Podcast Summary
JPMorgan Chase CEO Expects More Market Turbulence: JPMorgan Chase CEO Jamie Dimon anticipates more market turbulence due to underestimated inflation impact from fiscal spending, green economy, geopolitical tensions, and global trade restructuring. AI is seen as transformational technology, and bond traders focus on upcoming CPI data with varying inflation expectations.
Key takeaway from today's Wall Street lunch is that JPMorgan Chase CEO Jamie Dimon expects more market turbulence than what is currently priced in, with a broad range of interest rates and economic outcomes. He believes that markets are underestimating the impact of inflation, driven by fiscal spending, the green economy, geopolitical tensions, and global trade restructuring. Additionally, Dimon sees AI as a transformational technology, potentially on par with major inventions like the printing press and the Internet. In the bond market, traders are focusing on upcoming CPI data, with US consumers keeping short-term inflation expectations unchanged but median 3-year and 5-year expectations edging up and down, respectively. Richard Saperstein of Treasury Partners anticipates further volatility in inflation data and a longer time frame until it reaches the Fed's 2% target.
Investor concern grows as interest rates rise: Rising interest rates are causing worry for investors, potentially leading to significant stock impact when yields increase by around 60 basis points over a month, while earnings season will provide important insights into market conditions.
Higher interest rates are causing increasing concern for investors, with the 2-year Treasury yield nearing 4.8% and the 10-year yield at 4.45%. Tony Pasquariello, of Goldman Sachs, suggests that a significant impact on stocks may occur when yields rise by around 60 basis points over a month, which would bring the 10-year yield to approximately 4.8%. Despite this, Wells Fargo has raised its year-end S&P 500 target to 5535, but analysts remain cautious due to elevated market multiples and rising bond yields. Active stocks saw movement today, with Apartment Income REIT rallying after Blackstone agreed to purchase the company for a 25% premium, Fastly gaining favor from Piper Sandler due to market share growth, and Perion Network plunging after cutting full-year guidance. Ultimately, the earnings season will provide crucial evidence of earnings growth to help navigate the uncertain market environment.
Tesla's Robo Taxi Fleet Reveal and Citi's Stock Picks: Tesla sets August 8th for robo taxi fleet reveal, experts predict a long journey due to legal and regulatory issues. Citi's recommended stocks, led by Amazon and Quanta Services, have outperformed the market this year.
Tesla is making moves towards revealing its robo taxi fleet, with Elon Musk setting an August 8th date for the reveal. This news came as Uber and Lyft faced pressure in the market. Musk also disputed reports that Tesla had canceled plans for a more affordable Model 2 vehicle. While being the first to offer full autonomy at scale could provide a significant first-mover advantage, experts predict that legal and regulatory issues could make the realization of a robo taxi fleet a decades-long journey. In other news, Citi's basket of recommended large cap stocks has outperformed the broader market benchmark year to date, with Quanta Services having the highest return since its addition and Prologis being the worst performer. Among the picks are Amazon, Walmart, Bank of New York Mellon, Delta Airlines, and Lockheed Martin. Tesla's potential robo taxi fleet and the ongoing performance of Citi's recommended stocks are key developments to watch in the business world.