Banco Santander-Chile (BSAC) is a Top Dividend Stock Right Now: Should You Buy?
Cash flow can come from bond interest, interest from other types of investments, and of course, dividends. A dividend is the distribution of a company's earnings paid out to shareholders; it's often viewed by its dividend yield, a metric that measures a dividend as a percent of the current stock price. Many academic studies show that dividends account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Banco Santander-Chile (BSAC) is headquartered in Santiago Chile, and is in the Finance sector. The stock has seen a price change of 32.72% since the start of the year. Currently paying a dividend of $0.99 per share, the company has a dividend yield of 3.96%. In comparison, the Banks - Foreign industry's yield is 3.33%, while the S&P 500's yield is 1.54%.
Taking a look at the company's dividend growth, its current annualized dividend of $0.99 is up 74% from last year. Banco Santander-Chile has increased its dividend 3 times on a year-over-year basis over the last 5 years for an average annual increase of 9.01%. Future dividend growth will depend on earnings growth as well as payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Banco Santander-Chile's current payout ratio is 25%. This means it paid out 25% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, BSAC expects solid earnings growth. The Zacks Consensus Estimate for 2025 is $2.31 per share, which represents a year-over-year growth rate of 22.87%.
Investors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. But, not every company offers a quarterly payout.
Big, established firms that have more secure profits are often seen as the best dividend options, but it's fairly uncommon to see high-growth businesses or tech start-ups offer their stockholders a dividend. Income investors must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. That said, they can take comfort from the fact that BSAC is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy).
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This article originally published on Zacks Investment Research (zacks.com).
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CNBC
17 minutes ago
- CNBC
Here's what powered the stock market higher during its short and sweet record week
Short and sweet: That was this week's stock market in a nutshell. The second half of the year kicked off in record style, with both the S & P 500 and the Nasdaq closing at multiple all-time highs, including in Thursday's holiday-shortened session. The U.S. stock market is closed on Friday for the Fourth of July. Extending its stunning comeback from its April sell-off, Club stock Nvidia broke all kinds of records this week as its market value topped $3.9 trillion on Thursday. It ended the day up 1.3% at $159.34 a share, good for a $3.89 trillion market cap. To fully appreciate the current bullishness on Wall Street, we have to look back on the volatile second quarter in the market, which ended Monday. Considering the Nasdaq lost over 12% in the first week of the quarter on President Donald Trump's "reciprocal" tariff announcement, it was incredible to see the tech-heavy index close out the April-to-June period with a 17.75% gain. That was the Nasdaq's best quarterly performance since the early days of Covid, when it gained over 30% in the second quarter of 2020, as the Federal Reserve cut interest rates to zero and pumped money into the economy to prevent economic Armageddon from the pandemic. The S & P 500, meanwhile, advanced 10.57% in this year's second quarter, recovering from a greater-than-11% decline in the first week of April. The board market index saw its best quarter since Q4 of 2023, when it gained 11.24%. Eight out of the 11 sectors advanced in the April-to-June period, with technology leading the way with 23.5% gain. The worst performing sector was energy, which lost 9.37% in Q2, its worst quarter since Q3 of 2020. The bulk of the losses in energy came in the waning days of the second quarter when oil prices tanked following the U.S. bombing of three Iranian nuclear sites. The market deemed the U.S. involvement in the Israel-Iran conflict as a non-systemic risk and West Texas Intermediate crude sank nearly 9% for the quarter. In the absence of any major headlines out of the Mideast and Trump's Wednesday announcement of a framework for a trade deal with Vietnam, the S & P 500 and Nasdaq each advanced for the week, up 1.7% and 1.6%, respectively. Capitol Hill is on the precipice of delivering the president a major legislative victory, with the final passage of the "big, beautiful bill" of spending priorities and tax cuts expected soon after clearing a key procedural vote in the House . Ironically, a strong jobs report Thursday cut both ways for the president. On the one hand, more hiring and a lower unemployment rate shows the resiliency of the economy in the face of the tariff and geopolitical uncertainty. That was a win for Trump. But on the other hand, strength in the economy weakens the president's argument for immediate Federal Reserve interest rates cuts. In fact, on the eve of the government's June employment report and following a much weaker-than-expected ADP private-sector jobs reading, the president posted on social media that Fed Chairman Jerome Powell should resign. Trump was quiet on the rate front on Thursday. That's because payrolls for last month grew by 147,000, much more than the Dow Jones estimate for 110,000. The nation's unemployment rate in June dipped to 4.1% when a slight uptick to 4.3% had been expected. To be sure, much of that unemployment rate decline can be attributed to fewer people working or looking for jobs. Average hourly earnings for last month increased by a less-than-expected 3.7% versus the year0ago period and were below the 3.8% gain seen in May. This week, we got positive updates from the banks, which were free to update capital allocation plans following the conclusion of the Fed's stress tests. Club holdings Goldman Sachs and Wells Fargo were the two standout winners this year, and both of them increased their dividends . Goldman hiked its quarterly payout by 33% to $4 per share. Wells Fargo boosted its dividend 12.5% to 45 cents per share. For Wells, the stress test was just one more bit of good news since the 2018 Fed-imposed $1.95 trillion asset cap was lifted early last month. Another positive update within the portfolio came Monday when Jim Cramer interviewed Amazon CEO Andy Jassy on "Mad Money." In the wide-ranging interview, Jassy clearly laid out the massive opportunity he sees in artificial intelligence, as well its long-term bets such as its Project Kuiper satellite internet service. Jim is optimistic that Kuiper could eventually help Amazon's Prime program add more members. 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Yahoo
25 minutes ago
- Yahoo
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US stocks posted fresh records on Thursday as investors digested a stronger-than-expected June jobs report that dampened hopes for a Federal Reserve interest-rate cut soon. The S&P 500 (^GSPC) and Nasdaq Composite (^IXIC) clinched record highs for the third time this week after moving up about 0.8% and 1%, respectively. The Dow Jones Industrial Average (^DJI) gained over 0.7%, with its own record close suddenly back in sight. The jobs report showed an increase of 147,000 jobs added in June, versus expectations of 106,000. Meanwhile, the unemployment rate unexpectedly ticked down to 4.1%, and the May payrolls print was revised higher. Recent signs of a softening in the labor market had given investors a new wave of confidence that a rate cut could come soon. But traders pared bets on rate cuts after the payrolls data, all but taking a July cut off the table. Trump's ongoing feud with its chair, Jerome Powell — particularly reports he may announce a successor early — has further buoyed hopes for a reduction in rates. The president said Powell "should resign immediately" in a social media post late Wednesday, ramping up an already intense White House pressure campaign. Investors are also on alert for fresh developments on the trade front, as countries race to beat the July 9 deadline for the resumption of sweeping tariffs. Trump's trade deal with Vietnam has boosted market sentiment and hopes for more agreements to fend off economic damage from tariffs. Read more: The latest on Trump's tariffs The US has lifted curbs on exports of chip design software to China, a sign of thawing in trade tensions between the world's top two economies. Shares of leading US providers of Synopsys (SNPS) and Cadence Design Systems (CDNS) jumped in premarket trading. Meanwhile, the president's massive tax and spending bill is nearing a final vote after it cleared a key House procedural vote on Thursday. House Speaker Mike Johnson said he has the backing to get the legislation passed by Friday, July 4, Trump's deadline, as Republican leaders win over opponents. US stock trading ended early on Thursday for the Independence Day holiday. Markets are closed on Friday. Stocks closed at fresh records on Thursday after the release of June's jobs report, which showed that unemployment eased to 4.1%. The S&P 500 (^GSPC) moved up about 0.8%, while the Nasdaq Composite (^IXIC) advanced 1%, pushing both to record highs. The Dow Jones Industrial Average (^DJI) gained nearly 0.8%, or roughly 300 points. According to the Bureau of Labor Statistics report released on Thursday morning, the US economy added 147,000 nonfarm payrolls in June, more than the 106,000 expected by economists. However, analysts pointed out that much of the job growth lies in the public sector. Still, Wall Street expects the latest jobs print will be unlikely to sway the Fed to cut rates in July. Expectations have now shifted overwhelmingly to a decrease in September. Brian Rose, senior US economist at UBS Global Wealth Management, noted "the weakness in private payrolls, the participation rate, earnings, and sentiment surveys suggest that labor demand is deteriorating." "We therefore maintain our base case scenario of 100bps in rate cuts starting in September," he wrote in a client note. The stock market closed early on Thursday in observance of the Fourth of July holiday. The major averages will reopen on Monday. Bitcoin (BTC-USD) rose to hover above $109,000 per token on Thursday, increasing optimism among bulls that the token may be showing signs of a breakout. The world's largest cryptocurrency has been trading range-bound over the past two months. Thursday's move was encouraging to bulls, after bitcoin touched an all-time high just beneath $112,000 in May. Year-to-date the token is up roughly 16%. Yahoo Finance's Jennifer Schonberger reports: Read more here. Microsoft (MSFT) and Nvidia (NVDA) could both hit $4 trillion in market value this summer, Wedbush analyst Dan Ives believes. Potentially, the "Magnificent Seven" members could reach $5 trillion in over the next 18 months, Ives told clients in a note on Thursday. "We believe tech stocks will have a very strong second half of the year," he said. "Our bullish view is that investors are still underestimating the tidal wave of growth on the horizon from the $2 trillion of spending over the next 3 years coming from enterprise and government spending around AI technology and use cases." Microsoft and Nvidia recently notched record highs after a rocky first half of the year for stocks more broadly. Other market watchers are more skeptical about the AI boom. Legendary short seller Jim Chanos told Bloomberg that the "ecosystem around the AI boom" is similar to the dot-com bubble. 'But it is a riskier revenue stream because if people pull back, they can pull back CapEx very easily. Projects can get put on hold ... and that immediately shows up in disappointing revenues and earnings forecast, if it happens," Chanos said, per the report. 'We're not there yet, but that's one of the risks out there that I think a lot of people are underestimating,' he added. Nvidia (NVDA) reached $3.92 trillion in market cap during intraday trading on Thursday, setting it on track to become the world's most valuable company in history. Shares in the the AI chipmaker were up over 2% at one point in the morning, trading at $160.98 apiece. The current record market cap was set by Apple (AAPL), which notched a $3.915 trillion closing value in December. The iPhone maker's value has dropped since then, as it struggled to catch up to its Big Tech peers on AI and contended with President Trump's threat to hit its overseas-made products with tariffs. Meanwhile, Nvidia's stock has seen a stunning comeback since May: Its most recent quarterly earnings report showed the chipmaker continuing to thrive, despite US restrictions on Chinese use of its chips. The stock has continued to notch fresh record highs since late June. The payrolls report showed more jobs were added in June — a sign that the US labor market was more resilient than anticipated in the final month of the second quarter. But Indeed senior economist Cory Stahle said the report was "not stormproof" and "might not be as solid as it seems on the surface." The job gains were again concentrated in just a few industries, Stahle noted in an analysis out Thursday. Healthcare and social assistance, and state and local government employers accounted for 94% of the total. "The headline job gains and surprising dip in unemployment are undoubtedly good news, but for job seekers outside of healthcare & social assistance, local government, and public education, the gains will likely ring hollow," Stahle wrote. Outside of those industries, employment growth has been "anemic at best", he added, noting the duration of unemployment for the typical unemployed worker seeking a job continues to creep up. "There are real weaknesses in the market — including concentrated job gains, slowing wage growth, and falling participation — that have persisted for months, and there are scant signs of those concerns fading anytime soon," he wrote. Gasoline prices hovered at their lowest level since 2021 heading into the July Fourth holiday, Yahoo Finance's Ines Ferré reports. Read more here. Meta (META) shares climbed 1.2%, leading the "Magnificent Seven" stocks higher alongside Amazon (AMZN). The gain came after the Facebook parent's stock was upgraded to Hold from an Underperform rating by Needham analyst Laura Martin. Martin cited strength in Meta's labor productivity, measured by free cash flow per full-time employee. "Our upgrade to Hold is driven by our latest labor productivity research that shows that META has had among the strongest labor productivity metrics for the past 4 years," she wrote. In its fiscal year 2024, Meta had a free cash flow of over $730,000 for every full-time employee. That was followed by Apple's $663,457, while the average for big-cap companies covered by Martin was nearly $302,000. Martin said she remained at a Hold rather than a Buy rating partly due to the "uncertain" return on Meta's growing capital expenditures, which have been driven by its investments in AI. Martin said "the larger the spending, the more likely there is waste, in our view." US stocks rose on Thursday morning after a stronger-than-expected June jobs report that showed unemployment ticking down to 4.1%. The S&P 500 (^GSPC) moved up about 0.4%, while the Nasdaq Composite (^IXIC) advanced 0.6%, after both indices closed at fresh record highs on Wednesday. The Dow Jones Industrial Average (^DJI) gained 0.3%. Tech led the gains in stocks Thursday, with Meta (META) and Amazon (AMZN) leading the "Magnificent Seven" Big Tech stocks higher. Meta was up over 2% after an analyst at investing firm Needham upgraded the stock to Hold from Underperform, citing its "strong" labor productivity. A stronger-than-expected June jobs report has traders scaling back bets on when the Federal Reserve will cut interest rates next. Following the report, increasing bets on a July interest rate cut from the Fed reversed. Markets are now pricing in just a 5% chance the central bank lowers rates at its July meeting, down from the 24% odds seen a day prior, per the CME FedWatch Tool. Traders also grew more skeptical of a September move from the Fed. Markets are now pricing in a 78% chance the Fed cuts by the end of its meeting that m, down from a 94% chance seen a day prior. The June jobs report showed the US labor market remained more resilient than anticipated in the final month of the second quarter. The US economy added 147,000 nonfarm payrolls in June, more than the 106,000 expected by economists. The unemployment rate unexpectedly fell to 4.1%. Economists had expected the unemployment rate to move higher, to 4.3%. In May, the US economy added 144,000 jobs while the unemployment held flat at 4.2%. Those figures were revised higher on Friday from a previously reported 139,000 job additions in May. Read more here. Yahoo Finance's Hamza Shaban reports in today's Morning Brief: Read more here. Earnings: No notable earnings releases. Economic data: Nonfarm payrolls (June); Unemployment rate (June); Average hourly earnings; Average weekly hours worked (June); Labor force participation rate (June); Initial jobless claims (week ending June 28); Continuing claims (week ending May 24); Unit labor costs (first quarter final); S&P Global US Composite PMI (June final); ISM Services index (June); Federal Reserve Beige Book released; Durable goods orders (May final) Here are some of the biggest stories you may have missed overnight and early this morning: Investors are all smiles as 'Liberation Day' Part 2 looms June jobs report on deck as Fed rate cut bets heat up House vote moves Trump's megabill toward final vote US lifts chip design curbs on China in sign of thaw OpenAI condemns Robinhood's 'OpenAI tokens' Stock pickers shine, sniffing out value during market tumult Trump aims to shut trade loopholes China uses to evade tariffs Here are some top stocks trending on Yahoo Finance in premarket trading: Datadog, Inc. (DDOG) stock jumped 11% before the bell on Thursday after it was announced it would be joining the S&P 500. Datadog, which makes monitoring and analytic programs, will join the S&P 500 on July 9, replacing Juniper Networks, which was acquired by Hewlett Packard Enterprise. Robinhood (HOOD) stock fell over 1% in premarket trading following OpenAI's statement that Robinhood's sale of 'OpenAI tokens' will not give everyday consumers equity — or stock — in OpenAI, the company said in a post from its official newsroom account on X. Tripadvisor (TRIP) stock rose 6% before the bell following a report that activist investor Starboard Value has taken a stake of more than 9% in the travel review group. UK stocks and bonds bounced back from Wednesday's sharp selloff as Keir Starmer said Rachel Reeves will retain her role as finance minister for many years to come. The British prime minister was attempting to calm speculation about a possible exit of the chancellor of the Exchequer, after he failed to back a tearful Reeves in parliament on Wednesday. The yield on 30-year UK bonds dropped 10 basis points to 5.32%, coming back from a 19 basis point jump on Wednesday. The FTSE 250, which lists UK-focused stocks, moved up 0.5%. US Treasurys were also coming back after getting caught up in the UK gilt turmoil. The benchmark 10-year yield (^TNX) edged down roughly 2 basis points to 4.27% early on Thursday morning, while the 30-year yield (^TYX) slipped to around 4.79%. Bloomberg reports: Read more here. US stock markets will close early on Thursday, July 3, and trading will end at 1 p.m. ET. They will stay shuttered on July 4 for the Independence Day holiday. The stock market will reopen on Monday, July 7, at 9:30 a.m. ET. After that, the remaining holidays in 2025 observed by the New York Stock Exchange and Nasdaq are: Read more here about the 10 stock market holidays in 2025. Software companies Synopsys (SNPS) and Cadence (CDNS) rose in premarket trading by over 5% after the US removed export restrictions on chip design software shipments to China, easing trade tensions between the two countries. China recently made concessions over its rare earth export controls. Synopsys, Cadence and Siemens said they will now restore access for their Chinese customers. These firms develop important electronic design automation tools used in chipmaking. The US also lifted licensing rules for ethane producers. Earlier restrictions were part of Trump's response to China blocking rare earth exports, which had disrupted supply chains for cars, aerospace and defence industries. Reuters reports: Read more here. Oil prices slipped after posting their strongest gain in nearly two weeks, as investors monitored ongoing US trade negotiations and an upcoming OPEC+ meeting this weekend. Bloomberg reports: Brent (BZ=F) traded near $69 a barrel after surging by 3% on Wednesday, with West Texas Intermediate (CL=F) above $67. President Donald Trump said he had struck a trade deal with Vietnam, which would be just the third announced following agreements with the UK and China, before a July 9 deadline to reach accords. Crude has been buffeted in recent weeks, surging and collapsing along with perceived geopolitical risk in the Middle East, although volatility and volumes have fallen in recent days before Friday's US holiday. Focus is returning to trade talks, and the associated tariffs that threaten oil demand, as well as to Sunday's OPEC+ meeting, where the group is widely expected to agree on another bumper increase in supply quotas. 'While trade optimism provided a boost to oil prices, the sustainability of this move will likely be short-lived,' said Warren Patterson, head of commodities strategy for ING Groep NV. 'OPEC+ is set to decide on August output levels this weekend, and so the market will probably be cautious about carrying too much risk into the US long weekend.' Read more here. Stocks closed at fresh records on Thursday after the release of June's jobs report, which showed that unemployment eased to 4.1%. The S&P 500 (^GSPC) moved up about 0.8%, while the Nasdaq Composite (^IXIC) advanced 1%, pushing both to record highs. The Dow Jones Industrial Average (^DJI) gained nearly 0.8%, or roughly 300 points. According to the Bureau of Labor Statistics report released on Thursday morning, the US economy added 147,000 nonfarm payrolls in June, more than the 106,000 expected by economists. However, analysts pointed out that much of the job growth lies in the public sector. Still, Wall Street expects the latest jobs print will be unlikely to sway the Fed to cut rates in July. Expectations have now shifted overwhelmingly to a decrease in September. Brian Rose, senior US economist at UBS Global Wealth Management, noted "the weakness in private payrolls, the participation rate, earnings, and sentiment surveys suggest that labor demand is deteriorating." "We therefore maintain our base case scenario of 100bps in rate cuts starting in September," he wrote in a client note. The stock market closed early on Thursday in observance of the Fourth of July holiday. The major averages will reopen on Monday. Bitcoin (BTC-USD) rose to hover above $109,000 per token on Thursday, increasing optimism among bulls that the token may be showing signs of a breakout. The world's largest cryptocurrency has been trading range-bound over the past two months. Thursday's move was encouraging to bulls, after bitcoin touched an all-time high just beneath $112,000 in May. Year-to-date the token is up roughly 16%. Yahoo Finance's Jennifer Schonberger reports: Read more here. Microsoft (MSFT) and Nvidia (NVDA) could both hit $4 trillion in market value this summer, Wedbush analyst Dan Ives believes. Potentially, the "Magnificent Seven" members could reach $5 trillion in over the next 18 months, Ives told clients in a note on Thursday. "We believe tech stocks will have a very strong second half of the year," he said. "Our bullish view is that investors are still underestimating the tidal wave of growth on the horizon from the $2 trillion of spending over the next 3 years coming from enterprise and government spending around AI technology and use cases." Microsoft and Nvidia recently notched record highs after a rocky first half of the year for stocks more broadly. Other market watchers are more skeptical about the AI boom. Legendary short seller Jim Chanos told Bloomberg that the "ecosystem around the AI boom" is similar to the dot-com bubble. 'But it is a riskier revenue stream because if people pull back, they can pull back CapEx very easily. Projects can get put on hold ... and that immediately shows up in disappointing revenues and earnings forecast, if it happens," Chanos said, per the report. 'We're not there yet, but that's one of the risks out there that I think a lot of people are underestimating,' he added. Nvidia (NVDA) reached $3.92 trillion in market cap during intraday trading on Thursday, setting it on track to become the world's most valuable company in history. Shares in the the AI chipmaker were up over 2% at one point in the morning, trading at $160.98 apiece. The current record market cap was set by Apple (AAPL), which notched a $3.915 trillion closing value in December. The iPhone maker's value has dropped since then, as it struggled to catch up to its Big Tech peers on AI and contended with President Trump's threat to hit its overseas-made products with tariffs. Meanwhile, Nvidia's stock has seen a stunning comeback since May: Its most recent quarterly earnings report showed the chipmaker continuing to thrive, despite US restrictions on Chinese use of its chips. The stock has continued to notch fresh record highs since late June. The payrolls report showed more jobs were added in June — a sign that the US labor market was more resilient than anticipated in the final month of the second quarter. But Indeed senior economist Cory Stahle said the report was "not stormproof" and "might not be as solid as it seems on the surface." The job gains were again concentrated in just a few industries, Stahle noted in an analysis out Thursday. Healthcare and social assistance, and state and local government employers accounted for 94% of the total. "The headline job gains and surprising dip in unemployment are undoubtedly good news, but for job seekers outside of healthcare & social assistance, local government, and public education, the gains will likely ring hollow," Stahle wrote. Outside of those industries, employment growth has been "anemic at best", he added, noting the duration of unemployment for the typical unemployed worker seeking a job continues to creep up. "There are real weaknesses in the market — including concentrated job gains, slowing wage growth, and falling participation — that have persisted for months, and there are scant signs of those concerns fading anytime soon," he wrote. Gasoline prices hovered at their lowest level since 2021 heading into the July Fourth holiday, Yahoo Finance's Ines Ferré reports. Read more here. Meta (META) shares climbed 1.2%, leading the "Magnificent Seven" stocks higher alongside Amazon (AMZN). The gain came after the Facebook parent's stock was upgraded to Hold from an Underperform rating by Needham analyst Laura Martin. Martin cited strength in Meta's labor productivity, measured by free cash flow per full-time employee. "Our upgrade to Hold is driven by our latest labor productivity research that shows that META has had among the strongest labor productivity metrics for the past 4 years," she wrote. In its fiscal year 2024, Meta had a free cash flow of over $730,000 for every full-time employee. That was followed by Apple's $663,457, while the average for big-cap companies covered by Martin was nearly $302,000. Martin said she remained at a Hold rather than a Buy rating partly due to the "uncertain" return on Meta's growing capital expenditures, which have been driven by its investments in AI. Martin said "the larger the spending, the more likely there is waste, in our view." US stocks rose on Thursday morning after a stronger-than-expected June jobs report that showed unemployment ticking down to 4.1%. The S&P 500 (^GSPC) moved up about 0.4%, while the Nasdaq Composite (^IXIC) advanced 0.6%, after both indices closed at fresh record highs on Wednesday. The Dow Jones Industrial Average (^DJI) gained 0.3%. Tech led the gains in stocks Thursday, with Meta (META) and Amazon (AMZN) leading the "Magnificent Seven" Big Tech stocks higher. Meta was up over 2% after an analyst at investing firm Needham upgraded the stock to Hold from Underperform, citing its "strong" labor productivity. A stronger-than-expected June jobs report has traders scaling back bets on when the Federal Reserve will cut interest rates next. Following the report, increasing bets on a July interest rate cut from the Fed reversed. Markets are now pricing in just a 5% chance the central bank lowers rates at its July meeting, down from the 24% odds seen a day prior, per the CME FedWatch Tool. Traders also grew more skeptical of a September move from the Fed. Markets are now pricing in a 78% chance the Fed cuts by the end of its meeting that m, down from a 94% chance seen a day prior. The June jobs report showed the US labor market remained more resilient than anticipated in the final month of the second quarter. The US economy added 147,000 nonfarm payrolls in June, more than the 106,000 expected by economists. The unemployment rate unexpectedly fell to 4.1%. Economists had expected the unemployment rate to move higher, to 4.3%. In May, the US economy added 144,000 jobs while the unemployment held flat at 4.2%. Those figures were revised higher on Friday from a previously reported 139,000 job additions in May. Read more here. Yahoo Finance's Hamza Shaban reports in today's Morning Brief: Read more here. Earnings: No notable earnings releases. Economic data: Nonfarm payrolls (June); Unemployment rate (June); Average hourly earnings; Average weekly hours worked (June); Labor force participation rate (June); Initial jobless claims (week ending June 28); Continuing claims (week ending May 24); Unit labor costs (first quarter final); S&P Global US Composite PMI (June final); ISM Services index (June); Federal Reserve Beige Book released; Durable goods orders (May final) Here are some of the biggest stories you may have missed overnight and early this morning: Investors are all smiles as 'Liberation Day' Part 2 looms June jobs report on deck as Fed rate cut bets heat up House vote moves Trump's megabill toward final vote US lifts chip design curbs on China in sign of thaw OpenAI condemns Robinhood's 'OpenAI tokens' Stock pickers shine, sniffing out value during market tumult Trump aims to shut trade loopholes China uses to evade tariffs Here are some top stocks trending on Yahoo Finance in premarket trading: Datadog, Inc. (DDOG) stock jumped 11% before the bell on Thursday after it was announced it would be joining the S&P 500. Datadog, which makes monitoring and analytic programs, will join the S&P 500 on July 9, replacing Juniper Networks, which was acquired by Hewlett Packard Enterprise. Robinhood (HOOD) stock fell over 1% in premarket trading following OpenAI's statement that Robinhood's sale of 'OpenAI tokens' will not give everyday consumers equity — or stock — in OpenAI, the company said in a post from its official newsroom account on X. Tripadvisor (TRIP) stock rose 6% before the bell following a report that activist investor Starboard Value has taken a stake of more than 9% in the travel review group. UK stocks and bonds bounced back from Wednesday's sharp selloff as Keir Starmer said Rachel Reeves will retain her role as finance minister for many years to come. The British prime minister was attempting to calm speculation about a possible exit of the chancellor of the Exchequer, after he failed to back a tearful Reeves in parliament on Wednesday. The yield on 30-year UK bonds dropped 10 basis points to 5.32%, coming back from a 19 basis point jump on Wednesday. The FTSE 250, which lists UK-focused stocks, moved up 0.5%. US Treasurys were also coming back after getting caught up in the UK gilt turmoil. The benchmark 10-year yield (^TNX) edged down roughly 2 basis points to 4.27% early on Thursday morning, while the 30-year yield (^TYX) slipped to around 4.79%. Bloomberg reports: Read more here. US stock markets will close early on Thursday, July 3, and trading will end at 1 p.m. ET. They will stay shuttered on July 4 for the Independence Day holiday. The stock market will reopen on Monday, July 7, at 9:30 a.m. ET. After that, the remaining holidays in 2025 observed by the New York Stock Exchange and Nasdaq are: Read more here about the 10 stock market holidays in 2025. Software companies Synopsys (SNPS) and Cadence (CDNS) rose in premarket trading by over 5% after the US removed export restrictions on chip design software shipments to China, easing trade tensions between the two countries. China recently made concessions over its rare earth export controls. Synopsys, Cadence and Siemens said they will now restore access for their Chinese customers. These firms develop important electronic design automation tools used in chipmaking. The US also lifted licensing rules for ethane producers. Earlier restrictions were part of Trump's response to China blocking rare earth exports, which had disrupted supply chains for cars, aerospace and defence industries. Reuters reports: Read more here. Oil prices slipped after posting their strongest gain in nearly two weeks, as investors monitored ongoing US trade negotiations and an upcoming OPEC+ meeting this weekend. Bloomberg reports: Brent (BZ=F) traded near $69 a barrel after surging by 3% on Wednesday, with West Texas Intermediate (CL=F) above $67. President Donald Trump said he had struck a trade deal with Vietnam, which would be just the third announced following agreements with the UK and China, before a July 9 deadline to reach accords. Crude has been buffeted in recent weeks, surging and collapsing along with perceived geopolitical risk in the Middle East, although volatility and volumes have fallen in recent days before Friday's US holiday. Focus is returning to trade talks, and the associated tariffs that threaten oil demand, as well as to Sunday's OPEC+ meeting, where the group is widely expected to agree on another bumper increase in supply quotas. 'While trade optimism provided a boost to oil prices, the sustainability of this move will likely be short-lived,' said Warren Patterson, head of commodities strategy for ING Groep NV. 'OPEC+ is set to decide on August output levels this weekend, and so the market will probably be cautious about carrying too much risk into the US long weekend.' Read more here. 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
Miami Herald
26 minutes ago
- Miami Herald
Veteran fund manager drops bold July Fed interest rate prediction after jobs shocker
The debate over the Federal Reserve's reluctance to lower rates has intensified recently. Those hoping that the Fed would tilt dovish in 2025 after cutting its Fed Funds Rate by 1% last year have been deeply disappointed. Instead, Federal Reserve Chairman Powell has taken a wait-and-see approach to monetary policy that's drawn sharp words from President Trump and others worried that a weaker economy could tilt into stagflation or recession this year. There's good reason to worry. Inflation has proven stickier than hoped, and the US unemployment rate has crept higher since 2023. We've also seen GDP shrink since last summer, and consumer confidence took it on the chin earlier this year when President Trump revealed harsher-than-expected tariffs, including a 30% tariff on China. Related: Fannie Mae Chair Pulte drops grim message to Fed Chair Powell The Fed's reluctance to cut rates has created uncertainty in the stock market, contributing to a 19% nearly-bear market drop in the S&P 500 from mid-February through early April. As a result, most on Wall Street are closely watching economic data, especially job reports, for signals about what will happen to interest rates next, given the impact of interest rate policy on corporate sales, profits, and stock prices. On July 3, the Bureau of Labor Statistics released its June unemployment report, which was surprising enough to prompt long-time fund manager Chris Versace to revamp his forecast for whether the Fed will reduce rates at its next meeting on July 30. Image source: Watson/Getty Images While historically still low, unemployment has increased since 2003, partly due to hawkish rate hikes in 2022 and 2023. There's also been a steady drumbeat of job losses, including earlier this year, when the Department of Government Efficiency, or DOGE, took an axe to Federal spending. The risk that unemployment continues to rise prompted the Fed to lower interest rates late last year, but the risk of sticky inflation caused by President Trump's recently enacted tariffs has the Fed boxed into a corner. Related: Veteran analyst sends blunt message on what's next for stocks The Fed's dual mandate is low unemployment and inflation. However, those goals can contradict each other, making the Fed's job challenging. When the Fed cuts rates, it can lower unemployment, but it raises inflation. The opposite happens when it raises rates. The Fed's monetary policy significantly impacts households and businesses. The Fed controls rates by changing the Fed Funds Rate, the interest rate banks charge each other on overnight borrowing. Therefore, changes to the Fed's interest rate can raise or lower lending rates on everything from credit cards to mortgage loans. Business loans are similarly impacted, and profits and losses can climb or fall with rates for companies with variable interest rate debt or if fixed rate debt is refinanced. In 2022, the Fed significantly raised interest rates after inflation topped 8%. The hikes worked, given that inflation has fallen below 3%. However, as expected, job losses have increased amid slower economic activity. In Q1, GDP shrank 0.5% and while the Atlanta Fed's GDPNow forecasts 2.5% growth in Q2, the Federal Reserve and World Bank currently expect GDP growth of just 1.4% for the whole year, down from 2.8% in 2024. Slowing growth has increased the risk that the Fed's hesitancy to cut rates may mean it's falling behind the curve, increasing the chances of a recession. As a result, the Fed's next move will be determined by two factors: how sticky inflation proves to be because of tariffs and what happens to the unemployment rate. After the Fed decided to keep rates unchanged at its June FOMC meeting, some Fed members, including Federal Reserve Governor Michelle Bowman, said they'd support a rate cut in July. As a result, the probability of a July interest rate cut swelled to roughly 24%, according to the CME's closely tracked FedWatch tool. More Federal Reserve: Fed interest rate cut decision resets forecasts for the rest of this yearFederal Reserve prepares strong message on long-term interest ratesFed official revamps interest-rate cut forecast for this year Unfortunately for those in the 'cut rates now' camp, the BLS June jobs report released on July 3 appears to have dashed those hopes. "The June Employment Report surprised to the upside with 147,000 jobs added during the month, up modestly from the upwardly revised May figure of 144,000 and the market forecast of 110,000," wrote long-time fund manager Chris Versace on TheStreet Pro. "The June Unemployment Rate ticked lower to 4.1% from 4.2% in May, not rising to 4.3% as the market expected it would." The downtick in joblessness throws a monkey wrench in the possibility that interest rates will head lower later this month. "That's enough jobs being added, especially when paired with recent inflation data, for the Fed not to deliver a rate cut later this month, especially with the Unemployment Rate inching lower," wrote Versace. On the jobs news, the CME's FedWatch probability for a July rate cut fell below 5%. The strong labor report suggests the US economy is healthy enough for the Fed to continue to watch how tariffs affect prices. Import taxes are widely viewed as inflationary, given that companies are reluctant to absorb them entirely. So, when could we see another rate cut? Versace thinks that while a September rate cut is still on the table, it's not guaranteed. "The longer we go without Trump trade deals, the longer it will take tariffs to work through the supply chain," wrote Versace. "If the market is underwhelmed by the expected trade deal announcements slated before July 9, we could see the rate-cut conversation shift to the Fed's October meeting." Related: Legendary fund manager issues stock market prediction as S&P 500 tests all-time highs The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
