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On Sat, 31 Aug, 8:04 AM UTC
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[1]
Wall St Week Ahead: US stock rally broadens as investors await Fed
Paid parking in Dubai: Residents face up to Dh4,000 extra yearly costs when new rates kick in A broadening rally in US stocks is offering an encouraging signal to investors worried about concentration in technology shares, as markets await key jobs data and the Federal Reserve's expected rate cuts in September. As the market's fortunes keep rising and falling with big tech stocks such as Nvidia and Apple, investors are also putting money in less-loved value stocks and small caps, which are expected to benefit from lower interest rates. The Fed is expected to kick off a rate-cutting cycle at its monetary policy meeting on September 17 and 18. Many investors view the broadening trend, which picked up steam last month before faltering during an early August sell-off, as a healthy development in a market rally led by a cluster of giant tech names. Chipmaker Nvidia, which has benefited from bets on artificial intelligence, alone has accounted for roughly a quarter of the S&P 500's year-to-date gain of 18.4 per cent. "No matter how you slice and dice it you have seen a pretty meaningful broadening out and I think that has legs," said Liz Ann Sonders, chief investment officer at Charles Schwab. Value stocks are those of companies trading at a discount on metrics like book value or price-to-earnings and include sectors such as financials and industrials. Some investors believe rallies in these sectors and small caps could go further if the Fed cuts borrowing costs while the economy stays healthy. The market's rotation has recently accelerated, with 61 per cent of stocks in the S&P 500 outperforming the index in the past month, compared to 14 per cent outperforming over the past year, Charles Schwab data showed. Meanwhile, the so-called Magnificent Seven group of tech giants - which includes Nvidia, Tesla and Microsoft - have underperformed the other 493 stocks in the S&P 500 by 14 percentage points since the release of a weaker-than-expected US inflation report on July 11, according to an analysis by BofA Global Research. Stocks have also held up after an Nvidia forecast failed to meet lofty investor expectations earlier this week, another sign that investors may be looking beyond tech. The equal weight S&P 500 index, a proxy for the average stock, hit a fresh record this week and is up around 10.5 per cent year-to-date, narrowing its performance gap with the S&P 500. "People will sometimes take a deep breath after a nice run and look at other opportunities, but technology is still the clearest driver of growth, particularly the AI theme which is innocent until proven guilty," Alonzo said.
[2]
Wall St Week Ahead-U.S. stock rally broadens as investors await Fed
A broadening rally in U.S. stocks is offering an encouraging signal to investors worried about concentration in technology shares, as markets await key jobs data and the Federal Reserve's expected rate cuts in September. As the market's fortunes keep rising and falling with big tech stocks such as Nvidia and Apple, investors are also putting money in less-loved value stocks and small caps, which are expected to benefit from lower interest rates. The Fed is expected to kick off a rate-cutting cycle at its monetary policy meeting on Sept. 17-18. Many investors view the broadening trend, which picked up steam last month before faltering during an early August sell-off, as a healthy development in a market rally led by a cluster of giant tech names. Chipmaker Nvidia, which has benefited from bets on artificial intelligence, alone has accounted for roughly a quarter of the S&P 500's year-to-date gain of 18.4%. "No matter how you slice and dice it you have seen a pretty meaningful broadening out and I think that has legs," said Liz Ann Sonders, chief investment officer at Charles Schwab. Value stocks are those of companies trading at a discount on metrics like book value or price-to-earnings and include sectors such as financials and industrials. Some investors believe rallies in these sectors and small caps could go further if the Fed cuts borrowing costs while the economy stays healthy. The market's rotation has recently accelerated, with 61% of stocks in the S&P 500 outperforming the index in the past month, compared to 14% outperforming over the past year, Charles Schwab data showed. Meanwhile, the so-called Magnificent Seven group of tech giants - which includes Nvidia, Tesla and Microsoft - have underperformed the other 493 stocks in the S&P 500 by 14 percentage points since the release of a weaker-than-expected U.S. inflation report on July 11, according to an analysis by BofA Global Research. Stocks have also held up after an Nvidia forecast failed to meet lofty investor expectations earlier this week, another sign that investors may be looking beyond tech. The equal weight S&P 500 index, a proxy for the average stock, hit a fresh record this week and is up around 10.5% year-to-date, narrowing its performance gap with the S&P 500. "When market breadth is improving, the message is that an increasing number of stocks are rallying on expectations that economic conditions will support earnings growth and profitability," analysts at Ned David Research wrote. Value stocks that have performed well this year include General Electric and midstream energy company Targa Resources, which are up 70% and 68%, respectively. The small-cap focused Russell 2000 index, meanwhile, is up 8.5% from its lows of the month, though it has not breached its July peak. Next Friday's non-farm payrolls report could help bolster the case for a broader market rally if it shows the labor market is cooling at a steady, though not alarming pace, said David Lefkowitz, head of U.S. Equities for UBS Global Wealth Management. The jobs report "tends to be one of the more market moving releases in general, and right now it's going to get even more attention than normal." Investors are unlikely to turn their back on tech stocks, particularly if volatility gives them a chance to buy on the cheap, said Jason Alonzo, a portfolio manager with Harbor Capital. Technology stocks are expected to post above-market earnings growth over every quarter through 2025, with third-quarter earnings coming in at 15.3% compared with a 7.5% gain for the S&P 500 as a whole, according to LSEG data. "People will sometimes take a deep breath after a nice run and look at other opportunities, but technology is still the clearest driver of growth, particularly the AI theme which is innocent until proven guilty," Alonzo said.
[3]
Wall St Week Ahead-U.S. stock rally broadens as investors await Fed
A broadening rally in U.S. stocks offers an encouraging sign to investors, who are focusing beyond technology shares as markets await key jobs data and potential rate cuts from the Federal Reserve. The increased market breadth, reflecting investor interest in value stocks and small caps, signals optimism for earnings growth and profitability.A broadening rally in U.S. stocks is offering an encouraging signal to investors worried about concentration in technology shares, as markets await key jobs data and the Federal Reserve's expected rate cuts in September. As the market's fortunes keep rising and falling with big tech stocks such as Nvidia and Apple, investors are also putting money in less-loved value stocks and small caps, which are expected to benefit from lower interest rates. The Fed is expected to kick off a rate-cutting cycle at its monetary policy meeting on Sept. 17-18. Many investors view the broadening trend, which picked up steam last month before faltering during an early August sell-off, as a healthy development in a market rally led by a cluster of giant tech names. Chipmaker Nvidia, which has benefited from bets on artificial intelligence, alone has accounted for roughly a quarter of the S&P 500's year-to-date gain of 18.4%. "No matter how you slice and dice it you have seen a pretty meaningful broadening out and I think that has legs," said Liz Ann Sonders, chief investment officer at Charles Schwab. Value stocks are those of companies trading at a discount on metrics like book value or price-to-earnings and include sectors such as financials and industrials. Some investors believe rallies in these sectors and small caps could go further if the Fed cuts borrowing costs while the economy stays healthy. The market's rotation has recently accelerated, with 61% of stocks in the S&P 500 outperforming the index in the past month, compared to 14% outperforming over the past year, Charles Schwab data showed. Meanwhile, the so-called Magnificent Seven group of tech giants - which includes Nvidia, Tesla and Microsoft - have underperformed the other 493 stocks in the S&P 500 by 14 percentage points since the release of a weaker-than-expected U.S. inflation report on July 11, according to an analysis by BofA Global Research. Stocks have also held up after an Nvidia forecast failed to meet lofty investor expectations earlier this week, another sign that investors may be looking beyond tech. The equal weight S&P 500 index, a proxy for the average stock, hit a fresh record this week and is up around 10.5% year-to-date, narrowing its performance gap with the S&P 500. "When market breadth is improving, the message is that an increasing number of stocks are rallying on expectations that economic conditions will support earnings growth and profitability," analysts at Ned David Research wrote. Value stocks that have performed well this year include General Electric and midstream energy company Targa Resources, which are up 70% and 68%, respectively. The small-cap focused Russell 2000 index, meanwhile, is up 8.5% from its lows of the month, though it has not breached its July peak. Next Friday's non-farm payrolls report could help bolster the case for a broader market rally if it shows the labor market is cooling at a steady, though not alarming pace, said David Lefkowitz, head of U.S. Equities for UBS Global Wealth Management. The jobs report "tends to be one of the more market moving releases in general, and right now it's going to get even more attention than normal." Investors are unlikely to turn their back on tech stocks, particularly if volatility gives them a chance to buy on the cheap, said Jason Alonzo, a portfolio manager with Harbor Capital. Technology stocks are expected to post above-market earnings growth over every quarter through 2025, with third-quarter earnings coming in at 15.3% compared with a 7.5% gain for the S&P 500 as a whole, according to LSEG data. "People will sometimes take a deep breath after a nice run and look at other opportunities, but technology is still the clearest driver of growth, particularly the AI theme which is innocent until proven guilty," Alonzo said.
[4]
U.S. stock rally broadens as investors await Fed
NEW YORK (Reuters) - A broadening rally in U.S. stocks is offering an encouraging signal to investors worried about concentration in technology shares, as markets await key jobs data and the Federal Reserve's expected rate cuts in September. As the market's fortunes keep rising and falling with big tech stocks such as Nvidia and Apple, investors are also putting money in less-loved value stocks and small caps, which are expected to benefit from lower interest rates. The Fed is expected to kick off a rate-cutting cycle at its monetary policy meeting on Sept. 17-18. Many investors view the broadening trend, which picked up steam last month before faltering during an early August sell-off, as a healthy development in a market rally led by a cluster of giant tech names. Chipmaker Nvidia, which has benefited from bets on artificial intelligence, alone has accounted for roughly a quarter of the S&P 500's year-to-date gain of 18.4%. "No matter how you slice and dice it you have seen a pretty meaningful broadening out and I think that has legs," said Liz Ann Sonders, chief investment officer at Charles Schwab. Value stocks are those of companies trading at a discount on metrics like book value or price-to-earnings and include sectors such as financials and industrials. Some investors believe rallies in these sectors and small caps could go further if the Fed cuts borrowing costs while the economy stays healthy. The market's rotation has recently accelerated, with 61% of stocks in the S&P 500 outperforming the index in the past month, compared to 14% outperforming over the past year, Charles Schwab data showed. Meanwhile, the so-called Magnificent Seven group of tech giants - which includes Nvidia, Tesla and Microsoft - have underperformed the other 493 stocks in the S&P 500 by 14 percentage points since the release of a weaker-than-expected U.S. inflation report on July 11, according to an analysis by BofA Global Research. Stocks have also held up after an Nvidia forecast failed to meet lofty investor expectations earlier this week, another sign that investors may be looking beyond tech. The equal weight S&P 500 index, a proxy for the average stock, hit a fresh record this week and is up around 10.5% year-to-date, narrowing its performance gap with the S&P 500. "When market breadth is improving, the message is that an increasing number of stocks are rallying on expectations that economic conditions will support earnings growth and profitability," analysts at Ned David Research wrote. Value stocks that have performed well this year include General Electric and midstream energy company Targa Resources, which are up 70% and 68%, respectively. The small-cap focused Russell 2000 index, meanwhile, is up 8.5% from its lows of the month, though it has not breached its July peak. Next Friday's non-farm payrolls report could help bolster the case for a broader market rally if it shows the labor market is cooling at a steady, though not alarming pace, said David Lefkowitz, head of U.S. Equities for UBS Global Wealth Management. The jobs report "tends to be one of the more market moving releases in general, and right now it's going to get even more attention than normal." Investors are unlikely to turn their back on tech stocks, particularly if volatility gives them a chance to buy on the cheap, said Jason Alonzo, a portfolio manager with Harbor Capital. Technology stocks are expected to post above-market earnings growth over every quarter through 2025, with third-quarter earnings coming in at 15.3% compared with a 7.5% gain for the S&P 500 as a whole, according to LSEG data. "People will sometimes take a deep breath after a nice run and look at other opportunities, but technology is still the clearest driver of growth, particularly the AI theme which is innocent until proven guilty," Alonzo said. (Reporting by David Randall; Editing by Ira Iosebashvili and Richard Chang)
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The U.S. stock market rally has expanded beyond the "Magnificent Seven" mega-cap stocks, with investors eagerly anticipating the Federal Reserve's upcoming policy decision. This broader market participation has raised hopes for a more sustainable bull run.
The U.S. stock market has experienced a significant shift in recent weeks, with the rally extending beyond the dominant "Magnificent Seven" mega-cap stocks. This broader market participation has caught the attention of investors and analysts alike, sparking optimism for a more sustainable bull run 1.
The S&P 500 index has seen impressive gains, with nearly 70% of its components trading above their 50-day moving average, a stark contrast to the mere 30% observed in late October. This widespread improvement across various sectors indicates a healthier market environment 2.
Several factors have contributed to this broadening rally:
These elements have collectively bolstered investor confidence and encouraged participation across a wider range of stocks 3.
Investors are now keenly awaiting the Federal Reserve's final policy decision of the year, scheduled for December 13. While the central bank is expected to keep interest rates unchanged, market participants will be closely analyzing the Fed's commentary for insights into future monetary policy directions 4.
The S&P 500 has surged approximately 20% year-to-date, with a significant portion of these gains occurring in the past six weeks. The index recently reached its highest closing level of 2023, further fueling optimism among investors 1.
However, some analysts caution that the market may be overbought in the short term, potentially setting the stage for a pullback. Despite these concerns, many remain optimistic about the long-term prospects of the broader market rally 2.
The rally's expansion has been particularly noticeable in certain sectors:
This diversification of market leadership is seen as a positive sign by many investors, suggesting a more sustainable and balanced market environment.
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As the Federal Reserve signals potential interest rate cuts, investors are expanding their focus beyond Big Tech stocks. This shift is driving interest in small-cap stocks and previously underperforming sectors, reshaping market dynamics.
3 Sources
3 Sources
The S&P 500 and Nasdaq indices experienced significant gains, driven by a strong performance in the semiconductor sector and positive signals from the Federal Reserve regarding potential interest rate cuts.
15 Sources
15 Sources
The U.S. stock market braces for a crucial week as major tech companies report earnings and the Federal Reserve holds its policy meeting, amid concerns over high valuations and economic uncertainties.
2 Sources
2 Sources
U.S. stock futures edge higher as investors anticipate potential rate cuts and await Nvidia's earnings report. The market sentiment is cautiously optimistic, with the S&P 500 and Dow Jones Industrial Average poised for gains.
7 Sources
7 Sources
Wall Street braces for a crucial week as tech behemoths report earnings and the Federal Reserve meets, potentially shaping market direction amid economic uncertainties and AI-driven optimism.
7 Sources
7 Sources
