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  • Powell surprises with dovish turn; economists mull how many Fed rate cuts in '24

    Powell surprises with dovish turn; economists mull how many Fed rate cuts in '24

    Federal Reserve Chairman Jerome Powell startled economists with a press conference Wednesday that was viewed as much more dovish than expected.

    It was “12 doves a-leaping,” said Michael Feroli, U.S. economist at JPMorgan Chase.

    “The Fed can’t believe its luck. The data is going their way,” said Krishna Guha, vice chairman of Evercore ISI.

    The first dovish signals came in the Fed’s statement and economic forecasts at 2 p.m. Eastern. First, the Fed penciled in three rate cuts in 2024 instead of two that were projected in September. The Fed also softened its tightening bias by saying they were mulling the need for “any” more hikes.

    Then, half an hour later at his press conference, “Chair Powell did nothing to undo the impression of those signals,” said Feroli, in a note to clients. Powell said Fed officials were starting to discuss when to cut rates.

    “The question of when it will be appropriate to begin dialing back the policy restraint” was clearly “a discussion for us at out meeting today,” Powell said. Fed officials think the Fed is “likely at or near the peak rate for this cycle.”

    While Powell didn’t take rate cuts “off the table,” they are “collecting dust,” said Michael Gregory, deputy chief economist at BMO Capital Markets.

    Markets reacted with the 10-year Treasury yield
    BX:TMUBMUSD10Y
    falling to 4.025%.

    Traders in derivative markets now see an 80% chance of the first rate cut in March, and now see five quarter-point cuts next year.

    Matt Luzzetti, chief U.S. economist at Deutsche Bank, said the main thing learned from Wednesday’s press conference was that Fed Gov. Chris Waller’s dovish comments a few weeks ago were a reflection of the mainstream view at the central bank, rather than a dovish outsider.

    In a speech late last month, Waller raised the possibility of a rate cut by spring if inflation keeps slowing.

    Some economists think that March is too soon for a rate cut.

    “We still judge rate cuts will commence later rather than sooner, still by the end of the third quarter of 2024,” Gregory of BMO Capital Markets said.

    Feroli said he now sees the first rate cut in June, instead of his prior forecast of July, and predicted that the Fed will cut five times by the end of 2024.

    Luzzetti of Deutsche Bank sees six rate cuts next year, but not beginning until June as the economy falls into a mild recession.

    The Fed doesn’t forecast a recession. Its rate cuts are purely a story of weakening inflation. If there is a recession, the Fed will cut very fast, Luzzetti said.

    Diane Swonk, chief economist at KPMG, said the odds of a recession are lower now that the Fed has signaled it will actively take steps to try to avoid one.

    The Fed wants the economy to cruise at a lower altitude, and no longer wants a landing, Swonk said in an interview.

    That is a 180-degree turn from Powell’s speech in Jackson Hole, Wyo., in the summer of 2022 when he spoke for less than 10 minutes but warned of “pain” and the unfortunate costs of fighting inflation. That speech, “a bucket of ice water,” Swonk said, sent the stock market reeling at the time.

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  • S&P 500's year-end rally lifts 51 stocks to a record close

    S&P 500's year-end rally lifts 51 stocks to a record close

    It has been a record day for 10% of the S&P 500.

    A group of 51 stocks in the benchmark equity index swept to record finishes on Tuesday, the most since April 20, 2022, according to a tally from Dow Jones Market Data.

    It was a record day for 51 stocks in the S&P 500.


    Dow Jones Market Data

    Stocks that logged a record close on Tuesday included Allstate Corp
    ALL,
    +0.90%    ,
    Costco Wholesale
    COST,
    +0.90%    ,
    D.R. Horton, Inc.
    DHI,
    +0.65%    ,
    Mastercard
    MA,
    +1.21%    ,
    T-Mobile US Inc.,
    TMUS,
    +1.00%
    Visa Inc.
    V,
    +1.19%
    and Waste Management Inc.,
    WM,
    +1.85%
    among others.

    Equities have been in a year-end rally mode, driven higher by tumbling benchmark yields that finance much of the U.S. economy and expectations of coming interest-rate cuts.

    The 10-year Treasury rate
    BX:TMUBMUSD10Y
    fell to 4.2% on Tuesday from a high of about 5% in October.

    The Dow Jones Industrial Average
    DJIA
    on Tuesday ended at its third-highest level on record, while the S&P 500 index
    SPX
    and Nasdaq Composite Index
    COMP
    added to a string of new closing highs for 2023. The Dow finished 0.6% away from its record close logged almost two years ago, while the S&P 500 was only 3.2% below its close from the same period, according to Dow Jones Market Data.

    The push higher for stocks followed inflation data for November that showed price pressures continued to ease from peak levels, but still were above the Fed’s 2% annual target.

    The consumer-price index pegged the annual rate of inflation at 3.1%, down from 3.2% in October, with the “last mile” of inflation expected to be the hardest part to tame.

    Investors now will be focused on Wednesday’s Federal Reserve decision. Short-term interest rates are expected to remain unchanged at a 22-year high, but the central bank is expected to update its “dot plot” forecast of rates over a longer time horizon.

    “Although the market will focus on the timing of rate cuts, we suspect Chair Powell will be keen to strike notes of caution to avoid financial conditions easing too much further to ensure the Fed continues to see encouraging progress on inflation,” said Emin Hajiyev, senior economist at Insight Investment, in emailed comments.

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  • This week's Fed meeting could slam brakes on year-end stock rally

    This week's Fed meeting could slam brakes on year-end stock rally

    The rally lifting U.S. stocks to fresh 2023 highs in the year’s home stretch could be at risk if the Federal Reserve on Wednesday crushes expectations for interest-rate cuts in 2024. 

    U.S. central bankers and investors haven’t exactly been seeing eye-to-eye about when the Fed will start easing its monetary policy, according to Melissa Brown, senior principal of applied research at Axioma. 

    Traders also have been flip-flopping on their forecasts for rate cuts over the past few months, based on fed-funds futures data.


    Oxford Economics/Bloomberg

    Given the whipsaw of recent volatility, it isn’t hard to imagine a jittery market backdrop as investors wait to hear from Fed Chairman Jerome Powell on Wednesday, even though the central bank isn’t expected to change its range for short-term interest rates. Since July, the Fed funds rate rate has been at a 22-year high in a 5.25% to 5.5% range.

    U.S. stocks advanced this year after a bruising 2022, adding big gains in November, as benchmark 10-year Treasury yields
    BX:TMUBMUSD10Y
    tumbled from a 16-year high of 5%. The Dow Jones Industrial Average
    DJIA
    closed on Friday only 1.5% away from its record close nearly two years ago. The S&P 500 index
    SPX
    booked its highest finish since March 2022, according to Dow Jones Market Data.

    Year Ahead: The VIX says stocks are ‘reliably in a bull market’ heading into 2024. Here’s how to read it.

    “I don’t see any report on the horizon that would really make them [the Fed] change their stance on where we are on monetary policy,” said Alex McGrath, chief investment officer at NorthEnd Private Wealth. It is mostly the expectation of Fed rate cuts next year that have supported stock and bond markets rallies recently, he said.

    The Dow Jones closed 9.4% higher on the year through Friday, the S&P 500 was up 19.9% and the Nasdaq Composite advanced 37.6% for the same period, according to FactSet data. 

    “We have been a little skeptical of the market’s excitement over rate cuts early next year,” said Ed Clissold, chief U.S. strategist at Ned Davis Research.

    It takes a gradual process for the Fed to move away from its monetary policy tightening, Clissold told MarketWatch. The Fed is likely to pivot its tone from being very hawkish to neutral, remove the tightening bias, and then talk about rate cuts, noted Clissold.

    The bond market on Friday already was again flashing signs of a potential rethink by investors about the path of interest rates in 2024.

    Junk bonds
    JNK

    HYG,
    often a canary in the coal mine for markets, hit pause on a rally that started in late October as benchmark borrowing costs fell, even though the sector has benefited from big inflows of funds in recent weeks.

    Treasury yields for 10-year and 30-year
    BX:TMUBMUSD30Y
    bonds also shot higher Friday, echoing volatility that took hold in mid-October. 

    Read: Investors have fought a 2-year battle with the bond market. Here’s what’s next.

    Mike Sanders, head of fixed income at Madison Investments, has been similarly cautious. “I think the market is a little too aggressive in terms of thinking that cuts are going to occur in March,” Sanders said. It is more likely that the Fed will start cutting rates in the second half of next year, he said. 

    “I think the biggest thing is that the continued strength in the labor market continues to make the services inflation stickier,” Sanders said. “Right now we just don’t see the weakness that we need to get that down.” 

    Friday’s U.S. employment report adds to his concerns. About 199,000 new jobs were created in November, the government said Friday. Economists polled by the Wall Street Journal had forecast 190,000 jobs. The report also showed rising wages and a retreating unemployment rate to a four-month low of 3.7% from 3.9%.

    The U.S. central bank will likely “try their best to push back on the narrative of cuts coming very soon,” Sanders said. That could be accomplished in its updated “dot plot” interest rate forecast, also due Wednesday, which will provide the Fed’s latest thinking on the likely path of monetary policy. The Fed’s update in September surprised some in the market as it bolstered the central bank’s stance of higher rates for longer. 

    There’s still a chance that inflation will reaccelerate, Sanders said. “The Fed is worried about the inflation side more than anything else. For them to take the foot off the brake sooner, it just doesn’t do them any good.”

    Ahead of the Fed decision, an inflation update is due Tuesday in the November consumer-price index, while the producer-price index is due Wednesday. 

    Still, seasonality factors could aid the stock market in December. The Dow Jones Industrial Average in December rises about 70% of the time, regardless of whether it is in a bull or bear market, according to historical data. 

    See: Stock market barrels into year-end with momentum. What that means for December and beyond.

    “The overall market outlook remains constructive,” said Ned Davis’s Clissold. “A soft landing scenario could support the bull market continuing.”

    Last week the Dow eked out a gain of less than 0.1%, the S&P 500 edged up 0.2% and the Nasdaq rose 0.7%. All three major indexes went up for a sixth straight week, with the Dow logging its longest weekly winning streak since February 2019, according to Dow Jones Market Data.

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  • S&P 500 ends at 2023 high, books longest weekly win streak in 4 years

    S&P 500 ends at 2023 high, books longest weekly win streak in 4 years

    U.S. stocks closed higher on Friday, shaking off earlier weakness after a strong monthly jobs report, to clinch a sixth straight week in a row of gains. The Dow Jones Industrial Average
    DJIA,
    +0.36%
    advanced about 130 points, or 0.4%, to end near 36,247, according to preliminary FactSet data. The S&P 500 index gained 0.4% Friday and the Nasdaq Composite finished 0.5% higher. A string of weekly gains propelled the S&P 500 index
    SPX,
    +0.41%
    to a fresh 2023 closing high and left the Dow about 1.4% away from its record close set nearly two years ago, according to Dow Jones Market Data. Equities have benefitted from a risk-on tone going into year end, which has been driven by falling 10-year Treasury yields
    TMUBMUSD10Y,
    4.230%
    and optimism around the Federal Reserve potentially cutting interest rates in the year ahead. That hinges on if inflation continues to ease. November’s robust jobs report served as a reminder Friday of the tough path of the “last mile” in getting inflation down to the Fed’s 2% annual target. As part of this, the 10-year Treasury yield jumped about 11.5 basis points Friday to 4.244%, but still was about 74 basis points lower than its October high. For the week, the Dow was only fractionally higher, the S&P 500 gained 0.2% and the Nasdaq climbed 0.7%.

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  • Mortgage rates' dip to 7% could be brief if jobs market stays strong, Fannie Mae economist says

    Mortgage rates' dip to 7% could be brief if jobs market stays strong, Fannie Mae economist says

    November’s sharp pullback in 30-year fixed mortgage rates may not last if the labor market remains strong, said Mark Palim, deputy chief economist at Fannie Mae.

    Palim was speaking to the robust jobs report released on Friday, showing the U.S. added 199,000 jobs in November and that wages rose, albeit with the figures somewhat inflated by the return of striking workers from the auto industry and from Hollywood.

    Homebuyers can benefit from a robust labor market and the near 80 basis point decline in mortgage rates since the end of October, Palim said. But if the “labor markets remain this strong, we believe the pace of mortgage rate declines will likely not continue in the near term or may partially reverse,” he said in a statement.

    The benchmark 30-year fixed mortgage rate was edging down to 7.05% on Friday, after surging to nearly 8% in October, according to Mortgage Daily News.

    Optimism around the potential for falling mortgage costs to thaw home sales helped lift shares of Toll Brothers Inc.,
    TOL,
    +1.86%
    and a slew of other homebuilders tracked by the SPDR S&P Homebuilders ETF, 
    XH,
    to record highs earlier this week, even while investors in some homebuilder bonds have been sellers in recent weeks.

    Yields on 10-year
    BX:TMUBMUSD10Y
    and 30-year Treasury notes
    BX:TMUBMUSD30Y
    were up sharply Friday, to about 4.23% and 4.32%, respectively, but still below the highs of about 5% in October. The surge in long-term borrowing costs was stoked by tough talk by Federal Reserve officials about the need to keep rates higher for longer to bring inflation down to a 2% annual target.

    Read: Solid job growth, sharp wage gains sends Treasury yields up by the most in months

    U.S. stocks were up Friday afternoon, shaking off earlier weakness following the jobs report. The Dow Jones Industrial Average
    DJIA
    was 0.2% higher, further narrowing the gap between its last record close set two years ago, the S&P 500 index
    SPX
    and the Nasdaq Composite Index
    COMP
    also were up 0.2%, according to FactSet data.

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  • Consumer sentiment jumps in early December for the first increase in five months

    Consumer sentiment jumps in early December for the first increase in five months

    This is a developing story. Stay tuned for updates here.

    The numbers: The University of Michigan’s gauge of consumer sentiment rose to a preliminary December reading of 69.4 from a six-month low of 61.3 in the prior month. This is the highest level since August.

    Economists polled by the Wall Street Journal had expected a December reading of 62.4.

    Expectations of inflation cooled in early December, according to the report.

    Americans think inflation will average a 3.1% rate over the next year, down from 4.5% in the prior month. That’s the lowest level since March 2021.

    Expectations for inflation over the next five years fell to 2.8% from 3.2% in November, which was the highest reading in over a decade.

    Key details: According to the report, a gauge of consumers’ views on current conditions jumped to 74 in December from 68.3 in the prior month, while a barometer of their expectations of the future rose to 66.4 from 56.8.

    Big picture: A lot of factors were behind the increase in confidence, with the solid job market and declining gasoline prices mentioned most often by economists. Stock prices have also been strong. Despite the gains, sentiment is still well below prepandemic levels.

    Market reaction: Stocks
    DJIA

    SPX
    were higher in early trading on Friday, while the 10-year Treasury yield
    BX:TMUBMUSD10Y
    rose to 4.21% after the solid job report was released earlier in the morning.

    undefined

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  • November's rally just erased two months of Fed tightening, economist says

    November's rally just erased two months of Fed tightening, economist says

    Financial conditions are now looser than in September, says economist

    Financial conditions in the U.S. are looser than in September, says economist.


    Getty Images

    The feel-good tone gripping markets in the home stretch of 2023 may not be what the Federal Reserve had penciled in for the holidays.

    The stock market in December, once again, has been knocking on the door of record levels, driven by optimism about easing inflation and potential Fed rate cuts next year.

    But while the prospect of double-digit equity gains this year would be a reprieve for investors after a brutal 2022, the latest rally also points to looser financial conditions.

    Ultimately, the risk of looser financial conditions is that they could backfire, particularly if they rub against the Fed’s own goal of keeping credit restrictive until inflation has been decisively tamed.

    Read: Inflation is falling but interest rates will be higher for longer. Way longer.

    Specifically, the November rally for the S&P 500 index
    SPX
    can be traced to the 10-year Treasury yield
    BX:TMUBMUSD10Y
    dropping to 4.1% on Thursday from a 16-year peak of 5% in October.

    Falling 10-year Treasury yields from a 5% peak in October coincides with a sharp rally in the S&P 500 at the tail end of 2023.


    Oxford Economics

    The Fed only exerts direct control over short-term rates, but 10-year and 30-year Treasury yields
    BX:TMUBMUSD30Y
    are important because they are a peg for pricing auto loans, corporate debt and mortgages.

    That makes long-term rates matter a lot to investors in stocks, bonds and other assets, since higher rates can lead to rising defaults, but also can crimp corporate earnings, growth and the U.S. economy.

    Michael Pearce, lead U.S. economist at Oxford Economics, thinks the November rally may put Fed officials in a difficult spot ahead of next week’s Dec. 12 to 13 Federal Open Market Committee meeting — the eighth and final policy gathering of 2023.

    “The decline in yields and surge in equity prices more than fully unwinds the tightening in conditions seen since the September FOMC meeting,” Pearce said in a Thursday client note.

    The Fed next week isn’t expected to raise rates, but instead opt to keep its benchmark rate steady at a 22-year high in a 5.25% to 5.5% range, which was set in July. The hope is that higher rates will keep bringing inflation down to the central bank’s 2% annual target.

    Ahead of the Fed’s July meeting, stocks were extending a spring rally into summer, largely driven by shares of six meg-cap technology companies and AI optimism.

    From June: Nvidia officially closes in $1 trillion territory, becoming seventh U.S. company to hit market-cap milestone

    Rates in September were kept unchanged, but central bankers also drove home a “higher for longer” message at that meeting, by penciling in only two rate cuts in 2024, instead of four earlier. That spooked markets and triggered a string of monthly losses in stocks.

    Pearce said he expects the Fed next week to “push back against the idea that rate cuts could come onto the agenda anytime soon,” but also to “err on the side of leaving rates high for too long.”

    That might mean the first rate cut comes in September, he said, later than market odds of a 52.8% chance of the first cut in March, as reflected by Thursday by the CME FedWatch Tool.

    Stocks were higher Thursday, poised to snap a three-session drop. A day earlier, the S&P 500 closed 5.2% off its record high set nearly two years ago, the Dow Jones Industrial Average
    DJIA
    was 2% away from its record close and the Nasdaq Composite Index
    COMP
    was almost 12% below its November 2021 record, according to Dow Jones Market Data.

    Related: What investors can expect in 2024 after a 2-year battle with the bond market

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  • Why the U.S. economy isn't out of the woods as stock market soars

    Why the U.S. economy isn't out of the woods as stock market soars

    A rally in the U.S. stock and bond markets in the past week defied the bears and fueled hopes for more gains to come by year-end and in 2024 as Wall Street bought into the idea that the economy will pull off a “soft landing” after a run of interest-rate hikes by the Federal Reserve.

    But market skeptics are putting investors on alert that the “soft-landing” scenario is still at risk with consumer spending and job growth slowing, along with corporate earnings.  

    “The equity market is misguided,” said Josh Schachter, senior portfolio manager at Easterly Investment Partners, in a phone interview with MarketWatch. “The markets are behaving in almost a bipolar fashion — some asset classes such as bonds
    BX:TMUBMUSD10Y,
    oil
    BRN00,
    -0.29%    ,
    and dollar
    DXY,
    are being priced for a recession, while other assets such as equities and bitcoin
    BTCUSD,
    +2.16%    ,
    are priced risk-on.” 

    U.S. stocks built on their November gains in the past week, with the S&P 500 index
    SPX
    ending at new 2023 high on Friday and the Dow Jones Industrial Average
    DJIA
    logging its fifth week in the green. The rebound in stocks was due in part to bond investors starting to believe the Fed is done raising interest rates and is likely to begin cutting them by the first quarter of 2024. 

    Meanwhile, the narrative that a resilient labor market and steadier-than-expected economic growth should keep a recession at bay has gained traction, bolstering the “goldilocks” scenario for the financial markets. 

    See: These two leading indicators suggest a U.S. recession has already begun, according to Wall Street’s favorite permabear

    However, signs are emerging that consumer spending, which accounts for about 70% of the U.S. economic output and has boosted the economy this year, has likely run its course following the post-pandemic recovery. Credit card and car loan delinquency rates are rising, student loan payments have resumed, consumer spending is cooling, and there are warnings from top retailers.

    Joseph Quinlan, head of CIO market strategy for Merrill and Bank of America Private Bank, said the “softness” in the U.S. consumer sector is visible but not huge, referring to that as “a canary in a coal mine,” he told MarketWatch via phone on Thursday. 

    The pullback in consumer spending is welcome news for Fed officials, who have increased interest rates 11 times since March 2022 to get inflation back to its preferred target of 2%. However, some analysts are worried that high interest rates and a decline in pandemic savings could eventually translate to weaker consumers in 2024, potentially another sign of a long-predicted slowdown in the U.S. economy.

    “One of the things I’m most concerned about is consumers’ ability to continue to pace the economy — you’ve got several headwinds that haven’t really borne completely out yet,” said Jason Heller, senior executive vice president at Coastal Wealth. “Does the consumer continue to behave the way they behaved the last 36 months? I think you will eventually see a slowdown in consumer spending which is going to mandate a slowdown in the labor market.” 

    Lauren Goodwin, economist and portfolio strategist at New York Life Investments, acknowledged that a modest slowdown in inflation and employment growth means that a “Fed relief rally” in stocks can be sustained, but her concern is this late-cycle limbo is no different than those of the past, which is a moment of “goldilocks” before the very reason that inflation is moderating — slowing economic growth and employment — becomes clear in the data.

    See: ‘We Are Still Headed for a Pretty Hard Landing,’ Ex-Treasury Secretary Larry Summers Says

    That’s why the November employment report, which will be released by the Bureau of Labor Statistics next Friday at 8:30 a.m. Eastern, will be key for investors to watch. The U.S is expected to add 172,500 jobs in November after a 150,000 increase in the prior month, according to economists polled by Dow Jones. The percentage of jobless Americans seeking work is forecast to stay the same at 3.9%, leaving it at the highest level since the beginning of 2022.

    See: U.S. job growth pick up on the radar this coming week

    In fact, nonfarm payroll report publication days have been among the most volatile for stocks in 2023, compared with the release of monthly consumer-price index readings, which sparked some of the biggest daily up and down moves for the S&P 500 and other major indexes in 2022. 

    See also: Do CPI days still rock the stock market? How 2023 stacks up to 2022

    This year, the S&P 500 saw an absolute average percentage change of 1.12% on employment situation release dates, compared with an average percentage move of 0.64% on CPI days, according to figures compiled by Dow Jones Market Data. 

    That said, analysts are skeptical if the employment data is able to tell “a radically different story” but suggest the labor market will remain relatively tight into 2024, said Quinlan and Lauren Sanfilippo at Merrill and Bank of America Private Bank, in a phone interview. 

    See: What 2024 S&P 500 forecasts really say about the stock market

    Too much optimism in 2024 earnings growth

    Corporate America and their shares are telling investors a different story about next year. 

    With an estimated average S&P 500 earnings growth of 11.7% next year, the U.S. stock market is nowhere near recessionary concerns, said Heller. “We’ve [the stocks] priced in pretty significant growth in 2024.” 

    Strategists at Merrill and Bank of America Private Bank are in the camp of expecting a “mid-single digit” earnings growth for the S&P 500 in 2024, as earnings have troughed and the economy will fall back to the 2%-level of real growth after high rates confine consumer spending and corporate profits, cooling a red-hot economy. 

    To be sure, Wall Street analysts tend to overestimate the earnings-per-share (EPS) for the S&P 500, said John Butters, senior earnings analyst at FactSet. 

    The current bottom-up EPS estimate for the S&P 500 in 2024 is $246.30. If that holds true, that would be the highest EPS number reported by the large-cap index since FactSet began tracking this metric in 1996. 

    However, over the past 25 years, the average difference between the EPS estimate at the beginning of the year and the actual EPS number has been 6.9%, meaning analysts on average have overestimated the earnings one year in advance, said Butters in a Friday note (see chart below).

    SOURCE: FACTSET

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  • Bitcoin is up 130% this year. Could it extend the rally in December and 2024?

    Bitcoin is up 130% this year. Could it extend the rally in December and 2024?

    Bitcoin has extended its rally on Friday, rising to the loftiest level since May 2022, pushing its yearly gain up to over 130%, on pace to be one of the best performing assets this year. 

    The crypto
    BTCUSD,
    +1.28%
    rose about 2.5% over the past 24 hours to around $38,676 Friday afternoon, as excitement about the potential approval of bitcoin exchange-traded funds continues to build. Bitcoin is still 44% down from its all-time high in 2021. 

    Risk assets in general performed well in November, as concerns eased around several pressure points, including the surge in long-term Treasury yields and inflation, analysts at Grayscale Research wrote in a Friday note.

    Despite outperforming many major assets year-to-date, bitcoin underperformed long-term Treasurys and the S&P 500 in November on a volatility-adjusted basis, gaining 9% for the month.


    Bloomberg; Grayscale Investments

    Sam Callahan, market analyst at Swan Bitcoin, said he expects bitcoin to trade between $36,000 and $40,000 by the end of the year, “provided that the macroeconomic environment doesn’t take a turn for the worse, and barring any significant positive development, such as the approval of a Spot Bitcoin ETF or the adoption of Bitcoin by a major corporation, sovereign-wealth fund, or nation-state.”

    Despite bitcoin’s rally so far this year, December has historically been a particularly volatile month for the crypto, since it was created in 2009. It rose seven out of 13 times in December, according to Dow Jones Market Data.

    In years when bitcoin gained more than 100% through November, the digital asset saw an average gain of 20% in December, rising four of the six times it occurred, according to Dow Jones Market Data.

    To be sure, bitcoin has a relatively short history and was particularly volatile during its early years. 

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  • 7% Dividend Yields or Higher: The S&P 500’s 6 Best Payouts

    7% Dividend Yields or Higher: The S&P 500’s 6 Best Payouts

    7% Dividend Yields or Higher: The S&P 500’s 6 Best Payouts

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  • Why do people keep suing celebrities like Ronaldo and Tom Brady over crypto losses?

    Why do people keep suing celebrities like Ronaldo and Tom Brady over crypto losses?

    Ever since the collapse of crypto currencies last year, the lawsuits have been flying.

    But a series of class-action suits targeting celebrity endorsers of crypto exchanges like FTX and Binance have been piling up in federal court in Miami, all filed by the same group of south Florida lawyers.

    The latest suit names global soccer superstar Cristiano Ronaldo for allegedly promoting “the mass solicitation of investments in unregistered securities” sold by Binance, the crypto exchange that was hit with a $4 billion fine last week after pleading guilty to violating the bank secrecy act.

    The suit was filed in federal court in the southern district of Florida this week and centered around Ronaldo’s role in a global marketing campaign launched in 2022 for a series of Binance NFTs — or non-fungible tokens, a form of blockchain-backed art works that were, for a brief time, wildly popular.

    A representative for Ronaldo didn’t immediately respond to a message seeking comment.

    The filing against Ronaldo on Monday came alongside similar class action suits naming Major League Baseball, Formula 1 racing, Mercedes Benz and the advertising giants Dentsu and Wasserman, who created much of FTX’s global promotion campaign.

    Messages left with representatives for MLB, Formula 1, Mercedes Benz, Dentsu and Wasserman weren’t immediately returned.

    Those suits are the latest in a series of similar class action suits starting last year against celebrity endorsers of failed crypto exchanges such as Voyager and FTX, in which customers lost billions of dollars in deposits.

    Over the past 18 months, a group of south Florida lawyers led by Adam Moskowitz have brought the suits on behalf of investors who lost money in last year’s crypto collapse, against paid celebrity endorsers including Shaquille O’Neal, Mark Cuban, Tom Brady, Gisele Bundchen, Shohei Ohtani, Larry David, Steph Curry and Naomi Osaka.

    “All of these celebrities were paid hundreds of millions of dollars taken directly from customer deposits,” Moskowitz said in a statement. “Some of the most famous and wealthiest groups in the world may now be held responsible for the dramatic $20 billion dollar crypto collapse and biggest financial scandals in U.S. history.”    

    Moskowitz, who has been joined in the suits by lawyers with the firms Mark Migdal & Hayden and Boies Schiller and Flexner, headed by famed litigator David Boies, is seeking at least $5 billion in damages from those who helped promote the crypto exchanges. 

    The cases from last year are ongoing and each of the celebrities named have been fighting the suits in court. 

    Moskowitz, who specializes in class-action lawsuits, says issues revolving around crypto first got his attention more than two years ago, before the entire market crashed, when he came to believe that the special tokens each exchange was minting amounted to an unregistered security.

    He first filed a lawsuit against Voyager early last year, before the exchange collapsed and the Securities and Exchange Commission began filing suits against many in the industry accusing them of dealing in unregistered securities.

    “Right then what we were doing started to gain traction,” he said.

    A series of favorable court rulings have allowed his cases to gain steam, he said, and has allowed to him to take the lead in such actions.

    In another class action suit filed earlier this year, Moskowitz and his partners sued a group of YouTube financial influencers for their role in promoting FTX, accusing them of taking cash for uncritically singing the exchange’s praises.

    Moskowitz said several of those suits have been settled but that others have continued. 

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  • Apple scotches credit-card partnership with Goldman Sachs: report

    Apple scotches credit-card partnership with Goldman Sachs: report

    Apple Inc. AAPL is calling it quits on its credit-card partnership with Goldman Sachs Group Inc. GS, ending the Wall Street bank’s push into consumer lending, according to a Wall Street Journal report Tuesday. The iPhone maker sent a proposal to Goldman to leave the contract within 15 months, according to people briefed on the matter. The exit would cover the companies’ consumer partnership, which includes the credit card the companies launched in 2019 and the savings account rolled out in 2023. It is unclear if Apple has lined up a new issuer for the card.

    …

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  • Dow Jones ends about 80 points higher as U.S. bond yields keep falling

    Dow Jones ends about 80 points higher as U.S. bond yields keep falling

    U.S. stocks posted modest gains on Tuesday, resuming a strong rally in November that has been propelled by tumbling U.S. bond yields. The Dow Jones Industrial Average DJIA closed up about 83 points, or 0.2%, ending near 35,416, according to preliminary FactSet data. The S&P 500 index SPX was 0.1% higher, while the Nasdaq Composite Index COMP closed up 0.3%. Equity investors were emboldened after Fed Governor Christopher Waller said on Tuesday that a cooling economy could help bring inflation down to the central bank’s 2% yearly target, even though he also said it’s unclear if more interest rate hikes were warranted. The…

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  • The Cost of Doing Business With China? A $40,000 Dinner With Xi Jinping Might Be Just the Start

    The Cost of Doing Business With China? A $40,000 Dinner With Xi Jinping Might Be Just the Start

    Updated Nov. 28, 2023 12:54 am ET

    Broadcom Chief Executive Hock Tan shelled out $40,000 to sit at Xi Jinping’s table for the Chinese leader’s recent dinner in San Francisco with the heads of American businesses. Tan had a lot more at stake—a $69 billion deal he was waiting on China to approve.

    For months, Chinese regulators wouldn’t clear the U.S. chipmaker’s bid to buy enterprise software developer VMware, leading Broadcom to put off its date for completion of the deal—first announced in May 2022—three times. Beijing had held up previous mergers involving U.S. companies. Intel’s planned acquisition of Israeli firm Tower Semiconductor, for more than $5 billion, was scuttled in August after Chinese regulators failed to approve it.

    Copyright ©2023 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

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  • New-home sales drop in October to much lower level than expected

    New-home sales drop in October to much lower level than expected

    The numbers: U.S. new-home sales fell 5.6% to a seasonally adjusted annual rate of 679,000 in October, from a revised 719,000 in September, the government reported Monday. 

    Analysts polled by the Wall Street Journal had forecast new-home sales to occur at a seasonally adjusted annual rate of 725,000 in October.

    The data are often revised sharply….

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  • Congress returns to face big to-do list: Israel and Ukraine aid, possible border or tax deals, and more

    Congress returns to face big to-do list: Israel and Ukraine aid, possible border or tax deals, and more

    Both the House and Senate are due to get back to work this week after their Thanksgiving break, and lawmakers have a lot on their plates.

    A divided Washington put off the threat of a partial government shutdown until mid-January by enacting a short-term spending bill in mid-November, but the measure didn’t address President Joe Biden’s $106 billion funding request that includes wartime aid for Israel and Ukraine.

    So…

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  • Crypto bulls eye $40,000 as bitcoin’s next level as the coin refreshes yearly high

    Crypto bulls eye $40,000 as bitcoin’s next level as the coin refreshes yearly high

    Crypto bulls are eyeing $40,000 as bitcoin’s next level, with the recent rally sending the crypto to a new high for the year, as the market shakes off the news that Binance’s co-founder Changpeng Zhao pleaded guilty on Tuesday to criminal charges related to violating U.S. anti-money-laundering laws, and stepped down as head of the company.

    The largest crypto BTCUSD on Friday rose to as high as $38,294, the loftiest level since May 2022, according to CoinDesk data. It climbed over 3% over the past 24 hours. 

    Bitcoin…

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  • SEC charges crypto platform Kraken with operating as an unregistered exchange

    SEC charges crypto platform Kraken with operating as an unregistered exchange

    The Securities and Exchange Commission charged cryptocurrency trading platform Kraken with operating as an unregistered securities exchange.

    The charges are the latest effort by regulators to crack down on crypto companies, some of which the SEC views as illegally selling securities without registering with the commission.

    Kraken didn’t immediately…

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  • How ransomware attack on ICBC rattled the Treasury market and shook up a 30-year bond auction

    How ransomware attack on ICBC rattled the Treasury market and shook up a 30-year bond auction

    It was a trading day unlike any other for traders in the $25 trillion Treasury market, with a 30-year bond auction seen as having been partially undermined by a cyberattack on the U.S. unit of a Chinese bank.

    In recapping Treasury’s poorly received $24 billion bond auction on Thursday, traders said the weaker-than-expected results likely had at least something to do with this week’s ransomware hit on the American arm of Industrial & Commercial Bank of China, known as ICBC. That attack reportedly caused disruptions across the market and had some impact on liquidity, with the Financial Times citing unnamed sources as saying hedge funds and asset managers were forced to reroute trades.

    Traders were grappling on Friday to answer the question of what created the sudden lack of interest at the auction, which went so badly that it also shook up U.S. stock investors. Thursday’s sale was the worst since November 2021, based on the extent to which primary dealers were forced to step in and pick up the slack in demand, one trader said. And it reinforced a recent pattern of weak auctions for the 30-year bond that may not bode well for future sales of that long-dated maturity.

    It’s possible that bonds simply “look much less attractive” following a recent “explosive rally” since late October, according to Charlie McElligott, a cross-asset macro strategist at Nomura Securities in New York. However, “this might be the case of ‘more than meets the eye’ to this ‘ugly auction evidencing low demand for duration’ story,” he wrote in a note.

    “One dynamic that makes yesterday’s ugly auction results murky was the ICBC cyberattack described across various financial media, which gunked-up anybody who clears UST trades through them, and made it so that many dealers were then likely unable to trade with those clients until resolved, on account of unsettled trades which weren’t able to be matched,” McElligott said.

    Adding to Thursday’s uncertainty was another random event. Federal Reserve Chairman Jerome Powell appeared on stage in an International Monetary Fund panel, was interrupted by a climate protester, and then uttered a seven-letter expletive that could be heard on the event’s livestream.

    Powell’s policy-related remarks, which indicated the central bank might take further action to control inflation, “didn’t help things and kind of spooked people again,” said John Farawell, head of municipal trading at New York bond underwriter Roosevelt & Cross.

    Read: Fed’s Powell Made Cryptic Comments. How He’s Guiding the Market.

    On Friday, the Treasury market found stabilization as buyers returned to segments of government debt in a sign that calm was being restored. A rush of buying was seen on the 30-year bond
    BX:TMUBMUSD30Y,
    sending its yield down to 4.733% and to a third straight weekly decline.

    Meanwhile, Bloomberg News reported that the repercussions of the ICBC cyberattack included an inability to deliver U.S. debt that was being pledged as collateral. ICBC’s U.S. unit was forced to rely on a messenger carrying a USB stick across Manhattan to complete disrupted trades, according to the news service, which also described Thursday’s $24 billion 30-year bond auction as one of the worst in a decade.

    The ICBC attack “might have had a dramatic impact on the auction. I don’t know how much, but I also can’t imagine it didn’t,” said Tom di Galoma, co-head of global rates trading for BTIG in New York. “When people see that there are trade-settlement issues, there’s a willingness to back off and that’s exactly what happened yesterday. Institutional accounts were saying, ‘We don’t know who is settling this trade.’ If the cyberattack hadn’t happened, I think the auction would have gone a lot better.”

    Ben Emons, a senior portfolio manager and head of fixed income for NewEdge Wealth in New York, said that once the Treasury market got upended by the ICBC cyberattack, the bad auction, and the interruption during Powell’s appearance, liquidity on U.S. government debt “was, for a moment, a dark matter.”

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