Asian Equities to Rise as US Jobs Buoy Sentiment: Markets Wrap
Equity index futures for Japan and Australia rose, while those for Hong Kong were fractionally lower. The S&P 500 gained 0.8% and the Nasdaq 100 advanced 1% Thursday, leaving each index at the highest closing level on record in a shortened session ahead of Friday's Independence Day holiday. Contracts for US stocks were little changed in early Asian trading.
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24 minutes ago
- Yahoo
One of Wall Street's Flawless Stock Market Predictors Is Knocking on the Door of History -- and Not in a Good Way
The Dow Jones Industrial Average, S&P 500, and Nasdaq Composite have all been whipsawed in 2025. One of Wall Street's most tried-and-true valuation tools shows this to be one of the most expensive stock markets dating back to 1871. Although this stock market predictor foreshadows turmoil, it's also a silver lining for optimistic, long-term-minded investors. 10 stocks we like better than S&P 500 Index › This has been a year investors won't soon forget. During a one-week stretch from the closing bell on April 2 to April 9, the benchmark S&P 500 (SNPINDEX: ^GSPC) endured its fifth-steepest two-day percentage decline dating back 75 years, as well as its largest single-day point gain since it was incepted. In fact, April 9 marked the largest single-session point gains for the iconic Dow Jones Industrial Average (DJINDICES: ^DJI) and Nasdaq Composite (NASDAQINDEX: ^IXIC), as well. For the S&P 500 and Dow, the late-March and early April tumult sent both indexes firmly into correction territory. As for the Nasdaq Composite, it endured its first bear market since 2022. But oh, how the tables have turned. In the three months since these major indexes bottomed on April 8, the S&P 500 and Nasdaq Composite have exploded to respective all-time highs, and the Dow is within a stone's throw of joining its peers. While everything would appear to be perfect for Wall Street, one historically flawless stock market predictor suggests trouble is brewing. When this forecasting tool makes history, "Look out below" eventually becomes a theme for the Dow, S&P 500, and Nasdaq Composite. To preface this discussion, understand that no forecasting tool, metric, or correlative event can, with guaranteed accuracy, predict the future. Though the following predictive indicator has never incorrectly forecasted what's to come, there's nothing that concretely guarantees the next directional move for Wall Street's major stock indexes. With the above being said, the historically flawless forecasting tool that's on the verge of making history -- and not in a good way -- is the S&P 500's Shiller price-to-earnings (P/E) ratio, also known as the cyclically adjusted P/E ratio, or CAPE ratio. When evaluating companies, most investors tend to rely on the time-tested P/E ratio, which divides a company's share price by its trailing-12-month earnings per share (EPS). This quick and easy valuation metric works wonders for mature businesses and during long-winded periods of economic expansion. However, it often fails to offer much substance for growth stocks or during recessions. Thus enters the S&P 500's Shiller P/E ratio, which is based on average inflation-adjusted EPS over the trailing decade. Accounting for 10 years of earnings history and adjusting for inflation ensures the closest thing to an apples-to-apples valuation comparison over time. As of the closing bell on July 10, with the broad-based S&P 500 clocking in at a fresh record high, the Shiller P/E ended at a multiple of 38.26. Though this is still well off its record multiple of 44.19 set during the dot-com bubble and below the multiple of just over 40 achieved during the first week of January 2022, it's edging very close to the 38.89 peak logged in December during the current bull market cycle. In other words, the stock market is knocking on the door of its third-priciest valuation multiple in history (during a continuous bull market), when back-tested over 154 years. Why's this relevant? There have been only six unique instances, dating back to January 1871, where the S&P 500's Shiller P/E ratio has surpassed 30 and held that mark for at least two months. Following the five prior occurrences, the Dow Jones Industrial Average, S&P 500, and/or Nasdaq Composite eventually plunged by 20% to 89%. What should be made clear here is that the Shiller P/E isn't a timing tool in any way. Sometimes the Shiller P/E remains above 30 for a very short period, as it did prior to the start of the Great Depression in the summer of 1929. On other occasions, we've witnessed the Shiller P/E maintain a multiple above 30 for more than four years, such as prior to and during the bursting of the dot-com bubble. But what this flawless predictive tool has demonstrated is an uncanny track record of foreshadowing significant downside in equities. It's a harbinger of trouble for the stock market, and a multiple of 38.26 signals that valuations are extended and unsustainable. If history were to rhyme, once more, Wall Street's major stock indexes will dip into a bear market at some point in the presumed not-too-distant future. On the surface, this probably doesn't sound like an enticing forecast for investors. However, it's actually a silver lining in disguise. When stock market corrections and bear markets occur, it's not uncommon for investors to be worried or for their emotions to come into play. In late March and early April, for example, the market's major indexes fell at a much faster pace than they had risen. This is part of the old adage that stocks "take the stairs up and the elevator down." But there's a nonlinearity to Wall Street's ebbs and flows that unequivocally benefits patient and optimistic investors. In June 2023, with the S&P 500 having risen 20% from its October 2022 bear market bottom, the benchmark index was officially in a new bull market. That's when analysts at Bespoke Investment Group published a data set on X (formerly Twitter) that compared the calendar-day length of every S&P 500 bull and bear market dating back to the start of the Great Depression in September 1929. On one end of the spectrum, the 27 separate S&P 500 bear markets have stuck around for an average of only 286 calendar days. Furthermore, none of these 27 bear markets surpassed 630 calendar days in length. On the other end of the spectrum, the typical S&P 500 bull market endured for 1,011 calendar days, or approximately 3.5 times longer than the usual bear market. What's more, if the current S&P 500 bull market, which began in October 2022, were extrapolated to present day, it would mean more than half of all bull markets (14 out of 27) have lasted longer than the lengthiest bear market. What all this data implies is that bear markets tend to be short-lived and are surefire buying opportunities for investors with an optimistic, long-term mindset. Just as the Shiller P/E has a flawless track record of forecasting eventual downside of at least 20% in Wall Street's major indexes, more than a century of stock market history shows the major indexes climb in value over time. If this correlation proves accurate, once again, approach it as a gift to buy stakes in high-quality stocks and/or exchange-traded funds (ETFs) at an attractive price. Before you buy stock in S&P 500 Index, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and S&P 500 Index wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $671,477!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,010,880!* Now, it's worth noting Stock Advisor's total average return is 1,047% — a market-crushing outperformance compared to 180% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of July 7, 2025 Sean Williams has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. One of Wall Street's Flawless Stock Market Predictors Is Knocking on the Door of History -- and Not in a Good Way was originally published by The Motley Fool
Yahoo
an hour ago
- Yahoo
Warren Buffett Says Most Investors Should Buy This Vanguard Index Fund. It Could Turn $500 Per Month Into $1 Million.
Warren Buffett has specifically suggested the Vanguard S&P 500 ETF as the most sensible way for average investors to get exposure to U.S. stocks. Outperforming the S&P 500 is difficult, so much so that nearly 90% of large-cap fund managers achieved worse returns over the last 15 years. The S&P 500 advanced 1,860% over the last three decades, growing at a pace that would have turned $500 per month into $1 million. 10 stocks we like better than Vanguard S&P 500 ETF › Warren Buffett took control of Berkshire Hathaway in 1965. It started as a small textile operation but has since become a trillion-dollar company due to Buffett's knack for investing. Berkshire stock has returned 20% annually for six decades under Buffett's leadership, while the S&P 500 (SNPINDEX: ^GSPC) has added 10.4% annually. Nevertheless, Buffett has never recommended Berkshire stock, but rather has consistently told investors to stick with a specific index fund. "Over the years, I've often been asked for investment advice," Buffett wrote in his 2016 letter to shareholders. "My regular recommendation has been a low-cost S&P 500 index fund." Several investment products satisfy that description, but Buffett has specifically suggested the Vanguard S&P 500 ETF (NYSEMKT: VOO). Following his advice could turn $500 per month into $1 million over 30 years. Here's what investors should know. The Vanguard S&P 500 ETF measures the performance of the S&P 500. The fund comprises growth stocks and value stocks from all 11 market sectors, and it covers more than 80% of domestic equities and nearly 50% of global equities by market capitalization. In short, the Vanguard S&P 500 ETF provides exposure to many of the world's most important companies. The 10 largest positions in the index fund are listed by weight below: Microsoft: 6.8% Nvidia: 6.6% Apple: 5.9% Amazon: 3.9% Alphabet: 3.6% Meta Platforms: 2.8% Broadcom: 2.3% Tesla: 1.9% Berkshire Hathaway: 1.8% JPMorgan Chase: 1.4% Warren Buffett is an adamant believer in U.S. innovation and commerce, so much so that he has warned investors to "never bet against America." The S&P 500 is basically a basket of the most influential U.S. companies, which explains why Buffett believes an S&P 500 index fund is the best way for most investors to get exposure to U.S. stocks. Beyond that, beating the S&P 500 is hard even for experienced investors. More than three-quarters of large-cap funds underperformed the index in the last five years, and nearly 90% underperformed in the last 15 years. Put differently, most professional money managers would be better off buying an S&P 500 index fund rather than individual stocks. Buffett made that point in his 2014 shareholder letter. "Huge institutional investors, viewed as a group, have long underperformed the unsophisticated index-fund investor who simply sits tight for decades." The S&P 500 achieved a total return of 1,860% in the last three decades, meaning the index compounded at 10.4% annually. That period encompasses a broad range of economic and market environments -- three recessions, four bear markets, and 12 market corrections -- so investors can be reasonably confident in similar returns over the next 30 years. At that pace, $500 invested monthly in the Vanguard S&P 500 ETF would be worth about $97,400 after one decade, $359,600 after two decades, and a little more than $1 million after three decades. That last thing prospective investors should know is that the Vanguard S&P 500 ETF has an expense ratio of 0.03%. That means shareholders will pay $3 per year on every $10,000 invested in the index fund. Very few (if any) index funds are more attractive. I say that because the S&P 500 outperformed every other major stock market in the world over the last 20 years. It also beat benchmarks in fixed income, real estate, and precious metals, according to Morgan Stanley. As a final thought, investors don't have to choose between individual stocks and an S&P 500 index fund. For instance, I keep some money in the Vanguard S&P 500 ETF and the rest in stocks. My logic is simple: My portfolio will outperform if my stocks beat the S&P 500, but it will still perform reasonably well if my stocks trail the S&P 500 because I have nearly a quarter of my portfolio in the Vanguard S&P 500 ETF. Before you buy stock in Vanguard S&P 500 ETF, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Vanguard S&P 500 ETF wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $671,477!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,010,880!* Now, it's worth noting Stock Advisor's total average return is 1,047% — a market-crushing outperformance compared to 180% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of July 7, 2025 JPMorgan Chase is an advertising partner of Motley Fool Money. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Trevor Jennewine has positions in Amazon, Nvidia, Tesla, and Vanguard S&P 500 ETF. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Berkshire Hathaway, JPMorgan Chase, Meta Platforms, Microsoft, Nvidia, Tesla, and Vanguard S&P 500 ETF. The Motley Fool recommends Broadcom and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy. Warren Buffett Says Most Investors Should Buy This Vanguard Index Fund. It Could Turn $500 Per Month Into $1 Million. was originally published by The Motley Fool Fehler beim Abrufen der Daten Melden Sie sich an, um Ihr Portfolio aufzurufen. 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Yahoo
an hour ago
- Yahoo
Warren Buffett Says Most Investors Should Buy This Vanguard Index Fund. It Could Turn $500 Per Month Into $1 Million.
Warren Buffett has specifically suggested the Vanguard S&P 500 ETF as the most sensible way for average investors to get exposure to U.S. stocks. Outperforming the S&P 500 is difficult, so much so that nearly 90% of large-cap fund managers achieved worse returns over the last 15 years. The S&P 500 advanced 1,860% over the last three decades, growing at a pace that would have turned $500 per month into $1 million. 10 stocks we like better than Vanguard S&P 500 ETF › Warren Buffett took control of Berkshire Hathaway in 1965. It started as a small textile operation but has since become a trillion-dollar company due to Buffett's knack for investing. Berkshire stock has returned 20% annually for six decades under Buffett's leadership, while the S&P 500 (SNPINDEX: ^GSPC) has added 10.4% annually. Nevertheless, Buffett has never recommended Berkshire stock, but rather has consistently told investors to stick with a specific index fund. "Over the years, I've often been asked for investment advice," Buffett wrote in his 2016 letter to shareholders. "My regular recommendation has been a low-cost S&P 500 index fund." Several investment products satisfy that description, but Buffett has specifically suggested the Vanguard S&P 500 ETF (NYSEMKT: VOO). Following his advice could turn $500 per month into $1 million over 30 years. Here's what investors should know. The Vanguard S&P 500 ETF measures the performance of the S&P 500. The fund comprises growth stocks and value stocks from all 11 market sectors, and it covers more than 80% of domestic equities and nearly 50% of global equities by market capitalization. In short, the Vanguard S&P 500 ETF provides exposure to many of the world's most important companies. The 10 largest positions in the index fund are listed by weight below: Microsoft: 6.8% Nvidia: 6.6% Apple: 5.9% Amazon: 3.9% Alphabet: 3.6% Meta Platforms: 2.8% Broadcom: 2.3% Tesla: 1.9% Berkshire Hathaway: 1.8% JPMorgan Chase: 1.4% Warren Buffett is an adamant believer in U.S. innovation and commerce, so much so that he has warned investors to "never bet against America." The S&P 500 is basically a basket of the most influential U.S. companies, which explains why Buffett believes an S&P 500 index fund is the best way for most investors to get exposure to U.S. stocks. Beyond that, beating the S&P 500 is hard even for experienced investors. More than three-quarters of large-cap funds underperformed the index in the last five years, and nearly 90% underperformed in the last 15 years. Put differently, most professional money managers would be better off buying an S&P 500 index fund rather than individual stocks. Buffett made that point in his 2014 shareholder letter. "Huge institutional investors, viewed as a group, have long underperformed the unsophisticated index-fund investor who simply sits tight for decades." The S&P 500 achieved a total return of 1,860% in the last three decades, meaning the index compounded at 10.4% annually. That period encompasses a broad range of economic and market environments -- three recessions, four bear markets, and 12 market corrections -- so investors can be reasonably confident in similar returns over the next 30 years. At that pace, $500 invested monthly in the Vanguard S&P 500 ETF would be worth about $97,400 after one decade, $359,600 after two decades, and a little more than $1 million after three decades. That last thing prospective investors should know is that the Vanguard S&P 500 ETF has an expense ratio of 0.03%. That means shareholders will pay $3 per year on every $10,000 invested in the index fund. Very few (if any) index funds are more attractive. I say that because the S&P 500 outperformed every other major stock market in the world over the last 20 years. It also beat benchmarks in fixed income, real estate, and precious metals, according to Morgan Stanley. As a final thought, investors don't have to choose between individual stocks and an S&P 500 index fund. For instance, I keep some money in the Vanguard S&P 500 ETF and the rest in stocks. My logic is simple: My portfolio will outperform if my stocks beat the S&P 500, but it will still perform reasonably well if my stocks trail the S&P 500 because I have nearly a quarter of my portfolio in the Vanguard S&P 500 ETF. Before you buy stock in Vanguard S&P 500 ETF, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Vanguard S&P 500 ETF wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $671,477!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,010,880!* Now, it's worth noting Stock Advisor's total average return is 1,047% — a market-crushing outperformance compared to 180% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of July 7, 2025 JPMorgan Chase is an advertising partner of Motley Fool Money. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Trevor Jennewine has positions in Amazon, Nvidia, Tesla, and Vanguard S&P 500 ETF. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Berkshire Hathaway, JPMorgan Chase, Meta Platforms, Microsoft, Nvidia, Tesla, and Vanguard S&P 500 ETF. The Motley Fool recommends Broadcom and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy. Warren Buffett Says Most Investors Should Buy This Vanguard Index Fund. It Could Turn $500 Per Month Into $1 Million. was originally published by The Motley Fool
