There’s around $1 trillion of private debt that’s headed for potential trouble, Bank of America warned. Most of that debt has been created by below-investment grade companies through high yield loans or bonds. Around $400 billion assets are considered to be in “pre-distress,” while $150 billion assets are “deeply distressed.”
Financial News
Extreme bubble in stocks ‘will end in tears’, risk of 64% crash: Hussman
John Hussman, an asset-bubble expert, forecasts the ongoing rally in US stocks will “end in tears.” The S&P 500 risks a 64% collapse given extreme valuations and “unfavourable market internals,” he said. Here are the long-time market bear’s six most striking quotes from a recent note.
What Could Knock Stocks Back Into a Bear Market
Even though the stock market has climbed its way back into bull-market territory, don’t forget: Several factors could easily send it lower. At just over 4300, the S&P 500 is now about 20% above 3577, the lowest closing price seen in the recent bear market. That level, reached in early October, left stocks 25% below the record high hit in early 2022. A gain of 20% from a low technically marks the start of a new bull market, which matches a recent surge of optimism. A Barron’s cover story this
Morgan Stanley’s investment chief called 2022’s bear market, and he says stocks are still hibernating—he sees a 14% drop ahead
“With the S&P 500 rally now crossing the 20% threshold, more are declaring the bear market officially over. We respectfully disagree,” Mike Wilson wrote Monday, arguing corporate earnings are set to fall.
Wall Street’s Once-Hot Trades of 2023 Are Unraveling in Markets
The once-hot Wall Street trades of 2023 are all falling apart, in a fresh blow to market pros blindsided again and again ever since the pandemic broke out.
The next big threat hovering over the U.S. economy
Some $1.5 trillion in mortgages will come due in the next two years, a potential time bomb as higher interest rates push down property values.