Latest news with #Shalett
Yahoo
19-05-2025
- Business
- Yahoo
Why the rally in stocks is destined to fizzle out, according to Morgan Stanley's wealth CIO
The stock market rally will "stall out," Morgan Stanley's Lisa Shalett said. The Magnificent 7 stocks will lose momentum amid decelerating growth and dropping cash levels. Shalett suggested a turn toward beneficiaries of deregulation. Stocks have rallied sharply since April lows but investors shouldn't treat the upside as a blueprint for what's to come, a top Wall Street exec warned last week. Lisa Shalett, the chief investment officer at Morgan Stanley Wealth Management, said she expects slower momentum going forward among key tech stocks. That will jeopardize a sustained rally, she said. "I think we're going to stall out here. I think it's just hard to justify the numbers," she told Bloomberg TV on Friday, emphasizing that the top S&P 500 leaders are trading back at highs from earlier in the year despite a 6% earnings-per-share drawdown. Even for those who still believe the Magnificent Seven stocks' outperformance will last, Shalett listed three reasons to reconsider their bullishness. There's the fact that top-line growth has decelerated, as has free-cash-flow, she said. Typically, Mag Seven stocks don't perform well when the latter declines — the "arms race" to spend on AI has already shrunk free-cash-flow 11%, Shalett outlined. What's more, investors shouldn't forget the wall of uncertainty that still surrounds artificial intelligence, especially in terms of AI competition. Despite current market euphoria, this year's DeepSeek surprise shouldn't be discounted, showcasing that international AI competition is rising. "We fundamentally think it was the wake-up call around global engineering, global innovation, and the fact that none of us know how the movie ends here on Gen AI," Shalett said. Convinced that the AI rally is losing steam, Shalett suggested that investors take profits in tech now and gain exposure to the next beneficiaries: stocks set to rise on industry deregulation. That includes financials, energy, and certain healthcare names. Shalett's forecast isn't necessarily shared by everyone on Wall Street, with opinions split on what comes next after the recent tariff euphoria. Trade deals have revived investor bullishness, sending the S&P 500 up 19% from April's lowest point. Read the original article on Business Insider
Business Insider
19-05-2025
- Business
- Business Insider
Why the rally in stocks is destined to fizzle out, according to Morgan Stanley's wealth CIO
The stock market rally will "stall out," Morgan Stanley's Lisa Shalett said. The Magnificent 7 stocks will lose momentum amid decelerating growth and dropping cash levels. Shalett suggested a turn toward beneficiaries of deregulation. Stocks have rallied sharply since April lows but investors shouldn't treat the upside as a blueprint for what's to come, a top Wall Street exec warned last week. Lisa Shalett, the chief investment officer at Morgan Stanley Wealth Management, said she expects slower momentum going forward among key tech stocks. That will jeopardize a sustained rally, she said. "I think we're going to stall out here. I think it's just hard to justify the numbers," she told Bloomberg TV on Friday, emphasizing that the top S&P 500 leaders are trading back at highs from earlier in the year despite a 6% earnings-per-share drawdown. Even for those who still believe the Magnificent Seven stocks' outperformance will last, Shalett listed three reasons to reconsider their bullishness. There's the fact that top-line growth has decelerated, as has free-cash-flow, she said. Typically, Mag Seven stocks don't perform well when the latter declines — the "arms race" to spend on AI has already shrunk free-cash-flow 11%, Shalett outlined. What's more, investors shouldn't forget the wall of uncertainty that still surrounds artificial intelligence, especially in terms of AI competition. Despite current market euphoria, this year's DeepSeek surprise shouldn't be discounted, showcasing that international AI competition is rising. "We fundamentally think it was the wake-up call around global engineering, global innovation, and the fact that none of us know how the movie ends here on Gen AI," Shalett said. Convinced that the AI rally is losing steam, Shalett suggested that investors take profits in tech now and gain exposure to the next beneficiaries: stocks set to rise on industry deregulation. That includes financials, energy, and certain healthcare names. Shalett's forecast isn't necessarily shared by everyone on Wall Street, with opinions split on what comes next after the recent tariff euphoria. Trade deals have revived investor bullishness, sending the S&P 500 up 19% from April's lowest point.
Business Insider
19-05-2025
- Business
- Business Insider
Why the rally in stocks is destined to fizzle out, according to Morgan Stanley's wealth CIO
Stocks have rallied sharply since April lows but investors shouldn't treat the upside as a blueprint for what's to come, a top Wall Street exec warned last week. Lisa Shalett, the chief investment officer at Morgan Stanley Wealth Management, said she expects slower momentum going forward among key tech stocks. That will jeopardize a sustained rally, she said. "I think we're going to stall out here. I think it's just hard to justify the numbers," she told Bloomberg TV on Friday, emphasizing that the top S&P 500 leaders are trading back at highs from earlier in the year despite a 6% earnings-per-share drawdown. Even for those who still believe the Magnificent Seven stocks' outperformance will last, Shalett listed three reasons to reconsider their bullishness. There's the fact that top-line growth has decelerated, as has free-cash-flow, she said. Typically, Mag Seven stocks don't perform well when the latter declines — the "arms race" to spend on AI has already shrunk free-cash-flow 11%, Shalett outlined. What's more, investors shouldn't forget the wall of uncertainty that still surrounds artificial intelligence, especially in terms of AI competition. Despite current market euphoria, this year's DeepSeek surprise shouldn't be discounted, showcasing that international AI competition is rising. "We fundamentally think it was the wake-up call around global engineering, global innovation, and the fact that none of us know how the movie ends here on Gen AI," Shalett said. Convinced that the AI rally is losing steam, Shalett suggested that investors take profits in tech now and gain exposure to the next beneficiaries: stocks set to rise on industry deregulation. That includes financials, energy, and certain healthcare names. Shalett's forecast isn't necessarily shared by everyone on Wall Street, with opinions split on what comes next after the recent tariff euphoria. Trade deals have revived investor bullishness, sending the S&P 500 up 19% from April's lowest point.
Forbes
30-03-2025
- Business
- Forbes
Trump's Tariffs Aren't The Only Problem For The Stock Market
The stock market selloff has laid bare a crisis of confidence on Wall Street over Washington's policy direction, and tax-cut optimism — even the cuts themselves — may be not enough to lift investor spirits. 'The pace and sequencing of policy reform appear to have structurally impaired confidence, impeding growth forecasts,' said Lisa Shalett, Chief Investment Officer at Morgan Stanley, in a note to clients. Meanwhile, the policy pivot to deregulation and tax relief Wall Street has been banking on since the election remains elusive. The problem isn't just politics; the math simply doesn't add up. Even under the Republican base case, the cost of extending existing tax cuts is pegged at $4.5 trillion over the next decade. That's more than double the proposed spending cuts of $1.5 to $2.0 trillion, much of which would have to come from Medicaid and Medicare. 'Even in the best-case scenario, the implication is limited genuine progress on the 10-year debt and deficit forecast,' Shalett wrote. Investors hoping for growth from new cuts like the repeal of the SALT cap or exemptions on tip income may also be disappointed. According to Shalett, 'many of the proposals fall into [high fiscal multiplier] categories… [and] this is a very regressive policy stance, with the negative impacts unlikely to be offset by positive effects from tax cuts for higher-income households and corporations.' The administration has floated tariffs as a revenue solution, but here, the assumptions are questionable. According to the Trump administration estimates, fully implemented tariffs — 25% on Mexico and Canada, 10% on China — could generate $120 billion annually. But that figure is based on 'a maximalist scenario enduring for a decade,' Shalett noted. In reality, about half of Canadian and Mexican imports will be exempt under USMCA, and any revenue gains would likely be offset by retaliation, substitution, and declining import volumes. 'Tariff-revenue offsets [are] elusive,' Shalett added, and the unpredictability of trade policy has only made matters worse. The S&P 500 may have pulled back, but it's still not broadly cheap. Shalett noted that 'with upcoming fiscal drag likely to weigh on earnings estimates, the S&P 500 is still not broadly cheap, despite improved risk premiums.' Consensus earnings expectations have already dropped 3.5% for Q1. Shalett expects that 'negative revisions [will] continue, undermining the 'value' argument that may be emerging from the drawdown.' Her advice is to stay selective. 'Consider being opportunistic amid recent turbulence,' she said, pointing to stable growers in software, health care, and media, as well as financials and regional diversification in EM, Japan, and Europe. As she put it. 'Too soon to declare the 'all clear,' the market will likely remain volatile and idiosyncratic.'
Yahoo
30-03-2025
- Business
- Yahoo
New London waits for environmental test results for former dry cleaner, school
New London ― City officials in the coming weeks and months expect to receive environmental assessment reports for two vacant properties ― an abandoned dry cleaners and what was once New London's oldest school ― that will determine the fate of the parcels. Assessment teams are wrapping up studies of the former Harbor Elementary School building, 432 Montauk Ave., and the Shalett's dry cleaning business at 2 Montauk Ave., said Felix Reyes, the city's director of economic development and planning, on Thursday. 'What we learn from those reports will help any potential developer figure out what can be done with the properties,' Reyes said. 'It'll start the real conversations of whether we can keep the buildings and re-use them or have to demolish them.' Without a clear idea of what potential contaminants are embedded on the sites ― and what it would take to scour them out ― developers are justifiably leery of making any financial commitments on the land, Reyes said. 'It's difficult to do that not knowing what dark secrets those sites might contain,' he said. Assessing a shuttered school The city last year approved using $63,700 in federal COVID-19 American Rescue Plan Act monies for a Phase I and a partial Phase II environmental assessment of the 3-acre Harbor school property that includes a 104-year-old school building and two 1990-era annexes. A Phase I study usually entails poring through the history of a property, while a Phase II can include more invasive work, such as test borings and well monitoring. The school was shuttered in June 2023 after cracks were discovered on the main building's second and third floors, prompting a two-day closure of the structure for inspections. The closing led to 270 Harbor students and 45 staff members being reassigned to new schools. In addition to the main assessment work, GZA GeoEnvironmental Inc. was also tasked with carrying out targeted checks of the main building's soil for lead, and recreation areas for the presence of pesticides and other contaminants. A pre-demolition survey of the school will include checks for asbestos, lead, mercury and refrigerants. Reyes said that report is expected within six to eight weeks. EPA lends a hand The city took possession of the former Shalett's property in 2023 after its owner failed to pay $43,000 in back taxes. The 119-year-old white brick building on Garibaldi Square was owned and operated by the Shalett's Cleaning and Dying Corp. until 2004 when ownership was transferred to Ronit Inc., property records show. 'We basically inherited it,' Reyes said. The city was able to avail itself of free technical funding from the U.S. Environmental Protection Agency to conduct ongoing environmental studies of the property. A findings report is still several months from being complete. A request for proposal advertised last year, which called for transforming the 1.6-acre property, and its 11,000-square foot building, into a 'vibrant, multi-functional space,' attracted one interested company, Parker Benjamin, a national real estate and investment banking firm. Parker Benjamin representatives could not be reached for comment on Friday. Reyes said Parker Benjamin has made no formal offer on the property, but Reyes said informal conversations have revolved around creating a new, mixed-use development there.
