What shape might the next recession take?

Pandemic era rally is now a distant memory for some stocks

Now, it feels like the rally never happened. Bank shares have fallen below the level they were in February 2020, erasing all of their gains from the pandemic-era market boom.
It’s not just banks. The streak of post-lockdown wins for cloud computing companies has been completely wiped out. The same goes for payment companies like Parents Square to forbid (mint) And PayPal (PYPL). Netflix (NFLX) Stocks are at their lowest level since late 2017.

Shares saw a healthy rally on Friday. But the prevailing view on Wall Street, for now, is that the sell-off is likely to continue further, as losses pile up.

“It looks like stocks are starting to go through another physical bear market,” Michael Wilson, an equity analyst at Morgan Stanley told clients on Sunday. “After that, we remain confident that lower prices are still ahead.”

Wilson is known for his bearish tendencies. But he’s not the only one in the position, as investor fears hang over rising interest rates and the possibility of a recession – hurting corporate earnings -. In addition, stocks may have become a lot cheaper, but still not cheap.

“For most investors, trying to time the market is likely to be a waste of time and a loss,” Mark Heffel, chief investment officer at UBS Global Wealth Management, said Monday. “Investor sentiment is volatile, and markets are likely to remain volatile until we get more clarity on Rs 3 – rates, stagnation and risks.”

Michael Hartnett, chief investment analyst at Bank of America, has been tracking capital’s “exit” from the market. He recently told customers that the sign of “real surrender” is when investors sell “what they love,” and noted that Apple, long a fan favorite, recently fell more than 20% from its recent high.

“Are we there yet? No,” he said late last week. “Stores [are] vulnerable to [an] A bear market rally is imminent but we don’t think the final lows have been reached.”

One exception: Goldman Sachs said it believed “the worst of the downturn is likely behind us” – as long as a recession is avoided.

However, it recently lowered its year-end price target for the S&P 500 “to reflect higher interest rates and slower economic growth than we previously assumed.”

JetBlue becomes hostile in its attempt to purchase Spirit

Jet Blue (JBLU) Turning towards hostility in his efforts to take possession spirit (save)the latest twist in an industry battle for the low-cost carrier.

Spirit previously rejected a takeover offer from JetBlue, favoring an earlier deal to merge with another budget airline Frontier.

Now, JetBlue is appealing directly to Spirit shareholders, urging them to vote against the Frontier deal as they launch their entire cash offer of $30 per share, my CNN Business colleague Alison Morrow reports.

JetBlue said in a statement Monday that its offer represents a 60% premium to the value of the Frontier deal. The airline added that it was willing to negotiate a deal worth $33 per share if Spirit agreed to provide information about its business that JetBlue claims it has withheld.

Spirit shares are up 14% in pre-market trading, rising to more than $19 per share.

Fast Rewind: In February, Spirit agreed to be acquired by Frontier in a cash and stock transaction that at the time valued Spirit shares at $25.83 each.

JetBlue entered the picture in April, but Spirit ultimately rejected its entire cash offer of $33 per share.

Spirit CEO Ted Christie told analysts earlier this month that the offer could not be taken seriously because the company did not expect regulators to eventually sign.

“It is reasonable to believe that the acquisition of Spirit by JetBlue would be approved by the Department of Justice,” Christie said, noting that the Department of Justice had already opposed JetBlue’s alliance with American Airlines in the northeastern part of the United States. United State.

Top bargain maker says Chinese markets ‘close to bottom’

Lots of people on Wall Street are convinced that the US stock markets will continue to fall. But is China a different story?

That’s what one of the country’s top investment bankers thinks.

“I think the market is about to bottom out now,” Fan Bao, CEO of China Renaissance, told CNN Business.

He admitted that the general sentiment of investors is “very bad”. However, he believes that the world’s second largest economy remains a promising place to raise money, despite slowing economic growth and pressure from President Xi Jinping’s “zero Covid” policy.

“We actually see a great investment opportunity,” said Bao, sitting in front of a sign in his Hong Kong office that reads “BullMarket4ever”.

He added that his Beijing-based company, which invests in start-ups through several funds, has recently been able to close deals with valuations that have been cut to half of what they were previously.

“I don’t think people need to panic,” he added.

However, China Renaissance, which manages $7.7 billion in assets, has slowed the pace of its new investment this year.

next one

Warby Parker reports results before US markets open. Take-Two Interactive. interactive (TTWO) Followed after closing.

Also today: The Empire State Manufacturing Survey publishes at 8:30 a.m. ET.

Coming Soon Tomorrow: Economists expect US retail sales to grow 0.8% m/m in April, up slightly.

2022-05-16 12:36:00

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