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☆ He Bombed the Nazis. 75 Years Later, the Nightmares Began.
▼ + stars: | 2023-04-30 | by ( Michael Wilson | ) www.nytimes.com time to read: +1 min

The nightmare shook the old man, who was now in his late 90s. Since his wife, Alice, died more than 10 years earlier, he had settled into a quiet rhythm, alone with his jazz records and his painting. He feared he had suffered a seizure, but his vital signs were normal. His adult daughters, Emily and Abby, were also worried. Their father had always been so steady and predictable and was never prone to this sort of profound disquiet.

☆ Here are 3 important reasons why stocks shouldn't be rallying in the wake of bank bailouts, and why bond investors are right to be bearish, according to Morgan Stanley
▼ + stars: | 2023-03-22 | by ( Marley Jay | ) www.businessinsider.com time to read: +5 min

Stocks have risen as investors conclude that authorities will prevent a bank crisis from spreading. He says that tighter credit conditions and the economy will weaken, and stocks look expensive. While bank stocks are still down, the rest of the market is collectively higher since the crisis started. But even if that's true, Morgan Stanley says investors are far too optimistic right now. In short, Wilson wrote that investors who see conditions in markets right now as positive for stocks, especially for tech, are making a mistake.

NEW YORK, March 21 (Reuters) - Worries over the banking crisis are boosting disparate assets, with traditional safe-havens such as gold, Treasuries and money markets seeing high demand along with more speculative instruments such as tech stocks and bitcoin. The gains have come alongside big moves in assets traditionally perceived as safe-havens during uncertain times. Yields on shorter-dated Treasuries, which move inversely to prices, saw a historic drop last week, while money market funds notched their biggest inflows since April 2020 in the week to March 15, Refinitiv Lipper data showed. Well, the 10-year U.S. Treasury yield is down about 60 basis points from early March,” said Keith Lerner, chief market strategist at Truist Advisory Services, in a Monday report. Reporting by Lewis Krauskopf and David Randall; Editing by Ira Iosebashvili and Leslie AdlerOur Standards: The Thomson Reuters Trust Principles.

☆ Top Wall Street strategists and money managers are warning that the risk-reward ratio for stocks is at its worst since the 2008 crisis. Here are 10 places they say to put your money instead with furth
▼ + stars: | 2023-03-01 | by ( William Edwards | ) www.businessinsider.com time to read: +5 min

In other words, the risk-reward ratio for stocks — or the equity risk premium — has to make sense, or else why take the risk by investing in them? 10 places to investDespite the lackluster outlook for stocks, strategists still say there are plenty of investing opportunities. The Vanguard US Quality Factor ETF (VFQY) and the Fidelity MSCI Consumer Staples Index ETF (FSTA) offer exposure to the above areas of the market. This supports our preference for emerging markets, and our preference for Germany and consumer stocks in Europe. Within defensives, we like consumer staples over healthcare, which we downgraded this month.

☆ Analysis: Rebounding U.S. dollar a growing headache for investors
▼ + stars: | 2023-03-01 | by ( Saqib Iqbal Ahmed | ) www.reuters.com time to read: +5 min

NEW YORK, March 1 (Reuters) - Investors reeling from the recent volatility in global financial markets are eyeing another potential worry: a rebounding dollar. MSCI’s index for emerging market stocks (.MSCIEF) has slipped 8% from its January highs, while the MSCI Emerging Markets Currency Index (.MIEM00000CUS) is down 3% from its early February high. "A stronger dollar poses a problem for risk assets," said Lauren Goodwin, economist and portfolio strategist at New York Life Investments. The dollar's recent rebound has weighed on various risk assetsBecause of the dollar's central role in the global financial system, its fluctuations have widespread repercussions. Whether the dollar continues its rebound will depend in part on investors' perceptions of how much higher the Fed will need to raise interest rates.

☆ A renowned market bear who called the dot-com crash warns stock valuations are at 'nosebleed' levels — and suggests that tech stocks could be the market's 'Achilles' heel'
▼ + stars: | 2023-02-24 | by ( William Edwards | ) www.businessinsider.com time to read: +3 min

Societe Generale's Albert Edwards warns stock valuations are at 'nosebleed' levels. Historically, when yields are low, higher stock valuations are accepted as investors seek yield. But currently high yields in the Treasury market mean stock valuations, on a historical basis, should be lower. Societe GeneraleEdwards said the drop in long-term growth expectations could be assigned to a deteriorating outlook for tech stocks. Societe Generale"An expensive US CAPE ratio has long been justified by the US market's far higher weighting in tech," he said.

☆ Analysis: U.S. stocks’ early-year rally is melting away as Treasury yields surge
▼ + stars: | 2023-02-22 | by ( David Randall | ) www.reuters.com time to read: +4 min

NEW YORK, Feb 22 (Reuters) - Cracks are widening in an early-year rally in stocks, as rising Treasury yields bolster the allure of bonds and skew equity valuations. Stocks are still sitting on sizeable year-to-date gains, though some of their rally has melted away in recent days. The S&P 500 (.SPX) is down 4.4% from its recent highs, but remains up 4.1% year-to-date. That is a "death zone" that makes the "risk-reward very poor" for stocks, strategist Michael Wilson wrote. To be sure, bullish investors might have history on their side, thanks in part to January’s hefty 6.2% gain for the S&P 500.

☆ U.S. companies face more pain as expected ‘earnings recession’ looms
▼ + stars: | 2023-02-13 | by ( Caroline Valetkevitch | ) www.reuters.com time to read: +3 min

Expectations for U.S. earnings to decline in the first and second quarter come amid weaker-than-expected fourth-quarter results for 2022, which Credit Suisse estimates will be the worst earnings season outside of a recession in 24 years. With fourth-quarter 2022 earnings estimated to have fallen from a year ago, a subsequent decline in the first quarter of 2023 would put the S&P 500 into a so-called earnings recession, a back-to-back decline in earnings that hasn't occurred since COVID-19 blasted corporate results in 2020. Fourth-quarter results are in already from 344 of the S&P 500 companies, and the quarter's earnings are estimated at this point to have fallen 2.8% from the year-ago period, according to IBES data from Refinitiv. Most strategists expect little improvement for the season, and analysts now forecast S&P 500 earnings falling 3.7% year-over-year in the first quarter of 2023 and 3.1% for the second quarter. The S&P 500 notched its biggest percentage weekly decline since mid-December last week, though the index is up about 7% for the year to date.

☆ Stocks are jumping as investors bet on a 'pivot' away from interest rate hikes. Here's why experts think the path might be much more complicated.
▼ + stars: | 2023-02-09 | by ( Marley Jay | ) www.businessinsider.com time to read: +4 min

Investors hope the Federal Reserve will soon "pause" interest rate hikes and cut them before long. Stocks have been on a roll in early 2023, and one reason is that investors think the Federal Reserve is very close to changing course on interest rates. The more interest rates rise, the more the economy will slow and the more likely a recession becomes. Along similar lines, Bank of America interest rate strategist Ralph Axel told Morningstar in December that he expects "multiple pivots" from the Fed. "A Fed pause is undoubtedly worth some lift to stocks but once again we want to remind readers that both bonds and stocks have rallied already on that conclusion."

☆ Premarket stocks: Will the Fed end the 2023 market rally?
▼ + stars: | 2023-02-01 | by ( Nicole Goodkind | ) edition.cnn.com time to read: +6 min

So will Fed Chair Jerome Powell dampen expectations and reiterate that the fight against inflation still has a way to go, or will the Fed show signs that they’re ready to ease up on rate hikes? Wall Street analysts also expect the Fed will stop hiking altogether by the spring. This will leave the market hanging on the future of how many rate hikes we will see.”He’s preparing for a volatile market reaction. But now, investors may be a bit too eager to end treatment, even as Fed officials warn that doing so would be premature. Stocks close out a jubilant JanuaryThe greatest comebacks of all time: Rocky Balboa, JNCO jeans, Apple and now… the US stock market.

☆ The stock-market rally that's jumpstarted 2023 is about to fade as the Fed reasserts its resolve in fighting inflation, Morgan Stanley's top stock strategist says
▼ + stars: | 2023-01-30 | by ( Carla Mozée | ) www.businessinsider.com time to read: +3 min

Stocks are off to a "surprisingly good start" in 2023, but the upside momentum looks set to fizzle, Morgan Stanley said Monday. This week's FOMC meeting may remind investors of the cardinal rule: "Don't Fight the Fed," said strategist Mike Wilson. The investment bank is now leaning more toward its bear case of per-share earnings of $180 for the S&P 500. He said recent price action in stocks has prompted investors to participate more actively as they fear missing out. "We think it's important to note that typically when forward earnings growth goes negative, the Fed is actually cutting rates.

☆ The S&P 500 could fall another 22% and investors' view of more downside for stocks is too mild, Morgan Stanley says
▼ + stars: | 2023-01-09 | by ( Carla Mozée | ) www.businessinsider.com time to read: +3 min

The S&P 500 could sink by more than investors anticipate, Morgan Stanley warned on Monday. Investors see the S&P 500 sitting at 3,500-3,600. The S&P 500 tumbled 19% in 2022 but has been pushing higher as 2023 trade gets underway. The S&P 500 was pushing its rally into a second consecutive session on Monday, up by more than 1% to around 3,945. "The bottom line, we don't think a 3,500-3,600 S&P 500 is consistent with the consensus view for a mild recession.

Some top equity strategists predict no profit growth or even a decline in earnings. For the U.S. benchmark S&P 500, analysts project full-year 2023 profit growth of 4.7% following estimated growth of 5.7% for all of 2022, based on Refinitiv data. Jonathan Golub, chief U.S. equity strategist at Credit Suisse Securities in New York, recently lowered his profit forecast and expects a decline in year-over-year S&P 500 earnings in 2023. "Our analysis shows that both earnings and margins typically contract when global GDP (gross domestic product) growth ran below trend". Earnings breakdown by regionEarnings growth by global sectorBlackRock in its 2023 global outlook said earnings expectations are not yet pricing in a recession.

☆ The next few months should be a good time for struggling investors to recoup some of their losses, according to Morgan Stanley. Here's why — and when to get out again.
▼ + stars: | 2022-10-27 | by ( Marley Jay | ) www.businessinsider.com time to read: +4 min

Stocks have upside over the next few months, according to Morgan Stanley CIO Michael Wilson. After months of painful losses and unpleasant surprises, Morgan Stanley says investors are going to catch a break. "Such a move could provide the necessary fuel for the next leg of the tactical rally in stocks," Wilson wrote in a recent note to clients. So Wilson says the next two or three months could be good times, but investors will need to recognize when they're ending. Even if investors do expect a recession, Wilson says they won't fully price it in until they see employment is falling in the monthly non-farm payrolls report.

☆ Analysis: As U.S. stocks rip higher, investors hunt for signs of market bottom
▼ + stars: | 2022-10-19 | by ( Lewis Krauskopf | ) www.reuters.com time to read: +5 min

The current gain – which has seen the S&P 500 bounce about 6.5% last week's fresh intraday low for 2022 – comes on the heels of several rebounds throughout the year that eventually crumbled. However, the index has not been above that level since March even as the S&P 500 continued making new lows. The put/call ratio is yet to approach a 10-day average of at least 1.2 that has historically indicated that "you are more in the ballpark of panic and fear and close to a market low," he said. The current bear market has also been less severe than many past downturns. The S&P 500 slid as much as 25.4% this year, while bear markets since 1929 have seen an average decline of 35%, according to BofA.

☆ Morgan Stanley's Mike Wilson sees a bear market rally that can lead to an 11% gain from here
▼ + stars: | 2022-10-17 | by ( Tanaya Macheel | ) www.cnbc.com time to read: +1 min

The stock market's historic turnaround last week following a hotter-than-expected inflation report was the beginning of a tradeable short-term rally, according to Morgan Stanley. The S & P 500 closed lower on Friday at 3,583.07, after notching a 2.6% gain the day before following the CPI report. "[We] would not rule out another attempt to re-take the 200-day moving average. While that seems like an awfully big move, it would be in line with prior bear market rallies this year and prior ones." However, he added: "We also believe the 200-week moving average will eventually give way like it typically does when earnings forecasts fall by 20% [or more].

☆ MORGAN STANLEY: Buy these 9 stocks now because they'll be among the only winners as the market struggles with the combination of falling demand and growing supply
▼ + stars: | 2022-10-12 | by ( Marley Jay | ) www.businessinsider.com time to read: +3 min

Morgan Stanley says many companies are solving their supply chain woes and building inventory. The good news is the supply chain messes of the post-pandemic world are finally clearing up. "Increasing supply and falling demand is likely to spark discounting, adding fuel to the earnings slowdown we are calling for." Morgan Stanley says consumers are getting pessimistic, with more of them worried their finances will be worse in a year instead of better. Several are from industrial sectors, which Morgan Stanley says are relatively protected from further supply chain problems.

The British pound plunged to a record low against the U.S. dollar Monday. The pound, historically one of the strongest currencies in the world, fell to as low as $1.04 before bouncing back to approximately $1.07. For most of the past few decades, the pound averaged a price of about $1.50 against the dollar. The decline in the British pound in itself won't have a direct impact on the U.S. economy, experts say. But as the value of the pound has dropped, the value of the U.S. dollar has reached all-time highs.

☆ U.S. dollar strength creating 'untenable' situation that risks financial crisis -Morgan Stanley
▼ + stars: | 2022-09-26 | by ( ) www.reuters.com time to read: +1 min

A man counts U.S. dollar banknotes at an exchange shop in Beirut, Lebanon March 18, 2022. REUTERS/Mohamed Azakir/File PhotoNEW YORK, Sept 26 (Reuters) - The recent rally in the U.S. dollar is creating an “untenable situation" for riskier assets that could end in a financial or economic crisis, strategists at Morgan Stanley warned in a note Monday. The dollar index hit a new two-decade high Monday as the pound hit an all-time low against the greenback. The S&P 500 fell 1% on Monday and it is close to its year low. Register now for FREE unlimited access to Reuters.com RegisterReporting by David Randall; Editing by Andrea RicciOur Standards: The Thomson Reuters Trust Principles.

☆ Morgan Stanley sees dollar surge setting the stage for 'something to break'
▼ + stars: | 2022-09-26 | by ( Jeff Cox | ) www.cnbc.com time to read: +4 min

The U.S. dollar's strength is setting the stage for a crisis, as well as a looming bottom in the stock market, according to Morgan Stanley. Fears are rising that the moves in the dollar will pressure corporate earnings, and "such US dollar strength has historically led to some kind of financial/economic crisis," Morgan Stanley equity strategist Michael Wilson and others said in a client note. "What's amazing is that this dollar strength is happening even as other major central banks are also tightening monetary policy at a historically hawkish pace," Wilson wrote. "The recent move in the US dollar creates an untenable situation for risk assets that historically has ended in a financial or economic crisis, or both," Wilson wrote. "In our view, such an outcome is exactly how something does break, which leads to MAJOR top for the US dollar and maybe rates, too," Wilson wrote.

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