CNBC Pro: Credit Suisse is under pressure, but short sellers appear to be targeting another global bank
Investor anxiety over Credit Suisse sent its shares tumbling, but short sellers appear to be targeting another European bank, the data showed.
Credit Suisse is only the eighth most shorted European bank, with 2.42% of its free float used to bet against it, according to data analytics firm S3 Partners.
Some French, Italian and German banks are even more heavily shorted.
CNBC Pro subscribers can learn more here.
UBS: Expect ‘periodic bounces’ in stocks, but more near-term volatility
Mark Haefele, chief investment officer at UBS Global Wealth Management, said investors can expect periodic rebounds in stocks like we’re seeing today, but volatility will persist.
“After falling more than 9% in September and extending its year-to-date decline to nearly 25% at Friday’s close, we believe the S&P 500 appeared oversold,” Haefele said in a note Tuesday. morning.
He suggested that some of the selling pressure in the past week may have been driven by “end-of-quarter rebalancing”, which has now eased as we enter the fourth quarter.
“With sentiment towards equities already very weak, periodic rebounds are to be expected. But markets are likely to remain volatile in the near term, primarily driven by inflation and policy rate expectations,” Haefele said.
“As risk assets rebounded on Monday, we believe a more sustained rally in equities will likely require indications of a clear downward trend in US inflation (e.g., at least three months of PCE inflation base +0.2% month-over-month or less), along with signs of a slowing labor market.This week’s JOLTS job openings data and September will be key data to watch.”
Stocks on the move: Greggs, Accelleron up 5%
Shares of British bakery chain Greggs gained 5.6% in early trading after reporting an increase in quarterly sales despite the worsening cost of living crisis and plummeting consumer confidence in the UK United
Shares of Accelleron gained 5% as investors bought the stock at a discount after the weak market debut of ABB’s former supercharger unit on Monday.
CNBC Pro: Want a “defensive move” with a return of up to 5%? Buy this fund, says the strategist
It’s been a volatile year for stocks and bonds, with major Wall Street indices coming off their worst month since March 2020 and Treasury yields remaining high.
However, David Dietze, chief investment strategist at Point View Wealth Management, says “pockets of opportunity” still exist.
“Short-term defensive moves are probably warranted,” Dietze told CNBC’s “Street Signs Asia” on Monday, and named his favorite fund to play in the market right now.
Pro subscribers can learn more here.
Look at Q4 earnings forecast more than Q3 actuals, says S&P Global
According to S&P Global, fourth-quarter earnings forecasts provided by companies when releasing third-quarter results will be far more important to the future direction of the market than the actual third-quarter numbers themselves.
“October brings earnings, with third-quarter estimates already down 7%, and the numbers whispering little more than that,” wrote Howard Silverblatt, the index’s senior analyst over the weekend. “The biggest concern (than the actual numbers for Q3, when consumers were still spending) is the guidance for Q4, as consumers have pulled back, inflation continues, and the Fed’s ‘adjustments’ will have a more substantial impact.”
Analysts expect third-quarter S&P 500 earnings to rise 6.1% from the same quarter a year ago, and nearly 18% from the second quarter of 2022, S&P Global said.
Next year estimates call for earnings growth of 14.3% over 2022 and a corresponding forecast P/E ratio of 15.0.
Silverblatt also looked at the typical performance of the S&P 500 in the month of October. “Historically, the index has shown gains 57.4% of the time, with an average gain of 4.18% for up months, an average decrease of 4.67% for down months, and a decrease overall average of 0.46%,” he wrote.
CNBC Pro: Here’s What’s Next For Stocks, According To Wall Street Pros
September is finally behind us, much to the relief of many equity investors who endured a difficult month, with all major US indices posting steep losses.
With a historically weak month now firmly in the rearview mirror, what is the outlook for equities as we enter the fourth quarter of the year?
CNBC Pro scoured the research to find out what Wall Street is thinking.
Pro subscribers can learn more here.
— Zavier Ong
European markets: here are the opening calls
European stocks are heading for a higher open on Tuesday, building on the gains seen in yesterday’s trading session.
Britain’s FTSE is expected to open 30 points higher at 6,934, Germany’s DAX 126 points higher at 12,324, France’s CAC 40 58 points higher at 5,850 and Italy’s FTSE MIB 245 points higher at 21,043, according to IG data.
The expected higher open in Europe comes after a rebound on Wall Street on Monday. There, stocks rallied to start the new month and quarter on a positive note, as Treasury yields fell from levels not seen in about a decade. It was the best day since June 24 for the Dow and the S&P 500 the best day since July 27.
Earnings come in from Greggs on Tuesday and Eurozone producer price data for August is released.