Down goes the Dow

pretty good call here from a year ago during a market downturn. The actual low was 3491, not far off. And we certainly got a 1H2024 rebound and economic growth.

Jonathan Ferro
@FerroTV
“we believe the S&P 500 will bottom near 3400 in our base case (50% probability) and 3000 in our bear case recession scenario (40% probability) before rebounding in the first half of next year as visibility around a growth reacceleration forms”
Morgan Stanley’s Mike Wilson
5:16 AM · Sep 19, 2022

Reminder that just six months ago the biggest story in investing was a banking crisis. Remember that? It has completely gone away. ALthough every now and then I see worried people about Schwab's balance sheet. But point is, markets move fast - who knows what will be moving markets in march 2024.

ʎllǝuuop ʇuǝɹq
@donnelly_brent
Macro update... There are two schools of thought...
A. Regional bank fear is contained with no new SVB popping up and FRC is the last domino. Similar to UK gilt crisis, the authorities changed the rules and now we slowly go back to normal.
B. Lending is impaired going forward as deposits flee and fear takes over at US banks. Even the large banks will be pushing lending standards to 11 out of 10 now as there are so many cracks in the edifice and YC inversion is squeeeeezing...
I'm more in Camp B but think it's a slow motion story that will need some horrendous US data to confirm.
I still think the Fed hikes 25 at the March meeting as a final bonetoss to the inflation mandate. Cuts in mid-summer don't seem outrageous but obviously depend on sentiment and growth data. Inflation data is less important now as the Fed can easily look through spot inflation and point out deflating commodity prices, tight bank lending, and big base effects.
Like 2019, we might be surprised at how fast yields go down. 10-year yield went from 3.25% to 1.45% in less than 12 months in 2019 (before COVID).
11:42 AM · Mar 17, 2023
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221.5K
Views

The guy is a Permabear ...

marketwatch.com

Morgan Stanley's Mike Wilson admits 'we were wrong' about 2023 stock-market rally, but refuses to throw in the towel

@jsadinolfi

A lot can change in a year --- just ask Morgan Stanley's Mike Wilson.

Link:www.marketwatch.com/story/one-of-wall-...

Ask anybody on Wall Street last December what was next for stocks, and most would've told you they were going lower this year. However, Morgan Stanley's chief US equity strategist, Mike Wilson, was one of the most adamant bears.
He said stocks had run out of steam in December, and the S&P 500 would fall to between 3,000 to 3,200.
Instead, the S&P 500 is up about 18% this year, significantly better than the annual average return of about 10% over the past 30 years. It closed at 4,554 on July 24.
Wilson apologized for his wrong-way bet in a note to Morgan Stanley clients on July 24.

Whoopsies. The 2 year is north of 5% and stocks are fine - up 17% since this tweet.

Jim Cramer
@jimcramer
Up markets are unsustainable until the two year goes back to 3.5%

5:22 PM · Sep 20, 2022

Nah.

David Rosenberg
@EconguyRosie
The yield curve leads the econ cycle with a classic lag of just over a year. It inverted last summer, which means Q2 &/or Q3 have a bullseye on their foreheads. Our models peg GDP contraction next quarter & all these calls of “no landing” will be relegated to the dustbin.
7:35 AM · Feb 15, 2023
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145.7K
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Sold SOXS today above $11.30. Positions purchased earlier in the month up as much as 27%.

Market cheerleading and AI slobbering strangely silent.

Take the hint.

20 years ago today!

Sergeant Greenspan told the band to play

Revamped Vix format begins.

And there was fear the last market hour.

Eat the loss.

A year ago JPM had three stock picks. Now we can see how they did.

BCAB: -76%

STER: -32%

FNKO -68%

I've seen some bad stock picks... but putting three catastrophes into one article is rare air. SP500 +16% over the period.

finance.yahoo.com

J.P. Morgan Says Stock Market Downside Risk Is Limited; Here Are 3 Stocks to Consider

A strong bearish trend defined the markets in the first half of the year; since then, the key point has been volatility. Stocks hit a bottom back in June, when the S&P 500 dropped into the 3,600s. That has proven to be a supp...

Link:finance.yahoo.com/news/j-p-morgan-says...

Larry Summers is an odd character. He seems to be taken very seriously but anecdotally he just grabs his thoughts and spews them, usually basing his views on the 1970s.

Anyway, here he is a year ago on inflation and the fed.

Lawrence H. Summers
@LHSummers
·
Sep 21, 2022
The Fed is projecting 4.6 Fed funds at END of 2023. If this happens, I expect that rate will have been higher during year. So, the Fed’s implied expectation for the terminal rate must be very much in the range of 5 percent. Encouraging but not sure fully grasped by the market.

Agip: No, the rate was not higher during 2023. This is as high as it got. By 'encouraging' summers means 'a number that high would have already caused a recession and rates would be heading down after a Fed flip.' Obvi the high rates did not cause a recession.

I cannot see how they expect as a central case, core inflation to fall to 2 percent w/unemployment peaking at 4.5 (below reasonable NAIRU estimates), two vacancies for every job & wage growth running near 6. Their forecast would for me be the optimistic tail of the distribution.

Well actually Larry that case seems not have been optimistic enough. Inflation is falling fast with unemployment at 3.8%, not 4.5%.

Happy to bet anyone that we see 6 months of unemployment above 5 before we see 6 months of inflation below 2.5.

to be determined but I suspect larry would not make this bet today with current trends in place.

Not a bad recommendation. Gold up 16%ish since this tweet. But the Fed has not surrendered, no. And stocks are up about the same amount.

Peter Schiff
@PeterSchiff
For years Wall Street told investors not to buy #gold, because there was no #inflation. Now Wall Street is telling investors to sell gold, because the #Fed will fight hard to vanquish the high inflation they didn't see coming. The Fed will surrender. Inflation will win. Buy gold.
10:31 AM · Sep 26, 2022

To say that JPM has a bad track record would be a huge understatement.

They also said this year-end 2022:

"Top JPMorgan stock strategist says the bear market lows are likely to be retested soon."

TECS +3% and SOXS +4% pre-market….