Morgan Stanley's Mike Wilson warns U.S. stocks could slump another 22% if recession arrives in 2023
U.S. equities could face a sharper-than-expected selloff in 2023 from a recession shock that pushes stocks down another 22% from the current levels, according to Morgan Stanley's Michael Wilson.
The chief equity strategist, who correctly predicted the 2022 stock-market selloff, which saw all three major indexes cement their worst annual losses since 2008, suggested on Monday that the S&P 500 SPX could find a bottom around 3,000 points by the end of 2023. The index was trading around 3,919 at last check, according to FactSet.
Mary Daly Says Slower Rate Raises Could Help Fed Account for Monetary Policy Lags
Lags between Federal Reserve interest-rate increases and their effect on the economy could be an argument to raise interest rates by a quarter percentage point rather than a half point at the central bank's next meeting, Federal Reserve Bank of San Francisco President Mary Daly said Monday.
Speaking at a Wall Street Journal Live event, Ms. Daly suggested it might be a good idea to slow the pace of rate increases to see how previous rate moves have affected the economy. Some Fed officials have raised concerns that moving too fast could risk slowing the economy too much.
Chinese Banks Issued Higher-Than-Expected New Yuan Loans in December
Chinese banks issued higher-than-expected new yuan loans in December, as Beijing pivoted to supporting economic growth after Covid-19 infections roiled the country in the wake of an abrupt reopening.
New yuan loans stood at 1.4 trillion yuan ($206.72 billion) in December, higher than the CNY1.2 trillion issued in November, the People's Bank of China said Tuesday. Economists polled earlier by The Wall Street Journal had expected new yuan loans to be at CNY1.1 trillion in December.
China's Passenger Car Retail Sales Grew 1.9% in 2022
HONG KONG-China's passenger car retail sales growth slowed last year to 1.9%, down from more than 4% in 2021, as auto makers faced severe production disruptions and economic challenges under strict Covid curbs.
China's car makers and dealers sold 20.5 million passenger cars in 2022, the China Passenger Car Association said Tuesday.
Space Launches Should Withstand Chinese Challenge, Pentagon Mandate Says
The next generation of rockets built to launch U.S. spy satellites into orbit will have to be capable of fending off interference by China and Russia, according to people briefed on a coming Pentagon competition.
The Defense Department is preparing to issue new requirements for the contractors vying to build the rockets, intended to counter China's growing capabilities in space. That marks a change from previous contract awards, which were driven primarily by reliability and cost concerns.
Brazil's Former President Jair Bolsonaro, in Florida, Accused of Provoking Rioters Back Home
ORLANDO-President Luiz Inácio Lula da Silva laid much of the blame for the rioting that ransacked government buildings on his predecessor: a right-wing populist who has recently been seen thousands of miles away in Florida munching on fried chicken.
"There are several speeches by the former president encouraging this," Mr. da Silva said in a Sunday night television address of his conservative rival, Jair Bolsonaro, the former president. "This is also his responsibility and of those who support him. All of this will be investigated very strongly and quickly."
Biden Administration Plans to Ease Rules for Income-Based Student-Loan Forgiveness
The Biden administration on Tuesday released a detailed plan that will make it easier for student-loan holders to wipe out their debts using income-driven repayment plans.
The proposed rule from the Education Department is a key step in overhauling the $1.6 trillion federal loan program that has left millions with ballooning debts. The administration first announced the change in August when it unveiled its plan to cancel up to $20,000 in student debt for qualifying borrowers. The Supreme Court plans next month to take up a challenge to that broader debt-forgiveness, which is frozen after being blocked by lower courts.
China Bars South Korean Visitors in Response to Covid-19 Rules
HONG KONG-Beijing suspended issuing several types of short-term visas to South Korean citizens in the first of threatened retaliation measures over travel restrictions many countries have imposed on flights from China to curb the spread of Covid-19.
China's diplomatic mission has temporarily stopped issuing short-term visas to South Koreans for business visits, tourism, medical care, transit and other personal matters, the Chinese Embassy said in a notice issued on Tuesday.
House Passes Rules Package as Republicans Regroup After Speaker Fight
WASHINGTON-House Republicans passed a rules package Monday dictating the terms of the next session of Congress, the first test for House Speaker Kevin McCarthy (R., Calif.) in keeping his raucous conference united.
The rules package, a required step before moving on to legislation, is typically passed on the first day of a new Congress. But it was delayed by the GOP fight to elect a new speaker. Mr. McCarthy prevailed early Saturday morning on the 15th ballot over four days, after making a series of concessions to holdouts.
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This article is a text version of a Wall Street Journal newsletter published earlier today.
(END) Dow Jones Newswires
01-10-23 0618ET
