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What is recession

A recession is a macroeconomic term that refers to a significant decline in general economic activity in a designated region. It had been typically recognized as two consecutive quarters of economic decline, as reflected by GDP in conjunction with monthly indicators such as a rise in unemployment. However, the National Bureau of Economic Research (NBER), which officially declares recessions, says the two consecutive quarters of decline in real GDP are not how it is defined anymore.

Elon Musk Makes $43 Billion Unsolicited Bid to Take Twitter Private

  • World’s richest person will offer $54.20 per share in cash
  • Tesla executive is one of Twitter’s most-watched firebrands.
  • Billionaire entrepreneur Elon Musk offered to take Twitter Inc. private in a deal valued at $43 billion, lambasting company management and saying he’s the person who can unlock the “extraordinary potential” of a communication platform used daily by more than 200 million people.The world’s richest person said he’ll pay $54.20 per share in cash, 38% above the price on April 1, the last trading day before Musk went public with his stake. The social media company’s shares were little changed at $45.81 in New York on Thursday, a sign there’s skepticism that one of the platform’s most outspoken users will succeed in his takeover attempt.Musk, 50, announced the proposed deal in a filing with the U.S. Securities and Exchange Commission on Thursday, after turning down the chance to take a board seat at the company. Musk, who also controls Tesla Inc., first disclosed a stake of about 9% on April 4, making him the largest individual investor. Tesla shares fell about 3% on concern that the attempt to acquire Twitter will be a distraction for Musk.

U.S. Dollar Vs. Commodities: Correlation Confusion

  • The US Dollar Index notched a very strong April amid turmoil in Europe and Asia
  • Traditional asset class relationships have bucked trends in 2022
  • Any pullback in commodities is likely a buying opportunity as the year progresses

The US dollar had one of its best months of the last decade in April. The trade-weighted dollar index measures the greenback versus six major currencies. The euro is the biggest driver, making up 58% of the ICE futures US Dollar Index (DXY). The yenBritish pound, and Canadian dollar are other components. Traders can easily play the USD via the popular Invesco DB US Dollar Index Bullish ETF (NYSE:UUP).

USD Surges in 2022 Amid A Volatile Macro Backdrop

Our Global Cross Asset Market Monitor report sent each Monday morning reviews where the macro landscape stands before a busy week. With the DXY hitting its highest level since December 2002 recently, investors are clearly bracing for relative strength in the US currency. The Euro area continues to endure skyrocketing producer and consumer prices while Japan faces its own issues with supply constraints related to China’s zero-COVID lockdown measures. The relative bright spot is the CADUSD – the Loonie is still more than 10% above its 2016 and 2020 lows vs the USD

Fed Governor Waller says half-point rate hikes could be needed as ‘inflation is raging’

  • Fed Governor Christopher Waller told CNBC that the central bank may need to enact one or more half-percentage point rate hikes in the months ahead.
  • “Inflation is raging,” he said, as he pushed for aggressive moves that include balance sheet reduction soon.
  • Federal Reserve Governor Christopher Waller told CNBC on Friday that the central bank may need to enact one or more 50 basis point interest rate hikes this year to tame inflation.

    Though he voted this week for just a 25 basis point move due to uncertainty from the Russian invasion of Ukraine, Waller said he thinks the Fed may need to be more aggressive soon.

The average mortgage holder has a record $185,000 in equity.

  • Rising home prices mean today’s mortgage holders also have record levels of equity.
  • With interest rates poised to rise, many homeowners may want to tap those funds.
  • But just because you can, that does not mean you should, experts say.
  • Record increases in home prices are also pushing up the amount of equity people have in their abodes. For many Americans, that means they can borrow more against what is often their biggest asset.However, financial experts caution you should think carefully before making such a move.

    The average mortgage holder currently has about $185,000 in home equity to tap, which is the amount they can access while still retaining a 20% stake, according to mortgage research from Black Knight.

    news from CNBC.

Fed Chair Powell notes ‘highly uncertain’ Ukraine impact, but says rate hikes are still coming

  • Fed Chairman Jerome Powell said Wednesday he still sees interest rate hikes ahead though he noted the “implications for the U.S. economy are highly uncertain” from the Ukraine war.
  • Powell called the labor market “extremely tight” and said inflation has risen well above the Fed’s 2% target.
  • His remarks are part of mandatory appearances this week before House and Senate committees in Congress.
  • Federal Reserve Chairman Jerome Powell still sees interest rate hikes coming, but noted Wednesday that the Russia-Ukraine war has injected uncertainty into the outlook. Powell said he sees a series of quarter-percentage-point increases coming, though he left open the possibility of moving more aggressively should inflation persist. In remarks prepared for dual appearances this week before House and Senate committees in Congress, the central bank chief acknowledged the “tremendous hardship” the Russian invasion of Ukraine is causing.  “The implications for the U.S. economy are highly uncertain, and we will be monitoring the situation closely,” Powell said.

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Mortgage rates plunge just as home prices set another record.

  • The average rate on the popular 30-year fixed mortgage had risen close to a full percentage point from the start of this year up until last Friday, when it hit 4.18%, according to Mortgage News Daily.
  • It hit 3.9% on Tuesday.
  • This will give homebuyers more purchasing power as the historically busy spring season kicks off. It will also keep record-high home prices continuing on their run higher.
  • Mortgage rates are sinking as markets contend with the ramifications of Russia’s attack on Ukraine, and that means home prices are likely to continue surging.The average rate on the popular 30-year fixed mortgage had risen close to a full percentage point from the start of this year up until last Friday, when it hit 4.18%, according to Mortgage News Daily. It then fell to 4.04% Monday and 3.9% on Tuesday. That is the largest two-day drop since March 2020, the start of the pandemic.

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Economic sanctions cripple Russian economy as ruble plunges, interest rates soar

  • Economic sanctions levied by the U.S. and allies have sent everyday Russians flocking to ATMs to wait in lines dozens deep in the hopes of withdrawing cash.
  • Russians want to withdraw their rubles either to spend them on physical goods insulated from inflation or to swap them for stable currencies like the U.S. dollar or euro.
  • A prolonged drop in the value of the ruble would ultimately translate into a lower standard of living for Russians.
  • Any goods or commodities Moscow imports — from wheat and soybeans to medical supplies — will be magnitudes more expensive, as well as foreign travel.

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U.S. mortgage interest rates top 4%

(Reuters) – The interest rate on the most popular U.S. home loan surged by the most in nearly two years last week, shooting above the 4% level for the first time since 2019 as financial markets anticipate that the Federal Reserve will respond to the highest inflation in a generation with an aggressive run of rate hikes.

The Mortgage Bankers Association on Wednesday said its weekly measure of the average contract rate on a 30-year, fixed-rate mortgage climbed to 4.05% in the week ended Feb. 11 from 3.83% a week earlier. That was the highest since October 2019 and the largest weekly increase since March 2020 when the onset of the coronavirus pandemic was roiling financial markets.

Fed ready to raise rates, shrink balance sheet soon

  • Federal Reserve officials outlined plans for interest rate hikes and a reduction in the asset holdings on their balance sheet at their last meeting.
  • Minutes released Wednesday from the January session show concern about inflation and financial stability though members urged a measured approach to tightening monetary policy.
  • FOMC members noted that inflation was beginning to spread beyond pandemic-affected sectors and into the broader economy.

Inflation surges 7.5% on an annual basis

  • The consumer price index for all items rose 0.6% in January, driving up annual inflation by 7.5%.
  • That marked the biggest gain since February 1982 and was even higher than the Wall Street estimate.
  • Core inflation rose 6%, which also was a notch above expectations.
  • Real earnings for workers increased just 0.1% on the month when accounting for inflation.
  • Weekly jobless claims declined to 223,000, below the 230,000 estimate.