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☆ 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.

☆ S&P 500 climbs to snap 5-day losing streak as investors assess recession risks
▼ + stars: | 2022-12-08 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +1 min

US stocks climbed on Thursday, with the S&P 500 snapping a five-day losing streak. Markets had been weighed earlier by fears the Fed will keep rates higher for longer amid resilient economic data. But on Thursday, the Labor Department reported that claims for unemployment benefits increased 4,000 to 230,000 last week. The Labor Department reported that claims for unemployment benefits increased 4,000 to 230,000 in the week ending December 3. That came after Monday's strong service-sector report and last week's hot jobs report left investors weighing the odds of the central bank keeping rates higher for longer.

☆ Markets shouldn't get caught up in recession fears, and the Fed's credibility is near an all-time high, Jefferies' chief market strategist says
▼ + stars: | 2022-12-08 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

Markets shouldn't fixate on the potential for a recession, Jefferies' chief market strategist says. David Zervos pointed to strong economic data and anchored inflation expectations - a sign that the Fed has restored its credibility. The Fed probably needed to engineer a lot of this aggregate demand slowdown to anchor inflation expectations," Zervos said in an interview with CNBC on Wednesday. But economic data remains strong, Zervos noted, which is buffering the shock of Fed rate hikes. "They've done it," Zervos said of the Fed anchoring the market's inflation expectations.

☆ SPAC king Chamath Palihapitiya says the Fed crushed the bubble in blank-check firms, and swears he's not responsible for the poor performance of companies he took public
▼ + stars: | 2022-12-08 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +2 min

Chamath Palihapitiya said he isn't responsible for the poor performance of so-called blank check companies. Instead, the venture capitalist blamed Fed policy for causing the market rout this year, according to his recent interview with the NYT. He used SPACs to bring 10 businesses public, including Virgin Galactic, Opendoor, and his own SPAC in 2017, Social Capital. That was a "perverted" and "distorted" marketplace created by the Fed, he said earlier this year, criticizing the low interest rates that allowed speculation and SPAC companies to take hold of investors. But the Fed has raised interest rates 375 basis points so far this year in a scramble to rein in inflation.

☆ Activision Blizzard falls as FTC says it is suing to stop Microsoft's takeover of the gaming giant
▼ + stars: | 2022-12-08 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +2 min

Activision Blizzard shares fell as the FTC announced it will sue to stop Microsoft from acquiring the video game giant. The deal would harm competition in the gaming industry, the FTC said in a statement on Thursday. Microsoft said it would buy the video game publisher for $69 billion in January. "Today we seek to stop Microsoft from gaining control over a leading independent game studio and using it to harm competition in multiple dynamic and fast-growing gaming markets." Activision publishes many of the most popular video game franchises, including Call of Duty, World of Warcraft, and Candy Crush.

☆ China is snapping up Russian oil at the steepest discount in months as EU scrambles to keep a lid on Moscow's energy income
▼ + stars: | 2022-12-07 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +2 min

China is purchasing Russian crude at the steepest discounts in months, Reuters reported. "They don't really care about the price cap. While China has said it won't abide by the price cap on Russian oil that the G7 and EU imposed, it could give Moscow's customers more bargaining power in oil deals, according to analysts from Rystad Energy in a recent note. But for now, sources told Reuters that China-Russia oil traders were doing business as usual. "They don't really care about the price cap.

☆ The stock market may retest this year's lows and returns will be nearly flat in 2023, Goldman Sachs chief equities strategist says
▼ + stars: | 2022-12-06 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

Stocks may retest lows this year and returns will be near-flat in 2023, according to Goldman Sachs' chief equities strategist David Kostin. The S&P 500 may hit 3,600 in the near term, as companies have revise 2023 earnings forecasts lower, he warned. Next year, the S&P 500 could see nearly flat returns, Kostin added, estimating that it could end 2023 at 3,750 to 4,000. "Therefore, if valuations are roughly at these levels – that's an optimistic scenario in my opinion – and there's not much earnings growth, you basically have a flat market," Kostin warned. And while the S&P 500 is down 17% from levels in January, the price-to-earnings ratio of the index is currently hovering around a multiple of 18.

☆ Markets are wrong in thinking the Fed would step in to boost falling stock prices, and investors should prepare for a volatile January, Bank of America's chief stock strategist says
▼ + stars: | 2022-12-06 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

The Fed won't step back from hawkish policy if stocks are crashing, according to BofA's Savita Subramanian. "The higher the market goes in December, the worse it's going to be in January," Subramanian said to CNBC. But that prospect is unlikely, Subramanian said, predicting more downside for the stock market. But stocks hitting a trough next year could contain the silver lining of setting up a long-term bull market, Subramanian said. She pointed to Bank of America's valuation model – which the bank considers to be its most reliable 10-year predictive model – and estimated that the stock market could have an average annual return of 5% over the next decade.

☆ The US Justice Department wants the fraud allegations against FTX to be investigated
▼ + stars: | 2022-12-02 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +2 min

US Justice Department is pushing for an independent examiner to look into allegations of fraud against FTX. Authorities were already investigating FTX, and are now seeking a probe of alleged wrongdoing that led to its crash. But ex-CEO Sam Bankman-Fried has tried to deflect those accusations, stating he "didn't ever try to commit fraud on anyone." The Justice Department and US regulators were already probing Sam Bankman-Fried's crypto empire before FTX filed for bankruptcy November 11. But Bankman-Fried has tried to deflect allegations of fraud, saying he wasn't aware of what was going on at his companies.

☆ US stocks finish mixed amid fears of more Fed hawkishness after hot jobs report
▼ + stars: | 2022-12-02 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

The Dow reversed higher as the Fed is still largely expected to slow its pace of rate hikes. But the hot jobs data could push the Fed to tack on more rate hikes in early 2023, some analysts say. JPMorgan Asset Management chief strategist David Kelly said the jobs report was likely distorted, and there's still plenty of room for the Fed to taper rate hikes and pause in 2023. Principal Asset Management chief strategist Seema Shah said the jobs report could push the Fed to raise rates above 5%. "This report doesn't mean the risks of the Fed raising rates to 6% are back on the table.

☆ A housing market correction will take a long time and prices need to fall as much as 20% in the next few years to return to their historical trend
▼ + stars: | 2022-12-01 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +2 min

The housing market correction will take time, according to DataTrek's Nicholas Colas. Colas pointed to the length of previous housing cycles, where home prices strayed from long-term trends for years. He predicted home prices would need to drop by 15%-20% for the market to return to its long-term growth trend. "US home prices need to fall by about 15-20 percent over the coming years in order to return to their long run growth trend. "Higher mortgage rates will do part of the work in bringing prices back down, of course, but history says any correction in this market will take time," Colas said.

☆ The rally in stocks will trick investors into thinking the bear market is over, but there's still a case for the S&P 500 to fall another 26% next year, Morgan Stanley's Mike Wilson says
▼ + stars: | 2022-12-01 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

Stocks rallying on hopes of the Fed pausing rate hikes will fool investors into thinking the bear market is over, Morgan Stanley's Mike Wilson said. But stocks could be hit with an earnings recession next year, he told Bloomberg, warning a 26% drop in the S&P 500 was still possible. This is a classic Fed pause stock market rally," Wilson said in an interview with Bloomberg TV on Thursday. That means the Nasdaq and other heavily-shorted stocks could be leading the new market rally, but investors are still in a bear market, even if gains last through December, Wilson warned. "This rally will go further and will probably drag people back into thinking that this bear market is over," he added.

☆ Markets 'completely ignored' Powell's balanced inflation remarks and are not pricing in key risks, Mohamed El-Erian says
▼ + stars: | 2022-12-01 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

Markets are dismissing inflation risks after Powell signaled rate hikes may slow, Mohamed El-Erian said. But inflation is likely to stay sticky next year, and there are still credit and earnings risks for stocks. "So the marketplace is saying inflation risks are over. The market isn't focusing yet on credit and earnings risk, and that's because … there's no sign of a recession," El-Erian added. So keep an open mind, and let's not repeat the mistake of last year, when we all embraced transitory inflation," El-Erian said.

☆ The economy is already in a 'rolling recession', and that could set stocks up for a better 2023, Charles Schwab investment chief says
▼ + stars: | 2022-11-30 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

The US is already in a "rolling recession," according to Charles Schwab's Liz Ann Sonders. Sonders said that could soon weigh on corporate earnings, with more downside possible for stocks. "We're already in a version of recession, we've been talking about it in the context of a rolling recession. A rolling recession means those losses could soon spread to corporate earnings, Sonders said, which would likely hit the stock market sector by sector rather than crashing all at once. If a recession is mild and the job market holds up, that could mean a better environment for stocks in the second half of 2023.

☆ The 30-year mortgage rate has toppled to a 2-month low as the US housing market sees pickup in purchase demand
▼ + stars: | 2022-11-30 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +2 min

The 30-year fixed mortgage rate tumbled to 6.49%, the lowest level since September. The rate has dropped 65 basis points over the last three weeks and 18 basis points in the last week alone. The MBA's mortgage purchase index rose 3.8%, marking the fourth straight gain. Meanwhile, the MBA's mortgage purchase index rose 3.8%, marking the fourth straight gain. The central bank has hiked rates by 375 basis points so far this year in a scramble to rein in sky-high inflation.

☆ Markets should brace for a period of central bank-induced turmoil before the Fed dials back on rate hikes, and stocks could soon retest recent lows, JPMorgan says
▼ + stars: | 2022-11-30 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

Stocks could be in for another bout of volatility before the Fed pivots from aggressive rate hikes, JPMorgan warned. That's because the Fed and other central banks could inject more volatility before backing down from raising rates. Stocks could retest recent lows in the first quarter of 2023, strategists predicted. Wharton professor Jeremy Siegel said the odds of a recession were "virtually 100%" if the Fed continued hiking rates into 2023. That would take the fed funds rate to a range of 4.25%-4.5%.

☆ Recession predictions are too complacent, and there isn't enough evidence that a coming downturn will be short and shallow, Mohamed El-Erian says
▼ + stars: | 2022-11-29 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

There's not enough evidence an incoming recession will be short and shallow, Mohamed El-Erian warned. El-Erian noted that mild recession calls were similar to the ways people dismissed rising inflation last year. "I hope we don't end up in a recession, but if we do, there isn't enough evidence to suggest it's short and shallow." If we end up in a recession it will be short and shallow.' "I hope we don't end up in a recession, but if we do, there isn't enough evidence to suggest it's short and shallow," El-Erian warned.

☆ Dow sinks 500 points as China protests and hawkish Fed comments rattle markets
▼ + stars: | 2022-11-28 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +2 min

Stocks sank on Monday as protestors in China and hawkish comments from Fed officials weighed on the market. Unrest over China's zero-COVID policy could exacerbate supply-chain issues, which are partly responsible for rising inflation. St. Louis Fed President James Bullard added the US had "a ways to go" on rate hikes before claiming victory on the inflation front. Anger over China's zero-COVID policy has sparked turmoil across the nation, with protests threatening to exacerbate supply-chain issues in the global economy. Experts say the protests could fuel US inflation, as supply-chain issues have been a major driver of high prices so far.

☆ Billionaire bitcoin bull Mike Novogratz says crypto should and will be regulated and the FTX disaster has created a 'deficit of trust' in the whole industry
▼ + stars: | 2022-11-23 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

The FTX disaster has created a "deficit of trust" in crypto, according to bitcoin bull Mike Novogratz. The industry should and will get regulated he said, pointing to the fallout of Sam Bankman-Fried's crypto exchange. But while investors are being rocked by this bout of volatility, crypto isn't going anywhere, he told CNBC. Sign up for our newsletter to get the inside scoop on what traders are talking about — delivered daily to your inbox. And so in no world is bitcoin is going away, or quite frankly, the blockchain and Ethereum and everything else," he said.

☆ The Fed's last rate hike will come in January, but stocks will still be under pressure from dismal earnings in 2023, Morgan Stanley strategist says
▼ + stars: | 2022-11-23 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +2 min

The Fed could stop hiking rates as soon as January of next year, according to Morgan Stanley's Andrew Sheets. Sheets pointed to evidence of falling inflation, though he noted central bankers would likely keep monitoring the economy after pausing rate hikes. But while investors are hoping a pause could spark a new rally, stocks will still be under pressure next year on poor earnings, he warned. But central bankers risk undoing the tightening they've done so far by pausing rate hikes, Sheets pointed out. Stocks are still likely to face downward pressure with dismal earnings into 2023, Sheets said.

☆ The stock market could soar to new records in another 1982-style vertical rally as inflation continues to ease, Fundstrat says
▼ + stars: | 2022-11-23 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

Stocks could rise abruptly and cause the S&P 500 to hit 4,400-4,500 by the end of the year, Fundstrat's Tom Lee said. Lee also noted that inflation was being fueled by several transitory pressures, such as supply chain issues and "revenge" spending. In 1982, the S&P 500 rebounded so sharply that in just four months it recovered from a 27-month bear market, he pointed out in a note on Tuesday. In his view, it could cause the S&P 500 to rally to 4,400 to 4,500 by the end of the year — a 12% rise from current levels. He's previously said the S&P 500 could rally to another all-time high of 4800 by the end of the year, before revising that prediction downward.

☆ Markets in 2023 will face 'extreme volatility' as the economy navigates 1940s-style boom-bust inflation cycle, Morgan Stanley's Mike Wilson says
▼ + stars: | 2022-11-22 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

Next year will see extreme volatility as the economy grapples with the boom-bust inflation cycle, Morgan Stanley's Mike Wilson said. Sign up for our newsletter to get the inside scoop on what traders are talking about — delivered daily to your inbox. He compared the current inflation cycle to the demand-driven inflation that took root in the economy after World War II. Sticky inflation spells trouble for the Federal Reserve, which has been scrambling to hike rates and rein in high prices. But it creates probably a lot more dispersion, quite frankly, across the stock market," Wilson said, warning investors of mixed corporate earnings results next year.

☆ The market is still a long way from seeing stocks hit a bottom and interest rates come down, Goldman Sachs chief equities strategist says
▼ + stars: | 2022-11-21 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

The stock market is still a long way from hitting a bottom, Goldman Sachs' Peter Oppenheimer warned. Meanwhile, markets are similarly far off from seeing interest rates come down. "We don't think we've hit yet the sort of conditions that we would typically see in a genuine trough in the bear market." That's because companies are still struggling with high interest rates and a soaring US dollar. But he warned investors of more volatility ahead until interest rates start to coming down.

☆ Interest rates probably won't stay high, thanks to a shrinking workforce and the tech industry's 'midlife crisis,' top economist Paul Krugman says
▼ + stars: | 2022-11-21 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

Interest rates probably won't stay high, top economist Paul Krugman wrote in an op-ed. For one, higher rates are a lingering effect of the pandemic, when the government flooded the economy with stimulus money, Krugman said. Households are still spending leftover stimulus, which has supported high prices and therefore, higher interest rates this year. But those effects will eventually fade away – and, along with slowing investment demand, that will likely result in interest rates being dragged lower. Lower rates could potentially revive asset bubbles, though risk assets are feeling serious pain from today's high interest rates.

☆ US stocks fall after last week's big rally as investors digest Fed messaging on rate hikes
▼ + stars: | 2022-11-14 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +1 min

US stocks ended lower on Monday, losing steam after last week's huge rally. Investors digested comments from Fed officials. Vice chair Lael Brainard said the pace of rate hike could soon slow. Meanwhile, markets were absorbing comments from Fed governor Christopher Waller over the weekend, stating it was too early for investors to get excited about easing monetary policy. That message conflicted slightly with comments on Monday from Fed Vice Chair Lael Brainard, who suggested the central bank could soon start slowing its pace of rate hikes.

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