I usually love Tuesdays — but today is shaking out to be bumpier than usual. Markets look tumultuous, crypto is still suffering after the recent plunge, and we had another bear market sighting yesterday.
All this — and I just realized I brewed decaf this morning.
I'm Phil Rosen, and today we're breaking down why some analysts aren't ready to buy the dip (yet).
You can listen to me talk about the crypto downturn on The Refresh from Insider.
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1. Yesterday's sell-off shouldn't be a sign to buy the dip in stocks, as technical analysts say they still have room to fall. The S&P 500's move on Monday pushed the benchmark index 20% off its previous highs, putting it firmly in bear market territory.
But the S&P 500 is primed for as much as 8% more downside after it endured a "major breakdown," Fairlead's Katie Stockton explained.
"Momentum gauges point lower, and short-term oversold conditions are not widespread," Stockton said.
Stockton isn't alone in her forecast. Bank of America's Stephen Suttmeier echoed her bearishness, pointing out that the S&P 500 failed to clear certain resistance levels.
"The inability to clear first resistances and the lack of bullish follow-through signals from the indicators increase the risk for lower lows toward the next supports at 3500," Suttmeier noted.
Recession fears are spooking investors more and more. But even after Monday's deep losses, BlackRock analysts broke down three reasons why it isn't time to buy the dip just yet:
- Margin pressures are a risk to earnings, so stocks may slide further.
- The Fed will hike rates too high.
- Valuations aren't much cheaper given rising interest rates.
In other news:
2. US stock futures rise early Tuesday, after entering bear market territory yesterday. Meanwhile, the US dollar hovered at two-decade highs ahead of the Federal Reserve's rate decision due on Wednesday. Here are the latest market moves.
3. On deck today: Monster Beverage Corp, Square, and more all reporting. Plus, the two-day Federal Open Market Committee meeting begins today.
4. History says to prepare for a "fast and furious" market rally, according to the top US equity strategist at RBC Capital Markets. Stocks may be bottoming, according to Lori Calvasina. These four types of stocks are set to benefit the most — including one overlooked group that's the cheapest it's been since the tech bubble.
5. The majority of leading economists told the Financial Times that the US will tumble into a recession. Thanks to soaring inflation, the Fed will be forced to hike rates so dramatically that it'll trigger a recession. The poll comes after US inflation soared to 8.6% in May, outstripping expectations and putting more pressure on the central bank.
6. Bitcoin could "easily" recover to hit $100,000 over the next 24 months. That's what Anthony Scaramucci says, as he thinks tech developments and macroeconomic improvements will fuel a rally. Plus, a Bank of America survey found that 91% of respondents said they plan on buying digital assets in the next six months.
7. "Rich Dad, Poor Dad" author Robert Kiyosaki bizarrely touted tuna as the best investment today. His rationale? That gold, silver, and bitcoin aren't edible. Get the full scoop on the investing author's take.
8. This real estate investor earned $1.5 million in 2021. Investor Todd Baldwin explained his strategy and why he doesn't buy old buildings. He shared why he nevers buys a house with an HOA — and what he looks for when he seeks out property.
9. Investors should buy these underpriced and high-returning stocks. Evercore analysts said this batch of companies are trading at unusually low valuations, and their dividend and free cash returns make them appealing. See the list of 23 stocks here.
10. Bitcoin tumbled to an 18-month low and cryptocurrencies have plunged across the board. The world's most popular crypto is now trading roughly 65% below last year's record high of $69,000 as inflation shock has sent investors out of riskier assets.
Keep up with the latest markets news throughout your day by checking out The Refresh from Insider, a dynamic audio news brief from the Insider newsroom. Listen here.
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.