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☆ A notorious market bear who called the 2000 and 2008 crashes warns the S&P 500's 17% surge since October is a bear market rally — and that stocks are ripe for a decline of up to 60%
▼ + stars: | 2023-05-27 | by ( William Edwards | ) www.businessinsider.com time to read: +7 min

Since October 2022, the S&P 500 is up 17% following a 25% decline as the Fed embarked on its rate-hiking cycle. The median S&P 500 price target for the end of the year is 4,000. Predicted in 2000 that the S&P 500 would likely see negative total returns over the following decade, which it did. Predicted in April 2007 that the S&P 500 could lose 40%, then it lost 55% in the subsequent collapse from 2007 to 2009. The S&P 500, by comparison, is up 1.1% over the past year.

☆ A 31-year market vet who called the current bear market warns an impending credit crunch and recession will sink stocks by 45% as valuations remain higher than dot-com bubble levels
▼ + stars: | 2023-05-13 | by ( William Edwards | ) www.businessinsider.com time to read: +7 min

Indicators like initial and continuing unemployment claims and loan demand show weakness. A recession paired with high valuations spells trouble for stocks, he said. For example, the number of initial unemployment claims is starting to jump at a recessionary pace, Wolfenbarger said. The four-week moving average of initial unemployment claims has risen 29% over the last eight months. Hussman FundsWhat others are sayingMany market onlookers have highlighted high stock market valuations in recent weeks.

☆ A notorious market bear who called the 2000 and 2008 crashes says a 60% decline in the S&P 500 is likely as high valuations and weak investor sentiment create a 'trap door' scenario
▼ + stars: | 2023-04-29 | by ( William Edwards | ) www.businessinsider.com time to read: +7 min

The chart below shows how far the S&P 500 would have to fall to provide either a 10% return or 2% premium over Treasury bonds. He sees the S&P 500 finishing 2023 at around 3,150, he told YouTube channel Wealthion. Predicted in 2000 that the S&P 500 would likely see negative total returns over the following decade, which it did. Predicted in April 2007 that the S&P 500 could lose 40%, then it lost 55% in the subsequent collapse from 2007 to 2009. The S&P 500, by comparison, is up 0.8% over the past year.

☆ These are the places most at risk from record-breaking heat waves as the planet warms
▼ + stars: | 2023-04-25 | by ( Laura Paddison | ) edition.cnn.com time to read: +5 min

They identified Afghanistan, Papua New Guinea and Central America – including Guatemala, Honduras and Nicaragua – as “hot spots” for high-risk heat waves. Not only is there high potential for record-breaking extreme heat, but the impacts will be intensified by the huge difficulties the country already faces, he said. “When a really extreme heat wave does finally come along, then there are instantly going to be a lot of problems,” Mitchell said. Heat waves have a wide-ranging negative impact. They also take a heavy toll on human health, and extreme heat is one of the deadliest natural disasters.

☆ Stock ETFs are seeing accelerated inflows even as grimmer Wall Street predictions warn of a bear market ahead
▼ + stars: | 2023-04-24 | by ( Zinya Salfiti | ) www.businessinsider.com time to read: +3 min

Stock ETFs pulled in more than $12.6 billion in April, according to data from Bloomberg. It's the largest inflow into such funds since January and more than double the pace seen in February and March. Investors are pouring large amounts into equity ETFs even as Wall Street predictions warn of a bear market ahead. Wall Street veteran Ed Yardeni wrote: "In late October, we concluded that sentiment was so bearish it had to be bullish." Then, the current bull market is likely to resume, in our opinion," according to the Yardeni Research founder.

☆ 'The equity market is poised to struggle in the weeks and months ahead': Comerica Bank's CIO says the S&P 500 is primed for a 15% drop as weak earnings, high valuations, and a hawkish Fed all work aga
▼ + stars: | 2023-04-22 | by ( William Edwards | ) www.businessinsider.com time to read: +6 min

Year-to-date, the S&P 500 is up 8%. Plus, when the Consumer Price Index is between 4-6% like it is now, it usually dictates that the S&P 500 trades at a lower multiple than it is. "For example, at the current S&P 500 P/E of 19, the earnings yield for stocks is 1 divided by 19, or ~5.2%. While he sees 15% downside in the months ahead, he also believes the S&P 500 will return to current levels by the end of 2023. Morgan StanleyWilson has also repeatedly warned of an earnings recession ahead, and recently said that the pullback in lending from banks strengthens his case.

☆ Jeremy Grantham warns US house prices will drop, the S&P 500 could plunge 52%, and more banking problems may lie ahead
▼ + stars: | 2023-04-21 | by ( Theron Mohamed | ) www.businessinsider.com time to read: +3 min

Jeremy Grantham expects US house prices to slide over the next few years. The GMO cofounder sees the S&P 500 plunging as low as 2,000 points, a 52% drop. "It doesn't happen overnight, but housing casts a very long shadow and economically is more dangerous than the stock market," Grantham said. "I don't expect a crash but I expect house prices to drift back into more affordability," he added. The S&P 500 is likely to plunge between 27% and 52% from its current level of 4,130 points, he told CityWire.

☆ World could face record temperatures in 2023 as El Nino returns
▼ + stars: | 2023-04-20 | by ( Kate Abnett | ) www.reuters.com time to read: +3 min

REUTERS/Issei KatoBRUSSELS, April 20 (Reuters) - The world could breach a new average temperature record in 2023 or 2024, fuelled by climate change and the anticipated return of the El Nino weather phenomenon, climate scientists say. During El Nino, winds blowing west along the equator slow down, and warm water is pushed east, creating warmer surface ocean temperatures. "El Nino is normally associated with record breaking temperatures at the global level. Climate models suggest a return to El Nino conditions in the late boreal summer, and the possibility of a strong El Nino developing towards the end of the year, Buontempo said. The world's hottest year on record so far was 2016, coinciding with a strong El Nino - although climate change has fuelled extreme temperatures even in years without the phenomenon.

☆ This startup founded by ex-Tesla, Google, and SolarCity staffers uses the ocean for carbon removal. Check out the 13-slide pitch deck Ebb Carbon used to raise $20 million.
▼ + stars: | 2023-04-20 | by ( Tasmin Lockwood | ) www.businessinsider.com time to read: +4 min

Ebb Carbon has found a way to remove carbon from the atmosphere while making the ocean less acidic. Check out the 13-slide pitch deck Ebb Carbon used to nab $20 million in Series A funding. California-based Ebb Carbon, founded in 2021, aims to capture and store carbon dioxide in the ocean while simultaneously tackling ocean acidification. Ebb Carbon has developed an electrochemical process that removes acidity from seawater while enhancing its ability to store carbon dioxide. Ebb CarbonThe alkaline release then helps to balance the pH of seawater locally, Ebb Carbon claims.

☆ If you're a new hire, you're more likely to be laid off—a Harvard expert's No. 1 way to rebound
▼ + stars: | 2023-04-19 | by ( Rebecca Picciotto | ) www.cnbc.com time to read: +2 min

Amid the slew of recent layoff headlines, a question lingers: when a company cuts jobs, who is first on the chopping block? According to new data from BambooHR, a human resources software company, 65% of HR professionals typically approach layoffs by eliminating newly hired workers first. The report surveyed over 1,500 employees and human resource professionals from December 19 to January 4. Overall, it found that employees believe that in a wave of job cuts, the likelihood of getting laid off is 62% for recent hires and 20% for longstanding employees. She says laid-off new hires need to be smart about how they get back into the job hunt.

☆ 20 stocks expected to outperform the market, including one by 2,637%, according to a fintech company that tracks Wall Street's top analysts' price targets
▼ + stars: | 2023-04-15 | by ( Laila Maidan | ) www.businessinsider.com time to read: +2 min

The S&P 500 could see a steeper downturn for the remainder of the year. This could mean a micro-driven market of stock pickers will outperform the broad market. Below is a list of 20 stocks with high upside compiled by TipRanks, a data-driven financial company. Morgan Stanley's chief US equity strategist is forecasting a 20% plunge for the S&P 500. The S&P 500 returned 106% for the same period.

☆ Bank of America's top global strategist warns there's 'plenty of room for more S&P 500 downside' as 80% of recessions since 1933 have torpedoed stocks by 20% after they started
▼ + stars: | 2023-04-15 | by ( William Edwards | ) www.businessinsider.com time to read: +6 min

Hartnett says S&P 500 EPS will fall by 16% in 2023, compared to the market's view of -4%. Some argue that stocks have already priced in a recession, having fallen 20% in 2022 (though the S&P 500 has rallied 8% year-to-date). He continued: "Plenty of room for more S&P 500 downside…since 1929, 2/3 of the S&P 500 peak-to-trough drawdowns have occurred during, not before, US recessions." So whether we have an economic recession or not it isn't as important as the earnings recession," he said. Most strategists see a more mild decline in store for stocks, and most — including Wilson — see the S&P 500 finishing the year somewhere near 4,000.

☆ The S&P 500 will tank 27% at least, a recession will hit, and more financial disasters will happen, elite investor Jeremy Grantham says
▼ + stars: | 2023-04-14 | by ( Theron Mohamed | ) www.businessinsider.com time to read: +3 min

Jeremy Grantham expects stocks to tank, a recession to bite, and more financial disasters to occur. The S&P 500 will plunge by at least 27%, and could plummet by more than 50%, the GMO cofounder says. Grantham predicts stress on the financial system will lead to further disasters like SVB's collapse. He described the prospect of bubbles bursting in both the stock market and real estate sector as "fairly ominous." "We're by no means finished with the stress to the financial system."

☆ Jeremy Grantham can spot market bubbles. Now he's warning of an 'ominous' bust
▼ + stars: | 2023-04-13 | by ( Julia Horowitz | ) edition.cnn.com time to read: +7 min

“Every one of these great bursts of euphoria, the great bubbles with overpriced markets … has been followed by a recession,” Grantham said. “When the great bubbles break, they do impose a lot of stress on the system,” Grantham said. What’s even more worrying is that this time, bubbles in the stock market and the real estate market are poised to burst simultaneously, Grantham said. The sector, which relies heavily on debt financing, has been hit hard by rising interest rates. Volcker raised interest rates to unprecedented levels to fight inflation in the late 1970s and early 1980s.

☆ US stocks face a 50% crash, a 'crypto apocalypse' is coming, and the economy is entering a 'doom loop.' Here are the 10 wildest predictions over the past quarter.
▼ + stars: | 2023-04-10 | by ( Zahra Tayeb | ) www.businessinsider.com time to read: +6 min

From stocks to commercial real estate, several parts of financial markets are on shaky ground. Here are the 10 wildest predictions about asset prices and the economy over the past quarter. Grantham said the prices of stocks, bonds, real estate, fine art, and other investments surged to unsustainable highs during the COVID-19 pandemic. Crypto: an 'apocalypse' is coming for digital assets"Dr. Doom" economist Nouriel Roubini isn't hopeful about the crypto industry. "I think it will spread into commercial real estate as banks become more reluctant to lend," Cooperman said.

☆ Bank of Canada seen on hold even as economy accelerates
▼ + stars: | 2023-04-09 | by ( Fergal Smith | ) www.reuters.com time to read: +4 min

Last month, the Bank of Canada became the first major global central bank to pause its rate-hiking campaign, after lifting its benchmark rate to a 15-year high of 4.50%. This will carry through to higher economic growth." That is welcome news for most, but not for Bank of Canada (BoC) Governor Tiff Macklem, as it could call into question his decision to announce a conditional rate pause in January. "We suspect that the Bank of Canada will view the apparent strength in Q1 GDP similarly, and increase its estimate of potential growth." Canada's economy faces headwinds from higher borrowing costs and financial stability concerns, while inflation has cooled more than in the United States, said Nathan Janzen, assistant chief economist at Royal Bank of Canada.

☆ The dollar's dominance on the world stage isn't going away. Here's why.
▼ + stars: | 2023-04-06 | by ( Phil Rosen | ) www.businessinsider.com time to read: +6 min

The move makes sense, given Russia's growing status as a pariah state, but it also highlights a push to unseat the dollar as a dominant force in global trade. But to strategists at the Carson Group, a scenario where the dollar isn't the world's primary reserve currency simply isn't in the cards in the near future. Are you convinced that the dollar won't lose its status as a dominant global reserve currency? Some companies in this batch of oil stocks have upsides of up to 180%, according to strategists at Bank of America. An expert from the World Gold Council pointed out that history says gold performs well in a recession.

☆ 5 must-see charts that show why the economy is barreling toward disaster — putting stocks at risk for massive declines
▼ + stars: | 2023-04-01 | by ( William Edwards | ) www.businessinsider.com time to read: +7 min

Reducing inflation is likely to require a period of below-trend growth and some softening in labor market conditions," Powell said. "Restoring price stability is essential to set the stage for achieving maximum employment and stable prices over the longer run." A large enough pullback in lending will send the economy into a downward spiral, he said. "If you get a credit crunch, you could have an immediate downturn in the economy, a very quick downturn," he said. Credit spreads are the gap between high-risk bond yields and yields on risk-free bonds.

OTTAWA, March 31 (Reuters) - The Canadian economy grew more than expected in January and is seen expanding further in February, data showed on Friday, results that are likely to fuel concern by the central bank that inflation has yet to be fully tamed. The economy gained by 0.5% in January, ahead of analysts' forecasts of a 0.3% rise, after contracting 0.1% in December, Statistics Canada said. The Bank of Canada became the first major central bank to pause interest rate hikes in March after increasing them at eight consecutive previous meetings. With the key overnight rate now at 4.5%, the bank said it would not raise rates again if inflation came down as forecast. While inflation has eased, falling to 5.2% in February from a high of 8.1% last year, the economy is expanding faster than the central bank had forecast in January.

☆ The Nasdaq 100 just entered a fresh bull market - and a top analyst says tech names look like the new safety trade
▼ + stars: | 2023-03-31 | by ( Phil Rosen | ) www.businessinsider.com time to read: +6 min

Those rate forecasts have bolstered tech names, and mega-caps like Apple and Microsoft have pulled the Nasdaq higher. "While it sounds like Twilight Zone comment to many investors, tech stocks have become the new safety trade with Big Tech names a major beneficiary of this dynamic," Ives, a managing director and senior equity research analyst at Wedbush, wrote in a note. "And these tech stocks have been under owned and still remain in that camp in our opinion." Short sellers generated paper profit of $14 billion betting against bank stocks over the last month. Shorting bank names in March produced a "wide swath of profitable trades that returned +17.2% in less than a month," S3 Partners said.

☆ Britain sets out next steps to green its financial system
▼ + stars: | 2023-03-30 | by ( Huw Jones | ) www.reuters.com time to read: +3 min

Asset managers oversee assets worth 10 trillion pounds ($12.35 trillion), with nearly half having integrated ESG into the investment process, the paper said. "This will support the quality of standards, labels and disclosures used in the industry for green finance activity," the ministry said in a statement. "The government proposes that nuclear - as a key technology within our pathways to reach net zero - will be included within the UK’s Green Taxonomy, subject to consultation." In the fourth quarter, Britain will also consult on requirements for the largest companies to disclose their transition plans to net zero carbon emissions, if they have one, the ministry said. Brendan Curry, policy fellow at the Grantham Research Institute on Climate Change, said the updated strategy has "failed to deliver" a clear roadmap for the annual investment needed for net zero.

☆ Jeremy Grantham's GMO says now is the time to jump into bank stocks as failures ravage the sector. Here are 2 banks it says are trading at valuations 90% cheaper than historical norms.
▼ + stars: | 2023-03-30 | by ( William Edwards | ) www.businessinsider.com time to read: +3 min

Big bank stocks have rarely been cheaper, says GMO's asset allocation team. Two GMO is most bullish on are JPMorgan and Bank of America. Financials-sector stocks have gotten hammered in March amid the failures of institutions like Silicon Valley Bank and Signature Bank, and as UBS hastily acquired a troubled Credit Suisse. The eight GSIBs include: JPMorgan, Bank of America, Citi, Goldman Sachs, BNY Mellon, Morgan Stanley, State Street, and Wells Fargo. While GMO said it couldn't comment on which seven banks it likes, it said they include JPMorgan (JPM) and Bank of America (BAC).

☆ The bank failures have opened up Pandora's box, and the huge hole in banks' balance sheets isn't going away, strategist says
▼ + stars: | 2023-03-30 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

The recent banking failures have opened up a Pandora's box, TD strategist Priya Misra warned. The gaping hole in banks' balance sheets will remain even as volatility fades, she said. "I think you opened a Pandora's box and massive unrealized losses sitting on banks' balance sheets," she said, adding that banks would likely need to sell their assets or raise capital. "The market will have to get used to a Fed that's not being responsive enough," Misra warned. Other Wall Street analysts have warned of a recession to strike this year, which could weigh heavily on stocks.

☆ Bond markets are flashing a recession signal that suggests the Fed may be about to step in to quickly cut rates
▼ + stars: | 2023-03-29 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +2 min

The bond market is flashing a recession signal that suggests the Fed will quickly cut rates. That's due to the large jump in short-term Treasuries, which the Fed has previously responded to by cutting rates. In all of these cases, the Fed moved quickly to cut interest rates – which suggests the signal's reappearance could be an omen for markets. "The default scenario baked into asset prices is based on the Fed pivoting - quickly - to lowering policy rates. Central bankers have raised interest rates aggressively over the past year to lower inflation, with the fed funds target rate at 4.75-5%, the highest rates have been since 2007.

☆ There's more economic pain coming as the SVB fallout is likely not contained, Mohamed El-Erian says
▼ + stars: | 2023-03-28 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

More economic pain is coming as the SVB fallout is likely not contained, Mohamed El-Erian said. Though policymakers have quelled financial contagion, economic contagion is still a risk, he warned. Other market commentators have also warned of more economic pain, as the outflow of deposits in recent weeks will make banks less willing to lend, leading to tighter credit conditions. It is also a reminder to markets not to allow the understandable focus on supersonic-speed financial contagion divert all the attention away from slower-moving economic contagion," El-Erian warned. Though El-Erian has said a recession isn't inevitable, other commentators have warned that a downturn is more likely.

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