DOW +230; Stocks skyrocketed Thursday as investors were encouraged by talk of a deal that may avert a U.S. government default. President Obama will meet with top House Republicans at the White House Thursday afternoon to seek a path beyond a confrontation
House Republicans stepped back from budget negotiations Saturday, leaving the Senate to take the lead on reopening the federal government and avoiding a default on the nation's debt.
At a meeting of House Republicans on Saturday morning, top leaders said they have no new proposal to offer the White House after President Obama rejected their offer.
The White House had expressed deep reservations with Boehner's plan for a debt ceiling increase that would have extended only to November 22 and other demands that would have required a series of negotiations to continue under the threat of debt default and government shutdown.
A senior House Republican aide said it was unlikely that Republican leaders will craft another proposal and submit it to Obama, now that the focus has shifted to the Senate.
Senate passes bill to end shutdown, raise debt limit By an overwhelming vote, the Senate passed a budget compromise Wednesday night that would reopen federal agencies and allow the Treasury to continue borrowing to pay the nation’s bills, averting the possibility of a default.
The legislation now goes to the House, which was expected to follow suit later Wednesday night. Federal agencies could begin reopening in the morning, although full operation in some cases could take longer.
The vote, 81-19, approved an agreement negotiated by Senate Majority Leader Harry Reid (D-Nev.) and Minority Leader Mitch McConnell (R-Ky.). It ends a political standoff that shut down federal programs for 16 days and led to the furlough of hundreds of thousands of federal workers.
The deal makes no significant changes in President Obama’s healthcare law, which Republicans had previously demanded.
The deal represents a bruising political defeat for Republican conservatives who had demanded changes to President Barack Obama's healthcare law before they would agree to fund the government.
Several House Republicans said Boehner's leadership position would not be at risk in the fallout. The speaker earned a standing ovation at an afternoon meeting of House Republicans, and Republican Representative John Fleming of Louisiana, a Tea Party activist, said Boehner's stock had risen because he "hung in there with us."
"Our drive to stop the train wreck that is the president's healthcare law will continue," Boehner said in a statement, adding the House had fought Obama "with everything it has" and he would not block the bipartisan Senate agreement.
But opinion polls show Republicans have taken a heavy political beating in the showdown as they head into next year's congressional elections.
he stock market opened around the flatline Tuesday as investors await the Fed's decision on monetary policy when its two-day meeting ends tomorrow.
he Fed's $85 billion of monthly bond purchases have kept U.S. interest rates low to encourage economic recovery but also sent a flood of money into stock markets worldwide in search of higher returns.
"Today kicks off the final Federal Open Market Committee (FOMC) meeting of the year, with a statement slated for release tomorrow," says Schaeffer's Investment Research senior options strategist Tony Venosa. "There has been a lot of chatter recently about a December tapering, so the next two days could be quite volatile."
Market jumps as Fed Cuts QE Pace to $75 Billion on Labor Market Outlook The Federal Reserve is cutting its monthly bond purchases to $75 billion from $85 billion, taking the first step toward unwinding the unprecedented stimulus that Chairman Ben S. Bernanke put in place to help the economy recover from the worst recession since the 1930s.
The central bank today left unchanged its statement that it will probably hold its target interest rate near zero “at least as long as” unemployment exceeds 6.5 percent, so long as the outlook for inflation is no higher than 2.5 percent.
His peers credit him with mitigating the deepest recession since the Great Depression, but with less than a month to go until his term ends, Ben Bernanke is hesitant to call his eight years as Federal Reserve Chairman a slam-dunk success.
"The recovery clearly remains incomplete," he said, in what sounded like a swan song speech at the American Economic Association's annual meeting in Philadelphia, Friday.
Bernanke's term officially ends on January 31, at which point Fed Vice-Chair Janet Yellen is expected to take the helm. (The Senate is scheduled to vote on her confirmation Monday evening).
Among the unfinished business that concerns Bernanke: the unemployment rate at 7% "still is elevated," he said. Meanwhile, participation in the labor market has continued to decline, partly because workers remain discouraged about their job prospects.
As of December, only 63% of Americans over age 16 participated in the job market -- meaning they either had a job or looked for one. Before the recession, it was around 66%.
Federal Reserve Chairman Ben S. Bernanke on Friday reflected on his eight-year tenure at the helm of the nation’s economy, celebrating the central bank’s accomplishments but also highlighting what he called “uncompleted tasks.”
Bernanke is stepping down at the end of the month after shepherding the country through the worst financial crisis since the Great Depression. He is widely credited with preventing the U.S. economy from free falling, but the lackluster recovery has led some critics to question whether the Fed is running out of firepower.
Bernanke saved his toughest critiques, however, for Washington. Since federal stimulus spending ended in 2010, government has been a drag on economic growth. After the 2001 recession, government employment rose by 600,000. In the current recovery, he said, it has declined by 700,000 jobs.
Fed Meeting on Tuesday and Wed (1/28 & 1/29) Things got crazy last week with the global markets getting rocked as the emerging markets (EM) tumbled.
While everyone is sure to keep an eye on the EMs this week, the Federal Reserve will take center stage as it holds its Federal Open Market Committee (FOMC) UVXY=3xTZA
Market dropping off after Fed continues to taper economic stimulus The Federal Reserve proved Wednesday that it will take more than a weak jobs report or global financial jitters to derail its plans to wean the economy off the central bank's extraordinary stimulus.
Despite a slowdown in job growth last month and recent financial turmoil in emerging markets, the Fed said it will pare its bond-buying program by $10 billion for the second straight month.
In a statement after a two-day meeting, Fed policymakers said the central bank will buy $65 billion a month in Treasury bonds and mortgage-backed securities, down from $75 billion. In December, Fed policymakers took their first step in tapering the program begun in September 2012, reducing the bond-buying from $85 billion a month.
The purchases are intended to hold down long-term interest rates and spur the economy and labor market.
4 big challenges for new Fed Chair Janet Yellen 1. Bubbles. Margin calls, when brokers call in the collateral that backs margin debt, are one of the things that could intensify a stock market correction, turning it into a bursting bubble. 2. Global aftershocks. Emerging market turmoil, in turn, is pushing down stock prices in the United States and Europe. 3. Scarce jobs. The risk now is that the Fed may have to raise rates, as a bulwark against inflation, before the labor market is convincingly healed. 4. Political meddling. Some Fed critics feel the central bank should focus only on inflation and forget about employment, while others feel Fed policy should be less subjective and more beholden to firm rules that would dictate policy, almost like an algorithm.
Wall Street Finally Realizes the Taper Is for Real So the Federal Reserve is doing exactly what it said it would do, sticking to the plan of reducing the amount of bonds it buys by about $10 billion a month. That puts its monthly purchases of U.S. Treasuries and mortgage-backed securities at $65 billion, down from the rate of $85 billion it kept through most of 2013.
For two straight months the Fed has announced a reduction in its massive, five-year quantitative easing policy. It’s fair to say that the dreaded taper is now in full-swing. At this pace, the program will end before the year is up. The U.S. economy and, more importantly, the stock market will have to stand on their own. Apparently, after more than a year of speculation, someone just told Wall Street.
Wednesday’s announcement from the Federal Open Market Committee kicked what was already a pretty steep stock market selloff into high gear. By 3:30 p.m., the Dow Jones Industrial Average was off more than 1 percent, having shed nearly 200 points. It finished with a slight rally that limited the day’s damage to a 189-point loss. http://www.businessweek.com/articles/2014-01-29/wall-street-finally-realizes-the-taper-is-for-real
Pensions Sell Stocks to Buy Bonds Coming off a year when the broad U.S. stock market enjoyed a 30 percent gain, investors and financial advisers are struggling to determine the most appropriate portfolio asset allocation consistent with their tolerance for risk, says Andrew Clinton, president of Clinton Investment Management, in Stamford, Conn. Pension funds, in particular, are striving to lock in the outsize gains they have enjoyed over the past few years in the booming debt and equity markets. To do so, they are going against the broader fund-flow trend by selling equities and shifting money to fixed income. Deutsche Bank (DB) forecasts that pensions will liquidate about $150 billion in equities this year alone to buy bonds with maturities of 10 years or longer. In the third quarter, U.S. pension funds, which have assets of $16 trillion, swapped out of equities and into bonds at the fastest clip in five years, data compiled by the Federal Reserve show. According to Matt Robinson of Bloomberg News, they bought $117 billion of debt on an annualized basis and offloaded $135 billion of stocks. The 100 biggest corporate pension plans thinned their deficits by a net $319 billion, according to consultancy Milliman; they are now 95 percent funded, compared with a low of 77 percent two years ago. http://investorshub.advfn.com/boards/post_reply.aspx?message_id=92567633
George Soros Doubles Down on Bearish Bet http://blogs.wsj.com/moneybeat/2014/02/18/george-soros-doubles-down-on-bearish-bet/ Mr. Soros held put options linked to 7.1 million shares of SPY as of Dec. 31, compared to about 2.8 million shares at the end of the third quarter, Mr. Soros’s increased bearish bet came as the S&P 500 soared in the fourth quarter and finished the year up 30%. Stocks started 2014 on a sour note, with the S&P 500 tumbling 5.8% from mid-January through early February. The market has recovered in recent weeks and currently sits less than 1% off its all-time high.
It’s unclear whether Mr. Soros changed his position at any point this year as the most recent regulatory filing, published late Friday, accounted for positions reported during the final three months of 2013.
Market went crazy today due to FOMC meeting note release:
Members of the Federal Reserve’s policy-setting board agreed unanimously that the central bank should continue cutting the pace of asset purchases in ‘measured steps’ as long as the economy continues to grow as expected, according to minutes from the January FOMC meeting.
However, ‘a few’ participants said they could see hiking the Fed’s benchmark interest rate ‘relatively soon,’ while others disagreed.
The members shrugged off a weaker-than-expected December jobs report and said they weren’t yet concerned about turmoil in emerging markets, although they agreed to ‘monitor’ the situation. Overall, the Federal Open Market Committee agreed the economy will probably improve at a ‘moderate’ pace, and eyed ‘unusually bad weather’ in the recent headwinds. http://www.foxbusiness.com/economy-policy/2014/02/19/fed-board-united-on-measured-qe-cuts-divided-on-rate-hike-timing/ As of 2/19/14 Live
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