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In today's big story, we're looking at Tesla's earnings report and what comes next for the EV maker. The big storyTesla's turnaround planJADE GAO/AFP via Getty Images; Chelsea Jia Feng; BIBad news: Tesla's earnings report was worse than expected. AdvertisementPerhaps that's why Musk spent so much of the earnings call discussing autonomy and the progress made with Tesla's Full Self-Driving software . Musk told analysts on the earnings call that Tesla is the majority of his work . If investors vote against the package at Tesla's annual meeting in June, who knows where Musk — and his AI ambitions — will end up .
Persons: , Chelsea Jia Feng, Elon Musk, Tesla, Musk, hasn't, Insider's Linette Lopez, Matt Anderson, Tyler Le, JPMorgan's Marko Kolanovic, Kolanovic, Cathie, Stocks, Goldman Sachs, Gerard Julien, Elon Musk's, Carl Godfrey, Joe Biden, Dan DeFrancesco, Jordan Parker Erb, Hallam Bullock, George Glover Organizations: Business, Service, Getty Images, Tesla, Getty, EV, Musk's, Intel, Micron Technology, Microsoft, BI America, Amazon, Boeing, Meta, IBM, US Locations: Delaware, Outflows, United States, China, Idaho, New York, London
Don't be fooled by Monday's bounce, JPMorgan's Marko Kolanovic warned. The S & P 500 entered the week down more than 5% from an all-time high reached earlier in the year. A correction is generally defined as a 10% drop from a 52-week high. "Market concentration has been very high, and positioning extended, which are typically red flags, at risk of a reversal." "The combination of these macro factors increases the downside risks, and suggests that more Defensive trading should be appropriate," he added.
Persons: JPMorgan's Marko Kolanovic, Kolanovic,
The recent stock slump was just the start of a correction, according to JPMorgan. Investors are too complacent with some risks, and inflation and geopolitics could hurt the market. AdvertisementHe pointed out that investors scrambled to dial down risk amid rising inflation fears and worsening geopolitical risks, which added to the slump in recent weeks. The hotter-than-expected CPI print of 3.5% year-over-year in March signals that recent inflation surprises in the US aren't just noise. AdvertisementSince January, the two-year Treasury yield has surged from 4.2% to 4.9%, matching levels seen last August.
Persons: , Stocks, Marko Kolanovic, Kolanovic, Israel didn't Organizations: JPMorgan, Investors, Service, Treasury Locations: Israel
The recent retreat in the stock market has made many worried about a deeper correction. Lingering inflation concerns, rising Treasury yields and a shifting outlook for Federal Reserve interest rate policy prompted a market pullback, with the S & P 500 almost 4% off its 52-week high as of Tuesday. A correction is defined as a 10% decline in one of the major U.S. stock indexes, typically the S & P 500 or Dow Jones Industrial Average, from a recent 52-week high close. .SPX 1Y mountain S & P 500 More to go? The heightened geopolitical risk led U.K. investment bank Liberum Capital to call for oil to surge to $100 and a stock market correction as big as 10%.
Persons: Sam Stovall, it's, Stovall, Jonathan Krinsky, Krinsky, Marko Kolanovic Organizations: Federal Reserve, CFRA Research, Dow Jones Locations: U.S
Investors should stay overweight on commodities with a focus on energy to hedge against inflation as interest rate cuts will likely to come later than originally forecast, according to JPMorgan. Economic growth is also coming in stronger than expected with JPMorgan revising global growth upward by 0.5% in the first half of this year. "However, ongoing growth resilience and sticky inflation raise the odds of fewer cuts," Kolanovic cautioned clients. Kolanovic advised investors to stay overweight on commodities with a focus on energy as oil prices rally. The U.S., however, could tap the strategic petroleum reserve as a countermeasure if the situation escalates and deteriorates further, according to JPMorgan.
Persons: Marko Kolanovic, Inflation, Kolanovic, Brent Organizations: JPMorgan, Reserve, Russia Locations: U.S, Western Europe, Ukraine, Russia
"In our mind, these debt-funded bitcoin purchases add froth to the current crypto rally by raising the risk of severe deleveraging in a potential downturn in the future," he added. MicroStrategy raised $604 million from the sale of converts on March 18, and another $800 million on March 8 . The latest purchases mark an acceleration from the fourth quarter pace, when MicroStrategy bought more than $1 billion of bitcoin. Originally launched as an enterprise business software company, Microstrategy has been buying bitcoin and holding them on its balance sheet since 2020. It largely trades as a proxy for the price of bitcoin, and in February of this year leaned into that, rebranding itself a Bitcoin development company.
Persons: JPMorgan's Marko Kolanovic, MicroStrategy, Microstrategy, Kolanovic, bitcoin, — CNBC's Michael Bloom Organizations: Momentum Locations: bitcoin, cryptocurrencies
JPMorgan is sticking to its bearish thesis amid a more optimistic outlook on Wall Street, saying investors are ignoring key market risks. The Wall Street firm is an outlier among the major banks when it comes to year-end forecasts. As of Monday's close, JPMorgan expects the S & P 500 will tumble more than 17% to its 2024 target of 4,200, according to CNBC's market strategist survey . The S & P 500 has repeatedly notched all-time highs on the back of the artificial intelligence trade. The AI beneficiary, which has been a major driver for the S & P 500's gains this year, could drag the benchmark should it start to sell off.
Persons: Marko Kolanovic, Goldman Sachs, David Kostin, America's Savita Subramanian, Kolanovic, NVDA Organizations: JPMorgan, Bank, America's, Nvidia Locations: Gaza, Ukraine
Stellar prices for gold have also stolen investor attention, with the precious metal scaling a new record of over $2,100. The record-breaking numbers for markets, however, haven't stopped some investors from worrying about three key issues. Inflation resurgenceAfter months of cooling, U.S inflation is proving itself to be more stubborn than experts had predicted. That's despite the Federal Reserve embarking on an aggressive monetary policy campaign over the past year, in a bid to tame consumer price pressures from their 40-year highs. Ariel Investments' Vice Chair Charlie Bobrinskoy told CNBC markets are not focused on China's residential real estate problems.
Persons: Michael M, haven't, Nobel, Paul Krugman, Mark Zandi's, Mark Zandi, Krugman, Nouriel Roubini, Doom, Trump, Marko Kolanovic, Mohamed El, Erian, Ariel, Charlie Bobrinskoy Organizations: New York Stock Exchange, Santiago, Federal, stoke, Allianz, Bloomberg, CNBC, El, Ariel Investments Locations: New York City, U.S, China
The soaring price of bitcoin could delay the Federal Reserve's plans to cut interest rates, according to JPMorgan. The bank said signs of froth in risk assets like bitcoin could lead to higher for longer interest rates. AdvertisementThe record rally in bitcoin could lead the Federal Reserve to delay its planned interest rate cuts later this year, according to JPMorgan. That froth could ultimately drive the Fed to hold off on its planned interest rate cuts, which are often stimulative for risk assets, as it could unleash another round of inflation. "This may keep monetary policy higher for longer, as premature rate cutting risks further inflating asset prices or causing another leg up in inflation," Kolanovic said.
Persons: Marko Kolanovic, Kolanovic, Christopher Waller Organizations: JPMorgan, Federal Reserve Locations: bitcoin
download the appSign up to get the inside scoop on today’s biggest stories in markets, tech, and business — delivered daily. Disco is backOthers have also started to compare today's market and the 1970s' "Nifty Fifty." AdvertisementJPMorgan's Chief Global Strategist Marko Kolanovic also said in a note on Wednesday that fiscal spending and inflation could resemble the 1970s landscape. Similar to the 1970s, there are currently 3 active geopolitical conflict zones – eastern Europe, Middle East, and South China Sea," Kolanovic said. Kolanovic included in his note the chart below, which shows the correlation between inflation and the performance of the S&P 500.
Persons: , Albert Edwards, Bank of America's Michael Hartnett, Jeffrey Gundlach, Cole Smead, Smead, Sears Roebuck, Alphabet's, Nvidia's, Microsoft's, Jeremy Siegel, David Rosenberg, Merrill Lynch, " Rosenberg, Marko Kolanovic, Kolanovic Organizations: Service, Societe Generale, Bank of America's, Treasury, Nasdaq, DoubleLine, Investments, Business, Morningstar, Microsoft, Nvidia, Xerox Locations: Europe, Middle East, South China
The stock market's strong start to 2024 could be short lived as the door for inflation to come back remains wide open, according to JPMorgan's Marko Kolanovic. The S & P 500 is coming off its first weekly loss in six weeks. Year to date, the S & P 500 is up about 4% and reached an all-time high earlier this month above 5,000. "Optimism now is quite high and some describe the current regime as 'parabolic stock markets' and 'platinum-locks,'" he said. According to CNBC Pro's Market Strategist Survey , JPMorgan has an S & P 500 target of 4,200.
Persons: JPMorgan's Marko Kolanovic, Kolanovic Organizations: U.S . Bureau of Labor Statistics, CNBC Pro's, Survey, JPMorgan Locations: Japan, Germany, Europe
Value-investing asset manager GMO last week published a study showing that the top ten S & P 500 stocks by size have handily beaten an equal-weighted pool of the other 490 for several years now. Neither is Microsoft, a useful indicator give that it was the largest stock by market cap both in December 1999 and today. Indeed, today the stock market has done well even as expectations for the speed and depth of rate cuts this year have diminished. (Industrials are leading, the equal-weight S & P is up 19% from October and there were 204 new 52-week highs on the NYSE Friday over 24 new lows.) The S & P 500 uptrend has for weeks targeted the 5050 area, as an immediate culmination point, and it's just about there.
Persons: Morgan, Marko Kolanovic, , Janus, Stocks, it's, Alan Greenspan, Greenspan, Jerome Powell, Ned Davis, Ed Clissold, Jurrien, Goldman Sachs Organizations: Nvidia, Cisco, Nasdaq, Cisco Systems, Microsoft, Fed, Netscape, Boston, NYSE Locations: Russia, It's, Orange County, Calif
Rising geopolitical headwinds and the potential for political turmoil could combine to thwart investors' hopes for the Federal Reserve to enact sharp interest rate cuts this year, according to JPMorgan Chase strategists. Markets have been betting that the Fed likely will start lowering its benchmark short-term borrowing rate by May or even as early as March. JPMorgan's investment team said the calculus could be important for investors as stocks and other asset classes look for direction. In recent days, multiple Fed officials have made remarks insisting that they are in no hurry to start cutting rates. For the full year, traders have gone from a strong chance of six cuts to a coin-flip between five and six.
Persons: Marko Kolanovic, Kolanovic, Raphael Bostic, Christopher Waller, — CNBC's Michael Bloom Organizations: Federal Reserve, Chase, JPMorgan, U.S, Fed, European Central Bank, Atlanta Fed, Federal, Market, Traders, Commerce Department Locations: 1H24
The equity market is due for a cooldown, according to several strategists, who are telling clients to begin positioning themselves defensively in preparation for a slow-growth earnings environment next year. The S & P 500 has rallied almost 24% this year, but is up 11% in the fourth quarter alone. The SPDR S & P Regional Banking ETF , for example, is up 24% this quarter, but still down 12% for the year. According to Calvasina, industrials are the most overvalued sector in the S & P 500, while energy and communication services offer the most attractive valuations. .GSPHC YTD mountain S & P Health Care sector performance this year.
Persons: Venu Krishna, Krishna, haven't, Lori Calvasina, Calvasina, Marko Kolanovic, Kolanovic Organizations: Barclays, Dow Jones, Federal Reserve, CNBC, Big Tech, Regional Banking, RBC Capital, P Health Care, JPMorgan Locations: Krishna, SPX, Europe
While options contracts historically expire on Fridays, the most popular stock indexes now have contracts that expire on every day of the week. This creates the ability for "zero-day to expiration," or "0DTE," options trading. The new funds come as trading in options that are about to expire has expanded dramatically as a share of the options market in recent years. The rise of short-term options trading has created split opinions on Wall Street. "In my mind, 0DTE has always been a risk day, but we've now spread that risk out across an entire month.
Persons: Michael M, IWM, Marko Kolanovic, 0DTE, you've, Randy Frederick Organizations: Nasdaq, Getty, Trust, Securities, Exchange Commission, Federal Reserve, Schwab Center, Financial Research, CNBC Locations: New York City, Cboe
REUTERS/Andrew Kelly Acquire Licensing RightsSummary poll dataBENGALURU, Nov 22 (Reuters) - Most key global stock indexes are forecast to rise modestly over the coming year, closing 2024 below record highs, while a slim majority of stock market experts polled by Reuters expected their markets to touch new peaks within the next six months. However, only a handful of the 15 top stock indexes were predicted to trade at record peaks by end-2024, based on a wider Nov. 9-22 poll of more than 120 stock market experts. LOWER BOND YIELDSFor now, markets are pricing in a series of 2024 rate cuts, which is sending bond yields lower and stock prices higher. "Falling bond yields are being interpreted by equity markets as a positive in the near-term," said Marko Kolanovic, chief global markets strategist at J.P. Morgan. Canada's main stock index was expected to rise less than previously thought over the coming year as a slowdown in the global economy weighs on the outlook for corporate earnings.
Persons: Andrew Kelly, Ajay Rajadhyaksha, Marko Kolanovic, Morgan, Hari Kishan, Indradip Ghosh, Ross Finley, Alex Richardson Organizations: New York Stock Exchange, REUTERS, Reuters, Traders, U.S . Federal, Barclays, Nikkei, Thomson Locations: New York City, U.S, BENGALURU, Monday's, Bengaluru, Buenos Aires, London, Mexico City, Milan, New York, San Francisco, Sao Paulo, Tokyo, Toronto
The S & P 500 is up more than 7% in November, but JPMorgan wrote to clients this week that the rebound is just a head fake. The biggest bank in the country thinks stocks are expensive and consumer spending is set to slow. Rather, "a significant part of this move was technical in nature, driven by momentum strategies and short covering." The hurdles for the stock market are manifold, according to JPMorgan. Instead, JPMorgan recommends a defensive posture in its model portfolio, underweighting stocks and bonds and overweighting cash and commodities.
Persons: Marko Kolanovic, Kolanovic, — CNBC's Michael Bloom Organizations: JPMorgan
Technical strategist Katie Stockton said that recent stock gains have been "explosive." But falling bond yields should continue to provide a boost to stocks if the pullback persists. The surge in equities, Wilson explained, is mostly a consequence of falling bond yields. Key government bond yields have pulled back sharply from 16-year highs in recent weeks. She said signs flashing in the TLT Treasury ETF point to an extended period of bond yields correcting from recent highs.
Persons: Katie Stockton, Stockton, , November's, Morgan Stanley's Mike Wilson, Wilson, JPMorgan's Marko Kolanovic Organizations: Service, CNBC Wednesday, TLT Treasury Locations: Stockton, TLT
The stock market's latest rally is set to fizzle, according to JPMorgan's Marko Kolanovic. He highlighted a number of looming concerns for investors, from valuations to higher-for-longer interest rates. AdvertisementAdvertisementLast week's stock market rally is about to fizzle, according to JPMorgan's chief global markets strategist Marko Kolanovic. While stock market investors would like to see interest rates drop, the reason behind any potential cut is what matters the most. Morgan Stanley's Mike Wilson reiterated his view on Monday that the recent rally in stocks is nothing more than a bear market rally.
Persons: JPMorgan's Marko Kolanovic, Kolanovic, , Marko Kolanovic, Morgan Stanley's Mike Wilson Organizations: Service, Markets, Federal Reserve Locations: fizzle
US stocks climbed as traders tried to keep the rally going following the best week of 2023. NEW LOOK Sign up to get the inside scoop on today’s biggest stories in markets, tech, and business — delivered daily. download the app Email address Sign up By clicking “Sign Up”, you accept our Terms of Service and Privacy Policy . AdvertisementAdvertisementUS stocks traded higher Monday after each of the major indexes recorded their strongest weekly performances of the year last week. "We think last week's rally in stocks was mainly a function of the fall in back-end Treasury yields," Wilson wrote in a Monday note.
Persons: Morgan Stanley, , Mike Wilson, Wilson, JPMorgan's Marko Kolanovic, Kolanovic Organizations: JPMorgan, Service, Federal Reserve, Dow Jones, Nasdaq
After a miserable October, the setup for November is looking better. Barring a huge rally Tuesday, October will be the third-consecutive down month for the S & P 500 — that's unusual. 1 month for the S & P 500. It's just that stocks have sold off during earnings season because of the cautious outlook being projected on many earnings calls. The chances the S & P 500 would be down four months in a row is very small.
Persons: , That's, Nicholas Colas, Colas, JPMorgan's Marko Kolanovic, It's, hasn't, Jonathan Krinsky Locations: DataTrek, Israel, BTIG
One place in the world stands as a beacon for investors in bank stocks: Japan. Japanese banks have outperformed in a year when U.S. banks have come under pressure both from rapidly rising interest rates and the regional banking crisis last spring. "We've been bullish on Japanese banks for a long time," said Chen Zhao, chief global strategist at Alpine Macro. Part of what's driving the bull case for Japanese banks is the country's yield curve. While the U.S. and other developed economies contend with an inverted yield curve that's weighing on financial profit margins, Japan continues to have a positive yield curve.
Persons: We've, Chen Zhao, Zhao, JPMorgan's Marko Kolanovic, Japan's, Kolanovic, — CNBC's Michael Bloom Organizations: JPMorgan, Regional Banking, Treasury, Japan Post Bank, Chiba Bank, JPMorgan BetaBuilders Japan, Resona Holdings Locations: Japan, U.S, EWJ
A higher-for-longer interest rate environment could mean a "stalemate" for equities after their long upward march in 2023. However, history indicates that's unlikely to continue, according to Chen Zhao, chief global strategist at Alpine Macro. He expects stocks will trade sideways for some time as investors weigh competing narratives around a robust economy with the pressures of higher bond yields. Of course, stocks bounced back the following year when the Federal Reserve began to cut rates. … But at the same time, you have rising borrowing costs, rising discount factors that actually tamp down asset values."
Persons: Stocks, Chen Zhao, Zhao, Komal, Kumar, Marko Kolanovic Organizations: Federal Reserve, Kumar Global
AdvertisementAdvertisementThe stock market is poised to disappoint investors over the coming months and into next year because S&P 500 earnings growth estimates are too optimistic, according to JPMorgan's quant guru Marko Kolanovic. Wall Street consensus expects S&P 500 earnings per share to deliver 4% year-over-year growth in the third-quarter, according to the note. Kolanovic doesn't expect much to change in 2024, arguing that Wall Street analysts are still too optimistic about the potential for earnings growth. Consensus estimates suggests that the S&P 500 will grow its earnings per share by 12% next year. Kolanovic is sticking by his year-end S&P 500 price target of 4,200, pointing to potential downside of 4% from current levels.
Persons: JPMorgan's, Marko Kolanovic, Kolanovic, Organizations: Service, PMI, Federal Reserve
Beware of these expensive stocks that analysts don't like
  + stars: | 2023-10-17 | by ( Brian Evans | ) www.cnbc.com   time to read: +8 min
For context, the longer-term P/E ratio for the past 12 months of the S & P 500 is about 21 times trailing earnings. That compares to a five-year average P/E ratio of 19.87. The life insurer's 12-month trailing P/E ratio came in at 31.99, compared to its five-year average P/E ratio of 13.62. For context, the longer-term P/E ratio for the past 12 months of the S&P 500 is about 21 times trailing earnings. The life insurer's 12-month trailing P/E ratio came in at 31.99, compared to its five-year average P/E ratio of 13.62.
Persons: JPMorgan's Marko Kolanovic, David Vogt, Tyson Foods, Jefferies, Henry Schein, Michael Bloom, Darla Mercado, Angela Weiss, HSIC Henry Schein, MOH Organizations: Treasury, Federal Reserve, CNBC Pro, IBM, UBS, Premier U.S, Tyson, Prudential Financial, Jefferies, Prudential, CNBC, Hewlett Packard Enterprise, Molina Healthcare, Pinnacle West, Traders, New York Stock Exchange, AFP, Getty, Business Machines Corp, Healthcare, Progressive Corp, Pinnacle West Capital Corp, TSN Tyson Foods, Business Machines Corp IBM, Target Premier U.S, Tyson Foods Inc TSN, Prudential Financial Inc
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