This chronic underperforming ETF may be turning around, according to the charts
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CNBC
3 hours ago
- CNBC
CNBC Daily Open: The 15% tariff rate on Japan can feel like a relief only because of hefty ones before
The anchoring effect is one of the sneakiest tools companies use to make us spend money. Here's how it works. Let's say we're shopping for a smartphone manufactured by Dapple, which has just released two new models: a $1,200 model with a big screen and a $900 one that is more compact. The more expensive smartphone will serve as the "anchor" by which we make comparisons, so the $900 model will appear to be value for money — even if it is costly in absolute terms. But we're likely to feel good about choosing it because we've "saved" $300 on our purchase. This scenario seems to be what's happening with the U.S-Japan trade agreement freshly announced late Tuesday stateside. U.S. President Donald Trump said Washington would gain access to Japan's markets for rice and cars — which had been sticking points during negotiations — while the latter would pay 15% tariffs on its exports to America. At first glance, that doesn't sound too positive for Japan. But, in comparison with the 25% tariff Trump slapped on Tokyo earlier this month, it's a big improvement. As Brian Jacobsen, chief economist at Annex Wealth Management, said, "It's a sign of the times that markets would cheer 15% tariffs. A year ago, that level of tariffs would be shocking. Today, we breathe a sigh of relief." That, in essence, is the anchoring effect at play. Trump announces 'massive' trade deal with Japan. Under the agreement, Japan's exports to the U.S. will face a 15% tariff, and the country will "open" its market for cars and rice, Trump said. Japan will reportedly pay 15% tariffs on autos, lower than the universal 25% the U.S. imposed on cars built outside the country. Tariff suspension with China likely to be extended. The U.S. and China's 90-day tariff pause expires on Aug. 12. However, U.S. Treasury Secretary Scott Bessent said the U.S. will be "working out what is likely an extension." Bessent says Jerome Powell doesn't need to resign. However, Bessent reiterated his call for the Fed Chair to conduct an internal review of the central bank. On the flipside, Mohamed El-Erian, chief economic advisor at Allianz, called on Powell to step down. The S&P 500 ticks up to a fresh record. That's the index's 11th record close in 2025. The Dow Jones Industrial Average rose 0.4%, but the Nasdaq Composite lost 0.39% as chip stocks slipped. The Stoxx Europe 600 fell 0.41%, led by a sell-off in defense stocks. [PRO] Goldman Sachs is getting worried over the U.S. economy. Economists at the investment bank expect growth to slow, real income to "drag" and inflation to heat up in 2025 — all of which will raise the firm's projected recession risk. How Europe's 'trade bazooka' could be a last resort against Trump's tariffs The European Union appears to be considering whether to deploy its "Anti-Coercion Instrument" — characterized as a "nuclear option" to try to deter trade disputes — as the threat of a 30% tariff on EU imports looms large. The measures could see the EU restrict U.S. suppliers' access to the EU market, excluding them from participation in public tenders in the bloc, as well as putting export and import restrictions on goods and services, and limits on foreign direct investment in the region.
Yahoo
4 hours ago
- Yahoo
3 Reasons to Buy Annaly Capital Management Stock Like There's No Tomorrow
Key Points Annaly Capital Management is a mortgage REIT, a complex corner of the REIT sector. The company has a huge 14%+ dividend yield and it increased its dividend in 2025. There are reasons to like Annaly Capital, but make sure you understand what you are buying. 10 stocks we like better than Annaly Capital Management › The most eye-catching feature of Annaly Capital Management's (NYSE: NLY) stock is its 14%+ dividend yield. There are some strong reasons to consider buying the mortgage real estate investment trust (REIT). And yet there's a caveat here that income investors specifically will want to know before buying this stock like there's no tomorrow. Here are three reasons to like Annaly and one very big reason to avoid it. What does Annaly Capital Management do? As noted, Annaly is a mortgage REIT, which is a unique corner of the broader REIT sector. It buys mortgages that have been pooled together into bond-like securities, which is very different from buying physical properties and leasing them out to tenants. The mortgage securities Annaly buys are impacted by things like interest rates, housing market dynamics, and mortgage repayment rates. It would be hard for most investors to track this business. Annaly has done a commendable job of creating value for investors over time. Notably, the total return of the stock has kept pace with the total return of the S&P 500 index (SNPINDEX: ^GSPC) over the long term. And the stock's performance has been notably different from that of the S&P 500 index, suggesting that Annaly would provide attractive diversification benefits to a portfolio. Those two facts combined are reason one that investors might like to buy this stock, perhaps with abandon. Reason two is that Annaly just increased its dividend at the start of 2025. There's a saying among dividend investors that the safest dividend is the one that has just been increased. At the very least, that dividend hike suggests that Annaly's business seems to be doing well right now. The third reason to jump on Annaly's stock is interest rates. It seems increasingly likely that interest rates are going to be cut before they are increased again. The main asset Annaly owns is its portfolio of mortgage bonds. When interest rates fall, the value of bonds tends to rise. So an interest rate cut would likely create value here. The dividend yield is the reason to stay away from Annaly Notice that the huge size of Annaly's dividend yield isn't in the list above. At 14%+ you would think it would be, especially given the recent dividend hike. But there's some history here to examine. Notice in the chart below that the dividend has been extremely volatile over time, including a long period in which it was steadily reduced. And yet there's that strong total return performance. The key is that to achieve that strong total return, investors would need to reinvest their dividends. Investors trying to live off of the dividends they generate from their portfolios would have been sorely disappointed with an investment in Annaly Capital. Given that dividend volatility is pretty normal for a mortgage REIT, this dynamic isn't likely to change. Annaly Capital will probably be a bad investment for most dividend investors, who are likely looking for dividends that grow steadily over time. This is a stock that investors focused on asset allocation will appreciate, providing exposure to a unique asset class that performs differently from the broader equity space. The lofty dividend yield, in the end, isn't really the most important feature here. Make sure you understand what you are buying with Annaly The big problem is that some income investors reach for yield without taking Annaly's business model into consideration. And then there's a mismatch between what an investor wants and what an investor gets. Annaly isn't a bad company, but it probably won't be a great dividend stock for income investors. However, if you are an asset allocator, this total return stock could be an interesting buy right now. Should you invest $1,000 in Annaly Capital Management right now? Before you buy stock in Annaly Capital Management, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Annaly Capital Management 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 $665,092!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,050,477!* Now, it's worth noting Stock Advisor's total average return is 1,055% — a market-crushing outperformance compared to 180% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 21, 2025 Reuben Gregg Brewer 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. 3 Reasons to Buy Annaly Capital Management Stock Like There's No Tomorrow was originally published by The Motley Fool Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Bloomberg
4 hours ago
- Bloomberg
US Tariffs Are Changing Europe's Approach to Chinese Investment
The Atlantic coastal town of Sines is best known as the birthplace of Vasco da Gama, the Portuguese explorer who forged the first maritime trade route from Europe to Asia. Centuries later, Sines is now an example of the shift in Europe's engagement with Beijing as the continent adapts to a world dominated by US-China rivalry. Where Chinese entities once focused on buying European infrastructure like ports and power grids, they're now building their own factories with the help of local state subsidies. In Sines, lithium battery maker CALB has become the latest Chinese company to locate in Portugal, breaking ground in May on a $2.2 billion plant with promises of creating 1,800 jobs.
