Stocks are likely to continue rallying on rising recession risks, Piper Sandler says
Rising risks of recession are unlikely to put a damper on the current market rally, according to Piper Sandler.
In fact, the opposite might be true.
“We believe stocks will rally on rising recession risks (i.e., softer macro data) — certainly an unusual take!” the investment firm wrote. “We remain constructive with the view that lower rates from softer macro data will set up stocks for another leg higher in the coming quarters.”
Going forward, Piper Sandler views higher rates as the greatest threat to the market rally and the most likely catalyst for a correction.
Bitcoin’s current market cap is greater than GDP of 159 of the world’s economies, and other surprising statistics from HSBC
In a Tuesday note, HSBC Global Research released a list of 13 surprising market statistics.
Here are a few:
- “The current market cap of Bitcoin is higher than the GDP of 159 of the world’s economies in 2023.”
- “40% of retail sales in Korea take place online vs less than 25% in the US and western Europe.”
- “Annual cement consumption in China is down 15% since 2020, but it is still more than the US has consumed in the last 20 years.”
- “India, Korea, and Taiwan all have twice the number of large, liquid companies open to foreign investors than there are in mainland China.”
Stock futures are slightly higher
Stock futures traded up modestly shortly following 6 p.m. ET.
Dow futures added 0.2%. S&P 500 and Nasdaq 100 futures each ticked up by 0.1%.
Stock markets continue to be resilient despite the rising risks of a global recession, as per Piper Sandler’s analysis. Contrary to conventional wisdom, Piper Sandler believes that stocks will rally on the back of these escalating recession risks, leveraging the impact of softer macro data. The investment firm maintains a constructive view, anticipating that lower rates driven by weakened macroeconomic indicators will pave the way for another leg higher in the stock market during the quarters to come. However, Piper Sandler identifies higher rates as the primary threat to the ongoing market rally, which might potentially trigger a market correction in the near future.
In a recent market analysis, HSBC Global Research presented 13 compelling market statistics that shed light on various global trends. One of the most striking statistics highlighted is the fact that Bitcoin’s market capitalization has surpassed the GDP of 159 different economies around the world. This astonishing feat demonstrates the growing significance and influence of cryptocurrencies in the global financial landscape. Furthermore, the report compares online retail sales in Korea, where 40% of transactions occur online, with the US and Western Europe, where the share remains below 25%. This emphasizes the rapid digital transformation of South Korea’s retail sector. Another noteworthy statistic relates to annual cement consumption in China, which has declined by 15% since 2020, but still exceeds the cumulative consumption of cement in the United States over the past two decades. Lastly, the report highlights that India, Korea, and Taiwan collectively host more large, liquid companies open to foreign investors compared to mainland China, indicating favorable investment opportunities in these regions.
Meanwhile, stock futures indicate a slightly positive start, with Dow futures edging up by 0.2%, while S&P 500 and Nasdaq 100 futures show a marginal increase of 0.1%. This suggests a potential continuation of the positive momentum in the stock market.
Looking ahead, the analysis from Piper Sandler and HSBC Global Research provides valuable insights into future trends and potential opportunities. As recession risks persist, investors should closely monitor the impact of macroeconomic data on stock prices. Additionally, the dominance of Bitcoin and the rapid growth of online retail in Korea highlight the increasing importance of digital currencies and technology-driven commerce. Investors may consider diversifying their portfolios to include exposure to these evolving sectors.
