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☆ US stocks rise but head for losing week amid spike in bond yields and surging oil prices
▼ + stars: | 2023-09-22 | by ( Phil Rosen | ) www.businessinsider.com time to read: +2 min

US stocks ticked higher Friday but were on track for a losing week. Oil prices and bond yields surged during the week, with Brent crude up 0.75% Friday. Policymakers made no rate adjustment Wednesday, but could make one more hike before year's end. The major indexes are coming off three consecutive days of losses and remain on track to finish the week in the red as bond yields jump on hawkish Federal Reserve commentary and surging oil prices. After policymakers indicated that rates could remain higher for longer into 2024, bond yields surged, with the 10-year Treasury hitting 4.49%, its highest level since 2007.

Persons: Brent, Nicholas Colas Organizations: Service, Fed, Treasury, Labor Department, Markets, Dow Jones Locations: Wall, Silicon

☆ What higher-for-longer Fed policy will mean for the markets and economy
▼ + stars: | 2023-09-21 | by ( Jeff Cox | ) www.cnbc.com time to read: +6 min

For Fed Chair Jerome Powell, who spoke to the press after the two-day session ended, "Resetting market expectations about real rates was his most important mission," Colas said. But this week's meeting indicated that Fed officials expect rates to stay higher for longer. The thinking there is that if inflation moves lower, the Fed won't need to keep nominal rates as high because real rates will be rising. "But, until one or both of those things happen, higher real rates are the Fed's strategy to tame inflation," Colas said. "This tells us that current equity market churn is unlikely to end until bond markets have settled out."

Persons: wasn't, Nicholas Colas, Jerome Powell, Colas, Krishna Guha, Claudia Sahm, Guha, Powell, Powell's, Morgan Stanley, Ellen Zentner, Goldman Sachs, Goldman, David Mericle, Goldman doesn't, Mericle, DataTrek's Colas Organizations: DataTrek Research, Companies, Evercore ISI, U.S ., Fed

☆ Gas is rapidly approaching $6 in one state
▼ + stars: | 2023-09-19 | by ( Matt Egan | ) edition.cnn.com time to read: +6 min

In California, gas prices are rapidly approaching $6 a gallon. Nationally, gas prices remain well below the record of $5.02 set last June. Still, US gas prices climbed this week to $3.88 a gallon, the highest level of the entire year, according to AAA. Boosted by those two nations’ aggressive supply cuts, US oil prices climbed to as high as $93.74 a barrel on Tuesday. And this recent rise in gas prices is causing headaches for some in Washington.

Persons: it’s, That’s, Pain, Joe Biden’s, Jerome Powell, Powell, ” Nicholas Colas, Colas, “, ”, Joe Brusuelas, Andy Lipow, Lipow, Russia don’t, Brent, Goldman Sachs, Vincent Reinhart, RSM’s, Reinhart, ’, Morgan Stanley, Kristina Hooper Organizations: New York CNN, —, AAA, Brent, Federal, DataTrek Research, RSM, Lipow Oil Associates, Rockies, Citigroup, Fed, Mellon Locations: United States, West Coast, In California, Los Angeles, Long Beach, California, Washington and Nevada, Saudi Arabia, Russia, It’s, Washington, OPEC

☆ Warning signs for at least a near-term stock pullback are building
▼ + stars: | 2023-09-07 | by ( Jeff Cox | ) www.cnbc.com time to read: +2 min

One of the potentially big ones is that the S & P 500 on Wednesday closed below its 50-day moving average. That's typically considered a good short-term warning sign that the market is in a downtrend as traders de-risk ahead of potentially turbulent times. Those moves come at a time when other signs are mounting for a potential modest pullback, according to Nicholas Colas, co-founder of DataTrek Research. Colas advised investors to watch the Cboe Volatility Index for clues about where the market is heading in the near term. "Longer term investors may want to just sit out this modest pullback," Colas wrote.

Persons: Nicholas Colas, Colas Organizations: Apple, Microsoft, Meta, Nvidia, Tesla, DataTrek Research, Big Tech

☆ Powell's pivotal speech Friday could see a marked shift from what he's done in the past
▼ + stars: | 2023-08-24 | by ( Jeff Cox | ) www.cnbc.com time to read: +5 min

"I just think he's going to play it about as down the middle as possible," said Joseph LaVorgna, chief economist at SMBC Nikko Securities America. "He's got to strike that chord that the Fed is going to finish the job. "He's going to want to be a little more hawkish than neutral. But he's not going to deliver what he delivered last year. A Cleveland Fed inflation tracker anticipates August's figures will show a noticeable jump.

Persons: Jerome Powell, Powell, Win Mcnamee, Joseph LaVorgna, circumspect, LaVorgna, Donald Trump, He's, It's, Quincy Krosby, he's, Inflation's, Krosby, Patrick Harker, you've, Harker, CNBC's Steve Liesman, Jackson Organizations: Financial, Federal, Getty, Federal Reserve, Nikko Securities America, Research, National Economic Council, LPL, Cleveland, San Francisco Fed, Philadelphia Fed Locations: Washington , DC, circumspect Powell

☆ Here's more evidence that it's really hard to make money picking stocks
▼ + stars: | 2023-08-18 | by ( Bob Pisani | ) www.cnbc.com time to read: +9 min

And only a handful of stocks have accounted for the bulk of wealth creation in the stock market in the last 30 years. The good news: U.S. companies are far and away the biggest drivers of stock wealth creation in the last 30 years. Stock market wealth is highly concentrated How can this be? Just five stocks accounted for 10% of global net stock market wealth creation over 31 years. The reason, as this paper demonstrates, is that stock returns are not normally distributed over time.

Persons: Hendrik Bessembinder, Johnson, Roche, Kwiechow, Tencent, Tesla, Nicholas Colas, Larry Swedroe, Swedroe, Colas Organizations: Global, CFA, Treasury, Microsoft, Apple, Walmart, Facebook, Samsung, Johnson, Taiwan Semiconductor, Nestle, U.S, DataTrek Research, Strategic, New York Stock Exchange Locations: United States, U.S, China

☆ The Fed's focus on 'real' rates is what investors should be watching
▼ + stars: | 2023-08-17 | by ( Jeff Cox | ) www.cnbc.com time to read: +4 min

Gauging the 'real' rate Chair Jerome Powell , following the July meeting, said his definition of real rates is the fed funds rate minus "near-term inflation expectations." With the fed funds rate running at 5.33% and the Michigan survey indicating one-year inflation expectations at 3.3%, that puts the real rate around 2%. Using the 10-year Treasury yield against the inflation rate, the real rate currently sits around 1.6% . The evidence, though, that higher real rates are holding back activity is mixed. Its focus on real rates could mean more hawkish policy, particularly if inflation expectations start rising again.

Persons: Nicholas Colas, Jerome Powell, Powell, Colas Organizations: DataTrek Research, University of Michigan, Fed, Primary Dealers Locations: Michigan

☆ Markets should brace for a turbulent few weeks as slow motion rate shock continues, DataTrek says
▼ + stars: | 2023-08-17 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

That's partly because the Fed is unlikely to stop its quantitative tightening regime. The Fed has reduced its balance sheet aggressively over the past year, which could weigh on stocks. As of last week, the Fed has already reduced its balance sheet around $700 billion from the first quarter of 2022, down to $8.2 trillion from $8.9 trillion. Aggressive balance sheet tightening was one of the factors that weighed heavily on stocks last year, with the S&P 500 shedding 20% to notch its worst performance since 2008. "The current slow-motion long-term rate shock has a way to go, in our view, and equity markets will struggle as it evolves.

Persons: DataTrek, Nicholas Colas, Colas Organizations: Fed, Service, Reserve, Treasury Locations: Wall, Silicon

☆ I would be cautious on consumer sensitive areas of the market, says Wilmington Trust's Meghan Shue
▼ + stars: | 2023-08-14 | by ( ) www.cnbc.com time to read: 1 min

In this videoShare Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailI would be cautious on consumer sensitive areas of the market, says Wilmington Trust's Meghan ShueNick Colas, DataTrek Research co-founder and Meghan Shue, Wilmington Trust EVP, join 'Closing Bell Overtime' to talk the day's market action, stocks versus bonds, upcoming earnings and more.

Persons: Wilmington, Meghan Shue Nick Colas, Meghan Shue Organizations: Research, Wilmington Trust Locations: Wilmington

☆ This year's big rally has come to only a few days, again challenging market-timers
▼ + stars: | 2023-07-21 | by ( Jeff Cox | ) www.cnbc.com time to read: +2 min

The massive 2023 stock rally essentially has come down to just a handful of trading days, offering more proof of how difficult it is to time the market. Of the 137 trading days so far, 74 have been positive and 63 have been negative. By contrast, last year's swoon on the S & P 500 could be traced to just five big losing days. "There is simply no other way for the S & P 500 to keep rallying," he wrote. "There are 113 trading days left in 2023.

Persons: Nicholas Colas, swoon, Colas Organizations: Big Tech, Tech, Federal Reserve

☆ The only reason to buy Tesla stock has nothing to do with its EV business, market strategist says
▼ + stars: | 2023-07-19 | by ( Matthew Fox | ) www.businessinsider.com time to read: +3 min

When it comes to Tesla stock, the only reason to buy has nothing to do with its electric vehicle business. But according to a Wednesday note from DataTrek Research co-founder Nicholas Colas, there's only one reason to buy Tesla stock at its current levels, and it has nothing to do with its EV business. The car industry is difficult to compete in, as evidenced by the current stock prices of legacy automakers, he observed. So when it comes to Tesla stock, don't just look at its EV sales, according to Colas. The remaining $200 billion to $300 billion of Tesla's current market valuation is assigned to the company's EV business, which is comparable to Toyota's current market valuation.

Persons: Tesla, Nicholas Colas, Ark, Elon Musk, Colas, Musk Organizations: General Motors, Ford, Honda, Mercedes, Service, DataTrek Research, Toyota Locations: Wall, Silicon

☆ Analysis: Apple's growing stock market heft poses dilemma for fund managers
▼ + stars: | 2023-07-03 | by ( Lewis Krauskopf | ) www.reuters.com time to read: +5 min

The company’s weighting in the S&P 500 has swelled to 7.6%, the biggest of any one stock in the history of the benchmark index, according to S&P Dow Jones Indices. If shares of Apple keep rallying, that could hurt the results of active fund managers, who strive to beat indexes such as the S&P 500 or Russell 1000. The cost of limiting Apple shares may be particularly high for fund managers this year, given the stock's swelling weight in indexes. “Fund managers at their own peril don’t hold Apple and a handful of stocks just like it at index weight or about index weight,” Morris said. The stock is still his firm's fourth-largest holding, even though at 4% of the portfolio, it puts it underweight Apple versus the S&P 500.

Persons: Dow, Russell, Todd Sohn, Robby Greengold, Walter Todd, Todd, Alex Morris, ” Morris, Refinitiv Datastream, Peter Tuz, ” Tuz, Lewis Krauskopf, Ira Iosebashvili, Anna Driver Organizations: YORK, Dow Jones, Apple, Microsoft, Nvidia, Morningstar, Greenwood Capital, Research, “, Chase Investment, Thomson Locations: Apple’s, South Carolina, United Kingdom, Russell

☆ The good news and the unknowns for bank stocks after the Fed's latest stress tests
▼ + stars: | 2023-06-30 | by ( Morgan Chittum | ) www.cnbc.com time to read: +6 min

Understandable because this year's stress tests came against a backdrop of uncertainty for the sector. The stress tests Starting in the aftermath of the 2007-2009 Great Financial Crisis, bank stress tests were designed as a tool to ensure that so-called too-big-to-fail institutions could endure a similar calamity. WFC MS YTD mountain Wells Fargo vs. Morgan Stanley YTD performance It's worth noting that Wells Fargo is in a unique situation compared to its rivals. He added that the "stress tests only really address a macro environment where rates decline during a crisis. A sign is posted in front of a Wells Fargo Bank on April 14, 2023 in San Bruno, California.

Persons: Morgan Stanley, Nicholas Colas, Wells Fargo, Doug Butler, Wells, Colas, Chris Kotowski, Oppenheimer, Banks, Kotowski, Jim Cramer's, Jim Cramer, Jim, Justin Sullivan Organizations: Wells, Silicon Valley Bank, Bank, Research, CNBC, Fed, JPMorgan, Bank of America, Rockland Trust, Citi, Equity, WFC, Wall, Wells Fargo Bank Locations: U.S, Silicon, Wells, Rockland, Wells Fargo, San Bruno , California

☆ Fed paper argues 'bleak' stock market returns could slide to 2% annually
▼ + stars: | 2023-06-29 | by ( Jeff Cox | ) www.cnbc.com time to read: +3 min

"The boost to profits and valuations from ever-declining interest and corporate tax rates is unlikely to continue, indicating significantly lower profit growth and stock returns in the future," Smolyansky says. Part of the thesis is a gap between the stock market average return and the 2.5% rate of real economic growth. "Stock price performance above this 2 percent real rate could only be accomplished by the perpetual expansion of P/E multiples. DataTrek research co-founder Nicholas Colas wrote that the paper's general assumption about taxes and interest rates and their correlation to stock market returns is "obviously true, but only to a point." Colas noted that interest rates in particular have been on the decline around the world, but global stock returns have been flat since 2008.

Persons: Michael Smolyansky, Smolyansky, Nicholas Colas, Colas Organizations: Federal Locations: Washington

☆ Here's why the market is ignoring a tell-tale sign that a recession is coming
▼ + stars: | 2023-06-26 | by ( Jeff Cox | ) www.cnbc.com time to read: +5 min

For just shy of a year now, the bond market has been signaling that a recession is on the horizon. And for the better part of the past six months, the stock market has been ignoring it. "The market's certainly not acting like it would if this 'Waiting for Godot' recession was right around the corner. "I would say it's much more about what started this conundrum, the combination of pandemic policy, pandemic reopening and hyperaggressive monetary policy. A key narrative from those looking for recession is the lag effects that Fed policy will have.

Persons: Godot, Hogan, Nicholas Colas, Colas, There's, Jeremy Siegel, Siegel Organizations: Riley Wealth Management, Federal Reserve, Treasury, New York Fed, DataTrek Research, Wharton Business Locations: It's, U.S

☆ The market isn't buying the Fed's tough talk on interest rates
▼ + stars: | 2023-06-15 | by ( Jeff Cox | ) www.cnbc.com time to read: +5 min

Try as the Federal Reserve did Wednesday to send the message that multiple interest rate hikes are ahead, the market wasn't buying it. Indeed, market pricing reflected a high level of skepticism that the Fed is going to do much more in terms of policy tightening. That came even though 12 of the 18 FOMC members said they envision rate hikes totaling 50 basis points, or 0.5 percentage point, by the end of 2023. "Fed Funds Futures aren't buying to [Wednesday's] FOMC SEP guidance of 2 more rate hikes this year," wrote Nicholas Colas, co-founder of DataTrek Research. Powell's news conference after the decision to skip a rate hike at this week's meeting went in multiple directions.

Persons: Quincy Krosby, Jerome, Powell, Nicholas Colas, Goldman Sachs, David Mericle, that's, Matthew Luzzetti, Christopher Waller, James Bullard Organizations: Federal Reserve, Fed, LPL, Dow Jones Industrial, DataTrek, Empire, Manufacturing Survey, Deutsche Bank, Louis Locations: St

☆ As regional bank stock rally regains steam, investors should watch out for these spoilers
▼ + stars: | 2023-06-13 | by ( Christina Cheddar Berk | ) www.cnbc.com time to read: +6 min

With the Federal Reserve expected to pause its rate-hiking campaign at this week's meeting, regional banks stocks have made a comeback, but that doesn't mean all the trouble is in the rearview mirror. Still, the upward march resumed on Tuesday, begging the question of what's ahead for bank stocks. As the Treasury sells tens of billions of dollars in Treasury bills, it could pressure bank deposits. Graseck predicts that a reacceleration of deposit outflows would snuff out the bank stock rally. In addition, regional bank earnings estimates, which had been cut severely in March and April, had leveled off in May.

Persons: Jack Ablin, Ablin, outflows, SVB, Aditya Bhave, Bhave, Morgan Stanley, Betsy Graseck, Graseck, Nicholas Colas, Huntington Bancshares, Matt O'Connor, KeyCorp, Albin Organizations: Federal Reserve, Fed, Cresset, Silvergate, Silicon Valley Bank, Signature Bank, PacWest Bancorp, Bank of America, Treasury, DataTrek Research, Citizens Financial Group, Truist, Morgan Stanley U.S, Financials, CRE Conference, Deutsche Bank, TFC Locations: Silicon, Federal, U.S, 2Q23, New York

☆ It's Wall Street vs Wall Street as the recession debate rages on. Here's what David Rosenberg, Jeff Gundlach and 5 other experts have warned.
▼ + stars: | 2023-06-10 | by ( Zahra Tayeb | ) www.businessinsider.com time to read: +6 min

Wall Street experts are butting heads over the health of the economy, and what's to come. David Rosenberg, Rosenberg Research president"Markets pricing in a 'soft landing'? Will they ever be in for a big surprise," the Rosenberg Research chief tweeted. "You look at the United States and it seems to me that we're still making this transition from expansion to recession," Rosenberg said. "We're referring to this phenomenon as a Cardboard Box Recession, because items that are made (manufacturing) and shipped (trade) tend to go in a box.

Persons: David Rosenberg, Jeff Gundlach, Clif Asness, —, Rosenberg, Will, hasn't, we're, Gundlach, Jeffrey Kleintop, Charles Schwab, Kleintop, Goldman Sachs, That's, Jan Hatzius, Hatzius, Jim Reid, David Folkerts, Landau, Reid, Folkerts, Nicholas Colas Organizations: Service, Federal Reserve, Rosenberg Research, DoubleLine Capital, CNBC, Fibre, Association, Deutsche Bank, Deutsche Locations: United States

☆ The stock market rally faces a conundrum as inflation can't fall enough to please the Fed while the economy is this strong
▼ + stars: | 2023-06-08 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

That's because inflation may not fall enough while the economy stays strong. The firm warned that rate hikes could continue, which would be a headwind for the stock market. Colas predicted that the rally in stocks will continue through the end of June, though the market could face a conundrum in the third quarter as inflation and Fed rate expectations become repriced. Commentators have warned more rate hikes are in order before the Fed gets inflation fully under control, though higher rates will likely be a headwind for stocks. The S&P 500 slumped 20% last year amid the Fed's aggressive interest rate hikes, notching its worst performance since 2008.

Persons: DataTrek, —, Nicholas Colas, Colas, that's Organizations: Service, Research, Federal, Fed

☆ Yes, you can have a red-hot jobs market and a recession
▼ + stars: | 2023-06-05 | by ( Jeff Cox | ) www.cnbc.com time to read: +6 min

The U.S. jobs market is still sizzling and the economy is heading for a recession: Both things can be true. May's nonfarm payrolls growth again stunned Wall Street, with the count climbing by 339,000, well ahead of Wall Street estimates that have consistently undershot the report since January 2022. However, there's an old adage on the Street that when it comes to recessions, the jobs market is always the last to know. Central bank policymakers specifically have targeted a slowdown in the labor market in their quest to bring down inflation. The weak services reading comes with an ISM manufacturing reading — most recently at 46.9 — in contraction for seven straight months.

Persons: Ian Shepherdson, Shepherdson, Kumar, Andrew Hunter, Hunter, DataTrek, Nicholas Colas Organizations: Federal, Pantheon, Fed, Sri, Kumar, Services, Capital Economics, Research, Atlanta Locations: payrolls

☆ The stock market's fear gauge just hit its lowest level in 3 years as a new bull market kicks off
▼ + stars: | 2023-06-05 | by ( Matthew Fox | ) www.businessinsider.com time to read: +4 min

Wall Street's fear gauge fell to its lowest level in 3 years just as a new bull market hits stocks. The decline in the VIX suggests that the stock market has entered a regime of low volatility following the bear market of 2022. A new bull market starts when an index surges 20% from the lowest close of its bear market. The Nasdaq 100 already entered its bull market at the end of March. "We wouldn't be surprised at all if this new bull market would continue much longer than most think and the VIX will also stay consistently beneath 20.

Persons: Carson Group's Ryan Detrick, —, Nicholas Colas, Colas, Carson Group's, Ryan Detrick, Detrick, Katie Stockton doesn't, we've, Stockton Organizations: Service, Nasdaq, DataTrek Research

☆ The hype in AI stocks isn't a bubble yet, and little buy in from retail investors means there's room for more upside
▼ + stars: | 2023-05-27 | by ( Matthew Fox | ) www.businessinsider.com time to read: +3 min

The research firm said retail investors have yet to pile into AI stocks and fuel a bubble frenzy like they did during the pandemic. "Interest in 'tech stock' is nowhere near levels reached during the Pandemic Era speculative tech bubble," DataTrek said. "Interest in 'tech stock' is nowhere near levels reached during the Pandemic Era speculative tech bubble," DataTrek Research co-founder Jessica Rabe said. In other words, not enough retail investors have been sucked into these Big Tech stocks yet to indicate a bubble," Rabe said. "On the plus side, there's not enough retail interest to indicate a bubble is forming, and there's a lot more room for retail investors to get involved in these names."

☆ Analysis: Why we may need a stock market plunge to solve the debt ceiling crisis
▼ + stars: | 2023-05-22 | by ( Matt Egan | ) edition.cnn.com time to read: +4 min

They know how it ends: with politicians waiting until the last minute before giving in and finally raising the debt ceiling before disaster strikes. On Friday, it looked like the White House and Republicans were getting closer to a deal on the debt ceiling before talks unexpectedly broke down. In 2011, the most serious near-default in American history, markets experienced volatility in the days and weeks before Washington reached a last-minute deal to raise the debt ceiling. None of this is to say markets are completely ignoring the debt ceiling drama today. The debt ceiling is a manufactured crisis that officials could have dealt with months ago.

☆ Wall St Week Ahead Artificial intelligence gives real boost to U.S. stock market
▼ + stars: | 2023-05-19 | by ( Lewis Krauskopf | ) www.reuters.com time to read: +4 min

NEW YORK, May 19 (Reuters) - Recent advances in artificial intelligence are fueling optimism over how businesses can operate more productively in the years ahead. They are also providing a big boost to the stock market. About 25% to 50% of those gains are owed to "the buzz around artificial intelligence," she noted. Indeed, optimism over AI is a key factor supporting a stock market facing numerous headwinds. His firm owns shares of Microsoft, Nvidia and Alphabet.

☆ Record earnings by Q4 just won't happen this year: DataTrek's Nicholas Colas
▼ + stars: | 2023-04-24 | 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 EmailRecord earnings by Q4 just won't happen this year: DataTrek's Nicholas ColasDataTrek Research co-founder Nick Colas joins 'Squawk on the Street' to discuss his take on the volatility index, earnings outlook, and his read on investor sentiment.

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