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☆ Here's what even a 'mild' recession would look like for stocks
▼ + stars: | 2023-04-13 | by ( Bob Pisani | ) www.cnbc.com time to read: +3 min

That is hardly an "earnings recession." More accurately: analysts are predicting a mild "earnings recession" for the first half of the year, but then a rebound in the second half. The strategists have good reason to be nervous Strategists are nervous because the market is priced for a perfect landing. It is not even priced for a "mild" recession. The difference between a "mild" recession and a "deep" recession on stocks is enormous: a "typical" recession will produce an earnings decline of 10%-20%, and a multiple compression of 20%-25%.

☆ A 31-year market vet who called the current bear market says the S&P 500 has another 45% downside as investors remain blind to signs that a recession is hurtling toward the US economy
▼ + stars: | 2023-04-08 | by ( William Edwards | ) www.businessinsider.com time to read: +5 min

Yet, stock market investors remain bullish, he said. He's been warning of a significant stock market decline since late 2021,"People are ignoring all the lessons of history," Wolfenbarger told Insider on Friday. His bearish outlook stems from how high stock valuations are relative to 10-year Treasury yields. Wolfenbarger also has company in thinking that stock market investors aren't heeding the warnings of a coming downturn. Yet, the stock market doesn't seem to reflect this uncertainty, he said.

☆ Bank of America shares its recession investing playbook based on 150 years of market history — including 5 ETFs to own now and 3 signals to watch to know when to 'confidently buy' at the bottom
▼ + stars: | 2023-04-05 | by ( William Edwards | ) www.businessinsider.com time to read: +4 min

For a downturn, the bank likes ETFs like IYK, ANGL, FALN, and CALF. Economists at Bank of America expect a recession to hit the US economy this year. Bank of AmericaThat's bad news for stock market investors, as a recession likely means downward pressure on corporate earnings and share prices. Bank of AmericaWhen the indicator has entered this phase in the past, the strategists said defensive stocks, small-cap stocks, value stocks, and emerging-market stocks have outperformed. In addition to the broader index, they also said materials stocks should outperform when the market begins to recover.

☆ Wall Street sentiment about stocks is worse than it was during the Global Financial Crisis lows
▼ + stars: | 2023-04-04 | by ( Jeff Cox | ) www.cnbc.com time to read: +2 min

Wall Street strategists have pared back allocations to stocks at a level not seen even during the worst of the 2008 financial crisis, according to Bank of America. BofA's "Sell-Side Indicator" shows that stocks are down to 52.7% as a share of investment portfolios. But when worry over stocks has run this high, it often means a rally ahead. While the firm has been pessimistic about stocks in the short term, it still finds equities a preferable alternative over the long run. "We note that Wall Street recommended underweighting equities through the entire bull market of the 1980s and 1990s as well as the 2009 to 2020 bull," Subramanian wrote.

☆ 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.

☆ Bank of America's model with a good track record predicts S&P 500's annual return for the next decade
▼ + stars: | 2023-03-30 | by ( Yun Li | ) www.cnbc.com time to read: +1 min

The recent volatility has kept investors on edge, but Bank of America advised equity investors to focus on the long term as its trusty model suggests a sizable return for the next 10 years. The Wall Street firm said price-to-normalized earnings has explained 80% of S & P 500 returns over a 10-year time horizon since 1987, and the current valuations suggest a 7% annual total return (a 5% price return) for the S & P 500 for the next decade. "We have yet to find any factor with such strong predictive power for the market over the short or medium term," she added. .SPX 1Y mountain S & P 500 The S & P 500 is still up 5% this year despite the banking crisis and recession fears. Based on data going back to 1929, the probability of losing money in the S & P 500 over one day is 46%, but the chance declines to just 6% over a 10-year time horizon, she said.

☆ Investors should keep buying stocks for the long-term despite attractive yields from short-term money market funds, Bank of America says
▼ + stars: | 2023-03-29 | by ( Matthew Fox | ) www.businessinsider.com time to read: +3 min

High cash yields shouldn't stop investors from buying stocks for the long term, according to Bank of America. "For long term investors, the S&P 500's price to normalized earnings has explained 80%+ of subsequent 10-year S&P 500 returns. That means money market funds that yield close to 5% are viable alternatives for investors, but only for short-term money. According to the note, investors' long-term holding period for stocks has fallen over time due to fixations on short-term price moves. For example, zero-day S&P 500 options now account for 45% of options volume versus less than 5% a decade ago.

☆ A notorious market bear who called the 2000 and 2008 crashes warns that the stock sell-off is 'not over by a long shot' — and that the S&P 500 could sink by more than 50%
▼ + stars: | 2023-03-25 | by ( William Edwards | ) www.businessinsider.com time to read: +6 min

Hussman called the 2000 and 2008 stock market crashes. Sure, the S&P 500 is down 17% from its peak on the first day of trading in 2022, 15 months ago. But the numbers don't lie, says Hussman, who called the 2000 and 2008 stock market crashes. Wilson sees the S&P 500 bottoming between 3,000-3,300, making him one of the more bearish strategists on the Street. Predicted in 2000 that the S&P 500 would likely see negative total returns over the following decade, which it did.

☆ BofA's US stock chief highlights a 'tremendous opportunity' that's opened up for investors, and explains the adjustment they should make to enjoy stronger returns
▼ + stars: | 2023-03-14 | by ( Marley Jay | ) www.businessinsider.com time to read: +4 min

She says there is a great deal of opportunity for investors who focus on company fundamentals. When investors find something that works for a long time, it only makes sense that they're going to stick with it. "We've all been trained to ignore fundamentals and just pay attention to Fed speak, central banks, and then also pay attention to what quants are doing to extend any momentum." She suggested that a lot of investors think that sooner or later, conditions will revert back to where they were before the pandemic, leaving a low-interest rate, low-inflation, low-growth environment. "There is a tremendous opportunity for fundamental investors, the few that are left," she said.

☆ The Fed wants higher unemployment because it would bring down inflation
▼ + stars: | 2023-03-10 | by ( Phil Rosen | ) www.businessinsider.com time to read: +7 min

Powell testified abou the Federal Reserve's semi-annual monetary policy report to Congress and the state of the economy Chip Somodevilla/Getty1. A reading of 200,000 or more jobs added in February means we're getting a bigger rate hike this month. Fed Chair Jerome Powell said this week that the trajectory of monetary policy doesn't hinge solely on today's jobs report, but markets are still bracing for impact. Remember, the Fed's stated goal is a 2% inflation rate. Meanwhile, Wharton's Jeremy Siegel said Thursday that the Fed is taking a flawed policy approach, and it shouldn't be so focused on jobs.

☆ Merrill financial advisor survey shows they love cash and bonds, but hate stocks
▼ + stars: | 2023-03-08 | by ( Scott Schnipper | ) www.cnbc.com time to read: +2 min

Almost 400 financial advisors surveyed at Bank of America's Merrill Lynch unit said they favor bonds and cash the most for investment portfolios, with stocks at a "distant third," a report out Wednesday said. Bonds as a percentage of portfolios climbed to 27% when the survey was taken in late January and early February, up from 24% a year earlier. The average allocation to cash climbed to 10% from 7% a year ago, while stocks fell to 57% from 62%. With the surplus cash that's being generated in portfolios, 26% of advisors plan to buy stocks, down from 42% last year. Meanwhile, 29% intend to put the money into bonds and 30% "are happy to remain in cash."

☆ Bank of America stock chief Savita Subramanian told us why she thinks investors are using the exact wrong playbook for the oncoming recession, and what they should do instead
▼ + stars: | 2023-03-08 | by ( Marley Jay | ) www.businessinsider.com time to read: +4 min

Savita Subramanian says investors need to update their approaches as the economy slows down. Bank of America's US stock chief told Insider she's very wary of tech stocks and long-term bonds. In a recent interview with Insider, however, Subramanian pushed back on the idea that she's a bear. She's telling investors to overweight materials, energy, consumer staples, and financials in their stock portfolios. Stocks have outperformed bonds dramatically since that last high, and investors might start dumping bonds if they're disappointed by their returns again.

☆ Bank of America's stock chief warns the S&P 500 could fall another 26% as valuations remain too elevated and decades of market history show half of the criteria for a bottom still aren't being met
▼ + stars: | 2023-03-04 | by ( William Edwards | ) www.businessinsider.com time to read: +6 min

The S&P 500 could fall to as low as 3,000, they said. In a note this week, Wilson said that the S&P 500 remains overvalued relative to history by price-to-earnings and price-to-sales metrics. S&P 500 P/E multiples are 9% above their median while P/Sales multiples are 23% above median," Wilson said. "History implies that for the current level of real rates the S&P 500 multiple is ~2.5x overvalued," the chief market strategist said. Wilson's end-of-year target for the S&P 500 is 3,900, while Krishna and Kolanovic have targets of 3,725 and 4,200, respectively.

☆ These are the highest quality stocks in the S&P 500 that could win in this volatile market
▼ + stars: | 2023-03-02 | by ( Hakyung Kim | ) www.cnbc.com time to read: +3 min

Quality stocks are about to outperform this year, according to Bank of America. Against such a backdrop, equity strategist Savita Subramanian at Bank of America advised investors to own high quality stocks — specifically stocks with a rated high quality by S & P. A basket of such stocks outperformed low quality stocks by 1.2% in February. "Tailwinds for Low Quality from fiscal and monetary stimulus are now over, and we recommend owning High Quality stocks," she added. To be sure, Subramanian said that while high quality shares are still lagging low quality shares year-to-date, the bank anticipates the economy entering a downturn, during which quality factors have typically outperformed. With this in mind, CNBC screened for stocks in the S & P 500 that had the highest quality rating of A+ as determined by S & P Global Market Intelligence.

☆ The stock market is about to get a signal to buy - and it's 'old economy' sectors like materials that will be worth a look, Bank of America says
▼ + stars: | 2023-03-01 | by ( Carla Mozée | ) www.businessinsider.com time to read: +3 min

A buy signal is about to flash for stocks, Bank of America said Wednesday. The S&P 500 is hovering close to the firm's year-end target of 4,000. Investors should take a look at "old economy" sectors like materials and energy. "But we do see stock selection opportunities, particularly in old economy sectors that have been starved of capital for 10+ years." The sector, which has a nearly 3% weighting on the S&P 500, is also most exposed to China's reopening after its extensive COVID lockdowns.

☆ JPMorgan says Q1 could mark high point for stocks in 2023, sees warning signs mounting
▼ + stars: | 2023-02-21 | by ( Fred Imbert | ) www.cnbc.com time to read: +2 min

Don't expect the market's early 2023 momentum to last, JPMorgan Chase warned. The S & P 500 is up more than 6% since the start of the year, recovering some of the lost ground from 2022. Further gains will be harder to come by as warning signs continue to mount, JPMorgan strategist Mislav Matejka said in a Monday note. The Fed hiked rates at its Jan. 31-Feb. 1 meeting by 25 basis points, down from 50 basis points at its December meeting. Subramanian upgraded materials to overweight from underweight and communication services to market weight from underweight.

☆ A former BlackRock stock chief says he thinks the S&P 500 will fall another 17% as investors ignore a growing mountain of tell-tale recession signals
▼ + stars: | 2023-02-18 | by ( William Edwards | ) www.businessinsider.com time to read: +6 min

Doll says the S&P 500 will drop to 3,400 if a mild recession unfolds. If a more normal recession (more severe than a mild downturn) comes, Doll said the index could fall to 3,000. The Fed's recession probability tracker based on the yield curve also now puts the odds of a recession at 57%. Subramanian expects the S&P 500 to fall as low as 3,000, a view shared by Morgan Stanley's Mike Wilson. If trouble hits, like Doll and much of Wall Street expects, stocks could extend their fall to new lows.

☆ A Bank of America indicator just signaled the economy is tipping into a recession. Their stock chief shares 5 trades that are likely to outperform the rest of the market based on decades of history.
▼ + stars: | 2023-02-15 | by ( William Edwards | ) www.businessinsider.com time to read: +4 min

Bank of America shares where to invest in a recession: high quality; low risk; large caps; small caps; and stocks that generate high free cash flow. It can be difficult to pinpoint where in a market cycle stocks are — to be able to tell whether there's further downside in a sell-off, or whether stocks have already seen their lowest point. "We have found that factor behavior is relatively predictable during different phases of the US Regime Indicator," Subramanian added. Bank of AmericaFurther, Subramanian said stocks that generate high cash flow should also outperform in the current late cycle environment and into the downturn phase. "As the market cycle matures, companies that continue to generate healthy free cash become scarcer and sought after," she said.

☆ Why all the big bank equity analysts think the market is going to drop
▼ + stars: | 2023-02-06 | by ( Samantha Subin | ) www.cnbc.com time to read: +3 min

After a stellar start to 2023, many big bank analysts are skeptical that this rally can continue and urge investors to prepare for another leg lower. "We believe investors should fade the YTD rally as recession risks are merely postponed rather than diminished," wrote JPMorgan's Marko Kolanovic in a January note to clients. Meanwhile, Barclays' Venu Krishna wrote in a Monday note that equities have "jumped the gun." Several factors, including falling recession risks and a correction in the CBOE Volatility Index and other spreads, also support a long-due fade in the market rally, wrote Credit Suisse's Patrick Palfrey in a January note. "We continue to recommend that equity investors position defensively and be prepared for additional volatility ahead," she said.

☆ The 60/40 investing strategy posted one of its best months ever after a nightmare 2022
▼ + stars: | 2023-02-03 | by ( Carmen Reinicke | ) www.cnbc.com time to read: +2 min

After the worst yearly performance ever in 2022 , the standard portfolio of 60% stocks and 40% bonds had a solid rebound in the first month of the new year. The gain was just below the 6.3% total return of the S & P 500 in the same timeframe, recouping losses from December. "We view the rally as sentiment-driven, given how bearish consensus was on 1H23 heading into this year," said Subramanian. .SPX YTD mountain spx ytd Rebound rally The sharp rebound in January was led by the worst-performing sectors in 2022. That's a drastic difference from last year, when both stocks and bonds fell, slamming investors who used the assets to balance their portfolios.

☆ Recession 2023: Jerome Powell's Legacy Will Dictate Inflation, Stock Market, Economy
▼ + stars: | 2023-01-30 | by ( William Edwards | ) www.businessinsider.com time to read: +15 min

This obsession with controlling inflation — and potentially causing serious pain for average Americans — is driven by one major factor: legacy. High inflation eats away at consumers' purchasing power, and persistent inflation seeps into expectations for price and wage adjustments, which further fuel inflation. What's more, the full impact of the Fed's rate hikes have yet to hit. Legacy actsThere are signs that certain Fed officials are ready to dial back on the inflation fight. And navigating such a tricky economy — without throwing hundreds of thousands of Americans out of work — could cement Powell's legacy.

☆ Watch CNBC's full interview with BofA's Savita Subramanian
▼ + stars: | 2023-01-30 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailWatch CNBC's full interview with BofA's Savita SubramanianSavita Subramanian, head of U.S. equity and quantitative strategy at Bank of America Securities, joins CNBC's 'Squawk Box'' to discuss the year's equity market performance, bond yields, and more.

☆ The market has 'decoupled,' says BofA's Savita Subramanian
▼ + stars: | 2023-01-30 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailThe market has 'decoupled,' says BofA's Savita SubramanianSavita Subramanian, head of U.S. equity and quantitative strategy at Bank of America Securities, joins CNBC's 'Squawk Box'' to discuss the year's equity market performance, bond yields, and more.

☆ A notorious market bear who called the dot-com bubble warns that stocks will face losses rivaling 1929, 2000, and 2007 as high valuations and poor investor sentiment create a "trap door" scenario
▼ + stars: | 2023-01-28 | by ( William Edwards | ) www.businessinsider.com time to read: +7 min

There are two major driving forces of stock-market returns, according to John Hussman: valuations and investor sentiment. "Put simply, we estimate that the S&P 500 faces the same prospect of full-cycle loss and return-free risk as it did in 1929, 2000, and 2007. The S&P 500, in its current form since 1957, fell more than 46% from 2000-2002 and more than 52% from 2007-2009. Hussman FundsAs for investors sentiment — or what Hussman calls "market internals" — he uses a proprietary measure of the uniformity of investor behavior. Predicted in April 2007 that the S&P 500 could lose 40%, then it lost 55% in the subsequent collapse from 2007 to 2009.

☆ Premarket stocks: Wall Street is ignoring the Fed. That could be dangerous
▼ + stars: | 2023-01-27 | by ( Nicole Goodkind | ) edition.cnn.com time to read: +7 min

Price increases are also moderating: December brought the sixth consecutive monthly fall in consumer price index (CPI) inflation to 6.5%. That’s a change from 2022 when the Fed and the market tended to move in unison. This could mean that the upcoming Fed meeting will generate a lot of market disappointment, said Christian Scherrmann, an economist at DWS Group. The Fed flagged investors’ persistent belief in a pivot away from elevated rates as something that could hurt efforts to restore price stability. But even though the lawsuit drives at the heart of Google’s revenue machine, it could take years to play out.

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