Can anyone hear that? Phil Rosen here — I'm talking about all the economic warning bells that top commentators keep ringing.
But, as it turns out, individual investors aren't trading like they expect a recession.
Let's break down what that means.
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1. Retail traders aren't acting like a recession is coming. The everyday investor hasn't moved to position their portfolio for an economic downturn, according to Bank of America analysts.
The bank's fund flows showed that people are consistently buying riskier stocks in sectors like tech over defensive shares in areas like healthcare and financials, despite a flurry of economic warnings from top commentators.
"Clients don't view recession as imminent: cyclical sector flows have continued to lead defensive sector flows since last July," BofA said.
It's possible that this behavior reflects that consumers remain on solid financial footing, having boosted savings and paid debts during the pandemic.
Luckily for retail traders, the head of investing at iShares said the Fed is going to be able to stick the landing and avoid pushing the US into a recession after all.
Policy will tame inflation and the economy will avoid shrinkage — but investors face an environment of low returns, the exec said. Aggressive monetary tightening could mean more market volatility, regardless of a recession.
"Rising rates and slowing growth are not a supportive environment for investors, so it is unlikely that equity or fixed income returns will match the stimulus-fueled returns of the past two years," the investing chief said.
2. US stock futures fell early Wednesday, as rising bond yields and oil prices spooked investors. Here are the latest market moves.
3. On the docket: Five Below, Lovesac, and Campbell Soup, all reporting.
4. Bank of America recommended buying these battered tech stocks that will turn strong cash flow into an upside. And returns will keep flowing, analysts said, even as the sector loses steam after a decade of dominance. See the list of 16 companies here.
5. High-profile cybercrime and NFT swindles haven't helped this year's crypto bear market. Digital attacks — including a $625 million hack by a North Korean actor — have taken place in a broader bear market and have contributed to investors fleeing the space. Three experts broke down the current digital asset landscape for Insider.
6. Target's profit warnings over the last month paint a grim portrait for retail stocks. The consumer discretionary sector has already plunged 25% in 2022 — but there's likely more pain ahead as earnings-growth estimates could stumble.
7. Russian oil production could drop 18% by 2023. Once Europe imposes a proposed ban on all Russian seaborne crude imports, Russia's output could fall by almost one-fifth, according to the EIA. That would wipe out 18 years of production gains and would risk driving crude prices higher than expected.
8. Warnings from Target, Apple, and Microsoft are the start of a pattern that's going to spread, Morgan Stanley warned. Companies are going to cut their guidance in the next month or so, leading to more pain for stocks. The firm said investors should keep an eye out for another market downturn this summer.
9. It's harder than ever to purchase or invest in real estate. But these startups are touting "fractional ownership" of properties as a way they believe they can help. Here's how you can buy vacation homes from $68,000 or become a landlord for as little as $5 with these 8 companies.
10. Millennials who aren't homeowners already are losing faith they'll ever buy a house. Buyers face higher interest rates, which makes homes more costly, as well as current owners less likely to move as the market turns. Now, the number of people who believe now is a good time to buy a house is slipping.
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Curated by Phil Rosen in New York. (Feedback or tips? Email [email protected] or tweet @philrosenn.) Edited by Hallam Bullock (tweet @hallam_bullock) in London.