Displaying items by tag: S&P 500

(New York)

The market has been doing great. So great in fact, that many are nervous about a swift correction. Despite this, the market continues to push for new all-time highs each week. Credit Suisse weighed in on the market in a big way this week. To be clear, the bank is not exactly bearish on the market. Their overall position is “We have remained overweight equities on the back of highly supportive policy, a high ERP [equity risk premium], the start of a bond-for-equity switch and huge excess liquidity, while tactical indicators are not yet sending a sell signal”. That said, the bank warned that there was one very “high” risk to the market: the Fed. Credit Suisse thinks there is a good chance that the Fed suddenly gets less dovish in the second half of the year after some good growth in 1H. This would be a dramatic turn for investors and could risk a sharp reversal.


FINSUM: We have to agree with this risk. The huge stimulus and excess liquidity which are flooding the market are major tailwinds, so if they reversed, it would be a shock. The whole set up reminds of us what occurred in Q4 2018.

Published in Eq: Total Market

(New York)

According to both Morgan Stanley and Goldman Sachs, last week’s retail-driven chaos was nothing…Read the full story here on our partner Magnifi’s site.

Published in Eq: Total Market

(New York)

Despite all fears, markets had a fairly strong year in 2020. Why? See the full story on our partner Magnifi’s site.

Published in Eq: Total Market
Friday, 29 January 2021 19:29

ESG Investing is Beating the S&P 500

(New York)

For those paying attention, ESG has had a great run over the last year. While many may feel that in an intangible way, the real world results are strong too, with ESG investments outperforming the S&P 500 by 1.3% in 2020. ESG investment experienced some solid outperformance early in the pandemic because if its natural defensive. Millennials appear to be driving the trend, which seems likely to only increase. More generally, the environment has become a major focus for both retail investors and major asset managers, like BlackRock, which has helped make the sector mainstream.


FINSUM: Our best call for ESG is that it will do great in 2021. The main reason being that the Biden administration is bringing a strong and renewed focus on the environment, which will both awaken public consciousness but also give ESG some favorable regulatory tailwinds.

Published in Eq: Total Market

(New York)

Goldman Sachs has been one of the biggest bulls on the street so far in 2021. The bank is calling for 6.6% GDP growth and a strong year for the S&P 500. However, in the last week they have been backtracking a bit and pointing out some of the key risks to the economy and market. Whether or not investors like it, Goldman has a very clear risk risk—COVID variants. The bank says that if the new variants make the current vaccine ineffective, then all bets for the market are off. Based on the current science, that seems unlikely to happen. But nonetheless, there are intermediate risks, such as the new variants slowing down herd immunity or making consumers more fearful about going out/spending/the economy, both of which could have unforeseen negative consequences on the economy.


FINSUM: The new virus strains are a big risk. While the current vaccines don’t seem likely to be rendered useless, consumer fear of the new variants could slow down the recovery. Notably, Goldman says its baseline forecasts don’t include any of these eventualities.

Published in Eq: Total Market
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