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Tag Archives: Volatility
Mortgage rates ‘reeling’ after Silicon Valley Bank’s sudden collapse and one expert says borrowers can capitalize on the current volatility — here’s how much you could save on your home loan – Yahoo Finance
- Mortgage rates ‘reeling’ after Silicon Valley Bank’s sudden collapse and one expert says borrowers can capitalize on the current volatility — here’s how much you could save on your home loan Yahoo Finance
- Today’s Mortgage, Refinance Rates: March 18, 2023 | SVB Collapse Pushed Rates Down This Week Business Insider
- SVB Collapse Rocks California Housing Market as House Prices to Bottom Out msnNOW
- Mortgage Rates Fall After SVB Failure, But Is It Safe To Buy A House Now? Yahoo Finance
- Mortgage interest rates dip amid recent bank collapses, but Valley experts can’t say for how long ABC15 Arizona in Phoenix
- View Full Coverage on Google News
Mortgage rates ‘reeling’ after Silicon Valley Bank’s sudden collapse and one expert says borrowers can capitalize on the current volatility — here’s how much you could save on your home loan – Yahoo Finance
- Mortgage rates ‘reeling’ after Silicon Valley Bank’s sudden collapse and one expert says borrowers can capitalize on the current volatility — here’s how much you could save on your home loan Yahoo Finance
- Today’s Mortgage, Refinance Rates: March 18, 2023 | SVB Collapse Pushed Rates Down This Week Business Insider
- SVB Collapse Rocks California Housing Market as House Prices to Bottom Out msnNOW
- Mortgage Rates Fall After SVB Failure, But Is It Safe To Buy A House Now? Yahoo Finance
- Mortgage interest rates dip amid recent bank collapses, but Valley experts can’t say for how long ABC15 Arizona in Phoenix
- View Full Coverage on Google News
401(k) balances fell 23% year-over-year due to market volatility: Fidelity
Months of market swings have taken a heavy toll on retirement savers.
The average 401(k) balance sank for the third consecutive quarter and is now down 23% from a year ago to $97,200, according to a new report by Fidelity Investments, the nation’s largest provider of 401(k) plans. The financial services firm handles more than 35 million retirement accounts in total.
The average individual retirement account balance also plunged 25% year-over-year to $101,900 in the third quarter of 2022.
Still, the majority of retirement savers continue to contribute, Fidelity found. The average 401(k) contribution rate, including employer and employee contributions, held steady at 13.9%, just shy of Fidelity’s suggested savings rate of 15%.
“The market has taken some dramatic turns this year,” Kevin Barry, president of workplace investing at Fidelity, said in a statement. “Retirement savers have wisely chosen to avoid the drama.”
“One of the most essential aspects of a sound retirement savings strategy is contributing enough consistently — in up markets, down markets and sideways markets — to help reach your goals,” Barry said.
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Just 4.5% of savers changed their asset allocation in the most recent quarter, with most moving their savings into a more conservative investment option, Fidelity said. Some retirement savers seem to have been spooked after suffering big losses amid worries tied to inflation, interest rates, geopolitical turmoil and other factors, 401(k) administrator Alight Solutions also found.
‘It’s best to take a long-term approach to retirement’
“We encourage people not to make changes to their account based on short-term market events because often that can do more harm than good,” said Mike Shamrell, Fidelity’s vice president of thought leadership.
“It’s best to take a long-term approach to retirement.”
And despite the ongoing inflationary pressure straining most households, only 2.4% of plan participants took a loan from their 401(k), Fidelity said.
Federal law allows workers to borrow up to 50% of their account balance, or $50,000, whichever is less. However many financial experts similarly advise against tapping a 401(k) before exhausting all other alternatives since you’ll also be forfeiting the power of compound interest.
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Twitter whistleblower could help Musk by adding ‘volatility’ to legal battle
An image of Elon Musk is seen on a smartphone placed on printed Twitter logos in this picture illustration taken April 28, 2022. REUTERS/Dado Ruvic/Illustration/
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WILMINGTON, Del., Aug 23 (Reuters) – A whistleblower’s complaint that Twitter Inc (TWTR.N) misled federal regulators about the company’s security risks could provide Elon Musk with fresh ammunition in his bid to get out of buying the company for $44 billion.
Until now, Musk’s legal showdown with Twitter has primarily centered around claims that the company misled the billionaire about the number of bot and spam accounts on its platform.
The whistleblower complaint by Twitter’s former security chief Peiter Zatko gives Musk new angles to pursue in his legal battle, such as claims that Twitter failed to disclose weaknesses in its security and data privacy.
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It provides “a different basis for fraud,” said Ann Lipton, a professor at Tulane Law School.
It is not clear if and how Musk’s team will use the whistleblower’s information, although Musk’s lawyer, Alex Spiro with Quinn Emanuel Urquhart & Sullivan, said on Tuesday that a subpoena had been issued to Zatko.
“We found his exit and that of other key employees curious in light of what we have been finding,” Spiro said in a statement.
Legal experts said the whistleblower complaint introduced uncertainty to Musk’s showdown with Twitter, rather than dramatically transforming a case that corporate law specialists have said favors Twitter.
“Volatility is helpful if you’re not playing a strong hand. It creates some possibility that something crazy might happen,” said Eric Talley, a professor at Columbia Law School, of the whistleblower complaint.
Twitter’s stock was down about 5.9% in late trading at $40.44 a share.
‘ADDING TEXTURE’
Musk, the world’s richest person and the chief executive of electric vehicle maker Tesla Inc(TSLA.O), told Twitter in July that he was ending the agreement to buy the company for $54.20 per share.
Musk accused Twitter of fraudulently misrepresenting the true number of spam and bot accounts on its social media platform, which the company has estimated at 5% in corporate filings. Musk said he relied on those filings when he offered to buy the company.
Twitter and Musk have since sued each other, with Twitter asking a judge on the Delaware Court of Chancery to order Musk to close the deal. A trial is set to start on Oct. 17.
On Wednesday, Chancellor Kathaleen McCormick will hear arguments by the two sides over access to documents as part of the discovery process. Legal experts said Musk might raise the whistleblower complaint and indicate how his team might use the allegations.
Zatko’s whistleblower complaint, which was made public on Tuesday, claimed that Twitter had falsely told regulators that it had a solid security plan.
Zatko said he had warned colleagues that half the company’s servers were running out-of-date and vulnerable software, according to a redacted version of his complaint. read more
Twitter Chief Executive Parag Agrawal told employees in a memo that the company is reviewing the claims. “What we have seen so far is a false narrative that is riddled with inconsistencies and inaccuracies, and presented without important context,” Agrawal said, according to a CNN report.
Claims that Twitter failed to disclose security and privacy risks could be easier for Musk to prove than allegations that Twitter misrepresented the number of spam accounts, legal experts said.
To prevail on the spam claim, Musk must show that he relied on Twitter’s disclosures about spam accounts.
Corporate deal specialists have said this will be tough since Musk cited defeating spam as the very reason for buying the company.
By contrast, Zatko’s allegations that the company withheld security information from investors and regulators could qualify as an omission, which would not require Musk to show reliance on the company’s disclosures.
Musk, however, would still need to prove that Twitter’s allegedly weak defenses against hackers was a material risk that was not disclosed to investors.
And to walk away from the acquisition without paying a $1 billion termination fee, he would have to show the omission amounted to a material adverse effect on Twitter.
A material adverse effect (MAE) is an event that significantly reduces the long-term value of an acquisition.
Talley said whether Zatko’s claims amount to an MAE could be an issue for the trial.
“This doesn’t open a brand new battlefront,” said Talley. “It’s adding texture to existing ones.”
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4 Ways to Fortify Your Retirement Against Market Volatility
“It is important to not confuse risk with volatility, because volatility is something we have to live with,” Ms. Benz said. “Checking your liquid and near-liquid reserves, that’s a way of understanding how much of a buffer you have and how long a downturn you can sustain.”
For those looking to improve their flexibility, or ability to avoid selling in a volatile market, she often asks people to consider the answers to a range of questions, including: What would it look like to find a job that replaced the income you would require your portfolio to generate? What would your expenses look like if you downsized? She encourages people to consider incremental moves or changes, citing an example of a couple who wanted to live on the commuter train line in Chicago, but decided to move farther away from the city center, where housing was more affordable. The new spot allowed them access to the city but at a savings from their prior home.
Wait for Social Security
Delaying taking Social Security benefits becomes an even more effective strategy in bumpy markets, according to William Reichenstein, head of research at Social Security Solutions in Overland Park, Kan., and professor emeritus at Baylor University.
“The best returning portion of your bond portfolio is actually delaying Social Security,” Dr. Reichenstein said. “Why do most people start as soon as they can or pretty close to as soon as they can? My strong expectation is, they haven’t learned deferred gratification.”
In recent years, the number of people claiming benefits in their early 60s has been declining, with only about one-quarter of eligible 62-year-olds doing so in 2019, according the Center for Retirement Research at Boston College.
By Dr. Reichenstein’s calculations, assuming a healthy retiree with an average life span, deferring benefits generates an 8 percent return each year that they hold off. For example, a 67-year-old would collect 108 percent of his or her expected benefit by waiting until age 68, and 116 percent by delaying until age 69. Conversely, those who collect earlier, at age 62, receive only 70 percent of their expected benefit with incremental increases each year they hold off.
As an example, consider a 62-year-old with a life expectancy of 90 who began collecting a $1,400 monthly check. If he or she had waited to begin benefits at age 70, with the same life expectancy, the 62-year-old would have received an additional $124,800 in real benefits — not factoring in cost-of-living increases — and would break even at age 80 and five months, he said.
Charts suggest the market could rally after its current ‘short-term volatility spike,’ Jim Cramer says
CNBC’s Jim Cramer said Wednesday that the market is poised to bottom and rally again by Monday, leaning on analysis from Option Pit founder and volatility expert Mark Sebastian.
“The charts as interpreted by Mark Sebastian say we’re currently in the middle of a short-term volatility spike, and once it’s over, we’re going to return to the post-March bottom environment where stocks can easily go higher,” the “Mad Money” host said.
Cramer first explained the relationship between the S&P 500 and the CBOE Volatility Index, also known as a fear gauge.
“Because the volatility index reflects fear, it’s normal for it and the S&P to move in opposite directions,” Cramer said, adding that that’s what happened Wednesday. “It’s when they move in the same direction that you have to start asking questions about the sustainability of the market’s trajectory.”
The Dow Jones Industrial Average slid 0.42% on Wednesday while the S&P 500 dropped 0.97%. The Nasdaq Composite decreased 2.22%.
At the beginning of 2022, the S&P dropped while the VIX went almost straight up, Cramer said, adding that the VIX didn’t take out its previous lows even as the S&P temporarily went higher.
“From there, the volatility index was off to the races. While the S&P did recover in the last week of January, it rolled over again in February. More importantly, from Sebastian’s perspective, is the fact that the VIX confirmed this negativity. With every new low for the S&P, the VIX went higher, just like it should,” Cramer said.
In contrast, Sebastian noted that on March 14, the S&P edged incredibly close to its previous low from March 8, but the VIX rallied to much lower levels on the 14th than it did on the 8th, Cramer said. He added that that means investor fears were going down.
Cramer said that when examining what the charts show about the market more recently, Sebastian believes there’s “more room to run higher.” Cramer explained how the S&P 500’s and VIX’s recent movements support Sebastian’s point.
“The S&P 500’s most recent high was 4,631 back on March 29th. At the time, the VIX closed at 18.90. While the S&P failed to touch that same level at its highs on Monday, notice that the VIX hit a lower level there. … The level it hit was 18.57. In other words, the market went down, but the VIX also went down,” Cramer said.
“That means despite the action today, the fear is continuing to subside,” he added.
Sebastian believes the market will start rallying again by Monday, even though the S&P likely won’t reach incredibly high new levels, Cramer said.
“In his view, we’re in the midst of a two-to-three day VIX spike. … The kind of move that’s incredibly fast, but tends to be short-lived,” Cramer said. “He does think [the S&P] could see 4,700 again sometime, maybe potentially before Easter.”
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Oil Prices Drop Slightly as Market Volatility Eases
Oil prices drifted lower at the start of trading on Sunday evening, a respite from the volatility of recent weeks as Russia’s assault on Ukraine grinds on.
Brent crude, the international benchmark, was trading at about $111 a barrel, down roughly 1 percent, early Sunday night. In December, it cost about $65 a barrel, before Russia’s president, Vladimir V. Putin, began what President Biden called a “vicious war of choice” in Ukraine. West Texas Intermediate, the American benchmark, was trading around $108, down about 1.5 percent.
Oil prices, which surged last week as the markets braced for American sanctions, are showing signs of leveling out. On Tuesday, President Biden shut off the spigot of Russian oil into the United States as punishment for the war in Ukraine. He also banned the import of Russian natural gas and coal.
Mr. Biden had initially resisted calls for such aggressive sanctions on Russian oil, concerned that they would push fuel prices higher — a potentially polarizing issue in an election year. But as Russia escalated its attacks on Ukraine, he announced sweeping sanctions, which he warned would inevitably bring more pain at the pump for Americans.
“I said I would level with the American people from the beginning,” he said last week. “And when I first spoke to this, I said defending freedom is going to cost.”
The average price of a gallon of gas was $4.325 on Sunday, according to AAA. That is up from a week earlier when gas prices hit $4.009, nearly the highest level since 2008, but down a tenth of a cent from Saturday.
Even before Mr. Biden’s decision, the United States imported only a small amount of Russian oil, representing less than 10 percent of its total energy resources. But the step, intended to further economically isolate Russia, effectively prevents the country from profiting from American oil purchases.
Stocks Surge, Oil Falls, Extending Volatility Amid Ukraine War
U.S. stocks jumped and oil prices dropped Wednesday, extending a volatile spell as investors track the economic fallout of the war in Ukraine.
The S&P 500 rose 2.2%, while the technology-focused Nasdaq Composite Index added 2.7%. The Dow Jones Industrial Average advanced 607 points, or 1.9%. All three indexes are poised to break a four-session losing streak.
The war in Ukraine has fueled big moves in stocks, commodities, currencies and bonds. For investors, analyzing the direction of the conflict, fast-changing Western sanctions on Russia and their effects on the global economy is challenging. The turbulence has sent stock indexes spiraling, erasing much of the gains of the last year. Both the Dow industrials and the Nasdaq, which has entered a bear market, closed Tuesday at levels last seen roughly a year ago.
A surge in oil prices, given new momentum by the U.S. embargo on Russian energy, has raised concerns that sustained inflation and lower economic growth could collide. Major central banks were on track to begin tightening monetary policy before Russia invaded Ukraine. The European Central Bank is meeting Thursday. Federal Reserve Chairman
Jerome Powell
said last week that he planned to propose a quarter percentage-point rate increase at the central bank’s meeting this month.
“The market sentiment and the daily movement, and even the intraday movement, certainly has been whipsawed by the headlines surrounding the conflict in Ukraine,” said David Sekera,
Morningstar’s
chief U.S. market strategist. Mr. Sekera said investors who are overweight in energy stocks should consider rotating into equities.
Brent-crude futures, the international benchmark, declined 5.6% to $120.86 a barrel, reversing gains from earlier in the session. The U.S. has banned imports of Russian oil and gas, while Russian President
Vladimir Putin
has issued a decree banning exports of unspecified commodities and raw materials.
The jump in equity markets spurred investors to pull back from haven assets Wednesday. The ICE U.S. Dollar index, which tracks the currency against a basket of others, lost 0.9%, pulling back after a winning streak that pushed the greenback to its highest level in nearly two years. The yield on 10-year Treasury notes edged up to 1.917% from 1.870% Tuesday. Yields and bond prices move in opposite directions.
Gold prices, another asset that investors perceive as safer, lost 2.3%. Trading in the nickel market was suspended for another day, following violent moves Tuesday that sent the metal surging to briefly top the $100,000-a-ton mark for the first time.
In early New York trading, travel stocks rallied, while energy shares declined. Cruise lines
Carnival
and
Royal Caribbean
added 9.6% and 6.1%, respectively.
American Airlines Group
and
United Airlines Holdings
added 5.8% and 12%, respectively. In contrast,
Occidental Petroleum
fell 2.6%,
Halliburton
declined 5.4% and
Marathon Oil
fell 3.9%.
In Europe, London-listed shares of
Polymetal International,
a Russian precious-metals company, surged 60%. Shares of banks also jumped. Austria’s
Raiffeisen Bank International,
which made roughly a third of its pretax profit in Russia last year, gained 15%.
Société Générale,
which also has exposure to Russia, jumped 11%. U.K.-based budget airline
easyJet
jumped 14%.
“It seems like markets are taking a breather today,” said
Viraj Patel,
global macro strategist at Vanda Research. “I don’t think…a lot of investors are thinking that we’re in a new regime and that the worst is over—I think it’s more of a dead-cat bounce and profit-taking [on safe havens] than the start of a new reversal.”
In the cryptocurrency market, bitcoin mounted a comeback after its recent slide, rising about 9.6% from its 5 p.m. ET closing price to trade around $42,224. On Wednesday, President Biden will sign an executive order instructing agencies across the federal government to consider the creation of a U.S. digital currency.
A traderat the New York Stock Exchange on Tuesday.
Photo:
Courtney Crow/Associated Press
Overseas, the pan-continental Stoxx Europe 600 jumped 3.5%. Russia’s stock market remained closed, though its currency trading was open. In the offshore market, the ruble edged slightly lower in volatile trading to around 128 rubles to the dollar. Pricing of Russia’s currency has been choppy since the country imposed measures to stem its selloff, and Western banks have shunned Russian assets.
In Asia, stocks largely fell, tracking Wall Street’s Tuesday session. Japan’s Nikkei 225 lost 0.3%, while Hong Kong’s Hang Seng Index fell 0.7%. The Shanghai Composite dropped 1.1%.
—Caitlin Ostroff contributed to this article.
Write to Caitlin McCabe at caitlin.mccabe@wsj.com and Joe Wallace at joe.wallace@wsj.com
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US Bitcoin miners expanding operations despite price volatility
Crypto mining operations based in the United States are committed to increasing their hash power with more hardware despite Bitcoin’s (BTC) three-month downturn.
The Marathon Digital Holdings and GEM Mining companies in the U.S. told Cointelegraph this week that they each expect the size of their respective operations to grow through 2022 by at least doubling the number of machines at their facilities.
Marathon Digital’s VP of corporate communications Charlie Schumacher told Cointelegraph in an interview that it is moving forward with plans to deploy 199,000 new machines by 2023 to secure what is “arguably the future of the global monetary system.”
GEM Mining CEO John Warren said via email that it “plans to have 32,000 miners online by the end of 2022.”
For Marathon, that would be more than a six-time increase in size whereas GEM’s capacity would double if it follows through with its plans.
The fact that miners are expanding their operations comes as somewhat of a surprise. Late last week, concerns were raised about the capital efficiency of miners as it was reported that many were selling off BTC in order to maintain cash reserves. Marathon Digital filed with the SEC to sell up to $750 million worth of its stock on Feb. 13.
However, Schumacher clarified that the company is keeping its options open and “is in a position to better work through capital markets” while it looks for the most economically efficient way towards growth. He said that “filing to shelf doesn’t mean they are necessarily selling. Everything we do is about increasing optionality.” He continued
“We can’t control the price of BTC, but we can control how we react to the market. We believe we are in a position to act opportunistically.”
Warren shares optimism about growing his company’s scale. He told Cointelegraph that GEM has also not sold any BTC to date.
His temperament can be derived in part by the potential capital efficiency provided by newly proposed tax incentives in Illinois and Georgia. If passed, the Illinois bill would offer tax breaks for crypto mining data centers, while Georgia would reduce taxes on electricity used for crypto mining.
Whereas Marathon’s strategy appears to be securing greater sources of revenue, GEM is seeking out ways to reduce expenses. Warren said, “State tax incentives for mining are tremendously beneficial to companies like GEM Mining due to their effects on the cost of energy use.”
“Energy is one of the most significant inputs for mining operations, and tax breaks that exempt the sale or use of electricity can assist with reducing overhead costs and maintaining cash flows.”
Both Schumacher and Warren acknowledged the possibility for turbulence in Bitcoin price over the next coming months. Schumacher would not comment on whether we are entering a “crypto winter”, but made it clear that his company focuses on “decreasing risk and making sure that we can pivot.”
Related: Tonga’s timeline for Bitcoin as legal tender and BTC mining with volcanoes
Conversely, Warren commented that we are “more likely in a short-term bearish sentiment within the market.” He concluded by saying
“I anticipate there will be continued investment in bitcoin and the larger crypto space, regardless of short-term volatility.”