Jeffrey Gundlach, an expert investor, believes the Federal Reserve (Fed) will only cut interest rates once this year. Previously, he expected multiple cuts. This change of view came after Fed Chair Jerome Powell indicated that interest rate hikes are unlikely in the near future. As a result of Powell's comments, Treasury yields declined and stock prices surged.
The U.S. government's I bonds, which are linked to inflation and offer a nearly risk-free investment, will now pay 4.28% annual interest until October 2024. The fixed rate makes them attractive for long-term investors despite falling rates. However, they may not be suitable for short-term savers with better options available.
If you have multiple student loans, you can combine them until April 30th. This will allow you to receive credit for all the time you've been paying on the loan you've had the longest towards loan forgiveness. This is beneficial because it can expedite the loan forgiveness process, especially for those who have been paying for an extended period. You can apply for consolidation at StudentAid.gov or with your loan servicer.
Inflation is staying high, so the Federal Reserve may not lower interest rates soon. This is good news for people with cash to save, as they can now earn higher returns on their money. Treasury bonds, Series I bonds, and high-yield savings accounts are great options for locking in high rates. Just be sure to consider when you might need the money and spread your deposits across different accounts to minimize risk.
The Biden administration is forgiving over $6 billion in student debt for former students of The Art Institutes. The schools misled students about job prospects and salaries. This automatic relief affects 317,000 borrowers who enrolled between 2004 and 2017. The schools falsified data, including using Serena Williams' income to inflate salary expectations.
Inflation is still rising, making it difficult for consumers to afford everyday items. As a result, people are cutting back on spending, which is hurting companies that sell consumer products. McDonald's, 3M, and Newell Brands have reported lower sales because of this trend.
The Federal Reserve won't make any changes to interest rates this week, keeping them at the current high level. The only news expected from the Fed's meeting is an announcement that it will reduce the amount of money it's withdrawing from its holdings. Despite strong inflation, the Fed is holding back on rate cuts until it's sure inflation is under control. The market now expects only one small rate cut by the end of next year.
Private sector employment rose by 192,000 in April, beating expectations. Pay growth slowed to a 5% annual increase, the lowest since August 2021. Leisure and hospitality led job gains, with construction and other sectors also showing increases. Large companies hired the most new workers. This follows March's revised gain of 208,000. The official government jobs report is expected on Friday, which typically provides a different count.
Rising bond yields are putting pressure on stocks, and, according to Goldman Sachs, once the 10-year Treasury yield surpasses 5%, it could spell trouble for equities. Historically, higher yields have correlated with weaker stock performance. The current yield of 4.67% suggests the market is in an "optimism phase," but as yields approach 5%, investors may shift towards bonds, leaving stocks vulnerable.
Amazon surged after beating earnings and revenue expectations, while Starbucks fell after missing estimates. Chipmaker AMD dropped on declining gaming revenue. Pinterest gained on earnings and revenue beats. Super Micro Computer declined after missing revenue estimates. Caesars Entertainment lost after worse-than-expected first-quarter results. Mondelez slipped despite better-than-expected results due to currency headwinds. Diamondback Energy beat earnings estimates but shares fell. Clorox dipped after missing revenue expectations.
A new ETF called CPSM provides investors with complete downside protection against S&P 500 losses for a year. It employs a combination of options positions to achieve this, with investors getting 100% capital protection if they buy on the first day. The ETF has a capped upside and an annual expense ratio of 0.69%. Calamos plans to launch additional structured protection ETFs for other indexes like Nasdaq 100 and Russell 2000.
Bitcoin prices have plummeted to their lowest point in over two months due to uncertainty in the markets. The upcoming interest rate decision by the U.S. Federal Reserve and concerns about inflation have contributed to the decline. Other cryptocurrencies, such as ether and solana, have also experienced losses. Experts speculate that Bitcoin's fall below $60,000 could lead to further price declines in the future.
