But one of our next guests sees the S&P 500 falling next year with a target of 6,500. Joining us now, Steve Sausnik, chief strategist at Interactive Brokers and Bridge Corana, Wellington Management, fixed income portfolio manager. Great to have you both here on set.We have a full house. Um Steve, I'm going to start right there with you because you are a bit at a consensus here with what you expect for stocks next year. How much of this does hinge on what we are seeing right now in the bond market and as we ...

But one of our next guests sees the S&P 500 falling next year with a target of 6,500. Joining us now, Steve Sausnik, chief strategist at Interactive Brokers and Bridge Corana, Wellington Management, fixed income portfolio manager. Great to have you both here on set.We have a full house. Um Steve, I'm going to start right there with you because you are a bit at a consensus here with what you expect for stocks next year. How much of this does hinge on what we are seeing right now in the bond market and as we ...

and Megan, uh, even with today's uh, bounce in the, uh, in the indexes, you still have the S&P down 2% on the week, almost 5% off of its highs. Has this pullback um, kind of changed the riskreward in your view or or given a signal as to where to go next within the market. >> Yeah, I think this has been a bit of a healthy development for the market.We've been watching with a bit of trepidation that the market just keeps continuing to climb higher and it's been a pretty significant momentum trade. I think wha ...

Core Viewpoint - The recent market pullback is seen as a healthy development, indicating a shift in sentiment towards higher quality companies, which have underperformed in the past six months [1][2][3]. Market Sentiment and Valuations - There has been a notable underperformance of higher quality names, suggesting a shift in market sentiment where valuations and balance sheets are gaining more attention [2]. - The speculative and aggressively valued stocks have driven the market to recent highs, leaving higher quality companies behind [3]. Economic Indicators - A stabilization in the labor market, particularly in small businesses and cyclical sectors, is necessary for higher quality companies to thrive [5]. - The ideal scenario for these companies would be a "Goldilocks" environment, where economic conditions are neither too hot nor too cold [4][6]. Recession Risks - There is a 45% probability of recession within the next 12 months, which is considered uncomfortably high compared to other Wall Street estimates [6]. - Current labor market conditions show some cracks, and clarity is expected in the coming weeks regarding the labor market's direction and potential productivity gains from AI investments [7].

Stocks are moving lower here, close to session lows in early trade as November gets a little uglier for the bulls. We are on pace for the worst November since 2008. Let's bring in Sam Stovall, CFR research chief investment strategist.Sam, it's good to get your take on this market. We closed below that 50-day. A lot of discussion about uh difficult technicals, weak breadth, and now we lost this support that we've had last couple Fridays.How much technical damage is getting done. >> Well, I think a lot, Carl. ...

Stocks are moving lower here, close to session lows in early trade as November gets a little uglier for the bulls. We are on pace for the worst November since 2008. Let's bring in Sam Stovall, CFR research chief investment strategist.Sam, it's good to get your take on this market. We closed below that 50-day. A lot of discussion about uh difficult technicals, weak breadth, and now we lost this support that we've had last couple Fridays.How much technical damage is getting done. >> Well, I think a lot, Carl. ...

Red tape across the screen is never random. It reveals the segments of the market that were already under pressure. Leadership weakens before the story does. I’ve seen this play out in everything from industrials in 2015 to software in 2021. Liquidity thins out. Crowded trades start to wobble. And suddenly everyone is forced to reevaluate their positioning, not because of panic but because the market stopped offering cover.When the market turns red, loss aversion takes over. The pain of a loss is twice as s ...

Market Overview - The recent market pullback saw the S&P down 1.5%, Nasdaq down over 2%, and Dow dropping 800 points, raising concerns among investors about the market's direction [2][3] - The current pullback is viewed as a positioning flush of higher beta names rather than a macroeconomic issue, indicating potential for continued market growth [4][5] Investment Sentiment - Investors are expected to buy the dip, as pullbacks in high beta stocks often lead to a more rational market that rewards companies with strong fundamentals [5][6] - The overall market sentiment remains optimistic, with significant liquidity and ongoing support from monetary and fiscal policies [6][7] Company Focus: Nvidia - Nvidia's stock has risen 50% year-to-date, with a favorable valuation at 32 times earnings and strong cash reserves [8] - Expectations for Nvidia's data center revenues are higher than Wall Street's projections, with estimates potentially reaching $300 billion compared to the $258 billion forecast [9] Company Focus: MAG 7 - The MAG 7 companies exhibit strong operating leverage, allowing them to grow margins effectively, making them attractive investments [10] - There is a general bullish sentiment towards the MAG 7, with expectations of continued performance [10] Company Focus: Progressive - Progressive has shown the best earnings per share revisions since the beginning of 2024, despite underperforming the S&P 500 [11][12] - The company is trading at 13 times forward earnings, presenting a significant discount compared to the market, while maintaining strong growth and margins [13] Market Dispersion - The current market shows record high dispersion, with high-quality names underperforming relative to low-quality names [15] - There is an expectation that as the market rationalizes, high-quality names will be rewarded for their resilience [15] Cryptocurrency and Gold - The total addressable market for Bitcoin is expanding, with a shift in perception towards it being a store of value rather than a tech proxy [16][19] - Gold is increasingly viewed as a store of value rather than a hedge against market volatility, reflecting a significant change in investment strategy over the past decades [19][20]

Market Overview - There is ongoing discussion about a potential market bubble and whether the peak of the bull market has been reached, with strategists suggesting a pullback is imminent [1][2] - A pullback is considered normal and could be constructive, allowing markets to reset after significant gains [3][4] Earnings and Fundamentals - Despite market fluctuations, underlying fundamentals remain strong, with two-thirds of S&P companies reporting double-digit earnings growth [2][5] - The concentration of gains among a few stocks raises concerns, as six stocks have driven half of the S&P's record highs [4][5] Debt and Funding - Companies are increasingly funding their growth through debt markets rather than cash flow, which is a point of concern [6][8] - There is a need to monitor the intertwining of companies and their funders to avoid creating a "too big to fail" scenario [9] Investment Strategy - Investors are advised to consider portfolio hygiene and global diversification, as U.S. markets have underperformed compared to global markets [11][12] - A pullback may present opportunities for clients to deploy cash or rebalance portfolios, especially for those with significant year-to-date gains [12][13] Economic Disparities - The stock market and economy are exhibiting a K-shaped recovery, with higher-income consumers driving resilience, while lower-income consumers face challenges [13][15] - The disparity in consumer spending patterns is notable, with higher-income consumers more tied to asset values, while lower-income consumers remain value-conscious [17] Federal Reserve Outlook - The Federal Reserve's medium-term outlook includes a target for interest rates around 3%, with expectations for rate cuts being moderated [18][20] - The credibility of the Fed is under scrutiny, as inflation expectations have shifted, indicating a potential long-term impact on its policies [26][27]

Market Performance - The S&P 500 ended October with a 1.9% increase, marking its sixth consecutive monthly gain, the longest stretch in four years [1][2] - The index continued its upward momentum into November, adding approximately 0.18% on the first Monday of the month [1] Economic Outlook - Progress in the U.S.-China trade agreement, the Federal Reserve's interest rate cut in October, and rising AI demand contribute to a positive outlook for the U.S. economy [2] - Despite the optimistic economic picture, underlying volatility risks remain, suggesting a cautious approach may be prudent [2][5] Volatility Concerns - Ongoing government shutdown, diminishing expectations for a December rate cut, and worries about a potential AI bubble may increase market volatility [3][4] - The sustainability of the U.S.-China trade truce is questioned, adding to investor anxiety [3] Market Predictions - Goldman Sachs and Morgan Stanley predict a potential 10-20% market pullback within the next 12 to 24 months, which is typical in long-term bull markets [6][7] - Both firms emphasize that periodic pullbacks should be viewed as healthy market corrections rather than crises [8] Investment Strategies - Investors are advised to adopt a defensive and conservative investment theme to navigate potential market turbulence [9] - Increasing allocations toward defensive funds while maintaining exposure to growth-oriented investments may be a sound strategy [10] ETF Recommendations - Value ETFs, characterized by solid fundamentals and trading below intrinsic value, have shown positive performance, with the S&P 500 Value Index gaining 7.52% year to date [12] - Consumer staple ETFs provide stability, with the S&P 500 Consumer Staples Index up 3.20% year to date, making them a good option for risk-averse investors [13] - Quality ETFs are recommended as a strategic response to market uncertainty, offering a buffer against potential headwinds [14] Investment Strategies for Stability - Passive, long-term strategies such as buy-and-hold or dollar-cost averaging are suggested to help investors navigate potential pullbacks while positioning for sustainable returns [15][16]