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☆ Wall St Week Ahead Resilient U.S. stocks failing to factor in recession, investors fear
▼ + stars: | 2023-03-31 | by ( Lewis Krauskopf | ) www.reuters.com time to read: +5 min

NEW YORK, March 31 (Reuters) - U.S. stocks have soldiered on through a banking mess to notch solid first-quarter gains. Some investors say that performance could come under pressure if a widely expected recession hits. Wary investors say those gains leave stocks more vulnerable to an economic downturn, which may have been brought closer by tumult in the banking sector following this month’s collapse of Silicon Valley Bank. S&P 500 earnings for the first quarter are estimated to have fallen 5% from the prior year, followed by an expected 3.9% drop in the second quarter, Refinitiv data shows. Nathan Shetty, head of multi-asset at Nuveen, believes current valuations show investors have yet to price in a recession.

But after a two-week storm which had analysts and investors rushing to rework their spreadsheets, the outlook is clouded. And the ructions have left the gap between the ratios of European and U.S. banks at its narrowest since September 2017. Reflecting concerns over the stability of the sector, bank shares are set for an almost 15% monthly drop in March, after five consecutive months of gains. European bank earnings growth expectations'UNLIKELY TO BUY'Other investors see pressure on European bank earnings as they anticipate the euro zone economy will slow down. Also in the calculation mix is the ECB's campaign to raise interest rates to tackle rising inflation, which had previously been a boon for euro zone lenders.

HONG KONG, March 28 (Reuters Breakingviews) - In the biblical parable of the prodigal son, a repentant wastrel returns home to a forgiving and beneficent father. In China, Alibaba (9988.HK) founder Jack Ma's homecoming and rehabilitation appears to be part of an official campaign to revive flagging private sector investment. However, if officials believe the mere sight of Ma in public will revive business confidence, that hope has a whiff of desperation. Ma the prodigal entrepreneur has returned, but perhaps not for long. Shares of Alibaba rallied as much as 4% in Hong Kong following the SCMP report before closing flat at HK$85.25 on March 27.

NEW YORK, March 17 (Reuters) - Whipsawed U.S. stocks have gained an unexpected ally in recent days - a historic plunge in bond yields. The volatility in fixed income markets has unsettled investors, and falling yields can reflect expectations that the Fed will cut rates because of a hit to growth. The index finished up 1.4% for the week, with strength in technology stocks outweighing sharp declines in bank shares. Tech stocks vs US bond yieldsThe near-term trajectory of yields will likely hinge on next week's Federal Reserve meeting. The S&P 500 trades at 17.5 times forward earnings estimates compared to its historic average P/E of 15.6 times, according to Refinitiv Datastream.

☆ Wall St Week Ahead Defensives may not be safe place to hide as stock market stumbles
▼ + stars: | 2023-03-03 | by ( Lewis Krauskopf | ) www.reuters.com time to read: +5 min

"Last year it was really easy to hide out in defensives," said Anthony Saglimbene, chief market strategist at Ameriprise Financial. When compounded by the fact that some defensive stocks carry relatively expensive valuations, investors may avoid them even if the broader market sours. The S&P 500 was last up 3.7% in 2023, but had pulled back since posting its best January performance since 2019. However the sector's financial prospects this year are relatively weak; S&P 500 healthcare earnings are expected to fall 8.3% against a 1.7% increase for the overall S&P 500, according to Refinitiv IBES. Should concerns about recession spike, as they did last year, defensives could outperform again on a relative basis, according to investors.

☆ Wall St Week Ahead: Defensives may not be safe place to hide as stock market stumbles
▼ + stars: | 2023-03-03 | by ( Lewis Krauskopf | ) www.reuters.com time to read: +5 min

☆ Analysis: Boom in European bank earnings hints at a rally with legs
▼ + stars: | 2023-02-23 | by ( Joice Alves | ) www.reuters.com time to read: +5 min

The euro zone is expected to stagnate rather than contract, while cost of borrowing is still rising. The European Central Bank's campaign to raise interest rates as it fights to bring inflation back to its 2% target has been a boon for euro zone lenders. In the meantime, euro zone lenders' earnings per share (EPS) have surged to their highest since the global financial crisis in 2008. In the United State, where the rate cycle is more advanced, there's less potential for earnings upgrades at this point, she said. Earnings euro zone banks($1 = 0.9408 euros)Reporting by Joice Alves and additional reporting by Samuel Indyk in London; editing by Amanda Cooper and Sharon SingletonOur Standards: The Thomson Reuters Trust Principles.

☆ Analysis: U.S. stock rally faces uphill climb after mixed inflation data
▼ + stars: | 2023-02-14 | by ( Lewis Krauskopf | ) www.reuters.com time to read: +5 min

[1/2] A trader works on the trading floor at the New York Stock Exchange (NYSE) in New York City, U.S., January 27, 2023. Tuesday's closely watched inflation report on U.S. consumer prices showed the smallest annual price increase since late 2021. But the data did little to dispel expectations that the Federal Reserve will have to continue raising rates higher and keep them elevated for longer to drive inflation lower. The CPI data continues the trend of moderating annual inflation rates that have helped propel this year's rally in risk assets. Some have also expressed concern about investor positioning, which has grown stretched in recent weeks as market participants piled into the stock rally.

☆ Wall St Week Ahead Tech stock rebound faces doubters with earnings season ahead
▼ + stars: | 2023-01-20 | by ( Lewis Krauskopf | ) www.reuters.com time to read: +5 min

The tech-heavy Nasdaq 100 index (.NDX) has gained over 3% in 2023, double the rise for the S&P 500 (.SPX). The Nasdaq 100 fell 33% in 2022, while the S&P 500 lost 19.4%. Apple, the largest U.S. company by market value, and Google-parent Alphabet report the following week. Fourth-quarter earnings in the tech sector are expected to have declined 9.1% from a year ago, compared to a 2.8% decline for S&P 500 earnings overall, according to Refinitiv IBES. The S&P 500 tech sector still trades at a roughly 19% premium to the broader index, above its 7% average of the past 10 years, according to Refinitiv Datastream.

☆ 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.

☆ Wall St Week Ahead Stock swoon resets valuations but recession risk, rates cloud outlook
▼ + stars: | 2023-01-06 | by ( Lewis Krauskopf | ) www.reuters.com time to read: +5 min

The S&P 500 tumbled 19.4% in 2022, as the Federal Reserve's aggressive rate hikes designed to tamp down 40-year high inflation punished asset prices. The market's 2022 slide cut the ratio of price to forward earnings estimates to around 17 from about 21.7 a year ago, according to Refinitiv Datastream. S&P 500 forward price-to-earnings ratio over timeValuations may still be too high if a recession comes to pass, as many on Wall Street expect. Combined with an expectation of weakening earnings estimates, that would lower the S&P 500 to 3,200, UBS said, roughly 16% below current levels. The 2022 surge in interest rates also could undermine stock valuations by making relatively safe assets like U.S. Treasuries more attractive alternatives.

☆ Wall St Week Ahead U.S. bank stocks falter as recession worries take hold
▼ + stars: | 2022-12-16 | by ( Lewis Krauskopf | ) www.reuters.com time to read: +4 min

The S&P 500 banks index (.SPXBK) has slumped some 11% this month against a 5.5% drop for the broader index (.SPX) in the same period. While bank stocks have traded broadly in line with the S&P 500 throughout the year, their decline accelerated in recent weeks, with the S&P 500 bank index now off over 24% in 2022. The S&P 500 is down 19% year-to-date, on pace for its biggest annual percentage drop since 2008. Expectations of a slowdown led Todd's firm to sell some of its bank shares earlier this year. King Lip, chief strategist at Baker Avenue Wealth Management, said his firm recently bought bank stocks, convinced that any hit to U.S. growth will likely be moderate.

☆ Wall St Week Ahead Soaring U.S. tech stocks leave some investors doubtful rebound will last
▼ + stars: | 2022-11-12 | by ( Lewis Krauskopf | ) www.reuters.com time to read: +5 min

At the same time, tech sector valuations remain well above the overall market, while analysts are dimming their profit outlooks for the group. That level, which is still above the 17 times earnings commanded by the S&P 500, is still too lofty for some investors. Still, some investors are considering increasing their positions in tech and megacap stocks if further evidence of easing inflation presents itself. Higher yields can weigh heavily on tech and growth stocks, whose valuations tend to be based heavily on future profits that are discounted more severely as yields go higher. The firm has been underweight large-cap tech and growth stocks, preferring small cap and value shares, Lip said.

☆ BNP defies French banks’ interest-rate malaise
▼ + stars: | 2022-11-03 | by ( Liam Proud | ) www.reuters.com time to read: +3 min

A regulated savings rate, with roots tracing back to the French Emperor’s wars of conquest, is one reason why Gallic retail lenders could miss out on an interest-rate windfall that is boosting banks elsewhere. Ironically, 60 billion euro BNP Paribas (BNPP.PA) looks set to escape the curse because of some international expansion of its own. One-third of Gallic lenders’ deposits sit in savings vehicles with regulated interest rates, Jefferies analysts reckon. Combined with other interest-rate regulations and the fact that many French mortgage borrowers are on fixed rates, the upshot is that Gallic retail lending margins don’t rise as quickly as they might in Spain or Britain. Chief Executive Jean-Laurent Bonnafé, who is approaching his 11-year anniversary in the role, deserves credit for helping BNP to defy the lending malaise at home.

☆ Wall Street Week Ahead: Megacap earnings to test fledgling U.S. stock rebound
▼ + stars: | 2022-10-21 | by ( Lewis Krauskopf | ) www.reuters.com time to read: +5 min

Top stocks' market value as percentage of S&P 500The S&P 500 is up nearly 5% from its Oct 12 closing low for the year after posting its biggest weekly gain since late June. Even with stocks' latest rebound, the index has dropped 21% so far in 2022, on track for its biggest decline since 2008. Yields continued to rise this week, with the yield on the benchmark 10-year Treasury note hitting a fresh 14-year high. All four stocks command higher valuations than the S&P 500, which trades at nearly 16 times forward earnings estimates. The P/Es for Apple and Microsoft are both about 22 times, Alphabet trades at 17.5 times, while Amazon sits at 60 times, according to Refinitiv Datastream.

The Dow and S&P 500 e-minis fell for the seventh time in eight sessions, while megacap growth names such as Amazon.com Inc , Apple Inc (AAPL.O), Microsoft Corp , Meta Platforms Inc and Tesla Inc (TSLA.O) lost between 1.6% and 2.7% in premarket trading. read moreIn the previous session, the S&P 500 recorded its first gain in seven sessions. The benchmark index has lost about $9.1 trillion in market value this year and was last valued at $31.2 trillion, according to Datastream. ET, Dow e-minis were down 364 points, or 1.22%, S&P 500 e-minis were down 55 points, or 1.47%, and Nasdaq 100 e-minis were down 207.75 points, or 1.8%. read moreShare of peers United Airlines Holdings (UAL.O), Southwest Airlines (LUV.N) and Delta Air Lines (DAL.N) fell between 1.6% and 2.0%.

☆ Analysis: Goodbye, TINA: higher yields muddy outlook for struggling U.S. stocks
▼ + stars: | 2022-09-29 | by ( Lewis Krauskopf | ) www.reuters.com time to read: +4 min

NEW YORK, Sept 29 (Reuters) - Soaring interest rates are providing investors with attractive alternatives to stocks, complicating the picture for equities in an already-vicious year. Register now for FREE unlimited access to Reuters.com RegisterThat calculus has drastically changed as the Fed hikes interest rates to stave off the worst inflation in decades, bolstering yields on everything from Treasuries to money markets. Money market funds took in $30 billion in the latest week, according to Refinitiv Lipper, while equity funds, taxable fixed income funds, and tax-exempt bond funds all had net redemptions. "We are definitely getting a resizing of that now.”Reuters GraphicsOf course, the alternatives to stocks are far from risk free. Still, the robust yields are likely to continue presenting a challenge to stocks, investors said.

☆ Wall Street futures resume fall as economic worries weigh
▼ + stars: | 2022-09-29 | by ( ) www.reuters.com time to read: +2 min

Megacap growth names such as Amazon.com Inc , Apple Inc (AAPL.O), Microsoft Corp , Meta Platforms Inc and Tesla Inc (TSLA.O) lost between 0.8% and 1.6% in premarket trading. ET, Dow e-minis were down 225 points, or 0.76%, S&P 500 e-minis were down 31.25 points, or 0.84%, and Nasdaq 100 e-minis were down 117.75 points, or 1.02%. Investors will be watching for weekly jobless claims, which is expected to rise by 2,000 to 215,000 last week. A second estimate of the government last month had shown the economy contracted at 0.6%, a more moderate pace than initially thought. Register now for FREE unlimited access to Reuters.com RegisterReporting by Susan Mathew in Bengaluru; Editing by Anil D'SilvaOur Standards: The Thomson Reuters Trust Principles.

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