{"id":1226,"date":"2023-10-13T20:05:29","date_gmt":"2023-10-13T20:05:29","guid":{"rendered":"https:\/\/infundpros.com\/finance\/jamie-dimon-says-its-the-most-dangerous-time-the-world-has-seen-in-decades-here-are-all-the-ripple-effects\/"},"modified":"2023-10-13T20:05:30","modified_gmt":"2023-10-13T20:05:30","slug":"jamie-dimon-says-its-the-most-dangerous-time-the-world-has-seen-in-decades-here-are-all-the-ripple-effects","status":"publish","type":"post","link":"https:\/\/infundpros.com\/?p=1226","title":{"rendered":"Jamie Dimon says it\u2019s \u2018the most dangerous time the world has seen in decades.\u2019 Here are all the ripple effects."},"content":{"rendered":"

JPMorgan Chase & Co.
\n JPM,
\n +1.56%<\/bg-quote>
\n CEO Jamie Dimon didn\u2019t mince words when the bank reported its third-quarter results on Friday. <\/p>\n

It was a very good quarter for the largest U.S. bank, but Dimon said: \u201cThis may be the most dangerous time the world has seen in decades.\u201d <\/p>\n

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In JPM\u2019s earnings press release, Dimon referred to the war between Russia and Ukraine and Israel\u2019s war against and Hamas, and the potential for various disruptions to international trade and commodity markets. But he also said \u201cthe largest peacetime fiscal deficits ever are increasing the risks that inflation remains elevated and that interest rates rise further from here.\u201d<\/p>\n

Vivien Lou Chen works through a complicated set of circumstances affecting the bond market<\/strong>, including traders\u2019 expectations for Federal Reserve Policy and oil prices under various scenarios.<\/p>\n

West Texas Intermediate crude oil for November delivery
\n CL.1,
\n +5.70%<\/bg-quote>
\n settled at $82.91 on Thursday, only 1% higher than a week earlier. But on Friday oil prices jumped early after Israel ordered more than a million residents of Gaza to evacuate to the south.<\/p>\n

More coverage of markets:<\/p>\n

Housing, high mortgage interest rates and hope<\/h2>\n
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This week the national average interest rate on a 30-year mortgage loan rose to 7.57%, according to Freddie Mac. Prospective home buyers already know that potential sellers are reluctant to move because so many of them have low-rate loans locked-in. <\/p>\n

But the market has been perking up. There is hope in two important aspects of residential real estate, according Redfin.<\/p>\n

And this may fascinate you. Aarthi Swaminathan explains how it is possible to find a home for sale with an assumable mortgage loan, featuring a low interest rate.<\/p>\n

Related: <\/strong>Three reasons investors have fallen in love with home builders\u2019 stocks<\/p>\n

Is it finally time to shift into bonds?<\/h2>\n
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The dramatic rise in long-term interest rates is making life difficult for prospective home buyers, or people looking to move, but it is also setting up opportunities for investors.<\/p>\n

When you see headlines about plunging bond prices, there can be opportunities because bonds\u2019 yields have risen. Following four decades of declining bond interest rates, and a slower rise for long-term yields after the Federal Reserve began its cycle of increases for short-term rates, this may be the right time for investors to shift their portfolios more toward fixed income.<\/p>\n

Pimco makes the case that bonds can provide downside protection for investors, in addition to income, in the event of a recession, as Joy Wiltermuth reports. <\/p>\n

More bond market coverage:<\/p>\n

Should you try to avoid taxes with municipal bonds?<\/h2>\n
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There are times when municipal bonds \u2014 most of which pay interest that is exempt from federal income taxes and from state taxes if issued within your state \u2014 have such low interest rates that they are only worth considering if you are in one of the highest tax brackets. This isn\u2019t one of those times, especially if you live in a state with a high income-tax rate.<\/p>\n

Here\u2019s a detailed explanation of how to calculate fully taxable equivalent yields for municipal bonds and U.S. Treasury bonds, which are exempt from state and local taxes.<\/p>\n

A different angle for investors:<\/strong> Dividend stocks are dirt cheap. It may be time to back up the truck.<\/p>\n

Another twist on high bond rates \u2014 credit problems<\/h2>\n

High interest rates bring new opportunities for income-seeking savers and investors. The flip side is that borrowers face much higher interest rates:<\/p>\n

The risk of defaults is increasing as companies\u2019 debt matures and renewal rates soar. And the pace of corporate bankruptcies has been increasing.<\/p>\n

Meanwhile, interest rates on auto loans, for people with less-than-stellar credit, have climbed to 17%-22%, which investors are shrugging off, for now.<\/p>\n

Related:<\/strong> Americans are less confident they can make the minimum payments on their credit cards, New York Fed says<\/p>\n

Exxon\u2019s shale move and a happy exit for Pioneer\u2019s shareholders<\/h2>\n
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On Wednesday, Exxon Mobil Corp.
\n XOM,
\n +3.22%<\/bg-quote>
\n finally announced an agreement to acquire Pioneer Natural Resources Co.
\n PXD,
\n +3.35%<\/bg-quote>
\n in an all-stock deal valued at $59.5 billion. <\/p>\n

Exxon\u2019s expansion of its shale drilling business in the Permian Basin in Texas and New Mexico is the largest deal in a tempered M&A market this year.<\/p>\n

More reaction:<\/p>\n