A seven-day winning run for the S&P 500
\n SPX
\n could turn into eight, depending on what Fed Chair Jerome Powell says Thursday.<\/p>\n
It could mark the perfect opportunity for the Fed chief to clear up confusion among investors and \u201cproperly frame expectations\u201d by equity markets that rate cuts will be here in six months, Michael O\u2019Rourke, chief market strategist at JonesTrading, tells clients. <\/p>\n
Those rate-cutting hopes set off some big gains last week. Stay tuned. <\/p>\n
Switching gears, we return to the Global Financial Leaders\u2019 Investment Summit in Hong Kong that offered more big finance names on Wednesday.<\/p>\n
Sitting on a panel alongside CEOs from investment management firms Neuberger Berman and GCM Grosvenor, was Howard Marks, co-founder of Oaktree Capital, who earns the call of the day<\/strong> as he answered this question: Where would he put investing dollars to work for the next 10 years if he had just turned 50?<\/p>\n \u201cYou can get very good returns with a high degree of certainty in credit,\u201d says Marks, who adds a bit more. \u201cThe bedrock for every portfolio should always be equities. In the long run you want to invest in the global economy and performance of leading global corporations, you should never get away from that.\u201d <\/p>\n Marks didn\u2019t get into exactly where Gen-Xers can find compelling stocks, offering more advice on the credit side, as he drew from a recent letter to shareholders that hammered home that asset class\u2019s importance right now. <\/p>\n He said credit simply needs to be made a bigger part of portfolios, after a \u201csea change\u201d that halted a four-decade decline in interest rates. <\/p>\n \u201cI don\u2019t think this is the<\/em> time to invest in credit, I think this is a<\/em> time to invest in credit,\u201d Marks said, as he noted that anyone who came into the business since 1980 has only seen interest rates fall or ultra low rates, and that has been great for some strategies.<\/p>\n \u201cWe have had a lot of popular asset strategies which consist of buying assets with borrowed money. You have to have something wrong with you not to do well, but my essential message is that\u2019s over,\u201d he said. <\/p>\n \u201cThe key is today you can get equity returns from credit and that changes a lot. Twenty-one months ago high-yield bonds yielded 4%, today they yield over 9%\u20269% plus change everything,\u201d said Marks. And investors should expect fed funds rates to come down some, but not stabilize at 0.5% such as in 2009 to 2021, he said. <\/p>\n Marks added that that 9%-plus is the \u201clowest aspiring of all of our strategies,\u201d and investors who can lock their money for a few years in private credit can earn double-digit returns. <\/p>\n Ming Mei, co-founder and CEO at Singapore-based investment manager GLP, said his firm is \u201cinvesting in things that won\u2019t change in next 20 to 30 years,\u201d such as population, consumption, AI and energy transition. <\/p>\n Finally, some more straight-stock advice came from George H. Walker, chairman and CEO of Neuberger Berman.<\/p>\n But Walker said investors should put the bulk of that money in \u201ca high-quality portfolio of small and midcap companies that are profitable, have low leverage and solid market positions. The steady Eddies which are unloved right now have a good shot at delivering a solid, diversifying portfolio over a 10-year period.\u201d<\/p>\n Last word goes to Marks. \u201cRead, be exposed to the media, talk to people, understand what\u2019s generally going on and you can get a sense for whether markets are precarious or propitious,\u201d he said. Marks also said it was not worth trying to guess if a recession was coming, as one is always looming. \u201cEmphasis in our business in the short run is really excessive and immaterial.\u201d <\/p>\n <\/p>\n Stocks SPX<\/p>\n COMP Powell made brief remarks this morning, but didn\u2019t discuss the economy or markets. Still ahead are comments expected from Fed Vice Chair for Supervision Michael Barr at 2 p.m. and Fed Vice Chair Philip Jefferson at 4:45 p.m. Wholesale inventories are due at 10 a.m. Data showed mortgage rates falling by the most in a year amid signs of a faltering economy. <\/p>\n Reporting ahead of the market open, Under Armour shares Take-Two Among companies reporting late Tuesday, Upwork Elsewhere, Sleep Number shares Democrats won off-year elections in Kentucky, Ohio and Virginia, campaigning on abortion rights. That said, those aren\u2019t enough to make Dems feel secure enough headed into the 2024 presidential election.<\/p>\n Not one S&P 500 CEO is donating to Donald Trump<\/p>\n The Fed\u2019s 2011 \u201cTreasury Default Playbook.\u201d What it says, why it matters<\/p>\n Gen X and boomer Americans doing amazing things in the second half of life<\/p>\n EV market\u2019s surge toward $57\u00a0trillion sparks global flashpoints<\/p>\nThe markets<\/h2>\n
\n DJIA<\/p>\n
\n are edging north, with 10-year Treasury bonds
\n BX:TMUBMUSD10Y
\n drifting south ahead of a $40 billion auction . Oil prices
\n CL.1,
\n
\n is extending Tuesday\u2019s slump and the dollar
\n DXY
\n remains higher. In Europe, a warning on U.S. commercial real estate has pummeled one German bank\u2019s shares.<\/p>\nThe buzz<\/h2>\n
\n UAA,
\n
\n climbed 5% after the sports leisurewear maker topped estimates. EVgo stock
\n EVGO,
\n
\n is up 16% after the EV charger\u2019s revenue beat estimates and reported narrower losses. Warner Bros. Discovery
\n WBD,
\n
\n stock is down after the streaming company\u2019s wider-than-forecast loss, and that\u2019s ahead of Disney
\n DIS,
\n
\n results later. <\/p>\n
\n TTWO,
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\n will also report after the close, and its shares are up 8% on a report it may announce a new Grand Theft Auto game possibly this week.<\/p>\n
\n UPWK,
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\n is up 18% after the freelancing platform\u2019s big earnings beat, while Rivian Automotive
\n RIVN,
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\n rose after the EV maker narrowed its loss, and ended an exclusive deal with Amazon. GoPro
\n GPRO,
\n
\n got a boost from forecast-beating results. <\/p>\n
\n SNBR,
\n
\n are tanking after the mattress maker swung to a surprise loss and gave a gloomy forecast. And trading app Robinhood Markets
\n HOOD,
\n
\n slid 9% after a revenue miss. <\/p>\nBest of the web<\/h2>\n
The chart<\/h2>\n