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Axios
21 hours ago
- Business
- Axios
Investors risk 1999-like bubble and 2000s-era crash
While the market is partying like it's 1999, investors would be smart to remember what came next: the 2000 dotcom bubble, when stock prices rose substantially above underlying asset values, resulting in a market crash. Why it matters: Wall Street analysts are increasingly noting signals of a bubble, as stocks are priced to perfection while uncertainty remains on the political and economic fronts. By the numbers: The Nasdaq 100 has gone 60 trading days without closing below its 20-day moving average, according to financial services firm BTIG. That's the second-longest streak in history. The longest streak ended in early 1999 and, as noted above, a crash followed. It's worth noting the S&P 500 is currently trading at 26 times forward earnings, which is above the historic average of 18. Between the lines: Investor activity on volatile stocks is a "red flag for the broader market," according to a research note from J.P. Morgan. Investors are buying highly volatile stocks — with the greatest upside and the largest downside risk — at the fastest rate in 30 years. This is driven by markets "pricing in a goldilocks outcome," per the note. J.P. Morgan analysts are saying investors should sell into this unbridled enthusiasm for high-beta stocks specifically. The intrigue: Sky-high valuations put stocks at risk, especially if there's an economic slowdown. The second half of 2025 is looking "pretty soft", Bob Elliott, chief investment officer at Unlimited Funds, wrote on Substack. "The slew of hard data released over the last couple weeks confirms a broad based slowing of the US economy," he wrote. Yes, but: As the big banks recently made clear in their quarterly earnings, there are not signs of much slowing when you look at how consumers are spending. Bank of America analysts do not predict a recession this year, thanks to continued resiliency among consumers. Be smart: In 1999, tech stock darling Cisco was priced at 200 times earnings. Today, a similar market darling, Nvidia, is priced at under 40 times earnings. The market may not be at the bubble yet, but the risks are mounting. The bottom line: Strategists from J.P. Morgan and RBC to HSBC told Axios that clients are increasingly focused on 2026 and hoping the uncertainty in 2025 works itself out.
CNBC
7 days ago
- Business
- CNBC
Why defensive names and bitcoin could be solid plays over the next six months
It may be a strategic time to pivot away from this year's Big Tech winners. Bob Elliott, who runs Unlimited Funds, suggests building portfolios designed to withstand a slowing economy over the next six months should be a priority. "You're talking about positions long bonds, long gold and short the U.S. dollar," the firm's CEO and chief investment officer told "ETF Edge" this week. "That's a very non-consensus view that is also favored by some of the smartest financial minds in the world [and] in the hedge fund community." Elliott's firm Unlimited Funds uses proprietary technology to create accessible alternative investment strategies, including four Unlimited ETFs. According to Elliott, stock and bond market investors are pricing in a near-perfect scenario over the short and medium term. He thinks President Donald Trump's tariffs and an inflation acceleration could expose market vulnerabilities. "Being able to flexibly respond to the policy environment as it evolves... is really important in terms of building a portfolio and getting away from the long-only mega cap tech stock mindset and get to something that's flexible that can navigate through this sort of environment," said Elliott. Meanwhile, Strategas Securities' Todd Sohn thinks underperformers have potential for upside as earnings season gets underway. "The bar is so low for some of these defensive companies," the firm's technical strategist said in the same interview – noting it's "basement bottom pickings." Sohn's contrarian ideas include health care. "There's been a mass exodus of outflows from health care sector ETFs," he said. "Folks are scared of the administration. I get that, but I wonder if you can start to nibble in certain areas." Sohn also finds bitcoin an attractive play right now. The House of Representatives is looking at a series of bills tied to cryptocurrencies this week. "We're about three months off the S&P 500 low back on April 8. The leading category, I like to dig a little level deeper here, has been crypto. Investors are just latching on to this move in crypto," he said. "I think investors are realizing it's an asset that's here to stay." After hitting an all-time high on Monday, bitcoin fell and was below $117,000 as of Tuesday evening.
Axios
08-07-2025
- Business
- Axios
The paradox of Trump's tariff policy
U.S. trade policy has entered the great in-between, a liminal state in which high tariffs on major trading partners are ostensibly imminent, yet also forever just over the next horizon. Why it matters: The good news for American consumers and businesses is that potential price shocks and other disruptions from an all-out global trade war remain at bay — and Wall Street is taking this confusing landscape in stride. The bad news is it's hardly the kind of policy landscape conducive to companies making long-term investments. State of play: With a much-balleyhooed 90-day negotiation period set to expire Wednesday, President Trump issued a slew of letters announcing new tariffs on major trading partners that are close to those originally announced on the April 2 "Liberation Day." The most economically consequential are 25% tariffs on imports from Japan and South Korea, major trading partners and traditional geopolitical allies. But they are not set to go into effect until Aug. 1, three weeks away. Driving the news: On Tuesday morning, Trump insisted that the onset of higher tariffs is real this time, suggesting it's not just a negotiating feint. "TARIFFS WILL START BEING PAID ON AUGUST 1, 2025. There has been no change to this date, and there will be no change," he wrote on Truth Social. "No extensions will be granted," he added. Zoom in: Markets have largely shrugged off those threats, betting that Trump envisions further deal-making — and, implicitly, further punting of tariffs — ahead. Stock, bond, and currency markets have seen only modest moves on the news, in contrast to their early April sell-off. Meanwhile, inflation data came in soft for April and May, contrary to warnings from business leaders and economists that tariff-fueled price spikes and shortages could loom. Between the lines: The combination of a booming stock market and lack of evident economic damage from the earlier rollout of tariffs seems to have empowered Trump to keep pushing tariff talk, rather than strike quick deals and move on. What they're saying: These are, as Bob Elliott of Unlimited Funds wrote, "Schrodinger's Tariffs," simultaneously alive and dead. The administration "has had room to swing back to a more aggressive policy stance on the trade war because so far the effects are not being felt significantly across the economy," he wrote in his newsletter, Nonconsensus. "But a big reason why there has been no impact here is simply because it's taking time to ramp up the prospective tariff collection, and that then is taking time to flow into the real economy given normal lags," Elliott argued. The fact that negotiations with countries like Japan and South Korea were at such a stalemate that Trump has reignited the trade war is a sign of a new normal. "At a very basic level, nothing actually happened based on Trump sending these letters, so there's no reason to panic over headlines," wrote Tobin Marcus at Wolfe Research in a note. "But we think these moves do contain some signal about where the trade war is heading, and that signal is mostly hawkish," he added. By the numbers: If the tariffs announced Monday go into effect and remain in place, it would translate to a 17.6% average effective tariff rate on U.S. imports, the Yale Budget Lab estimates, the highest since 1934. That's up from 15.8% previously and up from 2.4% as of January. If sustained, the currently announced tariff regime would translate to a 1.7% rise in consumer prices, costing the average household $2,300 per year, per the Yale Budget Lab. The bottom line: There is good reason to believe Trump's latest letters to trading partners are a negotiating strategy, but the fact that they exist is a warning sign about the new global trade landscape.
CNBC
16-05-2025
- Business
- CNBC
AI is the big story that got pushed aside amid tariff uncertainty, says Truist Wealth's Keith Lerner
Bob Elliott, Unlimited Funds CEO, and Keith Lerner, Truist Wealth co-chief investment officer, join 'Closing Bell Overtime' to discuss this week's market action, how tariff uncertainty affected the market, and more.
Yahoo
21-04-2025
- Business
- Yahoo
HFGM: Ex-Bridgewater Exec's New Global Macro Hedge Fund ETF
Unlimited Funds, a private markets investment firm co-founded by Bob Elliott, a former senior investment executive of Bridgewater Associates, recently introduced a new exchange-traded fund to give investors exposure to global macro hedge fund-style strategies. The actively managed Unlimited HFGM Global Macro ETF (HFGM) is 'dynamically allocating capital long and short across a wide range of global market opportunities in search of mispricing,' according to a press release issued last week. It uses liquid exchange-listed futures contracts and a basket of exchange-traded funds based upon systematic signals and aims to offer diversification benefits by adjusting positions based on evolving market conditions. The expense ratio is 1%. "With the amount of uncertainty in both the stock and bond markets right now, and for the foreseeable future, investors of all types are looking for strategies that have the flexibility to go long and short across major asset classes, providing diversification to traditional long-only positions,' Elliott told 'Global macro strategies have traditionally achieved that." The launch of HFGM is the latest move from Unlimited to offer investors access to hedge fund-style strategies without the high fees and tax inefficiencies that can often come with this type of investing and erode performance. The firm also introduced the Unlimited HFND Multi-Strategy Return Tracker ETF (HFND) in 2022. The firm plans to launch 'several' new actively managed ETFs over the coming months, according to the press release. These include two strategies that have been approved by the Securities and Exchange Commission with launch plans in the works for later this year: the Unlimited HFMF Managed Futures ETF and the Unlimited HFEQ Equity Long/Short ETF. The aim of HFGM is to capitalize on global market mispricing opportunities spanning currency, fixed-income, equity, credit and exchange rate markets, according to the release. Macro strategies can offer meaningful diversification benefits, particularly during periods of elevated market volatility and uncertainty, Rob Kane, director of alternative investments on the Investment Management and Research team at Commonwealth Financial Network, told These environments often prompt decisive action from major market influencers—most notably, central banks—which can create trading opportunities across asset classes, he added. 'To capitalize on these dynamics, successful macro managers typically rely on either an informational edge or a strong ability to anticipate how policy decisions and macroeconomic shifts will impact markets, leading to opportunistic long and/or short positioning,' Kane said. He added that, while his firm hasn't fully analyzed HFGM, 'Investors should recognize that this ETF does not invest directly in underlying hedge fund managers.' Rather, it seeks to replicate positioning by analyzing and decomposing return drivers, risk exposures and portfolio characteristics. 'The strategy also targets a higher level of volatility, helping to align its return potential with that of the hedge fund managers it aims to emulate—many of whom use substantial leverage in executing macro strategies.'Permalink | © Copyright 2025 All rights reserved
