Latest news with #BirinyiAssociates
Yahoo
16-05-2025
- Business
- Yahoo
Has the stock market's epic rebound come too far, too fast? What investors chasing the rally should keep in mind.
Any investor who was bold enough to buy the dip in stocks last month has been quickly rewarded. But has the stock market's comeback been too much, too fast? Some on Wall Street think so. I have $50,000 in credit-card debt after my divorce, but received $30,000 after a car wreck. Do I buy a used Lexus? My second wife says her 2 kids should inherit our estate, but I also have 2 kids. Is that fair? My husband and I spend more money on our daughter and her family than on my single son. Do we compensate him? These $5,000 bonds can help you fix a stock-heavy portfolio 'I am scared to death that I'll run out of money': My wife and I are in our 50s and have $4.4 million. Can we retire early? 'I think what we're seeing now is emotion and people chasing the rally, and this fear of missing out,' said Michael O'Rourke, chief market strategist at Jones Trading, during an interview with MarketWatch. Since its closing low on April 8, the S&P 500 SPX has risen by more than 17% through Tuesday's close, a pace rarely seen over the past 75 years. Analysts at Birinyi Associates have found six examples since 1950 where short-term returns for the S&P 500 were on par with what investors have seen over the past six weeks. Following each example, returns 12 months later were almost universally strong. The strongest example followed the COVID-19-inspired meltdown in early 2020: Following the market's initial comeback, the S&P 500 continued to climb, ultimately tacking on a 46% return 12 months later. But a lot can happen in a year, and there are still plenty of investors out there who expect stocks could head lower once again in the interim. Even Wall Street luminaries like Paul Tudor Jones have said that they expect the market will revisit its April lows later this year as the economic damage from Trump's tariffs is finally felt. See: Paul Tudor Jones says U.S. stocks will fall to new lows — even if Trump dramatically dials back China tariffs Mark Hackett, chief market strategist at Nationwide, pointed out that U.S. stocks are still expensive compared with companies' expected earnings over the next 12 months. 'The market has raced from oversold to overbought in record time, with the S&P 500 now trading at 21x forward earnings,' Hackett said in emailed commentary. The relative strength index for the S&P 500, a popular stock-market momentum gauge, was sitting north of 70 on Wednesday, putting the index squarely in overbought territory. It had fallen below 30 as recently as April 4, before Trump announced his initial 90-day pause on global tariffs. To be sure, investors inclined to keep on buying have plenty of grist to support their thesis. Trump has walked back many of his most economically damaging tariffs, and few expect the administration will bring them back — at least not at the levels announced on April 2. At the same time, many hedge funds and other institutional investors who either sold stocks in April or sat things out are likely facing pressure to chase the rally. Trade deals with the U.K. and China have shown that the White House is serious about finding an off-ramp. After unveiling the 90-day pause followed by a dramatic de-escalation of its China tariffs this week, the U.S. effective tariff rate has fallen to 14.4%, compared with nearly 24% just before, according to data from J.P. Morgan. To be sure, even 14.4% is higher than where tariffs stood at the beginning of 2025. Adding to the sense of optimism, much of the hard economic data released so far have shown little indication that the tariffs, and the attendant surge in policy uncertainty caused by their chaotic rollout, have caused any deeper damage to the American labor market or consumers' willingness to spend. But plenty of data from April has yet to be released, and some expect the full extent of the economic blowback could take longer to play out. 'There has likely been damage done, especially to smaller businesses, that it will be difficult to recover from, at least in the short term,' said Melissa Brown, managing director of investment-decision research at SimCorp. There are still plenty of unanswered questions surrounding the White House's tariff agenda that could upend stocks. After rampant speculation about whether the 'Trump put' was still in play, the administration has shown once again that it is responsive to pressure from the financial markets, be it stocks or bonds. See: Stock-market recovery suggests equities must fall this far to spark a 'Trump put' or pivot Trump's plans for national-security tariffs on semiconductors and pharmaceuticals remain a key unanswered question for investors. The administration has been largely quiet regarding its plans lately, although the Commerce Department was asked to begin a formal investigation at the beginning of April, Jones Trading's O'Rourke noted. If the White House follows through with substantial levies intended to encourage the reshoring of production related to sensitive goods, it could send stocks reeling once again. The confusion here helps underscore a key risk for stocks: The fact that with one Truth Social post, Trump could send investors scrambling out of equities once again. O'Rourke, however, said he is beginning to suspect that last month's market chaos may have caused the president to lose his nerve on his tariff agenda. 'Did the president get so spooked on the reaction to his China tariffs that he doesn't follow through here?' O'Rourke wondered. Then there's the question of the bond market. The yield on the 10-year Treasury note BX:TMUBMUSD10Y quietly crept back above 4.50% on Wednesday, returning to levels seen last month that spooked fears of a bond-market meltdown and helped encourage Trump to announce the 90-day pause on many of his 'liberation day' levies. Bond prices move inversely to bond yields, falling as yields rise. 'Yields on the long end are rising, that's going to be our ultimate battle now,' said George Cipolloni, a portfolio manager at Penn Mutual Asset Management. U.S. stocks traded mostly higher on Wednesday, with the S&P 500 up marginally while the Nasdaq Composite COMP ended on solid gains. The Dow Jones Industrial Average DJIA and the Russell 2000 RUT both closed lower. Wall Street's biggest bull held his nerve throughout this year's selloff. What he's saying now. 'I'm flabbergasted': My friend wants to borrow $5,800 to save his home from foreclosure. What should I do? Has the stock market's epic rebound come too far, too fast? What investors chasing the rally should keep in mind. 'We live modestly': My wife and I have $900K in stocks and $380K in savings and CDs. Are we holding too much cash? Wall Street's fear gauge just dropped with striking speed. What historically comes next for stocks?
Yahoo
08-05-2025
- Business
- Yahoo
US corporate stock buybacks on pace for record high in 2025
US corporate stock buybacks are moving to a record high in 2025, according to data from Birinyi Associates. Morning Brief anchor Madison Mills evaluates this trend and what this communicates about market sentiment (^DJI, ^IXIC, ^GSPC) from both investors and major companies. To watch more expert insights and analysis on the latest market action, check out more Morning Brief here. Time now for our chart of the day. Let's send it over to Madison Mills for a look at why corporate America is bullish on the stock market, Maddie. That's exactly right, Brad. So, taking a look at corporate buybacks. This is what it sounds like when corporate America buys back some of its own shares and companies hitting a record high. We're on track for the second biggest monthly gains in corporate buybacks since the mid 1980s. Take a look at this chart here behind me. You can see the increase that we have had here, and that is on a monthly basis, that stat that I just pointed out, but you can see for the first quarter of 2025 we are nearing over $500 billion of corporate buybacks. The month of April seeing over $230 billion in buybacks, making up half of the gains that you're seeing on the screen behind me. So a couple of different takeaways for investors here on the one hand, when companies are buying back stock that can be seen as a positive catalyst because that means that companies aren't going to let their own share prices suffer too much off the back of any macro headwinds. We're facing a lot of those right now, right? But then there's a question. Is that the best use of company's money on the balance sheet to be buying back some of their own stock and also what happens if that money goes to waste? Does it overinflate stock prices and make valuations get a little bit unattractive? That is the question on a stock-by-stock basis. And also question about whether or not the levels that we're seeing in the market right now, especially off the back of a little bit of a recent recovery rally are those levels really an accurate picture of sentiment on the market when we know that sentiment amongst investors has still been a little bit bearish or is it something like buybacks and maybe some hedge fund leveraging and repositioning, making the market look a little bit better than it might be under the surface, Brad? Yeah, it comes after an annual record for buybacks of $942 and a half billion dollars according to the S&P last year, Maddie. 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
Yahoo
07-05-2025
- Business
- Yahoo
US corporate stock buybacks on pace for record high in 2025
US corporate stock buybacks are moving to a record high in 2025, according to data from Birinyi Associates. Morning Brief anchor Madison Mills evaluates this trend and what this communicates about market sentiment (^DJI, ^IXIC, ^GSPC) from both investors and major companies. To watch more expert insights and analysis on the latest market action, check out more Morning Brief here.
Bloomberg
06-05-2025
- Business
- Bloomberg
Corporate America Plans Record Stock Buybacks as Turmoil Mounts
US companies are planning to buy back their own shares at a historic clip, opting to return cash to shareholders and provide some support for their stock price in a time of great uncertainty. The value of announced buybacks in the US reached $233.8 billion in April, the second highest monthly tally in records going back to 1984, according to data compiled by Birinyi Associates. Data from Deutsche Bank shows a similar trend, revealing a historic surge in repurchase announcements that are running at more than $500 billion over the past three months.
Bloomberg
02-04-2025
- Business
- Bloomberg
Corporate America Hoards Cash for Tariffs Over Buying Back Stock
US companies last month announced the fewest stock buybacks, in dollar terms, since the Covid pandemic, an early sign of cash hoarding from worries about economic growth and the impact of a global trade war. The value of announced buybacks in the US reached $39.1 billion in March, the lowest dollar value since October 2020 and the lowest for March since 2019, according to data compiled by Birinyi Associates. That's a worrisome sign for investors since buybacks offer a crucial pillar of support for the US stock market, which is already down significantly from February's all-time highs and is facing pressure from the Trump administration's tariffs, which will be announced Wednesday afternoon.
