Stocks could surge on cusp of huge buying signal says Bank of America Merrill Lynch

The S&P 500 SPX, +0.61% is poised for its best weekly performance of the year thus far , on the heels of the worst five-day return of 2019 to date.

Despite the apparent fever for stocks lately, others see investors still reluctant to pile into this market. Wall Street stocks have rallied hard since the December meltdown—the S&P 500 is up 13% even if May stank—and global trade worries refuse to go away. Their proprietary gauge charts whether investor buying or selling of stocks has swung too far either side of a scale of zero to ten. The closer to 0— least bearish—and closer to 10—most bearish. The indicator sticks to this rule: when investor sentiment is over 8, sell equities, and when it’s under 2, buy them.

The bank’s asset flow data is of June 6, so clearly reflecting as well a big bad week for stocks and risk aversion. The economy Economists expect 185,000 new jobs were created in April, and we’ll also get the unemployment rate and average hourly earnings ahead of the open. Wholesale inventories and consumer credit are expected later.

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There's a drawback to the Fed rate cuts the market so craves: It could wreck bank earningsBank earnings could take a 10% hit if the Fed cuts rates by 75 basis points by 2020, according to Bank of America Merrill Lynch. Aren't the banks reliant for this free money for their earnings? and what will Pensions have to do? Reach for more yield buying $AMZN stock? Talk about bifurcation creation in action. Why does everything need to be an extreme? If there are signs of a slowing a rate cut will be a quarter point to show a signal that increases have stopped and the Fed intends to potentially step in. At most we would see a second (.50). Nobody suggests .75 is on the table.
منبع: CNBC - 🏆 12. / 72 ادامه مطلب »

Fed typically ‘cuts swiftly and does not disappoint market expectations,’ says BAMLIn a report dated June 6, Mark Cabana, rates strategist, Joseph Song, U.S. economist, and currency strategist Adarsh Sinha at BAML, say that history offers a... Like taking the hair of the dog, this just prolongs the hangover and makes it worse once it hits. What is this stock photo?
منبع: MarketWatch - 🏆 3. / 97 ادامه مطلب »