Displaying items by tag: s&p

Thursday, 22 September 2022 05:20

Charles Schwab Warns of More Volatility This Year

In a recent Business Insider article, Charles Schwab is warning that stocks could see more volatility through the rest of this year, as we head into what the firm considers a weak earnings season. The company believes that more companies could miss earnings estimates in the following quarter, using FedEx as an example. The transportation firm slashed its earnings guidance last week in what is expected to be a sign of things to come for the rest of the S&P 500. In a note on Monday, analysts stated, "We believe the weakness in expected earnings growth is early in its trip to an ultimate negative (year-over-year decline) destination." Analysts also noted that the rate at which S&P 500 companies beat earnings expectations fell to 5% last quarter. This compares to over 20% in the middle of 2021. The company noted that the trend could be even lower in the third quarter as earnings reports come in. Excluding the energy sector, Schwab estimates that earnings growth in the S&P 500 will shrink by 2% over the third quarter, down over 11% from June.



Finsum:Analysts atCharles Schwab are warning of more stock volatility as we head into a weak earnings season.

Published in Wealth Management

In the aftermath of what had been a sweet buzz of a ride, stocks are embroiled in another unwelcome turn, according to ally.com. Last week, of course, the S&P 500, bless it, threw in the towel of what had been a four-week run. This week? You go it; the setback continues.  

 

So, what’s up with that? Well, let’s count the uncertainties. Corporate earnings season’s winding down. Summer? Vaulting into the rear view mirror. And the news cycle will slow to a trickle. It all spells a vacuum in solid direction which, right again, puts air under the likelihood of volatility, the site continued.

 

In fact, taking, well, stock, of the interest rate trend lines over this  summer, they’re more rocky than stable, according to money.usnews.com. The swings in the average 30 year fixed rates have been madcap, percolating and descending by as much as a quarter point per seek following a mid June peak to 5.81%.

 

The 30-year fixed rate went back up to well over 5% this week -- a reminder that recent volatility remains persistent, said Sam Khater, vice president, chief economist and head of Freddie Mac’s Economic and Housing Research division. “Although rates continue to fluctuate, recent data suggest that the housing market is stabilizing as it transitions from the surge of activity during the pandemic to a more balanced market.” 

Published in Eq: Real Estate
Friday, 19 August 2022 12:13

Beware the Bull in Bear Clothing

Equities have rallied, inflation is falling in the month of July, and global gas prices seem to be easing; investors can shake off the volatility concerns, right? Not just yet. Volatility experts Paul Britton founder of Capstone Investment Advisors told the FT that we aren’t through the weeds just yet as the corporate debt crisis looms at the end of 2022. Britton says there is a significant repricing as companies might struggle to pay off high corporate debt with rising interest rates. Capstone looks to profit on increasing volatility as they are a considerable hedge fund, but the VIX is still falling below its long-run moving average for the first time in four months. Fed experts like Mary Daly, president of the SF Fed branch, say the inflation battle hasn’t been won yet, signaling more rate hikes may be needed to bury inflation.


Finsum: Failing to consider the fact that inflation favors borrowers, real borrowing costs on corporate debt have decreased considerably.

Published in Eq: Large Cap
Friday, 18 March 2022 19:29

JPMorgan says the Market Correction is….

There have been huge sectoral pains for tech, bio-tech, emerging market, and growth stocks in the last couple of weeks, but JPMorgan says it's time to turn bullish on these beta positions. Analyst Kolanovic said that these equity sectors are about to benefit because many of the geopolitical risk and macro pressures are about to ease. JPMorgan’s analyst believes that there will be little inflation and the US will avoid a recession. Biotech has been beat down since last August when the Nasdaq Biotech Index peaked; it is now at 75% of its previous high.


Finsum: The Fed projections could be bad for tech stocks as higher interest rates decrease the relative value of techs profits.

Published in Eq: Total Market
Wednesday, 02 February 2022 19:13

Goldman and Morgan Get Very Bearish

David Kostin, a strategist at Goldman Sachs Group Inc., took a bearish tilt on U.S. stocks worrying about risks that may be on the road ahead. Goldman is far from the only bear on Wallstreet, Michael Wilson of Morgan Stanley says that the fair value of the S&P 500 is closer to 4,000. This would be a 10% downturn in the S&P if fully realized. Goldman isn’t that pessimistic but if real U.S. treasury yields rise 60 basis points then that will be their baseline. The median forecast is still quite positive for the S&P 500 by the end of the year with a target price close to around 5,100. However, Wallstreet says the antidote is to focus on quality and energy stocks.


FINSUM: Wall street is forgetting how bad sustained realized inflation will be for the market; it's without a doubt the biggest risk, because companies are used to operating with systematic sub 2% inflation.

Published in Eq: Total Market
Page 1 of 2

Contact Us

Newsletter

Subscribe

Subscribe to our daily newsletter

Top
We use cookies to improve our website. By continuing to use this website, you are giving consent to cookies being used. More details…