Stock Markets
Morgan Stanley: bear market rally to continue
One of Wall Street’s best-known bears, Michael Wilson, thinks the S&P 500 will rise another 7% before turning down, so the bear market rally will continue for now, writes Market Watch.
After the Dow Jones, S&P 500 and Nasdaq Composite joined their strongest weekly gains since at least May last Friday, Wilson, who is chief strategist and head of U.S. equity markets at Morgan Stanley (NYSE:MS), told clients that there could be another 5% to 7% before the downward trajectory of U.S. stocks resumes during the latest bear market recovery.
Wilson has held a bearish view of the stock market for about 2 years and correctly predicted a sell-off this year.
Wilson explained in a research note sent out to clients on Monday that a pullback in the 38-50% drop in the stock market this year “would not seem like something unnatural, not consistent with the previous bear market rally.”
While growth concerns have triggered a sell-off in commodities and lowered inflation expectations, the fact that the U.S. economy is already slowing and heading toward recession means that any market rally is likely to be short-lived, and U.S. stocks are likely to eventually fall.
Wilson mentioned in the note that the bear market is not over yet, although it may appear otherwise in the next few weeks as the market takes the rate cut as a sign that the Fed can still manage a “soft landing” and prevent a meaningful revision to earnings forecasts.
U.S. stocks rose last week as investors now hope the slowing economy and falling commodity prices may inspire the Fed to raise interest rates less sharply. Federal funds futures, a derivative used by investors to bet on the pace of the Fed’s monetary policy changes, estimate with a high probability that the Fed will be forced to start cutting interest rates again as soon as next summer.
They also consider the lower peak in the federal funds rate: it will peak around 3.5% at the end of 2022 instead of 3.75% just a couple of weeks ago. Wilson also pointed out the drop in Treasury yields: the 10-year Treasury bond yield went from 3.230% to a low of 3.07% on Friday before rebonding again on Monday.
Wilson expects the S&P 500 index to fall to around 3,400 points if the U.S. Federal Reserve manages to get a “soft landing” for the economy — which Fed Chairman Jerome Powell said last week would be “a very difficult thing to do.”
Wilson expects that if the U.S. economy plunges into recession, the S&P 500 index will fall to around 3,000 points. In any case, Wilson believes that U.S. stocks are still highly valued because the risk premium — that is, the measure of compensation that investors receive for the extra risk of owning stocks instead of bonds — remains about 300 basis points higher than the 10-year Treasury bond yield, which is considered a “risk-free rate.”
Stock Markets
Brazilian rightist Bolsonaro says he does not fear being put on trial
© Reuters. FILE PHOTO: Former Brazilian President Jair Bolsonaro gestures while standing in front of his house before testifying to the Federal Police in Brasilia, Brazil, February 22, 2024. REUTERS/Adriano Machado/File Photo
RIO DE JANEIRO (Reuters) – Brazil’s former President Jair Bolsonaro said on Saturday he does not fear being put on trial, one day after a police investigation revealed the far-right politician tried to co-op the country’s military chiefs in a coup plan to overturn his 2022 election defeat.
Bolsonaro did not refer directly to the allegations made by two armed forces commanders that he had summoned them to discuss a possible coup d’etat to prevent leftist President Luiz Inacio Lula da Silva from returning to power.
But he did refer to a trial he could face, as evidence mounts of his efforts to convince the military to step in.
“I do not fear any judgment, as long as the judges are impartial,” Bolsonaro said at a political rally in Rio de Janeiro to back his candidate for mayor of the city in local elections in October.
At the event in a Rio samba school quadrangle, the former president claimed he was being politically persecuted by the Lula government because he was a thorn in the side of the left.
Bolsonaro has denied planning a coup after his election defeat, which he never conceded. He left for Florida to avoid handing the presidential sash to Lula, and days later Bolsonaro’s supporters stormed government buildings in an attempt to provoke a coup.
Last year, Bolsonaro was banned from running for elected office for eight years for abusing his power as president and repeatedly criticizing the country’s electoral system. He could face possible arrest and a trial by the Supreme Court.
The crowd in Rio cheered Bolsonaro’s name as he endorsed Alexandre Ramagem, a former police chief who briefly served as head of the national intelligence agency during his presidency.
“I hope to continue in politics,” Bolsonaro said.
Ramagen is running against incumbent Rio Mayor Eduardo Paes, who is supported by Lula.
Stock Markets
Thousands of Russians join Navalny-inspired ‘noon against Putin’ election protest
© Reuters. Yulia Navalnaya, the widow of Alexei Navalny, the Russian opposition leader who died in a prison camp, stands in a queue outside the Russian Embassy on the final day of the presidential election in Russia, in Berlin, Germany, March 17, 2024. REUTERS/Anneg
By Guy Faulconbridge and Andrew Osborn
MOSCOW (Reuters) – Thousands of people turned up at polling stations in Russia and capitals across the world on Sunday to take part in what the anti-Kremlin opposition said was a peaceful but symbolic protest against the re-election of President Vladimir Putin.
In an action called “noon against Putin”, Russians who oppose the veteran Kremlin leader went to their local polling station at midday to either spoil their ballot paper or to vote for one of the three candidates standing against Putin, who is widely expected to win by a landslide.
Others had vowed to write the name of late opposition leader Alexei Navalny, who died last month in an Arctic prison, on their voting slip and some visited Navalny’s grave in Moscow to symbolically cast their vote for him.
Navalny’s allies broadcast videos on YouTube of lines of people queuing up at different polling stations across Russia at midday who they said were there to peacefully protest.
Navalny had endorsed the “Noon against Putin” plan in a message on social media facilitated by his lawyers before he died. The independent Novaya Gazeta newspaper called the planned action “Navalny’s political testament”.
“There is very little hope but if you can do something (like this) you should do it. There is nothing left of democracy,” one young woman, who did not give her name and whose face was blurred out by Navalny’s team, said at one polling station.
Another young woman at a different polling station, whose identity had been disguised in the same way, said she had voted for the “least dubious” of the three candidates running against Putin.
A male student voting in Moscow told Navalny’s channel that people like him who disagreed with the current system needed to go on living their lives regardless.
“History has shown that changes occur at the most unexpected of times,” he said.
Despite the protesters – who represent a small fraction of Russia’s 114 million voters – Putin is poised to tighten his grip on power in the election that is certain to deliver him a big victory.
Russia’s foreign ministry spokeswoman Maria Zakharova questioned if all those voting at foreign embassies were opponents of Putin and accused Western media of disseminating propaganda about the events.
“Russian citizens did not come to the rallies and performances that unfriendly regimes and their paid information services are trying to present,” Zakharova said.
“They came to cast their vote. Who they voted for and how they voted is their free choice. But the fact that they rejected the appeals of the marginalised is obvious to everyone.”
PROTEST
The Kremlin casts Navalny’s political allies – most of whom are based outside Russia – as dangerous extremists out to destabilise the country on behalf of the West. It says Putin enjoys overwhelming support among ordinary Russians, pointing to opinion polls which put his approval rating above 80%.
With Russia’s vast landmass stretching across 11 time zones, protest voters were scattered rather than concentrated into a single mass, making it hard to estimate how many people turned up for the protest event.
The size of the queues at each polling station shown on Navalny’s channel ranged from a few dozen people to what looked like several hundred people.
Reuters journalists saw a slight increase in the flow of voters, especially younger people, at noon at some polling stations in Moscow and Yekaterinburg, with queues of several hundred people, and in some places even thousands.
Some said they were protesting though there were few outward signs to distinguish them from ordinary voters.
Leonid Volkov, an exiled Navalny aide who was attacked with a hammer last week in Vilnius, estimated hundreds of thousands of people had come out to polling stations in Moscow, St Petersburg, Yekaterinburg and other cities.
Reuters could not independently verify that estimate.
At polling stations at Russian diplomatic missions in Australia, Japan, Armenia, Kazakhstan, Germany, Britain, hundreds of Russians stood in line at noon.
In Berlin, Yulia, Navalny’s widow, showed up at the Russian embassy to take part in the protest event there along with Kira Yarmysh, Navalny’s spokesperson. Other Russians present clapped and chanted her name.
Not all of the Russians who came to vote appeared to be opponents. In London, one man queuing to vote was wearing a top that read ‘Jesus is my saviour. Putin is my president’.
Others were registering a protest.
“We haven’t been heard for past 30 years. Nobody listened to us. We moved, we emigrated, and even here, far away from Russia, we feel the consequences of not us not being heard,” voter Natalia Cherednikova said in London.
“This year is so important just to be there for ourselves, even though we all (are) …fatalistic in terms of the meaning of it and that nobody really cares. It’s just for ourselves that we’ve been here. We have voted. We showed up.”
Stock Markets
Israel stocks higher at close of trade; TA 35 up 1.20%
Israel stocks higher at close of trade; TA 35 up 1.20%
Investing.com – Israel stocks were higher after the close on Sunday, as gains in the , and sectors led shares higher.
At the close in Tel Aviv, the gained 1.20%.
The best performers of the session on the were First International Bank of Israel Ltd (TASE:), which rose 3.51% or 520.00 points to trade at 15,350.00 at the close. Meanwhile, Mizrahi Tefahot (TASE:) added 3.38% or 430.00 points to end at 13,150.00 and Electra Ltd (TASE:) was up 3.13% or 4,670.00 points to 153,870.00 in late trade.
The worst performers of the session were Energean Oil & Gas PLC (TASE:), which fell 1.03% or 49.00 points to trade at 4,711.00 at the close. NICE Ltd (TASE:) declined 0.90% or 790.00 points to end at 86,810.00 and Ormat Technologies (TASE:) was down 0.81% or 190.00 points to 23,190.00.
Rising stocks outnumbered declining ones on the Tel Aviv Stock Exchange by 335 to 124 and 77 ended unchanged.
Crude oil for May delivery was down 0.32% or 0.26 to $80.58 a barrel. Elsewhere in commodities trading, Brent oil for delivery in May fell 0.08% or 0.07 to hit $85.35 a barrel, while the April Gold Futures contract fell 0.37% or 8.10 to trade at $2,159.40 a troy ounce.
USD/ILS was up 0.69% to 3.68, while EUR/ILS rose 0.76% to 4.00.
The US Dollar Index Futures was up 0.07% at 103.06.
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