Wall Street Today | The Federal Reserve Is Deflating Financial Bubbles, Without a Crash

The Fed hasn't had much success so far in wrestling down sky-high inflation, but its monetary tightening campaign is having a major impact in deflating asset bubbles that swelled during the pandemic.

The cryptocurrency market has shrunk by more than two-thirds; Investor-favored technology stocks have tumbled by more than 50%; Red-hot housing prices are falling for the first time in 10 years.

U.S. unemployment filings rose slightly last week, a sign the labor market remains tight despite layoffs at some companies and broader economic uncertainty. Initial jobless claims, a proxy for layoffs, rose by 4,000 to a seasonally adjusted 230,000 last week, the Labor Department said Thursday.

One of the most bullish Wall Street voices on oil and gas stocks, JPMorgan strategist Marko Kolanovic, is telling investors to sell energy as share prices and oil prices diverge. Kolanovic expects share prices to fall more than 20%, but over the longer term still believes the industry is experiencing a "supercycle."

Chinese equities will outperform the broad emerging markets and even their global peers, according to Morgan Stanley. The bank has turned bullish on Chinese stocks after almost two years, lifting its rating to overweight from an equal-weight position last Sunday.