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Investors are worried about what the end of 2023 will bring for stocks and the US economy.
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Wall Street banks, including JPMorgan and Bank of America Merrill Lynch, are becoming more defensive about their investment approach.
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In the year Here’s what six top voices had to say about US stocks as 2023 swings into its final quarter.
There is growing concern about the issue in the US stock market. Economy In the year As 2023 swings into its final quarter — and it’s fueling a more defensive approach among investors.
It’s a change in sentiment from the first half as investors cheered the increase. Artificial intelligence – and what basic technology can mean for productivity and profits of companies.
The S&P 500 stock index is on course for its first two-month decline of the year, as investors worry that higher interest rates, declining household savings and rising consumer debt spell bad news for stocks and the broader economy.
Wall Street banks such as JPMorgan and Bank of America follow a more cautious approach to investment. In the year Experts such as Jon Husman, the famous market bear who predicted crashes in 2000 and 2008, have also warned of future pain in stocks, urging them to “hold on.”
Here’s a selection of the latest market sentiment from the six top voices who have changed relatively downward in their outlook.
JPMorgan
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“US incomes are contracting, and given the aging business cycle with too restrictive monetary policy, rising capital costs, too easy fiscal policy, eroding consumer savings and family planning, and higher risk of default, the outlook for next year looks pretty good.” “Recession,” strategists at the largest U.S. bank wrote in a recent research note.
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“Thus, we remain defensive in our model portfolio, UW (underweight) in stocks and credit and OW (overweight) in cash and commodities,” he said.
Bank of America Merrill Lynch
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“Recently, investors have been responding positively to data that the economy is weakening. The main driver of this ‘bad news is good news’ is the belief that inflation will cool, which is simply driven by central bank policy and low interest rates. In our view, this trend will not last forever.” The bank’s strategists said in a note seen by Insider.
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He added: “We see a number of conditions that could develop over the next several months that could change the interpretation of economic data and add to market volatility for the rest of the year.”
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“Our underlying issue is a choppy, choppy market environment to persist for the remainder of the year. Against this backdrop, we continue to favor a disciplined approach that emphasizes diversification across asset classes,” the strategists wrote.
John Hussman, president of Hussman Investment Trust
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“If the downturn starts in Q4, now is the time to end it. It can’t be measured in real time, but the worst equity market effect starts ~2 months before the downturn and ~4 months before it returns.” Husman said. Recently in X.
Ken Griffin, CEO of Citadel
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“I’m a little worried that this rally might continue.” The billionaire hedge-fund manager told CNBC’s “Squawk on the Street” Thursday..
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“It’s certainly been one of the big drivers of the rally … it’s just the frustration over generative AI that’s generated a lot of big tech stocks. I want to believe this rally has legs, I’m a little worried we’re in. The seventh or eighth inning of this rally,” he added.
Mike Wilson, Morgan Stanley’s head of equities
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“The risk/reward of the S&P 500 is one of the worst I’ve seen today, given the earnings setup ahead of us and our prices today.” Wilson said. On a recent Rosenberg Research website.
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“The cracks are forming,” he said. “They’re all over the place, that’s why people tend to crowd into a few stocks,” he added.
Jeremy Grantham, veteran investor.
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“A dozen giant American stocks have a hell of a run on the back of AI, and it definitely feels like it’s game over.” Grantham saidDuring the investor event Livewire Markets This week in Sydney.
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“The problem is that the price is incredibly high and basically the economy is starting to reverse,” added asset manager GMO. “So it’s a head lie, but a hell of a head lie.”
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