U.S. regional banking headwinds won’t spill over to the Euro zone, JPMorgan says
Stress from the regional banking crisis in the U.S. this year isn’t likely to afflict the Euro zone, according to JPMorgan.
Economist Ravi Balakrishnan wrote in a Wednesday note that European banks haven’t yet felt any material headwinds from the liquidity crisis in regional banks even though they have both lower deposit insurance levels.
Balakrishnan also noted that Euro zone banks have “stickier deposits” as well as smaller downside risk for “unrecognized market-to-market losses.”
“…while Euro area banks are less profitable than their US counterparts, they score better on several measures of solvency, liquidity and funding stability,” Balakrishnan said.
— Brian Evans
An effective use of recent rallies? Take some profits and look for yield, says BofA’s Jared Woodard
This year’s hot runup for tech names presents a plum opportunity for investors to cash in some chips and invest those proceeds elsewhere, said Jared Woodard, investment and ETF strategist at Bank of America.
“Investors should use rallies in tech and other kinds of megacap growth assets to take profits and to invest in other parts of the market where there’s better valuation opportunities,” he said on “Closing Bell: Overtime” Wednesday evening.
“I think that the top priority for investors this year has to be to capture yield where they can, to protect against deflation and the recession we think is coming and to keep hedges in place if the stagflationary risks from 2022 prove to be a continuing threat,” he added.
For yield-seeking investors, he highlighted the iShares Preferred and Income Securities ETF (PFF). “If you’re looking for income, I think these beaten-down preferreds are a top place to look,” Woodard said.
CNBC Pro: Goldman Sachs is bullish on these 5 stocks in a corner of A.I. — giving one 140% upside
Goldman Sachs is bullish about generative artificial intelligence: It expects it will drive upside in the broader S&P 500 — and one specific corner of tech.
It gives the fair value upside for the S&P 500, and lists stocks to buy.
European markets are expected to open mixed Thursday.
The U.K.’s FTSE 100 index is expected to open 7 points higher at 7,624, Germany’s DAX 33 points lower at 15,929, France’s CAC 14 points lower at 7,194 and Italy’s FTSE MIB 22 points lower at 27,025, according to data from IG.
Data releases Thursday include euro zone unemployment figures for the first quarter and revised gross domestic product data for the same period. There are no major earnings releases today.