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1.

Why the Invesco QQQ ETF Gained 10.6% in January

2023-02-01 21:11:03 by Dave Kovaleski, The Motley Fool from Motley Fool

The Invesco QQQ Trust (NASDAQ: QQQ) got off to a good start in 2023, as the exchange-traded fund (ETF) finished the month of January up 10.6%, according to S&P Global Market Intelligence. The Invesco QQQ is one of the most popular ETFs in the world, with $156 billion in assets under management. It is a fund that tracks the performance of the Nasdaq 100, which includes the approximately 100 largest stocks on the Nasdaq Stock Exchange, not including financial stocks.


2.

Stock ETFs Rise After Fed’s First Rate Hike of 2023

2023-02-01 20:30:00 by Shubham Saharan from ETF.com

Stock exchange-traded funds rose after the Federal Reserve’s anticipated 25 basis point hike, as Fed Chairman Jerome Powell suggested the bank’s eighth straight increase is blunting soaring inflation. 

“We can say the disinflationary process has started,” Powell said during a press conference after the rate hike was announced, adding that more increases are coming. “The job is not fully done.” 

The SPDR S&P 500 ETF Trust (SPY), which tracks the S&P 500 index, pared earlier losses and jumped 1.1% after the Fed’s announcement. The Invesco QQQ Trust (QQQ), which follows the top 100 Nasdaq stocks, rose 2.1%, adding to the gains that led to the best January for the index in over 20 years. The Dow Jones 30 ETF, the SPDR Dow Jones Industrial Average ETF Trust (DIA), posted muted gains, inching 0.1% higher. 

The rate increase was the latest in a series that began in March, and brings the federal funds rate between 4.5% and 4.75%. It was half of the last hike, a 50 basis point boost in December, and far smaller than four back-to-back 75 basis point increases before that.  

Powell added that the committee anticipates that heightened interest rates would be maintained “for some time” and that the central bank remains committed to return inflation to 2% from the 6.5% current rate announced in December by the Labor Department. 

“It will not be appropriate to cut rates this year,” he said. 

Meanwhile, the yield on the policy-sensitive two-year Treasury note dipped 11 basis points to 4.1%, resting under the current fed funds rate.  

Still, Powell continued to warn of one of the prime concerns the U.S. economy faces before the Federal Reserve begins easing rates: an unyielding labor market.  

“The labor market continues to be out of balance,” Powell said, pointing to the economy’s inability to fill job vacancies as fewer people enter the job market. “The job openings number has been quite volatile.”  

U.S. job openings increased to 11 million in December, according to the Labor Department’s Job Openings and Labor Turnover Survey released Wednesday. That exceeded both Bloomberg-polled analyst expectations of 10.3 million vacancies for the month, and the 10.4 million job openings in November 2022.  

"One of the big questions for the job market this year will be the extent to which the Federal Reserve’s rate raising campaign causes a rise in joblessness and a further slowdown in hiring,” said Mark Hamrick, senior economic analyst at Bankrate.com, in a note to ETF.com.  

“The central bank can only address the demand side of the equation by imposing a virtual tax on the economy through rate hikes,” he added. 

Global events like Russia’s invasion of Ukraine are also weighing on the Fed’s decisions, bankers noted.  

“Russia's war against Ukraine is causing tremendous human and economic hardship and is contributing to elevated global uncertainty,” Federal Open Market Committee participants wrote in the statement announcing the rate increases. 

 

Contact Shubham Saharanatshubham.saharan@etf.com       

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3.

Stocks move higher, Nasdaq on pace for best January since 2001

2023-01-31 20:14:26 by Yahoo Finance Video

Yahoo Finance's Seana Smith breaks down how stocks are moving on Tuesday afternoon. 


4.

Stock market: 3 expert observations about January 2023's spirited move

2023-01-31 11:39:54 by Brian Sozzi from Yahoo Finance

Investors have had a slew of downbeat headlines to kick off 2023. 

Eye-popping layoff news from tech stalwarts Amazon, Microsoft, Salesforce and 3M. Chip giant Intel reported another tough outlook amid a major slowdown in PC demand. Ford and Tesla slashing prices on EVs as the economy has cooled. Signs that inflation continues to slow — but not at such a rapid pace as to suggest rate cuts from the Federal Reserve later this year. Earnings are meh.

And yet stocks are off to a surprisingly solid start to the year

As of this writing, the Nasdaq Composite has posted a nearly 9% gain so far in 2023, per Yahoo Finance data. The S&P 500 and Dow Jones Industrial Average have clocked in with 4.65% and 1.7% advances, respectively. 

It's unclear if January will be as good as it gets for stocks this year or the party will continue — in any case, the action has been interesting to watch. Here are a few interesting stats from 2023 served up by astute market strategist Keith Lerner at Truist:

1. Investors are feeling the forgotten.

The 50 worst-performing stocks of 2022 are up an average of 20.1% so far this year, according to Lerner's research. The 50 best-performing stocks from last year, meanwhile, are up an average of only 1.9%. 

"We view this as most likely a short-term reversion of oversold stocks as opposed to new market leadership or a fundamental shift," Lerner says.

2. Investors pump up PEs.

Analyst earnings estimates for the S&P 500 have ticked down to an 11-month low, Lerner noted. So, the advance in stocks has been fueled by rising price-to-earnings multiples — likely on the hope the Fed halts its rate hikes mid-year. 

The S&P 500’s forward PE ratio has jumped back to 17.9 times, near the peak level of 18.0x-18.5x it traded to over the past decade outside of the pandemic highs.

"While this is typical during the early stages of a new bull market, since prices tend to advance well before earnings and the economy turn up, we remain skeptical," Lerner wrote. "Our view is investors, as reflected in rising valuations, are placing too high of a probability on a soft economic landing and leaving little margin for error."

Competitors drive their homemade vehicle without an engine during the Red Bull Soapbox Race in Almaty, Kazakhstan September 11, 2022. REUTERS/Pavel Mikheyev     TPX IMAGES OF THE DAY
Competitors drive their homemade vehicle without an engine during the Red Bull Soapbox Race in Almaty, Kazakhstan September 11, 2022. REUTERS/Pavel Mikheyev
Pavel Mikheyev / reuters

3. There's 'indiscriminate buying' happening.

Going back to the previously out-of-favor stocks...

Lerner notes that "remarkably," all 50 of last year’s worst-performing stocks are up in 2023.  

The appetite to buy these names has led to "indiscriminate buying", Lerner says.

Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

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5.

Invesco Canada announces changes to risk ratings on Canadian ETFs

2023-01-17 23:00:00 by CNW Group

TORONTO, Jan. 17, 2023 /CNW/ -- Invesco Canada Ltd. announced today changes to the risk ratings applicable to several of its Canadian exchange-traded funds (ETFs). The changes in risk rating are effective immediately and details are included in the following table.

ETF Name and Series

Ticker Symbol  

Previous Risk Rating  

New Risk Rating  

Invesco FTSE RAFI
Canadian Small-Mid Index
ETF

– CAD Units

PZC

Medium

Medium to High

Invesco NASDAQ 100
Equal Weight Index ETF

CAD Hedged Units

QQEQ.F

Medium

Medium to High

Invesco NASDAQ 100
Index ETF
CAD Hedged
Units

QQC.F

Medium

Medium to High

Invesco NASDAQ Next Gen
100 Index ETF
– CAD Units

QQQJR

Medium

Medium to High

Invesco S&P 500 Equal
Weight Index ETF
USD
Units

EQL.U

Medium

Medium to High

Invesco S&P 500 Equal
Weight Index ETF
CAD
Hedged
Units

EQL.F

Medium

Medium to High

Invesco S&P Global ex.
Canada High Dividend Low
Volatility Index ETF

CAD
Hedged
Units

GHD.F

Low to Medium

Medium

Invesco FTSE RAFI Global
Small-Mid ETF
CAD
Hedged Units

PZW.F

Medium

Medium to High

Invesco Global Shareholder
Yield ETF
– CAD Units

PSY

Low to Medium

Medium

The risk rating changes were made in accordance with the risk classification methodology set by the Canadian Securities Administrators to determine the risk level of funds. No changes have been made to the investment objectives or strategies of these ETFs. A summary of the risk rating classification methodology, investment objectives and strategies of an ETF can be found in the ETF's most recently filed prospectus.

About Invesco Ltd.

Invesco Ltd. (Ticker NYSE: IVZ) is a global independent investment management firm dedicated to delivering an investment experience that helps people get more out of life. Our distinctive investment teams deliver a comprehensive range of active, passive and alternative investment capabilities. With offices in more than 20 countries, Invesco managed US $1.3 trillion in assets on behalf of clients worldwide as of September 30, 2022. For more information, visit www.invesco.com/corporate.

Commissions, management fees and expenses may all be associated with investments in ETFs. ETFs are not guaranteed, their values change frequently and past performance may not be repeated. Please read the prospectus before investing. Copies are available from Invesco Canada Ltd. at invesco.ca.

There are risks involved with investing in ETFs. Please read the prospectus for a complete description of risks relevant to the ETF. Ordinary brokerage commissions apply to purchases and sales of ETF units.

Most Invesco ETFs seek to replicate, before fees and expenses, the performance of the applicable index, and are not actively managed. This means that the sub-advisor will not attempt to take defensive positions in declining markets and the ETF will continue to provide exposure to each of the securities in the index regardless of whether the financial condition of one or more issuers of securities in the index deteriorates. In contrast, if an Invesco ETFs ETF is actively managed, then the sub-advisor has discretion to adjust that Invesco ETFs ETF's holdings in accordance with the ETF's investment objectives and strategies.

FTSE® is a trademark owned by the London Stock Exchange Group companies and is used by FTSE International Limited ("FTSE") under licence. The FTSE RAFI® Index Series is calculated by FTSE in conjunction with Research Affiliates LLC ("RA"). Neither FTSE nor RA sponsor, endorse or promote this product and are not in any way connected to it and do not accept any liability in relation to its issue, operation and trading. Any intellectual property rights in the Index values and constituent list vest in FTSE. 

Investors should be aware of the risks associated with data sources and quantitative processes used in investment management process. Errors may exist in data acquired from third party vendors, the construction of model portfolios, and in coding related to the Index and portfolio construction process. While Research Affiliates takes steps to identify data and process errors so as to minimize the potential impact of such errors on Index and portfolio performance, we cannot guarantee that such errors will not occur. 

"Fundamental Index®" and/or "Research Affiliates Fundamental Index®" and/or "RAFI®" and/or all other RA trademarks, trade names, patented and patent-pending concepts are the exclusive property of Research Affiliates, LLC. 

S&P®, S&P 500® are registered trademarks of Standard & Poor's Financial Services LLC and have been licensed for use by S&P Dow Jones Indices LLC and sublicensed for certain purposes by Invesco Canada Ltd. The S&P 500 Equal Weight Index is a product of S&P Dow Jones Indices LLC, and have been licensed for use by Invesco Canada Ltd. Invesco Canada Ltd.'s Invesco Index ETFs are not sponsored, endorsed, sold or promoted by S&P Dow Jones Indices LLC, its affiliates, LSTA, or TSX and none of such parties make any representation regarding the advisability of investing in such product.

S&P® is a registered trademark of Standard & Poor's Financial Services LLC and has been licensed for use by S&P Dow Jones Indices LLC and sublicensed for certain purposes by Invesco Canada Ltd. The S&P Global 1200 ex. Canada High Dividend Low Volatility Index is a product of S&P Dow Jones Indices LLC, and has been licensed for use by Invesco Canada Ltd. Invesco Canada Ltd.'s Invesco S&P Global 1200 ex. Canada High Dividend Low Volatility Index ETF is not sponsored, endorsed, sold or promoted by S&P Dow Jones Indices LLC or its affiliates and none of S&P Dow Jones Indices LLC or its affiliates make any representation regarding the advisability of investing in such product(s). 

Nasdaq®, Nasdaq-100 Index®, Nasdaq-100® Equal Weighted Index and Nasdaq Next Generation 100 Index ® are registered trademarks of Nasdaq, Inc. (which with its affiliates is referred to as the "Corporations") and are licensed for use by Invesco Canada Ltd. 

The Product(s) have not been passed on by the Corporations as to their legality or suitability. The Product(s) are not issued, endorsed, sold, or promoted by the Corporations. THE CORPORATIONS MAKE NO WARRANTIES AND BEAR NO LIABILITY WITH RESPECT TO THE PRODUCT(S). 

Invesco is a registered business name of Invesco Canada Ltd.

Invesco® and all associated trademarks are trademarks of Invesco Holding Company Limited, used under licence.

© Invesco Canada Ltd., 2023

Contact: Gina Simonis gina.simonis@invesco.com 917-715-8339

SOURCE Invesco Ltd.

Cision View original content to download multimedia: http://www.newswire.ca/en/releases/archive/January2023/17/c5743.html


6.

2 Tech ETFs to Help You Capture the Sector's Rebound

2023-01-16 15:40:45 by Bram Berkowitz, The Motley Fool from Motley Fool

The tech sector had a difficult year in 2022, as soaring inflation followed by rapidly rising interest rates brought the sector back down from the meteoric valuations it saw in 2021. The outlook for this year is still quite uncertain, with liquidity tightening and the impact of all of the Fed's rate hikes still largely unknown. The Invesco QQQ Trust (NASDAQ: QQQ) is a popular tech ETF because it owns many headline-grabbing tech stocks like Apple, Microsoft, Amazon, Alphabet, and Meta Platforms, just to name some of its largest holdings.


7.

7 of the Hottest ETFs to Buy for 2023

2023-01-12 23:18:33 by Josh Enomoto from InvestorPlace

No matter what the market conditions are, the hottest ETFs to buy will almost always make sense for investors. Fundamentally, these exchange-traded funds cover a basket of securities, thereby mitigating risk while enjoying broad upside opportunities. According to authors Larry Swedroe and Andrew Berkin, investors can replicate the strategy of buying high-quality stocks at low prices with compelling ETFs.

Further, they argue, “[y]ou don’t need to hire Warren Buffett or pay a hedge fund manager a 2% fee and 20% of the profits.” It’s not that they dismiss folks like Buffett, who has earned a much-deserved strong reputation for reliable guidance. Rather, not everyone enjoys access to such expertise. For the regular folks, the hottest ETFs to buy offer the performance of professional advice but without the costs.

Plus, we’re entering uncharted territory. With the post-coronavirus new normal sparking myriad challenges, we just don’t know what lies ahead. Therefore, merely betting on individual stocks presents risks. To lessen downside exposure, the below hottest ETFs to buy for 2023 provide a critical solution.

InvestorPlace - Stock Market News, Stock Advice & Trading Tips

XLE Energy Select Sector SPDR Fund $89.90
VPU Vanguard Utilities Index Fund ETF $156.39
YUMY VanEck Future of Food ETF $18.95
XAR SPDR S&P Aerospace & Defense ETF $115.49
SCHD Schwab US Dividend Equity ETF $77.68
QQQ Invesco QQQ Trust Series 1 $278.24
VWO Vanguard Emerging Markets Stock Index Fund ETF $41.82

Energy Select Sector SPDR Fund (XLE)

Tiles that say ETF on top of stacks of coins on a blue backgroundSource: kenary820 / Shutterstock

One of the best-performing names among the hottest ETFs to buy in the new year, Energy Select Sector SPDR Fund (NYSEARCA:XLE) inherently delivers plenty of relevance. However, last year, Russia’s invasion of Ukraine along with the aggressor’s cutting of energy resources to the west sparked a radical geopolitical paradigm shift.

Put simply, Russia might not return as a respected member of the international community for quite some time. At the same time, Europe and other energy-dependent regions must scour for alternative sources. Cynically, this dynamic should bolster XLE as one of the hottest ETFs to buy in 2023. If anything, the fund gained over 39% in the trailing year, reflecting strong demand. Currently, the top three holdings for XLE are Exxon Mobil (NYSE:XOM), Chevron (NYSE:CVX) and Schlumberger (NYSE:SLB). It’s also worth noting that the fund includes downstream specialist Phillips 66 (NYSE:PSX). Should societal circumstances fully return to normal, traffic volume may spike, boosting downstream units. Finally, XLE features a very low expense ratio of 0.10% (much lower than the category average of 0.46%).

Vanguard Utilities Index Fund ETF (VPU)

Piggy banks with coins in them that spell out ETF.Source: Maxx-Studio / Shutterstock

Heading into an uncertain environment in 2023, investors will likely take comfort in Vanguard Utilities Index Fund ETF (NYSEARCA:VPU). As I’ve expressed many times before, people expect the lights to turn on when they flip the switch. Unfortunately, when nothing happens during this otherwise mundane exercise, circumstances may go awry.

On a much lighter note (though hardly any less cynical), public utility firms benefit from inelastic demand. Enterprises that enjoy inelastic demand see consistent and predictable revenue irrespective of pricing fluctuations. For utilities, everybody needs access to a certain amount of critical resources. Therefore, VPU should be a dependable name among the hottest ETFs to buy. In the trailing year, it gained over 3% of market value.

Currently, Vanguard Utilities Index’s top three holdings are NextEra Energy (NYSE:NEE), Duke Energy (NYSE:DUK) and Southern Company (NYSE:SO). Also, VPU offers low costs, with an expense ratio of 0.10%. In contrast, the category average stands at 0.42%.

VanEck Future of Food ETF (YUMY)

ETF Investment index funds concept with letter wooden blocks and lots of different currencies, ETFs to buySource: Eviart / Shutterstock.com

If you’re worried about what the new year might bring, VanEck Future of Food ETF (NYSEARCA:YUMY) may be the most appropriate entry among the hottest ETFs to buy. Obviously, everyone needs to eat. Generally, public health authorities recommend 2,000 calories daily for women and 2,500 for men.

As with the utility sector, the broader food and agricultural industry enjoys inelastic demand. Admittedly, few sectors enjoy perfect inelasticity. As economic conditions justify, people will adjust their consumption of goods (necessary or discretionary) accordingly. However, at the baseline of consumption (i.e. minimum calorie intake), the food sector commands consistent sales. It is what it is.

Presently, VanEck Future of Food’s top three holdings includes Deere (NYSE:DE), Corteva (NYSE:CTVA), and Ingredion (NYSE:INGR). Geographically, most of the held companies are located in the U.S. However, a significant portion stems from Europe. Although relevant, YUMY does feature a higher cost, with an expense ratio of 0.69%. In contrast, the category average pings at 0.46%. Still, the importance of food and agriculture may lift YUMY later this year.

SPDR S&P Aerospace & Defense ETF (XAR)

close-up of the phrase Source: shutterstock.com/bangoland

While Russian aggression in Ukraine isn’t our fight per se, in arguably most ways, it is. Unfortunately, the reality is that if Russia (or any belligerent state actor) accrues rewards for their imperialistic ambitions, it facilitates a green light for other dangerous entities. Geopolitically, then, when freedom falls under threat, the embattled cry out for Dad.

In this case, Dad is the U.S. and his instruments of discipline can be found among the individual holdings of SPDR S&P Aerospace & Defense ETF (NYSEARCA:XAR). To be fair, XAR slipped nearly 4% in the trailing year. However, in the trailing half-year period, the fund gained a solid 13% of market value. Therefore, in recent months, it’s been one of the hottest ETFs to buy.

No wonder. It’s not just Russia causing consternation for the international community. Along with our constant rivalry with China, both North Korea and Iran made their presence known. Therefore, it almost seems inevitable that XAR will rise. Right now, XAR isn’t terribly costly with an expense ratio of 0.35%. The category average stands at 0.48%.

Schwab US Dividend Equity ETF (SCHD)

the word Source: shutterstock.com/Imagentle

Although picking individual stocks may represent the most exciting market endeavor, in 2023, too many risks exist. And that’s why passive-income-providing enterprises may be more appropriate. For those not too sure of what may happen next, the Schwab US Dividend Equity ETF (NYSEARCA:SCHD) may be a great candidate for the hottest ETFs to buy.

Again, it’s not so much that dividends are “hot.” Rather, investors must consider the reality of the current market environment. With the real M2 money stock skyrocketing at the start of the Covid-19 pandemic, the Federal Reserve has a tough job ahead in reeling in prior monetary excesses. Subsequently, the central bank’s hawkish policy will disincentivize many growth names.

Moving forward, the market may reward stability, established track records, and value over growth-oriented attributes. Therefore, SCHD deserves special consideration. While the fund did suffer red ink in the trailing year, it’s up 2.5% in the trailing five sessions. Finally, SCHD is cheap, with an expense ratio of 0.06%. In contrast, the category average stands at 0.39%.

Invesco QQQ Trust Series 1 (QQQ)

A person drawing a line graph with the phrase Source: Shutterstock

One of the worst-hit segments last year was the broader technology sector. As multiple sources mentioned, the global supply chain disruption that sparked during the Covid-19 crisis devastated the semiconductor industry. In turn, several tech companies couldn’t meet demand because of a lack of inventory. Still, I think big tech may be due for a comeback. If so, you’ll want to own Invesco QQQ Trust Series 1 (NASDAQ:QQQ).

To be fair, QQQ took it on the chin as well in 2022. In the trailing year, the fund gave up over 28% of its market value. However, circumstances appear to be improving recently. In the past five sessions, QQQ gained over 5%. Moving forward, societal normalization may help lift the broader tech ecosystem, particularly as supply chains finally normalize.

Currently, the fund’s top three holdings are Microsoft (NASDAQ:MSFT), Apple (NASDAQ:AAPL), and Amazon (NASDAQ:AMZN). All three companies command relevant businesses and they’re all undervalued relative to prior highs. However, spreading out the risk across several compelling innovators may be the smarter choice (than individual wagers). Also, QQQ is one of the cheaper names among the hottest ETFs to buy with an expense ratio of 0.20%. This compares favorably to the category average of 0.54%.

Vanguard Emerging Markets (VWO)

Three wood blocks spelling out Source: Shutterstock

Finally, on this list of hottest ETFs to buy, adventurous investors may want to go abroad with their portfolio. If so, the Vanguard Emerging Markets (NYSEARCA:VWO) fund provides an excellent low-cost opportunity. While most financial advisors will direct you to U.S.-based public companies, the underlying economy is a mature one. For substantial gains, you’ll need to explore developing regions.

To be fair, going this route means greater risks. In the trailing year, for instance, VWO lost almost 19% of its market value. While that might deter some prospective buyers, consider this: in the trailing month, VWO moved up 4%. As the domestic market possibly begins favoring value over growth, investors will have more incentives to hit the international market.

Currently, VWO’s top three industry holdings are financial services (a weighting of 21.27%), technology (15.96%), and consumer cyclical (13.32%). On a parting note, VWO is cheap, featuring an expense ratio of 0.08%. This compares very favorably to the category average of 0.47%.

On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.

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8.

BLS Jobs: 223K, 3.5% Unemployment Strong, Wage Growth Down

2023-01-06 15:24:03 by Mark Vickery from Zacks

Friday, January 6th, 2023

The latest monthly non-farm payroll report from the U.S. Bureau of Labor Statistics (BLS) is out this morning: 223K new jobs were created in December, more than the 200K estimated but below the downwardly revised 256K the previous month. The Unemployment Rate came down to 3.5% from 3.7% the previous two months. This means we are officially back down to pre-pandemic levels on unemployment.

Fed decision be damned — this is good news! We appear to still be adjusting overall labor force from pandemic conditions, which would explain the insistent robustness in monthly jobs gains. But while this only will firm the Fed’s mindset on a 5% Fed funds rate going forward, at least the American workforce is not falling off a cliff. In fact, just the opposite: our pre-Covid unemployment rate was historically good -- the best since 1969! -- and now we’re right back to where we were. Not too shabby.

Average Hourly Earnings came in notably cooler than expected: +0.3% from +0.4%, with November’s high +0.6% now revised down to +0.4%, with October’s revision lower as well. Year over year, this figure is +4.6%, a low we haven’t seen since August 2021. With persistently strong monthly job gains, the fear is wages will heat up too fast and promote more inflation. But this is proving to be cooling down a bit — a “Goldilocks” item in this current slew of data.

That said, +4.6% wage growth year over year is clearly lower than current year-over-year inflation. Thus, a large percentage of this strong workforce isn’t seeing its earnings go as far, which promotes recessionary conditions — at least with a certain class of workforce. We saw in yesterday’s ADP ADP report that workers who move to new jobs averaged a +15% gain in income last month; certain markets, like tech, are outperforming others, like manufacturing.

Tech, by the way, only makes up 2% of the total U.S. workforce. There are roughly 3 million tech workers of the 154 million total employees in this country, much lower than the 15.5 million in Leisure/Hospitality (which led the way again last month with 67K new hires) and 21.5 million in Government. So when we expect big layoffs in major tech companies to show up in monthly jobs data, this is why they may be hard to see.

Labor Force Participation grew to 62.3% from 62.1%. This is still historically low (though, again, consider post-Covid situations of early retirement, etc. as anomalies), but going in the right direction. Increased participation among able-bodied Americans entering the workforce is a positive development on many levels — let’s see more of that in the jobs reports to come.

The figure on long-term unemployed Americans has nearly been cut in half over the past year: 1.1 million versus 2 million before. Again, we consider labor adjustments across a plethora of industries to still be grappling with pandemic/post-pandemic issues (including companies doing a lot of business in China, for instance), so we might not be looking at “normal” employment conditions. But as long as we can see inflation metrics continue coming down everywhere, the longer we have a good labor market, the better chance the economy has of reaching a “soft landing.”

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9.

Here's the 2023 Chart Setup for the S&P 500 and Nasdaq

2022-12-30 19:17:00 by TheStreet.com

Despite a brutal year, the trend is still not a friend for the bulls. Here's how the charts look going into 2023.


10.

Once 2023 Starts, Investors Have Work to Do

2022-12-30 14:59:02 by Mark Vickery from Zacks

Friday, December 30, 2022

We’ll close out the worst trading year of the last four years with a half-session today — markets close at 1pm ET. The way we started 2022, I’m sure we all remember seeing rather profound risks in front of us… but we were also near all-time highs, so they were relatively easy to look past. Well, we’re on the other side of that coin now, aren’t we?

That’s the good news for the new year, actually: plenty of valuations have been depleted, across sectors and including some truly great companies. We’ve finally managed to remove an unreasonable level of expectations from forward earnings. We may, in fact, even be headed for an earnings recession, though this is far from a consensus view just a couple weeks prior to Q4 earnings season.

Zacks Director of Research Sheraz Mian spoke a bit about what to expect this earnings session. He acknowledged that expected declining growth in back-to-back quarters might technically put us in an earnings recession, but he preferred to look at it this way: “Overall, a moderating earnings environment is the less-dramatic way to put it… Estimates have been coming down for a while now — April, to be precise. But if the economy can avoid a nasty recession, then the bulk of cuts could likely be behind us.”

A “steady as she goes” Q4 earnings season, and maybe glancing into a light recession for just a couple quarters, might be the optimistic way of looking at 2023, or at least the first half. And the Fed has already suggested that the longer it is underwhelmed by major economic reports, the more it plans to keep high interest rates (5.00-5.25%, 75 bps higher than we are today) for longer, meaning a prolonged period of slightly tighter monetary policy than we’re experiencing now.

If the coming economic reports in early 2023 bring some surprises, however — negative surprises — that’s a likelier way to see shifts in Fed policy, near term. These things are not set in stone, after all (remember when inflation was just “transitory”?). But with it would come pain in areas that have been comfortable for some time. Thinking of the jobs market. Next week brings us monthly ADP and nonfarm payroll reports.

Not only do we get private-sector payrolls (Thursday next holiday-shortened week, not the usual Wednesday) from ADP and the U.S. Bureau of Labor Statistics (BLS) Employment Situation on Friday, but next week brings us ISM and S&P PMI Manufacturing and Services, JOLTS and job quits, Fed minutes from the December meeting, Weekly Jobless Claims, Trade Deficit and Factory Orders. We’ll know a lot more about our economic situation a week from today than we do now.

Thus, with the last glasses of mulled wine sipped (and champagne on New Year’s — while we can still get champagne), we can put this cruel year of dashed hopes behind us. Zacks.com will observe New Year’s Day on Monday, January 2nd. We’ll see you here again Tuesday of next week. Happy New Year!

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11.

Pinduoduo biggest Nasdaq gainer in 2022, tech gets clobbered

2022-12-30 14:24:24 by Yahoo Finance Video

Yahoo Finance’s Jared Blikre breaks down Nasdaq 100's biggest stock performers in 2022.


12.

Stock market: Nasdaq on track for worst December on record

2022-12-29 14:53:12 by Yahoo Finance Video

Yahoo Finance Live’s Brian Sozzi breaks down the stat of the day.


13.

Dow Jones and S&P 500 rise, Nasdaq trades lower as investors eye Santa Claus rally

2022-12-23 16:36:16 by Yahoo Finance Video

Yahoo Finance's Jared Blikre breaks down the prospects of a Santa Claus rally this year and what that portends for stocks in 2023.


14.

PCE Stays Healthy, Durable Goods Drop

2022-12-23 15:13:03 by Mark Vickery from Zacks

Friday, December 23, 2022

Pre-market futures slipped into negative territory on the release of new economic data ahead of today’s opening bell — but then reversed course mere minutes later. November Personal Consumption Expenditures (PCE), oft-cited by voting Fed members, including Fed Chair Jay Powell, came in at +0.4% — a gain of 10 bps month over month. Stripping out volatile food and energy costs, the “core” read brings us +0.2%, down 10 bps from the upwardly revised +0.3% for October.

That’s income; spending gained +0.1% last month, though this is down big from October’s +0.9%. What this tells us — at a glance, anyway — is that holiday shopping this year was pulled forward to mid-fall; likely this was based on retailers not being caught with short supply like they were last year. It also tells us that at least some aspects of our long-suffering supply chain issues have been solved, at least for this year’s retail commerce.

The Deflator, month over month — a key indicator for the Fed in quantifying monetary policy — rose +0.1% for November. This is well off the hot June high +1.0%, indicating that, from yet another angle, inflation is cooling down. Year over year, the Deflator came in at expected at +5.5%, down 150 bps from June. Core deflator month over month was also in-line at +0.2%, down from April’s high +0.6%. More evidence things are progressing in the right direction, albeit slower than we’d prefer.

Preliminary (subject to revision) Durable Goods Orders for last month sank nearly twice as low as expected: -2.1% from the -1.1% consensus. This is the lowest monthly read since the Covid-ravaged April 2020 — not a good sign, unless we’re looking for bad news to be good news. Ex-defense, orders were down -2.6%, though ex-Transportation this figure moves up to +0.2%. Core capital orders, non-defense, ex-aircraft (a proxy for “normal” business expenditures) was also +0.2%, slightly higher than expected.

Shipments came in somewhat better than anticipated: -0.1% month over month, whereas -0.3% was expected — in any case, shrunken notably from October’s +1.4%. Again, consider holiday seasonality with these numbers; hotter retail spending (thus constituting greater need for shipments) for shopping season tends to distort these figures. We’ll see a “purer” print this time a month from now.

Pre-markets have been flipping and flopping all morning; apparently, this data isn’t bringing the masses of investors to any clear conclusions today. Perhaps that will change with the University of Michigan’s consumer sentiment survey for December due after the opening bell. We’ll also get 5-year inflation expectations from the same folks, as well as New Home Sales for November, widely expected to come in lower month over month.

Volumes ought to be rather low, if we go by history. It’s Christmas weekend, after all. Which reminds me: Ahead of Wall Street, and Zacks.com overall, will be off Monday in observance of the holiday. We will return Tuesday to close out the year, hopefully with that long-sought “Santa Claus Rally” (but who really knows?). Also, markets close early today: 1pm ET. Finally, Happy Holidays and Merry Christmas to everyone!

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15.

The 3 Biggest Opportunities for Stock Investors in 2023

2022-12-22 15:37:58 by Bret Kenwell from InvestorPlace

It’s been a tough year for investors, but the bear market hasn’t relented much just because we are approaching the end of 2022. That said, all this pain has investors looking for the biggest investing opportunities of next year.

Will it be better in 2023? In some ways, yes, as certain assets should enjoy more upside. However, there’s still likely more pain on the way in many asset classes.

Even when we look at just the stock market, some industries and sectors continue to do quite well, while others have been obliterated. Tech is in a job recession, and the stocks have been pummeled while defense and energy stocks continue to roar.

InvestorPlace - Stock Market News, Stock Advice & Trading Tips

Considering all sectors and asset classes, one can see how the biggest investing opportunities may not be what they seem.

Biggest Investing Opportunities: Treasury Bonds

Several U.S. Treasury Bonds stacked on each other.Source: larry1235 / Shutterstock.com

Taking a global view of the market is very difficult, and it’s not easy to navigate. There’s an infinite number of moving parts and considerations, so bear with me a bit.

In just ten days, we’ll likely get confirmation that the 10-year Treasury bond just had its worst year in more than a century. Since 1990, the worst one-year performance for the 10-year was an 8% loss in 1994. This year? It’s down more than 15%.

The iShares 20 Plus Year Treasury Bond ETF (NASDAQ:TLT) is setting up for the worst one-year performance in its history.

That has me thinking that the 10-year and other intermediate-term bonds can make a rebound next year. That’s particularly true when we are going into 2023 with a very hawkish Fed and now central bankers around the globe acting in a coordinated hawkish fashion in an effort to crush inflation.

While it will eventually work, it will likely put us in a recession, forcing buyers into Treasuries.

Biggest Investing Opportunities: The Invesco QQQ ETF (QQQ)

Invesco logo in blue with mountain imageSource: Shutterstock

There are two caveats here with the Invesco QQQ Trust Series (NASDAQ:QQQ).

First, the safer alternative would likely be the SPDR S&P 500 ETF Trust (NYSEARCA:SPY). Second, the QQQ very well could make new lows in 2023 before the bottom is in.

My personal opinion — and it’s just that, an opinion — is that the market could bottom in the March/April time frame before turning higher.

With a hawkish Fed and a recession likely on the way, there’s no reason the market has a reason to avoid making new 52-week lows. It may have bottomed already, or it might mark the low in September 2023. No one knows — and I’m no exception.

However, the S&P 500 has rallied 80% of the time over the last 80 years. Until recently, the QQQ has been a monstrous outperformer vs. the SPY. Like bonds, these types of years are not common, and I expect us to get back on track in the next 12 months.

If that’s the case, I expect the QQQ to lead us out of those depths, and the reasoning is two-fold: First, the QQQ has a lot of exposure to mega-cap tech, which has some of the best financials in the world. Second, this year, tech was hit disproportionately hard, and the rebound can be stronger than some of the market’s counterparts.

Bonus point: The 60/40 portfolio is set for one of its ten worst performances since 1900. In 9 out of 10 of the prior scenarios, the 60/40 portfolio rebounded in the following year while averaging a double-digit gain. The only year it didn’t — in 1931 — was during the Great Depression.

Biggest Investing Opportunities: Profitable Growth Stocks

Hand of woman watering small plant in pot shaped like growing graph representing growth stocksSource: Khakimullin Aleksandr / Shutterstock

Perhaps a little controversial, but it’s impossible for me to look away from growth stocks at this point. These are the names that create outsized, long-term gains when bought at the correct time. Buying on the way down has been a sucker’s game this year, as investors keep thinking these stocks won’t go lower.

Instead, I like the idea of looking at profitable growth stocks. The ones that have been beaten down are now getting cheap on a price-to-earnings basis. The others — those without positive free cash flow and earnings — are hard to lean on as they have no bottom-line support.

A small list in no particular order includes:

Amazon (NASDAQ:AMZN), Alphabet (NASDAQ:GOOGL, NASDAQ:GOOG), Nvidia (NASDAQ:NVDA), Advanced Micro Devices (NASDAQ:AMD), PayPal (NASDAQ:PYPL), DigitalOcean (NASDAQ:DOCN), Tesla (NASDAQ:TSLA) and The Trade Desk (NASDAQ:TTD).

That doesn’t mean all of these stocks are a buy right now or that they won’t make new lows. But they are names to keep an eye on in 2023 as potentially great long-term buys.

On the date of publication, Bret Kenwell held a long position in NVDA and PYPL. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell.

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The post The 3 Biggest Opportunities for Stock Investors in 2023 appeared first on InvestorPlace.


16.

U.S. tech stocks face major technical trial

2022-12-20 16:38:09 by Yahoo Finance Video

Yahoo Finance's Jared Blikre explains the technical ranges constraining the Nasdaq 100 and other indices.


17.

Stock ETFs Sink as Fed, Market at Odds Over Rate Hikes

2022-12-15 21:00:00 by Sumit Roy from ETF.com

The Federal Reserve is likely to push the economy into a recession if it doesn’t lay off its rate hikes—that’s one interpretation of market movements following the Federal Open Market Committee policy decision Wednesday. 

While stocks gyrated in the immediate aftermath of the Fed’s decision to raise interest rates by 50 basis points, the SPDR S&P 500 ETF Trust (SPY) ultimately ended the session with only a modest 0.6% decline. 

On Thursday, the market’s reaction was more emphatic—a 2.4% decline for SPY and a 3.4% drop for the Invesco QQQ Trust (QQQ)

While the Fed’s half-a-percent rate hike was widely anticipated, it was the central bank’s forecast for future rate hikes that was more aggressive than investors had hoped. 

In the latest Summary of Economic Projections released Wednesday, the Fed officials forecast that their benchmark rate would reach a peak of 5.1% and stay there throughout 2023. 

That’s higher than the 4.9% peak that markets are still pricing in, based on federal funds futures. The 20 basis point gap between the Fed and the market isn’t all that significant, but where the Fed and markets stand far apart is what happens after the peak in rates is reached. 

The Fed expects it will leave rates at 5.1% throughout 2023, while the market is expecting at least two rate cuts.  

The Tale of Two Landings 

There are a few ways to interpret what’s going on here. One interpretation is that the market believes inflation is on the downswing—a view corroborated by this week’s reading on consumer prices for November.  

If that’s the case, the Fed has no reason to leave interest rates so high, and it will happily start cutting rates later in 2023 as it becomes increasingly clear inflation isn’t a problem anymore. This is the soft landing scenario.  

The other interpretation is more ominous. In this scenario, not only won’t inflation be an issue in 2023, the Fed’s rate hikes will push the economy into a recession, forcing the central bank to reverse course sometime next year. 

In either case, it’s clear the market believes inflation won’t be a problem next year. It’s harder to ascertain what the market thinks about economic growth by just looking at its projections for the fed funds rate. 

The market’s prediction for lower rates could be the result of a soft landing or a recession. 

But if you combine what fed funds futures are telling us with signals from other markets as well as the latest economic data, you start to see worrying signs. 

The 10-year Treasury yield dipped to 3.43% on Thursday, close to its lowest levels in three months and nearly 80 basis points below its highs of the year after the government reported that U.S. retail sales fell by 0.6% in November--the largest decline in a year.  

The yield on the 10-year is now a whopping 167 basis points below the Fed’s projected peak for its federal funds rate. 

 

 

It’s hard to imagine the 10-year yield trading so far below the federal funds rate if bond traders didn’t think a recession was a distinct possibility.  

Then there’s the stock market, which tanked 2% Thursday. The S&P 500 is still a good 8.5% above its October lows, so you can’t read too much into this one-day move—but the stock market’s post-Fed-meeting downward trajectory fits into this idea that the Fed could overdo the rate hikes and push the economy into a recession. 

 

 

For the past six months or so, the stock market has swung up and down based on the likelihood of a soft landing versus a hard landing. The S&P 500 is down about 18.5% from its highs—a notable decline but nothing that necessarily screams “hard landing.”  

Still, investors collectively edged closer to the hard landing camp Thursday. 

When it comes to the bigger picture, investors are still split in terms of whether a recession can be avoided or not. 

 

Email Sumit Roy atsumit.roy@etf.comor follow him on Twitter@sumitroy2   

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18.

Fed Funds Expected to Come In at 50bps; Import/Exports Report

2022-12-14 15:30:03 by Mark Vickery from Zacks

Wednesday, December 14, 2022

New Import Price Index results for the month of November are out ahead of the opening bell this Hump Day, with the headline down -0.6% versus the -0.5% expected and the downwardly revised -0.4% from the previous month. This brings import prices year over year to +2.7% — down notably from the +13.0% this index brought us in March of this year.

Exports for November was slightly back toward the zero-balance: -0.3%, from the previous month’s -0.4%. Year over year, exports are still up +6.3%, though well off the May and June 2022 prints of a whopping +18.6%. Just like in most other aspects of the domestic economy, we’re returning to a level of normalcy in both imports and exports.

The big news this morning, however, is wha we’ve been talking about all week: the conclusion of the latest two-day meeting of the Federal Open Market Committee (FOMC), upon which a new Fed funds interest rate will be announced at 1pm ET today. Baked into the cake already — and frosted yesterday with cooler-than-expected CPI numbers for last month — is a 50 basis-point (bps) rate hike. It will be the first time in 15 years the rate has been this high.

It will put the Fed funds rate in a range of 4.25-4.50%, up from 0.00-0.25% until the start of March this year. Current projections (from the SEP median Fed funds rate) for the end of 2023 are for a range of 4.50-4.75%. This would imply only one more 25 bps rate hike between now and a year from now, or perhaps a ramp-up higher and then the pivot beginning to wind down rates at some point earlier next year.

The FOMC statement today will be parsed carefully to see if there are any clues in the language whether this era of aggressive rate hikes is about to come to an end. A 50 bps hike is already a step in this direction, after 75 bps hikes for four successive meetings in a row. Currently, somewhere around the 5% range looks reasonable going forward: it would, over time, be expected to suck air from the inflation balloon without, one hopes, “breaking” anything in the economy and sending us into recession.

Even though there is a wide discrepancy of viewpoints on this interest rate debate, what most people seem to agree on is that what will happen can be expected to in the first half of 2023, not in the second half. Whether we fall into recession or the Fed is able to land the inflation plane safely, at this point we expect the second half of next year to be market participants taking action on the first half — if the news is good or if it isn’t.

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19.

Annual Changes to the Nasdaq-100 Index

2022-12-10 01:00:00 by Nasdaq, Inc. from GlobeNewswire

Nasdaq, Inc.

NEW YORK, Dec. 09, 2022 (GLOBE NEWSWIRE) -- Nasdaq (Nasdaq: NDAQ) today announced the results of the annual reconstitution of the Nasdaq-100 Index® (Nasdaq: NDX), which will become effective prior to market open on Monday, December 19, 2022.

The following six companies will be added to the Index: CoStar Group, Inc. (Nasdaq: CSGP), Rivian Automotive, Inc. (Nasdaq: RIVN), Warner Bros. Discovery, Inc. (Nasdaq: WBD), GlobalFoundries Inc. (Nasdaq: GFS), Baker Hughes Company (Nasdaq: BKR), and Diamondback Energy, Inc. (Nasdaq: FANG).

The Nasdaq-100 Index is composed of the 100 largest non-financial companies listed on The Nasdaq Stock Market and dates to January 1985 when it was launched along with the Nasdaq Financial-100 Index, which is comprised of the 100 largest financial stocks on Nasdaq. These indexes act as benchmarks for financial products such as options, futures, and funds. The Nasdaq-100 is reconstituted each year in December, timed to coincide with the quadruple witch expiration Friday of the quarter.

The Nasdaq-100 Index is the basis of the Invesco QQQ Trust (Nasdaq: QQQ) which aims to provide investment results that, before expenses, correspond with the Nasdaq-100 Index performance. In addition, options, futures and structured products based on the Nasdaq-100 Index and the Invesco QQQ Trust trade on various exchanges.

As a result of the reconstitution, the following seven companies will be removed from the Index: VeriSign, Inc. (Nasdaq: VRSN), Skyworks Solutions, Inc. (Nasdaq: SWKS), Splunk Inc. (SPLK), Baidu, Inc. (Nasdaq: BIDU), Match Group, Inc. (Nasdaq: MTCH), DocuSign, Inc. (Nasdaq: DOCU), and NetEase, Inc. (Nasdaq: NTES).

Information

For information about the six companies to be added to the Nasdaq-100 Index, please visit the following respective company websites:

CoStar Group, Inc. – https://www.costargroup.com/

Rivian Automotive, Inc. – https://rivian.com/

Warner Bros. Discovery, Inc. – https://wbd.com/

GlobalFoundries Inc. – https://gf.com/

Baker Hughes Company – https://www.bakerhughes.com/

Diamondback Energy, Inc. – https://ir.diamondbackenergy.com/

About Nasdaq Global Indexes
Nasdaq Global Indexes has been creating innovative, market-leading, transparent indexes since 1971. Today, our index offering spans geographies and asset classes and includes diverse families such as the Dividend and Income (includes Dividend Achievers), Dorsey Wright, Fixed Income (includes BulletShares®), Global Equity, Green Economy, Nordic, and Commodity indexes. We continuously offer new opportunities for financial product sponsors across a wide-spectrum of investable products and for asset managers to measure risk and performance. Nasdaq also provides exchange listing, custom index, and design solutions to financial organizations worldwide.

About Nasdaq
Nasdaq (Nasdaq: NDAQ) is a global technology company serving the capital markets and other industries. Our diverse offering of data, analytics, software, and services enables clients to optimize and execute their business vision with confidence. To learn more about the company, technology solutions and career opportunities, visit us on LinkedIn, on Twitter @Nasdaq, or at www.nasdaq.com.

The information contained above is provided for informational and educational purposes only, and nothing contained herein should be construed as investment advice, either on behalf of a particular financial product or an overall investment strategy. Neither The Nasdaq OMX Group, Inc. nor any of its affiliates makes any recommendation to buy or sell any financial product or any representation about the financial condition of any company or fund. Statements regarding Nasdaq’s proprietary indexes are not guarantees of future performance. Actual results may differ materially from those expressed or implied. Past performance is not indicative of future results. Investors should undertake their own due diligence and carefully evaluate companies before investing. ADVICE FROM A SECURITIES PROFESSIONAL IS STRONGLY ADVISED.

– NDAQG –

Media Relations Contact   Investor Relations Contact
Name: Camille Stafford   Name: Index Client Services
Email: Camille.Stafford@nasdaq.com   Email indexservices@nasdaq.com
     



20.

Why stock bulls are sitting on their hands again: Morning Brief

2022-12-08 10:20:40 by Jared Blikre from Yahoo Finance

This article first appeared in the Morning Brief. Get the Morning Brief sent directly to your inbox every Monday to Friday by 6:30 a.m. ET. Subscribe

Thursday, December 8, 2022

Today's newsletter is by Jared Blikre, a reporter focused on the markets on Yahoo Finance. Follow him on Twitter @SPYJared. Read this and more market news on the go with Yahoo Finance App.

What a difference a week makes. 

Last Wednesday's Powell-fueled risk rally that landed the S&P 500 on top of its 200-day moving average for the first time since April has now been fully reversed and then some. 

What was an upside breakout is now a failed upside breakout. A declining moving average ready to be rejected has again become a declining moving average that must be respected. 

This, along with five straight days of declines in the S&P 500, now resets expectations about what Santa may or not deliver into year-end.

Sometimes in trading, patterns become obvious with hindsight — patterns that inform a host of woulda-coulda-shoulda trades which nearly perfectly reflect and predict price action over a period of time.

Along these lines, the CBOE Volatility Index — a/k/a the VIX — has provided a beautiful roadmap for trading the major indices in 2022. 

A simple system emerges: buy the the S&P 500 when the VIX surges above the 35 level — indicating a relative amount of fear — and sell the S&P 500 when the VIX dips below 20, indicating relative complacency among investors.

S&P 500 vs. CBOE Volatility Index
This year's "easy" trade seen only with hindsight.

And though the VIX tends to move inversely with the direction of the S&P 500, it's rare to see a mean-reverting pattern play out this cleanly over the arbitrary time frame of one calendar year.

In the context of a market that is shifting from one looking for excuses to move higher into a market looking for reasons to remain range-bound, this emerging VIX-to-S&P relationship makes sense.

Of course, it's not as though anyone could have (or would have) predicted on January 1, 2022 that this pattern would emerge. Or that this relationship would emerge at these particular levels. Sell at 20 and buy at 35 are retro-fitted thresholds in the VIX. In life and in markets, hindsight remains crystal clear.  

CHICAGO, IL - JUNE 06: Traders work on the new floor of The Chicago Board Of Options Exchange on June 6, 2022 in Chicago, Illinois. The new trading floor officially opened at the beginning of trading today with upgraded technology and infrastructure. (Photo by Jim Vondruska/Getty Images)
Traders work on the new floor of The Chicago Board Of Options Exchange on June 6, 2022 in Chicago, Illinois. (Photo by Jim Vondruska/Getty Images)
Jim Vondruska via Getty Images

Nevertheless, with the latest "VIX sell" signal becoming a confirmed winner, it makes sense to prepare for the next potential "VIX buy" signal that could emerge and think about how that plays out around some of the important levels in the S&P 500.

A surge in the VIX back above 35 after a bout of selling in the stock market would no doubt get the attention of traders and algos the world over. But there's no way to predict where the S&P 500 would be trading at that point, or how long it will take to get there. 

However, by way of recent comparison, it took about six weeks for the VIX to travel from 20 to 35 the last go-around — during the market sell-off that ran from mid-August to early October — which would point to a potential buy early in the new year.

Failing any signal clarity with the VIX, the S&P 500 could flash a bullish signal by simply reclaiming its 200-day moving average to the upside. This would likely (but not necessarily) occur in confluence with a simultaneous close over its 2022 negative trend line (the red line in the first chart), which would strengthen the signal. 

The U.S. dollar could also add clarity, but it simply continues to consolidate under its 200-day moving average after last week's breakdown.

All in all, it's looking like another waiting game for S&P 500 bulls as the latest signal melts into noise. Next week's inflation reads and Fed meeting might clear that up. Or just add volume to the current market broadcast.

What to Watch Today

Economy

  • 8:30 a.m. ET: Initial Jobless Claims, week ended Dec. 3 (230,000 expected, 225,000 during prior week)

  • 8:30 a.m. ET: Continuing Claims, week ended Nov. 26 (1.618 million expected, 1.608 million during prior week)

Earnings

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21.

Charting the Santa Claus Rally That Wasn't

2022-12-07 23:00:11 by Mark Vickery from Zacks

First off, let’s clear something up right now: the “official” definition of a “Santa Claus Rally” is a stock market catching a bid the week between Christmas and New Year’s Day — in other words: after Christmas, not before. So the rally many analysts had been cheering on as of Fed Chair Jay Powell’s latest public appearance indicating the Fed will begin the process of slowing interest rate hikes was not actually attributed to Santa Claus. It’s more closely aligned to other painful head-fakes investors have been prone to throughout 2022.

From the very start of this year, each market peak has been lower than the last, and each valley has been lower, as well. An air of positive bullishness accentuating the rosiest of possibilities has been routinely slapped down by the realities of persistent inflation and a Fed catching up fighting it with higher interest rates. This latest peak was no different: investors start talking about the Fed stopping and pivoting on interest rates, but in reality these events look to be deep into 2023 from this vista.

Next week, the Federal Open Market Committee (FOMC) reconvenes and will raise interest rates another half-point to put Fed funds over 4% for the first time in 15 years. This will happen a week from today. On Tuesday of next week, we’ll get fresh data on the Consumer Price Index (CPI) for November. Those will be the two largest potential market catalysts, perhaps through the end of the year. If we are to see a bump in market valuations before the end of the year, look toward next week to find it.

That 50 basis-point hike may spur semi-rally all by itself, perhaps to levels we reached mid-last week. Core CPI, year over year, was +7.7% last time around — much better than the 9%+ we’d seen earlier in the year, but still close to 4x higher than what the Fed continues to consider optimum inflation levels. Even core CPI at +6.3% is more than the optimum +2%. However, should another half-point or more be shed from November CPI year-over-year next Tuesday, this might poise markets for a holiday-situated upturn.

Otherwise, we’re now sitting around contemplating our navels and trying to figure out how the Fed lands the inflation plane without bumping (or crashing) into a recession. There’s an old saying: “Idle hands are the devil’s workshop.” Well, the same might be said for idle market participants: it doesn’t take much of an examination of the 2-year and 10-year yield curve inversion — less than 60 bps currently, by the way, a big improvement from early this morning — to start fretting that the inflation plane isn’t going to land safely.

We suggest doing what the weather has been doing over the past month here in Chicago: chill. This rate-hike cycle is already demonstrably in its late stages; we’re going to get where we need to go. There are plenty of reasons to believe if we do settle into a recession it won’t be particularly deep — banks are well situated with capital, industries are well stocked with labor. If the investment environment gets more difficult than it is right now, it will likely still bear a strong resemblance to our condition today.

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22.

7 Index Funds to Buy to Retire a Millionaire

2022-11-23 23:01:23 by Josh Enomoto from InvestorPlace

Recently, Barron’s published a thought-provoking op-ed which triumphantly declared that stocks have already bottomed, which might not be the positive catalyst for index funds, as you might think it is. After all, one of the key advantages of this broad-stroke investment strategy is to mitigate volatility. Through multiple bets via a benchmark indicator, investors are less likely to suffer catastrophic losses.

Among the central points of the aforementioned op-ed centered on inflation; namely, the trajectory of rising prices may have peaked, which would imply a relaxing of the Federal Reserve’s hawkish policy. That would be great for individual wagers, which if correct would likely draw better rewards than index funds to buy. But here’s the thing – no one really knows for sure what may transpire next. Even the confident Barron’s article left room for doubt. Therefore, index funds to buy remain incredibly relevant, if not more so right now.

SPY SPDR S&P 500 ETF Trust $402.42
QQQ Invesco QQQ Trust $288.82
MDY SPDR S&P MidCap 400 ETF $465.10
IWO iShares Russell 2000 Growth ETF $227.00
VFIAX Vanguard 500 Index Fund $370.33
VEIEX Vanguard Emerging Markets $24.43
VSMSX Vanguard S&P Small-Cap 600 $374.90

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SPDR S&P 500 ETF Trust (SPY)

Man standing behind a Wall Street chart with S&P 500 on top of it. SPY stock.Source: Funtap / Shutterstock

A venerable name among index funds to buy, the SPDR S&P 500 ETF Trust (NYSEARCA:SPY) generally corresponds to the price and yield performance of the benchmark S&P 500. On a year-to-date basis, SPY dropped a little over 16% of equity value, almost exactly the same as the S&P. Notably, though, in the trailing month, the SPY exchange-traded fund gained 5.5%, reflecting a possible momentum shift.

Fundamentally, the SPDR S&P 500 ETF focuses mostly on U.S.-based blue chips. Its top three holdings are Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT) and Amazon (NASDAQ:AMZN). These stocks represent 6.84%, 5.39% and 2.5% of the SPY’s holdings, respectively. Sector-wise, the SPY mostly covers the technology sector with a 23.73% weighting, followed by healthcare and financial services at 15.24% and 13.85%, respectively. On a final note, the expense ratio for the SPY pings at 0.09%. This compares very favorably to the category average of 0.41%.

Invesco QQQ Trust (QQQ)

index fundsSource: Shutterstock

While the tech sector delivers the most innovative businesses to investors, it also features some of the highest-risk profiles in the market. Still, those with a patient outlook may want to consider the Invesco QQQ Trust (NASDAQ:QQQ). Per its prospectus, it generally corresponds to the price and yield performance of the Nasdaq 100 index. Since the start of this year, QQQ declined nearly 29%.

At the same time, QQQ gained nearly 3% in the trailing month, reflecting a rise in enthusiasm for growth-oriented investments. Still, individual names can be risky during this ambiguous environment, thereby making QQQ an ideal play among index funds to buy. Through the QQQ, you can gain balanced exposure to Apple, Microsoft and Amazon – its top three holdings. As well, you can acquire intriguing discounts such as Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) and Tesla (NASDAQ:TSLA).

Obviously, tech represents the lion’s share of QQQ’s weighting at 48.23%. However, it also involves communication services and consumer cyclicals at weightings of 15.25% and 14.14%, respectively. Finally, the Invesco tech ETF features an expense ratio of 0.20%, below the category average of 0.56%.

SPDR S&P MidCap 400 ETF (MDY)

Blocks spelling out index fundsSource: Dmitry Demidovich / Shutterstock

While large caps usually offer the most stable investment opportunities among index funds to buy, they can also be boring. For those investors that want a little extra kick in their portfolio but without going purely speculative, the SPDR S&P MidCap 400 ETF (NYSEARCA:MDY) could be just right. Per the ETF’s prospectus, the MDY corresponds to the price and yield performance of the S&P MidCap 400.

Since the beginning of the year, MDY dropped 10.5% of market value, which is rather surprising. Ordinarily, you’d expect the more stable large-cap index funds to buy to outperform during market volatility. In the trailing month, MDY gained 9.5%, reflecting strong near-term momentum.

The ETF’s top three holdings are Steel Dynamics (NASDAQ:STLD), First Solar (NASDAQ:FSLR) and First Horizon (NYSE:FHN). Primarily, MDY’s weighting focuses on the industrials at 18.52%, followed by financial services and consumer cyclical at 15.54% and 14.26%, respectively. Finally, MDY features an expense ratio of 0.22%, slipping under the category average of 0.41%.

iShares Russell 2000 Growth ETF (IWO)

Illustration of an ETF in multiple sectors.Source: SWKStock / Shutterstock

Investors can’t live on bread-and-butter investments alone but must venture out into the wilderness of high-growth opportunities on occasion. Fortunately, in this day and age, investors enjoy ample and diverse selections among index funds to buy. In particular, those that want to roll the dice a bit should check out the iShares Russell 2000 Growth ETF (NYSEARCA:IWO). Per its prospectus, the IWO fund tracks the investment results of the Russell 2000 Growth Index.

The aforementioned index measures the performance of small-cap stocks. Indeed, the top three holdings of IWO feature lesser-known enterprises: ShockWave Medical (NASDAQ:SWAV), Matador Resources (NYSE:MTDR) and Emcor Group (NYSE:EME).

Mostly, the iShares Russell 2000 targets the healthcare segment at a 21.81% weighting, followed by technology (20.72%) and industrials (17.35%). Geographically, the IWO is mostly geared toward U.S. companies with a 98% weighting. Finally, the IWO fund features an expense ratio of 0.23%, significantly below the category average of 0.56%.

Vanguard 500 Index Fund (VFIAX)

Source: Shutterstock

Although ETFs garnered much popularity as index funds to buy, traditional mutual funds deliver their own advantages. For instance, the latter offers a wider variety of offerings and investment strategies. As well, mutual funds often facilitate superior support services.

Regarding the Vanguard 500 Index Fund (MUTF:VFIAX), this investment tracks the S&P 500. Currently, the VFIAX fund dropped 16% YTD. However, in the trailing month, it’s up nearly 6%. The Vanguard 500’s top three funds are identical to the venerable SPY: Apple, Microsoft and Amazon. In terms of sector weighting, the VFIAX primarily targets tech (24.69%), followed by healthcare (14.16%) and financial services (12.96%).

Finally, the VFIAX features a net expense ratio of 0.14%, below the category average of 0.87%. As well, its management fee is 0.13%, which sits below the category average of 0.5%.

Vanguard Emerging Markets (VEIEX)

image of the vanguard app iconSource: Shutterstock

Usually, financial advisors will direct their clients to U.S.-based investments. Owning the world’s reserve currency and (so far) the top economy brings with it incredible privileges. Still, the U.S. is a mature market. For those seeking more robust upside – in exchange for a higher-risk profile – the Vanguard Emerging Markets (MUTF:VEIEX) may be an intriguing alternative.

Per the fund’s prospectus, VEIEX closely tracks the MSCI Emerging Market Index. Since the start of the year, the fund lost over 22% of market value. However, in the trailing month, it gained over 9%, possibly reflecting a sentiment shift. Its top three holdings are Taiwan Semiconductor (NYSE:TSM), Tencent (OTCMKTS:TCEHY) and Alibaba (NYSE:BABA).

Currently, this Vanguard fund’s top weighting concentrates on financial services at 21.09%, followed by technology (15.87%) and consumer cyclical (13.76%). Finally, VEIEX features a net expense ratio of 0.29%, well below the category average of 1.26%. As well, its management fee is 0.27%, below the category average of 0.88%.

Vanguard S&P Small-Cap 600 (VSMSX)

vanguard website displayed on a mobile phone screen representing vanguard etfsSource: Shutterstock

While slow-and-steady investments in blue-chip enterprises may represent the surest way to wealth, it’s also time consuming. For those that want to quicken the pace in their index funds to buy, the Vanguard S&P Small-Cap 600 (MUTF:VSMSX) may provide an attractive alternative.

Since the January opener, VSMSX declined a bit over 12%, which again represents a relatively robust performance. In the trailing month, the mutual fund gained over 8%, demonstrating a return of bullish sentiment. According to its prospectus, the Vanguard S&P Small-Cap seeks to track the performance of the S&P SmallCap 600 index.

Presently, VSMSX’s top three holdings are Agree Realty (NYSE:ADC), ExlService (NASDAQ:EXLS) and Lantheus (NASDAQ:LNTH). Primarily, the fund targets the industrials sector with a 15.63% weighting, followed by tech (13.57%) and consumer cyclical (12.31%). Lastly, the VSMSX fund features a rock-bottom net expense ratio of 0.08%, well below the category average of 1.06%. Also, its management fee is 0.07%, below the category average of 0.69%.

On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.

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23.

Jobless Claims, Goods Orders, Airline Metrics Up Ahead of Holiday

2022-11-23 15:16:03 by Mark Vickery from Zacks

Wednesday, November 23, 2022

Pre-market futures are flat at this hour, following the release of economic and employment data that continues to suggest the U.S. economy is on sound footing — or at least not on the very brink of recession, as many analysts had forecast by now. We’re also embarking on Thanksgiving travel weekend, so trading volumes are depleted (and are expected to be on Friday’s half-day session, as well).

Initial Jobless Claims last week came in higher than expected: 240K, the most for a weekly tally since August and +17K from the previous week’s upwardly revised 223K. We’re off the July peak of 261K, but certainly higher than the 50-year lows we were seeing back in April of this year, when we were seeing reports down in the 160Ks. New claims are creeping up; will they continue on this trajectory, or will they ebb back down again?

Continuing Claims give us a bigger picture of the labor market, and here we see a rise week over week, as well: 1.551 million is notably higher than the 1.51 million reported a week ago. Longer-term jobless claims are reported a week behind new claims, so we may expected these numbers to keep moving higher in the next week. That said, we don’t appear to be in any pocket of labor market softness that would augment the Fed’s trajectory for interest rate increases — not yet.

Next week will tell us more, not only with fresh weekly claims data but with a private-sector monthly employment report from ADP ADP and next Friday’s non-farm payrolls for November. For October, we saw gains of 239K new jobs filled on the ADP report and 261K for non-farm payrolls. These continue to represent a healthy labor market — will we start to see evidence of this eroding? Analysts will certainly be paying attention.

Durable Goods Orders for October doubled expectations on headline: +1.0% versus +0.5% estimated. This is the highest print since June’s +2.3% and more than 3x higher than September’s +0.3%. Ex-transportation, +0.5% is the number — well above the 0.0% analysts were looking for. This is the highest read since March. Not exactly a ringing endorsement for a pending recession.

Non-defense, ex-aircraft orders — a proxy for “normal” business investment (computers, furniture, office space, etc.) swung to a positive +0.7% from the previous month’s -0.8%. Shipments, which fold into other economic data elsewhere, came in at a higher-than-expected +1.3%. So the business of trade is picking up; this is good news for everything except inflation metrics.

After the opening bell today, we’ll also get new S&P PMI data on both Manufacturing and Services for the month of November. Both appear headed subtly in opposite directions, but both look to continue to hover around the 50-level that separates expansion from contraction. Also a new University of Michigan consumer confidence survey is out later this morning, and the minutes from the latest Fed meeting are out this afternoon.

A quick glance at the current travel industry in the U.S. — with so many people on the go for the holiday — shows airlines on sounder footing than they’ve been in the past few years: staffing is +6.4% from a year ago, +2.7% from the previous comparable year of 2019. Flights have been reduced, but resources — attendants, mechanics, etc. — have increased. Also, jet fuel is down -37% versus Thanksgiving Week a year ago. Thus, major airlines, which are mostly down year-to-date but nowhere near Big Tech, are sitting pretty from this vista.

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24.

Stocks surge at open, Nasdaq solidly in the green

2022-11-15 14:46:10 by Yahoo Finance Video

Yahoo Finance Live’s Brad Smith breaks down how stocks are trading following the opening bell.


25.

Nasdaq rips higher, S&P 500 gains as tech lifts stocks

2022-11-10 15:14:45 by Yahoo Finance Video

Yahoo Finance's Brad Smith breaks down the rising tide in stocks on Thursday morning.


26.

ETF investors are ‘trying to get back to core set of exposures’ amid surging inflows, expert says

2022-11-09 21:12:11 by Yahoo Finance Video

VettaFi Financial Futurist Dave Nadig joins Yahoo Finance Live to discuss the surge of net ETF inflows in the month of October and why many are focused on tech and bitcoin ETFs.


27.

How Every Leveraged ETF Can Cost Investors Money

2022-11-04 09:55:00 by Dan Caplinger, The Motley Fool from Motley Fool

Investors in the Nasdaq have seen huge ups and downs in the past several years. The beginning of the COVID-19 pandemic caused a near-panic in the stock market, but many of the tech stocks in the Nasdaq performed well once it became clear that their services would become essential to maintain business activity at reasonable levels. When all is said and done, though, the Nasdaq-100 index has posted a reasonable gain of more than 23% since the beginning of 2020.


28.

Nasdaq leads market declines, British pound loses value against U.S. dollar

2022-11-03 15:19:50 by Yahoo Finance Video

Yahoo Finance’s Jared Blikre breaks down stocks in the red, the British pound falling on the heels of a Bank of England rate increase, and Treasury yields.


29.

Economic Data Gradually Dwindles: Jobless Claims, Productivity & More

2022-11-03 14:33:02 by Mark Vickery from Zacks

Thursday, November 3, 2022

New weekly jobless claims are out this morning, with Initial Jobless Claims reaching 217K, beneath expectations and 1000 fewer claims than the upwardly revised 218K the previous week. Continuing Claims reached 1.485 million -- higher than recent reads, but historically still pretty low.

We’ve been pretty much range-bound on either side of 200K initial claims since August or so. These are still historically low figures, continuing to demonstrate a frustratingly healthy labor market.

I’m kidding, of course — countries all over the world wish they had our problems. But without some clear and sustained decay in employment, the Fed has already said as of yesterday afternoon it’s going to keep the hammer down to defeat inflation. Fed Chair Powell did acknowledge the workforce may be the very last indicator of an economic slowdown, but nevertheless, here we are.

Tomorrow’s big non-farm payroll report from the U.S. government expects to bring in around 200K new jobs last month. Yesterday’s private-sector payroll report from ADP ADP showed better-than-expected job growth, especially in Services and particularly Leisure & Hospitality. There was negative job growth in Manufacturing and Information sectors last month in the ADP print; we’ll make sure to compare notes tomorrow, even though we all know these monthly job reports don’t always present in-line numbers in real time.

The other side of employment is productivity, and Q3 Productivity numbers are out this morning, as well. A headline of +0.3% is 10 basis points (bps) lower than expectations, but swung to a positive from the previous month’s slightly downwardly revised -4.1% in Q2. These are preliminary seasonally adjusted, annualized figures, and can be expected to be revised over time.

Unit Labor Costs for Q3 also came in lower than expected — a rarity; usually these reports are somewhat inverse of one another — +3.5% on headline, below the +4.0% economists were looking for. The Q2 revision was significant: +8.9%, still high, but well off the +10.2% we saw at our last look. For some perspective, earlier this year we registered unit labor costs +12.7%; thus, while employment metrics remain strong, wage growth is not following suit — at least not to the same extent.

Our Foreign Trade Deficit for September came in this morning at -$73.3 billion, worse than expectations by a billion dollars or so, following an improved revision of -$65.7 billion from -$67.4 billion previously reported. Last month’s revision now represents a cycle ebb; the worst foreign trade deficit also happened to be an all-time low -$106 billion back in March of this year. So, while we still have improvements to make here, we’ve finally gotten a little slack in foreign trade over the past six months.

After today’s open, we’ll take a look at ISM Services for October and Factory Orders for September. With a Fed meeting still in our rearview mirror, these data points will not be directly consequential, just as those reported from this morning won’t be. But, as we do here at Ahead of Wall Street and the Fed does in its own way, we’re keeping track of incremental changes to these economic prints over time in order to help illustrate what our market will look like in the future. Pre-market futures are down again today, by the way, looking for a positive catalyst now that Powell has pooped our party.

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30.

Nasdaq, S&P 500 sectors dragged down by the Fed rate hike news ahead of the close

2022-11-02 20:29:19 by Yahoo Finance Video

Yahoo Finance's Jared Blikre breaks down how stocks are trading into the close as the Nasdaq and other major indices extend losses.


31.

Investing in the Stock Market Could Turn Your $10,000 Into $300,000. Here's How.

2022-10-29 14:08:00 by Dave Kovaleski, The Motley Fool from Motley Fool

It has been a brutal year for the stock market, but downturns like the current one are often the best time to invest. In theory, because valuations are depressed, investors have the opportunity to buy shares of quality companies at a bargain and watch their positions grow.


32.

Stocks trending after hours: Apple, Amazon, Intel, and more

2022-10-27 22:07:50 by Seana Smith from Yahoo Finance

Amazon (AMZN): Shares traded at their lowest level since March 2020 in extended trading on weak fourth-quarter guidance. Amazon sees revenue of $140 billion to $148 billion for its holiday quarter, missing Wall Street’s estimate of $155 billion. For the third quarter, the company reported sales of $127.10 billion, up 15% from a year ago, marking a return to double-digit revenue growth. AWS revenue was $20.5 billion, missing Wall Street’s estimate of $21 billion.

Apple (AAPL): Shares fluctuated in after-hours trading after Apple reported record revenue for its September quarter. The tech giant posted sales of $90.15 billion, up 8% from a year ago, while earnings were $1.29 per share.

iPhone sales totaled $42.6 billion, just shy of Wall Street’s expectations. “The strength of our ecosystem, unmatched customer loyalty, and record sales spurred our active installed base of devices to a new all-time high,” CFO Luca Maestri wrote in the earnings release. “Our record September quarter results continue to demonstrate our ability to execute effectively in spite of a challenging and volatile macroeconomic backdrop.”

Intel (INTC): Shares rose more than 6% in after hours trading after the chipmaker outlined cost-cutting plans through 2025. Intel aims to reduce costs by $3 billion in 2023, and by up to $10 billion by the end of 2025. The company’s adjusted earnings were 59 cents per share while revenue totaled $15.3 billion.

Pinterest (PINS): Shares surged in extended trading after the company beat on both the top and bottom lines. Sales were $685 million for the third quarter, up 8% from a year ago. Adjusted earnings were 11 cents a share. Global Monthly Active Users (MAUs) held flat year over year at 445 million.

Deckers Outdoor (DECK): The maker of Ugg boots and Hoka running shoes fell in extended trading after the company maintained its full year guidance but missed Wall Street expectations. Deckers Outdoor sales were $876 million, up 21% from a year ago, while Diluted earnings were $3.80 per share. In the earnings release, CEO Dave Powers wrote "As we head into the UGG brand's peak selling season and continue to fuel expanding demand for HOKA performance footwear, we are confident in our ability to deliver our maintained full year guidance."

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33.

Meta leads tech losses as Nasdaq turns lower

2022-10-27 14:13:31 by Yahoo Finance Video

Yahoo Finance's Brad Smith breaks down how stocks are performing in early trading.


34.

ETFs: 'Diversifying away from these big companies is important,' expert says

2022-10-26 19:44:48 by Yahoo Finance Video

VettaFi Vice Chairman Tom Lydon joins Yahoo Finance Live to discuss market opportunities outside of mega-cap stocks, active ETF management, and opportunities for Chinese stocks in the ETF space.


35.

Nasdaq opens sharply lower on rocky tech earnings

2022-10-26 13:50:59 by Yahoo Finance Video

Yahoo Finance's Brad Smith breaks down how the major indices and sectors are trading just after the opening bell.


36.

Nasdaq, S&P 500 add to gains, Dow opens lower

2022-10-25 13:52:19 by Yahoo Finance Video

Yahoo Finance's Brad Smith breaks down how stocks opened on Tuesday morning.


37.

Netflix stock leads Nasdaq 100 gains following earnings report

2022-10-21 19:48:41 by Yahoo Finance Video

Yahoo Finance Live anchors discuss why Netflix stock is moving higher on Friday.


38.

Japanese yen falls in currency markets, Nasdaq leaders rally

2022-10-21 19:13:48 by Yahoo Finance Video

Yahoo Finance's Jared Blikre breaks down how markets are trading toward the close of the week.


39.

Why Wall Street is warming up to small cap stocks: Morning Brief

2022-10-20 10:00:19 by Jared Blikre from Yahoo Finance

This article first appeared in the Morning Brief. Get the Morning Brief sent directly to your inbox every Monday to Friday by 6:30 a.m. ET. Subscribe

Wednesday, October 20, 2022

Today's newsletter is by Jared Blikre, a reporter focused on the markets on Yahoo Finance. Follow him on Twitter @SPYJared. Read this and more market news on the go with Yahoo Finance App

The volatility on Wall Street continued on Wednesday, this time to the downside. U.S. stocks closed in the red, eating into the prior two days' gains. 

While the small-cap Russell 2000 index declined the most — down 1.7% — it has outperformed the major indices recently. This performance has caught the attention of Wall Street, which is laser-focused on the impacts of the strengthening U.S. dollar and surging Treasury yields. 

Both of those factors likely led to Wednesday's decline in U.S. stocks. Small-cap companies — which generally have market capitalizations of less than $2 billion — tend to be less affected by currency fluctuations than larger cap companies. The stronger dollar is less likely to take a toll on these companies, as smaller caps are more likely to do business in the U.S. rather than overseas.

While the Russell 2000 index sold off sharply from mid-August to early October with the other averages, it didn't break down through its June low, while the so-called major averages did. 

The Russell bottomed on Sept. 26 — putting in its most recent low — days ahead of the Dow and two weeks ahead of the lagging Nasdaq.

This relative outperformance by small caps is catching the attention of Wall Street because, as Liz Young, head of investment strategy at SoFi, pointed out in a tweet, "small-caps have outperformed large-caps coming out of recessions 6 out of the last 6 times (all that we have data for)." 

Wall Street might debate whether we're in a recession, but it's undeniable that many stocks have declined this year. Until larger cap stocks stop making lower lows, small caps are looking like the better play and have the potential to lead the general market higher.

What to Watch Today

Economy

  • 8:30 a.m. ET: Philadelphia Fed Business Outlook Index, October (-5.0 expected, 9.9 during prior month)

  • 8:30 a.m. ET: Initial jobless claims, week ended Oct. 15 (230,000 expected, 228,000 during prior week)

  • 8:30 a.m. ET: Continuing claims, week ended Oct. 8 (1.380 expected, 1.368 during prior week)

  • 10:00 a.m. ET: Existing Home Sales, September (4.69 million expected, 4.80 million during prior month)

  • 10:00 a.m. ET: Existing Home Sales, month-over-month, September (-2.2% expected, -0.4% during prior month)

  • 10:00 a.m. ET: Leading Index, September (-0.3% expected, -0.3% in during prior month)

Earnings

  • Alaska Air (ALK), American Airlines (AAL), AT&T (T), Blackstone (BX), Nokia (NOK), Philip Morris International (PM), Snap (SNAP), Whirlpool (WHR)

Yahoo Finance Highlights

Netflix stock surges but Wall Street still seems split on future

The pandemic is finally hitting big tech — two years later

Tesla stock falls 5% after missing revenue expectations

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40.

ETFs are 'actually great price discovery vehicles' for the market: Expert

2022-10-19 20:03:47 by Yahoo Finance Video

ETF Think Tank Director of Research Cinthia Murphy joins Yahoo Finance Live to share the latest in the ETF space and what to know about direct indexing.


41.

REIT and Currency Hedged: 2 ETFs to Watch for Outsized Volume

2022-10-19 13:15:01 by Sweta Killa from Zacks

In the last trading session, Wall Street continued its second day of rally on bouts of strong earnings reports. Among the top ETFs, SPY gained 1.2% and DIA added 1.1%, while QQQ moved 0.8% up on the day.

Two more specialized ETFs are worth noting as both saw trading volume that was far outside of normal. In fact, both these funds experienced volume levels that were more than double their average for the most-recent trading session. This could make these ETFs the ones to watch out for in the days ahead to see if this trend of extra interest continues.

ICF: Volume 5.75 Times Average

This REIT ETF was in the spotlight as around 322,000 shares moved hands compared with an average of 205,000 shares a day. We also saw some price movement as ICF gained 1.1% in the last session.

The move was largely the result of rising shelter cost that could have a big impact on REIT ETFs like the ones we find in this ETF portfolio. ICF has declined 11% over the past month and has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook.

DXJ: Volume 3.85 Times Average

This Japan currency-hedged ETF was under the microscope as nearly 1.2 million shares moved hands. This compared with an average trading volume of roughly 528,000 shares and came as DXJ shed 0.4% in the last trading session.

The movement can largely be blamed on a rising dollar, and a falling yen that have raised the appeal for currency hedged ETFs. DXJ has plunged 1.1% in a month’s time and has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.


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42.

Top 25 QQQ Stocks By Index Weight

2022-10-14 18:52:20 by Insider Monkey Team from Insider Monkey

In this article, we will take a look at 25 top QQQ stocks by index weight. If you want to see some more of the stocks that the QQQ ETF owns, go directly to Top 5 QQQ Stocks By Index Weight.

The Invesco QQQ Trust (NASDAQ:QQQ) is one of the largest exchange traded funds in the world with assets under management of $147.52 billion as of 10/13 and a total expense ratio of 0.2%.

The Invesco QQQ Trust (NASDAQ:QQQ) under most circumstances, consists of all the stocks in the NASDAQ 100 index, which includes 100 of the largest domestic and international non-financial companies listed on the NASDAQ using market capitalization. The ETF and the NASDAQ 100 index is also re-balanced quarterly and they are reconstituted annually as well.

In terms of its sector allocation, Information Technology accounted for almost 50% of The Invesco QQQ Trust (NASDAQ:QQQ), and Communication Services accounted for 17.27%. Consumer Discretionary and Consumer Staples accounted for 14.98% and 6.67% respectively.

The Invesco QQQ Trust (NASDAQ:QQQ) has been around for a long time having been founded in 3/10/1999.

Since inception, the fund's NAV has averaged an annual return of 8.26% as of June 30, 2022 since inception. Due to the market weakness with the Federal Reserve having increased interest rates 5 times this year, The Invesco QQQ Trust (NASDAQ:QQQ) is down around 33% year to date, however.

Due to the NASDAQ 100 index including many tech names, The Invesco QQQ Trust (NASDAQ:QQQ) offers investor substantial technology exposure as some of the index's leading companies are at the forefront of tech trends such as augmented reality, cloud computing, big data, mobile payments and more.

With some economists expecting a potential recession in the future, there could be more downside in the market if economic data doesn't meet expectations. Nevertheless, the long term potential of The Invesco QQQ Trust (NASDAQ:QQQ) remains attractive.

Methodology

For our list of Top 25 QQQ Stocks By Index Weight, we took the top 25 holdings of all QQQ ETF holdings as of 10/12/22 and excluded Alphabet Class A since Alphabet Class C shares are also in the top 25.

Top 25 QQQ Stocks By Index Weight

25. Automatic Data Processing (NASDAQ:ADP)

Index Weight as of 10/12: 0.94%

Automatic Data Processing (NASDAQ:ADP) is one of the leading cloud based human capital management solutions. As of 10/13 Automatic Data Processing (NASDAQ:ADP) had a market cap of almost $100 billion and an index weight of 0.94% as of 10/12. As a result, Automatic Data Processing (NASDAQ:ADP) ranks #25 on our list of Top 25 QQQ Stocks By Index Weight.

Iakov Filimonov/Shutterstock.com

24. Advanced Micro Devices, Inc. (NASDAQ:AMD)

Index Weight as of 10/12: 0.94%

Advanced Micro Devices, Inc. (NASDAQ:AMD) is a leading semiconductor company that makes AMD Ryzen as well as AMD Athlon chips. In the last few years, Advanced Micro Devices, Inc. (NASDAQ:AMD) has gained market share against competitor Intel and as a result it has an index weight of 0.94% as of 10/12. Advanced Micro Devices, Inc. (NASDAQ:AMD) shares trade for a forward P/E ratio of around 13.6.

Semiconductor Photo by Yogesh Phuyal on Unsplash

23. Paypal Holdings, Inc. (NASDAQ:PYPL)

Index Weight as of 10/12: 0.98%

Paypal Holdings, Inc. (NASDAQ:PYPL) is a leading online digital payments company founded in 1998. Although shares of Paypal Holdings, Inc. (NASDAQ:PYPL) are down 55% year to date, they trade for a forward P/E ratio of 17.5. As of 10/12, Paypal Holdings, Inc. (NASDAQ:PYPL) has an index weight of 0.98%.

22. Netflix, Inc. (NASDAQ:NFLX)

Index Weight as of 10/12: 0.99%

Netflix, Inc. (NASDAQ:NFLX) is a leading streaming entertainment company that offers TV series, documentaries, feature films and also mobile games. Netflix, Inc. (NASDAQ:NFLX) also has around 222 million paid members in 190 countries. As of 10/12, Netflix, Inc. (NASDAQ:NFLX) had an index weight of 0.99%.

Photo by Souvik Banerjee on Unsplash

21. Starbucks Corporation (NASDAQ:SBUX)

Index Weight as of 10/12: 1%

Starbucks Corporation (NASDAQ:SBUX) is a leading coffee chain with 16,826 company operated and licensed stores in North America and 17,007 company operated and licensed stores internationally. In terms of the last twelve months, Starbucks Corporation (NASDAQ:SBUX) had total sales of almost $32 billion as well as net income of $4.168 billion. As of 10/12, Starbucks Corporation (NASDAQ:SBUX) had an index weight of 1%.

Copyright: buschmen / 123RF Stock Photo

20. Intel Corporation (NASDAQ:INTC)

Index Weight as of 10/12: 1.05%

Intel Corporation (NASDAQ:INTC) is a leading semiconductor company whose shares have fallen almost 50% due to the market weakness and competition. As a result of the decline, Intel Corporation (NASDAQ:INTC) has a market cap of around $115 billion as of 10/13 and an index weight of 1.05% as of 10/12. Intel Corporation (NASDAQ:INTC) also has a forward P/E ratio of around 10.

Semiconductor Photo by Yogesh Phuyal on Unsplash

19. Intuit Inc. (NASDAQ:INTU)

Index Weight as of 10/12: 1.1%

Intuit Inc. (NASDAQ:INTU) is a leading financial management and compliance products and services company that services small businesses and accounting professionals. Given the market decline, Intuit Inc. (NASDAQ:INTU) shares are down 38.5% and trade for a forward P/E ratio of around 25. As of 10/12, Intuit Inc. (NASDAQ:INTU) has an index weight of 1.1%.

Intuit Inc. (NASDAQ:INTU)

18. Honeywell International Inc. (NYSE:HON)

Index Weight as of 10/12: 1.17%

Honeywell International Inc. (NYSE:HON) is a diversified technology and manufacturing company that makes auxiliary power units, propulsion engines, integrated avionics and more. As of 10/13 Honeywell International Inc. (NYSE:HON) had a market cap of over $120 billion and an index weight of 1.17%. Honeywell International Inc. (NYSE:HON) shares are down around 15% year to date.

Honeywell International Inc. (NYSE:HON) Pixabay/Public Domain

17. QUALCOMM Incorporated (NASDAQ:QCOM)

Index Weight as of 10/12: 1.23%

QUALCOMM Incorporated (NASDAQ:QCOM) is a leading semiconductor maker that develops and commercializes foundational technologies for the wireless industry. In terms of the last twelve months QUALCOMM Incorporated (NASDAQ:QCOM) had total sales of over $42.1 billion and net income of almost $12.9 billion. As of 10/12, QUALCOMM Incorporated (NASDAQ:QCOM) had an index weight of 1.23%.

16. Comcast Corporation (NASDAQ:CMCSA)

Index Weight as of 10/12: 1.27%

Comcast Corporation (NASDAQ:CMCSA) is a leading media and tech company that whose media segment operates NBCUniversal's TV and streaming platforms. Comcast Corporation (NASDAQ:CMCSA) also has Cable Communications, Theme Parks and other segments. As of 10/12, Comcast Corporation (NASDAQ:CMCSA) had an index weight of 1.27%.

Longest Running TV Shows Currently On The Air Concept Photo/Shutterstock.com

15. Amgen, Inc. (NASDAQ:AMGN)

Index Weight as of 10/12: 1.33%

Amgen, Inc. (NASDAQ:AMGN) is a leading drug manufacturer that focuses on inflammation, oncology/hematology, bone health, and more. Despite the market weakness, shares of Amgen, Inc. (NASDAQ:AMGN) have rallied almost 12% year to date and trade at a forward P/E of 13.5. As of 10/12, Amgen, Inc. (NASDAQ:AMGN) had an index weight of 1.33%.

Sergey Nivens/Shutterstock.com

14. Adobe Inc. (NASDAQ:ADBE)

Index Weight as of 10/12: 1.35%

Adobe Inc. (NASDAQ:ADBE) is a leading diversified software cloud company whose products include the company's Adobe Creative Cloud. Given the market weakness and Adobe Inc. (NASDAQ:ADBE) agreeing to buy Figma for $20 billion, Adobe Inc. (NASDAQ:ADBE) shares are almost down 50% year to date. As of 10/12, Adobe Inc. (NASDAQ:ADBE) had an index weight of 1.35%.

adobe, basel, company, grey, logo, logotype, red, sign, signage, stone, switzerland, wall, white Copyright: photogearch / 123RF Stock Photo

13. Texas Instruments Incorporated (NASDAQ:TXN)

Index Weight as of 10/12: 1.4%

Texas Instruments Incorporated (NASDAQ:TXN) is a leading semiconductor manufacturer that sells to electronics designers and manufacturers. On 10/11, Joshua Buchalter of Cowen initated a 'Market Perform' and $170 price target on Texas Instruments Incorporated (NASDAQ:TXN). As of 10/12, Texas Instruments Incorporated (NASDAQ:TXN) had an index weight of 1.4%.

Photo by Umberto on Unsplash

12. Cisco Systems, Inc. (NASDAQ:CSCO)

Index Weight as of 10/12: 1.64%

Cisco Systems, Inc. (NASDAQ:CSCO) is a leading Internet Protocol based networking company. Cisco Systems, Inc. (NASDAQ:CSCO) also sells other products such as data center switching and also cloud-managed offerings. As of 10/13, Cisco Systems, Inc. (NASDAQ:CSCO) had a market cap of $172 billion and an index weight of 1.64% as of 10/12.

cisco, valley, silicon, logo, network, switch, tech, provider, business, sign, symbol, infrastructure, hub, technology, computer, equipment, computing, bone, electronic, Ken Wolter / Shutterstock.com

11. T-Mobile US, Inc. (NYSE:TMUS)

Index Weight as of 10/12: 1.68%

T-Mobile US, Inc. (NYSE:TMUS) is a leading telecom that offers voice, messaging, and data services to 108.7 million customers. On 9/29 Peter Supino of Wolfe Research upped his price target on T-Mobile US, Inc. (NYSE:TMUS) to $168 from $162 and kept an 'Outperform' rating citing a potentially lower baseline of underlying costs beginning next year. As of 10/12, T-Mobile US, Inc. (NYSE:TMUS) had an index weight of 1.68%.

10. Broadcom Inc. (NASDAQ:AVGO)

Index Weight as of 10/12: 1.76%

Broadcom Inc. (NASDAQ:AVGO) is a leading semiconductor company with a semiconductor solutions segment and an infrastructure software segment. Due to the market decline, Broadcom Inc. (NASDAQ:AVGO) shares are down 34% year to date, which is about the same as the NASDAQ's 33% decline. As of 10/12, Broadcom Inc. (NASDAQ:AVGO) had an index weight of 1.76%.

Semiconductor Photo by Yogesh Phuyal on Unsplash

9. Costco Wholesale Corporation (NASDAQ:COST)

Index Weight as of 10/12: 2.08%

Costco Wholesale Corporation (NASDAQ:COST) is a leading membership warehouse retailer. As of August 28, Costco Wholesale Corporation (NASDAQ:COST) had 838 membership warehouses including 578 in the United States and Puerto Rico. As of 10/12, Costco Wholesale Corporation (NASDAQ:COST) had an index weight of 2.08%.

costco, store, club, membership, sign, night, department, kirkland, corporation, sell, ontario, merchandise, retail, corporate, warehouse, business, buyer, canada, bright, Niloo / Shutterstock.com

8. PepsiCo, Inc. (NASDAQ:PEP)

Index Weight as of 10/12: 2.36%

PepsiCo, Inc. (NASDAQ:PEP) is a leading beverage and convenient foods worldwide. As of 10/13, PepsiCo, Inc. (NASDAQ:PEP) had a market cap of $243 billion and an index weight of 2.36%. For its third quarter, PepsiCo, Inc. (NASDAQ:PEP) reported core EPS of $1.97 versus the consensus of $1.84.

Pepsi, softdrinks ja-san-miguel-xYSp0kkIUio-unsplash

7. NVIDIA Corporation (NASDAQ:NVDA)

Index Weight as of 10/12: 2.45%

NVIDIA Corporation (NASDAQ:NVDA) is a leading graphics, compute and networking solutions company. On 10/11 Atif Malik of Citi cut his price target on NVIDIA Corporation (NASDAQ:NVDA) to $210 from $248 but kept a 'Buy' rating citing reduced estimates for cloud data-centric semis as well as slowing macro and advertising sales. As of 10/12, NVIDIA Corporation (NASDAQ:NVDA) has an index weight of 2.45%.

6. Meta Platforms, Inc. (NASDAQ:META)

Index Weight as of 10/12: 2.65%

Meta Platforms, Inc. (NASDAQ:META) is a leading social media company whose products include Facebook, Instagram, and WhatsApp. On 10/10 Brian Nowak of Morgan Stanley cut his price target on Meta Platforms, Inc. (NASDAQ:META) to $205 from $225 but kept an 'Overweight' rating on shares. Meta Platforms, Inc. (NASDAQ:META) has an index weight of 2.65%.

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43.

2 Magnificent Index Funds That Could Make You a Stock Market Millionaire

2022-10-11 14:00:00 by Trevor Jennewine, The Motley Fool from Motley Fool

Fortunately, it is still possible to become a stock market millionaire with less than $162 per week. Here are two index funds that could help you build a $1 million portfolio. The Vanguard S&P 500 ETF (NYSEMKT: VOO) tracks the S&P 500, an index comprising 500 of the largest U.S. companies.


44.

PCE Price Index In-Line, +6.2% Year Over Year

2022-09-30 14:27:02 by Mark Vickery from Zacks

Friday, September 30, 2022

We close out an eventful week on Wall Street with a comprehensive report on Personal Consumption Expenditures (PCE) for August, with results mostly in-line with expectations, as per normal. PCE Price Index figures are derived from a number of previously released data, like Retail Sales, so they don’t typically offer big surprise swings in either direction.

Headline PCE month over month reached +0.3%, as expected, following the -0.1% posted for July. The core read — stripping away more transitory aspects of consumer spending, food and energy — doubled the overall headline to +0.6%, 10 basis points (bps) hotter than expected and well above the 0.0% presented for the previous month.

The main aspect of these figures market participants pay closer attention to are the year over year numbers: +6.2% for the PCE Price Index, down 20 bps from July. Core year over year reached +4.9%, 20 bps above consensus and the upwardly revised previous month read. This suggests “transitory” inflation metrics have somewhat been absorbed into the stickier parts of the economy, making inflation more difficult to tame.

That said, +4.9% on core, while still historically high, is well below the +6.8% we saw in June of this year, which was the highest print we’d seen since Ronald Reagan’s first year as President. What we would rather see, of course, is these numbers come down on core as well as headline to have a better grasp of controlling overall inflation metrics. Clearly this is still a work in progress.

Real Consumer Spending for August swung to +0.1% from -0.1% in July, while Real Disposable Income for August posted an identical +0.1%, but which has come down notably from the +0.5% for the previous month. The demonstrates the consumer remains relatively undaunted in its purchases, even as extra cash in their paychecks may not be what they were just recently.

Market futures are flat, after a topsy-turvy past several days. Bullish traders will continue to seek a ramp to the highway, though even today's green shoots currently appear like dip-buying. It's the last day of the quarter, after all, and it's a Friday before earnings season. Thus, we don't expect crazy trading volumes or a big push in either direction. We look to finish the week in the red over all.

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45.

S&P 500 flat after hitting new yearly low, Nasdaq in the red

2022-09-28 13:50:07 by Yahoo Finance Video

Yahoo Finance's Jared Blikre breaks down how markets opened on Wednesday.


46.

QQQ ETF Risks and Rewards

2022-09-28 08:36:29 by Investopedia

The QQQ ETF attracts traders who want exposure to the tech sector. But are the risks and rewards worth it? We answer your QQQ questions here.


47.

10 Best ETFs to Diversify Your Portfolio and Avoid Risks

2022-09-23 17:37:33 by Hamna Asim from Insider Monkey

In this article, we discuss 10 best ETFs to diversify your portfolio and avoid risks. If you want to see more exchange traded funds in this list, click 5 Best ETFs to Diversify Your Portfolio and Avoid Risks

The importance of ETFs has redoubled in 2022 as the stock market takes a beating amid volatility, inflation and rate hikes. ETFs are managed by professionals who closely monitor changes at the stock market, and adjust the underlying portfolios and asset weights accordingly. Most ETFs also offer attractive distribution yields, as well as exposure to the biggest names in the market like Microsoft Corporation (NASDAQ:MSFT), Apple Inc. (NASDAQ:AAPL), and Johnson & Johnson (NASDAQ:JNJ), at relatively affordable prices.

A Bloomberg report dated September 9 reveals that Neuberger Berman, a private investment management firm, is planning to convert its only US commodity mutual fund into an exchange traded fund. Neuberger is the latest asset manager to jump on this ETF trend, and will likely pour around $1 trillion into the ETF universe with this move. The Neuberger Berman Commodity Strategy Fund, with $233 million in net assets, will be converted to an actively managed ETF in the fourth quarter of 2022. One of the primary reasons for the conversion is the lower-cost and more tax-efficient nature of ETFs. 

Money managers have been exiting emerging market ETFs rapidly, fearing a strong US dollar. Investors withdrew $1.21 billion from US-listed ETFs that invest in developing economies and emerging countries in the week ended September 2, and this was the highest pull back since May 2020, according to data presented by Bloomberg. This is why it is important to assess new market dynamics frequently and invest accordingly when one wants to diversify portfolios and avoid risks. 

10 Best ETFs to Diversify Your Portfolio and Avoid Risks Photo by Adam Nowakowski on Unsplash

Our Methodology 

We explored ETFs that offer exposure to multiple sectors of the economy, both value and growth plays, large and small-cap equities, and dividend stocks for a well-rounded outlook of some of the top funds listed on US exchanges. We have also discussed the top holdings of the ETFs to offer better insight to potential investors. 

Best ETFs to Diversify Your Portfolio and Avoid Risks 

10. Vanguard Real Estate Index Fund (NYSE:VNQ)

Vanguard Real Estate Index Fund (NYSE:VNQ) invests primarily in real estate investment trusts (REITs) that own and operate office buildings, hotels, residential properties, and other real estate. The ETF tracks the total returns of the MSCI US Investable Market Real Estate 25/50 Index. As of May 27, Vanguard Real Estate Index Fund (NYSE:VNQ) offers an expense ratio of 0.12%, while the average expense ratio of similar funds is 1.05%. The ETF holds 167 stocks in its portfolio, and as of August 31, the median market cap stands at $26.6 billion. Vanguard Real Estate Index Fund (NYSE:VNQ)’s total net assets were $72 billion as of late August. 

A top holding of Vanguard Real Estate Index Fund (NYSE:VNQ) is American Tower Corporation (NYSE:AMT), one of the largest global REITs that operates multi-tenant communications real estate. JPMorgan analyst Philip Cusick on September 8 reiterated an Overweight rating on American Tower Corporation (NYSE:AMT) with a $305 price target after meeting with CFO Rod Smith. The analyst had "incrementally positive views" on the U.S., Europe, and Asia-Pacific businesses of American Tower Corporation (NYSE:AMT), and he was "encouraged" by trends in Latin America and Africa as well. The U.S. services business appears "poised to remain strong" in the next year with the carriers benefiting from American Tower Corporation (NYSE:AMT)’s "value-added offerings," the analyst tells investors in a bullish thesis.

According to Insider Monkey’s data, 52 hedge funds were long American Tower Corporation (NYSE:AMT) at the end of Q2 2022, compared to 50 funds in the last quarter. Charles Akre’s Akre Capital Management is the biggest stakeholder of the company, with approximately 7 million shares worth $1.78 billion. 

Like Microsoft Corporation (NASDAQ:MSFT), Apple Inc. (NASDAQ:AAPL), and Johnson & Johnson (NASDAQ:JNJ), elite hedge funds are bullish on American Tower Corporation (NYSE:AMT). 

Here is what Baron Real Estate Fund has to say about American Tower Corporation (NYSE:AMT) in its Q2 2022 investor letter:

“American Tower is a leading global tower company with 220,000 communication sites globally and over 40,000 in the U.S. We added to our position during the market dislocation and as it became increasingly clear that the company would put permanent equity financing in place at better-than-expected terms for its previously announced acquisition of CoreSite (thereby removing the “equity overhang”).

In addition, the company stepped back from a large potential deal in Europe, which would have required significant incremental funding, due to unfavorable contract terms and price. This decision further reinforced our confidence in management’s capital allocation discipline knowing that these were highly sought-after assets.”

9. Invesco S&P 500 High Dividend Low Volatility ETF (NYSE:SPHD)

Invesco S&P 500 High Dividend Low Volatility ETF (NYSE:SPHD) tracks the performance of the S&P 500 Low Volatility High Dividend Index. The fund invests at least 90% of its total assets in the 50 securities in the benchmark index that have historically offered high dividend yields and low volatility. As of September 21, the SEC 30 day yield of Invesco S&P 500 High Dividend Low Volatility ETF (NYSE:SPHD) is 4.58%, and the fund offers a total expense ratio of 0.30%. The ETF has an average market cap of $75.5 billion. The portfolio comprises stocks from the utilities, real estate, consumer staples, financials, materials, energy, and communications services sectors, among others. It is one of the best ETFs to diversify a portfolio, as investors are seeking refuge in low volatility yet high income stocks. 

Altria Group, Inc. (NYSE:MO) is the biggest holding of the Invesco S&P 500 High Dividend Low Volatility ETF (NYSE:SPHD), representing 3.14% of the total portfolio. Altria Group, Inc. (NYSE:MO) is an American company that manufactures and sells smokable and oral tobacco products in the United States. On August 25, Altria Group, Inc. (NYSE:MO) declared a $0.94 per share quarterly dividend, a 4.4% increase from its prior dividend of $0.90. The dividend is distributable on October 11, to shareholders of record on September 15. The company delivered a dividend yield of 8.69% on September 22. 

According to the second quarter database of Insider Monkey, 48 hedge funds held stakes worth $1.8 billion in Altria Group, Inc. (NYSE:MO), up from 47 funds the prior quarter worth $1.95 billion. Arrowstreet Capital is the leading position holder in the company, with 8.86 million shares valued at $370.3 million. 

Here is what Broyhill Asset Management has to say about Altria Group, Inc. (NYSE:MO) in its Q2 2021 investor letter:

“Altria (MO) shook off the prospects of a ban on menthol and a potential cap on nicotine and gained 20%. We shared our thoughts on these regulations during the quarter, which are available here.

MO Valuation. MO is up ~ 18% YTD (even accounting for the recent sell-off). We expect MO to generate close to $5 in annual FCF per share over the next few years, putting the stock at ~ 10x, which is less than half the market’s multiple today. Over the last decade, shares have traded at an average multiple of 15x and within a range of ~ 10x – 20x (+/-1 standard deviation). The stock yields 7.2% at the current price, close to a 6% premium to treasuries. Historically, shares have traded closer to a 3% premium to the 10Y, which would imply a ~ $75 share price.”

8. Vanguard 500 Index Fund (NYSE:VOO)

Vanguard 500 Index Fund (NYSE:VOO) is one of the best ETFs to diversify a portfolio and avoid risks. The fund invests in stocks in the S&P 500 Index, which represents 500 of the largest American companies. Vanguard 500 Index Fund (NYSE:VOO) offers an expense ratio of 0.03% as of the end of April. The ETF is a feasible investment for long-term investors who want to grow their money. On August 31, the median market cap stood at $168.5 billion.

Apple Inc. (NASDAQ:AAPL) is the biggest holding of Vanguard 500 Index Fund (NYSE:VOO), with the stock representing 7.16% of the total portfolio. On September 20, Evercore ISI analyst Amit Daryanani raised the price target on Apple Inc. (NASDAQ:AAPL) to $190 from $185 and reiterated an Outperform rating on the shares, noting that demand for high-end iPhone models is "notably higher" compared to prior years. 

According to Insider Monkey’s Q2 data, Apple Inc. (NASDAQ:AAPL) was part of 128 hedge fund portfolios, compared to 131 in the prior quarter. Warren Buffett’s Berkshire Hathaway is the leading stakeholder of the company, with a position worth more than $122 billion. 

In its Q2 2022 investor letter, Alger Capital, an asset management firm, highlighted a few stocks and Apple Inc. (NASDAQ:AAPL) was one of them. Here is what the fund said:

“Apple Inc. (NASDAQ:AAPL) is a leading technology provider in telecommunications. computing and services. Apple’s iOS operating system is the company’s unique intellectual property and competitive strength. This software drives extremely tight engagement with consumers and enterprises. The engagement is fostering the growing purchase of high-margin services like music, apps, and apple pay. Apple’s shares detracted from performance as management lowered its guidance for the second quarter due to headwinds from the war in Ukraine, adverse foreign currency shifts, and dampened consumer demand associated with the coronavirus in China. Additionally, many investors were concerned that lockdowns implemented to curtail the spread of COVID-19 would impact production of apple products, however the manufacturing facilities have resumed activity.”

7. Invesco S&P 500 GARP ETF (NYSE:SPGP)

Invesco S&P 500 GARP ETF (NYSE:SPGP) seeks to track the investment results of the S&P 500 Growth at a Reasonable Price Index. The underlying index comprises roughly 75 stocks from the S&P 500 that have been categorized as having the largest “growth scores” and “quality and value composite scores”. Invesco S&P 500 GARP ETF (NYSE:SPGP) has an average market cap of roughly $138 billion as of the end of June 2022, and the total expense ratio on September 21 came in at 0.33%. It is one of the best ETFs to diversify a portfolio and avoid risks in this market environment. 

Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN), a New York-based manufacturer of medicines for multiple diseases, holds the leading position in Invesco S&P 500 GARP ETF (NYSE:SPGP)’s portfolio. On September 16, Canaccord analyst John Newman raised the price target on Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) to $750 from $700 and maintained a Buy rating on the shares, citing successful preliminary trial results from its collaboration with Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY). 

Among the hedge funds tracked by Insider Monkey, Jim Simons’ Renaissance Technologies is the biggest stakeholder of the company, with 583,062 shares worth $344.6 million. Overall, 44 hedge funds were bullish on Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) at the end of June 2022, with collective stakes worth $1.60 billion. 

In addition to Microsoft Corporation (NASDAQ:MSFT), Apple Inc. (NASDAQ:AAPL), and Johnson & Johnson (NASDAQ:JNJ), Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) is one of the stocks on the radar of smart investors. 

Oakmark Funds shared its stance on Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) in its Q2 2021 investor letter. Here is what the investment management firm said:

“We restored Regeneron Pharmaceuticals from a rather trivial to a more normal position size. You may recall Regeneron performed well for the Fund during the Covid-19 crisis, so we significantly reduced our position as its price-value gap narrowed. During the past several quarters, however, the market has experienced the now infamous “reopening trade,” in which companies that performed well during the pandemic trailed as the economy reopened. Regeneron suffered a similar fate and its shares have lagged the S&P 500 by roughly 4000 basis points, despite the company’s strong fundamentals and robust pipeline of new products. The underperformance widened Regeneron’s price-value gap, so we restored it to a more normal position size.”

6. Invesco QQQ Trust (NASDAQ:QQQ)

Invesco QQQ Trust (NASDAQ:QQQ) tracks the NASDAQ-100 Index and ranks in the top 1% of large-cap growth ETFs. Invesco QQQ Trust (NASDAQ:QQQ)’s performance has historically outperformed the S&P 500 Index. The fund exposes investors to long-term investment themes like augmented reality, cloud computing, big data, online streaming, electric vehicles, and more. As of September 21, Invesco QQQ Trust (NASDAQ:QQQ) reported $157.21 billion in assets under management. 

Microsoft Corporation (NASDAQ:MSFT) is one of the premier holdings of Invesco QQQ Trust (NASDAQ:QQQ). On September 20, Microsoft Corporation (NASDAQ:MSFT) declared a quarterly dividend of $0.68 per share, a 10% increase from its prior dividend of $0.62. The dividend is payable on December 8, to shareholders of record on November 17. In a recent interview with Bloomberg, Microsoft Corporation (NASDAQ:MSFT) CEO Satya Nadella reiterated his confidence that the $69 billion deal to acquire Activision Blizzard will get approved by regulators in the United Kingdom. It is Microsoft's largest acquisition ever.

Among the hedge funds tracked by Insider Monkey, Microsoft Corporation (NASDAQ:MSFT) was part of 258 public stock portfolios, with collective stakes worth $56 billion. Ken Fisher’s Fisher Asset Management is the leading position holder in the company, with a stake valued at $7.36 billion. 

In its Q2 2022 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Microsoft Corporation (NASDAQ:MSFT) was one of them. Here is what the fund said:

“Shares of Microsoft Corporation (NASDAQ:MSFT), a leading global provider of software solutions, declined 16.6% in the quarter along with the broader software group as well as due to growing concerns of a potential macro-driven slowdown. This is despite the company posting strong quarterly financial results and successfully absorbing headwinds from the war in Ukraine. The company had 21% revenue growth, 23% operating income growth, and 35% growth in Microsoft Cloud (all year-over-year in constant currency), which now represents 47% of total revenues. (read more…)

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48.

Stocks slip following Fed-induced sell-off

2022-09-22 15:24:09 by Yahoo Finance Video

Yahoo Finance's Jared Blikre breaks down how stocks are moving after the Fed's interest rate hike on Wednesday.


49.

Stocks fall on possibility of 75-basis-point Fed rate hike

2022-09-16 15:13:46 by Yahoo Finance Video

Yahoo Finance's Ines Ferré breaks down how stocks are moving near the close of the week, consumer sentiment, and ExxonMobil's market cap nearing that of Meta.


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Tech giants have bigger problems than rising interest rates: Morning Brief

2022-09-16 10:00:24 by Julie Hyman from Yahoo Finance

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Friday, September 16, 2022

Today's newsletter is by Julie Hyman, anchor and correspondent at Yahoo Finance. Follow Julie on Twitter @juleshyman.

Another day, another tumble in tech stocks.

The disproportionate shellacking the sector has suffered recently has raised questions about why, exactly, technology is seemingly so vulnerable to rising interest rates. 

The answer? Rate hikes are far from tech's only problem.

Traditionally, rising rate periods have implications for many sectors — not just tech. When rates go up, it costs more for companies to borrow money to finance their businesses. It can also mean consumers have less disposable income because they, too, are paying more for mortgages and cars and credit cards. That latter point is especially pertinent now. Not only are homebuyers paying more than 6% interest for a 30-year mortgage for the first time since 2008 — they’re doing it while paying 13.5% more for groceries than a year ago.

In other words, we’re seeing the double whammy of inflation and rising interest rates. While the Federal Reserve has been raising rates to tamp down on inflation, the central bank still has a long way to go. Data released on Tuesday revealed that inflation remains high at 8.3%, though it moderated slightly in August.

Of course, this environment has taken its toll on the broader market. The S&P 500 has fallen 17% this year, beginning its decline before the Federal Reserve began raising interest rates on March 16.

Still, tech has gotten slammed harder. The S&P Info Tech Index — whose members include tech giants such as Apple (AAPL) and Microsoft (MSFT) — has fallen 25% this year. The Communications Services group, with Netflix (NFLX) and Apple (AAPL), has fallen even further — by 33%.

Netflix Co-CEO Ted Sarandos accepts the 2022 Economic Development Visionary Award during the Hollywood Chamber of Commerce 2022 Economic Development Summit in Los Angeles, California, U.S., August 25, 2022. REUTERS/Mario Anzuoni
Netflix Co-CEO Ted Sarandos accepts the 2022 Economic Development Visionary Award during the Hollywood Chamber of Commerce 2022 Economic Development Summit in Los Angeles, California, U.S., August 25, 2022. REUTERS/Mario Anzuoni
Mario Anzuoni / reuters

Let’s leave aside the modeling and nitty-gritty calculation of higher financing costs and whether Netflix is paying more to service its debt than energy companies (the best S&P 500 performers this year).

Some of tech’s underperformance might come down to vibe. Speaking to Yahoo Finance's Brian Sozzi this week, Goldman Sachs Managing Director Eric Sheridan pointed out that tech is an inherently risky sector — and right now, investors crave safety because they're uncertain of the Fed's next moves.

“At the end of the day, what tech investors want is visibility into a calm economic environment,” Goldman Sachs Managing Director Eric Sheridan told our Brian Sozzi at his firm’s tech conference this week. In order for tech stocks to do well, he added, “You really need a stable macro environment where people feel comfortable putting more risk back on in their portfolio.”

It’s not just about feelings, though. Technology companies across the spectrum have seen lower demand recently as COVID-19 has eased and inspired consumers to re-join the physical world. Investors have had to readjust their expectations for the future growth of companies like Netflix and Meta (META).

Semiconductor makers have been hit in particular as they’ve struggled to adjust to the tightness in supply brought on during the pandemic, followed by the unwinding of that trend.

Paul Meeks, a veteran tech investor and portfolio manager at Independent Solutions Wealth Management, told Yahoo Finance that semiconductors are a key reason he’s underweight tech right now

While Meeks believes in tech in the long term, he contends the current inventory correction puts them at risk right now. “I’m really worried now, because the key driver for the tech sector is semiconductors. The semiconductor stocks are in peril," he said. “Semiconductor companies will be required to lead us out, and unfortunately, they are really sagging here. I don’t see near-term relief.”

While inflation and interest rates are two problems for tech, they’re clearly not the only challenges the sector faces right now. In the short term, at least, investors might continue to stay away.

What to Watch Today

Economic calendar

  • 10:00 a.m. ET: University of Michigan Consumer Sentiment, September preliminary (60.0 expected, 58.2 during prior month)

Earnings

  • Manchester United (MANU)

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