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☆ Investors jump into equities and bonds in Goldilocks scenario - BofA
▼ + stars: | 2023-01-13 | by ( ) www.reuters.com time to read: +2 min

LONDON, Jan 13 (Reuters) - Investors poured money into equity and bond funds and moved money out of gold in the week to Wednesday, according to BofA Global Research, taking heart from a string of positive data points and policy changes. Bofa also pointed to the impact of China reopening its borders after COVID-19 restrictions, lower EU energy prices and encouraging U.S. fiscal and labour market data, as all factors behind the moves. The report found there were weekly flows into funds investing in bonds ($17.5bn), cash ($8.3bn), and stocks ($7.2bn), and out of gold ($0.4bn). BofA also said there were the largest inflow to investment grade bonds since July 21 ($10.4bn), and the largest inflow to emerging market debt and emerging market stocks since April 22 ($3.6bn). "Flows show the chase is on," said BofaReporting by Alun John, editing by Lucy Raitano and Angus MacSwanOur Standards: The Thomson Reuters Trust Principles.

☆ 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.

Major carriers such as United Airlines Holdings Inc (UAL.O), American Airlines Group Inc (AAL.O), Delta Air Lines Inc (DAL.N) and Southwest Airlines Co (LUV.N) have rushed to add staff after a faster-than-expected rebound in the U.S. travel market. "Margins are set to take a hit in 2023 as airlines ratify new contracts with labor groups," Cowen analyst Helane Becker said last month. "Delta's recent tentative pilot agreement, assuming it is ratified, could drive incremental unit costs higher by ~2%, and 2%-3% higher for American, Southwest and United," Barclays analyst Brandon Oglenski said on Wednesday. American Airlines on Thursday forecast a higher fourth-quarter profit as the Texas-based carrier benefited from strong demand for travel during the key holiday season. Shares of American Airlines, Delta Air Lines, United Airlines and Southwest Airlines fell between 14% and 30% in 2022 on mass cancellations and economic worries.

☆ Analysis: With banks' results on tap, options traders prepare for volatility
▼ + stars: | 2023-01-10 | by ( Saqib Iqbal Ahmed | ) www.reuters.com time to read: +4 min

REUTERS/Brian SnyderNEW YORK, Jan 10 (Reuters) - Options traders are bracing for volatility in U.S. bank shares days ahead of an earnings season many believe will bring lower profits and reflect worries over an expected recession. The trade would be profitable if the ETF’s shares slipped below $33 by mid-February, a 6% decline from current levels. The S&P 500 bank index (.SPXBK) fell 21.6% last year, compared to a compared to a 19.4% decline for the S&P 500 as a whole. Options on big bank stocks, on average, are pricing the largest post-earnings moves in the last two years, an analysis by Susquehanna International Group showed. "The trading bias in the options heading into big bank earnings has been buying volatility and protecting positions," said Chris Murphy, co-head of derivatives strategy at Susquehanna International Group.

☆ Southwest launches one-way fares starting $49 for some routes
▼ + stars: | 2023-01-10 | by ( ) www.reuters.com time to read: +1 min

Jan 10 (Reuters) - Southwest Airlines Co (LUV.N) on Tuesday launched a limited fare sale for select one-way routes, days after the carrier's massive flight disruptions in December. The airline said it will offer the fares starting at $49 for certain one-way routes, with travelers required to make the purchase 21 days in advance. Southwest faced operational chaos during the peak holiday season due to a tech meltdown, forcing the carrier to cancel more than 16,000 flights that stranded passengers and invited scrutiny from the U.S. government. BofA Global Research on Tuesday cut the price target on the company's shares by $3 to $42 after the wave of cancellations. Reporting by Aishwarya Nair in BengaluruOur Standards: The Thomson Reuters Trust Principles.

☆ Analysis: Fall in India nominal GDP growth in FY24 to challenge fiscal math
▼ + stars: | 2023-01-09 | by ( Ira Dugal | ) www.reuters.com time to read: +4 min

At least four leading economists expect nominal GDP growth to come in between 8% and 11% as inflation slows and real GDP growth eases from an estimated 7% this year, when pandemic-related distortions and pent-up demand pushed up growth rates. Das said he expects nominal GDP growth of 8%-9% in FY24, with inflation and real GDP growth seen declining. A growth of 8-9% would bring that number close to the 7.6% nominal growth seen in 2019/20, before the Covid crisis hit. State Bank of India and rating agency ICRA estimate the nominal GDP growth at around 10% for next financial year. "Higher-than-budgeted nominal GDP growth,(will help) to keep fiscal deficit as a percentage of GDP at 6.4%, with downside risks," it said.

☆ Wall St Week Ahead Stock swoon resets valuations but recession risk, rates cloud outlook
▼ + stars: | 2023-01-06 | by ( Lewis Krauskopf | ) www.reuters.com time to read: +5 min

The S&P 500 tumbled 19.4% in 2022, as the Federal Reserve's aggressive rate hikes designed to tamp down 40-year high inflation punished asset prices. The market's 2022 slide cut the ratio of price to forward earnings estimates to around 17 from about 21.7 a year ago, according to Refinitiv Datastream. S&P 500 forward price-to-earnings ratio over timeValuations may still be too high if a recession comes to pass, as many on Wall Street expect. Combined with an expectation of weakening earnings estimates, that would lower the S&P 500 to 3,200, UBS said, roughly 16% below current levels. The 2022 surge in interest rates also could undermine stock valuations by making relatively safe assets like U.S. Treasuries more attractive alternatives.

☆ The S&P 500 could return 16% in 2023 as a contrarian indicator sends bullish signals, says Bank of America
▼ + stars: | 2023-01-03 | by ( Phil Rosen | ) www.businessinsider.com time to read: +2 min

Bank of America's Sell Side Indicator is nearing a "Buy" signal, as Wall Street sentiment remains bearish on stocks. The indicator is part of the firm's forecast for 16% returns in the S&P 500 in 2023. BofA's Sell Side Indicator, which tracks strategists' average recommended allocation for stocks, is nearing a "Buy" signal, and is part of the firm's view for 16% returns in the S&P 500 in 2023. In 2022, the average recommended allocation to stocks fell by 6 percentage points, and the S&P 500 shed more than 19%. In the note, BofA analysts pointed out that Wall Street recommended underweighting equities through the bull market of the 1980s and 1990s, as well as the 2009-to-2020 bull market.

☆ Wall St Week Ahead Stumbling Treasury rally clouds bond market outlook for 2023
▼ + stars: | 2022-12-30 | by ( Davide Barbuscia | ) www.reuters.com time to read: +5 min

[1/2] A street sign for Wall Street is seen outside the New York Stock Exchange (NYSE) in New York City, New York, U.S., July 19, 2021. December’s BofA Global Research survey showed fund managers were the most overweight bonds versus stocks in nearly 14 years. Benchmark 10-year Treasury yields have climbed over 40 basis points since mid-December to nearly 3.9%, the highest in over a month. At the moment, the Treasury market “is more focused on inflation still than … recession," said Matthew Miskin, co-chief investment strategist at John Hancock Investment Management. Matthew Nest, head of active global fixed income at State Street Global Advisors, believes yields will likely fall in 2023.

☆ Analysis: U.S. stock investors face recession fears as they bid good riddance to 2022
▼ + stars: | 2022-12-23 | by ( Lewis Krauskopf | ) www.reuters.com time to read: +5 min

"The issue is how much has the market already discounted a recession, and that’s where it gets a little bit thornier." Concerns that the Fed will maintain its hawkish stance helped drive the S&P 500 down 1.45% on Thursday. The S&P 500 marked a 2022 closing low of 3,577.03 in October, just over 6% below its current level. Yet earnings fall by an average annual rate of 24% during recessions, according to Clissold, leaving plenty of downside for profits if a slowdown hits. Bear markets on average have bottomed four months before the end of a recession, according to Clissold, of Ned Davis.

☆ Wall St Week Ahead Investors look for 'Santa Rally' after grim year in U.S. stocks
▼ + stars: | 2022-12-23 | by ( David Randall | ) www.reuters.com time to read: +4 min

NEW YORK, Dec 23 (Reuters) - Bruised investors are hoping a so-called Santa Claus rally can soften the pain of a tough year in U.S. stocks and potentially brighten the outlook for 2023. Friday is this year's start date for this rally named after Santa Claus - if it happens. The phenomenon has lifted the S&P 500 an average of 1.3% since 1969, according to the Stock Trader's Almanac. A December without a Santa rally has been followed by a weaker-than-average year, data from LPL Financial going back to 1950 showed. "The lack of a 'Santa Claus rally' this month, with a 'lump of coal selloff' in its place, is a troubling sign about 2023 US equity returns," strategists at DataTrek wrote.

☆ Equity funds record largest ever weekly outflows -BofA
▼ + stars: | 2022-12-23 | by ( Lucy Raitano | ) www.reuters.com time to read: +2 min

U.S. value funds and passive equities also recorded record weekly net outflows, of $17.2 billion and $27.8 billion respectively, the bank said. BofA said "tax loss harvesting" was behind the record outflows, a strategy that involves selling assets at a loss to offset capital gains taxes. Local emerging market bonds drew their first net inflow since April, while emerging market equities recorded a third week of inflows, adding a net $3.2 billion. On a sector basis they favour value over growth, and industrials and banks over tech and private equity. Bond funds recorded net outflows of $10 billion, prompting a small drop in BofA's "Bull & Bear" indicator to 3 from 3.1 last week - which was its highest since March 15th.

☆ Energy security has been at the forefront of investors' minds this year, says BoFA Global Research
▼ + stars: | 2022-12-16 | 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 EmailEnergy security has been at the forefront of investors' minds this year, says BoFA Global ResearchGirish Nair of Bank of America's Global Research says that energy security will "no longer be a major concern" as inflation peaks, China fully reopens and the war in Ukraine eases.

☆ Extreme bear sentiment over as investors buy stocks and bonds - BofA
▼ + stars: | 2022-12-16 | by ( Lucy Raitano | ) www.reuters.com time to read: +1 min

LONDON, Dec 16 (Reuters) - Investors ploughed cash into stocks and bonds and sold cash and gold in the week to Wednesday, BofA Global Research said on Friday, hailing the end of "extreme bear sentiment". Equity inflows totalled $18 billion and bond funds saw $2.3 billion of inflows while investors sold $0.2 billion of gold and shed cash at the highest rate in three months, selling $31.1 billion. U.S. equity value funds recorded their largest inflows ever, of $14.3 billion, and investors bought passive equities and sold active equities. BofA's "Bull & Bear" indicator jumped to its highest level since March 15 in the week to Wednesday. Investors sold $1.3 billion of bank loan funds, the largest outflow in three months.

The fed funds rate currently stands in the 4.25%-4.50% range. Plenty of investors believe the Fed will stick to its guns, even if the economy wobbles. The Fed's economic projections showed rates dropping to 4.1% in 2024, higher than estimated three months ago. She is expecting the gyrations that rocked bonds this year to continue, driven in part by investors second-guessing the Fed's commitment to keeping monetary policy tight. "We have a generation of traders that has never seen the Fed not bail it out when push comes to shove."

☆ Philippine central bank will 'follow the Fed's drumbeat,' says economist
▼ + stars: | 2022-12-15 | 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 EmailPhilippine central bank will 'follow the Fed's drumbeat,' says economistMohamed Faiz Nagutha of BofA Global Research says the Bangko Sentral ng Pilipinas is likely to continue hiking rates in early 2023, following the U.S. Federal Reserve.

☆ Tax-loss selling in battered U.S. stocks could spur January snap-back
▼ + stars: | 2022-12-12 | by ( David Randall | ) www.reuters.com time to read: +4 min

Yet some investors are betting a number of those beaten-down stocks and possibly the broader market could snap back in January, once the selling period is over. DoubleLine founder Jeffrey Gundlach told CNBC on Wednesday that risk assets will likely rally in January once retail investors finish tax-loss selling. Strategists at Evercore wrote on Nov. 30 that they were "buyers of stocks whose 2022 Tax Loss selling pressure will soon abate." Investors appear to have already started selling underperforming shares. Private clients at BofA, for instance, sold nearly $1.4 billion of stocks in likely tax-motivated selling in November, up from roughly $800 million last year, and appear poised to continue that outsized rate of selling this month, the firm said.

☆ The 2 factors that could send oil prices 23% higher over the next year, according to Bank of America
▼ + stars: | 2022-12-12 | by ( Phil Rosen | ) www.businessinsider.com time to read: +3 min

Global crude prices have fallen sharply but they could jump 23% over the next 12 to 36 monhts, according to Bank of America. BofA analysts said oil prices depend on a Fed pivot, as well as China reopening its economy. Fears of weaker growth have dragged oil lower, as well as other commodity markets, but a Fed pivot could bring demand back and send oil prices higher, Bank of America strategists wrote in a Monday note. Demand risks from a delayed China reopening could keep oil prices muted, but if Beijing accelerates the process it would present upside for Brent crude. What's more, aggregate open interest in oil markets has fallen off to a point not seen since 2015, BofA said, which poses another headwind for oil prices from the investor side.

☆ Wall St Week Ahead U.S. stock rally faces gauntlet of CPI data, Fed meeting
▼ + stars: | 2022-12-09 | by ( Lewis Krauskopf | ) www.reuters.com time to read: +5 min

The index has bounced about 10% from its October lows but remains down more than 17% on the year. Equities’ trajectory in the near future may depend on whether Tuesday’s consumer price index report shows inflation is responding to the most aggressive Fed hiking cycle since the 1980s. Hotter-than-expected data could bolster fears of more Fed hawkishness, pressuring stocks. A second helping of benign data could bolster the case for a peak in inflation and buoy equities further. Reuters GraphicsMeanwhile, investors are factoring in a half-percentage-point rate hike from the Fed next week, a step down from its recent series of three-quarter-point increases.

☆ "Small joyless flows" as investors sell stocks and cash - Bofa
▼ + stars: | 2022-12-09 | by ( ) www.reuters.com time to read: +2 min

LONDON, Dec 9 (Reuters) - Investors sold stocks and bought gold in the week to Wednesday, withdrawing $5.7 billion from equity funds, BofA Global Research said on Friday, a week of "small, joyless flows", as markets position for the approaching end of the Fed's rate hiking cycle. Both stocks and cash recorded outflows of $5.7 billion, in the week to Wednesday, while bond outflows stood at £0.1 billion and gold funds got a $65 million boost, BofA said, citing EPFR data. "Weekly Flows: inflow to gold funds of $65mn, outflow from bonds $0.1bn, cash $5.7bn, & stocks $5.7bn…small, joyless flows," BofA said. BofA private clients put cash into equities for the first time in 11 weeks, and bought bonds for the 41st week in a row, the report said. BofA analysts expect the U.S central bank to stop hiking rates in March 2023, but they say the uncertainty in the market is justified.

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☆ U.S. dollar likely to remain strong in 2023 amid recession fears
▼ + stars: | 2022-12-08 | by ( Saqib Iqbal Ahmed | ) www.reuters.com time to read: +5 min

NEW YORK, Dec 8 (Reuters) - A breathtaking surge in the U.S. dollar trampled foreign currencies, gouged corporate profits and gave investors one of the year’s few winning trades. Investors flocked to the dollar — a popular destination during uncertain times — to shelter from market volatility spurred by surging global inflation, spiking energy prices and Russia’s invasion of Ukraine. A stronger dollar makes U.S. exporters' products less competitive abroad while hurting U.S. multinationals that need to exchange their earnings into dollars. REUTERS/Lee Jae-Won/File PhotoNike (NKE.N), IBM (IBM.N) and Meta Platforms (META.O) were among the broad range of companies that warned of a hit from a stronger dollar this year. Nearly 80% of strategists polled by Reuters said there was little scope for dollar upside based on monetary policy.

☆ Recession worries could support dollar after monstrous 2022 rally
▼ + stars: | 2022-12-08 | by ( Saqib Iqbal Ahmed | ) www.reuters.com time to read: +4 min

A stronger dollar makes U.S. exporters' products less competitive abroad while hurting U.S. multinationals that need to exchange their earnings into dollars. Nike (NKE.N), IBM (IBM.N) and Meta Platforms (META.O) were among the broad range of companies that warned of a hit from a stronger dollar this year. The dollar's rally shaved about 8% from S&P earnings in 2022, according to Tom Lee, head of research at Fundstrat Global Advisors. Whether the dollar's decline continues may depend on the Fed's ability to contain inflation enough to eventually ease monetary policy. Nearly 80% of strategists polled by Reuters said there was little scope for dollar upside based on monetary policy.

☆ Here are Tuesday's biggest analyst calls: Tesla, Apple, JPMorgan Chase, GE, Starbucks, Costco & more
▼ + stars: | 2022-12-06 | by ( Michael Bloom | ) www.cnbc.com time to read: +7 min

Here are Tuesday's biggest calls on Wall Street: UBS reiterates Apple as buy UBS said Apple's iPhone supply chain headwinds are abating. Cowen reiterates TJX Company as outperform Cowen said it's feeling more bullish on the stock after a series of recent management meetings. Piper Sandler reiterates Tesla as outperform Piper said reports of Tesla cutting production in China are mostly overdone. Bank of America reiterates Chipotle as buy Bank of America said the Mexican chain restaurant has "price elasticity." Oppenheimer upgrades General Electric to outperform from market perform Oppenheimer said it's starting to see strong execution from GE .

☆ Wall Street Week Ahead: Wall Street hunts for recession plays to weather potential 2023 turbulence
▼ + stars: | 2022-12-02 | by ( David Randall | ) www.reuters.com time to read: +5 min

JPMorgan, Citi and BlackRock are among those who believe a recession is likely in 2023. Nevertheless, many on Wall Street are increasing allocations to areas of the market that have a reputation for outperforming during uncertain economic times. The S&P 500 Health Care sector is down around 1.7% year-to-date, handily beating the broader index's performance. JPMorgan's analysts forecast a "mild recession" and expect the S&P 500 to test its 2022 lows in the first quarter of next year. Signs of ebbing inflation have fueled hopes that the Fed may tighten monetary policy less than expected, supporting a rebound in the S&P 500 that has buoyed the index from its October low.

LONDON, Dec 2 (Reuters) - Investors have withdrawn $316 billion from credit funds this year, unwinding all of the previous year's inflows, BofA Global Research said in a note on Friday. In its latest note on fund flows, BofA said equities funds had seen inflows of $207 billion in 2022, below the "euphoric inflows" of the previous year. Equity funds suffered a $14.1 billion outflow in the largest exit in three months, BofA said, citing EPFR data. Cash funds attracted $31.1 billion of inflows and gold funds added $59 million, BofA added. In emerging markets, BofA said bonds had a 15th week of outflows, losing $500 million, while equities attracted $1.1 billion of inflows.

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