Latest news with #Dot-Com
Economic Times
16 hours ago
- Business
- Economic Times
The stock market's biggest winners may be finished, says BofA — is a bubble coming as investors may shift strategy?
Top 50 S&P 500 Stocks Have Outperformed Since 2015 A Familiar Pattern From the Dot-Com Era? Live Events BofA's 'Regime Indicator' Signals a New Market Phase AI Boom Drove Top 20 Stocks to Outperform the S&P 500 Small-Cap Stocks Start to Shine as Rotation Begins A Fed Rate Cut Could Spark a Change in Market Leadership FAQs (You can now subscribe to our (You can now subscribe to our Economic Times WhatsApp channel The days of mega-cap stocks leading the stock market advances may be over, warned Bank of America's head of US equity and quantitative strategy, Savita Subramanian, as per a report. After decades of market leadership by the biggest firms, investors may be on the verge of a dramatic shift that will redefine market leadership and maybe also raise fears of a bubble that could burst soon, according to Yahoo a client note, Subramanian pointed out that the top 50 stocks in the S&P 500 have surpassed the overall index by 73 percentage points since 2015, as per the report. This type of concentrated market leadership isn't new, such dominance also occurred in the late 1990s, leading to the bursting of the dot-com bubble, as reported by Yahoo READ: Were YouTube Influencers Nina Santiago and Patrick Blackwood's lives put at risk for views? Watch the shocking SUV crash viral video After the bust, the market witnessed a large shift from megacap growth, leading to value and small-cap stocks outperforming during the early 2000s, and now Subramanian thinks a similar tide shift might be coming to markets soon, according to the said that, "History would suggest there is more to go in cap-weighted dominance," adding, "But if the Fed's next move is a rate cut, and if the Regime indicator is shifting to a Recovery, we think the run may be closer to done," as quoted in the READ: Morgan Stanley: AI boom could add $16 trillion to markets, but workers may pay the price as 90% jobs may be impacted Bank of America's "regime indicator" separates market cycles into four stages: Recovery, Mid Cycle, Late Cycle, and Downturn, reported Yahoo Finance. The firm decides based on a variety of factors such as corporate earnings revisions, inflation data, and economic growth projections, according to the Yahoo Finance the company thinks that the market is moving out of a Downturn stage, when mega-cap stocks tend to perform well, and into a Recovery stage that is good for value and small-cap stocks, as per the READ: Leaked: iPhone 17 Pro Max internal design shows game-changing metal battery, hints at big redesign This move may mark the end of the technology-driven rally since the start of the current bull market in October 2022, dominated by tech titans as Nvidia, Microsoft, Apple, Amazon, and Alphabet, many of whose recent advances are a result of the AI boom, according to the Yahoo Finance report. The top 20 stocks since the most recent market bottom in April have risen about 40%, better than the broader S&P 500's 28% advance, and the other 480 stocks have typically lagged behind, as reported by Yahoo READ: Apple just dropped 2 free iPhone apps with iOS 26, and users can't stop talking about them However, in recent weeks, there have been some signs of rotation under the surface as the small-cap Russell 2000, which hasn't reached a new high since 2021, has increased nearly 6% in August, outperforming the S&P 500's roughly 3.5% gain over the same time period, as reported by Yahoo highlighted that, "[Federal Reserve] easing has been accompanied by Mega caps lagging more than leading, and higher inflation should support a broadening of the S&P 500 beyond defensives/secular growth," as quoted in the they've been dominating for years, and market indicators suggest a shift could be usually favors smaller, value-oriented stocks over big tech names.
Time of India
16 hours ago
- Business
- Time of India
The stock market's biggest winners may be finished, says BofA — is a bubble coming as investors may shift strategy?
Signs of stock market bubble 2025 : The days of mega-cap stocks leading the stock market advances may be over, warned Bank of America's head of US equity and quantitative strategy, Savita Subramanian, as per a report. After decades of market leadership by the biggest firms, investors may be on the verge of a dramatic shift that will redefine market leadership and maybe also raise fears of a bubble that could burst soon, according to Yahoo Finance. Top 50 S&P 500 Stocks Have Outperformed Since 2015 In a client note, Subramanian pointed out that the top 50 stocks in the S&P 500 have surpassed the overall index by 73 percentage points since 2015, as per the report. This type of concentrated market leadership isn't new, such dominance also occurred in the late 1990s, leading to the bursting of the dot-com bubble, as reported by Yahoo Finance. ALSO READ: Were YouTube Influencers Nina Santiago and Patrick Blackwood's lives put at risk for views? Watch the shocking SUV crash viral video by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Villas For Sale in Dubai Might Surprise You Villas In Dubai | Search Ads Get Rates Undo A Familiar Pattern From the Dot-Com Era? After the bust, the market witnessed a large shift from megacap growth, leading to value and small-cap stocks outperforming during the early 2000s, and now Subramanian thinks a similar tide shift might be coming to markets soon, according to the report. Subramanian said that, "History would suggest there is more to go in cap-weighted dominance," adding, "But if the Fed's next move is a rate cut, and if the Regime indicator is shifting to a Recovery, we think the run may be closer to done," as quoted in the report. Live Events ASLO READ: Morgan Stanley: AI boom could add $16 trillion to markets, but workers may pay the price as 90% jobs may be impacted BofA's 'Regime Indicator' Signals a New Market Phase Bank of America's "regime indicator" separates market cycles into four stages: Recovery, Mid Cycle, Late Cycle, and Downturn, reported Yahoo Finance. The firm decides based on a variety of factors such as corporate earnings revisions, inflation data, and economic growth projections, according to the Yahoo Finance report. Currently, the company thinks that the market is moving out of a Downturn stage, when mega-cap stocks tend to perform well, and into a Recovery stage that is good for value and small-cap stocks, as per the report. ALSO READ: Leaked: iPhone 17 Pro Max internal design shows game-changing metal battery, hints at big redesign AI Boom Drove Top 20 Stocks to Outperform the S&P 500 This move may mark the end of the technology-driven rally since the start of the current bull market in October 2022, dominated by tech titans as Nvidia, Microsoft, Apple, Amazon, and Alphabet, many of whose recent advances are a result of the AI boom, according to the Yahoo Finance report. The top 20 stocks since the most recent market bottom in April have risen about 40%, better than the broader S&P 500's 28% advance, and the other 480 stocks have typically lagged behind, as reported by Yahoo Finance. ALSO READ: Apple just dropped 2 free iPhone apps with iOS 26, and users can't stop talking about them Small-Cap Stocks Start to Shine as Rotation Begins However, in recent weeks, there have been some signs of rotation under the surface as the small-cap Russell 2000, which hasn't reached a new high since 2021, has increased nearly 6% in August, outperforming the S&P 500's roughly 3.5% gain over the same time period, as reported by Yahoo Finance. A Fed Rate Cut Could Spark a Change in Market Leadership Subramanian highlighted that, "[Federal Reserve] easing has been accompanied by Mega caps lagging more than leading, and higher inflation should support a broadening of the S&P 500 beyond defensives/secular growth," as quoted in the report. FAQs Why is Bank of America warning about mega-cap stocks now? Because they've been dominating for years, and market indicators suggest a shift could be near. How does a Recovery phase affect investing? It usually favors smaller, value-oriented stocks over big tech names.
Economic Times
2 days ago
- Business
- Economic Times
BofA sounds alarm: Stock valuations now higher than 2000 bubble — here's what you need to take note of
S&P 500 valuation 2025: Bank of America cautions investors about high equity market valuations. The S&P 500's price-to-book ratio exceeds the dot-com bubble peak. Other valuation metrics also signal potential overvaluation. While AI growth justifies some optimism, history suggests caution. Experts differ on the market's future. Some suggest bonds and non-US stocks as safe havens if the market declines. Tired of too many ads? Remove Ads Market Valuation Surpasses Dot-Com Era Tired of too many ads? Remove Ads Are These Valuations Justified or Just Hype? Not All Experts Are Worried Potential Safe Havens If the Market Turns FAQs Investors surfing on the wave of optimism surrounding AI might want to take a step back and be cautious because Bank of America strategist Michael Hartnett pointed out that the equity market is now pricier than it was at the peak of the dot-com bubble, as per a presented a striking chart demonstrating the S&P 500's price-to-book ratio, a metric comparing the aggregate market value of the index's constituents to their net assets has risen to 5.3, an all-time high, as per Busienss Insider. That is higher than the previous high of 5.1 in March 2000, when the tech bubble was about to burst, according to the people who think "this time is different" since AI firms are in fact yielding profits, Hartnett highlighted that, "It better be different this time," as quoted by Business not a single measure flashing red. Hartnett also pointed to the S&P 500's 12-month forward price-to-earnings multiple, which is its highest since the dot-com bubble, apart from August 2020, as per the Business Insider report. The Shiller cyclically-adjusted price-to-earnings ratio, which matches prices to a 10-year moving average of earnings, is near historical highs reached in 1929, 2000, and 2021, according to the READ: Apple just dropped 2 free iPhone apps with iOS 26, and users can't stop talking about them While high valuations tend to mirror high expectations for future growth, particularly with AI companies continuing to surpass earnings estimates, which suggest the optimism could be justified, as reported by Business Insider. However, sometimes those expectations turn out to be too elevated, and prices correct, but they don't necessitate a bubble scenario, according to the valuations are better predictors of average long-term returns compared to near-term performance, and views on Wall Street on where the market goes in the months ahead differ, even though, there are calls for caution, many strategists continue to raise their year-end S&P 500 price targets, as reported by Business READ: In times of AI, Microsoft engineer reveals secret formula for 4 promotions in just 5 years Recently, the chief investment officer of global fixed income at BlackRock, Rick Rieder said that the market is in the "best investing environment ever" due to factors like strong demand for stocks, looming rate cuts, and recent boosts in productivity and earnings growth, as per the READ: Is it AI or Trump's policies? US sees brutal 140% layoff spike in July, worst surge since early COVID chaos Hartnett also pointed out that if the market does start to unwind, he sees bonds and non-US stocks benefiting, according to Business Insider. Examples of funds that offer exposure to these trades include the iShares Core U.S. Aggregate Bond ETF (AGG) and the Vanguard FTSE All-World ex-US ETF (VEU), reported Business the S&P 500 is now valued higher than it was at the peak of the 2000 dot-com bubble, a level that eventually led to a major crash, as per the Business Insider necessarily. High valuations don't guarantee a crash, but they often lead to lower long-term returns.
Yahoo
19-05-2025
- Business
- Yahoo
Warren Buffett claims market volatility ‘really nothing' — says Berkshire Hathaway has crashed 50% many times
Recent turbulence in the stock market might make some novice investors nauseous, but veterans like Warren Buffett remain unfazed. During his recent meeting with Berkshire Hathaway shareholders, the 94-year-old Oracle of Omaha downplayed the market's volatility. 'What's happened in the last 30, 45 days, 100 days, whatever you want to call it, it's really nothing,' he said. Here's why the world's most famous investor isn't unnerved by recent swings in the stock market and why he believes we could see a 'hair-curler' in the future. Thanks to Jeff Bezos, you can now become a landlord for as little as $100 — and no, you don't have to deal with tenants or fix freezers. Here's how I'm 49 years old and have nothing saved for retirement — what should I do? Don't panic. Here are 5 of the easiest ways you can catch up (and fast) Nervous about the stock market in 2025? Find out how you can access this $1B private real estate fund (with as little as $10) While headlines might convince some investors the markets are ablaze, for Buffett it's just a minor bump in the road. After all, the Oracle has been actively investing in stocks since the age of 11 in 1941, and has much more historical context than the average novice investor. Over the course of his career, Buffett said he's seen his company, Berkshire Hathaway, lose roughly half its value on at least three separate occasions. For context, he's lived through the Second World War, the Black Monday stock crash of 1987, the Dot-Com bust in 2001, the Great Financial Crisis of 2008, and the recent pandemic. After roughly eight decades of picking stocks amidst these swings, nothing fazes him anymore. 'However many years I've been old enough to trade stocks — 17 or 18,000 days — there's been plenty of periods that… just are dramatically different [from] this,' he quipped. However, the Oracle insists young investors with limited experience should adopt a similar approach. 'If it makes a difference to you whether your stocks are down 15% or not, you need to get a somewhat different investment philosophy,' he recommended. 'The world will not adapt to you, you have to adapt to the world. You will certainly see a period in the next 20 years that will be a hair-curler compared to what you've seen before. The world makes big, big mistakes sometimes.' If you're worried about that upcoming hair curling crash, here's how you can prepare for it like Buffett does. Read more: You're probably already overpaying for this 1 'must-have' expense — and thanks to Trump's tariffs, your monthly bill could soar even higher. Here's how 2 minutes can protect your wallet right now Market crashes and volatility are inevitable. Which is why sophisticated investors like Buffett embrace the volatility and structure their portfolio to sail through turbulence. For instance, Buffett's portfolio has always been remarkably well-diversified. According to his latest 13-F filing, Berkshire had 38 holdings in its publicly traded portfolio with the largest position being Apple (AAPL), which accounts for just 28% of the total value. However, Berkshire is even more diversified when you consider all the private businesses Buffett has acquired over the years. The Oracle also prefers to keep a healthy pile of cash on hand for buying stocks on discount when crashes occur. In fact, according to his most recent filing, he had more in cash than stocks. Buffett's cash pile is worth roughly $350 billion, according to MarketWatch. That's a record-high and nearly 31% higher than the $267 billion value of his stock portfolio. By simply diversifying your portfolio and keeping some cash on hand, you could be in a position to not just sail through market volatility but actually benefit from it. In other words, you can be greedy when others are truly fearful. Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan 'works every single time' to kill debt, get rich in America — and that 'anyone' can do it Rich, young Americans are ditching the stormy stock market — here are the alternative assets they're banking on instead Robert Kiyosaki warns of a 'Greater Depression' coming to the US — with millions of Americans going poor. But he says these 2 'easy-money' assets will bring in 'great wealth'. How to get in now Here are 5 'must have' items that Americans (almost) always overpay for — and very quickly regret. How many are hurting you? This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
