Morgan Stanley: A 10% selloff in the stock market is most likely

Morgan Stanley: A 10% selloff in the stock market is most likely

Aug 04, 2020 (MENAFN via COMTEX) —

(MENAFN – FxPro) Michael Wilson, chief U.S. equity strategist at Morgan Stanley, and his colleagues believe that the narrow breadth of winners in the stock market will likely result in a 10% correction before giving way to a renewed rally.

The analysts, in a Monday research report, say that either a host of risks that are building beneath the surface of the markets’ unimpeded uptrend — spiking COVID-19 cases, 2020 presidential election uncertainty and nearly unchecked government spending — must be cured or the recent technology-related winners need to fall along with the rest of the market.

The report comes as the tech-heavy Nasdaq Composite Index finished the session up 1.5% to post its 29th all-time closing high of 2020. The index is up nearly 60% from its March 23 low, powered by a handful of large-capitalization companies, including Microsoft Corp. and Tesla as well as from the so-called FAANG names. The Dow Jones Industrial Average and the S & P 500 index are both up by at least 43% since their late-March nadirs, but that pace isn’t as brisk as the Nasdaq because of the latter’s proportion of tech-related shares.

A 10% selloff in the stock market is most likely, says expert who called March lows: ‘Something has to give’, MarketWatch, Aug 4

MENAFN0408202001560000ID1100584451

********************************************************************** As of Friday, 07-31-2020 23:59, the latest Comtex SmarTrend® Alert, an automated pattern recognition system, indicated a DOWNTREND on 04-09-2012 for MS @ $17.98. For more informa

Read More Here...

Morgan Stanley: A 10% selloff in the stock market is most likely

Morgan Stanley: A 10% selloff in the stock market is most likely

Aug 04, 2020 (MENAFN via COMTEX) —

(MENAFN – FxPro) Michael Wilson, chief U.S. equity strategist at Morgan Stanley, and his colleagues believe that the narrow breadth of winners in the stock market will likely result in a 10% correction before giving way to a renewed rally.

The analysts, in a Monday research report, say that either a host of risks that are building beneath the surface of the markets’ unimpeded uptrend — spiking COVID-19 cases, 2020 presidential election uncertainty and nearly unchecked government spending — must be cured or the recent technology-related winners need to fall along with the rest of the market.

The report comes as the tech-heavy Nasdaq Composite Index finished the session up 1.5% to post its 29th all-time closing high of 2020. The index is up nearly 60% from its March 23 low, powered by a handful of large-capitalization companies, including Microsoft Corp. and Tesla as well as from the so-called FAANG names. The Dow Jones Industrial Average and the S & P 500 index are both up by at least 43% since their late-March nadirs, but that pace isn’t as brisk as the Nasdaq because of the latter’s proportion of tech-related shares.

A 10% selloff in the stock market is most likely, says expert who called March lows: ‘Something has to give’, MarketWatch, Aug 4

MENAFN0408202001560000ID1100584451

********************************************************************** As of Friday, 07-31-2020 23:59, the latest Comtex SmarTrend® Alert, an automated pattern recognition system, indicated a DOWNTREND on 04-09-2012 for MS @ $17.98. For more informa

Read More Here...

Morgan Stanley: A 10% selloff in the stock market is most likely

Morgan Stanley: A 10% selloff in the stock market is most likely

Aug 04, 2020 (MENAFN via COMTEX) —

(MENAFN – FxPro) Michael Wilson, chief U.S. equity strategist at Morgan Stanley, and his colleagues believe that the narrow breadth of winners in the stock market will likely result in a 10% correction before giving way to a renewed rally.

The analysts, in a Monday research report, say that either a host of risks that are building beneath the surface of the markets’ unimpeded uptrend — spiking COVID-19 cases, 2020 presidential election uncertainty and nearly unchecked government spending — must be cured or the recent technology-related winners need to fall along with the rest of the market.

The report comes as the tech-heavy Nasdaq Composite Index finished the session up 1.5% to post its 29th all-time closing high of 2020. The index is up nearly 60% from its March 23 low, powered by a handful of large-capitalization companies, including Microsoft Corp. and Tesla as well as from the so-called FAANG names. The Dow Jones Industrial Average and the S & P 500 index are both up by at least 43% since their late-March nadirs, but that pace isn’t as brisk as the Nasdaq because of the latter’s proportion of tech-related shares.

A 10% selloff in the stock market is most likely, says expert who called March lows: ‘Something has to give’, MarketWatch, Aug 4

MENAFN0408202001560000ID1100584451

********************************************************************** As of Friday, 07-31-2020 23:59, the latest Comtex SmarTrend® Alert, an automated pattern recognition system, indicated a DOWNTREND on 04-09-2012 for MS @ $17.98. For more informa

Read More Here...

Stock market crash, what stock market crash?

When the stock market crashed in March, pretty much no sector escaped unscathed. But since then, some companies have continued to struggle while others’ share prices have risen past pre-Covid-19 levels.

What trends can we identify here and how can we protect ourselves against a future stock market crash?

Sectors thriving through the stock market crash

Any sector that is cyclical and dependent on a strong economy has performed poorly in the stock market crash. Travel, tourism, construction, oil, property, retail, banking, and leisure have all been hit hard.

Conversely, utilities might not provide much growth, but they come into their own in a stock market crash. Their dividends are dependable, as everyone needs water and electricity, so earnings are stable no matter how the economy is performing. Pennon Group, for example, hit its all-time high this year.

Healthcare and consumer durables are both traditionally defensive and have weathered the storm well. AstraZeneca is now the biggest stock by market cap in the UK. Hikma Pharmaceuticals has stormed into the FTSE 100.

Consumer durables like Unilever and Reckitt Benckiser have proven resilient partially because they sell products like soap or hand sanitizers, but also because the range of products they sell tend to be in demand regardless of the state of the economy.

Miners of precious metals have also seen their share price climb as investors pile into gold and silver. There is usually a strong negative correlation between a stock market crash and the increase in demand for gold so precious metals can act as a good hedge in your portfolio. Centamin and Fresnillo have risen 60% and 90% respectively since the turn of the year.

The star performing sector?

Arguably that belongs to technology. While not traditionally defensive, many tech shares have prospered. An astonishing fact is that the four biggest US tech stocks now have the same net worth as Japan, the world’s third largest economy.

Closer to home, video gaming stocks have been on a charge as lockdown has increased use and driven revenues higher. Codemasters and Keywords Studios are beneficiaries here.

But there are strong performers everywhere you look in technology. Ocado (online shopping tech), Avast (cybersecurity), Kainos (IT solutions). My only worry is perhaps prices have been driven too high into a bubble scenario like we could be seeing with Tesla stock in the US.

How to protect yourself

How do you avoid a future stock market crash? Unfortunately, no one can consistently predict the future. All you can do is diversify your portfolio to protect yourself as best as possible.

Most big investment sites will analyse your investments for you. The advice here is not to avoid cyclical stocks. When the economy rises, they might well be your star performers. But try to have a balanced portfolio across all sectors but also across stocks, bonds, commodities, and property.

Geographical diversification is also key. The FTSE 100 market is over 20% down from its 12-month high, but the NASDAQ is at an all time high.

David Barnes owns shares in Unilever. The Motley Fool UK owns shares of and has recommended Tesla. The Motley Fool UK has recommended Fresnillo, Hikma Pharmaceuticals, Kainos, Keywords Studios, Pennon Group, and Unilever. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Read More Here...

Stock market crash, what stock market crash?

When the stock market crashed in March, pretty much no sector escaped unscathed. But since then, some companies have continued to struggle while others’ share prices have risen past pre-Covid-19 levels.

What trends can we identify here and how can we protect ourselves against a future stock market crash?

Sectors thriving through the stock market crash

Any sector that is cyclical and dependent on a strong economy has performed poorly in the stock market crash. Travel, tourism, construction, oil, property, retail, banking, and leisure have all been hit hard.

Conversely, utilities might not provide much growth, but they come into their own in a stock market crash. Their dividends are dependable, as everyone needs water and electricity, so earnings are stable no matter how the economy is performing. Pennon Group, for example, hit its all-time high this year.

Healthcare and consumer durables are both traditionally defensive and have weathered the storm well. AstraZeneca is now the biggest stock by market cap in the UK. Hikma Pharmaceuticals has stormed into the FTSE 100.

Consumer durables like Unilever and Reckitt Benckiser have proven resilient partially because they sell products like soap or hand sanitizers, but also because the range of products they sell tend to be in demand regardless of the state of the economy.

Miners of precious metals have also seen their share price climb as investors pile into gold and silver. There is usually a strong negative correlation between a stock market crash and the increase in demand for gold so precious metals can act as a good hedge in your portfolio. Centamin and Fresnillo have risen 60% and 90% respectively since the turn of the year.

The star performing sector?

Arguably that belongs to technology. While not traditionally defensive, many tech shares have prospered. An astonishing fact is that

Read More Here...

Stock rally sends S&P 500 within 3% of record high

NEW YORK — Stocks started August with more gains, and a worldwide rally Monday sent Wall Street back to where it was just a couple days after it set its record early this year.

The S&P 500 tacked 0.7% more onto its four-month winning streak, and Big Tech once again led the way. The index rose 23.49 points to 3,294.61 to get within 3% of its record for the first time since February.

The Dow Jones Industrial Average rose 236.08 points, or 0.9%, to 26,664.40. The gains for tech stocks, particularly Microsoft and Apple, pushed the Nasdaq composite up 157.52, or 1.5%, to 10,902.80, another record.

Helping to launch markets higher were reports showing manufacturing activity strengthened across Europe in July by more than economists expected. The gains built higher after a separate report showed U.S. manufacturing growth accelerated last month at a faster pace than economists expected.

Still, “there is clear confusion among investors,” said Mark Hackett, chief of investment research at Nationwide. Even though the stock market is indicating a steady recovery, he said big moves in the foreign-currency and gold markets are “suggesting greater disruption.”

In Washington, meanwhile, grinding negotiations on another huge relief effort for the U.S. economy are ongoing. Both the Trump administration negotiating team and top Capitol Hill Democrats reported progress over the weekend, though differences remain.

The discussions have taken on more urgency because $600 in weekly benefits for laid-off workers from the federal government have expired, just as the number of layoffs ticks up across the country amid a resurgence of coronavirus counts and business restrictions.

The continued spread of the virus is raising worries that the economy could backslide again and snuff out the budding improvements it’s shown. The shakeout from the pandemic took down two more big retailers over the

Read More Here...

Stock rally sends S&P 500 within 3% of record high

NEW YORK — Stocks started August with more gains, and a worldwide rally Monday sent Wall Street back to where it was just a couple days after it set its record early this year.

The S&P 500 tacked 0.7% more onto its four-month winning streak, and Big Tech once again led the way. The index rose 23.49 points to 3,294.61 to get within 3% of its record for the first time since February.

The Dow Jones Industrial Average rose 236.08 points, or 0.9%, to 26,664.40. The gains for tech stocks, particularly Microsoft and Apple, pushed the Nasdaq composite up 157.52, or 1.5%, to 10,902.80, another record.

Helping to launch markets higher were reports showing manufacturing activity strengthened across Europe in July by more than economists expected. The gains built higher after a separate report showed U.S. manufacturing growth accelerated last month at a faster pace than economists expected.

Still, “there is clear confusion among investors,” said Mark Hackett, chief of investment research at Nationwide. Even though the stock market is indicating a steady recovery, he said big moves in the foreign-currency and gold markets are “suggesting greater disruption.”

In Washington, meanwhile, grinding negotiations on another huge relief effort for the U.S. economy are ongoing. Both the Trump administration negotiating team and top Capitol Hill Democrats reported progress over the weekend, though differences remain.

The discussions have taken on more urgency because $600 in weekly benefits for laid-off workers from the federal government have expired, just as the number of layoffs ticks up across the country amid a resurgence of coronavirus counts and business restrictions.

The continued spread of the virus is raising worries that the economy could backslide again and snuff out the budding improvements it’s shown. The shakeout from the pandemic took down two more big retailers over the

Read More Here...