Why this portfolio manager is 'concerned' right now
The S&P 500 (^GSPC) is trading near all-time highs. But with tariff uncertainty still looming, Globalt Investments senior portfolio manager Keith Buchanan says he is still "concerned" about valuations being too high.
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Yahoo
21 minutes ago
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An Exceptionally Rare Event for Stocks -- the 6th Occurrence in 35 Years -- Has Historically Led to Supercharged Returns for the S&P 500
Though the stock market is a bona fide long-term wealth creator, the performance of the Dow Jones, S&P 500, and Nasdaq Composite is anything but predictable over short timelines. The CBOE Volatility Index (VIX) skyrocketed in April due to President Donald Trump's tariff and trade policy announcements, among other factors. Historically rare plunges in the VIX have previously been followed by outsized gains in the S&P 500. 10 stocks we like better than S&P 500 Index › When examined over multiple decades, Wall Street's major stock indexes -- the ageless Dow Jones Industrial Average (DJINDICES: ^DJI), benchmark S&P 500 (SNPINDEX: ^GSPC), and innovation-propelled Nasdaq Composite (NASDAQINDEX: ^IXIC) -- are highly predictable and fully capable of hitting new all-time highs with regularity. But when narrowing things down to the span of a few weeks, months, or even years, it's a different story. Through the first five months and change of 2025, we've witnessed the broad-based S&P 500 achieve a fresh record-closing high, as well as observed the Dow Jones and S&P 500 dip into correction territory, with the Nasdaq Composite entering its first bear market in three years. Stocks were particularly volatile during a one-week stretch from April 2 through 9. The widely followed S&P 500 endured its fifth-largest two-day percentage decline in 75 years from the close on April 2 through 4, then delivered its largest single-day nominal point increase in its storied history on April 9. While volatility can at times be scary, exceptionally rare events characterized by outsized levels of volatility are a historically positive signal for investors that outsized returns lie ahead. Wall Street's prized measure of volatility for more than three decades is the CBOE Volatility Index (VOLATILITYINDICES: ^VIX), or VIX. In simple terms, the VIX relies on the price of options contracts to measure the 30-day implied volatility for the S&P 500. The higher the VIX, the higher the implied volatility in Wall Street's benchmark index. During the aforementioned wild week for Wall Street in April, the CBOE Volatility Index surged above 50, which is a level it's only visited on a handful of occasions since 1990. The bulk of this volatility stems from President Donald Trump's "Liberation Day" tariff and trade policy announcements following the close of trading on April 2. Trump introduced a global 10% tariff, as well as a series of higher "reciprocal tariffs" on dozens of countries that have historically run adverse trade imbalances with America. Tariffs come with a host of uncertainties, including the potential for worsening trade relations with our allies, the prospect of anti-American sentiment toward U.S. goods in foreign markets, and the possibility of the prevailing rate of inflation rising domestically. But perhaps the bigger issue with President Trump's tariff policy has been its complete lack of consistency. Wall Street values predictability above all else. Trump has paused tariffs, adjusted reciprocal tariff rates, and added and removed which goods and countries are subjected to tariffs. There's been no sustained consistency in the messaging, which has whipsawed the Dow Jones, S&P 500, and Nasdaq Composite. Another factor that's played a role in Wall Street's outsized volatility is stock valuations. In December 2024, the S&P 500's Shiller price-to-earnings (P/E) Ratio, which is also referred to as the cyclically adjusted P/E ratio (CAPE ratio), almost hit a multiple of 39. To put this into context, it marked the third-priciest reading during a continuous bull market when back-tested to January 1871. Throughout history, there have only been a half-dozen occasions where the Shiller P/E has surpassed 30 and held that level for at least two months. The five prior instances were all, eventually, followed by declines of between 20% and 89% in the Dow, S&P 500, and/or Nasdaq Composite. In other words, a historically pricey market has been a harbinger of future volatility. Furthermore, the bond market has played a role in whipsawing Wall Street. While significant upticks in long-term Treasury bond yields are fantastic news for buyers of fixed-income securities, it's a worrisome development for the stock market. Bond yields tend to be reflective of Federal Reserve monetary policy and the prevailing rate of inflation. With the Fed currently in a slow-stepped rate-easing cycle, we'd expect long-term Treasury yields to be falling or remain somewhat flat. The fact that they're rising is indicative of the bond market's expectation that the inflation rate may pick up and force the central bank's hand. For day traders and short-term investors, heightened periods of volatility can be unnerving. But for long-term-minded investors, a period of outsized volatility has consistently led to supercharged returns for the S&P 500. To preface this discussion, there isn't an indicator or forecasting tool that can, with concrete accuracy, guarantee directional moves in the stock market. But there are metrics and events that have strongly correlated with directional moves in one or more of Wall Street's major indexes throughout history. Big spikes higher in the VIX are one such indicator that, at specific levels, tend to trigger phenomenal buying opportunities for investors. Based on research conducted by Creative Planning chief market strategist Charlie Bilello, the VIX has endured 20 declines of at least 44.9% over a nine-week period since 1990. But what's particularly noteworthy is how stocks have performed following the six largest drops in the VIX over these nine-week stretches. As you'll note in Bilello's post on social media platform X (formerly Twitter), there have been six times in 35 years when the VIX fell at least 50% over nine weeks. This includes the largest nine-week drop in the VIX's history -- a 63% decline (from 45.31 to 16.77) that ended the week of June 6, 2025. While the total returns (including dividends) of the S&P 500 at the six-month, one-year, and two-year marks were a bit mixed when the VIX declined by 44.9% to 49.7%, they were green across the board at the six-month mark, as well as one-, two-, three-, four-, and five-year marks, when it dropped more than 50%. Furthermore, the S&P 500 didn't just eke out gains on a total return basis in the wake of a historic drop in volatility -- it crushed its average annual return. Whereas the S&P 500 has historically delivered a return of around 10% annually, the five previous instances where the VIX fell by more than 50% resulted in an average total return of 102.14% five years later. This works to an average annual total return of 15.1%, or roughly 50% higher per annum than the historical average. What Charlie Bilello's data set really drives home is the oft-overlooked disparity in stock market cycles. Though stock market corrections and bear markets can be scary and tug on investors' emotions, they tend to be short-lived. According to calculations from Bespoke Investment Group, the average S&P 500 bear market lasted just 286 calendar days (about 9.5 months) between the start of the Great Depression in September 1929 and June 2023. Conversely, the typical S&P 500 bull market has endured 3.5 times longer (1,011 calendar days) over a nearly 94-year timeline. What's more, 14 out of 27 bull markets have lasted longer than the lengthiest bear market, when extrapolating the current S&P 500 bull market to present day. The next time the VIX rockets to rarely before-seen levels, consider it a green light to put your capital to work in the stock market. Before you buy stock in S&P 500 Index, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and S&P 500 Index wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $649,102!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $882,344!* Now, it's worth noting Stock Advisor's total average return is 996% — a market-crushing outperformance compared to 174% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 9, 2025 Sean Williams has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. An Exceptionally Rare Event for Stocks -- the 6th Occurrence in 35 Years -- Has Historically Led to Supercharged Returns for the S&P 500 was originally published by The Motley Fool
CNBC
40 minutes ago
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U.S. uncertainty is handing Europe a huge opportunity
Europe is being urged to capitalize on the volatility of the Trump administration, as shifts in capital and private market flows suggest U.S. exceptionalism is waning and losing out to a resurgent Europe. The numbers tell part of the story, with Europe's Stoxx 600 up over 8% compared to a 5% jump for the S&P 500 since Nov. 1, 2024, just days ahead of the U.S. election. Bank of America said in a report dated June 5 that U.S. equities had seen outflows of $7.5 billion over the previous three weeks, while European stocks benefited from inflows of $2.6 billion over the same period. Earlier this year, meanwhile, data from Morningstar showed that investors withdrew 2.8 billion euros ($3.2 billion) from U.S. equity ETFs in the month to the middle of March, while shifting 14.6 billion euros into European ETFs. Goldman Sachs International Co-CEO Anthony Gutman told CNBC that the convergence in U.S. and European growth rates came about quickly this year and was a big factor prompting investors to shift money toward Europe. "In January, sentiment felt very strong in the U.S., it felt somewhat more muted in Europe. You roll the clock forward and now the picture has changed fairly dramatically, that's to the benefit of Europe in many cases. Europe is getting more capital inflows and there is more optimism in Europe," Gutman told CNBC's Annette Weisbach Wednesday on the sidelines of the Goldman Sachs European Financials Conference in Berlin. Meanwhile, in private markets, talk of the breakdown of U.S. exceptionalism dominated the Super Return forum in Berlin last week. Carlyle Group's Managing Director Mark Jenkins told CNBC that, "in Europe, we've seen a lot of great opportunity and think we can pick up greater returns here relative to the risk you're taking in the U.S." This sentiment was echoed by private equity giant Permira, which holds private equity funds and credit vehicles representing around 60 billion euros worth of capital under management. "If you look at Europe at the moment, firstly, capital is cheaper, if you look at the trend of where euro rates are going versus dollar rates are going, you can fund and finance things cheaper here. Secondly, valuations are cheaper, you can buy great companies for less," Permira Executive Chairman Kurt Björklund told CNBC's "Squawk Box Europe" on Tuesday. "Thirdly the innovation cycle is growing exponentially in Europe … there is an enormous number of highly innovative companies that are growing in a disruptive and global way," he added. All eyes are now on the potential for an EU-U.S. trade deal — which is proving trickier to pin down than with some other countries, including the U.K. Referencing the complexity of the behemoth that is the European Union, Siemens Energy Chairman Joe Kaeser told CNBC that the EU is "politically not ready to strike these types of deals." The White House hinted on Wednesday that a July 9 deadline for a deal may be movable, however, with Treasury Secretary Scott Bessent saying: "It is highly likely that for those countries that are negotiating — or trading blocs, in the case of the EU — who are negotiating in good faith, we will roll the date forward to continue the good faith negotiation." French President Emmanuel Macron also struck an optimistic tone, telling CNBC's Karen Tso on Wednesday: "I'm sure that we will find, at the end of the day, a good solution." Unicredit CEO Andrea Orcel stressed that the opportunity for Europe's continued revival lies in its own hands, however. He explained that the 27-member European Union could galvanize amid the fracturing of Europe's relationship with the U.S., but warned that investors can also be fickle. The expectation is that "there will be convergence, there will be a banking union, there will be a capital markets union. There will be a lot of spend on infrastructure, on defense... That's exciting for the market, therefore money flowing in," Orcel told CNBC Wednesday. "But if, little by little, investors realize that this is lip service, but it doesn't really happen. Money will flow back in a nanosecond, and you will see [that] very quickly." Europe is faced with a "phenomenal opportunity," he added. "We have every reason to be ... on par with the U.S., but it's our fault if we don't do it."
Business Insider
43 minutes ago
- Business Insider
Beer 2.0: The Meme Coin That is Brewing Something Bigger on Solana
Panama,, Republic of Panama, June 12th, 2025, Chainwire Beer 2.0 aims to be more than a nostalgic nod to its predecessor. It's a fresh pour of meme culture, community power, and real utility — served cold on Solana. Building on the viral rise of Beercoin (which hit an impressive 35x), this second iteration is aiming to turn that moment into something lasting. In less than 48 hours since the official announcement, over 10,000 people have registered their interest in the Beer 2.0 presale via the official website. This strong response highlights a level of anticipation that surpasses typical meme coin hype, suggesting notable traction as the presale approaches. Beer 2.0's New Direction The original Beercoin was a case study in how simplicity and community can drive exponential growth. But Beer 2.0 isn't content with just good vibes and gains. 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Phase 2: Strengthening Infrastructure CEX listings (Centralized Exchanges) come into play, critical for scaling access. While DEXes serve early adopters, CEXes provide the liquidity and on-ramp ease needed for newcomers. Online events for holders create a sense of belonging and fun while reinforcing the Positive Mental Attitude (PMA) ethos. Strategic Web3 partnerships allow Beer 2.0 to extend its reach — integrations, collabs, and cross-community activations with other protocols or NFT projects. Phase 3: Real-World Use Cases Meet Culture Exclusive prizes for holders keep the traction going and reward long-term commitment. A merch drop helps transform Beer 2.0 from a coin into a cultural symbol, with community members repping the brand IRL. Real-world $BEER payments in bars are being explored. Because what better utility for a beer-themed token than buying an actual pint? 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About the $BEER 2.0 The $ Beer 2.0 team is an independent group of developers and community builders focused on creating culturally relevant crypto projects. Beer 2.0 is a memecoin launched on the Solana blockchain, designed to combine entertainment with accessible on-chain participation. The project draws on lessons from earlier meme tokens, including $TRUMP, incorporating a capped supply, transparent token distribution, and community-first initiatives. The team operates with a focus on decentralized engagement, online events, and real-world integration, including plans for brand collaborations. Contact
