After a charmed start to 2019, the stock market was shocked out of complacency last week as President Donald Trump reignited trade-war tensions with China.
The benchmark S&P 500 suffered through its worst week of the year, tumbling 2.2%, while global equities saw as much as $1.4 trillion erased at one point. In retrospect, it was to be expected considering the market had long been priced for a successful trade-war resolution.
That scenario seems a long way off now, with the US and China continuing to volley threats back and forth. That has equities plummeting once again, and strategists across Wall Street are scrambling to advise their clients how to navigate the volatility.
Goldman Sachs recently unveiled a strategy that involves seeking out service providers, as opposed to goods producers the firm sees as more vulnerable to tariff risk. The recommendation was a follow-on to a trade previously laid out by Goldman: buy reasonably priced growth stocks.
Meanwhile, Wells Fargo derivatives strategy extraordinaire Pravit Chintawongvanich noticed a compelling mispricing in the options market, which led him to suggest a simple trade involving small-cap equities.
Uber’s IPO was the other top story of last week. So far, the ride-sharing giant is struggling with the same turbulent market conditions that tripped up its main competitor, Lyft. One recent study we covered suggests that the rush of IPOs from big, unprofitable companies like Uber and Lyft could throw the entire market off track — so consider yourself warned.
Here’s a rundown of our other main coverage from last week, which featured continued dispatches from the Milken Institute Global Conference, as well as a sitdown with so-called bond king Jeff Gundlach:
An investment chief overseeing $100 billion at Pimco says beware of the ‘riskiest corporate market we’ve ever had’ — and offers these strategies for surviving the next recession
Scott Mather, the chief investment officer of US core strategies at Pimco, doesn’t necessarily think a recession is imminent, but he’s advising his clients to be prepared just in case.
He lays out how he thinks investors can best avoid the negative fallout from a possible economic meltdown. Mather is particularly wary of the high-yield market, as well as what he’s identified as an unsustainable corporate debt situation.
Wall Street titans from Jamie Dimon to Jeff Gundlach are warning about a spike in volatility — and the worst bond-market auction in 10 years just raised the threat level
With all of the other negative forces whipsawing markets, it might be easy to overlook the historically weak demand seen at the most recent Treasury bond auction.
Fear not, because Wall Street giants like JPMorgan CEO Jamie Dimon and “bond king” Jeff Gundlach are worrying for you. They’re both expecting a surge in Treasury-market volatility, which could wreak even more havoc on an already-vulnerable market.
Other good stories from the investing realm:
- The stock-investing chief overseeing $235 billion at Charles Schwab breaks down his surprisingly bullish call on the market’s least favorite sector
- A top-rated wealth manager for pro athletes reveals the mistakes newly minted millionaires often make — and explains how he helps them avoid those pitfalls
- One expert says an imminent 65% stock-market crash would be ‘run-of-the-mill’ — and explains why risks are greater now than during the tech bubble
- Bond king Jeff Gundlach breaks down why a booming $8 trillion market is poised to face a reckoning when the next recession hits
- The investment chief at America’s 2nd-biggest pension fund warns markets are foolishly overlooking climate change — and paints a stark picture for the future
- A business manager for Hollywood celebrities and billionaires explains why fake meat is the next big investing trend for the ultrarich