CNBC Pro: Keep cash while they beat the market, say the pros
Strategists are urging investors to allocate more of their portfolios to cash in these volatile times, as rising interest rates mean they now offer higher returns.
“Cash was king” last month, Bank of America said in a Sept. 1 note, as most asset classes — such as stocks, bonds and even commodities — posted losses.
Here’s how to add it to your portfolios, according to the pros.
CNBC Pro subscribers can read more here.
— Weizhen Tan
Where the big averages stand to start the week
Last week’s sell-off saw the major averages post their third straight week of losses. All 11 S&P 500 sectors that ended the week in the negative led materials to the downside, which fell nearly 5%.
Here’s how the major averages fared:
- The Dow Industrial Average fell 1.1 percent on Friday. The 30-stock index closed about 3% lower for the week and ended more than 15% off its 52-week high.
- The S&P 500 fell 1.1% on Friday and 3.29% for the week. The benchmark index hit its lowest close since July, closing more than 18% off its 52-week highs.
- The Nasdaq Composite fell 1.3% on Friday, ending its sixth consecutive negative session for the first time since 2019. The tech-heavy index fell 4.21% for the week and closed more than 28% off its 52-week high.
—Samantha Subin, Christopher Hayes
Truist’s Lerner on searching for signs of “stabilization” in an oversold market
How markets react to the news over the weekend could play an integral role in where markets move forward, Truist’s Keith Lerner said
“The best side for the bulls would be that the market is actually able to stabilize with all the bad news,” he said. “At least that will tell you that the market has taken enough short-term pain. I’m just looking to see — in an oversold market — we can find some sort of stabilization coming back online after a long weekend.”
According to Lerner, technical indicators are showing the most extreme oversold conditions since the bottom in June, but the market moving higher or just slightly lower on the back of the weekend could be a good sign.
Over the long weekend, Europe grappled with concerns about energy supplies amid news that Russia would cut off gas flows to Europe, while OPEC+ announced a production cut. Lerner is also keeping a close eye on the ECB and its impending decision on rate hikes.
“What you want to see is if the market can find some stability tomorrow as opposed to a big broad selloff,” Lerner said.
– Samantha Subin
CVS acquires Signify Health for approximately $8 billion
CVS Health said Monday it has reached an agreement to buy home health care company Signify Health for $30.50 a share, or about $8 billion.
The acquisition, which both companies expect to close in the first half of 2023, will enable CVS to continue expanding its growing healthcare offerings and comes amid a push from rivals Amazon and Walgreens to expand in the area.
“This acquisition will strengthen our connection to consumers in the home and enable providers to better meet patient needs as we execute our vision to redefine the healthcare experience,” CVS Health President and CEO Karen Lynch said in a press release.
— Samantha Subin, Leslie Josephs
Stock futures open higher
Stock futures rose on Monday as Wall Street began a holiday-shortened week of trading. Futures tied to the Dow Jones Industrial Average rose 121 points, or 0.39%, while S&P 500 futures rose 0.26%. Nasdaq 100 futures were last up 0.12 percent.
– Samantha Subin