Posted by Keyman188 > 2020-06-24 08:34 | Report Abuse

There’s a wave of selling estimated to be in the billions that’s about to hit the stock market

PUBLISHED TUE, JUN 23 20201:18 PM EDTUPDATED 3 HOURS AGO

~ The final day of June is a week away, and Wall Street is already speculating that there’s the potential some asset allocators, like pension funds, could take the big gains from the stock market and move them into bonds.

~ There’s a wide range of views about how much selling could hit the stock market, but some strategists say the resulting market move may not be that big after all because of prior selling and action in the derivatives market.

~ The amount of pension fund rebalancing is estimated in a wide range, with some estimates from $35 billion to $76 billion.

~ Wells Fargo estimates the rebalance into bonds could be the largest in six years.


With the S&P 500 up more than 21% for the quarter so far, strategists are handicapping the likelihood that pensions and other funds and investors will sell some of their big stock market gains and buy bonds in the course of the next week.

Estimates of how much could move out of the stock market are wide ranging and JPMorgan analysts say if stocks lose ground as a result, it would be a buying opportunity. There’s also the chance that not much at all could happen, since some strategists say the volatility of month end and quarter end may have already been playing out in the equity derivatives markets, and investors could also have already been shifting stock holdings.

“The end of the quarter is going to be pretty interesting, given how much the market has moved during this quarter. There could be volatility here. We already witnessed it and there’s potential for more, as we move toward the end of Q2,” said Dan Deming, managing director at KKM Financial.

Bond strategists pay particular attention to the month end, which can bring about moves in fixed income markets as pensions and other funds and investors adjust their portfolios to bring asset allocations back in line. Quarter end makes it an even bigger event, and this quarter’s big move in stocks has some speculating there could be a sizeable move by pension funds into bonds, with some estimates ranging from $35 billion to $76 billion.

“We estimate that U.S corporate pensions will move about $35 billion into fixed income,” said Michael Schumacher, director of rates strategy at Wells Fargo. He added that is the largest flow in the six years he has been tracking portfolio rebalancing.

“The reasons are pretty obvious. You had this massive rally in stocks and bonds haven’t been keeping pace,” said Schumacher. The S&P 500 is up 3.3% for the month of June. Schumacher said his estimate is based on the assumption that about 20% of the amount of imbalance will be traded at month end.

But JPMorgan analysts see an even bigger $65 billion rebalancing flow from U.S. defined benefit pension funds. But on a global basis, they say there could be $170 billion that could flow from equities, when considering U.S. corporate pension plans, mutual funds and other global institutions like Norway’s Norges Bank, which manages state funds.

Goldman Sachs reportedly identified $76 billion in pension selling of stocks.

“While we acknowledge the risk of a small correction in equity markets over the coming two weeks as a result of this negative equity rebalancing flow, we continue to believe that we are in a strong bull market in equities and any dip would represent a buying opportunity,” the JPMorgan strategists wrote.

Schumacher said after the “monster” stock market rally the pension outflows should be highest in U.S. large-cap stocks, followed by small caps and international stocks. He said if 10-year Treasury yields moved back toward June’s high of near 0.96%, and if stocks rise along with it, there’s potentially $50 billion that could roll from stocks into bonds.

“Three weeks ago, there was a move like that, so it’s conceivable. I would call that the upper bound. It could happen. Markets have been pretty weird so you can’t totally discount it,” he said. “There’s been more bizarre behavior in 2020 than in the last 10 years combined.”

Corporate pension funds likely returned about 10% this quarter, Schumacher said. He added that stock market gains have helped pensions improve their solvency rate by an estimated 0.6 percentage point, to near 85%.



##https://www.cnbc.com/2020/06/23/theres-a-wave-of-selling-estimated-to-be-in-the-billions-thats-about-to-hit-the-stock-market.html

Posted by Keyman188 > 2020-06-24 14:42 | Report Abuse

Bursa Malaysia market sentiment still extremely weak...

Another 4 more day, IDSS will be uplifted......

Very vulnerable market coming soon...........

Posted by Keyman188 > 2020-06-24 16:05 | Report Abuse

Stock market bubble burst is possible, says MIDF Research

(theedgemarkets.com / June 24, 2020 14:54 pm +08)

KUALA LUMPUR (June 24): Given the current flood of liquidity in the equity market, MIDF Research has not discounted the possibility of a "market bubble burst" following the recent rebound in the FBM KLCI.

MIDF Research senior analyst Imran Yassin Md Yusof said that although the rebound may look sustainable at the moment, he is of the belief that it may not last for long.

"Of course there is a possibility for the bubble to burst because eventually, the market will follow fundamentals, and [corporate] earnings prospects are not that great.

"So yes, we do think that there is going to be another downward thrust," he said today during MIDF's Live Webinar entitled "Surviving & Embracing Malaysia's New Normal".

After falling nearly 400 points to a low of 1,219.72 points in mid-March due to the Covid-19 pandemic, its lowest since the global financial crisis in October 2009, the KLCI has been observed to project a rebound, erasing nearly all its losses this year.

Yesterday, the composite index closed at 1,507.04 points, representing a jump of 23.5% since the lowest point in March.

Imran said his team had calculated that over US$14 trillion (RM59.84 trillion) in stimulus programmes and packages, both in terms of fiscal and monetary, from countries around the world had been injected into the global economy.

This, he said, resulted in some sort of a disconnect between the underlying lacklustre economic growth prospects and the liquidity-driven bullish stock market.

"What we expect, as I said earlier, [is that] the market will follow fundamentals and earnings sooner or later. With more bad numbers coming out, we expect that will put downward pressure on the market," Imran added.

In terms of investment strategy, Imran advised his investors to look for companies that are fundamentally strong, and in a typically defensive sector if possible, as well as dividend-yielding.

He pointed to the tech sector as the sector that might be the most resilient during the current economic uncertainty, given the fact that there is still a lot of technology adoption that companies need to embrace.

Meanwhile, MIDF group managing director Datuk Charon Wardini Mokhzani highlighted that prolonged liquidity in the financial market may also worsen wealth inequality.

"The people with money are just getting richer because if we have the money to put into the market and invest in assets, we are the only ones who will be making more and more. And that money was originally supposed to help the guy with no money, but for some reason, that money ended up in the market.

"Unfortunately, it does mean that the rich get richer, which again, in the long run, is not sustainable," he added.



##https://www.theedgemarkets.com/article/stock-market-bubble-burst-possible-says-midf-research

Posted by Keyman188 > 2020-06-25 08:52 | Report Abuse

Dow drops more than 700 points in worst day since June 11 as virus resurgence concerns grow

PUBLISHED TUE, JUN 23 20206:04 PM EDTUPDATED 4 HOURS AGO

Stocks fell sharply on Wednesday as the increasing number of newly confirmed coronavirus cases dampened expectations of an economic recovery.

The Dow Jones Industrial Average dropped 710.16 points, or 2.7%, to 25,445.94. The S&P 500 closed 2.6% lower at 3,050.33 while the Nasdaq Composite slid 2.2% to 9,909.17. The tech-heavy Nasdaq posted its first daily decline in nine sessions. It was the worst day for the Dow, S&P 500 and Nasdaq since June 11.

Florida said its confirmed cases jumped by 5,508 on Tuesday, a record, and now total 109,014. The state also said its positivity rate rose to 15.91% from 10.82%. Stocks fell to their session lows after Florida reported its latest case figures. At one point, the Dow had fallen more than 800 points on Wednesday.

California is one of the states that has also seen a dramatic spike in cases, adding a record of more than 7,000 in one day on Tuesday. In Texas, the Covid-19 number of Covid-19 cases jumped by 5,489. Meanwhile, New York, New Jersey and Connecticut ordered visitors from certain hotspot states to quarantine for 14 days.

“The latest coronavirus news is not positive for the stock market which was betting the worst of the pandemic recession was behind us,” said Chris Rupkey, chief financial economist at MUFG. “All the hopes of investors looking for a better economy to improve the bottom lines of companies shut down in the recession have been dashed. Forget about the fears of the virus coming back in the fall, the number of new cases and hospitalizations in states like Arizona, Texas, and Florida says the threat is happening right now.”

Shares of companies primed to benefit from the economy reopening faltered. United Airlines fell 8.3%. Delta, American and Southwest all slid over 7%. Airlines were especially hit by the quarantine orders issued by New York, New Jersey and Connecticut.

“It’s definitely the reason for the last leg down. Airline stocks and transports are down, and oil tanked,” said Peter Boockvar, chief investment officer at Bleakley Advisory Group. “The regional quarantine sparked concerns about a dampening of activity as the economy in the region is just reopening.”

Carnival, Norwegian Cruise Line and Royal Caribbean were lower by 11.1%, 12.4% and 11.3%, respectively. Retailer Gap also fell 7.8%. Disney, meanwhile, declined by 3.9% after its Orlando theme-park workers petitioned to postpone the reopening amid the spike in cases in Florida.

The “market is going down on this...bottom line,” Evercore ISI strategist Dennis DeBusschere wrote in an email. It “brings up the question: What will California do? They have had consistent case growth and never really opened up.”

Masks and social distancing, which had been enforced to varying degrees across the country in recent week, “will become the norm nationally,” the strategist wrote.

He added that the Covid numbers also have implications for politics and policy that the market may not like. Specifically, DeBusschere argued that the infection spike weighs against President Trump’s odds of reelection and reinforce the case for even more fiscal stimulus from Congress.

Wednesday’s sell-off in equities led investors into traditional safe havens such as gold and Treasurys. Gold prices hit their highest levels in nearly eight years, before retreating. The 10-year Treasury note yield fell to 0.68%. To be sure, the drop in stocks would feel even more significant if it occurred any other year, but in 2020, volatility is the norm. The 2.7% drop by the Dow was just its 16th worst drop this year.

“Markets pause with all eyes on the virus and the reopening heading into the summer months,” said Gregory Faranello, head of U.S. rates trading at AmeriVet Securities, in a note. The health side is back front and center as both monetary and fiscal liquidity has been factored in short-term. We have entered a new phase of this crisis.”

Oil prices fell more than 5.6% to settle back below $40 per barrel.

Wall Street was coming off a banner day, with the Nasdaq Composite posting its 21st closing record for 2020 on Tuesday. The Nasdaq’s gain on Tuesday also represented its eighth straight day of gains, its longest winning streak since December, when it advanced for 11 straight sessions.


##https://www.cnbc.com/2020/06/23/stock-market-futures-open-to-close-news.html

Posted by Keyman188 > 2020-06-25 09:43 | Report Abuse

OMG...Finally KLCI break below 1490 level......

Bursa Malaysia market sentiment still extremely weak...

Another 3 more day, IDSS will be uplifted......

Very vulnerable market coming soon...........

Posted by Keyman188 > 2020-06-25 11:34 | Report Abuse

IMF revises Malaysia 2020 GDP forecast to 3.8% contraction

(theedgemarkets.com / June 25, 2020 11:18 am +08)

KUALA LUMPUR (June 25): The International Monetary Fund (IMF) has revised its Malaysia 2020 gross domestic product (GDP) forecast to a 3.8% year-on-year (y-o-y) contraction from the previously estimated 1.7% contraction as the Covid-19 pandemic has had a more negative impact on global activity in the first half of 2020 (1H20) than anticipated.

The IMF said in its June 2020 World Economic Outlook Update report that global economic recovery is projected to be more gradual than previously forecast.

"Global growth is projected at -4.9% in 2020, 1.9 percentage points below the April 2020 World Economic Outlook forecast. For 2021, global growth is projected at 5.4%. Overall, this would leave 2021 GDP some 6½ percentage points lower than in the pre-Covid-19 projection in January 2020.

"The adverse impact on low-income households is particularly acute, imperilling the significant progress made in reducing extreme poverty in the world since the 1990s,” the IMF said.

Malaysia’s 2019 GDP grew 4.3% from a year earlier, while first quarter of 2020 (1Q20) GDP expanded 0.7%, according to Bank Negara Malaysia (BNM) and the Department of Statistics Malaysia (DOSM).

For 1Q20, BNM said in a statement on May 13, 2020 that on a quarter-on-quarter seasonally-adjusted basis, the economy contracted 2% during the quarter.

"The global and Malaysian economic outlook for 2020 will be significantly impacted by the Covid-19 pandemic as strict measures to contain the spread of the pandemic will weigh considerably on both external demand and domestic growth. The Malaysian economy is expected to contract in the second quarter. This reflects the longer duration of containment measures both globally and domestically.

"When these containment measures are eased and the domestic MCO (movement control order) is lifted, economic activity is expected to gradually improve in 2H20. The sizeable fiscal, monetary and financial measures and progress in transport-related public infrastructure projects will provide further support to growth in 2H20. In line with the projected improvement in global growth, the Malaysian economy is expected to register a positive recovery in 2021,” BNM said.


##https://www.theedgemarkets.com/article/imf-revises-malaysia-2020-gdp-forecast-38-contraction

Posted by Keyman188 > 2020-06-25 17:08 | Report Abuse

OMG...Finally KLCI closing below 1490 level......

Bursa Malaysia market sentiment still extremely weak...

Another 3 more day, IDSS will be uplifted......

Very vulnerable market coming soon...........

Posted by Keyman188 > 2020-06-25 17:11 | Report Abuse

World Bank projects Malaysia's economy to decline by 3.1% in 2020

(theedgemarkets.com / June 25, 2020 13:43 pm +08)

KUALA LUMPUR (June 25): The Malaysian economy is projected to contract by 3.1% in 2020, due to a sharp slowdown in economic activity caused by the Covid-19 pandemic and lockdown measures to contain its spread, according to the World Bank.

Malaysia's economic growth of 4.3% in 2019 was already the country's lowest level since the global financial crisis in 2009.

Note that the World Bank already revised down its Malaysia's 2020 gross domestic product (GDP) growth target to 4.5%, from 4.6%, back in December 2019 in its previous Malaysia Economic Monitor report.

However, the World Bank expects growth to resume in 2021 at 6.9% as the outbreak eases.

Most importantly, the World Bank pointed out that the crisis underscored the need for a more enhanced social protection system in order to protect individuals and households in Malaysia, especially among the bottom 40% income group (B40), the most vulnerable group to be hit the worst by the pandemic.

"Important social protection measures are needed to help vulnerable Malaysians survive the current economic storm and thrive in the new post-pandemic reality.

"Protecting livelihoods is important so that those who have lost their jobs and businesses are able to get back on their feet and contribute to Malaysia’s economic recovery,” said Firas Raad, World Bank Group's representative to Malaysia and country manager, during the launch of the Malaysia Economic Monitor — "Surviving the Storm" report today.

The World Bank report highlighted that the country's social protection system is facing challenges from the changing nature of work and a rapidly ageing population.

Although the coverage of social assistance is high across all income groups, especially among the B20, the World Bank argued that social assistance programmes in Malaysia had so far only had a modest impact on poverty reduction and promoting productive employment.

As such, the report recommended that in the near term, government efforts should focus on supporting relief and recovery efforts by deepening social assistance for lower-income households, improving the delivery of social protection programmes and promoting job recovery.

The World Bank said that as the recovery continues, further rounds of cash transfers will remain vitally important to mitigate acute financial strain among the most vulnerable groups in Malaysian society, and support domestic consumption and human capital development during a severe economic downturn.

Over the medium and long term, support for lower-income groups can be gradually expanded to ensure that Malaysia’s social protection system provides a minimum level of protection to all households and individuals in need, it added.

Nevertheless, the bank said Malaysia’s economy remains resilient and rests on strong fundamentals.

“Its diversified economic structure, sound financial system, effective public health response and proactive macroeconomic policy support suggest that Malaysia will be able to ride out the storm better than many other countries,” it said.


##https://www.theedgemarkets.com/article/world-bank-projects-malaysias-economy-contract-31-2020

Posted by Keyman188 > 2020-06-25 17:14 | Report Abuse

KLCI more & more downside risk due to IMF & World Bank had revised Malaysia economy will be contracted by 3.80% & 3.10% respectively in year 2020...

KLCI foresee more & more foreign fund will be withdrawing investment funds out from Malaysia...

Posted by Keyman188 > 2020-06-26 08:36 | Report Abuse

KLCI more & more downside risk due to IMF & World Bank had revised Malaysia economy will be contracted by 3.80% & 3.10% respectively in year 2020...


KLCI foresee more & more foreign fund will be withdrawing investment funds out from Malaysia...


Bursa Malaysia market sentiment still extremely weak...


Another 2 more day, IDSS will be uplifted......


Very vulnerable market coming soon...........

Posted by Keyman188 > 2020-06-26 10:06 | Report Abuse

OMG...today market no more stem to rebound...


Bursa Malaysia market sentiment still extremely weak...


Another 2 more day, IDSS will be uplifted......


Very vulnerable market coming soon...........


Foresee afternoon session more selling pressure........

Posted by Keyman188 > 2020-06-26 10:28 | Report Abuse

IMF warns disconnect in financial markets risks a correction in asset prices

PUBLISHED THU, JUN 25 20208:31 AM EDTUPDATED THU, JUN 25 202011:12 AM EDT

~ A correction is defined as a 10% or more decline in the price of an asset or index.

~ The IMF estimated earlier this week that the global economy would contract by 4.9% this year, before growing at a pace of 5.4% in 2021. Both estimates were downgraded from April’s forecast.


The International Monetary Fund has warned that the ongoing disconnect between financial markets and the real economy could lead to a correction in asset prices.

In recent months, equity markets have rallied despite troubling real-world events. The world is grappling with the coronavirus health emergency that has taken the lives of almost 500,000 people, according to John Hopkins University data, and threatens to cause an unprecedented economic crisis. In addition, there is social unrest in many advanced economies as citizens demand a more equal society, which could hit investor confidence.

Recent data indicates a deeper-than-expected downturn, the Fund added, but markets appear unfazed: the S&P 500 enjoyed its largest 50-day rally in history in early June.

“This disconnect between markets and the real economy raises the risk of another correction in risk asset prices should investor risk appetite fade, posing a threat to the recovery,” the IMF said Thursday in its updated Global Financial Stability report.

A correction is defined as a 10% or more decline in the price of an asset or index.

The Fund said that valuations currently looked stretched across many different markets.

“According to IMF staff models, the difference between market prices and fundamental valuations is near historic highs across most major advanced economy equity and bond markets, though the reverse is true for stocks in some emerging market economies,” it said.

Triggers for a shift in market sentiment could include a second wave of coronavirus infections, further social unrest, changes to monetary policy and a resurgence in trade tensions, the Fund added.

Asset and fund managers

There is a risk that “nonbank” financial companies — such as asset and fund managers — could also face shocks in the event of a broad wave of insolvencies. The IMF warned that these businesses could even act as an amplifier of this stress.

“For example, a substantial shock to asset prices could lead to further outflows from investment funds, which could, in turn, trigger fire sales from those fund managers that would exacerbate market pressures,” the Fund said.

The IMF estimated earlier this week that the global economy would contract by 4.9% this year, before growing at a pace of 5.4% in 2021. Both estimates were downgraded from April’s forecast.

“There is tremendous uncertainty,” Gita Gopinath, the IMF’s chief economist told CNBC’s Squawk on the Street Wednesday.

She added that “substantial support will need to be continued,” but its form will depend on how the recovery goes.

Governments and central banks around the world have launched large stimulus programs in an effort to keep economies afloat. In the euro zone, for instance, the European Central Bank is buying government bonds as part of a 1.35 trillion euros ($1.5 billion) emergency program to keep borrowing costs low for euro zone governments. Meanwhile,

The IMF also warned that corporate debt had risen over several years and currently stands at a “historically high level relative to GDP (gross domestic product).” This, coupled with household debt, which has also grown over the last years, is another vulnerability in the financial sector and could have a broader impact in the ongoing economic crisis.

“High levels of debt may become unmanageable for some borrowers, and the losses resulting from insolvencies could test bank resilience in some countries,” the IMF said.


##https://www.cnbc.com/2020/06/25/imf-global-financial-stability-markets-disconnect-risks-a-correction.html

Posted by Keyman188 > 2020-06-26 15:14 | Report Abuse

OMG...today market really no more stem to rebound...


Bursa Malaysia market sentiment still extremely weak...


Another 2 more day, IDSS will be uplifted......


Very vulnerable market coming soon...........


As Keyman188 highlighted morning, afternoon session more selling pressure........

Posted by Keyman188 > 2020-06-26 15:47 | Report Abuse

Dow futures down nearly 200 points after bank stress test results, Nike reports surprise loss

PUBLISHED THU, JUN 25 20206:01 PM EDTUPDATED 17 MIN AGO

U.S. stock futures were lower in early morning trade on Friday following the release of the Fed’s latest bank stress-test results and disappointing quarterly numbers out of Nike.

Dow Jones Industrial Average futures were down 173 points, while S&P 500 and Nasdaq-100 futures also traded in negative territory.

The moves came after the Fed’s annual stress test of the major banks showed some banks could get close to minimum capital levels in scenarios related to the coronavirus pandemic. Because of this, banks must suspend share repurchase programs and keep dividend payments at current levels for the third quarter.

“While I expect banks will continue to manage their capital actions and liquidity risk prudently, and in support of the real economy, there is material uncertainty about the trajectory for the economic recovery,” Fed Vice Chair Randall Quarles said in a statement.

The announcement sent some bank shares lower in after-hours trading. Bank of America and JPMorgan Chase both dipped more than 1.8%. Wells Fargo slid 3% and Goldman Sachs fell 3.4%. Bank stocks were coming off sharp gains, rallying more than 3% during regular trading Thursday.

Meanwhile, Nike shares slid nearly 4% after the bell on the back of a surprising quarterly loss for the apparel giant.

The company reported a loss of 51 cents per share and revenue of $6.31 billion for the its fiscal fourth quarter. Nike’s quarterly revenue reflected a drop of 38% on a year-over-year basis.

Wall Street was coming off strong gains after a late-day surge helped the major averages recover some of the steep losses from Wednesday’s session. The Dow jumped nearly 300 points Thursday while the S&P 500 and Nasdaq Composite each closed higher by 1.1%.

The major averages, however, struggled for direction for most of Thursday’s session as the number of coronavirus cases keeps rising in certain states. Florida reported just over 5,000 additional cases. Arizona’s cases jumped by 5.1%, topping a seven-day average of 2.3%. Texas Gov. Greg Abbott said the state would pause its reopening plans given the recent spike in cases and hospitalizations.


##https://www.cnbc.com/2020/06/25/stock-market-futures-open-to-close-news.html