Latest news with #economicslowdown
Yahoo
5 days ago
- Business
- Yahoo
Select Wall Street Analysts Are Raising Their S&P 500 Targets for 2025. Here's What You Should Do, Based on Decades of History.
President Trump's "Liberation Day" tariffs rocked Wall Street in April, prompting many top analysts to slash their 2025 forecasts for the S&P 500. Two of those analysts reversed course after Trump paused the worst of the tariffs, and a recent court ruling could hold them off indefinitely. History provides a clear playbook for dealing with stock market volatility, and it's simpler than you might think. 10 stocks we like better than S&P 500 Index › The S&P 500 (SNPINDEX: ^GSPC) was down by as much as 19% from its all-time high after President Donald Trump imposed sweeping tariffs on America's trading partners in April. Analysts at almost every top investment firm on Wall Street agreed the tariffs would trigger an economic slowdown, which would dent corporate earnings. As a result, they raced to slash their 2025 price targets for the S&P 500, and some of them even predicted the index would deliver a negative return for the year. But optimism crept back onto Wall Street after Trump quickly paused some of the harsher tariffs. Plus, in another positive turn of events, a ruling by the U.S. Court of International Trade on May 28 suggested the president never had grounds to impose the tariffs at all. This decision was paused by the Federal Circuit Court of Appeals, setting the stage for a legal battle over the next month. The S&P 500 is steadily recovering, and at least two top analysts have partly reversed their recent price target cuts. These swings can be very difficult to navigate, but history provides a very clear playbook for dealing with stock market volatility. Here's what investors should do. Before we dive into where the S&P 500 might go next, let's recap what happened in April, because tariffs probably aren't going away entirely. Trump dubbed April 2 "Liberation Day," and he marked the occasion by announcing a 10% tariff on all imported goods from every country in the world. He also added a series of much higher "reciprocal tariffs" on imports from specific countries that have large trade imbalances with the U.S. Trump paused the reciprocal tariffs for 90 days shortly after April 2 to make way for good-faith negotiations with America's trading partners, but the May 28 ruling by the U.S. Court of International Trade blocked them entirely. They were reinstated a few hours later by the Court of Appeals for the Federal Circuit, which will oversee arguments from the plaintiffs and the government in early June. In other words, there is still a chance the May 28 ruling will stand, potentially setting up an even bigger showdown in the Supreme Court. The May 28 ruling also blocked the sweeping 10% tariffs, but even if this stands, there are other ways for the administration to reinstate them using a different justification. For example, Section 122 of the Trade Act of 1974 could give Trump the authority to impose broad tariffs of up to 15% on imported goods, but they can only remain in place for 150 days (roughly four months). Trump is trying to achieve two main objectives with the trade levies. First, he wants to encourage companies to manufacture more of their products inside America. Second, he wants other countries to lower their trade barriers so U.S. businesses can sell their products into those markets with more freedom. On the first point, it could take years for American companies to move their offshore production back home. Technology analyst Dan Ives from Wedbush Securities predicts Apple might need a full decade to move iPhone manufacturing to the U.S. from its facilities in China, and in the meantime, American consumers would have to suffer under the weight of tariffs, which increase the price of the goods they buy each day. Any reduction in consumer spending would have downstream effects on businesses and supply chains all over the country, which might even lead to a recession. In that scenario, corporate earnings would take a significant hit, which is why analysts were so downbeat on the S&P 500 after April 2. Below is a list of top Wall Street firms and investment banks that slashed their 2025 targets for the S&P 500 on the back of the rising global trade tensions: Oppenheimer cut its S&P 500 target for 2025 from 7,100 to 5,950. Yardeni Research slashed its target from 7,000 to 6,400, and then again to 6,000. Goldman Sachs lowered its estimate from 6,500 to 6,200, and then to 5,700. RBC Capital Markets reduced its forecast from 6,600 to 5,500. Barclays trimmed its target from 6,600 to 5,900. UBS cut its estimate from 6,400 to 5,800. HSBC slashed its target from 6,700 to 5,600. The S&P 500 ended 2024 at a price of 5,881, so the revised targets from Goldman Sachs, RBC Capital Markets, UBS, and HSBC implied a negative return for the index this year. But sentiment has started to turn for the better now that Trump's reciprocal tariffs are on hold, and top analysts at two firms recently increased their S&P 500 targets for this year. In early May, David Kostin and his team at Goldman Sachs lifted their three-month price target to 5,900, and their 12-month target to 6,500. Around the same time, Ed Yardeni from Yardeni Research raised his 2025 target back to 6,500, specifically citing the rollback of Trump's tariffs. The S&P 500 has already climbed back to 5,900 as of this writing, so it's up by a whopping 23% from its April low point. It would still have to climb by another 4% to reclaim its all-time high, but it's certainly trending in the right direction. Here's the bottom line: Market sell-offs and extreme volatility are a normal part of investing. According to Capital Group, corrections of at least 10% occur every two and a half years, on average. Crashes of 20% or more -- which is the technical threshold for a bear market -- happen every six years or so. Investors have weathered four bear markets over the last 25 years alone, triggered by the bursting of the dot-com internet bubble in 2000, the global financial crisis in 2008, the COVID-19 pandemic in 2020, and the inflation surge in 2022. The S&P 500 went on to make new record highs every single time. Steep sell-offs are the price investors pay for the opportunity to earn significant returns over the long run. In fact, the S&P 500 has delivered a compound annual return of 10.3% since it was established in 1957, even after accounting for every sell-off, correction, and bear market. The lesson? Stay the course and focus on the long run. History suggests a market sell-off is more likely to be a buying opportunity than a reason to panic sell. After all, the big swings in Wall Street's price targets this year are proof that even the experts struggle to predict the short-term direction of the stock market. Before you buy stock in S&P 500 Index, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and S&P 500 Index 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 $638,985!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $853,108!* Now, it's worth noting Stock Advisor's total average return is 978% — a market-crushing outperformance compared to 171% 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 May 19, 2025 HSBC Holdings is an advertising partner of Motley Fool Money. Anthony Di Pizio has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple and Goldman Sachs Group. The Motley Fool recommends Barclays Plc and HSBC Holdings. The Motley Fool has a disclosure policy. Select Wall Street Analysts Are Raising Their S&P 500 Targets for 2025. Here's What You Should Do, Based on Decades of History. was originally published by The Motley Fool 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
Globe and Mail
6 days ago
- Business
- Globe and Mail
Can AI Momentum Power Dell Stock Beyond $179 Again?
Shares of Dell Technologies (DELL) hit an all-time high of $179.70 on May 29, 2024. However, the rally didn't last, and the stock has dropped roughly 36% since then, as broader concerns about an economic slowdown and reduced enterprise IT spending rattled investors. While macroeconomic uncertainty persists, Dell's fundamentals remain solid, with the company delivering strong financial results driven by artificial intelligence (AI) demand. Moreover, Dell stock is trading at a compelling valuation, which will likely support its share price. Let's take a closer look. AI Demand: Dell's Growth Engine Dell's recent quarterly earnings reflect the strength of the AI tailwind for the company. In its first quarter of fiscal 2026, Dell's Infrastructure Solutions Group's (ISG) revenue was $10.3 billion, up 12%. The company witnessed significant demand for AI servers. Thanks to the solid demand trends, Dell's earnings per share (EPS) of $1.55 jumped about 17% year-over-year, much faster than its revenue growth rate. The company recorded $12.1 billion in AI-related orders during the quarter, which was more than what it shipped in the entire previous fiscal year. Actual shipments for the quarter came in at $1.8 billion, leaving Dell with a significant backlog of $14.4 billion. Notably, demand is showing no signs of slowing, with a solid and growing pipeline across cloud service providers and enterprise customers in multiple sectors. While Dell is seeing solid demand, the company is rapidly deploying large-scale AI server clusters, supporting its growth. Dell's end-to-end support services, including managed services and flexible financing options, enable customers to scale their AI infrastructure and, in turn, drive the company's financials. Looking ahead, Dell is doubling down on AI. It's enhancing its AI Factory approach, providing the compute, storage, networking, and software foundation needed to power next-gen AI applications. Innovations span from AI-capable PCs to cutting-edge data center platforms. Over the past quarter alone, Dell has expanded its portfolio with Copilot+ capable AI PCs, upgraded notebooks and desktops powered by Nvidia's (NVDA) RTX Pro Blackwell GPUs, and new Intel (INTC) and Advanced Micro Devices (AMD) processors. On the server side, Dell is expanding with air-cooled and liquid-cooled platforms designed to reduce energy costs and enhance performance in AI-intensive environments. The company's new AI Data Platform is another growth catalyst. Dell is offering high-speed, scalable storage solutions and advanced software integrations that will support future financial growth. Further, Dell's growing network of partners is another strategic advantage. Collaborations with tech leaders to bring AI models on-premises and simplify on-premises deployment of agentic AI is strengthening its position in the AI space. Dell is also innovating in the private cloud segment, introducing platforms that make it easier for enterprises to deploy and manage AI workloads efficiently. These initiatives will ultimately drive Dell's revenue and earnings, supporting its share price. Dell Stock Trades at Attractive Valuation While Dell is consistently delivering solid financials and is poised to benefit from strong AI demand, its stock is still trading at a very reasonable valuation. Dell stock has a forward P/E ratio of just 13.7x, and its price-sales (P/S) ratio sits at 0.83x. For a company growing as quickly as Dell, those numbers are hard to ignore. Since FY21, the company's earnings per share (EPS) have grown at a compound annual growth rate (CAGR) of 14%. Moreover, the company's management projects FY26 adjusted EPS to increase by 15%. Its reasonable valuation, double-digit earnings growth rate, and AI tailwinds suggest further upside in DELL stock. Here's What Analysts Recommend for Dell Stock Wall Street analysts remain optimistic about Dell's future and have a "Strong Buy" consensus rating. The average price target of $131.87 suggests 16% upside from current levels. Moreover, the Street-high price target of $155 represents a 37% potential gain from current levels. Can Dell Stock Surpass $179? With strong financials, double-digit earnings growth, and a foothold in the high-growth AI space (with $14.4 billion in backlog) — all at a reasonable valuation — Dell stock has plenty of room to run and could very well reclaim and surpass its previous high of $179.70.
Bloomberg
29-05-2025
- Business
- Bloomberg
Positive Returns Possible, But Volatile: Shah
Seema Shah, chief global strategist at Principal Asset Management, discusses the market reaction after a US court blocked the bulk of President Donald Trump's import tariffs. "I don't think this is the end of the tariff story," she tells Bloomberg Television. Shah says she expects "an economic slowdown" but not a recession. "You can still get positive returns this year. It's just going to be something which is fairly volatile, very erratic, but it will be an upward-sloping move in the end." (Source: Bloomberg)
Independent Singapore
23-05-2025
- Business
- Independent Singapore
SME Association warns some Singapore firms could enter ‘life support mode' as US tariff pause nears end
SINGAPORE: Some Singapore firms could go into 'life support mode' once the 90-day pause on sweeping U.S. tariffs announced by U.S. President Donald Trump in April ends, Channel News Asia (CNA) reported, citing the Association of Small and Medium Enterprises (ASME). The association also said that some firms are already shelving their expansion plans amid the crippling tariffs from the United States and the global economic slowdown. ASME president Ang Yuit told CNA that if businesses are impacted, 'They will go on life saving and life support mode and minimise expenses.' He also mentioned that although overall interest rates have dropped slightly, they are 'still not low' enough to make borrowing easy for SMEs. Because of this, 'Many are still a bit reluctant to apply for loan or working capital, unless they really have no choice,' he said. CNA reported that Funding Societies, a non-bank lender that offers short-term financing of one to 12 months, reported a 15% decrease in loan requests from March to April. Several months before the dip, loan requests had been steadily going up. While the non-bank lender does not expect a wave of bankruptcies, it noted that it's closely watching red flags. Funding Societies CEO and co-founder Kelvin Teo said, 'Other bank and non-bank lenders have also started tightening within this segment preemptively and similarly for us, we also have additional scrutiny of borrowers that have supply chains that could potentially be impacted by selling to the U.S.,' adding that many SMEs are recalibrating their business strategy. He said that in the short term, things are fine, but in the medium term, if cash flow starts to drop or liabilities begin to rise, they will have to take action. ASME said companies need to start considering what might happen when the U.S. tariff pause ends and the likelihood of a shift in the global trading system. The association also called for more government support to help SMEs enter new markets and build a bigger supply chain network. Last week, Deputy Prime Minister Gan Kim Yong said the government is in talks with banks to improve financing options for local companies after they raised concerns about delayed or cancelled orders and not receiving payment from their customers amid trade tensions. He added that if needed, new support schemes could be rolled out to help companies address their specific areas of concern. /TISG Read also: Malaysia to strengthen anti-dumping law to protect local SMEs from China's flood of cheap goods
CNA
22-05-2025
- Business
- CNA
Some Singapore firms could go on ‘life support mode' amid crippling US tariffs, says SME association
SINGAPORE: Some Singapore companies are shelving expansion plans amid crippling United States tariffs and a global economic slowdown, while others could go on 'life support mode', said the Association of Small and Medium Enterprises (ASME). Businesses are bracing for uncertainty once a 90-day pause on sweeping tariffs announced by US President Donald Trump in April ends. 'If they are impacted, they will go on life saving and life support mode and minimise expenses,' ASME president Ang Yuit told CNA. 'They will have to try out a pivot, and it ranges from case to case.' CASH FLOW INSTABILITY Mr Ang said that while overall interest rates have come down slightly, leading to less intense loan repayments, they are 'still not low'. 'So I think for SMEs, many are still a bit reluctant to apply for loan or working capital at this point, unless they really have no choice,' he noted. Non-bank lender Funding Societies told CNA that it has seen a 15 per cent dip in loan requests and submissions from March to April. Before the drop, loan applications were steadily rising for several months. The financial institution said firms are hesitant to take on loans as they reconsider their cash flows to stay afloat. It specialises in short-term financing ranging from one to 12 months. While it does not expect a wave of bankruptcies, it is watching closely for any red flags. 'Other bank and non-bank lenders have also started tightening within this segment preemptively and similarly for us, we also have additional scrutiny of borrowers that have supply chains that could potentially be impacted by selling to the US,' said Kelvin Teo, group CEO and co-founder of Funding Societies. He added that many SMEs are recalibrating their business strategy. 'I think in the short term, we are fine. In the medium term, once we start seeing the cash flow level to drop or liabilities to increase, then we will have to start taking measures to manage our exposure.' MORE GOVERNMENT SUPPORT NEEDED With less than half of the 90-day pause in US tariffs to go, the ASME said firms need to consider what happens after, including the likely reconfiguration of the global trading system. The association also called for more government support to help SMEs enter new markets and integrate into a bigger supply chain network. Skincare product company Theo10, for instance, has postponed its business growth plans and moved funds into purchasing more supplies. The firm - which makes skincare products such as eczema creams and body washes - sources its materials from around the world, including Australia, the US and China. When the US announced sweeping tariffs in April, the prices of such material shot up by as much as 30 per cent overnight, said the company's director Theodore Khng. He said the firm increased its bulk purchases when suppliers warned of a possible price hike after US President Trump secured a return to the White House. 'We had lesser cash flow for us to expand regionally, even though it was in the works,' Mr Khng added. 'We felt that securing our supply chain and the logistics issue was more pressing, rather than expansion, especially considering how unpredictable the issue may be.' As tariff fears mounted and consumers tightened their spending, the company's sales also fell by 15 per cent. This is despite efforts to entice customers with discounts. Mr Khng said the situation has pushed its cash flow levels down to a 'super thin line'. 'We do have reserves, but even our reserves are quite badly affected by the tariff news and all the uncertain economic moves,' he added. 'If we stretch a little bit more, it's a very dangerous game for us to play.'
