Here are the takeaways from today’s Morning Brief. Sign up to receive the following in your inbox each morning:
Volatility is on the rise again this week, and you’ve probably seen the warnings against checking your 401(k). Advise you to buy stocks on the decline. Encourage portfolio rebalancing. Some say that the possibility of an economic recession is increasing.
I mean, weeks like this can be scary and confusing.
Steve Sosnick, chief strategist at Interactive Brokers, appears with a Zen-like suggestion. “Please breathe.”
When faced with a selloff, investors have three options: buy, sell, or hold. Of course, these are always optional. But when there is disruption, it’s worth remembering that doing nothing is always an option.
There are many commentators who agree with this moderate tone.
“To date, asset market volatility has remained within historically normal ranges and is not alarming in our view,” Michael Gapen, head of U.S. economics at BofA Global Research, said in a note to investors. ” he said. Evercore ISI’s Julien Emanuel told clients that stocks remain in a bull market. Kevin Gordon, senior investment strategist at Charles Schwab & Co., also explained to Yahoo Finance why he doesn’t see recent employment data as a sign of a recession.
Goldman Sachs’ strategy team, led by David Kostin, announced earlier this week that it is sticking to its goal of getting the S&P 500 index to 5,600 this year. In a note to clients, they noted that their 2024 and 2025 revenue and profit expectations remain unchanged, and that the S&P 500 typically falls 5% before rebounding.
Of course, not everyone is saying, “Oh.” David Rosenberg of Rosenberg Research told Yahoo Finance that the U.S. economy remains headed for recession. For now, that view appears to be in the minority, even though JPMorgan economists have raised their forecast for the probability of an economic contraction by the end of the year from 25% to 35%.
Meanwhile, Sosnick said he’s been getting a lot of calls from friends outside of the financial industry asking, “What should I do?” His answer: “Nothing.”
He said there is one thing to be aware of, especially if Monday’s decline “spooks you, it’s too much risk.” If a margin call occurs, you may want to reduce your risk a little more. ”
Julie Hyman is co-anchor of Yahoo Finance Live, which airs weekdays from 9 a.m. to 11 a.m. ET. Follow her on X @juleshymanand read her other stories.
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