The stock market last week followed a familiar path. After getting off to a rocky start following another trade-war escalation by President Donald Trump, equity benchmarks spent the next four days trying to claw back those losses.
And, like the prior week, the S&P 500 was ultimately unsuccessful. It may not have been the worst five-day stretch of the year, but there’s no denying the trade war’s lasting overhang.
The market now finds itself at an important intersection, having weathered the initially shocking gyrations of the reignited trade war. So what comes next?
Morgan Stanley warns that focusing solely on the trade war would be a grave mistake – and outlines four other reasons the stock market will struggle to rise going forward. UBS is also on the bearish train, calling for a 10% drop in the S&P 500 by year-end. The firm says traders should start focusing now on a handful of hedging strategies.
Meanwhile, Vincent Deluard, a macro strategist at INTL FCStone, is closely watching three “black swan” events he says could create major pain for investors and send equities tumbling into a correction.
Here’s a rundown of our other main coverage from last week, which – in addition to trade war analysis – featured continued dispatches from the Milken Institute Global Conference, a look at WeWork’s controversial valuation, and your latest warning about massive corporate debt loads.
‘The disruptors will be disrupted’: The man who runs the $US100 billion SoftBank Vision Fund offers bold predictions for how different the world will look in 10 years
Rajeev Misra, the CEO of SoftBank Investment Advisers, had a wide-ranging discussion at the recent Milken Institute Global Conference about his investing process. That involved addressing what he thinks the big developments will be in the future.
Misra’s response offered an incredible look into how he sees the world morphing over the coming decade. It also provided crucial context around some of the investments already present in his portfolio.
WeWork’s latest earnings report shows it’s still using a controversial accounting method that reminds experts of tech-bubble shenanigans
WeWork is continuing to report a gauge of profits it created called community-adjusted EBITDA. And some Wall Street experts are calling it an inventive method that reminds them of the 1990s tech bubble.
Those same experts worry that sloppy public debuts – such as those experienced in recent months by Uber and Lyft – are sending troubling signals about the overall sustainability of stock-market health.
The brightest minds on Wall Street warn companies are engaging in risky behaviour that could spark a rash of bankruptcies – and make the next recession even worse
A record portion of the investment-grade bond market is sitting just one step above junk status, and the world’s foremost financial experts view this as a ticking time bomb waiting to go off. Attendees of the recent Milken Institute Global Conference broke down their fears around the situation, which are hitting a fever pitch.
“Credit agreements look like Swiss cheese to us,” Bryan Whalen, group managing director of US fixed income at the TCW Group, said during a panel discussion.
Other good stories from the investing realm:
- GOLDMAN SACHS: These 16 stocks will get crushed on a sharp market pullback. Here’s a dirt-cheap way to profit from their demise.
- ‘The winner’s curse’: 3 reasons why the stock-market dominance of Facebook, Google, Amazon, and the rest of the mega-cap tech elite may soon be over
- BANK OF AMERICA: Stock-picking conditions are the best since the financial crisis. Here are 7 things investors can do to maximise profits and crush the market.
- ‘The Ice Age will soon be upon us’: One market bear explains why the next recession will do the unthinkable to US markets
- Here’s how bitcoin’s latest surge could be indirectly signalling that recession fears are hitting a fever pitch
- BANK OF AMERICA: Buy these 14 stocks, which will surge even as the US hurtles toward a full-blown trade war with China
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