Friday, March 24, 2023
99newser
  • Home
  • World News
  • Celebrity News
  • Stock Market News
  • Health News Updates
  • Latest Sport News
No Result
View All Result
99newser
  • Home
  • World News
  • Celebrity News
  • Stock Market News
  • Health News Updates
  • Latest Sport News
No Result
View All Result
99newser
No Result
View All Result
Home Stock Market News

Wall St Week Ahead: Stay sidelined or scoop up stocks? Investors weigh choice as market slides – Reuters

Editorial Team by Editorial Team
October 7, 2022
in Stock Market News
0
Wall St Week Ahead: Stay sidelined or scoop up stocks? Investors weigh choice as market slides – Reuters
587
SHARES
3.3k
VIEWS
Share on FacebookShare on Twitter

NEW YORK, Oct 7 (Reuters) – As a painful decline in markets drags on, investors are grappling with a difficult choice: stick with stocks and hope for a turnaround or avoid them until better times arrive.

The S&P 500 is down 23% on the year, with a brief rally in October threatening to crumble after strong U.S. jobs data bolstered the case for more market-punishing rate hikes from a Federal Reserve that has made fighting inflation its top priority.

As markets have tumbled, wary investors have cut their stock holdings this year in favor of safer terrain, drawn by higher yields on everything from Treasuries to money market accounts.

Register now for FREE unlimited access to Reuters.com

Yet some investors are beginning to worry that sitting on the sidelines could eventually cost them once the market turns. Missing out on a few big days of gains can cut overall returns over time, while previous market bottoms have been marked by furious rallies that have rewarded those who stuck it out in stocks.

“It’s a push and pull between, am I more afraid to be under-invested and miss out on an upside move and a rally or am I more afraid to make a wrong decision,” said Glenn Koh, head of global equities trading at Bank of America.

History shows that being under-invested in stocks could lead to missing out on substantial gains. Investors’ annual average return fell from 7.8% a year to 3.2% if they missed the 20 best stock market days over the last three decades, a Wells Fargo Investment Institute study found.

Meanwhile, the market tends to see its strongest gains in the month after it hits a bottom, according to Goldman Sachs research. The firm found that the S&P 500 (.SPX) has posted a median return of 16% during the month following the trough of eight bear or near-bear markets since 1980.

John Lynch, chief investment officer for Comerica Wealth Management, believes a lot of negative news is already priced in to markets, including fears of a recession. His firm is maintaining its standard allocation toward stocks in general in its portfolios.

“The upside 12-18 months from now is much better than the downside … three to six months from now,” Lynch said.

Investors are looking to next week’s U.S. consumer price report for clues on whether the 300 basis points in rate hikes already delivered by the Fed have dented inflation. Signs that prices remain steep are likely to weigh on markets, further undercutting the case for staying in stocks.

Reuters Graphics
Reuters Graphics

Plenty of investors believe it is too early to get bullish on stocks. Valuations are one concern: The S&P 500’s forward price-to-earnings ratio has fallen to about 16 from nearly 22 at the start of the year, but remains above the level of about 10 times earnings seen during the throes of the 2007-2009 financial crisis.

And while profit estimates have weakened, they may fall further in coming weeks as investors factor in a potential economic slowdown. The challenges to the corporate outlook will become clearer starting next week, when third-quarter results start pouring in.

Morgan Stanley strategists this week said the stock market faced more downside, pointing to earnings uncertainties including the stronger dollar and weakness in Europe.

“This is one of the most difficult macro forecasting environments most companies have ever encountered,” they wrote.

Amid the uncertainty, conventional equity funds have seen net outflows for 35 straight weeks, according to Refinitiv Lipper. Meanwhile, fund managers increased their average cash balances to the highest level in more than two decades, the latest monthly survey from BofA Global Research showed.

King Lip, chief strategist at Baker Avenue Asset Management, said many of his investing clients are more concerned about greater potential losses than missing out on some potential gains.

In fact, some of the firm’s clients want to raise their cash positions further – even though many now hold 5% to 10% of their portfolios in cash compared with their more typical allocation in the low single digits.

“The conversation right now is it’s not about missing out on the rebound per se, it’s about capturing another 20 to 30% of the downside,” said Lip. “That’s what our clients are worried about right now.”

Register now for FREE unlimited access to Reuters.com

Reporting by Lewis Krauskopf in New York
Editing by Ira Iosebashvili and Matthew Lewis

You might also like

S&P 500 rises to the highest level in five months Thursday as Meta leads a tech comeback – CNBC

Nasdaq-100 futures rise as Meta surges on quarterly revenue beat – CNBC

Beware of tech stocks — these cash-rich names are a better bet, analysts say – CNBC

Our Standards: The Thomson Reuters Trust Principles.

Previous Post

Everton news and transfers LIVE – Cody Gakpo boost, Bebo interest, Hakan Calhanoglu enquiry – Liverpool Echo

Next Post

The shaky stock market is barreling towards key tests with bank earnings, inflation data on deck – CNBC

Editorial Team

Editorial Team

Related Posts

S&P 500 rises to the highest level in five months Thursday as Meta leads a tech comeback – CNBC
Stock Market News

S&P 500 rises to the highest level in five months Thursday as Meta leads a tech comeback – CNBC

by Editorial Team
February 2, 2023
Nasdaq-100 futures rise as Meta surges on quarterly revenue beat – CNBC
Stock Market News

Nasdaq-100 futures rise as Meta surges on quarterly revenue beat – CNBC

by Editorial Team
February 2, 2023
Beware of tech stocks — these cash-rich names are a better bet, analysts say – CNBC
Stock Market News

Beware of tech stocks — these cash-rich names are a better bet, analysts say – CNBC

by Editorial Team
February 2, 2023
Live updates: Stocks rise after Fed hikes rates – CNN
Stock Market News

Live updates: Stocks rise after Fed hikes rates – CNN

by Editorial Team
February 1, 2023
Dow falls more than 300 points as traders await Federal Reserve’s rate hike decision – CNBC
Stock Market News

Dow falls more than 300 points as traders await Federal Reserve’s rate hike decision – CNBC

by Editorial Team
February 1, 2023
Next Post
The shaky stock market is barreling towards key tests with bank earnings, inflation data on deck – CNBC

The shaky stock market is barreling towards key tests with bank earnings, inflation data on deck - CNBC

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Recommended

5 Guidelines to Get You Started

5 Guidelines to Get You Started

January 10, 2023
Mass. Reports 5,160 New COVID-19 Cases, 112 Deaths This Week – NBC10 Boston

Fail or sale? What could be next for stricken Credit Suisse – CNBC

March 18, 2023

Categories

  • Celebrity News
  • Health News Updates
  • Latest Sport News
  • Stock Market News
  • World News

Don't miss it

Mass. Reports 5,160 New COVID-19 Cases, 112 Deaths This Week – NBC10 Boston

The Style Download: Succession-worthy sneakers, Shawn Mendes & Stussy All Stars – GQ Australia

March 24, 2023
Mass. Reports 5,160 New COVID-19 Cases, 112 Deaths This Week – NBC10 Boston

Dua Lipa rocks this season's hottest 1970s beachwear trend – HELLO!

March 24, 2023
Mass. Reports 5,160 New COVID-19 Cases, 112 Deaths This Week – NBC10 Boston

Ukraine war live updates: Russian strikes overnight kill civilians; Estonia calls China peace plan 'extremely unfair' – CNBC

March 24, 2023
Mass. Reports 5,160 New COVID-19 Cases, 112 Deaths This Week – NBC10 Boston

Make Money Online With Algorand (ALGO), Stellar (XLM) and … – Blockzeit

March 24, 2023
Going ultra-thin for a better Euro-nymphing rig | Hatch Magazine

Going ultra-thin for a better Euro-nymphing rig | Hatch Magazine

March 24, 2023
Mass. Reports 5,160 New COVID-19 Cases, 112 Deaths This Week – NBC10 Boston

Meet the 10 Aussies braving the wild in Alone – Daily Telegraph

March 24, 2023

Recent News

Mass. Reports 5,160 New COVID-19 Cases, 112 Deaths This Week – NBC10 Boston

The Style Download: Succession-worthy sneakers, Shawn Mendes & Stussy All Stars – GQ Australia

March 24, 2023
Mass. Reports 5,160 New COVID-19 Cases, 112 Deaths This Week – NBC10 Boston

Dua Lipa rocks this season's hottest 1970s beachwear trend – HELLO!

March 24, 2023
  • Home
  • World News
  • Celebrity News
  • Stock Market News
  • Health News Updates
  • Latest Sport News

© 2020 99newser.com

No Result
View All Result
  • Home
  • World News
  • Celebrity News
  • Stock Market News
  • Health News Updates
  • Latest Sport News

© 2020 99newser.com