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Yahoo
an hour ago
- Business
- Yahoo
ADP says the private sector is shrinking. That's bad news for the job market—but possibly great news for Trump
ADP's June jobs report shocked economists on Wednesday with its dismal numbers. Some economists say the data may very well diverge from the official numbers set to be published Thursday, but the report signals a private-sector slowdown nonetheless, in line with a cooling in hiring seen recently. An official contraction could cause the Fed to step in sooner rather than later with rate cuts—something President Donald Trump has wanted since he took the White House. Private-sector hiring contracted in June, ADP said, completely missing economists' forecasts ahead of Thursday's official jobs report. The private sector lost 33,000 jobs in June, according to a Wednesday report by payroll provider ADP. This marks the lowest reading since March 2023. The government's nonfarm payrolls report will be released Thursday morning, and economists expect a 110,000 increase for June, per Dow Jones estimates. But in light of ADP's data, some economists may revise down their jobs reports estimates. 'The ADP report increased the odds of a downside surprise in Thursday's nonfarm payroll release,' Jeffrey Roach, chief economist for LPL Financial, wrote in a note. 'I expect a weaker-than-consensus report, increasing the odds the Fed cuts three times this year.' The Federal Reserve's decision not to cut interest rates yet this year due to market uncertainty and stronger-than-expected labor data has been a pain point for President Donald Trump. Trump has said the federal government is stuck paying massive interest-rate payments on its debt because the Fed hasn't lowered rates, even calling for the equivalent of 10 rate cuts in June. The White House said on Monday that Trump sent a letter to Fed Chair Jerome Powell writing, 'You have cost the U.S.A. a fortune—and continue to do so… You should lower the rate by a lot!' Powell reiterated on Tuesday the central bank plans to 'wait and learn more' about tariff effects on the economy before lowering rates again, Reuters reported. But weak labor data could incentivize the Fed to step in. 'Though layoffs continue to be rare, a hesitancy to hire and a reluctance to replace departing workers led to job losses last month,' Nela Richardson, ADP's chief economist, said in a press release published Wednesday morning. The ADP report has diverged from official jobs reports in the past, signaling to some economists the measure can't always predict the subsequent government jobs report. In May, ADP reported soft data that ended up differing significantly from the monthly jobs report figures that came later in the week. 'The drop in ADP's measure of private payrolls tells us very little about the likely outturn for tomorrow's official payrolls estimate for June, mostly because ADP's forecasting track record is dire,' Pantheon Macroeconomics Senior U.S. Economist Oliver Allen said in a note. 'ADP's forecast error, regardless of sign, has averaged 87K—and has been as big as 348K—since its methodology was overhauled in August 2022.' Allen added Pantheon maintains its forecast of a 100,000 increase in private payrolls in June, a 'material step down' from the average 187,000 rise over the previous six months. He expects the Fed to wait until September to cut rates. Though economists question the accuracy of ADP's jobs report on a monthly basis, the data is 'still helpful in determining long-term trends,' LPL Financial's Jeffrey Roach said. 'This report isn't entirely surprising,' LaborIQ Chief Economist Mallory Vachon told Fortune in an email. 'First, the ADP payroll figures often differ from the Bureau of Labor Statistics report. And second, both tell a similar story about the current labor market trajectory–private-sector employment growth has slowed or declined.' According to ADP's report, the bulk of job losses came in service roles tied to professional and business services, as well as health and education. Small businesses led the losses, with large companies with more than 500 employees gaining the most. This past month, the labor market has seen a slowdown in hiring, continuing a trend that's been going on for the past year-and-a-half. Vachon said despite a slight uptick in layoffs over this time, 'the lack of hiring volume has been a driver of unemployment increases.' Bill Adams, chief economist for Comerica Bank, said in a note tariff hikes, the Israel-Iran conflict, and policy uncertainty gave employers reason to pull back on hiring during the second quarter. 'Hiring will likely stay slow in the second half of 2025,' Adams wrote. 'Ordinarily, job growth malingering at the second quarter's sluggish pace for half a year would translate into a meaningful increase in the unemployment rate, which would pressure the Fed to cut rates this fall.' 'This is why financial markets price in half a percent to three quarters of a percent in rate cuts by year-end,' he added. Adams warned of the changing labor market—one where foreign-born workers accounted for four-fifths of labor force growth between early 2020 and early 2025. Trump's crackdown on immigration 'means that financial markets will likely be surprised by the unemployment rate holding steadier in the second half of the year than is currently priced in,' he wrote. 'This labor market has required constant reconciliation of data points that are seemingly at odds with one another,' Vachon said. Vachon said the most prominent example of this is wage growth, which hasn't slowed as hiring cools. 'This puts pressure on businesses who face dueling challenges of slower economic growth and continued pressure to keep up with compensation,' she said. This story was originally featured on
Yahoo
2 days ago
- Business
- Yahoo
The Flooring Approach: 4 Steps To Create a Stable Financial ‘Floor' in Retirement
Everyone has a different approach to retirement planning, which makes sense considering one person's needs and goals are going to be different from another's. Some prefer to play it safe, while others are willing to take more risks in pursuit of flexibility and potentially greater returns. Find Out: Try This: One popular retirement planning method is the 'flooring' approach. This method prioritizes building financial security through steady, predictable monthly payments that cover just the essentials — like housing, groceries and healthcare. But it doesn't leave much room for any extras. GOBankingRates spoke with experts about the flooring approach to retirement planning, how to do it, and the pros and cons. Read on for more. If you want to make sure to have some financial cushion for extra spending in retirement, find out how much a comfortable retirement costs in your state. The flooring method entails determining how much you absolutely need to support yourself in retirement. This means having enough to cover basic living expenses. 'Creating a floor in one's income can be as simple as starting to [understand] your non-discretionary expenses. The concept of an income floor is not to handle all of your expenses, just the ones you can't live without,' said Kyle Ryan, CFP, ChFC, financial planner at LPL Financial. 'Once you understand your non-discretionary expenses, you can identify the monthly income your 'floor' requires.' You can create a stable financial floor in several ways. However, your income streams should be ones unaffected by changes in the market. They should also have a steady payout, so you always know how much you're bringing in. 'Creating a floor in income during retirement is as much dependent upon one's psychology toward money as it is the amount and type of assets they have,' said Ryan. 'Receiving this income can come in many forms: Social Security, annuities, distributions from investment accounts, dividends, etc.' Here are the four steps you'll need to take to create a stable financial floor. Start by figuring out your basic needs. Remember, the flooring method won't cover every expense you'll ever have in retirement. But it is designed to eliminate financial uncertainty in your retirement planning. Basic needs include essential living expenses, such as: Housing expenses Groceries or food Utilities Healthcare premiums Other insurance costs Transportation Debt payments, if any remain Be Aware: Next, create some short- and long-term financial goals that will get you to that stable financial floor. 'In my opinion, it is very important for many retirees to use some level of flooring,' said David Orsolino, CFP, CLU, RICP at Strategies for Wealth. 'Depending on a retiree's desired income, assets and overall objectives, a general rule of thumb can be [to set] 50% plus of desired income [as the] initial goal.' Say you need $3,000 a month to feel financially stable in retirement. This means your initial goal should be $1,500. If you need more or less, you can adjust your goal accordingly. Knowing how much you need is only half the battle. Once you've got your calculations, it's time to establish some steady income streams. 'Social Security, pensions or annuities with guaranteed lifetime income all qualify for 'flooring,'' said Orsolino. As Ryan pointed out, other income streams could include investment account distributions or dividends. Find out which income streams work best for you, and start saving and investing. This could mean regularly contributing to a 401(k) or IRA — and possibly taking advantage of employer-matching contributions. Or it could mean contributing as much as possible to an annuity. Weigh your options and get started as soon as you can to build that stability. You don't have to limit yourself to the essentials. Once you've established your financial floor, you can find other ways to increase your income. This might mean creating a secondary income stream that does get impacted by market fluctuations — like investments in stocks or other income-producing assets. In the worst case, dips in the market will only impact your non-essential spending — like travel. You'll still have the basic 'floor' you need to cover your retirement. The flooring method has quite a few advantages, but there are also some downsides. 'Some of the pros would be peace of mind, having the guaranteed income, which mitigates the risk of longevity and market volatility. Sequence of returns risk is a major factor most retirees are not familiar with and can be a major factor in the outcome of one's retirement,' said Orsolino. 'Having the guaranteed income, or the 'floor,' allows someone to take more risk with other assets if inclined to do so and more flexibility to how they distribute the other assets,' he continued. 'It's a strategy that works best when incorporated with other strategies, such us systematic withdrawal and bucketing, to produce an optimal retirement plan.' On the other hand, it can be limiting or even lead to a 'boring' retirement lifestyle. 'Some of the cons of 'flooring' can be perceived as giving up the ability to gain upside, flexibility or the use of those funds used to create the flooring income,' Orsolino. Keep in mind that you don't have to stick with this method alone. You can, as Orsolino said, combine it with other retirement planning strategies. 'It is dependent upon one's psychology toward money and the type of income and assets they have,' said Ryan. 'If one has worked their entire life and is used to having consistent cash flow, they may be more open to the concept of creating an income floor than someone who has been used to living off of savings or other assets, rather than income streams, to draw upon for regular expenses.' More From GOBankingRates Mark Cuban Warns of 'Red Rural Recession' -- 4 States That Could Get Hit Hard 4 Affordable Car Brands You Won't Regret Buying in 2025 10 Cars That Outlast the Average Vehicle This article originally appeared on The Flooring Approach: 4 Steps To Create a Stable Financial 'Floor' in Retirement
Yahoo
6 days ago
- Business
- Yahoo
Here's Why LPL Financial Holdings Inc. (LPLA) is a Strong Growth Stock
It doesn't matter your age or experience: taking full advantage of the stock market and investing with confidence are common goals for all investors. Many investors also have a go-to methodology that helps guide their buy and sell decisions. One way to find winning stocks based on your preferred way of investing is to use the Zacks Style Scores, which are indicators that rate stocks based on three widely-followed investing types: value, growth, and momentum. Different than value or momentum investors, growth-oriented investors are concerned with a stock's future prospects, and the overall financial health and strength of a company. Thus, they'll want to focus on the Growth Style Score, which analyzes characteristics like projected and historical earnings, sales, and cash flow to find stocks that will see sustainable growth over time. LPL Financial Holdings Inc. is based in Boston, MA. It is a clearing broker-dealer and an investment advisory firm that acts as an agent for its advisors on behalf of their clients by providing access to a broad array of financial products and services. LPLA sits at a Zacks Rank #3 (Hold), holds a Growth Style Score of B, and has a VGM Score of B. Earnings and sales are forecasted to increase 12.7% and 24.3% year-over-year, respectively. Six analysts revised their earnings estimate upwards in the last 60 days for fiscal 2025. The Zacks Consensus Estimate has increased $0.64 to $18.60 per share. LPLA boasts an average earnings surprise of 10.2%. On a historic basis, LPL Financial Holdings Inc. has generated cash flow growth of 17.1%, and is expected to report cash flow expansion of 7.1% this year. With solid fundamentals, a good Zacks Rank, and top-tier Growth and VGM Style Scores, LPLA should be on investors' short lists. 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 LPL Financial Holdings Inc. (LPLA) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
Mint
7 days ago
- Business
- Mint
Stock investors are embracing risk on the cusp of new highs
Forget TACOs and memes, we're in the era of the YOLO trade. War, tariffs, a spending bill that adds to the ballooning U.S. deficit. There have been no shortages of major worries for the market lately, and yet stocks seem to continually shrug off each new worry, with the S&P 500 trading comfortably over 6,000 and not far from its all-time high. The philosophy that 'you only live once' encourages people to embrace risk and take chances while they can. That idea might help explain why investors have been so relentlessly optimistic recently, despite a barrage of headlines that might have been expected to bring the mood down. The S&P 500 High Beta Index, which measures the performance of 100 constituents in the S&P 500 that are most sensitive to changes in market returns, is a good example. It, along with the Invesco S&P 500 High Beta exchange-traded fund, are up well over 6% this past month, and SPHB has soared more than 41% since the April 8 post-Liberation Day lows. That compares to the S&P 500, which is up 2.9% in the past month and has risen some 22% from April 8, and the iShares MSCI USA Quality Factor ETF, which is up an anemic 1.2% in the past month and just under 18% since April 8. Investors might have expected just the opposite, with so many potential geopolitical and domestic boogeymen in the background. Still, the moves do make sense in light of the ongoing artificial-intelligence trade and the initial tariff meltdown. Capex spending is usually a negative for tech stocks, notes Joseph Mezrich, founder of investment strategy firm Metafoura, but has actually been a driver over the past month: 'The positive turn for capex spending in large-cap tech likely reflects investors' view that the massive capex spending for AI is now a good thing. That would show up as a positive for beta (and tech).' The SPHB is, not surprisingly, heavily weighted toward the tech sector, with plenty of semiconductor companies that have benefited from the resurgence of AI enthusiasm, notes Adam Turnquist, chief technical strategist for LPL Financial. So with the Nasdaq Composite up just over 4% in the past month and the iShares Semiconductor ETF rising some 12.5%, it isn't surprising that the high-beta ETF has also been taken along for the ride. Yet we're also still feeling the impact of the tariff rollercoaster, he says: High-beta stocks were one of the most oversold categories after the Liberation Day announcement, SPHB was 'a logical spot' for anyone who was looking to 'add risk and have a high tolerance for volatility.' Moreover, the tariffs were just one of a long series of events coming out of Donald Trump's administration that would have been shocking under any other leader, but have now become commonplace—to the point that investors are getting desensitized to his bombastic moves. 'Investors are acclimating to the Trump White House, so the shock factor has worn off a little and the headlines get a little less potent,' Turnquist says. There are some other contributing factors, too, he notes: Investors have been positively conditioned to buy the dip in recent years, there is optimism that the government is moving more toward pro-growth policies, the first-quarter earnings season wasn't nearly as bad as expected, and Treasury yields have backed off from their highs. Overall though, investors just seem interested in taking the bull market by the horns. Write to Teresa Rivas at
Globe and Mail
24-06-2025
- Business
- Globe and Mail
LPL Financial's May Brokerage & Advisory Assets Rise Y/Y
LPL Financial LPLA witnessed a rise in total brokerage and advisory assets in May 2025. The metric was $1.85 trillion, which grew 3.7% from the prior month and 26.5% year over year. LPLA's Performance Breakdown Of LPLA's total assets, brokerage assets were $832.9 billion and advisory assets amounted to $1.02 trillion. Brokerage assets rose 2.9% from April 2025 and 26.8% year over year. Advisory assets were up 4.4% from the previous month and 26.2% from May 2024. Total net new assets (NNAs) were $6.5 billion in May. Total organic NNAs were $6.5 billion as well, including $1 billion off-boarded assets as part of the previously disclosed planned separation from misaligned large offices of supervisory jurisdiction. Excluding these assets, organic NNAs were $7.5 billion. The company reported $49.2 billion of total client cash balance in May, down 5% from the prior month but up 10.6% from May 2024. Of the total balance, $33.4 billion was insured cash, $10.6 billion was deposit cash, and the remainder was money-market sweep and client cash balance. Our Take on LPLA Stock LPL Financial's impending acquisition of Commonwealth Financial, the buyouts of Investment Center and Atria Wealth, and solid advisor productivity and recruiting efforts are expected to bolster advisory revenues. However, uncertainty about the performance of the capital markets and substantial goodwill on the balance sheet are headwinds. In the past three months, LPLA's shares have risen 9.3%, outperforming the industry 's growth of 7.8%. Currently, LPL Financial carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Performance of LPLA's Peers in May Charles Schwab SCHW released its monthly activity report for May 2025. The company's total client assets were $10.35 trillion, up 12.4% from May 2024 and 4.6% from April 2025. SCHW's client assets receiving ongoing advisory services were $5.24 trillion, growing 12.6% from the year-ago period and 3.9% from the prior month. Interactive Brokers Group, Inc. IBKR released the Electronic Brokerage segment's performance metrics for May 2025. The segment deals with the clearance and settlement of trades for individual and institutional clients globally. It reported a rise in client Daily Average Revenue Trades (DARTs) from a year ago. IBKR's total client DARTs in May were 3,384,000, representing a 43% increase from May 2024 but an 11% decline from April 2025. Zacks Names #1 Semiconductor Stock It's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom. With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028. See This Stock Now for Free >> The Charles Schwab Corporation (SCHW): Free Stock Analysis Report Interactive Brokers Group, Inc. (IBKR): Free Stock Analysis Report LPL Financial Holdings Inc. (LPLA): Free Stock Analysis Report
