Investment Learning

  • October 18, 2024

ERCOT stepping in to help Texas grid prep for energy demand spike

Texas is among the states seeing the fastest-growing energy demands, with the Electric Reliability Council of Texas (ERCOT) working to expand grid operations and meet customers' electricity needs. ERCOT CEO Pablo Vegas comes on Market Domination Overtime to talk about how the council is planning to satisfy grid demands "Now we're starting to see some of these larger loads coming in faster, like the data centers," Vegas says about AI data centers' expected strain on power grids. "And what we've been doing is we've been planning for this eventuality over the last several years. We are seeing tremendous growth in renewables on the electric grid." He explains one aspect of the regulatory process that allows the Texas grid to get ahead of power consumption strains: "One of the things we do is a process that we call 'connect and manage,' where when a generator wants to come onto the grid, we do not require if there's the potential for any transmission level constraints for that generator, we don't require the whole transmission system to be upgraded before that generator can come online. A lot of other parts of the US do require that, and that's what can take so many years in other parts of the US to develop new power supply." Pablo advises other states' operators to "be nimble" on their regulatory processes and try to find "balance" in growing power supplies, maintaining reliability on said sources. To watch more expert insights and analysis on the latest market action, check out more Market Domination Overtime here. This post was written by Luke Carberry Mogan.

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  • October 18, 2024

A Mag 7 underperformance could be an opportunity for the S&P 493

Mega-cap tech stocks, which are part of the Magnificent Seven, will kick off earnings season with Tesla (TSLA) to report third quarter earnings results next week. With speculation forming around the Federal Reserve's future interest rate moves, what does this mean for small-cap (^RUT) stocks? "Regardless of the fact that we have a pretty strong economy right now, Q3 GDP looks like it's going to be above 3%. So that all plays to the small-cap rotation. Basically, in the high interest rate environment, you saw a lot of investors flock to the Mag seven names because they had size and safety," JonesTrading Chief Market Strategist Michael O'Rourke tells Seana Smith and Brad Smith. "But now that we're in this new easing cycle, you're seeing that rally broaden out and it's benefiting both small caps and mid caps," he goes on to say, outlining the core differences between the Russell 2000 and S&P 600 (^SP600). O'Rourke views the Magnificent Seven's overperformance as an opportunity for even the lowest S&P 500 (^GSPC) components to buoy the rest of the index. To watch more expert insights and analysis on the latest market action, check out more Morning Brief here. This post was written by Luke Carberry Mogan.

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  • October 18, 2024

Fed cut had 'psychological impact' on real estate: Redfin CEO

US pending home sales surged 2.5% in September, marking the largest monthly increase in over a year and a half, according to a Redfin report. Redfin (RDFN) CEO Glenn Kelman joins Wealth! to share his insights on the current housing market dynamics. The 30-year fixed mortgage rate spiked to 6.44%, rising for the third consecutive week. Kelman emphasizes homebuyers' resilience in today's market, particularly their responsiveness to rate fluctuations. "We see people trying to lock a rate on a Friday before it goes up on a Monday," he explains. The Federal Reserve's September rate decision had a psychological impact, triggering what Kelman describes as a "change in the real estate industry." While acknowledging the impact of interest rates on housing affordability, Kelman points to some positive developments. Despite elevated median mortgage rates, monthly payments have decreased by an average of $300 since April, which Kelman says is helping to keep potential buyers engaged: "so people are still staying in the game." Looking ahead to the presidential election, Kelman doesn't anticipate immediate changes to the housing sector, whether under a Trump or Harris administration. Instead, he draws a parallel to the Federal Reserve's influence: "I think many people are waiting the same way they were waiting on the Fed. When the Fed made its cut, it didn't actually affect mortgage rates, but it did affect consumer psychology, and I think when the election is over, it won't actually immediately affect inventory home prices or anything like that, but it might affect homebuyer and home seller psychology." Kelman came on Yahoo Finance in September and commented on the US housing market and policy expectations from Vice President Kamala Harris and former President Donald Trump. Here's what he had to say: One thing Redfin's CEO would like to hear Harris, Trump address America has forgotten how to build homes: Redfin CEO To watch more expert insights and analysis on the latest market action, check out more Wealth here. This post was written by Angel Smith

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  • October 18, 2024

Don't fight the Fed, but curb growth expectations: Portfolio mgr.

Market indexes (^DJI, ^IXIC, ^GSPC) are rolling strong, continuing to hit all-time highs in the fourth quarter as the Federal Reserve considers future interest rate cuts. "That should provide a little bit of a tailwind going forward. And that's really what's been boosting equities... day after day it seems like," NFJ Investment Group managing director and senior portfolio manager Burns McKinney tells Yahoo Finance. McKinney sits down with Brad Smith to talk more about the "Goldilocks-type environment" for stocks, explaining the utilities sector's (XLU) turnaround from 2023's underperformance. "As I noted, you don't want to fight the Fed. But that said, given the fact that you're looking at S&P with a price-to-earnings ratio of 23 times earnings, which over the last several decades, it's only been higher during a brief span in 2020 as well as during the Dot Com Bubble," McKinney says, adding: "And so there are a lot of aggressive assumptions baked in there. So in many ways that is priced for perfection. So what we're arguing is that, you know because the Fed does provide a tailwind. We do expect positive returns going forward, but it's really going to be you're not looking at... long bombs down the field." To watch more expert insights and analysis on the latest market action, check out more Wealth here. This post was written by Luke Carberry Mogan.

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  • October 17, 2024

Nuclear reactors an 'emerging space' to meet rising energy needs

Big Tech has been going nuclear over its AI data centers, turning to energy startups to build nuclear reactors to meet the energy demands of artificial intelligence. This ranges from Amazon (AMZN), Microsoft (MSFT), and Alphabet's Google (GOOG, GOOGL) recent agreements with providers. Canaccord Genuity Managing Director George Gianarikas joins Julie Hyman and Josh Lipton for a conversation about investing in nuclear energy adoption, starting with stocks like small modular reactor designer NuScale Power (SMR) and uranium materials company ASP Isotopes (ASPI). "There are the utilities (XLU) which are investing directly in the reactors and signing the power purchase agreements with some of the large hyperscalers. But those are more indirect ways to invest in the trend," Gianarikas tells Yahoo Finance, claiming that the US energy grid "isn't ready to deal with" surges in electricity consumption for AI. "For some of the private companies, they actually have to get something called NRC — US Nuclear Regulatory Commission — approval to actually build those reactor designs. The one company that we do cover, Nuscale ticker symbol SMR, actually has that very approval from the US Nuclear Regulatory Commission," Gianarikas says. He goes on to explain the vitality of uranium enrichment to this process, which is where ASP Isotopes comes in: "They're taking that feedstock from the miners and then enriching it, isolating the isotope that's needed for a fission reaction and then selling that to the reactor company. So there's an entire food chain here that's really important to make all this stuff happen." Kairos Power Co-Founder and CEO Mike Laufer sat down with Yahoo Finance earlier this week to elaborate on the energy startup's agreement with Google to build out small modular reactors. To watch more expert insights and analysis on the latest market action, check out more Market Domination here. This post was written by Luke Carberry Mogan.

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  • October 17, 2024

Housing affordability is getting tougher. Here's why and how.

The average rate on a 30-year fixed mortgage rose for the third week in a row to 6.44%. As housing affordability remains a key issue for Americans, Market Domination Host Julie Hyman analyzes a Bloomberg Economics chart showing the percentage of monthly income homebuyers are putting toward mortgage payments. To watch more expert insights and analysis on the latest market action, check out more Asking for a Trend here. This post was written by Melanie Riehl

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  • October 17, 2024

Investors must 'be wary' how interest rates impact this market: Strategist

The Russell 2000 (^RUT) small-cap index has reached its highest level in three years, signaling a clear shift in market dynamics. MarketGauge.com chief strategist Michele Schneider joins Yahoo Finance's Morning Brief to share her insights on this market (^DJI, ^IXIC, ^GSPC) rotation and overall outlook. Schneider attributes the broadening market to investor sentiment around interest rates, suggesting that many believe "rates at least have peaked and will actually go down." While markets are hovering near all-time highs, she cautions investors to "be wary" of future interest rate trends — noting that October is historically a volatile month for markets. "We may need a little bit more patience," Schneider told Yahoo Finance, "to really see if this is a sustainable broadening. Certainly, it is a bullish season after two years of a bull market. By the third year, it generally goes up. We're optimistic, but we're not flying into everything yet." Regarding investment opportunities, Schneider highlights retail companies like Ulta Beauty (ULTA) and e.l.f. Beauty (ELF), as well as pharmaceutical giant Novo Nordisk (NVO). She describes these stocks as relatively "cheap," potentially offering attractive entry points for investors. In the tech sector (XLK), Schneider points to ASML Holding (ASML) as a promising option, noting that investors "cannot deny that that [the tech sector] is a growing field." To watch more expert insights and analysis on the latest market action, check out more Morning Brief here. This post was written by Angel Smith

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  • October 17, 2024

Homebuilder confidence hit 4-month high in October. Here's why.

According to the latest data from the National Association of Home Builders (NAHB), confidence among home builders rose to a four-month high in October. Jim Tobin, NAHB CEO, joins Wealth! to break down the state of the housing market and how the election may impact home builders. Tobin explains that home builder confidence is up because of falling interest rates. He tells Yahoo Finance that the Federal Reserve's rate-cutting cycle "is really giving our members, and our survey members in particular, a feeling that we're on the backside of the bad news and that we are looking forward to a lower interest rate environment, certainly for mortgage rates in the future, and that the market is going to come back strong." As the election looms ahead, Tobin explains, "I travel all over the country, talk to builders and homebuyers everywhere. And there really is this kind of constriction in the market because of the political environment right now. Knowing who's going to be at the top of the economy and what kind of philosophy is going to take hold as far as the next four years, I think has really kind of put people in a bit of a pause here, even though rates have fallen." With so much uncertainty, he advises against waiting on the sidelines for Congress to act. While the Harris Campaign has promised incentives for both home buyers and builders, he explains that these plans will have to work their way through Congress, which could take a long time before coming into law. He adds that both candidates see housing — particularly supply — as a top priority. He particularly likes policies focused on supply more than on prices, like measures such as rent control. "I think anything that suppresses prices artificially and gets federal intervention into the marketplace, that scares me," he says. "I think overall, the fact that we've got both candidates talking about housing really earns them a lot of credibility in our builders' minds, and gives us opportunity that no matter who wins the white House, housing is going to be the top of their agenda," Tobin concludes. To watch more expert insights and analysis on the latest market action, check out more Wealth here. This post was written by Melanie Riehl

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