Latest news with #RoseAdvisors
CNBC
14 hours ago
- Business
- CNBC
Defense stocks to buy as spending bill moves through Congress; trading small caps
(This is a wrap-up of the key money moving discussions on CNBC's "Worldwide Exchange" exclusive for PRO subscribers. Worldwide Exchange airs at 5 a.m. ET each day.) Investors are looking for opportunities in the oil and natural gas space. They are also eyeing a tailwind for defense stocks in President Donald Trump's spending bill. Worldwide Exchange Pick: EOG Resources Patrick Fruzzetti of Rose Advisors said EOG Resources is a good buy despite the decline in oil prices. "It's a premium driller with a great balance sheet, good assets they have been in West Texas for a long time, they are expanding in Utica (Ohio)," said Fruzzetti. "With the environment we have been in geopolitically it's always worth having some exposure oil and gas in your portfolio." EOG Resources shares are down more than 1% in 2025. The stock pays a more than 3% dividend. Investing in defense Sheila Kahyaoglu of Jefferies said she is surprised that defense stocks haven't moved higher during the escalation of the Israel-Iran conflicts and U.S. strikes. However she said a new tailwind for the space for legacy players like RTX , Lockheed Martin and Northrop Grumman could come from Congress in the "Big Beautiful Bill," with defense spending proposed to increase by $150 billion, or roughly 13%, year over year. "If (President Trump) gets the $150 billion approved, maybe you could say it's all used in fiscal 2026, and it's clear he wants to be supportive of his 'Golden Dome' project which would literally be half of that $150 billion, $75 billion. A golden dome would be a beneficiary for existing systems because he wants to deploy it in three years," said Kahyaoglu. Two other stocks Kahyaoglu said are getting recent investor attention Israeli defense contractor Elbit Systems and Kratos Defense & Security Solutions . Investing in industrials Keith Lerner of Truist sees more upside in industrials that have been the leading sector year to date. "I think Industrials lead by defense continues to be something that will have a big," Lerner said. He added: "It is also an indirect AI play with things like cooling as an example." Lerner said FedEx earnings could have an impact on sentiment within the sector and advises investing through a diversified ETF rather than trying to find individual winners with the current trade and geopolitical uncertainty. Outlook for small caps Daniel Morris of BNP Paribas sees gains ahead the Russell 2000 . "If you increase your allocation to the S & P 500 you are implicitly betting more on that tech call," Morris said. "The appeal of small caps then becomes that you can increase your exposure to U.S. growth without increasing your exposure to megacap tech. We see it as diversified access to US growth." The Russell 2000 is more than 13% away from it's 52-week high, while the S & P 500 is 2% from a new all-time high.
Zawya
13-03-2025
- Business
- Zawya
Ominous market signals show more trouble could await US stocks
NEW YORK - Investors are wary about worrisome market signs, after a steep U.S. stocks selloff that has wiped out more than $4 trillion in value and all of the gains notched following President Donald Trump's election. Among the signs are technical signals such as the S&P 500 on Monday closing below a crucial trend line, a key measure of the market's internals weakening, a concerning pattern in volatility futures contracts, rising cash levels among investors and de-leveraging by hedge funds away from equities. U.S. equities experienced a punishing drop this week, with the S&P 500 briefly falling into correction territory on Tuesday as uncertainty over Trump's tariffs exacerbated worries about economic growth. 'This is a classic S&P 500 selloff, with growth stocks taking it in the teeth," said Patrick Fruzzetti, managing director of Rose Advisors, part of wealth management firm Hightower Advisors. "With more bearish signals appearing, this could be ongoing for quite a while." After registering its biggest drop of the year on Monday, the benchmark S&P 500 index endured another volatile day on Tuesday, ending down 0.8%. The index has dropped 9.3% from its February 19 record high, with some of the market's highest fliers including Nvidia and Tesla hit particularly hard. It is now down 3.6% since Trump's November election. TARIFF, RECESSION UNCERTAINTY The ominous market signals add to growing anxiety about the economic outlook. A Reuters poll last week found 95% of economists across Canada, the U.S. and Mexico said the risk of a recession in their respective countries had increased following Trump's chaotic tariff implementation. Trump has offered conflicting views on whether the U.S. could face a recession amid tariff concerns. Over the weekend he declined to predict if there could be a recession. On Tuesday Trump's take on a possible recession was: "I don't see it at all." "The back and forth on tariff announcements is playing havoc with consumer and business confidence," equity strategists at HSBC said in a note. Shares of major U.S. airlines sank on Tuesday after Delta Air Lines slashed its first-quarter profit estimates by half. Delta's CEO said the environment had weakened due to U.S. economic uncertainty. WORRYING TECHNICAL SIGNALS On Monday, the S&P 500 closed below its 200-day moving average -- a closely watched long-term trendline -- for the first time since late 2023. Bespoke Investment Group found that in 15 other instances when the S&P 500 stayed above its 200-day moving average for at least a year, when the index finally fell below the trendline, returns over the next year were generally weaker than normal. The S&P 500 rose 6.9% on a median basis in those cases compared with a 10.3% one-year median gain historically. 'We are starting to shift more toward a downtrend,' said Adam Turnquist, chief technical strategist for LPL Financial. "That alone is a warning sign." Turnquist also noted a key measure of the market's internals was weakening. The number of S&P 500 constituents above their 200-day levels had dropped to 47% as of Monday. When that percentage has dropped below 48% historically, the S&P 500 has fallen by an average of 7.3% over the next year, according to Turnquist, citing data since 1990. The yield spread between junk-rated corporate bonds and U.S. Treasuries -- typically a measure of investor views of the strength of the riskier part of the corporate sector -- widened to 316 basis points on Monday, the biggest spread since September. The widening spread is "showing that the markets are getting more concerned with this growth slowdown narrative," said Matthew Miskin, co-chief investment strategist at John Hancock Investment Management. Philip Palumbo, founder and CEO of Palumbo Wealth Management, said some clients who had a full allocation toward stocks were lightening up on equity exposure because of concerns about elevated valuations. Even with the recent slide, the S&P 500 on Monday was trading at 20.5 times earnings estimates for the next year, versus a long-term average P/E of 15.8, according to LSEG Datastream. "Volatility, with valuations at all-time highs, has made stocks too unpredictable,' Palumbo said. NO MORE BUYING DIPS? Absent a signal that either confirms or denies economic fears, the market could be entering a period when sharp rallies get sold, provided investors keep rotating out of equities into bonds and from U.S. equities into markets abroad, Nomura strategist Charlie McElligott said in a note on Tuesday. Equity volatility futures contracts expiring this month are trading at a premium to those expiring eight months out, signaling greater investor concern about higher volatility now than future market turmoil. Volatility futures have been in this state, called "backwardation," for four straight sessions, and history suggests it may take a few more days before investors grow less fearful. Over the last 10 years, volatility futures, once in backwardation, remain in a state of heightened fear for up to seven sessions on average, according to a Reuters analysis of LSEG data. To be sure, the pullback in stocks could become an opportunity for investors. "Buying the dip" has often been a profitable strategy over the past 15 years, with the S&P 500 up over 700% since the market bottomed during the financial crisis in March 2009. Concerns about a severe economic growth scare were overblown, said Scott Wren, senior global market strategist at the Wells Fargo Investment Institute. The firm on Tuesday recommended clients move some of their allocation in fixed income to equities, specifically mid-cap stocks, Wren said. "The stock market's probably going to trade a little bit lower before we see some sort of a meaningful rebound," Wren said. "But we're trying to stick a toe in and do a little buying." (Reporting by Lewis Krauskopf; additional reporting by Saqib Iqbal Ahmed, Carolina Mandl and Davide Barbuscia; editing by Megan Davies and Leslie Adler)
Reuters
12-03-2025
- Business
- Reuters
Ominous market signals show more trouble could await US stocks
NEW YORK, March 12 (Reuters) - Investors are wary about worrisome market signs, after a steep U.S. stocks selloff that has wiped out more than $4 trillion in value and all of the gains notched following President Donald Trump's election. Among the signs are technical signals such as the S&P 500 on Monday closing below a crucial trend line, a key measure of the market's internals weakening, a concerning pattern in volatility futures contracts, rising cash levels among investors and de-leveraging by hedge funds away from equities. U.S. equities experienced a punishing drop this week, with the S&P 500 briefly falling into correction territory on Tuesday as uncertainty over Trump's tariffs exacerbated worries about economic growth. 'This is a classic S&P 500 selloff, with growth stocks taking it in the teeth," said Patrick Fruzzetti, managing director of Rose Advisors, part of wealth management firm Hightower Advisors. "With more bearish signals appearing, this could be ongoing for quite a while." After registering its biggest drop of the year on Monday, the benchmark S&P 500 index (.SPX), opens new tab endured another volatile day on Tuesday, ending down 0.8%. The index has dropped 9.3% from its February 19 record high, with some of the market's highest fliers including Nvidia (NVDA.O), opens new tab and Tesla (TSLA.O), opens new tab hit particularly hard. It is now down 3.6% since Trump's November election. TARIFF, RECESSION UNCERTAINTY The ominous market signals add to growing anxiety about the economic outlook. A Reuters poll last week found 95% of economists across Canada, the U.S. and Mexico said the risk of a recession in their respective countries had increased following Trump's chaotic tariff implementation. Trump has offered conflicting views on whether the U.S. could face a recession amid tariff concerns. Over the weekend he declined to predict if there could be a recession. On Tuesday Trump's take on a possible recession was: "I don't see it at all." "The back and forth on tariff announcements is playing havoc with consumer and business confidence," equity strategists at HSBC said in a note. Shares of major U.S. airlines sank on Tuesday after Delta Air Lines (DAL.N), opens new tab slashed its first-quarter profit estimates by half. Delta's CEO said the environment had weakened due to U.S. economic uncertainty. WORRYING TECHNICAL SIGNALS On Monday, the S&P 500 closed below its 200-day moving average -- a closely watched long-term trendline -- for the first time since late 2023. Bespoke Investment Group found that in 15 other instances when the S&P 500 stayed above its 200-day moving average for at least a year, when the index finally fell below the trendline, returns over the next year were generally weaker than normal. The S&P 500 rose 6.9% on a median basis in those cases compared with a 10.3% one-year median gain historically. 'We are starting to shift more toward a downtrend,' said Adam Turnquist, chief technical strategist for LPL Financial. "That alone is a warning sign." Turnquist also noted a key measure of the market's internals was weakening. The number of S&P 500 constituents above their 200-day levels had dropped to 47% as of Monday. When that percentage has dropped below 48% historically, the S&P 500 has fallen by an average of 7.3% over the next year, according to Turnquist, citing data since 1990. The yield spread between junk-rated corporate bonds and U.S. Treasuries -- typically a measure of investor views of the strength of the riskier part of the corporate sector -- widened to 316 basis points on Monday, the biggest spread since September. The widening spread is "showing that the markets are getting more concerned with this growth slowdown narrative," said Matthew Miskin, co-chief investment strategist at John Hancock Investment Management. Philip Palumbo, founder and CEO of Palumbo Wealth Management, said some clients who had a full allocation toward stocks were lightening up on equity exposure because of concerns about elevated valuations. Even with the recent slide, the S&P 500 on Monday was trading at 20.5 times earnings estimates for the next year, versus a long-term average P/E of 15.8, according to LSEG Datastream. "Volatility, with valuations at all-time highs, has made stocks too unpredictable,' Palumbo said. NO MORE BUYING DIPS? Absent a signal that either confirms or denies economic fears, the market could be entering a period when sharp rallies get sold, provided investors keep rotating out of equities into bonds and from U.S. equities into markets abroad, Nomura strategist Charlie McElligott said in a note on Tuesday. Equity volatility futures contracts expiring this month are trading at a premium to those expiring eight months out, signaling greater investor concern about higher volatility now than future market turmoil. Volatility futures have been in this state, called "backwardation," for four straight sessions, and history suggests it may take a few more days before investors grow less fearful. Over the last 10 years, volatility futures, once in backwardation, remain in a state of heightened fear for up to seven sessions on average, according to a Reuters analysis of LSEG data. To be sure, the pullback in stocks could become an opportunity for investors. "Buying the dip" has often been a profitable strategy over the past 15 years, with the S&P 500 up over 700% since the market bottomed during the financial crisis in March 2009. Concerns about a severe economic growth scare were overblown, said Scott Wren, senior global market strategist at the Wells Fargo Investment Institute. The firm on Tuesday recommended clients move some of their allocation in fixed income to equities, specifically mid-cap stocks, Wren said. "The stock market's probably going to trade a little bit lower before we see some sort of a meaningful rebound," Wren said. "But we're trying to stick a toe in and do a little buying." Get a look at the day ahead in U.S. and global markets with the Morning Bid U.S. newsletter. Sign up here.
Yahoo
12-03-2025
- Business
- Yahoo
Analysis-Ominous market signals show more trouble could await US stocks
By Lewis Krauskopf and Suzanne McGee NEW YORK (Reuters) - Investors are wary about worrisome market signs, after a steep U.S. stocks selloff that has wiped out more than $4 trillion in value and all of the gains notched following President Donald Trump's election. Among the signs are technical signals such as the S&P 500 on Monday closing below a crucial trend line, a key measure of the market's internals weakening, a concerning pattern in volatility futures contracts, rising cash levels among investors and de-leveraging by hedge funds away from equities. U.S. equities experienced a punishing drop this week, with the S&P 500 briefly falling into correction territory on Tuesday as uncertainty over Trump's tariffs exacerbated worries about economic growth. 'This is a classic S&P 500 selloff, with growth stocks taking it in the teeth," said Patrick Fruzzetti, managing director of Rose Advisors, part of wealth management firm Hightower Advisors. "With more bearish signals appearing, this could be ongoing for quite a while." After registering its biggest drop of the year on Monday, the benchmark S&P 500 index endured another volatile day on Tuesday, ending down 0.8%. The index has dropped 9.3% from its February 19 record high, with some of the market's highest fliers including Nvidia and Tesla hit particularly hard. It is now down 3.6% since Trump's November election. TARIFF, RECESSION UNCERTAINTY The ominous market signals add to growing anxiety about the economic outlook. A Reuters poll last week found 95% of economists across Canada, the U.S. and Mexico said the risk of a recession in their respective countries had increased following Trump's chaotic tariff implementation. Trump has offered conflicting views on whether the U.S. could face a recession amid tariff concerns. Over the weekend he declined to predict if there could be a recession. On Tuesday Trump's take on a possible recession was: "I don't see it at all." "The back and forth on tariff announcements is playing havoc with consumer and business confidence," equity strategists at HSBC said in a note. Shares of major U.S. airlines sank on Tuesday after Delta Air Lines slashed its first-quarter profit estimates by half. Delta's CEO said the environment had weakened due to U.S. economic uncertainty. WORRYING TECHNICAL SIGNALS On Monday, the S&P 500 closed below its 200-day moving average -- a closely watched long-term trendline -- for the first time since late 2023. Bespoke Investment Group found that in 15 other instances when the S&P 500 stayed above its 200-day moving average for at least a year, when the index finally fell below the trendline, returns over the next year were generally weaker than normal. The S&P 500 rose 6.9% on a median basis in those cases compared with a 10.3% one-year median gain historically. 'We are starting to shift more toward a downtrend,' said Adam Turnquist, chief technical strategist for LPL Financial. "That alone is a warning sign." Turnquist also noted a key measure of the market's internals was weakening. The number of S&P 500 constituents above their 200-day levels had dropped to 47% as of Monday. When that percentage has dropped below 48% historically, the S&P 500 has fallen by an average of 7.3% over the next year, according to Turnquist, citing data since 1990. The yield spread between junk-rated corporate bonds and U.S. Treasuries -- typically a measure of investor views of the strength of the riskier part of the corporate sector -- widened to 316 basis points on Monday, the biggest spread since September. The widening spread is "showing that the markets are getting more concerned with this growth slowdown narrative," said Matthew Miskin, co-chief investment strategist at John Hancock Investment Management. Philip Palumbo, founder and CEO of Palumbo Wealth Management, said some clients who had a full allocation toward stocks were lightening up on equity exposure because of concerns about elevated valuations. Even with the recent slide, the S&P 500 on Monday was trading at 20.5 times earnings estimates for the next year, versus a long-term average P/E of 15.8, according to LSEG Datastream. "Volatility, with valuations at all-time highs, has made stocks too unpredictable,' Palumbo said. NO MORE BUYING DIPS? Absent a signal that either confirms or denies economic fears, the market could be entering a period when sharp rallies get sold, provided investors keep rotating out of equities into bonds and from U.S. equities into markets abroad, Nomura strategist Charlie McElligott said in a note on Tuesday. Equity volatility futures contracts expiring this month are trading at a premium to those expiring eight months out, signaling greater investor concern about higher volatility now than future market turmoil. Volatility futures have been in this state, called "backwardation," for four straight sessions, and history suggests it may take a few more days before investors grow less fearful. Over the last 10 years, volatility futures, once in backwardation, remain in a state of heightened fear for up to seven sessions on average, according to a Reuters analysis of LSEG data. To be sure, the pullback in stocks could become an opportunity for investors. "Buying the dip" has often been a profitable strategy over the past 15 years, with the S&P 500 up over 700% since the market bottomed during the financial crisis in March 2009. Concerns about a severe economic growth scare were overblown, said Scott Wren, senior global market strategist at the Wells Fargo Investment Institute. The firm on Tuesday recommended clients move some of their allocation in fixed income to equities, specifically mid-cap stocks, Wren said. "The stock market's probably going to trade a little bit lower before we see some sort of a meaningful rebound," Wren said. "But we're trying to stick a toe in and do a little buying." Sign in to access your portfolio
