Latest news with #S&P50
Forbes
02-05-2025
- Business
- Forbes
Is Amazon Stock A Buy At $190?
29 April 2025, Bavaria, Munich: The logo and lettering of the global online mail order company ... More Amazon can be seen under the blue sky on the façade of Amazon Germany's headquarters in Parkstadt Schwabing in Munich (Bavaria) on April 29, 2025. Photo: Matthias Balk/dpa (Photo by Matthias Balk/picture alliance via Getty Images) Amazon stock (NASDAQ: AMZN) declined approximately 3% in after-market trading Thursday following the company's March quarter results. While the company beat overall sales and earnings expectations, its cloud revenue came in at $29.27 billion, falling short of the anticipated $29.42 billion. The company's Q2 outlook presented a mixed picture. Sales forecasts of $161.5 billion slightly exceeded analyst expectations of $161.2 billion, but projected operating income of $15.3 billion fell significantly below the consensus estimate of $17.6 billion. Amazon's management acknowledged uncertainties around tariffs but reported no current slowdown in demand. Now, if you are looking for an upside with a smoother ride than an individual stock, consider the High Quality portfolio, which has outperformed the S&P, and clocked >91% returns since inception. These kinds of diversified investment options may provide a buffer against the volatility that single stocks like Amazon could experience amid economic uncertainties. The moderate stock decline occurs against a backdrop of increasing economic challenges. The U.S. economy contracted in Q1 2025, and President Trump's recently implemented tariffs on key trading partners raise inflation concerns. In an environment of slowing economic growth, these pressures could lead companies to cut costs, potentially impacting cloud spending. This would negatively affect AWS, Amazon's most profitable business segment. Furthermore, a significant portion of products sold on Amazon's marketplace are sourced from China. The implementation of higher tariffs would likely force Amazon and its third-party sellers to raise prices for consumers. This price inflation could dampen consumer purchasing power and overall demand, potentially impacting Amazon's core e-commerce revenue. While Amazon has a diversified supply chain, the scale of Chinese imports makes the company particularly vulnerable to escalating trade tensions. Despite these challenges, AMZN stock currently trades at 3.1x trailing revenues, in line with its four-year average P/S ratio of 3.2x. However, the growing AWS business is improving Amazon's overall profitability, suggesting the stock deserves a higher valuation multiple than its historical average. With the stock now down over 20% from February highs, we believe tariff-related risks are somewhat priced in. We consider AMZN a strong long-term investment opportunity at prices around $190. Still, investing in a single stock like AMZN can be risky. On the other hand, the Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming the S&P 500 over the last 4-year period. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index, less of a roller-coaster ride as evident in HQ Portfolio performance metrics.
Yahoo
25-04-2025
- Business
- Yahoo
1 ETF Outperforming the S&P 500 in 2025 That Could Continue to Do So For the Foreseeable Future
The stock market is off to a very volatile start in 2025. After climbing to an all-time high in February, the stock market started capitulating amid fears of President Trump's forthcoming tariff policies. Expectations of an all-out trade war accelerated the sell-off after Trump announced higher-than-anticipated tariffs at the start of April. Investors are now concerned about international reactions to the administration's position, the impact on inflation, and ultimately, whether a trade war could push the economy into a recession (if we're not already in one). Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue » As a result, the S&P 500 (SNPINDEX: ^GSPC) declined nearly 20% at one point before recovering some of those losses after Trump announced a 90-day pause on higher reciprocal tariffs (except China). News on Wednesday suggested Trump might be easing some of his tariff plans for China, giving a boost to the market (at least for the moment). Year to date, the benchmark index is down roughly 7.3% as of this writing. A simple ETF has proven more resilient, beating the benchmark index's 2025 performance by roughly three percentage points. What's more, investors can reasonably expect the index fund to continue outperforming, not just through 2025, but for the foreseeable future. An index fund tracking a broad-based index like the S&P 500 is typically a safe recommendation. It guarantees you'll get your fair share of the stock market returns. In fact, an S&P 500 index fund typically outperforms the vast majority of actively managed mutual funds. However, a standard S&P 500 index fund comes with some significant drawbacks that are exacerbated right now. The drawbacks stem from the fact that the S&P 500 is a market-cap-weighted index. That means the biggest companies in the world have much more influence over the index's value than smaller companies. That's become an issue recently because the biggest companies currently sport relatively high valuations. Their forward PE ratios typically fall in the high-20 to 30 range. The S&P 500 10-year average is 18.3. That valuation put added pressure on the index recently because the impact of tariffs could significantly shrink future earnings for those big companies with significant international operations and supply chains. It's worth pointing out that the S&P 500 has become extremely concentrated over the last few years. Even after a strong sell-off of the biggest companies in the index, the top 10 constituents of the S&P 500 account for more than one-third of the index's value. Combined with their relatively high valuations, that led Goldman Sachs analysts to slap a long-term total return outlook on the S&P 500 of just 3% per year over the next decade last October. The good news for investors is that there's a simple index fund that can correct for those issues: the Invesco S&P 500 Equal Weight ETF (NYSEMKT: RSP). The S&P 500 equal weight index, as the name implies, weights each company's stock in the S&P 500 equally. So, the biggest company in the world gets as much room in the portfolio as companies 499 and 500. Here's why that's a good investment right now and for the long run. As mentioned, the biggest companies in the S&P 500 tend to have valuations well above the historical average of the index. But if you look at the forward price-to-earnings (P/E) ratio of the equal weight index, it looks far more appealing. The Invesco ETF trades for a forward P/E of less than 16 as of this writing. Granted, the price-to-earnings ratio isn't the most reliable right now, but it still sits well below the cap-weighted index's forward P/E of 19.4. Warren Buffett has also been a fan of looking at smaller S&P 500 companies for value. In fact, he's sold tens of billions of dollars' worth of the largest stocks in the S&P 500 over the last two years in favor of putting money to work in smaller constituents. Investors shouldn't ignore the Oracle of Omaha's portfolio moves. They say something very clear about the current state of the stock market. However, the investment thesis for the equal-weight index goes beyond valuation. The long-term returns of the index should outpace the S&P 500. That's because smaller companies generally outperform larger companies over the long run. That's due to the law of large numbers. It's typically harder for a $3 trillion stock to increase 10% than it is for a $30 billion stock. One takes $300 billion of additional capital, and the other takes just $3 billion. The long-term returns of the equal-weight index prove this. Over the last 30 years, the equal weight index has produced a cumulative total return of 2,000% versus the S&P 500's 1,720% return. While the equal-weight index hasn't outperformed over the last decade, it looks poised to experience a reversion to the mean. That makes it a great option for ETF investors looking to take advantage of lower prices amid the current stock market sell-off. Before you buy stock in Invesco S&P 500 Equal Weight ETF, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Invesco S&P 500 Equal Weight 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 $561,046!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $606,106!* Now, it's worth noting Stock Advisor's total average return is 811% — a market-crushing outperformance compared to 153% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of April 21, 2025 Adam Levy has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Goldman Sachs Group. The Motley Fool has a disclosure policy. 1 ETF Outperforming the S&P 500 in 2025 That Could Continue to Do So For the Foreseeable Future was originally published by The Motley Fool Sign in to access your portfolio
Yahoo
10-04-2025
- Business
- Yahoo
Why Broadcom Stock Is Plummeting Today
Shares of the semiconductor company Broadcom (NASDAQ: AVGO) were falling hard today as the broader market turned red once again. Investors are still trying to figure out what to do amid President Donald Trump's chaotic rollout, and subsequent rollback, of some import tariffs. Semiconductor stocks, including Broadcom's, are also likely reeling as investors process the news that China and the U.S. are in a full-blown trade war. A significant percentage of Broadcom's revenue came from China last year. As a result, Broadcom's stock is down 7% as of 11:37 a.m. ET. While investors were very happy to see the Trump administration lower tariffs to 10% for most countries yesterday, they're still understandably jittery about the future. Specifically for Broadcom, there are still plenty of questions about how tariffs could impact the company. Broadcom's sales from China totaled $10.5 billion in 2024, accounting for more than 20% of its total revenue. That level of exposure to China is likely unnerving investors as Trump has ratcheted up tariffs on China to effectively 145% as of this morning. Not all of Broadcom's business in China may be impacted by tariffs, but with the U.S. and China engaged in a trade war, there's fear that tariffs will put pressure on device sales, which in turn could lower sales of Broadcom's processors. Adding to the turmoil is the fact that Trump said last week that tariffs on semiconductors are coming "very soon." Whatever those unannounced tariffs could have been are likely on pause right now, but since the administration hasn't been clear about its plans, investors are left wondering if semiconductor tariffs could still be announced in the near future. Most investors have probably already figured this out by now, but there's likely more volatility ahead for Broadcom and other stocks. It's worth remembering during this time that Broadcom is still a significant player in the artificial intelligence (AI) processor market and its AI sales spiked 220% last year. Broadcom investors may do better to hold onto their shares right now rather than panic sell. The dust has yet to settle on the U.S. and China trade war and other tariffs, so making a rash decision to sell Broadcom at a time when the AI boom is still in full swing may do more harm to your portfolio than good. Before you buy stock in Broadcom, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Broadcom 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 $509,884!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $700,739!* Now, it's worth noting Stock Advisor's total average return is 820% — a market-crushing outperformance compared to 158% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of April 5, 2025 Chris Neiger has no position in any of the stocks mentioned. The Motley Fool recommends Broadcom. The Motley Fool has a disclosure policy. Why Broadcom Stock Is Plummeting Today was originally published by The Motley Fool Sign in to access your portfolio
Reuters
13-03-2025
- Business
- Reuters
AMERICAS Markets now eye government shutdown after trade row
LONDON, March 13 (Reuters) - What matters in U.S. and global markets today By Mike Dolan, opens new tab, Editor-At-Large, Financial Industry and Financial Markets From one crunch to another, markets are finding it hard to catch a break as we go from tit-for-tat trade wars one day to U.S. government shutdown fears the next. Today I'll take a look at how all of the U.S. policy uncertainty and diplomatic upheavals have sparked a conversation in global investment circles about trust and transparency in U.S. governance and how eroding that could undermine the U.S. position as the world's dominant investment destination. Find this and more on today's major market news below. Today's Market Minute President Donald Trump threatened on Wednesday to escalate a global trade war with further tariffs on European Union goods, as major U.S. trading partners said they would retaliate for trade barriers already erected by the U.S. president. Germany's outgoing lower house of parliament will hold a special session on Thursday to debate a 500 billion euro fund for infrastructure and sweeping changes to borrowing rules in Europe's largest economy to bolster defence. The Bank of Canada trimmed its key policy rate by 25 basis points on Wednesday to 2.75% and raised concerns about inflationary pressures and weaker growth stemming from trade uncertainty and U.S. tariffs. The Kremlin said on Wednesday it would review details from Washington about a proposal for a 30-day ceasefire in Ukraine before responding, while U.S. Secretary of State Marco Rubio hoped a deal would be struck within days. U.S. consumer prices increased less than expected in February, Wednesday data showed, but the improvement is likely temporary against the backdrop of aggressive tariffs on imports that are expected to raise the costs of most goods in the months ahead. Can't catch a break This week's U.S. metal tariff hikes and the instant retaliation from Europe and Canada are likely only the opening salvos in a global trade conflict that President Donald Trump appears intent on ratcheting up in less than three weeks' time. The rhetoric shows no sign of compromise. "Whatever they charge us, we're charging them," Trump told reporters at the White House. "We will not stand idly by," Canada's Finance Minister Dominic LeBlanc said of the latest tariffs moves. There is background tension in Europe too as Germany's dramatic fiscal reforms and defence reboot now need to pass through parliament, with the Green Party's necessary support still not secured. The Bundestag lower house of parliament will on Thursday hold the first reading of the proposal, which electrified European markets last week. A vote is due next Tuesday. Back stateside, the focus will be on the Senate. If it doesn't support the Republican-backed stopgap funding bill, a partial government shutdown could be triggered as soon as this weekend. The whole picture means U.S. stock futures have reversed all of Wednesday's modest bounce in the S&P500 (.SPX), opens new tab. And stock benchmarks across Europe and Asia are also in the red. Meanwhile, Treasury yields pushed higher, batting away better-than-forecast consumer price inflation numbers on Wednesday, as the tentative stock market stabilisation reduced Federal Reserve easing bets once again. The dollar index (.DXY), opens new tab was also off slightly. CPI numbers are now very much in the rear-view mirror for a Fed waiting to see the impact of tariff hikes, so today's producer price numbers should also have little market impact. But what could have quite a bit of market impact over the long term is the growing sense that the tumult in Washington could threaten the U.S. position as the world's safe haven. Exorbitant disruption risks undermining US 'privilege' There's something more than U.S. tariffs and recession risks gnawing at financial markets. There's the growing sense that the chaotic policy disruption in Washington is eroding the world's trust in U.S. institutions and its assets. Broken political alliances and economic wars with major trade partners are having many effects - not least heightened business uncertainty over what will happen next - but one of the most notable is the brewing investor concern that America could lose a chunk of its "exorbitant privilege". This term, first coined in the 1960s by then French finance minister Valéry Giscard d'Estaing, essentially refers to the benefits the U.S. gains from the outsize demand the world has for U.S. assets as a safe haven. The privilege hinges variously on the extensive use of the dollar internationally, the U.S. rule of law and institutional rigor as well as the projection of its soft power. The list is much longer than that, but you get the picture. The sheer size, depth and transparency of U.S. markets, in combination with the reliability and openness of its governance, have - for decades - given the U.S. a disproportionate slice of world capital and the cheaper financing that goes with that. Could Donald Trump's avowedly disruptive administration call all that into question and whittle this advantage away? Financing metrics, such as long-term U.S. borrowing costs, don't yet suggest that a major fracture is afoot. But U.S. equity prices have started to correct over the past month, even as the dollar has weakened - an ominous combination. Ultimately, though, the very fact that trust - or the lack thereof - is part of the U.S. conversation at all is the most remarkable thing. On Wednesday, JPMorgan's chief global economist Bruce Kasman spoke openly about the challenges during a roadshow in Singapore. He opined about how the U.S. secured its "exorbitant privilege", citing many of the reasons noted above and including things like the "integrity of information flow". The administration's cutbacks to government agencies and moves to disband the advisory committees assisting with data collection are also potentially jarring, he said. "All of those things are part of the uncertainties that have moved into U.S. policy, and that part of the risk in the outlook this year I don't think has been appreciated." 'Exorbitant burden'? Referring to exorbitant privilege, Kasman added: "The risk that stuff starts to come under pressure and becomes a structural issue in the markets is not something I would, by any means, underplay." This is likely what investors and strategists both within the United States and around the world have been thinking for weeks - even if relatively few have verbalized it. And Kasman is not alone in saying something. Writing about speculation surrounding the prospect of a " Mar-a-Lago Accord" to correct U.S. deficits and global imbalances, former Reserve Bank of India governor Raghuram Rajan, opens new tab questioned the diagnosis of Trump adviser Stephen Miran and said it was dangerous for America to play around with its exorbitant privilege. Rajan expressed doubt that reforming U.S. macroeconomic policy would somehow deter overseas savers from the U.S., thereby weakening an overvalued dollar or helping to cut U.S. deficits. "It is not clear where the Trump administration's current path of 'shock and awe' is supposed to lead," the former International Monetary Fund chief economist wrote in Project Syndicate this week. "The claim that the dollar's attractiveness is an exorbitant burden rather than an exorbitant privilege is unpersuasive, especially when those making such arguments are so reluctant to give up the burden," he said, referring to the administration's regular support for the dollar's global status while promoting policies that undermine it. "Markets are unnerved by the punishment that the administration, convinced that the U.S. is a victim, is willing to inflict on close allies," he concluded. "If such behavior reduces the attractiveness of the dollar, perhaps it really will become an exorbitant burden. But that is not a future that any American should want." It's good to remember that foreign holdings of U.S. financial assets nearly doubled over the past decade to some $60 trillion before the recent market ructions. Given the scale of this cross-border money, if faith in the U.S. truly is shaken, the outcome could make the year's market shakeout to date seem very small indeed. Chart of the day Stock markets have voted clearly over the past month on the brewing trade wars and lack of policy visibility in the U.S., as they've repeatedly hit the "sell" button. Regular voters now seem to be following suit. A Reuters/Ipsos poll found 57% of Americans think Trump is being too erratic in his efforts to shake up the U.S. economy, and 70% expect that tariffs will make goods more expensive. Today's events to watch * U.S. February producer price report, weekly jobless claims * Federal Reserve reports on financial health of U.S. households in its Flow of Funds update for 4Q2024 * Bank of France Governor Francois Villeroy de Galhau and Bundesbank President Joachim Nagel speak together in Paris * Germany's Bundestag holds first reading of budget reform proposal * U.S. Treasury sells $22 billion of 30-year bonds * U.S. corporate earnings: Dollar General, Ulta Beauty Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, opens new tab, is committed to integrity, independence, and freedom from bias. By Mike Dolan; Editing by Lisa Shumaker
