Growth ETFs Set New Records, Brush Off Tariff Headwinds
Investors are hoping for resilience in corporate profits as the earnings season kicks off with major U.S. banks set to report results beginning today. Per the Earnings Trend report, total S&P 500 earnings are expected to grow 4.7% from the year-ago period on 4.7% revenue growth. However, this will be a material deceleration from the growth trend of recent quarters and will be the lowest earnings growth pace since Q3 2023 (read: 5 Sector ETFs Set to Power Q2 Earnings Growth).
The AI boom will continue to fuel the rally, with companies investing huge sums in the technology sector and beyond. The expansion of AI applications holds the promise of ushering in fresh growth opportunities. Tech companies have poured billions into data centers and AI chips to support the growth of AI models. Amid the AI boom, NVIDIA (NVDA) became the first company to reach a $4 trillion market cap, driving a sharp rally in the technology sector.
Trump reignited global trade tensions by threatening new tariff rates, ranging from 25% to 40% on more than a dozen countries starting Aug. 1. The United States will impose 25% tariffs on goods from South Korea and Japan, and a 30% tariff on goods from the European Union and Mexico from Aug. 1. Trump also announced sweeping tariff measures, including a 35% levy on Canadian imports and proposed universal tariffs of 15%–20% on most major trading partners. He confirmed 50% duties on Brazilian goods and copper shipments. Trump also warned that BRICS countries could face an additional 10% tariff, accusing the group of attempting to harm the United States and weaken the U.S. dollar. The President also escalated tensions with Russia, announcing potential "secondary" tariffs of up to 100% in response to the war in Ukraine, alongside a pledge to supply weapons to Ukrainian forces.Though the escalation adds to fears that global trade tensions could resurface and strain the broader economy, markets now view Trump's tariff threats as negotiating tactics rather than guaranteed policy moves.
Wall Street strategists are growing more optimistic about stocks, even as renewed trade tensions cloud the economic outlook. Goldman Sachs (GS) raised its year-end S&P 500 target to 6,600 from 6,100, citing deeper-than-expected Federal Reserve rate cuts, lower bond yields, and investors' growing willingness to look beyond short-term earnings weakness. Bank of America (BAC) lifted its forecast to 6,300 from 5,600 (read: How to Trade the Ups and Downs of the S&P 500 With ETFs).
Growth funds typically outperform during market uptrends, especially when investor sentiment is resilient. Growth investing prioritizes capital appreciation over income or dividends, focusing on companies expected to grow at above-average rates relative to their industry or the broader market. Unlike value investing, which targets undervalued stocks, growth investing is a more active strategy aimed at maximizing returns through high-growth opportunities. However, these funds often hold stocks with elevated price-to-book, price-to-sales and price-to-earnings ratios, and they tend to exhibit greater volatility, particularly when compared to more stable value-oriented stocks.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Vanguard Growth ETF (VUG): ETF Research Reports
iShares Russell Top 200 Growth ETF (IWY): ETF Research Reports
Schwab U.S. Large-Cap Growth ETF (SCHG): ETF Research Reports
Vanguard Mega Cap Growth ETF (MGK): ETF Research Reports
SPDR Portfolio S&P 500 Growth ETF (SPYG): ETF Research Reports
Vanguard S&P 500 Growth ETF (VOOG): ETF Research Reports
This article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Politico
a minute ago
- Politico
House passes public media, foreign aid clawbacks after Epstein scramble
The president's budget director said Trump is likely to send more cutbacks requests to Congress 'soon.' House Majority Leader Steve Scalise (R-La.) walks to a vote at the U.S. Capitol July 2, 2025. (Francis Chung/POLITICO via AP Images) | AP By Katherine Tully-McManus and Jennifer Scholtes 07/18/2025 12:07 AM EDT Six months into Donald Trump's presidency, Congress finally codified a small piece of the hundreds of billions of dollars his Department of Government Efficiency pinpointed as 'waste.' House Republicans gave final approval just after midnight Friday to Trump's proposal to claw back $9 billion in public media and foreign assistance, greenlighting the Senate's changes to the measure that will bake in proposed DOGE cuts to public media and foreign aid. The package now heads to the president's desk. The House's 216-213 vote to clear the Senate-amended package comes less than 24 hours after the Senate voted to tweak the administration's original proposal that would have cut an additional $400 million from the global AIDS fighting program, PEPFAR. Senate Republicans also added language vowing that certain food assistance programs would be protected, and staved off impacts to other food aid, maternal health, malaria and tuberculosis-related initiatives.
Yahoo
29 minutes ago
- Yahoo
Are Strong Financial Prospects The Force That Is Driving The Momentum In Samaiden Group Berhad's KLSE:SAMAIDEN) Stock?
Samaiden Group Berhad (KLSE:SAMAIDEN) has had a great run on the share market with its stock up by a significant 25% over the last month. Since the market usually pay for a company's long-term fundamentals, we decided to study the company's key performance indicators to see if they could be influencing the market. In this article, we decided to focus on Samaiden Group Berhad's ROE. Return on Equity or ROE is a test of how effectively a company is growing its value and managing investors' money. In short, ROE shows the profit each dollar generates with respect to its shareholder investments. Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit. How To Calculate Return On Equity? Return on equity can be calculated by using the formula: Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity So, based on the above formula, the ROE for Samaiden Group Berhad is: 14% = RM19m ÷ RM140m (Based on the trailing twelve months to March 2025). The 'return' refers to a company's earnings over the last year. That means that for every MYR1 worth of shareholders' equity, the company generated MYR0.14 in profit. Check out our latest analysis for Samaiden Group Berhad What Has ROE Got To Do With Earnings Growth? So far, we've learned that ROE is a measure of a company's profitability. Depending on how much of these profits the company reinvests or "retains", and how effectively it does so, we are then able to assess a company's earnings growth potential. Generally speaking, other things being equal, firms with a high return on equity and profit retention, have a higher growth rate than firms that don't share these attributes. A Side By Side comparison of Samaiden Group Berhad's Earnings Growth And 14% ROE To begin with, Samaiden Group Berhad seems to have a respectable ROE. Further, the company's ROE compares quite favorably to the industry average of 9.0%. Probably as a result of this, Samaiden Group Berhad was able to see an impressive net income growth of 22% over the last five years. We believe that there might also be other aspects that are positively influencing the company's earnings growth. For example, it is possible that the company's management has made some good strategic decisions, or that the company has a low payout ratio. We then performed a comparison between Samaiden Group Berhad's net income growth with the industry, which revealed that the company's growth is similar to the average industry growth of 22% in the same 5-year period. Earnings growth is a huge factor in stock valuation. What investors need to determine next is if the expected earnings growth, or the lack of it, is already built into the share price. By doing so, they will have an idea if the stock is headed into clear blue waters or if swampy waters await. One good indicator of expected earnings growth is the P/E ratio which determines the price the market is willing to pay for a stock based on its earnings prospects. So, you may want to check if Samaiden Group Berhad is trading on a high P/E or a low P/E, relative to its industry. Is Samaiden Group Berhad Using Its Retained Earnings Effectively? Samaiden Group Berhad has a really low three-year median payout ratio of 19%, meaning that it has the remaining 81% left over to reinvest into its business. So it seems like the management is reinvesting profits heavily to grow its business and this reflects in its earnings growth number. Along with seeing a growth in earnings, Samaiden Group Berhad only recently started paying dividends. Its quite possible that the company was looking to impress its shareholders. Our latest analyst data shows that the future payout ratio of the company is expected to rise to 24% over the next three years. Regardless, the ROE is not expected to change much for the company despite the higher expected payout ratio. Conclusion In total, we are pretty happy with Samaiden Group Berhad's performance. In particular, it's great to see that the company is investing heavily into its business and along with a high rate of return, that has resulted in a sizeable growth in its earnings. With that said, the latest industry analyst forecasts reveal that the company's earnings are expected to accelerate. Are these analysts expectations based on the broad expectations for the industry, or on the company's fundamentals? Click here to be taken to our analyst's forecasts page for the company. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Sign in to access your portfolio
Boston Globe
30 minutes ago
- Boston Globe
The House is poised to OK Trump's $9 billion cut to public broadcasting and foreign aid
Get Starting Point A guide through the most important stories of the morning, delivered Monday through Friday. Enter Email Sign Up The House has already approved a previous version of the bill. But it now needs to take up the version that passed the Senate before it can be sent to Trump's desk for his signature. Advertisement 'We need to get back to fiscal sanity and this is an important step,' House Speaker Mike Johnson, R-La., told reporters shortly after the chamber opened. The package cancels about $1.1 billion for the Corporation for Public Broadcasting and nearly $8 billion for a variety of foreign aid programs, many designed to help countries where drought, disease and political unrest endure. The effort to claw back a sliver of federal spending comes just weeks after Republicans also muscled through Trump's tax and spending cut bill without any Democratic support. The Congressional Budget Office has projected that measure will increase the U.S. debt by about $3.3 trillion over the coming decade. Advertisement A heavy blow to the Corporation for Public Broadcasting The cancellation of $1.1 billion for the CPR represents the full amount it is due to receive during the next two budget years. The White House says the public media system is politically biased and an unnecessary expense. The corporation distributes more than two-thirds of the money to more than 1,500 locally operated public television and radio stations, with much of the remainder assigned to National Public Radio and the Public Broadcasting Service to support national programming. Democrats were unsuccessful in restoring the cut in the Senate. Lawmakers with large rural constituencies have voiced particular concern about what the cuts to public broadcasting could mean for some local public stations in their state. Sen. Lisa Murkowski, R-Alaska, said the stations are 'not just your news — it is your tsunami alert, it is your landslide alert, it is your volcano alert.' Later in the day Tuesday, as the Senate debated the bill, a 7.3 magnitude earthquake struck off the remote Alaska Peninsula, triggering tsunami warnings on local public broadcasting stations that advised people to get to higher ground. Sen. Mike Rounds, R-S.D., said he secured a deal from the White House that some money administered by the Interior Department would be repurposed to subsidize Native American public radio stations in about a dozen states. But Kate Riley, president and CEO of America's Public Television Stations, a network of locally owned and operated stations, said that deal was 'at best a short-term, half-measure that will still result in cuts and reduced service at the stations it purports to save.' Advertisement Inside the cuts to foreign aid Among the foreign aid cuts are $800 million for a program that provides emergency shelter, water and family reunification for refugees and $496 million to provide food, water and health care for countries hit by natural disasters and conflicts. There also is a $4.15 billion cut for programs that aim to boost economies and democratic institutions in developing nations. Democrats argued that the Republican administration's animus toward foreign aid programs would hurt America's standing in the world and create a vacuum for China to fill. 'When we retreat from the world diplomatically and through our assistance to vulnerable people, America will be alone, without allies, in a less stable world,' said Rep. Rosa DeLauro, D-Conn. 'And you know who will come out ahead? China. Russia. Iran.' The White House argued that many of the cuts would incentivize other nations to step up and do more to respond to humanitarian crises and that the rescissions best served the American taxpayer. 'The money that we're clawing back in this rescissions package is the people's money. We ought not to forget that,' said Rep. Virginia Foxx, R-N.C., chair of the House Rules Committee. After objections from several Republicans, Senate GOP leaders took out a $400 million cut to PEPFAR, a politically popular program to combat HIV/AIDS that is credited with saving millions of lives since its creation under Republican President George W. Bush. Looking ahead to future spending fights Democrats say the bill upends a legislative process that typically requires lawmakers from both parties to work together to fund the nation's priorities. Triggered by the official rescissions request from the White House, the legislation only needs a simple majority vote to advance instead of the 60 votes usually required to break a filibuster. That meant Republicans could use their 53-47 majority to pass it along party lines. Advertisement In the end, two Republican senators, Murkowski and Sen. Susan Collins of Maine, joined with Democrats in voting against the bill, though a few other Republicans also raised concerns about the process. 'Let's not make a habit of this,' said Senate Armed Services Committee Chairman Roger Wicker of Mississippi, who voted for the bill but said he was wary that the White House wasn't providing enough information on what exactly will be cut. Russ Vought, the director of the Office of Management and Budget, said the imminent successful passage of the rescissions shows 'enthusiasm' for getting the nation's fiscal situation under control. 'We're happy to go to great lengths to get this thing done,' he said during a breakfast with reporters hosted by the Christian Science Monitor. In response to questions about the relatively small size of the cuts -- $9 billion -- Vought said that was because 'I knew it would be hard' to pass in Congress. Vought said another rescissions package is 'likely to come soon.' Associated Press writers Becky Bohrer in Juneau, Alaska, and Seung Min Kim contributed to this report.
