Latest news with #February
Yahoo
12 hours ago
- Business
- Yahoo
Monitoring The Cape Ratio: Are Stocks Overvalued or Will the Bull Run Continue?
Amid a historic rebound, the S&P 500 has hit another all-time high after flirting with correction territory just three months ago in March. With the S&P 500 dropping more than 10% in March from its previous high of 6,144 in February, the benchmark has now rebounded and hit a new peak of over 6,180 on Friday. Such a fast recoup in the broader market is unprecedented and can sometimes take years. That said, it's certainly a worthy topic of whether stocks are overvalued or if there is indeed a clear path for a Bull market to continue. To do so, let's take a look at the Cape ratio, also known as the Shiller P/E ratio, and review the bullish sentiment that's lifting markets. Notably, the Cape ratio is used to calculate the price of the stock market or individual stocks relative to their average inflation-adjusted earnings over the last 10 years. Keeping this in mind, the Cape ratio smooths out fluctuations caused by economic cycles, providing a clearer view of whether stocks are overvalued or undervalued based on their historical average. Preluding the market correction earlier in the year, many analysts, including famed billionaire Jeffrey Gundlach, had called for a market recalibration based on the Cape ratio's reading of 38X earnings on the benchmark S&P 500, the second-highest level ever. This Clinically Adjusted Price-to-Earnings Ratio (CAPE) has roots that date back to 1934, when David Dodd and Warren Buffett's mentor Benjamin Graham proposed smoothing out earnings over multiple years in their investment book 'Security Analysis', which provided a foundational idea behind CAPE. Retroactively calculating historical earnings data for the U.S. stock market back to 1881, the Cape ratio was formally introduced by economists Robert Shiller and John Y. Campbell in 1988. Furthermore, the Cape ratio gained notoriety in the late 1990s and early 2000s, thanks to Shiller's warning of the dot-com bubble. Following the broader market's most recent and historical rebound, the Cape ratio on the S&P 500 is currently at 36X, which is once again well above its historical average of around 16-17X. Image Source: YCHARTS Despite the Cape ratio indicating stocks are overvalued, a clearer path to global economic growth has been established with the U.S. officially reaching a framework trade deal agreement with China on Friday. President Trump's 10% baseline tariff on most countries is set to expire on July 8, but has eased concerns that rattled the stock market, providing a 90-day pause on higher imposed country-specific tariffs. While this deadline is just a few weeks away, Treasury Secretary Scott Bessent has advised that most trade deals should be done by Labor Day (Monday, September 1st). Allowing more time for negotiations, the U.S. has come to a trade agreement with the U.K. as well and is in talks with other major trading partners, including the E.U., India, and Japan. Optimistically, May's jobs report and inflation data added fuel to the market rebound earlier in the month after coming in better than economists' expectations. Meanwhile, reports of an Israel-Iran truce were able to sustain this optimism, although it's noteworthy that President Trump has just gone on the record and said he is terminating trade talks with Canada at the time of this writing. While overly bullish market sentiment can sometimes be questioned as a conundrum, investors should know that this usually preludes to higher corporate earnings, the general principle that manifests in a higher stock market. Over the last decade, the earnings from the companies in the S&P 500 have grown by over 9% annually, with the index up a bullish +200% during this period. Image Source: Zacks Investment Research Considering the stock market needs higher EPS figures to ease the Cape ratio's overhyped reading, it's noteworthy that Zacks director Sheraz Mian has pointed out that S&P 500 earnings for the second quarter are currently expected to be up +4.9% from the same period last year on +3.9% higher revenues. However, Mian also points out that while negative revisions to Q2 estimates have stabilized in recent weeks, tariff uncertainty has caused estimates for the period to be under significant pressure relative to other recent periods. Inherently, for the bull run to continue, a relatively strong Q2 earnings season and better-than-expected corporate guidance will be crucial, with the Cape ratio at a very high 36X. This may certainly be the case with the S&P 500 already hitting a new all-time peak after rebounding +10% in just three months. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report This article originally published on Zacks Investment Research ( Zacks Investment Research
Yahoo
3 days ago
- Business
- Yahoo
The S&P 500 flirts with it's all-time high, oil futures rise 1.4% after Middle East ceasefire
The S&P 500 closed the day at 6,092, just 51 points off its all-time high of 6,144 from February. Oil prices recovered from, rising 1.4% today, as tensions in the Middle East settled. Across the board other macro issues from tariffs to the looming spending bill also sat in limbo, easing uncertainty for markets. Despite little change in the U.S. stocks on Wednesday, investors watched the markets closely. The S&P 500 closed the day just 51 points off from its all-time high closing price of 6,144 on February 19. The Dow Jones closed the day down about 106 points, but still higher than its mid-afternoon lows on Monday. Meanwhile, the tech-heavy Nasdaq finished up 0.3%, closing Tuesday at 19,974. It is also flirting with a return to its all-time high of 20,173 points from December 16, 2024. The fact U.S. equities are not just recovering from their April rout, but rebounding to the record highs they saw before President Donald Trump's tariff policies, indicates markets may have started readjusting to the era of increased uncertainty investors find themselves in. Overall levels of market uncertainty have declined compared to their peaks in the immediate aftermath of Trump's on-again, off-again tariff policy. (A point reiterated by Federal Reserve chair Jerome Powell during congressional testimony on Tuesday). But market conditions have not returned to the humdrum routine that investors welcome. On the other hand, the many issues that could roil markets—from the Middle East, to the looming inflationary impacts of tariffs, to an unprecedented government spending bill—are in a holding pattern. Yes, they haven't been solved but neither have they worsened. The U.S. announced a ceasefire between Israel and Iran. Trump stopped removing and reinstituting tariffs on a daily basis like he had been just a few weeks ago. The U.S. and China appear to be working on a trade deal but, there is nothing concrete other than the removal of the more than 100% tariffs they'd placed on each other. The spending bill, which would send the deficit skyrocketing, is for now, mired in the sandpits of the American legislative branch. This week started with slumps in the equities market over fears the conflict in the Middle East would disrupt oil flows. But what a difference a couple of days can make. On Wednesday oil futures were up 1.4% after falling earlier this week. Stocks also saw a similar drop earlier this week. After Monday's initial shock, a muted and fairly surprising reaction followed, noted Jake Schurmeier, portfolio manager at Harbor Capital and a former member of the Federal Reserve Bank of New York's Markets Group. 'The risk premium in markets lasted all of five hours,' Schurmeier told Fortune. 'I think the answer could be that markets are becoming more efficient in getting used to these geopolitical blips.' The ups and downs of the last few days pointed to a reactionary market, Schurmeier said. 'The broader point is we've become so short term,' he said. 'It all strikes me as very cynical and short-term thinking at this point.' With choppy markets, including in intraday trading, some investors keep an eye on the long game. Bob Robotti, president and chief investment officer of asset manager Robotti & Company, said he's focused on the structural risks facing the economy rather than short-term geopolitical volatility. For instance, several major forces are going to drive inflation higher, he said. Key inflationary pressures such as 'all the aspects of tariffs, changing supply chains, extra frictional costs' aren't temporary but represent fundamental shifts in how the global economy operates, Robotti said. He sees the outcome from those shifts resulting in permanently higher prices. 'If inflation is a persistent event and higher interest rates are required, that means lower multiples on everything in the investable world,' Robotti told Fortune. 'This is particularly concerning given the concentration of capital in growth assets and private equity that have benefited from the low-rate environment, making the entire system more vulnerable to an inflationary regime change.' This story was originally featured on
Fox News
4 days ago
- Politics
- Fox News
Joy Reid says MSNBC fired her without warning, speculates her coverage of Trump, Gaza led to ouster
Print Close By Joseph Wulfsohn Published June 24, 2025 Ex-MSNBC host Joy Reid speculated Tuesday that her coverage of President Donald Trump and the ongoing war in Gaza were unstated factors that led to her sudden ouster from the liberal network. During her appearance on "The Breakfast Club," Reid was asked what was behind her firing from MSNBC in February, insisting it wasn't a ratings issue despite the fact that the network's viewership took a huge dive after the 2024 election. "And we had actually just had a ratings meeting, like, two weeks before I was fired, where they were like, 'You guys are actually losing - you guys lost less than, you know, your competitors, and you're actually doing fine,'" Reid said. "So ratings were fine. We were doing fine. And you know, the ratings have not gotten better since I left." MSNBC CANCELS JOY REID'S SHOW AS PART OF PROGRAMMING SHAKEUP AT LIBERAL NETWORK Reid then pointed to a report about her being on the chopping block that surfaced the Friday before she was fired, which she at first thought was just a "rumor," but her producers began "freaking out" over what was alleged. "We hadn't heard anything," Reid said. "Nobody had called me. Nobody had said, 'You did something wrong, you're in trouble, you're on probation.' I had gotten nothing. Then I get a text message early the next morning saying, 'Can you talk at noon?' And I was fired immediately. There was no warning. And I asked, 'Well, what, you know, what's the [issue]?' Nothing. They were just like, 'Oh, we just want to make some changes.' They never said why. So I've had to live in the rumor mill with everybody else." JOY REID WARNS MSNBC VIEWERS FASCISM IS 'ALREADY HERE' IN HER FINAL SHOW AT LIBERAL NETWORK The former "ReidOut" host went on to claim there were "two topics" that had made MSNBC management "uncomfortable." "One of them is Trump, because Trump is suing everybody," Reid said. "I mean, he's literally threatening people to the point where '60 Minutes' is shook, where ABC News is shook. You know, he's verbally threatened Comcast by name, named [Comcast CEO] Brian Roberts by name, and all of these are businesses that want to do business that need the FCC approval. They actually have to have the federal government's approval to do mergers, acquisitions… He can pull your license… so it's like everybody is trying to navigate this really deranged man. So I think they're activating out of a sense of 'we don't want to poke the bear too much.'" "I think the other piece is Gaza," she continued. "And you just can't get away from the fact that talking about Gaza in a way that humanizes Palestinians is not the usual way that cable news operates, or that any news in this country operates for whatever reason, that topic makes people uncomfortable." MSNBC did not immediately respond to Fox News Digital's request for comment. CLICK HERE FOR THE LATEST MEDIA AND CULTURE NEWS CLICK HERE TO GET THE FOX NEWS APP Reid remained defiant following her ousting, saying at the time that she would not apologize for going "hard" on issues like Black Lives Matter, illegal immigrants, the 1619 Project and Gaza, as well as her opposition to Trump. "I am not sorry I stood up for those things because those things are of God," Reid said in February. "And you know, I'm a church girl, too, and those are the things that I was taught were of God. So I'm not sorry. I'm just proud of my show." Print Close URL
Bloomberg
4 days ago
- Business
- Bloomberg
Stocks Are Within Reach of Records on Shaky Ceasefire
The ceasefire, however shaky, has investors convinced the stock market is headed higher. The risks are swiftly diminishing as economic growth remains solid despite the turmoil from tariffs and geopolitics. Equities have been remarkably resilient over the past two months: The S&P 500 has bounced sharply from the April lows, putting it 2% away from its record high of 6144.15 points, set in February.
The Sun
6 days ago
- The Sun
Jon Jones charged with leaving accident scene where ‘intoxicated' woman ‘lacking clothing from waist down' found
JON JONES was charged with fleeing with scene of an accident just days before announcing his retirement. Court records show the Hall of Famer was charged with leaving the scene of an accident, which caused no great bodily harm or death, on June 17. 5 5 5 But records show that the alleged incident took place in New Mexico back on February 24. The police report states that a woman was found in the front passenger seat of one of the cars involved in the incident. The woman, according to the report, was 'exhibiting signs of significant intoxication and lacking clothing from the waist down.' She is said to have told the police that Jones was the driver and ran away from the scene on foot before calling the MMA icon. A police aide stated the person on the phone, who they believed to be Jones, 'appeared to be heavily intoxicated and made statements implying his capacity to employ lethal force through third parties.' Jones is also said to have not directly identified himself to police during the conversation, in which he allegedly made 'allusions to violence'. In an interview with police, Jones claims the woman found in the car was intoxicated when she left his house earlier in the day. He claims she rang him after getting into the crash and passed the phone over to an officer who 'immediately opened the conversations with unprofessional language, which led him to doubt the legitimacy of the individual's claim.' 5 In the police report, the woman found in the car claims she drank alcohol and took mushrooms at Jones' house, with her "next recollection was being at the scene of a traffic accident.' But she remained adamant the person driving the car was Jones, who, in the police report, is said to have called the woman 13 times and sent her scores of text messages from the time of he crash until the following morning. Five Things UFC 309 Cameras Didn't Show Jones, 37, is no stranger to falling afoul of the law when it comes to driving. In 2015, he was charged with a felony hit and run after crashing into two cars - one of which was being driven by a pregnant woman - and leaving the scene on foot. Jones, who faced a litany of DUI's during his career, pled guilty to leaving the scene of a crime and served 18 months probation for the incident, which led to him being stripped of the light-heavyweight title. The bombshell news came on the same day Jones announced he wouldn't be fighting Brit Tom Aspinall in an eagerly-anticipated heayweight title unification fight and would be retiring from MMA. He wrote on X: "Today, I'm officially announcing my retirement from the UFC. "This decision comes after a lot of reflection, and I want to take a moment to express my deepest gratitude for the journey I've experienced over the years. "From the first time I stepped into the Octagon, my goal was to push the boundaries of what was possible in this sport. "Becoming the youngest UFC champion in history, defending my title against some of the best fighters in the world, and sharing unforgettable moments with fans across the globe—these are memories I'll cherish forever. "I've faced incredible highs and some tough lows, but every challenge has taught me something valuable and made me stronger, both as a fighter and as a person. "I want to thank the UFC, Dana, Hunter, Lorenzo, God, my family, coaches, teammates, and all the fans who have stood by me through every chapter. "Your unwavering support and belief in me have been my foundation. "To my fellow fighters, thank you for bringing out the best in me and for the respect we've shared inside and outside the cage. "As I close this chapter of my life, I look forward to new opportunities and challenges ahead. " MMA will always be a part of who I am. "And I'm excited to see how I can continue to contribute to the sport and inspire others in new ways. "Thank you all for being part of this incredible journey with me. The best is yet to come." 5
