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Mar 13, 2015
via Morning Bid with David Gaffen

Doubling down

By this time, it’s safe to say the market is starting to gear up for the Federal Reserve’s meeting on Tuesday and Wednesday next week. It is expecting the Fed to remove the word “patient” from its statement, which will indicate a plan to raise rates by the beginning of the summer.

With that in mind, the market stands at something of an inflection point. It has alternated between weakness and strength in recent days, depending on the whims of the bond market. Rates still appear to be headed higher, which makes stocks look a bit soft.

Mar 12, 2015
via Morning Bid with David Gaffen

When you wish upon a star

The day is filled with a number of events, most of which couldn’t overwhelm the entire market, but remain important in their own right as both sentiment indicators and as signals of where demand is going for particular assets:

–Corporate news, to begin with: The earnings season is over, and we’re not at pre-warnings season yet (thank goodness), but there’s still activity to be aware of. Walt Disney holds its annual meeting of shareholders, where investors will vote on trying to separate the chair/CEO position currently held by Bob Iger. It’s failed in the past, and the chances are slim that it will succeed this time. In the past, some big investors, like CalSTERs, voted in favor of separating the positions, in part because they were concerned that Iger wasn’t doing enough to really drive revenue and growth at Disney. They complained bitterly about it in 2012, but since then, the company’s strong equity performance (in no small part due to share buybacks) has held the day, though it’s questionable in the last two years whether the primary person responsible for the company’s success is Mr. Iger or Queen Elsa of Arundel; plenty would bet on the latter.

Mar 11, 2015
via Morning Bid with David Gaffen

Outpost in Ukraine

The International Monetary Fund will decide later today whether to approve a big package of bailouts for Ukraine – provided the country, struggling with a weak economy, a sharp decline in oil prices and a conflict with Russia, can figure out a way to get about $15 billion from its creditors. Ukraine would have to keep its debt-to-GDP low enough so that the IMF doesn’t feel like it’s sticking its neck out too far.

Ukraine is only one of a few spaces in emerging markets that’s getting hit hard of late. A major index of emerging markets stocks has dropped for nine straight days. The dollar is at a 12-year high against a basket of major currencies. The dollar hit its highest level against the Brazilian real in 11 years and a high not seen against the Mexican peso since at least the late 1980s. Those gains won’t go on in perpetuity – markets go two ways, even the lousy ones. But the move and the fallout for emerging markets is one that investors are going to be dealing with for some time. The low interest rates in the United States that have buoyed borrowing in both the corporate and EM sectors for years are being shaken by anticipation of the Fed’s raising interest rates as early as this summer. The dollar’s gains increase the costs of our imports.

Mar 11, 2015
via Morning Bid with David Gaffen

Outpost in Ukraine

The International Monetary Fund will decide later today whether to approve a big package of bailouts for Ukraine – provided the country, struggling with a weak economy, a sharp decline in oil prices and a conflict with Russia, can figure out a way to get about $15 billion from its creditors. Ukraine would have to keep its debt-to-GDP low enough so that the IMF doesn’t feel like it’s sticking its neck out too far.

Ukraine is only one of a few spaces in emerging markets that’s getting hit hard of late. A major index of emerging markets stocks has dropped for nine straight days. The dollar is at a 12-year high against a basket of major currencies. The dollar hit its highest level against the Brazilian real in 11 years and a high not seen against the Mexican peso since at least the late 1980s. Those gains won’t go on in perpetuity – markets go two ways, even the lousy ones. But the move and the fallout for emerging markets is one that investors are going to be dealing with for some time. The low interest rates in the United States that have buoyed borrowing in both the corporate and EM sectors for years are being shaken by anticipation of the Fed’s raising interest rates as early as this summer. The dollar’s gains increase the costs of our imports.

Mar 10, 2015
via Morning Bid with David Gaffen

The bull market ripens

Bull markets do not die of old age, as the saying goes, and with this current bull celebrating its sixth anniversary, that’s something investors are keeping in mind.

What commentators expect going forward for the next few weeks during a dry spell of information (no important earnings, too early for warning season, mostly second-tier economic figures for the past few days) is a consolidative-type move. It has already been going on ever since the Nasdaq managed to tip its way over 5,000 for a cup of coffee and has since been turned back by some pent-up selling that was clearly looking for the tech-heavy index to push through that 5K mark, at which point the buying exhausted itself and let the sellers take over.

Mar 10, 2015
via Morning Bid with David Gaffen

The bull market ripens

Bull markets do not die of old age, as the saying goes, and with this current bull celebrating its sixth anniversary, that’s something investors are keeping in mind.

What commentators expect going forward for the next few weeks during a dry spell of information (no important earnings, too early for warning season, mostly second-tier economic figures for the past few days) is a consolidative-type move. It has already been going on ever since the Nasdaq managed to tip its way over 5,000 for a cup of coffee and has since been turned back by some pent-up selling that was clearly looking for the tech-heavy index to push through that 5K mark, at which point the buying exhausted itself and let the sellers take over.

Mar 9, 2015

At long last, Dow gets a taste for Apple

NEW YORK (Reuters) – Apple Inc (AAPL.O: Quote, Profile, Research), the largest U.S. company by market value, will join the Dow Jones industrial average .DJI, replacing AT&T Inc (T.N: Quote, Profile, Research), in a change that reflects the dominant position of the iPhone maker in the U.S. consumer economy.

The decision to nudge aside AT&T, which has been part of the Dow for the better part of a century, is a recognition of how communications and technology have evolved. It’s also a marker of Apple’s transformation, from a struggling company with a small, fervent following two decades ago, into the nation’s predominant consumer tech company.

Mar 6, 2015

Apple to replace AT&T in Dow industrials

NEW YORK (Reuters) – Apple Inc (AAPL.O: Quote, Profile, Research, Stock Buzz), the largest U.S. company by market value, will join the storied Dow Jones industrial average .DJI, replacing AT&T Inc (T.N: Quote, Profile, Research, Stock Buzz), in a change that reflects the dominant position of iPhone maker in the U.S. economy and society.

The decision to nudge aside AT&T, which has been part of the Dow for the better part of a century, is a recognition of the way in which communications and technology have evolved over the last several decades.

Feb 27, 2015

Former AIG head Benmosche dies at 70

By David Gaffen

(Reuters) – Robert Benmosche, who headed insurer American International Group (AIG.N: Quote, Profile, Research, Stock Buzz) after a massive government bailout at the height of the financial crisis, died Friday at 70, the company said in a statement.

Benmosche, president and chief executive officer of AIG between August 2009 and September 2014, died at NYU Langone Medical Center in New York City. He had undergone treatment for lung cancer since 2010.

Feb 25, 2015

World stocks stay near all-time high after Fed signals

NEW YORK (Reuters) – An index of world equities stayed within reach of an all-time high on Wednesday as investors welcomed comments from Federal Reserve Chair Janet Yellen suggesting the U.S. central bank is in no rush to raise interest rates.

Markets were also supported by slightly better than expected Chinese factory activity data and U.S. sales of new homes.

    • About David

      "David Gaffen oversees the U.S. markets team, having joined Reuters in May 2009. He spent four years at the Wall Street Journal, where he was the original writer of the web site's MarketBeat blog. He is a frequent guest on Reuters TV, and has appeared on CNN International, Fox Business, NPR, and assorted other media and is the author of the book "Never Buy Another Stock Again.""
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