41 minutes ago
Bill Ackman suggests the Fed should pause on rate hikes on Wednesday
Billionaire investor and Pershing Square CEO Bill Ackman said the Federal Reserve should pause rate hikes as the Federal Open Market Committee meeting begins Tuesday.
Noting that markets have experienced “major shocks” from US bank shutdowns, Ackman said the banking crisis “remains unresolved” and that higher interest rates would not help the situation.
“This is not an environment that the @federalreserve should raise rates and put additional pressure on the system as financial stability is the Fed’s first responsibility,” he said in his tweet
– Jihye Lee
2 hours ago
The Fed is stuck between a rock and a hard place, trader says
The Federal Reserve is in a difficult position ahead of this week’s monetary policy meeting, according to Victor Masotti, director of repo trading at Clear Street.
“The Fed is really stuck between a rock and a hard place as it tries to manage more than its dual mandates of inflation and employment amid deteriorating consumer bank confidence,” Masotti said.
While most on Wall Street still expects a 25 basis point rate hike, Goldman Sachs said Monday it expects the central bank to pause to “avoid worsening market fears of further bank stress.”
— Yun-Li
2 hours ago
Markets are not pricing in a recession, says Cantor Fitzgerald’s Johnston
Markets have yet to price in a recession, and that could mean stocks take a big step down from here, according to Cantor Fitzgerald’s Eric Johnston.
“I think almost no opportunity has been priced in, and I’m saying that based on the numbers,” the head of equity derivatives and cross-asset told CNBC’s Closing Bell: Overtime on Monday. “Right now the market is trading at 18 times the earnings estimates we see in print and if we had a recession the numbers would be far lower…”
The rates market, he added, seems to be signaling a recession is coming much sooner than investors are expecting, which could mean bad news for stocks going forward.
While it’s difficult to time a market’s exact bottom, Johnston said now is a good time for investors to sell stocks and move into cash and money market funds to maintain liquidity.
“If we were to make a move down, you want to be able to be agile to take advantage of this stock sale,” he said.
Johnston is negative on cyclicals, which he described as one of the “last places you want to be” on the way into a downturn.
— Samantha Subin