Latest news with #VenuKrishna
CNBC
3 days ago
- Business
- CNBC
May jobs report, tariffs will rise to top of mind next week after comeback rally
Whether the stock market can sustain its big comeback next week will hinge in large part on the employment picture, with investors counting on resilient consumer spending to prop up an economy that's undergoing a massive upheaval from tariffs. Stocks have staged a rapid turnaround this month, with the S & P 500 rallying nearly 6% and the tech-heavy Nasdaq Composite climbing almost 9%. Tech stocks stocks tied to artificial intelligence especially benefited. Nvidia 's strong results this week added to renewed confidence in the sector, helping to drive up the chipmaker more than 23% in May alone . Still, there is concern that investors may be starting to get too complacent at a time when the S & P 500 looks priced for perfection. The broad market index is now trading at a forward price-to-earnings multiple of roughly 21, about where it was at the start of the year when investors worried that lofty valuations meant a pullback was in the offing. "While our own view is that recession risks have moderated since April, equities could still be getting complacent here considering EPS estimates are still getting marked down, the May rally likely got an assist from systematic/technical tailwinds, rates remain high, jobless claims are rising, and the tariff picture remains uncertain despite some recent risk-on headlines," Venu Krishna, head of U.S. equity-linked strategies at Barclays, said in a note. Ramped up tensions What's more, trade tensions are also ramping up again. The stock rally this month was driven in large part by the preliminary trade deal between the U.S. and China just two weeks ago, which reassured investors the worst of the tariff conflict may be in the past. On Friday, however, President Donald Trump revived fears of an extended trade war, saying China had reneged on their agreement. Nevertheless, Krishna said the stock market has looked past macroeconomic concerns before. In 2023, U.S. equities continued their upward ascent despite surging interest rates that led to a chorus of recession calls sounding from all corners of Wall Street. It was a demonstration of the stock market's "willingness to continue looking through macro distortions in the post-Covid era," Krishna said. Much of the reason investors appear willing to look past the macroeconomic challenges lies in the strength of the consumer, whose spending accounts for two thirds of the economy and which has powered forward even as sentiment tanked around Trump's tariffs. That has put greater attention on the employment data, with investors fearful that upcoming reports will start to show consumers and businesses crumbling under the weight of tariffs. Economists polled by FactSet expect the May jobs report next week will show the U.S. economy added just 125,000 jobs last month, down from the 177,000 jobs added n April. An in-line or stronger-than-expected result could be taken in stride by the stock market, while a miss on the consensus estimate could spook investors. For the time being, many investors remain optimistic. They expect a recession could be averted, even if a slowdown is inevitable, as both consumers and companies have so far weathered the tariff uncertainty better than was expected. Tight labor market "It's still a pretty tight labor market," said Anthony Saglimbene, chief market strategist at Ameriprise Financial. "Employers have been unwilling to shed employees, even if they're uncertain about the future, because they lived through the pandemic, and understood how hard it was to hire back and get qualified workers." "And so, the expectation is that, and we'll see this week, our labor market's holding up," Saglimbene added. Still, economists worry tariffs are slowly making their impact felt. EY-Parthenon chief economist Gregory Daco said that durable goods spending fell in the latest April personal income and outlays data, while the personal savings rate rose. "Tariffs had begun to take hold — but their full impact had yet to materialize," Daco wrote. "With employment growth slowing, income gains moderating and the inflationary effects of tariffs building, households are likely to become more cautious in the months ahead." "The Fed and Chair Powell deserve credit for guiding the economy to this point," Daco added. "But any summer celebration may be premature: a tariff-induced inflation storm is on the horizon." Fresh trade aggression Tariffs will continue to be top of mind for investors in the week ahead, especially after a federal court this week halted the majority of the administration's tariffs, only to be reversed by an appeals court granting a stay that allowed the levies to remain in place until next week. Investors worry the legal concerns only inject further uncertainty into tariff policy, especially if the Trump administration finds workarounds to put levies in place that could spur more trade aggression from the U.S. and retaliation abroad. Others worry that investors betting on the TACO trade, a term coined by the Financial Times standing for "Trump Always Chickens Out" on trade deals, could be a dangerous assumption. "We might actually get aggression where the market was anticipating we wouldn't, because [Trump] can't do exactly what he wanted to do with tariffs in the first place," Ameriprise's Saglimbene said. Week ahead calendar All times ET. Monday, June 2 9:45 a.m. S & P PMI Manufacturing final (May) 10 a.m. Construction Spending (May) 10 a.m. ISM Manufacturing (April) Earnings: The Campbell's Co. Tuesday, June 3 10 a.m. Durable Orders final (April) 10 a.m. Factory Orders (April) 10 a.m. JOLTS Job Openings (May) Earnings: Hewlett Packard Enterprise , CrowdStrike Holdings , Dollar General Wednesday, June 4 9:45 a.m. PMI Composite final (May) 9:45 a.m. S & P PMI Services final (May) 10 a.m. ISM Services PMI (May) 2 p.m. Fed Beige Book Earnings: Dollar Tree Thursday, June 5 8:30 a.m. Continuing Jobless Claims (05/24) 8:30 a.m. Initial Claims (05/31) 8:30 a.m. Unit Labor Costs final (Q1) 8:30 a.m. Productivity final (Q1) 8:30 a.m. Trade Balance (April) Earnings: Broadcom , Brown-Forman , Fastenal Friday, June 6 8:30 a.m. Hourly Earnings preliminary (May) 8:30 a.m. Average Workweek preliminary (May) 8:30 a.m. Manufacturing Payrolls (May) 8:30 a.m. Nonfarm Payrolls (May) 8:30 a.m. Participation Rate (May) 8:30 a.m. Private Nonfarm Payrolls (May) 8:30 a.m. Unemployment Rate (May) 3:00 p.m. Consumer Credit (April)
CNBC
21-05-2025
- Business
- CNBC
Barclays' Venu Krishna: The coming quarters are likely to be weaker compared to recent strength
Venu Krishna, Barclays head of U.S. equity linked strategies, joins CNBC's 'Squawk on the Street' to discuss market outlooks, whether a weaker dollar could be an unexpected tailwind for earnings, and more.
Yahoo
28-03-2025
- Business
- Yahoo
Wall Street is cooling on stocks — but it still likes the 'Magnificent 7'
A growing number of Wall Street strategists are lowering their S&P forecasts for the year. What hasn't been a feature in many of these calls is a more bearish outlook for the "Magnificent Seven" and Big Tech more broadly. This stands out given that bullishness on tech and artificial intelligence drove S&P 500 targets higher over the past two years and has also led to the recent 10% correction in the benchmark index. "Elevated capex is a clear and present risk amid ongoing concerns around AI monetization, but [Big Tech] valuations are the most reasonable in almost two years after the group led the recent selloff, and we think they will still deliver solid earnings growth this year," Barclays head of US equity strategy Venu Krishna wrote in a note cutting his year-end S&P 500 target to 5,900 from 6,600. Krishna, like many on Wall Street, expects that slower economic growth and higher inflation will weigh on stocks. An unwinding of the AI hype trade has been at the forefront of the past month's sell-off. For instance, on Wednesday, as more news on tariffs shook stocks, shares of Nvidia (NVDA), Tesla (TSLA), Alphabet (GOOG, GOOGL), Amazon (AMZN), Meta (META), and Microsoft (MSFT) all fell more than the S&P 500's 1.3% decline. Even Apple (AAPL), which has held steadier than the rest of its Magnificent Seven cohort, fell roughly 15% off its most recent all-time high. Big Tech has faced growing investor criticism about its ballooning AI spend and whether or not it will eventually turn into future profits. The year also included a massive drawdown in some large tech names, including Nvidia, following the release of a cheaper AI model from Chinese company DeepSeek. But with fears of a broader economic slowdown swirling, strategists have argued that Big Tech's steady earnings growth and cash-filled balance sheets could make it a place to hide as policy uncertainty comes to the forefront during upcoming earnings reports over the next two months. Citi US equity strategist Scott Chronert told Yahoo Finance that when comparing valuations across their 20-year average, the seven tech stocks are actually now "cheaper" than the other 493 stocks in the S&P. "We think their fundamentals are in pretty good shape in terms of expected growth trajectories for this year," Chronert told Yahoo Finance. "We're not sure we can say that about the rest of the index as we go through tariffs and as we go through signs of economic sluggishness. So, all told, our view here is that the megacap growth cohort, led by the Mag Seven, takes on a little bit more of a growth-as-defensive bias as we go into the quarterly reporting period." Morgan Stanley's Mike Wilson wrote in a note to clients on Sunday that the weakening US dollar — which could help US-centric companies this earnings season — and stabilizing earnings revisions for the Magnificent Seven could help bring investor flows back to US stocks. "The most notable change here is that Mag 7 earnings revisions look to be stabilizing and potentially bottoming around 0%," Wilson wrote. "This could halt the underperformance of these mega cap stocks in the near term as we head into earnings season." Josh Schafer is a reporter for Yahoo Finance. Follow him on X @_joshschafer.
Yahoo
27-03-2025
- Business
- Yahoo
Wall Street is cooling on stocks — but it still likes the 'Magnificent 7'
A growing number of Wall Street strategists are lowering their S&P forecasts for the year. What hasn't been a feature in many of these calls is a more bearish outlook for the "Magnificent Seven" and Big Tech more broadly. This stands out given that bullishness on tech and artificial intelligence drove S&P 500 targets higher over the past two years and has also led to the recent 10% correction in the benchmark index. "Elevated capex is a clear and present risk amid ongoing concerns around AI monetization, but [Big Tech] valuations are the most reasonable in almost two years after the group led the recent selloff, and we think they will still deliver solid earnings growth this year," Barclays head of US equity strategy Venu Krishna wrote in a note cutting his year-end S&P 500 target to 5,900 from 6,600. Krishna, like many on Wall Street, expects that slower economic growth and higher inflation will weigh on stocks. An unwinding of the AI hype trade has been at the forefront of the past month's sell-off. For instance, on Wednesday, as more news on tariffs shook stocks, shares of Nvidia (NVDA), Tesla (TSLA), Alphabet (GOOG, GOOGL), Amazon (AMZN), Meta (META), and Microsoft (MSFT) all fell more than the S&P 500's 1.3% decline. Even Apple (AAPL), which has held steadier than the rest of its Magnificent Seven cohort, fell roughly 15% off its most recent all-time high. Big Tech has faced growing investor criticism about its ballooning AI spend and whether or not it will eventually turn into future profits. The year also included a massive drawdown in some large tech names, including Nvidia, following the release of a cheaper AI model from Chinese company DeepSeek. But with fears of a broader economic slowdown swirling, strategists have argued that Big Tech's steady earnings growth and cash-filled balance sheets could make it a place to hide as policy uncertainty comes to the forefront during upcoming earnings reports over the next two months. Citi US equity strategist Scott Chronert told Yahoo Finance that when comparing valuations across their 20-year average, the seven tech stocks are actually now "cheaper" than the other 493 stocks in the S&P. "We think their fundamentals are in pretty good shape in terms of expected growth trajectories for this year," Chronert told Yahoo Finance. "We're not sure we can say that about the rest of the index as we go through tariffs and as we go through signs of economic sluggishness. So, all told, our view here is that the megacap growth cohort, led by the Mag Seven, takes on a little bit more of a growth-as-defensive bias as we go into the quarterly reporting period." Morgan Stanley's Mike Wilson wrote in a note to clients on Sunday that the weakening US dollar — which could help US-centric companies this earnings season — and stabilizing earnings revisions for the Magnificent Seven could help bring investor flows back to US stocks. "The most notable change here is that Mag 7 earnings revisions look to be stabilizing and potentially bottoming around 0%," Wilson wrote. "This could halt the underperformance of these mega cap stocks in the near term as we head into earnings season." Josh Schafer is a reporter for Yahoo Finance. Follow him on X @_joshschafer.
Globe and Mail
26-03-2025
- Business
- Globe and Mail
Barclays (BCS) Drops Its S&P 500 Target to the Lowest Level on Wall Street
You can place Barclays Bank (BCS) firmly in the bear camp. Light Up your Portfolio with Spark: Easily identify stocks' risks and opportunities. Discover stocks' market position with detailed competitor analyses. The British lender has cut its year-end target on the benchmark S&P 500 index to the lowest level on Wall Street. Analyst Venu Krishna has lowered his 2025 S&P 500 target to 5,900 from 6,600, citing rising global trade tensions as a major risk to stock gains this year. Barclay's revised target implies that the S&P 500 will finish the year only 0.3% higher than where it began in January. The bank's forecast is now the lowest outlook for the S&P 500 among increasingly bearish Wall Street firms, many of which have also ratcheted down their year-end targets. More Tariffs Barclays gloomy downgrade comes as the U.S. prepares to impose more tariffs on goods imported from key trading partners such as Canada, Mexico and China. The White House is expected to announce what U.S. President Donald Trump calls 'reciprocal tariffs' on other countries April 2. He is also expected to announce new tariffs on automotive imports as early as March 26. Barclays points to a recent survey that shows consumers and investors are growing increasingly concerned over the U.S. economic outlook. 'Our base case assumes that earnings take a hit as tariffs contribute to material slowing in U.S. activity that nonetheless stops short of outright recession,' wrote Krishna. The S&P 500 has been see-sawing between gains and losses over the last month, losing a total of 3% since the end of February. The index also dipped into correction territory, briefly trading more than 10% below its record high before recovering somewhat. BCS stock has risen 23% so far this year. Is BCS Stock a Buy? Not enough analysts rate the U.S.-listed shares of Barclays bank. So instead we'll look at the three-month performance of the company's stock. As one can see in the chart below, BCS stock has gained 23.37% over the last 12 weeks.
