Bond bloodbath: What you need to know before markets open

Financial Post

U.S. stock index futures are tumbling today as a selloff in bond markets shook the confidence of investors and the dollar fell to its lowest level in about three weeks.

  • German 10-year Bund yields, the benchmark for European debt costs, rose to 2015 highs, while U.S. benchmark Treasury yields jumped to seven-month highs on Wednesday.
  • The European Central Bank’s insistence on Wednesday that there was no need to adjust monetary policy in the face of volatility also rattled financial markets.
  • The Greece stand-off continued with Greek Prime Minister Alexis Tsipras emerging from late-night talks with senior EU officials in Brussels saying a deal with creditors was “within sight,” but differences remain.
  • U.S. weekly jobless claims are expected to fall to 279,000 from 282,000 in the latest week. The data is expected at 8:30 a.m. ET. Investors have been perusing data for clues on the timing of a rate hike by…

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I Can’t Tell You If It Will Rain in a Month, But I Can Say It Will Be Colder This Winter

The Small Investor

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Counter-intuitive as it may sound, it is very difficult to predict the near-term future when it comes to investing. This is not to say that it is difficult to predict if a given stock will go up or down the next day when some news is heard. If a scandal breaks out, obviously the stock will fall in price. Likewise, if a large drug company gets a new wonder drug approved, the stock will go up. Sometimes even in these situations a stock will still trade in an unpredictable way. This occurs when the price of the stock has already gone up so much on the expectation that the drug would be approved that it falls a bit after the actual announcement comes. (This behavior is the reason for the old axiom, “buy on the rumor, sell on the news”.) But in general the reaction of a stock’s price to…

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Baird Adds New Top Stocks to Buy to Its Focus List

24/7 Wall St.

onshore wind farmWith summer just around the corner, most of the major Wall Street firms that we cover are making some changes and additions to their firms top stock ideas for institutional and high net worth investors. At one of the top regional brokerage firms, Baird, they are making some additions to the firm’s Focus Idea list that look like they make very good sense for investors searching for new ideas.

The Baird Focus Idea list is a selection of the top stock ideas at the firm organized by growth and value, as well as by sector. The firm added 16 new stocks to the list. We screened the new additions for those with the best upside to the Baird price target.

Autodesk

This company is an outstanding tech stock that now makes the list. Autodesk Inc. (NASDAQ: ADSK) operates as a design software and services company worldwide. Its Platform Solutions and…

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Why the sky still isn’t falling on Canada’s real estate market

Financial Post

American economist Paul Samuelson back in 1966 famously said of the predictive power of stock markets that “Wall Street has correctly predicted nine out of the last five recessions.” These days, you could say much the same thing, in a different way, about the Canadian housing market.

[np_storybar title=”At $1.11 million, Toronto’s detached home is climbing further out of reach” link=”http://business.financialpost.com/personal-finance/mortgages-real-estate/at-1-15-million-torontos-detached-home-is-climbing-further-out-of-reach-literally”]

As the Toronto market continues to blaze, nowhere is it hotter than in the detached home category. In the city proper, the average sale price was $1.1 million, 18.2 per cent higher than last year

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Media and some economists have been dutifully predicting a crash in house prices every year since at least since 2010. Yet every year, the market continues to go up, seemingly defying gravity.

In Toronto, we’ve all heard stories of termite-ridden shacks selling for $200,000 above asking. Bidding wars are the norm…

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Merrill Lynch Sees No Bear Market for Now but Trouble Brewing

24/7 Wall St.

bearThink about it. The S&P 500 is up over 200% since the lows in March of 2009. We have had near zero federal funds rates for more than five years. We have not had a 10% correction in over three years. And worst of all? The S&P 500 is trading at an incredible 18 times trailing earnings. Everything is in place for a pain-inducing correction.

For now, Michael Hartnett, the ever crafty and outstanding chief investment strategist at Merrill Lynch, says there is no bear market dead ahead. What he does point out in splendid detail is that during a recent marketing trip to Europe, he discovered that while many believe that consumer data here in the United States is poised to improve, faith in the overall U.S. recovery is beginning to crack. All one has to do to justify that is to look at the incredible weak -0.7 gross…

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IMF warns U.S. Federal Reserve should delay interest rate hike until 2016

Financial Post

The Federal Reserve should hold off from raising interest rates until the first half of 2016, the International Monetary Fund said as it cut its U.S. growth forecast for the second time in three months.

The lender also said that the dollar was “moderately overvalued” and a further marked appreciation would be “harmful,” in a statement released in Washington on Thursday on its annual checkup of the U.S. economy.

“The FOMC should remain data dependent and defer its first increase in policy rates until there are greater signs of wage or price inflation than are currently evident,” the IMF said. Based on the fund’s economic forecast, and “barring upside surprises to growth and inflation, this would put lift-off into the first half of 2016.”

A stronger dollar, declining oil investment and a West Coast port strike in the first quarter will pull down U.S. growth to 2.5 per cent this…

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