelle Walensky said hospitals are seeing more and more younger adults with severe Covid-19.

* “Data suggests this is all happening as we are seeing increasing prevalence of variants, with 52 jurisdictions now reporting cases of variants of concern,” Walensky said.

* The B.1.1.7 variant has since spread and now accounts for more than 16,000 cases across 52 jurisdictions in the country.


Hospitals are seeing more and more younger adults in their 30s and 40s admitted with severe cases of Covid-19, Centers for Disease Control and Prevention Director Dr. Rochelle Walensky said Wednesday.

“Data suggests this is all happening as we are seeing increasing prevalence of variants, with 52 jurisdictions now reporting cases of variants of concern,” Walensky said at a press briefing on the pandemic.


Scientists say new variants of the coronavirus are more transmittable and some of them may be more lethal as well, resulting in more severe cases.

The highly contagious B.1.1.7 variant from the United Kingdom has become the dominant strain circulating in the United States, Walensky said.

Walensky previously warned that traveling for spring break could lead to another rise in cases, especially in Florida where the variant was rapidly spreading.


“I’m pleading with you, for the sake of our nation’s health,” Walensky said at a briefing last month.

“Cases climbed last spring, they climbed again in the summer, they will climb now if we stop taking precautions when we continue to get more and more people vaccinated.”

The B.1.1.7 variant has since spread and now accounts for more than 16,000 cases across 52 jurisdictions in the country.

The variant is about 50% more transmissible than the original wild strain of the coronavirus.

https://www.cnbc.com/2021/04/07/hospita ... says-.html

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Re: THE DAILY NEWS

Post by thelivyjr » Thu Apr 08, 2021 1:40 p

CNBC

"Treasury yields rise slightly following release of Fed minutes"


Vicky McKeever @VMCKEEVERCNBC

PUBLISHED WED, APR 7 2021

U.S. Treasury yields moved modestly higher on Wednesday following the release of minutes from the Federal Reserve’s recent monetary policy meeting.

The yield on the benchmark 10-year Treasury note ticked up to 1.672%.

The yield on the 30-year Treasury bond rose to 2.357%.

Yields move inversely to prices.

The Federal Open Market Committee’s March meetings showed that participants were seeing signs of an economic rebound and a pickup in inflation but still believed they were a long way from altering their interest rate policy or asset purchasing program.

“In particular, various participants noted that changes in the path of policy should be based primarily on observed outcomes rather than forecasts,” the minutes said.

The Fed kept its benchmark interest rate unchanged at that meeting, but market rates for U.S. Treasurys have risen this year as investors start to price in a strong economic recovery and possible inflation.

JPMorgan CEO Jamie Dimon also presented an optimistic view of the U.S. economic recovery in his annual shareholder letter, saying that the economic boom could last into 2023 thanks to all of the federal spending to boost the economy.

“This boom could easily run into 2023 because all the spending could extend well into 2023."

"The permanent effect of this boom will be fully known only when we see the quality, effectiveness and sustainability of the infrastructure and other government investments,” Dimon wrote.

The International Monetary Fund on Tuesday raised its 2021 growth outlook for the global economy to 6%, up from January’s forecast of 5.5%.

The organization said that “a way out of this health and economic crisis is increasingly visible.”

The IMF did, however, warn of “daunting challenges” given the varied pace of vaccine rollouts around the world.

An auction was held Wednesday for $35 billion of 119-day bills.

— CNBC’s Pippa Stevens contributed to this report.

https://www.cnbc.com/2021/04/07/us-bond ... nutes.html

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