Displaying items by tag: equities

Global stock markets declined this week as investors braced for new U.S. tariffs that have heightened recession fears. The S&P 500 briefly fell into correction territory before rebounding, but it still posted its worst quarter since 2022. 

The uncertainty surrounding trade policy pushed the CBOE Volatility Index higher and drove investors toward safe-haven assets like gold, which reached a record high above $3,100 an ounce. 

Asian and European markets also struggled, with automakers hit particularly hard after Trump announced a 25% tariff on imported vehicles and parts. Meanwhile, CoreWeave's stock tumbled after its IPO, and Hong Kong’s CK Hutchison declined as a Chinese regulatory review delayed a major ports deal.

Finsum: Investors are flocking to bonds for any chance of relief, but this could be the time to buy on the bottom of the market if Trump pulls the rug on tariffs once again. 

Energy stocks have outperformed the broader market this year as investors pivot toward companies with strong cash flow and reliable dividends. Despite a slight dip in oil prices, the S&P 500 Energy Select ETF (XLE) has gained nearly 8%, while tech and consumer discretionary stocks have struggled. 

Energy equities appear more resilient to inflation and tariff concerns, with experts noting that U.S. energy exports are less likely to face retaliatory trade measures. Rising natural gas prices, which have surged over 30% in 2025, have further fueled gains for energy companies. 

Some major pipeline firms, like Plains All American and MPLX, have posted double-digit gains year to date. With Brent crude trading above $71 per barrel, analysts anticipate a gradual climb before prices dip later in the year.

Finsum: With rising inflation expectations, energy stocks could be the pathway to avoid the inflation tax or at least offset it in your portfolio. 

Value stocks are making a strong comeback in early 2025, with major names like JPMorgan Chase, IBM, and Ford surpassing earnings expectations. The Vanguard Value ETF, which has lagged behind the S&P 500 in recent years, is now up 4.8% year-to-date, outpacing the broader market’s 3.5% gain. 

A key driver has been robust earnings, as 72% of value companies have exceeded forecasts, well above the long-term median of 63%. Large banks have been standout performers, benefiting from improved investment banking revenue and lower interest rates compared to last year. 

IBM has also surged, riding the AI wave and streamlining operations, while Ford remains a deep-value play despite short-term headwinds. With a forward P/E of just 6.4 and a high dividend yield, Ford could reward investors willing to weather its challenges.

Finsum: Factor investing is very cyclical, and with interest rate uncertainty it might be time to consider value as a critical factor when making portfolio changes. 

Mid-cap stocks are tracked by multiple indexes, with the S&P Mid-Cap 400 being the most commonly referenced, alongside the Russell Midcap and Wilshire US Mid-Cap Index. These indexes serve as benchmarks for investors seeking exposure to mid-sized companies, which typically have market capitalizations between $2 billion and $10 billion, as defined by FINRA. 

For investors looking to track mid-cap performance, popular ETFs include the iShares Core S&P Mid-Cap ETF (IJH), Vanguard Mid-Cap Index ETF (VO), and iShares Russell Mid-Cap ETF (IWR). IJH follows the S&P MidCap 400 Index, holding companies like Williams Sonoma and Interactive Brokers, with a strong weighting in industrials and financials. 

Vanguard’s VO, which mirrors the CRSP US Mid Cap Index, includes firms such as Welltower and Palantir Technologies, while IWR, aligned with the Russell MidCap Index, features holdings like Applovin and Williams Inc.

Finsum: Mid-cap investments offer a middle ground between the stability of large caps and the growth potential of small caps, making them an attractive option for investors aiming to diversify their portfolios.

Mike Bailey, director of research at FBB Capital Partners, shared his outlook on large-cap stocks during an appearance on CNBC. Bailey expressed optimism about the U.S. economic outlook for 2025 and beyond, highlighting job growth and strong macroeconomic conditions as key factors. 

He emphasized that large-cap companies are better positioned than small caps to deliver consistent long-term earnings growth and exceed expectations. Three of the large-cap stocks have seen significant gains due to favorable market conditions and growth prospects. 

The selection of these stocks, all with market capitalizations exceeding $10 billion, was based on their top performance over the 30 days ending January 22, 2025.  Among the standouts are SoFi Technologies, United Airlines, and Rocket Lab, which benefited from strong earnings, strategic partnerships, and growth in innovative sectors, cementing their positions as key players in their respective industries.

Finsum: Finding large caps without technology could be the short term play with all of the tech volatility.