Tag: Banking/Credit

Asian stocks moving lower in wake of latest volatile session on Wall Street

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TOKYO (AP) — Asian shares were mostly lower on Wednesday following another volatile day on Wall Street, as traders braced for updates on inflation and corporate earnings.

Benchmarks fell in Tokyo
NIY00,
+0.09%,
Shanghai
SHCOMP,
-1.12%
and Hong Kong
HSI00,
-2.90%
but rose in Sydney.

South Korea’s Kospi
180721,
+0.34%
lost 0.1% to 2,189.86 after the Bank of Korea raised its key rate by 0.5 percentage point, amid the backdrop of Fed rate hikes in the U.S. and growing inflation risks from the weak won and rebounding global oil prices.

In currency trading the Japanese yen declined to a 24-year low against the U.S. dollar
JPYUSD,
-0.24
at 146 yen-levels, raising expectations of another intervention by Tokyo to prop up the yen. By midday the dollar
USDJPY,
+0.24%
was at 146.17 yen, up from 145.80 late Tuesday. The euro
EURUSD,
+0.12%
cost 96.96 cents, inching down from 97.07 yen.

The weaker yen raises costs for both consumers and businesses who rely on imports of food, fuel and other needs, but the bigger purchasing power for foreign currencies is expected to boost tourism. Japan reopened fully to individual tourist travel this week after being closed for more than two years because of the pandemic.

Japan’s benchmark Nikkei 225 lost 0.2% to 26,348.73 in morning trading. Australia’s S&P/ASX 200
ASX10000,
-1.54%
gained nearly 0.2% to 6,656.00. Hong Kong’s Hang Seng slipped 2% to 16,491.39, while the Shanghai Composite shed 1.2% to 2,943.24.

On Tuesday, the S&P 500
SPX,
-0.65%
fell 0.7%, marking its fifth straight loss, closing at 3,588.84. The Nasdaq
COMP,
-1.10%
dropped 1.1% to 10,426.19. The Dow Jones Industrial Average
DJIA,
+0.12%
added 0.1% to 29,239.19, while the Russell 2000 index
RUT,
+0.06%
rose 1 point, or about 0.1%, to 1,692.92.

Recession fears have been weighing heavily on markets as stubbornly hot inflation burns businesses and consumers. Economic growth has been slowing as consumers temper spending and the Federal Reserve and other central banks raise interest rates.

The International Monetary Fund on Tuesday cut its forecast for global economic growth in 2023 to 2.7%, down from the 2.9% it had estimated in July. The cut comes as Europe faces a particularly high risk of a recession with energy costs soaring amid Russia’s invasion of Ukraine.

See: Global economy most vulnerable since COVID crisis, with housing market at potential ‘tipping point,’ IMF warns

Wall Street is closely watching the Federal Reserve as it continues to aggressively raise its benchmark interest rate to make borrowing more expensive and slow economic growth. The goal is to cool inflation, but the strategy carries the risk of slowing the economy too much and pushing it into a recession.

“The market desperately wants a reason for the Fed to be able to stop tightening and the data recently hasn’t given them that opening with respect to inflation,” said Willie Delwiche, investment strategist at All Star Charts.

Computer-chip manufacturers continued slipping in the wake of the U.S. government’s decision to tighten export controls on semiconductors and chip manufacturing equipment to China. Qualcomm
QCOM,
-3.99%
fell 4%.

See: Intel reportedly plans to lay off thousands of workers, with details potentially emerging alongside quarterly earnings

Uber
UBER,
-10.42%
fell 10.4% and Lyft
LYFT,
-12.02%
slumped 12% following a proposal by the U.S. government that could give contract workers at ride-hailing and other gig economy companies full status as employees.

The Fed will release minutes from its last meeting on Wednesday, possibly giving Wall Street more insight into its views on inflation and next steps.

Investors still expect the Fed to raise its overnight rate by three-quarters of a percentage point next month, the fourth such increase. That’s triple the usual amount, and would bring the rate up to a range of 3.75% to 4%. It started the year at virtually zero.

Rex Nutting: Leading indicators show inflation is slowing, but Fed policy makers are too busy looking in rearview mirror to notice

The government will also release its report on wholesale prices Wednesday, providing an update on how inflation is hitting businesses. The closely watched report on consumer prices will be released on Thursday, and a report on retail sales is due Friday.

“Everyone is still hoping that every inflation report will be the one that shows that pressure is alleviating,” Delwiche said.

Wall Street is also gearing up for the start of the latest corporate earnings reporting season, which could provide a clearer picture of inflation’s impact.

Among the companies reporting quarterly results this week: PepsiCo
PEP,
+0.48%,
Delta Air Lines
DAL,
-1.97%
and Domino’s Pizza
DPZ,
-1.99%.
Banks including Citigroup
C,
-2.76%
and JPMorgan Chase
JPM,
-2.89%
will also report results.

In energy trading, benchmark U.S. crude
CL00,
-0.75%
lost 82 cents to $88.53 a barrel in electronic trading on the New York Mercantile Exchange. U.S. crude-oil prices fell 2% Tuesday. Brent crude
BRN00,
-0.56%,
the international pricing standard, fell 62 cents to $93.67 a barrel.

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October 11, 2022
WSJ News Exclusive | Peloton Co-Founder John Foley Faced Repeated Margin Calls From Goldman Sachs as Stock Slumped

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John Foley, the co-founder and former chief executive of Peloton Interactive faced repeated margin calls on money he borrowed against his Peloton holdings before he left the fitness company’s board last month, according to people familiar with the situation.

As Peloton’s shares slumped over the past year, Goldman Sachs Group asked Mr. Foley several times to provide fresh funds or additional collateral for personal loans the bank had extended to him, the people said. The company’s share price has fallen nearly 95% from its $160 peak in December 2020.

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October 11, 2022

Meet the 10 biggest megadonors for the 2022 midterm elections

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With four weeks until Election Day, congressional candidates are on track to break midterm fundraising records, having raised nearly $2.5 billion so far this cycle. That’s already 70% more than what was raised during the 2014 cycle and just $200 million shy of the total raised during the full 2018 cycle.

This cycle has also seen record-shattering outside spending, topping $1 billion through the beginning of October, according to an OpenSecrets estimate.

The increase in spending and fundraising is due in large part to the involvement of millionaire and billionaire megadonors who have sought to influence the outcome of an election in which both chambers of Congress are in play.

“When megadonors pump millions of dollars into super PACs, they get to help call the shots,” said Michael Beckel, research director at Issue One, a nonpartisan political reform organization. “Massive spending from a megadonor can influence what issues are talked about on the campaign trail and in Congress.”

Super PACs are independent political action committees that can raise unlimited sums of money but are not allowed to coordinate with a candidate or campaign. Due to contribution limits, such as those restricting individuals’ candidate contributions to $2,900 per election per candidate, most megadonor spending goes to super PACs.

More context: These are the basics of campaign finance in 2020 — in two handy charts

A MarketWatch analysis of Federal Election Commission data through the end of September shows that these 10 business moguls and philanthropists are the biggest federal-level donors this cycle.

Read: These 3 races could determine whether Democrats or Republicans control the Senate in 2023

And see: If this seat flips red, Republicans will have ‘probably won a relatively comfortable House majority’

Top federal-level megadonors this cycle

Rank	Contributor	Total Contributions	For Republicans	For Democrats	Nonpartisan/Bipartisan
1	George Soros	$128,782,000	$0	$128,782,000	$0
2	Ken Griffin	$50,955,800	$50,955,800	$0	$0
3	Richard Uihlein	$49,117,000	$49,117,000	$0	$0
4	Sam Bankman-Fried	$39,931,000	$201,000	$37,725,000	$2,005,000
5	Jeff Yass	$32,754,000	$32,754,000	$0	$0
6	Peter Thiel	$30,189,000	$30,189,000	$0	$0
7	Fred Eychaner	$22,343,000	$0	$22,343,000	$0
8	Stephen Schwarzman	$21,870,000	$21,865,000	$0	$5,000
9	Larry Ellison	$21,003,000	$21,003,000	$0	$0
10	Ryan Salame	$18,932,000	$17,432,000	$0	$1,500,000

	Totals:	$415,877,000	$223,517,000	$188,850,000	$3,510,000

Source: MarketWatch analysis of FEC data as of Sept. 30, 2022
Note: Partisan breakdown includes non-party affiliated PACs with over 95% of their spending benefitting one party, data has been rounded to the nearest thousand

Big spending by itself doesn’t automatically mean winning. There have been notable instances of the financially strongest candidates losing (such as crypto-backed House candidate Carrick Flynn earlier this year and billionaire Michael Bloomberg’s self-financed presidential bid) — but money can certainly help put a candidate on the right track.

“Money alone doesn’t guarantee electoral success, but every candidate prefers to be the one with more money to spend,” Beckel said. He added: “Outside spending on behalf of a candidate isn’t a silver bullet that’s going to guarantee electoral success. But it goes a long way to boosting somebody’s name recognition, and to presenting them as a viable candidate — somebody who has the resources to run a competitive campaign.”

Information about the spending by the top 10 donors this cycle has been compiled from MarketWatch’s analysis of FEC data and filings, super PAC websites and previously reported comments. Read on to find out who are the top 10 biggest donors this cycle.

10. Ryan Salame — $19 million

Ryan Salame, the co-CEO of FTX Digital Markets, a subsidiary of cryptocurrency exchange FTX, founded a hybrid PAC earlier this year called American Dream Federal Action. The vast majority ($15 million) of the $19 million Salame has spent this cycle has gone into bankrolling the PAC, which has spent $2.4 million in independent expenditures supporting Illinois Republican Rep. Rodney Davis, $2 million supporting Republican Senate candidate Katie Britt from Alabama, and $1.2 million each supporting Arkansas GOP Sen. John Boozman and Brad Finstad, a GOP congressional candidate in Minnesota.

On its website, the PAC describes itself as “organization dedicated to electing forward-looking candidates — those who want to protect America’s long term economic and national security by advancing smart policy decisions now.” A representative for Salame didn’t respond to a request for comment.

9. Lawrence Ellison — $21 million

The co-founder of Oracle
ORCL,
+0.26%
has similarly bankrolled a PAC this election cycle — giving a total $20 million to Opportunity Matters Fund Inc. The super PAC has largely held onto its funds so far, recent FEC records show, having $17 million cash on hand as of the end of August. Of the independent expenditures it has made this cycle, it spent the most on Georgia Republican Senate candidate Herschel Walker ($1.3 million), Wisconsin Republican Sen. Ron Johnson ($1.3 million) and North Carolina Senate candidate and current Republican Rep. Ted Budd ($1.1 million). A representative for Ellison didn’t respond to a request for comment.

8. Stephen Schwarzman — $22 million

Billionaire Stephen Schwarzman, the CEO of private-equity giant Blackstone
BX,
-2.41%,
is the eighth biggest donor at the federal level this cycle. In March, Schwarzman gave $10 million to both the Senate Leadership Fund and Congressional Leadership Fund, super PACs aimed at obtaining a Republican majority in the Senate and House, respectively. A representative for Schwarzman didn’t respond to a request for comment.

7. Fred Eychaner — $22 million

Fred Eychaner has also contributed $22 million so far this cycle, but unlike most of the spending on this list, his has been directed toward Democratic causes. The chairman of Chicago-based Newsweb Corporation has given $9 million to the House Majority PAC and $8 million to the Senate Majority PAC, as well as just under $1.5 million to the Democratic National Committee and several hundred thousands to the Democratic Congressional Campaign Committee and Democratic Senatorial Campaign Committee. A representative for Eychaner didn’t respond to a request for comment.

6. Peter Thiel — $30 million

Venture capitalist Peter Thiel was heavily involved in backing Ohio Republican J.D. Vance’s primary bid, giving $15 million in the spring to the Vance-aligned Protect Ohio Values PAC.

The massive primary investment was “historic” and record-setting, according to Beckel, who added that Thiel’s involvement in the Ohio Senate primary could mark “a new chapter of how mega donors are choosing to play in politics.”

“I think it’s become clear for a lot of megadonors that there are high stakes to a lot of primaries, and by spending in the primary, where there is typically lower turnout than in say, a statewide general election, they can get a lot of bang for their buck by investing in a primary election,” Beckel added.

Thiel has indicated that he doesn’t intend to put any more money toward Vance’s bid as he reportedly believes the Ohio candidate is on track to win, and instead will focus his funding on Arizona Republican Blake Masters’ bid to oust Democratic Sen. Mark Kelly in the final weeks leading up to the midterm election.

Thiel, known for his roles in PayPal
PYPL,
-1.69%,
Palantir
PLTR,
-0.25%
and Facebook
META,
-3.92%,
has also given a total $15 million to the Masters-aligned PAC, Saving Arizona, with his most recent contribution in July. Both Vance and Masters are venture capitalists, but Masters has worked with Thiel. He served as chief operating officer of Thiel Capital and president of the Thiel Foundation, and he co-authored a book on startups with Thiel in 2014. A representative for Thiel didn’t respond to a request for comment.

5. Jeff Yass — $33 million

Options trader Jeff Yass, who founded trading firm Susquehanna International Group, has contributed about $33 million on a federal level this cycle. Yass has given $15 million to the School Freedom Fund, or the equivalent of 97% of the PAC’s total fundraising. The group focuses on the issue of school choice, and its website states that some bureaucrats “hindered the development and education of our youth through school closures, mask mandates, critical race theory, and more.”

Aside from the School Freedom Fund, Yass’ other biggest contributions are to the conservative Club for Action ($6.5 million), Kentucky Freedom ($5 million), Protect Freedom ($2 million) and Crypto Freedom ($1.9 million). A representative for Yass didn’t respond to a request for comment.

4. Sam Bankman-Fried — $40 million

Sam Bankman-Fried, the founder and CEO of FTX, is the main funder behind Protect Our Future PAC, giving it $27 million of the $28 million it raised this cycle.

The organization says on its website that it focuses on promoting Democratic candidates championing pandemic preparedness and prevention “so this is the last time in our lifetime, and our children’s lifetimes, that we will face the devastation that has gripped communities across the U.S. since 2020.”

The group spent more than $10 million supporting Democrat Carrick Flynn’s House bid in Oregon. Flynn lost his primary in May by 18 points despite his massive outside spending advantage. In addition to Flynn, the group has made over $1 million in independent expenditures each supporting Democratic congressional candidates Lucy McBath, a current representative from Georgia; Jasmine Crockett of Texas, Adam Hollier of Michigan, Valerie Foushee of North Carolina and Shontel Brown, a current representative from Ohio.

Most of the other $10 million Bankman-Fried spent this cycle has gone to the House Majority PAC ($6 million) and the crypto PAC GMI ($2 million).

While the vast majority of his spending has supported Democratic candidates and causes, Bankman-Fried does not classify himself as an exclusively Democratic donor — for instance he gave $105,000 to the Alabama Conservatives Fund in June and $45,000 to the NRCC in July.

He told Politico in August that he is “legitimately worried about doing things that will make people view me as partisan when it’s not how I feel … because I think it both misses what I’m trying to do and makes it harder for me to act constructively.” A representative for the FTX boss didn’t respond to a request for comment.

3. Richard Uihlein — $49 million

Richard Uihlein is the founder of the shipping and business supply company Uline, and is a longtime conservative donor. This cycle has seen nearly $50 million in political spending by him, with just over half of it going to Club for Growth Action. Uihlein has also given about $14 million to Restoration PAC, an organization that says it is “dedicated to strengthening the foundations that made America the greatest nation in the world: God, family, education, and community.”

Uihlein’s next largest contributions are to the conservative Team PAC ($2.5 million) and the Arkansas Patriots Fund ($2.2 million), which earlier this year made ad buys favoring Republican Sen. John Boozman’s primary opponent. A representative for Uihlein didn’t respond to a request for comment.

2. Ken Griffin — $51 million

With $51 million in federal-level political spending, Ken Griffin, CEO of hedge fund Citadel, is the second most prolific donor this cycle.

The biggest beneficiaries are the Republican-aligned Congressional Leadership Fund with $18.5 million in contributions, the Senate Leadership Fund with $10 million and Honor Pennsylvania, a super PAC that backed Republican Dave McCormick’s Senate bid. McCormick lost in the primary to Mehmet Oz by less than a thousand votes.

While Griffin spent about $64 million during the last cycle, his $51 million figure this year marks by far the most he has spent during a midterm cycle. During the 2018 cycle, his contributions totaled less than $8 million.

A spokesperson for Griffin told MarketWatch that Griffin “supports leaders who are committed to protecting the American Dream and pursuing policies that will create a better future for the United States.”

“The right policies will focus on creating rewarding jobs, prioritizing public safety, and investing in a strong national defense,” his spokesperson said. “Preserving the American Dream will require that every child is well educated, can access great healthcare, and has the opportunity to succeed.”

1. George Soros — $129 million

Not one donor comes close to matching the sum that billionaire philanthropist George Soros has contributed this cycle: $129 million. However, much of that money hasn’t actually been put to work this cycle.

The majority of those on this list have focused their funding on Republican causes, but Soros’ money has gone to Democratic groups — specifically Democracy PAC II, whose $125 million in contributions comprises 99% of its fundraising. The super PAC spent more than $80 million on Democratic groups and candidates during the 2020 election.

A representative for Soros pointed MarketWatch to a Politico article from January, in which Soros said the $125 million is aimed at supporting pro-democracy “causes and candidates, regardless of political party” who are invested in “strengthening the infrastructure of American democracy: voting rights and civic participation, civil rights and liberties, and the rule of law” and called his contribution a “long-term investment” that will support political work beyond this year.

So far this cycle, Democracy PAC has spent very little and holds $113 million in available cash. Contributions the PAC has made this cycle include $5 million to the Senate Majority PAC, $2.5 million to One Georgia and $1 million to both Care in Action and House Majority PAC.

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October 11, 2022

The stock market is in trouble. That’s because the the bond market is ‘very close to a crash.’

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Don’t assume the worst is over, says investor Larry McDonald.

There’s talk of a policy pivot by the Federal Reserve as interest rates rise quickly and stocks keep falling. Both may continue.

McDonald, founder of The Bear Traps Report and author of “A Colossal Failure of Common Sense,” which described the 2008 failure of Lehman Brothers, expects more turmoil in the bond market, in part, because “there is $50 trillion more in world debt today than there was in 2018.” And that will hurt equities.

The bond market dwarfs the stock market — both have fallen this year, although the rise in interest rates has been worse for bond investors because of the inverse relationship between rates (yields) and bond prices.

About 600 institutional investors from 23 countries participate in chats on the Bear Traps site. During an interview, McDonald said the consensus among these money managers is “things are breaking,” and that the Federal Reserve will have to make a policy change fairly soon.

Pointing to the bond-market turmoil in the U.K., McDonald said government bonds that mature in 2061 were trading at 97 cents to the dollar in December, 58 cents in August and as low as 24 cents over recent weeks.

When asked if institutional investors could simply hold on to those bonds to avoid booking losses, he said that because of margin calls on derivative contracts, some institutional investors were forced to sell and take massive losses.

Read: British bond market turmoil is sign of sickness growing in markets

And investors haven’t yet seen the financial statements reflecting those losses — they happened too recently. Write-downs of bond valuations and the booking of losses on some of those will hurt bottom-line results for banks and other institutional money managers.

Interest rates aren’t high, historically

Now, in case you think interest rates have already gone through the roof, check out this chart, showing yields for 10-year U.S. Treasury notes
TMUBMUSD10Y,
3.898%
over the past 30 years:

The yield on 10-year Treasury notes has risen considerably as the Federal Reserve has tightened during 2022, but it is at an average level if you look back 30 years.

FactSet

The 10-year yield is right in line with its 30-year average. Now look at the movement of forward price-to-earnings ratios for S&P 500
SPX,
-0.03%
since March 31, 2000, which is as far back as FactSet can go for this metric:

FactSet

The index’s weighted forward price-to-earnings (P/E) ratio of 15.4 is way down from its level two years ago. However, it is not very low when compared to the average of 16.3 since March 2000 or to the 2008 crisis-bottom valuation of 8.8.

Then again, rates don’t have to be high to hurt

McDonald said that interest rates didn’t need to get anywhere near as high as they were in 1994 or 1995 — as you can see in the first chart — to cause havoc, because “today there is a lot of low-coupon paper in the world.”

“So when yields go up, there is a lot more destruction” than in previous central-bank tightening cycles, he said.

It may seem the worst of the damage has been done, but bond yields can still move higher.

Heading into the next Consumer Price Index report on Oct. 13, strategists at Goldman Sachs warned clients not to expect a change in Federal Reserve policy, which has included three consecutive 0.75% increases in the federal funds rate to its current target range of 3.00% to 3.25%.

The Federal Open Market Committee has also been pushing long-term interest rates higher through reductions in its portfolio of U.S. Treasury securities. After reducing these holdings by $30 billion a month in June, July and August, the Federal Reserve began reducing them by $60 billion a month in September. And after reducing its holdings of federal agency debt and agency mortgage-backed securities at a pace of $17.5 billion a month for three months, the Fed began reducing these holdings by $35 billion a month in September.

Bond-market analysts at BCA Research led by Ryan Swift wrote in a client note on Oct. 11 that they continued to expect the Fed not to pause its tightening cycle until the first or second quarter of 2023. They also expect the default rate on high-yield (or junk) bonds to increase to 5% from the current rate of 1.5%. The next FOMC meeting will be held Nov. 1-2, with a policy announcement on Nov. 2.

McDonald said that if the Federal Reserve raises the federal funds rate by another 100 basis points and continues its balance-sheet reductions at current levels, “they will crash the market.”

A pivot may not prevent pain

McDonald expects the Federal Reserve to become concerned enough about the market’s reaction to its monetary tightening to “back away over the next three weeks,” announce a smaller federal funds rate increase of 0.50% in November “and then stop.”

He also said that there will be less pressure on the Fed following the U.S. midterm elections on Nov. 8.

Don’t miss: Dividend yields on preferred stocks have soared. This is how to pick the best ones for your portfolio.

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October 11, 2022
As bond yields spike, Bank of England widens U.K. market intervention in second effort this week to calm volatile markets

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The Bank of England said Tuesday that it will expand its daily U.K. bond purchase operations to include index-linked gilts, the second move this week aimed at trying to calm market volatility.

“These additional operations will act as a further backstop to restore orderly market conditions by temporarily absorbing selling of index-linked gilts in excess of market intermediation capacity,” the BoE said in a statement on Tuesday, adding that it has also consulted with the Debt Management Office.

The inclusion of those index-linked bonds will run from Oct. 11 to 14, alongside its existing daily conventional gilt purchase auctions, the BoE said.

But it remained to be seen if a second-day move by the central bank to calm markets will be effective.

Investors are anxiously looking ahead to Friday, when the central bank’s emergency bond-buying program announced last month are scheduled to end. The BoE announced additional measures on Monday to smooth that path, but the yield on the 30-year gilt
TMBMKGB-30Y,
4.667%
jumped 29 basis points to 4.68% on Monday.

While that’s still below the 5.17% peak, it indicates concerns about the imminent end to the central bank’s program were causing fear in the market. The yield on the 10-year gilt
TMBMKGB-10Y,
4.431%,
which the central bank has not been buying, rose 24 basis points to 4.47%

On Monday, the BoE said it would boost the size of its daily gilt purchases and implement extra measures “to support an orderly end” to its emergency bond-buying plans.

It now will buy up to £10 billion ($11 billion) in bonds, up from a previous auction limit of £5 billion ($5.5 billion), though sticking with its pricing policy that has seen the central bank refuse many of the bonds put up for auction.

The BoE also said Monday that it plans to to launch a temporary expanded collateral repo operation for liability-driven investment funds through liquidity insurance operations, which will run beyond the end of this week.

LDI funds are a popular product sold by asset managers like BlackRock
BLK,
-0.88%,
Legal & General
LGEN,
-2.99%
and Schroders
SDR,
+0.05%
to pension funds, using derivatives to help them match assets and liabilities so there is no risk of shortfall in money to pay pensioners.

But those measures failed to stop bond yields from surging, amid market fears that the pension fund market is not yet ready for that temporary debt purchase program to end.

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October 11, 2022
Nasdaq closes at 2-year low after stocks fail to shake off Fed rate-hike gloom
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AP

U.S. stocks finished with losses on Monday, sending the Nasdaq Composite to its lowest close in more than two years, after investors failed to shake off worries about further Federal Reserve rate hikes and JPMorgan Chase & Co.’s Jamie Dimon warned of a potential 20% decline in the S&P 500.
How stocks traded

The Dow
DJIA,
-0.32%
closed down by 93.91 points, or 0.3% at 29,202.88.

The S&P 500
SPX,
-0.75%
finished down by 27.27 points, or 0.8%, at 3,612.39.

The Nasdaq Composite gave up 110.30 points, or 1%, to end at 10,542.10 — the lowest close since July 28, 2020.

Monday’s declines exacerbated losses which occurred at the end of last week. On Friday, the Dow fell 630 points, or 2.1%, the S&P 500 declined 2.8%, and the Nasdaq Composite dropped 3.8%. The Nasdaq Composite was down 31.9% for the year to date through Friday.

What drove markets

Major indexes finished lower for a fourth consecutive session on Monday as concerns about additional rate hikes by the Fed continued to damp sentiment. Dow industrials, the S&P 500 and the Nasdaq all fell to session lows after a CNBC interview with Dimon, chief executive of JPMorgan
JPM,
-0.93%,
who said the S&P 500 could fall by “another easy 20%” from current levels.

Read: Here are the 5 times traders and stock-market investors got fooled by Fed ‘pivot’ hopes in past year

Soft data a week ago had raised hopes that the Fed would soon pause its monetary tightening cycle in its battle to suppress multidecade high inflation, and the market subsequently rebounded off its near two-year lows. But a strong jobs report on Friday crushed that Fed “pivot” narrative and stocks plunged again.

On Monday, the CBOE Vix index
VIX,
+3.48%,
a gauge of expected S&P 500 volatility, sat at 32.15, well above its long-term average of 20.

“The low interest-rate environment forced investors to chase yield and bid up the asset prices too high. Eventually the market is fair and asset values have to achieve some sense of common ground or base level valuation. So it was inevitable that this valuation correction would happen,” said Siddharth Singhai, chief investment officer for New York-based hedge fund IronHold Capital.

“Panic will swing the market towards excessive pessimism and then the valuations will be too cheap. That hasn’t happened yet. Upcoming rate hikes will most likely be a catalyst for panic, however,” he wrote in an email to MarketWatch on Monday.

Coming into Monday’s session, trading had been expected to be somewhat thinned by the Columbus Day and Indigenous People’s Day holiday, which closed the Treasury market.

Now, traders are looking toward more data later in the week for further guidance on Fed thinking and equity valuations. The U.S. producer price numbers will be released on Wednesday and the consumer prices report on Thursday, the last of their kind before the Fed’s policy decision on Nov. 2.

Then on Friday, third-quarter corporate earnings season really kicks into gear when big banks like JPMorgan
JPM,
-0.93%
and Citigroup
C,
-1.40%
present their numbers.

Read: JPMorgan, Citi, Morgan Stanley and Wells Fargo kick off bank earnings season in choppy waters and S&P 500 would be in an ‘earnings recession’ if not for this one booming sector — but that may not last long

Investors were also keeping an eye on the strong U.S. dollar, which is considered a drag on the earnings of U.S. multinationals. The dollar index
DXY,
+0.25%
rose 0.3% to 113.12 as the euro intermittently broke below $0.97 after Russia sent missiles into cities across Ukraine.

See: A rampaging U.S. dollar is wreaking havoc in financial markets. Here’s why it’s so hard to stop it.

“We expect a lot more volatility in markets for the remainder of the year as the inevitability of higher rates sinks in and the economic consequences become more pronounced,” said Arthur Laffer Jr., president of Nashville-based Laffer Tengler Investments. Fed Chairman Jerome Powell “will not be a very popular person but it seems his legacy is focused on fighting any resurgence of 1970s inflation in the U.S. at all costs.”

Companies in focus

Rivian Automotive Inc.
RIVN,
-7.28%
intends to recall about 13,000 vehicles due to a possible safety issue that has so far been found to have affected several units, the company said Friday night. Shares finished down by 7.3%.

Tesla Inc.
TSLA,
-0.05%
reported record monthly sales of China-made electric vehicles in September, as it continues to ramp production in the world’s number-two economy. The electric-vehicle maker delivered 83,135 EVs from its Shanghai plant in September, an 8% rise from August, according to a report by the China Passenger Car Association. Tesla shares nonetheless finished down by less than 0.1%.

–— Jamie Chisholm contributed to this article.
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October 10, 2022
Will the stock market be open on Columbus Day?

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It’s a regular day of business for the U.S. stock market on Monday, October 10, as equity exchanges stay open for Columbus Day, a federal holiday that also has been recognized as Indigenous Peoples’ Day.

Bond markets, however, take the day off, which means a long weekend for the Treasury market, corporate bonds and other forms of tradable debt, starting after the close of business on Friday.

Stocks have endured a brutal selloff in the first nine months of the year as the Federal Reserve has worked to fight inflation that’s been stuck near it highest levels since the early 1980s.

See: Why stock-market bulls keep falling for Fed ‘pivot’ feints — and what it will take to put in a bottom

The central bank’s main tool to battle inflation has been to dramatically increase interest rates, while also shrinking its balance sheet, in an effort to tighten financial conditions and squelch demand for goods and services, while also bringing down stubbornly high costs of living, including food, shelter and energy prices.

The Fed’s focus in recent months also has been on cooling the roaring labor market, with strong wage gains in the past year viewed as one of several culprits behind elevated inflation.

Friday’s jobs report for September pegged the unemployment rate as matching a prepandemic low of 3.5%, dashing hopes for now of a significant trend toward a pullback in the labor market.

The S&P 500 index
SPX,
-2.80%
tumbled 2.8% on Friday, the Dow Jones Industrial Average
DJIA,
-2.11%
fell 630.15 points, or 2.1%, and the Nasdaq Composite Index
COMP,
-3.04%
dropped 3.8%. An early October rally had offered some hope for a bounce for stocks, after a brutal first nine months for investors.

Bonds also have undergone a painful repricing this year as volatility tied to the Fed’s monetary tightening campaign has eroded the value of bonds issued in the past decade of low rates.

Read: Bond markets facing historic losses grow anxious about Fed that ‘isn’t blinking yet’

The S&P 500 is down about 24% for the year, while the Dow is off 19% and the Nasdaq nearly 32%.The 10-year Treasury rate
TMUBMUSD10Y,
3.889%
was near 3.9% Friday, after recently touching 4%, it’s highest since 2010

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October 9, 2022
Dow books 630-point drop after strong jobs data rattles investors, but stocks cement weekly gains
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U.S. stocks finished sharply lower Friday, but still booked their best weekly gains in a month, after September jobs data showed an unexpected fall in the unemployment rate that’s anticipated to reinforce the Federal Reserve’s resolve to keep tightening monetary policy.

Investors also weighed a profit warning at a leading microchip maker ahead of next week’s increase in quarterly earnings results.
What happened

The Dow Jones Industrial Average
DJIA,
-2.11%
fell 630.15 points, or 2.1%, ending at 29,296.79, but off the session low of 29,142.66.

The S&P 500
SPX,
-2.80%
dropped 104.86 points, or 2.8%, closing at 3,639.66.

The Nasdaq Composite
COMP,
-3.80%
shed 420.91 points, or 3.8%, to finish at 10,652.40.

Stocks posted back-to-back losses, trimming weekly gains, but recorded their best weekly gains since Sept. 9, according to Dow Jones Market Data.

Read: Will the stock market be open on Columbus Day?

What drove markets

Stocks recorded sharp losses Friday after the Labor Department said the U.S. economy added 263,000 jobs in September, while the unemployment rate declined to 3.5% from an August reading of 3.7%. Average hourly earnings rose 0.3%.

Still, a powerful rally earlier in the week boosted all three major stock indexes to weekly gains, a departure from three straight weekly losses, according to Dow Jones Market Data.

“It’s manic. We are all on edge,” said Kent Engelke, chief economic strategist at Capitol Securities Management, of the sharp market swings.

“Any piece of good news is a cause for an explosive rally,” Engelke said by phone. On the flip side, he pegged technology-based trading “in an illiquid and emotional market” as exacerbating Friday’s selloff.

“It’s a reflection that people have re-entered the mind-set that the Fed is going to be raising rates at a rapid clip, probably for longer than what they might have suspected at the start of the week,” said Robert Pavlik, a senior portfolio manager at Dakota Wealth Management, by phone.

Pavlik expects the Fed to keep tightening financial conditions to try to head off inflation. “But once we turn the corner, and the economy slows down, the Fed probably will be more aggressive in cutting rates on the way down.”

In addition, the Fed has been “draining liquidity from the system at a remarkable pace,” wrote Rick Rieder, BlackRock’s chief investment officer of global fixed income, in a Friday client note, while pointing to an astounding $1.3 trillion decline in the central bank’s balance sheet since the December 2021 peak.

Pavlik at Dakota Wealth said he anticipates the Fed will start slowing interest rate hikes by mid-next year, which likely means continued pressure for the stock market, particularly with a backdrop of big oil-price
CL00,
+5.37%
gains this week after global crude producers voted to cut monthly production and with the U.S. dollar’s
DXY,
+0.44%
surge this year against a basket of rival currencies.

U.S. crude oil prices climbed for a fifth day in a row on Friday to settle at $92.64 a barrel, while booking at 16.5% weekly gain.

New York Fed President John Williams said Friday that benchmark interest rates likely need to hit 4.5% over time. The Fed’s policy rate now sits in a 3%-3.25% range, up from a zero-0.25% range a year ago.

The benchmark 10-year Treasury rate
TMUBMUSD10Y,
3.889%
climbed to 3.883% Friday, as the key metric used to gauge the affordability of credit for businesses, household and the economy posted 10 straight weeks of gains, according to Dow Jones Market Data.

Read: Bond markets facing historic losses grow anxious of Fed that ‘isn’t blinking yet’

Investors continued to hope for relief on the inflation front and will be monitoring next week’s release of the September consumer-price index, as well as corporate earnings season as it picks up.

Companies in focus

Twitter Inc.
TWTR,
-0.43%
shares fell 0.4% Friday after a judge delayed a looming trial between the company and Elon Musk to allow the Tesla Inc.
TSLA,
-6.32%
CEO more time to close his $44 billion acquisition of the social media platform.

Besides the jobs report, investors weighed a profit warning from microchip maker Advanced Micro Devices Inc. AMD, which said the PC market weakened significantly during the quarter. AMD shares fell 13.9%, and rivals including Nvidia Corp. NVDA and Intel Corp. INTC also closed lower.

U.S. cannabis stocks were choppy Friday, with the AdvisorShares Pure US Cannabis ETF
MSOS,
-2.80%
ending lower, following steep gains earlier in the week after President Joe Biden said the U.S. would consider de-scheduling cannabis from its current position as a Schedule 1 narcotic under federal law.

—Steven Goldstein contributed reporting to this article
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October 7, 2022
Will the stock market be open on Columbus Day?

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It’s a regular day of business for the U.S. stock market on Monday, October 10, as equity exchanges stay open for Columbus Day, a federal holiday that also has been recognized as Indigenous Peoples’ Day.

Bond markets, however, take the day off, which means a long weekend for the Treasury market, corporate bonds and other forms of tradable debt, starting after the close of business on Friday.

Stocks have endured a brutal selloff in the first nine months of the year as the Federal Reserve has worked to fight inflation that’s been stuck near it highest levels since the early 1980s.

The central bank’s main tool to battle inflation has been to dramatically increase interest rates, while also shrinking its balance sheet, in an effort to tighten financial conditions and squelch demand for goods and services, while also bringing down stubbornly high costs of living, including food, shelter and energy prices.

The Fed’s focus in recent months also has been on cooling the roaring labor market, with strong wage gains in the past year viewed as one of several culprits behind elevated inflation.

Friday’s jobs report for September pegged the unemployment rate as matching a prepandemic low of 3.5%, dashing hopes for now of a significant trend toward a pullback in the labor market.

The S&P 500 index
SPX,
-3.03%
tumbled 1.9% on Friday, the Dow Jones Industrial Average
DJIA,
-2.39%
was down 1.5% and the Nasdaq Composite Index
COMP,
-3.89%
was off 2.6%. And early October rally had offered some hope for a bounce for stocks, after a brutal first nine months for investors.

Bonds also have undergone a painful repricing this year as volatility tied to the Fed’s monetary tightening campaign has eroded the value of bonds issued in the past decade of low rates.

The S&P 500 is down about 23% for the year, the Dow off 19% and the Nasdaq off 31% since January. The 10-year Treasury rate
TMUBMUSD10Y,
3.884%
was near 3.9% Friday, after recently touching 4%, it’s highest since 2010

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October 7, 2022
Credit Suisse makes $2.98 billion debt-repurchase offers

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Credit Suisse Group AG said Friday that it is offering to repurchase debt securities for a total of close to $3 billion as the troubled lender looks to manage its liabilities ahead of a touted restructuring.

The Swiss bank
CS,
+1.66%

CSGN,
+3.13%
is offering to buy back eight euro- or pound sterling-denominated senior debt securities for a total of up to 1 billion euros ($979.2 million,) it said.

It is also offering to buy back 12 U.S. dollar-denominated securities for up to $2 billion. Both offers are subject to various conditions and will expire on Nov. 3 and Nov. 10, respectively, Credit Suisse said.

The value of some Credit Suisse bonds fell at the beginning of this week alongside shares in the lender amid speculation over its financial health. The bank has moved to reassure investors ahead of a planned strategy update due on Oct. 27 alongside quarterly results.

Write to Joshua Kirby at joshua.kirby@wsj.com; @joshualeokirby

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October 6, 2022
A strong fall COVID booster campaign could save 90,000 U.S. lives and avoid more than 936,000 hospitalizations, study finds

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A strong fall COVID booster campaign could save about 90,000 people living in the U.S. from dying of the virus and avoid more than 936,000 hospitalizations, according to a new study by the Commonwealth Fund.

As immunity wanes and new variants that can evade protection from early vaccines emerge, surges in hospitalizations and deaths are increasingly likely this fall and winter, the authors wrote. That makes it important that people get the bivalent boosters recently authorized by the Food and Drug Administration and help stop transmission, they wrote.

Researchers analyzed three scenarios to evaluate the impact of vaccination on reducing fatalities, hospitalizations and medical costs to both the Medicare and Medicaid programs.

The first measured the outcome if daily vaccination rates remain unchanged from current levels; they have gradually declined since the first wave of the omicron variant. Federal financial support has also not been replenished, amid a perception among many Americans that the pandemic is over and as congressional Republicans oppose legislative efforts to continue the pandemic fight.

As of Oct. 3, some 68% of the U.S. population has had primary shots, but fewer than half of those have received a booster dose, and only 36% of those aged 50 and older have had a second booster.

The second and third Commonwealth Fund scenarios looked at outcomes if rates increased by the end of 2022.

In one scenario, researchers imagined booster uptake would track flu-shot coverage in 2020 to 2021. The other scenario assumed 80% of eligible individuals 5 and older get a booster by the end of 2022.

Source: Commonwealth Fund

The data found that more than 75,000 deaths could be prevented along with more than 745,000 hospitalizations if coverage reaches similar levels to 2021 to 2022 flu vaccination. The best scenario would save $56 billion in direct medical costs over the course of the next six months.

“Stratifying by insurance type, we found direct medical costs would be reduced by $11 billion for Medicare alone under scenario 1 and $13 billion under scenario 2,” the authors wrote. “An additional $3.5 to $4.5 billion in savings would accrue to Medicaid. Even if the federal government paid all vaccination costs, accelerated campaigns would generate more than $10 billion in net savings from federal programs like Medicare and Medicaid.”

The study comes as U.S. known cases of COVID are continuing to ease and now stand at their lowest level since late April, although the true tally is likely higher given how many people are testing at home, with data not being collected.

The daily average for new cases stood at 44,484 on Tuesday, according to a New York Times tracker, down 22% from two weeks ago. Cases are rising in most northeastern states by 10% of more, while cases in the are rising in the western states Montana, Washington and Oregon.

The daily average for hospitalizations was down 12% at 27,334, while the daily average for deaths is down 8% to 393.

The new bivalent vaccine might be the first step in developing annual Covid shots, which could follow a similar process to the one used to update flu vaccines every year. Here’s what that process looks like, and why applying it to Covid could be challenging. Illustration: Ryan Trefes

Coronavirus Update: MarketWatch’s daily roundup has been curating and reporting all the latest developments every weekday since the coronavirus pandemic began

Other COVID-19 news you should know about:

• Long COVID, a condition that can encompass symptoms such as respiratory distress, cough, “brain fog,” fatigue and malaise that last 12 weeks or longer after initial infection, is becoming a long-term challenge as both employers and workers navigate an ever-mutating virus, according to Liz Seegert, writing for NextAvenue.org. The Centers for Disease Control and Prevention found that one in five COVID survivors younger than 65 experienced at least one incident that might be related to previous COVID-19 infection. Among those 65 and older, the rate was one in four. Their data also show that nearly three times as many people age 50 to 59 currently have long COVID than those 80 or older.

• A retired judge opened a public inquiry on Tuesday into how Britain handled the coronavirus pandemic, saying bereaved families and those who suffered would be at the heart of the proceedings, the Associated Press reported. Former Court of Appeal judge Heather Hallett said the inquiry would investigate the U.K.’s preparedness for a pandemic, how the government responded, and whether the “level of loss was inevitable or whether things could have been done better.”

With each mutation, the Covid-19 virus is becoming more transmissible. WSJ’s Daniela Hernandez breaks down the science of how Covid variants are getting better at infecting and spreading. Illustration: Rami Abukalam

• Health experts are keeping an eye on new versions of the BA.5 omicron subvariant amid concerns those virus versions can evade the drugs developed to fight COVID, Salon reported. Of particular concern are two named BQ.1 and BQ.1.1, along with BA.2.75.2, which is spreading in Singapore, India and parts of Europe. Then there’s XBB, which some research suggest is the most antibody-evasive strain tested so far. The World Health Organization said in its weekly update on the virus that BA.5 descendent lineages continued to be dominant in the latest week, accounting for 80.8% of sequences shared through a global database. It also noted “increased diversity” within omicron and its lineages.

• Eiger BioPharmaecuticals Inc.
EIGR,
-5.01%
said Wednesday it will not pursue emergency authorization of its experimental treatment for mild and moderate COVID-19 infections. It had asked the Food and Drug Administration to consider an EUA application based on data from the Together trial, a Phase 3 study that has assessed 11 possible treatments for COVID-19 that is being conducted in Brazil and Canada. Eiger said the FDA instead recommended the company consider running its own pivotal trial for peginterferon lambda that would support full approval of the drug.

Here’s what the numbers say:

The global tally of confirmed cases of COVID-19 topped 619.2 million on Wednesday, while the death toll rose above 6.55 million, according to data aggregated by Johns Hopkins University.

The U.S. leads the world with 96.5 million cases and 1,060,446 fatalities.

The Centers for Disease Control and Prevention’s tracker shows that 225.3 million people living in the U.S., equal to 67.9% of the total population, are fully vaccinated, meaning they have had their primary shots. Just 109.9 million have had a booster, equal to 48.8% of the vaccinated population, and 23.9 million of those who are eligible for a second booster have had one, equal to 36.6% of those who received a first booster.

Some 7.6 million people have had a shot of the new bivalent booster that targets the new omicron subvariants that have become dominant around the world.

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October 5, 2022
Elon Musk wants to move forward with his purchase of Twitter. Here’s how some Twitter users reacted.

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Elon Musk sent a letter to Twitter
TWTR,
+22.24%
indicating he intends to move forward with his original proposal that he acquire the company for $54.20 a share, according to a filing from the Securities and Exchange Commission.

The Tesla Inc.
TSLA,
+2.90%
CEO agreed to buy the social media company back in April for $44 billion, but in recent months said he wanted to terminate the deal, publicly citing concerns about bots on the platform. The two sides had been entrenched in a legal battle over the past few months, and a Delaware Chancery Court judge was scheduled to hear arguments on the case in October, a case Wedbush analyst Daniel Ives said Musk was “highly unlikely” to win.

See also: College students who got low grades complained about their ‘dismissive’ professor. Then NYU fired him.

Twitter users reacted to the news on Tuesday afternoon, many of them joking about a potential resolution to the seemingly never-ending Elon Musk Twitter saga.

One Twitter user said she believes Musk will look to reinstate the account of former President Donald Trump, which was banned shortly after the attack on the Capitol on Jan. 6, 2021. Trump has claimed he won’t return to Twitter even if the Musk deal is executed, and he’ll continue to post on his platform, Truth Social.

See also: Trump’s Facebook ban may end as soon as January 2023, Meta executive says

“We’re doing a big platform right now, so I probably wouldn’t have any interest,” the former president said.

Another user tweeted that supporters of the meme crypto dogecoin
DOGEUSD,
+1.11%
are excited by Musk’s move to proceed with the deal. Musk has touted dogecoin on several occasions in the past few years.

Similar to bitcoin, dogecoin is a peer-to-peer, open-source cryptocurrency. It trades under the ticker symbol “DOGE” and features the face of the shiba inu from the popular Doge meme as its logo. Dogecoin was up as much as 9.16% after the Bloomberg news was published.

Musk has not publicly commented on the report, but one Twitter user pointed out that he tweeted about his satellite internet project Starlink after the news broke, but did not mention Twitter in any way.

A report from The Wall Street Journal stated Musk’s legal team relayed the proposal to Twitter’s team “overnight Monday.”

Shares of Tesla Inc. dipped after the news, and are now up just 1.31% during Tuesday’s trading. Shares of the EV maker were up as much as 5.65% on the day before the Musk news.

See also: SPAC backing Trump’s Truth Social hit by news Musk is again offering to acquire Twitter at original price

The news comes a few days after hundreds of text messages from Musk’s phone were made public as evidence in Twitter’s lawsuit.

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October 4, 2022

21 dividend stocks yielding 5% or more of companies that will produce plenty of cash in 2023

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When the stock market has jumped two days in a row, as it has now, it is easy to become complacent.

But the Federal Reserve isn’t finished raising interest rates, and recession talk abounds. Stock investors aren’t out of the woods yet. That can make dividend stocks attractive if the yields are high and the companies produce more cash flow than they need to cover the payouts.

Below is a list of 21 stocks drawn from the S&P Composite 1500 Index
SP1500,
+3.12%
that appear to fit the bill. The S&P Composite 1500 is made up of the S&P 500
SPX,
+3.06%,
the S&P 400 Mid Cap Index
MID,
+3.18%
and the S&P Small Cap 600 Index
SML,
+3.80%.

The purpose of the list is to provide a starting point for further research. These stocks may be appropriate for you if you are looking for income, but you should do your own assessment to form your own opinion about a company’s ability to remain competitive over the next decade.

Cash flow is key

One way to measure a company’s ability to pay dividends is to look at its free cash flow yield. Free cash flow is remaining cash flow after planned capital expenditures. This money can be used to pay for dividends, buy back shares (which can raise earnings and cash flow per share), or fund acquisitions, organic expansion or for other corporate purposes.

If we divide a company’s estimated annual free cash flow per share by its current share price, we have its estimated free cash flow yield. If we compare the free cash flow yield to the current dividend yield, we may see “headroom” for cash to be deployed in ways that can benefit shareholders.

For this screen, we began with the S&P Composite 1500, then narrowed the list as follows:

Dividend yield of at least 5.00%.
Consensus free cash flow estimate available for calendar 2023, among at least five analysts polled by FactSet. We used calendar-year estimates, even though fiscal years for many companies don’t match the calendar.
Estimated 2023 free cash flow yield of at least double the current dividend yield.

For real-estate investment trusts, dividend-paying ability is measured by funds from operations (FFO), a non-GAAP figure that adds depreciation and amortization back to earnings. Adjusted funds from operations (AFFO) takes this a step further, subtracting cash expected to be used to maintain properties. So for the two REITs on the list, the FCF yield column makes use of AFFO.

For many companies in the financial sector, especially banks and insurers, free cash flow figures aren’t available, so the screen made use of earnings-per-share estimates. These are generally considered to run close to actual cash flow for these heavily regulated industries.

Here are the 21 companies that passed the screen, with dividend yields of at least 5% and estimated 2023 FCF yields at least twice the current payout. They are sorted by dividend yield:

Company	Ticker	Type	Dividend yield	Estimated 2023 FCF yield	Estimated “headroom”
Uniti Group Inc.	UNIT, +7.36%	Real-Estate Investment Trusts	8.33%	25.25%	16.92%
Hanesbrands Inc.	HBI, +5.56%	Apparel/ Footwear	8.33%	17.29%	8.96%
Kohl’s Corp.	KSS, +5.80%	Department Stores	7.68%	16.72%	9.04%
Rent-A-Center Inc.	RCII, +10.40%	Finance/ Rental/ Leasing	7.52%	17.26%	9.73%
Macerich Co.	MAC, +8.18%	Real-Estate Investment Trusts	7.43%	18.04%	10.60%
Devon Energy Corp.	DVN, +5.72%	Oil & Gas Production	7.13%	14.47%	7.33%
AT&T Inc.	T, +1.19%	Major Telecommunications	6.98%	14.82%	7.84%
Newell Brands Inc.	NWL, +5.16%	Industrial Conglomerates	6.59%	17.42%	10.82%
Dow Inc.	DOW, +2.96%	Chemicals	6.18%	15.63%	9.45%
LyondellBasell Industries NV	LYB, +3.64%	Chemicals	6.09%	16.07%	9.99%
Scotts Miracle-Gro Co. Class A	SMG, +5.01%	Chemicals	6.04%	12.68%	6.65%
Diamondback Energy Inc.	FANG, +5.23%	Oil & Gas Production	5.56%	13.63%	8.08%
Best Buy Co. Inc.	BBY, +5.86%	Electronics/ Appliance Stores	5.53%	14.08%	8.55%
Viatris Inc.	VTRS, +5.62%	Pharmaceuticals	5.50%	28.95%	23.45%
Prudential Financial Inc.	PRU, +5.66%	Life/ Health Insurance	5.38%	13.30%	7.91%
Ford Motor Co.	F, +7.76%	Motor Vehicles	5.23%	15.95%	10.72%
Invesco Ltd.	IVZ, +6.76%	Investment Managers	5.23%	14.95%	9.73%
Franklin Resources Inc.	BEN, +4.37%	Investment Managers	5.17%	13.21%	8.04%
Kontoor Brands Inc.	KTB, +0.73%	Apparel/ Footwear	5.17%	14.15%	8.98%
Seagate Technology Holdings PLC	STX, +4.09%	Computer Peripherals	5.11%	13.19%	8.07%
Foot Locker Inc.	FL, +1.35%	Apparel/ Footwear Retail	5.03%	15.52%	10.49%
Source: FactSet

Any stock screen has its limitations. If you are interested in stocks listed here, it is best to do your own research, and it is easy to get started by clicking the tickers in the table for more information about each company. Click here for Tomi Kilgore’s detailed guide to the wealth of information for free on the MarketWatch quote page.

For the “estimated FCF yields,” consensus free cash flow estimates for calendar 2023 were used for all companies except the following:

For the REITs, (Uniti Group Inc.
UNIT,
+7.36%
and Macerich Co.
MAC,
+8.18%
), consensus AFFO estimates were used.
Consensus EPS estimates were used for Prudential Financial Inc.
PRU,
+5.66%,
Invesco Ltd.
IVZ,
+6.76%
and Franklin Resources Inc.
BEN,
+4.37%.

Don’t miss: Dividend yields on preferred stocks have soared. This is how to pick the best ones for your portfolio.

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October 4, 2022

Weekend reads: What to expect now for home prices, stocks and bonds

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This week Freddie Mac said the average interest rate on a 30-year mortgage loan in the U.S. had climbed to 6.70% from 6.29% the week before and 6.02% two weeks ago. The average rate a year ago was 3.01%.

Would-be sellers who have low-rate mortgage loans are reluctant if it means they need to take out a new loan to fund their next home. Would-be buyers are forced out of the market, as the monthly principal and interest payment for a new 30-year loan, based on Freddie Mac’s figures, has increased 53% from a year ago.

Home-sale contracts are being canceled at a record pace in some areas.

But these factors could lead to a buyer’s market in 2023 if prices plunge. Here are the areas economists expect to see the largest home price declines.

The strong dollar and the stock market

Khaled Desouki/Agence France-Presse/Getty Images

The dollar has strengthened as the Federal Reserve has taken the lead among central banks in raising interest rates. This is reverberating across the world, making it more costly for countries to make interest payments on dollar-denominated debt and increasing the cost of any commodity traded in dollars.

The rising dollar lowers prices on imported goods for Americans and can also lower their international travel costs. But Michael Wilson, Morgan Stanley’s chief equity strategist, warns that earnings for the S&P 500
SPX,
-1.51%
would decline as a direct result of the strong dollar and called the current foreign-exchange backdrop an “untenable situation” for the stock market.

On the other hand: Companies are trying to blame weak earnings on the strong U.S. dollar, but that’s a lame excuse

This is what happens when bearish sentiment runs high

Michael Brush interviews David Baron, co-manager of the Baron Focused Growth Fund
BFGFX,
-0.76%,
who describes opportunities cropping up as institutional investors dump stocks. He also explains his winning long-term strategy, which has included a very long-term investment in Tesla Inc.
TSLA,
-1.10%.

A a positive sign for the stock market: These 12 stocks have seen strong insider buying

Time to buy bonds?

When interest rates rise, bond prices fall. But it also means that if you have money to put to work, bond yields have become much more attractive.

Khuram Chaudhry, a European equity quantitative strategist at JPMorgan in London, makes the case for buying bonds now.

What about preferred stocks?

Getty Images/iStockphoto

Preferred stocks feature stated dividend yields and prices that move the same way bond prices do. That means prices for many issues are now heavily discounted to face value and that current yields are much higher than they were at the end of 2021. Here’s an in-depth guide on how to research preferred stocks and make your own selections.

Related: 22 dividend stocks screened for quality and safety

The problem with macro market projections

Stanley Druckenmiller predicted a “hard landing” in 2023 for the U.S. economy while speaking at CNBC’s Delivering Alpha Investor Summit on Sept. 28.

Bloomberg

Stanley Druckenmiller predicted a U.S. recession in 2023 as a result of monetary policy tightening by the Federal Reserve. That may not be much of a stretch, considering that the U.S. economy contracted during the first half of 2022, according to revised GDP figures from the Bureau of Economic Analysis.

But investors should be careful — macro forecasts often turn out to be incorrect, Mark Hulbert warns.

More on stocks: It’s the worst September for stocks since 2008. What that means for October.

Recessions and your retirement plans

Getty Images

Alessandra Malito has advice on how retirees and people planning for retirement can prepare for tough economic times.

Also: Reset your retirement calculator now for today’s bleaker stock markets and make sure you’re still on track

Investors tremble and a central bank scrambles

The Bank of England’s headquarters.

Agence France-Presse/Getty Images

After the new U.K. government of Prime Minister Liz Truss announced a massive tax cut along with a new spending program to help counter rising fuel costs and new borrowing, the pound hit a new low against the dollar on Sept. 26 as investors and money managers panicked and sold-off U.K. government bonds. Steve Goldstein explains how and why the Bank of England came tot the rescue.

A closer look at reverse mortgages

Getty Images/iStockphoto

Beth Pinsker digs deeply to explain how to use a reverse mortgage as a financial planning tool.

Poking a little fun at Elon Musk

Getty Images

After Tesla CEO Elon Musk said the upcoming Cybertruck would be sufficiently waterproof to “serve briefly as a boat,” the San Francisco Bay Ferry offered this advice to patrons.

Want more from MarketWatch? Sign up for this and other newsletters, and get the latest news, personal finance and investing advice.

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September 30, 2022