Analysts say possibility of U.S. rate hike could shake up markets
Shares in South Korea shipping giant Hyundai Merchant Marine Co. were sharply down Thursday.
Shares in Asia were choppy and shares were sliding — except in China
and Japan — as many investors grow cautious about the stronger chance
that U.S. interest rates will rise in June.
In China, the Shanghai Composite
SHCOMP, +0.14%
recently rose 0.6%, while Japan’s Nikkei Stock Average
NIK, +0.01%
opened higher but pared gains
to recently trade about flat. But Hong Kong’s Hang Seng Index
HSI, -0.64%
dropped 0.4%, Korea’s Kospi
SEU, -0.51%
fell 0.5% and Australia’s ASX/S&P 200
XJO, -0.61%
sank 0.7%.
Many
investors across the Asia-Pacific region pulled back after the U.S.
Federal Reserve’s April meeting minutes suggested a June interest-rate
increase was still in the cards if data supported the case that the
American economy was getting stronger.
The
U.S. dollar strengthened against its major peers after the minutes were
released, putting pressure on some Asia-Pacific stock markets and
prices for commodities.
“In Asia it should be quite negative —
especially in emerging markets we have seen the USD bid higher” against
Asian currencies, said Tareck Horchani, a senior sales trader at Saxo
Capital Markets. “This rate hike is not really a good sign. I believe we
might see some larger correction in Asia over the next few days.”
Investors
were initially more positive in Japan, where stocks were up as much as
0.5% in the early morning. Shares gained after the yen weakened
overnight.
A weaker currency helps Japanese exporters, who can
sell their goods at more competitive prices overseas and can increase
earnings made abroad when they are repatriated into yen.
“The
strength of the yen has been a real problem on Japanese exporters,” said
Alex Furber, senior client services executive for CMC Markets in
Singapore. The yen weakened to 110 per U.S. dollar in the early morning,
and “that’s going to ease a little bit of pressure on exporters and
potentially is good for stocks,” he said.
Japanese financial
shares were leading the market higher on expectations that higher U.S.
interest rates could boost their net interest margins. Financial stocks
had suffered in recent weeks in an ultralow interest-rate environment.
Dai-ichi Life Insurance Co.
8750, +2.80%
rose 4.3% and Mitsubishi UFJ Financial Group Inc.
8306, +0.82%
advanced 3.2%.
In China,
technology and telecom stocks rallied, with the Nasdaq-style ChiNext
board in Shenzhen up 2.4%. Trading volumes, however, were thin as
investors were uncertain about the Chinese economy.
“Weak
economic fundamentals and tightening liquidity as a result of sustained
[deleveraging] efforts prompted more investors to stay on the sideline,”
says Jacky Zhang, an analyst at BOC International.
In Korea, shares of Hyundai Merchant Marine Co.
011200, -15.04%
plummeted 11% after the
company and its creditors failed to reach an agreement Wednesday over
charter rate cuts with foreign shipowners, which is part of its debt
restructuring efforts.
The price of Brent crude oil slipped in
early Asia trading hours to $48.07 a barrel. Earlier this week, Brent
had neared the psychologically-important $50 mark but failed to breach
it.
Dramatically cut your wait times with these insider tips
Earlier this week, roughly 450 American Airlines
AAL, -0.09%
passengers trying to fly out
of Chicago’s O’Hare airport missed their flights due to serious TSA
screening checkpoint delays. And this is just the latest in a series of
security-related slowdowns that have caused thousands of consumers to
miss their flights.
For its part, the TSA plans to hire roughly
800 more officers and get more people to work part-time and overtime.
But the TSA union says it will need 6,000 more staffers to fix the
problems, which have been caused by an increase in fliers and tighter
security measures.
For consumers planning to fly this summer,
this news, no doubt, creates alarm. After all, spending the afternoon
inching forward in a jam-packed security line only to then be forced to
remove shoes, empty pockets, toss shampoo and endure a TSA pat-down is
enough to make anyone irate.
Of course, most consumers know that TSA PreCheck
— which allows vetted fliers to use special, typically speedier lines —
is a good option to help avoid the lines, and there is evidence that
it’s popularity is catching on. As of April 26, more than 2.5 million
people had enrolled, up from a little over 2.2 million on March 1st,
according to the TSA.
But there other, lesser-known ways travelers can avoid long airport security lines. Don’t travel on a Friday afternoon
On
average, security lines on Friday afternoons between about 4 p.m. and 8
p.m. local time are the slowest, as wait times tend to double then, according to custom data run for MarketWatch by WhatsBusy.com, a site that tracks airport security wait times for consumers.
“That’s
the tail-end of business travel for the week and the start of a lot of
personal travel,” explains Jordan Thaeler, the president and co-founder
of WhatsBusy;
this confluence of factors creates longer lines. The firm analyzed
security line wait times for the 20 busiest airports in the nation to
make this analysis.
You may also want to avoid traditionally busy travel days like the day before and the Sunday after Thanksgiving.
World's largest cruise ship makes maiden voyage
The Harmony of the Seas is 1,187 feet long (362 meters)
and is operated by Royal Caribbean Cruises. Its 16 decks contain over
2,500 staterooms, 20 dining venues, 23 swimming pools and a park. Get Global Entry (in some circumstances for free)
You’ve probably heard about TSA PreCheck,
which costs $85 for five years and allows flyers departing from the
U.S. to go through security quickly without having to remove their
shoes, laptops, belts and light coats. The TSA says that about 99% of
TSA PreCheck passengers wait in security lines that are under five
minutes.
But most experts recommend you get Global Entry — at
least if you ever plan to travel abroad — as it gives you the perks of
TSA PreCheck status, plus easy entry into the U.S. from abroad (you’ll
enter the country through automatic kiosks that scan your passport and
fingerprint rather than long customs lines). It costs $100. “It’s
drastically quicker,” says Brian Kelly, founder of ThePointsGuy.com. George Hobica, the founder of AirfareWatchdog.com,
says Global Entry is “the best way” to beat long lines. “The other day I
flew in from Vietnam to LA and not only was the immigration line at LAX
endless, but the line at customs was also huge,” he says. “It took me
about two minutes to get through both lines because I have Global Entry;
otherwise I’m sure I would have been waiting an hour or more to get
through both lines.”
Some consumers can get Global Entry essentially for free by buying it using certain American Express
AXP, +1.21%
credit cards, including its
Corporate Gold Card, Consumer Platinum Card, Corporate Platinum Card,
Business Platinum Card and Centurion Card all of which give you a $100 statement credit when you pay for Global Entry. Of course, you need to pay your balance in full and make sure the annual fees are worth it for you.
Buy Clear
Fewer people have heard of Clear — a program available in 13 airports
including San Francisco, Denver, Las Vegas, and Houston that speeds you
through airport security (it promises consistent wait times of less
than 5 minutes) — but some experts say it’s worth the $179 a year price
(you can add family members for $50 each).
“Clear can save you
time,” says Kelly. “It’s in a limited number of airports but if you’re
based out of one of those airports, [consider it],” he says. Plus, Clear
is adding expedited access to sporting events to its roster.
With
Clear, rather than waiting in a line for an agent to scan your boarding
pass and ID, you instead place your finger and boarding pass saved to
your smartphone into a Clear kiosk (you can watch a video of how this works here),
and then you can go right to the screener machine (the same one that
everyone else uses). Clear is typically faster than the TSA PreCheck
line, a spokesperson for the company says, because the PreCheck lines
have become more crowded as more consumers use the service. The TSA
points out that Clear consumers — though they do get to go to the front
of the travel document check line — still have to go through the same
screening machines that everyone else does, and notes that 99% of
TSAPreCheck passengers wait in lines less than 5 minutes. Become an elite flyer (or upgrade to be one for a day)
There
are perks to staying loyal to one airline, namely all the benefits you
get with your elite status. One of the big ones is the priority security
lines, which tend to be faster and shorter than the lines that regular
Joes have to stand in.
“If you can stick to one airline, that does pay off when it comes to security lines,” says Travelzoo senior editor Gabe Saglie. “They have dedicated security lanes for their premier or elite flyers that are almost always considerably shorter.”
But
even if you aren’t an elite flyer, you can still pay to get into those
short security lines. Saglie says that when you upgrade your seat — say
to get extra legroom or to move towards the front of the plane — you can
sometimes get priority security line status as well. Sometimes, this
can cost as little as $25, though that varies depending on the airport
and where you are flying. Get savvy about which line to choose
Often,
travelers pour into whichever security line is closest to their
airline’s check-in area, but that can be a huge waste of time, says
Kelly. Instead, before you get to the airport, look at the map online if
it’s available to figure out where alternate security points might be
and/or simply ask when you are there.
Sometimes, they won’t let
you through a line in an alternate terminal, says Kelly, but if you have
an excuse like that you are meeting a client, they might. You may have
to do more walking this way, but for many, that’s a lot better than
standing still in line. Pick your airport wisely
Most
consumers don’t think about avoiding security lines when they’re
booking their flights, but it can be smart to. If you have the choice of
a smaller airport or a larger one, you may want to choose the smaller
one if you want to avoid long lines, says Hobica. (This story has been updated.)
Mounting uncertainties over a tepid economy, weak earnings, and a more hawkish Federal Reserve is making cash popular again.
Cash levels are inching toward a multiyear high
If cash positions are anything to go by, investors are bracing for a wild ride in the markets.
More
fund managers are keeping their money in cookie jars rather than
investing, pushing cash levels toward a multiyear high not seen since
earlier this year when stocks
DJIA, -0.02%SPX, +0.02%
were tumbling, according to a Bank of America Merrill Lynch survey.
Cash levels inched up to 5.5% in May versus 5.4% in April, nearing the 15-year high of 5.6% in February.
Bank of America Merrill Lynch
“If you go down to the woods
today, it will be full of bears. Investors [are] positioned for a
‘summer of shocks,” said the bank in its monthly survey of money
managers positions released Tuesday.
The survey also showed that
only 12% of the respondents were taking “higher-than-normal” risks with
most managers crowded into quality assets.
Investors and corporations tend to boost their cash hoards during times of uncertainty.
A
tepid economy, weak outlook on corporate profits, and expectations of
at least two interest rate increases by the Federal Reserve are all
forcing investment managers to be more conservative, said Michael
Hartnett, chief investment strategist at Bank of America Merrill Lynch.
On Wednesday, minutes from the policy-setting Federal Open Market Committee hinted that an interest-rate hike could come as early as June.
But the one overriding worry for fund managers this month is the risk associated with the U.K. leaving the European Union, or Brexit as it is commonly referred to as.
Bank of America, along with Goldman Sachs and J.P. Morgan Chase, earlier this week urged investors to rotate out of stocks
due to what they described as inflated stock values. The Fed tightening
U.S. monetary policy as well as uncertainties over the U.S.
presidential election are among the reasons cited by the banks as events
that could roil markets.
On Tuesday, Goldman recommended that
investors remain overweight in cash, at least for the next three months,
due to expectations of increased volatility.
“Key risks include
less China growth, a general pick-up of European political risk, a
repricing of the Fed rate hike cycle, and commodity price declines,” the
economists said in a report.
Goldman also downgraded global equities to neutral
from overweight over a 12-month period due to high valuation, noting
that unless they see sustained earnings growth, stocks aren't very
attractive for now.
Mounting uncertainties over a tepid economy, weak earnings, and a more hawkish Federal Reserve is making cash popular again.
Cash levels are inching toward a multiyear high
If cash positions are anything to go by, investors are bracing for a wild ride in the markets.
More
fund managers are keeping their money in cookie jars rather than
investing, pushing cash levels toward a multiyear high not seen since
earlier this year when stocks
DJIA, -0.02%SPX, +0.02%
were tumbling, according to a Bank of America Merrill Lynch survey.
Cash levels inched up to 5.5% in May versus 5.4% in April, nearing the 15-year high of 5.6% in February.
Bank of America Merrill Lynch
“If you go down to the woods
today, it will be full of bears. Investors [are] positioned for a
‘summer of shocks,” said the bank in its monthly survey of money
managers positions released Tuesday.
The survey also showed that
only 12% of the respondents were taking “higher-than-normal” risks with
most managers crowded into quality assets.
Investors and corporations tend to boost their cash hoards during times of uncertainty.
A
tepid economy, weak outlook on corporate profits, and expectations of
at least two interest rate increases by the Federal Reserve are all
forcing investment managers to be more conservative, said Michael
Hartnett, chief investment strategist at Bank of America Merrill Lynch.
On Wednesday, minutes from the policy-setting Federal Open Market Committee hinted that an interest-rate hike could come as early as June.
But the one overriding worry for fund managers this month is the risk associated with the U.K. leaving the European Union, or Brexit as it is commonly referred to as.
Bank of America, along with Goldman Sachs and J.P. Morgan Chase, earlier this week urged investors to rotate out of stocks
due to what they described as inflated stock values. The Fed tightening
U.S. monetary policy as well as uncertainties over the U.S.
presidential election are among the reasons cited by the banks as events
that could roil markets.
On Tuesday, Goldman recommended that
investors remain overweight in cash, at least for the next three months,
due to expectations of increased volatility.
“Key risks include
less China growth, a general pick-up of European political risk, a
repricing of the Fed rate hike cycle, and commodity price declines,” the
economists said in a report.
Goldman also downgraded global equities to neutral
from overweight over a 12-month period due to high valuation, noting
that unless they see sustained earnings growth, stocks aren't very
attractive for now.
Mounting uncertainties over a tepid economy, weak earnings, and a more hawkish Federal Reserve is making cash popular again.
Cash levels are inching toward a multiyear high
If cash positions are anything to go by, investors are bracing for a wild ride in the markets.
More
fund managers are keeping their money in cookie jars rather than
investing, pushing cash levels toward a multiyear high not seen since
earlier this year when stocks
DJIA, -0.02%SPX, +0.02%
were tumbling, according to a Bank of America Merrill Lynch survey.
Cash levels inched up to 5.5% in May versus 5.4% in April, nearing the 15-year high of 5.6% in February.
Bank of America Merrill Lynch
“If you go down to the woods
today, it will be full of bears. Investors [are] positioned for a
‘summer of shocks,” said the bank in its monthly survey of money
managers positions released Tuesday.
The survey also showed that
only 12% of the respondents were taking “higher-than-normal” risks with
most managers crowded into quality assets.
Investors and corporations tend to boost their cash hoards during times of uncertainty.
A
tepid economy, weak outlook on corporate profits, and expectations of
at least two interest rate increases by the Federal Reserve are all
forcing investment managers to be more conservative, said Michael
Hartnett, chief investment strategist at Bank of America Merrill Lynch.
On Wednesday, minutes from the policy-setting Federal Open Market Committee hinted that an interest-rate hike could come as early as June.
But the one overriding worry for fund managers this month is the risk associated with the U.K. leaving the European Union, or Brexit as it is commonly referred to as.
Bank of America, along with Goldman Sachs and J.P. Morgan Chase, earlier this week urged investors to rotate out of stocks
due to what they described as inflated stock values. The Fed tightening
U.S. monetary policy as well as uncertainties over the U.S.
presidential election are among the reasons cited by the banks as events
that could roil markets.
On Tuesday, Goldman recommended that
investors remain overweight in cash, at least for the next three months,
due to expectations of increased volatility.
“Key risks include
less China growth, a general pick-up of European political risk, a
repricing of the Fed rate hike cycle, and commodity price declines,” the
economists said in a report.
Goldman also downgraded global equities to neutral
from overweight over a 12-month period due to high valuation, noting
that unless they see sustained earnings growth, stocks aren't very
attractive for now.
Help wanted: Stoners need not apply.
Employers across the U.S.
are having more trouble filling job openings as applicants and current
employees refuse to take or are unable to pass drug tests, according to a
New York Times report.
The problem reflects a combination of growing drug use among adult
Americans and companies doubling down on their efforts to maintain a
safe and regulated workplace at a time when the U.S. unemployment rate
is hovering near what’s considered an ideal level of 5%.
“Political
discourse is all about bringing back high-paying manufacturing jobs,”
says Jonathan Caulkins, a professor at Carnegie Mellon University. “But
companies are saying they’re having trouble filling those positions.”
While
part of the problem lies in finding qualified and reliable workers,
Caulkins says, drug use has become a growing factor in filling
increasingly open jobs. The portion of workers testing positive for
illicit drugs increased for the second consecutive year in 2014 after
declining steadily between 1988 and 2012, according to data from Quest
Diagnostics, a testing services and health care company. The amount of
workplace urine tests that tested positive for illegal substances
increased over 9% overall, from 4.3% in 2013 to 4.7% in 2014, according
to the company.
These
trends affect some sectors more than others, decreasing the labor pool
for industries that have high turnover and relatively high risks to
worker safety, like construction and transportation, says Dale
Deitchler, a labor attorney at Littler Mendelson. “You aren’t going to
see employers in these fields move away from pre-employment drug
testing,” Deitchler says.
Despite changes in state marijuana
legalization laws, positive results increased among other drugs as well,
with cocaine up to 0.24% from 0.22%, amphetamines up to 1.04% from
0.97% and heroin up to 0.031% from 0.015%, according to Quest data.
Marijuana remained the most commonly found drug, up to 2.4% from 2.1%.
The
recent effects of marijuana legalization aren’t necessarily on access,
Caulkins says, but on the number of people who use it daily or
near-daily, increasing the chances of failing random drug tests. “The
total amount of marijuana consumed in the U.S. has doubled from 2004 to
2014,” Caulkins says, adding that the total number of daily or near
daily users has increased by nearly eight times since 1992.
Even
in states that have legalized marijuana, rates of positive marijuana
tests haven't increased significantly compared with the rest of the
country. In Colorado and Washington, which both legalized the use of
recreational marijuana in 2012, the number of tests that returned
positive marijuana results increased to 2.62% from 2.3% and 2.75% from
2.38% between 2013 and 2014, respectively, according to Quest data.
Your flight got cancelled. Now what?
Cancelled flights are the single-biggest generator of
complaints but some airlines are rolling out new systems that they think
will help.
Employers, in turn, have
been increasingly aware of the risks to maintaining a drug-free
workplace. About 16% of 2,200 companies surveyed in 2014 by HireRight,
an employee screening company, identified drug and alcohol testing as a
policy they planned to beef up in the next year, while 23% said they had
revised their testing policies in the past year.
Clearly defined
testing policies can help employers avoid workplace incidents and
costly lawsuits, especially in states that have legalized marijuana
either medically or recreationally, according to legal experts.
(Twenty-three states have legalized cannabis for medical use and four
states and the District of Columbia have legalized recreational
marijuana.)
Implementing drug tests before hiring employees in
any industry can help increase overall workplace safety, decrease worker
compensation costs and lower the potential for unlawful activity to
occur on the job, Deitchler says.
However, if illegal drug use
continues to become more prevalent, industries with high turnover but
lower risks to worker safety, like hospitality and restaurants, and
white collar companies looking to attract a more creative workforce may
begin to move away from drug testing job applicants, Deitchler says. For
employers worrying about limiting applicants because of pre-employment
drug tests, Deitchler says it is still important to have a drug testing
program in place, but only to implement it under “reasonable suspicion”
that an employee is impaired. “You have some protection, but you’re not
going to reduce the labor pool,” he says.
Prepare to be shocked at just how little most Americans know about even the most basic financial concepts. No wonder we devote the entire month of April to boning up on financial literacy. Read:Investors need to know the answer to this key financial question.
To
get an understanding of how woefully uneducated the masses are when it
comes to money, economists from Wharton and George Washington University
have been asking three basic financial questions — very basic — for years, and the results have been rather startling.
Before you try your hand at it, here’s how others have fared: According to a working paper published last year,
only half of Americans over the age of 50 answered at least two of the
three questions correctly. Less than a third got them all right.
When breaking it down by education, only 44% of Americans with a
college degree nailed all of them. That number drops to 31% for those
with some college.
Of course, you’re a MarketWatch reader, so 100% should be a slam dunk.
Give it a shot:
Bank of America Merrill Lynch
