Bain Capital Scouts for Its Next Airline After Big Virgin Payday
Today's must-reads:
• Bain eyes next airline
• Albanese in China podcast
• Jobs data spurs rate-cut talk
Virgin Australia's part-owner Bain Capital is scouting for its next airline deal after already more than tripling its money on our no. 2 carrier. I interviewed the US buyout firm's Sydney-based partner Mike Murphy, who led the original Virgin acquisition, and you can read it here.
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19 minutes ago
- Yahoo
Why the AI stock bubble may be just getting started
Valuations for the biggest stocks in the S&P 500 (^GSPC) are starting to look stretched, raising fresh concerns about concentration risk. Chad Morganlander, senior portfolio manager at Washington Crossing Advisors, breaks down why we may be in the early stages of a bubble and how artificial intelligence (AI) hype fits into long-term expectations. To watch more expert insights and analysis on the latest market action, check out more Opening Bid here. Are we witnessing another tech stock bubble? I put this to Apollo chief economist Torsten Slok. Here's what he said. I do think that we'll have a lot of growth, but it looks somewhat extreme to me that the valuations for those significant big stocks in the S&P 500 which make up such a big share of the overall S&P 500 is at these very high levels relative to where we were in the IT bubble where the valuations of the 10 biggest companies in the S&P was a lot lower. So, I do think that there is a bubble from a PE ratio perspective, because these companies have just become so expensive and it's become so concentrated for investors that it's really no longer diversified investment to buy the S&P 500. All right. Still with me is my round table Chad Morganlander of Washington Crossing Advisors and Yahoo Finance senior reporter Alexandra Canal. And Ines Ferre. Chad, over to you on this one. You never know if you're in a bubble until after the fact, right? Yeah, correct. And in fact, uh, your, your clip there was correct. Uh, you are sitting at a 23 multiple. So you during the earlier stages of a bubble. Living through the 90s, one must recall that the S&P earnings or PE multiple got over 30 times, uh, in 1999. Uh, so there will be, look, when you look back at this time, there will be a lot of mal investment made, some silly investment ideas that, that didn't work out. But over the long run, over the next 10 to 15 years, uh, this excitement about artificial intelligence is justified. It's just a matter of the, the, the, the valuation gap and where that valuation gap meets, uh, the reality of, of earnings. Well, it sounds like, Chad, if you want to compare it to the internet craze, we still have more to go in terms of valuations, at least from a PE perspective. Well, that could be true. Uh, again, you know, buyer beware on the type of companies that you're buying. Uh, at Washington Crossing Advisors, we own Alphabet, for example. That's trading at roughly about a 17 times multiple when you look at, when you take, when you take away cash. Um, full disclosure, not only do we own it in our portfolio, but I personally own it. But that company has a full competitive stack to go against OpenAI. Ines, I haven't covered a good bubble in a while. Uh, the last one I covered was cannabis a couple years ago. Every day, cannabis stocks would go up until, well, they did it. Maybe it's time, uh, we do get a bubble bursting and maybe it does start with AI. And we could, for sure. Uh, this is probably different than cannabis, uh, because it is touching all sorts of industries. I mean, if you take a look right now at the different sectors of the S&P 500, you are seeing industrials, which is leading the way. Think big construction, factories, AI centers. Uh, you're seeing tech. You're seeing utilities, which is usually the sleepy part of the market. Utilities is, uh, outperforming the broader market. And then, of course, you're seeing financials as well. So you can tell that it is touching all parts of the market right now. And if you think in the future, like what Chad was saying earlier, um, look, long term, this will be a huge productivity boom for the entire economy. Uh, because just imagine having endless amounts of workers at your disposal, endless amount of AI bots that are doing work for you. And this is not just about AI bots, then you're talking about, uh, later on, having robots doing everything. I mean, this is going to be a massive, massive productivity move. But yes, we could be in a bubble right now. We will see, we would see it deflate, but then we would see, uh, exponential growth. Right on, Ines. I need a thousand personal digital assistants. Thank you. Thank you. And I'm going to get those someday because of AI. Related Videos Amex earnings: What credit card cos. reveal about the US consumer The odds of Trump firing Powell are 'quite low,' perhaps 'zero' Netflix stock slips despite Q2 beat: How valuation factors in How Volvo plans to navigate tariffs with a new product focus Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
19 minutes ago
- Yahoo
Why it's so challenging for Trump to fire Powell
A firing of Jerome Powell by President Trump would likely open up a legal war never before seen in the US, without any guarantee of a courtroom victory for the White House. That may be why Trump hasn't done so. Yet. Powell has made his intentions clear. He said earlier this year that he wouldn't leave if Trump tried to fire him and that his removal is 'not permitted by law.' Fed officials privately have been preparing for a legal battle as far back as Trump's first term, when the president also toyed with removing the chair, according to the Wall Street Journal. The strength of Powell's case is based on some protections of Fed autonomy already embedded in US statute. The Federal Reserve Act, which created the central bank in 1913 and was amended in 1935, states that each member of the Fed board shall hold office for 14 years "unless sooner removed for cause by the President." The intention of the "for cause" condition was to enhance the Fed's independence by making it more difficult for a president to fire its board members, who are appointed by the president. There are also signs that the Supreme Court would step in if Trump were to act, although the high court's views on the topic are unclear. In an ambiguous ruling earlier this year, Supreme Court justices allowed Trump to temporarily proceed with the firings of board members at two other independent agencies. In granting the administration's request, the court said that in its judgment, the government "is likely to show" that the fired board members exercised "considerable executive power," a view that suggests the president possesses broader power to remove the officials at will. Read more: How much control does the president have over the Fed and interest rates? Legal challenges from those board members are still playing out at an appeals court. But Powell got a good sign Thursday when a Washington, D.C., district court judge ruled that another Trump firing of FTC commissioner Rebecca Slaughter was illegal and that she should be reappointed. The judge cited a 90-year-old Supreme Court precedent that limits the power of the president to dismiss independent agency board members except in cases of neglect or malfeasance. That precedent offers Powell a layer of protection. It was set in a 1935 case titled Humphrey's Executor v. US that challenged President Franklin Roosevelt's termination of the US Federal Trade Commissioner. The court held that the president's authority to terminate agency officials at will was limited to purely executive officers, and not those leading independent agencies that engage in regulation and adjudication. Congress, the court said, had power to limit the president's removal power over those officials "for cause" — then described that term to mean inefficiency, neglect of duty, or malfeasance. Trump is challenging whether that precedent applies across various independent agencies, but the Supreme Court has not yet made a definitive ruling on whether it should stand. If the precedent falls and leaves no explicit protection for the central bank, a Powell firing could certainly be a lot easier to pull off. 'For cause' Powell does have one major vulnerability, however. That 'for cause' language embedded in the Federal Reserve Act hasn't really been defined or tested in court. The statute also doesn't have any language that specifically addresses the chair of the Board of Governors. And the White House has been using a new line of attack against Powell that could offer a path to a 'for cause' dismissal, as the president and his allies raise concerns about a $2.5 billion renovation of the central bank's headquarters. "I mean it's possible there's fraud involved with the $2.5 billion renovation," Trump told reporters on Wednesday, after saying earlier that the project "sort of is" a fireable offense. He said he wasn't planning to fire Powell but also left the door open, saying, "I don't rule out anything, but I think it's highly unlikely, unless he has to leave for fraud.' National Economic Council director Kevin Hassett — one of Powell's potential successors — said last Sunday on ABC News's "This Week" that whether the president has the legal authority to fire Powell before his term is up next May "is being looked into" and that "certainly, if there's cause, he does." But he also acknowledged it was a 'highly uncertain legal matter.' Politico reported that outside lawyers told the White House counsel's office it would likely lose a legal fight with Powell if Trump removed Powell solely over accusations that he mishandled renovations and that White House officials were also unsure whether it would work. Politico quoted one official who said, 'Whether or not it's illegal, I don't know. But is it a good thing to point out to damage this guy's image? Yeah.' The White House is certainly showing no signs of letting up on its pressure. They are seeking a site visit to see the Fed's renovations in person. Powell has asked the Fed's inspector general to review the costs involved. He also sent White House budget director Russ Vought a letter Thursday offering a point-by-point rebuttal of questions raised about the project and denying reports of a VIP elevator and VIP dining rooms. "We take seriously the responsibility to be good stewards of public resources," he said, and "we have taken great care to ensure the project is carefully overseen.' Case Western Reserve University business law professor Eric Chaffee said he thinks Powell would win any legal battle with the White House on the 'for cause' clause, but he doesn't think such a confrontation will come to pass given that Powell only has 10 months left as chair. "We're just so close to the end of the term that I think the Trump administration is very likely just to wait things out,' he said. Alexis Keenan is a legal reporter for Yahoo Finance. Follow Alexis on X @alexiskweed. Click here for in-depth analysis of the latest stock market news and events moving stock prices Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
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19 minutes ago
- Yahoo
Webull (BULL) Jumps 11.86% on Crypto Platform Initiatives
We recently published . Webull Corporation (NASDAQ:BULL) is one of the top-performing companies on Thursday. Webull extended its rally for a second day on Thursday, jumping 11.86 percent to finish at $14.43 apiece as investors cheered plans to reintegrate cryptocurrency trading into its group platform. In a statement, Webull Corporation (NASDAQ:BULL) said the move would support its plans to reintroduce cryptocurrency trading to its global customer base following its launch in Brazil last month. Additional markets are also expected to take place, including making cryptocurrency trading available to its US customers through the Webull app by the end of the third quarter. 'The improving clarity of cryptocurrency regulations, both in the United States and internationally, underlies our decision to bring crypto trading back to our platform,' Webull Corporation (NASDAQ:BULL) President and CEO Anthony Denier said. A technical analyst using a cloud-based analytics dashboard for financial services. 'With this consolidation, the company will be better positioned to meet the needs of our customers. We are excited about the evolution of the financial services industry as it begins to adopt blockchain technology, and we've already seen great success with our rollout in Brazil. We look forward to tapping additional markets this year,' he added. While we acknowledge the potential of BULL as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the . READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy Right Now. Disclosure: None. This article is originally published at Insider Monkey. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
