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Morgan Stanley's Jim Lacamp: We are steam rolling to recession
  + stars: | 2023-05-03 | 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 EmailMorgan Stanley's Jim Lacamp: We are steam rolling to recessionMorgan Stanley Wealth Management's Jim Lacamp joins 'Squawk on the Street' to discuss market expectations for Fed policy, resilient portfolio strategies, and more.
Office buildings should be torn down as demand isn't going to bounce back, Kyle Bass said. Converting office space to apartments isn't practical either, he told Bloomberg. And despite the shortage in housing inventory, it's not practical to keep most buildings and convert office space to apartments, he added. You wouldn't want to live there," he told Bloomberg, citing the lack of light as an example. Others on Wall Street are also bearish on commercial real estate.
From stocks to commercial real estate, several parts of financial markets are on shaky ground. Here are the 10 wildest predictions about asset prices and the economy over the past quarter. Grantham said the prices of stocks, bonds, real estate, fine art, and other investments surged to unsustainable highs during the COVID-19 pandemic. Crypto: an 'apocalypse' is coming for digital assets"Dr. Doom" economist Nouriel Roubini isn't hopeful about the crypto industry. "I think it will spread into commercial real estate as banks become more reluctant to lend," Cooperman said.
“I’m more concerned than I’ve been in a long time,” said Matt Anderson, managing director at Trepp, which provides data on commercial real estate. About $270 billion in commercial real estate loans held by banks will come due in 2023, according to Trepp. Questions about the health of banks with sizable exposures to commercial real estate loans cause customers to pull deposits. That forces lenders to demand repayment — exacerbating the sector’s downturn and further damaging the banks’ financial position. The likeliest outcome is thought to be an uptick in defaults and reduced access to funding for the commercial real estate industry.
Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailWatch CNBC's full interview with Morgan Stanley’s Lisa Shalett on inflation and interest ratesLisa Shalett, Morgan Stanley Wealth Management CIO, joins ‘Squawk on the Street’ to discuss her thoughts on the market, how inflation impacts companies, and more.
In this videoShare Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailEconomy not going back to 2% inflation anytime soon without paying, says Morgan Stanley’s Lisa ShalettLisa Shalett, Morgan Stanley Wealth Management CIO, joins ‘Squawk on the Street’ to discuss her thoughts on the market, how inflation impacts companies, and more.
Merrill Lynch head Andy Sieg is leaving to lead rival Citi's wealth management business. Sieg is leaving for rival bank Citi, where he faces a big challenge when he starts in September: improving Citi's wealth business, which has lagged behind competitors like Merrill and Morgan Stanley Wealth Management. New battles await both Sieg at Citi, where he will be head of Citi Global Wealth, and his successors at Merrill. The move was made after the wealth business had missed revenue targets, the Wall Street Journal reported. Citi CEO Jane Fraser described the wealth management unit's performance as "disappointing" on a call to discuss earnings in January.
New York CNN —The job market has remained strong even as the Federal Reserve has spent a full year attempting to cool off the economy by raising interest rates. But economists think that the recent banking turmoil may be what finally raises unemployment. Even with those big job cuts, the labor market in the United States remains white hot. Since the pandemic, regional banks “have provided a vast majority of lending to small firms, underwriting local small business formation,” said Philip Wool, an analyst with asset manager Rayliant. AI will likely lead to job loss, they wrote, but technological innovation that initially displaces workers has historically created employment growth over long haul.
From the central bank's latest rate hike to new developments in the ongoing bank crisis, a lot has happened in my absence. And all the while, Jerome Powell's favorite bond-market indicator is quietly telling us that a recession is all but guaranteed this year. Talk of basis points, yield spreads, and other market jargon is obscuring the key message here: Markets think a recession is guaranteed in 2023. How much credence as a recession signal do you give the bond market indicator? He said the current bank crisis isn't a redux of that era, or even of 2008.
With returns bound to be muted, Shalett likes investments outside of US stocks. "Market psychology has been shaken, setting off a dynamic that likely raises the odds of an imminent recession. Morgan Stanley Wealth ManagementShalett doesn't expect the size of decline her Morgan Stanley colleague Mike Wilson sees. However, with spreads widening and long-term rates reflecting a more reasonable terminal value, bonds are a decent relative portfolio hedge," Shalett said. And finally, active money managers like hedge funds should outperform in an environment where index returns are muted, Shalett said.
US stocks look as overvalued as when the 2022 bear market kicked off, Morgan Stanley warned. "The stock market and the credit market are fighting the Federal Reserve's likely path of rising interest rates. But the Morgan Stanley Wealth Management team said that rally has dragged valuations — an assessment of a stock's fundamental worth — to extreme levels. Morgan Stanley Wealth Management's gloomy outlook echoes the bearish view held by the bank's top strategist. Read more: The bear market rally isn't over yet as stocks just survived a crucial test, Morgan Stanley CIO says
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.
The year-to-date rally can't last, according to Morgan Stanley's chief US equity strategist. Sign up for our newsletter to get the inside scoop on what traders are talking about — delivered daily to your inbox. He added: "This is a perfect analogy for where equity investors find themselves today, and quite frankly, where they've been many times over the past decade." Goldman Sachs' chief US equity strategist David Kostin has said he is also skeptical of the market's gains so far in 2023. Meanwhile, JPMorgan's top stock strategist Marko Kolanovic, a long-time equities bull, says investors should ditch stocks because a recession is coming.
Recent data has shown that inflation is still hot, and that the economy is rip-roaring. On Thursday, JPMorgan Chase (JPM) CEO Jamie Dimon publicly expressed his doubt in the central bank’s ability to control inflation. This, in turn, can help make it easier for the central bank to achieve its inflation targets. Blackrock analysts wrote in a note Thursday that “we think we are going to be living with inflation. Watson was accused in a federal indictment of having “engaged in a scheme to defraud OZY’s investors, potential investors, potential acquirers, lenders and potential lenders.”The charges said that Watson committed the fraud “through material misrepresentations and omissions” about Ozy Media, including the company’s finances, investors, business partners, contracts, and potential acquisitions.
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.
Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailMorgan Stanley’s Lisa Shalett explains what investors should do right nowLisa Shalett, Morgan Stanley Wealth Management CIO, joins 'Squawk on the Street' to discuss her thoughts on the job market, which sectors you should invest in, and more.
Tuesday's CPI data showed inflation climbed 0.5% in January, slightly higher than expected, and year-over-year it slowed to 6.4%. Prices, it seems, aren't cooling down as smoothly or quickly as anyone wants, especially the Fed. To Kolanovic, a recession is all but guaranteed if the Fed is serious about its 2% inflation target. And like Kolanovic, Morgan Stanley Wealth Management investment chief Lisa Shalett warned that Fed policy is going to pull stocks lower. US stock futures fall early Wednesday, as investors pick over yesterday's CPI inflation report to assess what it means for the Fed.
New York CNN —The labor market ballooned in January when the US economy added an astonishing 517,000 jobs, blowing past Wall Street’s expectations. “It’s tough to say that… Some of those people making those layoffs are our clients.”Alaska Air Group noted a smaller number of tech workers and tech companies using their airline. In San Francisco, apartment rents have fallen and tech layoffs have further weakened the housing market. Manufacturing layoffs: While tech layoffs may not be a leading recession indicator, a decrease in manufacturing hiring could be an ominous sign of things to come. What’s next: Investors looking for clarity on a confusing labor market are unlikely to find it in the frequently revised, high-frequency weekly jobless claims data on Thursday.
Watch CNBC's full interview with Morgan Stanley's Lisa Shalett
  + stars: | 2023-02-15 | 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 Morgan Stanley's Lisa ShalettLisa Shalett, Morgan Stanley Wealth Management CIO, joins 'Squawk on the Street' to discuss her thoughts on the job market, retail sales, and more.
New York CNN —Investors who believe the bear market is over are “ignorant,” Lisa Shalett, chief investment officer of Morgan Stanley Wealth Management, told CNN. She believes a bigger drop is on its way as the Fed’s rapid interest rate hikes reduce economic growth down the road. Investors, she said, haven’t yet priced that hit to the economy into stock prices. They do, however, see increased interest rates as a long-term positive. How do you grow when you already have such a large percentage of the market share?
Best Online Stock Trading Platforms of 2023
  + stars: | 2023-02-02 | by ( ) www.wsj.com   time to read: +20 min
Luckily, the past few years has seen a profusion of online stock trading platforms. We spent hours comparing more than a dozen stock trading platforms looking for the most intuitive tools, in-depth research and access to guidance and other educational content. We considered all of this when making our picks for the Best Stock Trading Platforms of 2023. How we pickedTo pick Buy Side from WSJ’s best stock trading platforms, we reviewed offerings from more than a dozen companies. Morgan Stanley is the corporate parent of E*Trade, one of the stock trading platforms considered for this story.
New York CNN —Wall Street analysts are holding their breath and crossing their fingers this morning as they await gross domestic product numbers for the final quarter of 2022. But that could all change if a recession looms into view and the US debt ceiling standoff drags on. “That is the worry: That you get turmoil in financial markets, a big tightening in financial conditions and that adds to downward pressure on economic activity,” he said. It’s not our expectation.”The United States hit the debt ceiling last week, forcing Treasury Secretary Janet Yellen to make accounting maneuvers to avoid breaching that $31 trillion borrowing limit. They argue it unfairly targets the fast-food industry and will increase prices and force businesses to lay off workers.
Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailAll indicators are suggesting slowing, particularly on the manufactured good, says Lisa ShalettLisa Shalett, Morgan Stanley Wealth Management CIO, and Brian Levitt, Invesco global market strategist, join 'Squawk on the Street' to discuss markets pricing in valuations, the bell bear debate on Fed policy, and more.
Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailWatch CNBC's full interview with Morgan Stanley's Lisa Shalett and Invesco's Brian LevittLisa Shalett, Morgan Stanley Wealth Management CIO, and Brian Levitt, Invesco global market strategist, join 'Squawk on the Street' to discuss markets pricing in valuations, the bell bear debate on Fed policy, and more.
Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailStock market facing 'major regime shift,' says Morgan Stanley's Andrew SlimmonMorgan Stanley Wealth Management's Andrew Slimmon and UBS Private Wealth Management's Alli McCartney, joins 'Squawk on the Street' to discuss expectations for the FOMC meeting, locating overweight stocks in energy and tech markets, and a recap on Q3 earnings thus far.
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