Feb 23, 2021
Premarket stocks: A spike in prices could change everything for Wall Street
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Wall Street is increasingly concerned that a wave of spending when the economy reopens could cause prices to spike, spoiling the financial market party that's been raging since last March.© Nicole Pereira/New York Stock Exchange/AP In this photo provided by the New York Stock Exchange, traders work on the floor, Friday, Feb. 19. 2021, in New York. Stocks moved higher in morning trading Friday, recovering some ground after three straight days of losses. Investors remain focused on the future of the COVID-stricken economy and the potential for more stimulus to fix it. (Nicole Pereira/New York Stock Exchange via AP)
What's happening: Government bond yields — which move opposite prices — have jumped, signaling rising optimism about the economic recovery. But a surging economy can also mean rising prices.
Investors are worried that higher inflation would pressure central banks like the Federal Reserve to hike interest rates or taper bond purchases sooner than expected. After a long period of easy access to money, that could trigger a market tantrum.
"The economy is more leveraged than in previous eras, so a bit of Fed tightening eventually can do more damage," John Normand, JPMorgan's head of cross-asset fundamental strategy, said in a recent note to clients.
Monitoring prices is a key job of central banks. The Federal Reserve targets long-term inflation of 2%.
Such a goal has proved elusive in recent years. Inflation following the 2008 financial crisis remained extremely muted. But that could change in the post-pandemic era as people sprint to restaurants, movie theaters and vacation hotspots this spring and summer. Another big stimulus package in the United States could add fuel to the fire.
"The surprising jump in January US retail sales may offer a glimpse of things to come," Jean Boivin, head of the BlackRock Investment Institute, told clients Monday.
Such anxiety is starting to appear in bond markets, and central bankers are paying attention. A rise in government bond yields can affect borrowing rates, and make it harder for governments to manage large piles of debt.
European Central Bank President Christine Lagarde said Monday that her institution is "closely monitoring" longer-term bond yields, emphasizing that "banks use those yields as a reference when setting the price of their loans to households and firms."
Many on Wall Street think central banks are prepared to look past inflation noise, letting the economy run hotter than they normally would in order to maintain favorable financing conditions that will juice the recovery.
"We expect central banks to lean against any market concerns around rising debt levels and to keep interest rates low for now," Boivin said.
There's a lot is riding on that assumption. The recent run-up in stocks is thanks in part to super-low interest rates, which have boosted interest in riskier assets.
See here: The Nasdaq Composite fell sharply on Monday. Apple's stock dropped 3%, while Microsoft shares dipped 2.7%. Corporate bonds and even bitcoin are exposed, too.
Trading on Tuesday didn't look much better, with all three major stock indexes in the red for much of the session. But with a little help from Federal Reserve Chairman Jerome Powell, most of the losses were reversed.
Although the central banker acknowledged that inflation could rise as the economy reopens fully, he reiterated in his testimony before the Senate Banking Committee Tuesday that it is unlikely to spark an immediate need for higher interest rates.
"The economy is a long way from our employment and inflation goals," Powell said in prepared remarks, signaling once again that the central bank isn't ready to raise interest rates in the near term.
The S&P 500 snapped a five-day losing streak and closed up 0.1%. The Dow also eked out a small gain, finishing up 0.1% or 16 points. The Nasdaq Composite, which had tumbled more than 3% at its low point, closed down 0.5%.
"If the narrative on high debt levels, combined with rising inflation, were to change, it could eventually undermine the markets' faith in the low-rate regime — with implications across asset classes," Boivin noted.
After GameStop, momentum builds for $800 billion tax
Uncle Sam is in search for a pot of gold that could ease the pain of trillion-dollar deficits. And some believe Wall Street might have the answer.
For more than a decade, progressives have tried and failed to impose a financial transaction tax. But there is new momentum for such a levy as the national debt skyrockets during the pandemic, and after the GameStop frenzy highlighted concerns about market structure, my CNN Business colleague Matt Egan reports.
The White House told CNN Business that a financial transaction tax on GameStop-like trading deserves additional study and can be part of a greater evaluation of such a tax for revenue and market stability. The leading proposal amounts to a $1 tax on every $1,000 of transactions.
A 0.1% tax on stock, bond and derivative transactions could raise $777 billion for the federal government over a decade, according to a 2018 estimate by the nonpartisan Congressional Budget Office. The top 1% of American households would pay 40% of the total amount of the tax, while the bottom 60% would pay just over 11%, the Urban-Brookings Tax Policy Center has found.
But there is a deep divide over the wisdom of a levy.
Proponents see it as a smart way to simultaneously curb predatory trading while funding ambitious programs aimed at easing America's inequality problem. Critics, meanwhile, paint such a tax as a nightmare. Wall Street, which would take a hit, is already warning such a policy would backfire on Main Street, raising trading costs and depressing market liquidity.
"The odds are still against a financial transaction tax being enacted, but for the first time in a decade this proposal should be considered as a viable policy option rather than just another talking point," said Isaac Boltansky, director of policy research at Compass Point Research & Trading.
Watch this space: Last week, House Financial Services Chair Maxine Waters said she's "very interested" and "certainly looking at" a financial transaction tax. Will this become a priority for Congress after President Joe Biden's stimulus bill?
Facebook has 'friended' Australia again
Facebook will restore news pages in Australia, capping a bitter dispute between the social media giant and the country's government.
Remember: Australian lawmakers have been pushing legislation that would allow certain media outlets to bargain with tech companies so they could be paid for distribution of the news they produce. Both parties would enter arbitration if they can't reach an agreement.
In protest, Facebook stopped people from finding news on its platform in Australia last week, a decision that produced a global backlash and generated negative headlines for the company.
The latest: On Tuesday, the Australian government said it would amend the code so that arbitration would only be used as a "last resort" following a period of "good faith" mediation. As a result, Facebook said it would restore news in Australia "in the coming days."
"The government has clarified we will retain the ability to decide if news appears on Facebook so that we won't automatically be subject to a forced negotiation," Campbell Brown, Facebook's vice president for global news partnerships, said in a statement.
Big picture: Policymakers around the world have closely watched what's happening in Australia. On Monday, Microsoft joined forces with publishers to call for an Australia-style system in Europe. Canada's government has said it plans to introduce legislation in the coming months.
That means that the agreement reached between Facebook and Canberra could be replicated globally, sparking major changes to how the biggest tech companies run their businesses.
Home Depot, Macy's and Thomson Reuters reported results before US markets open. Square follows after the close.
Coming tomorrow: Powell testifies before the House Financial Services Committee.
-- CNN Business' Anneken Tappe contributed to this story.
News Source: msn.com
Tags: government happening the economy reopens the federal reserve the federal reserve the economy interest rates tech companies said it in the coming central banks in australia restore news could change but cnn business the central debt levels wall street
Maquette – The Gateways Full Chapter Walkthrough
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The Gateways introduces a new mechanic to Maquette, using crystals to pass through energy walls. This area gets a little complicated, so we will lay it all out step by step below.© Provided by GamePur
The central area still forms a smaller version of the overall level that will allow you to manipulate the size of certain items.© Provided by GamePur
You will begin in a sandy area with a house in front of you. Walk around to the rear of the house to find a small alcove with a round, pink crystal inside. Bring the crystal to the front gate, then use it on the taller pink crystal there to cause the gate to open. Make sure you pick up the round crystal and bring it with you into the level.© Provided by GamePur
Walk past the central area to a pink house on the far side. You can walk in the front as long as you are carrying the pink crystal. Go to the back of the house, then right into the garden, then upstairs, and pull the lever, releasing a blue crystal.© Provided by GamePur
Drop the pink crystal and pick up the blue one and place it in the garden, then pick up the pink crystal again and leave through the front of the house.© Provided by GamePur
Head to the area in the center and it is time to start manipulating the size of our crystals. Find the blue house on the model, then place the pink crystal between it and the real blue house. You will notice that on the model of the blue house a small pink crystal is shown on the back wall, above a ramp.© Provided by GamePur
Pink up the small pink crystal that will now be outside the blue house in the model, and let it roll down the ramp of the small blue house where it will be stopped by a blue energy wall.© Provided by GamePur
Go to the garden of the small pink house in the central model and grab the blue crystal from the garden that we left there earlier.© Provided by GamePur
Use this small blue crystal to enter the blue house, then use it to deactivate the blue wall that is stopping the pink crystal from rolling inside. Grab the pink crystal and head through the pink wall on the left. Inside, you will get a cutscene about the two story characters.© Provided by GamePur
A green crystal will appear in the room after the cutscene is over. Hit the switch on the far wall to open the door, then go outside with the pink crystal. Drop the pink crystal on the ground outside, go to the model in the center and pick up the small pink crystal, then take it to the small gree house and drop it on the upstairs green energy floor.© Provided by GamePur
Go grab the big green crystal, then go to the small green house in the model. Use the crystal to remove the green energy floor, allowing the pink crystal to drop down inside, then make your way to the big green house and head inside.
Pink up the pink crystal and walk into the black to get another cutscene. After the cutscene you will be in the house, and to your left will be a large golden key.© Provided by GamePur
Pick up the key and walk it down the corridor, then push it through the window in front of you. Pick up the pink crystal and leave through the front, then switch to the green crystal and head to the model where you will find a small golden key near the wall closest to you.© Provided by GamePur
Pick it up and drop it on the model just beside the lock at the building where you first began this area. Walk back to the first area and use the golden key to open the door. Inside is a green energy wall, so go and grab the green crystal.
Don’t go back just yet, we have some moves we need to make, as inside the green wall is another pink wall. Drop the green crystal in the street outside the big green house, then pick up the small version from the model. Go into the big green house to the place where you left the pink crystal.© Provided by GamePur
Push the small green crystal through the holes in the grating and it drop outside, then grab the pink crystal and head inside. Take the short stairs down to the left and use the lever to open the door and head back outside.
Drop the pink crystal in the yard, then pick up the green crystal and leave the area. Drop the green crystal in the yard of the small model, near the green door in the very first area.© Provided by GamePur
Now, pick up the small pink crystal from the yard of the small green house in the central model, and take it to the small first area house with the sand. On the left side is a round window you can push it through and drop it inside.© Provided by GamePur
Grab the small green crystal and head to the first sandy area, then go inside the green energy wall. Switch to the pink crystal and go through the pink energy wall and another cutscene will play. When it ends, use the level to open the door and a bridge will form, allowing you to grab a new item in front of you.© Provided by GamePur
Keep the pink crystal in your hand and try and leave through the front and a wall will appear, with a new pink crystal behind it. This section get a little odd, so follow the steps carefully.
Turn around and go back up the ramp to the weird cog and you will notice the fence on the right is broken, allowing you to jump to the rock.© Provided by GamePur
Jump over to it, then jump onto the wall, drop down on the other side and turn left. You will see a giant version of the wall from earlier and the crystal, so touch the taller crystal with the on you are carrying.
They will dissolve and you can turn around, jump back up the steps, and go into the alcove in front of you. Inside you will find a switch on the left. Pull it to drop a platform, then hit the next switch to raise it again.© Provided by GamePur
Drop the crystal in the street, then turn around and grab the cog and place it in the wall of the model directly across from the sandy house.
(this guide is under construction)
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