That’s why, according to the big bank, the madness of meme stocks and the 99th percentile valuation continue.


It was pretty Manic Monday, and not only did the S & P 500 suffer from the worst day’s performance in nearly two weeks, but retail favorites such as Meme’s GameStop and AMC Entertainment fell apart.

Fundstrat’s Thomas Lee mentioned three points. No investor wants to risk the Federal Open Market Committee meeting. Last week, stocks reached record highs. The UK’s promotion of the COVID-19 vaccine reminds us that the United States still has to overcome the wave of Omicron variants.

The outlook for 2022 is still pouring, and the relatively optimistic outlook comes from BNP Paribas’ equity and derivatives strategy team, where 5,100 people are demanding the S & P500.

Next year will be in line with Goldman Sachs, but not the best on Wall Street. The team says the rating is “reasonably overflowing.” S & P 500 futures earnings generate a premium for the US Treasury

Even though Schiller’s price-earnings ratio is in the 99th percentile reading, is consistent with the five-year average. “It was rarely the only cause of market corrections,” the assessment said.

BNP also details the vibrancy elsewhere, such as options. The amount of call options has exploded at various times in 2021, and recent exchange-traded fund flows and market movements are positively correlated. “

From memetic stocks to megacaps, there were some examples of large dislocations and unusual price fluctuations. It is expected that these dislocations will increase further next year, but there is still “episodic and peculiar” diversity. Margin debt is the highest ever, The household balance sheet is also in excellent shape., And the labor market remains strong. “Changing this behavior could require a significant recession or market downturn, neither of which is expected in 2022,” BNP said.

For institutional investors, while the real returns of many assets are low or negative, there are high standards for reducing equity allocations. There is no so-called alternative, or it is a TINA transaction.

What about the Fed’s tightening cycle? Historically, the team has stated that it is the end of the tightening cycle, not the start, that is at stake for equities. It’s not without speed bumps, but BNP states that subsequent rallies can occur.

We expect the turmoil to begin to ease next year, but it’s more worried about another topic, the supply chain. The backlog measured by the Supply Chain Management’s survey of purchasing managers has already begun to peak, and the gradual return to service demand from commodities will alleviate inflation bottlenecks. However, if these turmoil are not mitigated or exacerbated, there is a risk that the Fed will raise it to a weaker growth outlook, which could unravel the elevated valuation.

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However, the team is optimistic about corporate profits. Historically, US sales growth has been correlated with global nominal gross domestic product growth (that is, real growth and inflation). BNP’s estimated real GDP growth rate is 4.8%, the consumer price index growth rate is 4.1%, and profit per share growth rate is 12.4%, which is 5% higher than the consensus.


The Fed’s two-day meeting begins on Tuesday. There will be an announcement and a press conference on Wednesday. Producer prices rose 0.8% in November, higher than expected.

As Philadelphia requires vaccination certification for bars, restaurants and indoor sporting events, California has imposed a one-month mask mandate on indoor public places.Two doses of Pfizer vaccine

And BioNTech

A South African study provides 70% protection against hospitalization with a variant of Omicron, but only 33% protection against infection. Pfizer separately stated that oral antivirals provide 89% protection against hospitalization or death.


Integrating food safety business into $ 9 billion transaction with Neogen

Rentokil Initial

Signed a $ 7 billion deal to buy Terminix Global Holdings

Increase your presence in the United States in pest control.

US-listed Chinese social media provider Weibo

He was fined by Chinese internet regulators for violating cybersecurity laws.


CEO Elon Musk continued to sell shares while exercising options, bringing total stock sales to approximately $ 12 billion.Cryptocurrency dogecoin

After Musk tweeted, Tesla began using it to allow purchases of goods, soaring in value.

Initial research by the UK Competition and Markets Authority found Apple’s “bad-looking” grip

And the alphabet

Unitize Google through the mobile device ecosystem prior to the final report in June.

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U.S. stock futures


Especially in the interest rate-sensitive technology sector, he pointed out a decline on the second day.

Yields on 10-year government bonds

It was 1.43%.

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As of 6am Eastern Standard Time, the most active tickers on MarketWatch are:

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That’s why, according to the big bank, the madness of meme stocks and the 99th percentile valuation continue.

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