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  Tuesday, 3 Mar 2015 | 10:57 AM ET

Are markets ready for June rate hike?

Posted By: Lawrence Delevingne

The smart money thinks the Federal Reserve will finally begin to increase interest rates early this summer. The question is how much market turmoil the move will cause.

Janet Yellen's Fed will finally increase the cost of borrowing money in June, according to remarks made by top BlackRock bond investor Rick Rieder and prominent hedge fund managers Jamie Dinan and Kyle Bass at a New York charity event Monday night.

Bass, head of Hayman Capital Management in Dallas, said the market isn't fully prepared.

"I think when she moves, it's going to cause a problem," Bass said at the Portfolios with Purpose awards night during a panel discussion moderated by CNBC's Scott Wapner.

»Read more
  Tuesday, 3 Mar 2015 | 7:00 AM ET

With dollar at 11-year high, here's what's next

Posted By: Sara Eisen

It's been a remarkable run for the dollar.

In the scope of eight months, the dollar index has shot up more than 19 percent against other currencies, after going nowhere for almost 10 years.

Companies from IBM to Harley-Davidson to Google to Coca-Cola to Proctor & Gamble have blamed the strong dollar for chipping away from their overseas profits.

The dollar is now sitting at the highest level in 11 years against other major currencies.

In the last 12 months alone, it's appreciated more than 21 percent against Norwegian and Swedish currencies; more than 17 percent against the euro and more than 13.5 percent against the yen.

So now what?

The strong dollar story has not changed, and many pros will tell you the currency has further to climb.

Why?

»Read more
  Friday, 27 Feb 2015 | 2:33 PM ET

This is the Fed's biggest economic headache

Posted By: Jeff Cox

If investors learned anything from Fed Chair Janet Yellen's testimony to Congress this week, it's that the central bank is willing to wait for inflation to catch up to employment before hiking rates.

It could be a long wait—longer, in fact, than many market participants anticipate.

Language tweaks in Yellen's semiannual appearance Tuesday and Wednesday sent strong indications that even if the Fed removes the word "patient" from its next post-meeting communique, it will remain, indeed, patient when it comes to rate hikes.

"The more I think about it, the more I feel that Yellen was very dovish," David Rosenberg, economist and strategist at Gluskin Sheff, wrote of the testimony. "If a shift in policy was coming, this was the setting for verbalizing it—she passed up the opportunity."

»Read more
  Monday, 2 Mar 2015 | 10:09 AM ET

Bill Gross: Central banks have gone 'too far'

Posted By: Jeff Cox
Bill Gross
Reuters
Bill Gross

Ultra-easy central bank monetary policies are about to come back to bite the global economy, bond guru Bill Gross said in his latest letter to investors.

Institutions including the U.S. Federal Reserve fired the first shot in global competitive currency devaluation at the height of the financial crisis as a means to increase liquidity and push investors toward taking more risk.

Others followed suit but have only recently matched the Fed's aggressiveness. The European Central Bank, Bank of Japan and multiple others across foreign markets have gone to near-zero or negative interest rates as global growth has slowed.

Gross, who runs an unconstrained fund for Janus Capital, worries that the financial repression that goes along with easy-money policies is doing harm.

»Read more
  Monday, 2 Mar 2015 | 10:30 AM ET

Hedge funds cut Apple and these other VIP stocks

Posted By: Lawrence Delevingne

More hedge funds sold down or exited positions in eight of the 10 most commonly held stocks than the number of those that entered or added to the stakes, according to fourth quarter public stock ownership data compiled by industry analyst Novus.

Hedge funds showed their hand with new filings in February, with familiar names like Apple, Microsoft, Google, Johnson & Johnson and Citigroup showing up in the most portfolios as of Dec. 31.

»Read more
  Thursday, 26 Feb 2015 | 1:30 PM ET

All analysts want you to do is buy; here's proof

Posted By: Jeff Cox
A trader works on the floor of the New York Stock Exchange.
Getty Images
A trader works on the floor of the New York Stock Exchange.

Will Rogers once famously said he never met a man he didn't like. Wall Street has taken that sentiment and applied it to the stock market in an extreme way.

Most analysts on the Street have rarely met an S&P 500 stock they didn't like, or at least weren't willing to hang out with for a while.

An analysis from Bespoke Investment Group on stock ratings paints the picture in stunning fashion: Of the 12,122 ratings there are of companies in the broad market index, just 6.67 percent carry a "sell" label. The balance consisted of 48.43 percent "buy" ratings and 44.9 percent "hold." (The full report, which is premium content, can be accessed here.)

What's more, there's nothing particularly striking about the numbers from a historic perspective. Bespoke's Paul Hickey said in the report that the "percentages are roughly inline with where they have always been." In fact, the level of "sell" positions increased slightly from the last time Bespoke looked at the trend in August.

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  Thursday, 26 Feb 2015 | 1:22 PM ET

The oil selloff created this buying opportunity

Posted By: Lawrence Delevingne

The sharp decline in oil prices caused a selloff outside of traditional energy companies. But some of that selling—particularly in solar and water businesses—was misguided and presents an excellent buying opportunity, according to a leading natural resources and alternative energy investor.

"There isn't really a correlation. The market got nervous and ran too far," Ken Locklin, a director at $4.6 billion Impax Asset Management, said at an energy investing event Wednesday in Manhattan organized by the New York Hedge Fund Roundtable.

Locklin said that Impax had used the price decline as a buying opportunity. The firm added to its already large positions in water businesses, which investors sold in anticipation of beat-up energy companies slowing their hydraulic fracking, an extraction process that relies on huge volumes of water. Locklin said that related water companies actually had relatively low exposure to energy and actually focused more on industrial and municipal demand.

Impax also used the oil dip to add to its solar holdings, which sold off as the market anticipated higher use of oil as an energy source given its suddenly much-lower price. The stocks of large solar companies such as SunEdison and First Solar fell by double digits over the second half of 2014.

»Read more
  Wednesday, 25 Feb 2015 | 12:44 PM ET

Four survivor CEOs since Nasdaq last hit 5,000

Posted By: Mary Thompson

Almost 15 years have passed since the Nasdaq first broke the 5,000 mark. Now, after the bursting of the dot-com bubble and a long recovery, the index is poised to pass that mark again.

The Nasdaq has changed though, as many of the companies that first drove the index to that lofty level have gone.

Still, a few that defined the index in 2000 have survived and thrived, as have their top executives—an unusual feat given the average tenure of an S&P 500 CEO is 9.7 years, according to the Conference Board.

"What these CEOs have in common is that they are business innovators, they have an ability to reinvent themselves and, importantly, they are not afraid to hire other people to help them reinvent," said Mike Kwatinetz, a general partner at the venture firm Azure Capital Partners.

The CEOs Kwatinetz is referring to are: Amazon's Jeff Bezos, Starbucks' Howard Schultz, Oracle's Larry Ellison and Cisco's John Chambers. All four were CEOs when the Nasdaq last hit 5,000 and all, save for Ellison, who stepped down as CEO last year but remains as chairman, are still in that role.

"They understand the business cycle," said Columbia Business School adjunct professor William Klepper when asked how these CEOs have lasted this long. "That it's like an 'S' curve with peaks and valleys and they've figured out what practices are best employed—what is the agenda."

Two of the four, Bezos and Ellison, are founders, and Schultz and Chambers were with their companies at the very early stages. Schultz bought the four original Starbucks outlets in 1987 and Chambers joined Cisco in 1991, becoming CEO four years later.

"The two things that strike me is that they are not only not just business innovators, they are organizational builders," said Don Hambrick, the Evan Pugh professor of management at Penn State University. "To have a great idea is rare enough, but to build a thriving organization is extraordinary. They are not Johnny-one-notes."

»Read more
  Tuesday, 24 Feb 2015 | 3:32 PM ET

Hedge fund: 'Distressed cycle' for energy coming

Posted By: Lawrence Delevingne
David Warren, DW Investment Management
Patrick T. Fallon | Bloomberg | Getty Images
David Warren, DW Investment Management

Another big hedge fund manager is getting ready to make money on the crash in energy prices.

"For the first time in years, the high-yield selloff has created opportunities to buy sound, albeit leveraged, companies at expected compound returns above 10 percent," DW Partners wrote of the opportunity in the junk bonds of companies in a market outlook for clients.

DW manages about $6 billion in credit-related investments and is led by former Morgan Stanley bond trader David Warren.

»Read more
  Tuesday, 24 Feb 2015 | 3:24 PM ET

JPMorgan CFO: Bigger is better...for now

Posted By: Kayla Tausche

Each year, JPMorgan Chase's investor day serves as the company's agenda-setting town hall. It lays out its strategy for the year ahead and the benchmarks by which it will measure its success.

Past years have focused on layoffs, with an improvement in mortgage credit and a sharp slowdown in underwriting forcing the bank to eliminate some 19,000 jobs.

This year, before getting to the nitty gritty of the bank's strategy, Chief Financial Officer Marianne Lake addressed the elephant in the room: A growing debate over whether the bank, the largest in the country by assets, would need to split up.

"Our synergies are real," said Lake, pointing to a slide showing some $15 billion in revenue and $3 billion in cost savings shared by the bank due to its wide-ranging business model. Previously, JPMorgan executives had discussed synergies in the range of $6 billion to $7 billion.

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About NetNet

  • NetNet is where you'll find the low-down and the high jinks of Wall Street. It's the place for insider stories, trader gossip, and tales of the foibles of the moneyed crowd and the culture of finance.Wall Street news and commentary served fresh all day long.

 

  • Jeff Cox is finance editor for CNBC.com.

  • Lawrence Develingne

    Lawrence Delevingne is the ‘Big Money’ enterprise reporter for CNBC.com and NetNet.

  • Stephanie Landsman is one of the producers of "Fast Money."

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