Latest news with #JeffBuchbinder
Business Insider
4 days ago
- Business
- Business Insider
Rate cuts could be weeks away. Here's how much history says stocks could rise as the Fed eases policy.
After a weak few months of job growth, investors are banking on rate cuts from the Federal Reserve at their September meeting, and history shows cuts could be like rocket fuel for stocks in the months that follow. LPL Financial recently conducted an analysis of how stocks have performed from the first rate cut in a rate-reduction cycle until the eventual start of a new hiking cycle. On average, the S&P 500 has returned 30.3% during the nine periods when rates have been on the decline since 1974. The median return during those periods was 13.3%. Returns have been positive in six of those nine cycles. "Using history and prior Fed cutting cycles as a guide, some upside potential may remain for the second half of 2025," Jeff Buchbinder, LPL's chief equity strategist, said in the August 5 report. "But of course, past performance does not guarantee future results, and a new tariff regime not seen since the 1930s could slow earnings growth and fuel volatility." The largest market surges came in the lead up to the dot-com bubble, when the S&P 500 rose 161% from 1995 to 1999, the analysis showed. Other big gains included 62.8% from 1984 to 1993, and 38.2% from 2019 to 2021. But rate cuts aren't always a tailwind, especially during recessionary periods where the Fed acts too late. The market fell 23.5% during the 2007-2009 rate-cutting cycle, and from 2001-2004, the S&P 500 dropped 9.6%. This time around, Buchbinder said it's not a sure thing that rate cuts will be a boon for stocks, with ebullient investor sentiment having pushed up the market to new highs despite uncertainty remaining about the health of the economy. The market has also risen 12% already since the Fed's first cut of the cycle last September. "The delayed effects of trade policy are likely to weigh on the economy in the second half, leading to weaker labor market demand," Buchbinder wrote. "Recent market complacency toward trade policy and an economic narrative dependent upon strong economic data has caught our attention in recent weeks as a potential point of weakness." It's also not a guarantee the Fed continues to ease policy in the months ahead. Economists at Morgan Stanley and Bank of America both see the central bank keeping rates steady for the rest of 2025 despite CME FedWatch data showing investors pricing in 93.2% odds that the Fed cuts in next month. Given the apparent heightened levels of risk at the moment, Buchbinder said a conservative approach could be the best way forward in the near term. The firm likes growth stocks, large caps, and the financials and communication services sectors, he said. "Bottom line, investors may be well served by bracing for occasional bouts of volatility given how much optimism is currently reflected in equity prices," Buchbinder said. The firm's short-term asset allocation committee "advises against increasing portfolio risk beyond benchmark targets currently and continues to monitor tariff negotiations, economic data, earnings, the bond market, and various technical indicators to identify a potentially more attractive entry point to add equities on weakness," he added.
Miami Herald
20-06-2025
- Business
- Miami Herald
Stock; oil futures on roller-coaster ride amid Israel-Iran conflict
June 20 (UPI) -- Stock futures ticked lower before markets reopened Friday morning amid uncertainty among investors over the Middle East and whether the United States was about to get directly involved in the Israel-Iran conflict. Contracts connected to the Dow Jones Industrial Average dropped more than 83 points, 0.2%; futures for the tech-heavy NASDAQ 100 and broad-market S&P 500 futures were also off by 0.2% at the open after markets were shuttered all day Thursday for the Juneteenth holiday. However, all three sets of futures recovered lost ground by 8 a.m. EDT, and were roughly flat. The November contract for Brent Crude Oil, the international benchmark, fell by more than 2% on jitters from comments by Israeli Prime Minister Benjamin Netanyahu that he was weighing expanding airstrikes to "stategic targets" in Iran. However, at just over $72 per barrel, it remains more than $6 above where it was on June 12 before Israel launched its offensive on Iran. The news sent the July contract for West Texas Intermediate -- U.S. crude -- 1% higher, before reversing into negative territory, down 0.2%. "There are several key questions to answer before we know how stocks will handle this geopolitical shock, including how much of Iran's energy infrastructure will be impaired and for how long, whether Iran's nuclear capabilities will be completely wiped out, and whether the current regime will remain in power," LPL Financial chief equity strategist Jeff Buchbinder told CNBC. Analysts suggested the market was in a holding pattern, still digesting Fed Reserve Jerome Powell's decision to keep interest rates unchanged and comments that the central bank was unlikely to make a cut until the economic impact of President Donald Trump's tariffs became clearer. International markets were mostly positive, with stock prices higher in Europe and Asia, with the exception of Tokyo where the Nikkei 225 ended the day down 0.2%. Copyright 2025 UPI News Corporation. All Rights Reserved.
Yahoo
17-06-2025
- Business
- Yahoo
Investor optimism rolls over another geopolitical catalyst: Morning Brief
It doesn't take much to spook investors. For several months the broader macro environment has functioned like a grab bag of justifications to close out and watch from afar. Trade uncertainty, an unmoving Fed, and turmoil in the Middle East have kept money on the sidelines. And by the time you are reading this, those storylines will have already changed. Sensitivity to global events has also worked in investors' favor. It takes a lot to get the market down for a 10 count, even if it trips and even falls on a semi-regular basis. Being unfazed has yielded powerful returns as the S&P approaches the prior highs of February. But for as much as fickleness has defined Wall Street, optimism has a track record of rolling over negative catalysts in a year full of them. For those surprised at how resilient the markets have been despite the swirling geopolitical headlines, analysts have pointed to several factors that are motivating investors. Jeff Buchbinder, chief equity strategist at LPL Financial, wrote in a note on Monday that the parties behind the hostilities between Israel and Iran are likely interested in keeping the conflict contained, and that investors are also banking on limited disruption of oil production facilities. Jitters over the potential for a widening of the violence appeared to have been calmed amid a report that Tehran is looking to deescalate the conflict. On Monday, oil prices eased lower in a new sign that investors don't believe a protracted war — and fresh energy pricing pressures — will ensue this summer. As for the Fed, many central bank watchers expect officials to stick with their cautious approach, even or perhaps especially because of heightened uncertainty. Bill Adams, chief economist for Comerica Bank, wrote in a note on Monday that the Fed is likely to adhere to a plan of "patience" and "wait and see" as officials analyze how the mix of higher tariffs and tax cuts will impact the economy. The Fed isn't coming to the rescue, at least for a few more months. But as far as the stock market is concerned, even with mounting external events, there isn't much that needs rescuing. Hamza Shaban is a reporter for Yahoo Finance covering markets and the economy. Follow Hamza on X @hshaban. 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
17-06-2025
- Business
- Yahoo
Stocks rally and oil dips after report says Iran is looking to de-escalate its conflict with Israel
U.S. stocks rose Monday despite escalating attacks between Israel and Iran. The Dow, S&P 500, and Nasdaq all ended higher after falling Friday. The price of crude oil also fell almost 2% after a report claimed Iran is looking to negotiate with Israel to end the conflict. Despite several confrontations between Israel and Iran over the weekend and on Monday that have left hundreds of civilians dead, investors in the U.S. seemed to shrug off the escalating tensions in the Middle East as stocks rebounded to start the week. In fact, after falling Friday, the Dow Jones industrial average closed 0.75% higher Monday, while the S&P 500 increased 0.94%, and the Nasdaq Composite rose 1.52%. Jeff Buchbinder, chief equity strategist for LPL Financial, says the U.S. market is holding up well owing to a confluence of factors, including that both Iran and Israel have an 'interest in keeping the conflict contained.' 'There are several key questions to answer before we know how stocks will handle this geopolitical shock, including how much of Iran's energy infrastructure will be impaired and for how long, whether Iran's nuclear capabilities will be completely wiped out, and whether the current regime will remain in power,' says Buchbinder. Though U.S. crude oil surged Friday following Israel's initial attack, it fell almost 2% Monday, after the Wall Street Journal reported that Iran wants to negotiate an end to the conflict with Israel. That said, the two countries continued to attack each other's energy facilities Monday, and Israel struck the headquarters of Iran's state television live on air. The conflict in the Middle East is adding yet another layer of uncertainty to the economy, at a time when President Donald Trump's tariff policies are causing concern, as are the White House's immigration policies and the GOP tax bill. Investors will also be watching the Federal Reserve meeting this week. Though officials have signaled a hold on interest rates is likely, all eyes will be on Chair Jerome Powell for information on when the central bank could move. This story was originally featured on
Yahoo
13-06-2025
- Business
- Yahoo
Stocks fall as oil prices surge following Israel attack on Iran
Stocks are down on Friday, with oil prices surging in the wake of the Israel's military strike on Iran. The S&P 500 slid 48 points, or 0.5%, to 5,998 points in early trading, while the Dow Jones Industrial Average dropped 559 points, or 1.3%, to 42,409 points. The Nasdaq Composite shed 0.8%. The market slide comes after Israel launched strikes on Iran's nuclear sites and other targets early Friday, the start of what Israel said could be a days-long attack. Iran responded by launching over 100 drones, which Israel claimed it was able to mostly intercept. The strikes come as President Trump seeks to rein in Iran's nuclear capabilities. The U.S. and Iran are scheduled to meet Sunday in Oman, as part of a series on ongoing talks. "The initial market response has been largely contained, but the risk of a broader military conflict certainly cannot be dismissed," said Jeff Buchbinder, chief equity strategist at LPL Financial. "Iran has begun to retaliate and will continue to do so. This phase of the conflict will likely last several weeks at least." The oil market had an even stronger reaction on Friday, with U.S. benchmark crude oil increasing $4.73 or 6.9% to $72.77 per barrel. Bent crude, the international standard, climbed $4.58 to $73.94 per barrel. If the conflict between Israel and Iran continues, it could impact the flow of oil from Iran, which is one of the largest producers of the natural resource in the world. One concern would be if Iran closes the Strait of Hormuz, through which millions of barrels of oil flow each day. But that's probably off the table for now, according to Kristian Kerr, head of macro strategy at LPL Financial. "We think this is unlikely for now given Iran's need to maintain oil sales to China," Kerr said in an email. In a research note, Capital Economics economists said the risk to oil prices is "more balanced" than previously thought. The Middle East tensions also affect markets beyond oil, said Joy Yang, head of index product management at MarketVector Indexes, noting a decline in Bitcoin prices and a rally in defense stocks, as airline stocks fall. Airlines, which use a lot of fuel as part of their business and need their customers feeling confident enough to travel, experienced sharp losses. United Airlines lost 5.2%, Delta Air Lines gave up 4.5% and Norwegian Cruise Line Holdings dropped 2.9%. Boeing shares are down 1% after a 5% dip Thursday following a crash in India involving one of its 787-8 Dreamliner planes. Video shows Air India plane crashing in Ahmedabad Air India plane crashes shortly after takeoff, carrying more than 240 people Remembering the Beach Boys' Brian Wilson 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
