Latest news with #NathanThooft
Bloomberg
2 days ago
- Business
- Bloomberg
Wall Street Wrestles With Hedging Conundrum as Valuations Swell
Nathan Thooft is no market bear. His team at Manulife Investment Management, which oversees $160 billion, still holds a modest overweight in stocks. But as US markets jump from record to record, he's been trimming big winners, buying bonds and adding a layer of protection with longer-dated options. 'Markets are getting overly complacent,' said Thooft, the chief investment officer of multi-asset solutions at the Boston-based firm. Over the past nine months, his team has steadily reduced exposure to high-yield credit, shifted toward non-US equities, and redeployed capital into safer corners. 'We have had a massive rebound since the tariff driven lows in April with limited pullbacks. Valuations are stretched in many markets. Risk indicators have fallen to the lows of the year.'
Boston Globe
07-04-2025
- Business
- Boston Globe
Asian markets plunge with Japan's Nikkei diving nearly 8 percent after the big meltdown on Wall Street
Among the biggest losers was Mizuho Financial Group, whose shares sank 11.3%. Mitsubishi UFJ Financial Group's stock lost 9.9% as investors panicked over how the trade war may affect the global economy. Chinese markets often don't follow global trends, but they also tumbled. Hong Kong's Hang Seng dropped 9.4% to 20,703.30, while the Shanghai Composite index lost 6.2% to 3,134.98. Get Starting Point A guide through the most important stories of the morning, delivered Monday through Friday. Enter Email Sign Up E-commerce giant Alibaba Group Holdings fell 10% and Tencent Holdings, another tech giant, lost 9.4%. Advertisement South Korea's Kospi lost 4.1% to 2,363.82, while Australia's S&P/ASX 200 lost 3.8% to 7,377.70, recovering from a loss of more than 6%. Oil prices sank further, with U.S. benchmark crude down 4%, or $2.50, at $59.49 per barrel. Brent crude, the international standard, gave up $2.25 to $63.33 a barrel. In currency trading, the U.S. dollar fell to 146.70 Japanese yen from 146.94 yen. The yen is often viewed as a safe haven in times of turmoil. The euro slipped to $1.0926 from $1.0962. On Friday, Wall Street's worst crisis since COVID slammed into a higher gear. The S&P 500 plummeted 6% and the Dow plunged 5.5%. The Nasdaq composite dropped 5.8%. Advertisement Market observers expect investors will face more wild swings in the days and weeks to come, with a short-term resolution to the trade war appearing unlikely. Nathan Thooft, chief investment officer and senior portfolio manager at Manulife Investment Management, said more countries are likely to respond to the U.S. with retaliatory tariffs. Given the large number of countries involved, 'it will take a considerable amount of time in our view to work through the various negotiations that are likely to happen.' 'Ultimately, our take is market uncertainly and volatility are likely to persist for some time,' he said. The losses came after China matched President Donald Trump's big raise in tariffs announced last week, upping the stakes in a trade war that could end with a recession that hurts everyone. Even a better-than-expected report on the U.S. job market, usually the economic highlight of each month, wasn't enough to stop the slide. So far there have been few, if any, winners in financial markets from the trade war, and China's response to the U.S. tariffs caused an immediate acceleration of losses in markets worldwide. The Commerce Ministry in Beijing said it would respond to the 34% tariffs imposed by the U.S. on imports from China with its own 34% tariff on imports of all U.S. products beginning April 10, among other measures. The United States and China are the world's two largest economies. A big fear is that the trade war could cause a global recession. If it does, stock prices may need to come down even more than they have already. The S&P 500 is down 17.4% from its record set in February. Advertisement Trump has said Americans may feel 'some pain' because of tariffs, but he has also said the long-term goals, including getting more manufacturing jobs back to the United States, are worth it. He seemed unfazed as millions of investors lost big chunks of their nest eggs. From Mar-a-Lago, his private club in Florida, he headed to his golf course a few miles away after writing on social media that 'THIS IS A GREAT TIME TO GET RICH.' The Federal Reserve could cushion the blow of tariffs on the economy by cutting interest rates, which can encourage companies and households to borrow and spend. But Fed Chair Jerome Powell said Friday that tariffs could drive up expectations for inflation and lower rates could fuel still more price increases. 'Our obligation is to keep longer-term inflation expectations well anchored and to make certain that a one-time increase in the price level does not become an ongoing inflation problem,' Powell said. Much will depend on how long Trump's tariffs stick and what kind of retaliations other countries deliver. Some of Wall Street is holding onto hope that Trump will lower the tariffs after prying 'wins' from other countries following negotiations. Stuart Kaiser, head of U.S. equity strategy at Citi, wrote in a note to clients on Sunday that earnings estimates and stock values still don't reflect the full potential impact of the trade war. 'There is ample space to the downside despite the large pullback,' he said. The Trump administration showed no signs of relenting on the tariffs that have caused trillions of dollars in losses. Advertisement Appearing on Fox News Channel's 'Sunday Morning Futures,' White House trade adviser Peter Navarro echoed the president when he said investors shouldn't panic because the administration's approach to trade would usher in 'the biggest boom in the stock market we have ever seen.' 'People should just sit tight, let that market find its bottom, don't get shook out by the panic in the media,' Navarro said. AP Business Writer Paul Harloff contributed.
Yahoo
02-03-2025
- Business
- Yahoo
Bonds Walloping Stocks Shows Wall Street Growth Agita Ramping Up
(Bloomberg) -- For anyone worried about the economy, recent reports gave ample reason to fret. Flailing consumer confidence, a big jump in jobless claims, gloomy housing data, and more. Cuts to Section 8 Housing Assistance Loom Amid HUD Uncertainty The Trump Administration Takes Aim at Transportation Research Shelters Await Billions in Federal Money for Homelessness Providers NYC Office Buildings See Resurgence as Investors Pile Into Bonds Remembering the Landscape Architect Who Embraced the City Anxiety fueled by the latest economics reports has been taking hold across markets. While a late-day rally boosted the S&P 500 Friday, investor sentiment has been deteriorating, with even a merciful inflation report still flashing warnings on consumer spending. The result: Treasuries are off to their strongest start to a year since the crisis months of early 2020, while stocks have nearly wiped out 2025 gains. Friday's big bounce in equities, which pared a second straight weekly loss, was one bright spot in otherwise volatile trading stretch. Now, with the so-called Trump trade euphoria evaporating, big money managers at Manulife Asset Management and Penn Mutual Asset Management have been paring equity positions while building bond exposure. 'If the consumer weakens materially and corporations pull back on growth plans, economic growth deterioration becomes a major headwind,' said Nathan Thooft at Manulife Investment Management in Boston, which oversees $160 billion. 'There is little room for policy missteps' February was a microcosm for the cross-asset divergence. A proxy for longer-dated government bonds gained 5.3% while an ETF tracking large-cap US stocks fell 1.3%. That's the biggest outperformance for the Treasury haven since June 2022. Mounting concern that something — perhaps tariff threats, a stubborn Federal Reserve, or retrenching consumers — is stressing the American growth engine has been casting a risk-off mood. Even with the sudden Friday bounce, potentially spurred by constructive tariff news, the Nasdaq 100 tumbled more than 3% to its worst week this year, while the S&P 500 fell about 1% on the week. Bitcoin slid to the lowest level since early November and is down more than 20% from its all-time high. Ten-year Treasury yields that approached 4.8% in January now sit near 4.2%. Wall Street's 'fear gauge' — the VIX index of equity volatility — along with similar measures of credit gyrations were around their highest levels of 2025. The US economic outlook is getting murky, with the gap between how data actually comes in versus forecasts at the lowest in seven months, Citigroup Inc. data show. Consumer confidence is the lowest since 2021, personal spending unexpectedly decreased, and virtually no reading on the American housing market has met forecasts over the last 10 days. On Friday, Atlanta Fed forecast showed that the US gross domestic product may be set for a 1.5% annualized decline in the current quarter, a sizable markdown from the 2.3% pace of growth expected just days ago. While the market reaction has been swift, it also strikes some as shortsighted, particularly given how quickly growth and inflation keep alternating as the bugaboo of choice among investors. A lot of bad economic news has come in reports based on surveys, according Cayla Seder, a macro multi-asset strategist at State Street Global Markets. With income rising at 0.9% monthly pace and the unemployment rate hovering around 4%, it's too early to declare the expansion is in serious trouble, she says. 'So far weakness has been concentrated in soft data, not hard data,' said Seder. 'We still see a strong aggregate consumer, even if there are fewer tailwinds' Still, sentiment in markets has been souring fast, itself a potential economic irritant given how much American wealth is held in risky assets. Pessimism among individual investors about the short-term outlook for stocks jumped to its third-highest level since 2009, according to a survey from the American Association of Individual Investors. Blue-chip corporate-bond spreads rose to the highest level in more than three months. Uneasiness about looming deadlines for US tariffs has added to Wall Street's angst. Uncertainty about the actual implementation of the levies remains high as the administration has previously delayed and changed the deadlines. To George Cipolloni, portfolio manager at Penn Mutual Asset Management, which oversees $39 billion, the new administration's push for fiscal prudence will put more pressure on markets. He has reduced his exposure to US stocks while adding to long duration investment grade names to prepare for higher volatility. 'There are a lot of changes with this new administration causing some consternation among company execs and global leaders,' said Cipolloni. 'After setting a standard of enormously wasteful spending, the markets could need a period of adjustment and could be subject to significant volatility.' --With assistance from Isabelle Lee. Rich People Are Firing a Cash Cannon at the US Economy—But at What Cost? Can Dr. Phil's Streaming Makeover Find an Audience in the MAGA Era? Trump's SALT Tax Promise Hinges on an Obscure Loophole Warner Bros. Movie Heads Are Burning Cash, and Their Boss Is Losing Patience Walmart Wants to Be Something for Everyone in a Divided America ©2025 Bloomberg L.P.
