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☆ Bank stocks are now oversold but it's not time to buy the dip just yet, DataTrek says
▼ + stars: | 2023-03-14 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

Bank stocks are now oversold, but it's not time to buy in just yet, DataTrek's Nicholas Colas said. He said regional bank stocks could see more downside, pointing to data in previous financial crises. In a note on Tuesday, the research firm pointed to the plunge in bank stocks on Monday as Wall Street reels from the collapse of SVB. Meanwhile KRE, a regional bank ETF, has plunged 23% over the past 50 trading days, which is 2 standard deviations below its long-run average. Regional banks posted a strong rebound in early Tuesday trading.

☆ Investors fear inflation, higher yields may make U.S. equities 'dead money'
▼ + stars: | 2023-03-09 | by ( David Randall | ) www.reuters.com time to read: +5 min

Jonathan Golub, managing director at Credit Suisse, is among those with a bleak outlook for equities. "A six-month (Treasury) yield effectively guaranteed at 5.25% changes the dynamics for investors when the stock market looks shaky," he said. "You would need to get risk-adjusted returns in equities of at least 1 or 2 percentage points more than that, so in that environment stocks are not worth the effort and are dead money. Still, stocks have managed to hold onto their year-to-date gains so far even as bond yields have risen, with the S&P 500 up 4% and the Nasdaq Composite up nearly 11%. "You no longer have to hold your nose and invest in stocks because there's no other alternative," he said.

☆ Be cautious on Big Tech stocks even though the Nasdaq has been beating the S&P 500 so far in 2023, DataTrek says
▼ + stars: | 2023-03-09 | by ( Phil Rosen | ) www.businessinsider.com time to read: +2 min

The Nasdaq has outperformed the S&P 500 to start the year by a significant margin. When the Nasdaq beats the S&P 500 by 5 points or more over 50 days, underperformance has followed. In 2023, the Nasdaq is up roughly 10.6%, while the S&P 500 is up about 4%. In every instance, the Nasdaq then went on to underperform the S&P 500, they said. They've had a great relative run versus the S&P 500, "but +12 years of market history says it is time to be more cautious," DataTrek said.

☆ Here's why hawkish Powell testimony might not derail the stock market rally
▼ + stars: | 2023-03-07 | by ( Phil Rosen | ) www.businessinsider.com time to read: +5 min

Today, all eyes will be on central bank chairman Jerome Powell as he begins two days of hearings on Capitol Hill. Chairman of the Federal Reserve nominee Jerome Powell testifies during his confirmation hearing before the Senate Banking, Housing and Urban Affairs Committee November 28, 2017 on Capitol Hill in Washington, DC. Fed policy aside, the stock market has marched higher to start the year, with the S&P 500 gaining about 6% over the last nine weeks. US stock futures rise early Tuesday, as investors await the two-day testimony of Fed Chair Jerome Powell. The bear market rally isn't over yet as stocks just survived a crucial test.

☆ Earnings estimates have seen the steepest cuts in 7 years, but that doesn't spell doom for the stock market, DataTrek says
▼ + stars: | 2023-03-06 | by ( Carla Mozée | ) www.businessinsider.com time to read: +3 min

Stocks have held up even as analysts have cut 2023 S&P 500 earnings expectations by the most in years. DataTrek says stable earnings expectations is the best answer as to why stocks have been resilient. stable earnings expectations is the single best answer," Nicholas Colas, co-founder of DataTrek Research, in a note published Monday. "That still works out to $205/share ($51.15/share times 4), or 26 percent higher than the 2018 – 2019 pre-pandemic average S&P earnings of $162/share. "Yes, interest/discount rates are higher but without a material deterioration in earnings expectations that dynamic plays second fiddle to a stable outlook for earnings," he said.

☆ Here's one bullish factor the stock market can continue to rely on to limit future downside, DataTrek says
▼ + stars: | 2023-02-27 | by ( Matthew Fox | ) www.businessinsider.com time to read: +3 min

The stock market is relying on its earnings power to limit further downside, according to a note from DataTrek. The S&P 500 continuing to deliver $200+ in earnings per share "should limit US equity market volatility," DataTrek said. In April 2021, when the S&P 500 first crossed the 4,000 level, the 2-year US Treasury yield was just 0.1%. And as long as S&P 500 earnings hold steady and the index trades flat, that could be a solid win for the bulls as many investors expect big downside ahead. "S&P 500 earnings of $210 to $220 per share have been the market's anchor as market sentiment shifts.

☆ The stock market's euphoric rally has been a head fake, Wall Street's top strategists warn
▼ + stars: | 2023-02-25 | by ( Morgan Chittum | ) www.businessinsider.com time to read: +5 min

The year-to-date rally can't last, according to Morgan Stanley's chief US equity strategist. Sign up for our newsletter to get the inside scoop on what traders are talking about — delivered daily to your inbox. He added: "This is a perfect analogy for where equity investors find themselves today, and quite frankly, where they've been many times over the past decade." Goldman Sachs' chief US equity strategist David Kostin has said he is also skeptical of the market's gains so far in 2023. Meanwhile, JPMorgan's top stock strategist Marko Kolanovic, a long-time equities bull, says investors should ditch stocks because a recession is coming.

☆ Fed economists say the central bank will have to cause serious pain to Americans and the economy if it sticks to its current path
▼ + stars: | 2023-02-24 | by ( Phil Rosen | ) www.businessinsider.com time to read: +6 min

In the Fed minutes released this week, the central bank's own economists have started to sound the alarm on a recession. Jerome Powell, for his part, has insisted that the Fed's 2% inflation target is set in stone. The jobless rate today stands at 3.4%. We will have other things to worry about at that point besides whether the Fed's inflation target should be 2.0 or 2.75 percent." How realistic do you think the Fed's 2% inflation target is?

☆ Reddit-loving retail investors are making their chaotic presence felt again - and their risky behavior is fueling a stock rally that doesn't look sustainable
▼ + stars: | 2023-02-23 | by ( Phil Rosen | ) www.businessinsider.com time to read: +6 min

Bullish sentiment has returned in a big way among retail investors as they've started the year piling record amounts into stocks. Speculative bets are backSome of what retail investors are buying has troubled observers. Different from 2021, however, is that institutional and retail investors look like they're on the same team, at least to a noticeable degree. To JPMorgan's Kolanovic, retail investors' optimism foreshadows future weakness in the stock market, as weak hands get wiped out by volatility, similar to how 2022 played out. With the Fed still set to tighten monetary policy, retail investors' enthusiasm for risky assets could backfire like it did last year.

☆ Lowering inflation to the Fed's target would require a deep recession that more than doubles unemployment, say Cleveland Fed economists
▼ + stars: | 2023-02-23 | by ( Phil Rosen | ) www.businessinsider.com time to read: +3 min

Cleveland Fed economists wrote a working paper arguing that inflation will remain above the Fed's 2% goal by the end of 2025. Unemployment will soar and a deep recession will ensue if the Fed remains committed to its current goals, the economists said. But the Cleveland Fed economists are warning of the downsides to that, noting that policymakers' Summary of Economic Projections (SEP) appears to be a stretch. The economists added that for the Fed's stated 2% inflation target to be achieved, the unemployment rate would have to climb to 7.4% for one year. We will have other things to worry about at that point besides whether the Fed's inflation target should be 2.0 or 2.75 percent."

☆ The chief executive of an AI-driven markets analytics company breaks down how to invest in the craze sparked by ChatGPT
▼ + stars: | 2023-02-18 | by ( Phil Rosen | ) www.businessinsider.com time to read: +6 min

Today, I'm eager to share my conversation with the CEO of a markets analytics platform that leverages the power of artificial intelligence. Jan Szilagyi is the chief executive officer and cofounder of Toggle AI. Toggle AIJan Szilagyi is the chief executive officer and cofounder of Toggle AI. Jan Szilagyi: We've seen a big increase in business and a huge spike in inquiries to Toggle AI. Ultimately, I don't think AI is going to be a fad though.

☆ The good news is markets look resilient — but the bad news is just about everything else
▼ + stars: | 2023-02-17 | by ( Phil Rosen | ) www.businessinsider.com time to read: +5 min

Wizardry aside, let's see why the stock market has proved so resilient this year, even though the economy's providing nothing to cheer for. DataTrek cofounder Nicholas Colas is chalking up stable markets to strong earnings. "The only explanation that makes sense to us for this conundrum of 'bad' news and stable markets is that US corporate earnings power remains resilient," Colas wrote in a Thursday note to clients. Even as markets act like everything's fine, there's still not quite enough optimism among investors to say that markets are nearing a peak, according to Ned Davis Research. A top-ranked stock-picker said January's hot CPI report suggests the stock market is far from the bottom.

☆ Wall Street luminaries say it's time to get out of the stock market before the Fed crushes the economy
▼ + stars: | 2023-02-15 | by ( Phil Rosen | ) www.businessinsider.com time to read: +6 min

Tuesday's CPI data showed inflation climbed 0.5% in January, slightly higher than expected, and year-over-year it slowed to 6.4%. Prices, it seems, aren't cooling down as smoothly or quickly as anyone wants, especially the Fed. To Kolanovic, a recession is all but guaranteed if the Fed is serious about its 2% inflation target. And like Kolanovic, Morgan Stanley Wealth Management investment chief Lisa Shalett warned that Fed policy is going to pull stocks lower. US stock futures fall early Wednesday, as investors pick over yesterday's CPI inflation report to assess what it means for the Fed.

☆ A recession indicator is blaring louder than it did before the 2008 downturn - but 'no one seems to care'
▼ + stars: | 2023-02-14 | by ( Phil Rosen | ) www.businessinsider.com time to read: +2 min

A New York Fed economic model shows the odds of a recession in the next 12 months are at 57%. That's worse than it was before 2008 and the highest it's been since the early 1980s, according to DataTrek Research. Currently, the model shows the odds of a recession in the next 12 months are at 57%. Probability of US Recession Predicted by Treasury Spread DataTrek Research, NY FedMarkets have rallied to start the new year. The realistic chance of a downturn hasn't been fully priced in, in his view, and investors should fade 2023's early stock rally.

☆ Here's why the US economy won't fall into a recession this year or next, according to a key market signal
▼ + stars: | 2023-02-07 | by ( Phil Rosen | ) www.businessinsider.com time to read: +5 min

In that case, it may be wise to heed a key bond market signal that's saying we'll avoid a recession after all. But if you look at the bond market, there's a clear answer that seems to be forming: The US economy won't enter a downturn this year or next. That's because the spread between corporate bonds and Treasury yields is steadily narrowing, according to DataTrek Research. The spread between corporate bond yields and US Treasuries helps measure the risk appetite of bond traders. Strategists warned that markets have yet to price in an earnings recession, which could pose a major headwind in 2023.

☆ Forgotten parts of the market lead the way in 2023 as advisors wrestle with how to play the economy
▼ + stars: | 2023-02-07 | by ( Bob Pisani | ) www.cnbc.com time to read: +5 min

Everyone here is amazed at how forgotten segments of the market have rebounded in 2023: international, growth, small cap and bonds. Advisors here are having a hard time wrapping their heads around the idea that there would be a recession ins 2023, and now maybe not. "With real wage growth, large payroll growth and earnings beating expectations it equals a soft landing at worst and maybe no recession near term." Most advisors here are coming to grips with Powell's insistence the Fed will not lower rates this year. Their Equal Weight S & P 500 ETF (RSP) has also attracted significant inflows from investors wary of market cap weighted indexes.

☆ Markets may be taking the wrong read from January's shocking jobs report
▼ + stars: | 2023-02-06 | by ( Jeff Cox | ) www.cnbc.com time to read: +5 min

"The resounding strength of January employment report does not change our view of the labor market. Significant imbalances remain in the labor market due to too much excess demand and limited labor market slack," added Michael Gapen, chief U.S. economist at Bank of America. That's because they see the jobs report gain of 517,000 as a potential impetus to push the Fed into more aggressive interest rate hikes. He thinks future months will show a slowing labor market that will force the Fed into halting its hikes. "From a data-dependency perspective, the strength of the labor market suggests there might be need to continue to raise interest rates."

☆ Brittney Griner's return could be the unlikely catalyst that forces the WNBA to relent on its most contentious policy
▼ + stars: | 2023-01-29 | by ( Meredith Cash | ) www.businessinsider.com time to read: +10 min

WNBA free agency is underway, with teams receiving the green light to recruit stars as of this weekend. Top free agent Breanna Stewart has reportedly made charter flights a key issue for teams wooing her. Private flights are not covered by the league's CBA, but Brittney Griner's return may force policy changes. The 2018 MVP took to Twitter to announce that she's prepared to help "subsidize charter travel for the entire WNBA" by offering her "NIL, posts + production hours." Several current WNBA players, including Nneka and Chiney Ogwumike, Elena Delle Donne, Napheesa Collier, Alysha Clark, Erica Wheeler, Kahleah Copper, and Natalie Achonwa, offered their support in the comments.

☆ Markets may be underestimating how much the Fed wants to avoid turning this into the 1970s
▼ + stars: | 2023-01-24 | by ( Jeff Cox | ) www.cnbc.com time to read: +3 min

Fed fund futures are even anticipating some mild rate cuts by the end of 2023, according to CME Group data. "We also believe that the market is vastly underestimating the Fed Chair's desire to avoid a 1970's-style inflation resurgence," the firm said in a client note. "We expect Powell to disappoint markets by maintaining a hawkish tone during his press conference on February 1st." The 1970s saw the Fed raise rates to control inflation, only to cut them on signs of economic weakness. Fed rate hikes work by essentially tightening financial conditions, of which stock prices are a key component.

☆ Wall St Week Ahead U.S. investors hunt for gains in foreign stocks
▼ + stars: | 2023-01-13 | by ( Lewis Krauskopf | ) www.reuters.com time to read: +5 min

Europe's STOXX 600 index (.STOXX) has gained some 17% since the end of the third quarter, versus 11% for the U.S. benchmark S&P 500. MSCI's gauge of global stocks excluding the U.S. has risen more than 20% over that time. The firm last month rotated more into international equities as it increased its overall stock exposure, de Longis said. US vs European stock performanceInternational stocks were recently touted by investor Jeffrey Gundlach of DoubleLine Capital and BofA Global Research, which projected global stocks would "crush" their U.S peers in 2023. Buying international stocks could be a "complement" to the opportunity domestically, said Mona Mahajan, senior investment strategist at Edward Jones.

☆ Pepsi is changing its Zero Sugar recipe
▼ + stars: | 2023-01-13 | by ( Jordan Valinsky | ) edition.cnn.com time to read: +2 min

New York CNN —Pepsi Zero Sugar will soon taste different. Pepsi Zero Sugar’s tweaked formula comes about a year after debuted a refreshed Coca-Cola Zero Sugar recipe. From a sales standpoint, Pepsi Zero Sugar has struggled against main rival Coke Zero Sugar. “Pepsi can no longer be satisfied having an also-ran to Coke Zero Sugar,” Duane Stanford, editor and publisher of Beverage Digest, told CNN. “Reformulating Pepsi Zero Sugar is a line in the sand that says it’s time to compete in earnest for share in the most important cola segment today.”He added that “reformulation is a must to compete effectively,” because customers like sweeter colas.

☆ Markets don't believe the Fed when it comes to where rates are headed
▼ + stars: | 2023-01-11 | by ( Jeff Cox | ) www.cnbc.com time to read: +4 min

No matter how many times Federal Reserve officials say they're raising interest rates and keeping them there, the markets don't want to believe them. Recent comments from Fed presidents have tried, and failed, to nudge the market's view towards the [Federal Open Market Committee's] guidance." Traders are pricing in nearly an 80% probability that the FOMC approves a 0.25 percentage point rate increase when it releases its post-meeting decision Feb. 1, according to CME Group data . Doubts about the 'terminal rate' Markets, though, aren't buying it. The futures market also is indicating the likelihood of cuts of as much as half a percentage point by year-end.

☆ Is the bottom in for the bear? Market valuation measures suggest not
▼ + stars: | 2023-01-04 | by ( Bob Pisani | ) www.cnbc.com time to read: +2 min

The most recent market bottom occurred on October 12th, when the S & P 500 closed at 3,577. At the time, analysts were quite optimistic about 2023 earnings, expecting them to come in at $239, up almost 8% from the 2022 earnings estimates. That translates into a forward multiple (P/E ratio) of 15 times 2023 earnings. Other strategists have also noticed that the S & P 500, despite a 20% drop in 2022, is still trading at a rich valuation. Instead of $237, estimates are now $229, and the multiple is now 16.7 times forward earnings.

☆ Stocks have taken a beating this year and investors feel worse than during 2008's Great Financial Crisis. Here's what that means for 2023.
▼ + stars: | 2022-12-30 | by ( Phil Rosen | ) www.businessinsider.com time to read: +5 min

Now, unlike this newsletter and all you readers, the stock market is rounding out a year to forget. It's worth noting, too, that alongside slumping stocks, investor sentiment is worse than it was during the 2008 Financial Crisis. But in Fundstrat's view, that suggests a stock market bottom is near, if it hasn't happened already. In other words, overly bearish sentiment suggests stocks could be set up for a big rally in 2023. What's your stock market outlook for the new year?

☆ Just 5 trading days accounted for 94% of the S&P 500's decline in 2022 - and they could signal what's to come in 2023, DataTrek says
▼ + stars: | 2022-12-29 | by ( Matthew Fox | ) www.businessinsider.com time to read: +4 min

Just five trading days in 2022 are responsible for 94% of the S&P 500's year-to-date decline of 21%. And these down days could shed some light on how the stock market in 2023. These were the five trading days that tanked the market in 2022, according to DataTrek co-founder Nicholas Colas. May 18 - S&P 500 down 4.0%A big earnings miss from Target highlighted shifts in consumer spending patterns, supply chain issues, and rising input costs. Instead, there were 34 more down days this year in the S&P 500 than up days.

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