The Business Roundtable, a group of CEOs of nearly 200 major U.S. corporations, gave a new definition of the "purpose of a corporation."Marketsread more
Stocks rose sharply on Monday as Treasury yields rebounded, quelling fears of a possible recessionUS Marketsread more
J.P. Morgan estimates the average annual tariff cost per household will be $1,000 with the new round of Trump's tariffs.Marketsread more
Since its IPO 15 years ago, Google has become more and more powerful. Today, that power is being highly scrutinized.Technologyread more
Sequoia's Michael Moritz says that direct listings worked for Spotify and Slack and will become more common for companies with "courage and intelligence."Technologyread more
Shares of embattled utility PG&E plummeted after a judge ruled that a jury can decided whether it should pay up to $18 billion in damages.Marketsread more
The attacks come after state and local ransomware attacks in New York, Louisiana, Maryland and Florida resulted in the loss of significant sums.Technologyread more
The New York City police officer who used a chokehold on Eric Garner in an encounter that ended with Garner's death has been fired, New York City Police Commissioner James...Politicsread more
The president said the Fed has been hampered by a "horrendous lack of vision" and said it should institute 100 basis points worth of reductions in its benchmark rate.Marketsread more
"I think if yields roll over and start slipping, we may see renewed pressure on stocks," UBS' Art Cashin says.Marketsread more
These are the stocks posting the largest moves midday.Market Insiderread more
Global stocks are likely to rise in the near term and investors should be selling into that strength, according to Credit Suisse strategists.
Reduced corporate profit expectations, tightening financial conditions due to Federal Reserve actions and elevated levels of corporate debt are three of the principal factors conspiring to limit market upside, the bank said in a research note. Weakness in China and an overall inability for central banks to respond also are compounding the challenge.
To be sure, Credit Suisse does not see conditions ripe for a bear market and is in fact forecasting a further boost in equities on top of the solid rally that has kicked off 2019.
But it anticipates that the market obstacles will make further increases tough to come by.
"We stick to the year-end targets ... which currently point to around 5% upside for the key global markets, but advise selling developed markets into the rally rather than continuing to build positions," analyst Andrew Garthwaite and others said in the report.
On the positive side, Garthwaite said a recession is unlikely, valuations are attractive particularly outside the U.S., and central bank pauses in rate hikes, like the one the market expects from the Fed, typically coincide with market gains.
The slowdown in corporate earnings, after a year in which U.S. companies posted 20 percent gains, is one obstacle. This year is likely to see that earnings pace domestically drop to 6.9 percent, according to FactSet.
"Global earnings revisions are now negative and correlate very closely to moves in equities," Garthwaite wrote. "At this level, they are now consistent with falling equities over the next year."
The note also cited a slowdown in money supply that is consistent with declines. Specifically, the Federal Reserve's four rate hikes in 2018, combined with the reduction of the bond portfolio on its balance sheet, have caused the money supply to slow.
"We would also stress that the contraction in the Fed balance sheet is unprecedented and, although correlation is not causation, that such a contraction has historically been problematic," Garthwaite said.
The firm also sees some problems with China, though it is not advising clients to ditch investments in the country.
Chinese growth is on pace to post its slowest level since 2009, and the country finds itself locked in a bitter trade dispute with the U.S. that has featured tit-for-tat tariffs that has slowed the movement of goods from the world's second-largest economy.
"China is the biggest macro risk globally. Our bottom line is that we see demand growth slowing further, with some destocking likely, and have yet to see the policy response to cause [Purchase Manager Indexes] to stabilize. We would stress, though, that we do not believe China has run out of policy flexibility, and do not see the preconditions in place for a hard landing," the analysts wrote.
Credit Suisse joins a number of other forecasters tempering expectations for this year.
J.P. Morgan this week lowered its S&P 500 price target from 3,100 to 3,000. Piper Jaffray, usually one of Wall Street's most optimistic firms, this week reiterated its 2,725 price target for a year that it expects to be "rangebound" for the large-cap market index.