Steve Sosnick: 'Buckle up' if markets don't get best-case scenario on trade
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4 Crypto-Centric Stocks to Buy Before Bitcoin Resumes Its Rally
The cryptocurrency rally has slowed over the past couple of days, with Bitcoin (BTC) retreating from its all-time high. Several factors have been weighing on the crypto market, but the decline is temporary as the rally is expected to resume once these tensions ease. President Donald Trump's tariffs, a delay in the interest rate cut by the Federal Reserve and multiple other factors are hurting Bitcoin. However, the cryptocurrency has still held its ground and is trying to make a rebound. The temporary dip might be an ideal opportunity to invest in crypto-focused stocks. We have selected four stocks, namely Interactive Brokers Group IBKR, Visa Inc. V, Robinhood Markets, Inc. HOOD and PayPal Holdings PYPL. Each of these stocks has strong growth potential for 2025 and has seen positive earnings estimate revisions in the last 90 days. Bitcoin Retreats From All-Time High Bitcoin hit an all-time high of $123,153.22 earlier last month before paring some of its gains. The cryptocurrency remained rangebound, hovering around $119,000 for most of July. However, the final days of July saw Bitcoin falling below $116,000 to enter a short-term bearish zone. On Thursday, Bitcoin was hovering around $115,100. The decline came after the Federal Reserve left interest rates steady in its current range of 4.25-4.5%. The decision was anticipated, but there was a bleak hope among investors that the Fed could go for a 25-basis-point rate cut. Higher interest rates negatively impact growth-oriented sectors, which include technology, consumer discretionary industries and cryptocurrencies. Also, uncertainty over the impact of Trump's tariffs on inflation has made investors jittery. Although the White House said that it has reached trade deals with several nations after negotiations, there is a lack of clarity over the new tariff structure. In recent months, the effects of higher tariffs have become evident, as prices of goods have increased. Inflation saw an uptick in June, which analysts largely attribute to the elevated tariffs. The Federal Reserve is postponing any interest rate cuts as it monitors how these developments influence inflation and broader economic trends. However, Bitcoin is likely to resume its rally once investors get more clarity on these issues. Markets are still pricing in two 25-basis-point rate cuts by the end of this year, which are expected to boost Bitcoin. 4 Crypto-Centric Stocks With Upside Interactive Brokers Group, Inc. Interactive Brokers Group is a global automated electronic broker. IBKR executes, processes and trades in cryptocurrencies. IBKR's commodities futures trading desk also offers customers a chance to trade cryptocurrency futures. Interactive Brokers Group has an expected earnings growth rate of 9.7% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 9% over the last 90 days. IBKR currently has a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here. Visa Inc. Visa is taking a significant step toward modernizing cross-border money movement. In a move aimed at enhancing the efficiency of global transactions, V is expanding its stablecoin settlement capabilities to the high-performing Solana blockchain. This expansion of V includes collaboration with prominent merchant acquirers Worldpay and Nuvei, marking a pivotal development in the world of digital payments. Visa's expected earnings growth rate for the current year is 13.5%. The Zacks Consensus Estimate for current-year earnings has improved 0.5% over the last 90 days. V currently has a Zacks Rank #2 (Buy). Robinhood Markets Robinhood Markets, Inc .operates a financial services platform in the United States. Its platform allows users to invest in stocks, exchange-traded funds, options, gold and cryptocurrencies. 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Yahoo
14 hours ago
- Yahoo
Market in a 'reckoning period' with weak jobs data & tariff hikes
The US added 73,000 jobs in July, a big miss from the 104,000 that economists were expecting. Unemployment also ticked up to 4.2% as estimated. Additionally, President Trump announced a flurry of new tariff rates overnight. Interactive Brokers chief strategist Steve Sosnick, Citi economist Veronica Clark, UBS Global Wealth Management head of taxable fixed income strategy Leslie Falconio join Morning Brief with Julie Hyman to discuss the impact of a weakening labor market in combination with President Trump's tariffs. To watch more expert insights and analysis on the latest market action, check out more Morning Brief. Speaking of the push pull, you've got the, you know, maybe, I don't know which is a push and which is a pull. You've got the weakening, uh, what looks like a weakening labor market on the one hand. And then on the other hand, you have overnight, President Trump announcing these tariff rates. What looks like is going to be an average tariff on goods coming to the US of at least 15%, some estimates would put it even higher, which in theory would at least cause a temporary upward pressure on inflation, which means the Fed is maybe in a tougher spot than ever. Yeah, it's it's certainly not the ideal spot for the Fed. Um, and I think we probably will see more, you know, goods price increases. We just started to see that really in in June. Um, but if the labor market is weakening, then it really comes down to, you know, do we think these tariff increases are going to lead to persistent inflation? Um, is it a supply shock like the pandemic? And that's where if the labor market is weakening, it really isn't. Um, you could see these temporary, you know, one-time kind of price level resets in in goods prices. Um, but you wouldn't expect it to spread to services. We see wages slowing. Um, home prices have actually been falling on a monthly basis the last couple months. That underlying demand backdrop just looks very different. Leslie, what does all of this mean for for bond yields and for yields sort of across the curve? You know, this is it's really interesting because, you know, as much as we look at this data and we say that the Fed should cut, but we we, you know, it's it's it wasn't that long ago when we saw what happened in, you know, September 24 when they cut 50 and the back end actually rose just because of the concern over reacceleration inflation. It's very important that the Fed doesn't cut too soon simply because market perception will lead that back end higher, which obviously won't be good for the mortgage rate. You know, I think this this number is obviously weak. I don't think it really shifts the dynamic of the fact that the Fed will cut and they have a lot of ammunition to cut. But I don't think they're going to necessarily be that preemptive. I think this is one number, you need to and we need to see the data because, you know, the be careful what you wish for, which is exactly right, and might not lead to the results that, you know, one might think. And again, when we think about these this inflation related in terms of tariffs, it's really going to depend. Is this going to be a really quick, you know, price change that happens quickly over over a few months and then falls or is it just going to gradually rise higher, but then stay elevated above the Fed's projected target for a longer period of time? So they definitely have, you know, um, a lot to deal with, but I don't think this one number necessarily changes the projection, but it doesn't necessarily mean that, you know, cutting is going to assume that long-term interest rates are going to fall. You really have to wait and see and how some of these inflation numbers due to these tariffs actually come out over the next couple months. Yeah, great point. Um, you know, and and sort of another reminder, be careful what you wish for, be careful what you expect. Um, Steve, you know, we don't seem to be in the bad news is good news, uh, vibe this morning, right? Yes, you have futures bouncing off the lows a little bit, but they're still sharply lower here. So again, that, you know, it sort of makes one question the like Fed galloping to the rescue narrative. Well, I think the the mood actually changed a little bit. I think the the the whamies of the tariffs and some of the earnings reactions, um, you know, I think I I would actually say we're almost we were almost in a situation where all news was good news for this market. And now I think there's there's been a reassessment. There's been a rejiggering of that. Um, you know, to to Leslie's point, I'm I'm seeing the the the two to 10 year, uh, yields, the curve yield curve steepening by about seven basis points. That's a that's a big move. Um, I think right now, you know, that's telling us that's telling us some longer-term worries, um, about the relative the relativity of inflation. Um, also, I just think right now, you know, that the market had sort of put tariffs in the rear view mirror and assumed that the labor market was okay. Well, both of those assumptions have been overturned quite dramatically, uh, this morning. And so I think this is this is the market going through a reckoning period, and I think it's a bit of a tell that we're not seeing a lot of reflexive dip buying because that has characterized the stock market for the last, you know, two call it two, three months, um, where every dip was perceived as a buying opportunity. And as we saw them what I would say the half-life of dips was getting so short because no one wanted to miss a buyable dip, so they were just stepping in at the smallest possible opportunity. We're actually seeing it persist for a little bit this morning. That to me tells me that the psychology, at least as of this particular moment, is a bit, uh, more tenuous than it was, let's say even a couple days ago. Um, and Veronica, you know, speaking of this sort of double whammy, I just want to ask you one more question about tariffs, which is what we learned overnight, why was it such a surprise? Yeah, I mean, I think it comes down to, you know, we have been seeing these high rates and we saw that in in, um, announced in early April. Um, but we've gotten them delayed, and maybe now we're not getting them delayed. Um, in a lot of sense, some of these rates are not too dissimilar from what we saw announced on April 2nd. Um, so there is some of this persistence to actually follow through with with what's being announced. Um, of course, these are still starting maybe a week from now, so maybe there is still more chance to get them delayed. Um, but there is more willingness on the administration to to maybe follow through.
Yahoo
14 hours ago
- Yahoo
July jobs report: AI is contributing to job cuts & slow hiring
The US added 73,000 jobs in July, a big miss from the 104,000 that economists were expecting. Unemployment also ticked up to 4.2% as estimated. The labor market data comes after a week of Big Tech earnings from Amazon (AMZN), Apple (AAPL), Microsoft (MSFT), and Meta (META). Interactive Brokers chief strategist Steve Sosnick and Citi economist Veronica Clark join Morning Brief with Julie Hyman to discuss the numbers in the wake of Big Tech earnings and how impacts of artificial intelligence (AI) adoption are showing up in the labor data. To watch more expert insights and analysis on the latest market action, check out more Morning Brief. So, this morning, we have three big stories that we are watching, obviously. The trade headlines coming out overnight, the jobs report which we just got, and then the other story that Jared Blickre just referred to, and that has to do with big tech. Apple, as you can see, rising in pre-market trading, Amazon falling after their numbers. So, let's talk more with the panel about that, and the sort of broader implications of tech in this economy. Veronica Clark, Leslie Falconio, Steve Sosnick, still with me now. Steve, I want to go to you first here because as of late, it seems like earnings have really taken precedence over some of these macro concerns. But as you said, there's been kind of a tone shift. So, you know, Microsoft and Meta hitting a market a couple days ago, that feels different from where we are this morning. So how are you thinking about Apple and Amazon, and sort of the tech trade in a market like this? Well, what a difference a day makes, right? I mean, this, you know, 24 hours ago, that was the story. It was how, you know, Meta and Microsoft were just roaring ahead. Today, it's a bit calmer. Part of it is, I think the, you know, the mental, the bar got set a bit higher after those two earnings reports. You know, in the case of Apple, the numbers look very good across the board in terms of, let's say, of iPhone revenues and things of that nature, though I think part of the enthuse, part of the reason we're not seeing a super enthusiastic reaction, nor did we last night, or right after the close, was that, you know, there's a, there's a fear that a lot of the, the iPhone extra revenue was brought forward from people who are nervous about tariffs. And I do know anecdotally, I know people who, who pushed forward their iPhone purchases because they didn't want to be exposed to the potential for having them go up 25% or more, a little bit later. So that, I think, might have helped, and that's kind of why the market, I think, is, is meandering there. In the case of Amazon, I think it's, you know, there's a lot of different factors because this company has so many different directions, but basically, you know, to the extent that, that one of the reasons that, that Alphabet and, and Microsoft did so well is their cloud revenues. And I think in the case of Amazon, it didn't necessarily keep pace. There was nothing in there to inspire people, and I think that's kind of, that's where Amazon is a bit more of a victim of, I'm not going to say irrational exuberance, but, but of the market's exuberance for the stocks that, that had come prior. And Veronica, I want to bring you in on, on sort of a related question here, which is the AI question. Because obviously, all these companies are reflective of this push into AI. Are we seeing that at all in jobs numbers, like we saw today? Or, you know, is the miss primarily a reflection of weakening economy, maybe even tariffs in some areas? Yeah, it's, it's really hard to pinpoint. Yesterday we got the Challenger job cut announcements, which always take those with a bit of a grain of salt, but they, they do look at job cuts by reason. And there was an increase in AI being the reason for some job cuts. But I think more, it might have to do with why hiring has been so low. I think it probably is also just a fundamentally weaker labor demand story. That's what high rates are supposed to do. But if AI is, you know, improving productivity, maybe if someone leaves, you're not replacing them. And a lot of this weakening in the labor market we've seen so far has been driven not by layoffs, but by very low hiring. And maybe AI would be part of that story. Related Videos Market in a 'reckoning period' with weak jobs data & tariff hikes Labor market is 'weakening' — rate cuts are 'back on the table' Jobs report sector breakdown: Healthcare wins, federal jobs lose US Adds 73,000 Jobs in July, Unemployment Rate Rises to 4.2% Sign in to access your portfolio
