Latest news with #MarkHackett
Yahoo
4 days ago
- Business
- Yahoo
‘Historical trends are no longer working.' This strategist says retail investors are completely baffling Wall Street.
Investors might be ready to buy Tuesday's dip in the stock market triggered by weak service-sector numbers and signs of price pressures. Our call of the day from Nationwide Investment Management Group's chief market strategist, Mark Hackett, discusses the fierce battle that's been ongoing between institutional and retail investors. He says for now, Wall Street shouldn't bet against that cohort. Why Nvidia and other chip stocks are shrugging off Trump's latest tariff threat My late husband's employer is forcing me to take 10% 401(k) distributions. Help! I plan to work until 80. Can I contribute to my IRA while taking RMDs? Friday's selloff marked a 'typical response' for the institutional investors, Hackett told MarketWatch in an interview. 'Bad jobs data on top of the tariff launch and then you had the Russia submarine issue. There's a whole lot of things together that caused the pullback in the market and then you saw Monday which was almost a complete reversal,' he said. 'To me, that is retail investors having been trained into this concept of buying a dip and it's confusing institutional investors completely at this point,' he said. 'And then you go back to the April/May timeframe where institutions were completely on the sidelines, very conservatively positioned and the retail investors was aggressively buying dips. Now it's worked so many times, at this point, the retail investor has fueled this sense of inevitability about recoveries, and that's what i think you saw [Monday] continuing a little bit today [Tuesday],' said Hackett. According to data from Interactive Brokers, some retail investors didn't even wait for Monday to buy. The retail brokerage said its cumulative net stock buy orders rose 78% on Friday from a week ago. Friday also marked the S&P 500's SPX fourth-straight losing session, the longest such streak since May 23. 'If you look back in history before the pandemic, Friday would have led to a more consistent downturn. You have the seasonal period of August and September weak, you're sitting at 22 times earnings [for the S&P 500], the market had rallied almost 30% off the [April] low. That's exactly the time you would expect this period of consolidation, downward sloping for a couple of months until you can maybe have a full-order rally,' he said. 'Historical trends are no longer working, and what it does is make institutional investors very cautious about being short on an absolute relative basis, simply because of what's happening with the retail investor,' said Hackett. That said, the nature of those investors has become predictable as they aggressively buy with each market pullback, he added. Helping those investors out has been an enhanced toolkit with access to more options, lowered tech barriers and lots of free time during the pandemic that gave them a foothold in markets. 'Retail investors have a sensitivity to momentum, a focus on thematics, and an insensitivity to high valuations,' LPL Financial head of equity research Thomas Shipp wrote in July. In a reboot of 2021, investors have this summer also been flexing their muscles on individual names, such as OpenDoor OPEN. The bottom line from Hackett is that 'you don't bet against the retail investor right now.' That's not to say that their power is unlimited and that buy-the-dip strategy might run out of steam, but now 'the retail investor confusing the institutional investor out of doing what they want,' he said. He said the last time retail investors ran into trouble was the spring of 2022 when Russia invaded Ukraine and markets endured a lengthy stretch of weakness, he noted. 'But again, you got to October and then for no reason that felt real at the time, you saw this rebound and a very aggressive move from there,' he said. Institutions coming into the final quarter of this year are struggling because major technology stocks are so heavily weighed already and they can't have most of a diversified portfolio just sitting in seven major technology stocks. 'Layer on top of that the fact that most of these people were very conservatively positioned back in April and now you're chasing, you're running from behind and it's a terrifying place to be,' he said. His expectation is that markets could consolidate through September, until tailwinds from U.S. government's spending package and elsewhere start to kick in. That could then build up to a year-end rally, in his view. Hackett says the retail cohort should take care right now, as markets bump up against high valuations, and economic uncertainty swirls. 'Now wouldn't be the time where I would be aggressively shifting my portfolio to risk on,' he said. Read: U.S. data is a bedrock of the American economy. Now it's under attack. U.S. stocks SPX DJIA COMP opened higher but paring gains, with Treasury yields BX:TMUBMUSD10Y BX:TMUBMUSD02Y mostly steady and gold prices GC00 dropping. Oil prices CL00 BRN00 are climbing. Key asset performance Last 5d 1m YTD 1y S&P 500 6299.19 -1.12% 1.18% 7.10% 20.21% Nasdaq Composite 20,916.55 -0.86% 2.44% 8.32% 27.80% 10-year Treasury 4.225 -15.40 -11.50 -35.10 27.10 Gold 3426.4 2.96% 3.13% 29.82% 41.41% Oil 65.52 -6.80% -4.06% -8.84% -13.16% Data: MarketWatch. Treasury yields change expressed in basis points Need to Know starts early and is updated until the opening bell, but to get it delivered once to your email box. The emailed version will be sent out at about 7:30 a.m. Eastern. Walt Disney DIS beat on earnings and missed on revenue as the NFL said it would take a 10% stake in Disney's ESPN. Shares are down. McDonald's stock MCD is rising after the fast-food giant posted forecast-beating results. Uber UBER reported better-than-forecast results and announced a $20 billion share buyback program. Airbnb ABNB and DoorDash DASH will report after the close. Super Micro SMCI backed off a lofty forecast and the server maker's stock is down 16%. Disappointing Snap SNAP earnings are sending the Snapchat parent's shares tumbling. Shares of Advanced Micro Devices AMD are dropping even after the chipmaker's upbeat revenue outlook. Rivian Automotive shares RIVN getting hit after EV maker forecast a bigger loss for 2025. Banned Coinbase ad portrays a dystopian Britain — with only crypto as an exit. OpenAI in talks for share sale at $500 billion valuation. AI is listening to your meetings. Watch what you say. Richard Bernstein Advisors, in a post on X, shows how Tuesday's Institute for Supply Management services survey stacks up looking back over the past 18 years: 'Services #ISM now screaming LATE-CYCLE #STAGFLATION. Prices going up and New Orders going down. Not seen in ~18 years since before the [global financial crisis].' These were the top-searched stock-market tickers on MarketWatch as of 6 a.m.: Ticker Security name NVDA Nvidia TSLA Tesla AMD Advanced Micro Devices PLTR Palantir Technologies SMCI Super Micro Computer GME GameStop AMZN Amazon AAPL Apple TSM Taiwan Semiconductor Manufacturing NIO NIO The U.K.'s viral birthday-cake sandwich. A driver got caught for speeding a mere 124 miles per hour above the speed limit Denim war? Beyonce versus Sydney Sweeney. Eli Lilly's weight-loss pill didn't work so well, and the stock is plunging Mortgage rates plunge to 10-month low, opening window of opportunity for house hunters SoundHound earnings show a growing embrace of voice AI, and the stock is surging 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
Business Times
02-08-2025
- Automotive
- Business Times
Carvana's 10,000% rally from low deals US$7 billion blow to shorts
[NEW YORK] Carvana's shares notched an all-time high this week, rising more than 10,000 per cent from a low in late 2022, and delivering a blow to investors betting against the online used-car dealer. The jump to record caps a roller-coaster ride for the stock that quickly became an investor darling after a public debut in 2017, but has also been plagued by criticisms ranging from claims that the company was overvalued and allegations of lax business practices. The latest gains came after the company's blockbuster second-quarter results on Wednesday (Jul 30) fuelled expectations that a turnaround is taking hold at the embattled company. As a result of the rally, short investors betting against Carvana have been dealt a US$7.42 billion blow in mark-to-market losses since the end of 2022, according to calculations from S3 Partners. About 10 per cent of the company's free float is currently held short, down from 55 per cent on Dec 27, 2022, when the stock had dropped to its lowest level. 'This rally from the lows has turned Carvana into one of the most spectacular recoveries in modern market history and a brutal reminder of how dangerous shorting stocks like this can be,' said Dave Mazza, CEO at Roundhill Financial. Carvana shares closed 5.7 per cent lower on Friday, retreating from Thursday's record but still ending the week more than 10 per cent higher. Carvana's online platform allows customers to buy a used car without getting up from their couch, a business model that attracted immense interest during the Covid-19 pandemic. The share price quickly skyrocketed, followed by a brutal 99 per cent wipeout during the wider tech sell-off that ensued. But now, as the appetite for riskier stocks and growth assets has come roaring back over the past month, Carvana is in the right spot to benefit. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up 'Before Gamestop, a move like this would have been impossible,' said Mark Hackett, chief strategist at Nationwide Funds Group, referring to the retail-trading-driven mania involving risky stocks that gripped the markets in 2021, and seems to be rearing its head again this year. 'But now it is common.' But it is not just the retail-trading fervour around growth stocks that's helping Carvana's shares, market watchers say. Carvana's online business model helps to differentiate it from other auto dealers, who largely operate brick-and-mortar stores, and that has given the relative upstart a higher valuation multiple. At the same time, the trade policy chaos unleashed by US President Donald Trump's tariff programme has been a boon to used-car sellers, who saw demand rise as consumers try to avoid the steep new levies. On Wednesday, Carvana reported second-quarter results that included record-setting revenue, propelling the stock to a breakout above 2021's prior record high. Nationwide's Hackett said that tariff-driven margin benefit was the main source of growth during the quarter. As Carvana soared from the 2022 low, its more traditional peers, such as CarMax, AutoNation and Lithia Motors, have seen no such surge. CarMax shares have fallen about 7 per cent over the same period as at Friday's close, while AutoNation climbed nearly 80 per cent and Lithia rose 44 per cent. After the latest results, some analysts see more strength ahead for Carvana. 'Investors haven't yet witnessed Carvana's true earnings power,' said Alexander Potter, analyst at Piper Sandler. BLOOMBERG
CNBC
01-08-2025
- Business
- CNBC
Wall Street stumbles into August — a historically weak season for stocks — with a new worry emerging
The near-term outlook suddenly looks precarious for a stock market that's near all-time highs, even after Friday's big sell-off. Next week, investors will continue to act on what they learned this week. On the one hand, the artificial intelligence story that's powered the stock market rally the last several months remains intact, with Microsoft this week becoming the second public company ever in the U.S. to hit a $4 trillion valuation after its strong June quarter results. On the other, it now turns out the U.S. labor market weakened significantly the past three months as tariffs moved higher. "Signs of fatigue are surfacing," wrote Mark Hackett, chief market strategist at Nationwide Financial. "Elevated valuations, softening performance and the onset of a historically weak seasonal stretch could test investors' conviction in the weeks ahead." On Friday, stocks were headed for a losing week. The Dow Jones Industrial Average slid about 3% in the latest five days. The S & P 500 and Nasdaq Composite were off by more than 2%, each. After leaving rates unchanged last week, the Federal Reserve remains in wait-and-see-mode until September, by which time the central bank will have another two months of inflation and labor market data to gauge the effect of higher tariffs. Investors are walking that tightrope while navigating what is historically a weak season for stocks. According to the Stock Trader's Almanac, August is the worst month for the Dow Jones Industrial Average in data going back to 1988, and the second worst for the S & P 500 and Nasdaq Composite. In fact, the S & P 500′s total monthly returns for August and September since 1990 averaged a decline of 0.3% and 0.7%, respectively, according to Wolfe Research. Tariffs With little on the calendar next week, investors are likely to turn their attention to the minute-by-minute changes on tariffs, among other events. Trump on Thursday signed an executive order that adjusted "reciprocal" tariffs on a host of countries, with new duties ranging from 10% to 41%. That latest round of updates raises the effective tariff rate across the entire economy to a range between 15% and 20%. While that is lower than the range of 25% or more that would have resulted from the initial April 2 announcement, it's higher than the 10% baseline markets were pricing in just several weeks ago — and far above the 2% rate that prevailed at the start of the year. With trade deals far from over, more market observers are proceeding with caution . The eventual results of U.S. negotiations with China are one key focus, given that rare earths metals and magnets that power everything from electric vehicles to data centers are the major bargaining chip for Beijing . "Tariffs, number one, is what's going to be driving the news cycle, as well as the market direction in conjunction," said Charlie Ashley, portfolio manager at Catalyst Funds. Earnings The second quarter earnings season also continues to run at high gear. Thus far, of the 331 S & P 500 companies that have reported, more than 82% issues positive surprises. As of Aug. 1, the blended second quarter earnings growth rate for the S & P 500 is now 10.2%, double the 4.9% that was projected at the end of the June, according to FactSet data. Several S & P 500 companies will report results next week that will give investors further insight into the AI story, as well as into the health of consumer spending. Catalyst Funds' Ashley said he's paying particular attention to Palantir Technologies and Advanced Micro Devices . Consumer giants such as Walt Disney will also be reporting, as will major industrials, such as Caterpillar . Week ahead calendar All times ET. Monday, Aug. 4 10:00 a.m. Durable Orders final (June) 10:00 a.m. Factory Orders (June) Earnings: Palantir Technologies , Vertex Pharmaceuticals , Axon Enterprise , Simon Property Group , Diamondback Energy , Coterra Energy , Tyson Foods , Loews , ON Semiconductor Tuesday, Aug. 5 8:30 a.m. Trade Balance (June) 9:45 a.m. PMI Composite final (July) 9:45 a.m. S & P PMI Services final (July) 10:00 a.m. ISM Services PMI (July) Earnings: News Corp. , Devon Energy , Arista Networks , Amgen , Super Micro Computer , Match Group , Advanced Micro Devices , Yum! Brands , Marriott International , Fidelity National Information Services , Duke Energy , Pfizer , Molson Coors Beverage , Caterpillar , Marathon Petroleum , Apollo Global Management , Archer-Daniels-Midland Wednesday, Aug. 6 Earnings: CF Industries , Costco Wholesale , TKO Group , Paycom Software , Fortinet , Uber Technologies , Occidental Petroleum , MetLife , DoorDash , Airbnb , Rockwell Automation , McDonald's , Emerson Electric , Walt Disney Thursday, Aug. 7 8:30 a.m. Continuing Jobless Claims (07/26) 8:30 a.m. Initial Claims (08/02) 8:30 a.m. Unit Labor Costs preliminary (Q2) 8:30 a.m. Productivity preliminary (Q2) 10:00 a.m. Wholesale Inventories final (June) 3:00 p.m. Consumer Credit (June) Earnings: Live Nation Entertainment , Block , Take-Two Interactive Software , GoDaddy , Wynn Resorts , Gilead Sciences , Trade Desk , Insulet , Expedia Group , Motorola Solutions , Microchip Technology , Akamai Technologies , Ralph Lauren , Parker-Hannifin , Warner Bros. Discovery , ConocoPhillips , Martin Marietta Materials , Eli Lilly , Zimmer Biomet Holdings , EPAM Systems , Kenvue , Constellation Energy Friday, Aug. 8
Yahoo
25-07-2025
- Business
- Yahoo
S&P 500's Humming Profit Engine Can Keep Powering Stocks Rally
(Bloomberg) -- A solid earnings season shows Corporate America's profit engine is humming along, potentially easing worries that the record-setting rally in US stocks is starting to overheat. Trump Awards $1.26 Billion Contract to Build Biggest Immigrant Detention Center in US The High Costs of Trump's 'Big Beautiful' New Car Loan Deduction Can This Bridge Ease the Troubled US-Canadian Relationship? Salt Lake City Turns Winter Olympic Bid Into Statewide Bond Boom With about a third of S&P 500 Index members reporting by Thursday's close, this earnings cycle is turning out to be much more robust than expected. Around 83% of companies have exceeded analysts' profit estimates, according to data compiled by Bloomberg Intelligence. That's on track for the highest share of beats since the second quarter of 2021. The S&P 500 is up 28% since hitting a low on April 8, setting a series of record highs over the past few weeks. Even a version of the US benchmark that weights all members equally, rather than by market value, has notched a record. Those advances have come as fears about the impact of tariffs on the economy ebbed and investors slowly returned to stocks, abandoning an extreme aversion to risk. For the gains to persist, corporate earnings will need to keep impressing investors, and Mark Hackett at Nationwide says the earnings season is pointing in that direction. 'As some of the pessimistic scenarios are fading, management commentary is less conservative and estimates for 2025 and 2026 are beginning to increase, which provides that tailwind,' said the firm's chief market strategist. Several major companies have been upbeat. Alphabet Inc. saw demand for artificial intelligence products boosting quarterly sales. Homebuilders D.R. Horton Inc. and PulteGroup Inc. reported better-than-expected earnings, sparking a relief rally in the stocks. Netflix Inc. raised its forecast for full-year sales and profit margins. And Levi Strauss & Co. said it expected sales growth to outweigh the effect of tariffs. Most companies are topping estimates for a quarter where many analysts lowered their expectations, anticipating a weak reporting period amid heightened uncertainty about trade policy and economic growth. Before the cycle started, S&P 500 companies were expected to post a profit increase of 2.8% year-over-year in the second quarter, according to data compiled by BI. So far, overall earnings growth is 4.5%. Meanwhile, economic data is also showing no immediate cause for alarm. Applications for US unemployment benefits fell for a sixth straight week, Labor Department data showed on Thursday, suggesting the job market is staying resilient. 'While the labor market is not firing on all cylinders, it's not showing signs of distress either,' said Bret Kenwell, US investment analyst at EToro. That should help investors breathe easy, Kenwell said. Still, the runway isn't completely clear for US stocks. Equity valuations are high, with the S&P 500 trading at around 22.5 times projected earnings, compared to a 10-year average of 18.6. That's sparked concerns that there may be little room for error. In fact, companies missing both earnings and sales estimates are being punished the hardest since the third quarter of 2022. Moreover, signs of froth are emerging, with a manic rally in so-called meme stocks offering a reminder of 2021's extreme investor euphoria. 'Overly bullish sentiment is still the market's biggest risk factor,' said John Kolovos, chief technical market strategist at Macro Risk Advisors. Some Wall Street trading desks are telling clients to hedge against potential losses in case developments from the Federal Reserve or on the tariff front sour investor sentiment. Pricey valuations are the reason why Dec Mullarkey, managing director at SLC Management, is keeping a close eye on profit beats, but an even closer one on guidance. 'Stronger-than-expected results are a support for equities, but this is an exacting market,' Mullarkey said. 'Companies need to have a decent story and a strong outlook.' Burning Man Is Burning Through Cash Elon Musk's Empire Is Creaking Under the Strain of Elon Musk It's Not Just Tokyo and Kyoto: Tourists Descend on Rural Japan Confessions of a Laptop Farmer: How an American Helped North Korea's Wild Remote Worker Scheme A Rebel Army Is Building a Rare-Earth Empire on China's Border ©2025 Bloomberg L.P. 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
CNBC
22-07-2025
- Business
- CNBC
Asia-Pacific markets set to open mixed as investors assess Wall Street's rally
Asia-Pacific stocks are set to open mixed Tuesday, after two of the three key benchmarks on Wall Street hit record highs overnight as investors assessed the resilience in corporate earnings amid tariff risks. Investors in the region will also be keeping a close watch on Japanese markets, which reopen after its election over the weekend. Good morning from Singapore. Investors will be keeping a close watch on Japan's equity and bond markets, which will reopen after a national holiday following its election. The Japanese yen strengthened against the greenback on Monday, after weakening in the weeks leading up to the election. Japan's benchmark Nikkei 225 was set to open higher, with the futures contract in Chicago at 39,830 while its counterpart in Osaka last traded at 39,820, against the index's last close of 39,819.11. Futures for Hong Kong's Hang Seng index stood at 25,049, pointing to a stronger open compared with the HSI's Monday close of 24,994.14. Australia's S&P/ASX 200 was set to start the day lower with futures tied to the benchmark at 8,660, compared with its last close of 8,668.20. — Amala Balakrishner The stock market may be unusually calm, with the CBOE Volatility Index (VIX) remaining notably muted all month in spite of ongoing risks around trade and inflation, one strategist said. However, that could change quickly in the coming weeks. "With next week bringing the FOMC meeting, GDP data, a key tariff deadline, and a wave of earnings — in a historically weak window for the markets — even small surprises could trigger sharp reactions," wrote Mark Hackett, chief market strategist at Nationwide. "We're in a window where calm can quickly turn to complacency." "While a break in either direction is possible, current positioning suggests we'd bet on a rally before a drop," Hackett wrote. — Sarah Min The S&P 500 and the Nasdaq Composite finished Monday's session with fresh closing records after both indexes scored new all-time intraday highs. The broad market S&P 500 gained 0.14% to close at 6,305.60, while the tech-heavy Nasdaq climbed 0.38% to end at 20,974.17. In contrast, the blue-chip Dow Jones Industrial Average declined 19.12 points, or 0.04%, to finish at 44,323.07. — Sean Conlon
