{"id":71346,"date":"2023-10-11T08:32:07","date_gmt":"2023-10-11T12:32:07","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/steer-clear-of-these-stocks-where-the-economy-is-in-trouble-says-steve-eisman-of-big-short-fame\/"},"modified":"2023-10-11T08:32:10","modified_gmt":"2023-10-11T12:32:10","slug":"steer-clear-of-these-stocks-where-the-economy-is-in-trouble-says-steve-eisman-of-big-short-fame","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=71346","title":{"rendered":"Steer clear of these stocks where the economy is in trouble, says Steve Eisman of \u2018Big Short\u2019 fame"},"content":{"rendered":"

Storied hedge-fund manager Paul Tudor Jones\u00a0is the latest to warn of a looming recession as he urges investors to be wary of stocks. <\/p>\n

Jones, who predicted the 1987 stock-market crash, has been vocal this year, such as in May when he said he saw a higher 2023 finish for stocks because the Fed was done hiking. <\/p>\n

\n

Investors and forecasters have been twisting themselves into knots this year trying to predict an economic pullback. Wall Street now seems to be shifting toward first quarter, as Jones has newly forecast. <\/p>\n

It\u2019s a mug\u2019s game \u2014 predicting a recession, that is \u2014 Steve Eisman, portfolio manager at Neuberger Berman, told CNBC Tuesday on a \u201cFast Money\u201d segment.<\/a><\/p>\n

Eisman is another Wall Street legend, earning his stripes making lucrative bets against the U.S. housing market just before the 2008 collapse and global financial crisis. He got an extra shot at fame after being depicted by Steve Carell in the 2015 hit, \u201cThe Big Short,\u201d based on the same-name Michael Lewis book about those bets. <\/p>\n

In our call of the day<\/strong>, Eisman lays out where investors should be focusing their concerns right now, offering sectors and parts of the economy to avoid. <\/p>\n

First up, \u201cthe consumer is fine, it\u2019s fine,\u201d he tells the broadcaster. \u201cThe consumer has savings, the consumers is employed, the consumer has income. So it\u2019s not a data point, in terms of there being a recession, where I think you could be negative, it\u2019s just that rates are a lot higher.\u201d<\/p>\n

So it\u2019s more expensive to buy a house, or car and any part of the economy that requires the consumer needing finance to buy something will be problematic, he said. \u201cThat\u2019s not an indictment of the consumer, that\u2019s just a mathematical fact.\u201d <\/p>\n

Eisman said he wouldn\u2019t own home builders right now. The SPDR S&P Homebuilders ETF
\n XHB
\n is up 27% this year, though down 9% from its late July peak.<\/p>\n

While they\u2019ve had a \u201cgreat run,\u201d builders have also been \u201csubsidizing their customers with lower rates, but even that\u2019s going to bite. I wouldn\u2019t be involved with building products to any significant degree on the residential side. I don\u2019t think you should buy\u2026somebody who finances cars or used cars. Anything in that universe is just going to have trouble, just because of simple math,\u201d he says.<\/p>\n

And the housing market is \u201clocked,\u201d with people not buying or selling. That said, he doesn\u2019t think the housing market is as important for the economy as it was in 2008. \u201cI\u2019m surprised as everyone else that the economy is a strong as it is, you have to respect it.\u201d<\/p>\n

So he thinks the consumer is not bad off, just not as able to buy the big ticket items as before, and that will continue as people try to rebuild savings. \u201cYou would have thought given what\u2019s gone on with rates the economy would be in a recession. And not only are we not in a recession, we\u2019re not even close to a recession.\u201d<\/p>\n

On that note, Eisman said \u201ceveryone should have a little humility at this point\u201d about predicting recessions, noting lots of people have been wrong. The data currently shows no recession and so now investors just need to wait for that data point to say what is happening. he says. <\/p>\n

Ahead of this week\u2019s flood of bank results, Eisman says banks are \u201cuninvestible,\u201d and not worth buying just because they\u2019re cheap. He added that he wouldn\u2019t buy Bank of America
\n BAC,
\n +2.66%<\/bg-quote>
\n because it has an \u201cearnings problem,\u201d not a capital issue or solvency problem. \u201cIt\u2019s a question of what do you want to pay for a bank that has a net interest margin problem.\u201d According to FactSet, Bank of America\u2019s forecasted net interest margin is 5.4%, compared to over 7% at JPMorgan and over 8% at Citigroup.<\/p>\n

The markets<\/h2>\n
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Stock futures
\n ES00,
\n +0.28%<\/bg-quote><\/p>\n

YM00,
\n +0.26%<\/bg-quote>
\n are climbing, with bonds yields
\n BX:TMUBMUSD10Y
\n continuing to ease. Oil prices
\n CL.1,
\n -1.05%<\/bg-quote>
\n are lower, and gold
\n GC00,
\n +0.53%<\/bg-quote>
\n may be ready to notch a fourth day of wins. Asia stocks trading largely ended in the green.<\/p>\n

For more market updates plus actionable trade ideas for stocks, options and crypto,\u00a0subscribe to\u00a0MarketDiem by Investor\u2019s Business Daily.<\/strong><\/p>\n

The buzz<\/h2>\n

Producer price data is coming at 8:30 a.m., with the minutes of the Fed\u2019s September meeting at 2 p.m. <\/p>\n

Exxon Mobil
\n XOM,
\n -0.42%<\/bg-quote>
\n has confirmed a $59.5 billion all-stock deal to buy Pioneer Natural Resources
\n PXD,
\n +0.76%<\/bg-quote>.<\/span>
\n Shares of both are up modestly in premarket trading.<\/p>\n

A trial success of Novo Nordisk\u2019s
\n NOVO.B,
\n +4.49%<\/bg-quote>
\n kidney failure drug is hitting dialysis services firms, with shares of DaVita
\n DVA,
\n +3.14%<\/bg-quote>
\n and Baxter International
\n BAX,
\n +2.27%<\/bg-quote>
\n down 14% and 18%, respectively.<\/p>\n

German sandal maker Birkenstock
\n BIRK,
\n <\/bg-quote>
\n priced its\u00a0initial public offering\u00a0at $46 a share ahead of Wednesday\u2019s New York debut.<\/p>\n

Silk Road Medical shares
\n SILK,
\n -0.71%<\/bg-quote>
\n tumbled 33% after a downbeat forecast from the medical device company, which said its CEO was retiring. <\/p>\n

Walgreens Boots
\n WBA,
\n +0.49%<\/bg-quote>
\n has named a new CEO \u2014 former head of Express Scripts , Tim Wentworth.<\/p>\n

Dialysis companies including Fresenius Medical Care
\n FMS,
\n +0.92%<\/bg-quote>
\n and DaVita
\n DVA,
\n +3.14%<\/bg-quote>
\n slumped after a study on Ozempic versus kidney disease was ended early due to efficacy. Novo Nordisk
\n NVO,
\n +1.03%<\/bg-quote>
\n shares rose.<\/p>\n

Best of the web<\/h2>\n

Her health insurance refused to pay for a weight-loss drug. So she sued.<\/p>\n

The war in Israel shows how X and Facebook have stopped covering the news.<\/p>\n

Google insiders are slamming its AI product Bard.<\/p>\n

The chart<\/h2>\n

Taking a step back, our chart from Sven Henrich, founder and the lead market strategist of\u00a0NorthmanTrader.com, shows it\u2019s really been steady an uninterrupted move north for the S&P 500 since the COVID-19 selloff: <\/p>\n

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The tickers<\/h2>\n

These were the top-searched tickers on MarketWatch as of 6 a.m.:<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n
\n Ticker<\/p>\n<\/td>\n\n Security name<\/p>\n<\/td>\n<\/tr>\n
\n TSLA,
\n +1.52%<\/bg-quote>\n <\/td>\n		\n Tesla<\/p>\n<\/td>\n<\/tr>\n
\n AMC,
\n +1.02%<\/bg-quote>\n <\/td>\n		\n AMC Entertainment<\/p>\n<\/td>\n<\/tr>\n
\n GME,
\n +3.90%<\/bg-quote>\n <\/td>\n		\n GameStop<\/p>\n<\/td>\n<\/tr>\n
\n NVDA,
\n +1.16%<\/bg-quote>\n <\/td>\n		\n Nvidia<\/p>\n<\/td>\n<\/tr>\n
\n NIO,
\n +5.88%<\/bg-quote>\n <\/td>\n		\n NIO<\/p>\n<\/td>\n<\/tr>\n
\n AAPL,
\n -0.34%<\/bg-quote>\n <\/td>\n		\n Apple<\/p>\n<\/td>\n<\/tr>\n
\n TTOO,
\n +3.61%<\/bg-quote>\n <\/td>\n		\n T2 Biosystems<\/p>\n<\/td>\n<\/tr>\n
\n PLTR,
\n +1.08%<\/bg-quote>\n <\/td>\n		\n Palantir<\/p>\n<\/td>\n<\/tr>\n
\n AMZN,
\n +0.95%<\/bg-quote>\n <\/td>\n		\n Amazon.com<\/p>\n<\/td>\n<\/tr>\n
\n MULN,
\n +3.27%<\/bg-quote>\n <\/td>\n		\n Mullen Automotive <\/p>\n<\/td>\n<\/tr>\n<\/table>\n

Random reads<\/h2>\n

Wildlife photographer of the year won for picture of a golden horseshoe crab.<\/p>\n

Phillies fans, come and get your \u201cSchwarBurger\u201d\u00a0<\/p>\n

This Congresswoman branded herself with a Scarlett letter for voting against former House Speaker Kevin McCarthy.<\/p>\n

Need to Know starts early and is updated until the opening bell, but\u00a0sign up here\u00a0to get it delivered once to your email box. The emailed version will be sent out at about 7:30 a.m. Eastern.<\/strong><\/p>\n

Listen to the\u00a0Best New Ideas in Money podcast\u00a0with MarketWatch financial columnist James Rogers and economist Stephanie Kelton.<\/strong><\/p>\n<\/p><\/div>\n