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Investors wonder when sell-off in stocks will end
NEW YORK: A week of heavy selling has rocked US stocks and bonds, and many investors are bracing for more pain ahead.
Wall Street banks are adjusting their forecasts to account for a Federal Reserve (Fed) that shows no evidence of letting up, signalling more tightening ahead to fight inflation after another market-bruising rate hike this week.
The S&P 500 is down more than 22% this year. On Friday, it briefly dipped below its mid-June closing low of 3,666, erasing a sharp summer rebound in US stocks before paring losses and closing above that level.
With the Fed intent on raising rates higher than expected, “the market right now is going through a crisis of confidence,” said Sam Stovall, chief investment strategist at CFRA Research.
If the S&P 500 closes below the mid-June low in the days ahead, that may prompt another wave of aggressive selling, Stovall said. This could send the index as low as 3,200, a level in line with the average historical decline in bear markets that coincide with recessions.
While recent data has shown a US economy that is comparatively strong, investors worry the Fed’s tightening will bring on a downturn.
A rout in bond markets added pressure on stocks. Yields on the benchmark 10-year Treasury, which move inversely to prices, recently stood at around 3.69%, their highest level since 2010.
Higher yields on government bonds can dull the allure of equities. Tech stocks are particularly sensitive to rising yields because their value rests heavily on future earnings, which are discounted more deeply when bond yields rise.
Michael Hartnett, chief investment strategist at Bank of America (BofA) Global Research, believes high inflation will likely push US Treasury yields as high as 5% over the next five months, exacerbating the sell-off in both stocks and bonds.
“We say new highs in yields equals new lows in stocks,” he said, estimating that the S&P 500 will fall as low as 3,020, at which point investors should “gorge” on equities.
Goldman Sachs, meanwhile, cut its year-end target for the S&P 500 by 16% to 3,600 points from 4,300 points.
“Based on our client discussions, a majority of equity investors have adopted the view that a hard landing scenario is inevitable,” wrote Goldman analyst David Kostin.
Investors are looking for signs of a capitulation point that would indicate a bottom is near.
The Cboe Volatility Index, known as Wall Street’s fear gauge, on Friday shot above 30, its highest point since late June but below the 37 average level that has marked crescendos of selling in past market declines since 1990.
Bond funds recorded outflows of US$6.9bil during the week to Wednesday, while US$7.8bil was removed from equity funds and investors plowed US$30.3bil into cash, BofA said in a research note citing EPFR data.
Investor sentiment is the worst it has been since the 2008 global financial crash, the bank said.
Kevin Gordon, senior investment research manager at Charles Schwab, believes there is more downside ahead because central banks are tightening monetary policy into a global economy that already appears to be weakening.
“It will take us longer to get out of this rut not only because of slowdown around the world but because the Fed and other central banks are hiking into the slowdown,” Gordon said. “It’s a toxic mix for risk assets.”
Still, some on Wall Street say the declines may be overdone. “Selling is becoming indiscriminate,” wrote Keith Lerner, co-chief investment officer at Truist Advisory Services.
- Reuters
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Created by Tan KW | Apr 18, 2024
Discussions
Be the first to like this. Showing 50 of 58 comments
The situation now is still far from that of Mar 2020, by then, people just threw at whatever price, very shocking ...... now, still no panic selling (force selling?), however, the selling still not ended ..... no sure whether a more shocking scenario is brewing .......
2022-09-30 08:30
Daily Trading Participation
As at 29 September 2022
Participation Participation % Bought (RM Mil) Sold (RM Mil) Net (RM Mil)
Foreign 29.10% 467 616 -148
Local Institution 47.04% 937 814 123
Local Retail 23.87% 457 431 25
Total 100.00% 1,861 1,861 0
FF selling everyday ..... USD is appreciating and interest rate is rising
2022-10-01 22:09
Fed Vice Chair Brainard says the Fed shouldn’t pull away from inflation fight ‘prematurely’
2022-10-02 15:06
Federal Reserve Vice Chair Lael Brainard said it’s imperative that the central bank not shrink from fighting inflation until the job is done.
2022-10-02 15:07
Fed is not fighting inflation! They are strengething dollar! It's part of enlightens game part! The whole world just got fooled!
2022-10-02 15:55
Agreed with u Tobby. How true is the inflations rate that they told keep increasing every month. They just created havoz to the stock market to neutralised and reset it back so that the big player can buy and gain control back at much lower price. This is just a sentiment war. The recession will happen went the dollar is so strong and all other countries will suffer economically. And their objectives is almost achieved anytime soon..
2022-10-02 19:03
That is not the case. They will keep increasing the int rate until the inflation rate is reduce gradually. Bcoz, with int rate hike, it will reduce the consumer purchasing power and and balance back the market supply and demand. With high inflation rate, theoritically there is over demand than supplied in the market.
2022-10-02 20:18
Posted by ahbah > 3 hours ago | Report Abuse
To fight inflation, interest rate must be higher than inflation rate ?
~~~~~~~~~~~~~~~~~~~~~
This derived from the concept of real interest rate ........
A “real interest rate” is an interest rate that has been adjusted for inflation. To calculate a real interest rate, you subtract the inflation rate from the nominal interest rate. In mathematical terms we would phrase it this way: The real interest rate equals the nominal interest rate minus the inflation rate.
Real interest rate = Nominal interest rate - Inflation rate
Real interest rate affect value of money over time. Value of money becomes higher if real interest rate is +ve, value of money is diminishing over time if real interest rate is -ve ........ this affects the willingness of people to keep thier money or spend it ..........
2022-10-03 00:02
Printing new money got affect value of existing money ?
Where the new money come from ? from empty space in the sky ?
2022-10-03 13:05
The treasury arm of the government issues bonds to borrow money. Another arm of the government, The Central Bank, buys it and release the money to the government. This is quantity easing (QE). The value of the existing money should drop unless the nation's money is the reserve currency of trade (USD). In a way, it is money dropping from the sky.
2022-10-03 15:16
Daily Trading Participation
As at 30 September 2022
Participation Participation % Bought (RM Mil) Sold (RM Mil) Net (RM Mil)
Foreign 36.29% 652 736 -85
Local Institution 41.59% 847 744 103
Local Retail 22.12% 414 432 -19
Total 100.00% 1,913 1,913 0
Retailer also sell loh , only local institution buy ......
2022-10-03 22:34
Foreign shareholding in Bursa down to 13.6% in August, lowest on record
https://www.theedgemarkets.com/article/foreign-shareholding-bursa-down-136-august-lowest-record
2022-10-03 23:19
Posted by ahbah > 1 day ago | Report Abuse
Printing new money got affect value of existing money ?
Where the new money come from ? from empty space in the sky ?
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
I think you knew the answer :-)
They are suffering too, by printing too much money from the air .......
Although the CPI downed from 8.5% to 8.3%, the core CPI (exclusion of food and fuel) rose from 5.9% to 6.3% (mainly contributed by rents, cars, medical care services) which is more stubborn ...... some people think the Fed would stop the rate increment soon, like what happened in 2020, but this time, it won't be so easy ...... :-)
2022-10-04 14:44
Daily Trading Participation
As at 03 October 2022
Participation Participation % Bought (RM Mil) Sold (RM Mil) Net (RM Mil)
Foreign 36.21% 468 581 -113
Local Institution 40.03% 632 528 103
Local Retail 23.76% 349 340 9
Total 100.00% 1,449 1,449 0
FF continues selling .....
2022-10-05 00:03
Daily Trading Participation
As at 04 October 2022
Participation Participation % Bought (RM Mil) Sold (RM Mil) Net (RM Mil)
Foreign 25.18% 397 336 61
Local Institution 47.92% 679 715 -36
Local Retail 26.89% 379 404 -25
Total 100.00% 1,455 1,455 0
Open yr eye big big and see, FF is buying, both local inst. and retailers are selling :D
2022-10-05 22:11
Daily Trading Participation
As at 05 October 2022
Participation Participation % Bought (RM Mil) Sold (RM Mil) Net (RM Mil)
Foreign 23.41% 369 437 -67
Local Institution 48.93% 892 792 100
Local Retail 27.66% 460 492 -32
Total 100.00% 1,721 1,721 0
FF resumed selling, retailers continue their selling .....
2022-10-06 23:04
Daily Trading Participation
As at 07 October 2022
Participation Participation % Bought (RM Mil) Sold (RM Mil) Net (RM Mil)
Foreign 30.45% 365 508 -143
Local Institution 44.61% 708 572 136
Local Retail 24.93% 361 354 7
Total 100.00% 1,434 1,434 0
FF keep on selling ......
2022-10-10 22:25
GE brings a lot of uncertainties, another good reason for FF leaving ......
2022-10-11 15:38
Daily Trading Participation
As at 11 October 2022
Participation Participation % Bought (RM Mil) Sold (RM Mil) Net (RM Mil)
Foreign 31.10% 509 648 -139
Local Institution 46.30% 900 821 79
Local Retail 22.59% 450 390 60
Total 100.00% 1,859 1,859 0
Retailers took the bargain opportunity to buy more ..... while FF sold more ......
2022-10-13 08:39
Core inflation in us jump more thn expected.The main thing.the other slightly lower.so.2-3 percent drop started.not include bad news from reporting season...
13/10/23 8.52pm
2022-10-13 20:53
Daily Trading Participation
As at 12 October 2022
Participation Participation % Bought (RM Mil) Sold (RM Mil) Net (RM Mil)
Foreign 28.00% 394 479 -84
Local Institution 48.66% 778 740 38
Local Retail 23.34% 387 341 46
Total 100.00% 1,559 1,559 0
FF continue selling ..... get back their USD?
2022-10-14 08:46
Daily Trading Participation
As at 14 October 2022
Participation Participation % Bought (RM Mil) Sold (RM Mil) Net (RM Mil)
Foreign 27.18% 429 528 -99
Local Institution 49.17% 920 812 109
Local Retail 23.65% 412 421 -10
Total 100.00% 1,761 1,761 0
2022-10-17 09:07
Be careful with semiconductor ctrs that have investment in China, Biden imposes stern restrictions on the industries in China ......
2022-10-17 09:12
Warren buffet says buy when others are shivering,,,
Just enter don’t ask,,,,hahahaha,,,
2022-10-17 14:20
The selling will probably end when Fed is forced to do QE again. What happened in UK bond market could potentially happen in US as foreign governments holding huge chunks of T Bills are forced to sell in order to protect their local currencies.
2022-10-17 15:57
Daily Trading Participation
As at 17 October 2022
Participation Participation % Bought (RM Mil) Sold (RM Mil) Net (RM Mil)
Foreign 24.78% 343 395 -53
Local Institution 47.79% 736 687 49
Local Retail 27.43% 410 406 4
Total 100.00% 1,489 1,489 0
FF still the net seller .....
2022-10-18 11:28
Integrity. Intelligent. Industrious. 3iii (iiinvestsmart)$€£¥
Quality company
Buy value.
Is price below intrinsic value?
If yes, buy.
2022-10-18 13:19
Definition: Intrinsic value is the Present value of the investment of all the expected cash flow over the lifetime discounted at the appropriate discount rate.
Intrinsic value = (CF1/ (1+d)^1) + (CF2/(1+d)^2) + ----- +(CFn/(1+d)^n)
Where:
CF = Cash Flow in the Period
d = Discount rate
n = The period number
This Intrinsic value is actually a Discounted Cash Flow (DCF)
Example of intrinsic value of INSAS is then the Sum of DCF expected cash flow from varies business streams.
For INSAS assets rich case, it is my opinion that the liquid assets minus total liabilities should be added to this intrinsic value.
2022-10-18 15:08
The concept of intrinsic value is beyond the understanding of an ordinary investor lah.
It is so complicated n complex. A look at its formula is enough to send shiver down my spine !
2022-10-18 16:20
Daily Trading Participation
As at 18 October 2022
Participation Participation % Bought (RM Mil) Sold (RM Mil) Net (RM Mil)
Foreign 27.55% 523 420 103
Local Institution 44.99% 716 824 -108
Local Retail 27.45% 473 467 6
Total 100.00% 1,711 1,711 0
Open yr eye big big and see, local institution is selling now ......
2022-10-19 08:38
Daily Trading Participation
As at 19 October 2022
Participation Participation % Bought (RM Mil) Sold (RM Mil) Net (RM Mil)
Foreign 27.99% 454 507 -53
Local Institution 46.64% 830 772 58
Local Retail 25.37% 433 438 -5
Total 100.00% 1,718 1,718 0
2022-10-20 09:31
Investors should not hope for rebound until 2025!!
The entire decade is dramatic with many problems.
2022-10-20 15:27
Integrity. Intelligent. Industrious. 3iii (iiinvestsmart)$€£¥
>>>
Posted by firehawk > Oct 18, 2022 4:18 PM | Report Abuse
Could insas be regarded as a value trap counter?
>>>
Insas is an "undervalued" company by many measures. Low PE.
However, an undervalued company can remains undervalued for a long time, for various and obvious reasons.
Share prices adjusted for capital changes:
On 9th March 2007, Insas was RM 0.66 per share.
Today, 20.10.2022, Insas is RM 0.76 per share.
For many years, the shareholders did not receive dividends.
Its DY today is 5.3%.
One of the problems with investing in a not so good company is the opportunity cost. The opportunity cost of not investing into a good / great company that delivers high consistent returns over the long term is obviously very huge indeed.
2022-10-20 15:44
Daily Trading Participation
As at 20 October 2022
Participation Participation % Bought (RM Mil) Sold (RM Mil) Net (RM Mil)
Foreign 44.27% 1,107 1,191 -84
Local Institution 38.69% 1,065 944 121
Local Retail 17.04% 424 461 -37
Total 100.00% 2,596 2,596 0
Retailers also sold their holding yesterday .......
2022-10-21 09:32
Daily Trading Participation
As at 21 October 2022
Participation Participation % Bought (RM Mil) Sold (RM Mil) Net (RM Mil)
Foreign 27.06% 418 398 21
Local Institution 48.88% 752 723 29
Local Retail 24.06% 338 388 -50
Total 100.00% 1,508 1,508 0
Retailer ---> the only net seller
2022-10-25 09:55
Daily Trading Participation
As at 25 October 2022
Participation Participation % Bought (RM Mil) Sold (RM Mil) Net (RM Mil)
Foreign 27.91% 518 466 52
Local Institution 48.21% 842 858 -17
Local Retail 23.87% 403 438 -35
Total 100.00% 1,763 1,763 0
Open yr eyes big big and see, only FF was net buying ......
2022-10-26 10:44
Daily Trading Participation
As at 26 October 2022
Participation Participation % Bought (RM Mil) Sold (RM Mil) Net (RM Mil)
Foreign 21.19% 422 340 82
Local Institution 50.27% 895 914 -19
Local Retail 28.55% 482 545 -63
Total 100.00% 1,800 1,800 0
FF becomes the only net buyer again ......
2022-10-27 15:19
Daily Trading Participation
As at 27 October 2022
Participation Participation % Bought (RM Mil) Sold (RM Mil) Net (RM Mil)
Foreign 26.27% 554 429 125
Local Institution 47.19% 832 933 -101
Local Retail 26.54% 484 508 -24
Total 100.00% 1,870 1,870 0
2022-10-28 14:47
Daily Trading Participation
As at 21 November 2022
Participation Participation % Bought (RM Mil) Sold (RM Mil) Net (RM Mil)
Foreign 22.37% 476 643 -168
Local Institution 48.67% 1,207 1,228 -22
Local Retail 28.97% 819 630 189
Total 100.00% 2,502 2,502 0
Yesterday, the day after the GE, FF and local institution were selling ... retailers was sole buyer.
2022-11-22 10:20
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