Big stock drop off
Welcome back, readers. Phil Rosen here, I'm on my way to Times Square, where NFT.NYC is about to kick off — keep an eye out for dispatches from the conference this week.
Ahead of the summit, I sat down with the founder of the "Coachella of NFTs" and asked him what's to come.
But stock market investors are in no mood for monkey business today. Top analysts see another dramatic drop-off looming after last week's Fed rate hike.
Let's break it down.
1. A nightmare scenario for the stock market could be brewing, and the Fed's rate hikes have increased the likelihood of a prolonged recession, according to Axonic Capital's top hedge fund strategist.
"The 1970s' drawdown scenario of almost 50% for the S&P 500 is becoming all the more likely," the strategist said. Cutting the index's January high in half would send it to 2,400, about 30% lower than the current levels.
Richard Sapertein, chief investment officer at a $9 billion money manager, agreed that there's plenty of room left to fall for stocks.
The massive uncertainty and volatility mean we haven't seen the bottom yet, and the Fed's quantitative tightening could drag shares even lower. In his view, investors shouldn't be rushing into stocks right now.
As if those forecasts weren't enough, JPMorgan analysts said the stock market is currently pricing in an 85% chance of a recession. Gloomy talk of economic turmoil can have its own influence on market moves.
"Whether one looks at web searches or market pricing there appears to be heightened concern about the prospect of a US recession which by itself has the potential to become self-fulfilling," JPMorgan said.
2. Stocks jumped Tuesday, with S&P 500 futures climbing 500 points in early trading and reversing from last week's broad sell-off. Analysts say the major indexes are set for a "sympathy bounce" after the market holiday. Check out your morning wrap.
3. On the docket: Progressive, La-Z Boy, and Icanic Brands, all reporting. Plus, as I mentioned, the world's biggest NFT conference begins today in New York.
4. A CIO with $98 billion in assets under management explained why he's getting back into equities now. He's also successfully sidestepped a 14% correction this year — and now he's eyeing these five stocks he thinks are set to surge.
5. I sat down with Shark Tank star Kevin O'Leary to learn about his crypto investing strategy during the bear market. The veteran investor explained that he's been snapping up more bitcoin and ether as prices have slumped — and said the collapse of risky tokens is actually good for cryptocurrencies in the long run.
6. These European countries paid Russia $40 billion for fuel in the first three months of the Ukraine war. And those transactions happened despite impending bans and sanctions on imports. Here's what you want to know.
8. This psychologist who earns $1 million a year coaching wealthy clients explained why she never uses the word "saving." The idea goes with the concept of "wealth language," Dr. Tracy Thomas said. She believes that reframing the concept of budgeting can help individuals build wealth more effectively.
9. Northwestern Mutual's chief investment officer shared three out-of-favor areas of the stock market that look appealing now. Investors must contend with Fed rate hikes, but Brent Schutte still sees opportunities in the current landscape. See what he's recommending to buy right now.
10. Real estate sales are starting to take longer. Earlier this year, less than half of pending sales lasted more than two weeks on the market. Slowly but surely, that number is ticking up — here's what that means for the housing sector.
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