Elon Musk joins the growing chorus in fear of the US recession. But there are shares for that.

Beware above, dip buyers are back in town.

Shares of futures are soaring – for now – as Wall Street returns from a big holiday weekend, with Fed Reserve Chairman Jerome Powell testifying before Congress this week. The buying mood comes after the worst week of the S&P 500 since March 2020, including its fall in the bear market and the Fed’s biggest increase since 1994.

But while opportunity hunters are on track, so is the US financial wrecker.

Introduce the Tesla TSLA,
+ 1.72%
CEO Elon Musk, who in ours call of the day joins a growing Wall Street vocal chorus, including Roubini Macro Associates’ Nouriel Roubini and many banks warning of more difficult times.

“I think a recession is inevitable at some point. “As for whether there is a recession in the short term, I think that is more likely than not,” Musk told Bloomberg in an interview with the Qatar Economic Forum early Tuesday.

Musk’s comment is linked to an email he reportedly sent to company executives earlier this month, where he spoke of a “super bad feeling” about the global economy and said 10% of Tesla jobs had to be cut, knocking the shares of the company at that time. .

Reading: Stocks are still very expensive and rising interest rates could shock the financial system, warns Seth Klarman

In a video to those in attendance in Qatar, Musk confirmed that, saying that 10% of Tesla’s capital would be abolished in the next three months, although in a year from now the salary and hourly wage will be higher.

As for this declining economic outlook, the forecasts of Wall Street banks are falling like flies. Goldman Sachs now sees a 30% chance of a slowdown in the next 12 months, up from the previous 15% amid concerns that the Fed will “feel compelled to respond strongly” to high inflation.

Goldman Sachs Global Investment Research

Nomura was even more pessimistic, telling customers on Monday that “a mild downturn starting in the fourth quarter of 2022 is now more likely than not”, lowering its Gross Domestic Product forecast to 1.8% from 2, 5% for 2022 and 1% from 1.3% for 2023. Deutsche Bank sees growth below 1% in the first half of 2023 and negative growth in the first quarter of the third quarter of 2023.

On equities, Goldman’s strategic stock analyst in the United States, David Kostin, said in a statement that “investors concerned about tightening financial conditions, slowing economic growth and increased market volatility should hold firm stocks.” – low stock price volatility and steady earnings growth.

The High Sharpe ratio basket “also takes into account volatility, but maximizes future risk-adjusted returns”. The median share in this basket is expected to generate twice the return of the median share of the S&P 500 with only slightly higher imputed volatility, Kostin said.

Here is a look at this cart:

FactSet, Goldman Sachs Global Investment Research

The hum

Spirit SHARES SAVE,
+ 2.11%
increased by 12% after JetBlue JBLU,
+ 5.30%
increased its airline bid to $ 33.50 in cash from $ 31.50.

Stock in AI Symbotic SYM supply chain group,
+ 23.80%
increases after Walmart WMT,
-1.93%
said it gets a 62.2% stake in the company.

St. Louis Fed Chairman James Bullard downgraded fears of a growing recession in the coming months. And former US Treasury Secretary Larry Summers said unemployment must rise to curb inflation. President Joe Biden said the recession could be avoided.

Biden will also decide by the end of the week whether to order a federal gas tax holiday that could save up to 18.4 cents a gallon.

Existing home sales are expected after the market opens and we will learn from Cleveland Fed Chairman Loretta Mester and Richmond Fed Chairman Tom Barkin.

Italian helicopter manufacturer Leonardo LDO,
+ 5.51%
will merge its US operations with the Israeli defense group Rada Electronic Industries RADA,
-1.19%
in a deal for all the shares to create a new company to be listed in New York and Tel Aviv.

The markets

Dow YM00 futures,
+ 1.36%
rose almost 500 points, with gains of 1.5% for the S&P 500 ES00,
+ 1.50%
and Nasdaq-100 NQ00 futures contracts,
+ 1.48%,
with raw CL.1,
+ 1.94%

BRN00,
+ 1.50%
over 2% and TMUBMUSD02Y bond yields,
3.198%

TMUBMUSD10Y,
3.286%
also on the rise. Bitcoin BTCUSD,
+ 2.63%
is over $ 21,000 after a volatile weekend that saw prices fall below $ 20,000.

Reading: Tom DeMark spotted the downside of bitcoin in March. It has good and bad news.

The diagram

Peter Oppenheimer, Goldman’s chief global equities analyst, said the markets were likely to be headed for a cyclical downturn – driven by rising interest rates and impending recessions. But this is not expensive enough, so it is possible to sell more. (See the day chart below).

Datastream, Haver Analytics, STOXX, Worldscope, Goldman Sachs Global Investment Research

The tickers

These were the items with the top searches on MarketWatch from 6 a.m. Eastern:

Heart

Security name

TSLA,
+ 1.72%

Tesla

GME,
+ 7.48%

GameStop

AMC,
+ 6.28%

AMC Entertainment

ΝΙΟ,
+ 8.29%

ΝΙΟ

AAPL,
+ 1.15%

apple

AMZN,
+ 2.47%

Amazon

MULN,
+ 5.60%

Mullein

TWTR,
+ 1.12%

Twitter

RDBX,
+ 2.74%

Redbox Entertainment

DAD,
+ 0.78%

Alibaba

Random readings

Hong Kong’s famous floating restaurant, where Tom Cruise and other celebrities have dined, is sinking.

An imbalance in one leg for 10 seconds can mean a shorter lifespan.

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