Alpha Live latest information distribution: Top investors say “more things will break” in the stock market and economy

14 minutes ago

TCW CEO says investors need to prepare for coming recession

TCW Group CEO Katie Koch sees a recession in the U.S. economy and advises investors to play it safe.

“We’re going to go into a recession, because that’s how the world works. We haven’t had real panels for more than a decade and a half,” Koch said in his opening “Providing Alpha Panels.”

To combat the economic slowdown, he recommends a variety of conservative investments, from U.S. Treasuries to mortgage-backed securities to cash. “We haven’t seen the pain of rising interest rates yet, but it will come eventually.”

—Jeff Cox

52 minutes ago

TCW and Soros investment leaders say there are more reasons to be patient than aggressive in the market

The market has remained resilient this year despite recent stock declines, but two top investors say investors shouldn’t get complacent after seeing the U.S. stock market’s year-to-date returns. ing. It’s a mistake to bet aggressively on stocks in the short term, as things are likely to get worse before they get better, and you can earn 5% on your cash in the bank.

“We’re more bearish than most people about the future,” said Katie Koch, president and CEO of TCW. “If you reprice aggressively, things break,” she says.

Mr. Koch said that although the Fed has raised interest rates from zero to over 5%, the lag effects of monetary policy on the economy have not yet fully materialized, and the longer it takes to take effect, the more He said things would break.

“You’re now getting paid to be patient,” Koch said. “Cash has good returns.”

Dawn Fitzpatrick, CEO and chief investment officer at Soros Fund Management, said there is still a lot of pain behind the scenes with hundreds of billions of dollars in bond portfolios held to maturity by banks, and the recent He pointed out that the situation has been exacerbated by the sharp rise in interest rates.

Meanwhile, U.S. consumers hold $2 trillion in fixed-rate mortgages. That means the pain of rising interest rates is not being felt as acutely in real time in the U.S. as in other markets, where there are more mortgages in circulation. rate.

“Everything gets difficult from here,” she said.

— Eric Rosenbaum

17 minutes ago

One-third of office real estate could disappear

TCW President and CEO Katie Koch speaks at the Delivering Alpha conference on September 28, 2023 in New York.

Adam Jeffrey | CNBC

Remember what happened in the retail industry 10 years ago when a large part of retail started disappearing? Next, that’s going to happen in the office market.

Katie Koch, CEO and president of TCW, said about one-third of the existing office space supply would need to be taken off the market, particularly non-top-tier office properties.

“We have to give people a reason to come to work, and it has to be a great asset,” she added.

Market debt burdens will also remain under stress.

“The $1.5 trillion of the CMBS market will need to expand by 4 percentage points over the next 18 months or so,” Koch said.

Koch noted that TCW is a tenant and investor in downtown Los Angeles, calling it a “very tough real estate market” for large cities across America and that supply will be taken out of the market. Ta.

“In Los Angeles, San Francisco and other cities, some people are starting to leave buildings,” she said. “It’s a long tail of events.”

Ian Thomas

37 minutes ago

Even after the big boom, artificial intelligence has not yet reached its peak.

Even after this year’s excitement, there’s still room for artificial intelligence, according to TCW CEO and President Katie Koch.

“The story has a long way to go before it unfolds,” Koch said, noting that all technologies go through hype cycles, but AI has not yet reached its peak.

She compared AI to mobile phones and called it a “transformative technology” that will determine winners and losers across sectors.

— Samantha Subin

2 hours ago

Investors see 2023 gains as a bear market rebound, according to CNBC survey

The 13th annual CNBC Delivering Alpha Investor Summit comes at a critical time for the market, as investors grow increasingly concerned about further stock declines. A new CNBC Delivering Alpha Investor Survey finds that a majority of Wall Street investors are not reassured by stock market gains in 2023 and believe the market could retreat further as recession risk increases. ing.

We surveyed nearly 300 chief investment officers, equity strategists, portfolio managers, and CNBC contributors about where they stand in the market for the rest of 2023 and beyond. The survey was conducted this week.

More than 60% of respondents believe this year’s stock market rally is simply a bear market rebound, with more challenges ahead. A total of 39% of investors believe we are already in a new bull market.

When asked about the likelihood of a recession, 41% of survey respondents said they expected a recession to occur in mid-2024, and 23% said it would occur 12 months from now. Only 14% said they do not expect a recession.

— Yun Lee

1 hour ago

Investors can earn 10% on stocks, but only if they look outside the U.S., says Goldman’s public investment CIO.

With a 6% yield available in the bond market, stocks have to do a lot to deliver returns to investors on a risk-adjusted basis.

Ashish Shah, CIO of public investments at Goldman Sachs Asset Management, said such investments are possible, but only for investors willing to look beyond the U.S. market.

Shah sees this market setup as an “interesting buying opportunity” for stocks in India, Japan and other global markets. “There are a lot of good things happening around the world in the stock market, and one of the most important things is to look at the world,” Shah said in an interview before delivering Alpha on CNBC’s “Squawk Box.” He spoke at

How much should investors expect when buying foreign stocks?

“I think we can get 10% in equity, but we need to look internationally,” he said.

The USD trendline and tight US balance sheets, combined with bond yields, mean there are headwinds for USD-based assets in the near term. “It’s a great structure for cheap assets overseas,” Shah said, pointing to reflation trades in India, where there is significant investment tied to long-term trends, and Japan, where supply chain diversification is helping. ” he said.

And, he said, “valuations are much better than in the United States.”

Eric Rosenbaum

1 hour ago

Kyle Bass says Wall Street is more interested in making money in China than national security.

Kyle Bass, founder and chief information officer of Hayman Capital Management, said investors and companies looking to deepen rather than cut ties with China are making a “wrong bet” said.

“China’s dependence on Wall Street is deeply ingrained in us. All the major companies keep saying we need more integration, not less,” said Bass of Delivering Alpha. He said this in an interview with “Squawk Box” held on the sidelines. “They’re not interested in our national security, they’re interested in making another dollar. And someday we’re going to wake up and realize it was a bad bet.”

Bass said the desire to build a business relationship with China means “we’re looking for the cheapest labor, and we’re looking for the cheapest labor with a partner that is hostile to our way of life and our values.” He said that this comes from the fact that there are

He called the situation with China a cold war, saying: “We’re not doing a great job, but we’re starting to protect ourselves.”

One way Bass says the U.S. should protect itself is through an FTC review of TikTok. “TikTok has never had to obtain an FTC license because it broadcasts directly into children’s bedrooms,” he said.

Ian Thomas

1 hour ago

Ariel Alternatives CEO says private equity valuations will fall as more companies face cash pressure

Les Blanc, CEO of Ariel Alternatives, said private equity valuations are changing as more companies “run out of cash” and need to complete deals to fund growth. He said it would decrease.

In an interview with CNBC’s “Squawk Box” ahead of the Delivering Alpha Summit, Brann said the current situation is reminiscent of the 2008-2009 period. At the time, private equity investors had money and were able to make more money, but those who held on to their assets did not, and companies whose value fell during the crisis did not. Valuations will likely fall further because there aren’t enough buyers.

The current interest rate environment will put further pressure on valuations.

He said traditional companies struggle to find financing at attractive rates and deals need to be completed with more equity or lower valuations. “It has to be one or the other,” he said.

“They will have to find a way to do a deal at a lower valuation than expected,” Brann added.

Eric Rosenbaum

2 hours ago

Bill Ackman on the deck of Delivering Alpha this afternoon.

Bill Ackman, founder and CEO of Pershing Square Capital Management.

Adam Jeffrey | CNBC

U.S. Treasury yields have hit multi-year highs, and major stock market averages appear poised to make up for September’s weakness and weakness. The S&P 500 index closed below the 4,300 level for the first time since June earlier this week, while the Dow Jones Industrial Average posted its biggest single-day decline since March.Tech stocks have also come under pressure in recent weeks from the threat of rising interest rates.

Pershing Square’s Bill Ackman’s comments later today could play a pivotal role in market sentiment. The prominent billionaire hedge fund manager, who has been a vocal commentator on inflation, the Federal Reserve and the state of the markets, will speak with CNBC’s Scott Wapner at 4:15 p.m. ET.

— Samantha Subin

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