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Bank of Japan Governor Haruhiko Kuroda. Photo: Alastair Pike /AFP/Getty Images
As the Fed approaches a likely rate cut at the end of the month — in the face of 50-year low unemployment, rising wages and strong consumer spending — it could not have been a better time for a visit to Washington from Bank of Japan Governor Haruhiko Kuroda.
What it means: Kuroda has instituted some of the world’s most extreme and unorthodox monetary policies, including directing the central bank to buy Japanese stocks. More analysts are starting to believe such policies will be adopted in other places, including the U.S.
Catch up quick:
"We live in a time where the book on monetary policy continues to be rewritten ... just about every day," IMF acting managing director David Lipton said. "Of course, all serious monetary policy students will have read the book on Japan."
What's next: “If the ECB is really going to try to restimulate the economy in Europe, they are going to have to buy equities,” BlackRock CEO Larry Fink said on CNBC Friday.
The last word: Asked whether it would be a good idea for other central banks to follow his lead, Kuroda said that in light of the current economic environment, "that might be the case."
The S&P 500's 19% year-to-date return this year is no reason to sell, especially in light of July's expected Fed rate cut, strategists from LPL Financial argue.
What they're saying: “Even though fundamentals may not justify the market going much above our 3,000 forecast on the S&P 500, with the Fed tailwind behind us, we’ll ride the wave for now,” LPL chief investment strategist John Lynch said in a note.
By the numbers: The last 5 times the Fed started cutting rates outside of recessions, the S&P rose an average of 11.1% over the next 6 months and 15.8% over the next year,
Investors unloaded AT&T and CBS stocks Monday after at least 6.5 million customers lost their access to CBS over the weekend.
What happened: The carriage agreement between AT&T's DirecTV and U-verse and the country's No. 1 broadcaster expired without a new deal Friday night and customers in New York, LA and a host of major markets around the country were blacked out on CBS.
The last word: CBS' stock closed 1.3% lower and AT&T's stock dropped 2% Monday.
A new survey from CreditCards.com finds that in addition to being the most sought after credit cards, ones that offer cash back were the most likely to be redeemed (88% did so at least once).
The Atlantic's Jerry Useem writes: "[A]nother effort is under way to raid corporate assets at the expense of employees, investors, and taxpayers."
What's happening: Data released this year shows companies spent more than $1 trillion in 2018 to buy back their own stock, far outpacing what they spent on R&D. Buybacks accounted for more than half of earnings per share growth last year, and companies are expected to spend more to buy back stock this year.
The big picture: Useem argues that buybacks are not just detrimental to the market and investors, they're eroding U.S. companies by incentivizing executives to pump stock prices at the expense of workers and the long-term interests of their firms.
Quick take: "By systematically draining capital from America’s public companies," Useem writes, "the habit threatens the competitive prospects of American industry — and corrupts the underpinnings of corporate capitalism itself."
Go deeper: The Stock-Buyback Swindle