Friday, March 18, 2022

Stocks Rally on Friday to End Fed Week in the Black. U.S. stocks finished higher on Friday, with all three major indexes sweeping to big weekly gains after the Federal Reserve raised its benchmark rate for the first time since 2018 to help tighten financial conditions and tackle high inflation. The S&P 500 rose 51 points, or 1.2%, on Friday to close at 4463, booking a 6.2% weekly advance. The Dow Jones Industrial Average rose 274 points, or 0.8%, Friday to finish at 34,755, up 5.5% for the week. Meanwhile, the Nasdaq Composite index jumped 279 points, or 2%, Friday to close at 13,894, up 8.2% for the week.

The Fed Isn’t Doing Enough to Fight Inflation, St. Louis Fed President Says

St. Louis Federal Reserve Bank President James Bullard has released a statement explaining why he dissented when the Fed elected to raise interest rates by a quarter-point.

In the statement, Bullard argues that the Fed is moving far too slow given the strength of the economy and the rate of inflation. He would have preferred that the Fed raise interest rates by 0.5 or 0.75 percentage points, and would like to see a 3% fed-funds rate by the end of the year. The Fed is only now moving away from 0%.
Bullard isn’t worried that moving that quickly would hurt the U.S. economy. In fact, he points to Fed rate hikes in 1994 and 1995 as an example of when the Fed raised rates very quickly, brought inflation back to 2%, and set the U.S. economy up for a booming second half of the decade. “The results were excellent,” he writes. “I think the committee should try to achieve a similar outcome in the current environment.”

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What to Know About the Million-Dollar Yachts Being Seized From Russia’s Oligarchs

Superyachts are a new front in the Russian war—but there haven’t always been superyachts to seize.
European governments are increasingly seizing yachts owned by Russian oligarchs with an aim to punish those closest to President Vladimir Putin. The boats are enormous—as are their price tags. Spain seized a $143 million vessel called Valerie on Monday. Italian authorities on Friday seized what is reputed to be the world’s largest sailing yacht, over 150 meters long and worth $580 million.

Starbucks CEO Johnson to Retire, Founder Schultz to Serve as Interim Chief

Starbucks CEO Kevin Johnson will retire this year, the coffee chain announced, making way for the temporary return of the company’s founder.
Johnson, who has served as CEO of Starbucks for five years, plans to step down on April 4. Founder Howard Schultz will serve as interim CEO while the board looks for a new chief executive. Schultz also will rejoin the board. The company said it plans to announce a new leader by the fall.

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Delta Might Buy Boeing 737 MAX Jets. That Would Be a Big Win for Boeing.

Delta Air Lines is reportedly considering an order of 100 737 MAX jets from Boeing, in what would be a nice win for the commercial aerospace giant.
It’s a potential positive for Boeing because Delta doesn’t operate the MAX jet or have any on order. Delta CEO Ed Bastian said back in January on a conference call with reporters that he wouldn’t speculate about a potential MAX order.

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The Fed Raised Rates as Expected. What Comes Next Is Key.

The Federal Reserve said it would kick off its monetary policy tightening with a quarter-point interest rate hike, ending a period of emergency pandemic stimulus and raising rates for the first time since 2018 as inflation and the Russia-Ukraine war threaten economic growth.
The long-awaited move comes as the central bank, which wrapped up a two-day policy meeting this week, is navigating inflation running at 40-year highs and continued geopolitical uncertainty caused by the war.

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Mortgage Rates Rise Above 4% to the Highest Level Since 2019

The average rate on a 30-year fixed mortgage climbed above 4% to its highest level since 2019, a surge that makes homes less affordable even as rising prices for gasoline and other goods leave households with less money to spend.
The average 30-year fixed mortgage rate for the week ending Thursday was 4.16%, according to Freddie Mac’s Primary Mortgage Market Survey. It was the highest rate since April 2019, and the first time the rate had been above 4% since May 2019.

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Amazon Completes $8.45 Billion MGM Deal. Competition Concerns Weren’t a Problem.

Amazon.com said it closed its $8.45 billion acquisition of MGM as a deadline passed for the Federal Trade Commission to mount a challenge.
The company said MGM’s catalog, which includes 4,000 film titles and 17,000 TV episodes, will join its Prime Video streaming app. The crown jewel of MGM is the James Bond franchise, but other franchises include Rocky (and the Creed sequel series starring Michael B. Jordan) and RoboCop. MGM employees, creators, and talent will join Prime Video and Amazon Studios.

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Walmart Seeks to Hire 50,000 U.S. Workers by the End of First Quarter

Walmart said this week it plans to hire more than 50,000 workers in its U.S. stores by the end of its fiscal first quarter in April.
The latest announcement follows Walmart’s stated goal that it is aiming to hire 5,000 technology workers across the globe during the fiscal year. Walmart also said it plans to open new hubs in Toronto and Atlanta.

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Retail Sales Grow at Slower Pace as Inflation Curbs Spending

U.S. retail sales rose at a slower-than-expected pace in February, as rising inflation seemed to catch up to consumers’ wallets and curb spending.
Seasonally adjusted retail sales rose by 0.3% to $658.1 billion from January, and 17.6% year over year, according to data released by the Census Bureau. Economists surveyed by FactSet were calculating a 0.4% monthly increase. January’s percentage change was revised up to a 4.9% increase from 3.8%.

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Housing Starts Climbed in February Despite Headwinds

A monthly gauge of new-home construction climbed to its highest level since 2006 in February—but that doesn’t mean the coast is clear for home builders.
Housing starts—the Census Bureau and Department of Housing and Urban Development’s measure of the beginning of new-home construction—climbed to a seasonally adjusted annual rate of about 1.77 million in February. Consensus estimates gathered by FactSet had anticipated a rate of about 1.7 million.

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