Latest news with #AngeloKourkafas
Zawya
4 days ago
- Business
- Zawya
US stocks heal from tariff pain but trade news to keep markets edgy
After months of Wall Street gyrations to the twists and turns of U.S. trade policy, signs suggest stock investors are becoming more resilient to developments and cautiously defaulting to optimism that they have weathered the worst of the tariff-related shocks. U.S. equities have edged higher over the past two weeks as they digest a sharp rally that has brought the benchmark S&P 500 within 3% of its February record high, fueled in part by easing fears about the economic fallout from tariffs. A case in point: stocks ended Monday's session higher even as markets had grappled with President Donald Trump's announcement of doubling steel tariffs to 50%. Trump's stunning "Liberation Day" tariff announcement on April 2 sent stocks plunging and set off some of the most extreme market swings since the onset of the COVID-19 pandemic five years ago. Since then, volatility measures have moderated considerably, and, with the market's rebound, there are signs that technical damage from the slide has healed. Still, investors are mindful that markets remain susceptible to daily swings stemming from negotiations between the U.S. and trading partners as key deadlines near in coming weeks, with elevated valuations making stocks more vulnerable to disappointments. "What has allowed this almost full recovery in the stock market hinges on the negotiations that are now under way," said Angelo Kourkafas, senior investment strategist at Edward Jones. "Markets, consumers and businesses have vested interest that we get clarity sooner than later," Kourkafas said. "So potentially it's going to be a critical summer that is going to test the market's momentum." After falling to the brink of confirming a bear market on April 8, the S&P 500 has surged back nearly 20% and erased its losses for the year. Near the halfway mark of 2025, the index is now up 1.5%. While Trump's tariffs remain a risk, the market no longer is perceiving them as "this big outlier event," said Keith Lerner, co-chief investment officer at Truist Advisory Services. "We went through a period where the only thing that mattered for the markets was tariffs," Lerner said. "And now we are in a period where tariffs still matter, but they are not the only thing that matters." Truist is among the firms becoming more upbeat on the outlook for equities, with RBC Capital Markets and Barclays this week lifting their year-end targets for the S&P 500. Deutsche Bank strategists this week boosted their year-end target to 6,550, about 10% above current levels, as they cited a less severe expected tariffs hit to corporate profits. The strategists noted they expect the rally to be "punctuated by sharp pullbacks on repeated cycles of escalation and de-escalation on trade policy." Several investors and strategists pointed to a "base case" on Wall Street emerging for Trump's tariffs - 10% broadly, 30% on China along with some specific sectoral levies. The market "started saying the worst is behind us in terms of this whole tariff discussion," said King Lip, chief strategist at BakerAvenue Wealth Management. "The U.S. and China still have a lot of things to work out, but likely the worst is behind us." MODERATING VOLATILITY Volatility measures indicate calming fears about trade. The Cboe Volatility Index, an options-based measure of investor anxiety, reached 52.33 in early April, its highest closing level in five years, but has steadily receded and hovered at 17.6 on Wednesday, around its long-term median. In another sign, the average daily range of the S&P 500 has fallen to about 75 points, on a 10-session basis, about one-third the size from April during the height of post-Liberation Day volatility. Meanwhile, the S&P 500 has traded above its 200-day moving average - a closely watched trend-line - for about three weeks. The percentage of S&P 500 stocks trading in some form of an uptrend has jumped from 29.4% at the April 8 low to 60% as of last week, said Adam Turnquist, chief technical strategist for LPL Financial. "There is a growing list of technical evidence that suggests this recovery is real," Turnquist said in a note this week. Options data also suggests growing bullishness. Over the last month, on average about 0.84 S&P 500 call options traded daily against every put contract traded, the most this measure of sentiment has favored call contracts in at least the last four years, according to a Reuters analysis of data from options analytics firm Trade Alert. Calls confer the right to buy stocks at a specific price and future date, while puts grant the right to sell shares. To be sure, some investors warn the threat of tariff disruptions is not going away anytime soon and are wary of market complacency. "There is still just so much uncertainty," said Matthew Miskin, co-chief investment strategist at John Hancock Investment Management. Indeed, talk of the acronym "TACO" - Trump Always Chickens Out - has spread on Wall Street as a rationale for why markets should not fear harsh tariffs because many believe they will likely be walked back. But some investors are worried about a backlash from the president. BCA Research strategists said they were wary of "relying on a TACO backstop." "Trade tensions may have peaked, but we are unwilling to assume they won't sporadically rise from current levels," BCA said in a note this week. Stock valuations also continue to swell, with the S&P 500's forward price-to-earnings ratio reaching 21.7, its highest level since late February and well above its long-term average of 15.8, according to LSEG Datastream. Stocks are at "a more vulnerable level," said Chuck Carlson, chief executive officer at Horizon Investment Services. "The market is probably going to be a little bit more sensitive to what it perceives as negative news." (Reporting by Lewis Krauskopf in New York; Additional reporting by Saqib Iqbal Ahmed in New York; Editing by Alden Bentley and Matthew Lewis)
CNA
7 days ago
- Business
- CNA
US stocks end higher as traders shake off trade tensions
NEW YORK: US stocks shook off a gloomy start to the week to close higher Monday (Jun 2), with traders looking through the new trade uncertainty fueled by President Donald Trump's recent tariff threats. On Friday, Trump unleashed a new fear into the financial markets, threatening to double steel tariffs from 25 per cent to 50 per cent. But by Monday afternoon, traders were adopting a more buoyant mood, with all three major indices on Wall Street closing higher. The Dow Jones Industrial Average closed up 0.1 per cent at 42,305.48, while the broad-based S&P 500 finished up 0.4 per cent at 5,935.94. The tech-rich Nasdaq Composite also rose, climbing 0.7 per cent to 19,242.61 amid enthusiasm about the impact of AI on profits. "I think we are seeing a bit of continuation of the positive interpretation of the market from Nvidia's earnings," Angelo Kourkafas from Edward Jones told AFP, referring to the chip titan's recent strong results. "Artificial intelligence remains a powerful driver for earnings," he continued, adding that the financial markets had become "a little insensitive" to the constant tariff threats from the White House. "We are moving away from the worst-case scenarios," he said.
Reuters
27-05-2025
- Business
- Reuters
TSX's gains set to slow as trade war hits Canada's economy
TORONTO, May 27 (Reuters) - Canada's main stock index is set to largely consolidate its recent gains through the rest of 2025 and could be at risk of another correction as the domestic economy shows signs of a slowdown due to U.S. tariffs, a Reuters poll found. The S&P/TSX Composite index (.GSPTSE), opens new tab has rebounded nearly 16% from its lowest closing level in April to post a record closing high on Monday at 26,073.13. Since the start of the year, the index has gained 5.4%, outperforming major U.S. indexes such as the S&P 500. It has been helped by a heavy weighting in metal mining shares as safe-haven demand lifted the price of gold to record highs. "We still believe that peak uncertainty is behind us but the Canadian economy is starting to show the impact from tariffs," said Angelo Kourkafas, a senior global investment strategist at Edward Jones. Canada sends about 75% of its exports to the United States, including steel, aluminum and autos which have been hit by hefty U.S. duties, while Canada's unemployment rate was at 6.9% in April, its highest level since November. The median prediction of 21 equity strategists and portfolio managers in the May 15-27 poll was for the S&P/TSX Composite index to edge 0.7% higher to 26,250 by year-end, slightly less than the 26,500 mark expected in a February poll. "As companies continue to grapple with the implications of tariffs and recalibrate their inventory strategies, alongside the inclination to delay capital expenditures, profit margins will likely face pressure," said Victor Kuntzevitsky, a portfolio manager at Stonehaven, Wellington-Altus Private Counsel. Seven out of 13 analysts who answered a separate question said corporate earnings would be lower in 2025 compared with 2024 while eight out of 13 said a correction was likely or highly likely over the coming three months. A correction, or a drop of 10% or more from the peak, was confirmed in April before the market rebounded. "We are focusing more on dividend payers as it will protect one's portfolio better during a market correction," said Ben Jang, a portfolio manager at Nicola Wealth. "Over time, falling interest rates are expected to drive outflows from money market instruments." The Bank of Canada has cut its benchmark interest rate by 2-1/4 percentage points since last June, to 2.75%, to support the economy. Lower borrowing costs and the potential for trade deals could eventually see the market take another leg higher, analysts say. The index was expected to reach 27,750 by the end of next year, a gain of 6.4%. "Once there is more clarity on trade and lower interest rates start filtering through the economy in 2026, we see a reacceleration in earnings," Kourkafas, from Edward Jones, said. (Other stories from the Reuters Q2 global stock markets poll package)
Yahoo
27-05-2025
- Business
- Yahoo
TSX's gains set to slow as trade war hits Canada's economy:Reuters poll
By Fergal Smith TORONTO (Reuters) - Canada's main stock index is set to largely consolidate its recent gains through the rest of 2025 and could be at risk of another correction as the domestic economy shows signs of a slowdown due to U.S. tariffs, a Reuters poll found. The S&P/TSX Composite index has rebounded nearly 16% from its lowest closing level in April to post a record closing high on Monday at 26,073.13. Since the start of the year, the index has gained 5.4%, outperforming major U.S. indexes such as the S&P 500. It has been helped by a heavy weighting in metal mining shares as safe-haven demand lifted the price of gold to record highs. "We still believe that peak uncertainty is behind us but the Canadian economy is starting to show the impact from tariffs," said Angelo Kourkafas, a senior global investment strategist at Edward Jones. Canada sends about 75% of its exports to the United States, including steel, aluminum and autos which have been hit by hefty U.S. duties, while Canada's unemployment rate was at 6.9% in April, its highest level since November. The median prediction of 21 equity strategists and portfolio managers in the May 15-27 poll was for the S&P/TSX Composite index to edge 0.7% higher to 26,250 by year-end, slightly less than the 26,500 mark expected in a February poll. "As companies continue to grapple with the implications of tariffs and recalibrate their inventory strategies, alongside the inclination to delay capital expenditures, profit margins will likely face pressure," said Victor Kuntzevitsky, a portfolio manager at Stonehaven, Wellington-Altus Private Counsel. CORRECTION? Seven out of 13 analysts who answered a separate question said corporate earnings would be lower in 2025 compared with 2024 while eight out of 13 said a correction was likely or highly likely over the coming three months. A correction, or a drop of 10% or more from the peak, was confirmed in April before the market rebounded. "We are focusing more on dividend payers as it will protect one's portfolio better during a market correction," said Ben Jang, a portfolio manager at Nicola Wealth. "Over time, falling interest rates are expected to drive outflows from money market instruments." The Bank of Canada has cut its benchmark interest rate by 2-1/4 percentage points since last June, to 2.75%, to support the economy. Lower borrowing costs and the potential for trade deals could eventually see the market take another leg higher, analysts say. The index was expected to reach 27,750 by the end of next year, a gain of 6.4%. "Once there is more clarity on trade and lower interest rates start filtering through the economy in 2026, we see a reacceleration in earnings," Kourkafas, from Edward Jones, said. (Other stories from the Reuters Q2 global stock markets poll package)
Bloomberg
16-05-2025
- Business
- Bloomberg
Fed to Cut 10% of Workforce Over 2 Years
"Bloomberg Markets" follows the market moves across every global asset class and discusses the biggest issues for Wall Street. Today's guests; Edward Jones Senior Global Investment Strategist Angelo Kourkafas, Bloomberg's Michael Mckee, Geetha Rangananthan, Sri Taylor, and Janet Lorin. (Source: Bloomberg)
