US Economy: Inflation Will Hurt Both Stocks and Bonds - by Nouriel Roubini

Rising inflation in the United States and around the world is forcing investors to assess the likely effects on both “risky” assets (generally stocks) and “safe” assets (such as US Treasury bonds). The traditional investment advice is to allocate wealth according to the 60/40 rule: 60% of one’s portfolio should be in higher-return but more volatile stocks, and 40% should be in lower-return, lower-volatility bonds. The rationale is that stocks and bond prices are usually negatively correlated (when one goes up, the other goes down), so this mix will balance a portfolio’s risks and returns. During a “risk-on period,” when investors are optimistic, stock prices and bond yields will rise and bond prices will fall, resulting in a market loss for bonds; and during a risk-off period, when investors are pessimistic, prices and yields will follow an inverse pattern. Similarly, when the economy is booming, stock prices and bond yields tend to rise while bond prices fall, whereas in a recession, the reverse is true.

But the negative correlation between stock and bond prices presupposes low inflation. When inflation rises, returns on bonds become negative, because rising yields, led by higher inflation expectations, will reduce their market price. Consider that any 100-basis-point increase in long-term bond yields leads to a 10% fall in the market price – a sharp loss. Owing to higher inflation and inflation expectations, bond yields have risen and the overall return on long bonds reached -5% in 2021.

Read more at: Inflation Will Hurt Both Stocks and Bonds by Nouriel Roubini - Project Syndicate

US Economy: S&P 500, Dow close at record highs, dollar gains at end of tumultuous year

All three major indexes gained ground, with the Dow and S&P 500 picking up steam in the session’s final minutes to exit 2020 at record highs. Over the course of a historic year, the indexes both roared and plummeted as economic shutdowns to contain the coronavirus brought markets to their knees.

Read more at:S&P 500, Dow close at record highs, dollar gains at end of tumultuous year | Reuters

USA - Economy- Poll:Americans Wary That Stock Market Bubble Will Burst

The stock market has recently hit record highs, but Americans are increasingly worried that the boom won’t last much longer.

A new Rasmussen Reports national telephone and online survey finds that 61% of American Adults are at least somewhat concerned that the stock market bubble will burst and push the economy back into recession with 23% who are Very Concerned. Twenty-five percent (25%) don't share that fear, but that includes only seven percent (7%) who are Not at All Concerned.

Read more at: Americans Wary That Stock Market Bubble Will Burst - Rasmussen Reports®

Wall Street versus Main Street: Why the stock market is nowhere near a bottom and investors can expect a massive hit

S&P 500 could tumble to a range between 1,275 and 1,710 before a bull market resumes, writes Cam Hui.

Read more at:
https://www.marketwatch.com/story/why-the-stock-market-is-nowhere-near-a-bottom-and-investors-can-expect-a-massive-hit-2020-04-13

US ECONOMY: COVID-19 job cuts: Layoffs accelerate as coronavirus disrupts economy

The American economy is bracing for a wave of layoffs due to the coronavirus, as airlines, hotels, restaurants and others suffer.

Read more at:
https://www.usatoday.com/story/money/2020/03/17/covid-19-job-cuts-layoffs-coronavirus-economy/5068695002/

US Stock Market: Hurricane Irma is already causing Florida insurance stocks to plunge

Shares of Homeowners Choice, Universal Insurance Holdings and Heritage Insurance Holdings were down by double digits.

Reinsurers XL Group and Everest contributed some of the largest losses to the S&P 500's decline, down 4.3 and 3.7 percent respectively.

While Irma is still a few days off the United States coast, insurers are bracing for storm surges, flooding and deadly winds.

Read more: Hurricane Irma is already causing Florida insurance stocks to plunge

Germany: Merkel Sees Biggest Victory Since Kohl’s Reunification Vote - by Tony Czuczka and Brian Parkin

Angela Merkel won an overwhelming endorsement from German voters, putting the country’s first female chancellor on course for the biggest election tally since Helmut Kohl’s post-reunification victory of 1990.

Merkel’s Christian Democratic bloc took 41.8 percent in today’s election to 25.5 percent for the Social Democrats of Peer Steinbrueck, projections on ZDF television as of 8:57 p.m. showed. Earlier forecasts had her group with a one-seat majority in the lower house for only the second time since World War II after Konrad Adenauer in 1957.

The euro gained even as her lead later shrank below a majority.

“This is a super result,” Merkel, who is now set to become the fourth chancellor since the war to win a third term, told supporters at her party’s headquarters in Berlin. “To the voters, I promise that we will handle it responsibly and with care. We will do everything we can in the next four years to ensure that they’re once again successful years for Germany.”

Read more: Merkel Sees Biggest Victory Since Kohl’s Reunification Vote - Businessweek

Scotland on Sunday - World Finance - The Stockmarket is a financial Casino- Crash! Banks! Wallet! So what's the picture? - by Bill Jamieson

For the complete report from Scotland On Sunday click on this link

World Finance: The Stockmarket is a financial Casino- Crash! Banks! Wallet! So what's the picture? - by Bill Jamieson

So, did the great global credit crunch really happen? Or was it all just a bad dream? Just two months after share prices plunged, America's Dow Jones Industrial Average has hit all-time highs and the FTSE 100 Index of Britain's leading shares came within a whisker this week of its 2007 high.

Market plunges and rebounds continue to mystify outsiders and professional investors. And these huge swings have a special resonance for us now. This week sees the 20th anniversary of the 1987 stock market crash, one of the most disconcerting moments in global financial markets since the epochal 1929 Wall Street Crash and subsequent Great Depression.

Europe's stock markets eclipse Wall Street. Hooray! - by Justin Fox

For the complete report from TIME magazine click on this link

Europe's stock markets eclipse Wall Street. Hooray! - by Justin Fox

Europe's stock markets have passed those of the U.S. in value, at least if you count Russia and Turkey as part of Europe (which they both partly are). This apparently happened last week, but nobody seems to have noticed until Tuesday after an analyst in London named Ian Harnett pointed it out.

For decades, through boom and bust, US companies were more focused on shareholder value, and delivered far higher returns on equity than their European counterparts. Restructuring has turned that round. According to Absolute Strategy Research, European companies managed a return on equity last month of 17.5 per cent, compared to 16.5 per cent for the US.