How investors can navigate pandemic related risk in emerging markets

A new era of austerity Shares in tech companies are in retreat after investors got sobering news on Thursday about three of the industry’s giants — Alphabet, Amazon and Apple — including slowing demand for everything from iPhones to digital ads to cloud services. “You’re hearing that from, I would think, everybody ,” Tim Cook of Apple said of the challenging environment on CNBC. That outlook is largely responsible for Nasdaq 100 futures being down 1.4 percent this morning, eroding Thursday’s big tech stock gains after investors hoped that the Facebook parent Meta had shown tech how to operate in leaner times. Plenty of headwinds are hitting the tech sector. Central bankers this week reiterated that they’re not done raising interest rates (even if market participants don’t fully believe it ). Together with a slowing economy, that has led companies and consumers alike to spend less — a move toward austerity that tech companies have now embraced , after years of rocketing … [Read more...] about Tech Earnings Give a Wake-Up Call to Investors

It is no secret that the stock market has been rocky since the start of the year. Tech giants like Apple, Microsoft, Google and Amazon have been no help at all. Their shares have all had double-digit percentage declines. So far in 2022, the S&P 500 is down more than 13 percent, and it briefly dipped more than 20 percent below its peak, putting stocks in bear market territory. Dismal as the stock market may be, the situation looks even worse if you are worried about the future of the planet. The fact is that only one broad stock sector has provided consistent returns over the last year: old-fashioned fossil fuel, and the companies that extract, refine, sell and service it. In fact, when I looked at a performance table of the top companies in the S&P 500 for 2022, I found that 19 of the top 20 spots belonged to companies connected, in one way or another, with fossil fuel. The best performer was Occidental Petroleum, with a gain of 142 percent. This isn’t just a U.S. … [Read more...] about Fossil-Fuel Shares Lead the Stock Market. How Awkward.

It is impossible even to talk about the long bull market that ended in January 2022 without saying high-growth tech stocks propelled the market higher. Companies like Alphabet (Google) , Amazon , Apple, Meta (Facebook) , Microsoft , Netflix, Nvidia and Tesla dominated the headlines for years. Tech stocks and growth stocks were virtually synonymous. But not anymore. The new growth stocks, in the estimation of S&P Dow Jones Indices, an influential market analysis firm, now include fossil-fuel energy companies. The world has changed radically in the last year or two, and traditional categories, like growth and value, are topsy-turvy. S&P Dow Jones Indices handles the plumbing behind the two most famous American stock market indexes — the S&P 500 and the Dow Jones industrial average — and many other important world market benchmarks. In an annual review of the S&P 500 index, it has found that the seemingly immutable connections … [Read more...] about Value Stocks? Growth Stocks? Markets Last Year Turned Everything Topsy-Turvy.

How much higher will interest rates go? It’s a question nagging investors across the financial markets. Inflation is out of control, and traders fear that the Federal Reserve could tank the economy as it tries to wrestle prices lower by raising interest rates. In the stock market, the S&P 500 is down about 22 percent this year, reflecting worries that a slow economy will hurt corporate profits. But even as the index jumped 8 percent in October, many analysts warned not to make too much of the rally. $24 trillion market for U.S. government bonds, called the Treasury market, offers clearer signals about the prospects for both interest rates and the economy. Those come from yields — think of them as interest rates — on Treasury bonds, which have gone up fast this year. They started to rise well before the Fed began to raise its policy rate, in anticipation that it would do so. The Treasury market doesn’t just interpret economic winds; it also influences them. When yields on … [Read more...] about The $24 Trillion Market That Predicts and Influences Interest Rates

Germany’s largest storage chamber for natural gas stretches underneath a swath of farmland the size of nine soccer fields in the western part of the country. The bucolic area has become a kind of battlefield in Europe’s effort to defend itself against a looming gas crisis driven by Russia. Since last month, the German government has been rapidly pumping fuel into the vast underground site in Rehden, hoping to fill it in time for the winter, when demand for gas surges to heat homes and businesses. The scene is being repeated at storage facilities across the continent, in a jousting over energy between Europe and Russia that has been escalating since Moscow’s invasion of Ukraine in February. In the latest sign that Moscow appears intent on punishing Europe for sanctions and military support for Ukraine, Gazprom, the Russian state-controlled energy giant, last week cut by 60 percent the amount of gas it delivers via Nord Stream 1, a critical pipeline serving Germany and other … [Read more...] about Russia Crimps Gas Flows Just as Europe Races to Stock Up for Winter

Federal Reserve officials are widely expected to raise interest rates by a quarter point at their meeting this week, further slowing what had been an aggressive pace of rate increases in 2022 as they wait to see how swiftly inflation will fade. Moving gradually will give Fed officials more time to assess how high rates need to rise and how long they need to stay elevated to fully wrangle inflation, both of which are looming and crucial questions. The answers will help to determine how much damage the Fed inflicts on the labor market and broader economy in its quest to control price increases. Central bankers raised interest rates from near zero to above 4.25 percent last year, and they are expected to lift rates to a range of 4.5 to 4.75 percent on Wednesday. Investors will be even more attuned to what may come next, and will parse the Fed’s 2 p.m. statement and the subsequent news conference by the Fed chair, Jerome H. Powell, for clues about the future. Fed officials predicted … [Read more...] about Smaller Rate Increase by Federal Reserve Is Likely as Inflation Cools