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☆ The chief executive of an AI-driven markets analytics company breaks down how to invest in the craze sparked by ChatGPT
▼ + stars: | 2023-02-18 | by ( Phil Rosen | ) www.businessinsider.com time to read: +6 min

Today, I'm eager to share my conversation with the CEO of a markets analytics platform that leverages the power of artificial intelligence. Jan Szilagyi is the chief executive officer and cofounder of Toggle AI. Toggle AIJan Szilagyi is the chief executive officer and cofounder of Toggle AI. Jan Szilagyi: We've seen a big increase in business and a huge spike in inquiries to Toggle AI. Ultimately, I don't think AI is going to be a fad though.

☆ The good news is markets look resilient — but the bad news is just about everything else
▼ + stars: | 2023-02-17 | by ( Phil Rosen | ) www.businessinsider.com time to read: +5 min

Wizardry aside, let's see why the stock market has proved so resilient this year, even though the economy's providing nothing to cheer for. DataTrek cofounder Nicholas Colas is chalking up stable markets to strong earnings. "The only explanation that makes sense to us for this conundrum of 'bad' news and stable markets is that US corporate earnings power remains resilient," Colas wrote in a Thursday note to clients. Even as markets act like everything's fine, there's still not quite enough optimism among investors to say that markets are nearing a peak, according to Ned Davis Research. A top-ranked stock-picker said January's hot CPI report suggests the stock market is far from the bottom.

☆ Wall Street luminaries say it's time to get out of the stock market before the Fed crushes the economy
▼ + stars: | 2023-02-15 | by ( Phil Rosen | ) www.businessinsider.com time to read: +6 min

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.

☆ A recession indicator is blaring louder than it did before the 2008 downturn - but 'no one seems to care'
▼ + stars: | 2023-02-14 | by ( Phil Rosen | ) www.businessinsider.com time to read: +2 min

A New York Fed economic model shows the odds of a recession in the next 12 months are at 57%. That's worse than it was before 2008 and the highest it's been since the early 1980s, according to DataTrek Research. Currently, the model shows the odds of a recession in the next 12 months are at 57%. Probability of US Recession Predicted by Treasury Spread DataTrek Research, NY FedMarkets have rallied to start the new year. The realistic chance of a downturn hasn't been fully priced in, in his view, and investors should fade 2023's early stock rally.

☆ Forgotten parts of the market lead the way in 2023 as advisors wrestle with how to play the economy
▼ + stars: | 2023-02-07 | by ( Bob Pisani | ) www.cnbc.com time to read: +5 min

Everyone here is amazed at how forgotten segments of the market have rebounded in 2023: international, growth, small cap and bonds. Advisors here are having a hard time wrapping their heads around the idea that there would be a recession ins 2023, and now maybe not. "With real wage growth, large payroll growth and earnings beating expectations it equals a soft landing at worst and maybe no recession near term." Most advisors here are coming to grips with Powell's insistence the Fed will not lower rates this year. Their Equal Weight S & P 500 ETF (RSP) has also attracted significant inflows from investors wary of market cap weighted indexes.

☆ Here's why the US economy won't fall into a recession this year or next, according to a key market signal
▼ + stars: | 2023-02-07 | by ( Phil Rosen | ) www.businessinsider.com time to read: +5 min

In that case, it may be wise to heed a key bond market signal that's saying we'll avoid a recession after all. But if you look at the bond market, there's a clear answer that seems to be forming: The US economy won't enter a downturn this year or next. That's because the spread between corporate bonds and Treasury yields is steadily narrowing, according to DataTrek Research. The spread between corporate bond yields and US Treasuries helps measure the risk appetite of bond traders. Strategists warned that markets have yet to price in an earnings recession, which could pose a major headwind in 2023.

☆ Markets may be taking the wrong read from January's shocking jobs report
▼ + stars: | 2023-02-06 | by ( Jeff Cox | ) www.cnbc.com time to read: +5 min

"The resounding strength of January employment report does not change our view of the labor market. Significant imbalances remain in the labor market due to too much excess demand and limited labor market slack," added Michael Gapen, chief U.S. economist at Bank of America. That's because they see the jobs report gain of 517,000 as a potential impetus to push the Fed into more aggressive interest rate hikes. He thinks future months will show a slowing labor market that will force the Fed into halting its hikes. "From a data-dependency perspective, the strength of the labor market suggests there might be need to continue to raise interest rates."

☆ Markets may be underestimating how much the Fed wants to avoid turning this into the 1970s
▼ + stars: | 2023-01-24 | by ( Jeff Cox | ) www.cnbc.com time to read: +3 min

Fed fund futures are even anticipating some mild rate cuts by the end of 2023, according to CME Group data. "We also believe that the market is vastly underestimating the Fed Chair's desire to avoid a 1970's-style inflation resurgence," the firm said in a client note. "We expect Powell to disappoint markets by maintaining a hawkish tone during his press conference on February 1st." The 1970s saw the Fed raise rates to control inflation, only to cut them on signs of economic weakness. Fed rate hikes work by essentially tightening financial conditions, of which stock prices are a key component.

☆ Wall St Week Ahead U.S. investors hunt for gains in foreign stocks
▼ + stars: | 2023-01-13 | by ( Lewis Krauskopf | ) www.reuters.com time to read: +5 min

Europe's STOXX 600 index (.STOXX) has gained some 17% since the end of the third quarter, versus 11% for the U.S. benchmark S&P 500. MSCI's gauge of global stocks excluding the U.S. has risen more than 20% over that time. The firm last month rotated more into international equities as it increased its overall stock exposure, de Longis said. US vs European stock performanceInternational stocks were recently touted by investor Jeffrey Gundlach of DoubleLine Capital and BofA Global Research, which projected global stocks would "crush" their U.S peers in 2023. Buying international stocks could be a "complement" to the opportunity domestically, said Mona Mahajan, senior investment strategist at Edward Jones.

☆ Markets don't believe the Fed when it comes to where rates are headed
▼ + stars: | 2023-01-11 | by ( Jeff Cox | ) www.cnbc.com time to read: +4 min

No matter how many times Federal Reserve officials say they're raising interest rates and keeping them there, the markets don't want to believe them. Recent comments from Fed presidents have tried, and failed, to nudge the market's view towards the [Federal Open Market Committee's] guidance." Traders are pricing in nearly an 80% probability that the FOMC approves a 0.25 percentage point rate increase when it releases its post-meeting decision Feb. 1, according to CME Group data . Doubts about the 'terminal rate' Markets, though, aren't buying it. The futures market also is indicating the likelihood of cuts of as much as half a percentage point by year-end.

☆ Is the bottom in for the bear? Market valuation measures suggest not
▼ + stars: | 2023-01-04 | by ( Bob Pisani | ) www.cnbc.com time to read: +2 min

The most recent market bottom occurred on October 12th, when the S & P 500 closed at 3,577. At the time, analysts were quite optimistic about 2023 earnings, expecting them to come in at $239, up almost 8% from the 2022 earnings estimates. That translates into a forward multiple (P/E ratio) of 15 times 2023 earnings. Other strategists have also noticed that the S & P 500, despite a 20% drop in 2022, is still trading at a rich valuation. Instead of $237, estimates are now $229, and the multiple is now 16.7 times forward earnings.

☆ Stocks have taken a beating this year and investors feel worse than during 2008's Great Financial Crisis. Here's what that means for 2023.
▼ + stars: | 2022-12-30 | by ( Phil Rosen | ) www.businessinsider.com time to read: +5 min

Now, unlike this newsletter and all you readers, the stock market is rounding out a year to forget. It's worth noting, too, that alongside slumping stocks, investor sentiment is worse than it was during the 2008 Financial Crisis. But in Fundstrat's view, that suggests a stock market bottom is near, if it hasn't happened already. In other words, overly bearish sentiment suggests stocks could be set up for a big rally in 2023. What's your stock market outlook for the new year?

☆ Just 5 trading days accounted for 94% of the S&P 500's decline in 2022 - and they could signal what's to come in 2023, DataTrek says
▼ + stars: | 2022-12-29 | by ( Matthew Fox | ) www.businessinsider.com time to read: +4 min

Just five trading days in 2022 are responsible for 94% of the S&P 500's year-to-date decline of 21%. And these down days could shed some light on how the stock market in 2023. These were the five trading days that tanked the market in 2022, according to DataTrek co-founder Nicholas Colas. May 18 - S&P 500 down 4.0%A big earnings miss from Target highlighted shifts in consumer spending patterns, supply chain issues, and rising input costs. Instead, there were 34 more down days this year in the S&P 500 than up days.

☆ Think you can time the markets? Five losing days made up most of the losses this year
▼ + stars: | 2022-12-28 | by ( Bob Pisani | ) www.cnbc.com time to read: +3 min

There are many studies that indicate what happens to portfolios when they are not invested on days when the markets move up (or down) significantly. Hypothetical growth of $1,000 invested in the S & P 500 in 1970 through August 2019 Total return $138,908 Minus the best performing day $124,491 Minus the best 5 days $90,171 Minus the best 15 days $52,246 Minus the best 25 days $32,763 Source: Dimensional Funds These are amazing statistics. Missing just one day — "the best day" — in the last 50 years means you are making more than $14,000 less. With the S & P 500 down nearly 20% for the year, he pointed out that just 5 days account for 98% of that loss. The same as my example above: "It is impossible to know ahead of time which days will 'make the year' in either up or down markets," he said.

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☆ Think you can time the markets? Four losing days made up most of the losses this year
▼ + stars: | 2022-12-28 | by ( Bob Pisani | ) www.cnbc.com time to read: +3 min

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☆ With the Fed out of the way, this is what could move the markets into year-end
▼ + stars: | 2022-12-19 | by ( Bob Pisani | ) www.cnbc.com time to read: +2 min

With the Federal Reserve out of the way, and major economic news light (only the PCE on this Friday), traders are bracing for a wave of earnings reductions from the analysts community ahead of fourth quarter earnings. "Fed induced recession fears are to blame for December's pullback," Nicholas Colas, co-founder of DataTrek Research, said in a note to clients. Analyst earnings expectations for the fourth quarter have been in negative territory for several weeks, and now expectations for the first quarter of 2023 are also on the verge of going negative. It's very early, but early reporters have not been disastrous. So, early February 2023 is when the worst of the cuts may occur," wrote Raich.

☆ Markets are bracing for a 'Powell recession' that could be coming soon
▼ + stars: | 2022-12-07 | by ( Jeff Cox | ) www.cnbc.com time to read: +5 min

Markets are essentially saying there will be another man-made economic contraction soon: the 'Powell recession.'" The New York Fed even has a tracker on its site that gauges the possibility of a recession by the three-month/10-year curve. As of the end of November, the inversion level implied a 38% recession chance within 12 months, according to the central bank's methodology. Markets also anticipate the Fed will approve a few more increases, ultimately taking the bottom end of the range to about 5%. Similarly, Wells Fargo economists noted that "Our own yield curve forecast signals turbulent times are ahead, aligning with our expectation for a recession starting next year."

☆ 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.

☆ Stock prices are rising, but earnings are not: Here's what that means for the market
▼ + stars: | 2022-11-14 | by ( Bob Pisani | ) www.cnbc.com time to read: +2 min

There is good news on several fronts, but the market has moved fast, and earnings forecasts are not cooperating. The problem is that while the S & P 500 has been advancing, earnings have been declining. The S & P is up 11% since its October low, but earnings growth for the fourth quarter is now expected to be negative 0.1%. Remove them, and the overall earnings outlook greatly improves. S & P 500: Q4 earnings estimates Q4: down 0.1% Ex-Amazon, Intel, Meta: up 3.9% Ex-Exxon, Boeing, Chevron: down 3.1%

☆ Rallies this year are following a distinct pattern — and so this one may have a little further to run
▼ + stars: | 2022-11-11 | by ( Jeff Cox | ) www.cnbc.com time to read: +1 min

But Nicholas Colas, co-founder of DataTrek Research, pointed out that the rally also came amid a falling level of market fear as gauged by the CBOE Volatility Index . "Our standing advice is the same: keep watching the CBOE VIX Index." The VIX closed Thursday at 23.5, just above its long-run average of 20 after peaking near 34 in early October. "By this measure, the current rally has some room to run. Being up +5 percent [Thursday] doesn't tell us that; the VIX as a measure of investor uncertainty does."

☆ There are more signs that a revaluation of growth stocks is underway
▼ + stars: | 2022-10-31 | by ( Bob Pisani | ) www.cnbc.com time to read: +3 min

It is the value player's dream: A revaluation of growth stocks. As a result, money in October has been moving into financials, materials, industrials, energy and even small caps. Investors have noticed this deceleration in earnings for growth sectors and have been buying classic "value" sectors like energy, industrials and health care this month. Third-quarter arnings growth for tech names is down a modest 1.2% and is only projected down 3.3% for the fourth quarter. Krinsky wasn't alone in his caution about earnings estimates.

☆ Is Exxon the new 'FANG'? The value rotation is starting to look more real
▼ + stars: | 2022-10-28 | by ( Bob Pisani | ) www.cnbc.com time to read: +3 min

Value buyers have been waiting for a sustainable rally for so long, many have moved on to other quests. "Exxon is the new FANG," has been a quip on trading desks for the past few weeks. As the year has gone on, the direction of earnings growth has decelerated for big-cap tech — in some cases dramatically. "2022's pandemic era earnings growth rates are proving to be unsustainable, so markets are revising their estimate of fair value for these stocks," he said. True, all are seeing earnings growth, just not as fast as expected a couple years ago.

☆ There's still a bull case for the stock market even as inflation runs hot and rates rise
▼ + stars: | 2022-10-20 | by ( Carla Mozée | ) www.businessinsider.com time to read: +5 min

Today we're also looking at one firm's view that there's still a bull case to be made for stocks, but its sitting on increasingly shaky ground. The upside case for stocks rests largely on two things: inflation and rates. DataTrek Research co-founder Nicholas Colas told clients this week that investors could propel stocks up heading into 2023. "TIPS and Fed Funds Futures prices do currently support the idea that in six months inflation will be dropping and Fed policy will be moving into neutral," Colas said. Individual investors have reduced net purchases of stocks in recent days following the September inflation shock.

☆ The bull case for stocks is still alive, but it's on increasingly shaky ground, DataTrek says
▼ + stars: | 2022-10-19 | by ( Matthew Fox | ) www.businessinsider.com time to read: +3 min

There is still a bull case that suggests further upside for the stock market, according to DataTrek. The upside case hinges on inflation and rates decelerating considerably over the next six months. The bull case for stocks would only get stronger if analysts' corporate earnings estimates stop moving lower and bottom out. "Pull these points together and you have a reasonable upside case for US stocks." But there is still plenty of risk, and any derailment of the above factors would reset the six-month clock and lead to more doldrums for the stock market.

☆ The 2-year Treasury just touched its highest level since 2007 as aggressive Fed moves send bonds yields soaring
▼ + stars: | 2022-09-23 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

The two-year Treasury yield hit its highest level since 2007 on Friday. The jump in US bond yields follows another aggressive rate hike by the Fed this week. 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 two-year Treasury yield touched its highest level in 15 years on Friday, as aggressive moves by the Federal Reserve send bond yields soaring. The two-year Treasury, which is highly sensitive to economic policy moves, topped 4.2% in trading on Friday, at one point beating a 15-year high of 4.266%. Most of the Treasury yield curve was higher Friday morning.

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