Latest news with #JulianEmanuel
Yahoo
a day ago
- Business
- Yahoo
‘So Bad It's Good': Buying Window Opens for Battered Small Caps
(Bloomberg) -- The smallest US stocks have entered a historically favorable time of year, boosting hopes that the beleaguered group can rebound after a dismal start to 2025. ICE Moves to DNA-Test Families Targeted for Deportation with New Contract The Global Struggle to Build Safer Cars NYC Residents Want Safer Streets, Cheaper Housing, Survey Says The Buffalo Architect Fighting for Women in Design Small-cap stocks have outpaced their bigger counterparts 60% of the time in June since 1990, according to an analysis from Evercore ISI strategist Julian Emanuel. That seasonality has been even more pronounced when larger stocks are trouncing smaller ones, as they are this year: In those instances, the returns of smaller stocks have bested the larger peers in June every single time. Such a period would be a long-awaited bright spot for small-cap investors, should history repeat. The Russell 2000 Index, a small-cap benchmark, hasn't made a fresh record high since 2021 and has fallen 5.9% year-to-date as uncertainty sparked by President Donald Trump's trade war shocked markets. The S&P 500 has also seen its share of dizzying swings, but is up 1.5% for the year and stands within a few percentage points of February's all-time high. 'It is truly a case of small caps being 'so bad, it's good,' right now,' Emanuel said. 'Buy these stocks for a possible performance-reversion trade in June, and perhaps for longer if macro catalysts such as trade deals materialize.' Small-cap stocks initially benefited from the enthusiasm that gripped markets following Trump's election late last year, as investors bet that the lower taxes and reduced regulation he had promised would help smaller companies. But the administration's focus on tariffs — another key part of Trump's platform — sparked worries that small-cap firms would be more vulnerable to the economic disruptions that a trade war could bring, souring investors on the category in the early months of 2025. Bearish Bets While a rally in some of the market's riskier names has boosted small-cap stocks, positioning data shows that traders remain largely negative on the group. Open interest in bullish call options on the biggest fund tracking the Russell 2000 was hovering near the lowest level since February relative to put options earlier this week, suggesting market participants are bracing for more declines. The measure has become slightly more bullish over the last trading session. Meanwhile, bearish bets against small-caps have been growing. Short interest in dollar terms in the iShares Russell 2000 ETF — which shows how much bearish investors have at risk on their wagers — has risen to the highest level since 2022, according to data from S3 Partners. Still, the buildup of bearish positions also creates the conditions for a squeeze higher, if rising prices or favorable news causes those investors to unwind their bets on small-cap stocks, said Jeff Jacobson, derivatives specialist at 22V Research. 'We have seen these 'consensus' ideas flip very quickly on short notice,' Jacobson said. Signs that the US is reaching constructive agreements with its trading partners and strong economic data could heighten the group's appeal, strategists said. While its still early days, small-cap stocks are so far enjoying a tailwind this month. The Russell 2000 has outperformed the S&P 500 by over half a percentage point in the first three trading days of June. Technical strategists, who analyze chart patterns to predict where stocks may be headed next, are also seeing constructive signals. The Russell 2000 is near an 'inflection point' at its current level of around 2,100, according to analysts at Piper Sandler. A break could see it rise 19% to 2,500 by mid-August, they wrote on Wednesday. Jacobson, of 22V, also expects a 'decent-sized move higher' in the small-cap index in the short term. 'It is a window of opportunity,' he said. Cavs Owner Dan Gilbert Wants to Donate His Billions—and Walk Again YouTube Is Swallowing TV Whole, and It's Coming for the Sitcom Millions of Americans Are Obsessed With This Japanese Barbecue Sauce Is Elon Musk's Political Capital Spent? Trump Considers Deporting Migrants to Rwanda After the UK Decides Not To ©2025 Bloomberg L.P. Sign in to access your portfolio
Yahoo
a day ago
- Business
- Yahoo
‘So Bad It's Good': Buying Window Opens for Battered Small Caps
(Bloomberg) -- The smallest US stocks have entered a historically favorable time of year, boosting hopes that the beleaguered group can rebound after a dismal start to 2025. ICE Moves to DNA-Test Families Targeted for Deportation with New Contract The Global Struggle to Build Safer Cars NYC Residents Want Safer Streets, Cheaper Housing, Survey Says The Buffalo Architect Fighting for Women in Design Small-cap stocks have outpaced their bigger counterparts 60% of the time in June since 1990, according to an analysis from Evercore ISI strategist Julian Emanuel. That seasonality has been even more pronounced when larger stocks are trouncing smaller ones, as they are this year: In those instances, the returns of smaller stocks have bested the larger peers in June every single time. Such a period would be a long-awaited bright spot for small-cap investors, should history repeat. The Russell 2000 Index, a small-cap benchmark, hasn't made a fresh record high since 2021 and has fallen 5.9% year-to-date as uncertainty sparked by President Donald Trump's trade war shocked markets. The S&P 500 has also seen its share of dizzying swings, but is up 1.5% for the year and stands within a few percentage points of February's all-time high. 'It is truly a case of small caps being 'so bad, it's good,' right now,' Emanuel said. 'Buy these stocks for a possible performance-reversion trade in June, and perhaps for longer if macro catalysts such as trade deals materialize.' Small-cap stocks initially benefited from the enthusiasm that gripped markets following Trump's election late last year, as investors bet that the lower taxes and reduced regulation he had promised would help smaller companies. But the administration's focus on tariffs — another key part of Trump's platform — sparked worries that small-cap firms would be more vulnerable to the economic disruptions that a trade war could bring, souring investors on the category in the early months of 2025. Bearish Bets While a rally in some of the market's riskier names has boosted small-cap stocks, positioning data shows that traders remain largely negative on the group. Open interest in bullish call options on the biggest fund tracking the Russell 2000 was hovering near the lowest level since February relative to put options earlier this week, suggesting market participants are bracing for more declines. The measure has become slightly more bullish over the last trading session. Meanwhile, bearish bets against small-caps have been growing. Short interest in dollar terms in the iShares Russell 2000 ETF — which shows how much bearish investors have at risk on their wagers — has risen to the highest level since 2022, according to data from S3 Partners. Still, the buildup of bearish positions also creates the conditions for a squeeze higher, if rising prices or favorable news causes those investors to unwind their bets on small-cap stocks, said Jeff Jacobson, derivatives specialist at 22V Research. 'We have seen these 'consensus' ideas flip very quickly on short notice,' Jacobson said. Signs that the US is reaching constructive agreements with its trading partners and strong economic data could heighten the group's appeal, strategists said. While its still early days, small-cap stocks are so far enjoying a tailwind this month. The Russell 2000 has outperformed the S&P 500 by over half a percentage point in the first three trading days of June. Technical strategists, who analyze chart patterns to predict where stocks may be headed next, are also seeing constructive signals. The Russell 2000 is near an 'inflection point' at its current level of around 2,100, according to analysts at Piper Sandler. A break could see it rise 19% to 2,500 by mid-August, they wrote on Wednesday. Jacobson, of 22V, also expects a 'decent-sized move higher' in the small-cap index in the short term. 'It is a window of opportunity,' he said. Cavs Owner Dan Gilbert Wants to Donate His Billions—and Walk Again YouTube Is Swallowing TV Whole, and It's Coming for the Sitcom Millions of Americans Are Obsessed With This Japanese Barbecue Sauce Is Elon Musk's Political Capital Spent? Trump Considers Deporting Migrants to Rwanda After the UK Decides Not To ©2025 Bloomberg L.P.
Bloomberg
a day ago
- Business
- Bloomberg
‘So Bad It's Good': Buying Window Opens for Battered Small Caps
The smallest US stocks have entered a historically favorable time of year, boosting hopes that the beleaguered group can rebound after a dismal start to 2025. Small-cap stocks have outpaced their bigger counterparts 60% of the time in June since 1990, according to an analysis from Evercore ISI strategist Julian Emanuel. That seasonality has been even more pronounced when larger stocks are trouncing smaller ones, as they are this year: In those instances, the returns of smaller stocks have bested the larger peers in June every single time.
CNBC
2 days ago
- Business
- CNBC
Here are Jefferies' top stock picks for the summer
As a new trading month kicks off, analysts from Jefferies shared their top stock picks heading into the summer. Uncertainty over tariff policy was the theme that dominated markets to start the year. But stocks saw a rebound in May, with the S & P 500 adding 6.2% and posting its best month since November 2023. Investors are divided on where the market could go from here. On the more optimistic end, Fundstrat Global Advisors' Tom Lee said that the April sell-off has " rebirthed the new bull market ." But Evercore's Julian Emanuel seemed less certain, pointing to historical records suggesting that investors may have to contend with some rocky times ahead . With trade uncertainty likely to be at the forefront of investors' minds going forward, Jefferies' top stock picks seem "ready for sunshine or rainclouds," the firm wrote in a Tuesday note. Jefferies shared 28 of its top buy-rated, highest-conviction ideas that "are underpinned by differentiated analysis, supported by catalysts and sit at valuation levels that suggest upside." The table below lists 10 of these picks: One of the names on Jefferies' list was Nvidia . Shares of the chipmaker are up 5% this year. Jefferies' price target of $185 implies a further upside of 31%. "We view NVDA as the dominant supplier of AI accelerators within the data center, an industry that is expanding rapidly due to the development and adoption of AI," the firm wrote. "The ramp of the co's next-generation Blackwell GPU platform is now fully underway, so [ gross margins ] should improve from the low-70% to mid-70% range throughout the year." Dexcom , the maker of glucose monitoring systems, was another name on Jefferies' list. Shares have risen 11% in 2025. The bank's price target of $110 corresponds to an upside of nearly 27%. "We think DXCM is about to capitalize on a major top-line driver as it looks to expand coverage to Type 2 non-insulin (NIT2) patients," Jefferies wrote. The company has received approval from the U.S. Food and Drug Administration for its 15-day glucose monitoring sensor , and "the conversion to 15-day sensors could be a significant margin driver," the firm said. Jefferies also singled out Capital One as another winner. The bank's price target of $230 is nearly 18% above where shares settled on Tuesday afternoon. The firm cited Capital One's recent acquisition of Discover Financial Services as a major catalyst for the company. "Merger with DFS has been completed, unlocking significant network and OPEX synergies. Additional items that provide conviction on the name are improving credit trends within the COF/DFS books, leading to potentially higher net interest margin coupled with reserve releases," the firm wrote. Shares of Capital One have rallied more than 9% this year.
CNBC
4 days ago
- Business
- CNBC
Stocks just had a big earnings season rally. History shows June could be a rough one
If history is any indication, this stellar earnings season and the ensuing May rally mean investors may be in for some rocky times ahead. By all standards, the first-quarter earnings season — which ended last week with Nvidia reporting an earnings and revenue beat — marked the resumption of the artificial intelligence-driven structural bull market, Evercore ISI wrote in a Sunday note. The investment firm noted that this earnings season had one of the biggest rallies of any season since 1992. "1Q Earnings Season was a Blowout (493 S & P 500 companies, 98% of market cap have reported), with S & P 500 Earnings Growth of 13.1% and Sales Growth of 5.0%, surprising by 8.1% and 0.8% respectively," wrote Julian Emanuel, Evercore ISI senior managing director. The results helped propel the S & P 500 to a nearly 6.2% advance in May for its best month since November 2023. Emanuel noted that this blowout season and the subsequent rally have occurred despite uncertainty around President Donald Trump's proposed "big, beautiful" tax bill. However, he said history suggests that investors could be contending with elevated volatility in June. "The precedent for huge rallies during Earnings Season, similar to 1Q25's, is that the month ahead returns are choppy with plenty of volatility," he wrote. Emanuel added that the CBOE Volatility Index, or VIX, Wall Street's fear gauge, has on average gained 19% in the month after a huge earnings-fueled rally. The last time an earnings season was followed by a huge jump for stocks, in 2022, the VIX surged more than 17% the following month. Despite this volatility ahead, Emanuel said investors don't need to worry about revisiting the stock market's lows. "We think there's going to be further runway, but we don't think there's going to be a recession," he said Monday morning on CNBC's " Squawk on the Street ." "As we've seen, the policy tends to, let's say, evolve when we get down to the lows. But we don't think you need to go back there. We just think it needs to be sort of one of these healthier periods where we get more clarity around policy."
