Displaying items by tag: equities

The S&P 500 fell last week, marking its weakest performance since early October as investors sold off tech stocks amid fading hopes for a December rate cut. Market volatility jumped sharply, with the CBOE Volatility Index rising roughly 14 percent and signaling heightened investor anxiety. 

Expectations for a rate cut dropped meaningfully, and concerns around inflated AI valuations added further pressure to the tech-driven market. 

In this environment, some investors are turning to volatility ETFs as tactical tools to hedge near-term uncertainty and potentially benefit from market swings. Several ETFs, including VXX, VIXY, and VIXM, offer exposure to VIX futures for those seeking short-term protection or volatility-linked opportunities.

Finsum: Rapid capital inflows into AI resemble past speculative bubbles, increasing the risk of concentrated losses if sentiment shifts.

FUTY and XLU both provide strong exposure to U.S. utilities, but FUTY stands out thanks to broader diversification, lower volatility, and more balanced subsector representation. As interest rates gradually decline and AI-driven electrification boosts long-term power demand, utilities are increasingly attractive for investors seeking stability and income. 

Both ETFs benefit from these structural trends, with similar yields and nearly identical top holdings, but FUTY’s larger roster of companies helps reduce concentration risk. While performance and valuation metrics between the two funds remain very close, FUTY’s lower standard deviations give it a slight advantage for risk-adjusted returns.

Investors should remain aware of sector risks, including interest-rate uncertainty and the heavy influence of top holdings like NextEra Energy. 

Finsum: This is a great way to get exposure to the energy AI boom.

Asian equities saw significant foreign selling in early November as investors took profits amid concerns over stretched tech valuations and the durability of the recent market rally. 

Across Taiwan, South Korea, India, Thailand, Indonesia, Vietnam, and the Philippines, foreign investors pulled a combined $10.18 billion for the week ending November 7, reversing October’s net inflows. 

South Korea and Taiwan were hit hardest, with outflows of $5.05 billion and $3.86 billion respectively, largely driven by weakness in major AI-related companies. Regional tech indices reflected this pressure, as MSCI’s Asia ex-Japan IT sector fell over 4% after massive multi-month gains. Elsewhere in the region, India saw $1.42 billion in outflows, while Indonesia and the Philippines bucked the trend with moderate inflows.

Finsum: Despite volatility, some strategists argue valuations remain justified, citing strong expected global tech earnings growth.

Markets entered 2025 on strong footing but were quickly rattled by earlier-than-expected U.S. tariff actions, delaying anticipated rate cuts and fueling volatility across equities, Treasuries, and currencies. AllianceBernstein expects moderate—not recessionary—growth in the second half, with fiscal and trade policy, Fed actions, and geopolitics serving as key macro drivers. 

Credit markets have shown resilience, and despite tighter spreads, elevated yields make high-quality issuers—particularly BB-rated bonds—attractive for income and risk management. With inflation expected to peak by the third quarter, the firm favors short-to-intermediate bond maturities to balance yield opportunities against interest-rate risk. 

Equity markets, while volatile in early 2025, have since broadened beyond U.S. tech leaders to global and value-oriented sectors, especially in Europe where banks and dividend payers stand out. 

Finsum: Multi-asset income strategies as well-positioned for this uncertain backdrop, combining yield, diversification, and adaptability amid shifting policy and market conditions.

Technology and Communication Services stocks continue to dominate markets in 2025, gaining 23% and 25% respectively—well above the S&P 500’s 15% return. Together, these sectors now account for nearly 45% of the S&P 500’s market cap, with Broadcom, NVIDIA, and Alphabet leading gains among the “Magnificent Seven.” 

Despite volatility earlier in the year due to competitive AI platforms like DeepSeek, resilient consumer demand and strong corporate profits have kept indexes at record highs. Analysts from U.S. Bank Asset Management Group note that AI and cloud computing remain major growth drivers, even as investors scrutinize valuations and capital expenditures. 

While elevated prices could leave tech stocks vulnerable to earnings slowdowns, experts see continued upside as innovation fuels productivity and structural growth. 

Finsum: Technology remains the market’s core engine, volatile yet essential for long-term investment performance.