18 minutes ago
CNBC Pro: Tesla vs. BYD: Analysts favor one of them – up over 70%
US electric vehicle giant Tesla has long been a favorite of investors, but its Chinese rival BYD is going from strength to strength.
Last week, data from both companies showed that BYD dethroned Tesla as the world's top electric vehicle maker in the fourth quarter, surpassing Tesla's production for the second consecutive year in 2023.
Should investors stick with long-time favorite Tesla or invest in up-and-coming BYD?
That's what the professionals say.
CNBC Pro subscribers can read more here.
– Weizhen Tan
18 minutes ago
CNBC Pro: These stocks are Bernstein's top picks for a “good travel year.”
The year 2024 has only just begun, but Alliance Bernstein is already looking forward to a “good year” for the travel industry
“There are many reasons to be cheerful – demand data remains strong, with both leisure and business travel expected to increase year-on-year; Even if this shifts, the areas of continued recovery (Group, APAC, Corporate)[orate] The limited supply outlook will mitigate the impact on utilization and tariffs,” the investment bank’s analysts wrote.
They promise hotels and online travel agencies and name their top tips for hotels and online travel agencies.
CNBC Pro subscribers can read more here.
— Amala Balakrishner
6 hours ago
According to strategist Ed Yardeni, the market is ahead of itself on AI earnings estimates and Fed policy easing
Stock market investors and analysts went beyond reality as they gauged the immediate contribution of artificial intelligence to corporate earnings and predicted the likely pace of monetary easing this year, long-time Federal Reserve Wall Street strategist and economist Ed Yardeni said on Wednesday in the CNBC's “Squawk on the Street.”
“We are seeing exuberance not only from investors, but certainly from analysts,” Yardeni said. “They dramatically increased their earnings expectations for Nvidia,” and that caused the stock's forward P/E ratio to fall from the 80s to 20. “But look, it's a hot stock, and it's likely to remain a hot stock as long as AI delivers results. I think it will take a little longer for AI to deliver as much as the market seems to expect.”
Yardeni said Nvidia's performance in the 2020s reminded him of Cisco System's behavior in the 1990s. “The problem is that the market is irrationally exuberant about how much can be achieved in a very short period of time,” said Yardeni, referring to AI’s contribution to the bottom line. “And I’m worried about some sort of parabolic meltdown.”
Additionally, investors expect too many interest rate cuts from the Federal Reserve in 2024, Yardeni said. “I think we're not going to go into recession – I've been saying that for the third year in a row – and I think we're likely to see two to three rate cuts in the second half of the year, not four before five, what the market has priced in.”
– Scott Schnipper
4 hours ago
The Federal Reserve's John Williams said inflation was easing but monetary policy needed to remain tight
New York Federal Reserve President John Williams said on Wednesday that inflation data was moving in the right direction but expected monetary policy to remain restrictive.
“My base case is that the current tight monetary policy stance will continue to restore balance and bring inflation back to our longer-term target of 2 percent,” the influential central bank officials said in a prepared speech.
“I expect that we will need to maintain a restrictive policy stance for some time to fully achieve our objectives and it will only be appropriate to scale back the level of policy restraint when we are confident that inflation is at its best Day moved towards 2 percent “sustainable basis,” he added.
Williams added that the risks for the Fed remain “two-sided,” as it could withdraw too soon and risk higher inflation, or hold on too long and hurt the economy.
–Jeff Cox
3 hours ago
HSBC expects a “temporary pause” in the stock rally
Stocks ended 2023 on a strong note, with the S&P 500 up 24.2%, the Dow Jones Industrial Average up 13.7% and the Nasdaq Composite up a staggering 43%.
However, HSBC believes global stocks have now exceeded their fundamentals.
“While we remain strategically positive on stocks, we expect a temporary pause in the rally,” the company wrote. “Global equities have outperformed our machine learning (ML) model forecast by 10% over the past three months.”
As “markets increasingly price in perfection,” the bank noted that equity valuations could be vulnerable to hawkish signals from the Fed or positive inflation surprises.
HSBC added that of all equity sectors, consumer staples, energy and healthcare look the most attractive at the moment. Regionally, this extends to China, the United Arab Emirates and Switzerland.
—Lisa Kailai Han
9 hours ago
“Higher but more sober” stock market in 2024, says Barclays
After the strong year-end rally in 2023, the market will see some upside in 2024, albeit limited, Barclays says.
“We expect a higher but more sober stock market in 2024. After an extraordinary year-end rally, the bar for positive surprises is higher and cyclical stocks appear to be top,” said Barclays equity strategist Emmanuel Cau.
Barclays expects “healthy consolidation” for stocks after the rapid rally in stocks. Cau added that valuations and earnings could potentially create some upside.
“Although the interest rate cuts priced in the US seem too aggressive to us without a deep recession, we agree that the direction is towards lower interest rates,” Cau said.
– Hakyung Kim