Block shares soar 10% on entry into S&P 500
It's the second change to the benchmark this week, after S&P Global announced on Monday that ad-tech firm The Trade Desk would be added to the S&P 500. Trade Desk is taking the place of software maker Ansys, which was acquired by Synopsys in a deal that closed on Thursday.
Hess' departure comes just after Chevron completed its $54 billion purchase of the oil producer prevailing against Exxon Mobil in a legal dispute over offshore oil assets in the South American nation of Guyana.
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Miami Herald
2 hours ago
- Miami Herald
The stock market is being led by a new group of winners
For a while, the S&P 500's returns have been dominated by a select group of technology kingpins known as the magnificent seven. Those seven stocks, Alphabet, Apple, Amazon, Microsoft, Meta Platforms, Nvidia, and Tesla, powered the market higher due to massive spending and demand growth for artificial intelligence training and inference. Related: History suggests stocks could have more upside, says analyst They remain key cogs in the S&P 500's performance, but more recently, a new basket of stocks is delivering big returns, potentially signaling the early days of a regime change. Unlike the Mag 7, the new leaders are far less tied to AI. Sure, names like Palantir and Nvidia remain big winners, but the broader group of stocks delivering eye-popping returns spans more industries, including finance and, yes, even space. It's been a tale of two markets this year. First, stocks took a drubbing beginning in February when President Trump launched his trade war, instituting 25% tariffs on Canada and Mexico. Related: Veteran fund manager who predicted Nvidia stock rally reboots forecast on China The White House followed that up with more tariffs, often higher than Wall Street and businesses expected, including a baseline 10% tariff on all imports and a 25% tariff on autos. Altogether, the tariff tit-for-tat took a big toll on stocks, causing the S&P 500 to fall by 19%-nearly into bear market territory-and the Nasdaq Composite to tumble about 24% through early April. Then, everything changed. President Trump paused most reciprocal tariffs on April 9, providing leeway for trade deals that could settle tariffs at more reasonable levels. The glimmer of hope for avoiding a worst-case scenario of high tariffs sparking inflation and sending the economy into a tailspin marked a bottom for stocks, kicking off a record-setting rally. The S&P 500 has marched 24% higher while the Nasdaq has rallied by over 30% as more people have lowered their forward inflation expectations. While there's some concerning economic data on jobs and the economy, market gains suggest we'll sidestep an economic reckoning, providing upside to revenue and earnings growth. By now, most investors are familiar with market darlings Nvidia and Palantir, two of the most prominent AI players. Given its dominance in high-end AI semiconductor chips and optimization software, Nvidia is the de facto Goliath in AI network infrastructure. Palantir has become a go-to for securely developing AI apps for government and corporations. Related: Billionaire Ackman has one-word message on stock market Those stocks have been top performers over the past few months, rising 82% and 107% from their early April lows. But other big-cap technology companies haven't performed nearly as well. Alphabet and Apple are up 28% and 23%, respectively. Solid. But not game-changing. You could have bought the Nasdaq 100 and done much better. Instead, a new set of stock market darlings has been outpacing the market, including space technology leader Rocket Lab (RKLB) and fintech leader SoFi Technologies (SOFI) . Crypto leader Coinbase (COIN) has also been a star. These three stocks are up 214%, 130%, and 176%, respectively, from their April lows. Moreover, to understand just how good the performance of this new basket of leaders has been, you need look no further than the VanEck Social Sentiment ETF (BUZZ) . The BUZZ ETF invests in "75 large cap U.S. stocks which exhibit the highest degree of positive investor sentiment and bullish perception based on content aggregated from online sources including social media, news articles, blog posts and other alternative datasets," according to VanEck. In short, it attempts to keep its finger on the pulse of the most interesting stocks. So far, that strategy is working. The BUZZ ETF gained 36% in the second quarter and is up 22% year-to-date through June. Meanwhile, the S&P 500 is up 11% and 6%. It's up 66% since early April, and month-to-date through July 18, it's gained 8% versus a 2% return for the Nasdaq. More on next-generation stocks: Veteran trader has blunt words for SoFi's latest moveSpace stocks soar as Elon Musk and Donald Trump argueIs quantum computing the next big thing in stocks? "Look at how poorly the QQQs have done relative to BUZZ since April. Think about this, we consider the QQQs to be the pinnacle of technology stocks, yet they practically look like the healthcare stocks relative to the S&P when compared to BUZZ," wrote long-time technical analyst Helene Meisler on TheStreet Pro. It's not just Rocket Lab, Coinbase, and SoFi powering the ETF, either. Yes, those are the three largest holdings in BUZZ, but AST SpaceMobile and Robinhood (HOOD) are number four and five, and they've been up 186% and 219% since early April. Nvidia and Palantir are only BUZZ's 10th and 11th biggest holdings, so while their gains are substantial, they're not the ones behind the ETF's significant outperformance. Does the rise of Rocket Lab, thanks to a steady stream of revenue growth from shooting satellites into the sky, or SoFI, which is increasingly disrupting traditional banking, signal the rise of a new guard, or is it just a temporary speculative frenzy? "I was taught that corrections are the market's way of changing leadership," wrote Meisler. "Was the spring plunge the market's way of changing leadership? Or is this just speculation run amok? If you go back to that ratio chart, it's a trend that has been in place for at least a year." Of course, stocks don't go up in a straight line, and some backfilling of gains for this new group of winners is to be expected. Still, one year is a pretty long period for this ETF and its biggest components to outpace the broader market. Todd Campbell owns Rocket Lab, SoFi Technologies, Nvidia, and Palantir. Related: Bank of America delivers bold S&P 500 target The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Business Insider
3 hours ago
- Business Insider
Seeking Up to 15% Dividend Yield? Piper Sandler Suggests 2 Dividend Stocks to Buy
Stock investing is all about returns, and the markets have delivered just that since hitting their trough in April. The S&P 500 bottomed out at 4,983 and has since rebounded 26%, bringing its year-to-date gain to 7% and pushing it to record levels. But is there room for more gains? Elevate Your Investing Strategy: Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. Make smarter investment decisions with TipRanks' Smart Investor Picks, delivered to your inbox every week. Piper Sandler chief investment strategist Michael Kantrowitz, in a recent interview, explains why he believes that markets haven't hit their ceiling yet, but he acknowledges that all gains have their limits. 'I think it's important to recognize or acknowledge that the last three months' moves were largely pricing out of macro risk. Whether you look at PEs, which have rebounded, or credit spreads, which have compressed, it's been a very macro-led tape where kind of a rising tide has lifted all boats. Going forward, we should not expect this to sustain the same level of returns, of course,' Kantrowitz stated. But investors are still looking for profits, and when the market ceiling is facing limits, high-yield dividend stocks offer a sound choice to maximize portfolio returns. Against this backdrop, Piper Sandler analyst Crispin Love has highlighted two high-yielding dividend stocks to buy – including one with a yield approaching 15%. Let's give them a closer look. We'll start with AGNC, a real estate investment trust, or REIT, whose activities mainly revolve around agency mortgage-backed securities. These assets are guaranteed against credit losses by Federal entities – Fannie Mae, Freddie Mac, and Ginnie Mae – providing a level of protection for investors. AGNC is an internally managed REIT, with a long-term goal of delivering solid returns to its shareholders. That goal is reflected in the company's highly focused investment strategy. AGNC has built a portfolio where 98% of its assets are agency MBS, including pass-through certificates, collateralized mortgage obligations (CMOs), and 'to-be-announced' securities (TBAs) – all carrying federal guarantees that help mitigate credit risk. As of March 31, the portfolio stood at $78.9 billion in value, with over 95% allocated to 30-year fixed-rate assets, underscoring AGNC's preference for stable, long-duration instruments. AGNC's consistent dividend policy is a key reason it stands out among income investors. In fact, the company pays dividends monthly – a less common but appealing feature for those seeking regular income. This monthly cadence allows investors to better match dividend inflows with ongoing expenses. AGNC's most recent declaration came on July 9 for an August 11 payment, maintaining its 12-cent monthly rate. That equates to 36 cents per quarter and $1.44 annually, translating to a generous forward yield of 15.5%. While its dividend track record is attractive, it's worth examining AGNC's underlying financials to assess the sustainability of those payouts. In its latest quarterly report for Q1 2025, the company posted net interest income of $159 million and a non-GAAP EPS of 44 cents. Although NII fell short of expectations by $284 million, the earnings per share came in 3 cents above the consensus. In setting out the Piper Sandler view here, analyst Crispin Love explains why he believes that this REIT will continue to deliver on the dividend. 'Since AGNC's 1Q25 earnings, agency spreads have tightened slightly following significant volatility around Liberation Day. We believe near-term spread levels and mortgage rates should be somewhat range-bound, but we could see continued rate volatility in 2025 given the macro landscape and uncertainty related to economic growth, inflation, and tariffs. Going forward, we believe AGNC can maintain its current dividend level, with AGNC generating mid-to-high teens returns over the near-term,' Love opined. Love's comments back up his Overweight (i.e., Buy) rating on the stock, and his $10 price target implies a one-year upside potential of 8%. Together with the dividend yield, the total one-year return on this stock may approach 23.5%. (To watch Love's track record, click here) Rithm Capital (RITM) The second dividend stock we'll look at is Rithm Capital, a REIT that was founded in 2013 and for the past decade-plus has provided a compelling investment option in mortgage servicing rights (MSRs). Early on, Rithm focused on MSR management; today, its portfolio is more varied, holding a diverse set of real estate assets. In addition to mortgage servicing rights, these assets include residential mortgage loans, commercial real estate, single-family rentals, business purpose loans, and even consumer loans. Building on this expanded investment scope, Rithm took a major strategic step in late 2023 by acquiring the asset management firm Sculptor Capital Management. The $719.8 million deal significantly broadened Rithm's operational reach and brought Sculptor's sizable asset base under its umbrella. The impact of this acquisition is evident in the company's numbers. Rithm now boasts $7.8 billion in total equity and a book value of $12.39 per common share. Its total assets stand at $45 billion, while assets under management have grown to $35 billion – a figure reflecting the addition of Sculptor's portfolio. Diving into specific segments, the company holds over $5.5 billion in mortgage origination and servicing and nearly $850 million in residential transitional lending. These robust figures support Rithm's overarching goal: to deliver stable and attractive long-term returns to shareholders. A key part of that strategy is the dividend, which the company has paid consistently for 12 years. The current quarterly dividend stands at 25 cents per common share, declared most recently on June 18 for a July 31 payment. At the annualized rate of $1, this payout translates to a forward yield of 8.4%. That yield appears well-supported by the company's latest financials. In 1Q25, earnings available for distribution (EAD) came in at $275.3 million, or 52 cents per share – 5 cents ahead of expectations and more than enough to cover the dividend. Checking in again with Piper Sandler's Crispin Love, we find that the analyst has a lot to say about Rithm – and it's mostly positive. 'With 30-year mortgage rates keeping the origination outlook still far from a normalized environment, we are focused on names that can perform in this higher for longer backdrop. One name that stands out to us for multiple reasons is RITM. Rithm is a diversified business across mortgage and asset management and is currently trading at just 5x earnings. On the mortgage side, RITM is the #3 mortgage servicer in the US which is an annuity like business that can actually outperform in higher rate backdrops. In addition, management is contemplating a potential spin of its mortgage business (Newrez), which could serve as a catalyst to shares. And lastly, RITM continues to grow in asset management following its acquisition of Sculptor in late 2023 with the potential for more acquisitions or partnerships in the space,' Love noted. The analyst quantifies this stance with an Overweight (i.e., Buy) rating, along with a $14 price target that points toward a one-year gain of 17.25%. Add in the dividend yield, and the return for RITM over the coming year can hit as high as ~26%. All in all, there are 6 recent analyst reviews on record for Rithm Capital and they are all positive – for a unanimous Strong Buy consensus rating. (See RITM stock forecast) To find good ideas for dividend stocks trading at attractive valuations, visit TipRanks' Best Stocks to Buy, a tool that unites all of TipRanks' equity insights.
Miami Herald
3 hours ago
- Miami Herald
History suggests stocks could have more upside, says analyst
There weren't many beating the bullish drum on the stock market in early April. The S&P 500 and tech-laden Nasdaq Composite were mired in a brutal downturn following harsher-than-hoped tariff announcements and growing economic concerns on jobs and inflation. The S&P 500 retreated 19% from its mid-February highs before finding its footing on April 9. That near-bear market had everyone a bit antsy, particularly given President Donald Trump's mounting trade war. Nevertheless, stocks' decline was fast and steep enough to cause most sentiment measures to signal oversold, suggesting that those willing to step into the fray could be rewarded for buying the dip. And boy, have they been rewarded. Don't miss the move: Subscribe to TheStreet's free daily newsletter The S&P 500 has marched 25% higher, and the Nasdaq has surged over 30%. President Trump's pause on most reciprocal tariffs fueled the gains on April 9. Hope that tariffs would settle at more manageable levels and significant new stimulus associated with trillions of dollars in tax cuts from the One Big Beautiful Bill Act kept the rally humming along to new all-time highs. The big question on most minds now is whether this record-setting run can continue. Those in the bearish camp point toward weaker GDP, cracks in the jobs market, and inflation risks. Bullish investors think most of those risks were priced in during the spring sell-off, and the bar has been set low enough that anything less than disaster would be good enough to push forward revenue, earnings, and economic outlooks higher, rather than lower. The debate has prompted many popular Wall Street analysts, including Carson Group's Chief Strategist Ryan Detrick, to update their outlook. Image source: Michael M. Santiago/Getty Images Stocks are forward-looking and are considered a leading, rather than lagging, indicator. The ability of stock prices to predict what may happen to the economy can be messy, with short-term fits and starts. However, stocks' ability to aggregate market participants' collective wisdom is generally considered a valuable tool for economists and investors. Related: Market legend makes surprising stock market bet The predictive nature of markets is one reason behind the old Wall Street adage, "stocks climb a wall of worry." Often, stocks bottom when everyone thinks the worst has yet to happen, and they top when everyone sees roses and daisies. Over the past three months, the stock market has climbed a big wall of concern. U.S. employers have announced over 696,000 layoffs through May, up 80% year over year, according to Challenger, Gray & Christmas. The unemployment rate has inched up to 4.1% in June from 3.4% in 2023. And inflation, while much lower than in 2022, when the Federal Reserve declared war on it by significantly raising interest rates, is still above the 2% level targeted by many, including the Fed. The backdrop still suggests that stagflation or, worse, recession is a possibility. But so far, stocks indicate the economy will sidestep most damage. While we don't know when the Fed may support the economy with interest rate cuts, most are modeling lower rates over the coming year, helping fuel economic activity. Also, the recently passed One Big Beautiful Bill Act contains significant tax cuts, including new Social Security income tax breaks and a higher State and Local Tax deduction, which provide additional money to support spending and GDP. If so, analysts who cut revenue and growth outlooks this spring will shift gears, increasing forecasts and potentially fueling additional upside. Those upward revisions would go a long way toward appeasing those concerned about the S&P 500's valuation, given that the recent rally has inflated its price-to-earnings (P/E) ratio. The S&P 500 topped out in February when its forward price-to-earnings ratio eclipsed 22. It bottomed out when the P/E ratio reached about 19. The recent rally has again pushed the S&P 500's P/E over 22, which historically doesn't correspond with favorable one-year returns. Ryan Detrick has been correctly banging the bullish drum for a while, and his team's midyear outlook also tells a bullish tale. Detrick's optimism is partially rooted in history. He often shares data highlighting how the stock market has historically behaved after catalysts, and this time is no exception. Fortunately, for bulls, history is on the side of more gains. The strategist points out that since the early 1970s, there have been five instances when the S&P 500 rose by 19% in 27 trading days like this year. Each time, the market was higher one year later, returning a median of 32.6%. Since 1950, the S&P 500 has been up one year later 74% of the time, returning a median of 10.4%. Related: Billionaire Ackman has one-word message on stock market We've already made a big chunk of returns, but Detrick's team writes, "This is still a young bull market." The average bull market lasts 67 months, and this one has only lasted a little over 30 months so far. "Like a cruise ship that is very hard to turn once it gets moving, bull markets tend to carry their momentum forward, another reason this one could last much longer than many think," wrote the analysts. As for valuation, they believe there's a bull case that a "low tariffs, big tax bill" environment will provide a catalyst for earnings, helping keep the P/E ratio in check. "It's hard to imagine that the tariffs will go back to where they were, but perhaps we're left with about 15% additional new tariffs on average- not at all trivial, but far from worst case," wrote the analysts. "Companies should be able to navigate the additional tariffs and maintain profit margins, especially larger companies with less fragile supply chains." Carson Group thinks the S&P 500 could reach 6,550, a 10% to 12% gain for 2025. Add in dividends, and the index's total return could be 12% to 15%. Currently, the S&P 500 is up about 7% in 2025. "Stocks came soaring back in one of the largest reversals ever, suggesting the lows for 2025 are likely behind us and better times could be coming for investors," said Detrick. "While 2025 has already been a wild ride - and we should still prepare for more ups and downs - we see reasons to expect this bull market to continue." Related: Legendary fund manager has blunt message on 'Big Beautiful Bill' The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
