Latest news with #JamieCox
Mint
21-07-2025
- Business
- Mint
AI is dividing the fortunes of the Magnificent Seven
The 'Magnificent Seven" stocks are starting to grow apart. They are not quite heading to splitsville, but some of the market's tech heavyweights have made more headway in artificial intelligence—and that has put a strain on their relationship. At least with respect to their recent relative stock performance. 'They are in therapy," said Dan Morgan, senior portfolio manager at Synovus Trust, of the Magnificent Seven's diverging paths. Alphabet, Apple, Meta Platforms, Microsoft, Nvidia and Tesla have lorded over the stock market in recent years, linked by the outsize role they share in the economy's future and the significant slice they comprise in the benchmark S&P 500 index. This year, though, shares of Nvidia, Meta and Microsoft have climbed about 20% or more, while Apple and Alphabet are down 16% and 2%, respectively. Each will soon deliver a quarterly scorecard to investors, with Alphabet and Tesla set to report earnings Wednesday, followed by Meta, Microsoft and Apple the following week. 'It was inevitable. They all can't run in lockstep forever because they do different things," said Jamie Cox, managing partner at Harris Financial Group. 'Now, the winners and losers stratification is upon us." The Magnificent Seven still have a strong grip over the market. Their stocks led the tariff-induced selloff in April, and then helped lift the market all the way back during its march toward new highs. Those big names represent about 35% of the S&P 500, according to Dow Jones Market Data, and investors don't expect that to change soon. One major reason the seven were grouped together in the first place was that those seven companies were spearheading the AI push, Michael Hartnett, the Bank of America strategist who is credited with coining the term 'Magnificent Seven" in 2023, has said. But 'right now, we're seeing a pretty big divergence in the fundamentals," said Ivana Delevska, founder and chief investment officer of Spear. Apple, for instance, has failed to woo investors with its AI efforts. Last year, it introduced its Apple Intelligence service to great fanfare, only to come up short on its promises. The company has said it would share updates about its AI-powered Siri in the coming year, meaning it might not reach the market until late 2026. Morgan, of Synovus, said he recently trimmed his Apple holdings for the first time in years. When a client was looking to make a donation, he recommended gifting Apple equities, something he wouldn't have done years ago. Other investors have reduced Apple positions in favor of Nvidia or Microsoft. 'Apple is on a park bench eating an apple, watching the AI revolution go by on the highway," said Dan Ives, managing director of Wedbush Securities and one of Wall Street's biggest AI bulls. Google's parent company, Alphabet, faces antitrust scrutiny in the U.S. and Europe, along with mounting concern that AI chatbots such as ChatGPT will eat into Google's dominant search business. Some investors see plenty of upside potential. Google has a significant trove of user data available, something analysts say could help advance its AI models beyond competitors. Its AI overviews, which appear atop some search-results pages, are gaining traction, as are its Gemini AI tools. 'We believe that the perceived 'missteps' in AI with Google will correct and that Google will figure this all out," wrote Jeff McClean, chief executive officer of Solidarity Wealth. Tesla, a ticker long beloved by individual investors, has diverged from its Magnificent Seven counterparts for very different reasons, including flagging electric-vehicle sales and Elon Musk's foray into politics. Musk has pushed to transform Tesla, down 18% this year, from an EV maker into a robotics and artificial-intelligence company. The CEO recently said Tesla shareholders would vote on investing in xAI, one of his other companies. 'In the Mag Seven, there's the cool kids table—and Apple, Tesla and Alphabet, they're by the kitchen at the bad table, wishing they were at the cool kids table," Ives said. The other half of the tech-stock group has continued to reap the rewards of AI optimism. The chip giant Nvidia has been the clearest winner in the AI race thus far. The world's first $4 trillion company has split off from the Magnificent Seven more than any other. Its stock has more than tripled in the past two years. Meta and Microsoft are well-positioned too, investors said. Amazon, whose shares are up 3% year to date, has been affected by tariffs and the uncertainty regarding them. The company has invested in the AI startup Anthropic. Wall Street will be parsing second-quarter results for indications that these large tech companies are continuing to invest big in artificial intelligence. That is important given lofty valuations: Six of those seven companies recently traded at more than 25 times their expected earnings over the next year, compared with an S&P 500 average of 22.35. Alphabet was the only one below that bar. 'Earnings are going to have to be really spectacular to push these stocks significantly forward from here," said Cox of Harris Financial. 'I don't know if that's possible." In the second quarter, the Magnificent Seven are expecting 14% year-over-year net-income growth, significantly outpacing the 3% decline expected for the other 493 companies in the S&P index, according to a recent report from Morgan Stanley. Given that all seven companies have strong exposure to AI, or enough capital to make acquisitions and catch up, it is possible this divergence is temporary, according to some investors. 'The Mag Seven friends could reunite at the party over the next year, but it all depends on how they navigate the AI revolution," said Ives, the Wedbush managing director. The previous era was defined by FAANG—Facebook's parent, Meta; Amazon; Apple; Netflix; and Google's owner, Alphabet—until that group fizzled in 2023. If these companies' stocks continue heading in wildly different directions, that might leave the door open for a newly named group of hot stocks—and the Magnificent Seven could go the way of FAANG or the Nifty Fifty. Some investors are already wondering about what moniker will be next. Write to Roshan Fernandez at
Forbes
11-06-2025
- Business
- Forbes
What The CPI Inflation Numbers Mean For The Future
The Consumer Price Index numbers for May came out on Wednesday. The seasonally adjusted number was up 0.1% in May, a drop from April's 0.2%. except for March, it was the lowest monthly inflation figure since July 2024. Over the last 12 months, inflation was 2.4% before seasonal adjustment. There is volatility over time, but also a downward trend line, even if it hasn't dropped fast enough for people's tastes. Below is a graph from the Federal Reserve Bank of St. Louis, showing year-over-year comparisons. Year-over-year changes in the CPI Federal Reserve Bank of St. Louis The news was good, at least in theory and at a high level. At a more detailed look, perhaps not. Other issues — tariffs, rising deficit spending, and spending cuts for important common good activities — combine with inflation to create greater uncertainty in the near future and the potential for a recession. Here Are The CPI Details That Affect You CPI at the headline level sounds good. Details are, on the whole, more discouraging. Here are some product categories where inflation was much higher: All are necessities, if not for everyone, for many millions. Other items helped keep the headline inflation down: The moderating factors don't necessarily remove the burden of the items with greater inflation, depending on how households spend and experience inflation. Near Future Effects On Inflation 'Shelter and energy are going to keep the disinflation trend intact,' wrote Jamie Cox, managing partner for Harris Financial Group, in a note. 'Prices are moving down in two of the largest categories, so investors should expect further declines in inflation in the coming months. 'However, CPI remains above 2% and even though the tariff rates are going to be less than originally feared, after they are implemented, they will further increase the cost of goods,' wrote Chris Zaccarelli, chief investment officer for Northlight Asset Management, in a second note. 'Because of this and the tariff pause that's scheduled to be lifted next month, we are still cautious, but many of the risks that were present in early April, appear to be receding at this time.' As Oxford Economics noted, the May CPI data have been 'encouraging, but unlikely the new norm.' For example, the administration announced a temporary trade truce — again — with China following talks in London. This time, tariffs will be 55%. That's a blended number and includes 20% tariffs on fentanyl, a 10% reciprocal tariffs, and then an average 25% for tariffs already in place before this year, according to a MarketWatch report. The congressional spending bill is likely going to send spending and the deficit up, which will also provide inflationary pressure. While the headline numbers sound like a reprieve, it probably won't be ultimately.
The Star
02-06-2025
- Business
- The Star
U.S. stocks close higher despite trade headwinds
NEW YORK, June 2 (Xinhua) -- U.S. stocks ended higher on Monday, as investors appeared to look past renewed global trade tensions. The Dow Jones Industrial Average rose 35.41 points, or 0.08 percent, to 42,305.48. The S&P 500 added 24.25 points, or 0.41 percent, to 5,935.94. The Nasdaq Composite Index increased 128.85 points, or 0.67 percent, to 19,242.61. Ten of the 11 primary S&P 500 sectors ended in green, with energy and technology leading the gainers by adding 1.15 percent and 0.89 percent, respectively. Meanwhile, industrials bucked the trend by losing 0.24 percent. The United States has seriously undermined the consensus reached during the China-U.S. economic and trade talks in Geneva by successively introducing multiple discriminatory restrictive measures against China, China's Ministry of Commerce said Monday. These measures included issuing guidance on AI chip export controls, halting sales of chip design software to China, and announcing the revocation of visas for Chinese students, according to a spokesperson for the ministry. Meanwhile, friction with the European Union intensified after U.S. President Donald Trump announced plans to double tariffs on imported steel to 50 percent. In response, an EU spokesperson warned the move could derail ongoing negotiations, stating "this decision adds further uncertainty to the global economy and increases costs for consumers and businesses on both sides of the Atlantic." "Markets see the latest round of tariff threats and ramped up rhetoric against China, the EU, and steel as nudges to move negotiations towards the finish line," said Jamie Cox, managing partner at Harris Financial Group. U.S. stocks entered June cautiously after a strong May rally, during which the S&P 500 jumped more than 6 percent, marking its best month since November 2023 and the strongest May performance since 1990. Despite fears that new tariffs could trigger inflation, Federal Reserve Governor Christopher Waller said Monday that any price increases are likely to be short-lived. He added that this scenario could give the Fed room to make "positive" rate cuts in 2025. "I support looking through any tariff effects on near term-inflation when setting the policy rate," he said. As earnings season winds down, a few notable companies are still set to report this week, including CrowdStrike, Broadcom, DocuSign, and Lululemon. Looking ahead, markets are closely watching key economic data set for release this week, especially Friday's May nonfarm payrolls report, which could shed light on how ongoing trade disputes and shifting interest rate expectations are affecting the broader U.S. economy. On Monday, new data from the Institute for Supply Management showed continued contraction in the U.S. manufacturing sector, with imports falling to their lowest level since 2009.
Economic Times
16-05-2025
- Business
- Economic Times
Asian stocks, bonds climb as trade-truce rally holds
Live Events Stock Rally (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel Asian equities followed Wall Street higher in a sign the stock market rally has further to run. Treasuries advanced on Thursday as traders priced in two Federal Reserve rate cuts this in South Korea and Australia climbed early Friday, while Japan's were mixed. US futures inched higher after the S&P 500 rose 0.4% Thursday. Canada's stock benchmark hit a record with an eight-day still lurked in the background after a furious rally spurred worries about an overheated market, with the pendulum swinging in favor of defensive dividend-payers that had underperformed in the past month. Meta Platforms Inc. paced losses in big tech on a news report it was delaying the rollout of a flagship AI model. In late hours, Applied Materials Inc. gave a tepid forecast. And Alibaba Group Holding Ltd.'s quarterly revenue grew a disappointing 7%, reflecting pressure on Chinese were steady in Asian trading on Friday after a Thursday rally as prices paid to US producers unexpectedly declined by the most in five years suggesting companies are absorbing some of the hit from higher tariffs. Australian and New Zealand yields US economic data showed growth in retail sales decelerated. Factory production declined for the first time in six months while New York state manufacturing contracted again. And confidence among homebuilders slumped.'If you are in the stagflation camp, these data aren't confirming your thesis,' said Jamie Cox at Harris Financial Group. 'While growth is slowing, disinflation remains intact.'The bond rally on Thursday sent yields down 10 basis points or more for debt maturing in two to 10 years. Longer-dated bonds were earlier whipsawed by large trades that briefly pushed the 30-year yield to nearly 5%. A dollar gauge lost 0.2% Thursday and was flat early Friday.'Bad news is good news for the bond market' as Thursday's data — including producer prices and retail sales — pointed to a weaker economy, said Zachary Griffiths, head of investment-grade and macroeconomic strategy at CreditSights Asia, US President Donald Trump said India had made an offer to drop tariffs on US goods, as the Asian nation negotiates a deal to avert higher import taxes. India was one of the first countries to begin trade negotiations with the US following Prime Minister Narendra Modi's visit to the White House in Japan's economy shrank for the first time in a year, illustrating its vulnerability even before sustaining the impact of Trump's tariff measures. The yen gained 0.2% on Friday to trade around 145 per data set for release in the region includes gross-domestic product for Malaysia and Hong Kong, inflation expectations for New Zealand and international reserves for Thailand. Bank of Japan official Toyoaki Nakamura will speak later in the are now trading like last month's rout never happened. The S&P 500 is about 4% away from an all-time high, while the Nasdaq 100 swung from a bear market back into a bull market. The advance is building as economic tensions between the US and China ease and the White House appears to be softening its approach to trade negotiations.'I don't want to get too excited, but we may actually be able to focus on company fundamentals for a while this summer,' said Lamar Villere, portfolio manager at Villere & Co. 'If you'd told me a month ago that stocks would be up year-to-date when my kids finished their exams, I'd have called you a liar.'Still, there's little clarity over how the existing levies might impact the US economy or the trajectory the global trade war will take in coming Governor Michael Barr said the economy is on solid ground, but warned tariff-related supply-chain disruptions could lead to lower growth and higher remains a possibility as tariff fallout continues to buffet global economies, according to JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon.'Hopefully we'll avoid it, but I wouldn't take it off the table at this point,' Dimon said in a Bloomberg Television interview Thursday at JPMorgan's annual Global Markets Conference in Paris. 'If there is a recession, I don't know how big it would be or how long it would last.'Wells Fargo Investment Institute sees economic growth, clarity around Trump's tariffs and continued earnings growth driving further stock-market gains through the rest of this year and commodities, oil rebounded on Friday after slumping in its previous session as President Donald Trump said the US and Iran are getting closer to a deal regarding Tehran's nuclear program. Gold was little changed.
Time of India
16-05-2025
- Business
- Time of India
Asian stocks, bonds climb as trade-truce rally holds
Live Events Stock Rally (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel Asian equities followed Wall Street higher in a sign the stock market rally has further to run. Treasuries advanced on Thursday as traders priced in two Federal Reserve rate cuts this in South Korea and Australia climbed early Friday, while Japan's were mixed. US futures inched higher after the S&P 500 rose 0.4% Thursday. Canada's stock benchmark hit a record with an eight-day still lurked in the background after a furious rally spurred worries about an overheated market, with the pendulum swinging in favor of defensive dividend-payers that had underperformed in the past month. Meta Platforms Inc. paced losses in big tech on a news report it was delaying the rollout of a flagship AI model. In late hours, Applied Materials Inc. gave a tepid forecast. And Alibaba Group Holding Ltd.'s quarterly revenue grew a disappointing 7%, reflecting pressure on Chinese were steady in Asian trading on Friday after a Thursday rally as prices paid to US producers unexpectedly declined by the most in five years suggesting companies are absorbing some of the hit from higher tariffs. Australian and New Zealand yields US economic data showed growth in retail sales decelerated. Factory production declined for the first time in six months while New York state manufacturing contracted again. And confidence among homebuilders slumped.'If you are in the stagflation camp, these data aren't confirming your thesis,' said Jamie Cox at Harris Financial Group. 'While growth is slowing, disinflation remains intact.'The bond rally on Thursday sent yields down 10 basis points or more for debt maturing in two to 10 years. Longer-dated bonds were earlier whipsawed by large trades that briefly pushed the 30-year yield to nearly 5%. A dollar gauge lost 0.2% Thursday and was flat early Friday.'Bad news is good news for the bond market' as Thursday's data — including producer prices and retail sales — pointed to a weaker economy, said Zachary Griffiths, head of investment-grade and macroeconomic strategy at CreditSights Asia, US President Donald Trump said India had made an offer to drop tariffs on US goods, as the Asian nation negotiates a deal to avert higher import taxes. India was one of the first countries to begin trade negotiations with the US following Prime Minister Narendra Modi's visit to the White House in Japan's economy shrank for the first time in a year, illustrating its vulnerability even before sustaining the impact of Trump's tariff measures. The yen gained 0.2% on Friday to trade around 145 per data set for release in the region includes gross-domestic product for Malaysia and Hong Kong, inflation expectations for New Zealand and international reserves for Thailand. Bank of Japan official Toyoaki Nakamura will speak later in the are now trading like last month's rout never happened. The S&P 500 is about 4% away from an all-time high, while the Nasdaq 100 swung from a bear market back into a bull market. The advance is building as economic tensions between the US and China ease and the White House appears to be softening its approach to trade negotiations.'I don't want to get too excited, but we may actually be able to focus on company fundamentals for a while this summer,' said Lamar Villere, portfolio manager at Villere & Co. 'If you'd told me a month ago that stocks would be up year-to-date when my kids finished their exams, I'd have called you a liar.'Still, there's little clarity over how the existing levies might impact the US economy or the trajectory the global trade war will take in coming Governor Michael Barr said the economy is on solid ground, but warned tariff-related supply-chain disruptions could lead to lower growth and higher remains a possibility as tariff fallout continues to buffet global economies, according to JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon.'Hopefully we'll avoid it, but I wouldn't take it off the table at this point,' Dimon said in a Bloomberg Television interview Thursday at JPMorgan's annual Global Markets Conference in Paris. 'If there is a recession, I don't know how big it would be or how long it would last.'Wells Fargo Investment Institute sees economic growth, clarity around Trump's tariffs and continued earnings growth driving further stock-market gains through the rest of this year and commodities, oil rebounded on Friday after slumping in its previous session as President Donald Trump said the US and Iran are getting closer to a deal regarding Tehran's nuclear program. Gold was little changed.
