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S&P Set For 53rd Record High After Powell Gives The Green Light To Buy

S&P Set For 53rd Record High After Powell Gives The Green Light To Buy

After stocks closed on Friday at their 52nd record high of the year, when Powell’s unexpecteldy dovish Jackson Hole sparked a meltup in risk assets and a meltdown…

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S&P Set For 53rd Record High After Powell Gives The Green Light To Buy

After stocks closed on Friday at their 52nd record high of the year, when Powell's unexpecteldy dovish Jackson Hole sparked a meltup in risk assets and a meltdown in the dollar, on Monday all indications are that we will get the 53rd record high with 2021 set to have a record number of all time highs. At 7:30 a.m. ET, Dow e-minis were up 10 points, or 0.03%, S&P 500 e-minis were up 3.50 points, or 0.07%, and Nasdaq 100 e-minis were up 16.25 points, or 0.11%. Oil dropped then gain, the dollar rebounded from Friday's mauling and precious metals continued their ramp higher.

The S&P 500 closed at its 52nd all-time high of the year after Powell said the U.S. central bank could begin slowing asset purchases this year, but won’t be in a hurry to raise interest rates. Stocks globally traded higher on Monday amid continued optimism.

“The fact that the Fed did not give a definitive timetable for tapering on Friday gives stock and bond ‘bulls’ a needed boost of confidence,” Bankhaus Metzler analyst Sebastian Sachs wrote in a note. “As long as accommodative monetary policy remains in place, investors’ fear of missing out is greater than their fear of losing money.”

In the aftermath of Hurricane Ida, oil prices fluctuated and energy giants such as Chevron, Exxon and Halliburton rose between 0.3% and 0.8% after leading sectoral gains last week. Schlumberger and Occidental Petroleum, however, slipped between 0.1% and 0.3% on lost output in the Gulf. U.S.-listed shares of Chinese gaming firm NetEase Inc slumped 7.8% as Chinese regulators slashed the amount of time players under the age of 18 can spend on online games to an hour on Fridays, weekends and holidays. Shares of satellite transporter startup. Here are some of the biggest U.S. movers today:

  • Astra Space (ASTR) slumps 21% in premarket trading after the company’s rocket failed to reach orbit while carrying a test payload for the U.S. Space Force.
  • Globalstar (GSAT) soars 22% in premarket trading after AppleInsider cited a TF International Securities analyst as saying the iPhone 13 will be able to use satellite communications.
  • NetEase (NTES) drops 6.9% after China limited teenagers to three hours a week playing online games.
  • Support.com (SPRT), a little-known software company that’s attracted a following among day traders after it became the target of Wall Street short bets, rallies 35% in premarket trading, adding to a 199% rally last week.
  • Shares of U.S. insurance companies, energy firms, utilities and refiners may be active when trading starts Monday after Hurricane Ida slammed ashore, hitting the Louisiana coast with winds more powerful than Hurricane Katrina.

Investors had been waiting to see whether Powell  would give a clear indication of his views on timing of the central bank's tapering of asset purchases or hiking interest rates to start removing monetary stimulus. However, in his prepared remarks, he offered no indication on cutting asset purchases beyond saying it could be "this year", causing stocks to close at all time highs. And after Friday's Powell J-Hole speech turned out to be a nothingburger, now all eyes will be on the Labor Department's monthly jobs report, which could set the stage for the Fed's Sept. 21-22 policy meeting, when a majority now believe the Fed will announce a November taper.

"A strong payrolls print could instigate a debate for a September tapering start," Rodrigo Catril, senior FX strategist at NAB, said in a note.

Similar to the US, European stocks rose in a muted session where the UK was closed for holiday. Here are some of the biggest European movers today:

  • John Mattson gains as much as 13%, most since June 2019, after newspaper Dagens Industri recommends readers to buy the stock.
  • Atlantic Sapphire gains as much as 8.6% after the company said it has been able to source additional LOX deliveries, and said it has restarted feeding of fish across its fresh- and salt-water systems. By midday however, the shares had erased the gains, following rating downgrades by Kepler Cheuvreux, Arctic Securities and Pareto Securities. The stock plunged 31% last week.
  • Encavis shares decline as much as 4.7% after the German renewables firm announced on Saturday that it would convert EU149.5m worth of bonds to ordinary bearer shares early.
  • Green Landscaping falls as much as 7.5%. Analysts at Pareto say in note they were surprised by the margin decline in the Swedish company’s 2Q report, published Friday.
  • Collector shares decline 2.4% as the Swedish bank allegedly leaked personal customer data to Facebook in the first half of this year, Swedish Radio’s Ekot reports.
  • Gaming stocks including Evolution and Ubisoft fell after news that China’s regulators are setting a new set of tighter regulations over the country’s games industry, including limiting the number of hours that minors can play.

Asian stocks extended gains after their best weekly advance since early February as technology shares climbed and investors took comfort in Federal Reserve Chairman Jerome Powell’s remarks at an annual policy forum in Jackson Hole. The MSCI Asia Pacific Index climbed as much as 1% on Monday, adding to last week’s 3.3% gain. Alibaba Group Holding and Taiwan Semiconductor Manufacturing were among tech giants providing the biggest boosts to the gauge. Fortescue Metals Group and some industry peers rose after the world’s No. 4 iron-ore exporter said annual profit more than doubled to a historic high.

“The faux pre-taper tantrum, sell-offs across various asset classes have been unceremoniously reversed in their entirety,” Jeffrey Halley, senior market analyst for Asia Pacific at Oanda Asia Pacific Pte., wrote in a note. Yet, “Asian markets are still retaining Covid-19 nerves, and more importantly, China clampdown nerves, with each day delivering something new on that front.”

The regional equity benchmark staged a strong comeback last week, after two straight weeks of losses, backed by a rebound in Chinese technology stocks.  A rally in emerging-market equity benchmarks including Indonesia’s Jakarta composite and Thailand’s SET helped sustain the positive mood on Monday amid easing worries about the virus outbreak. Thailand reported 15,972 new Covid-19 infections, the lowest level since July 27.  Still, investors in Asia Pacific were looking to the U.S. central bank as much as activities in the region for guidance. “The most notable feature of the speech was that Chair Powell managed to delink tapering and liftoff by noting that the Fed has ‘articulated a different and substantially more stringent test’ for liftoff,” Nomura strategists including Chetan Seth wrote in a note. “This was possibly, in our view, the reason behind stronger U.S. stocks (particularly cyclicals) post Powell’s comments despite him confirming an inevitable tapering.” 

Japanese equities rose, following U.S. peers higher. Electronics makers and trading houses were the biggest boosts to the Topix, which advanced 1.1%, with all industry groups in the green. Tokyo Electron and Daikin were the largest contributors to a 0.5% gain in the Nikkei 225. Speaking at the Fed’s annual Jackson Hole policy forum on Friday, Powell said the Fed may begin slowing down asset purchases this year as the U.S. economy recovers from the pandemic, but it won’t be in a hurry.

Australian stocks edged higher, supported by mining shares. The S&P/ASX 200 index rose 0.2% to close at 7,504.50, led by the materials sector. Fortescue was among the top performers after its annual profit more than doubled on the back of surging iron ore prices. Altium was the worst performer after its earnings guidance missed expectations. In New Zealand, the S&P/NZX 50 index rose 0.9% to 13,180.58.

The absence of a timetable for tapering caused U.S. benchmark Treasuries and the dollar to slip, and both trends continued on Monday morning in Asia. The yield on benchmark 10-year Treasury notes was 1.3087% slightly richer on the day while spreads are steady and within a basis point of Friday close compared with its U.S. close of 1.312%, and the dollar index which measures the greenback against a basket of currencies was around a two week low. Treasury futures were steady toward top of Friday’s range, holding a narrow band with low volumes amid U.K. bank holiday. Upon cash reopen, yields sit slightly richer vs. last week’s close. Full slate of data this week is headed by Friday’s jobs report, while U.S. auctions are set to resume on Sept. 7.

In FX, the Bloomberg Dollar Spot Index was steady and the dollar was mixed against its Group-of-10 peers. Norway’s krone led gains even as oil prices reversed an earlier advance. The Swiss franc dropped after a leading indicator of economic growth fell to 113.5 in August, missing the lowest estimate in a survey by a margin. The Australian dollar retreated from a near two-week high as the nation posted record daily Covid cases.

Purchasing manager surveys for manufacturing and services are both due this week, with traders waiting to see whether a trend towards slowing growth will continue, a shift that has not been helped by recent localised movement restrictions to cope with an increase in cases of the Delta variant of the new coronavirus.

"We expect both the manufacturing and services PMIs to moderate in August, given the widespread Delta variant and strict lockdown," said Barclays analysts in a note. "With slowing growth momentum and dovish signals from the (People's Bank of China) meeting this week, we expect more easing, but still at a measured pace."

In commodities, oil was also in focus after energy firms suspended 1.74 million barrels per day of oil production in the U.S. Gulf of Mexico as Hurricane Ida slammed into the Louisiana coast as a Category 4 storm. U.S. crude rose 0.86% to $69.34 a barrel. Brent crude rose 1.25% to $73.38 per barrel. Gold was slightly higher, with the spot price gold was traded at $1,817.7863 per ounce, up 0.07%.

The next big event on traders' calendars is U.S. nonfarm payroll figures for August due to be published Friday, as Powell has suggested an improvement in the labour market is one major remining prerequisite for action.

Market Snapshot

  • S&P 500 futures little changed at 4,509.00
  • STOXX Europe 600 little changed at 472.76
  • MXAP up 1.0% to 199.31
  • MXAPJ up 0.9% to 655.12
  • Nikkei up 0.5% to 27,789.29
  • Topix up 1.1% to 1,950.14
  • Hang Seng Index up 0.5% to 25,539.54
  • Shanghai Composite up 0.2% to 3,528.15
  • Sensex up 1.0% to 56,698.74
  • Australia S&P/ASX 200 up 0.2% to 7,504.54
  • Kospi up 0.3% to 3,144.19
  • Brent Futures down 0.8% to $72.11/bbl
  • Gold spot down 0.1% to $1,815.31
  • U.S. Dollar Index little changed at 92.65
  • German 10Y yield little changed at 0.421%
  • Euro little changed at $1.1803

Top Overnight News from Bloomberg

  • Hurricane Ida pummeled New Orleans and the Louisiana coast overnight with lashing rain and ferocious gusts, leaving much of the region without electricity and bracing for widespread floods and devastation
  • The European Central Bank is in a different situation than the Federal Reserve, and “there is no urgency for us to decide at our September meeting next week,” Governing Council member Francois Villeroy de Galhausays in BFM TV interview
  • A third Covid vaccination shot appeared to significantly curb a delta-led surge in cases and prevent severe illness, according to a study in Israel, the first country to offer boosters to seniors
  • Base metals in Shanghai extended last week’s gains after comments from the Federal Reserve chair soothed concerns about an imminent tapering of stimulus in the U.S. Aluminum rallied to the highest close since 2006 amid intensified curbs in China that may crimp output
  • China Huarong Asset Management Co.’s long-delayed 2020 results showed a record loss, with leverage hitting 1,333 times and capital buffers far short of the regulatory minimum, emphasizing the difficult task ahead for the bad-debt manager that recently secured a government bailout

A more detailed look at global markets courtesy of Newsquawk

Asia-Pac stocks were mostly positive with the region mildly taking impetus from last Friday's gains on Wall St where the S&P 500 and Nasdaq extended on record highs as all focus centred on Fed Chair Powell's Jackson Hole speech. However, the gains across Asian bourses were only mild as participants in Asia also digested a slew of earnings and with US equity futures contained heading into month-end and this week’s risk events including Friday’s US jobs numbers. ASX 200 (+0.2%) was kept afloat by strength in mining names which benefitted from early advances in underlying commodity prices and with shares in Fortescue Metals boosted after it announced record profits and dividends, although the tailwinds for the index were offset by the losses in tech and the largest-weighted financials sector, as well as cautiousness from another record increase in daily COVID-19 cases impacting New South Wales. Nikkei 225 (+0.5%) traded with a slightly positive bias after better-than-expected Retail Sales data from Japan but with price action capped by an indecisive currency. Hang Seng (+0.5%) and Shanghai Comp. (+0.2) were choppy amid an overload of earnings releases including China’s largest banks ICBC and CCB which failed to benefit despite printing improved full year results, while regulatory concerns lingered with planning to propose new rules banning companies with large amounts of sensitive consumer data from undertaking US IPOs and after China began a two-month campaign to crack down on commercial platforms and social media accounts that post finance-related information deemed harmful to its economy. Finally, 10yr JGBs were higher as they tracked the continued upside in T-note futures which approached just shy of the 134.00 level in the aftermath of the dovishly-perceived commentary from Fed Chair Powell, while the BoJ were also present in the market today for just over JPY 1tln of JGBs mostly concentrated in 3yr-10yr maturities.

Top Asian News

  • China Limits Teenagers Online Game Play to 3 Hours Most Weeks
  • China Misses Target on BioNTech-Pfizer Shot, Raising Questions
  • Alibaba Fires 10 for Leaking Sexual Assault Accusations
  • Top China Diplomat Rips Blinken on Afghanistan, Virus Probe

European equities (Stoxx 600 +0.1%) are predominantly posting marginal gains in what has been a slow start to the week in the absence of UK participants. The Asia-Pac handover was mostly firmer with the region benefiting via some of the tailwinds from Wall Street on Friday which saw the S&P 500 and Nasdaq extend on record highs post-Powell. In China, bourses were able to overlook further crackdowns in the nation with regulators commencing a two-month campaign to pressure commercial platforms and social media accounts that post finance-related information deemed harmful to its economy. During early European hours, China unveiled new gaming restrictions for younger players and triggered some downside Ubisoft (-1.6%) shares alongside Activision Blizzard (-2% pre-market). Futures stateside are a touch firmer (ES Unch) with marginal outperformance in the RTY (+0.2%). Given the slew of Fed speak last week placing the emphasis on labour market conditions when assessing the tapering decision/timeline, it’s hard to see how much conviction markets will place into the equity space as markets await Friday’s NFP print. As it stands, the street looks for 728k nonfarm payrolls to be added to the US economy in August; that would be cooler than the previous three-month average pace (currently 832k/month), but above the six-month average pace (currently 681k/month). Back to Europe, sectors trade mostly firmer but with little in the way of breadth across the market. Chemicals, Technology and Retail outperform peers, whilst Insurance, Banks and Health Care lag. The latter saw some modest pressure at the open amid losses in Roche (-0.3%) after announcing it would voluntarily withdraw its US accelerated approval for Tecentriq. However, losses have been trimmed as the session progressed with individual movers in the region few and far between.

Top European News

  • Scholz Steals From Merkel’s Playbook to Shake Up German Election; German SPD’s Scholz Wins Election Debate in Blow to Merkel Heir; Scholz’s Chances of Succeeding Merkel Rise to 51%: Bookmakers
  • ECB’s Villeroy Hints at Looming Slowdown in Pandemic Bond-Buying
  • UBS Chairman Calls on Europe to Create Green Capital Market

In FX, the non-US Dollars initially experienced some mild underperformance, albeit antipodeans have since clambered off lows, and the Loonie has gained some composure after the APAC session. The Aussie and Kiwi are subdued as their domestic COVID situations remain dire, with the former reporting record cases and the latter extending its Auckland lockdown. AUD/USD trades on either side of its 21 DMA, which overlaps with the 0.7300 psychological mark. NZD/USD found support at its 50 DMA (0.6984) and probes 0.7000 at the time of writing. CAD sees mild gains despite unfavourable crude prices, with USD/CAD finding support around Friday’s 1.2600 low ahead of its 21 DMA at 1.2595, and the 200 and 100 DMAs further below around 1.2539, and 1.2525 respectively.

  • DXY, EUR, GBP - The Dollar index has nursed its overnight losses but remains within a tight 92.595-724 intraday band thus far. Fresh fundamentals have remained light post-Powell, although month-end flows could dictate in the absence of concrete catalysts and heading into Friday’s jobs report. From a technical perspective, the DXY is sandwiched between its 50 DMA (92.548) and 21 DMA (92.805). Looking ahead, the State-side docket remains light. Meanwhile, the EUR and GBP have remained quiet since the resumption of trade with little to report from a performance standpoint. Although, in the run-up to the German elections later this month – the SPD continues to make further gains in the latest polling data, with Scholz coming out on top in the latest debate. Desks also highlight the numerous coalition configurations possible from the rise of the SPD and the fall of the CDU/CSU. However, coalition negotiations will likely be prolonged, and Chancellor Merkel will still hold her spot until a coalition is made. EUR/USD eased off its 50 DMA (1.1811) after an overnight test of the level and resides on either side of 1.1800 at the time of writing (vs 1.1792 at worst). GBP/USD remains flat on the day in a narrow 1.3752-75 range – with UK participants observing Bank Holiday.
  • CHF, JPY - The traditional safe havens vary with USD/JPY caged but still north of its 100 DMA (109.65) and sub-110.00. Meanwhile, the CHF experiences some weakness despite a lack of fresh catalysts, and as the weekly Swiss Sight Deposits printed yet another uptick. EUR/CHF has mounted its 21 DMA (1.0758) and looks for resistance at Friday’s 1.0797 high ahead of the round number.
  • NOK, SEK - The Scandis see a divergence as with the NOK the clear G10 outperformer – despite tailwinds from oil. Fundamental catalysts for the NOK remain light, but there could be technical factors at play. EUR/NOK declined from its 10.3000 high, and losses were exacerbated after a dip below the 100 DMA (10.2786) to a low sub-1.2500 ahead of its 100 DMA at 10.2259. The SEK is weighed on by the NOK/SEK cross reclaiming 0.99-status and climbing above 100 DMA (0.9921) on its way to parity.

In commodities, WTI and Brent front month futures are softer on the day following the aftermath of the landfall of Hurricane Ida, which hit as a Category 4 in Louisiana, although has since weakened to a Tropical Storm and is poised to devolve into a Tropical Depression later this evening. In terms of price action, futures popped higher at the re-open of electronic trade as some 95% of GoM production was shuttered, but prices have since waned. The contracts also experienced somewhat of divergence since the APAC session, and despite overall global supply being hit, the pause in economic activity in the region alongside the inactivity of Gulf of Mexico refiners has weighed on the demand for US crude. Moving on, OPEC+ will be the next major catalyst for crude markets as participants tackle the demand dent from Delta alongside US pressure to ramp up output. Further, the impact from Hurricane Ida provides OPEC+ with more room for manoeuvre, at least in September. Subsequently, sources suggested that producers are likely to maintain the current plan to increase output by 400k BPD, although the Kuwaiti oil minister floated the idea of deferring the planned hike – no discussions have yet taken place – further source reports are expected to drip down in the run-up to the main event. WTI Oct resides just north of USD 68/bbl (vs high USD 69.64/bbl) while its Brent counterpart meanders around of USD 72.50/bbl (vs high 73.69/bbl). Elsewhere, spot gold and silver trade flat around USD 1,815/oz and USD 24/oz as catalysts remain light and risk evens loom as the week goes on. As a reminder, LME markets are closed today due to the UK bank holiday. Meanwhile, Chinese steel rebar and hot-rolled coils rose overnight with traders citing a decline in inventory and a pickup in downstream demand.

US Event Calendar

  • 10am: July Pending Home Sales YoY, est. -8.5%, prior -3.3%
  • 10am: July Pending Home Sales (MoM), est. 0.3%, prior -1.9%
  • 10:30am: Aug. Dallas Fed Manf. Activity, est. 23.0, prior 27.3
Tyler Durden Mon, 08/30/2021 - 08:04

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There Goes The Fed’s Inflation Target: Goldman Sees Terminal Rate 100bps Higher At 3.5%

There Goes The Fed’s Inflation Target: Goldman Sees Terminal Rate 100bps Higher At 3.5%

Two years ago, we first said that it’s only a matter…

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There Goes The Fed's Inflation Target: Goldman Sees Terminal Rate 100bps Higher At 3.5%

Two years ago, we first said that it's only a matter of time before the Fed admits it is unable to rsolve the so-called "last mile" of inflation and that as a result, the old inflation target of 2% is no longer viable.

Then one year ago, we correctly said that while everyone was paying attention elsewhere, the inflation target had already been hiked to 2.8%... on the way to even more increases.

And while the Fed still pretends it can one day lower inflation to 2% even as it prepares to cut rates as soon as June, moments ago Goldman published a note from its economics team which had to balls to finally call a spade a spade, and concluded that - as party of the Fed's next big debate, i.e., rethinking the Neutral rate - both the neutral and terminal rate, a polite euphemism for the inflation target, are much higher than conventional wisdom believes, and that as a result Goldman is "penciling in a terminal rate of 3.25-3.5% this cycle, 100bp above the peak reached last cycle."

There is more in the full Goldman note, but below we excerpt the key fragments:

We argued last cycle that the long-run neutral rate was not as low as widely thought, perhaps closer to 3-3.5% in nominal terms than to 2-2.5%. We have also argued this cycle that the short-run neutral rate could be higher still because the fiscal deficit is much larger than usual—in fact, estimates of the elasticity of the neutral rate to the deficit suggest that the wider deficit might boost the short-term neutral rate by 1-1.5%. Fed economists have also offered another reason why the short-term neutral rate might be elevated, namely that broad financial conditions have not tightened commensurately with the rise in the funds rate, limiting transmission to the economy.

Over the coming year, Fed officials are likely to debate whether the neutral rate is still as low as they assumed last cycle and as the dot plot implies....

...Translation: raising the neutral rate estimate is also the first step to admitting that the traditional 2% inflation target is higher than previously expected. And once the Fed officially crosses that particular Rubicon, all bets are off.

... Their thinking is likely to be influenced by distant forward market rates, which have risen 1-2pp since the pre-pandemic years to about 4%; by model-based estimates of neutral, whose earlier real-time values have been revised up by roughly 0.5pp on average to about 3.5% nominal and whose latest values are little changed; and by their perception of how well the economy is performing at the current level of the funds rate.

The bank's conclusion:

We expect Fed officials to raise their estimates of neutral over time both by raising their long-run neutral rate dots somewhat and by concluding that short-run neutral is currently higher than long-run neutral. While we are fairly confident that Fed officials will not be comfortable leaving the funds rate above 5% indefinitely once inflation approaches 2% and that they will not go all the way back to 2.5% purely in the name of normalization, we are quite uncertain about where in between they will ultimately land.

Because the economy is not sensitive enough to small changes in the funds rate to make it glaringly obvious when neutral has been reached, the terminal or equilibrium rate where the FOMC decides to leave the funds rate is partly a matter of the true neutral rate and partly a matter of the perceived neutral rate. For now, we are penciling in a terminal rate of 3.25-3.5% this cycle, 100bps above the peak reached last cycle. This reflects both our view that neutral is higher than Fed officials think and our expectation that their thinking will evolve.

Not that this should come as a surprise: as a reminder, with the US now $35.5 trillion in debt and rising by $1 trillion every 100 days, we are fast approaching the Minsky Moment, which means the US has just a handful of options left: losing the reserve currency status, QEing the deficit and every new dollar in debt, or - the only viable alternative - inflating it all away. The only question we had before is when do "serious" economists make the same admission.

They now have.

And while we have discussed the staggering consequences of raising the inflation target by just 1% from 2% to 3% on everything from markets, to economic growth (instead of doubling every 35 years at 2% inflation target, prices would double every 23 years at 3%), and social cohesion, we will soon rerun the analysis again as the implications are profound. For now all you need to know is that with the US about to implicitly hit the overdrive of dollar devaluation, anything that is non-fiat will be much more preferable over fiat alternatives.

Much more in the full Goldman note available to pro subs in the usual place.

Tyler Durden Tue, 03/19/2024 - 15:45

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Household Net Interest Income Falls As Rates Spike

A Bloomberg article from this morning offered an excellent array of charts detailing the shifts in interest payment flows amid rising rates. The historical…

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A Bloomberg article from this morning offered an excellent array of charts detailing the shifts in interest payment flows amid rising rates. The historical anomaly was both surprising and contradicted our priors.

10 Key Points:

  1. Historical Anomaly: This is the first time in the last fifty years that a Federal Reserve rate hike cycle has led to a significant drop in household net interest income.
  2. Interest Expense Increase: Since the Fed began raising rates in March 2022, Americans’ annual interest expenses on debts like mortgages and credit cards have surged by nearly $420 billion.
  3. Interest Income Lag: The increase in interest income during the same period was only about $280 billion, resulting in a net decline in household interest income, a departure from past trends.
  4. Consumer Debt Influence: The recent rate hikes impacted household finances more because of a higher proportion of consumer credit, which adjusts more quickly to rate changes, increasing interest costs.
  5. Banks and Savers: Banks have been slow to pass on higher interest rates to depositors, and the prolonged period of low rates before 2022 may have discouraged savers from actively seeking better returns.
  6. Shift in Wealth: There’s been a shift from interest-bearing assets to stocks, with dividends surpassing interest payments as a source of unearned income during the pandemic.
  7. Distributional Discrepancy: Higher interest rates benefit wealthier individuals who own interest-earning assets, whereas lower-income earners face the brunt of increased debt servicing costs, exacerbating economic inequality.
  8. Job Market Impact: Typically, Fed rate hikes affect households through the job market, as businesses cut costs, potentially leading to layoffs or wage suppression, though this hasn’t occurred yet in the current cycle.
  9. Economic Impact: The distribution of interest income and debt servicing means that rate increases transfer money from those more likely to spend (and thus stimulate the economy) to those less likely to increase consumption, potentially dampening economic activity.
  10. No Immediate Relief: Expectations for the Fed to reduce rates have diminished, indicating that high-interest expenses for households may persist.

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TJ Maxx and Marshalls follow Costco and Target on upcoming closures

Many of these stores have information customers need to know.

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U.S. consumers have come to increasingly rely on the near ubiquity of convenience stores and big-box retailers. 

Many of us depend on these stores being open practically all day, every day, even during some of the biggest holidays. After all, Black Friday beckons retail stores to open just hours after a Thanksgiving Day dinner in hopes of attracting huge crowds of shoppers in search of early holiday sales. 

Related: Walmart announces more store closures for 2024

And it's largely true that before the covid pandemic most of our favorite stores were open all the time. Practically nothing — from inclement weather to bad news to holidays — could shut down a major operation like Walmart  (WMT)  or Target  (TGT)

Then the pandemic hit, and it turned everything we thought we knew about retail operations upside down. 

Everything from grocery stores to shopping malls shut down in an effort to contain potential spread. And when they finally reopened to the public, different stores took different precautionary measures. Some monitored how many shoppers were inside at once, while others implemented foot-traffic rules dictating where one could enter and exit an aisle. And almost every one of them mandated wearing masks at one point or another. 

Though these safety measures seem like a distant memory, one relic from the early 2020s remains firmly a part of our new American retail life. 

A woman in a face mask shopping in the HomeGoods kitchen aisle.

Jeff Greenberg/Getty Images

Store closures announced for spring 2024

Many retailers have learned to adapt after a volatile start to this third decade, and in many ways this requires serving customers better and treating employees better to retain a workforce. 

In some cases, the changes also reflect a change in shopping behavior, as more customers order online and leave more breathing room for brick-and-mortar operations. This also means more time for employees. 

Thanks to this, big retailers have recently changed how they operate, especially during holiday hours, with Walmart recently saying it would close during Thanksgiving to give employees more time to spend with loved ones.

"I am delighted to share that once again, we'll be closing our doors for Thanksgiving this year," Walmart U.S. CEO John Furner told associates in a video posted to Twitter in November. "Thanksgiving is such a special day during a very busy season. We want you to spend that day at home with family and loved ones." 

Other retailers have now followed suit, with Costco  (COST) , Aldi, and Target all saying they would close their doors for 24 hours on Easter Sunday, March 31. 

Now, the stores that operate under TJX Cos.  (TJX)  will also shut down during the holiday, including HomeGoods, TJ Maxx and Marshalls

Though it closed on Thanksgiving, Walmart says it will remain open for shoppers on Easter. 

Here's a list of stores that are closing for Easter 2024: 

  • Target
  • Costco
  • Aldi
  • TJ Maxx
  • Marshalls
  • HomeGoods
  • Publix
  • Macy's
  • Best Buy
  • Apple
  • ACE Hardware

Others are expected to remain open, including:

  • Walmart
  • Ikea
  • Petco
  • Home Depot

Most of the stores closing on Sunday will reopen for regular business hours on Monday. 

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