The rest of the world is trouncing the U.S. stock market. Why that could continue
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Yahoo
2 minutes ago
- Yahoo
Alberta, Saskatchewan finances in best shape among provinces, says Conference Board
Pressures from the trade war are expected to push every Canadian province into fiscal deficit this year, but their fortunes going forward could be radically different, according to a new report released by the Conference Board of Canada on Tuesday. While all provinces currently face budget shortfalls brought on by pandemic debt and increased spending due to trade war uncertainty, Alberta and Saskatchewan are currently in the best fiscal position thanks to prudent debt management and revenue from the natural resources sector. 'Alberta has a younger population and has a really strong foundation in the oil and gas sector, which helps to boost their royalty revenues,' said Richard Forbes, chief economist at the board. The report forecasts Alberta's fiscal position will improve from a $4.3 billion expected deficit in 2025-2026, to a surplus of $3.9 billion by the end of the decade. Saskatchewan's shortfall is expected to improve as well, with the deficit shrinking from $373 million in 2025 to $172 million in 2026, with small budget surpluses for the remainder of the decade. Forbes noted Saskatchewan and Alberta remain heavily reliant on resources and could face volatility. On the flip side, the Atlantic provinces face tougher headwinds on the fiscal front, including declining population, lower investment and lower revenues. None of the Atlantic provinces' deficits are expected to return to balance by the end of the decade, with Newfoundland and Labrador and New Brunswick in particular contending with aging populations. 'Demographics is a really big driver of government finances,' said Forbes. 'In eastern provinces and Quebec, their populations are bit more senior, and their median ages are higher.' Forbes said as people get older, they contribute less to tax revenues and generally spend less in the economy. In addition, as the population ages, the demand for healthcare services increases, a key area of spending for provinces. British Columbia also currently faces a record-breaking deficit of $9.1 billion, which is 70 per cent higher than the record deficit it posted during the pandemic. In April, S&P Global Ratings downgraded the province's credit rating from AA to A+. The province's deficit is expected to remain elevated at $9.3 billion in 2029-30. Forbes said there is no indication the province will come back to balance by the end of this decade, but cited potential revenue from the resources sector as a reason to remain optimistic. 'I think in B.C., they have had such a run-up in debt, we don't see a clear path to balance for them,' said Forbes. 'But there is some upside to them, including the tech industry and their resources sector.' The report said potential revenue growth from newly launched LNG projects has the potential to offset royalty losses from the forestry sector, which has faced tough trade headwinds in recent years. Quebec's deficit in 2025 will hit a record $14.4 billion, before entering a modest surplus of $600 million by 2029-2030. This will be achieved through a deceleration in healthcare spending. Ontario's shortfall is also expected to improve by the end of the decade, going from a $13.5-billion deficit this year to a $3-billion surplus by 2029-2030, driven by improved revenue brought on by economic recovery starting in 2026. Ottawa's counter tariffs could cost Canadians $9 billion this year — or $550 per household, warns think tank These are the U.S. tariff rates the EU and other countries have agreed to as deadline for deal with Canada looms Overall, Forbes said he expects there will be cuts to the provincial public sector spending in most provinces, while spending will be maintained in education and healthcare. Forbes said the main risk to the forecast remains the uncertainty brought on by the trade war, which has the potential to worsen economic outcomes. • Email: jgowling@ 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
2 minutes ago
- Yahoo
It's not just Big Tech. Industrial stocks are on fire.
The stock market is hitting new records — and Big Tech isn't the top performer. The Industrials (XLI) sector has been on fire this year as it has outperformed the entire market to lead the S&P 500 (^GSPC) to all-time highs. The sector is up 16% year to date, outpacing Technology (XLK), which has risen 13%, and Utilities (XLU), up 11% over the same period A boom in aerospace production, combined with AI-driven data center build-outs and investments in power infrastructure, has created a crop of Industrial highfliers. On Tuesday, Boeing (BA) posted better-than-expected quarterly results, signaling continued progress in its recovery. The aerospace giant's stock is up 28% year to date, trailing only AI chip maker Nvidia (NVDA) on the Dow Jones Industrial Average (^DJI). Shares of the aircraft maker, which is undergoing a turnaround plan, are up nearly 30% year to date and roughly 70% since the April lows. The company has emerged as a major beneficiary of President Trump's dealmaking abroad, clinching its biggest order ever from Qatar Airways in May and securing a commitment from British Airways as part of a UK trade framework. GE Aerospace (GE) also recently highlighted a growth in engine orders stemming from deals abroad. Shares of the engine maker have surged more than 60% year to date as revenue and earnings per share jumped more than 20% last quarter. The outperformance of the Industrials sector underscores Trump's focus on beefing up manufacturing both through dealmaking and incentives within the One Big Beautiful Bill Act, signed into law earlier this month. Tax incentives, including write-offs for capital expenditures and onshoring, are expected to be a tailwind for the sector. "We think that the fiscal bill adds to some of the strength that industrials will see in the coming quarters," Yung-Yu Ma, chief investment strategist at PNC Asset Management Group, told Yahoo Finance on Tuesday. "We think there is still a lot of momentum, we don't think we're in the late innings of industrials strength, we're probably in the middle innings though," he added. Power generation for AI data centers and upgrades to the electrical grid have also driven a rally in shares of power equipment makers. GE Vernova (GEV) stock is up more than 90% year to date as the manufacturer of natural gas turbines saw its order books balloon last quarter with strong demand from data centers. Meta (META), Microsoft (MSFT), Amazon (AMZN), and Google parent Alphabet (GOOGL, GOOG) are expected to spend a cumulative $325 billion in 2025, driven by a continued commitment to building out artificial intelligence infrastructure. "The data center build-out is quite dramatic lately thanks to a lot of Big Tech spending," CFRA research analyst Jonathan Sakraida told Yahoo Finance earlier this month. He added, "In order to for any of this to take place, you need the industrial sector to be thriving." Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on Twitter at @ines_ferre. 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
CNBC
4 minutes ago
- CNBC
These 'steady compounders' have delivered superior earnings growth for the past decade, Bank of America says
A slate of companies that have posted "consistent and superior" earnings growth over the past 10 years could be poised for strong performances and are worth watching, according to Bank of America. "Since data began in 1998, the Global Steady Compounders have annualized 5.2% outperformance versus the MSCI AC World Index and have outperformed in more months than most strategies we monitor," strategist Nigel Tupper wrote in a Tuesday note. "Stocks screening as Steady Compounders tend to outperform for extended periods." There are circumstances in which "steady compounders" don't fare well. Tupper wrote that the names tend to underperform when bond yields rise with inflation and in "significant" risk-on market periods, given that the stocks reflect earnings stability. The strategist screened for stocks that have an average score of above 95 out of 100 based on 10-year earnings growth, "stable" earnings growth, the stock's two-year earnings per share growth forecast, earnings revisions and its 12-month return. The current earnings season has been solid thus far, which has helped send the market to new highs . Of the 199 S & P 500 companies that have reported earnings, nearly 82% have beaten expectations, per FactSet. Here are some of the names that popped up in the U.S. "steady compounders" screen. Global payments technology company Visa was among the names tied for the highest score on the list, with a score of 100 in the steady compounders rank. Shares have outperformed the S & P 500 in 2025, rising nearly 12%, versus the broad market index's roughly 8% gain during the period. Visa is scheduled to report its quarterly results for the fiscal third quarter after the bell Tuesday. Analysts surveyed by LSEG are expecting the company to post double-digit-percentage earnings and revenue growth compared to the prior-year period. Most analysts on Wall Street are bullish on Visa, as 32 out of 40 total analysts have a strong buy or buy rating on the name, per LSEG data. Microsoft , which reports after the bell on Wednesday, had a score of 100 as well. Analysts expect the "Magnificent Seven" company to post around 14% earnings and revenue growth year over year. The stock has similarly outpaced the broader market, seeing a meaningful advance in 2025 of more than 21%. Like Visa, a majority of the Street is optimistic on the stock's trajectory over the next several months, with 56 among the 62 analysts covering it having a strong buy or buy rating. Financial technology platform Intuit also made the cut at 100 in the steady compounders rank. The stock has soared more than 27% in 2025 and around 35% over the past six months, outperforming the broader market. The company is slated to post its earnings results in late August.
