Morgan Stanley, Goldman Sachs at odds on S&P 500’s bull market rally (3 min read) Bank strategists are split on the future of the S&P 500 after the index entered a technical bull market last week. Goldman Sachs is particularly optimistic, expecting the gains to continue as other sectors catch up with the technology rally. Morgan Stanley on the other hand, compared the current market to the bear of the 1940s, suggesting that the rally may be short-lived. The bank also predicts a drop in S&P 500 earnings this year, while other bank analysts have been upgrading their earnings expectations amid a resilient US economy.
Oil Traders Are Daring to Defy Market Kingpin Saudi Arabia (6 min read) Oil traders are becoming less responsive to Saudi Arabian Energy Minister Prince Abdulaziz bin Salman's effort to cut oil production and boost prices. Traders remain bearish due to factors such as booming Russian supplies and concerns about China's economy. The International Energy Agency and several Wall Street banks have also been reducing their anticipated demand increase. However, some investors still believe market tightening could occur later this year due to supply cuts and emerging market demand growth.
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Business & Stocks
UBS says it has completed the takeover of stricken rival Credit Suisse (4 min read) UBS has officially completed its takeover of Credit Suisse, forming one of the world's largest banks focused on wealth management. Following the acquisition, Credit Suisse will be delisted from stock exchanges, with shareholders receiving one UBS share for every 22.48 Credit Suisse shares held. UBS will manage the two banks separately for now, but questions remain about the future of Credit Suisse's assets. The acquisition was completed with the Swiss government agreeing to cover potential losses.
Nasdaq deepens fintech push with $10.5 bln Adenza deal (2 min read) Nasdaq has agreed to buy financial software firm Adenza from private equity firm Thoma Bravo for $10.5 billion in a cash and stock deal. This is Nasdaq’s largest acquisition to date as it accelerates its transformation into a more technology-focused company. The purchase aims to enhance its suite of technology solutions in the area of risk and regulatory management like anti-financial crime software, which has helped diversify its revenue streams. However, shares of Nasdaq shredded more than 11% after the news.
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Funds & ETFs
Hedge Fund Bond Bears Are Relentlessly Shorting Treasuries (2 min read) Hedge funds are continuing to sell short-dated Treasuries, indicating their belief that the Fed's rate-hiking campaign is not over. Leveraged investors have increased their net-short positions on two-year Treasuries for an eleventh consecutive week, the longest streak on record. This suggests that hedge funds are confident in betting against Treasuries due to persistent inflation concerns. Meanwhile, other bond managers argue that previous rate hikes have already caused damage and could lead to a US recession, which would support the bond market.
Why International ETFs Are Luring Investors (3 min read) Investors are flocking back to international ETFs after a lackluster performance in 2022. European ETFs and international multi-cap core ETFs have seen significant inflows this year. The appeal lies in the cheaper valuations of international stocks compared to US equities, making them attractive in a potential economic recovery. Many financial advisors have also been adding international ETFs into their clients’ portfolios for diversification and to capture potential profits in the coming year.
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