Latest news with #JurrienTimmer
Yahoo
23-05-2025
- Business
- Yahoo
Markets Hit a Ceiling, Says Fidelity's Timmer
Equity markets aren't priced for a slowdown, says Fidelity's Timmer, even after sharp swings. Jurrien Timmer, Fidelity's director of global macro, told CNBC that despite recent tariff-induced volatilitywhere the S&P 500 plunged 21.5% then rebounded 23%markets have established boundaries beyond which declines have been rolled back. He sees 2025 delivering moderate earnings growth offset by value pressures coming mostly from the interest rate side, with the 10-year Treasury (US10Y) yield at 4.5% competing directly with equity yields around 4.55%. Chicago Fed President Austan Goolsbee warned that tariff hikes could spur a stagflationary impact, hurting output and lifting pricesthe central bank's worst situation. Timmer noted tariffs act like a tax, paid either by companies via thinner margins or by consumers through higher costs. He added that both earnings and GDP estimates have been marked down, though not significantly worse than typical intra-year adjustments. Timmer argues the market now faces a ceiling: It's either rates driving down valuations or earnings driving down estimates from tariffs. He highlighted the tug-of-war between bond yieldsUS2Y, and equity benchmarks like The Dow Jones Index, complicating the outlook. Why It Matters: With fiscal and trade risks capping both valuations and earnings, investors must balance duration and equity exposure. This article first appeared on GuruFocus. Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Yahoo
23-05-2025
- Business
- Yahoo
Markets Hit a Ceiling, Says Fidelity's Timmer
Equity markets aren't priced for a slowdown, says Fidelity's Timmer, even after sharp swings. Jurrien Timmer, Fidelity's director of global macro, told CNBC that despite recent tariff-induced volatilitywhere the S&P 500 plunged 21.5% then rebounded 23%markets have established boundaries beyond which declines have been rolled back. He sees 2025 delivering moderate earnings growth offset by value pressures coming mostly from the interest rate side, with the 10-year Treasury (US10Y) yield at 4.5% competing directly with equity yields around 4.55%. Chicago Fed President Austan Goolsbee warned that tariff hikes could spur a stagflationary impact, hurting output and lifting pricesthe central bank's worst situation. Timmer noted tariffs act like a tax, paid either by companies via thinner margins or by consumers through higher costs. He added that both earnings and GDP estimates have been marked down, though not significantly worse than typical intra-year adjustments. Timmer argues the market now faces a ceiling: It's either rates driving down valuations or earnings driving down estimates from tariffs. He highlighted the tug-of-war between bond yieldsUS2Y, and equity benchmarks like The Dow Jones Index, complicating the outlook. Why It Matters: With fiscal and trade risks capping both valuations and earnings, investors must balance duration and equity exposure. This article first appeared on GuruFocus.
Yahoo
16-05-2025
- Business
- Yahoo
Veteran analyst has a new message for gold investors
Jurrien Timmer of Fidelity Investments, on May 16, wrote that Bitcoin has again become the dominant store of value in the market, referring to Bitcoin's recent rise to over $100,000 and the narrowing of the risk-adjusted returns to gold. In his post for X, Timmer suggested that after gold's rise, 'perhaps the baton is being passed again to Bitcoin, with Bitcoin back above $100K and the two Sharpe Ratios now converging'. Sharpe ratio is a mathematical way to show that long-term returns that are higher than expected may be due to risk and volatility rather than good investing skills. Timmer, who has been the Director of Global Macro at Fidelity Investments since 1995, believes that gold and Bitcoin is in 4:1 ratio where for four parts gold one can buy one part Bitcoin. He said, 'I still think a ratio of 4:1 (gold vs Bitcoin) makes sense in terms of how much gold vs Bitcoin might co-exist in a store-of-value allocation. At a 4:1 ratio, gold's volatility has been roughly equal to Bitcoin, as has its relative performance.' Timmer gives a data-based rationale to combine crypto with a traditional portfolio by quantifying risk adjusted performance. With both markets now revealing similar efficiency on a Sharpe basis, the Fidelity Investment strategist feels the future of store-of-value investing will see Bitcoin featured as a main protagonist and equal partner with the precious metals counterpart. On April 22, Timmer predicted an S&P 500 rally after it was in the correction territory during the month. At press time Bitcoin is trading at $104,043.55, up over 0.82% in the last 24 hours, as per Kraken.
Yahoo
22-04-2025
- Business
- Yahoo
Fidelity analyst has a surprising take on markets
Jurrien Timmer, global macro director of Fidelity Investments, thinks the S&P 500 might get a short-term bounce after falling nearly 20% from its all-time high. In a recent post on X, Timmer pointed out that the S&P has bounced between a rising trendline going back to 2011, and the recent decline in the S&P pushed it well below the trendline, and Timmer suspected a near-term peak. If S&P can break back above the point it broke down, Timmer thinks a recovery is possible. In his latest Linkedin Timmer says that the current market conditions may be near the end of the stock market correction, but he is also cautious. He uses today's market as a comparison against previous cycles, like 1998 where a short correction occurred immediately before a very steep rise. He believes that if the market can get above the S&P 500 at the 5500 level, it may be only into 'mini-bear' territory, and there could be seeing the very leading edge of the next cycle. However, if we drop below the 4835 level, that could be the leading indicator that we have entered a deeper bear market. Timmer acknowledges that in his opinion there has been almost uninterrupted strong performance in U.S. stocks since 2009. The headwinds have changed and include: (1) inflation is rising (2) the market is at the likely end of big tech's reign of dominance (3) the rapid shift in the face of where power resides globally, may shape how and where growth will occur, says the report. Based on this view, he shares that we might experience more limited opportunity for growth in US stocks, but there is plenty of opportunity for growth in undervalued global stocks. Timmer warns investors may need to recalibrate their thinking with respect to performance of stocks moving forward. While the stock market has been tanking, Bitcoin is decoupling from the effects. At press time, Bitcoin is trading at $87,266.04, up by 3.07% over the last day, as per Kraken's price feed. Sign in to access your portfolio
Yahoo
26-03-2025
- Business
- Yahoo
Is GE Vernova Inc. (GEV) the High-Valuation Stock to Buy According to Billionaires?
We recently published a list of . In this article, we are going to take a look at where GE Vernova Inc. (NYSE:GEV) stands against other high-valuation stocks to buy according to billionaires. High-valuation stocks are typically characterized by metrics such as high price-to-earnings (P/E) ratios, price-to-sales ratios, and enterprise value to EBITDA (EV/EBITDA) multiples. These high valuations often mean strong investor confidence in a company's future growth potential. However, they also imply that the market has priced in substantial future earnings growth, leaving less margin for error if the company fails to meet expectations. Investing in high-valuation stocks has been a subject of debate among investors for some time. While some investors argue that these stocks are overvalued and pose a risk of correction, others view them as opportunities to gain exposure to industry leading companies with strong growth potential. In the U.S. market, high-valuation stocks are often associated with technology, healthcare, and consumer sectors, where innovation, brand strength, and market dominance justify their premium pricing. The current market environment has been supportive of high-valuation stocks. In a February interview with CNBC, Fidelity Investments' Director of Global Macro, Jurrien Timmer, noted that the bull market, which is around 28 months old now, has delivered substantial returns. While some market cycles end around the 30-month mark, history shows that many extend further. Strong earnings performance has supported valuations, with 78% of companies beating expectations in the fourth-quarter earnings season. Echoing this sentiment, in a February discussion on CNBC, Ed Yardeni of Yardeni Research highlighted that while valuations are stretched, the earnings landscape remains strong. He emphasized that stock markets are primarily driven by earnings and valuation dynamics. Even though high-valuation stocks like the 'Magnificent Seven' have stopped rising on a valuation basis, their earnings potential continues to look promising. Sectors like AI, robotics, and automation remain key drivers of long-term growth, fuelling investor confidence. While earnings continue to support valuations, some experts argue that broader macroeconomic conditions play an equally important role. Julian Emanuel, senior managing director at Evercore ISI, provided good context in CNBC's 'Closing Bell' program on March 19. He noted that valuations have moderated from 'very expensive' to just 'expensive,' suggesting that some of the issues have been factored in. More importantly, he emphasized that valuation alone does not end bull markets. Unlike previous cycles, where an uncooperative Federal Reserve contributed to market downturns, Emanuel believes that the Fed's expected rate cuts in 2025 will provide continued support. Additionally, he points out that bond yields have remained contained, which reduces competition for equities and supports higher valuations. Despite concerns over rising bond yields and a maturing economic cycle, the fundamentals of the U.S. economy remain strong. Ed Yardeni pointed to steady employment levels and robust retail sales growth, which suggest that consumer spending remains healthy. As long as corporate earnings continue to support current valuations, the case for investing in high-valuation stocks remains intact. That said, these stocks aren't without risks. One of the biggest risks to high-valuation stocks is the potential for higher interest rates. Research has pointed out that if long-term yields rise above 5%, it could create more competition for equities. When risk-free returns from government bonds become more attractive, investors may demand higher risk premiums from stocks, leading to valuation corrections. Additionally, sector-specific challenges can impact high-valuation stocks. For example, companies in the artificial intelligence (AI) and cloud computing sectors, have generally received high valuations based on growth expectations. When expectations are reset due to some sector dynamics, these stocks often tend to correct first. Investors looking to invest in high-valuation stocks should focus on companies with strong fundamentals and long-term growth drivers. Companies with dominant market positions, innovative product offerings, and recurring revenue models tend to justify their premium valuations. To identify the 10 high-valuation stocks favoured by billionaires, we began by using online stock screeners to filter companies trading at a forward price-to-earnings (P/E) ratio between 50 and 150, as valuations above this range tend to carry higher risk due to elevated growth expectations. Next, we analyzed Insider Monkey's database of billionaire holdings to determine which of these high-valuation stocks were most favoured by billionaire investors. Finally, we ranked top 10 of the shortlisted stocks in ascending order based on the number of billionaire investors holding stakes in each company as of Q4 2024. Additionally, we provided insights into hedge fund sentiment surrounding these stocks using Insider Monkey's Q4 2024 hedge fund holdings are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here). Dmitry Kalinovsky/ Vernova Inc. (NYSE:GEV) is a newly formed entity as part of General Electric's split in early 2024. The company is a prominent name in electric power industry and focusses on products and services including generation, transfer, conversion, and storage. It operates across renewable energy, power generation, and grid technologies, playing a key role in decarbonization efforts. An RBC Capital analyst lowered the price target on GE Vernova Inc. (NYSE:GEV) from $453 to $445 while maintaining an Outperform rating, in a March 18 report. The analyst noted that ISO filings indicate combined cycle gas turbine (CCGT) equipment costs have risen another 15% since November, with gas turbines up about 30%, which signals strong market demand. This reinforces the long-term growth potential from price increases. While the analyst raised EPS estimates for FY 2026 and 2027, he adjusted the price target to reflect current market conditions. On March 19, Barclays analyst Julian Mitchell also reiterated his Buy rating on the company with a price target of $427, implying a 28% upside potential. Overall, GEV ranks 2nd on our list of high-valuation stocks to buy according to billionaires. While we acknowledge the potential of GEV to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than GEV but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock. READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires Disclosure: None. This article is originally published at Insider Monkey. Sign in to access your portfolio
