Latest news with #MichaelO'Rourke
Time of India
22-05-2025
- Business
- Time of India
Asian shares drop after US selloff, treasuries dip
Asian shares fell and Treasuries continued their slide at the open Thursday following losses in Wall Street on concerns about the US's ballooning deficit . A regional stock gauge dropped for the first time in three days on weaker openings in Australia, Japan and South Korea. The dollar edged down for a fourth consecutive session. US equity-index futures were steady after the S&P 500 index closed down 1.6% on Wednesday, its sharpest slide in a month. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Semua yang Perlu Anda Ketahui Tentang Limfoma Limfoma Pelajari Undo Treasuries fell across the curve Wednesday with long-term debt bearing the brunt as the 30-year yield rose 12 basis points. Tepid demand for a $16 billion sale of 20-year bonds rekindled fears over US government borrowing and budget deficit. That sapped sentiment after a sharp rebound in risk assets over the past month and revealed structural concerns in the bond market. 'The soft 20-year auction fueled additional weakness,' said Michael O'Rourke, chief market strategist at JonesTrading. 'It has been a theme all week starting with the Moody's downgrade. Additionally, there is the deficit/budget debate being fought in the background of this environment.' In Asia, investors will be monitoring the Korean won after the currency jumped to a six-month high. Local media had reported that the US believes a relatively weak won is a fundamental cause of South Korea's trade surplus. The currency weakened 0.4% in early Asian trade. Live Events Elsewhere, Baidu Inc. posted a surprise rise in revenue after the Chinese internet search leader fended off intensifying competition in AI and benefited from demand for computing in the post-DeepSeek Chinese AI development boom. Traders have been piling into bets that long-term bond yields would surge on concerns over the US's swelling debt and deficits, with Moody's Ratings on Friday lowering the nation's credit score below the top triple-A level. For many, the message was: Unless America gets its finances in order, the perceived risks of lending to the government will rise. The White House ramped up the pressure on Republicans on Wednesday urging lawmakers to quickly approve President Donald Trump's signature tax bill, adding that a failure to do so would be the 'ultimate betrayal.' Former Treasury Secretary Steven Mnuchin said he's more alarmed by the country's growing budget deficit than its trade imbalances, and urged Washington to prioritize fiscal repair. 'The budget deficit is a larger concern to me than the trade deficit,' he said during a panel discussion at the Qatar Economic Forum on Wednesday. 'I hope we do get more spending cuts.' The murky economic outlook has fueled hedging activity in Treasury options, with investors targeting higher rates on longer-dated bonds by the end of the year. Those wagers echo sentiment on Wall Street, where strategists from Goldman Sachs Group Inc. to JPMorgan Chase & Co. are lifting their forecasts for yields. 'These higher yields make it much tougher to justify today's very high valuation levels,' said Matt Maley at Miller Tabak. 'So, it's something that will likely create some renewed headwinds for stocks.' In commodities, gold rose for a fourth session Thursday. Oil extended its drop as higher US crude stockpiles reinforced worries about an oversupplied market, with geopolitical concerns also in focus. Bitcoin hit an all-time high.
Yahoo
16-05-2025
- Business
- Yahoo
Has the stock market's epic rebound come too far, too fast? What investors chasing the rally should keep in mind.
Any investor who was bold enough to buy the dip in stocks last month has been quickly rewarded. But has the stock market's comeback been too much, too fast? Some on Wall Street think so. I have $50,000 in credit-card debt after my divorce, but received $30,000 after a car wreck. Do I buy a used Lexus? My second wife says her 2 kids should inherit our estate, but I also have 2 kids. Is that fair? My husband and I spend more money on our daughter and her family than on my single son. Do we compensate him? These $5,000 bonds can help you fix a stock-heavy portfolio 'I am scared to death that I'll run out of money': My wife and I are in our 50s and have $4.4 million. Can we retire early? 'I think what we're seeing now is emotion and people chasing the rally, and this fear of missing out,' said Michael O'Rourke, chief market strategist at Jones Trading, during an interview with MarketWatch. Since its closing low on April 8, the S&P 500 SPX has risen by more than 17% through Tuesday's close, a pace rarely seen over the past 75 years. Analysts at Birinyi Associates have found six examples since 1950 where short-term returns for the S&P 500 were on par with what investors have seen over the past six weeks. Following each example, returns 12 months later were almost universally strong. The strongest example followed the COVID-19-inspired meltdown in early 2020: Following the market's initial comeback, the S&P 500 continued to climb, ultimately tacking on a 46% return 12 months later. But a lot can happen in a year, and there are still plenty of investors out there who expect stocks could head lower once again in the interim. Even Wall Street luminaries like Paul Tudor Jones have said that they expect the market will revisit its April lows later this year as the economic damage from Trump's tariffs is finally felt. See: Paul Tudor Jones says U.S. stocks will fall to new lows — even if Trump dramatically dials back China tariffs Mark Hackett, chief market strategist at Nationwide, pointed out that U.S. stocks are still expensive compared with companies' expected earnings over the next 12 months. 'The market has raced from oversold to overbought in record time, with the S&P 500 now trading at 21x forward earnings,' Hackett said in emailed commentary. The relative strength index for the S&P 500, a popular stock-market momentum gauge, was sitting north of 70 on Wednesday, putting the index squarely in overbought territory. It had fallen below 30 as recently as April 4, before Trump announced his initial 90-day pause on global tariffs. To be sure, investors inclined to keep on buying have plenty of grist to support their thesis. Trump has walked back many of his most economically damaging tariffs, and few expect the administration will bring them back — at least not at the levels announced on April 2. At the same time, many hedge funds and other institutional investors who either sold stocks in April or sat things out are likely facing pressure to chase the rally. Trade deals with the U.K. and China have shown that the White House is serious about finding an off-ramp. After unveiling the 90-day pause followed by a dramatic de-escalation of its China tariffs this week, the U.S. effective tariff rate has fallen to 14.4%, compared with nearly 24% just before, according to data from J.P. Morgan. To be sure, even 14.4% is higher than where tariffs stood at the beginning of 2025. Adding to the sense of optimism, much of the hard economic data released so far have shown little indication that the tariffs, and the attendant surge in policy uncertainty caused by their chaotic rollout, have caused any deeper damage to the American labor market or consumers' willingness to spend. But plenty of data from April has yet to be released, and some expect the full extent of the economic blowback could take longer to play out. 'There has likely been damage done, especially to smaller businesses, that it will be difficult to recover from, at least in the short term,' said Melissa Brown, managing director of investment-decision research at SimCorp. There are still plenty of unanswered questions surrounding the White House's tariff agenda that could upend stocks. After rampant speculation about whether the 'Trump put' was still in play, the administration has shown once again that it is responsive to pressure from the financial markets, be it stocks or bonds. See: Stock-market recovery suggests equities must fall this far to spark a 'Trump put' or pivot Trump's plans for national-security tariffs on semiconductors and pharmaceuticals remain a key unanswered question for investors. The administration has been largely quiet regarding its plans lately, although the Commerce Department was asked to begin a formal investigation at the beginning of April, Jones Trading's O'Rourke noted. If the White House follows through with substantial levies intended to encourage the reshoring of production related to sensitive goods, it could send stocks reeling once again. The confusion here helps underscore a key risk for stocks: The fact that with one Truth Social post, Trump could send investors scrambling out of equities once again. O'Rourke, however, said he is beginning to suspect that last month's market chaos may have caused the president to lose his nerve on his tariff agenda. 'Did the president get so spooked on the reaction to his China tariffs that he doesn't follow through here?' O'Rourke wondered. Then there's the question of the bond market. The yield on the 10-year Treasury note BX:TMUBMUSD10Y quietly crept back above 4.50% on Wednesday, returning to levels seen last month that spooked fears of a bond-market meltdown and helped encourage Trump to announce the 90-day pause on many of his 'liberation day' levies. Bond prices move inversely to bond yields, falling as yields rise. 'Yields on the long end are rising, that's going to be our ultimate battle now,' said George Cipolloni, a portfolio manager at Penn Mutual Asset Management. U.S. stocks traded mostly higher on Wednesday, with the S&P 500 up marginally while the Nasdaq Composite COMP ended on solid gains. The Dow Jones Industrial Average DJIA and the Russell 2000 RUT both closed lower. Wall Street's biggest bull held his nerve throughout this year's selloff. What he's saying now. 'I'm flabbergasted': My friend wants to borrow $5,800 to save his home from foreclosure. What should I do? Has the stock market's epic rebound come too far, too fast? What investors chasing the rally should keep in mind. 'We live modestly': My wife and I have $900K in stocks and $380K in savings and CDs. Are we holding too much cash? Wall Street's fear gauge just dropped with striking speed. What historically comes next for stocks?
Yahoo
06-05-2025
- Business
- Yahoo
Tariff worries hanging over investors despite the market rally
00:00 Speaker A US stock futures pointing lower here to begin the week after the S&P 500 recorded its longest streak of gains since 2004. Now the gains come as trade tensions ease with President Trump saying deals are coming but is the market's trade anxiety behind it? That's the big question. Joining us now to discuss, we've got Michael O'Rourke, Jones Trading Chief market strategist here. Great to have you back on the program with us and taking the time this morning. So Michael, as you kind of read through the data that you and your team are digesting, is the worst behind us? Is this rally, at least in the interim period of time, something that is more solidified and a longer-term trend that we should be watching for? 01:37 Michael O'Rourke I think the rally is more of a, a hope rally. Uh there's been a lot of speculation in the past few weeks. Obviously, President Trump said he is going to reduce the China tariffs. Uh last week we got headlines about a thaw with China. Over the weekend the president said they are finally talking. But um the situation remains. We still have a lot of tariffs in place and uh we haven't had any, you know, substantive progress made yet. Friday will mark uh the 30-day mark of the 90-day postponement and 10% cap on reciprocal tariffs. And we're looking at a situation where in Q1, um a lot of companies stockpiled inventory ahead of liberation day. And again, if we don't see some tariffs come down quickly, uh I think we're going to see some notable hiccups by the end of the month. So I think the uh the equity market's a little bit ahead of itself in this rally. 03:37 Speaker A Yeah, talk to me about this rally Michael because I was speaking with Ed Al-Hussainy of Columbia Threadneedle about this and he just said, well, investors can't stay mad for too long. That's what's driving this sort of recovery from that April 2nd uh so-called Liberation Day. If that's the case then why, then, then, where do we go from here? How much conviction do you have that stocks can continue to go up? 04:34 Michael O'Rourke Uh I well I think what we really need to see is, is the, where the China tariffs are going to come down to and this, you know, when, when the president said he's going to set them, which I'm take, I'm interpreting to be sometime this week. On Wednesday we're going to see uh that's the end of the comment period, uh the public comment period for the section 232 investigations for pharmaceuticals and semiconductors. So after that you would expect we're going to see announcements regarding those tariffs. So again, and then you have the, you know, the media tariffs about uh movies made outside the United States being tariffed at 100%. So there's still a lot of tariff news and potential negatives ahead of us here that I think when those headlines start to flow again, I think you're going to see investors begin to express concern. I think a lot of the rally has been people, you know, repositioned after the pause or the postponement of the reciprocal tariffs, and we're just drifting now and in kind of a holding period or just waiting.
Yahoo
26-04-2025
- Business
- Yahoo
QUALCOMM Incorporated (QCOM): One of the Growing Dividend Stocks with Low PE Ratios
We recently published a list of the . In this article, we are going to take a look at where QUALCOMM Incorporated (NASDAQ:QCOM) stands against other growing dividend stocks. Value stocks are enjoying a rare period of strength amid this year's broader market downturn. With earnings season approaching, it remains to be seen whether their recent edge over high-growth stocks will hold. The S&P Value Index—which includes sectors like banking, consumer staples, and healthcare, featuring companies that trade at relatively low valuations—has fallen around 9% this year. That's a smaller drop compared to the more than 15% decline seen in the growth-focused counterpart. Concerns over steep valuations in the tech sector, coupled with a wave of risk aversion triggered by tariffs, have pushed investors to shift from growth to value. While similar shifts haven't lasted long in the past, some investors believe that this time could be different, as expectations for value-oriented firms are modest enough that they may exceed them when earnings reports begin next month. Dan Morgan, senior portfolio manager at Synovus Trust, made the following comment about value investing: 'The bar has been set pretty low for value stocks compared to the uncertainty surrounding growth names and their ability to deliver on earnings estimates. If value can at least match or slightly beat expectations, the runway is clear for them.' According to data from Bloomberg Intelligence, analysts are forecasting a 12% decline in first-quarter earnings for value companies compared to the same period last year, while growth companies are expected to post a 20% increase. Supporters of value stocks believe that these lower expectations are already factored into their relatively modest valuations. On the other hand, optimism surrounding growth stocks—particularly in the tech sector—has soared in recent years, largely driven by enthusiasm over advancements in artificial intelligence. Historically, value stocks have lagged behind. Over the past 20 years, the S&P 500 Value Index has only outperformed its growth counterpart five times on an annual basis. During that period, the value index climbed 202%, while the growth index surged by 600%. Michael O'Rourke, chief market strategist at JonesTrading Institutional Services, made the following statement: 'Growth is about 40% more expensive; this outperformance of value was very long overdue. Due to the incredible strength of the Magnificent Seven, too many investors crowded into growth thinking it won't correct.' Investors often turn to dividend stocks when looking at companies with lower valuations. Dan Lefkovitz, a strategist at Morningstar Indexes, pointed out that dividend-growth stocks—those known for consistently raising their payouts—have underperformed the broader market in 2024. He attributed this to a market that has largely been driven by a handful of fast-growing tech names. However, he also remarked that while dividend-paying stocks may trail during such growth-led rallies, they tend to hold up better during market downturns, as seen in 2022 and 2018. Companies that consistently raise their dividends are often both profitable and financially stable—traits that become especially important during times of economic downturn. An aerial view of a bustling semiconductor production zone showcasing the company's integrated circuits. For this list, we focused on dividend-paying companies that have consistently paid dividends over the years and have also demonstrated a track record of increasing their payouts. From that group, we considered stocks with forward P/E ratios below 25, as of April 22. The stocks are ranked in ascending order of their P/E ratios. At Insider Monkey, we are obsessed with hedge funds. Why 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 (). Forward P/E Ratio as of April 22: 11.71 QUALCOMM Incorporated (NASDAQ:QCOM) is a California-based semiconductor manufacturing company. In fiscal Q1 2025, the company delivered impressive results, with revenue climbing to $11.7 billion—a 17.6% increase from the same period last year. This marked the third straight quarter of double-digit revenue growth and set a new record for the company. Its QCT segment, which includes core chip operations, brought in $10.1 billion, up 20% year-over-year. Notable contributors to this growth included a 13% rise in smartphone chip sales to $7.6 billion, a 61% jump in automotive revenue to $961 million, and a 36% increase in IoT-related sales to $1.5 billion. While QUALCOMM Incorporated (NASDAQ:QCOM) is widely recognized for its wireless technology, its product lineup also spans software, processors, and modems. Its Snapdragon SoCs power several prominent VR platforms, including Axon's VR training program, which uses the HTC Vive Focus 3 headset driven by Qualcomm's Snapdragon XR2 chipset. QUALCOMM Incorporated (NASDAQ:QCOM) currently pays a quarterly dividend of $0.89 per share for a dividend yield of 2.57%, as of April 22. The company wrapped up the quarter with more than $3.1 billion in cash and cash equivalents. It also produced nearly $4.6 billion in operating cash flow and returned $942 million to shareholders through dividends. The company has been rewarding shareholders with growing dividends for the past 21 years. Overall, QCOM ranks 9th on our list of the best growing dividend stocks with low P/E ratios. While we acknowledge the potential of QCOM as an investment, our conviction lies in the belief that some deeply undervalued dividend stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a deeply undervalued dividend stock that is more promising than QCOM but that trades at 10 times its earnings and grows its earnings at double digit rates annually, check out our report about the . 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 . Sign in to access your portfolio
Yahoo
26-04-2025
- Business
- Yahoo
Morgan Stanley (MS): One of the Growing Dividend Stocks with Low PE Ratios
We recently published a list of the . In this article, we are going to take a look at where Morgan Stanley (NYSE:MS) stands against other growing dividend stocks. Value stocks are enjoying a rare period of strength amid this year's broader market downturn. With earnings season approaching, it remains to be seen whether their recent edge over high-growth stocks will hold. The S&P Value Index—which includes sectors like banking, consumer staples, and healthcare, featuring companies that trade at relatively low valuations—has fallen around 9% this year. That's a smaller drop compared to the more than 15% decline seen in the growth-focused counterpart. Concerns over steep valuations in the tech sector, coupled with a wave of risk aversion triggered by tariffs, have pushed investors to shift from growth to value. While similar shifts haven't lasted long in the past, some investors believe that this time could be different, as expectations for value-oriented firms are modest enough that they may exceed them when earnings reports begin next month. Dan Morgan, senior portfolio manager at Synovus Trust, made the following comment about value investing: 'The bar has been set pretty low for value stocks compared to the uncertainty surrounding growth names and their ability to deliver on earnings estimates. If value can at least match or slightly beat expectations, the runway is clear for them.' According to data from Bloomberg Intelligence, analysts are forecasting a 12% decline in first-quarter earnings for value companies compared to the same period last year, while growth companies are expected to post a 20% increase. Supporters of value stocks believe that these lower expectations are already factored into their relatively modest valuations. On the other hand, optimism surrounding growth stocks—particularly in the tech sector—has soared in recent years, largely driven by enthusiasm over advancements in artificial intelligence. Historically, value stocks have lagged behind. Over the past 20 years, the S&P 500 Value Index has only outperformed its growth counterpart five times on an annual basis. During that period, the value index climbed 202%, while the growth index surged by 600%. Michael O'Rourke, chief market strategist at JonesTrading Institutional Services, made the following statement: 'Growth is about 40% more expensive; this outperformance of value was very long overdue. Due to the incredible strength of the Magnificent Seven, too many investors crowded into growth thinking it won't correct.' Investors often turn to dividend stocks when looking at companies with lower valuations. Dan Lefkovitz, a strategist at Morningstar Indexes, pointed out that dividend-growth stocks—those known for consistently raising their payouts—have underperformed the broader market in 2024. He attributed this to a market that has largely been driven by a handful of fast-growing tech names. However, he also remarked that while dividend-paying stocks may trail during such growth-led rallies, they tend to hold up better during market downturns, as seen in 2022 and 2018. Companies that consistently raise their dividends are often both profitable and financially stable—traits that become especially important during times of economic downturn. A financial advisor discussing financial plans with a client. For this list, we focused on dividend-paying companies that have consistently paid dividends over the years and have also demonstrated a track record of increasing their payouts. From that group, we considered stocks with forward P/E ratios below 25, as of April 22. The stocks are ranked in ascending order of their P/E ratios. At Insider Monkey, we are obsessed with hedge funds. Why 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 (). Forward P/E Ratio as of April 22: 12.86 Morgan Stanley (NYSE:MS) ranks eleventh on our list of the best growing dividend stocks with low P/E ratios. The American multinational financial services company offers a wide range of related services and products to its consumers. On March 14, the company revealed that it had secured $4.1 billion for its newest fund, North Haven Infrastructure Partners IV. The fund attracted support from major institutional investors, including pension and sovereign wealth funds. With close to 20 years of experience, MSIP concentrates on essential infrastructure investments—spanning transportation, digital connectivity, energy transition, and utilities—to deliver lasting value and steady, inflation-resistant returns. In the first quarter of 2025, Morgan Stanley (NYSE:MS) reported revenue of $17.7 billion, which showed a 17.5% growth from the same period last year. The revenue also beat analysts' estimates by $1.19 billion. The firm reported a return on tangible common equity (ROTCE) of 23.0% for the first quarter. Its expense efficiency ratio stood at 68% during the same period. Quarterly expenses included $144 million in severance charges tied to a workforce reduction carried out in March across its various business units. Morgan Stanley (NYSE:MS) also remained committed to returning value to shareholders, distributing $158 million through dividends in the most recent quarter. The company's quarterly dividend comes in at $0.925 per share for a dividend yield of 3.35%, as of April 22. Overall, MS ranks 11th on our list of the best growing dividend stocks with low P/E ratios. While we acknowledge the potential of MS as an investment, our conviction lies in the belief that some deeply undervalued dividend stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a deeply undervalued dividend stock that is more promising than MS but that trades at 10 times its earnings and grows its earnings at double digit rates annually, check out our report about the . 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 .
