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☆ 'Volatility could explode': The S&P 500 is ripe for a correction as tensions in the Middle East flare and inflation sticks, experts warn. Here's what to do with your money.
▼ + stars: | 2024-04-17 | by ( William Edwards | ) www.businessinsider.com time to read: +7 min

Since late October last year, the S&P 500 has risen as much as 27% on strong economic data and excitement about AI. Losses were steepest last week when Iran fired missiles at Israel, exacerbating regional and global tensions. But as more labor market and inflation data has come out, investors now believe a cut is off the table until at least July. The S&P 500 has now dipped below its 20-day moving average, like it did last summer when yields rose above 4.35%. "The VIX, SKEW and Put/Call Ratio all indicate that sophisticated investors are on edge and volatility could explode to 52-week highs in the weeks ahead," Essaye said.

Persons: —, that's, Israel, James Demmert, Demmert, Adam Turnquist, Turnquist, Tom Essaye, Essaye, selloff, Solita, It's, Marcelli, it's Organizations: Service, Business, Brent, Research, Federal Reserve, LPL, MAs, UBS Americas, UBS Global Investment Locations: Iran, Israel, Gaza, Lebanon, Yemen

☆ What's next for the S&P 500 after hitting a record? Nvidia is the key
▼ + stars: | 2024-02-22 | by ( Sarah Min | ) www.cnbc.com time to read: +3 min

Where markets go next may well depend on how Nvidia does after going forward. "The answer here will depend on NVDA," Tom Essaye of The Sevens Report wrote in a Thursday note. "The stock is at an all-time high ... and if it can hold (or extend) this rally ... it'll imply that tech can help lead this market higher." Nvidia and other artificial intelligence darlings, including Meta Platforms, powered the broader market last year, while other stocks underperformed. I'd rather take it elsewhere in something that hasn't had as much of a run as Nvidia has."

Persons: Tom Essaye, Essaye, Patrick McDonough, Solita Marcelli, Charles Ashley, hasn't, Said PGIM's McDonough Organizations: Nvidia, Revenue, Nasdaq, VanEck Semiconductor, Federal Reserve, Meta, UBS Global Wealth Management, Catalyst Funds

☆ Stocks are vulnerable to a 5% 'air-pocket drawdown' as greedy traders short volatility, research firm says
▼ + stars: | 2024-02-16 | by ( Aruni Soni | ) www.businessinsider.com time to read: +3 min

The "Volmageddon" episode happened six years ago after traders piled into a bunch of ETFs that were designed to return the inverse of market volatility (essentially betting on a calm market). And when volatility went up in February 2018, it tanked those strategies, sending the S&P 500 down more than 10% in two weeks. As VIX futures expire, the S&P 500 is seeing stronger price reactions. The short-volatility trade became very popular after 2010 when volatility was low, and traders could make money betting against market turbulence. AdvertisementIt's not a major concern right away as volatility upticks have been small, and the S&P 500 has remained resilient.

Persons: —, Tom Essaye, Essaye Organizations: Service, Business

☆ These 3 stocks could lead the charge for a 19% surge in the S&P 500 to 6,000 this year, according to a market research firm that counts Wall Street's top banks among its clients
▼ + stars: | 2024-02-13 | by ( William Edwards | ) www.businessinsider.com time to read: +4 min

Read previewThe S&P 500's 22% tear over the last few months may just be getting started, according to Sevens Report Research, a market research firm with clients that include top Wall Street banks like JPMorgan, Morgan Stanley, UBS, and more. On the valuations front, the S&P 500's multiple would only have to rise fairly slightly to lift the index to 6,000. "The S&P 500 is already trading with an elevated forward P/E multiple of over 20X expected 2024 EPS," he said. "If sentiment gets frothy, however, and stocks trade with a multiple pushing 22X, which is far from unheard of as the forward multiple of the S&P 500 hit 21.4 on 1/2/2022, then the S&P 500 could surpass 6,000 in H2'24." Essaye also said small-cap stocks cyclical sectors like big banks, and materials and transportation firms would do well in a soft-landing scenario.

Persons: —, Morgan Stanley, Tyler Richey, Richey, aren't, Louis Fed, Tom Essaye, Essaye, it's Organizations: Service, JPMorgan, UBS, Business, Investor, CNN, Federal Reserve, Nvidia, Amazon Locations: H2'24

☆ Wall Street is declaring victory too early — the US is still headed for a recession
▼ + stars: | 2023-08-22 | by ( William Edwards | ) www.businessinsider.com time to read: +11 min

In theory, these higher interest rates push down demand and slow inflation by forcing companies to cut prices to attract stretched-thin customers. And Americans have been spending right through the higher interest rates: Personal consumption expenditures and retail sales numbers have continued to forge upward. But eventually, this attitude will wane as people realize that the higher rates aren't a flash in the pan. The Treasury yield curve measures the different interest rates that are paid out on various bonds issued by the US government. It's the same story every time, both Kantrowitz and Rosenberg say: Investors are bad at pricing in a recession before it unfolds.

Persons: Michael Kantrowitz, Piper Sandler, Milton Friedman, Bob Doll, Doll, David Rosenberg, Rosenberg, Tom Essaye, Essaye, Granger, Kantrowitz, Jerome Powell, William Edwards Organizations: Philadelphia Fed, Bank of America, JPMorgan, Consumer, Crossmark Global Investments, BlackRock, Silicon Valley Bank, Rosenberg Research, Fed, Auto, Wall, CPI, Institute for Supply Management's, Treasury, Royal Bank of Canada Locations: Silicon, YOLO

☆ The 10-year Treasury yield hit its highest level since 2007. What it means for stocks
▼ + stars: | 2023-08-22 | by ( Sarah Min | ) www.cnbc.com time to read: +3 min

The U.S. 10-year Treasury yield climbed to its highest level since 2007 this week. Meanwhile, the 30-year Treasury yield reached its highest point since 2011. What's more, higher yields are typically a negative for tech and growth stocks — this year's best-performing group — as they lessen the value of their promised future earnings. Ned Davis Research's Joseph Kalish said Monday he expects the 10-year Treasury yield could rise to 5.25%, citing risks to the bond market on inflation expectations. US10Y YTD mountain U.S. 10-year Treasury yield YTD "The market has been consistently underpricing the risk of additional rate hikes and overpricing the speed of rate cuts," Kalish wrote.

Persons: Ned Davis Research's Joseph Kalish, Kalish, Strategas, Chris Verrone, 133bps, Verrone, Wolfe, Chris Senyek, Morgan Stanley's Matthew Hornbach, it's, Tom Essaye, — CNBC's Michael Bloom, Chris Hayes Organizations: Treasury, Federal Locations: U.S

☆ Forget about a recession sinking the stock market. Rising rates threaten to spoil the party just like they did in 2022.
▼ + stars: | 2023-08-19 | by ( William Edwards | ) www.businessinsider.com time to read: +6 min

Yields on 10-year Treasury yields have surged well above 4%. With both stock valuations and interest rates high, stock prices could continue to fall. Yields on 10-year Treasury notes surged to 15-year highs this week, surpassing 4.3% for the first time since late 2007. This has put a damper on what was a 20% rally for the S&P 500 from January to the end of July. The median S&P 500 year-end price target among major Wall Street strategists is 4,300, just below the index's current price around 4,370.

Persons: Stocks, Adam Turnquist, Treasurys, It's, John Lynch, they've, Tom Essaye, Lynch, Turnquist, David Rosenberg, Rosenberg, Greg Boutle, Cantor Fitzgerald's Eric Johnston, Piper Sandler's Michael Kantrowitz Organizations: Treasury, LPL, Bank of America, Comerica Wealth, Wall Street, Rosenberg Research, RBC, BNP

☆ How to position your portfolio following the Silicon Valley Bank fiasco — and why markets are wrongly anticipating a Fed pivot — according to a researcher whose clients include Wall Street's top money
▼ + stars: | 2023-03-14 | by ( William Edwards | ) www.businessinsider.com time to read: +4 min

Silicon Valley Bank and Signature Bank were shut by regulators in recent days. Following the collapse of Silicon Valley Bank and Signature Bank over the last few days, some market participants are expecting the Federal Reserve to back off from its hawkish stance. Goldman Sachs' Chief US Economist Jan Hatzius said on Sunday night that he expects the Fed not to hike rates at its next meeting before resuming them later in the spring. The Fed's next moves are relevant to recent events because higher interest rates contributed to the downfall of Silicon Valley Bank. For example, Jeffrey Gundlach, the CEO of DoubleLine Capital, told CNBC on Monday that the central bank will hike rates by 25 basis points at its next meeting.

☆ Top Wall Street strategists and money managers are warning that the risk-reward ratio for stocks is at its worst since the 2008 crisis. Here are 10 places they say to put your money instead with furth
▼ + stars: | 2023-03-01 | by ( William Edwards | ) www.businessinsider.com time to read: +5 min

In other words, the risk-reward ratio for stocks — or the equity risk premium — has to make sense, or else why take the risk by investing in them? 10 places to investDespite the lackluster outlook for stocks, strategists still say there are plenty of investing opportunities. The Vanguard US Quality Factor ETF (VFQY) and the Fidelity MSCI Consumer Staples Index ETF (FSTA) offer exposure to the above areas of the market. This supports our preference for emerging markets, and our preference for Germany and consumer stocks in Europe. Within defensives, we like consumer staples over healthcare, which we downgraded this month.

☆ It’s not the most wonderful time of the year for markets. Here’s why
▼ + stars: | 2022-12-12 | by ( Paul R. La Monica | ) edition.cnn.com time to read: +4 min

New York CNN —The holidays are meant to be the most wonderful time of the year. But for investors, this week just might be the most stressful time of the year. Then there’s the anticipated central bank meeting. “Most central banks will be reluctant to cut rates in 2023 given the need to cool wage growth.”It has all given the equity and fixed markets a jolt. Maybe investors will be able to relax and take a deep breath before the Fed announcement and press conference later that day.

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