CNBC Pro: Veteran investor says one type of energy company is ‘extremely attractive’ — naming a stock he likes
The commodities market is a “much more constructive place to invest” right now — and one type of company in the energy sector in particular is “extremely attractive,” according to one portfolio manager.
We’re “at the beginning of a longer term commodity cycle,” Aaron Dunn, co-head of value equity and portfolio manager at Morgan Stanley Investment Management, told CNBC’s “Squawk Box Asia” on Wednesday.
He named one stock he likes and others on his radar.
CNBC Pro subscribers can read more here.
— Amala Balakrishner
CNBC Pro: This bearish fund manager thinks the U.S. is headed for a major debt crisis. Here’s what he’s buying.
The U.S. is headed for a major debt crisis due to fiscal deficit being at the “worst structural point since World War Two,” according to value investor Matthew McLennan.
McLennan, who manages First Eagle’s Global Fund, said equity and bond markets are showing signs of “relative complacency” and are yet to digest the full impactions of the state’s borrowing program.
The fund manager also named the asset and stock to own to hedge against the risks markets face over the next few quarters.
CNBC Pro subscribers can read more here.
— Ganesh Rao
CNBC Pro: Goldman reveals its brand new ‘conviction list’ of European stocks — giving one nearly 150% upside
Goldman Sachs has a new list of top stock picks for Europe, which it called its “most differentiated” ideas for the region.
CNBC Pro takes a look at seven of them.
CNBC Pro subscribers can read more here.
— Weizhen Tan
The market will end 2023 with both lower rates and stocks, says Carter Worth
Worth Charting CEO Carter Worth is going against consensus by betting on a weakening dollar and falling interest rates and oil prices.
“I think when you get so much crowding and the sequence calls for a counter trend, try to play for it,” Worth told CNBC’s “The Exchange” on Wednesday. “My judgment is the timing here is to be buying bonds and to be fading the dollar.”
Generally, declining interest rates boost stock prices, so Worth’s forecast could provide fuel for the investors who predict a year-end stock market rally. But Worth cautioned that asset class relationships aren’t always perfectly inverse, and believes instead that the market will end up with both lower rates and lower stocks at the end of 2023.
— Lisa Kailai Han
Rate uncertainty drove Tuesday’s selloff, but there is a limit to how high yields will go, says Vanguard’s Aliaga-Diaz
Tuesday’s run-up in bond yields spooked investors, but the move is a side effect of markets transitioning to the new reality of higher interest rates, said Roger Aliaga-Diaz, global head of portfolio construction in Vanguard’s investment strategy group.
More than a year into the Federal Reserve’s policy tightening campaign, interest rates are likely to settle at a higher point compared to the pre-pandemic era, he said.
“The neutral policy rate is now higher on a permanent basis, perhaps 3.5% or 4%, and that gives you a higher floor for the 10-year bond compared to previous years,” Aliaga-Diaz told CNBC.
That adjustment results in two outcomes. “One it’s very painful on the front end because things are resetting to these higher rates,” he said. “And [two] you have the market digesting this news over the past few weeks.”
Aliaga-Diaz noted that while the central bank has communicated that rates will stay higher for longer, there’s also an implicit cap as to how high those rates will go. “It could be because of uncertainty and volatility that you can see higher 4 and even 5%,” he said, regarding the 10-year Treasury yield. “But we don’t see that as a permanent level of rates.”
-Darla Mercado
Oil hits lowest level since Sept. 5
Oil prices fell sharply Wednesday.
