Focus on data, not what Fed speakers say, says Art Hogan
Despite the “parade of Fed speakers,” that’s not what investors should be focusing on, according to Art Hogan, chief market strategist at B. Riley Financial.
“I think investors need to pay more attention to what the data is telling us than what every Fed speaker, voter or not, has to say about what our expectations should be,” Hogan told CNBC’s “Squawk Box.” Asia.”
Still, he said Fed officials have been able to shift expectations about the direction of Fed policy.
St. Louis Federal Reserve Chairman James Bullard said on Tuesday that the central bank will need to keep raising rates and the federal funds rate will likely need to rise to 3.75%-4% by the end of the day. of 2022. San Francisco Fed President Mary Daly said “our job is far from done” in the fight against inflation, while Chicago Fed President Charles Evans said that another big rate hike was possible, although he hopes it can be avoided.
After last week’s meeting, some expected the Fed to continue climbing to 3.25% to 3.5% before pivoting in 2023, Hogan said.
“I think the parade of Fed speakers this week did a pretty good job of pulling that off, lowering those expectations,” he said.
These stocks are poised to come back if inflation peaks, says Jefferies
A slowdown may be on the horizon and further downward earnings revisions are expected. If inflation also peaks, as some analysts expect, that mix of factors will favor a stock class, Jefferies says.
Jefferies has produced a screen of these stocks for investors to buy, based on a list of metrics that include high profitability, reasonable valuations and good cash flow. Pro subscribers can read the story here.
PayPal increases its profits and announces a share buyback
Shares of PayPal soared more than 11% after hours. The payments company beat analysts’ earnings and revenue estimates for the second quarter and issued an upbeat outlook for the full year. PayPal also announced a $15 billion share buyback program.
Share buybacks offer companies a way to increase their earnings per share and improve the value of their shares, especially as the market as a whole sees steep price declines this year. The company launched a $10 billion program four years ago.
Elliott Management said it has a $2 billion stake in the payments giant. PayPal has announced that it has entered into a value creation information sharing agreement with the activist investor.
Despite Fedspeak on fighting inflation, ‘easing cycle’ is emerging, says Leuthold’s Jim Paulsen
The Leuthold Group’s chief investment strategist, Jim Paulsen, said that despite the Federal Reserve’s “continued lip service to fighting inflation” by tightening monetary policy, several factors suggest the market could enter a an “emerging easing cycle”.
Bond yields have reached a significant rate cut, the dollar is finally rolling and junk spreads have retreated, he said in a note to investors Tuesday evening.
“The media, politicians and investors are mostly focused on the war on inflation and how aggressively the Fed will have to keep rates rising,” Paulsen said. “Yet, with real economic growth already down to a crawl and evidence that inflation is easing, the case for further Fed tightening at its September meeting is rapidly collapsing.”
“Investors should attach appropriate importance to the guiding nature of economic policies,” he added. “Tightening today means weaker real and nominal growth tomorrow.”
MatchGroup shares fall after hours
Shares of dating app operator Match Group fell 23% after the company reported second-quarter revenue of $795 million, against FactSet estimates of $803.9 million. dollars. Match also issued a weak guidance for operating profit and adjusted revenue for the current quarter.