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4.

7 Safe ETFs to Shield Your Portfolio From Market Turmoil

2023-05-15 19:01:44 by Josh Enomoto from InvestorPlace

While the benchmark S&P 500 index may be up nearly 8% for the year, recent pensiveness in the market incentivizes consideration of safe ETFs to buy. Fundamentally, exchange-traded funds offer relative protection thanks to their broad footprint. By entering the market with several market ideas, you stand a better chance of success.

Not to break the fourth wall but have you ever seen a list of 7 stocks to buy and thought to yourself, wouldn’t it be great to buy all seven securities? With these ETFs to buy for safety, you can basically do just that. You pick a theme that you’re most interested in and find the fund that aligns with your goals. To be fair, these funds do have one drawback: the losers can mitigate or even drag down the winners. Nevertheless, a wider canvas may be appropriate under current circumstances. Therefore, investors should focus on the below safe ETFs to buy.

SPDR S&P 500 ETF Trust (SPY)

Tiles that say ETF on top of stacks of coins on a blue background

Source: kenary820 / Shutterstock

While the SPDR S&P 500 ETF Trust (NYSEARCA:SPY) might not be the most imaginative fund out there, if you’re looking for safe ETFs to buy, this is the place to start. According to its prospectus, the SPY seeks to corresponding generally to the price and yield performance of the S&P 500. Since the Jan. opener, the SPY gained a hair over 8%. That’s conspicuously a tick higher than the index it’s tracking.

In terms of holdings, the SPY ranks among the ETFs to buy for safety because of its exposure to established enterprises. Up top stands consumer technology giant Apple (NASDAQ:AAPL) with 7.45% of net assets. In a close second place comes Microsoft (NASDAQ:MSFT) at 6.71%. Rounding out the top three sits e-commerce pioneer Amazon (NASDAQ:AMZN) at 2.84%.

For sector weighting, technology dominates the SPY with an allocation of 26.83%. Down considerably further is the healthcare segment at 14.5%. That’s followed closely by financial services at 12.28%. Finally, the SPY’s expense ratio lands at 0.09%. In contrast, the category average stands at 0.43%.

Invesco S&P 500 High Div Low Volatility ETF (SPHD)

Blocks that spell out ETF in front of jar with money and change.

Source: SHUN_J / Shutterstock

During times of uncertainty, acquiring enterprises that offer strong dividends can be incredibly comforting. Of course, not every investor has the time to filter out the winners from the losers. But that’s where the Invesco S&P 500 High Div Low Volatility ETF (NYSEARCA:SPHD) may prove invaluable. According to its prospectus, the SPHD seeks to track the investment results of the S&P 500 Low Volatility High Dividend Index.

Ranking among the safe ETFs to buy, the top holding is a major tobacco company, carrying 3.27% of total net assets. In second place stands a top player in the telecommunications space, with 3.02% of net assets. As a side note, I own shares of the two enterprises above so I’m avoiding naming the companies. In third place is Verizon Communications (NYSE:VZ) at 2.88% of net assets. For sector weighting, the SPHD mostly targets real estate with an allocation of 18.23%. In second place is the utilities sector at 17.43%, followed by consumer defensive at 11%. Lastly, SPHD’s expense ratio is 0.3%, which is a bit on the higher side. The category average is 0.39%.

Consumer Staples Select Sector SPDR Fund (XLP)

Piggy banks with coins in them that spell out ETF.

Source: Maxx-Studio / Shutterstock

For the ultimate in ETFs to buy for safety, the Consumer Staples Select Sector SPDR Fund (NYSEARCA:XLP) makes for a tempting proposition. According to its prospectus, the XLP generally corresponds to the price and yield performance of securities listed in the Consumer Staples Select Sector Index. Since the beginning of this year, XLP gained nearly 4% of equity value.

Regarding top holdings, Procter & Gamble (NYSE:PG) perhaps unsurprisingly took pole position with 14.27% of total net assets. In a relatively close second place sits soft drink icon PepsiCo (NASDAQ:PEP) at 10.51%. Fittingly, third place belongs to PepsiCo rival Coca-Cola (NYSE:KO) at 9.71%. For sector weighting, the consumer defensive space naturally dominates at 98.99% of the total allocation. The rest goes to healthcare. Geographically, 100% of all held securities originate in the U.S.

In closing, the expense ratio of the XLP lands at 0.1%. That’s very attractive compared to the category average of 0.46%. Therefore, it’s one of the safe ETFs to buy, along with being one of the cheapest.

Vanguard Utilities Index Fund ETF (VPU)

ETF Investment index funds concept with letter wooden blocks and lots of different currencies, ETFs to buy. Emerging markets ETFs

Source: Eviart / Shutterstock.com

When faced with an uncertain market environment, utilities offer an excellent place to park your money. Fundamentally, it comes down to the concept of the natural monopoly. While any enterprise can compete with utility providers, the barriers to entry are so steep that most don’t even bother. It’s this same idea that helps undergird the Vanguard Utilities Index Fund ETF (NYSEARCA:VPU).

A top idea for safe ETFs to buy, Vanguard’s most prominent individual holding is NextEra Energy (NYSE:NEE) with 13.8% of total net assets. In a rather distant second is Southern Company (NYSE:SO) at 6.83%, followed right behind by Duke Energy (NYSE:DUK) at 6.69%. Of course, the VPU focuses almost exclusively on the utilities sector with a 99.4% allocation. However, the energy and technology sector make up the rest at 0.45% and 0.15%, respectively. All of the securities originate in the U.S. Lastly, the VPU’s expense ratio comes in at 0.1%. This figure offers a significant discount to the category average of 0.43%.

Invesco QQQ Trust Series 1 (QQQ)

Source: shutterstock.com/bangoland

While the tech ecosystem tends to carry a higher growth profile (and thus carries higher risk), the famous Invesco QQQ Trust Series 1 (NASDAQ:QQQ) could rank among the safe ETFs to buy. Basically, with the QQQ fund, you can spread out your wagers across a wide canvas, improving odds of success. Notably, since the January opener, QQQ gained nearly 23% of market value.

In terms of individual holdings, Microsoft commands the top spot with 12.6% of total net assets. Coming right on its heels is Apple at 12.49%. Noticeably further down is Amazon at 6.52%. However, the QQQ also includes other intriguing internet technologies and semiconductor firms.

Breaking down the sector weightings, tech obviously dominates with an allocation of 49.47%. However, the QQQ fund is rather diversified, carrying significant exposure to communication services (16.54%) and consumer cyclical (14.85%). Although the vast majority (97.9%) of firms call the U.S. home, the rest of the holdings cover Europe, emerging Asia and Latin America.

Finally, the QQQ’s expense ratio sits at 0.2%, well below the category average of 0.52%. Thus, it’s one of the intriguing ETFs to buy for safety.

Schwab International Equity ETF (SCHF)

Source: shutterstock.com/Imagentle

Although the U.S. market tends to be the most resilient, investors may want to rotate out of the domestic arena and into the global sector. For that, investors may want to consider the Schwab International Equity ETF (NYSEARCA:SCHF). According to its prospectus, the SCHF seeks to replicate the total return of the FTSE Developed ex US Index. One of the safe ETFs to buy, the fund comprises of large and mid-capitalization enterprises.

If you’re seeking results, the SCHF presents a profile that’s difficult to argue with. Since the beginning of this year, the fund gained almost 10% of market value. In the past 365 days, the SCHF moved up more than 6%. And over the past five years, it gained nearly 3%. Therefore, it’s remarkably consistent, which symbolizes a top attribute these days. For sector weighting, the financial services dominate the holdings with an allocation of 18.27%. That’s followed closely by industrials at 15.8% and healthcare at 11.94%. For geography, the Eurozone dominates with 27.3% coverage. Japan comes in second place at 21.2%.

To close, the SCHF’s expense ratio comes in at 0.06%, noticeably below the category average of 0.35%.

SPDR Gold Trust (GLD)

Photo of silver bull and bear figurines with the word

Source: shutterstock.com/gopixa

Garnering criticism from naysayers for being “just” a commodity, gold and other precious metals present controversy within come circles. However, with so many flashpoints to worry about, the yellow metal swung higher this year. Breaching the $2,000 price point again, the SPDR Gold Trust (NYSEARCA:GLD) looks awfully attractive. If you’re not into doomsday bunkers and hoarding food and ammo, the GLD offers a sensible option for safe ETFs to buy.

Since the beginning of this year, the GLD gained over 9% of market value. In the past 365 days, it’s up nearly 11%. Interestingly, over the past five years, the gold-focused fund stormed to almost 53%. If you’re any bit worried about economic and social stability, the GLD has gotten so much more attractive. Relatively speaking, the GLD isn’t just one of the ETFs to buy for safety. Rather, it can also be quite economical. Its expense ratio sits at 0.4%, conspicuously 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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5.

What's Going On With ProShares UltraPro Short QQQ ETF Today

2023-05-05 17:45:58 by Anusuya Lahiri from Benzinga

ProShares UltraPro Short QQQ (NASDAQ: SQQQ) is trading lower today as investors dump the U.S. treasury bills for higher-risk, higher-reward investments following a surge in treasury yields.
SQQQ is a 3x-leveraged inverse ETF that tracks the Nasdaq-100. It has 31% exposure to June 2023 t-bills
The impressive quarterly results from the likes of Microsoft Corporation (NASDAQ: MSFT), Meta Platforms Inc (NASDAQ: META), Apple Inc (NASDAQ: AAPL), Amazon.com Inc (NASDAQ: AMZN), Alphabet Inc (NASDAQ: GOOG) (NASDAQ: GOOGL) served a significant boost to investor sentiment since last two weeks.
Quite likely, Nasdaq-100 ETFs like Invesco QQQ Trust, Series 1 (NASDAQ: QQQ), and Invesco NASDAQ 100 ETF (NASDAQ: QQQM) are trading in the green.
The SQQQ ETF is ideal for investors with a bearish short-term outlook for nonfinancial equities and is trading lower by 47% YTD.
Contrastingly, ProShares UltraPro QQQ (NASDAQ: TQQQ), a 3x daily long leverage to the NASDAQ-100 Index, ideal for investors with a bullish short-term outlook for nonfinancial equities, is trading up in the green, up over 64% YTD.
The TQQQ ETF noted a $(1.2) billion fund outflow in the last three months and $(275) million in the previous five days. The SQQQ ETF saw an inflow of $2.59 billion in the previous three months and $753 million in the last five days.
Price Action: SQQQ traded lower by 5.04% at $29.23 on the last check Friday.

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This article What's Going On With ProShares UltraPro Short QQQ ETF Today originally appeared on Benzinga.com

6.

Beat the Nasdaq? This Dividend Stock Has Actually Done It.

2023-04-27 10:15:00 by Dave Kovaleski, The Motley Fool from Motley Fool

As a financial stock, you won't find this stock in the Nasdaq 100, but it has better returns than the index.

7.

How to 10X Your Retirement Savings While Barely Lifting a Finger

2023-04-25 11:06:00 by Dave Kovaleski, The Motley Fool from Motley Fool

History has shown us that bull markets last longer and outperform bear markets over time, and that the S&P 500 has generated about a 10% annual total return over the long haul, so keep that in mind as you build your nest egg. Starting early, without question, is the most important factor in supercharging your retirement savings. The more time you are invested in the market, the more time you have for your investments to compound, or gain earnings on top of earnings.

8.

3 ETFs to Buy for the AI Revolution

2023-04-20 19:56:58 by Bret Kenwell from InvestorPlace

Artificial Intelligence (AI) has been the talk of Wall Street this year, especially when it comes to new technologies and growth avenues. AI continues to grow at an alarming rate, leaving consumers and investors scrambling to keep up. It’s got the latter group looking for AI ETFs to buy.

No one knows where the next ChatGPT will come from or when it will pop up. Since hitting the scene in November 2022, ChatGPT has blown up in popularity. It garnered millions of subscribers in record time and new platforms seem to pop up overnight.

There’s no question that AI is transforming the way that we’re using technology. It’s not a fad and it’s not going away. Rules will likely be put in place, or there will be an attempt to, but as the saying goes “the cat is out of the bag.”

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So now the big question is how can investors position themselves to take advantage?

Invesco QQQ Trust Series (QQQ)

Man in blue shirt presents open hand with bulb concept floating above palm, innovation background.

Source: Shutterstock

I would start with the Invesco QQQ Trust Series ETF (NASDAQ:QQQ). While this ETF is hardly obscure and is one of the most popular trading vehicles in the market. It is a worthy consideration when looking for AI ETFs to buy.

Microsoft (NASDAQ:MSFT) is the top holding in QQQ, with a weighting of 12.63%. The tech giant has been positioning itself to have a great foothold in the AI space.

As soon as ChatGPT showed off its stuff, Microsoft moved quickly to make a multi-billion dollar investment in the platform’s parent company, OpenAI. Now Microsoft is working to integrate AI into its search and browser products, as well as its other platforms aimed at enterprise use.

Nvidia (NASDAQ:NVDA) is another top holding in QQQ, coming in as the fourth-largest holding. Nvidia produces the hardware that makes AI possible. While others will eventually enter its domain, Nvidia is the king of AI chips for the moment.

VanEck Semiconductor ETF (SMH)

Close-up Presentation of a New Generation Microchip. Gloved Hand Holding Piece of Technological Wonder. Semiconductor stocks are in the news.

Source: Shutterstock

Another ETF where Nvidia is a top holding? The VanEck Semiconductor ETF (NASDAQ:SMH). Only in this case, Nvidia is the top holding in the fund, with a 13.66% weighting. The next largest company in the ETF is Taiwan Semiconductor (NYSE:TSM) with an 11.57% weighting.

That’s significant, as a quarter of the ETF is tied up in two stocks. More than 64% of SMH is invested in its top 10 holdings. So why am I picking this ETF? Put simply by Forbes:

“If you want investing exposure to artificial intelligence (AI) without betting on young, unproven companies, semiconductors may be your angle. Semiconductors are the building blocks of AI applications—so as AI adoption grows, so does the demand for semiconductors.”

None of this is possible without semiconductors and the strain and demand from new technology using AI applications is going to be intense. That means better chips, higher-end components and all-around stronger demand for the parts produced by semiconductor companies.

Global X Autonomous And Electric Vehicles ETF (DRIV)

Businessman show business growth investment stock finance profit graph of marketing financial increase trade chart. Charging an electric car battery, new innovative technology EV Electrical vehicle. EV stocks. EV penny stocks.

Source: totojang1977 / Shutterstock.com

Lastly, there’s the Global X Autonomous And Electric Vehicles ETF (NASDAQ:DRIV). While the name of the fund would lead you to believe that this is simply geared toward vehicles, it’s got more AI exposure than you’d think at first glance.

First, its top holding is Nvidia. That’s followed by Tesla (NASDAQ:TSLA), Apple (NASDAQ:AAPL) and Alphabet (NASDAQ:GOOGL, NASDAQ:GOOG). While there is an electric vehicle component in there, all three companies will surely play a role in AI adoption. Alphabet is working on its own AI platform called Bard, and like Microsoft, will surely look to integrate it into its existing platforms.

Other top stocks in the fund, like Qualcomm (NASDAQ:QCOM), Intel (NASDAQ:INTC) and Microsoft, will all benefit from, and play a role in, the future of AI as well.

On the date of publication, Bret Kenwell 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.

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

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9.

Jobless Claims Makeover: 228K, 200K+ for 8 Weeks

2023-04-06 14:30:02 by Mark Vickery from Zacks

Thursday, April 6th, 2023

The parade of weak economic data continues this morning — in fact, it looks to have accelerated. Weekly Jobless Claims not only surged above 200K in the new claims side, which is something analysts had been scratching their heads waiting for, but seasonal adjustments going back over the past 12-week cycle or more now show we’ve been above 200K for the past eight weeks.

The headline number on Initial Jobless Claims registered at 228K for last week, above the 200K analysts were estimating (based on the non-seasonally adjusted levels), which had been the first time we’d seen a headline number above 200K since the first week of March. It turns out we’ve actually come down in claims from 246K the previous week, which originally was reported as 198K. In fact, we now see this is the lowest level of new jobless claims in the entire month of March.

Continuing Claims show a similar revision above a psychologically pleasing level, in this case 1.7 million longer-term jobless claims — we blew past it two weeks ago (Continuing Claims report a week in arrears from Initial Claims) to 1.823 million, up from the previous week’s upwardly revised 1.817 million. Previously, this longer-term claims figure had been reported at 1.69 million. Today’s number was thought to have been the highest tally since December of 2021.

OK, so now we’re more clearly aligned with the rest of the labor market data we’ve seen of late. These weekly claims numbers were the last bastion of robust employment we’d seen, and now these revisions blow them out of the water. In one way, this is good news: it’s crystal clear that high interest rate levels have shrunk inflation metrics — labor being the laggard indicator. We’re now here: the “pain” the Fed told us it would be inflicting on the economy.

With this newly found trajectory of jobless claims data, we now look toward downward trajectories in other aspects of the economy, and we have no shortage of these, even in this very week: S&P and ISM Manufacturing and Services PMI, Construction Spending, JOLTS, Factory Orders, ADP private-sector payrolls — all lower than expected. Weekly jobless claims almost feels like the other shoe dropping.

And it don’t stop: next week brings us CPI and PPI data, Retail Sales, Industrial Production and Capacity Utilization, plus new weekly jobless claims totals. Should this train of lower economic prints add more cars next week, we would be hard pressed to believe the Fed will continue raising interest rates at its next meeting on May 2nd and 3rd. And this, my friends, is where this train of “good news is bad news” and “bad news is good news” finally pulls into the station.

Tomorrow morning we get the all-important Employment Situation report from the U.S. government — and there is a key notice here: Zacks’ offices will be closed in observance of Good Friday, so our report on these figures will have to wait until Monday. The past three reads on this data have been all over the place: 239K in December, 504K in January, 311K in February. Estimates are for 238K, about the same as we saw in the final month of last year. But with other metrics taking out lows, we advise toward a downward bias on tomorrow’s report — perhaps a significant one.

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10.

Bond ETFs Reign Supreme as Equity Funds Hemorrhage Assets

2023-04-03 17:45:00 by Shubham Saharan from etf.com

Investors have largely shunned equity exchange-traded funds in lieu of their fixed income counterparts as several bank runs raise concerns of economic fragility.

U.S. fixed income funds lured in nearly $44 billion in the first quarter of the year, according to etf.com data. That’s nearly triple the $15 billion the asset class pulled in during the same period last year. Meanwhile, U.S. equity funds bled $2.9 billion in the first three months of the year, a reversal from the $99 billion haul they posted in the year-ago quarter.

Whipsawing markets, bank runs and back-to-back-to-back Federal Reserve interest rate hikes have resulted in investors rebalancing portfolios and shying away from risk. That’s taking its toll on equity flows, according to analysts.

That rebalancing is favoring Treasury bill ETFs, especially those with shorter duration exposures, etf.com data shows. Four of the 10 top asset gatherers so far this year have been government exposure funds. The iShares 7-10 Year Treasury Bond ETF (IEF), the iShares 20+ Year Treasury Bond ETF (TLT), the iShares 0-3 Month Treasury Bond ETF (SGOV) and the SPDR Bloomberg 1-3 Month T-Bill ETF (BIL) collectively brought in nearly $19 billion through the end of March, according to etf.com data.

Meanwhile, equity funds have largely hemorrhaged assets despite an uptick in the stock market. Year to date, the SPDR S&P 500 ETF Trust (SPY) has risen 7.5% year to date, while the tech-heavy Invesco QQQ Trust (QQQ) has jumped 20.1%.

Still, SPY has been the biggest loser of the year so far, as $8.9 billion has escaped the fund, etf.com data shows.

For a full list of last quarter’s top inflows and outflows, see the table below: 

Asset Classes (Year-to-Date)

	Net Flows ($, mm)	AUM ($, mm)	% of AUM
U.S. Equity	-2,855.37	3,967,836.34	-0.07%
International Equity	28,785.37	1,230,424.80	2.34%
U.S. Fixed Income	43,756.48	1,216,982.19	3.60%
International Fixed Income	5,400.18	145,695.02	3.71%
Commodities	-295.30	135,803.07	-0.22%
Currency	-517.25	3,597.38	-14.38%
Leveraged	1,955.06	55,373.98	3.53%
Inverse	2,859.06	21,784.00	13.12%
Asset Allocation	-2,045.28	15,865.59	-12.89%
Alternatives	-161.06	7,189.14	-2.24%
Total:	76,881.90	6,800,551.51	1.13%

Disclaimer: All data as of 6 a.m. Eastern time the date the article is published. Data is believed to be accurate; however, transient market data is often subject to subsequent revision and correction by the exchanges.

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11.

The 7 Best Tech ETFs to Buy for Diversified Exposure

2023-04-02 17:20:35 by Josh Enomoto from InvestorPlace

While picking individual market ideas may offer the biggest chance for upside, the process carries risks, which is where the best tech ETFs to buy may earn their keep. Fundamentally, exchange-traded funds offer a broad range of stocks under one basket, thus limiting risk while maximizing success. Further, focusing on innovative sectors like technology may yield compelling opportunities.

That said, humans have their own limitations regarding researching which funds may be the best tech ETFs to buy. Therefore, I decided to give ChatGPT a whirl and asked it for seven tech-related ETFs that offer diversified exposure. The below names are exactly what the artificial intelligence protocol provided in the order you see.

XLK	Technology Select Sector SPDR Fund	$151.01
VGT	Vanguard Information Technology Index Fund	$385.47
IXN	iShares Global Tech ETF	$54.36
FDN	First Trust Dow Jones Internet Index Fund	$147.85
QQQ	Invesco QQQ Trust Series 1	$320.93
BOTZ	Global X Robotics and Artificial Intelligence	$25.50
ARKK	ARK Innovation ETF	$40.34

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Technology Select Sector SPDR Fund (XLK)

Source: kenary820 / Shutterstock

According to ChatGPT, the Technology Select Sector SPDR Fund (NYSEARCA:XLK) tracks the performance of the Technology Select Sector Index, which includes companies in the technology sector of the S&P 500. Since the Jan. opener, the XLK got off to a blistering start, gaining nearly 21% of market value. However, for the year, it’s down more than 6%.

Still, the XLK may rank among the best tech ETFs for broad exposure to the innovation space. For example, the top three holdings of the fund are Microsoft (NASDAQ:MSFT), Apple (NASDAQ:AAPL), and Nvidia (NASDAQ:NVDA). Notably, the former two enterprises feature a weighting of 23.76% and 22.79%. Therefore, unless you believe the biggest tech giants in the world are about to implode, XLK should be a safe bet.

In terms of expense, the XLK appeals to cost-conscious investors with an expense ratio of 0.1%. This compares very favorably to the category average of 0.56%.

Vanguard Information Technology ETF (VGT)

Source: SHUN_J / Shutterstock

Per the AI protocol, the Vanguard Information Technology ETF (NYSEARCA:VGT) tracks the performance of the MSCI US Investable Market Information Technology 25/50 Index, which includes companies in the technology sector of the U.S. stock market. Since the beginning of the year, VGT gained nearly 20% of its market value. However, it’s worth pointing out that the ETF dipped 9% in the trailing year.

As with the Technology Select Sector SPDR Fund, Vanguard Information features a heavy dosing of sector giants. Indeed, the top three holdings run almost identical to XLK’s: Apple, Microsoft, and Nvidia. Further, the former two enterprises carry the load for the VGT, with net weightings of 22.32% and 17.12%, respectively.

However, VGT distinguishes itself with exposure to the financial services sector. While the XLK is 100% dedicated to technology, VGT throws a bone to financial services (7.12% weighting) and industrials (1.76%). Therefore, it’s a more diverse play among the best tech ETFs to buy. Lastly, VGT features an expense ratio of 0.1%, which is relatively cheap.

iShares Global Tech ETF (IXN)

Illustration of an ETF in multiple sectors.

Source: SWKStock / Shutterstock

As ChatGPT stated, the iShares Global Tech ETF (NYSEARCA:IXN) tracks the performance of the S&P Global 1200 Information Technology Sector Index, which includes companies in the technology sector of global stock markets. Like the other names among the best tech ETFs to buy, IXN got off to a strong start in 2023. Since the Jan. opener, it popped up nearly 21%.

However, IXN also dipped roughly 8% in the past 365 days, something to watch for prospective investors. As with Vanguard Information Technology, IXN caters to tech heavyweights. Its top three holdings are Apple, Microsoft, and Nvidia. On a familiar theme, Apple and Microsoft make up the bulk of the ETF, with weightings of 22.27% and 19.52%, respectively.

What makes IXN slightly more distinct than other AI-recommended entries for best tech ETFs to buy centers on diversification. The IXN happens to throw a bone (a very small bone) to industrials with a 0.49% weighting. Still, investors should watch the expense ratio of 0.4%, which is a bit high compared to the category average of 0.56%.

First Trust Dow Jones Internet Index Fund (FDN)

Source: Eviart / Shutterstock.com

Per ChatGPT, the First Trust Dow Jones Internet Index Fund (NYSEARCA:FDN) tracks the performance of the Dow Jones Internet Composite Index, which includes companies that generate at least 50% of their revenue from the internet. Since the January opener, FDN gained almost 17% of its market value. However, it fell more than 23% in the trailing one-year period.

For speculators, this might make a case for the best tech ETFs to buy on a relative “chart” discount. Contextually, FDN represents a fund that aims to swing for the fences. Its top three holdings are Amazon (NASDAQ:AMZN), Meta Platforms (NASDAQ:META), and Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL).

Of course, the risk factor here centers on the volatility of the three innovators. At the same time, according to TipRanks, all three feature consensus buy ratings. For Amazon and Alphabet, the consensus stands as a strong buy. Although FDN entices with its upside potential, keep in mind that its expense ratio runs warm at 0.51%. Again, the category average comes out to 0.56%.

Invesco QQQ Trust (QQQ)

An image of three glass piggy banks with ETF written on the sides on a table.

Source: Maxx-Studio/ShutterStock.com

From ChatGPT, the Invesco QQQ Trust (NASDAQ:QQQ) tracks the performance of the Nasdaq 100 index, which includes 100 of the largest non-financial companies listed on the Nasdaq stock exchange. Since the beginning of this year, QQQ managed an outstanding performance, gaining over 19% of market value. However, it’s still recovering from the tech fallout of 2022. Since the trailing year, it’s down 13%.

For those seeking a wide canvas of innovative firms, the QQQ ETF stands among the best tech ETFs to buy for diversification. Yes, the top three holdings carry a familiar tune: Microsoft (at 12.52% net weighting), Apple (12.32%), and Amazon (6.19%). However, QQQ doesn’t exclusively (or near-exclusively) focus on the tech sector.

In fact, at the time of writing, the QQQ represents just under 50% of the fund’s weighting. Coming in second place stands the communications services industry at 16.3%. Rounding out the top three is consumer cyclical at 15%. Finally, the QQQ offers a discount in terms of its 0.2% expense ratio. That’s meaningfully under the category average of 0.54%.

Global X Robotics & Artificial Intelligence ETF (BOTZ)

Source: shutterstock.com/bangoland

According to ChatGPT, the Global X Robotics & Artificial Intelligence ETF (NASDAQ:BOTZ) tracks the performance of the Indxx Global Robotics & Artificial Intelligence Thematic Index, which includes companies involved in the development and production of robotics and artificial intelligence products and services. Since the January opener, BOTZ gained over 21% of its market value.

Before you get too excited, you should also note that BOTZ dipped nearly 14% in the past 365 days. Nevertheless, it’s easy to see why ChatGPT suggested BOTZ as one of the best tech ETFs to buy for diversification. Basically, the fund doesn’t just carry a wide canvas of tech-related enterprises. Instead, its specific focus aims at the robotics and automation sector.

In that regard, it’s quite diverse. While the tech segment commands 47.27% of the net weighting, the industrials, and healthcare make up the top three with weights of 35.62% and 14.82%, respectively. Also, BOTZ is geographically diverse, with significant exposure in the U.S. and Japan.

However, BOTZ presents a lofty cost profile with an expense ratio of 0.68%. That’s just under the category average of 0.69%.

ARK Innovation ETF (ARKK)

Source: shutterstock.com/Imagentle

Finally, the AI protocol notes that the ARK Innovation ETF (NYSEARCA:ARKK) seeks to provide exposure to companies that are focused on disruptive innovation, including those involved in DNA technologies, robotics, energy storage, and more. Since the January opener, ARKK adopted a take-no-prisoners attitude, skyrocketing by over 26%. Nevertheless, it’s too early to celebrate as it also absorbed a 42% loss in the trailing year.

Understandably, ChatGPT selected ARKK as a candidate for best tech ETFs to buy for diversification because, well, it’s diverse. You can find the individual holdings here, which cover a wide range of relevancies. From electric vehicles to communication services to content streaming to cryptocurrencies, you can’t go wrong with ARKK if you’re primarily seeking a shotgun approach to the tech ecosystem.

However, ARKK represents a bold bet that could go awry based on broader economic circumstances. For instance, if monetary policy doesn’t play ball, cryptos may tumble. Therefore, it’s a high risk, high reward. If that appeals to you, more power to you. However, keep in mind that ARKK’s expense ratio runs extremely hot at 0.75%. Here, the category average sits at 0.46%.

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12.

The first quarter of the year sent investors back to the future: Morning Brief

2023-03-31 09:30:34 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

Friday, March 31, 2023

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 the Yahoo Finance App.

Investors are celebrating the surge in tech stocks in 2023 as though last year — the worst year for risk markets in decades — never happened.

They could be forgiven.

The Nasdaq 100 (^NDX) just entered a new bull market and is about to notch its best first-quarter return since 2012 — up 18.5% with one day to go. Apple (AAPL) and Amazon (AMZN) are each up over 20% this year, while Tesla (TSLA) has surged nearly 60%, and Meta Platforms (META) is up over 70%. Chipmaker Nvidia (NVDA) is approaching an eye-watering 90% return this quarter — its best in over two decades.

Markets have seemingly entered a time warp — where last year's losers are this year's winners, and vice versa. Tech stocks are bringing the FAANG vibes from 2021 and before.

But peering under the market's hood reveals some critical differences between 2023 and the prior era of preternaturally low interest rates when FAANGs flourished.

First, the bond market has been turned on its head since the Fed began furiously raising rates a year ago. The 40-year down trend in interest rates that existed prior is now reversing.

Markets never go straight up (or down), but a reprieve this year from higher rates has facilitated an echo of the prior era with tech stocks surging as interest rates wane. Suffice to say, knee-jerk reversions to the mean do not a trend make.

Second, concentration worries are surfacing again. Investors may remember concerns that megacaps were accounting for a disproportionate share of the gains in the major indices during certain stretches from 2017 to 2021.

Those concerns are back, though for different reasons.

Currently, the top ten Nasdaq 100 stocks account for nearly all of the gains this year in the Nasdaq 100 (88%). Apple and Microsoft alone account for 13.2% of the S&P 500's composition, the highest level since Ma Bell (T) and Big Blue (IBM) ruled the roost in 1978.

Companies no longer have access to cheap capital. The longer rates stay high, the more small companies will fail. The Nasdaq 100 is outperforming its broader cousin, the Nasdaq Composite (^IXIC), by 375 basis points this year, which reflects this strength of its higher-market cap constituents.

To illustrate just how long these things can play out, recall that stat about Nvidia from above.

The chipmaker is about to post its best quarter since the fourth quarter of 2001, when it soared 144%. That monster rally began in the midst of a U.S. recession and a bear market in the Nasdaq that spanned three years. The following year in 2002, Nvidia would go on to crash 90% (top to bottom) before finding its footing in October.

Currently, there are a few tailwinds that could boost the major indices further. Investor sentiment is skewing bearish, which is complementary to bulls in a contrarian fashion. And even with recent gains, the best-performing index, the Nasdaq 100, isn't yet overbought according to market technicals on all but the shortest time frames.

But longer-term, investors must contend with (1) an economy that has yet to fully adjust to the reality of materially higher rates versus 2021 and before, and (2) a Fed that has so far kept its hawkish promises.

Markets don't like uncertainty. Unfortunately, it's still uncertainty that reigns.

What to Watch Today

Economy

Personal income, February (+0.3% expected, +0.6% previously); Personal spending, February (+0.3% expected, +1.8% previously); MNI Chicago PMI, March (43.9 expected, 43.6 previously); University of Michigan consumer sentiment, March (63.4 expected, 63.4 previously)

Earnings

No notable companies set to report.

—

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13.

Tech Charges QQQ as Nasdaq Enters Bull Market

2023-03-30 19:00:00 by Shubham Saharan from etf.com

The tech-heavy Invesco QQQ Trust (QQQ) is on a tear with the underlying Nasdaq index moving into bull territory, as investors bet on a pause in interest rate hikes that may be favorable to technology companies.

QQQ rose nearly 1% in afternoon trading Thursday, extending its yearly gains and pushing the fund, and its underlying index, firmly into bull market territory.

The ETF, which has gained 21% since its low at the end of December, and 18% year to date, is at its highest level since August, and well ahead of the SPDR S&P 500 ETF Trust (SPY)'s 5.8% increase so far this year.

Technology stocks, which make up the majority of QQQ’s underlying index, have surged as investors bet the Fed will pause interest rate hikes. Some experts see the spate of bank failures, a weak housing market and fears of recession as reasons the Federal Reserve will end a cycle of rapid rate hikes.

“The Nasdaq's rebound is a reflection of this year's shift back into growth stocks and away from value stocks,” said Sumit Roy, senior ETF analyst at etf.com.

“The key driver seems to be a decline in long-term interest rates,” he added, noting the dip in the 10-year Treasury, which fell to 3.5% compared to the 4.25% when QQQ hit its low. 

The central bank raised rates 25 basis points on March 22, bringing the federal funds rate to sit between 4.75% and 5%, the highest level since 2007. In the last statement made by the Federal Open Market Committee, participants reaffirmed their commitment to cutting inflation from the current 6% to its 2% goal, while acknowledging the effect of tightening on markets. Still, it noted that rates may remain more elevated for longer than expected.  

“Movements in the rate will probably continue to influence the direction of QQQ in the short term, but at some point, earnings will start to become a factor again,” Roy noted.

Despite the uptick in stock prices, many large tech companies have posted lackluster earnings in recent months. Tech behemoths like Meta Platforms Inc., Apple Inc., Amazon.com Inc. and Alphabet Inc. collectively missed earnings estimates by 8% in the fourth quarter, according to data from Bank of America.

Contact Shubham Saharan at shubham.saharan@etf.com          

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14.

Q4 GDP Ticks Down to +2.6%; Jobless Claims Stay Low

2023-03-30 15:43:03 by Mark Vickery from Zacks

Thursday, March 30th, 2023

The second and final revision to U.S. Gross Domestic Product (GDP) is out this morning: +2.6% is 10 basis points (bps) downwardly revised from the first revision, which was down from +2.9% in the initial print. This is down from the +3.2% we saw in Q3 of last year, which followed two quarters of negative GDP: -1.6% and -0.6%, respectively. Year over year GDP for 2022 comes in at +3.9%, 200 bps lower than the very strong 2021, which provided the Great Reopening from the Covid pandemic.

Those two negative quarters in a row in the first half of last year would technically depict a recession, but that’s not the recession bearish analysts are concerning themselves with. It did mark the time the yield curve between 2-year and 5-year T-bills inverted, where it has remained to varying degrees ever since. And now the the Fed is at or near the end of its rate-tightening cycle, it’s something of a ticking clock toward a more meaningful recession taking hold… or not.

Not that our recent trading days have paid any of this much attention. The tendency is currently to move higher, even devoid of meaningful earnings news, though this may be to do more with near-term specifics — a major banking crisis looks to have been averted, for instance — than with projections about a soft or hard landing for the economy at some point down the road. All major indices are in the green ahead of today’s opening bell.

Initial Jobless Claims ticked up to 198K from and expected 195K, which is the same figure as the upwardly revised previous week’s total in new claims. It’s a psychological figure — 200K weekly new jobless claims — but it remains a bit of a head-scratcher considering the amount of high-profile layoffs we’ve seen over the past half-year or more. Perhaps the vast need for additions to the workforce are sopping up the newly unemployed before they can even bother to file for unemployment. That would be the best-case scenario for this disconnect between jobs numbers and their expectations.

Continuing Claims remain under 1.7 million — another psychological figure (in fact, anything under 2 million in longer-term jobless claims would speak of a healthy overall labor market) that cannot seem to be breached by numerous company layoffs of late: 1.689 million was the headline, up a tad from the 1.685 million, which is the previous week’s downwardly revised tally. We haven’t seen a Continuing Claims headline above 2 million since the final months of 2021.

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15.

ETFs Lost Assets Last Month, While Active Funds Grabbed Share

2023-03-28 19:30:00 by Ron Day from etf.com

Falling stock markets last month chipped away at total exchange-traded fund assets, while active funds jumped as investors turned to professional management to help them beat markets.

Total assets in U.S.-listed ETFs dropped 3.4% to $6.7 trillion, according to Cerulli Associates’ latest U.S. Monthly Products Trends report. The decline was led by stocks, as U.S. equity ETFs lost 2.4%, reflecting the less than 1% declines in the SPDR S&P 500 ETF Trust (SPY), which tracks the broad stock index, and the Nasdaq-tracking Invesco QQQ Trust (QQQ).

Actively managed ETFs took in $8.8 billion during the month, while $6 billion flowed out of passive funds, the lower-cost ETFs that track indexes without professional stock-picking, Cerulli’s Matt Apkarian said in comments emailed to etf.com.

“We can expect a risk-off environment to continue until the Fed stops raising rates and/or inflation falls,” he wrote. “I would bet we continue to see flows out of equity and into fixed income.”

A separate report from London-based ETFGI said that, globally, active funds pulled in $14.3 billion last month, soaring 35% from the January total of $10.6 billion. Year to date through the end of February, active inflows globally reached $22.3 billion, nearly triple the $8.2 billion pulled in during the same period last year.

Stocks wavered last month following a January rally and a quarter-point interest rate hike on Feb. 1. Markets also hesitated after reports showed inflation rose faster than expected, worrying investors that the Federal Reserve will continue to raise interest rates to slow economic growth.

“Markets appear to be bracing for ‘higher for longer’ interest rates from the Federal Reserve,” Nasdaq analysts wrote Feb. 28 in an end-of-month report.

The loss in stock ETFs was bond funds’ gain: Taxable bond exchange-traded funds’ assets gained 5.5% and municipal bonds added 26%, Apkarian wrote.

ETF net flows slowed to $2.3 billion, a steep decline from the previous five-month average of $52.8 billion per month, he said.

While passive ETFs’ overall assets fell by $228 billion, most of that was due to declining markets, as those funds saw $11 billion of inflows that month, he added.

Contact Ron Day at  ron.day@etf.com or follow him on Twitter at @RonDayETF 

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16.

7 Safe Index Funds to Buy as Investors Seek Shelter

2023-03-28 18:20:01 by Josh Enomoto from InvestorPlace

As the world grapples with the banking sector fallout, investors may want to consider safe index funds to buy just in case. More than likely, the world won’t implode into an apocalyptic mess. However, with the Federal Reserve committed to tackling inflation despite serious concerns about financial sector viability, market participants should think more about preserving their wealth rather than just growing it.

With safe index funds to buy, investors can bolster their chances of protection while staying in the market. An index fund represents a type of mutual fund or exchange-traded fund (ETF) that attempts to match or track elements of a major index such as the S&P 500. Essentially, this investment category allows participants to benefit from a basket of securities, thereby improving upside success. As well, losses can be distributed over a wider canvas, facilitating greater confidence. At this moment, that’s exactly what we all need. Below are the safe index funds to buy for investors seeking shelter.

VOO	Vanguard 500 Index Fund ETF	$361.98
DIA	SPDR DJIA ETF Trust	$322.88
XLP	Consumer Staples Select Sector SPDR Fund	$73.56
IWV	iShares Russell 3000 ETF	$226.47
IWM	iShares Russell 2000 ETF	$172.98
QQQ	Invesco QQQ Trust Series 1	$305.26
GLD	SPDR Gold Trust	$183.49

InvestorPlace - Stock Market News, Stock Advice & Trading Tips

Vanguard 500 Index Fund ETF (VOO)

Source: Vova Shevchuk / Shutterstock.com

One of the higher-profile safe index funds to buy, Vanguard 500 Index Fund ETF (NYSEARCA:VOO) seeks to track the performance of the S&P 500 index that measures the investment return of large-capitalization stocks, per its public profile. Since the start of the new year, VOO gained nearly 4% of market value. However, on a trailing-year basis, it has work to do, shedding more than 13%.

Fundamentally, Vanguard 500 should be attractive for investors because it targets the best that the U.S. has to offer. While I’m not a big fan of investing purely on aphorisms, I agree with the Oracle of Omaha Warren Buffett. Notably, he stated once that “[f]or 240 years it’s been a terrible mistake to bet against America.” Over time, VOO should make good for investors that acquire it.

Currently, the Vanguard 500 features the heaviest allocation toward the technology sector with a weighting of 23.74%. In second and third place are healthcare (15.32%) and financial services (13.75%). Finally, VOO’s expense ratio sits at 0.03%, well below the category average of 0.41%.

SPDR Dow Jones Industrial Average ETF Trust (DIA)

Man holding stacks of money. Millionaire.

Source: Epic Cure / Shutterstock

Another top-tier name among safe index funds to buy, the SPDR Dow Jones Industrial Average ETF Trust (NYSEARCA:DIA) seeks to provide investment results that, before expenses, correspond generally to the price and yield performance of the Dow Jones Industrial Average. Since the Jan. opener, DIA slipped nearly 3%, which reflects the Dow’s performance almost right on point. However, in the trailing year, the DIA slipped less than 8%, reflecting a superior performance to the S&P 500.

Fundamentally, the SPDR Dow Jones reflects another bet on America, just from a different angle. With the Dow covering only 30 companies, it features a distinct risk-reward profile compared to indices that cover hundreds or thousands of names. In some ways, it could work out better and in others, it might fall short of the target. Basically, it’s a different flavor. Regarding sector weighting, the DIA ETF features the heaviest allocation toward healthcare, with a 22.4% weighting. Coming in a close second is the financial services arena at 20.28%. Rounding out the top three is the industrials sector at 15.08%.

Lastly, the SPDR Dow Jones’ expense ratio sits at 0.16%. That’s conspicuously lower than the category average of 0.39%.

Consumer Staples Select Sector SPDR Fund (XLP)

A person draws a stock chart on a chalkboard.

Source: Zurijeta / Shutterstock.com

According to U.S. News & World Report, the Consumer Staples Select Sector SPDR Fund (NYSEARCA:XLP) seeks to provide investment results that, before expenses, correspond generally to the price and yield performance of publicly traded equity securities of companies in the Consumer Staples Select Sector Index. Since the January opener, XLP slipped nearly 2%. However, in the trailing year, it’s down only about 3%.

Moving forward, XLP should rank among the more desirable safe index funds to buy. Primarily, with the banking sector fallout, consumers have greater incentive to divert discretionary spending toward critical goods and services. Indeed, the rise in demand for the global survival tools market indicates a behavioral shift materialized during the new normal. Therefore, XLP should be on your watch list.

Not surprisingly, the XLP ETF carries an overwhelming allocation toward the consumer defensive sector with a 98.57% weighting. The other morsel (1.43%) belongs to the healthcare segment. In closing, the expense ratio for the XLP fund is only 0.10%. This rates far lower than the category average of 0.44%.

iShares Russell 3000 ETF (IWV)

hands at desk near laptop computer, with one hand holding a pile of hundred dollar bills

Source: shutterstock.com/CC7

Another intriguing idea for safe index funds to buy is the iShares Russell 3000 ETF (NYSEARCA:IWV). According to U.S. News & World Report, the IWV seeks to track the investment results of the Russell 3000 index, which measures the performance of the broad U.S. equity market. Since the beginning of the year, IWV gained over 3% of market value. However, in the past 365 days, it’s down more than 14%.

Still, if you believe in the viability of American enterprises, IWV offers investors an opportunity for steady upside. While there’s always chatter on the internet about the U.S. losing its hegemonic influence, that’s unlikely to happen. Like it or not, the U.S. owns the world’s reserve currency. It also owns the most powerful military on the planet, which makes a competitor usurping the top-dog title improbable.

As with the Vanguard 500 Index Fund ETF, iShares Russell 3000 features the heaviest allocation toward the tech sector with a 22.87% weighting. That’s followed by healthcare (15.48%) and financial services (13.74%). Now, the IWV is a bit more expensive than other safe index funds with an expensive ratio of 0.20%. Nevertheless, it sits below the category average of 0.41%.

iShares Russell 2000 ETF (IWM)

tree growing on coin of stacking with green bokeh background; growth stocks

Source: Freedom365day / Shutterstock.com

Steering toward the riskier side of safe index funds to buy, the iShares Russell 2000 ETF (NYSEARCA:IWM) attempts to track the investment results of the Russell 2000 index, which measures the performance of the small-cap sector of the U.S. equities market. Since the beginning of the year, IWM lost just under 1%, which initially appears enticing. However, in the trailing year, it’s down almost 17%.

Because the IWM focuses on small caps, the ability to swing higher – particularly during bullish cycles – should put smiles on stakeholders’ faces. At the same time, any downturns may disproportionately impact IWM. It really comes down to an investor’s personal risk tolerance balanced with the desire for more robust profitability.

In terms of allocation, the IWM leans heaviest toward the healthcare sector with a 16.79% weighting. Coming in a close second place is financial services at 15.58%. Rounding out the top three is industrials at 14.81%. Finally, the iShares Russell 2000 features an expense ratio of 0.19%. This figure sits below the category average of 0.36%.

Invesco QQQ Trust (QQQ)

Stocks to buy: smartphone with the words

Source: Chompoo Suriyo / Shutterstock.com

For investors that want to roll the dice with their safe index funds to buy, Invesco QQQ Trust (NASDAQ:QQQ) offers an enticing opportunity. Per its public profile, the QQQ seeks investment results that generally correspond to the price and yield performance of the NASDAQ 100. Adding to the allure, since the January opener, QQQ gained almost 18% of market value. To be fair, it’s down nearly 15% in the trailing year.

Still, with the right catalysts, QQQ could spark substantial gains. True, the other side of the equation is that the tech-heavy ETF may underperform badly during deflationary cycles. However, societies will always invest resources to bolster various innovations. Therefore, it’s possible that even in a recession, the QQQ could rise over time. Plus, the broad canvas improves average performance stats.

Unsurprisingly, the Invesco QQQ Trust targets the tech sector with a weighting of nearly 48%. Coming in a very distant second is communications services at 15.64%, followed by consumer cyclical at 14.75%. Lastly, the QQQ features an expense ratio of 0.20%. In contrast, the category average is a lofty 0.54%.

SPDR Gold Trust (GLD)

A businessman ripping his shirt off to reveal an upward green arrow with the word buy on it underneath

Source: ImageFlow/Shutterstock.com

To be 100% clear, the SPDR Gold Trust (NYSEARCA:GLD) truly takes liberties with the theme, safe index funds to buy. However, I include GLD – seeks to reflect the performance of the price of gold bullion, less the expenses of the Trust’s operations – for contextual reasons. As mentioned at the top, investors carry serious concerns about the banking sector fallout. Therefore, the GLD may offer a convenient hedge against market vagaries.

That’s a somewhat convoluted way of saying that the SPDR Gold Trust may rise on the fear trade. With both investors and depositors recognizing that bank runs in America can happen at any time, the non-dividend-paying gold market starts to look very attractive. Yes, gold is a “dumb” commodity. However, it also carries intrinsic value. Plus, it’s not going to disappear arbitrarily.

Sure enough, it’s holistically the best-performing asset within this list of safe index funds to buy. Since the start of the year, GLD gained over 7% of market value. And significantly, in the trailing year, it’s up almost 3%. To close, GLD features an expense ratio of 0.40%, which is more expensive than many other competing funds. However, it also sits below the category average of 0.66%.

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17.

Charts: Three key readings to track financial market stress

2023-03-27 20:14:41 by Jared Blikre from Yahoo Finance

Stocks were mixed to start the week on Monday, though this action kept the Nasdaq Composite on pace for a quarterly gain north of 10% while the S&P 500 is up more than 3% to start the year.

Meanwhile, the Treasury market has also seen a huge rally with the 10-year yield falling from a high north of 4% in early March to as low as 3.38% last week.

These moves come as the Federal Reserve raised its benchmark interest rate by 25 basis points last week and investors weigh the Fed's latest actions and attempt to assess the odds of further bank failures and even recession.

For investors looking tracking financial stress to watch going forward, here are the key charts to watch.

1. Rising Market Volatility — YF Tickers: ^VIX, ^VVIX, ^MOVE

The VIX (^VIX), also known as the "fear index," measures investors' expectations of future (or "implied") volatility over the next 30 days in the S&P 500. It is calculated based on transactions in options on the index itself.

In general, higher stock index volatility tends to accompany selloffs, indicating "fear" in the market. Conversely, lower volatility is usually associated with stock market rallies

Just as the VIX measures stock market volatility, the VVIX (^VVIX) measures the volatility of the VIX itself. Sometimes, it will perk up and serve as an advance warning of moves in the underlying VIX.

The ICE BofAML MOVE Index (^MOVE) index is the bond market's answer to the VIX. It is calculated once each day after the close, and so unlike the VIX the MOVE Index does not give intraday readings of volatility.

Pro tip: An extreme upside VIX spike will usually accompany a huge down day in stocks — but that won't necessarily mark the low in stocks. If the VIX remains elevated, stocks can continue to drop as the VIX goes sideways, or even down itself. As the pros say, "Don't confuse pace with direction."

Current status: The VIX shot above the 30 level last week as concerns over bank stress grew — only to crash Monday and Tuesday last week and remain lower into the news week, trading near 21.

The MOVE index peaked at nearly 200 on March 20 — higher than the pandemic highs — and after cooling mid-week, surged on Friday amid investor fears over Deutsche Bank (DB), finishing the week above 170.

CHICAGO, IL - FEBRUARY 06: A trader watches prices in the VIX pit at the Cboe Global Markets, Inc. exchange (previously referred to as CBOE Holdings, Inc.) on February 6, 2018 in Chicago, Illinois. Yesterday the S&P 500 and Dow Industrials indices closed down more than 4.0 percent, the biggest single-day percentage drops since August 2011. (Photo by Scott Olson/Getty Images) — A trader watches prices in the VIX pit at the Cboe Global Markets, Inc. exchange on February 6, 2018 in Chicago, Illinois. (Photo by Scott Olson/Getty Images)

2. Haven Flows — YF Tickers: JPY=X, EURJPY=X

Foreign exchange pairs measure the change in two currencies relative to one another. Typically, the ratio reflects differences in short-term interest rates between the two countries or areas.

Relatively higher-rate countries tend to attract investment capital, while lower-rate jurisdictions are sources of funds to be borrowed and invested elsewhere — generally referred to as the carry trade.

However, in times of stress, a premium is placed on developed market currencies — especially the U.S. dollar and the Japanese yen. Money flows from risky areas into these safe havens in what are called "haven flows."

Over the last 30 years, the Bank of Japan has maintained the easiest monetary policy among developed nations. As a result, a favored macro trade is to borrow money in Japan, then invest it in the bonds of a higher-interest rate economy.

Traders have historically looked to the EURJPY pair — pitting the euro against the yen — as a barometer of global risk tolerance. If the euro rises against the yen, the theory says riskier investments are in favor as money flows into Europe from Japan. Conversely, the pair often heads south when global risk surfaces and funds need a relatively "safe" home.

Pitting the dollar against the yen is also useful to use as an early warning sign. With U.S. rates far above those in Japan, big flows into the yen — evidenced by a lower USDJPY — can be a red flag for overall risk tolerance when this pair drops quickly.

Pro tip: The order of the currencies in their abbreviated ticker is made by convention, which can be confusing. For instance, the euro versus the dollar is typically expressed as EURUSD. Notably, Yahoo Finance omits the "USD" in forex tickers if it occurs first and appends an "=X" to all pairs. For instance, the Yahoo Finance ticker for USDJPY is JPY=X, for EURJPY, the ticker is EURJPY=X.

Current status: Neither the euro nor the dollar is showing signs of sustained strong haven flows into the yen — though the yen has net strengthened since the SVB failure.

3. Deteriorating Credit Markets — YF Tickers: HYG, JNK

Investors closely watch corporate credit markets for signs of weakness, as they are often first to show cracks in risk appetite. Corporate bonds are measured in how wide or tight their rates of interest are from the corresponding tenors of government debt. But stock investors don't need a fancy terminal to measure stress in corporate bonds.

ETFs that track corporate credit — like the iShares iBoxx $ High Yield Corporate Bond ETF (HYG) and the SPDR Bloomberg High Yield Bond ETF (JNK) — can do the job.

The ETFs track prices on a selection of corporate bonds, which move inversely to yield. In times of stress, when yields surge higher, the ETFs will nosedive, as they did during the pandemic and other periods of stress.

Back in the early days of the pandemic, the Fed took the then-unprecedented step to support corporate credit markets by buying these two ETFs directly.

If these ETFs do plummet again, watch out for quick, outsized reversals to the upside, which can indicate the Fed has taken action to support markets.

Current status: HYG and JNK aren't currently reflecting or forecasting extreme market stress.

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18.

Worried About Banks? Buy This ETF

2023-03-25 11:10:00 by Dave Kovaleski, The Motley Fool from Motley Fool

The current environment in the banking industry has left a lot of investors concerned and confused. Bank stocks generally do well when interest rates are rising, particularly when the economy is not in a recession. In recent weeks, three banks -- SVB Financial's Silicon Valley Bank, Signature Bank, and Silvergate Capital -- have failed or collapsed.

19.

The Fed gave stocks a reprieve, but the all-clear is a ways off: Morning Brief

2023-03-24 09:30:16 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

Friday, March 24, 2023

Stocks partially clawed back Wednesday's post-Fed losses on Thurday, with the Nasdaq Composite (^IXIC) notching a gain of of 1.0%, while the Russell 2000 (^RUT) settled in the red, down 0.4%.

On the one hand, investors are weighing Powell's hawkish, inflation-fighting comments. On the other, they're weighing signs that the Fed is de facto entering wait-and-see mode — believing its work is nearly done.

While Powell said the Fed may still have to raise rates further, he came clear saying the Committee was inches away from a no-hike decision on Wednesday.

"[W]e did consider [a pause] in the days running up to the meeting," he said.

This is the closest yet the Fed has come to a change in its uber-hawkish tone since it began its breakneck pace of rate hikes one year ago.

But don't call it a "pivot," and don't sound the all-clear for investors just yet.

The major U.S. indices have been in rally mode since the Fed created a new liquidity facility a week ago last Monday to backstop regional banks. Tech stocks have been the biggest beneficiary, with the Nasdaq 100 (^NDX) up 7.6%.

Long-term rates crashed over these nine trading sessions, which fueled rallies in megacaps like Amazon (AMZN), Microsoft (MSFT), Tesla (TSLA), Alphabet (GOOGL, GOOG), and Meta (META) — which all rallied double-digits. Chipmakers Nvidia (NVDA) and Advanced Micro Devices (AMD) led the way — up 19% and 23%, respectively.

Yet the rally was not broad-based. Not surprisingly, financials suffered additional damage from the bank panic. The S&P 500 Select Financial SPDR Fund (XLF) erased the last of its pandemic gains Thursday. Meanwhile, the SPDR S&P Regional Bank ETF (KRE) sank to a new crisis low — the lowest level since November 2020.

Putting the narrow breadth of the latest rally aside for a minute, even the technicals on the tech trade are showing some cracks.

Zooming out on the Nasdaq 100 reveals it has been stuck in a giant trading range over the last year — roughly 10,500 to 13,000. And it is once again testing that upper bound, having failed there as recently as early February.

The catalyst of lower rates and a weaker dollar are also approaching some big levels, with the U.S. 10-year Treasury-note (^TNX) hugging the 3.4% level by the 2023 lows.

Even the greatest bellwether stock of all, Apple, is up against some tough technicals that suggest its rally may need a "pause" before rallying materially above $165.

Apple (AAPL) has rallied to big, long-term levels of interest

Without a fresh catalyst and narrative, investors chasing momentum and breakouts are more likely to be punished than rewarded.

In the meantime, Kenneth Rogoff, Maurits C. Boas chair of International Economics at Harvard University, has a message for investors who are betting on the banking crisis abating.

"If we're looking at the world as a whole, I believe we're just experiencing the first wave of this, and there are more to come," said Rogoff on Yahoo Finance Live Thursday.

What to Watch Today

Economy

Durable goods orders, February; S&P flash U.S. composite PMI

Earnings

Express (EXPR)

—

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20.

Thursday Predictions: 3 Hot Stocks for Tomorrow

2023-03-22 21:00:38 by Bret Kenwell from InvestorPlace

The stock market has seemingly found its footing, as it continues to push to the upside despite the banking crisis in the U.S. and across the pond in Europe. This apparent “all-clear” sign from the market has investors looking at the hot stocks for tomorrow.

But not so fast!

While we seem to be past the banking crisis, these things can take time to play out. Credit Suisse (NYSE:CS) is now being taken over by UBS Group (NYSE:UBS), while the U.S. is still sorting through several regional bank failures.

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This isn’t 2008 again, but that doesn’t mean we’ve seen the last of these issues. Not to mention, the Federal Reserve just announced a 25 basis point hike at its latest meeting.

With all of that in mind, let’s look at the hot stocks for tomorrow — Thursday.

Hot Stocks for Tomorrow: Chewy (CHWY)

CHWY is the first of our hot stocks for tomorrow

Click to Enlarge
Source: Chart courtesy of TrendSpider

The pet industry is a growing industry, not just here in the U.S. but worldwide. Yet, Chewy (NYSE:CHWY) stock has struggled for upside traction. Many have called it the “Amazon (NASDAQ:AMZN) of pets,” and that’s not far from the truth.

However, it also has to contend with Amazon and other online retailers, not to mention a formidable brick-and-mortar industry. Further, Amazon can lean on its consumer business, as well as its massive Web Services business, whereas Chewy cannot.

While the stock more than doubled off the 2022 low, Chewy stock has been back under pressure in recent trading. Shares are down about 27% from the February high. Bulls are hopeful that it’s just some consolidation after shares rallied almost 140% from the 52-week low. We’ll get a better sense of sentiment after the company reports on Wednesday after the close.

The Chart: Chewy stock is doing a good job holding the $34 to $37 area. However, bulls need it to regain the 10-week and 21-week moving averages. Above that could eventually open the door back up toward $50. On the downside, last week’s low near $36 is key. Below that and $34 is back in play, followed by a potential fall to $30.

Hot Stocks for Tomorrow: KB Home (KBH)

Click to Enlarge
Source: Chart courtesy of TrendSpider

Everyone thought the housing market was going to get crushed by the Federal Reserve. While the Fed has rapidly raised interest rates over the last several quarters — and thus mortgage rates have climbed significantly too — we haven’t seen the housing market get crushed.

Sure, it hasn’t been as smooth sailing as it was in 2021 when homebuilders and sellers couldn’t get enough houses on the market fast enough, but it’s hardly been the repeat of 2008 like many doomsayers were calling for.

That brings our attention back to KB Home (NYSE:KBH), which will report earnings on Wednesday evening.

Investors will be listening closely to the conference call, looking for any meaningful clues from CEO Jeffrey Mezger. He’s been in the industry for 40 years and has served as president and CEO of KB home since 2006.

The Chart: As it relates to KBH stock, shares have undergone a massive rally from the September low, climbing more than 60%. Now pushing higher following a recent pullback, investors want to know what’s next.

Specifically, I’m watching the $40 to $42 area. This marks the prior 2023 high, as well as the 61.8% retracement of the larger range. Above that puts $46.50 in play. On the downside, the $34 area is key. That’s followed by the 50-week moving average and the $31 level.

Fed and the Invesco QQQ Trust Series (QQQ)

Click to Enlarge
Source: Chart courtesy of TrendSpider

The Invesco QQQ Trust Series ETF (NASDAQ:QQQ) has been the relative strength leader lately, and that’s no surprise. Large-cap tech stocks like Tesla (NASDAQ:TSLA) and Nvidia (NASDAQ:NVDA) have soared year to date. Further, the “safety trade” away from banks has been into balance sheet behemoths like Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT) and Alphabet (NASDAQ:GOOGL, NASDAQ:GOOG).

As a result, the Nasdaq has easily outperformed its index peers so far this year, and thus, the QQQ has soared as well. So far on the year, the exchange-traded fund (ETF) is up 17%, even though it’s still down 10% over the last 12 months.

Never mind any of that though, as the Fed will dictate its next direction.

If the Fed comes out overly hawkish, tech stocks are likely to pay the price. However, if there is a hint of being accommodative (without causing a panic with too much accommodation), then tech may very well continue its rally.

The Chart: The weekly chart for the QQQ doesn’t look all that bad to me. In fact, it looks quite good — save for the fact that the Fed is a somewhat binary situation for the stock market.

For the QQQ, it had a notable correction down to the 61.8% retracement (from the all-time high down to the Covid-19 low). It put in a higher low, broke out over downtrend resistance (blue line), cleared resistance near $290, then found this prior resistance level to be current support. Now it’s pressing the year-to-date high and potentially looking for more.

If the QQQ can clear $313.68 and stay above this mark, it could very well open the door up toward the $330 to $332 zone.

On the flip side, if it can’t hold $300 on the downside, then the $288 to $290 zone is back in play.

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

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21.

Investors Bid Up Treasury ETFs After Quarter-Point Rate Hike

2023-03-22 19:15:00 by Shubham Saharan from etf.com

Treasury exchange-traded funds jumped Wednesday after the ninth-straight interest rate hike by the Federal Reserve.

The central bank raised rates 25 basis points, less than what was expected a few weeks ago, after a series of bank collapses and rescues suggested a worrisome fragility to the U.S. and European banking sectors. The Fed at the beginning of the month was expected to raise rates by a half-percentage point as it sought to slash inflation from the current 6% to 2%.

The increase shows curbing inflation remains the Fed’s priority, according to Andrew Patterson, senior economist at Vanguard Group, the No. 2 ETF issuer.

“We agree with their assessment of the need to maintain focus on inflation with increase in rates combined with language acknowledging banking sector volatility and continued risk of inflation,” Patterson said in emailed comments to etf.com.

The hike brings the federal funds rate to between 4.75% to 5%, the highest level since 2007.  Federal Open Market Committee participants reinforced their commitment to taming inflation to its 2% goal while acknowledging the effect of tightening on markets.

“Recent developments are likely to result in tighter credit conditions for households and businesses and to weigh on economic activity, hiring, and inflation,” officials said in a statement. Still, they noted that rates may remain more elevated for longer than expected. Projections from FOMC officials show that the fed funds rate could reach 5.1% by the end of the year.

Broad bond ETFs, which have gained around 3% this year before the rate increase, moved higher on the news. The iShares 7-10 Year Treasury Bond ETF (IEF) rose around 1.3%, and the iShares U.S. Treasury Bond ETF (GOVT) and the Vanguard Total Bond Market ETF (BND) both added one percent.

Stock ETFs declined after initially rallying. The SPDR S&P 500 ETF Trust (SPY) dropped 1.7% while the Invesco QQQ Trust (QQQ) slipped 1.4%, in correspondence with their underlying indexes. Meanwhile, the yield on the 10-year Treasury bill fell 15 basis points to 3.45%, while the policy-sensitive two-year note dipped 22 basis points to 3.96%. Bond yields fall as prices rise.

In comments after the rate hike announcement, Fed Chairman Jerome Powell reiterated the U.S. banking sector is strong, while also suggesting the impact from collapses and bailouts remains to be seen.

“We are committed to learning lessons from this episode,” he said, adding that recent events in the banking system are “likely to result in tighter credit conditions,” but its future impact on the economy and monetary policy remain unclear.

Bank ETFs have been beaten down over the past four weeks: the $3.1 billion SPDR S&P Regional Banking ETF (KRE) is down 30%; the $1.3 billion SPDR S&P Bank ETF (KBE) lost 26% and the iShares U.S. Regional Banks ETF (IAT) dropped 32%.  

Patterson said that it is “also clear that inflation remains the priority despite pain in the banking sector caused by higher rates based on statement language tweaks and forecast changes,” but maintained that there may be a recession in the second half of the year.

Before the rate hike, investors poured into both SPY and Treasury-linked ETFs. More than $10 billion went into SPY between March 13 and March 21. Meanwhile, IEF, GOVT and BIL hauled in $8.7 billion during the same period, according to etf.com data.

Contact Shubham Saharan at shubham.saharan@etf.com            

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22.

CPI Shrinks as Expected; Will the Fed Pause?

2023-03-14 14:33:02 by Mark Vickery from Zacks

Tuesday, March 14th, 2023

This morning, the most significant economic metric of this week is out: the Consumer Price Index (CPI) for February. Results were almost exactly as expected, save for a slightly hotter core month-over-month print. Last month, headline CPI reached +0.4%, 10 basis points (bps) lower than the upwardly revised +0.5% for January. Pre-market futures are trading in the green on the news, but look to be fluctuating quite a bit as these figures are digested.

Core CPI — stripping out volatile food and energy prices — month over month came in at +0.5%; it was expected to stay constant with the +0.4% posted the previous month. The high watermark here came in April 2021, when it was +0.8%. That was the highest level in 40 years, and may have been a good time, in hindsight, for the Fed to have considered working up interest rates and draining its balance sheet (more on this later).

The big numbers on monthly CPI reports are of the year-over-year variety: headline CPI over the past year — aka the “inflation Rate” — came in at +6.0%, just as expected, and 40 bps lower than January. The high point here was back in June of last year, which reached a 40+ year high +9.1%. This figure has come down each successive month, and by an average of nearly 40 bps per month. This is ultimately very good news for the economy as a whole, and demonstrates the Fed’s effectiveness in fighting inflation with interest rate hikes.

Core CPI year over year came in at +5.5%, again as expected. This is down a tick from +5.6% the previous month, and the lowest monthly print since November 2021. These figures have steadily descended from a cycle high +6.6% (yet another 40-year high) in September of last year, though this is the second straight 10 bps drop after three consecutive -0.3% slides. This is either a wrinkle in the overall descent of these numbers or a sign of resistance.

Accompanying these important data points is more open talk about the Fed holding steady on interest rate levels instead of tightening another 25 or 50 bps, as was widely expected a week ago. This is, of course, in light of three bank failures in the past week, which may be more an indication of tough market conditions for tech startups and crypto investments, or it might be because the Fed has increased rates 450 bps in the past year alone.

Because the Fed is “data dependent” in its monetary policy moves, we may see a strongly worded notice about the need to continue to fight inflation — while also pausing at the present time to see how much damage will have been done to the banking industry beyond these three failures to date. According to its dot-plot, the Fed’s preferred method would be to lift rates another quarter-point, but it’s in control of its own destiny. The fact that CPI levels are behaving may give the Fed members some solace that pausing here would not overly inflame inflation metrics.

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23.

Construction jobs hold the key to understanding Friday's February jobs report

2023-03-09 18:39:11 by Jared Blikre from Yahoo Finance

On Friday morning the Bureau of Labor Statistics is expected to announce another strong jobs report, with economists expecting 225,000 jobs were added to the U.S. economy last month.

This report would build on January's blowout report that showed 517,000 jobs were created in the first month of the year.

Economists and investors alike will be looking for signs that the breakneck pace of Federal Reserve rate hikes is starting to slow the hottest labor market in five decades. Especially after Fed chair Jay Powell just doubled-down on his hawkish message to Congress that there remains a ways to go on the inflation-fighting front.

The bond market seems to believe Powell, ratcheting up expectations for the Fed to hike rates by 50 basis points instead of 25 basis points at its next meeting in under two weeks.

But Wall Street is clinging to its expectation that the unemployment rate holds steady at 3.4% — the lowest level since 1969 — without a hint of recession fears. Intelligent investors will be forgiven for asking — what gives?

Thomas Kennedy, J.P. Morgan Global Wealth Management chief investment strategist, joined Yahoo Finance Live on Thursday to break down expectations coming into the monthly jobs report.

Kennedy notes despite the housing slowdown, jobs are still relatively plentiful for the time being. However, that's about to change.

"In the housing sector, the slowdown has been the fastest we have ever seen. In development of new properties, completions of jobs are now higher than starts," he said. "Imagine if you run a construction business. If you complete ten jobs, you only start eight. There's a team that needs to be laid off."

FILE- In this Wednesday, May 23, 2012, file photo, a new home still under construction is seen for sale in Springfield, Ill. Americans signed more contracts to buy previously occupied homes in May, matching the fastest pace in two years. The increase suggests home sales will rise this summer and the modest housing recovery will continue. (AP Photo/Seth Perlman, File) — In this Wednesday, May 23, 2012, file photo, a new home still under construction is seen for sale in Springfield, Ill. (AP Photo/Seth Perlman, File)

Historically, construction jobs are the canary in the coal mine in the U.S. labor market.

Over the last 11 recessions going back seven decades, growth in construction jobs has turned negative — meaning job losses have appeared in the sector — one month into the recession.

Construction jobs have often been a leading indicator as the U.S. economy tips into recession.

On average, construction job losses lead overall job losses by nearly half a year, though there are exceptions. After the dot-com bust in 2001, total U.S. payrolls finally turned negative five months into the 2001 recession. Construction flipped three months later.

Ironically, any negative surprises in the labor market stats revealed Friday will probably be a boon for stocks, as investors will likely view any weakness as a necessary prelude to an eventual Fed pivot.

Indeed, the weekly jobless claims report from the Department of Labor Thursday morning showed 211,000 initial jobless claims filed — more than the 195,000 expected by the Street.

Stock futures rallied strongly on the weaker-than-expected numbers.

Friday morning should be no different. Bad is good, and good is bad — at least for a while.

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24.

3 Index Funds to Buy for March

2023-03-09 15:50:28 by Joel Baglole from InvestorPlace

Index funds continue to be solid investments. With index funds, investors can gain broad exposure to the stock market or a particular economic sector or industry. This can help to lessen volatility and risk, and lead to big gains over the long-term. While markets around the world remain volatile, many of them have risen so far in 2023 as certain sectors recover after a bruising 2022. This presents an opportunity for investors to take positions in index funds now in order to ride the recovery as stocks gather steam and their momentum increases. Index funds’ fees can be expensive, so investors should become aware of funds with relatively low fees. Here are three index funds to buy in March.

QQQ	Invesco QQQ	$290
VOO	Vanguard 500 Index Fund	$356
VGK	Vanguard FTSE Europe ETF	$59

Invesco QQQ Trust Series 1 (QQQ)

Source: Shutterstock

The technology-laden Nasdaq index has been the best performer among the three best-known American stock indexes so far in 2023. After falling more than 30% in 2022, the Nasdaq has risen 7.4% so far this year as tech stocks stage a comeback. And what better way to ride the recovery of tech than by owning the Invesco QQQ Trust Series 1 (NASDAQ:QQQ) index fund? The “Q” or “Triple Q,” as the exchange-traded fund (ETF) is known, tracks the movements of the Nasdaq 100 index that is comprised of the 100 largest companies listed on the Nasdaq exchange.

In 2023, the QQQ ETF is up 10%, mirroring the gains of the Nasdaq 100. With this fund, investors get exposure to all the largest tech titans, including Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT), Alphabet (NASDAQ:GOOGL) and more.

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The fund, which has been around since the height of the dotcom stock craze in 1999, charges a fee of 0.20%, which is about average for an ETF of its size. For investors who want broad exposure to best-in-class technology stocks, the QQQ is the gold standard.

Vanguard 500 Index Fund (VOO)

Hot business growth. Businessman using tablet analyzing sales data and economic growth graph chart. Business strategy, financial and banking. Digital marketing. Hot stocks.

Source: PopTika / Shutterstock.com

Another index worth tracking is the S&P 500, which is made up of 503 of the largest publicly traded companies in the U.S. The S&P 500 has small, mid-sized and large-cap stocks. Consequently, it is widely viewed as the benchmark U.S. stock index and serves as a barometer for the health of all American stocks. After falling nearly 20% in 2022, the S&P 500 index has gained 1.4% since the start of January. The Vanguard 500 Index Fund (NYSE:VOO) is an ETF that tracks the S&P 500.

Many analysts recommend buying ETFs that track the S&P 500 index. In fact, VOO is one of the few ETFs that the Oracle of Omaha, Warren Buffett, holds in his own stock portfolio. There are other advantages to owning Vanguard funds, including its affordable fees which are among the lowest in the industry.

The VOO ETF currently charges an expense ratio of only 0.03%, which is about as low as investors are going to find. The fund’s major holdings include Amazon (NASDAQ:AMZN), Berkshire Hathaway (NYSE:BRK.A / NYSE:BRK.B) and UnitedHealth Group (NYSE:UNH).

Vanguard FTSE Europe ETF (VGK)

the European Union flag, a circle of gold stars on a navy blue background

Source: Shutterstock

Foreign stocks, especially those in Europe, have also outperformed U.S. stocks this year. After badly trailing U.S. equities for more than a decade, European stocks are being bought by investors who are looking abroad for cheaper stocks as U.S. markets continue to gyrate. So far in 2023, the Vanguard FTSE Europe ETF (NYSE:VGK) is up 5%. The expense ratio of the VGK fund is a little higher than my other two picks at 0.11%, but its expense ratio is still lower than most comparable funds.

With the VGK fund, investors get exposure to leading European companies such as Nestle (SWX:NESN), Novartis (SWX:NOVN) and Shell (NYSE:SHEL). It’s an eclectic mix that covers most of the major publicly traded corporations throughout the continent. With European stocks’ performance badly lagging U.S. equities over the last ten years, VGK’s long-term performance doesn’t appear that impressive (VGK is up about 5% in the last decade). However, with European stocks back in vogue, now is the time for investors to ride its recovery.

On the date of publication, Joel Baglole held long positions in AAPL, MSFT and GOOGL. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Joel Baglole has been a business journalist for 20 years. He spent five years as a staff reporter at The Wall Street Journal, and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.

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25.

Jobless Claims Show Signs of Weakness (Finally!)

2023-03-09 15:30:03 by Mark Vickery from Zacks

Thursday, March 9th, 2023

Wait, wait — can we call Mr Powell back? No sooner does the Fed Chair show up on Capitol Hill for two days to decry hotter-than-expected economic metrics like the labor market than we see our first cooling print on Weekly Jobless Claims this morning. Initial Jobless Claims raced ahead to 211K last week from an unrevised 190K the previous week — the highest read we’ve seen so far in 2023.

In fact, last week’s new jobless claims totals is only the second time all year we’ve been above 200K, which itself is a sign of a rather robust workforce. But the trajectory with which today’s number occurs — the fastest growth in new jobless claims since at least spring/early summer of last year — is what might be a sign that we’re on our way to a new plateau in the labor market.

Continuing Claims also “spiked” week over week (and one week in arrears from initial claims) to 1.718 million from a downwardly revised 1.649 million the previous week. The matches exactly the cycle high we saw back in the second full week of December last year, and brought the sharpest upswing since November 2022. It’s always a good idea to take a deep breath after one set of numbers and not jump to conclusions… but these numbers, should they hold, would speak to our long-awaited expected erosion in U.S. employment.

We now look toward tomorrow morning’s Employment Situation report (nonfarm payrolls and Unemployment Rate) somewhat in limbo, as yesterday’s ADP ADP private-sector numbers exceeded expectations almost as much as jobless claims this morning came up short. So monthly tallies from the U.S. Bureau of Labor Statistics (BLS) will be a tiebreaker of sorts. Expectations are currently for 225K new jobs having been created last month, well off the 517K pace last reported.

In fact, we might expect a notable downward revision to that 517K figure, though we really need to wait and see. Also, even though ADP and BLS numbers tend to align over time, they’re often at odds at the moment reported. Then again, they might both point the same direction — more job gains rather than fewer — and its the weekly claims that are the outliers. In any case, it should be interesting. Stay tuned!

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26.

Why recession odds just spiked after Powell addressed Congress: Morning Brief

2023-03-09 10:30:54 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, March 9, 2023

Fed chair Jay Powell just poured cold water on the "no landing" crowd hoping to avert a U.S. recession and rally stocks to fresh record highs this year.

After two days of grilling before Congress, investors have been reminded (again) that the Fed chief still sees inflation as a persistent, pernicious threat.

Stocks and bonds took notice Wednesday, as both sold off amid surging short-term rates — leaving the major indices underwater for the week as of the close.

"If the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes," said Powell before the Senate.

And with two weeks to go until the next Fed meeting, markets are now expecting exactly that. Bonds and derivatives are pricing in a more hawkish outcome — expecting the Fed to lift its benchmark rate 50 basis points instead of 25 basis points.

Since Monday's settlement, the U.S. 2-year Treasury-Note yield has surged 18 basis points to 5.06% — the highest level since 2007. It also deepened its inversion over the 10-year yield, with the spread reaching negative 108 basis points (or -1.08 percentage points) — the highest since the early 1980s when Paul Volcker was the Fed chair fighting a similar battle over price inflation.

Under normal conditions, interest rates of longer-term loans or bonds (the cost of money) are expected to be more expensive than their shorter-term counterparts, as risk is higher on the long end. But this changes when the Fed starts stamping out animal spirits, lifting short-term rates to restrict the creation of credit and eventually choke off growth.

While the magnitude, or depth, of a yield curve inversion isn't necessarily predictive of a deeper, or longer recession, there are a host of other indicators in the bond market that are sounding alarm bells.

Former bond trader and CEO of TheMacroCompass.com Alfonso Peccatiello recently joined Yahoo Finance Live to offer his insights.

Peccatiello notes that the bond market expects the Fed to fight inflation and remain tight, with interest rates well over 5% a year from now. "That cannot happen if a recession is unfolding. The Federal Reserve will be forced to cut interest rates," he said.

Bond market digests Fed chair Powell comments to Congress — Source: TheMacroCompass.com

Essentially, the inflation-fighting credibility that Powell has earned in the markets comes with a cost — pushing expectations of Fed capitulation far beyond what occurs historically.

"The issue is — the tighter you keep borrowing conditions for the private sector, the higher you keep mortgage rates, the higher you keep corporate borrowing rates — the higher the chances you're going to freeze these credit markets and basically sleepwalk into an accident or, in general, accelerate a recession later on," said Peccatiello.

But long before the Fed delivers relief in the form of cuts, Peccatiello expects stocks to suffer from an earnings recession, which, he says, "isn't fully priced in." (An earnings recession — marked by two consecutive quarterly declines in S&P 500 earnings — often, but not always precedes an economic recession.)

Peccatiello believes the U.S. is already in an earnings recession, with stocks reflecting complacency. Nevertheless, he doesn't expect a disaster. He sees about 10% maximum downside risk in the S&P 500 down to the 3600 level, which is right around last year's lows.

"I don't think it's going to be much lower than that," he says, adding, "[T]he stock market generally bottoms before earnings bottom." The reason gets back to the Fed, which historically capitulates and slashes rates as earnings drop.

The Fed rate cuts then get incorporated into better stock valuations, which eventually halt the decline in stock prices, Peccatiello added. "[This] means the stock market can stop its decline and start slowly but surely moving into a new bull market."

What to Watch Today

Economy

Challenger Job Cuts, February
Initial Jobless Claims

Earnings

Ulta Beauty (ULTA); Allbirds (BIRD); American Outdoor Brands (AOUT); BJ's Wholesale (BJ); DocuSign (DOCU); FuelCell Energy (FCEL); Gap (GPS); JD.com (JD); National Beverage (FIZZ); Smith & Wesson Brands (SWBI); Vail Resorts (MTN); Zumiez (ZUMZ)

—

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27.

Time to Get AWAY? Take a CRUZ?

2023-03-03 16:15:00 by Andrew Hecht from etf.com

With spring break bearing down, and the pandemic as a national emergency coming to an end, travel is again on people’s minds.

As warmer climates beckon fliers and road warriors, offices are reopening and business travel is also picking up.

Travel-related stocks are off to a strong start this year, with many outperforming the overall stock market. These include the Defiance Hotel, Airline, and Cruise ETF (CRUZ) and the ETFMG Travel Tech ETF (AWAY), both of which hold portfolios of travel stocks.

The S&P 500 tracking SPDR S&P 500 ETF Trust (SPY) has gained 3.7% so far this year, easily topped by the travel ETFs. AWAY has gained 9.5% this year, while CRUZ has added almost 17%.

Comparing CRUZ and AWAY

The ETF.com Comparison Tool highlights the differences between the two ETFs:

The above chart shows that while AWAY is three times CRUZ’s size and trades at a higher average daily dollar volume, it charges a higher management fee.

AWAY’s top holdings include:

The above chart shows AWAY’s holdings reflect technology-based companies in the travel industry.

Meanwhile, CRUZ’s top holdings are traditional hotels, airlines, and cruise lines.

Explaining CRUZ’s Recent Advantage

CRUZ’s outperformance compared to AWAY could reflect the underperformance of technology stocks in 2022. While SPY fell 18% last year, the tech-heavy Invesco QQQ Trust (QQQ) dropped 33%. Both have recovered some ground, with QQQ adding 10%.

While AWAY has nearly kept pace with the Nasdaq, CRUZ has done much better than the S&P 500 and tech index because of the boom in travel demand. The most direct impact of the rising travel demand has pushed the airline, hotel and cruise stocks appreciably higher than the high-tech travel sector.

The ETF.com ETF fund flow tool shows that while net flows for AWAY declined, they were marginally higher for CRUZ since the start of 2023, as investors seem to prefer the traditional travel stocks to the technology-based travel-related companies.

The Case for Higher Travel Stocks

Inflation is pushing all costs higher, and travel is no exception. At the same time, people are dusting off shelved travel plans thanks to the combination of rising incomes and savings as well as the end of the global pandemic.

While markets face uncertainty on many levels, if the trend in travel continues, hotels, airlines and cruise lines will benefit and earnings will reflect the increased demand.

A Cautionary Note

Still, thanks to rising interest rates, the threat of a U.S. recession lingers. If unemployment increases, travel plans will again be shelved.

Moreover, the impending debt crisis, with the national debt at $31.5 trillion and rising because of the significant interest rate increases, has created a line in the sand in Washington. The slim opposition margin in Congress is seeking austerity concessions from the administration to increase the debt ceiling.

The administration has said it is unwilling to negotiate on the debt ceiling issue, boosting the potential for default. A default would rattle all markets, especially those that rely on discretionary spending like travel and hospitality.

While both funds are performing well so far this year, a continuation depends on optimism that the economy will continue to grow. Any recessionary pressures leading to a soft landing over the coming months could keep the bullish trend intact, but a hard landing could be a bad trip.

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28.

Too many Americans are 'locked out of financial advice': financial literacy advocate

2023-03-03 14:37:06 by Jared Blikre from Yahoo Finance Video

A large number of Americans are not receiving adequate financial advice. Dr. Rhoiney, a renowned robotic surgeon and financial literacy enthusiast, has pointed out that many Americans are "locked out of financial advice," and this is a concerning trend that needs to be addressed. Dr. Rhoiney believes that financial literacy is an essential tool for building financial stability and security. Unfortunately, many Americans -- even the wealthy -- lack access to the kind of financial advice and education that can help them achieve their goals. This can be due to a lack of resources, geographical constraints, or simply not knowing where to turn for help. One of the most significant challenges facing many Americans is the rising cost of financial advice. Many financial advisors charge high fees that can be prohibitive for those who are struggling to make ends meet. This can create a vicious cycle in which individuals are unable to access the financial advice they need to improve their financial situation. Dr. Rhoiney believes that addressing this problem requires a multi-faceted approach. First and foremost, there needs to be more education and outreach to help individuals understand the importance of financial literacy. This can include initiatives at the community level, such as financial literacy classes or workshops, as well as national campaigns to raise awareness about the issue. Another key strategy is to provide more affordable financial advice. Dr. Rhoiney suggests that there needs to be greater competition in the financial advice industry to drive down costs and make advice more accessible. Additionally, there are emerging technologies, such as robo-advisors, that can provide low-cost financial advice to individuals who might not otherwise be able to afford it. However, such services are in their infnacy and are not robust. Beware Of Bad Advice From Financial Advisors – Forbes Advisor In conclusion, Dr. Rhoiney's observations highlight the urgent need to improve financial literacy and access to financial advice in America. As he points out, too many individuals currently don't have access to good financial advice. By taking a multi-faceted approach, we can help more Americans achieve financial stability and security.

29.

Breaking down anchored VWAP with AlphaTrends.net Founder Brian Shannon, CMT: YF Uncut

2023-03-02 15:53:49 by Yahoo Finance from Yahoo Finance Video

Volume weighted average price (VWAP) was created in 1988 as a benchmark for institutions to determine the quality of their order execution. It is the average price for the day, weighted by volume, with each share traded getting equal weight. The cumulative average builds throughout the day, and if more volume comes in on an up move, the VWAP will rise, but if more volume comes in as the market moves lower, the VWAP will decline, and prices will be below it. According to veteran trader and alphatrends.net founder Brian Shannon, CMT, we can determine with 100% accuracy who has control at the beginning of the day based on where the VWAP is in relation to it. When thinking about support and resistance levels, traders use the word "porosity," which is similar to drawing a trendline with a crayon instead of a straight edge, where the VWAP becomes a battleground in that area. He calls them levels of interest rather than levels of resistance. The anchored VWAP initiated from the all-time high for the NASDAQ, for instance. It measures sentiments with precision and tells us that from that top, the average long participant is losing money because the price is lower than the average, while the average short seller is making money. Shannon advises that as the market comes up to the anchored VWAP, not only will long people be looking to break even, but short sellers might put a big offer on there and try to scare the long holders out of it. He sees it as a transition of a balance of power, and if buyers are able to wrestle away control and take control of the trend, prices can re-emerge in a new uptrend supported by the average participant being in a profitable position and the average short seller scrambling to cover their losses. Shannon advises looking at the shorter-term timeframe for trend alignment and measuring sentiment and psychology to determine who is in control from a particular event. He suggests measuring VWAP from an event and looking for the first couple of days or two, where buyers gain control, and then a battle ensues where sellers regain control. By analyzing the sentiment and psychology, traders can determine whether the buyers or sellers have regained control and make informed trading decisions.

30.

How to chart anchored VWAP multiple time frames: Brian Shannon, CMT

2023-03-01 14:00:29 by Yahoo Finance from Yahoo Finance Video

Yahoo Finance’s Jared Blikre is joined by AlphaTrends.net Founder, Brian Shannon, CMT, as they discuss charting anchored VWAP.

31.

How anchored VWAP helps traders measure supply and demand: Brian Shannon, CMT

2023-03-01 13:00:19 by Yahoo Finance from Yahoo Finance Video

Yahoo Finance’s Jared Blikre is joined by AlphaTrends.net Founder, Brian Shannon, CMT, as they discuss anchored VWAP.

32.

'Everyone's a genius in a bull market' but this is simply a stock pickers' market: David Keller, CMT

2023-02-24 13:00:01 by Yahoo Finance from Yahoo Finance Video

Yahoo Finance’s Jared Blikre is joined by MarketGauge.com Director of Trading Education, Michele "Mish" Schneider, and StockCharts.com Chief Market Strategist, David Keller, CMT, as they discuss investing.

33.

15 Most Promising QQQ Stocks According to Hedge Funds

2023-02-22 19:38:49 by Omer Farooq from Insider Monkey

In this article, we will look at the 15 most promising QQQ stocks according to hedge funds. If you want to explore similar stocks, you can also take a look at 5 Most Promising QQQ Stocks According to Hedge Funds.

The Invesco QQQ Trust (NASDAQ:QQQ) is an exchange-traded fund that tracks the performance of the Nasdaq-100 Index. The fund is designed to provide investors with exposure to the largest and most actively traded stocks on the NASDAQ. The Invesco QQQ Trust (NASDAQ:QQQ) is one of the most popular ETFs in the United States and has become a mainstay in many investors’ portfolios. This is due to the fund's long track record of strong performance. Over the past decade, the Invesco QQQ Trust (NASDAQ:QQQ) has outperformed the S&P 500 nine out of ten times.

Overall, the Invesco QQQ Trust (NASDAQ:QQQ) is a great option for risk averse investors looking to gain exposure to the Nasdaq-100 Index. It is a low-cost, liquid, and diversified ETF that has consistently provided strong returns over time. However, for investors that have a higher risk tolerance, investing in individual QQQ stocks can lead to potentially higher returns.

Investing in stocks that make up the Invesco QQQ Trust (NASDAQ:QQQ) can provide investors with the opportunity to benefit from individual company performance without the risk of being exposed to the broader market. However, investors should be mindful of the risks associated with investing in individual stocks. As with any investment, investors should do their due diligence and consider factors such as a company’s financial performance, competitive landscape, business model, and management among many others.

With the ever-changing stock market, it can become overwhelming for individual investors to identify the best stocks to invest in. Thankfully, hedge funds have the expertise and resources to identify the most promising stocks. We have compiled a list of the most promising QQQ stocks that hedge funds are piling into.

Some of hedge funds' most promising QQQ stock picks include Apple Inc. (NASDAQ:AAPL), Alphabet Inc. (NASDAQ:GOOG), and Microsoft Corporation (NASDAQ:MSFT). Let's now discuss these stocks, among others, in detail.

Most Promising QQQ Stocks According to Hedge Funds

Our Methodology

We sifted through holdings of the Invesco QQQ Trust (NASDAQ:QQQ) and sourced the hedge fund sentiment for each stock from Insider Monkey's database. As of the fourth quarter of 2022, Insider Monkey tracks roughly 940 elite money managers.

We narrowed down our selection to stocks that were the most widely held by hedge funds. Finally, we ranked our picks in ascending order of the number of hedge funds that have positions in them. Along with each stock, we have mentioned the hedge fund sentiment, analyst ratings, and top shareholders.

Most Promising QQQ Stocks According to Hedge Funds

15. Palo Alto Networks, Inc. (NASDAQ:PANW)

Number of Hedge Fund Holders: 85

Palo Alto Networks, Inc. (NASDAQ:PANW) is a leading cybersecurity company that provides various information security services for enterprise, cloud, and government sectors. The company provides endpoint protection, cloud security, network security, and advanced threat prevention among others. As of February 21, Palo Alto Networks, Inc. (NASDAQ:PANW) has gained 20.54% year to date.

On February 21, Palo Alto Networks, Inc. (NASDAQ:PANW) reported earnings for the fiscal second quarter of 2023. The company reported an EPS of $1.05 and outperformed EPS estimates by $0.27. The company's revenue for the quarter amounted to $1.66 billion, up 25.68% year over year and ahead of Wall Street consensus by $5.54 million.

This February, Goldman Sachs analyst Gabriela Borges started coverage of Palo Alto Networks, Inc. (NASDAQ:PANW) with a Buy rating and a $205 price target.

At the close of Q4 2022, 85 hedge funds were long Palo Alto Networks, Inc. (NASDAQ:PANW) and disclosed positions worth $3.27 billion in the company. Of those, Ken Griffin's Citadel Investment Group was the largest investor and held a stake worth $363.7 million. Palo Alto Networks, Inc. (NASDAQ:PANW) is one of the most promising QQQ stocks to buy now according to hedge funds.

Here is what ClearBridge Investments had to say about Palo Alto Networks, Inc. (NASDAQ:PANW) in its fourth-quarter 2022 investor letter:

“Stock selection within the IT sector was the main detractor from relative performance during the period. In addition to rate hikes compressing the multiples of longerduration, high growth companies, recession concerns were also a headwind. IT companies which had proven resilient against customer budget reductions earlier in the year are starting to feel the impact of spending slowdowns as companies further scrutinize expenses in light of economic uncertainty. For example, Palo Alto Networks, Inc. (NASDAQ:PANW), which provides enterprise security solutions including next-generation firewalls and threat detection software, faced a challenging environment as customers delayed purchases and orders. However, we remain convinced of the company’s long-term growth prospects as an industry leader in a critical field and as digital attacks and ransomware continue to grow.”

14. Tesla, Inc. (NASDAQ:TSLA)

Number of Hedge Fund Holders: 91

Tesla, Inc. (NASDAQ:TSLA) is one of the most promising QQQ stocks to buy now according to hedge funds. At the end of the fourth quarter of 2022, Tesla, Inc. (NASDAQ:TSLA) was spotted on 91 investors' portfolios that disclosed positions worth $5.93 billion in the company.

This February, Wells Fargo analyst Colin Langan reiterated his $150 price target and an Equal Weight rating on Tesla, Inc. (NASDAQ:TSLA). As of February 21, Tesla, Inc. (NASDAQ:TSLA) has gained 82.58% year to date.

As of December 31, Citadel Investment Group is the top investor in Tesla, Inc. (NASDAQ:TSLA) and has disclosed a position worth $926.2 million.

Here is what Worm Capital, LLC had to say about Tesla, Inc. (NASDAQ:TSLA) in its 2022 annual investor letter:

“Even as rates rose and the macro environment devolved, we believed Tesla, Inc. (NASDAQ:TSLA) was best positioned to grow and thrive, even through a period of extreme uncertainty. They are the market leader in rapidly growing end markets and have spent the past decade growing their competitive advantages and building out physical infrastructure with worldwide reach. While we believe we were right regarding the direction of fundamentals, this was overcome by a vast array of factors we didn’t anticipate that negatively impacted the price.By and large, Tesla had amazing execution in 2022. They managed to achieve 40% YOY delivery growth. In addition, revenue growth should exceed 50% and profit growth should exceed 120% YOY once Q4 numbers are released. This was accomplished while navigating a myriad of difficulties including a prolonged shutdown at their most productive plant in Shanghai. They scaled two factories on different continents while maintaining industry-leading margins and continued to make advanced progress in transformational technologies that have fast future cash flow potential like AI, software, and manufacturing. Through all the noise a lot of remarkable progress was made…” (Click here to read the full text)

13. Intuit Inc. (NASDAQ:INTU)

Number of Hedge Fund Holders: 92

Intuit Inc. (NASDAQ:INTU) is an American software company specializing in business and financial management software. On January 4, KeyBanc analyst Josh Beck raised his price target on Intuit Inc. (NASDAQ:INTU) to $425 from $400 and maintained an Overweight rating on the shares.

Intuit Inc. (NASDAQ:INTU) was held by 92 hedge funds at the end of Q4 2022. These funds held collective positions worth $5.62 billion in the company, up from $5.11 billion in the preceding quarter with 86 positions. The hedge fund sentiment for the stock is positive and the stock is one of the most promising QQQ stocks according to hedge funds.

As of December 31, Durable Capital Partners is the most prominent shareholder in Intuit Inc. (NASDAQ:INTU) and has a position worth $681.6 million in the company.

Here is what Fundsmith had to say about Intuit Inc. (NASDAQ:INTU) in its 2022 yearly investor letter:

“Take the example of Microsoft and Intuit Inc. (NASDAQ:INTU). Microsoft shares are currently being valued at a P/E ratio of 25.0 times the consensus EPS estimate for the fiscal year ending June 2023. Meanwhile, Intuit is being valued at 28.4 times the non-GAAP consensus estimate for the fiscal year ending July 2023. Many investors and analysts may accept that Intuit is trading at a higher multiple given expectations of greater growth potential. However, Intuit removes share-based compensation from their non-GAAP EPS whereas Microsoft does not. Given that Intuit’s GAAP EPS guidance for the year ending 31st July 2023 is $6.92–$7.22, its non-GAAP guidance is $13.59–$13.89, and the consensus estimate for 2023 EPS is at $13.69, it seems clear that most sell-side analysts are accepting the company’s non-GAAP adjustments, which includes the removal of some $1.8bn of share-based compensation, in their estimates. If we include the impact of share-based compensation in Intuit’s 2023 EPS to make a more apples-to-apples comparison with Microsoft based upon GAAP EPS, Intuit’s 2023 EPS would be closer to $9, meaning that the shares would be trading at a multiple of about 43 times. I think investors and analysts may find a premium of 14% for Intuit over Microsoft (28.4 times versus 25.0 times) to be reasonable. I’m not so sure they are fully aware that Intuit shares are actually trading at a premium of 73% if share-based compensation is treated in the same manner between the two companies.Many investors and analysts, including us, look to cash flow metrics more than accrual profits. Unfortunately, share-based compensation may cause distortions in cash flow metrics as well, even when they follow GAAP. Under GAAP, share-based compensation is added back in the cash flow from operating activities, which in turn is used in the computation of free cash flow. ..” (Click here to read the full text)

12. T-Mobile US, Inc. (NASDAQ:TMUS)

Number of Hedge Fund Holders: 94

On February 1, T-Mobile US, Inc. (NASDAQ:TMUS) reported earnings for the fourth quarter of fiscal 2022. The company reported an EPS of $1.59 and outperformed EPS estimates by $0.53. The company's revenue for the quarter amounted to $20.27 billion.

On February 3, Citi analyst Michael Rollins raised his price target on T-Mobile US, Inc. (NASDAQ:TMUS) to $176 from $174 and maintained a Buy rating on the shares.

At the end of Q4 2022, 94 hedge funds were eager on T-Mobile US, Inc. (NASDAQ:TMUS) and held collective stakes worth $3.71 billion in the company. Of those, Warren Buffet's Berkshire Hathaway is the largest shareholder in the company and has disclosed a position worth $733.8 million.

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

Number of Hedge Fund Holders: 97

Advanced Micro Devices, Inc. (NASDAQ:AMD) is ranked eleventh among the most promising QQQ stocks according to hedge funds. At the end of Q4 2022, 97 hedge funds held stakes in Advanced Micro Devices, Inc. (NASDAQ:AMD). The total value of these stakes amounted to $5.70 billion. This is compared to 89 positions in the preceding quarter with stakes worth $4.99 billion. The hedge fund sentiment for the stock is positive.

On February 14, Benchmark analyst Cody Acree raised his price target on Advanced Micro Devices, Inc. (NASDAQ:AMD) to $103 from $93 and reiterated a Buy rating on the shares.

As of December 31, Citadel Investment Group is the largest shareholder in Advanced Micro Devices, Inc. (NASDAQ:AMD) and has a position worth $424.7 million.

Here is what L1 Capital International had to say about Advanced Micro Devices, Inc. (NASDAQ:AMD) in its third-quarter 2022 investor letter:

“The share price of Advanced Micro Devices, Inc. (NASDAQ:AMD) was weak during the quarter and weakened further in early October when the pre-announced revenue was significantly below prior guidance, reflecting an acute slowdown in the PC market. Data centre related revenue grew strongly, albeit below our expectations, while gaming and embedded revenue was in line with our base case.Geopolitical risks have increased for the semiconductor sector, with the U.S. Government announcing restrictions on the sale of certain technologies to China. Despite near term headwinds, AMD is well positioned for the medium term, with a technology lead over Intel in servers for data centres and rapidly gaining share in the PC/notebook sectors. Its gaming and embedded applications continue to grow strongly. AMD is a very capital light business, with manufacturing outsourced. After expending nearly $5b on research and development, AMD generates around $5b of free cashflow. With a net cash balance sheet, we expect management will accelerate buyback activity at a share price well below fair value.The share price of our more cyclical businesses, in particularly the building products companies which have exposure to the U.S. residential, repair and renovation and infrastructure sectors, were broadly flat for the quarter. Rapidly escalating mortgage rates and rapidly reducing affordability will have a pronounced negative effect on near term new residential construction activity. We believe these cyclical pressures are well understood and are more than reflected in current share prices. Overall, we strongly believe share prices are overly reflecting near-term challenges and our portfolio of companies are now meaningfully undervalued.”

10. Adobe Inc. (NASDAQ:ADBE)

Number of Hedge Fund Holders: 99

Wall Street sees upside to Adobe Inc. (NASDAQ:ADBE). On February 15, UBS analyst Karl Keirstead raised his price target on Adobe Inc. (NASDAQ:ADBE) to $400 from $350 and maintained a Neutral rating on the shares.

Adobe Inc. (NASDAQ:ADBE) was held by 99 hedge funds at the end of Q4 2022. These funds disclosed collective positions worth $8.38 billion in the company. This is compared to 93 hedge funds in Q3 2022 with collective stakes worth $6.74 billion. The hedge fund sentiment for Adobe Inc. (NASDAQ:ADBE) is positive.

As of December 31, Fundsmith LLP is the largest shareholder in Adobe Inc. (NASDAQ:ADBE) and has a position worth $709.8 million in the company.

Here is what Andvari Associates had to say about Adobe Inc. (NASDAQ:ADBE) in its fourth-quarter 2022 investor letter:

“Adobe Inc. (NASDAQ:ADBE) is one of several software companies we own. Its suite of creative products (Photoshop, Illustrator, Acrobat, Lightroom, etc.) are the industry standard for creative professionals. Adobe also has a suite of customer experience products that help other businesses sell more easily to consumers. All of Adobe’s products have high switching costs and sold on a subscription basis.Adobe’s business qualities enable extremely high margins and predictable, recurring revenues. The company had revenues of $17.6 billion in its last fiscal year with operating margins in the mid-30s. The company has also grown revenues at double-digit rates every year since 2015. Despite a good record of investing in its businesses, it still has an excess of cash on its balance sheet. As such, Adobe has returned cash to shareholders in the form of share buybacks. Since 2015 the company has returned a total of $24.5 billion.”

9. NVIDIA Corporation (NASDAQ:NVDA)

Number of Hedge Fund Holders: 106

Hedge funds are piling into NVIDIA Corporation (NASDAQ:NVDA). At the close of Q4 2022, 106 hedge funds were long NVIDIA Corporation (NASDAQ:NVDA) and held collective stakes worth $6.08 billion in the company. This is compared to 89 hedge funds in the previous quarter with stakes worth $4.29 billion. The hedge fund sentiment for the stock is positive.

This February, BMO Capital raised its price target on NVIDIA Corporation (NASDAQ:NVDA) to $240 from $210 and maintained an Outperform rating on the shares.

As of December 31, Matrix Capital Management is the leading investor in NVIDIA Corporation (NASDAQ:NVDA) and has a position worth $741.3 million in the company. NVIDIA Corporation (NASDAQ:NVDA) is placed ninth on our list of the most promising QQQ stocks according to hedge funds.

Here is what O’keefe Stevens Advisory had to say about NVIDIA Corporation (NASDAQ:NVDA) in its fourth-quarter 2022 investor letter:

“The market and our portfolios had a challenging year as interest rates rose, and deteriorating fundamentals cut our largest position, NVIDIA Corporation (NASDAQ:NVDA), in half. Since our initial purchase in 2013, NVDA has seen its stock decline 50% one other time, back in 2018. The best-performing businesses and stocks do not go up and to the right. Mr. Market gets moody, and even one of the highest quality companies in the world is not immune. Drawdowns of this magnitude are challenging to stomach, even though the stock is up 50x in less than ten years. While we consider ourselves old school value investors, we continue to hold this fantastic company even though, optically, it does not appear cheap. Our confidence in Jensen remains, and while gaming is no longer in hyper-growth mode, the Data Center segment continues to grow. AI, Automotive, and other small but rapidly growing industries are the next leg of the story. Chris Mayer discusses the position in greater detail with commentary from our CIO, Peter O’Keefe. Click here to read the article.”

8. PayPal Holdings, Inc. (NASDAQ:PYPL)

Number of Hedge Fund Holders: 115

On February 9, PayPal Holdings, Inc. (NASDAQ:PYPL) posted earnings for the fourth quarter of fiscal 2022. The company reported an EPS of $1.24 and beat EPS estimates by $0.04. The company's revenue for the quarter amounted to $7.38 billion.

On February 10, JPMorgan analyst Tien-tsin Huang raised his price target on PayPal Holdings, Inc. (NASDAQ:PYPL) to $103 from $95 and maintained an Overweight rating on the shares.

At the end of Q4 2022, PayPal Holdings, Inc. (NASDAQ:PYPL) was a part of 115 investors' portfolios. The total stakes of these hedge funds amounted to $5.10 billion. As of December 31, Citadel Investment Group is the most prominent shareholder in the company and has a position worth $481 million.

Here is what RGA Investment Advisors had to say about PayPal Holdings, Inc. (NASDAQ:PYPL) in its fourth-quarter 2022 investor letter:

“PayPal Holdings, Inc. (NASDAQ:PYPL) suffered with the slowdown in e-commerce, yet still will have outgrown e-commerce when we see final 2022 numbers. Much like Amazon, PayPal invested far too aggressively on the expectation of sustained elevated growth rates in e-commerce and unfortunately, unlike with Amazon, PayPal’s investment was on ancillary product excursions from which the company is already retrenching. The good news is that with this retrenchment, the company should once again return to its recipe of healthy top line growth and incremental margin leverage, but rather than grow back into their old margin structure they will have to cost-cut their way there.”

7. Netflix, Inc. (NASDAQ:NFLX)

Number of Hedge Fund Holders: 117

Netflix, Inc. (NASDAQ:NFLX) is ranked seventh among the most promising QQQ stocks according to hedge funds. The stock was held by 117 hedge funds at the end of Q4 2022. The total stakes of these hedge funds amounted to $8.14 billion, up from $6.66 billion in the previous quarter with 115 positions. The hedge fund sentiment for Netflix, Inc. (NASDAQ:NFLX) is positive.

On February 6, Jefferies analyst Andrew Uerkwitz raised his price target on Netflix, Inc. (NASDAQ:NFLX) to $425 from $400 and reiterated a Buy rating on the shares.

As of December 31, Eagle Capital Management is the top investor in Netflix, Inc. (NASDAQ:NFLX) and has a position worth $1.51 billion in the company.

Here is what Bireme Capital had to say about Netflix, Inc. (NASDAQ:NFLX) in its fourth-quarter 2022 investor letter:

“Netflix, Inc. (NASDAQ:NFLX) appreciated 25% in the quarter, well off its lows but still down more than 50% on the year. Q3 results saw a return to subscriber growth, with the firm adding 2.4m and finishing at an all time high 223m subscribers. Netflix also debuted its much-anticipated advertising tier in November, pricing it at a 30% discount in the US. While it is still very early days, we think by 2028 Netflix’s ad-supported tier will have tens of millions of subscribers and generate $10+ billion in revenue at high margins. We expect earnings to exceed $30 per share by then, roughly triple what the company earns today.”

6. Activision Blizzard, Inc. (NASDAQ:ATVI)

Number of Hedge Fund Holders: 129

On February 6, Activision Blizzard, Inc. (NASDAQ:ATVI) reported strong earnings for the fourth quarter of fiscal 2022. The company reported an EPS of $1.87 and outperformed EPS estimates by $0.36. The company's revenue for the quarter amounted to $3.57 billion, up 43.49% year over year and ahead of Wall Street consensus by $384.51 million.

This February, Deutsche Bank analyst Benjamin Soff raised his price target on Activision Blizzard, Inc. (NASDAQ:ATVI) and upgraded the stock to Buy from Hold.

Activision Blizzard, Inc. (NASDAQ:ATVI) is one of the most promising QQQ stocks according to hedge funds. At the end of Q4 2022, Activision Blizzard, Inc. (NASDAQ:ATVI) was a part of 129 investors' portfolios that held collective positions worth $9.52 billion in the company. This is compared to 96 hedge funds in the previous quarter with positions worth $9.08 billion. The hedge fund sentiment for the stock is positive.

As of December 31, Berkshire Hathaway is the leading investor in Activision Blizzard, Inc. (NASDAQ:ATVI) and has a position worth $4 billion in the company.

Click to continue reading and see 5 Most Promising QQQ Stocks According to Hedge Funds.

34.

Roku’s 18% Spike Boosts Wood’s ARK Innovation ETF

2023-02-16 20:15:00 by Ellen Chang from etf.com

Roku Inc. shares surged Thursday after the streaming platform’s fourth-quarter earnings beat Wall Street’s expectations, boosting Cathie Wood’s ARK Innovation ETF (ARKK), which last year was hurt by its investment in the company.

Roku added 18% in afternoon trading after yesterday laying out for investors a path to achieving profitability and reporting subscriber additions. That helped ARKK stay in positive territory on a day when the tech-heavy Invesco QQQ Trust (QQQ) dropped. Roku also said users spent more time streaming last fall, and advertising revenue saw improvements.

Roku's revenue beat and plans to rein in expense growth seemed to please analysts, validating the massive bet Wood placed on the firm—now valued at $575.6 million, according to the company.

Roku is ARKK’s third largest holding, consisting of 8.92 million shares or 7% of its assets. With a total net asset value of $7.65 billion, ARKK’S top holding is Tesla Inc., at 10.4%, while Zoom Video Communications is its second largest asset, at 8.2%.

ARKK’s 28% gain so far this year is helping erase investors’ worries after the much-heralded fund sunk 40% in 2022.

“Cathie Wood's ARK Innovation ETF is in a league of its own this year,” Investors.com writer Matt Krantz posted on Twitter after the Roku earnings report.

Roku has been a mercurial holding for ARKK. On Nov. 3, ARKK dropped 3% following a 15% decline in Roku after the company cut its fourth-quarter revenue guidance and predicted economic conditions could further “degrade advertising budgets.”

ARKK is the largest holder of Roku among the 101 ETFs that own the stock, with 24.2 million shares being held in ETFs alone, according to ETF.com data.

Roku reported fourth-quarter revenue of $867.1 million, which beat the $803 million expected by The Street.com. The company’s loss of $1.70 per share was lower than the expected $1.72 per share, according to FactSet.

The company said its customers streamed a record 23.9 billion hours during the fourth quarter, an increase from 21.9 billion hours in the prior quarter.

New customer additions of 4.6 million easily surpassed estimates of 3 million.

The company also estimated its first-quarter revenue to reach $700 million, which is also higher than analysts' estimates.

The average U.S. ETF portfolio allocates 0.42% to Roku, while the stock remains a favorite for both active and vanilla ETFs.

Contact Ellen Chang at ellenyinchang@gmail.com

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35.

ETFs Seesaw After Disappointing CPI Report

2023-02-14 19:15:00 by Shubham Saharan from etf.com

Moderating inflation may not be enough to keep the Federal Reserve from continuing rate hikes, as the latest consumer pricing index released Tuesday showed prices stayed elevated last month.

Data from the U.S. Bureau of Labor Statistics showed consumer prices rose 6.4% in January compared with a year ago. Overall CPI inched up 0.5% from the prior month, fueled by rising gasoline and shelter pricing.

Stock ETFs largely pared earlier losses.

“This inflation print served as a reminder to investors that the path to lower inflation is not as clear cut as previously thought, and it is too early for the Fed to declare victory on inflation,” Gargi Chaudhuri, head of iShares investment strategy in the Americas, said in a note. “While the economy has experienced meaningful cooling in prices recently, the tight labor market and continued growth in wages also remind us that many pockets of the economy are still strong.”

Excluding food and energy, the core CPI, which strips out more the volatile food and energy data, advanced 0.4% last month and was up 5.6% from a year earlier. Shelter costs, which are the biggest services component and make up about a third of the overall CPI index, rose 0.7% last month.

Energy prices rose for the first time in three months.

“Goods disinflation continues, though the pace has been less rapid than we anticipated and may fade going forward as goods prices such as those for automobiles normalize,” Vanguard Senior Economist Andrew Patterson wrote in a note. “Service price growth remains elevated, though less so when accounting for the likely fall in shelter prices coming in the latter part of the year.”

Both the SPDR S&P 500 ETF Trust (SPY) and the Invesco QQQ Trust (QQQ) rose and fell several times during the trading day, following their underlying indices, as investors parsed the data for a sense of the Federal Reserve’s path forward as it battles inflation. At day's end, SPY closed little changed, while QQQ rose 0.1%.

According to Federal Reserve Bank of Richmond President Thomas Barkin, the central bank may look to increase its terminal rate if inflation does not show signs of easing.

“Inflation is normalizing, but it’s coming down slowly,” Barkin said in a Tuesday interview on Bloomberg TV. “We may or may not choose to take rates up further if inflation continues to persist, but we’ll have to see what happens.”

On Feb. 1, the Fed posted a 25 basis point increase to its federal funds rate, bringing it to a range of 4.5% to 4.75%. Officials noted that additional increases would be warranted and reiterated their commitment to bringing inflation down to 2%.

Contact Shubham Saharan at shubham.saharan@etf.com        

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36.

Current stock market rally 'likely to mark the high point' for 2023: JPMorgan

2023-02-13 11:20:23 by Brian Sozzi from Yahoo Finance

JPMorgan says investors shouldn't get too comfortable with the stock market's impressive start to 2023.

"Big picture, we believe that the equity rally that started last October, and that we hoped would be driven by peaking bond yields/CPI, China reopening, and the fall in European gas prices, is unlikely to get the fundamental confirmation for the next leg higher as the year progresses," closely-watched JP Morgan strategist Mislav Matejka wrote in a note on Monday. "Once the positioning recovers, Q1 is in our view likely to mark the high point of the market."

Matejka recommends investors slash their exposure to stocks — which he says sport "questionably" high valuations — and eye more defense areas of the market. The strategist struck a notable cautious tone on tech stocks amid their big rally out of the gate this year.

"These big positives are not finished, but are clearly not fresh anymore," Matejka added, "and now there is some complacency setting in on multiple fronts."

The strong rally across the major indices so far this year has surprised many market watchers, especially given that the Federal Reserve is hot off another interest rate hike as it continues to try and combat nagging inflation.

Several Fed members, including Atlanta Fed President Raphael Bostic to Minneapolis Fed President Neel Kashkari, have come out since the last Fed meeting with warnings rates may have to head higher than investors currently expect.

And while the Fed is widely expected to pause its rate increases this year, the timing is uncertain. That leaves investors staring down the barrel of potentially multiple more rate increases that could have the effect of slowing the economy and compressing relatively elevated stock valuation multiples.

Corporate America, meanwhile, is slogging through a disappointing earnings season that arguably doesn't justify the market's 2023 advance.

Big household name companies such as Apple (AAPL), Meta (META), Snap (SNAP), Microsoft (MSFT) and Starbucks (SBUX) posted weak fourth quarter earnings while also offering cautious forward-looking commentary.

PepsiCo CFO Hugh Johnston told Yahoo Finance Live last week that he wouldn’t be surprised if there was a mild recession in the U.S. this year.

"Frankly, we are coming out of 2022 which was just an outstanding year," Johnston explained. “I mean, 14% revenue growth, strong EPS. Obviously, the company is just firing on all cylinders. We have good momentum coming into the year, but we are also aware of the fact in a high-interest rate environment it could start to drag at some point."

Oct 1, 2022; Colorado Springs, Colorado, USA; Members of the Wings of Blue parachute team fly in the American Flag in a stacked formation before the game between the Air Force Falcons and the Navy Midshipmen at Falcon Stadium. Mandatory Credit: Isaiah J. Downing-USA TODAY Sports — Members of the Wings of Blue parachute team fly in the American Flag in a stacked formation before the game between the Air Force Falcons and the Navy Midshipmen at Falcon Stadium. Mandatory Credit: Isaiah J. Downing-USA TODAY Sports

JP Morgan's Matejka ultimately thinks the market needs a reality check.

"The market appears to be betting that the new cycle has started, but there was no reset in the key variables, profits, labour market, capex and other," the strategist wrote, adding: "We do not believe that companies will be able to sustain margins at current levels. As PPIs roll over, margins are likely to weaken, too. Consumer has burned through the cushion of excess savings, which allowed them to absorb the price increases relatively painlessly. Consumer outlook is starting to look more challenged from here."

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

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37.

The little-known market indicator keeping tech bearish: Morning Brief

2023-02-09 10:36:50 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, February 9, 2023

Tech has had its greatest start to the year since 2019, with the Nasdaq Composite gaining just under 14% in the 26 sessions this year — even with Wednesday's red close across the major U.S. indices.

Yet for those investors waiting for the all-clear before jumping all-in long, at least one critical hurdle remains for bulls to demonstrate they've successfully taken the reins from the bears: the night.

Specifically, bulls need to assert dominance not only during the normal trading day (from the opening to closing bells) — but also after, during the much longer time period from the close to the open.

The U.S. stock market is open 6.5 hours each day — from 9:30 a.m. to 4:00 p.m. Conversely, this means it's closed 17.5 hours of the day — or 73% of the time on any given week day. Throw in two full days of inactivity over the weekend, and in any given week, the market is closed over 80% of the time. (Yes, after-hours sessions extend this considerably, but this is not an option for large investors in need of liquidity to absorb big orders.)

It's not surprising to find that the overnight and weekend returns generally lead the overall market. That is, the net returns over time from the close each night to the open each morning tend to directionally confirm whether stocks are going net up (a bull market), or down (a bear market).

To study this, we use the SPDR S&P 500 Trust (SPY) as a proxy for the overall market, beginning in mid-1998 (when our intraday data begins). Over that time, SPY is up 301 points, with 92% of those gains (277 points) coming outside of regular trading hours. This means, had you stayed out of the market each trading day — buying on the close and selling on the open — you'd still have 92% of the market's overall gains.

We can find even more useful information by subdividing the day session between the bells into three smaller parts — the opening two hours, the closing two hours, and the time in between (colloquially called "lunch" or the "daily doldrums").

Not surprisingly, what happens during the middle of the day isn't that predictive or reflective of the market's overall direction. But the close is quite useful. (Conventional market wisdom posits that investors buying toward the close are better-informed than those trading toward the open, and there are several technical indicators that attempt to capture what the "smart money" is doing.)

Also called the settlement, the close is the day's most important reference price. It's what is used to calculate mark-to-market returns presented to investors and regulators. Therefore, it's not surprising to find more buying than selling activity in the final two hours of the day in a bull market — and more selling than buying in a bear market.

Returns for the SPDR S&P 500 Trust (SPY) are broken down by time of day.

Looking at the above chart, we can see that right now the gains this year have been made throughout the trading day, including the final two hours. But critically, investors have been taking losses outside of regular, liquid trading hours since November.

If investors are getting hurt on overnight trades because of market conditions, then we would expect them to be even more risk-averse from pummelings over the weekend. Indeed, breaking down SPY returns by the day of the week reveals that since the October lows, Mondays have been producing negative returns. Even if we exclude Monday's day session and add up the return from Friday's close to Monday's open (not shown), the results are substantially similar.

SPY Returns by Day of the Week — Returns for the SPDR S&P 500 Trust (SPY) are broken down by day of the week.

Wednesdays have also been negative since the October lows due, in part, to some steep losses following Federal Reserve decisions. Wednesday's 1.1% loss this week didn't help, but overall, hump-day returns have traded sideways in 2023.

Meanwhile, all the net gains have been made on Tuesdays, Thursdays and Fridays.

Bottom line — looking at the market under-the-hood, it has improved considerably since October, but still has a bit to go before the transformation from bear to bull is complete. Investors are being punished by holding during those long stretches outside market hours when liquidity is scarce or nonexistent.

Until that changes, the bearish character of the market ought to persist.

What to Watch Today

Economy

8:30 a.m. ET: Initial Jobless Claims, week ended Feb. 4 (190,000 expected, 183,000 during prior week)
8:30 a.m. ET: Continuing Claims, week ended Jan. 28 (1.660 million expected, 1.655 million during prior week)

Earnings

AbbVie (ABBV), Apollo Global Management (APO), AstraZeneca (AZNL), Brookfield Asset Management (BAM), Canopy Growth (CGC), Duke Energy (DUK), Expedia Group (EXPE), Hilton (HLT), Kellogg (K) Lyft (LYFT), News Corp. (NWSA), PayPal (PYPL), PepsiCo (PEP), Philip Morris International (PM), Ralph Lauren (RL), S&P Global (SPGI), Thomson Reuters (TRI), Under Armour (UAA), VeriSign (VRSN), Willis Towers Watson (WTW), Yelp (YELP)

—

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38.

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.

39.

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 Saharan at shubham.saharan@etf.com       

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40.

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.

41.

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

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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42.

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.

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

SOURCE Invesco Ltd.

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

43.

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.

44.

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)

Source: 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)

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 buy

Source: 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)

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)

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)

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%.

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45.

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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46.

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.

47.

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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