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<keyword id="19896016" type="General" weightage="20" keywordseo="new-delhi" source="keywords">New Delhi</keyword> [<keyword id="19895063" type="General" weightage="20" keywordseo="india" source="keywords">India</keyword>], March 11 (ANI): Global rating agency Moody's expects India's economic growth in 2024-25 growth above that of other emerging market G20 peers, given its domestic demand managed to sustain momentum. India's real GDP growth accelerated to 8.4 per cent year over year in the October-December quarter of 2023, up from upwardly revised prints of 8.1 per cent in July-September and 8.2 per cent in April-June. The global rating agency Moody's attributed India's firm growth primarily to solid capital expenditure, defying private consumption which remained "sluggish" amid still-weak rural demand. On the supply side, an 11.6 per cent surge in manufacturing output and strong service sector activity more than offset a decline in agricultural output in India, it said. Even so, it said high-frequency indicators, including expanding <keyword id="20905252" type="General" weightage="20" keywordseo="purchasing-managers" source="keywords">Purchasing Managers</keyword>' Index (PMI), rising auto sales, consumer optimism and double-digit credit growth, suggest that the economy's strong October-December momentum carried into January-March this year. "Some of the large emerging market (EMs) countries stood out in 2023 for their resilient economies amid high-interest rates, exchange rate volatility, subdued capital flows and muted external demand. This year, we expect growth to slow across several major EMs as the economies transition to a post-pandemic steady growth path," Moody's said in its Macro Monday report, chaptered 'G-20 emerging markets are poised for growth stabilization'. In its recently published <keyword id="20905253" type="General" weightage="20" keywordseo="global-macro-outlook" source="keywords">Global Macro Outlook</keyword>, it forecasted G20 emerging market growth to stabilize around 4.0 per cent in 2024 and 2025, down from 4.7 per cent in 2023 as global monetary policy gradually normalises. On an annual basis, domestic demand was the primary engine of growth in several G20 emerging markets. "We believe growth cycles in India and Indonesia are at their peak, Brazil and Mexico are likely past their peak, and <keyword id="19899437" type="General" weightage="20" keywordseo="south-africa" source="keywords">South Africa</keyword>'s growth has likely troughed. Nevertheless, we expect relatively stable growth at close to potential in 2024 and 2025 for most G-20 EMs." On the policy side, the rating agency expects continuity after the general election in April-May and continued focus on infrastructure development. It forecasts India's real GDP to grow about 6.8 per cent in 2024 and 6.4 per cent in 2025, from 7.7 per cent in 2023. India's GDP grew at a massive 8.4 per cent during the October-December quarter of the current financial year 2023-24 and the country continued to remain the fastest-growing major economy. The Indian economy grew 7.8 per cent and 7.6 per cent during the preceding two quarters - April-June and July-September. The strength of domestic demand has driven the economy to a 7 per cent plus growth rate in the last three years. India's economy grew 7.2 per cent in 2022-23 and 8.7 per cent in 2021-22, respectively. In the next three years, India is expected to become the third-largest economy in the world, with a GDP of USD 5 trillion. India can aspire to become a USD 7 trillion economy in the next six to seven years (by 2030), India's finance ministry recently asserted. (ANI)

Domestic demand to keep India's growth above other G20 emerging markets: Moody's

<ul class="summary-list"><li>China's stock investors and watchers are actively discussing the markets before they reopen.</li><li>China released a stimulus blitz a week before the National Day break, sending downtrodden markets on a tear.</li></ul>China's investors are looking forward to some stock market action after the country's weeklong National Day break.On Monday — a day ahead of the mainland's markets reopening — China's Weibo microblog was abuzz with talking about what the markets may hold after a hot run following Beijing's stimulus blitz on September 24.China's domestic stock markets are dominated by retail traders, who number over 200 million and account for about <a target="_blank" class="" href="https://www.troweprice.com/financial-intermediary/sg/en/thinking/articles/2024/q2/chinas-economy-enters-a-new-cycle-unveiling-fresh-opportunities-apac.html">70% of trading volume.</a>China's stimulus measures include interest rate cuts and 800 billion yuan, or about $114 billion, to support the domestic stock markets. The country's top leadership has also <a target="_blank" class="" href="https://www.businessinsider.com/china-stimulus-fix-economy-xi-jinping-stock-market-2024-10">pledged more stimulus</a> is on the way. The world's second-largest economy is facing multiple challenges including a property crisis, deflation, and high youth unemployment. Mainland China's benchmark <a target="_blank" class="" href="https://markets.businessinsider.com/index/csi-300">CSI 300 Index</a> closed 17% higher year-to-date on September 31 before the weeklong break — a stark contrast to its <a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/china-stock-market-meltdown-brutal-year-explainer-whats-happening-2024-1">meltdown</a> and lackluster performance for much of the year.Hong Kong's Hang Seng Index closed 1.6% higher on Monday. It's up about 35% year-to-date.Trending topics on Weibo included <a target="_blank" class="" href="https://s.weibo.com/weibo?q=%23%E6%B8%AF%E8%82%A1%23&amp;t=31">#Hong Kong stocks,</a> <a target="_blank" class="" href="https://s.weibo.com/weibo?q=%23%E6%9C%AC%E8%BD%AE%E7%89%9B%E5%B8%82%E8%83%BD%E6%8C%81%E7%BB%AD%E5%A4%9A%E4%B9%85%23&amp;t=31">#How long this bull market can run,</a> and <a target="_blank" class="" href="https://s.weibo.com/weibo?q=%23%E8%8A%82%E5%90%8EA%E8%82%A1%E5%BC%80%E5%B8%82%E5%B0%86%E6%80%8E%E4%B9%88%E8%B5%B0%23&amp;t=31">#How A-shares will perform after the holiday.</a> A-shares are stocks of Chinese companies listed on the Shanghai and Shenzhen stock exchanges."I hope the rally can hold for a bit longer, so that I can at least get my initial investment back," wrote one <a target="_blank" class="" href="https://weibo.com/1988800805/OAq5ncUko">Weibo user.</a> The CSI 300 index was down 45% from a 2021 peak until the pivotal announcement in late September.There was also a trending hashtag discussing <a target="_blank" class="" href="https://s.weibo.com/weibo?q=%23%E8%82%A1%E6%B0%91%E6%8B%85%E5%BF%A7A%E8%82%A1%E5%BC%80%E7%9B%98%E7%AC%AC%E4%B8%80%E5%A4%A9%E4%B9%B0%E4%B8%8D%E5%88%B0%23&amp;t=31">those who fear</a> they will not be able to buy A-shares on Tuesday. Before the weeklong break, some brokers and traders reported <a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/china-stock-market-rally-economy-stimulus-liqudity-overwhelm-system-2024-9?">delays on the Shanghai Stock Exchange</a> as systems were so overwhelmed by enthusiastic investors and market watchers.Despite the market rally, skeptics about China's economic outlook and markets abound — and Weibo, too, isn't short of naysayers."I don't feel reassured now that the topic is trending," said a Weibo user in a <a target="_blank" class="" href="https://s.weibo.com/weibo?q=%23%E6%9C%AC%E8%BD%AE%E7%89%9B%E5%B8%82%E8%83%BD%E6%8C%81%E7%BB%AD%E5%A4%9A%E4%B9%85%23&amp;t=31">thread</a> discussing the likely duration of the bull market that garnered nearly 700 likes in half an hour."An expert said this is not a bull market, but bullshit," wrote a second user."What is the current economic situation in China? Are you all blind? Can't you see it?" asked a third user commenting on <a target="_blank" class="" href="https://weibo.com/1646051850/OAqbWwUIg">another post</a> discussing the market rally.However, given the extent to which China's stocks have sold down before Beijing's stimulus announcement, there may be more upside to come.Goldman Sachs, for one, has upgraded China's stocks to overweight and is forecasting another 15% to 20% upside to Chinese shares.Beijing's "coordinated forceful policy announcements" amid "an oversold, undervalued, and under-positioned market backdrop" are key factors in their reasoning, wrote the bank's analysts wrote in a note published on Saturday.There could also be earnings growth potential for companies should the economy respond positively to Beijing's coordinated stimulus, they wrote."Together, these announcements constitute a more substantial quantum of policy stimulus that contrasts with the sporadic and modest easing measures over the past few years," they wrote, even as they warned that China's macroeconomic challenges remain serious.

China's retail investors are eyeing the stock market reopening after a weeklong break

<ul class="summary-list"><li>Stocks rose on Wednesday after traders took in a handful of strong corporate earnings reports.</li><li>Morgan Stanley and United Airlines beat estimates, sending shares up 7% and 14% respectively.</li></ul>US stocks rose on Wednesday as traders took in strong earnings results to bounce back from a sell-off in the chip sector in the previous session. Major averages ended with a gain, and the Dow Jones Industrial Average climbed more than 300 points to close at a record high. Morgan Stanley beat estimates for the third quarter, sending shares up almost 7%. United Airlines also surpassed estimates for the last reporting period, causing shares to pop over 12% by the end of the day.Chip stocks traded mixed, struggling to fully recover after a sell-off in the sector on Tuesday. <a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/chipmakers-tumble-asml-guidance-semiconductor-nvidia-chip-growth-2024-10">ASML cut its sales guidance for 2025</a>, sparking worries about the demand outlook for AI-enabling chips. TSMC and Advanced Micro Devices traded slightly lower. Investors have their eye on TSMC in particular, which is s<a target="_blank" class="" href="https://www.businessinsider.com/tsmc-stock-price-q3-earnings-chip-stocks-asml-nvidia-amd-2024-10">et to report earnings early Thursday</a>."The focus will remain on chipmakers after the sector was hit on the back of a profit warning from Dutch chip equipment maker ASML and reports the US was capping sales of advanced AI chips from American companies such as Nvidia on a country-specific basis," Fawad Razaqzada, an analyst at Forex.com, said in a statement. "Traders will be wondering whether Tuesday marked a change in the trend. Is it time to start shorting the markets, or will the dip buyers once again come to the rescue?"Stocks, though, are on par for another strong quarter of earnings results. The S&amp;P 500 is on track to report <a target="_blank" class="" href="https://insight.factset.com/sp-500-will-likely-report-earnings-growth-above-7-for-q3">7% year-per-year earnings growth</a> for the third quarter, according to estimates from FactSet.Here's where US indexes stood at the 4:00 p.m. closing bell on Wednesday:<ul><li><a target="_blank" href="https://markets.businessinsider.com/index/s&amp;p_500?utm_source=markets&amp;utm_medium=ingest%3Futm_source%3Dmarkets&amp;utm_medium=ingest&amp;utm_medium=ingest&amp;utm_source=markets">S&amp;P 500</a>: 5,842.46, up 0.47% </li><li><a target="_blank" href="https://markets.businessinsider.com/index/dow_jones?utm_source=markets&amp;utm_medium=ingest%3Futm_source%3Dmarkets&amp;utm_medium=ingest&amp;utm_medium=ingest&amp;utm_source=markets">Dow Jones Industrial Average</a>: 43,077.70 up 0.79% (+337.28 points)</li><li><a target="_blank" href="https://markets.businessinsider.com/index/nasdaq_composite?utm_source=markets&amp;utm_medium=ingest%3Futm_source%3Dmarkets&amp;utm_medium=ingest&amp;utm_medium=ingest&amp;utm_source=markets">Nasdaq composite</a>: 18,367.08, up 0.28% </li></ul>Here's what else is going on:<ul><li><a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/stock-market-crash-sp500-prediction-bubble-overvalued-stifel-outlook-2024-10?_gl=1*1mejb5z*_ga*OTI1ODIwOTQ2LjE3MTYzOTg2NjU.*_ga_E21CV80ZCZ*MTcyOTA4OTkyMS40NTUuMS4xNzI5MDk1MjA3LjE2LjAuMA..">The stock market is in a "mania" that could set the stage for a 26% drop</a> in 2025, Stifel says.</li><li><a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/david-einhorn-warren-stock-stock-market-valuation-tech-cash-sales-2024-10">Billionaire David Einhorn says Warren Buffett's recent stock sales show just how overvalued</a> the market is.</li><li><a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/stock-market-outlook-sell-signal-triggers-froth-investor-sentiment-soars-2024-10">The stock market has flashed a sell signal not seen since February 2021</a>, according to Bank of America.</li><li><a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/stock-market-outlook-sp500-targets-bull-market-goldman-ubs-bmo-2024-10">Top Wall Street analysts are boosting their forecasts</a> for the stock market as the bull market continues.</li></ul>In commodities, bonds, and crypto:<ul><li><a target="_blank" href="https://markets.businessinsider.com/commodities/oil-price">West Texas Intermediate</a> crude oil edged lower to $70.50 a barrel. <a target="_blank" href="https://markets.businessinsider.com/commodities/oil-price">Brent crude</a>, the international benchmark, was slightly higher at $74.32 a barrel.</li><li><a target="_blank" href="https://markets.businessinsider.com/commodities/gold-price">Gold</a> rose 0.5% to $2,691 an ounce.</li><li>The 10-year Treasury yield slipped two basis points to 4.014%.</li><li><a target="_blank" href="https://markets.businessinsider.com/currencies/btc-usd">Bitcoin</a> was up 1.13% to $67,702.</li></ul>

Stock market today: Dow jumps 337 points to fresh record as US stocks rise on solid earnings

<ul class="summary-list"><li>Rob Arnott warns of a potential bear market in the next couple of years.</li><li>He said comparisons to the dot-com peak in 2000 are fair.</li></ul><a target="_blank" class="" href="https://www.businessinsider.com/where-to-invest-inflation-recession-stock-market-trades-rob-arnott-2024-5">Rob Arnott</a> says he's usually early when calling a bull market top. So when he says the current market environment reminds him a lot of the dot-com bubble peak, it doesn't mean he thinks a significant pullback is imminent.It does mean, however, that he sees a big decline somewhere not too far off."This looks and feels like the year 2000 to me," Arnott told Business Insider on November 11. "Are we likely to see a bear market in the next two years for large-cap growth? Yeah."Arnott's comments came as the S&amp;P 500 — a large-cap index dominated by mega-cap growth firms known as the Magnificent Seven — jumped 5% within a week following the election of Donald Trump, closing above 6,000 for the first time. The explosive move was the latest advance in a torrid 66% rally that's lasted more than two years.A robust economy and excitement about artificial intelligence and business-friendly policies from the future Trump administration have propelled the market to all-time highs. But Arnott believes AI optimism, which has driven the lion's share of the rally, is already fully priced in.Those high expectations are visible in the S&amp;P 500's Shiller cyclically adjusted price-to-earnings ratio, Arnott said, which sits at levels that rival the dot-com bubble peak. At 37 times earnings, just below the late-2021 peak of 38, before the market fell by 25%, and the 2000 peak of 43, right in front of a 50% loss.<div type="image" title="s&amp;p 500 cape ratio" height="943" width="1242" msid="115360049" hostid="261" sizebytes="38380"></div>The problem with high expectations is that the results eventually have to live up to them. But a couple of factors threaten the market's bullish narrative, he said.One is that companies like Nvidia will be able to keep their 90% market share as competition rises and the cost of chips eventually comes down."If you posed the question five years ago, the presumption would have been that Intel would be the dominant player," Arnott said. "Well, Intel is teetering perilously close to irrelevance, and Nvidia wasn't on anyone's radar screen five years ago. So disruptors get disrupted."There's also the possibility that the pace of AI adoption is slower than expected, Arnott said. He said internet use in 2005 wasn't all that different from its use in 2000, but that today, things have completely changed. A longer timeline may play out for AI as well, he said.Arnott joins a long list of strategists and money managers who have recently expressed lackluster outlooks about forward return prospects, given the state of stock valuations.Goldman Sachs' Chief US Equity Strategist <a target="_blank" class="" href="https://www.businessinsider.com/sp500-outlook-next-decade-forecast-david-kostin-goldman-stocks-strategist-2024-11">David Kostin</a> made waves in October when he said the S&amp;P 500 would deliver 3% annualized returns over the next 10 years. In an interview with Business Insider, he also made a similar point to Arnott in that the valuations of some of the market's most-loved names are much higher than the rest of the pack, similar to what happened during the dot-com bubble.<div type="image" title="Goldman Sachs chart showing 10 largest stocks trading at 31x P/E compared to 19x for the rest of the market." height="730" width="882" msid="115360050" hostid="261" sizebytes="38416"></div>Bank of America's Global Chief Equity Strategist Michael Hartnett said in a client note on Friday that US stocks have outperformed relative to equities in the rest of the world to the most extreme degree in at least 75 years. Relative performance levels have reached elevated levels in prior asset bubbles like the so-called Nifty Fifty and dot-com peaks.<div type="image" title="us stocks vs rest of the world" height="669" width="1154" msid="115360043" hostid="261" sizebytes="39832"></div>While Hartnett said it's difficult to call the top in investor sentiment, the strategist known for his short-winded writing simply said: "sell hubris, buy humiliation."Like both Arnott and Hartnett say, it's hard to call the top. As short-term interest rates fall and the market-friendly policies of the Trump administration on the way, the rally could continue for months or years.But history shows there will likely eventually be cheaper times to buy into the market, said David Einhorn, founder of hedge fund Greenlight Capital, at CNBC's Delivering Alpha conference on Wednesday."This is a really, really, really pricey environment, but it doesn't necessarily make me bearish. Asset prices can trade at the wrong price and they can trade at the wrong price for a long period of time," Einhorn said. "I just observe that it's a really expensive market that if you buy and hold for a very long period of time, I doubt that this is a great — you'll look back and say this was a great entry point of all of the entry points that you could have."The way Arnott sees things, that better entry point could come in the next couple of years.

'This looks and feels like the year 2000 to me': Investing legend Rob Arnott says the stock market's record rally reminds him of the dot-com bubble peak

<ul class="summary-list"><li>Long-dated Treasury yields soared after the presidential debate last Thursday.</li><li>The moves indicate the bond market reacting to a higher probability of a Trump presidency, Ed Yardeni said.</li></ul>The world's biggest financial market is swaying after Thursday's presidential debate, as the odds of a second Donald Trump presidency jumped among forecasters.US Treasury yields surged and prices dropped following the first debate, indicating investors are starting to price in a Trump victory in November, market veteran Ed Yardeni wrote in a note."The 10-year Treasury yield rose from 4.29% on Thursday afternoon to 4.48% today, the highest level since May 31," he wrote on Monday."That was in spite of the lowest y/y print for the personal consumption expenditures deflator since March 2021 on Friday," he added, referring to the Federal Reserve's preferred inflation gauge, which showed pricing pressures easing last month.Yields are rising chiefly on the long-dated end of the curve. It's a sign that investors' long-term expectations for the economy may have shifted, Yardeni said, even as the interest rate outlook remains stable.At the same time, climbing yields on Treasury Inflation Protection Securities indicate upside in real yields. 10-year TIPS gained 14 basis points since Thursday, he said."We think markets see a potential mix of stronger economic growth, higher inflation, and more Treasury supply in the event Trump wins," Yardeni explained.The spike in yields could partially be explained by deficit concerns, as economics experts say a second Trump presidency would likely widen the federal deficit by up to $5 trillion through the coming decade, Yardeni added.The Republican candidate has pledged to extend individual and estate tax cuts he introduced in his first term, which are set to expire next year.As bond traders are sensitive to high levels of government debt, unchecked deficit spending could prompt market "vigilantes" to stop buying US bonds and <a target="_blank" href="https://markets.businessinsider.com/news/bonds/us-debt-bond-market-vigilantes-deficit-government-spending-ed-yardeni-2023-9">send yields soaring</a>, Yardeni has repeatedly warned."Perhaps the bond market is overreacting since much can change between now and November's presidential election. But that's not to say that other financial markets won't follow suit, pricing in the rising probability of a Trump win as well," Yardeni said.After the debate, odds that Trump would be elected in November grew to 57% from 52%, according to cited data from PredictIt. Biden's odds fell to 31%.

The bond market is acting like Trump will win

<ul><li>JPMorgan's top quant guru is taking a victory lap as the S&amp;P 500 nears his 4,200 price target.</li><li>But JPMorgan's Marko Kolanovic doesn't think the pain is over yet for stock market investors.</li><li>"History doesn't repeat, but it rhymes with 2008," he said of his stock market outlook.</li></ul>The stock market has already sold off sharply but could still be in for a world of pain if the expectations of <a href="https://markets.businessinsider.com/stocks/jpm-stock">JPMorgan's</a> top quant guru materialize.JPMorgan chief global markets strategist Marko Kolanovic, along with Bram Kaplan and Dubravko Lakos-Bujas, said in a Wednesday note that even as the <a href="https://markets.businessinsider.com/index/s&amp;p_500">S&amp;P 500</a> approaches <a href="https://markets.businessinsider.com/news/stocks/stock-market-outlook-consumers-spend-down-excess-pandemic-savings-2023-8">their 4,200 price target</a>, there is still more downside risk than there is upside."Despite the strong early-summer rally, our framework continues to point to challenging macro fundamentals and headwinds for risky assets," Kolanovic said. "History doesn't repeat, but it rhymes with 2008."The headwinds that continue to challenge stock prices include still-elevated market valuations, overly bullish investor positioning, and <a href="https://www.businessinsider.com/fed-rate-hike-july-inflation-powell-recession-federal-reserve-2023-7">ongoing tightening in the form of higher interest rates</a> and the Federal Reserve's balance-sheet reduction plans.It also doesn't help that much of the gains in the stock market this year <a href="https://markets.businessinsider.com/news/stocks/sp500-spx-magnificent-7-tech-stocks-artificial-intelligence-nvda-tsla-2023-9">have been concentrated in a handful of mega-cap tech stocks</a>, while massive fiscal spending in 2021 and 2022 is beginning to moderate and consumers' cash savings are being depleted, according to Kolanovic. All of this informs his bearish view that investors should favor cash, which is currently yielding about 5%, rather than stocks in the medium term."This will likely remain the case as long as interest rates remain in deeply restrictive territory and the overhang of geopolitical risks persists," Kolanovic said.The Fed has hiked rates to just over 5%, and Minneapolis Fed President Neel Kashkari warned this week that another 25-basis-point hike is more likely than not. This interest rate shock is bound to have a negative impact on the economy, no matter how long the lag time is. "The current change in interest rates is about 5 times larger than the 2002-2008 increase," Kolanovic said, pointing to the rise in consumer loan interest rates. And this has led to a marked rise in delinquencies for credit cards, auto loans, and Chapter 11 bankruptcy filings.<div type="image" title="Delinquencies rising" height="414" width="678" msid="103998861" hostid="261" sizebytes="25812"></div>Mortgages have been so far able to avoid the rise in delinquencies because most consumers were able to lock in very low interest rates, Kolanovic highlighted. But that's not enough to prevent continued downside for risk assets. "The impact on consumers is negative, and there is nothing to reverse this trend unless interest rates are cut," Kolanovic said. "In addition, interest rate increases are disproportionately impacting small businesses and commercial real estate." And don't expect <a href="https://markets.businessinsider.com/news/stocks/stock-market-outlook-ai-trade-corporate-profit-boom-nvidia-nvda-2023-8">the AI boom</a> to save the economy. Kolanovic highlighted that while AI could boost the stock market in a speculative fashion, "that could equally quickly disappear." The similarities between 2008 and today are too strong to ignore, according to Kolanovic, and that should warrant caution from investors. "What we find remarkable is that going into the crisis in 2007, investors were discussing the exact same topics as today: Fed pause, consumer resiliency, soft landing, strong jobs, etc," Kolanovic said.While Kolanovic did not change his 4,200 price target on the S&amp;P 500 and did not offer a forecast of how far the stock market could fall from here, he is sure in no rush to raise it.

The stock market outlook 'rhymes with 2008' as headwinds continue to pile up, JPMorgan's quant guru says

<ul class="summary-list"><li>The job market is in the "yellow" zone as unemployment ticks higher, economist Claudia Sahm said.</li><li>Sahm is the creator of a highly accurate recession indicator that's close to being triggered.</li></ul>The <a target="_blank" class="" href="https://www.businessinsider.com/sahm-rule-recession-indicator-fed-rate-cuts-labor-unemployment-contraction-2024-6">job market is edging closes</a> to conditions typically associated with a downturn, according to the creator of a well-known recession indicator.Claudia Sahm, a former Fed economist, voiced concerns about the state of the job market in an interview with <a target="_blank" href="https://www.youtube.com/watch?v=m-cl_lTR4fg">Fox Business Network</a> on Wednesday.She's the creator of the <a target="_blank" href="https://fred.stlouisfed.org/series/SAHMREALTIME">Sahm Rule</a> — the indicator that says a recession has started when the three-month moving average unemployment rate rises by half a percentage point over the three-month average in the prior 12-month period.The indicator clocked in at 0.43% last month, meaning the unemployment rate is seven basis points away from triggering Sahm's historically accurate recession rule.To be clear, the economy isn't on the cusp of a recession, Sahm said. Hiring remains strong overall, with the US adding a more-than-expected <a target="_blank" class="" href="https://www.businessinsider.com/unemployment-rate-job-growth-june-economic-data-2024-7">206,000 jobs in June</a>, according to the Bureau of Labor Statistics.But hiring conditions are the yellow "yellow" zone, she said, as a big uptick in unemployment could easily push the US into recession territory."Things have cooled off. We should be concerned," Sahm said, later noting that increased immigration and slower-than-expected hiring in the state and the local sector could be contributing to higher unemployment."These things can all be part of good news — we're getting everything back in order and in balance and we can move forward — but…if we have further weakening in demand for workers, we start to see <a target="_blank" class="" href="https://www.businessinsider.com/recession-layoffs-unemployment-job-market-outlook-economy-corporate-bankruptcies-defaults-2024-6">layoff rates move up</a>, we're close enough to the danger zone you're moving into a recession," she added.<a target="_blank" href="https://www.businessinsider.com/recession-covid-recovery-job-market-decline-downturn-bear-calls-labor-2024-5">The jobless rate</a> remains near historic-lows, but has inched steadily higher over the past year. Unemployment rose to 4.1% last month, the highest level recorded since 2021, according to Fed data.Some forecasters have predicted <a target="_blank" class="" href="https://www.businessinsider.com/recession-layoffs-unemployment-job-market-outlook-economy-corporate-bankruptcies-defaults-2024-6">job losses could rise</a> in the coming months. Companies could continue to struggle financially amid high interest rates, which could push the <a target="_blank" class="" href="https://www.businessinsider.com/layoffs-recession-economy-job-market-outlook-fed-interest-rates-debt-2024-3">unemployment rate to 5%</a> by the end of the year, top economist David Rosenberg has predicted.The outlook on recession though still remains mixed. According to <a target="_blank" href="https://www.newyorkfed.org/medialibrary/media/research/capital_markets/Prob_Rec.pdf">New York Fed economists,</a> the economy has a 56% chance of tipping into a downturn by June of next year.

The US job market is close to the 'danger zone,' famed economist Claudia Sahm says

<ul><li>The <keyword id="11898248" type="UNKNOWN" weightage="60" keywordseo="sp-500" source="Orion">S&amp;P 500</keyword> is set to jump beyond 4,800 by year-end as investors overcome a growing wall of worry, Fundstrat said.</li><li>Rising COVID-19 cases in the US and Europe, supply chain disruptions, and tanking consumer confidence represent worries for investors.</li><li>"Even as this wall of worry continues to mount, we believe this resolves in equity upside," Fundstrat said.</li></ul>Investors should expect more <keyword id="11895235" type="UNKNOWN" weightage="60" keywordseo="stock-market" source="Orion">stock market</keyword> gains into year-end even as concerns of rising COVID-19 cases, supply chain disruptions, and weak consumer confidence persists, <a href="https://fsinsight.com/">Fundstrat's</a> Tom Lee said in a Monday note."Base case remains a strong rally into year-end taking the S&amp;P 500 beyond 4,800," Lee said, representing upside potential of at least 2% from current levels.Lee believes the stock market will overcome concerns of rising COVID-19 cases in the US and Europe because hospitalizations remain well below prior peaks, in-part helped by rising vaccinations and the arrival of anti-viral medications from <a href="https://markets.businessinsider.com/stocks/mrk-stock">Merck</a> and <a href="https://markets.businessinsider.com/stocks/pfe-stock">Pfizer</a>.Meanwhile, ongoing supply chain disruptions have hurt certain equity sectors and added to concerns of rising inflation, but signs suggest that the bottleneck of ships at ports <a href="https://markets.businessinsider.com/news/stocks/stock-market-2022-outlook-sp500-hit-5000-easing-supply-chain-2021-11">is beginning to ease</a>, lowering the risk of intensifying inflation, according to the note. Perhaps the biggest disconnect between the strengthening economy and record stock market highs is <a href="https://markets.businessinsider.com/news/stocks/consumer-sentiment-10-year-low-stocks-housing-economy-hit-records-2021-11">the sizable drop in consumer confidence</a>, which hit its lowest level since 2011 this month. "Falling consumer confidence poses near-term risk for consumer spending, and potentially highlights a larger issue for the economy," Lee said, adding that rising inflation and political views are the main reasons behind the marked drop.But low levels of consumer confidence have historically been a great sign for the forward returns of stocks, signalling that there may be more upside ahead for the market.Whenever consumer confidence falls below 74, consumer discretionary stocks return 21% to 30% over the next 12 months with a win-ratio of 88% or higher, according to Lee. Consumer confidence fell to 66.8 in the preliminary November report."Even as this wall of worry continues to mount, we believe this resolves in equity upside," Lee concluded.

Investors will overcome a rising wall of worry to push the S&P 500 beyond 4,800 by year-end, Fundstrat says

<ul><li>A top Wall Street analyst offered an upbeat <keyword id="11899352" type="UNKNOWN" weightage="60" keywordseo="stock-market-outlook" source="Orion">stock market outlook</keyword> for the rest of 2021 and early 2022 after a bout of steep selling.</li><li>JPMorgan quant guru Marko Kolanovic based this prediction on indications that short sellers will get squeezed soon.</li><li>The macroeconomic outlook remains strong despite the Omicron variant surge as coronavirus deaths have been muted. </li><li><a href="https://newsletter.businessinsider.com/join/4np/10-things-opening-bell?utm_medium=ingest%3Futm_source%3Dmarkets&amp;utm_medium=ingest%3Futm_source%3Dmarkets&amp;utm_medium=ingest&amp;utm_medium=ingest&amp;utm_source=markets&amp;utm_source=markets" target="_blank" rel="noopener">Sign up here for our daily newsletter, 10 Things Before the Opening Bell.</a></li></ul>Stocks are poised for a year-end and early-2022 rally as the recent sell-off appears overdone and hints at moves by short sellers who will soon get squeezed, according to Marko Kolanovic, the chief global <keyword id="11893875" type="UNKNOWN" weightage="100" keywordseo="markets" source="Orion">markets</keyword> strategist at JPMorgan.In a note published Friday laying out his stock market outlook, the quant guru said US stocks are 28% off their highs. But the overall market, as measured by the Russell 3000, is still up about 22% for the year."Such a divergence is unknown to us, and indicates a historically unprecedented overshoot in selling smaller, more volatile, typically value and cyclical stocks in the last 4 weeks," Kolanovic wrote.Headlines attribute the market decline to the Federal Reserve's more hawkish stance and the surge in Omicron coronavirus cases. Actual selling, however, is due to de-risking and shorting from hedge funds, he said.But the conditions needed for a successful short-selling effort don't exist, meaning "this market episode may end up in a <keyword id="11918411" type="UNKNOWN" weightage="60" keywordseo="short-squeeze" source="Orion">short squeeze</keyword> and cyclical rally into year-end and January," Kolanovic predicted.He pointed out volatility-targeting and risk-parity funds are adding exposure, with a strong value-growth rotation also underway. Overall, the situation from a technical or fundamental perspective doesn't resemble the massive stock market rout seen in the fourth quarter of 2018, he added.Still, Kolanovic said "there is aggressive shorting, likely in a hope of declines in retail equity position and cryptocurrency holdings – while in fact both of these markets and retail investors have shown resilience in the past weeks."Those shorts now looked to get squeezed. Large short positions will likely need to be closed before January, when he expects a rally in small-cap, value and cyclical stocks. Plus, the closing of short positions may have a bigger impact than the opening of them, as liquidity conditions dry up.Meanwhile, the Omicron variant appears less threatening to the stock market outlook. Even though vaccinated people are more vulnerable to infections, fatality rates are not spiking. In fact, in countries with a surge in cases like South Africa and the UK, deaths have been declining in recent weeks, according to the note. That tracks with public health agencies that have said Omicron is more transmissible than the Delta variant but produces milder symptoms.Kolanovic's bullish note follows another one he released on Wednesday that outlined three reasons behind his expectation that <a href="https://markets.businessinsider.com/news/stocks/stock-market-outlook-2022-investors-expect-more-gains-ahead-inflation-2021-12">equities will continue to rise next year</a>."We continue to see upside in equities on better than expected earnings growth, China/emerging market backdrop improving, and normalizing consumer spending habits," he explained, adding that US corporations could post above-consensus earnings growth of 14%.

Stocks will roar higher into year-end and January as an 'overshoot' in selling leads to a short squeeze, JPMorgan's quant guru says

<ul class="summary-list"><li>US stocks fell after a weak July jobs report raised concerns of a slowing economy.</li><li>The US added 114,000 jobs in July, below estimates of 175,000, and the unemployment rate unexpectedly rose to 4.3%.</li></ul>US stocks dropped on Friday after <a target="_blank" class="" href="https://www.businessinsider.com/unemployment-rate-job-growth-july-labor-market-economic-data-2024-7">a weak July jobs report</a> raised concerns of a slowing economy and cast a shadow over the prospects of a soft landing.The US economy added 114,000 jobs in July, well below economist estimates of 175,000. The unemployment rate also unexpectedly <a target="_blank" class="" href="https://www.businessinsider.com/unemployment-rate-job-growth-july-labor-market-economic-data-2024-7">rose to 4.3% from 4.1%,</a> its highest level since October 2021.The 10-Year US Treasury yield plunged nearly 20 basis points to a 2024 low of 3.80% immediately after the jobs report was released."The sharp slowdown in payrolls in July and sharper rise in the unemployment rate makes a September interest rate cut inevitable and will increase speculation that the Fed will kick off its loosening cycle with a 50 bp cut or even an intra-meeting move," economist Stephen Brown at Capital Economics said.Odds of a 50-basis point interest rate cut at the Federal Reserve's September FOMC meeting soared to 62% on Friday, a near triple from its 22% reading on Thursday, according to the CME Fed Watch Tool. Also pushing stocks lower were weak earnings reports and guidance from Intel and Amazon. Intel stock plunged 25% after it cut its dividend and laid off 15% of its workforce, and <a target="_blank" class="" href="https://www.businessinsider.com/amazon-stock-amzn-quarterly-earnings-call-report-live-updates-2024-7">Amazon stock dropped about 10% </a>after it offer a tepid third-quarter sales outlook.Here's where US indexes stood shortly after the 9:30 a.m. opening bell on Friday:<ul><li><a target="_blank" href="https://markets.businessinsider.com/index/s&amp;p_500?utm_source=markets&amp;utm_medium=ingest%3Futm_source%3Dmarkets&amp;utm_medium=ingest&amp;utm_medium=ingest&amp;utm_source=markets">S&amp;P 500</a>: 5,378.02, down 1.3%</li><li><a target="_blank" href="https://markets.businessinsider.com/index/dow_jones?utm_source=markets&amp;utm_medium=ingest%3Futm_source%3Dmarkets&amp;utm_medium=ingest&amp;utm_medium=ingest&amp;utm_source=markets">Dow Jones Industrial Average</a>: 5,378.02, down 1.1% (440 points)</li><li><a target="_blank" href="https://markets.businessinsider.com/index/nasdaq_composite?utm_source=markets&amp;utm_medium=ingest%3Futm_source%3Dmarkets&amp;utm_medium=ingest&amp;utm_medium=ingest&amp;utm_source=markets">Nasdaq composite</a>: 16,854.55, down 2%</li></ul>Here's what else is going on today:<ul><li><a target="_blank" class="" href="https://www.businessinsider.com/us-economy-slowdown-signal-flashed-interest-rate-cuts-accelerate-fed-2024-8">The Federal Reserve will have to cut interest rates more than expected this year, according to ING Economics.</a></li><li><a target="_blank" class="" href="https://www.businessinsider.com/mortgage-rates-housing-market-assumable-mortgage-loan-buying-a-home-2024-8">Homebuyers are flocking to assumable mortgages that offer lower interest rates, but they're hard to get.</a></li><li><a target="_blank" class="" href="https://www.businessinsider.com/reshoring-trade-investors-safe-haven-bet-regardless-of-election-winner-2024-8">The rising trend of reshoring and nearshoring will benefit these ten stocks.</a></li></ul>In commodities, bonds, and crypto:<ul><li><a target="_blank" href="https://markets.businessinsider.com/commodities/oil-price">West Texas Intermediate</a> crude oil fell 2.03% to $74.76 a barrel. <a target="_blank" href="https://markets.businessinsider.com/commodities/oil-price">Brent crude</a>, the international benchmark, declined 1.72% to $78.15 a barrel.</li><li><a target="_blank" href="https://markets.businessinsider.com/commodities/gold-price">Gold</a> was higher by 1.04% to $2,506.60 per ounce.</li><li>The 10-year Treasury yield dropped 11 basis points to 3.87%.</li><li><a target="_blank" href="https://markets.businessinsider.com/currencies/btc-usd">Bitcoin</a> was lower by 0.81% to $64,771.</li></ul>

Stock market today: US indexes extend plunge after surprise unemployment spike and jobs miss

<ul class="summary-list"><li>The <keyword id="11898248" type="UNKNOWN" weightage="60" keywordseo="sp-500" source="Orion">S&amp;P 500</keyword>'s 27% surge through 2021 thrashed nearly every <keyword id="11895526" type="UNKNOWN" weightage="60" keywordseo="wall-street" source="Orion">Wall Street</keyword> forecast from last December.</li><li>The market ripped higher as vaccine rollouts, reopening, and new stimulus boosted optimism.</li></ul>Even the most bullish analysts didn't expect the stock market to soar as high as it did throughout 2021.The <a href="https://markets.businessinsider.com/index/s&amp;p_500">S&amp;P 500</a> ended the year with a mammoth 27.2% gain after closing at 4,766.18 Friday afternoon. The rally marks a third straight year of double-digit growth for the benchmark and trounces its 16.3% jump from 2020. The index also enjoyed 70 record closes as investors cheered on the economic recovery.That overwhelming optimism surpassed all of Wall Street's full-year projections from 12 months ago. JPMorgan held the most bullish outlook going into 2021, with its S&amp;P 500 target of 4,400, implying a 17% climb. Goldman Sachs and UBS followed with projections of 4,300 and 4,100, respectively.Bank of America, Societe Generale, and Citigroup shared the Street's most bearish target of 3,800 at the end of 2020. Had the projection rung true, the S&amp;P 500 would've only crept 1.2% higher.To be sure, the banks repeatedly lifted their targets as stocks ripped higher. The aforementioned estimates were from December 2020, and several developments boosted sentiments in the following months.Vaccine approvals and rollouts in early 2021 served as a major step toward fighting the coronavirus and opened the door for reopening. The reversal of lockdown measures led many to return to work and unleashed a wave of pent-up demand. After a year of restrictions, layoffs, and closed doors, the <keyword id="11893570" type="UNKNOWN" weightage="100" keywordseo="economy" source="Orion">economy</keyword> finally took strides toward a new normal.The US also got more stimulus support early in the year, albeit not as much as it enjoyed in 2020. Democrats passed a $1.9 trillion stimulus package in March, giving the economy more fiscal aid just as vaccines started hitting arms. The plan included $1,400 payments, an extension to enhanced unemployment benefits, and an expansion to the child tax credit. The months following the plan's passage saw spending surge as Americans put the direct aid to use.Investing wasn't all smooth sailing over the last 12 months. Daily COVID cases hit then-record highs in January as the virus's winter resurgence crept into the new year. The Delta variant drove cases higher again in July and August, and the Omicron variant is now powering the sharpest ever rebound in cases. Though the US never returned to the strict lockdowns seen in 2020, each wave has dragged on consumer confidence and slowed the pace of the economic recovery.Markets also contended with the Federal Reserve pulling back on its policy support. In November, the central bank announced it would start reining in its emergency purchases of Treasurys and mortgage-backed securities, signaling a pivot from providing aid to fighting historic inflation. The Fed doubled the pace of its tapering in December, and officials' projections suggest the central bank will lift interest rates three times in 2022.Omicron's spread and the Fed's pullback have left banks with wildly different expectations for how stocks will fare in the year ahead. Firms' S&amp;P 500 targets boast the second-largest gap in a decade, according to Bloomberg data. Analysts at Morgan Stanley and Bank of America expect the benchmark to close lower at the end of 2022, with the banks touting projections of 4,400 and 4,600, respectively.If Morgan Stanley's target rings true, the index's annual slump of 7.7% will be the largest since the financial crisis.Others expect the party to rage on into 2023. Oppenheimer held the highest 2022 target of 5,330 as of December 13, while BMO, Credit Suisse, and Goldman Sachs followed with estimates of at least 5,100.The market's future remains highly uncertain as COVID spreads rapidly and the economy remains far from fully healed. For now, investors can celebrate the target-defying gains they enjoyed over the past year.

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