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☆ Citigroup downgrades US stocks amid recession risks, upgrades Europe
▼ + stars: | 2023-07-10 | by ( ) www.reuters.com time to read: +1 min

July 10 (Reuters) - Citigroup on Monday downgraded U.S. stocks in anticipation of a pullback in growth stocks and a recession in the fourth quarter of the year, while betting on beaten-down counterparts in Europe with an upgrade. The brokerage cut its rating on U.S. stocks to "neutral" from "overweight", following a strong rally in the first half of the year. It warned that growth stocks were set for a pullback as the "euphoria" around artificial intelligence enters a more "digestive" phase. Strategists at the brokerage downgraded UK stocks on a lack of exposure to growth stocks and a stronger pound . Emerging market (EM) stocks, upgraded to an "overweight" rating, replaced the UK stocks in Citigroup's asset allocation.

Persons: Subhadeep Chakravarty, Shilpi Majumdar Organizations: Citigroup, Nasdaq, Thomson Locations: Europe, China

☆ Goldman Sachs, other banks expect smaller hike from ECB in May
▼ + stars: | 2023-03-17 | by ( Subhadeep Chakravarty | ) www.reuters.com time to read: +2 min

March 17 (Reuters) - Goldman Sachs, Morgan Stanley and at least two other banks expect the European Central Bank to deliver a smaller quarter-point hike in May, as it grapples with stress in the banking sector and high core inflation. Goldman's terminal rate forecast for the ECB now stands at 3.5%, down from 3.75% expected previously when it forecasted a 50-bps raise in May. For Morgan Stanley, a smaller May hike expectation leaves the peak rate forecast at 3.75% by July, down from 4% expected earlier. The changes in forecast follow the ECB's decision on Thursday to press ahead with a 50-bps hike in its deposit facility rate, taking it to 3%. Traders see the ECB rate peaking at around 3.23% by September or October.

☆ Goldman Sachs and other banks expect smaller hike from ECB in May
▼ + stars: | 2023-03-17 | by ( Subhadeep Chakravarty | ) www.reuters.com time to read: +2 min

March 17 (Reuters) - Goldman Sachs and two other banks expect the European Central Bank to deliver a smaller quarter-point hike in May as it grapples with stress in the banking sector and high core inflation. Goldman earlier expected the ECB to deliver a 50 bps hike in May. The Wall Street bank's terminal rate forecast now stands at 3.5%, down from 3.75% previously. Traders see the ECB rate peaking at around 3.23% by September or October. Meanwhile, J.P.Morgan, Deutsche Bank and Swedish Bank SEB expect the ECB to deliver a 50 bps hike in May but warned of downside risks to their forecasts given current market volatility and inflation remaining well above the central bank's target.

☆ Goldman Sachs cuts ECB rate hike forecast to 25bps in May
▼ + stars: | 2023-03-17 | by ( ) www.reuters.com time to read: +1 min

March 17 (Reuters) - Goldman Sachs lowered its estimate for an interest rate hike by the European Central Bank (ECB) in May to 25 basis points after the central bank raised rates to fight inflation amid calls to rein in policy tightening. The investment bank reduced its estimate from the earlier forecast of 50 bps, pushing its ECB terminal rate forecast to 3.5% from 3.75% previously. The revised forecast comes after the ECB raised interest rates by 50 bps on Thursday. The investment bank anticipates the ECB will continue to be in tightening mode despite volatility in financial markets and expects Europe's core inflation to remain firm in coming months. Reporting by Subhadeep Chakravarty; Editing by Sonia CheemaOur Standards: The Thomson Reuters Trust Principles.

☆ JPMorgan expects smaller contraction in UK economy in 2023
▼ + stars: | 2023-01-20 | by ( ) www.reuters.com time to read: 1 min

Jan 20 (Reuters) - J.P.Morgan said the UK economy was expected to contract by 0.1% this year, revising it from the previously forecast 0.3% decline in the gross domestic product (GDP), buoyed by a recent drop in natural gas prices. The UK government is likely to pull back plans to raise household energy bills to 3,000 pounds ($3,710.70) in April, which should help bring down inflation faster than expected, J.P.Morgan economists wrote in a research note on Thursday. ($1 = 0.8085 pounds)Reporting by Subhadeep Chakravarty in Bengaluru; Editing by Rashmi AichOur Standards: The Thomson Reuters Trust Principles.

☆ Goldman Sachs no longer expects recession in euro zone in 2023
▼ + stars: | 2023-01-10 | by ( ) www.reuters.com time to read: +2 min

[1/2] The euro sign is photographed in front of the former head quarter of the European Central Bank in Frankfurt, Germany, April 9, 2019. REUTERS/Kai PfaffenbachJan 10 (Reuters) - Goldman Sachs said on Tuesday it expects the euro zone economy to grow by 0.6% this year, compared with its previous forecast of a contraction, thanks to a fall in natural gas prices and the reopening of China's borders. Euro zone inflation is expected to be around 3.25% at the end of 2023 compared with 4.50% forecast earlier, the economists said. In December, consumer price growth across euro zone slowed to 9.2% from 10.1% a month earlier, Eurostat data showed last week. For the UK, Goldman sees a smaller contraction of 0.7% in GDP, compared with an earlier expectation for it to shrink by 1%, helped by lower wholesale gas prices.

☆ J.P.Morgan cuts 2023 S&P 500 earnings forecast by 9%
▼ + stars: | 2022-12-01 | by ( ) www.reuters.com time to read: +1 min

Dec 1 (Reuters) - J.P.Morgan on Thursday cut its 2023 earnings forecast for S&P 500 (.SPX) companies, citing weaker demand and pricing power, margin compression, and limited buy-backs. JPM strategists now estimate S&P 500 earnings per share for next year to be $205, down 9% from an earlier forecast of $225. They also flagged that the S&P 500 index could "re-test" this year's low of 3,491.58 in the first six months of 2023, as the U.S. Federal Reserve's monetary policy tightening weakens fundamentals. "This sell-off combined with disinflation, rising unemployment, and declining corporate sentiment should be enough for the Fed to start signaling a pivot, subsequently driving an asset recovery," they said, adding that the index could claw back up to 4,200 by year-end, to reflect a near 3% upside from current levels. Reporting by Subhadeep Chakravarty and Siddarth S; Editing by Dhanya Ann ThoppilOur Standards: The Thomson Reuters Trust Principles.

☆ Goldman Sachs expects "significant" decline in U.S. inflation in 2023
▼ + stars: | 2022-11-14 | by ( ) www.reuters.com time to read: +1 min

Nov 14 (Reuters) - Goldman Sachs said it expects a "significant" decline in U.S. inflation next year due to easing in supply chain constraints, a peak in shelter inflation and slower wage growth. The U.S. lender on Sunday forecast core personal consumption expenditure (PCE) –– the Federal Reserve's preferred measure of inflation –– falling to 2.9% by December 2023 from 5.1% currently. Surging inflation and the Fed's battle to control it has sent Treasury yields and the dollar soaring this year, knocking stocks. The S&P 500 (.SPX) is down around 16% so far this year, on track for its worst year since a financial crisis of 2008. Reporting by Subhadeep Chakravarty; Editing by Savio D'SouzaOur Standards: The Thomson Reuters Trust Principles.

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