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☆ Reddit-loving retail investors are making their chaotic presence felt again - and their risky behavior is fueling a stock rally that doesn't look sustainable
▼ + stars: | 2023-02-23 | by ( Phil Rosen | ) www.businessinsider.com time to read: +6 min

Bullish sentiment has returned in a big way among retail investors as they've started the year piling record amounts into stocks. Speculative bets are backSome of what retail investors are buying has troubled observers. Different from 2021, however, is that institutional and retail investors look like they're on the same team, at least to a noticeable degree. To JPMorgan's Kolanovic, retail investors' optimism foreshadows future weakness in the stock market, as weak hands get wiped out by volatility, similar to how 2022 played out. With the Fed still set to tighten monetary policy, retail investors' enthusiasm for risky assets could backfire like it did last year.

☆ 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.

☆ ChatGPT has investors scrambling to get on the AI bandwagon so much that obscure stocks are soaring just like big-name chip companies
▼ + stars: | 2023-02-08 | by ( Phil Rosen | ) www.businessinsider.com time to read: +6 min

That's that for the latest Fed talk — but today, we're taking a closer look at the AI hype train passing through the stock market. And small-cap tech stocks with names that nod to bots like BigBear.ai and SoundHound AI have similarly notched gains so far this year. Tech stocks have come back with a "vengeance," Fundstrat's Mark Newton said. It's a necessary step for policymakers to take, the group said, even if it means declines in stock market returns. Wall Street's biggest firms are warning their clients not to trust the stock market rally.

☆ 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.

☆ These are the top 10 holdings of the AI-driven investment fund powered by Watson that has been crushing the market this year
▼ + stars: | 2023-02-07 | by ( Matthew Fox | ) www.businessinsider.com time to read: +3 min

The AI Powered Equity ETF has doubled the performance of the S&P 500 so far in 2023. These are the top 10 holdings in the AI Powered Equity ETF that's driven by IBM's Watson. One ETF has been utilizing aspects of artificial intelligence to drive its investment decisions since its launch in 2017: the AI Powered Equity ETF. These are the top 10 holdings in the AI Powered Equity ETF that's driven by IBM's Watson supercomputer. Norwegian Cruise Line HoldingsTicker: NCLH% of ETF: 1.9%Industry: Cruise Ships6.

☆ 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.

☆ 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."

☆ 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."

☆ Markets are losing retail traders, that's bad for stock prices
▼ + stars: | 2022-10-21 | by ( Nicole Goodkind | ) edition.cnn.com time to read: +8 min

Daily average trades at companies like TD Ameritrade (AMTD) and Charles Schwab (SCHW) spiked to new highs in March 2020 and again in January 2021 and February 2021. The number of daily retail trades at Morgan Stanley fell more than 15% over the third quarter from a year earlier, to 805,000 trades a day. In Februrary 2021, Interactive Brokers registered an average of 3.7 million daily retail trades. Recent search trends on Google also show a drop in interest in the stock market. The Investor Movement Index (IMX), created by TD Ameritrade to indicate the sentiment of retail investors, fell by 7.26% during the September period.

☆ 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.

☆ Here's how to play the bear market - and when to know it's safe buy again
▼ + stars: | 2022-10-13 | by ( Jason Ma | ) www.businessinsider.com time to read: +6 min

Investors should brace for a 5% stock market decline if the reading comes in above 8.3%, JPMorgan's trading desk said in a note this week. The stock market could continue to tumble in the face of rising inflation and a recession. Investors should wait to get bullish on the falling stock market as inflation and rate-hike concerns continue to roil the valuation norms of the past two decades, according to Bank of America. Has the stock market found a bottom yet? US stock futures rise early Thursday, ahead of the eagerly awaited US inflation data due later this morning.

☆ History shows the market should be bottoming soon, and inflation data could be catalyst
▼ + stars: | 2022-10-10 | by ( Patti Domm | In | ) www.cnbc.com time to read: +4 min

If the stock market is going to follow its historic pattern during a midterm election year, it would be bottoming just around now. "Typically, it's after Oct. 9 that you start to see some better performance," said Ari Wald, technical analyst at Oppenheimer. The analyst said that date was the average day the market bottomed in the last eight mid-term election years, going back to 1990. "Investors should moderate their expectations for US equity valuations; history shows these contract during periods of high volatility." "Generally our view is that the rate market is trading more off Fed policy and the Fed's commitment to fight inflation rather than the actual threat of inflation.

☆ Here are some active advantages for the long-term ETF investor
▼ + stars: | 2022-09-25 | by ( Kevin Schmidt | ) www.cnbc.com time to read: +3 min

Mid-Year 2022" report, highlighting the state of active management and how it performs against their benchmark. Despite this being the best year so far, the report found that 51% of large-cap active fund managers are underperforming. And that is why active management is so hard." While active management might be better suited for laborious strategies like playing the bond market, the lines between active and passive are becoming more blurred. Those choices are informed by emotion, and that is something that we battle a lot"On the topic of indexed funds, Colas also advised to not take active management for granted.

☆ Wall Street milestone: ETF popularity hits record number
▼ + stars: | 2022-09-24 | by ( Noah Sheidlower | ) www.cnbc.com time to read: +1 min

ETFs are seeing a record surge in popularity. The industry hit a milestone with more than 3,000 ETFs trading simultaneously for the first time ever this month — a 30% increase since December 2020, according to Morningstar. And this year investors are taking more active strategies, such as single-stock ETFs that offer traders exposure to the daily performance of a singular stock like Tesla or Apple. "Investors now are really spoiled for choice among just being able to pick not only the big sector funds or the big overall funds but any kind of fund they think might be interesting," he added. While Ellis believes those who go into ETFs to later dive into index funds will do fine, those choosing highly specialized ETFs are at risk of making disastrous mistakes.

☆ ETF Edge: The evolution of ETFs
▼ + stars: | 2022-09-19 | 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 EmailETF Edge: The evolution of ETFsDataTrek Research's Nicholas Colas and author Charles Ellis join the 'Halftime Report' to discuss the innovative versatility of ETFs and worthwhile longterm holdings.

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