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Yahoo
15 hours ago
- Business
- Yahoo
S&P 500's Banner Rally Faces Off With Worst Two Months of Year
(Bloomberg) — The S&P 500 Index (^GSPC), coming off its best streak of gains since 2020, is about to enter what has historically been its toughest stretch of the year. The World's Data Center Capital Has Residents Surrounded An Abandoned Art-Deco Landmark in Buffalo Awaits Revival Budapest's Most Historic Site Gets a Controversial Rebuild San Francisco in Talks With Vanderbilt for Downtown Campus Boston's Dumpsters Overflow as Trash-Strike Summer Drags On Over the past three decades, the benchmark has performed the worst in August and September, losing 0.7% on average in each month, compared with a 1.1% gain on average across other months, data compiled by Bloomberg show. Analysts attribute the pattern in part to money managers' tendency to reassess their portfolios around this time of year. That seasonality risks adding to a sense on Wall Street that the record run in equities may be due for a breather, with valuations looking stretched and some key events approaching. First off, investors will watch Wednesday's Federal Reserve decision to see whether Chair Jerome Powell lays the groundwork for interest-rate cuts this year, or if he signals more time is needed to observe the impact of tariffs on the economy. 'If Powell signals no rate cuts are coming for the foreseeable future, traders will be disappointed, and it may fuel a brief selloff,' said Ed Clissold, chief US strategist at Ned Davis Research. 'Any piece of bad news could cause the stock market to pull back.' So far, the S&P 500 has staged a stunning rebound, soaring 28% over the past 75 sessions through Friday — its biggest advance in such a span since stocks recovered from a brutal selloff in the depths of the pandemic in 2020, according to data compiled by JPMorgan Asset Management. The surge pushed investors off the sidelines and back into the market, propelled by a reprieve from President Donald Trump's tariff offensive. Sensitive Time But any shift in tariff news, economic data or corporate earnings could trigger a stock selloff in the sensitive months of August and September. It's a period when investors returning from summer vacations tend to reassess portfolio positioning and go on the defensive; companies prepare their budgets for the coming year and ponder belt tightening; and mutual funds sell positions at a loss to reduce the size of their capital-gains distributions. Of course, the past is not prologue. August has eked out positive returns in five of the previous 10 years, according to data compiled by Bloomberg. And while traders' stock exposure has continued to climb, it's still only modestly overweight, according to Deutsche Bank's (DB) analysis of rules-based and discretionary strategies. That clears the path for investors to buy equities in the weeks ahead after money managers rolled back exposures to US stocks to levels not seen since late May, according to a poll by the National Association of Active Investment Managers. 'This rally is certainly due for a pause or a pullback, but any declines will likely be shallow and short-lived,' said Chris Murphy, co-head of derivatives strategy at Susquehanna. 'Stocks may buck some of the weak seasonality trends.' In fact, Jeffrey Hirsch, editor of the Stock Trader's Almanac, says the rally has more room to grind higher, albeit at a more moderate pace. 'I'm more concerned this rally will keep chugging along and people will miss out because once we get past all of this week's events, it may turn out to be bullish for stocks in the short-run if things aren't as bad as feared,' Hirsch said. That said, commodity trading advisers, or CTAs, which typically buy stocks when index prices rise and sell when they decline, currently hold long equity positions in the 94th percentile — the highest levels since January 2020, Deutsche Bank data show. While that signals confidence in equities, it also increases the risk of sharp reversals should market conditions change, according to Murphy. To Mark Newton, head of technical strategy at Fundstrat Global Advisors, seasonality shows evidence of equities peaking in mid-August. Any jump in bond yields, which risks boosting corporate borrowing costs, would also darken the outlook. 'The warning signs I'm looking out for are if yields move dramatically higher, positioning flips more defensive and weakening breadth, but none of that is happening right now,' Newton said. Burning Man Is Burning Through Cash It's Not Just Tokyo and Kyoto: Tourists Descend on Rural Japan Everyone Loves to Hate Wind Power. Scotland Found a Way to Make It Pay Off Cage-Free Eggs Are Booming in the US, Despite Cost and Trump's Efforts Russia Builds a New Web Around Kremlin's Handpicked Super App ©2025 Bloomberg L.P. Sign up for the Yahoo Finance Morning Brief By subscribing, you are agreeing to Yahoo's Terms and Privacy Policy 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
4 days ago
- Business
- Yahoo
Want Decades of Passive Income? Buy This Index Fund and Hold It Forever.
Key Points There are many forms of passive income. Investing in dividend-paying stocks is a particularly effective form. This ETF makes it easy -- and it's recently yielding a hefty 3.9%. 10 stocks we like better than Schwab U.S. Dividend Equity ETF › It's hard to beat passive income. Set up your investments and then money flows to you regularly, without your having to do any, or much, work. There are many forms of passive income, too, such as rent checks from properties you own, interest payments from savings accounts or bonds you own, royalties from books you wrote, and dividend income from dividend-paying stocks or dividend-focused exchange-traded funds (ETFs) you own. Here's a look at a particularly attractive way to collect passive income: the Schwab U.S. Dividend Equity ETF (NYSEMKT: SCHD). As an ETF, it's a fund that trades like a stock. And it offers not only dividend income but growing dividend income and the likelihood of its component holdings growing in value over time as well. Why dividends? In case you're not yet sold on the power of dividend investing, check out the table below: Dividend-Paying Status Average Annual Total Return, 1973-2024 Dividend growers and initiators 10.24% Dividend payers 9.20% No change in dividend policy 6.75% Dividend non-payers 4.31% Dividend shrinkers and eliminators (0.89%) Equal-weighted S&P 500 index 7.65% Data source: Ned Davis Research and Hartford Funds. See? Dividend-paying stocks are not boring investments made by grandparents. They're suitable for all kinds of investors, and they perform rather well, too. That's partly because a company has to grow enough to have fairly dependable income before it will commit to paying a regular dividend. A passive-income winner: The Schwab U.S. Dividend Equity ETF There are lots of dividend-focused ETFs, so what's so great about the Schwab US Dividend Equity ETF? Well, while some dividend ETFs deliver lots of income but relatively little growth, and others are strong growers but don't offer that much income, this ETF strikes a nice balance between the two. The Schwab US Dividend Equity ETF recently sported a very solid dividend yield of 3.9%. It tracks the Dow Jones U.S. Dividend 100 Index, which is "designed to measure the performance of high-dividend-yielding stocks in the U.S. with a record of consistently paying dividends, selected for fundamental strength relative to their peers, based on financial ratios." As an index fund, it aims to deliver roughly the same return as the index it tracks, less its fees, which are rather puny. The ETF's expense ratio (annual fee) is 0/06%, meaning that you'll fork over $6 per year for every $10,000 you have invested in the ETF. What's in the Schwab U.S. Dividend Equity ETF? Here are the ETF's recent top 10 holdings: Stock Weight in ETF Recent yield Texas Instruments 4.35% 2.53% Chevron 4.22% 4.56% PepsiCo 4.16% 3.90% Cisco Systems 4.11% 2.41% ConocoPhillips 4.10% 3.36% Amgen 3.99% 3.11% Merck 3.92% 3.97% Altria Group 3.84% 6.86% AbbVie 3.82% 3.51% Verizon Communications 3.80% 6.31% Source: as of July 22, 2025. You can see that these 10 (out of about 100) holdings, which together make up around 40% of the ETF's value, pay meaningful dividends. And as long as they remain healthy and growing, they're likely to increase their payouts over time. For context, note that the S&P 500 index recently yielded 1.23%. How has the Schwab U.S. Dividend Equity ETF performed? Finally, here's a look at how the ETF has performed in the past. I'll include the S&P 500's performance for comparison, using the Vanguard S&P 500 ETF (NYSEMKT: VOO): Fund 3-year average annual gain 5-year average annual gain 10-year average annual gain Schwab U.S. Dividend Equity ETF 8.14% 12.54% 11.39% Vanguard S&P 500 ETF 18.49% 15.69% 13.51% Source: as of July 22, 2025. You can see that, on average, investors are likely to see their money grow faster in a low-fee S&P 500 index fund, but it's not going to produce nearly as much income as the Schwab ETF. Some investors may want to park a portion of their long-term portfolio in each of the ETFs. Either or both will deliver decades of passive income, though one will deliver more. Should you invest $1,000 in Schwab U.S. Dividend Equity ETF right now? Before you buy stock in Schwab U.S. Dividend Equity ETF, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Schwab U.S. Dividend Equity ETF wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $636,628!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,063,471!* Now, it's worth noting Stock Advisor's total average return is 1,041% — a market-crushing outperformance compared to 183% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 21, 2025 Selena Maranjian has positions in AbbVie, Altria Group, Amgen, Schwab U.S. Dividend Equity ETF, and Verizon Communications. The Motley Fool has positions in and recommends AbbVie, Amgen, Chevron, Cisco Systems, Merck, Texas Instruments, and Vanguard S&P 500 ETF. The Motley Fool recommends Verizon Communications. The Motley Fool has a disclosure policy. Want Decades of Passive Income? Buy This Index Fund and Hold It Forever. was originally published by The Motley Fool
Yahoo
18-07-2025
- Business
- Yahoo
The Trump Trade has changed. Here are the 6 big themes for investors to watch.
The market playbook for Donald Trump's presidency has shifted in the months since his inauguration. Analysts at NDR updated their Trump Trade index, a group of investments tied to Trump's agenda. Strategists identified six themes for investors to monitor. Investors in the early days of Donald Trump's second term thought they had identified the clearest winners from the president's agenda, but more than halfway through his first year in office, the playbook has shifted. Analysts at Ned Davis Research this week said they recently revised their Trump Trade Index — an index of investment themes they believe will benefit from Trump's agenda. The firm's original Trump Trade Index included investment themes like space and reshoring, as well as bitcoin and Trump Media & Technology Group, the parent company of Trump's social media network. "When we created our initial Trump Trade index prior to the 2024 election, we had only a general idea of Trump's agenda and key themes impacted," strategists wrote in a report on Wednesday. "However, after reviewing 170 executive orders, the One Big Beautiful Bill Act (OBBBA), and an ever-changing foray into tariffs, we have a much better indication of agenda priorities." Markets have been surprised by how Trump's policy agenda has shifted so far this year. US stocks soared after Trump secured his second term in office, before embarking on a wild roller coaster ride as Trump announced his worldwide tariff package and negotiations dragged into this summer. Here's an update on what investment themes investors should add to the Trump-era playbook. Defense Thesis: Trump signed a slew of executive orders supporting aerospace innovation and the drone, cybersecurity, and shipbuilding industries in the US. The GOP tax and spending bill has also earmarked around $150 billion for overall defense spending, $29 billion to shipbuilding, and $170 billion for border enforcement. The bill also has a $24 billion budget to help build the Golden Dome, an ambitious defense system that aims to put American anti-missile weapons into space. Factors like China's military advancement and the ongoing conflict between Russia and Ukraine also raise the risk that the US could become more involved in geopolitical conflict, strategists suggested. "While several themes look overbought, some are sure to have staying power over Trump's term. Unfortunately, we believe Defense could have staying power," the report said. Relevant ETFs: SHLD Metals & Mining Thesis: Trump has also signed executive orders supporting the copper and rare minerals industry in the US. Meanwhile, the Big Beautiful bill includes tax incentives that support energy exploration in the US, which could also boost the metals and mining industries. The president has also proposed steep tariffs on key commodities, like steel, copper, and aluminum. The metals and mining theme was on display already in the last week, when the Department of Defense announced a large stake in rare earth miner MP Materials. The stock surged on the news that the Pentagon would become the company's largest shareholder as it tries to strengthen America's position in a critical supply chain. Relevant ETFs: XME, REMX Traditional, Nuclear, and Hydrogen Energy Thesis: Energy was a cornerstone of Trump's campaign, and the president quickly declared a National Energy Emergency at the start of his term. "While Biden's agenda promoted Clean Energy, Trump clearly favors Traditional Energy, evidenced by orders to tap Alaska resources, remove production barriers, and promote Coal," strategists wrote. Uranium and Hydrogen energy are also in focus, the strategists added, pointing to "massive datacenter electricity demands." Trump has also proposed various tariffs that could raise energy prices, like tariffs on Canadian and Venezuelan energy, a 7.5% tariff on Uranium, and a 10% tariff on hydrogen-related goods. Relevant ETFs: IEO, URA, HYDR Bitcoin & Digital Assets Thesis: Trump, who branded himself as the "crypto president" on the campaign trail, has made a series of pushes into digital assets this year. Early in his second term, he signed an executive order that aimed to support the US's dominance in digital finance, and another that established a strategic bitcoin reserve. Lawmakers are also set to pass a slew of new crypto-related legislation this week, like the Senate's landmark stablecoin bill, the CLARITY Act, and the Anti-CBDC Surveillance State Act. Relevant ETFs: IBIT, ARKF Artificial Intelligence Thesis: Trump's executive orders and a handful of provisions in the One Big Beautiful Bill Act are aimed at bolstering AI development in the US, The GOP tax and spending bill includes a $250 million budget for AI-driven cyber defense, as well as tax incentives for chipmakers to build their tech in the US. Trump also announced a $500 billion AI infrastructure project in January, which involves Softbank, OpenAI, and Oracle building more data centers in the US. This week, Trump announced another $90 billion in AI and energy investments at an event in Pennsylvania. Relevant ETFs: MAGS Read the original article on Business Insider
Business Insider
17-07-2025
- Business
- Business Insider
The Trump Trade has changed. Here are the 6 big themes for investors to watch.
Investors in the early days of Donald Trump's second term thought they had identified the clearest winners from the president's agenda, but more than halfway through his first year in office, the playbook has shifted. Analysts at Ned Davis Research this week said they recently revised their Trump Trade Index — an index of investment themes they believe will benefit from Trump's agenda. The firm's original Trump Trade Index included investment themes like space and reshoring, as well as bitcoin and Trump Media & Technology Group, the parent company of Trump's social media network. "When we created our initial Trump Trade index prior to the 2024 election, we had only a general idea of Trump's agenda and key themes impacted," strategists wrote in a report on Wednesday. "However, after reviewing 170 executive orders, the One Big Beautiful Bill Act (OBBBA), and an ever-changing foray into tariffs, we have a much better indication of agenda priorities." Markets have been surprised by how Trump's policy agenda has shifted so far this year. US stocks soared after Trump secured his second term in office, before embarking on a wild roller coaster ride as Trump announced his worldwide tariff package and negotiations dragged into this summer. Trump-era playbook. Defense Thesis: Trump signed a slew of executive orders supporting aerospace innovation and the drone, cybersecurity, and shipbuilding industries in the US. The GOP tax and spending bill has also earmarked around $150 billion for overall defense spending, $29 billion to shipbuilding, and $170 billion for border enforcement. The bill also has a $24 billion budget to help build the Golden Dome, an ambitious defense system that aims to put American anti-missile weapons into space. Factors like China's military advancement and the ongoing conflict between Russia and Ukraine also raise the risk that the US could become more involved in geopolitical conflict, strategists suggested. "While several themes look overbought, some are sure to have staying power over Trump's term. Unfortunately, we believe Defense could have staying power," the report said. Metals & Mining Thesis: Trump has also signed executive orders supporting the copper and rare minerals industry in the US. Meanwhile, the Big Beautiful bill includes tax incentives that support energy exploration in the US, which could also boost the metals and mining industries. The president has also proposed steep tariffs on key commodities, like steel, copper, and aluminum. The metals and mining theme was on display already in the last week, when the Department of Defense announced a large stake in rare earth miner MP Materials. The stock surged on the news that the Pentagon would become the company's largest shareholder as it tries to strengthen America's position in a critical supply chain. Traditional, Nuclear, and Hydrogen Energy Associated Press Thesis: Energy was a cornerstone of Trump's campaign, and the president quickly declared a National Energy Emergency at the start of his term. "While Biden's agenda promoted Clean Energy, Trump clearly favors Traditional Energy, evidenced by orders to tap Alaska resources, remove production barriers, and promote Coal," strategists wrote. Uranium and Hydrogen energy are also in focus, the strategists added, pointing to "massive datacenter electricity demands." Trump has also proposed various tariffs that could raise energy prices, like tariffs on Canadian and Venezuelan energy, a 7.5% tariff on Uranium, and a 10% tariff on hydrogen-related goods. Bitcoin & Digital AssetsThesis: Trump, who branded himself as the "crypto president" on the campaign trail, has made a series of pushes into digital assets this year. Early in his second term, he signed an executive order that aimed to support the US's dominance in digital finance, and another that established a strategic bitcoin reserve. Lawmakers are also set to pass a slew of new crypto-related legislation this week, like the Senate's landmark stablecoin bill, the CLARITY Act, and the Anti-CBDC Surveillance State Act. Artificial Intelligence Thesis: Trump's executive orders and a handful of provisions in the One Big Beautiful Bill Act are aimed at bolstering AI development in the US, The GOP tax and spending bill includes a $250 million budget for AI-driven cyber defense, as well as tax incentives for chipmakers to build their tech in the US. Trump also announced a $500 billion AI infrastructure project in January, which involves Softbank, OpenAI, and Oracle building more data centers in the US. This week, Trump announced another $90 billion in AI and energy investments at an event in Pennsylvania.
CNBC
16-07-2025
- Business
- CNBC
Things may be getting frothy on Wall Street as stocks trade near record highs
Wall Street is feeling good. Perhaps, too good. Ned Davis Research noted that its daily trading sentiment composite has entered "excessive optimism" territory after hitting an all-time low in early April — when President Donald Trump unveiled steep tariffs on imported goods into the U.S. Indeed, the S & P 500 hit an intraday record Tuesday, briefly topping 6,300 before ending the day lower. The Nasdaq Composite also hit an all-time high in the last session. This comes despite the Trump administration putting more pressure on other countries over trade. Trump on Saturday said the U.S. will impose a 30% tariff on the European Union and Mexico beginning Aug. 1. .SPX YTD mountain SPX year to date Ned Davis highlighted other worrying signs: Rising speculation in leveraged long funds A spike higher in ETF flows over the past four weeks S & P 500 price-to-sales ratio at a record high To be sure, there are some counterintuitive positives that can keep the stock market going higher, including consumer pessimism about the economy and the direction of stocks over the next 12 months. These "offsets" are keeping Ned Davis Research bullish on equities despite the frothy signs, the firm said in the note. NDR added that it has "tested our sentiment polls after extreme pessimism and after breadth thrusts with breakaway upside momentum, and in most cases, the first move to excessive optimism was a fake signal." That said, investors should tread carefully as an escalation in trade negotiations could knock stocks from these levels. There's also the earnings issue. Corporate America is in the middle of reporting second-quarter results, with big banks such as Goldman Sachs , JPMorgan Chase and Morgan Stanley posting their numbers this week. If companies cannot meet already muted expectations for the season, it could spark a selling spree on the Street as the current sky high valuations are called into question.
