Stock futures were little changed after Moody’s downgraded US outlook: Live updates

28 minutes ago

Tech companies are still recovering from an era of low interest rates, according to Bank of America

According to Bank of America’s technology, media and telecommunications team, the technology sector is still feeling the effects of the period when real interest rates were below 1%. The company said that the waning effects of the “zero interest rate policy” era are still ongoing and will last into 2024.

“Earnings have not been a near-term priority for many companies as growth tech valuations have been driven by EV/sales, total revenue growth and top-line growth rather than earnings growth,” the TMT team wrote in a Sunday note.

“This encouraged companies to pursue sales with little or no margins. …Empty calories were on everyone’s lips. This led to many distortions,” it added.

This has led to overconfidence among both management teams and investors, she added, highlighting that software, internet, e-commerce and streaming companies have been hit hardest by this trend.

– Hakyung Kim

41 minutes ago

Morgan Stanley expects “slowing growth and policy easing” in 2024.

According to Morgan Stanley, US GDP growth will slow next year. The company also forecasts that the Federal Reserve will keep interest rates stable at 5.375% until June 2024 and then begin cutting rates.

“High interest rates in the longer term cause a persistent burden that more than offsets the fiscal stimulus and sustainably pushes growth below potential from the third quarter of 2024. We maintain our view that the Fed will achieve a soft landing, but weaker growth will keep recession fears alive. That’s what we’re forecasting.” “GDP is slowing from an estimated 2.5% in Q4/4. quarter (2.4% a year ago) in 2023 to 1.6% (1.9%) in 2024,” wrote U.S. chief economist Ellen Zentner in a Sunday note.

Demand for labor will also slow in 2024 but will not “fall off a cliff,” she added.

– Hakyung Kim

An hour ago

Stock futures open slightly lower

US stock futures fell on Sunday evening.

Futures tied to the Dow Jones Industrial Average fell 43 points, or 0.15%. Meanwhile, S&P 500 and Nasdaq 100 futures fell 0.16% and 0.12%, respectively.

– Hakyung Kim

Originally posted 2023-11-13 00:06:11.