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☆ Deutsche Bank sees 12% upside to S&P 500 through 2024-end
▼ + stars: | 2023-11-27 | by ( ) www.reuters.com time to read: +1 min

The logo of Deutsche Bank is seen in Brussels, Belgium December 6, 2022. REUTERS/Yves Herman/File Photo Acquire Licensing RightsNov 27 (Reuters) - Deutsche Bank on Monday forecast the S&P 500 (.SPX) to end next year 12% higher as it expects corporate earnings to remain resilient even if the United States experiences a mild and short recession. Deutsche Bank analysts expect the index to end 2024 at 5,100 points. Deutsche Bank's 2024-end S&P 500 target is 8.5% higher than the 4,700 median forecast of 33 strategists polled by Reuters. "If earnings growth continues to recover as we forecast, valuations will remain well supported around the top of the range as is typical on the pricing in of a pickup in earnings growth," the strategists said.

Persons: Yves Herman, Roshan Abraham, Rashmi Aich, Mrigank Organizations: Deutsche Bank, REUTERS, Deutsche, Reuters, Reserve, BofA, Research, Thomson Locations: Brussels, Belgium, United States, U.S, Bengaluru

☆ Stocks to outperform fixed income in 2024, says Barclays
▼ + stars: | 2023-11-16 | by ( ) www.reuters.com time to read: +2 min

REUTERS/Caitlin Ochs/File Photo Acquire Licensing RightsNov 16 (Reuters) - Global equities are set to outperform core fixed-income assets next year, as threats of a global economic slowdown have declined, Barclays strategists said in a note on Thursday. We think stocks will benefit from a fairly benign bottom to this business cycle and look through near-term earnings disappointments," said Ajay Rajadhyaksha, global chairman of research at Barclays. "We now turn overweight (on) global equities over core fixed income." Barclays expects mid-to-high single-digit equity returns in both the U.S. and Europe next year, even as bond yields stay elevated. JP Morgan had recommended commodities over stocks and bonds.

Persons: Caitlin Ochs, Ajay Rajadhyaksha, Goldman Sachs, J.P.Morgan, JP Morgan, Roshan Abraham, Susan Mathew, Janane Organizations: New York Stock Exchange, REUTERS, Barclays, Treasury, U.S, Thomson Locations: New York City, U.S, Europe, Bengaluru

☆ Morgan Stanley sees S&P 500 ending 2024 at 4,500
▼ + stars: | 2023-11-13 | by ( ) www.reuters.com time to read: +1 min

Specialist trader Ned Zelles works at his post on the floor of the New York Stock Exchange, August 21, 2015. REUTERS/Brendan McDermid/File Photo Acquire Licensing RightsNov 13 (Reuters) - Morgan Stanley said on Monday it expects the S&P 500 (.SPX) to end 2024 at 4,500, and predicted earnings recovery through the year. However, near-term earnings headwinds will persist into early next year before a "durable" recovery takes hold, Wilson said. Wilson sees strong earnings environment in 2025 with a 16% jump in profit driven by artificial intelligence-led improvement in productivity and margin expansion. Reporting by Roshan Abraham in Bengaluru; Editing by Dhanya Ann ThoppilOur Standards: The Thomson Reuters Trust Principles.

Persons: Ned Zelles, Brendan McDermid, Morgan Stanley, Michael Wilson, Wilson, Roshan Abraham, Dhanya Ann Thoppil Organizations: New York Stock Exchange, REUTERS, Thomson Locations: Bengaluru

☆ Barclays sees Fed raising rate in January instead of December
▼ + stars: | 2023-11-06 | by ( ) www.reuters.com time to read: +1 min

[1/2] An eagle tops the U.S. Federal Reserve building's facade in Washington, July 31, 2013. REUTERS/Jonathan Ernst/File Photo Acquire Licensing RightsNov 5 (Reuters) - Barclays said it now expects the U.S. Federal Reserve to deliver a 25 basis point interest rate increase in January instead of an earlier expectation for a December hike. The brokerage cited softer-than-expected October employment data and dovish Fed commentary for the forecast push to next year. The Labor Department's closely watched employment report on Friday showed that the unemployment rate rose to 3.9% last month, the highest level since January 2022, from 3.8% in September. Reporting by Roshan Abraham in Bengaluru; Editing by Subhranshu SahuOur Standards: The Thomson Reuters Trust Principles.

Persons: Jonathan Ernst, Roshan Abraham, Subhranshu Sahu Organizations: . Federal, REUTERS, Barclays, U.S . Federal Reserve, Labor, Thomson Locations: Washington, Bengaluru

☆ Goldman Sachs no longer sees U.S. govt shutdown in 2023
▼ + stars: | 2023-10-30 | by ( ) www.reuters.com time to read: +1 min

The U.S. Capitol Building is seen in Washington, U.S., August 15, 2023. The brokerage's previous base case was for a shutdown for up to 2-3 weeks in the current quarter ended December, which now seems "much less likely", Goldman Sachs economists led by Jan Hatzius said. "The longer the government operates under short-term extensions, the less likely it will be that Congress will reach a deal on full-year spending bills," said Hatzius. "So there is still some risk of a shutdown in early 2024." Reporting by Roshan Abraham in Bengaluru; Editing by Nivedita BhattacharjeeOur Standards: The Thomson Reuters Trust Principles.

Persons: Kevin Wurm, Goldman Sachs, Jan Hatzius, Mike Johnson, Hatzius, Roshan Abraham, Nivedita Organizations: U.S, Capitol, REUTERS, Thomson Locations: Washington , U.S, Israel, Syria, Bengaluru

☆ Goldman Sachs lifts Europe Inc's 2023 profit growth forecast to 3%
▼ + stars: | 2023-10-17 | by ( ) www.reuters.com time to read: +2 min

The logo for Goldman Sachs is seen on the trading floor at the New York Stock Exchange (NYSE) in New York City, New York, U.S., November 17, 2021. According to Goldman Sachs, higher oil prices will feed into higher revenues, benefiting commodity-related sectors — for which analysts at the brokerage expect positive earnings upgrades. Shares of European oil majors BP (BP.L), Shell (SHEL.L) and TotalEnergies (TTEF.PA) have gained between 4.5% and 7% since the conflict began. Adjusting for inflation, however, Goldman Sachs expects earnings in Europe to fall 2% this year. Through 2025, Goldman expects European and U.S. companies' profits to grow at 5% annually from current levels, but only 2% in real terms for Europe in the same period.

Persons: Goldman Sachs, Andrew Kelly, Brent, Lilia Peytavin, Goldman, Roshan Abraham, Susan Mathew, Shilpi Majumdar Organizations: New York Stock Exchange, REUTERS, Brent, East, BP, Shell, European, Thomson Locations: New York City , New York, U.S, Europe, Bengaluru

The British company gets most of its revenue from the smartphone market, in which it has a 99% share across Google's Android and Apple's iOS devices. Arm shares last closed at $54.08, compared with the IPO price of $51. Such growth would benefit SoftBank, which told investors ahead of the Arm IPO that it plans to remain the majority owner in the company it considers its crown jewel. But some brokerages, including HSBC, urged caution, saying Arm's shares could remain range-bound as uncertainty over a smartphone market recovery pressures earnings. At least 17 brokerages started covering Arm, with an average rating of "buy" and a median price target of $63.50.

Persons: Dado Ruvic, Goldman Sachs, TD Cowen, Roshan Abraham, Savio D'Souza, Anil D'Silva, Shounak Organizations: REUTERS, Holdings, Wall Street, SoftBank, J.P.Morgan, British, Citi, Deutsche Bank, Rosenblatt Securities, Philadelphia Semiconductors, HSBC, Thomson Locations: brokerages, Philadelphia, Bengaluru

Arm shares last closed at $54.08, about two dollars below their IPO price. TD Cowen said Arm faces some challenges from the weak smartphone market, but its current revenue represented an "under-monetization of its importance to the industry". Such growth would benefit SoftBank, which told investors ahead of the Arm IPO that it plans to remain the majority owner in the company it considers its crown jewel. But some brokerages, including HSBC, urged caution, saying Arm's shares could remain range-bound as uncertainty over a smartphone market recovery pressures earnings. But by 8 am ET on Monday, at least 15 brokerages started covering Arm with a mean rating of "buy" and a $60 median price target.

Persons: Dado Ruvic, Morgan, Goldman Sachs, TD Cowen, Roshan Abraham, Savio D'Souza, Anil D'Silva Organizations: REUTERS, Arm Holdings, SoftBank, Citi, Deutsche Bank, Mizuho, HSBC, Thomson Locations: brokerages, British, J.P, Morgan, Bengaluru

☆ Tesla jumps on prediction supercomputer unit could add $600 bln to mkt value
▼ + stars: | 2023-09-11 | by ( ) www.reuters.com time to read: +2 min

Dojo can open up new addressable markets that "extend well beyond selling vehicles at a fixed price," Morgan Stanley analysts led by Adam Jonas said in a note on Sunday. The Wall Street brokerage upgraded Tesla's stock to "overweight" from "equal-weight" and made it their "top pick," replacing Ferrari's U.S.-listed shares . That's about 76% higher than Tesla's market value of about $789 billion, based on the stock's close of $248.5 on Friday. Morgan Stanley raised its revenue estimate from Tesla's network services business to $335 billion in 2040, from $157 billion earlier. Jonas expects the unit to account for more than 60% of Tesla's core earnings by 2040, nearly doubling from 2030.

Persons: Matthew Childs, Morgan Stanley, Tesla, Adam Jonas, Jonas, Roshan Abraham, Susan Mathew, Medha Singh, Savio D'Souza, Sherry Jacob, Phillips, Rashmi Organizations: REUTERS, Dojo, Ferrari's U.S, Ford, Motors, Thomson Locations: London, Britain, Bengaluru

☆ Tesla supercomputer could boost EV maker's market cap by $600 bln -Morgan Stanley
▼ + stars: | 2023-09-11 | by ( ) www.reuters.com time to read: +2 min

REUTERS/Matthew Childs/File Photo Acquire Licensing RightsSept 11 (Reuters) - Tesla's (TSLA.O) supercomputer, Dojo, to train AI models for autonomous cars could give the electric vehicle maker an "asymmetric advantage" and boost its market capitalization by nearly $600 billion, or 76%, Morgan Stanley estimated. Tesla started production of Dojo in July and plans to spend more than $1 billion through next year. Dojo can open up new addressable markets that "extend well beyond selling vehicles at a fixed price," Morgan Stanley analysts, led by Adam Jonas, said in a note published on Sunday. The Wall Street brokerage upgraded its recommendation on Tesla's stock to "overweight" from "equal-weight" and made it their "top pick," replacing Ferrari's U.S.-listed shares . That compares with its current market value of about $789 billion, after the stock closed at $248.5 on Friday.

Persons: Matthew Childs, Morgan Stanley, Tesla, Adam Jonas, Jonas, Roshan Abraham, Susan Mathew, Savio D'Souza Organizations: REUTERS, Dojo, Ferrari's U.S, Thomson Locations: London, Britain, Bengaluru

☆ Tesla jumps as analyst predicts $600 billion value boost from Dojo
▼ + stars: | 2023-09-11 | by ( ) www.reuters.com time to read: +2 min

The logo of car manufacturer Tesla is seen at a dealership in London, Britain, May 14, 2021. REUTERS/Matthew Childs/File Photo Acquire Licensing RightsSept 11 (Reuters) - Tesla rallied 6% on Monday after Morgan Stanley said its Dojo supercomputer could power a near $600 billion surge in the electric-car maker's market value by helping speed up its foray into robotaxis and software services. The Wall Street brokerage upgraded Tesla's stock to "overweight" from "equal-weight" and replaced Ferrari's U.S.-listed shares with it as "top pick". That is about 76% higher than Tesla's market value of about $789 billion, based on the stock's close of $248.5 on Friday. Morgan Stanley raised its revenue estimate for Tesla's network services business to $335 billion in 2040 from $157 billion earlier.

Persons: Matthew Childs, Tesla, Morgan Stanley, Adam Jonas, Jonas, Roshan Abraham, Susan Mathew, Medha Singh, Savio D'Souza, Sherry Jacob, Phillips, Rashmi Aich, Anil D'Silva Organizations: REUTERS, Dojo, Ford, Motors, Thomson Locations: London, Britain, Ferrari's U.S, Bengaluru

☆ Citigroup cuts 2023 euro area real GDP growth forecast to 0.4%
▼ + stars: | 2023-09-08 | by ( ) www.reuters.com time to read: +1 min

The Citigroup Inc (Citi) logo is seen at the SIBOS banking and financial conference in Toronto, Ontario, Canada October 19, 2017. REUTERS/Chris Helgren/File Photo/File Photo/File Photo Acquire Licensing RightsSept 8 (Reuters) - Citigroup downgraded its 2023 economic growth forecast for the euro area to 0.4%, and said it expected the region's economy to shrink "gently" over the next three quarters. The Wall Street brokerage had earlier forecasted that the real gross domestic product (GDP) of the euro area, which includes Germany, France, Italy and Spain among others, to grow at 0.8%. They also expect the economy to shrink by 0.1% in 2024, compared to 0.8% growth expected earlier. Cyclical and structural headwinds to euro area growth are "too strong," Citigroup economists, led by Christian Schulz, said in a note dated Thursday.

Persons: Chris Helgren, Christian Schulz, Schulz, Roshan Abraham, Rashmi Organizations: Citigroup Inc, Citi, REUTERS, Citigroup, Thomson Locations: Toronto , Ontario, Canada, Germany, France, Italy, Spain, China, Bengaluru

☆ Goldman Sachs cuts chances of US recession in next one year to 15%
▼ + stars: | 2023-09-05 | by ( ) www.reuters.com time to read: +1 min

REUTERS/Andrew Kelly/File Photo Acquire Licensing RightsSept 5 (Reuters) - Goldman Sachs on Tuesday lowered its probability that a U.S recession would start in the next 12 months to 15% from an earlier 20% forecast. The continued positive inflation and labor market data led to the cut, Goldman Sachs Chief Economist Jan Hatzius wrote in a note. It also noted the drag from monetary policy tightening will continue to diminish before "vanishing entirely" by early 2024. Goldman added that it expected "very gradual" cuts of 25 basis points per quarter starting in second quarter of 2024. Reporting by Aniruddha Ghosh and Roshan Abraham in Bengaluru; Editing by Rashmi AichOur Standards: The Thomson Reuters Trust Principles.

Persons: Andrew Kelly, Goldman Sachs, Goldman, Jan Hatzius, Jerome Powell's, Aniruddha Ghosh, Roshan Abraham, Rashmi Organizations: REUTERS, Federal Reserve, GS, Thomson Locations: Manhattan , New York City, U.S, Bengaluru

☆ JPM warns of higher risk for Chinese REITs after Country Garden's troubles
▼ + stars: | 2023-08-14 | by ( ) www.reuters.com time to read: +2 min

The company logo of Chinese developer Country Garden is pictured at the Shanghai Country Garden Center in Shanghai, China August 9, 2023. REUTERS/Aly Song/File PhotoAug 14 (Reuters) - Brokerage J.P.Morgan warned on Monday an estimated 2.8 trillion yuan ($385.78 billion) worth of assets under the management of Chinese real estate investment trusts (REITs) face higher risk following the debt payment delays by Country Garden (2007.HK). Country Garden, China's largest private developer, is seeking to delay payment on a private onshore bond for the first time after suspending trading in 11 onshore bonds. More broadly, rising trust defaults would drag economic growth by 0.3-0.4 percentage points directly, JPM warned. ($1 = 7.2581 Chinese yuan renminbi)Reporting by Roshan Abraham in Bengaluru; Editing by Varun H KOur Standards: The Thomson Reuters Trust Principles.

Persons: Aly, J.P.Morgan, Katherine Lei, Lei, JPM, Roshan Abraham, Varun Organizations: Shanghai Country Garden, REUTERS, Country Garden, HK, Monday's, Thomson Locations: Shanghai, China, Bengaluru

☆ China's Country Garden woes raise fears of REIT defaults - J.P.Morgan
▼ + stars: | 2023-08-14 | by ( ) www.reuters.com time to read: +2 min

The company logo of Chinese developer Country Garden is pictured at the Shanghai Country Garden Center in Shanghai, China August 9, 2023. REUTERS/Aly Song/File PhotoAug 14 (Reuters) - Turmoil at China's largest private developer Country Garden could set off a "vicious cycle" of financing stress on the country's real estate investment trusts (REITs), brokerage J.P. Morgan warned on Monday. These fresh worries come as Country Garden sought to delay payment on a private onshore bond for the first time and suspended trading in 11 onshore bonds. "The default events may lead to a chain reaction on developer financing, adding stress to POE (privately owned enterprise) developers and their creditors." Rising trust defaults would drag economic growth by 0.3-0.4 percentage points directly, J.P.Morgan warned.

Persons: Aly, Morgan, Katherine Lei, POE, J.P.Morgan, Nomura, Roshan Abraham, Susan Mathew, Danilo Masoni, Varun, Arun Koyyur Organizations: Shanghai Country Garden, REUTERS, China's, Zhongzhi Enterprise Group, Zhongrong, China Evergrande, Thomson Locations: Shanghai, China, HK, Beijing, Bengaluru, Milan

☆ Wall Street banks cut China's growth forecast after dull second quarter
▼ + stars: | 2023-07-17 | by ( Aniruddha Ghosh | Roshan Abraham | ) www.reuters.com time to read: +2 min

(Reuters) -J.P.Morgan, Morgan Stanley and Citigroup trimmed China’s growth forecast for 2023 after the country’s economy grew at a weaker pace in the second quarter, with its post-COVID momentum unravelling rapidly. “Market scepticism on China’s growth outlook is on the rise,” said Morgan Stanley economists led by Robin Xing. JPM cut China’s Gross Domestic Product (GDP) forecast to 5% from 5.5%. Citi, meanwhile, expects a 20 bps cut in the policy rate and 25 bps in the reserve requirement ratio (RRR) by the end of the third quarter. Goldman Sachs, however, maintained its 2023 full-year GDP growth forecast at 5.4%, even as they cut their current-quarter growth forecast to 5.5% on a quarter-on-quarter basis from 6.5% previously.

Persons: Morgan Stanley, ”, Robin Xing, China’s, JPM, “, Xiangrong Yu, ” Morgan Stanley, Goldman Sachs, Lisheng Wang Organizations: Reuters, Citigroup, Citi Locations: China, Beijing

☆ HSBC cuts China's GDP forecast to 5.3% on weak property, business outlook
▼ + stars: | 2023-06-20 | by ( ) www.reuters.com time to read: 1 min

June 20 (Reuters) - HSBC on Tuesday lowered China's economic growth forecast for this year, citing drag from the property sector, and tempered business and household confidence. The global bank now forecasts China's gross domestic product (GDP) to grow at 5.3% in 2023, from 6.3% expected earlier. Last week, brokerages including J.P. Morgan and BofA Global Research lowered the country's growth outlook after the country's May industrial output and retail sales growth missed forecasts. Reporting by Roshan Abraham in Bengaluru; Editing by Varun H KOur Standards: The Thomson Reuters Trust Principles.

Persons: Morgan, Roshan Abraham, Varun Organizations: HSBC, BofA, Research, Thomson Locations: Bengaluru

☆ Morgan Stanley sees slump in US earnings in 2023, sharp rebound next year
▼ + stars: | 2023-06-05 | by ( ) www.reuters.com time to read: +1 min

June 5 (Reuters) - Morgan Stanley warns of a 16% drop in profit for S&P 500 companies this year, followed by a sharp rebound in 2024 when analysts say the Federal Reserve's policy will become more accommodative. Strategists led by Michael Wilson said in a note on Monday that they expect earnings to rebound sharply, with a 23% jump next year. The Wall Street bank warned that the EPS of S&P companies could slip to $185 from $195 in 2023 before recovering to $239 next year. Morgan Stanley predicted the index to rebound to 4,200 levels in 2024 while keeping its 2023-end target unchanged at 3,900. A slew of positive news, with expectations of a Fed pivot, persistent improvement in liquidity, and AI-related tailwinds to mega-cap names such as Nvidia Corp (NVDA.O), have buoyed indexes so far, Morgan Stanley said.

Persons: Morgan Stanley, Michael Wilson, Wilson, Roshan Abraham, Dhanya Ann Thoppil Organizations: Nvidia Corp, Thomson Locations: Bengaluru

☆ Citigroup cuts U.S. stocks to 'underweight', favours European equities in 2023
▼ + stars: | 2023-01-06 | by ( ) www.reuters.com time to read: 1 min

Jan 6 (Reuters) - Citigroup analysts turned "underweight" on U.S. equities on recession fears but were bullish on European stocks, saying much of the pessimism was already priced-in. The U.S. bank upgraded its view on continental European equities to "overweight". More broadly, it expects earnings per share for stocks in the MSCI All Country World index (.MIWD00000PUS) to contract by 5-10% over the year. The index, which was last trading at 606, could end 2023 towards the higher end of a 680-780 points range, Citi said in a research note. For 2023, the bank favours defensive sectors such as healthcare and cheaper cyclicals including energy and financials over more expensive technology and consumer discretionary names.

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