Insider Monkey
Insiders Are Buying These 11 Penny Stocks
Fahad Saleem
8 min read

In This Article:

In this article, we will take a detailed look at Insiders Are Buying These 11 Penny Stocks. For a quick overview of such stocks, read our article Insiders Are Buying These 5 Penny Stocks.

US stock market started the second quarter of 2024 in the red, driven by rising treasury yields, broader volatility and uncertainty around rate cuts as inflation remains sticky. Julian Emanuel, Evercore ISI senior managing director, recently talked to CNBC and said that it was surprising for him to see how well the market took the Fed’s revised expectations of three rate cuts this year instead of six rate cuts initially expected. But the analyst said that a further shift from three rate cuts to two cuts won’t be easy for the market to digest. Emanuel said that the market was 10% higher in the first quarter and its earnings expectations for the rest of 2024 are higher by “no landing” scenario. Emanuel also thinks there is volatility ahead since the CPI data point has become “unbelievably important” and the market would be on “pins and needles” when it comes to the Fed’s decisions in the coming weeks and months. The analyst, who has a year-end target of 4750 for the S&P 500, said the Fed’s indication of two or three rate cuts could further boost treasury yields because the market still expects inflation to remain high for a long period of time. This is what bothers the stock market, according to Emanuel. He said that when you have the market betting on $2 trillion market cap stocks to double over a matter of a few days, there’s something wrong and shows the market needs correction. Overall, Emanuel thinks this is not the end of the bull market. He thinks it’s a normal correction since we are priced for “great earnings”, “great interest rates trajectory” and inflation “not being as sticky as it’s proven in the last couple of months.”

Should The Fed Give Up On Its Inflation Target?

Many analysts and experts were already expecting the Federal Reserve and the overall markets to eventually accept higher-than-before inflation as a new normal. For example Switzerland-based Julius Bär Group AG, in its 2024 outlook report, predicted:

"Inflation usually lags growth, i.e. there is generally a delay in terms of when inflation is visible in an economy. However, in the current cycle, the effects have been immediate and enormous. Looking ahead, inflation should continue to fall closer to the comfort zone of central banks. The question now is when will inflation bottom? The risk is that overly restrictive policies for a longer period of time could hamper the recovery of economies. Thus, we believe that Western governments and central banks will choose to accept slightly higher inflation of around 3%. The reasons for this include the post-crisis normalisation of demand and, more importantly, supply-side factors, e.g. geopolitical tensions have led to a change in global supply chains, and demographic pressures in the workforce in the West and in China could limit the labour supply going forward and put upward pressure on wages."

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