Every Friday I recap “news you can use” from the week: a handful of quotes from major (and often expensive) news sources, so you can stay up to date on the news that affects your money without spending a dime and in less than a minute.
Here’s an overview of what happened this week.
Forget Peak Oil Demand: A Thirst for Barrels Puts $100 in View (March 5, Bloomberg) It all comes down to China: The world’s second-biggest oil consumer is snapping up crude after reversing its strict Covid-19 policies. Against a backdrop of tight supply, the demand boost has everyone from Goldman Sachs Group Inc. to trading powerhouse Vitol Group predicting a rally to $100 a barrel later this year.
Holding Cash Will Be a Winning Strategy in 2023, Investors Say (March 5, Bloomberg) Morgan Stanley’s chief US equity strategist Michael Wilson told Bloomberg TV last week that the S&P 500 Index could fall around 20% due to weak corporate earnings.
Against that backdrop, cash looks like a safe haven, particularly with recent yields on short-term Treasury bills high enough to beat the classic 60/40 portfolio of stocks and bonds for the first time since 2001.
Housing Market Momentum Stalls as Critical Spring Season Approaches (March 6, Wall Street Journal) Mortgage rates have moved higher for four straight weeks to 6.65% as of March 2, their highest level since early November, according to Freddie Mac. Mortgage applications from home buyers, meanwhile, slid during the week ended Feb. 24 to the lowest level in 28 years on a seasonally adjusted basis, according to the Mortgage Bankers Association.
An earnings recession seems inevitable, but it might not last long (March 6, MarketWatch) An earnings recession is defined as shrinking profit for two quarters or more in a row. Per-share profit for S&P 500 companies is down 4.6% in the fourth quarter…
Things will stay bumpy for the first half of this year, analysts’ forecasts indicate. For the first quarter and second quarter, Wall Street expects earnings declines of 5.9% and 3.8%. respectively, but forecasts call for a summer-season bounceback.
Debt Default Would Cripple U.S. Economy, New Analysis Warns (March 7, New York Times) The U.S. economy could quickly shed a million jobs and fall into recession if lawmakers fail to raise the nation’s borrowing limit before the federal government exhausts its ability to pay its bills on time, the chief economist of Moody’s Analytics, Mark Zandi, warned a Senate panel on Tuesday.
The damage could spiral to seven million jobs lost and a 2008-style financial crisis in the event of a prolonged breach of the debt limit…
It Turns Out Money Does Buy Happiness, At Least Up to $500,000 (March 7, Bloomberg) Money really does buy happiness, and the correlation extends well beyond the $75,000-a-year salary threshold that had been seen as the upper limit for making an impact, according to a team of scientists including the Nobel Prize-winning psychologist who introduced the idea of a happiness plateau more than a decade ago.
Contentedness does increase steadily in line with incomes and even accelerates as pay rises beyond $100,000 a year — as long as the person enjoys a certain baseline level of happiness to begin with.
Jerome Powell Says Fed Is Prepared to Speed Up Interest-Rate Rises (March 7, Wall Street Journal) Chair Jerome Powell said the Federal Reserve would consider raising interest rates by a larger half percentage point this month and was likely to lift rates higher than previously expected this year to cool an economy that has shown surprising strength.
Inflation Is Stickier Than Previously Thought, NY Fed Study Shows (March 9, Bloomberg) Revisions to US inflation reports released in January showed that price gains in the last three months of 2022 as measured by the personal consumption expenditure price index were stronger and more broad based than previously thought, New York Fed researchers explained in a blog post published Thursday.
Bad news for home buyers: Housing inventory remains low in America’s cities and towns (March 9, MarketWatch) The nation’s total housing listings in February reached 945,612, according to Realtor.com, up 13% from February 2022, when listings hit historic lows for the month. But those recent national inventory numbers still remain under the magical 1 million mark going into the spring house-buying season and housing inventory for the entire nation is still down 30% from five years ago.
Payrolls rose 311,000 in February, more than expected, showing solid growth (March 10, CNBC)
Job creation decelerated in February but was still stronger than expected despite Federal Reserve efforts to slow the economy and bring down inflation.
Nonfarm payrolls rose by 311,000 for the month, the Labor Department reported Friday. That was above the 225,000 Dow Jones estimate and a sign that the employment market is still hot.
The unemployment rate rose to 3.6%, above the expectation for 3.4%.
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I founded Money Talks News in 1991. I’m a CPA, and I have also earned licenses in stocks, commodities, options principal, mutual funds, life insurance, securities supervisor and real estate.