Fed rate cuts are a mistake: Oaktree chairman

We’re going to hear from a busy lineup of Federal Reserve officials on Friday, and they may shed more light on why the bank was so divided on this week’s interest rate cut.

Our call of the day, from Oaktree Capital’s billionaire co-chairman Howard Marks, also weighs in on the Fed as he says the economy doesn’t really need the rate cuts it’s been doling out.

“Our economy is the best performing in the world of major economies. So I’m happy with it and I don’t think I’d be stimulating at this time,” Marks in an interview. “Ten years later, do you want to cut rates to extend an economic expansion which is the longest in history? Some question, I question whether that’s a legitimate goal.”

The Fed should be controlling inflation and supporting growth to create jobs, but not stopping a recession, he said. Not that he’s worried too much about the latter, citing consumer strength, even as the manufacturing sector struggles with trade-war angst.

Opinion:

It’s also not the Fed’s job to bail out an ailing stock market, says Marks.

“OK, so you want to create jobs, OK maybe you want to prevent recessions, which I don’t think you can do in perpetuity. But do you want to cut rates because the stock market is going down? I think that’s totally illegitimate,” says Marks.

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The market

The Dow  , S&P    and Nasdaq   are slightly up at the start. Gold is up, along with oil , and the dollar .

Europe’s stocks are grinding higher, and struggled too. In China, the People’s Bank of China followed this week’s Fed rate cut with a trim to its one-year loan prime rate, as expected.

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The chart

Investors have been on the move lately — out of bonds and into stocks. Our chart of the day, from Bank of America Merrill Lynch makes that abundantly clear. In the past two weeks, $34 billion has flowed out of stocks, with $10 billion coming out of government bonds, the bank notes.

The buzz

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Ahead of a climate-change summit at the United Nations in New York next week, got a global #climatestrike rolling, “demand an end to the age of fossil fuels.”

Meanwhile, plastic straws, dog leashes and Christmas tree lights are among the 437 Chinese products the White House administration will .

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Facebook  CEO Mark Zuckerberg and one lawmaker who suggested he sell WhatsApp and Instagram to improve the social-media group’s privacy shortcomings. Separately, a Facebook employee at the group’s headquarters on Thursday.

Household debt is the only data on tap. Fed speakers are rolling in with, St Louis Fed President James Bullard saying he wanted a this week over worrying economic signals. Appearances by Fed Vice Chairman Richard Clarida, and New York, Boston and Dallas Fed Presidents John Williams, Eric Rosengren and Robert Kaplan are all still to come Friday.

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The stat

$320 million — That’s how much Mitsubishi Corp. due to unauthorized crude-oil derivative trades by one of its subsidiaries based in Singapore. The bank says it’s investigating.

The quote Oracle’s Larry Ellison, pictured October 2018.

“They have nothing…No technology. And no loyalty.” — That was Oracle founder and executive chairman Larry Ellison on ride-share group Uber , which he said, along with real estate group WeWork is “almost worthless,” . WeWork declined to comment on Ellison’s remarks. Uber didn’t immediately respond to a request for comment.

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