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☆ Wall Street's biggest firms are warning their clients not to trust the stock market rally with trouble still on the way for the US economy and corporate earnings
▼ + stars: | 2023-02-07 | by ( William Edwards | ) www.businessinsider.com time to read: +5 min

Stocks have responded positively, with the S&P 500 rising as much as 9.3% since the start of the year. "An improvement in US and global macro data has lifted the S&P 500 by 8% YTD and leads us to lift our 3-month S&P 500 target to 4000 (from 3600). Morgan StanleyMike Wilson, the bank's chief US equity strategist, has been warning of downside in the S&P 500 to fall for weeks now. In other words, this earnings recession is not priced, in our view." Wilson had the most accurate price target for the S&P 500 in 2022 among major Wall Street Strategists.

☆ A further stock rally will be 'like bathing in lava' for market bears, BofA says
▼ + stars: | 2023-01-27 | by ( Jeff Cox | ) www.cnbc.com time to read: +2 min

Investors betting against the stock market have taken their lumps in 2023 and could be in for more trouble ahead, according to Bank of America. In his weekly note examining the flow of money through financial markets, Bank of America chief investment strategist Michael Hartnett noted how tough it's been for the bears. "Another 3-5% [gain] here will feel like bathing in lava if you're a bear," Hartnett wrote in the "Heard on the Street" section of his "Flow Show" report. "After that we sell as we [are] now close to [the] moment where stock gains start dragging yields higher," Hartnett wrote. However, Hartnett noted that the current trend may not last.

☆ Emerging markets are a top investing trend for 2023. Here's the best way to take advantage
▼ + stars: | 2023-01-23 | by ( Carmen Reinicke | ) www.cnbc.com time to read: +6 min

The iShares MSCI emerging market Asia exchange traded fund is up 11% and the iShares core MSCI emerging markets ETF is up more than 10% since the year began. For Kotler, it's emerging market bonds, where his firm has an overweight rating as opposed to a neutral rating on equities. One other factor that should help emerging market countries outperform in 2023 is the winding down of the strength of the U.S. dollar. Some top emerging market bond funds include the iShares JP Morgan USD Emerging Markets Bond ETF , the Vanguard Emerging Markets Government Bond ETF and the VanEck JP Morgan EM Local Currency Bond ETF. Of course, the downside to large emerging market funds is that they tend to be most heavily weighted to China, as it's the largest emerging market country.

☆ Investors are stampeding into boring old bonds to start the year
▼ + stars: | 2023-01-21 | by ( Michael Santoli | ) www.cnbc.com time to read: +7 min

Yet boring old bonds have just about kept pace, as investors rush to lock in healthy-seeming yields after one of the worst years ever for fixed-income returns. The Federal Reserve's historically aggressive tightening campaign last year gouged debt portfolios but quickly rebuilt the supply of safe yield on offer for today's buyers. I made the case for bonds' value from this perspective in a column here three months ago , just as Treasury yields were peaking. The good news is that "real yields," meaning yields above the market's implied outlook for inflation, remain positive. The American Association of Individual Investors' monthly asset allocation survey for December showed bonds at 14.3%, below the survey's long-term average of 16%.

☆ The stock market is about to be flipped upside down as inflation rebounds ahead of an upcoming recession, Bank of America says
▼ + stars: | 2023-01-20 | by ( Matthew Fox | ) www.businessinsider.com time to read: +3 min

The stock market is about to be flipped upside down as inflation rebounds ahead of an upcoming recession, according to Bank of America. "Investment conclusion is super-trend of inflation assets over deflation assets remains in its infancy," he said. In other words, investors should own the new leadership assets like commodities and non-US stocks, according to BofA. The mega-cap tech trade that has dominated markets since the Great Recession will underperform in the years ahead, Hartnett warned. Investors should also own small-cap stocks over their large-cap peers, and value stocks over growth stocks, according to the note.

☆ Recession fears have peaked, which historically has been a great sign for stocks, BofA survey shows
▼ + stars: | 2023-01-17 | by ( Jeff Cox | ) www.cnbc.com time to read: +2 min

Professional investors are growing less pessimistic about the economy, which could mean good things for stocks. "Prior peaks in recession fear were big turning points in asset prices," wrote Michael Hartnett, Bank of America's chief investment strategist. In fact, a net 50% of respondents to the BofA survey say they see a slowing global economy over the next 12 months. That, too, is a potentially good sign for markets, as it represents an improvement from the peak of economic fears. "As with 'recession fear' ... asset prices have inflected higher whenever monetary policy was seen as restrictive in the past 20 years."

☆ Investors could find better stock market returns outside the U.S. in 2023
▼ + stars: | 2023-01-11 | by ( Patti Domm | In | ) www.cnbc.com time to read: +9 min

With the dollar weakening, it's time for U.S. investors to get more serious about going abroad for stock market gains. Europe, China, Japan, Asia are actually going to move from losers to winners," he said. The iShares China Large-Cap ETF (FXI), iShares MSCI China ETF (MCHI) and KraneShares CSI China Internet ETF (KWEB) are invested in shares of Chinese companies. Chinese stocks make up 33% of the MSCI Emerging Markets Index. The iShares MSCI Emerging Markets ETF (EEM) represents that index.

☆ Did the market already show its hand in the first week of 2023? What we've learned so far
▼ + stars: | 2023-01-07 | by ( Michael Santoli | ) www.cnbc.com time to read: +9 min

Recall that at the start of last year, the popular bet was for a smooth and painless rotation from expensive growth stocks to financials and cyclicals. It didn't last: The S & P financial sector trounced utilities by seven percentage points in just the first week of 2022. Yet the Nasdaq 100 's premium to the overall S & P 500 remains at 25% — higher than at any point in the decade before the Covid pandemic hit. And the broader tape, as measured by the equal-weighted S & P 500, continues to act better than the top-heavy headline index. This egalitarian basket, buyable via the Invesco S & P 500 Equal Weight ETF (RSP) , is up 16% from the autumn low, is down less than 12% from its record high and has broken to a new cycle high against the traditional S & P 500.

☆ Bank of America has 10 investing ideas on how to make it through the year ahead
▼ + stars: | 2022-12-16 | by ( Jeff Cox | ) www.cnbc.com time to read: +2 min

Bank of America strategists see risks of a Federal Reserve policy mistake in 2023 that could generate a "hard landing" for an economy trying to fight through elevated inflation. The bank's investing team has come up with 10 moves that investors can make to protect themselves against challenging conditions. Part of that trade is also to go long emerging market assets, which have been hurt by the stronger greenback. Specifically, the bank recommends emerging market distressed bonds, the Korean won currency, the reopening in China and the Mexican peso. Bank of America has a 4,000 price target on the S & P 500 for 2023, implying just a 2.7% gain from Thursday's close.

☆ The 'pain trade' is for stocks to rally because investors are so bearish, Bank of America says
▼ + stars: | 2022-12-13 | by ( Jesse Pound | ) www.cnbc.com time to read: +1 min

A big rebound for the stock market could prove unwelcome news to many professional investors, according to Bank of America. "We say Jan/Feb 'pain trade' is up for bond yields & risk assets. ... [fund manager survey] investors say best performing asset in '23 to be government bonds & most overweight bonds vs stocks since Apr'09," the note said. While stocks are well off their lows of the year, investors appeared to turn bearish again in recent weeks. There were some signs in the survey that investors were starting to become less bearish, according to Bank of America.

☆ A US recession is coming - here are 5 reasons why
▼ + stars: | 2022-12-12 | by ( Phil Rosen | ) www.businessinsider.com time to read: +6 min

Bank of America's strategists said the US could fall into a recession over the next 10 to 12 weeks. Bank stocks have tumbled in recent days. Frankly, a broad recession won't be a surprise to anyone at this point (especially Opening Bell readers). In other news:Whether or not the US is in a recession is a politically charged debate. These nine funds offer strong positioning through a recession and into the next bull market, in Bank of America's view.

☆ Here are 5 reasons why the US could be in a recession by March, according to Bank of America
▼ + stars: | 2022-12-10 | by ( Matthew Fox | ) www.businessinsider.com time to read: +3 min

The US economy could enter a recession in 10-12 weeks, according to Bank of America. These are the five reasons why Bank of America believes a recession could hit by March 2023. This potential recession has been called the most telegraphed recession in history because everyone seems to be expecting a decline. Bank stocks are down 10% in just four days. Bank stocks are often described as a "canary in the coal mine", and feel the pain of a downturn earlier than stocks in other sectors.

☆ Stocks are likely to get smacked down in the first half of 2023 before markets improve
▼ + stars: | 2022-12-05 | by ( Patti Domm | In | ) www.cnbc.com time to read: +5 min

The outlook for next year is a bit better for stocks, but the first half sounds like it could be downright ugly. The strategist expects lows to be retested due to what could be a significant decline in earnings as interest rates rise. Jeff Kleintop, Charles Schwab's chief global investment strategist, expects a shallow recession may already have begun. He predicts the first half will be worse for stocks than the back half of the year, with a choppiness similar to the past six months. Calvasina expects small caps to be an area of outperformance, and she still sees value in energy and financials.

☆ It's time for investors to sell any rally in stocks with job losses set to shock markets in 2023, Bank of America says
▼ + stars: | 2022-12-02 | by ( Carla Mozée | ) www.businessinsider.com time to read: +2 min

Sell stock rallies ahead of the likely recession shock for Main Street consumer sentiment in 2023, Bank of America said Friday. Job losses next year will shock consumers, as inflation did in 2022, analysts predicted. For now, the labor market still looks strong, with the addition of 263,000 jobs in November. Strength in the labor market was on display Friday with the November nonfarm payrolls report. Bank of America said it already sees signs of the labor market softening, with "small business jobs hard to fill (correlates with Fed funds) & peak in Atlanta Fed wage tracker," it said.

☆ The inflation story is driving the 2023 stock market forecast for now
▼ + stars: | 2022-12-02 | by ( Bob Pisani | ) www.cnbc.com time to read: +3 min

What's going to happen in the stock market in 2023? That is playing against the "inflation data is improving" narrative that has been powering the stock market recently. Judging by some of the comments from strategists, 2023 sounds pretty gloomy. The S & P 500 is above its 200-day moving average for the first time since April. Seven of the 11 sectors of the S & P 500 are above their 200-day moving average.

☆ 100 years of stock-market history show the sell-off is likely only half done, says a 30-year market vet who called the downturn. Here are 3 criteria to watch to know when the worst is over.
▼ + stars: | 2022-11-19 | by ( William Edwards | ) www.businessinsider.com time to read: +7 min

Jon Wolfenbarger thinks stock-market investors are still too optimistic that a bear market bottom is coming sometime in the immediate-to-near future. When bear markets occur when valuations are relatively high, the bear markets tend to drag on longer. The median bear market length during periods of high valuation among those listed above is 17 months, Wolfenbarger said, compared to 13 months when valuations are attractive. Given that the current market sell-off began amid some of the highest valuations in history, Wolfenbarger said he expects the bear market to last 17 months or longer. Wolfenbarger's views in contextIn June, Societe Generale conducted a similar analysis to Wolfenbarger's and looked at bear markets over the last 150 years.

☆ Here's when to buy stocks as Wall Street warnings suggest a recession is imminent, according to Bank of America
▼ + stars: | 2022-11-18 | by ( Matthew Fox | ) www.businessinsider.com time to read: +2 min

Signs are growing that an economic recession is imminent, according to Bank of America. BofA recommends investors focus on bond investing in the first half of 2023 and shift to stocks in the second half of next year. Instead, investors should focus on buying bonds between now and the first half of 2023, and shift to stocks in the second half of 2023, according to the note. "Rates shock so damaging to Wall Street asset values in 2022, but there's been no rates shock on Main Street," BofA's Michael Hartnett said. "There's your credible big bull trade; we say bonds first half of 2023, stocks second half of 2023," Hartnett said.

LONDON, Nov 18 (Reuters) - Inflows into global equity funds hit their highest level in 35 weeks in the week to Wednesday, according to a report from Bank of America (BofA), as investor optimism brightened. Investors poured a net $22.9 billion into equities, BofA said, citing EPFR data, and $4.2 billion into bonds. They pulled $3.7 billion from cash funds and $300 million from gold. U.S. equity funds saw inflows just shy of $24 billion in the week to Wednesday, BofA said. Money flowed into emerging market (EM) equities for the fourth week running, at $1.9 billion.

☆ Stagflation is now the consensus view on Wall Street for 2023 as investor sentiment remains historically bearish, Bank of America says
▼ + stars: | 2022-11-17 | by ( Matthew Fox | ) www.businessinsider.com time to read: +3 min

The consensus view on Wall Street is that stagflation will plague the stock market in 2023, according to Bank of America. A survey from the bank found that 92% of fund managers expect a period of high inflation and low economic growth next year. The bearish outlook comes as cash levels sit near record highs, signaling the lingering bearish sentiment. That dynamic sets contrarian investors up for a solid trade, as investor sentiment remains historically bearish. Other sentiment indicators are also showing overwhelmingly bearish sentiment among investors, like the weekly AAII Investor Sentiment survey.

☆ Investors gobble up bonds as worst of inflation may be over -BofA
▼ + stars: | 2022-11-11 | by ( Lucy Raitano | ) www.reuters.com time to read: +3 min

Investors bought $2.6 billion of bonds in the week to Wednesday, BofA said, citing EPFR data. "Inflation shock" is over, but 'inflation stick' of briskly rising services and wage inflation is here to stay; inflation will come down but to remain above range past 20 years," BofA strategists, led by Michael Hartnett, said. Inflation shock, rates shock and recession shock defined the the 2022 bear narrative, Bofa said, adding that 2023 looks very different. "2023 bull narrative is 'peak CPI, peak Fed, peak yields, peak US dollar'; we say 'rent the pivot' as 'no recession, no rate cuts'," the bank's strategists said. BofA said U.S. 30-year Treasuries, small-cap industrials and resources, emerging market bonds, plus China/Japan and weak dollar plays were on its list.

☆ Investors gobble up bonds as worst of inflation may be over - BofA
▼ + stars: | 2022-11-11 | by ( Lucy Raitano | ) www.reuters.com time to read: +2 min

LONDON, Nov 11 (Reuters) - Investors bought more bonds than at any time in the last four months in the week to Wednesday as signs emerged that inflation may have peaked, BofA Global Research said on Friday. Investors bought $2.6 billion of bonds in the week to Wednesday, BofA said, citing EPFR data. "Inflation shock" is over, but "inflation stick" of briskly rising services and wage inflation is here to stay; inflation will come down but to remain above range past 20 years," BofA strategists, led by Michael Hartnett, said. In the latest week, investors pulled $4.6 billion from equity funds and ploughed $2.4 billion into cash. Inflation shock, rates shock and recession shock defined the the 2022 bear narrative, Bofa said, adding that 2023 looks very different.

☆ It's the bond market's time to shine
▼ + stars: | 2022-11-06 | by ( William Edwards | ) www.businessinsider.com time to read: +6 min

Bond yields are at their highest levels in years. The result has been nothing but pain for stock and bond prices since the start of the year. Another reason is because in a recessionary environment, bond prices typically rise as investors pile into safe-haven assets like Treasurys. "Bond investors are facing a unique win-win scenario right now," Saperstein said in an October memo. He continued: "If inflation and rates continue to rise, bond prices will decline but unrealized price losses can be meaningfully offset by locked-in 4-6% income returns.

☆ Investors pile into cash at fastest rate since COVID crisis-BofA
▼ + stars: | 2022-11-04 | by ( ) www.reuters.com time to read: +1 min

Equity funds posted $6.3 billion in inflows, with emerging markets funds recording their second straight weekly inflow, with $4.3 billion, and European equity funds posting their 38th weekly outflow, down $900 million, BofA added. Stocks got a boost last week from a belief among investors that the Federal Reserve could shift the pace of rate hikes down a gear, as the economy shows signs of slowing. Fed Chair Jerome Powell has since poured cold water over such speculation, given stubbornly high inflation and a resilient labour market. Much harder to pivot when inflation is 8% & unemployment is 3%," BofA investment strategist Michael Hartnett wrote. The S&P 500 (.SPX) gained almost 4% last week, buoyed by optimism over quarterly earnings and the prospect of slower rate hikes from the Fed.

☆ Bank of America says 250 years of history point to turnaround for Treasury bonds
▼ + stars: | 2022-10-28 | by ( Jeff Cox | ) www.cnbc.com time to read: +2 min

Bank of America expects Treasurys to show positive returns in 2023. Normally a safe haven in time of market tumult, government bonds have gotten crushed in 2022. While the stock market has performed poorly as well , the S & P 500 is down just 18% — considerably better than the bond market returns. But Hartnett said the last time Treasurys fell more than 5% and were negative the following year happened in 1861. Putting it in perspective, that means "250 years of history say US Treasury returns up in 2023," Hartnett wrote.

☆ A pivot on the Fed's balance sheet reduction plans could be a bullish driver of stocks next year. Here's what to know.
▼ + stars: | 2022-10-24 | by ( Max Adams | ) www.businessinsider.com time to read: +5 min

No, not quantitative tightening, but rather quantitative tinkering. Don't forget about the Fed's massive balance sheet. changing the pace or even pausing balance sheet reduction) would also be a bullish development. When does the Fed pivot from its rate hike and balance sheet reduction plans? Here's where stock market investors want to be as signs of a powerful rally start to form.

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