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Byron Wien Warns “This Market Is Vulnerable”

Byron Wien Warns "This Market Is Vulnerable"

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Byron Wien Warns "This Market Is Vulnerable" Tyler Durden Tue, 09/08/2020 - 06:00

Authored by Christoph Gisiger via TheMarket.ch,

Blackstone’s market maven Byron Wien sees a significant correction risk. He warns of rising speculation in the stock market, the vulnerable state of the U.S. economy and possible turmoil in the course of the presidential election. He also shares his views on where he spots opportunities for patient investors.

Was this just a meaningless thunderstorm after an extraordinarily hot summer? Or should investors better prepare for a severe weather situation?

That’s the key question after a turbulent two-day stretch of trading that snapped a five-week winning streak for U.S. stocks. Popular tech mega caps like Apple and Microsoft lost 8% to 10%. Tesla is down more than 16%.

«There’s a lot of speculation going on. That’s probably not a healthy thing», says Byron Wien. «The market is vulnerable,» adds the renowned investment strategist during a conversation via Zoom from his private home in the East Hamptons.

Best known for his annual list of ten market surprises, Mr. Wien fears that the U.S. economy will recover slower than most investors think. He also believes that a lack of discipline in containing the pandemic, social unrest, record high debt and political bickering in Washington have a negative impact on America's stance in the world, reflected in the weaker dollar.

In this in-depth interview with the Market/NZZ, the Wall Street legend explains why the risk of a correction is high, how the presidential election could cause trouble for stocks in the coming weeks, and where he spots attractive opportunities for patient investors.

Mr. Wien, the market rally has suffered a setback last week. Is this a harbinger of more serious trouble to come, or are stocks just taking a breather?

Most investors are confused because the economy doesn't seem to be doing quite as well as financial markets. Yet, there really isn’t a disconnect: Individual investors are propelling the market to new highs, and they are doing it by pushing up the prices of the internet related stocks, the stocks that are benefiting from people working at home.

There’s a raging debate about the extent to which retail traders have been supporting this rally. What’s your take on this phenomenon?

There is a lot of gambling that’s going on. Individual investors that ordinarily would bet on sports events are betting on stocks. That’s being reflected in the FAANGs and names like Tesla. But I don’t think it’s indicative of the real world. Just look at the options market. There are a lot of individuals who are buying options, and they are particularly buying them with two weeks or less left to run. That’s speculation in the market and probably not a healthy thing.

As one of the most experienced market strategists in the investment business, you have seen a thing or two. To what extent does today’s mentality in financial markets remind you of the dotcom mania in the late nineties?

Every market cycle is different. In the late nineties, the dotcom bubble was fueled by a real breakthrough in technology, the advent of the internet. It was changing people’s lives, and that was a positive change. It just got carried to excess: The market got overpriced and it was selling at over 30 times earnings. Today, this is a different thing. It’s a negative surprise: A virus that is going to change the way we live, and it’s difficult to assess the long-term implications of it. In my opinion, the market is overpriced, but it isn't as outrageously priced as it was back then. So the market is vulnerable, but I don’t think we're going to have a bear market as a result of it.

Why?

In the United States, about 40% of the labor force can work effectively from home. And, we’re doing so with surprising effectiveness. I’m impressed with how much we can accomplish staying at home, even if we know we’re missing something: We’re not interacting with colleagues, mentoring junior people and cross-fertilizing ideas in group meetings. So the economy is moving along, but the unemployment rate is higher than 8%. That’s a lot of lost buying power because if you don’t have a job, you’re not spending much. And, even if you do have a job, you’re a little apprehensive. I’m not spending nearly as much as I would normally. I’m not going to the theater or to restaurants and I’m not buying any clothes. In addition to that, we’re going to have 17 million households evicted during the fourth quarter. That is 30 to 40 million people.

How will this affect the economic recovery?

I describe it as a square root recovery. So far, we’re through the V-part of it: Housing is back very strongly and manufacturing is bouncing back. For example, U.S. domestic auto production increased by 200% from May to June and has recovered to nearly two-thirds of pre-Covid levels. However, large portions of the economy are in serious trouble. The hospitality segment – including hotels, restaurants, resorts and cruise lines – will take a long time to recover. The airline industry may suffer from secular change. Thousands of small businesses have closed during the recession; many will never reopen, because their owners have gone bankrupt or chosen to retire. So now, we’re in a more gradual improvement. We will continue to work our way back to normal, but at a slower pace than we did right at the beginning of the recovery.

In the aftermath of the global financial crisis, the U.S. was first to come out of the recession. Will it be the other way around this time?

We’ve already seen that. China looks like it’s pretty much recovered, and Europe is following behind. The U.S. is lagging and that’s because we don’t have enough discipline in social distancing, in tracing, testing and wearing masks. There is a certain amount of defiance, and that’s hurting us.

So what’s going to happen next?

At best, the economy is a quarter or one third of the way back to normal. Yet, the market is pricing stocks as if we’re going to be back to 2019 levels some time next year. That’s very unlikely. The earliest we can get back to 2019 is 2022, and I’m not even sure about that. The market also thinks that we are going to have a vaccine by the end of the year. That’s a realistic assumption. It’s likely that the vaccine will be given to essential workers starting next year. But I don’t think that people like me will get it until the end of next year. So a return to normal is a 2022 phenomenon.

You love to travel and visit clients around the world. How does the pandemic affect your life on a personal level?

Right now, I go out once a week at somebody’s home for dinner, and I ask the person not to have more than six people. Most people adhere to that, but last Saturday night I went to a dinner and there were eight people over. I don’t think anybody would have more than eight people around a table. I have not been on an airplane since March, and I don't intend to get on an airplane until I have a vaccine. I don’t go into a store. I do go to restaurants, but I order take-out from them. I live with my wife and occasional relatives at home, so I have no reason to complain.

It’s less than two months until the presidential election. To what degree will the race for the White House impact financial markets?

A lot will depend on who is going to win the election. Joe Biden looks like he’s going to win, but then the lead is narrowing. Also, there’s the controversy over mail-in voting. In terms of the number of votes that are going to be exercised on the day of the election, Donald Trump will be the leader. But when all the mail-in votes are counted, I think Mr. Biden will win. So the outcome is going to be very confusing at the beginning. Assuming Mr. Biden wins, it’s likely that taxes will be raised, and that’s not reflected in the earnings estimates of analysts. Thus, those who are forecasting that earnings in 2021 will get back to 2019 levels are too optimistic. I don't think we have a shot at getting back to 2019 levels in earnings until 2022.

How will the stock market react if Mr. Biden wins the election?

The debates are going to be important and candidates are always subject to a gaffe. If the market was sure that Mr. Biden is going to win, stocks would be lower. In a Biden presidency, we’re going to see higher taxes on corporations and individuals as well as more regulations, especially environmental regulations that have been dismantled. So if the Democrats win, there are going to be some important changes, and they will probably be negative for the stock market. But the market is discounting the possibility of a Trump victory, and many investors view Mr. Trump as more favorable for the market.

How big is the risk of a correction against this background?

There’s a fair chance of a correction. Selling at 23 times next year’s earnings, the market is very fully priced here. It doesn’t discount anything that could go wrong. We have already seen the U.S. Dollar weaken by 10%. That could be a problem for the market. It will help earnings, but a weak Dollar is not a good sign. We don’t know how far the Dollar depreciation is going to go.

What's behind the Dollar weakness?

I’m just saying the market is being priced for a continuation of the present environment, and there are a number of factors that could change the environment. We haven’t licked the virus yet, and even when we have a vaccine, we won’t lick it because not everybody is going to take the vaccine. For instance, only 40% of Americans obtain ordinary flu shots. And, those who do take the vaccine are going to take it over a long period of time. So today’s combination of social unrest, enormous fiscal and monetary stimulus, poor discipline in limiting the spread of the virus, gridlock in Washington and avoidance of international involvement may have diminished America's standing among nations in the world.

For this year, the U.S. budget deficit is expected to hit a record $3.3 trillion. That’s more than double the levels experienced after the market meltdown and Great Recession of 2008-09. How worrisome is this to you?

There is a price to pay. We haven’t seen it show up in inflation or interest rates yet. So we don’t know what the price is going to be, but we just can’t keep on engaging in this fiscal and monetary stimulus indefinitely. We had an unprecedented level of stimulus, and that stimulus is supposed to get the economy going. But ultimately, the economy is expected to have a certain natural momentum on its own. That hasn’t shown up yet, so the market is dependent on continuous government subsidies. In my view, this is survival money: The economy is surviving on the basis of monetary expansion and fiscal spending. That means if it ever stops, the economy is going to recede and perhaps go into recession again - and that’s a very precarious position to be in.

There’s a growing number of market observers warning of inflation. Do you share their concern?

I’m not worried about inflation. Too many people are looking for jobs which means chances of wage inflation are low. There’s some food inflation, but the price of oil is still in the low forties, and that’s the most important commodity. In short, inflation is not going to be a problem and interest rates are going to stay low, and that’s a favorable background for the market.

What’s your take on gold?

I can’t say I’m a fan of gold, but I think it makes sense to own some gold here. I recommend it for individual clients, not for institutions. Individual clients should have a 5% position in gold. For institutions, there are still enough other things to buy.

On Wall Street, everybody knows you for your yearly prediction of ten surprises. What could surprise investors looking forward?

A big surprise on a global level is if there were more harmony between China and the West. The hostility between the two largest economies in the world is not good for the markets. So if there would be some reconciliation or some rapprochement between the U.S. and China that would restore normal relations, it would be interpreted favorably by the financial markets. That’s unlikely in a Trump presidency. It’s more likely, but not certain, in a Biden presidency.

What’s your advice for investors in this kind of environment?

There is a great deal of speculation going on in the market. Stocks like Apple, Amazon or Facebook reflect that. But there is a good part of the market that's underpriced. There’s a pocket of the market, hospitality and energy, that’s attractive because eventually, we will return to normal. I don’t know exactly when, but when we do, those stocks will respond. For example, if you go out on the highway, there are already a lot of cars on the road, so people are driving right now. Notably, China is consuming more oil today than it did a year ago. Airlines, transportation and hospitality have performed poorly, and some represent good value for patient investors who can tolerate the risk as a part of their portfolio.

And where do you spot opportunities internationally?

I’m sort of on hold on the emerging markets. They’re attractive in terms of valuation. But on the other hand, they are suffering more than the developed markets. Europe is attractive, there is a lot of good value in Europe. My feeling is that financial stocks, the banks, are attractive.

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Shakira’s net worth

After 12 albums, a tax evasion case, and now a towering bronze idol sculpted in her image, how much is Shakira worth more than 4 decades into her care…

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March 14, 2024

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Shakira’s considerable net worth is no surprise, given her massive popularity in Latin America, the U.S., and elsewhere. 

In fact, the belly-dancing contralto queen is the second-wealthiest Latin-America-born pop singer of all time after Gloria Estefan. (Interestingly, Estefan actually helped a young Shakira translate her breakout album “Laundry Service” into English, hugely propelling her stateside success.)

Since releasing her first record at age 13, Shakira has spent decades recording albums in both Spanish and English and performing all over the world. Over the course of her 40+ year career, she helped thrust Latin pop music into the American mainstream, paving the way for the subsequent success of massively popular modern acts like Karol G and Bad Bunny.

In late 2023, a 21-foot-tall bronze sculpture of Shakira, the barefoot belly dancer of Barranquilla, was unveiled at the city's waterfront. The statue was commissioned by the city's former mayor and other leadership.

Photo by STR/AFP via Getty Images

In December 2023, a 21-foot-tall beachside bronze statue of the “Hips Don’t Lie” singer was unveiled in her Colombian hometown of Barranquilla, making her a permanent fixture in the city’s skyline and cementing her legacy as one of Latin America’s most influential entertainers.

After 12 albums, a plethora of film and television appearances, a highly publicized tax evasion case, and now a towering bronze idol sculpted in her image, how much is Shakira worth? What does her income look like? And how does she spend her money?

Related: Dwayne 'The Rock' Johnson's net worth: How the new TKO Board Member built his wealth from $7

How much is Shakira worth?

In late 2023, Spanish sports and lifestyle publication Marca reported Shakira’s net worth at $400 million, citing Forbes as the figure’s source (although Forbes’ profile page for Shakira does not list a net worth — and didn’t when that article was published).

Most other sources list the singer’s wealth at an estimated $300 million, and almost all of these point to Celebrity Net Worth — a popular but dubious celebrity wealth estimation site — as the source for the figure.

A $300 million net worth would make Shakira the third-richest Latina pop star after Gloria Estefan ($500 million) and Jennifer Lopez ($400 million), and the second-richest Latin-America-born pop singer after Estefan (JLo is Puerto Rican but was born in New York).

Shakira’s income: How much does she make annually?

Entertainers like Shakira don’t have predictable paychecks like ordinary salaried professionals. Instead, annual take-home earnings vary quite a bit depending on each year’s album sales, royalties, film and television appearances, streaming revenue, and other sources of income. As one might expect, Shakira’s earnings have fluctuated quite a bit over the years.

From June 2018 to June 2019, for instance, Shakira was the 10th highest-earning female musician, grossing $35 million, according to Forbes. This wasn’t her first time gracing the top 10, though — back in 2012, she also landed the #10 spot, bringing in $20 million, according to Billboard.

In 2023, Billboard listed Shakira as the 16th-highest-grossing Latin artist of all time.

Shakira performed alongside producer Bizarrap during the 2023 Latin Grammy Awards Gala in Seville.

Photo By Maria Jose Lopez/Europa Press via Getty Images

How much does Shakira make from her concerts and tours?

A large part of Shakira’s wealth comes from her world tours, during which she sometimes sells out massive stadiums and arenas full of passionate fans eager to see her dance and sing live.

According to a 2020 report by Pollstar, she sold over 2.7 million tickets across 190 shows that grossed over $189 million between 2000 and 2020. This landed her the 19th spot on a list of female musicians ranked by touring revenue during that period. In 2023, Billboard reported a more modest touring revenue figure of $108.1 million across 120 shows.

In 2003, Shakira reportedly generated over $4 million from a single show on Valentine’s Day at Foro Sol in Mexico City. 15 years later, in 2018, Shakira grossed around $76.5 million from her El Dorado World Tour, according to Touring Data.

Related: RuPaul's net worth: Everything to know about the cultural icon and force behind 'Drag Race'

How much has Shakira made from her album sales?

According to a 2023 profile in Variety, Shakira has sold over 100 million records throughout her career. “Laundry Service,” the pop icon’s fifth studio album, was her most successful, selling over 13 million copies worldwide, according to TheRichest.

Exactly how much money Shakira has taken home from her album sales is unclear, but in 2008, it was widely reported that she signed a 10-year contract with LiveNation to the tune of between $70 and $100 million to release her subsequent albums and manage her tours.

Shakira and JLo co-headlined the 2020 Super Bowl Halftime Show in Florida.

Photo by Kevin Winter/Getty Images)

How much did Shakira make from her Super Bowl and World Cup performances?

Shakira co-wrote one of her biggest hits, “Waka Waka (This Time for Africa),” after FIFA selected her to create the official anthem for the 2010 World Cup in South Africa. She performed the song, along with several of her existing fan-favorite tracks, during the event’s opening ceremonies. TheThings reported in 2023 that the song generated $1.4 million in revenue, citing Popnable for the figure.

A decade later, 2020’s Superbowl halftime show featured Shakira and Jennifer Lopez as co-headliners with guest performances by Bad Bunny and J Balvin. The 14-minute performance was widely praised as a high-energy celebration of Latin music and dance, but as is typical for Super Bowl shows, neither Shakira nor JLo was compensated beyond expenses and production costs.

The exposure value that comes with performing in the Super Bowl Halftime Show, though, is significant. It is typically the most-watched television event in the U.S. each year, and in 2020, a 30-second Super Bowl ad spot cost between $5 and $6 million.

How much did Shakira make as a coach on “The Voice?”

Shakira served as a team coach on the popular singing competition program “The Voice” during the show’s fourth and sixth seasons. On the show, celebrity musicians coach up-and-coming amateurs in a team-based competition that eventually results in a single winner. In 2012, The Hollywood Reporter wrote that Shakira’s salary as a coach on “The Voice” was $12 million.

Related: John Cena's net worth: The wrestler-turned-actor's investments, businesses, and more

How does Shakira spend her money?

Shakira doesn’t just make a lot of money — she spends it, too. Like many wealthy entertainers, she’s purchased her share of luxuries, but Barranquilla’s barefoot belly dancer is also a prolific philanthropist, having donated tens of millions to charitable causes throughout her career.

Private island

Back in 2006, she teamed up with Roger Waters of Pink Floyd fame and Spanish singer Alejandro Sanz to purchase Bonds Cay, a 550-acre island in the Bahamas, which was listed for $16 million at the time.

Along with her two partners in the purchase, Shakira planned to develop the island to feature housing, hotels, and an artists’ retreat designed to host a revolving cast of artists-in-residence. This plan didn’t come to fruition, though, and as of this article’s last update, the island was once again for sale on Vladi Private Islands.

Real estate and vehicles

Like most wealthy celebs, Shakira’s portfolio of high-end playthings also features an array of luxury properties and vehicles, including a home in Barcelona, a villa in Cyprus, a Miami mansion, and a rotating cast of Mercedes-Benz vehicles.

Philanthropy and charity

Shakira doesn’t just spend her massive wealth on herself; the “Queen of Latin Music” is also a dedicated philanthropist and regularly donates portions of her earnings to the Fundación Pies Descalzos, or “Barefoot Foundation,” a charity she founded in 1997 to “improve the education and social development of children in Colombia, which has suffered decades of conflict.” The foundation focuses on providing meals for children and building and improving educational infrastructure in Shakira’s hometown of Barranquilla as well as four other Colombian communities.

In addition to her efforts with the Fundación Pies Descalzos, Shakira has made a number of other notable donations over the years. In 2007, she diverted a whopping $40 million of her wealth to help rebuild community infrastructure in Peru and Nicaragua in the wake of a devastating 8.0 magnitude earthquake. Later, during the COVID-19 pandemic in 2020, Shakira donated a large supply of N95 masks for healthcare workers and ventilators for hospital patients to her hometown of Barranquilla.

Back in 2010, the UN honored Shakira with a medal to recognize her dedication to social justice, at which time the Director General of the International Labour Organization described her as a “true ambassador for children and young people.”

On November 20, 2023 (which was supposed to be her first day of trial), Shakira reached a deal with the prosecution that resulted in a three-year suspended sentence and around $8 million in fines.

Photo by Adria Puig/Anadolu via Getty Images

Shakira’s tax fraud scandal: How much did she pay?

In 2018, prosecutors in Spain initiated a tax evasion case against Shakira, alleging she lived primarily in Spain from 2012 to 2014 and therefore failed to pay around $14.4 million in taxes to the Spanish government. Spanish law requires anyone who is “domiciled” (i.e., living primarily) in Spain for more than half of the year to pay income taxes.

During the period in question, Shakira listed the Bahamas as her primary residence but did spend some time in Spain, as she was dating Gerard Piqué, a professional footballer and Spanish citizen. The couple’s first son, Milan, was also born in Barcelona during this period. 

Shakira maintained that she spent far fewer than 183 days per year in Spain during each of the years in question. In an interview with Elle Magazine, the pop star opined that “Spanish tax authorities saw that I was dating a Spanish citizen and started to salivate. It's clear they wanted to go after that money no matter what."

Prosecutors in the case sought a fine of almost $26 million and a possible eight-year prison stint, but in November of 2023, Shakira took a deal to close the case, accepting a fine of around $8 million and a three-year suspended sentence to avoid going to trial. In reference to her decision to take the deal, Shakira stated, "While I was determined to defend my innocence in a trial that my lawyers were confident would have ruled in my favour [had the trial proceeded], I have made the decision to finally resolve this matter with the best interest of my kids at heart who do not want to see their mom sacrifice her personal well-being in this fight."

How much did the Shakira statue in Barranquilla cost?

In late 2023, a 21-foot-tall bronze likeness of Shakira was unveiled on a waterfront promenade in Barranquilla. The city’s then-mayor, Jaime Pumarejo, commissioned Colombian sculptor Yino Márquez to create the statue of the city’s treasured pop icon, along with a sculpture of the city’s coat of arms.

According to the New York Times, the two sculptures cost the city the equivalent of around $180,000. A plaque at the statue’s base reads, “A heart that composes, hips that don’t lie, an unmatched talent, a voice that moves the masses and bare feet that march for the good of children and humanity.” 

Related: Taylor Swift net worth: The most successful entertainer joins the billionaire's club

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Delta Air Lines adds a new route travelers have been asking for

The new Delta seasonal flight to the popular destination will run daily on a Boeing 767-300.

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March 14, 2024

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Those who have tried to book a flight from North America to Europe in the summer of 2023 know just how high travel demand to the continent has spiked.

At 2.93 billion, visitors to the countries making up the European Union had finally reached pre-pandemic levels last year while North Americans in particular were booking trips to both large metropolises such as Paris and Milan as well as smaller cities growing increasingly popular among tourists.

Related: A popular European city is introducing the highest 'tourist tax' yet

As a result, U.S.-based airlines have been re-evaluating their networks to add more direct routes to smaller European destinations that most travelers would have previously needed to reach by train or transfer flight with a local airline.

The new flight will take place on a Boeing 767-300.

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Delta Air Lines: ‘Glad to offer customers increased choice…’

By the end of March, Delta Air Lines  (DAL)  will be restarting its route between New York’s JFK and Marco Polo International Airport in Venice as well as launching two new flights to Venice from Atlanta. One will start running this month while the other will be added during peak demand in the summer.

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“As one of the most beautiful cities in the world, Venice is hugely popular with U.S. travelers, and our flights bring valuable tourism and trade opportunities to the city and the region as well as unrivalled opportunities for Venetians looking to explore destinations across the Americas,” Delta’s SVP for Europe Matteo Curcio said in a statement. “We’re glad to offer customers increased choice this summer with flights from New York and additional service from Atlanta.”

The JFK-Venice flight will run on a Boeing 767-300  (BA)  and have 216 seats including higher classes such as Delta One, Delta Premium Select and Delta Comfort Plus.

Delta offers these features on the new flight

Both the New York and Atlanta flights are seasonal routes that will be pulled out of service in October. Both will run daily while the first route will depart New York at 8:55 p.m. and arrive in Venice at 10:15 a.m. local time on the way there, while leaving Venice at 12:15 p.m. to arrive at JFK at 5:05 p.m. on the way back.

According to Delta, this will bring its service to 17 flights from different U.S. cities to Venice during the peak summer period. As with most Delta flights at this point, passengers in all fare classes will have access to free Wi-Fi during the flight.

Those flying in Delta’s highest class or with access through airline status or a credit card will also be able to use the new Delta lounge that is part of the airline’s $12 billion terminal renovation and is slated to open to travelers in the coming months. The space will take up more than 40,000 square feet and have an outdoor terrace.

“Delta One customers can stretch out in a lie-flat seat and enjoy premium amenities like plush bedding made from recycled plastic bottles, more beverage options, and a seasonal chef-curated four-course meal,” Delta said of the new route. “[…] All customers can enjoy a wide selection of in-flight entertainment options and stay connected with Wi-Fi and enjoy free mobile messaging.”

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Stock Market Today: Stocks turn lower as factory inflation spikes, retail sales miss target

Stocks will navigate the last major data releases prior to next week’s Fed rate meeting in Washington.

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6 hours ago

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March 14, 2024

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Check back for updates throughout the trading day

U.S. stocks edged lower Thursday following a trio of key economic releases that have added to the current inflation puzzle as investors shift focus to the Federal Reserve's March policy meeting next week in Washington.

Updated at 9:59 AM EDT

Red start

Stocks are now falling sharply following the PPI inflation data and retail sales miss, with the S&P 500 marked 18 points lower, or 0.36%, in the opening half hour of trading.

The Dow, meanwhile, was marked 92 points lower while the Nasdaq slipped 67 points.

Treasury yields are also on the move, with 2-year notes rising 5 basis points on the session to 4.679% and 10-year notes pegged 7 basis points higher at 4.271%.

Updated at 9:44 AM EDT

Under Water

Under Armour  (UAA)  shares slumped firmly lower in early trading following the sportswear group's decision to bring back founder Kevin Plank as CEO, replacing the outgoing Stephanie Linnartz.

Plank, who founded Under Armour in 1996, left the group in May of 2021 just weeks before the group revealed that it was co-operating with investigations from both the Securities and Exchange Commission and the U.S. Department of Justice into the company's revenue recognition accounting.

Under Armour shares were marked 10.6% lower in early trading to change hands at $7.21 each.

Source: Under Armour Investor Relations

Updated at 9:22 AM EDT

Steely resolve

U.S. Steel  (X)  shares extended their two-day decline Thursday, falling 5.75% in pre-market trading following multiple reports that suggest President Joe Biden will push to prevent Japan's Nippon Steel from buying the Pittsburgh-based group.

Both Reuters and the Associated Press have said Biden will express his views to Prime Minister Kishida Yuko ahead of a planned State Visit next month at the White House. 

Related: US Steel soars on $15 billion Nippon Steel takeover; United Steelworkers slams deal

Updated at 8:52 AM EDT

Clear as mud

Retail sales rebounded last month, but the overall tally of $700.7 billion missed Street forecasts and suggests the recent uptick in inflation could be holding back discretionary spending.

A separate reading of factory inflation, meanwhile, showed prices spiking by 1.6%, on the year, and 0.6% on the month, amid a jump in goods prices.

U.S. stocks held earlier gains following the data release, with futures tied to the S&P 500 indicating an opening bell gain of 10 points, while the Dow was called 140 points higher. The Nasdaq, meanwhile, is looking at a more modest 40 point gain.

Benchmark 10-year Treasury note yields edged 3 basis points lower to 4.213% while two-year notes were little-changed at 4.626%.

Stock Market Today

Stocks finished lower last night, with the S&P 500 ending modestly in the red and the Nasdaq falling around 0.5%. The declines came amid an uptick in Treasury yields tied to concern that inflation pressures have failed to ease over the opening months of the year.

A better-than-expected auction of $22 billion in 30-year bonds, drawing the strongest overall demand since last June, steadied the overall market, but stocks still slipped into the close with an eye towards today's dataset.

The Commerce Department will publish its February reading of factory-gate inflation at 8:30 am Eastern Time. Analysts are expecting a slowdown in the key core reading, which feeds into the Fed's favored PCE price index.

Retail sales figures for the month are also set for an 8:30 am release as investors search for clues on consumer strength, tied to a resilient job market. Those factors could give the Fed more justification to wait until the summer months to begin the first of its three projected rate cuts.

"The case for a gradual but sustained slowdown in growth in consumers’ spending from 2023’s robust pace is persuasive," said Ian Shepherdson of Pantheon Macroeconomics. 

"Most households have run down the excess savings accumulated during the pandemic, while the cost of credit has jumped and last year’s plunge in home sales has depressed demand housing-related retail items like furniture and appliances," he added.

Benchmark 10-year Treasury yields are holding steady at 4.196% heading into the start of the New York trading session, while 2-year notes were pegged at 4.628%.

With Fed officials in a quiet period, requiring no public comments ahead of next week's meeting in Washington, the U.S. dollar index is trading in a narrow range against its global peers and was last marked 0.06% higher at 102.852.

On Wall Street, futures tied to the S&P 500 are indicating an opening bell gain of around 19 points, with the Dow Jones Industrial Average indicating a 140-point advance.

The tech-focused Nasdaq, which is up 7.77% for the year, is priced for a gain of around 95 points, with Tesla  (TSLA)  once again sliding into the red after ending the Wednesday session at a 10-month low.

In Europe, the regionwide Stoxx 600 was marked 0.35% higher in early Frankfurt trading, while Britain's FTSE 100 slipped 0.09% in London.

Overnight in Asia, the Nikkei 225 gained 0.29% as investors looked to a key series of wage negotiation figures from key unions that are likely to see the biggest year-on-year pay increases in three decades.

The broader MSCI ex-Japan benchmark, meanwhile, rose 0.18% into the close of trading. 

Related: Veteran fund manager picks favorite stocks for 2024

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