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☆ Brace for turbulence in stocks as a recession, high interest rates, and China's reopening disrupt the market, BlackRock says
▼ + stars: | 2023-01-09 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +2 min

Strategists pointed to an incoming recession, high interest rates, and China's reopening. Emerging-market stocks could outperform developed-market stocks, the asset manager said in a note. First, sharp rate hikes from central banks aimed at pushing inflation down to targets will cause recessions in developed markets, BlackRock predicted. That means emerging-market stocks could outperform those of developed markets, BlackRock strategists said. That echoes the view of Bank of America, which said international stocks could outperform US stocks in 2023 for the first time in 15 years.

☆ Markets are wrong to think things will return to normal and should brace for an era of tumult, debt, and high interest rates, former Treasury Secretary Larry Summers says
▼ + stars: | 2023-01-06 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

Markets are wrong to think things will return to normal this year, former Treasury Secretary Larry Summers said. He warned investors to brace for a new period of debt, tumult, and volatile interest rates. Central bankers hiked interest rates an aggressive 425-basis-points to tackle sky-high inflation, driving stocks to a 20% loss for their worst performance since the 2008 recession. Markets may also be wrong to think a return-to-normal is possible after this inflationary shock, Summers said, as the era of ultra-low interest rates and steady economic growth is now in the past. Summers believed the new era would also be defined by higher debt levels due to higher national spending, as well as higher investment demand.

☆ The Fed wants a recession and is desperate to convince markets it's serious about bringing inflation down, Bank of America chief economist says
▼ + stars: | 2023-01-05 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

The Fed wants a recession to convince markets it's serious about bringing inflation down, BofA's chief economist Ethan Harris said. I think that's a very friendly way of saying you want a recession," Harris warned. He predicted the central bank would raise rates another 75-basis-points, and won't be stopped by recession warnings. I think that's a very friendly way of saying you want a recession," Harris warned. Harris said the Fed would continue hiking rates until they saw clearer evidence of a cooling job market and lower services inflation.

☆ Investors clinging to the S&P 500 aren't safe and should get out of crowded trades and into other areas like small caps, Bank of America's top stock strategist says
▼ + stars: | 2023-01-05 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +2 min

Investors clinging onto the S&P 500 aren't safe, according to BofA's Savita Subramanian. She encouraged investors to allocate more funds into overlooked areas of the market, like energy and small cap stocks. Last year was dismal for stocks, with the S&P 500 losing 20% as the Fed jacked up interest rates and battled sky-high inflation. She pointed instead to areas like energy and small cap stocks, which are relatively less crowded compared to the S&P 500 and could be a safer bet. Other Wall Street analysts have also predicted a 20% drop in the first half, which could be a major buying opportunity for investors, Subramanian said.

☆ The Fed isn't going to make things easy for the market and stocks still have at least another 7% to fall, JPMorgan's chief equities strategist says
▼ + stars: | 2023-01-04 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

Stocks still have at least 7% more to fall before hitting a bottom, according to JPMorgan's chief stock strategist Dubravko Lakos. He told CNBC that earnings estimates for 2023 are still too high, and the Fed would likely stay restrictive on monetary policy. "I don't think the Fed is going to make it easy for the market. He predicted the S&P 500 will dip at least to 3,600, representing a 7% decline from current levels, particularly since central bankers are expected to keep interest rates restrictive. The Fed hiked interest rates by 425 basis points last year to rein in inflation, leading the S&P 500 to sink 20% for its worst losses since 2008.

☆ US stocks slump in first trading day of 2023 as recession fears weigh on investors
▼ + stars: | 2023-01-03 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +2 min

US stocks slumped in their first trading session of 2023, after posting their worst year since 2008. Tech stocks led Tuesday's decline, with Tesla sinking more than 12% and Apple falling as much as 4%. Investors are concerned that stocks could fall further if the Fed continues hiking rates, which could tip the economy into a recession. Sign up for our newsletter to get the inside scoop on what traders are talking about — delivered daily to your inbox. Early Tuesday, S&P Global's US purchasing managers index for manufacturing fell below forecasts and indicated the steepest contraction in activity since May 2020.

☆ Markets are being rocked by the biggest macro storm in decades, and investors need to brace for volatility and persistent inflation, BlackRock warns
▼ + stars: | 2023-01-03 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

A recession is coming and investors need to brace for a new period of volatility in 2023, BlackRock warned. That's because markets are still being rocked by the "biggest macro storm in decades," strategists said in a note. Sign up for our newsletter to get the inside scoop on what traders are talking about — delivered daily to your inbox. Central bankers raised rates an aggressive 425-basis-points last year to rein in inflation, which cooled to 7.1% in November. BlackRock previously warned that a recession was already in the cards, although that hasn't been fully priced into corporate earnings.

☆ Here's why Wall Street is warning the Fed blew it on inflation and it won't save the stock market from crashing
▼ + stars: | 2022-12-24 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +7 min

The Fed blew it on inflation stocks are going to have to suffer as a result. The central bank has no choice now but to keep hiking until inflation is down, experts have said. Here are five top voices in markets warning investors not to pin their hopes on a Fed put to save stocks. El-Erian has been a loud critic of the Fed's response to inflation this year, slamming central bankers for saying inflation was "transitory" in 2021. That's the cost of the Fed being late to the game, and the central bank can't back away from its monetary tightening now, El-Erian warned.

☆ Crypto exchanges simply aren't following the rules, and it isn't a lack of regulation that is the problem with the market, former CFTC chair says
▼ + stars: | 2022-12-23 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +2 min

A problem with crypto is that many exchanges simply aren't following the rules, according to the former CFTC chief. Timothy Massad noted that many exchanges weren't registering with the SEC and claiming that tokens were commodities, not securities. That reluctance to follow rules that protect clients is among the biggest risks in the crypto space, he said. But many crypto exchanges just aren't registered with the regulator and are claiming that crypto tokens aren't securities, though SEC chief Gary Gensler has said that they are. Many crypto exchanges have claimed that cryptocurrencies are commodities, Massad said, which places them in a regulatory loophole, as there is no federal oversight over the commodities spot market.

☆ FTX US's auditor stands by its accounting work for the collapsed crypto exchange, report says
▼ + stars: | 2022-12-23 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

Armanino, the auditor for FTX's US branch, defended its accounting work for the exchange. "We were never engaged to audit internal controls," the company's chief operating officer told the FT.Armanino has stopped its auditing and proof of reserve work. "We definitely stand by the FTX US work," Armanino chief operating officer Chris Carlberg told the Financial Times on Friday. During a congressional hearing, Ray pointed to the fact that the multibillion-dollar crypto exchange used QuickBooks to manage its finances, and approved invoices via Slack. Armanino and Prager Metis, the auditor of FTX International, are being sued by FTX customers.

☆ The market is still not pricing in recession risk, and stocks have yet to bottom, UBS managing director says
▼ + stars: | 2022-12-22 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +2 min

Markets are underestimating the risk of an economic hard landing, UBS' Michael Zinn warned. Zinn pointed to recent corporate earnings, many of which have fallen below analysts' estimates. The Fed will remain hawkish until it sees more positive inflation and jobs data, he said, which spells trouble for stocks. "The market probably hasn't really quite priced in the likelihood of a harder landing, the likelihood of an earnings recession," Zinn said in an interview with CNBC on Thursday. Other commentators have warned the stock market will be hit with an earnings recession as firms continue to battle high inflation and persistent rate hikes from the Fed.

☆ Crypto contagion isn't over and the lack of transparency means the industry is an 'insider's game,' EY strategist says
▼ + stars: | 2022-12-20 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +2 min

FTX's collapse shows that crypto contagion isn't over and the industry has transparency issues, according to EY strategist Paul Brody. Brody noted that transparency claims made by crypto firms were often "difficult to test," which makes the industry an "insider's game." Policymakers have urged the SEC to tighten regulation on crypto firms, criticizing the current hands-off approach. He noted that his own team finds transparency claims among crypto firms "difficult to test and follow through." Lawmakers have been critical of the SEC's current approach, which asks crypto firms to "come in and talk" to be regulated.

☆ Nobel economist Paul Krugman slams Elon Musk and Sam Bankman-Fried, and says we're living in an era of 'petulant oligarchs'
▼ + stars: | 2022-12-20 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +4 min

Nobel laureate Paul Krugman slammed Elon Musk and Sam Bankman-Fried as "oligarchs" in an op-ed. His comments follow Musk's chaotic revamp of Twitter, a project that's sparked growing scrutiny over his leadership style and political tweets. The same narrative could also be applied to Sam Bankman-Fried, the disgraced crypto executive facing charges of fraud, money laundering, and conspiracy after the collapse of his crypto exchange, FTX. But the tarnished reputations of both Musk and Bankman-Fried could mean the allure of the "genius entrepreneur" has evaporated. "Musk and Bankman-Fried may end up doing a public service, by tarnishing the legend of the genius entrepreneur, which has done a great deal of harm," Krugman said.

☆ US stocks edge higher in volatile session after Bank of Japan rattles markets with hawkish policy shift
▼ + stars: | 2022-12-20 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +1 min

US stocks rose in volatile trading on Tuesday after a hawkish policy move from the Bank of Japan. Japanese central bankers widened the trading range for benchmark bond yields, allowing rates to get more restrictive. Japanese central bankers widened the trading range on benchmark bond yields, which allows rates to get more restrictive. The Bank of Japan since 2016 had maintained a cap on its 10-year bond yield to fight deflation. Tuesday's surprise shift came a week after the European Central Bank and the Federal Reserve raised interest rates as both continue to battle inflation.

☆ The worst earnings recession since 2008 could hit stocks next year, Morgan Stanley chief equity strategist Mike Wilson says
▼ + stars: | 2022-12-19 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

Stocks could be hit next year by the worst earnings recession since 2008, according to Morgan Stanley's Mike Wilson. "We're looking for an earnings recession that could be as big of a surprise to the market as it was in '08." An earnings recession is likely not priced into the market yet, Wilson said, warning investors of more downside to come. download the app Email address By clicking ‘Sign up’, you agree to receive marketing emails from Insider as well as other partner offers and accept our Terms of Service and Privacy PolicyThe worst earnings recession since 2008 could hit stocks next year, according to Morgan Stanley chief equity strategist Mike Wilson. "We're looking for an earnings recession that could be as big of a surprise to the market as it was in '08," Wilson said.

☆ The Fed's inflation projections 'make no sense' and central bankers could have been misled by a cyberattack, Fundstrat says
▼ + stars: | 2022-12-19 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

Inflation needs to "explode" this month to meet the Fed's expectations, which is why their estimates "make no sense," Fundstrat said. The research firm estimated that December inflation projections were likely 60-basis-points too high. Fed officials projected core PCE inflation, which strips out volatile food and energy prices, to average 4.8% in 2022. To meet the Fed's projection, core PCE inflation would need to "explode" by 75-basis-points over the next month, Lee said. That suggests the bond market thinks the Fed's inflation forecasts are too high, and a pause or cut in rates could be in the cards next year.

☆ FTX users say they take little comfort in Sam Bankman-Fried's arrest - and still don't have much hope they'll get their money back
▼ + stars: | 2022-12-17 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +5 min

SBF's arrest isn't reassuring users who are worried about getting their money out of the failed exchange. "It really wouldn't change my life or anyone's life if he goes to jail," one user said. Tadeh Tarverdian, a customer of FTX who had $10,000 in his account when the exchange collapsed last month, said news of the Sam Bankman-Fried's arrest made him more anxious about getting his money back. Evan Luthra, an entrepreneur who says he lost $2 million when the exchange collapsed, also doesn't find comfort in Bankman-Fried's arrest. He speculated the former crypto executive would be found guilty due to the "obvious" mismanagement of FTX, as well Bankman-Fried's media interviews.

☆ Shark Tank investor Kevin O'Leary hits back against Binance CEO calling him a 'liar'
▼ + stars: | 2022-12-16 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

Shark Tank's Kevin O'Leary said Changpeng Zhao was wrong to call him a "liar" in a recent interview to CNBC. The Binance CEO previously deflected O'Leary's claims that Binance intentionally put FTX out of business, calling them "nonsense." But O'Leary says he didn't perjure himself in front of Senate and doubled down on his claims. O'Leary testified in front of the Senate Banking Committee on the fallout of FTX, the now-defunct crypto exchange for which O'Leary was a paid spokesperson. "You ask anybody why was Sam Bankman-Fried or the whole company FTX forced into bankruptcy?

☆ Don't blame the Bahamas for FTX's implosion, foreign minister says as the disgraced company's lawyers hurl accusations of complicity
▼ + stars: | 2022-12-16 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

FTX lawyers want to deny liquidators access to company records, claiming the Bahamian government could use it to swipe money away from FTX. But it isn't the fault of the Bahamas that FTX is embroiled in its financial troubles, according to foreign minister Fred Mitchell. Court-appointed liquidators for FTX's Bahamas-based business asked for key records within the crypto exchange, including access to company accounts and data. The Securities Commission of the Bahamas has disputed those claims, and Bahamas foreign minister Fred Mitchell denounced the accusations in a voice recording distributed via WhatsApp on Friday. Sam Bankman-Fried was arrested on multiple charges this week, including fraud, money laundering, and conspiracy after the collapse of his crypto exchange shed light on glaring accounting scandals.

☆ Putin hits back at western sanctions on Russian oil by vowing to deepen trade ties with China and other allies
▼ + stars: | 2022-12-15 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

That comes shortly after the EU banned seaborne energy imports and slapped a $60 price cap on Russian crude. Putin has called the price cap "stupid," and previously threatened to retaliate against any country who participate. "Let me remind you that by introducing sanctions, Western countries were trying to push Russia to the periphery of world development. That includes measures like ramping up natural gas sales to China and other Asian countries, creating a natural gas trading hub in Turkey, and setting the price for natural gas sales to Europe. Putin has rebuffed the oil price cap as "stupid," and threatened to retaliate by refusing to sell Russia's supplies to participating countries.

☆ The Fed's inflation forecast was wrong and Powell shouldn't be trying to water down recession risks, according to RBC
▼ + stars: | 2022-12-15 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +4 min

The Fed was wrong again on its inflation forecast on Wednesday, according to RBC. Powell also shouldn't try to water down recession risks, since some Fed officials already see a recession in the cards. "Some of their economic projections are just head-scratchers," Porcelli said in a note on Wednesday, pointing to central bankers' inflation projections for next year. The unexpected revision in inflation projections could be because officials likely submitted their estimates before the release of the November Consumer Price Index report, which saw inflation cool to 7.7%. "He shouldn't try to water down the recession risks.

☆ US stocks fall as the Fed delivers smaller rate hike but maintains hawkish stance heading into 2023
▼ + stars: | 2022-12-14 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

Stocks ended lower Wednesday after the Fed hiked rates by 50-basis-points. The move was widely expected, though the Fed may have struck a more hawkish tone than what traders wanted to hear. The Fed funds rate is now at its highest level since 2007, with officials expecting to hike rates past 5% through next year. Today's move brought the Fed funds rate to 4.25%-4.5%, the highest policy rate since 2007. "The effects of the tightening in 2022 will continue to be felt in 2023 through a weaker labour market, recession in Europe, and potentially a recession in the US.

☆ Shark Tank's Kevin O'Leary says comparing crypto to gambling is the same way the stock market was described before it was regulated
▼ + stars: | 2022-12-14 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

Shark Tank investor Kevin O'Leary says crypto needs to be regulated like the stock market. It's just unregulated, wild west." O'Leary has said he lost nearly $10 million in the FTX collapse, and was paid $15 million as a spokesman. O'Leary, who was a paid spokesperson and account holder of FTX, says he lost around $10 million when the exchange declared bankruptcy last month. It's just unregulated, wild west."

☆ Putin Calls Oil Price Cap 'Stupid,' Says Russia Is Mulling Output Cut
▼ + stars: | 2022-12-09 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +2 min

Russia is considering slashing its oil production in response to the Western price cap, Vladimir Putin said on Friday. The Russian president also said Moscow wouldn't be financially affected by the price cap, calling the mechanism "stupid." If Russia cuts output, it could spur volatility and send crude prices higher, experts have warned. Putin added that Russia's finances wouldn't be hit by the new measures and the West's implementation of a price cap was "stupid," Reuters reported. He also warned energy prices would "skyrocket" for any countries that participated in the price cap.

☆ Stocks won't be hit as badly by weakening corporate earnings in 2023 as many think, BlackRock strategist says
▼ + stars: | 2022-12-09 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +2 min

Stocks won't be hit as badly by weak corporate earnings in 2023 as some think, according to BlackRock's Kate Moore. "There's a decent probability that the super bearish economic and earnings calls for 2023 are not going to prove right," she said to Bloomberg. "There's a decent probability that the super bearish economic and earnings calls for 2023 are not going to prove right. "And I don't think earnings are going to be catastrophic next year." Morgan Stanley's chief stock strategist Mike Wilson warned that corporate earnings estimates were still at least 20% too high for 2023.

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