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Yahoo
15-07-2025
- Business
- Yahoo
Why Trump removing Powell is the market's most underestimated risk
Fed independence is in the spotlight once again as White House officials criticize Fed deficits. However, the stock market isn't pricing in the full extent of the risk, according to Deutsche Bank. Fed Chair Powell's removal would cause a meltdown in the currency and bond markets. Markets are cruising at all-time highs, but a major risk lurks below the surface: the end of Fed independence. It's no secret that President Donald Trump and Federal Reserve Chair Jerome Powell do not see eye-to-eye. The president has repeatedly called for Powell to cut rates and threatened to fire him. Last week, the feud escalated to another level when Russell Vought, a senior Trump administrator, criticized Powell for renovations of the Federal Reserve headquarters running over budget and said he should be investigated for mismanagement. This shouldn't be dismissed as bluster from the administration, Deutsche Bank warned on Friday. George Saravelos, the bank's global head of FX research, said investors are seriously overlooking the danger of Trump removing Powell. Markets are pricing in just a 20% chance of Powell's removal this year, and the dollar index is indicating that investors aren't detecting a threat to Fed independence. If Trump were to remove Powell, the consequences would be severe, Saravelos said. "In extreme cases, both the currency and the bond market can collapse as inflation expectations move higher, real yields drop and broader risk premia increase on the back of institutional erosion," Saravelos wrote. The Trump-Powell feud poses severe risks to the currency and bond market. In the event of Powell's removal, Saravelos anticipates the dollar would immediately plunge 3%-4%. This would be followed by a 30-40 basis point sell-off in US Treasurys, especially among longer-dated bonds. Borrowing costs would rise overnight and inflation would creep up, leading to the exact opposite of what Trump intended by firing Powell. Additionally, the growing budget deficit is already posing a threat to bond yields, meaning that the consequences of Powell's removal would be amplified. "This raises the risk of far larger and more disruptive price moves than ones we have outlined here," Saravelos wrote. As tariff deadlines are pushed back and stocks soar to new highs, perhaps investors believe the TACO trade will act as a backstop for markets again. But Saravelos doesn't think investors should brush off Trump's threats when it comes to Fed independence, as there is historic precedent for the central bank being influenced by political pressure. In the 1970s, President Richard Nixon pressured Fed Chair Arthur Burns to keep rates low, worsening the country's stagflation crisis. Saravelos believes the implications would be more serious today, as the US has much higher debt levels, and capital markets are much more concentrated in the US. Even if Trump doesn't go through with his threats of removing Powell, the ongoing feud still injects lasting uncertainty into markets. "We would expect a sustained and persistent risk premium to be subsequently embedded in both the US dollar and the Treasury market, with exceptionally high sensitivity to both the mix of data and the conduct of monetary policy in the subsequent months," Saravelos wrote. "In sum, we consider the removal of Chair Powell as one of the largest under-priced event risks over the coming months." Read the original article on Business Insider 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
10-07-2025
- Business
- Yahoo
Vanguard Just Bought More SoundHound Stock. Should You?
SoundHound AI (SOUN) soared as much as 20% on Tuesday after a regulatory filing confirmed that Vanguard has been loading up on shares of the voice-enabled artificial intelligence platform this year. According to the SEC filing dated July 7, Vanguard added more than 5.29 million shares of the AI-enabled speech recognition firm in the first six months of 2025. This Analyst Just Raised His Broadcom Stock Price Target by 70%. Should You Buy AVGO Now? Why Alibaba Stock Looks Like a Screaming Buy After Falling 27% From Its 2025 Highs 2 ETFs Offering Juicy Dividend Yields of 20% or Higher Stop Missing Market Moves: Get the FREE Barchart Brief – your midday dose of stock movers, trending sectors, and actionable trade ideas, delivered right to your inbox. Sign Up Now! Including today's rally, SoundHound stock is up 100% versus its year-to-date low set in April. Vanguard – one of the most widely revered institutional investors in the world – now owns a total of 37.32 million shares of the voice AI firm. Its aggressive accumulation of SOUN shares is significant as it signals conviction in the company's long-term potential. Investors are cheering the news since Vanguard's validation could attract additional institutional interest, strengthen investor confidence, and improve overall liquidity in SoundHound stock. SOUN has been in a sharp uptrend over the past year primarily because its voice-enabled AI technology has been gaining traction across several industries, including automotive, customer care, and enterprise software. That momentum even helped the company's revenue come in a whopping 151% up on a year-over-year basis in its fiscal Q1. Despite Vanguard's vote of confidence and exceptional growth in SoundHound's revenue, caution is warranted in buying this AI stock at current levels due to valuation concerns. SOUN stock is currently going for a price-to-sales ratio of 53x – more than double the multiple on Nvidia (NVDA). That's actually why Michael Latimore – a senior Northland Securities analyst – reiterated his 'Hold' rating on SoundHound AI last week, warning of a potential downside in it to $8 per share. SOUN stock is now trading handily above analysts' mean target, which further suggests today's rally may have gone a bit too far. According to Barchart, the consensus rating on SoundHound shares remains at 'Moderate Buy' but the average price target of $11.50 indicates potential downside of nearly 14% from here. On the date of publication, Wajeeh Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on 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
Bloomberg
10-07-2025
- Business
- Bloomberg
Fuji Media Shares Dip After Company Floats Poison Pill Defense
By and Gareth Allan Save Fuji Media Holdings Inc. shares fell 4.2% after the broadcaster said it's considering measures to stop one of Japan's most prominent activist investors from gaining control of the firm. Since February, the Japanese entertainment and news conglomerate held several meetings with activist investor Yoshiaki Murakami and his daughter Aya Nomura, according to a company statement Thursday.
Globe and Mail
09-07-2025
- Business
- Globe and Mail
Motley Fool CEO: Selling Winners Too Soon Is Investors' "Most Significant Mistake"
Key Points Motley Fool CEO Tom Gardner recently said the worst mistake investors make is selling too soon. Long-term investing is a core principle of The Motley Fool's philosophy. Selling too soon could end up costing more than any losing stock investment. These 10 stocks could mint the next wave of millionaires › In a recent interview, The Motley Fool's CEO and co-founder, Tom Gardner, was asked what is the most significant mistake investors make. And it might be surprising to learn that the mistake he mentioned isn't one that involves losing money, at least in the immediate sense. "The most significant mistake that an investor makes is selling a winner too soon," Gardner said. "We don't think that because when we look at our portfolio and see a stock that's down 37%, we think 'that's the worst mistake I've made.' I put $4,000 in it, and I lost $1,000." Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More » Gardner went on to say that there's a far greater risk of loss when it comes to selling a winning investment too early: "The biggest loser, though, is the winner you sold too soon -- that is, the ability to take money, $10,000, and put it into Starbucks (NASDAQ: SBUX) and end up with $500,000." Letting your winners run, and focusing on long-term investing in general, are cornerstones of The Motley Fool's investment philosophy. Gardner pointed out that some of the market's biggest winners had times when they looked like they had plateaued, specifically mentioning a five-year period during which tech heavyweight Nvidia (NASDAQ: NVDA) went nowhere -- before rocketing higher. He's absolutely right. From 2010 through 2014, Nvidia produced just a 12% gain for investors in five years after nearly quintupling during the 2000s. Since that time, however, Nvidia has been up by 33,000%. That's not a typo. Imagine if you had sold in 2014 because you thought the growth story was over. Learning the hard way I learned this lesson firsthand, earlier in my investing career. I've written the full story several times, but the general idea is that I made a modest investment of 100 shares in Tesla (NASDAQ: TSLA) at $23, shortly after its IPO in 2011, and sold in late 2013 to help pay for my wedding. At the time, the then-new Model S had just been named "Car of the Year" by Motor Trend, and the stock had nearly tripled from the price I paid. However, I could have certainly paid for my wedding in other ways, such as with the AT&T (NYSE: T) stock I had decided to hang on to instead. And if I had held my Tesla stock, it would have been a grand slam home run. Tesla has split twice since I sold, once 5-for-1 and again at 3-for-1, so my original 100 shares would now be 1,500 shares. The current price is about $292 per share, so my $2,300 investment would be worth about $438,000 today if I had held on. A valuable investing principle Of course, this was a tough lesson to learn, but it's one that has served me well in the 12 years since. To be sure, I still sell stocks occasionally, but for the right reasons. For example, I recently sold a stock because its growth unexpectedly slowed down. On the other hand, when I sold Tesla, the company had been doing exactly what I hoped it would, or even better. The only reason I sold is that the price went up and I decided to take a profit. For this reason, I'm sitting on large gains in the Bank of America (NYSE: BAC) stock I bought just after the financial crisis, the Block (NYSE: XYZ) shares I scooped up shortly after its IPO for about $10, and the shares of real estate investment trust Ryman Hospitality Properties (NYSE: RHP) that have been nearly a ten-bagger since I bought at the depths of the COVID-19 pandemic. There are other examples as well, but the point is that I've learned to let my winners keep winning. Hopefully this helps you learn it as well without repeating my Tesla mistake. Where to invest $1,000 right now When our analyst team has a stock tip, it can pay to listen. After all, Stock Advisor's total average return is 1,048%* — a market-crushing outperformance compared to 179% for the S&P 500. They just revealed what they believe are the 10 best stocks for investors to buy right now, available when you join Stock Advisor. *Stock Advisor returns as of July 7, 2025
Wall Street Journal
09-07-2025
- Business
- Wall Street Journal
Stocks to Watch Wednesday: Freeport-McMoRan, UnitedHealth, Novo Nordisk
A Freeport-McMoRan copper mining complex in Arizona. President Trump's planned tariffs on the metal boosted Freeport's stock. (Rebecca Noble/Bloomberg News)
