NEW YORK, Aug 3- U.S. benchmark and long-dated Treasury yields hit their lowest levels in over two months on Monday on weak U.S. economic data and a muted inflation outlook, while declines in short-dated yields were limited ahead of a key U.S. jobs report. Continued concerns over China and Greece's economies also spurred some safe-haven bids for U.S.» Read More
Where are U.S. markets headed if China cools down inflation? Art Hogan, managing director at Jefferies, and Sam Stovall, chief investment strategist at Standard & Poor's, gave "Morning Call" viewers their answer: "We go higher."
Bill Strazzullo, chief market strategist for Bell Curve Trading, told CNBC’s “Closing Bell” that first quarter earnings estimates may have been too low.
Dean Maki, chief U.S. economist for Barclays, told CNBC’s “Power Lunch” that consumer spending is strong, but inflation is still a concern.
Gasoline costs in March helped push up overall U.S. consumer prices at the steepest rate in almost a year. Will American consumers tighten their belts? On "Morning Call," two economists debated the matter.
Ned Riley, chief executive officer of Riley Asset Management, told CNBC’s “Morning Call” that the Dow Jones Industrial Average will soon top 13,000 and 14,000 is possible. But Peter Schiff, president of Euro Pacific Capital, disagreed. “It’s not liquidity – it’s inflation,” Schiff said. “The new (market) high is meaningless. It’s an illusion created by inflation."
A surge in gasoline costs helped drive overall U.S. consumer prices up at the sharpest rate in nearly a year during March, though so-called core prices that exclude food and energy items rose at a muted pace, the Labor Department said. In a separate report, housing starts rose unexpectedly in March.
Philadelphia Federal Reserve President Charles Plosser Monday lauded the benefits of formal inflation targets but said it was too early to tell if the Fed would move in that direction as part of a study on its communications.
Consumer prices in Germany rose slightly more than expected during March on higher gasoline and electricity prices, the Federal Statistics Office said Monday, confirming its previously released initial estimates.
Euro-zone inflation rose to 1.9% for March, the European Union's statistics agency said Monday.
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Scott Kays, president of Kays Financial Advisory, told CNBC’s “Closing Bell” that the equities market isn’t overpriced.“What a lot of people have missed is that this market is not over-valued despite the strong trend upward we’ve had over the last several months,” Kays said Friday. “Earnings have been very strong. The P/E ratio is very reasonable. Even though the economy has slowed down, it still appears to be solid in 2% to 3% range going forward. I think conditions are good right now.”
Angel Mata, managing director of equity trading at Stifel, Nicolaus Capital Markets, told CNBC’s “Power Lunch” that investors should keep an eye on bank earnings next week.“On Monday and Tuesday, a lot of the banks reporting,” Mata said Friday. “The banks have clearly been one of the most underperforming groups since the beginning of the year. I have a hard time believing that the market can sustain any kind of upward momentum without the banks turning around.”
Federal Reserve policymakers were unanimous in the view last month that their predominant focus should remain on inflation rather than economic weakness. According to minutes of their deliberations released Wednesday, "all members agreed the statement should indicate that the committee's predominant policy concern remains the risk that inflation will fail to moderate as expected."
Subodh Kumar, chief investment strategist at Subodh Kumar Associates, told CNBC’s “Morning Call” that investors need to see increased corporate earnings and a Fed rate cut before putting more money into the equity markets. “I don’t think either of them is going to happen,” Kumar said Friday. “Consensus hopes it will happen by year end, but I think that’s too soon.”
The Federal Reserve should adjust its inflation expectations considering current economic factors, two economists told Liz Claman on “Morning Call.” “My concern in this whole discussion is the whole issue of what is a reasonable range for the Fed,” said Joel Naroff, chief economist at Commerce Bank. “The problem is that we rarely have inflation, a core inflation below 1.5% and almost never have it below 1% so I think the Fed has got a problem here.”
Inflation data could play a big role in setting the course for stocks, which so far are looking for direction ahead of the opening. Asia markets were mostly lower, while Europe's stock markets this morning are mostly higher.
Finland's annual inflation rate surged to 2.6 percent in March, the highest figure in almost six years, the government statistics agency said Friday.
U.S. import prices jumped a larger-than-expected 1.7% in March as petroleum prices rose sharply. Jobless Claims rose 19,000 to 342,000 --more than predicted.
Quincy Krosby, chief investment strategist at The Hartford, told CNBC’s “Closing Bell” that a Federal Reserve rate hike probably would push the economy into recession. “I think they have moved closer to neutral than a bias to hike,” Krosby said. “I don’t think they want to hike. If they are forced to, they may. But the repercussions of a hike are going to be, I think, pushing us toward a recession.”
Jim Glassman, senior U.S. economist for JP Morgan Chase, told CNBC’s “Street Signs” that the Federal Reserve’s minutes show concern for growth and inflation.“Inflation concerns aren’t new,” Glassman said Wednesday. “What’s new is the recognition that there are some downside risks to growth. I think the minutes show that (the Fed) is a little more cognizant of the two risks and it’s not just a debate about how much and when to tighten.”