April 16, 2024

28 minutes in the past

Tech corporations are nonetheless recovering from an period of low rates of interest, in line with Financial institution of America

In accordance with Financial institution of America’s know-how, media and telecommunications workforce, the know-how sector remains to be feeling the results of the interval when actual rates of interest have been under 1%. The corporate mentioned that the waning results of the “zero rate of interest coverage” period are nonetheless ongoing and can final into 2024.

“Earnings haven’t been a near-term precedence for a lot of corporations as progress tech valuations have been pushed by EV/gross sales, whole income progress and top-line progress somewhat than earnings progress,” the TMT workforce wrote in a Sunday notice.

“This inspired corporations to pursue gross sales with little or no margins. …Empty energy have been on everybody’s lips. This led to many distortions,” it added.

This has led to overconfidence amongst each administration groups and buyers, she added, highlighting that software program, web, e-commerce and streaming corporations have been hit hardest by this pattern.

– Hakyung Kim

41 minutes in the past

Morgan Stanley expects “slowing progress and coverage easing” in 2024.

In accordance with Morgan Stanley, US GDP progress will sluggish subsequent yr. The corporate additionally forecasts that the Federal Reserve will preserve rates of interest steady at 5.375% till June 2024 after which start reducing charges.

“Excessive rates of interest in the long term trigger a persistent burden that greater than offsets the fiscal stimulus and sustainably pushes progress under potential from the third quarter of 2024. We preserve our view that the Fed will obtain a comfortable touchdown, however weaker progress will preserve recession fears alive. That’s what we’re forecasting.” “GDP is slowing from an estimated 2.5% in This autumn/4. quarter (2.4% a yr in the past) in 2023 to 1.6% (1.9%) in 2024,” wrote U.S. chief economist Ellen Zentner in a Sunday notice.

Demand for labor can even sluggish in 2024 however won’t “fall off a cliff,” she added.

– Hakyung Kim

An hour in the past

Inventory futures open barely decrease

US inventory futures fell on Sunday night.

Futures tied to the Dow Jones Industrial Common fell 43 factors, or 0.15%. In the meantime, S&P 500 and Nasdaq 100 futures fell 0.16% and 0.12%, respectively.

– Hakyung Kim