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Yahoo
an hour ago
- Yahoo
The jobs report has dashed hopes of a rate cut this summer
Chances of a Fed rate cut this month cratered after the strong June jobs report. The economy added 147,000 jobs in June, way more than economists expected. The Trump administration continued to criticize the Fed chair this week for not lowering rates. Say goodbye to the prospect of a rate cut this summer. Investors have slashed the odds of an interest rate cut from the Federal Reserve this month after data released Thursday indicated the job market was unexpectedly strong in June. The robust jobs report gives the central bank room to keep interest rates elevated, with employment strong and inflation remaining above its 2% target. The report indicated that employers added 147,000 jobs to the economy last month, handily beating expectations of 110,000. In another sign of strength, payrolls for May were revised upward to 144,000, and the overall unemployment rate unexpectedly ticked down to 4.1% from 4.2%. This embedded content is not available in your region. According to the CME FedWatch tool, the perceived chances of the Fed cutting rates by 25 basis points plunged Thursday morning, dropping from a 23.8% chance Wednesday to 6.7% after the release of the jobs report. Markets still see a September rate cut as likely, with odds of about 71% after the jobs report. Stocks moved slightly higher as traders cheered the strong data, but dimmer rate-cut views kept a lid on more pronounced gains. Still, the S&P 500 managed to rise to a fresh intraday record of 6,271. The bigger reaction to the jobs data was in the bond market. This embedded content is not available in your region. Yields jumped on the prospects for the Fed to keep rates higher for longer. The 10-year US Treasury yield jumped 4 basis points to about 4.34%. The yield on the 2-year Treasury, which is the most sensitive to Fed policy, spiked 9 basis points to 3.88%. "The firm June unemployment rate waves the Federal Reserve off the possibility of a July rate cut, which shifts the spotlight to September," Mark Hamrick, a senior economic analyst at Bankrate, wrote in a note. "If businesses keep expanding payrolls like they've done so far this year, the Fed can comfortably sit in 'wait and see' mode at the upcoming policy meeting. Uncertainty around tariffs and trade have apparently not spooked businesses into shedding workers," said Jeffrey Roach, the chief economist at LPL Financial. The report is unlikely to lead to rate cuts this month, which means the Trump administration's withering criticism of Fed Chair Jerome Powell could intensify. Powell has signaled the central bank is comfortable holding interest rates steady while the central bank monitors the path of inflation and any impact from tariffs. This week, Powell said the Fed would have cut rates already were it not for Trump's trade war. Trump, who has harangued Powell to cut rates for years, posted on Truth Social on Wednesday suggesting the Fed chief leave his position. "'Too Late' should resign immediately!!!" Trump wrote, referring to the nickname he has frequently called Powell to express his annoyance at not cutting interest rates earlier. Trump's post also linked to an article detailing a post on X from William Pulte, the FHFA director, who suggested that Congress should investigate Powell. Pulte has criticized Powell for hurting the housing market by keeping rates high. "Like this tweet if you think it's time for Jerome Powell to resign," Pulte said in a separate post Wednesday evening. According to the latest Freddie Mac survey, the 30-year US fixed mortgage rate hovered at about 6.77% last week. Still, Powell looks likely to stand pat on interest rates, even amid escalating political pressure, Bankrate's Hamrick said. "He is determined to serve out the remainder of his term not being swayed by political pressure or blunt criticism from the president," he added. "Indeed, the president's pressure could have the opposite of the intended impact." Others have speculated that Trump's criticism only makes it less likely that Powell will bend and lower rates. Observers say Powell may now be more focused on his legacy of protecting Fed independence. Read the original article on Business Insider 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
Business Insider
2 hours ago
- Business Insider
Chris Hohn's TCI Crushes Market with 21% Return
Sir Chris Hohn's The Children's Investment (TCI) Fund has notched a spectacular year with a 21% gain, tripling the S&P 500's comparative return. The activist investor utilizes an extremely concentrated portfolio and held just 10 positions in his last 13F portfolio update. TCI has an average holding period of 23.3 quarters, or about 5.8 years, according to WhaleWisdom. Don't Miss TipRanks' Half-Year Sale Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. Make smarter investment decisions with TipRanks' Smart Investor Picks, delivered to your inbox every week. TCI's largest position, GE Aerospace (GE), accounts for 22% of its portfolio and has returned 47% year-to-date. Its second-largest position, Microsoft (MSFT), has a 15% allocation and has returned 19% this year. These two companies were the only stocks that TCI bought during the first quarter. What Stocks Does TCI Own? TCI also has significant positions in financial firms Moody's (MCO), Visa (V), and S&P Global (SPGI). Additionally, TCI sees upside in railroad companies Canadian Pacific Kansas City (CP) and Canadian National Railway (CNI). CP has an 8.91% weight while CNI comes in at 5.84%. At the same time, not all of the hedge fund's stocks are winners, as it owns both classes of Google (GOOG) (GOOGL), which are down by about 5% YTD. Head over to TipRanks' TCI Portfolio Page for more information on Chris Hohn and TCI.
Yahoo
3 hours ago
- Yahoo
Why Netflix Stock Jumped 11% in June
The market is feeling good about Netflix after management maintained guidance and said it believes it can reach $1 trillion in market cap by 2030. It received several analyst upgrades in June. NASA said it will stream rocket launches this summer, and streaming stocks rose after Apple released a film in theaters. 10 stocks we like better than Netflix › Netflix (NASDAQ: NFLX) stock gained 11% in June, according to data provided by S&P Global Market Intelligence. It received several analyst upgrades, it made some celebrated announcements, and it also seems to be rising on the coattails of Apple's success with its hit film F1: The Movie. Netflix has been having another moment. Despite tons of new competition and a changing streaming landscape, it has remained in the top streaming spot, which is a real feat. It speaks to the company's excellent management and foresight, and it bodes well for the company's future potential as it successfully adapts, changes, and leads. In the 2025 first quarter, revenue increased 13% year over year, and operating income was up 27%. Operating margin improved from 28.1% to 33.3%, and earnings per share (EPS) increased from $5.28 to $7.03. The company has stopped reporting subscriber count, but it had more than 300 million paid subscribers at the end of 2024. Ad revenue from its relatively new ad-supported tier is still a small portion of total revenue, but management is expecting it to double this year. It's also guiding for "healthy" subscriber growth and some price increases, and it maintained its full-year guidance despite continued pressure in the environment, boosting market confidence. The strong results and improving streaming have led to several recent analyst upgrades, and the stock is rising as a result. It's also benefiting from an overall improving market, with the S&P 500 index up 5% last month. Toward the end of June, Netflix stock surged on the day Apple's new hit film, F1:The Movie, hit theaters. That suggests that streaming tech giants can produce theater-level quality films that can be hits at the box office. Netflix has had some limited theater runs, but it doesn't seem to have plans to make this a major part of its model. To top off the month, it got another round of applause after NASA announced that it would stream rocket launches on Netflix starting this summer. Management recently boasted that it believes it can reach a $1 trillion valuation by 2030. That implies nearly doubling -- which may or may not happen -- but Netflix has demonstrated resilience and innovation over many years, and it's likely to keep changing with the times and offer value for shareholders. Before you buy stock in Netflix, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Netflix 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 $699,558!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $976,677!* Now, it's worth noting Stock Advisor's total average return is 1,060% — 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 June 30, 2025 Jennifer Saibil has positions in Apple. The Motley Fool has positions in and recommends Apple and Netflix. The Motley Fool has a disclosure policy. Why Netflix Stock Jumped 11% in June was originally published by The Motley Fool
