Latest news with #TreasuryBX
Yahoo
20-05-2025
- Business
- Yahoo
This veteran investor crunches the numbers and sees the risk of a full-blown bear market
For something that the pundit universe uniformly says doesn't matter — the Moody's downgrade of the U.S. debt rating — Monday kicks off with stocks and importantly bonds lower as well. More on that in a bit. My father's widow keeps sending me $200 checks in the mail. Why would she do this? 'I'm an idiot': I'm middle aged, earn $68,000 a year and have $39,000 in credit-card debt My ex-wife said she should have been compensated for working part time during our marriage. Do I owe her? Recession indicators are out of control. When will this madness end? My husband will inherit $180K. I think we should invest the money. He wants to pay off his $168K mortgage. Who's right? America's deteriorating finances plays a role, but not a starring one, in a new forecast from David Kotok. Kotok co-founded and until this year was the chief investment officer for the $3.3 billion investment advisory firm Cumberland Advisors. An author or co-author of five books, he is known for his summertime retreat called 'Camp Kotok,' where various analysts, investors and economists gather in Maine. Kotok, in his latest email to clients, walks through an estimate of just how much tariffs will take a bite out of corporate earnings. 'These estimates below are mine alone. The only thing we know about them is they are wrong. But I think they are within a reasonable guessing range for a starting point,' he says. He says that over 12 months, S&P 500 earnings per share will be reduced by 30 dollar from tariffs, which would take current estimates of $260 down to $230. 'Of course, this figure assumes that there are no other protectionist policy changes. I derive that number from models that attempt to convert a tariff level to an equivalent corporate tax-rate change,' says Kotok. Granted, the Trump administration and Republican Congress are trying to cut corporate taxes. But even so, every percentage point reduction in the existing 21% rate boosts S&P 500 EPS by only 2 dollars a share. Kotok says in total — so not just the tariffs but also the economy slowing down — earnings would fall to between $200 and $220 per share. That would, at a price-to-earnings multiple of 20, take the S&P 500 down to 4,000 to 4,400 range. But rising Treasury yields — a feature of trading on Monday — could drag that multiple even lower, he says. 'So, the worst case for the S&P 500 Index looks to be under 4,000 for a bottom,' he says. Granted, that's the worst case — a moderate case would be for the S&P 500 closer to 5,000, assuming a final tariff policy more in line with the originally expected 10% tariff level and with mild retaliation on America's services trade surplus, he says. 'Of course, a Trump pivot could change this trajectory. And a financial crisis that triggers Fed intervention could also change things,' says Kotok. A pretty rough start on tap — S&P 500 ES00 and Nasdaq 100 futures NQ00 each are down more than 1% as gold futures GC00 surge. The yield on the 10-year Treasury BX:TMUBMUSD10Y rose 10 basis points. Key asset performance Last 5d 1m YTD 1y S&P 500 5958.38 5.27% 12.79% 1.30% 12.35% Nasdaq Composite 19,211.10 7.15% 17.96% -0.52% 15.13% 10-year Treasury 4.546 7.20 13.20 -3.00 9.60 Gold 3242.8 0.03% -5.60% 22.87% 33.43% Oil 61.5 -0.74% -1.90% -14.43% -22.37% Data: MarketWatch. Treasury yields change expressed in basis points Moody's on Friday night became the last of the major agencies to reduce the U.S. credit rating. Republicans advanced their tax cut bill out of a committee that had previously resisted it. President Donald Trump said Walmart WMT should 'eat the tariffs' and Treasury Secretary Scott Bessent said he called Walmart CEO Doug McMillon. Johnnie Walker maker Diageo DEO said it's expecting an annual tariff hit of $150 million based on current policies. Blackstone BX is buying TXNM Energy TXNM in an $11.5 billion deal. President Joe Biden was diagnosed with an aggressive form of prostate cancer. Chinese billionaire who made fortune in gold is now betting on copper. Japanese prime minister says country's fiscal situation is worse than Greece's. El-Erian says the era of U.S. exceptionalism is on pause. This chart from the fund management company Incrementum shows global central bank purchases over the last 75 years. 'For three years in a row, central banks increased their gold reserves by more than 1,000 [metric tons] each year, achieving a special kind of hat-trick,' the firm says in its annual, 'In Gold We Trust' report. Here were the most active stock-market tickers on MarketWatch as of 6 a.m. Eastern. Ticker Security name TSLA Tesla NVDA Nvidia GME GameStop UNH UnitedHealth PLTR Palantir Technologies AAPL Apple SMCI Super Micro Computer AMD Advanced Micro Devices NVAX Novavax TSM Taiwan Semiconductor Manufacturing Co. These companies were named 'DEI' before the acronym became political. A paddleboarder makes friends with a manatee. A French town set a big record for Smurf aficionados. Bond yields jump after Moody's downgrade of U.S. credit. Why it matters for consumers — and Congress. I'm 57 and ready to retire next year on $7,500 a month, but my wife says no. Who's right? My wife and I paid off my stepdaughter's $415K mortgage in exchange for her house, but it's now worth $310K. Should we sue? My second wife says her 2 kids should inherit our estate, but I also have 2 kids. Is that fair? 'I am scared to death that I'll run out of money': My wife and I are in our 50s and have $4.4 million. Can we retire early? 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
20-02-2025
- Business
- Yahoo
Last week showed the stock market has moved on from obsessing about inflation. Here's the new playbook.
A shortened week could kick off with a new record for the S&P 500. Last week marked the best since late January for the index SPX, which broke a two-week losing streak despite a couple of hot inflation reports – consumer and producer prices. Last week showed the stock market has moved on from obsessing about inflation. Here's the new playbook. What drove this Vanguard fund to just top the U.S.'s oldest and largest ETF by $1.5 billion 'I have fear of financial insecurity': I'm 58, recently widowed with $1 million saved for retirement. What if the economy tanks? I want to leave my home to my children from my first marriage — not to my second husband. Is that ethical and fair? 'She's bleeding her retirement dry': My friend earns $9 an hour, but wastes money on vacations and massages. What can I do? This brings us to our call of the day from Neuberger Berman co CIOs Jeff Blazek and Erik Knutzen, who write that after two years, inflation is no longer the big data to watch and a 'new dynamic is at play.' 'Last Wednesday's unexpectedly high U.S. inflation data was a significant test for this analysis, and the market took it largely in stride. That underlines our view that investors need to shift from an 'inflation mindset' to a 'growth mindset' to understand current dynamics,' Blazek and Knutzen told clients in an investor note. And that means a market that now places more importance on growth expectations, they said. That's a shift they have been already predicting for the fixed-income market. They noted how the past three years shorter-term bonds were volatile due to shifting inflation and interest-rate expectations. Neuberger Berman's global head of fixed income, Ashok Bhatia, predicted at the start of 2025 that volatility would switch to longer-term bonds, as the market shifted its focus to fiscal policies and their impact on interest rate and growth expectations. The yield on the 10-year Treasury BX:TMUBMUSD10Y has seen some choppy action so far this year, currently trading back where it was in mid-December, around 4.5%. As for equities, they said a heavy concentration in strongly performing large technology stocks offset the fact that most stocks underperformed last year. The investors noted the new year is seeing more optimism in the economy, owing to consumer confidence, falling unemployment, rising wages and positive manufacturing surveys. Added to that is a budding rebound in China's economy and positive signs from Europe as well. 'The result since the start of the year, has been notable outperformance from U.S. value stocks, industrials, financials, higher-quality U.S. midcaps and, especially, European equities,' said Blazek and Knutzen, who expected this setup for 2025. In December, their positive outlook for stocks came with advice for clients to approach the S&P 500 cautiously and diversify for a broadening market performance. They note the broadening performance comes as worries about inflation haven't died down, with market expectations on prices creeping higher and plenty of commentary out there about the inflationary impact of tariffs. 'And yet, aside from the prospect of tariffs, none of those things have knocked equity markets off course. And note that the sell-off triggered by President Trump's tariff announcements was accompanied by falling bond yields, affirming…that their growth implications are far more important for market prices than their inflation implications,' Blazek and Knutzen said. 'We think the initial sell-off following Wednesday's inflation release was quickly erased for the same reason. Investors know that January's inflation data has a seasonal tendency to overshoot, but we see the growth mindset at work here, too.' U.S. stocks DJIA SPX COMP are struggling at the start of trading with Treasury yields BX:TMUBMUSD10Y BX:TMUBMUSD02Y rising and the dollar DXY up 0.4%. Gold GC00 is climbing — both Goldman and UBS lifted their forecasts. Key asset performance Last 5d 1m YTD 1y S&P 500 6114.63 1.47% 1.97% 3.96% 22.16% Nasdaq Composite 20,026.77 2.58% 2.02% 3.71% 26.95% 10-year Treasury 4.513 1.50 -11.70 -6.30 22.89 Gold 2926.1 -0.36% 7.12% 10.87% 44.47% Oil 71.49 -1.35% -6.39% -0.53% -8.63% Data: MarketWatch. Treasury yields change expressed in basis points Intel INTC shares are climbing on a report that Taiwan Semiconductor Manufacturing TSM and Broadcom AVGO are each considering deals for parts of the chip maker's business. Constellation Brands STZ stock is rallying after Warren Buffett's Berkshire Hathaway revealed a new stake via fourth-quarter 13-F filings, and upped stakes in Domino's Pizza DPZ and Pool Corp. POOL. Ulta Beauty ULTA is slipping after it exited the beauty supply group. Shares of several U.S.-listed China tech stocks are higher — Alibaba BABA, PDD PDD, XPeng XPEV, Li Auto LI and NetEase NTES — after President Xi Jinping's rare public meetup with the country's tech entrepreneurs. Baidu BIDU is weaker after reporting falling profits in its core business. Southwest Airlines LUV is cutting 1,750 corporate positions, the first nonvoluntary layoffs in its 53-year history. A Delta Air Lines DAL jet flipped over while landing in snowy Toronto on Monday. All 80 persons aboard survived, with some injuries. Delta shares are slipping. The Empire State manufacturing survey came in stronger than expected, and a U.S. home builder confidence survey is due at 10 a.m. Federal Reserve Gov. Christopher Waller said interest rates should be kept on hold for now. San Francisco Fed President Mary Daly is scheduled to speak on Tuesday. Why Tesla drivers may see higher insurance costs. Investors haven't been this pessimistic about stocks since 2023. There goes my hero. Financial blogger's ode to his late brother. The chart from Bank of America's latest global fund manager survey shows that a speeding up of China growth would be the most bullish development for risk assets in 2025. That's been at the top of the list for global managers since December. AI productivity gains are at No. 2 and Fed rate cuts at No. 3. Also read: Buffett's been hoarding cash. The rest of the market is doing the opposite. These were the top-searched tickers on MarketWatch as of 6 a.m.: Ticker Security name NVDA Nvidia TSLA Tesla GME GameStop PLTR Palantir Technologies SMCI Super Micro Computer TSM Taiwan Semiconductor Manufacturing INTC Intel BABA Alibaba AAPL Apple NIO NIO The hardest-working penguin in the Antarctic. Robotics whiz kid builds limb for three-legged shelter dog. Famed Chinese 'Snow Village' apologizes over cotton-wool pull. Super Micro's stock is its most overbought in a year. Here's why that's bullish. 20 stocks of companies expected to put up numbers to back investors' new 'growth mindset' The biggest U.S. stocks haven't been this expensive since the dot-com era. That's making investors nervous. My friend, 62, may only have weeks to live. How does he prevent his second wife from inheriting everything? 'They are as different as day and night': My son is upset that his brother got more financial support. Now it's payback time. What should I do?
