An Hour Ago
Technology Industry Still Recovering from Low-Rate Era, Bank of America Reports
The technology sector is still experiencing the lingering impacts of real rates being below 1%, as per Bank of America’s technology, media, and telecommunications team. According to the firm, the effects of the “zero interest rate policy” era are ongoing and expected to continue into 2024.
Bank of America’s TMT team noted that “Earnings were not a near-term priority at many companies, as valuations in Growth Tech were dictated by EV/Sales, total revenue growth, and revenue growth accretion, rather than earnings accretion.” They also mentioned that companies were incentivized to pursue low or no-margin revenues, creating distortions in the industry.
The trend had a significant impact on software, internet, e-commerce, and streaming companies, leading to overconfident management teams and investors, according to the report.
— Hakyung Kim
An Hour Ago
Morgan Stanley Anticipates ‘Slowing Growth, Easing Policy’ in 2024
Morgan Stanley forecasts that the U.S. GDP growth will decelerate next year and predicts that the Federal Reserve will maintain steady rates at 5.375% until June 2024, with expected rate cuts commencing thereafter. The chief U.S. economist Ellen Zentner outlined that the persistent drag from high rates will bring growth down below potential, further dampening GDP growth in 2024.
Zentner further mentioned that labor demand in 2024 will slow, but not plummet, emphasizing the potential for weakening growth to keep recession fears alive.
— Hakyung Kim
An Hour Ago
Stock Futures Open Slightly Lower
U.S. stock futures dipped on Sunday night, with futures tied to the Dow Jones Industrial Average falling by 43 points, and S&P 500 and Nasdaq 100 futures declining by 0.16% and 0.12%, respectively.
— Hakyung Kim
