Panic on Wall Street? Why the Big Players Are Backing Out and What’s Latest with the Market

5 min read

With the stock market becoming a roller-coaster ride in the last 12 months, institutional investors have been noticeably cutting down their stock holdings. This unusual trend might give individual investors a moment’s pause.

What Are The Markets Saying About Interest Rates?

As of 4 pm EST, 5/15/23, the CME Group’s FedWatch Tool showed that markets virtually discount any possibility that interest rates will remain at their current level of 5-5.25bps by year’s end. Despite this sentiment, Fed officials, such as Atlanta President Raphael Bostic and Minneapolis Fed President Neel Kashkari, suggest that rate cuts are unlikely until well into 2024.

Consumer Debt Hits Record High Amid Economic Stressors

A worrying trend has emerged with total consumer debt reaching an unprecedented $17 trillion, despite a slump in mortgage originations unseen since 2014. For the first time in two decades, consumers failed to pay down their credit card balances in Q1, hinting at financial strain due to rising costs.

Manufacturing Activity in New York Plunges

Manufacturing activity in New York nosedived to its lowest level in four months, hitting -31.8 in May. New orders, shipments, and inventories all saw considerable drops, indicating that the 10.8 reading in April may have been misleading.

Experts Weigh in on Market Dynamics

Prominent voices in the financial world, like Mark Kolanovic of JPMorgan, have underscored their cautious stance towards US and EU equities. Also, activist investor Nelson Peltz has significantly increased his stake in Walt Disney, suggesting potential future developments.

The Big Names: What Are They Buying and Selling?

Investment titans Warren Buffett and Michael Burry have made interesting moves in Q1. Buffett’s Berkshire Hathaway initiated the following orders:

Buy Sell
Capital One (COF) Bank of New York Mellon (BK)
Diageo (DEO) US Bancorp (USB)
Viatris (VTS) RH (RH)
Taiwan Semiconductor Manufacturing (TSM)

 

Meanwhile, Michael Burry‘s Scion Asset Management exhibited the following activity:

Buy Sell
Signet Jewelers (SIG) Black Knight (BKI)
New York Community Bancorp (NYCB) Wolverine World Wide (WWW)
Zoom Video Communications (ZM) MGM Resorts International (MGM)

Market Highlights and What to Watch

Recent earnings reports from companies like Nu Holdings and Monday.com exceeded expectations, while today we’re keeping an eye on Home Depot, Sea Limited, Baidu, Vodafone, and more.

Insights Into Cryptocurrency Market

The SEC’s recent moves and Bitcoin’s dwindling active users are some of the noteworthy events in the world of cryptocurrency.

Mergers and Acquisitions Updates

Despite opposition, Microsoft’s acquisition of Activision Blizzard has been approved by the EU, while the FTC plans to block Amgen’s acquisition of Horizon Therapeutics.

Latest News in Brief

Several notable events are shaping the financial landscape: Federal prosecutors are investigating allegations against Icahn Enterprises, potential El Niño conditions may shake up global commodity markets, Russian oil exports reached a peak since the Ukraine invasion, and Wells Fargo settled a $1 billion lawsuit over misleading compliance statements.

Tech Updates

In tech news, Elon Musk’s Twitter made its first acquisition with job-matching tech startup Laskie, while the SEC rejected Coinbase’s plea for regulatory clarity.

Major Moves in the Business World

In the business arena, activist investor Engaged Capital is gearing up for a proxy fight for 3 board seats at Shake Shack, private equity group TPG will acquire debt and real estate manager Angelo Gordon for $2.7 billion, and Russia’s government has approved the sale of Volkswagen’s Russian assets.

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