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6 hours ago
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Trading Day: Bond blues mar stocks' joy
ORLANDO, Florida (Reuters) -TRADING DAY Making sense of the forces driving global markets By Jamie McGeever, Markets Columnist The S&P 500 and Nasdaq leaped to new highs on Tuesday thanks to a surge in Nvidia shares, but closed mixed as investors digested a pick-up in U.S. inflation, a raft of major U.S. financial firms' earnings and spiking bond yields around the world, especially in Japan. More on that below, but in my column today I ask whether there is a sense of tariff complacency creeping into markets, as investors increasingly bet on the 'TACO' trade. If you have more time to read, here are a few articles I recommend to help you make sense of what happened in markets today. 1. For Europe, 30% US tariff would hammer trade, forceexport model rethink 2. Trump's fresh Fed attack simmers in markets: Mike Dolan 3. Investors seek protection from risk of Fed chief'souster 4. Fed's inflation fears start to be realized with June CPIincrease 5. What the rest of the world can learn from 'SwissExceptionalism': Jen Today's Key Market Moves * The Nasdaq gains 0.2% but other U.S. indices fall, withthe Russell 2000 small cap index losing 1.7%. Tech is the onlysector on the S&P 500 to rise. * Nvidia shares rise 4% to a new high above $172, pushingits market cap further above the $4 trillion mark. * Britain's FTSE 100 rises above 9000 points for the firsttime ever but ends down 0.6%, its biggest fall sincepost-Liberation Day turmoil in early April. * Japanese Government Bond yields hit fresh highs. The10-year yield is its highest since 2008 at 1.595%, and the 20-and 30-year yields at record peaks of 2.65% and 3.20%,respectively. * The dollar index rises for a seventh session, its best runsince last October. Bond blues mar stocks' joy It was a mixed bag on world markets on Tuesday. Two of Wall Street's three main indices, Britain's FTSE 100 and the MSCI World index hit fresh peaks, yet U.S. inflation rose, bond yields marched higher and investors gave a thumbs down to seemingly solid earnings from U.S. financial firms. Equity market strength was mostly in tech, after AI darling and chipmaker Nvidia said overnight it plans to resume sales of its H20 AI chips to China. Hong Kong's tech index got the ball rolling with a 2.8% rise, and tech was the only sector on the S&P 500 to close in the green. But if the market's glass was half full at the start of the day, it was half empty by the end of it. U.S. inflation was broadly in line with expectations, yet investors focused on the upside risks; U.S. bank earnings were solid, but financials were among the biggest decliners. The shadow of higher bond yields is beginning to lengthen as worries over governments' fiscal health, tariff-driven inflation and investor appetite for fixed income assets pick up again. The 30-year U.S. Treasury yield is back above 5.00%, but the eye of the bond market hurricane appears to be in Japan. Investor angst around an Upper House election on Sunday is bubbling up. Prime Minister Shigeru Ishiba's sliding popularity suggests even his modest goal of retaining a majority is out of reach, and defeat could bring anything from a shift in the makeup of Ishiba's coalition to his resignation. Japanese government bond yields are surging, but that's proving to be a headwind for the yen rather than a tailwind as extra pressure on the country's already strained public finances, a straight-jacketed Bank of Japan and stagflation fears more than offset any potential carry for yen investors. The yen slumped to a three-month low on Tuesday, back within sight of the 150 per dollar mark. The raft of economic indicators from China overnight, meanwhile, generally showed activity in June held up better than economists expected, and second quarter GDP growth was slightly stronger than forecasts too. But Beijing is still under pressure to inject more stimulus into the economy. The property bubble continues to deflate, with new home prices falling at their fastest pace in eight months, and more broadly, China's economic surprises index is its lowest in three months. If incoming data is beating forecasts, it is because expectations have been lowered so much. Tariff 'doom loop' hangs over global equities The astonishing rebound in stocks since early April largely reflects investors' bet that U.S. President Donald Trump won't follow through on his tariff threats. But the market's very resilience may encourage the president to push forward, which could be bad news for equities in both the U.S. and Europe. Investors appear to believe that the April 2 "reciprocal" tariffs were mostly a tactic to bring countries to the negotiating table, and Washington's levies will end up being much lower than advertised. Tariffs may end up much higher than they were before Trump's second term began, but the situation will still be better than the worst-case scenarios initially priced in after Trump's so-called "Liberation Day". Monday's equity moves were a case in point. Trump's threat on Saturday to impose 30% levies on imports from the European Union and Mexico - two of America's largest trading partners - was met with a collective market shrug. European and Mexican stocks dipped a bit, but Wall Street closed in the green and the Nasdaq hit a new high. This follows threats in recent days to place a 50% tariff rate on goods imported from Brazil and a 35% levy on goods from Canada not covered under the USMCA agreement. Brazilian stocks have slipped 5%, but Canadian stocks have hit new peaks. The question now is whether the line between complacency and the "TACO" trade - the bet that "Trump always chickens out" - is getting blurred. GETTING STRETCHED The scale of the recovery since April 7 is truly eye-popping. It took the S&P 500 less than three months to move from the April bear market lows to a new all-time high, as Charlie Bilello, chief market strategist at Creative Planning, recently noted on X. This was the second-fastest recovery in the last 75 years, only bested by the bear market recovery in 1982 that took less than two months. On a 12-month forward earnings basis, the S&P 500 index is now near its highest level in years and well above its long-term average. The tech sector, which has propelled the rally, has rarely been more expensive in the last quarter century either. None of that means further gains cannot materialize, and one could argue that the valuations are justified if AI truly delivers the promised world-changing productivity gains. Regardless, it is hard to argue that the rally since April is not rooted in the belief that tariffs will be significantly lower than the levels announced on Liberation Day. If many countries' levies do end up around 10% like Britain's and the aggregate rate settles around 15%, then equity pricing might very well be reasonable. But if that's not the case, growth forecasts will likely have to be revised a lot lower. "We stay overweight U.S. stocks, but don't rule out more sharp near-term market moves. Uncertainty on who will bear tariff costs means yet more dispersion in returns – and more opportunity to earn alpha, or above-benchmark returns," BlackRock Investment Institute analysts wrote on Monday. DOOM LOOP? One concern is that a loop is potentially being created, whereby Wall Street's resilience and strength in the face of heightened trade uncertainty actually emboldens Trump to double down on tariffs. Most analysts still believe cooler heads will prevail, however. Trump's tolerance for equity and bond market stress, and therefore U.S. economic pain, appears "limited", according to Barclays. But if markets have gotten too complacent and Trump does increase tariffs on EU goods to 30%, potential retaliation would risk a repeat of something similar to the post-Liberation Day selloff, sending European equities down by double digits, Barclays warns. It may also be that when it comes to tariffs, investors are focusing so intently on China that not much else moves the dial. This may be short-sighted though. China accounted for 13.4% of U.S. goods imports last year, the lowest in 20 years. In contrast, the U.S. imported $605.7 billion of goods from the European Union, or 18.6% of all imports and the most from any single jurisdiction. As Trump sees it, Europe is "ripping off" America almost as much as China. Bilateral U.S.-China trade last year totaled $582 billion, compared with bilateral U.S.-EU trade flows of $975 billion, U.S. Census data shows. America's $235.9 billion goods deficit with the EU was smaller than its $295.5 billion gaps with China, but that's still comfortably America's second-biggest trade deficit. What could move markets tomorrow? * Japan non-manufacturing tankan survey (July) * Indonesia interest rate decision * UK CPI inflation (June) * U.S. corporate earnings including financial heavyweightsMorgan Stanley, Goldman Sachs, and Bank of America * U.S. PPI inflation (June) * U.S. industrial production (June) * U.S. Fed officials scheduled to speak: Governor MichaelBarr, Cleveland Fed President Beth Hammack, Richmond FedPresident Thomas Barkin, New York Fed President John Williams Want to receive Trading Day in your inbox every weekday morning? Sign up for my newsletter here. Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias. (By Jamie McGeever)
Yahoo
7 hours ago
- Business
- Yahoo
Trading Day: Bond blues mar stocks' joy
ORLANDO, Florida (Reuters) -TRADING DAY Making sense of the forces driving global markets By Jamie McGeever, Markets Columnist The S&P 500 and Nasdaq leaped to new highs on Tuesday thanks to a surge in Nvidia shares, but closed mixed as investors digested a pick-up in U.S. inflation, a raft of major U.S. financial firms' earnings and spiking bond yields around the world, especially in Japan. More on that below, but in my column today I ask whether there is a sense of tariff complacency creeping into markets, as investors increasingly bet on the 'TACO' trade. If you have more time to read, here are a few articles I recommend to help you make sense of what happened in markets today. 1. For Europe, 30% US tariff would hammer trade, forceexport model rethink 2. Trump's fresh Fed attack simmers in markets: Mike Dolan 3. Investors seek protection from risk of Fed chief'souster 4. Fed's inflation fears start to be realized with June CPIincrease 5. What the rest of the world can learn from 'SwissExceptionalism': Jen Today's Key Market Moves * The Nasdaq gains 0.2% but other U.S. indices fall, withthe Russell 2000 small cap index losing 1.7%. Tech is the onlysector on the S&P 500 to rise. * Nvidia shares rise 4% to a new high above $172, pushingits market cap further above the $4 trillion mark. * Britain's FTSE 100 rises above 9000 points for the firsttime ever but ends down 0.6%, its biggest fall sincepost-Liberation Day turmoil in early April. * Japanese Government Bond yields hit fresh highs. The10-year yield is its highest since 2008 at 1.595%, and the 20-and 30-year yields at record peaks of 2.65% and 3.20%,respectively. * The dollar index rises for a seventh session, its best runsince last October. Bond blues mar stocks' joy It was a mixed bag on world markets on Tuesday. Two of Wall Street's three main indices, Britain's FTSE 100 and the MSCI World index hit fresh peaks, yet U.S. inflation rose, bond yields marched higher and investors gave a thumbs down to seemingly solid earnings from U.S. financial firms. Equity market strength was mostly in tech, after AI darling and chipmaker Nvidia said overnight it plans to resume sales of its H20 AI chips to China. Hong Kong's tech index got the ball rolling with a 2.8% rise, and tech was the only sector on the S&P 500 to close in the green. But if the market's glass was half full at the start of the day, it was half empty by the end of it. U.S. inflation was broadly in line with expectations, yet investors focused on the upside risks; U.S. bank earnings were solid, but financials were among the biggest decliners. The shadow of higher bond yields is beginning to lengthen as worries over governments' fiscal health, tariff-driven inflation and investor appetite for fixed income assets pick up again. The 30-year U.S. Treasury yield is back above 5.00%, but the eye of the bond market hurricane appears to be in Japan. Investor angst around an Upper House election on Sunday is bubbling up. Prime Minister Shigeru Ishiba's sliding popularity suggests even his modest goal of retaining a majority is out of reach, and defeat could bring anything from a shift in the makeup of Ishiba's coalition to his resignation. Japanese government bond yields are surging, but that's proving to be a headwind for the yen rather than a tailwind as extra pressure on the country's already strained public finances, a straight-jacketed Bank of Japan and stagflation fears more than offset any potential carry for yen investors. The yen slumped to a three-month low on Tuesday, back within sight of the 150 per dollar mark. The raft of economic indicators from China overnight, meanwhile, generally showed activity in June held up better than economists expected, and second quarter GDP growth was slightly stronger than forecasts too. But Beijing is still under pressure to inject more stimulus into the economy. The property bubble continues to deflate, with new home prices falling at their fastest pace in eight months, and more broadly, China's economic surprises index is its lowest in three months. If incoming data is beating forecasts, it is because expectations have been lowered so much. Tariff 'doom loop' hangs over global equities The astonishing rebound in stocks since early April largely reflects investors' bet that U.S. President Donald Trump won't follow through on his tariff threats. But the market's very resilience may encourage the president to push forward, which could be bad news for equities in both the U.S. and Europe. Investors appear to believe that the April 2 "reciprocal" tariffs were mostly a tactic to bring countries to the negotiating table, and Washington's levies will end up being much lower than advertised. Tariffs may end up much higher than they were before Trump's second term began, but the situation will still be better than the worst-case scenarios initially priced in after Trump's so-called "Liberation Day". Monday's equity moves were a case in point. Trump's threat on Saturday to impose 30% levies on imports from the European Union and Mexico - two of America's largest trading partners - was met with a collective market shrug. European and Mexican stocks dipped a bit, but Wall Street closed in the green and the Nasdaq hit a new high. This follows threats in recent days to place a 50% tariff rate on goods imported from Brazil and a 35% levy on goods from Canada not covered under the USMCA agreement. Brazilian stocks have slipped 5%, but Canadian stocks have hit new peaks. The question now is whether the line between complacency and the "TACO" trade - the bet that "Trump always chickens out" - is getting blurred. GETTING STRETCHED The scale of the recovery since April 7 is truly eye-popping. It took the S&P 500 less than three months to move from the April bear market lows to a new all-time high, as Charlie Bilello, chief market strategist at Creative Planning, recently noted on X. This was the second-fastest recovery in the last 75 years, only bested by the bear market recovery in 1982 that took less than two months. On a 12-month forward earnings basis, the S&P 500 index is now near its highest level in years and well above its long-term average. The tech sector, which has propelled the rally, has rarely been more expensive in the last quarter century either. None of that means further gains cannot materialize, and one could argue that the valuations are justified if AI truly delivers the promised world-changing productivity gains. Regardless, it is hard to argue that the rally since April is not rooted in the belief that tariffs will be significantly lower than the levels announced on Liberation Day. If many countries' levies do end up around 10% like Britain's and the aggregate rate settles around 15%, then equity pricing might very well be reasonable. But if that's not the case, growth forecasts will likely have to be revised a lot lower. "We stay overweight U.S. stocks, but don't rule out more sharp near-term market moves. Uncertainty on who will bear tariff costs means yet more dispersion in returns – and more opportunity to earn alpha, or above-benchmark returns," BlackRock Investment Institute analysts wrote on Monday. DOOM LOOP? One concern is that a loop is potentially being created, whereby Wall Street's resilience and strength in the face of heightened trade uncertainty actually emboldens Trump to double down on tariffs. Most analysts still believe cooler heads will prevail, however. Trump's tolerance for equity and bond market stress, and therefore U.S. economic pain, appears "limited", according to Barclays. But if markets have gotten too complacent and Trump does increase tariffs on EU goods to 30%, potential retaliation would risk a repeat of something similar to the post-Liberation Day selloff, sending European equities down by double digits, Barclays warns. It may also be that when it comes to tariffs, investors are focusing so intently on China that not much else moves the dial. This may be short-sighted though. China accounted for 13.4% of U.S. goods imports last year, the lowest in 20 years. In contrast, the U.S. imported $605.7 billion of goods from the European Union, or 18.6% of all imports and the most from any single jurisdiction. As Trump sees it, Europe is "ripping off" America almost as much as China. Bilateral U.S.-China trade last year totaled $582 billion, compared with bilateral U.S.-EU trade flows of $975 billion, U.S. Census data shows. America's $235.9 billion goods deficit with the EU was smaller than its $295.5 billion gaps with China, but that's still comfortably America's second-biggest trade deficit. What could move markets tomorrow? * Japan non-manufacturing tankan survey (July) * Indonesia interest rate decision * UK CPI inflation (June) * U.S. corporate earnings including financial heavyweightsMorgan Stanley, Goldman Sachs, and Bank of America * U.S. PPI inflation (June) * U.S. industrial production (June) * U.S. Fed officials scheduled to speak: Governor MichaelBarr, Cleveland Fed President Beth Hammack, Richmond FedPresident Thomas Barkin, New York Fed President John Williams Want to receive Trading Day in your inbox every weekday morning? Sign up for my newsletter here. Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias. (By Jamie McGeever)
Yahoo
9 hours ago
- Business
- Yahoo
Quantum (QUBT) Computing Rallies 8.7% Ahead of Q2 Earnings
We recently published . Quantum Computing Inc. (NASDAQ:QUBT) is one of Monday's top performers. Quantum Computing jumped by 8.66 percent on Monday to close at $18.94 apiece, in line with its peers, as investors repositioned portfolios ahead of the overall market's entry into the second quarter earnings season. Quantum Computing Inc. (NASDAQ:QUBT) traded higher alongside its counterparts, namely Rigetti Computing Inc., D-Wave Quantum Inc., and IonQ Inc. Sentiment was further supported by its inclusion in two Russell indices—the Russell 3000 index and the Russell 2000 index—on June 30, which paved the way for further visibility among institutional investors. A data analyst pouring over a chart, the intricacies of its lines being revealed. The Russell 3000 Index includes the largest 3,000 US public companies by market capitalization, while the Russell 2000 Index is a subset of the broader Russell 3000 Index limited to small-cap companies. Both indices are reconstituted annually by re-ranking companies based on total market capitalization as of the reconstitution rank date, which was April 30, 2025, this year. While we acknowledge the potential of QUBT as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the . READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy Right Now. Disclosure: None. This article is originally published at Insider Monkey. Sign in to access your portfolio
Yahoo
a day ago
- Business
- Yahoo
3 Russell 2000 Stocks Worth Your Attention
The Russell 2000 (^RUT) may be overshadowed by larger indexes, but it's full of companies with the potential to deliver high returns. A select few have the right mix of innovation, market opportunity, and execution to outperform over time. Spotting the best opportunities in the Russell 2000 takes research, and we're here to do the heavy lifting for you. That said, here are three Russell 2000 stocks that could be the next big thing. Market Cap: $3.39 billion Founded by Caltech professor Carver Mead and one of his students Chris Diorio, Impinj (NASDAQ:PI) is a maker of radio-frequency identification (RFID) hardware and software. Why Does PI Catch Our Eye? Annual revenue growth of 11.9% over the past two years was outstanding, reflecting market share gains this cycle Performance over the past five years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 38.1% outpaced its revenue gains Free cash flow margin expanded by 23.7 percentage points over the last five years, providing additional flexibility for investments and share buybacks/dividends Impinj is trading at $117 per share, or 73x forward P/E. Is now the time to initiate a position? Find out in our full research report, it's free. Market Cap: $12.97 billion Focused on the future of autonomous military combat, AeroVironment (NASDAQ:AVAV) specializes in advanced unmanned aircraft systems and electric vehicle charging solutions. Why Do We Watch AVAV? Annual revenue growth of 23.2% over the past two years was outstanding, reflecting market share gains this cycle Exciting sales outlook for the upcoming 12 months calls for 144% growth, an acceleration from its two-year trend Earnings growth has massively outpaced its peers over the last two years as its EPS has compounded at 63.4% annually At $263.71 per share, AeroVironment trades at 68.2x forward P/E. Is now the right time to buy? See for yourself in our in-depth research report, it's free. Market Cap: $1.34 billion Founded in 1884 and serving communities from Mendocino County in the north to Kern County in the south, Westamerica Bancorporation (NASDAQ:WABC) provides banking services to individuals and small businesses throughout Northern and Central California. Why Could WABC Be a Winner? Solid 9.7% annual net interest income growth over the last four years indicates its offerings are gaining share Efficiency ratio improved by 11.4 percentage points over the last four years as it scaled Performance over the past five years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue Westamerica Bancorporation's stock price of $51.12 implies a valuation ratio of 1.4x forward P/B. Is now a good time to buy? Find out in our full research report, it's free. Donald Trump's victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs. While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.
Yahoo
a day ago
- Business
- Yahoo
OPAL Fuels (OPAL) Profile Bolstered with Russell 3000 Index Addition
OPAL Fuels Inc. (NASDAQ:OPAL) is one of the best green energy penny stocks to buy right now. On June 30, the company was officially added to the Russell 3000 index. The addition is a significant boost to the company's profile as the index lists the 3,000 largest US stocks by market capitalization. With the addition, Opal will also be included in the small-cap Russell 2000 index, in addition to other growth and value style indexes. The addition marks a significant achievement in the company's evolution. 'This recognition highlights our position as an emerging leader in the small-cap segment, providing investors with exposure to our innovative, vertically integrated renewable energy model. We expect this recognition to enhance our visibility among investors,' said Jonathan Maurer, Co-Chief Executive Officer of OPAL Fuels OPAL Fuels Inc. (NASDAQ:OPAL) is a leader in the capture and conversion of biogas into low carbon intensity RNG and renewable electricity. It is also a leader in the marketing and distribution of RNG to heavy-duty trucking and other hard-to-decarbonize industrial sectors. While we acknowledge the potential of OPAL as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: 10 Most Popular AI Penny Stocks to Buy According to Billionaires and 10 Best Defensive Stocks to Buy in a Volatile Market. Disclosure: None. This article is originally published at Insider Monkey.
