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Bloomberg
28 minutes ago
- Bloomberg
China Stock Gauge Set for Decade High Driven by Savings Glut
A gauge of Shanghai-listed stocks is set for its highest close in a decade, as cash-rich local investors plow into a market that has surged amid easing trade tensions with the US. The Shanghai Stock Exchange Composite Index jumped as much as 0.5% to 3,715.93 on Monday, putting it on course for its highest close since August 2015, according to Bloomberg-compiled data. That cements a roughly 20% turnaround since an April selloff, when US President Donald Trump's sweeping tariffs roiled global markets. Trump extended a tariff truce with China last week.
Yahoo
41 minutes ago
- Yahoo
Energy Dividend Aristocrats Shine Amid Market Uncertainty
With U.S. markets trading close to record highs, many investors are now turning to dividend-paying stocks as they try to balance growth and income. Dividend investing provides a predictable and reliable source of cash flow that can complement other forms of income. Dividend stocks can also help protect your portfolio when the stock market loses steam, with predictions of a market crash growing. Studies have shown that dividend-paying stocks tend to hold up much better during market downturns, with an interesting study finding that they declined by an average of 14.4% during major drawdowns over the past 50 years compared with a 28.2% crash by non-dividend-paying stocks and 19.9% by the S&P 500. The ProShares S&P 500 Dividend Aristocrats ETF (NOBL) tracks the S&P 500 Dividend Aristocrats index composed of the companies that have grown their dividends for the last 25 consecutive years. Dividend aristocrats are generally considered to be high-quality businesses, a major attraction for long-term investing. After all, a company cannot consistently grow and pay out dividends for 25+ years without having a strong competitive advantage. Investing in dividend aristocrats helps investors avoid the so-called dividend traps wherein investors are attracted to potentially troubled companies by merely looking at their high yields. So far in 2025, energy-sector dividend aristocrats have shown a mixed performance compared to their counterparts in other industries. While mid-June's rally pushed WTI crude to about $77.6 per barrel (its highest level this year) prices have since retreated into the low $60s. Historically, the group's strong balance sheets and disciplined capital spending have allowed them to maintain and even grow dividends through commodity cycles, though they can lag more defensive sectors when crude prices weaken. This dynamic has kept the energy aristocrats in focus for income investors seeking yield with a measure of growth potential tied to the global energy market. Here are the leading dividend aristocrats in the oil and gas sector. #1. Exxon Mobil Forward Dividend Yield: 3.69% Sector: Energy Industry: Oil and Gas Integrated U.S. oil and gas giant, Exxon Mobil Corp. (NYSE:XOM), is a highly-rated dividend aristocrat, with a dividend growth streak of 41 years. Exxon has a high payout ratio for an energy company, with ~50% of 2025 earnings forecast in dividends. During the first quarter, Exxon returned $4.3B in dividend to shareholders with another $4.8B spent on share buybacks. Exxon reported second quarter revenue of $81.51B (-12.4% Y/Y), beating the Wall Street consensus by $1.2B while Q2 Non-GAAP EPS of $1.64 beat by $0.09. During the earnings call, Exxon Chairman and CEO Darren W. Woods outlined plans to grow Permian production by 700,000 barrels of oil equivalent (boe) per day to 2.3 million by 2030 and expand Guyana output to 1.7 mboe. Exxon tops Morningstar's best dividend stocks list, with Morningstar director Allen Good saying the company's dedication to growing oil and gas production lowers risks for investors, 'While this strategy is unlikely to win praise from environmentally oriented investors, we think it's more likely to be more successful and probably holds less risk.' Morningstar has a $135 price target on XOM, good for 26.2% upside from current price. #2. Chevron Forward Dividend Yield: 4.41% Sector: Energy Industry: Oil and Gas Integrated Chevron Corp. (NYSE:CVX) is another dividend champ, having grown distributions for 38 consecutive years. Chevron's 4.4% dividend yield is among the highest for large-cap oil and gas companies. The company returned a mixed report for the second quarter, with non-GAAP EPS of $1.77 beating by $0.02 while Q2 revenue of $44.82B (-12.4% Y/Y) missed by $230M. Chevron attributed lower earnings compared to a year ago to lower crude oil prices coupled with an unfavorable fair value adjustment for Hess shares. Chevron completed the acquisition of Hess on July 18, 2025, after winning a legal battle with ExxonMobil over the rights to a stake in a lucrative offshore oil project in Guyana. The total enterprise value of the deal was $55 billion, including debt. The company increased its 2026 free cash flow guidance to $12.5 billion, thanks to the Hess acquisition, and anticipates realizing $1 billion in annual run-rate synergies from the merger by the wend of 2025. #3. Eversource Energy Forward Dividend Yield: 4.5% Sector: Utilities Industry: Regulated Electricity Springfield, Massachusetts-based Eversource Energy (NYSE:ES) is a public utility that engages in the energy delivery business, providing electricity to 4.4 million customers. Eversource recently joined the S&P 500 Dividend Aristocrat Index thanks to its 25-year track record of dividend increases. However, what makes ES a compelling dividend pick is the fact that the company's five-year compound annual growth rate (CAGR) for the dividend clocks in at 5.9% — well above the average for the Aristocrat Index. The company has projected earnings growth of 5-7% annually through 2029, which should support dividend growth at the current clip. Eversource reported second quarter revenue of $2.84B (+12.3% Y/Y),$90M below the Wall Street consensus while Q2 GAAP EPS of $0.96 was in-line. The company increased its 5-year infrastructure investment plan by 10% thanks to the balance sheet strengthening coupled with constructive regulatory outcomes. By Alex Kimani for More Top Reads From this article on
Yahoo
an hour ago
- Yahoo
Trump gave China the AI chips it wanted. Beijing isn't saying thank you
In a surprising reversal of the United States' years-long technology restrictions on China, President Donald Trump last month allowed Nvidia to resume sales of a key AI chip designed specifically for the Chinese market. Yet rather than celebrating, Beijing's response has been noticeably lukewarm, despite having long urged Washington to ease the stringent export controls. In the weeks since the policy U-turn, Beijing has called the chip a security risk, summoned Nvidia for explanations and discouraged its companies from using it. The less-than-welcoming sentiment reflects Beijing's drive to build a self-sufficient semiconductor supply chain – and its confidence in the progress its rapidly advancing chip industry has made. But the cold shoulder may also represent some political posturing. Despite significant advances in its semiconductor sector, China still needs America's chips and technology. Experts said China's national champion Huawei has developed chips with performance comparable to — and in some cases surpassing — the newly approved Nvidia chip. However, China still wants the more advanced AI processors that remain blocked under US export controls. In the years since Trump first imposed tech restrictions on Huawei during his first term, China's chip technology has made significant strides, spurred by the frustration that mounted as Washington piled on export controls, said Xiang Ligang, director-general of a Beijing-based technology industry group and an advisor to the Ministry of Industry and Information Technology. 'We have this capability, it's not as they imagine – that if China is blocked, China won't be able to function, or that China will be finished,' he said. To him, the policy about-face only reflects the importance of having a wholly homegrown chip supply chain. 'For Chinese companies, we may only have one choice if we wish to ensure a relatively secure supply of chips – that means relying on our own domestically produced chips,' Xiang said. That may be China's goal, but in the high-stakes AI race, with all its national security implications, the US remains the leader, at least for now. China is not 'naive' The chip in focus is Nvidia's H20, which was released by the AI chip leader last year to maintain access to the Chinese market following strict export controls put in place under the Biden administration that stopped the export of chips with high processing power. Last month, Trump greenlit the sales of the chip to China after banning it in April as the US trade frictions with China deepened. Trump has justified his decision by calling the chip 'obsolete,' as it lags behind the company's cutting-edge AI processors like Blackwell or H100, from which H20 is derived. He and his officials appeared to have embraced a view long promoted by Nvidia's CEO Jensen Huang – that US can maintain its tech leadership only through ensuring its chips remain the global standard. 'You want to sell the Chinese enough that their developers get addicted to the American technology stack,' Commerce Secretary Howard Lutnick said last month. But the dramatic reversal has fueled questions about Trump's transactional approach to national security – once considered off-limits to bargaining. China, on the other hand, is alarmed by the alleged security risks of Nvidia's H20s like 'tracking and positioning' and 'remote shutdown' features, capabilities that some US lawmakers have called for but Nvidia denies it has placed in its chips. China's cyberspace watchdog and industry ministry have since summoned the American chip giant over the security concerns and urged firms to avoid H20 chips, a development which was previously reported by Bloomberg. One major Chinese tech company which has developed its AI models has received notice from the authorities urging it to exercise caution in the use of H20s, and advising it not to purchase them, a company insider said on the condition of anonymity. CNN has reached out to the ministry and the cyberspace authorities for comment. An Nvidia spokesperson told CNN that NVIDIA 'does not have 'backdoors' in our chips that would give anyone a remote way to access or control them.' 'Banning the sale of H20 in China would only harm US economic and technology leadership with zero national security benefit,' the spokesperson added. But China believes the US isn't playing fairly, Xiang said. 'What we actually want, you refuse to sell us. For the things you already consider obsolete, you still want to dump them into our market and occupy our market. Do you really think we're that naive?' he said. Still coveted Despite Beijing's concerns and the H20's reduced performance, the chips remain highly sought after by Chinese companies. Equity research firm Bernstein estimated that shipment of the chips to China this year would have reached 1.5 million units, or about 23 billion in revenue, without Trump's export restrictions. Major buyers include Chinese tech giants such as TikTok owner ByteDance, Alibaba and Tencent. While Huawei's top AI chips excel in computing power – one of the key measures in evaluating processors' performance – in comparison with H20, they fall short in terms of memory bandwidth, which determines how much data can move between a chip's memory and computing unit. That bandwidth depends on a technology known as High Bandwidth Memory (HBM) used in AI chips to ensure efficient data transmission in AI model training. China's top HBM maker CXMT, or ChangXin Memory Technologies, is still about three to four years behind industry leaders like South Korea's SK Hynix and Samsung, and American Micron, according to MS Hwang, research director at Counterpoint Research, a research firm. Last year, the Biden administration further tightened export controls on China, including restrictions on HBM sales, forcing Chinese companies to rely on existing stockpiles. Beijing has requested Washington to lift restrictions on HBM as part of the trade deal negotiations, Financial Times reported this week. Key appeal of H20 for Chinese companies also lies in Huawei's limited production capacity and Nvidia's well-established ecosystem, said Qingyuan Lin, senior analyst at Bernstein focusing China's semiconductor industry. 'Even when you want to completely replace the H20 demand with the local guys, they're not able to deliver the amount of chips that's needed,' he said. The supply bottlenecks stem from constraints in scaling up production of both the manufacturing of computing units of the AI chips and the integration of various components in them, a technology known as advanced packaging in the industry, Lin said. Bernstein estimated that Huawei's shipments of its advanced AI chips in 2025 would amount to around 700,000 units, still far short of the demand in the country. CNN has reached out to Huawei for comment. Meanwhile, Nvidia's powerful ecosystem, which integrates its chips with its software platform, has created what experts call a 'moat,' making it difficult and costly for AI developers who train models on its software to switch to alternatives. 'The H20 comes with a complete ecosystem covering both hardware and software support, ensuring better compatibility and ease of integration,' said Brady Wang, associate director at Counterpoint. 'This ecosystem maturity is still a challenge for many Chinese-developed chips, making the H20 more attractive despite its cost disadvantage.' 'Very close' Still, experts said China's rapid progress in semiconductor technology should not be underestimated. Years of tightening export controls have injected both urgency and opportunity into Beijing's push for self-sufficiency, Lin said. While chipmaking technology appeared to stall after Huawei's 2023 flagship smartphone showcased advanced chips that American officials had deemed extremely difficult to produce, domestic chipmaking equipment companies have been steadily gaining ground, he said. 'The local guys actually had very little chance to gain share from the global players because of the technology gap, but export controls created a market that didn't exist before and accelerated the domestic substitution,' he said. Bernstein projects that the percentage of homemade AI chips in China will surge from 17% in 2023 to 55% by 2027, while American suppliers like Nvidia and AMD will shrink to 45% from 83%. In April, Huang of Nvidia met with Trump in Washington, urging the administration to loosen export controls on chips and saying that the diffusion of American AI technology around the world needs to be accelerated. 'There's no question that Huawei is one of the most formidable technology companies in the world…they made enormous progress in the last several years,' he said. 'China is right behind us. We're very, very close.' CNN's Hassan Tayir and Fred He contributed reporting. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
