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Market News A summary of institutions' views on financial markets on May 24
A summary of institutions' views on financial markets on May 24
On May 24, institutions summarized their views on the stock market, commodities, foreign exchange and central bank policy prospects.
2022-05-24
7950
On May 24, institutions summarized their views on the stock market, commodities, foreign exchange and central bank policy prospects.
1. Morgan Stanley strategist: It is too early for investors to turn optimistic about the U.S. market;
① Morgan Stanley chief U.S. stock strategist Michael Wilson wrote on Monday, May 23 that it is too early to be bullish given the risks to economic growth have just emerged. Last week, the S&P and the Nasdaq both hit seven consecutive weekly negatives; the Dow fell for eight consecutive weeks, the first time since 1923. A well-known "big bear" on Wall Street, Wilson correctly predicted the near-term market downturn, pointing out that the biggest areas of risk in the market now include the ability and willingness of consumers, pressure on corporate margins, excess inventory and cyclical declines in technology spending;
②Wilson expects the S&P 500 to look at 3,400 at the end of the second-quarter earnings report, which is 13% lower than the current level. He believes that this level can more accurately reflect the risk of enterprises. Wilson advises investors to take advantage of bear market rallies to restructure holdings, and he's not personally a big fan of cyclical tech and consumer stocks
2. Bridgewater Co-Chief Investment Officer: The market is still too optimistic;
① Greg Jensen, co-chief investment officer of Water Fund, also believes that the current market is still too optimistic, and investors may not yet accept the normalization of an environment of higher inflation and slower growth. The Fed has recently entered a rate hike cycle and will shrink its balance sheet soon, and Jensen warns that investors are actually pricing in a relatively smooth economic landing, or what they believe the central bank can use without necessarily triggering a recession. Prices have fallen, but in our actual experience, the market is still too optimistic;
② Jensen warned that investors should not expect the central bank to come to their rescue. As former New York Fed President Dudley said, the Fed is bound to be happy with the fact that financial conditions are tightening, and it could even be said that they may be happy to see the stock market tumble. Assets that have relied on investor inflows to boost their valuations are now vulnerable and will be hardest hit as more liquidity is pulled from the market, Jensen said.
3. Kingsview is bearish on US stocks;
Paul Nolte, Portfolio Manager of Kingsview Investment Management Company: The U.S. stock market has been on the rise for a while, and the rise is unlikely to mean the end of the decline that started at the beginning of the year, but more like a respite from the continuous decline of the past two months
Senior Kitco analyst bullish on gold;
Kitco Senior Analyst Jim Wycoff: Gold has seen a strong corrective rally as the dollar falls sharply. Risk appetite among traders and investors remains far from strong, which is driving some safe-haven demand for gold. Investors are starting to realize that inflation problems will last longer, not be temporary
4. Bank of America Merrill Lynch: Latin America’s GDP is expected to grow 2.6% in 2022
5. JPMorgan CEO Dimon: Ukraine war poses recession risk for Europe
6. The IMF expects a moderate recovery in the German economy, but risks are skewed to the downside;
The International Monetary Fund (IMF) said on Monday that the German economy was on a moderate recovery track, but risks tilted to the downside and that the German government should focus on buffering the impact of the war in Ukraine and securing natural gas supplies;
German economic growth is expected to slow to around 2% in 2022, and if energy prices fall, supply bottlenecks subside, and the virus remains under control, the German economy will rebound to just over 2% in 2023. After 2024, economic growth will decline towards trend levels;
Medium-term output will be below the pre-pandemic trend given headwinds such as higher energy prices, weaker private investment and external demand, and post-war economic and geopolitical uncertainty. Uncertainty over the outlook for fossil fuel supplies makes the government's plans to speed up the green transition all the more important. The biggest threat to the outlook, the report says, is a long-term total disruption of Russian gas exports to Germany and the rest of Europe
7. Fitch: Global GDP growth is expected to slow in 2022 due to soaring global food and energy prices, coupled with tighter monetary policy in large economies
8. Morgan Stanley: The euro is expected to remain range-bound against the pound in the medium term;
EUR/GBP is expected to remain range-bound in the medium term as Europe faces slowing growth, geopolitical uncertainty and high inflation weighing heavily on consumer disposable income. Despite the imminent start of the ECB rate hike cycle, we believe policy normalization will be gradual, as the weak growth outlook will lead to a pause in further rate hikes after deposit rates rise to 0%
9. Barclays strategist Ajay Rajadhyaksha: The macro backdrop remains challenging, but a lot of the bad news has been priced in. We may be approaching a short-term bottom for risk assets
10. Wells Fargo: The dollar rally will pause and enter a consolidation trend in the next few weeks;
Wells Fargo believes that the dollar rally will pause and enter a consolidation trend in the coming weeks as investors digest disappointing economic data and expectations for Fed hawkishness peak;
Wells Fargo's currency strategist Erik Nelson wrote in a Monday report that the dollar's near-term outlook is that the U.S. Federal Reserve has signaled that it could raise rates by 50 basis points each at its next two meetings and has reduced the likelihood of a larger rate hike. unlikely to rise within the
The hawkishness of the Federal Reserve appears to have finally stabilized, while the European Central Bank has brought forward its policy tightening expectations. This change in central bank dynamics limits the dollar's upside, although the Fed could become more hawkish later this year, depending on how inflation evolves;
The dollar has been supported only by interest rate differentials and a more aggressive Fed, Peter Boockvar, chief investment officer at Bleakley Advisory Group, said in a note. Now other central banks are joining in and starting to tighten monetary policy more significantly, so the gap is closing
11. JPMorgan Chase CEO Dimon said that he does not know what inflation will be in the United States next year. If there's a Great Recession, it could be 5%, but it really doesn't know
12. Credit Suisse: EUR/USD will continue to advance towards the 1.0758/90 resistance area;
EUR/USD held the key support level at 1.0341 and the daily MACD indicator has turned higher. Additionally, a break above 1.0642 confirms the formation of a bottom, with analysts at Credit Suisse expecting the pair to rise to 1.0758/90. 1.0758/90 is expected to be a solid resistance, from which the medium-term downtrend resumes, and the medium-term momentum remains very strong in the end. Initial support moves up to 1.0608/0599, as long as the 1.0532 level holds the current uptrend will be maintained. A break below this level would clear the way for a test of 1.0460 and a retest of 1.0350/41
13. Rabobank: The prospect of a more aggressive interest rate cycle from the Bank of England is positive for the pound in the short term;
Jane Foley, head of FX strategy at Rabobank: The Bank of England's outlook for a more aggressive interest rate cycle is a positive short-term factor for the pound. However, the upside potential for further rate hikes for GBP may be limited insofar as this will increase the likelihood of a hard landing in the UK
14. MUFG: The Bank of England is under pressure to raise interest rates in the next few months;
Lee Hardman, foreign exchange analyst at MUFG: Accelerating economic growth and tighter labor market conditions will continue to put pressure on the Bank of England to continue raising interest rates in the coming months. Sterling's initial move higher, however, was a surprise, perhaps reflecting that the near-term outlook for the UK economy has become too short-term and pessimistic
1. Morgan Stanley strategist: It is too early for investors to turn optimistic about the U.S. market;
① Morgan Stanley chief U.S. stock strategist Michael Wilson wrote on Monday, May 23 that it is too early to be bullish given the risks to economic growth have just emerged. Last week, the S&P and the Nasdaq both hit seven consecutive weekly negatives; the Dow fell for eight consecutive weeks, the first time since 1923. A well-known "big bear" on Wall Street, Wilson correctly predicted the near-term market downturn, pointing out that the biggest areas of risk in the market now include the ability and willingness of consumers, pressure on corporate margins, excess inventory and cyclical declines in technology spending;
②Wilson expects the S&P 500 to look at 3,400 at the end of the second-quarter earnings report, which is 13% lower than the current level. He believes that this level can more accurately reflect the risk of enterprises. Wilson advises investors to take advantage of bear market rallies to restructure holdings, and he's not personally a big fan of cyclical tech and consumer stocks
2. Bridgewater Co-Chief Investment Officer: The market is still too optimistic;
① Greg Jensen, co-chief investment officer of Water Fund, also believes that the current market is still too optimistic, and investors may not yet accept the normalization of an environment of higher inflation and slower growth. The Fed has recently entered a rate hike cycle and will shrink its balance sheet soon, and Jensen warns that investors are actually pricing in a relatively smooth economic landing, or what they believe the central bank can use without necessarily triggering a recession. Prices have fallen, but in our actual experience, the market is still too optimistic;
② Jensen warned that investors should not expect the central bank to come to their rescue. As former New York Fed President Dudley said, the Fed is bound to be happy with the fact that financial conditions are tightening, and it could even be said that they may be happy to see the stock market tumble. Assets that have relied on investor inflows to boost their valuations are now vulnerable and will be hardest hit as more liquidity is pulled from the market, Jensen said.
3. Kingsview is bearish on US stocks;
Paul Nolte, Portfolio Manager of Kingsview Investment Management Company: The U.S. stock market has been on the rise for a while, and the rise is unlikely to mean the end of the decline that started at the beginning of the year, but more like a respite from the continuous decline of the past two months
Senior Kitco analyst bullish on gold;
Kitco Senior Analyst Jim Wycoff: Gold has seen a strong corrective rally as the dollar falls sharply. Risk appetite among traders and investors remains far from strong, which is driving some safe-haven demand for gold. Investors are starting to realize that inflation problems will last longer, not be temporary
4. Bank of America Merrill Lynch: Latin America’s GDP is expected to grow 2.6% in 2022
5. JPMorgan CEO Dimon: Ukraine war poses recession risk for Europe
6. The IMF expects a moderate recovery in the German economy, but risks are skewed to the downside;
The International Monetary Fund (IMF) said on Monday that the German economy was on a moderate recovery track, but risks tilted to the downside and that the German government should focus on buffering the impact of the war in Ukraine and securing natural gas supplies;
German economic growth is expected to slow to around 2% in 2022, and if energy prices fall, supply bottlenecks subside, and the virus remains under control, the German economy will rebound to just over 2% in 2023. After 2024, economic growth will decline towards trend levels;
Medium-term output will be below the pre-pandemic trend given headwinds such as higher energy prices, weaker private investment and external demand, and post-war economic and geopolitical uncertainty. Uncertainty over the outlook for fossil fuel supplies makes the government's plans to speed up the green transition all the more important. The biggest threat to the outlook, the report says, is a long-term total disruption of Russian gas exports to Germany and the rest of Europe
7. Fitch: Global GDP growth is expected to slow in 2022 due to soaring global food and energy prices, coupled with tighter monetary policy in large economies
8. Morgan Stanley: The euro is expected to remain range-bound against the pound in the medium term;
EUR/GBP is expected to remain range-bound in the medium term as Europe faces slowing growth, geopolitical uncertainty and high inflation weighing heavily on consumer disposable income. Despite the imminent start of the ECB rate hike cycle, we believe policy normalization will be gradual, as the weak growth outlook will lead to a pause in further rate hikes after deposit rates rise to 0%
9. Barclays strategist Ajay Rajadhyaksha: The macro backdrop remains challenging, but a lot of the bad news has been priced in. We may be approaching a short-term bottom for risk assets
10. Wells Fargo: The dollar rally will pause and enter a consolidation trend in the next few weeks;
Wells Fargo believes that the dollar rally will pause and enter a consolidation trend in the coming weeks as investors digest disappointing economic data and expectations for Fed hawkishness peak;
Wells Fargo's currency strategist Erik Nelson wrote in a Monday report that the dollar's near-term outlook is that the U.S. Federal Reserve has signaled that it could raise rates by 50 basis points each at its next two meetings and has reduced the likelihood of a larger rate hike. unlikely to rise within the
The hawkishness of the Federal Reserve appears to have finally stabilized, while the European Central Bank has brought forward its policy tightening expectations. This change in central bank dynamics limits the dollar's upside, although the Fed could become more hawkish later this year, depending on how inflation evolves;
The dollar has been supported only by interest rate differentials and a more aggressive Fed, Peter Boockvar, chief investment officer at Bleakley Advisory Group, said in a note. Now other central banks are joining in and starting to tighten monetary policy more significantly, so the gap is closing
11. JPMorgan Chase CEO Dimon said that he does not know what inflation will be in the United States next year. If there's a Great Recession, it could be 5%, but it really doesn't know
12. Credit Suisse: EUR/USD will continue to advance towards the 1.0758/90 resistance area;
EUR/USD held the key support level at 1.0341 and the daily MACD indicator has turned higher. Additionally, a break above 1.0642 confirms the formation of a bottom, with analysts at Credit Suisse expecting the pair to rise to 1.0758/90. 1.0758/90 is expected to be a solid resistance, from which the medium-term downtrend resumes, and the medium-term momentum remains very strong in the end. Initial support moves up to 1.0608/0599, as long as the 1.0532 level holds the current uptrend will be maintained. A break below this level would clear the way for a test of 1.0460 and a retest of 1.0350/41
13. Rabobank: The prospect of a more aggressive interest rate cycle from the Bank of England is positive for the pound in the short term;
Jane Foley, head of FX strategy at Rabobank: The Bank of England's outlook for a more aggressive interest rate cycle is a positive short-term factor for the pound. However, the upside potential for further rate hikes for GBP may be limited insofar as this will increase the likelihood of a hard landing in the UK
14. MUFG: The Bank of England is under pressure to raise interest rates in the next few months;
Lee Hardman, foreign exchange analyst at MUFG: Accelerating economic growth and tighter labor market conditions will continue to put pressure on the Bank of England to continue raising interest rates in the coming months. Sterling's initial move higher, however, was a surprise, perhaps reflecting that the near-term outlook for the UK economy has become too short-term and pessimistic
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