Latest news with #SamStovall


The Star
2 hours ago
- Business
- The Star
U.S. stocks close mixed after job reports
NEW YORK, July 2 (Xinhua) -- U.S. stocks ended mixed on Wednesday as optimism over new trade deals helped offset concerns about a slowing labor market. The Dow Jones Industrial Average edged down 10.52 points, or 0.02 percent, to 44,484.42. The S&P 500 rose 29.41 points, or 0.47 percent, to 6,227.42, while the Nasdaq Composite advanced 190.24 points, or 0.94 percent, to 20,393.13. Seven of the 11 primary S&P 500 sectors ended in green, with energy and materials leading the gainers by adding 1.70 percent and 1.33 percent, respectively. Meanwhile, health and utilities led the laggards by losing 0.97 percent and 0.87 percent, respectively. Gains were driven in part by upbeat sentiment around trade after U.S. President Donald Trump announced a new deal with Vietnam that includes a 20 percent tariff on Vietnamese imports. Shares of Nike, which sources a significant portion of its footwear from Vietnam and China, jumped more than 4 percent following the news. Earlier in the day, stocks came under pressure after a disappointing report from ADP showed the private sector shed 33,000 jobs in the prior month, which was the first decline in more than a year and well below economist forecasts of a 100,000-job increase. While the ADP report does not always align with the government's official nonfarm payrolls data, due on Thursday, it raised concerns about broader labor market weakness. Economists expect 110,000 jobs to have been added in June. Some strategists said the report could push the Federal Reserve closer to a rate cut, especially if government data also shows softness. Market expectations for a July rate cut rose slightly to 23 percent, up from 21 percent a day earlier, according to CME FedWatch. "If we end up having a fairly weak employment report, then that could allow the Fed to be cutting rates," said Sam Stovall, chief investment strategist at CFRA Research. "We think labor demand is slowing, but so far the slowdown is modest," Morgan Stanley chief U.S. economist Michael Gapen wrote in a note to clients. Among major tech movers, Tesla surged nearly 5 percent despite reporting a year-over-year drop in global second-quarter deliveries, as the decline was smaller than feared. Apple gained 2.22 percent, extending its winning streak to four sessions. Nvidia and Broadcom rose 2.58 percent and 1.95 percent, respectively, and Alphabet added 1.61 percent. Microsoft, Amazon, and Meta Platforms slipped modestly.
Yahoo
9 hours ago
- Business
- Yahoo
Bull markets 'die of fright,' not 'old age': Strategist
The US equity market (^DJI, ^GSPC, ^IXIC) is showing "irrational exuberance," with 10% of stocks trading in "euphoric" territory, Barclays research finds. CFRA Research chief investment strategist Sam Stovall joins Morning Brief with Brad Smith to discuss the current state of the market. Watch the video above to hear more from the strategist. To watch more expert insights and analysis on the latest market action, check out more Morning Brief here. Stock futures are lower this morning. Following that disappointing private payrolls reports, still, stocks are, uh, and trading right now, causing speculation on Wall Street that markets could be in bubble territory. The rebound from lows in April to fresh all-time highs at the end of the second quarter sparking a jump in Barclays' irrational exuberance gauge, which actually measures the percentage of stocks in euphoric territory. It currently sits just above 10%, which has signaled extreme frothiness in the past. So what does this mean for investors? Joining me now, we've got good friend of the show, Sam Stovall, CFRA Research Chief Investment Strategist. Sam, good to see you here this morning, and thanks for taking some time ahead of the market open. First and foremost, I I would love to get your assessment of what is being dubbed and called this irrational exuberance with us essentially still in this ballpark of some of the all-time highs that we saw notched earlier this week. Well, good morning, Brad. Uh, yeah, I think people are a bit concerned because we went through a very steep V-shaped decline and then recovery. Yet history actually says that that's typically what happens because we went from a new all-time high to the minus 10% threshold in only 22 calendar days versus the more normal 80 plus days. Uh, that implied that this decline was going to be swift, shallow, and the recovery would be quick at hand, which is exactly what we got. Instead of the four months that we normally take, uh, to go into a correction and then another four months to get out of that correction, those numbers were essentially cut in half. And actually because people are so concerned, uh, I think that history again will remind us that we tend to advance another 10% following the recovery of the old high. So, um, you know, while we can always see some sort of digestions of gains, uh, I think the overall trend remains upward. And so with that in mind, that if we're looking at an overall trend that remains upward, what what perhaps is the major kind of additive to the mindset and and and how far out investors might be looking through some of the trade deal negotiations, through a bill that's working its way now back through the house, and then, oh yeah, we're trying to figure out exactly what companies might say during earnings season in the next few weeks here as that kicks off. Sure. Well, I think that, uh, an initial reactions are like dropping a ping pong ball on the table. The first response is the greatest, and then subsequent ones are more muted. And that's what we have seen regarding the the tariff situation, uh, regarding the, uh, one big beautiful bill, et cetera. Um, and also, uh, because we had a worry that we were headed for recession. And bull markets don't die of old age, they die of fright. And what they're most afraid of is recession. But because of the recovery, the old adage of prices lead fundamentals implies that maybe we're seeing, uh, a near-term bottom in terms of earnings projections. Q2 results are now expected to be up only about 2% versus the near 10% advance that was expected at the end of 2024. So, uh, I think with the bar set so low, uh, that we'll probably end up seeing actual results exceed end of quarter estimates once again, which will make the 63rd quarter out of the last 65. You know, that that's so interesting, and and I was discussing this yesterday with a few of our guests, and would love to get your thoughts on this too since you raised the fact that this earnings growth rate, uh, could be one of the lowest growth rates that me we see since Q4 2023, according to fact set, if it does come in at this 5% earnings growth rate for Q2 for the S&P 500. Can you can you make sense of the fact that we we've got that in one hand, and then on the other hand, you've got forward 12 month PE ratio sitting for the S&P 500 at 21.9, which is above the five-year and the 10-year average right now. That's right. Well, I think your first thought is that, uh, fact sets estimate for Q2 is above 5%. S&P Capital IQ estimates, which is what we use, uh, is about 2%. So there is no, uh, FASB designated definition of operating earnings. Most people simply call it earnings before bad stuff. Uh, but still, the bar is set very low, and as my father used to say, rarely do you injure yourself falling out of a basement window. So I think we probably will be surprised to the upside when Q2 results are are com. Uh, but in terms of the PE ratio, you're absolutely right. If you look back, uh, over the many years, uh, the it is elevated, but I think that we're likely to see these earnings estimates increase as time goes on in a sense to match what happened with prices. Sam, we're marching to the opening bell here. We got to leave the conversation there. Great to see you, as always. Thanks, Brad. Thank you. 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 days ago
- Business
- Yahoo
Veteran analyst updates S&P 500 prediction after record rally
Veteran analyst updates S&P 500 prediction after record rally originally appeared on TheStreet. How high could stocks go? That's the question most investors are asking after the S&P 500 and Nasdaq Composite have delivered mouth-watering gains since President Donald Trump paused reciprocal tariffs on April 9. The S&P 500 has marched 24% higher, without much of a pause, while the technology-heavy Nasdaq Composite, which is weighted heavily toward the Magnificent 7, has climbed over 33%. 💵💰💰💵 Those returns are impressive, especially considering that the S&P 500's average annual return since 1957 is about 10%, and the market was flirting with bear market territory only a little over two months ago. Stocks' rapid recovery isn't uncharted territory, though. The market has experienced sharp drops in the past, and how the S&P 500 performed after those declines may offer insight into how much gas for stocks may be left in the proverbial tank. Longtime veteran Wall Street analyst Sam Stovall, who has been navigating stocks for decades, recently offered thoughts on how the rest of the year may play out. There have been plenty of reasons to worry that stocks could tumble in 2025 amid a weakening economy, including: Sticky inflation Declining GDP growth Growing unemployment Lackluster confidence Inflation is down substantially from its 8% plus peak in 2022, but progress lately has been limited. The Personal Consumption Expenditures (PCE) index showed core inflation, excluding volatile energy and food prices, rose 2.7% in May. That was up from 2.6% in April and matched the rate from last think the inflation picture will worsen in the coming months. Since February, President Trump has implemented 25% tariffs on Canada, Mexico, and autos, plus a 30% tariff on China and a 10% baseline tariff on all imports. Given that so much of what we buy, from clothing to electronics, is made overseas, many think businesses will pass along at least some of these higher costs to consumers this year. The prospect of higher prices isn't welcome news for already cash-strapped consumers and businesses, who may retrench spending, slowing our economy. There's already some evidence that economic activity is in trouble. First-quarter GDP declined 0.5%, and the World Bank estimates that full-year GDP in the U.S. will be just 1.4%, down from about 2.8% last year. The situation has led to an uptick in layoffs, which has increased the unemployment rate. Over 696,000 workers have been laid off through May, up 80% year over year, according to Challenger, Gray, & Christmas. The unemployment rate is 4.2%, up from its low of 3.4% in 2023. Risks that inflation reasserts itself and unemployment increases have taken a toll on consumer confidence. While confidence is better than in April, the Conference Board's Expectations Index is 69, handily lower than the 80 that often indicates a looming recession. Nevertheless, the stock market is forward looking, and since April, investors believe the worst of the risks are behind us and arguably got priced into stocks when they nose-dived this spring. Sam Stovall is a been-there-done-that Wall Street veteran analyst. He's built a long career analyzing the markets, including serving as managing director and chief investment strategist at S&P Global for over 27 years, before becoming chief investment strategist for CFRA, a major research has a reputation for connecting the dots between the past and the present. He considered past sharp sell-offs and what happened after them and came away bullish. "The recent correction recovered all that was lost in only 80 calendar days, versus the traditional 236 days for all 25 corrections (declines of 10.5% to 19.9%) since WWII," said Stovall in a note to clients. "Investors shouldn't be too surprised by this speedy recovery, due to the swiftness of the initial selloff." The V-shaped recovery after the dramatic drop reflects a market that had become very oversold, very quickly. The baskets that have performed best since April's low have perhaps, unsurprisingly, been the groups that got hit the hardest. For example, the information technology sector, which comprises high flyers like Nvidia, is up 41% from the lows. The average return for the three worst-performing sectors — information technology, consumer discretionary, and communication services — is up 32%. More Wall Street Analysts: Analysts reboot Olive Garden parent's stock price targets as earnings loom Analysts revamp forecast for Nvidia-backed AI stock Intuitive Surgical analyst raises eyebrows with new stock price target Those gains could continue, says Stovall, but he did offer a relatively tempered outlook for the third quarter. "The S&P 500 posted the weakest quarterly return, eking out only a 0.1% advance in Q3," said Stovall. "Five of its 11 sectors posted declines, led by communication services, consumer discretionary, energy, and materials." The third quarter's lackluster historical returns could mean it's a bit tougher sledding for stocks short term, but Stovall still thinks that stocks overall can deliver bigger returns through year's end. "Encouragingly, history indicates that quick drops to the -10% threshold typically result in a shorter and shallower total decline, followed by a more rapid recovery," said Stovall. "As a result, investors look forward to continued gains of between 6% and 10%, as was typically the case following declines of up to 20% since WWII, before slipping into a new decline of 5% or more; they just have to survive the traditionally challenging third quarter."Veteran analyst updates S&P 500 prediction after record rally first appeared on TheStreet on Jun 30, 2025 This story was originally reported by TheStreet on Jun 30, 2025, where it first appeared. 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

Miami Herald
2 days ago
- Business
- Miami Herald
Veteran analyst updates S&P 500 prediction after record rally
How high could stocks go? That's the question most investors are asking after the S&P 500 and Nasdaq Composite have delivered mouth-watering gains since President Donald Trump paused reciprocal tariffs on April 9. The S&P 500 has marched 24% higher, without much of a pause, while the technology-heavy Nasdaq Composite, which is weighted heavily toward the Magnificent 7, has climbed over 33%. Don't miss the move: Subscribe to TheStreet's free daily newsletter Those returns are impressive, especially considering that the S&P 500's average annual return since 1957 is about 10%, and the market was flirting with bear market territory only a little over two months ago. Stocks' rapid recovery isn't uncharted territory, though. The market has experienced sharp drops in the past, and how the S&P 500 performed after those declines may offer insight into how much gas for stocks may be left in the proverbial tank. Longtime veteran Wall Street analyst Sam Stovall, who has been navigating stocks for decades, recently offered thoughts on how the rest of the year may play out. There have been plenty of reasons to worry that stocks could tumble in 2025 amid a weakening economy, including: Sticky inflationDeclining GDP growthGrowing unemploymentLackluster confidence Inflation is down substantially from its 8% plus peak in 2022, but progress lately has been limited. The Personal Consumption Expenditures (PCE) index showed core inflation, excluding volatile energy and food prices, rose 2.7% in May. That was up from 2.6% in April and matched the rate from last September. Related: Morgan Stanley reboots stock market forecast after rally Many think the inflation picture will worsen in the coming months. Since February, President Trump has implemented 25% tariffs on Canada, Mexico, and autos, plus a 30% tariff on China and a 10% baseline tariff on all imports. Given that so much of what we buy, from clothing to electronics, is made overseas, many think businesses will pass along at least some of these higher costs to consumers this year. The prospect of higher prices isn't welcome news for already cash-strapped consumers and businesses, who may retrench spending, slowing our economy. There's already some evidence that economic activity is in trouble. First-quarter GDP declined 0.5%, and the World Bank estimates that full-year GDP in the U.S. will be just 1.4%, down from about 2.8% last year. The situation has led to an uptick in layoffs, which has increased the unemployment rate. Over 696,000 workers have been laid off through May, up 80% year over year, according to Challenger, Gray, & Christmas. The unemployment rate is 4.2%, up from its low of 3.4% in 2023. Risks that inflation reasserts itself and unemployment increases have taken a toll on consumer confidence. While confidence is better than in April, the Conference Board's Expectations Index is 69, handily lower than the 80 that often indicates a looming recession. Nevertheless, the stock market is forward looking, and since April, investors believe the worst of the risks are behind us and arguably got priced into stocks when they nose-dived this spring. Sam Stovall is a been-there-done-that Wall Street veteran analyst. He's built a long career analyzing the markets, including serving as managing director and chief investment strategist at S&P Global for over 27 years, before becoming chief investment strategist for CFRA, a major research firm. Related: Rare event could derail S&P 500 record-setting rally Stovall has a reputation for connecting the dots between the past and the present. He considered past sharp sell-offs and what happened after them and came away bullish. "The recent correction recovered all that was lost in only 80 calendar days, versus the traditional 236 days for all 25 corrections (declines of 10.5% to 19.9%) since WWII," said Stovall in a note to clients. "Investors shouldn't be too surprised by this speedy recovery, due to the swiftness of the initial selloff." The V-shaped recovery after the dramatic drop reflects a market that had become very oversold, very quickly. The baskets that have performed best since April's low have perhaps, unsurprisingly, been the groups that got hit the hardest. For example, the information technology sector, which comprises high flyers like Nvidia, is up 41% from the lows. The average return for the three worst-performing sectors - information technology, consumer discretionary, and communication services - is up 32%. More Wall Street Analysts: Analysts reboot Olive Garden parent's stock price targets as earnings loomAnalysts revamp forecast for Nvidia-backed AI stockIntuitive Surgical analyst raises eyebrows with new stock price target Those gains could continue, says Stovall, but he did offer a relatively tempered outlook for the third quarter. "The S&P 500 posted the weakest quarterly return, eking out only a 0.1% advance in Q3," said Stovall. "Five of its 11 sectors posted declines, led by communication services, consumer discretionary, energy, and materials." The third quarter's lackluster historical returns could mean it's a bit tougher sledding for stocks short term, but Stovall still thinks that stocks overall can deliver bigger returns through year's end. "Encouragingly, history indicates that quick drops to the -10% threshold typically result in a shorter and shallower total decline, followed by a more rapid recovery," said Stovall. "As a result, investors look forward to continued gains of between 6% and 10%, as was typically the case following declines of up to 20% since WWII, before slipping into a new decline of 5% or more; they just have to survive the traditionally challenging third quarter." Related: Analyst sends alarming message after S&P 500 hits all-time high The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.


RTHK
2 days ago
- Business
- RTHK
US stocks hit new highs on trade and tax optimism
US stocks hit new highs on trade and tax optimism A trader works on the floor of the New York Stock Exchange. Photo: AFP Wall Street stocks rose again on Monday amid optimism over trade negotiations and US tax cut legislation to conclude the final session of the second quarter at fresh records. The S&P 500 finished at 6,204.95, up 0.5 percent for the day and about 10.6 percent for the quarter. The tech-rich Nasdaq Composite Index climbed 0.5 percent to 20,369.73, which was also record, while the Dow Jones Industrial Average gained 0.6 percent to 44,094.77. "Investors are feeling optimistic that we had a very strong quarter with reasons to feel optimistic," said CFRA Research's Sam Stovall, who cited easing trade tensions and fewer worries about inflation as drivers. The latest records came after Canada rescinded taxes impacting US tech firms, setting the stage for negotiations to resume between Washington and Ottawa after President Donald Trump abruptly broke off talks on Friday because of the tax. Trump administration officials have said they are making progress on trade deals with major partners and could unveil trade agreements in the coming months. An aggressive tariff plan announced by Trump in early April initially battered financial markets, but Trump has backed off many of the most onerous provisions. Analysts have also cited investor enthusiasm about Trump's massive tax cut legislation currently being debated in the Senate. The measure also contains controversial cuts to health benefits for low-income populations and heavy spending on deportation programs. Large banks including Citigroup and JPMorgan Chase advanced after the Federal Reserve on Friday gave the industry a passing grade on stress tests, a finding that could boost givebacks to investors through shareholder repurchases and dividend hikes. Shares of Facebook parent Meta rose 0.6 percent and touched an all-time record as the company extends an aggressive recruitment drive of top artificial intelligence talent, luring some experts from other companies with US$100 million bonuses. Moderna rose 1.6 percent after announcing positive results from a phase three clinical trial into a vaccine for seasonal influenza. (AFP)