Stay away from Goldman Sachs after monster rally this year, Citizens says
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
2 hours ago
- Yahoo
Gemini Hires Goldmans, Citi, Morgan Stanley and Cantor as Lead Bookrunners For its IPO
Crypto exchange Gemini filed an updated registration statement for its initial public offering effort, sharing a few more details in its push to become a publicly traded firm. Goldman Sachs (GS), Citigroup (C), Morgan Stanley (MS) and Cantor acting as lead bookrunners on the IPO, Gemini said in a press release Friday. Evercore ISI, Mizuho, Truist Securities, Cohen & Company Capital Markets, Keefe, Bruyette & Woods, Needham & Company and Rosenblatt are also acting as bookrunners, the company said. Academy Securities and AmeriVet Securities are acting as co-managers. The S-1 published on Friday follows a confidential filing submitted to the U.S. Securities and Exchange Commission back in June, and confirms "Gemini Space Station," co-founded by Cameron and Tyler Winklevoss, intends to sell an undisclosed number of Class A shares. Gemini's filing indicated that it had generated total revenue of $142.2 million in 2024, up from $98.1 million the prior year. For the six months ending on June 30, 2025, the total revenue was $68.6 million, down from $74.3 million in the first six months of 2024. Its net loss in 2024 stood at $158.6 million, compared to $319.7 million in 2023. That figure stood at $282.5 million for the first six months of 2025. Its earnings before interest, taxes, depreciation and amortization for 2024 stood at a loss of $13.2 million, and a loss of $113.5 million for the first half of 2025. Like other crypto firms, Gemini pointed to standard risks in the risk portion of the filing, including the general nature of blockchain networks and how banks and regulators view the industry. "Key factors influencing the further development of blockchain networks and digital assets include the global adoption of digital assets and blockchain technology; regulatory and quasi-government restrictions on access to and operation of blockchain networks; and the maintenance of open source protocols that support blockchain networks," the filing said. Gemini is only the latest crypto company to try and go public this year, following Circle (CRCL), eToro (ETOR) and CoinDesk parent company Bullish (BLSH). BitGo has filed for paperwork to go public as well. Gemini plans to list its Class A common stock on the Nasdaq Global Select Market under the ticker symbol in to access your portfolio
CNBC
19 hours ago
- CNBC
Market concentration around AI darlings persists. It's making investors worried
The stock market continues to be extraordinary in the face of distressing headlines, but the growing concentration risk has more investors on edge. The S & P 500 is back at all-time highs as the bull case on Wall Street plays out. The artificial intelligence buildout is ramping up. Corporate earnings are topping expectations. Interest rate cuts seem inevitable, likely coming next month. On top of all that, the One Big Beautiful Bill will be stimulative for an economy where consumers are still spending. But the market's ascent at a time of seasonal weakness and ongoing inflation concerns has many investors worried. They fear that a stock market priced for perfection, with the S & P 500 currently trading at a 12-month forward multiple of 22, is vulnerable to some sort of setback. And that could come from anywhere. "What's going to happen, I think, is some shock will occur. I don't know what shock, but some shock will occur, which undercuts the thesis of continued economic growth," said David Kelly, chief global strategist at JPMorgan Asset Management. "And when that happens, I think you'll see a selloff in markets, and that'll probably be concentrated in those areas that look most overvalued right now." "So, I think investors ought to be pretty cautious here, because what's going on is the market slowly getting more and more overvalued," Kelly said. Top-heavy market More than anything, it's the top-heavy nature of the market raises concern. Goldman Sachs pointed out this week that the top 20% of quality companies in the S & P 500 — those with massive cash piles and fortress balance sheets — are trading at a 57% price-to-earnings premium to the lowest quality stocks — a gap in the 94th percentile going back to 1995. In practice, that means that the megacaps — which already benefit from AI tailwinds — get a further boost from investors seeking safety from economic uncertainty. Yet, the influence the tech giants wield on the market is troubling in the event of a pullback. AI superstar Nvidia alone now accounts for roughly 8% of the S & P 500, the biggest weighting of any individual stock in the cap weighted benchmark going back to 1981, according to Torsten Slok, chief economist at Apollo Global Management. The stock is easily a key reason for the bull market, after rallying more than 36% this year, surging more than 170% in 2024, and soaring more than 200% in 2023. But, if the bull case for the beloved stock falters, that could spell trouble for the broader benchmark. China, for example, is a key weak point for the stock, as any curbs on Nvidia's sales of its graphics processing units to Beijing will likely hurt the stock — and also the market. An incoming reversal? The top stocks look especially bloated when you consider this: While the S & P 500 has gained more than 10% in 2025, the median stock has only risen 3%, and remains 12% off its recent high, according to a note from Goldman Sachs this week. To be sure, that could set up the market for big rotations. Small-cap stocks outperformed their large-cap counterparts this week. Value-factor stocks also outpaced growth, while Nvidia slid and Apple advanced. Health care, a recent laggard, led the S & P 500. If the dovish outlook for Fed policy holds, or the macroeconomic picture improves, then the rotation trade could continue to work for investors. And yet, even optimistic investors continue to remain cautious, and are diversifying their holdings. JPMorgan's Kelly said he prefers assets with limited downside in the event of a pullback. The strategist prefers U.S. value stocks over growth, and said he's looking abroad to Europe, which he expects has further to run even after its gains this year. Some alternatives such as real estate could also add value to a portfolio, he said. Eventually, Kelly expects some "violent" reaction — a sustained bear market of 20% or more — is overdue for the stock market, whether it comes within a week or in the next three years. "It's just imperative that investors diversify some of that risk into other industries and other regions in particular," said Nanette Abuhoff Jacobson, global investment strategist at Hartford Funds. Reversal beneficiaries This past week, Goldman Sachs identified some lower quality stocks with weak balance sheets that could benefit from a reversal trade, if macroeconomic conditions improve or if the Fed turns dovish. Here are five of them. Estee Lauder was one lower quality stock identified. The stock is higher by more than 21% in 2025 but is in the midst of a multiyear turnaround plan that could cost between $1.2 billion and $1.6 billion. Paramount Skydance surged 33% this week alone, after it became a "play for momentum goons" after Paramount Global's merger with Skydance Media finalized. — CNBC's Sean Conlon contributed to this story.
Business Insider
a day ago
- Business Insider
Holding cash in case a bear market hits? Here's where and when to invest if stocks plunge.
If you've been building up a big cash reserve over the last few years, you're not alone. You're also probably not alone in wishing you'd had the money in stocks. Cash has generated meaningful yields since 2022 after the Federal Reserve went on a rate-hike spree, drawing record amounts into money market funds. The total value in money market funds — highly liquid, cash-equivalent assets that generate yield from short-term bonds — is at a record $7.3 trillion. About $2.1 trillion is held by retail investors. Even stock-investing icon Warren Buffett holds a record cash position worth nearly $350 billion as of March. But stocks have ripped higher in the meantime. The S&P 500 is up 80% since its October 2022 low. It's been difficult to know when to get into the market, though. With the stock market consistently hitting new highs and valuations historically elevated in recent years, you might have been waiting for a good opportunity to put that cash to work in equities, waiting for a dip to buy. If you missed the April plunge, you might still be doing so. It's not necessarily a bad approach. Goldman Sachs said this week that the chance of a stock-market pullback has jumped. In fact, stocks are so expensive that Vanguard said this mont that its ideal portfolio over the next 10 years is a very conservative allocation of 70% bonds and 30% stocks. The cheaper the entry point, the better the returns. But timing the market is tricky and something market pros usually advise against trying. No one knows how long a bull rally can go or how long an eventual pullback will last. That's why the best course of action is probably to dollar-cost-average, continuing to put money into the market at set intervals, whether the market is up or down. However, if you are resolved to waiting for a significant decline to enter the market, it's a good idea to have a plan set in place before that moment arrives. When and what to buy Though bear markets in recent years have been short-lived, the average bear market going back to 1932 has seen a 35.1% drawdown that lasts a year and a half, according to investment bank Stifel. So take it slow, says brokerage firm Charles Schwab. "Instead of going all in at once, one might consider buying small chunks at a time," Charles Schwab said in an August 6 post. But not too slow, said Hank Smith, the director and head of investment strategy at Haverford Trust. There's no way to tell when the bottom is in, so you want to start taking advantage of the pullback once it hits 10% correction territory, he said. It may hurt if the market ends up falling further than 10%, Smith said, but being indecisive about when to get in can result in missed opportunities. Remember the 19.9% decline in the S&P 500 from February to April? The pain was over in the blink of an eye, with the index back at all-time highs before the end of June — and the rally has been furious, with the market up 30% since April lows. So if the market does continue to drop, it's time to get even more aggressive, Smith said. "Let's say that correction morphs into a bear market of 20%, and now you're kicking yourself that you put any in at down 10%. You can't do that," Smith told Business Insider. "You have to say, 'Ok, this is another opportunity to tranche in again,' and probably with more than you did at down 10%." As for areas of the market to buy, it's difficult to know which sectors and themes will get beaten up the most. But Schwab said it's good to take a diversified approach and start buying all corners of the market. "Interestingly enough, traders can diversify their portfolios with as few as 12 stocks, targeting stocks in all major sectors," the firm said. "Although diversification doesn't eliminate the risk of experiencing investment losses, it can help increase the chances of capturing better-performing assets and avoid the risk of losing overall portfolio value to any single business, industry, or sector." Quality dividend stocks can also provide a good buffer to market losses, Merrill and Bank of America Private Bank said in a 2024 report. Smith said that economically sensitive sectors usually make for some of the best opportunities coming out of a recessionary bear market, as they dip during downturns and rebound when the economy recovers. Funds like the Fidelity MSCI Consumer Discretionary Index ETF (FDIS) and the Invesco Dorsey Wright Consumer Cyclicals Momentum ETF (PEZ) offer exposure to cyclical stocks. But he also said large-cap tech stocks are likely to drop the most because of how high their valuations are. If that's the case, it will likely be a good chance to add exposure to them, he said. "That's very common in high-growth stocks to have big sell-offs in what is a longer-term bull trend," Smith said. "That is where an investor with a lot of cash waiting for a significant decline in the market should look to."
