Investment Learning

  • September 27, 2024

SMH vs. FTXL: Which Semiconductor ETF Is Better?

After a brief dip this summer, semiconductor stocks are heating up again, as mainstays in the space like Micron (MU) post blowout earnings due to strong AI-related demand. The memory chip giant reported scorching 93.3% year-over-year revenue growth, and guided to record revenue of $8.7 billion for the upcoming quarter, well above analyst expectations. Micron’s results gave a jolt to the sector and illustrate that AI demand is still strong. Investors can achieve diversified exposure to the semico

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  • September 26, 2024

These are the 3 'broad pockets of growth' for AI, expert says

A new report from Bain & Company forecasts substantial growth in the AI product market in the coming years. The firm projects that the market for AI-related hardware and software could expand by 40-50% annually, reaching approximately $990 billion by 2027. Bain & Company global technology and cloud services practice chairman David Crawford joins Market Domination to dig into the bullish projection and discuss the outlook for AI as it seeps into all corners of the market. Crawford sees three "broad pockets of growth" for AI. First, large hyperscalers building out their capabilities are generating "enormous" demand. This demand, he says, "works its way back through the supply chain and creates shortages in a spectrum of spaces." The second pocket for growth lies in enterprise adoption. Crawford explains, "We know the trends are smaller models, more specialized models, open source, etc., but likewise requires computational capability. In some cases, they're using special-purpose compute and so forth." Finally, the third area for growth will likely be seen in independent software vendors that build AI capabilities for their products and run them in their own data centers. As generative AI becomes more widely adopted, Crawford believes there will be increased interest in sovereign ownership, control, and domiciled data centers. He tells Yahoo Finance, "It's broadly perceived that AI will be quite different and that it'll control culture, access to health and welfare, things like that. And so we think that the sort of state interests will play a much bigger role in the ultimate location of where all this occurs." Watch the video above to also find out how companies are spending on AI. For more expert insight and the latest market action, click here to watch this full episode of Market Domination. This post was written by Melanie Riehl

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  • September 26, 2024

‘Keep politics out of your portfolio’: BlackRock strategist

Gargi Chaudhuri, BlackRock Americas chief investment and portfolio strategist, joins Morning Brief hosts Brad Smith and Seana Smith to discuss how investors should position themselves amid the rate-cutting cycle and ahead of the election. The strategist explains that the market “backdrop is really great, especially for those investors looking to earn income in the fixed-income market… In the belly of the curve, go into the income-generating parts of the market, such as securitized assets, such as defensive high yield, such as parts of emerging markets.” Chaudhuri notes that recent normalization in the labor market and other aspects of the economy is not a reason for investors to fret. She says, “I want investors to understand that this is normal. This isn't something that they should be worried about or scared of. They should continue to remain invested.” “We love leaning into quality call as a way of expressing that view and then broadening out to value, especially to large-cap value where we think we're going to see a little bit of performance return, especially as we go into these last three months,” she adds. Chaudhuri tells Yahoo Finance that when looking for a quality company, she watches for consistent strong earnings growth, the ability to generate ample cash flow, and low leverage. Ahead of the election, Chaudhuri tells investors, “Think about the areas of the market that will do regardless of what happens in November or January 2025… We understand that you might be nervous about the elections, but keep politics out of your portfolio.” She highlights infrastructure, manufacturing, and independent tech as opportunities for bipartisan plays. For more expert insight and the latest market action, click here to watch this full episode of Morning Brief. This post was written by Naomi Buchanan.

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  • September 25, 2024

Rate cuts will fuel an 'upswing' for these sectors: Strategist

The Dow Jones Industrial Average (^DJI) and the S&P 500 (^GSPC) have pulled back from their all-time highs, with the Dow snapping its four-day winning streak. Citi US equity strategist Drew Pettit joins Market Domination Overtime to discuss the latest movement and what investors can expect in the second half of the year. Pettit believes the Federal Reserve's interest rate cut is behind the most recent market action. He explains, "I think the Fed, and honestly heading into the Fed decision, interest rates across the curve coming down gave people more confidence to look through some potential softness in the labor market, maybe a little bit of softness in earnings macro data, even the housing data today, out the other side to say, 'Hey, the Fed isn't going to be as far behind the curve. That's OK. I can start positioning for the recovery.' And we've seen not just the secular stories work, but we've seen some of the cyclical stories start to work, at least since the mid-July interim peak." As the third quarter earnings season looms ahead, he believes the market has not reached its peak. He notes that growth stocks can "probably survive any type of weakness," while cyclicals will finally get a boost from falling interest rates. Pettit adds, "We actually think we're on an upswing for some of the parts of the market that really haven't gotten much love over the past couple of years." While tech stocks have gotten a lot of love over the last year, he expects some pressure ahead: "The growth side of the market has had really strong growth. So it becomes the problem of, let's call it, the law of large numbers. You're growing really fast. It's hard to keep that up forever. But when growth stocks see their sales decelerate, there's been points in the past where that has actually pressured their earnings." However, he believes many Tech players will be able to handle topline deceleration. Thus, Pettit encourages investors to be cautious with tech moving forward. He encourages them instead to get into overlooked areas of the market like cyclicals, consumer goods (XLP, XLY), and financials (XLF). For more expert insight and the latest market action, click here to watch this full episode of Market Domination Overtime. This post was written by Melanie Riehl

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  • September 25, 2024

Why there's 'upside' in the S&P 500 as the Fed lowers rates

The Federal Reserve kicked off its highly anticipated interest rate easing cycle last week with a 50-basis-point cut. Summit Place Financial Advisors founder and president Liz Miller joins Wealth! to break down how investors can best position their portfolios in a lower-rate environment. "So far this year, we saw the early part of the year really led by, we know, the mega-cap techs and they've held up fine. But what we're going to see now, and we've even started to see in the last week or two, is that some of these other sectors that are more interest-rate sensitive are going to start doing better, like housing and rentals (XLRE) and financials (XLF) and consumer goods (XLP, XLY) that really were struggling in the market the first part of this year," Miller tells Yahoo Finance. With the S&P 500 (^GSPC) at all-time highs, Miller notes that it is largely skewed by mega-cap tech stocks. "When we look at other sectors, they aren't making all-time highs. And our last high in the market was really December 2021," she adds. Thus, she believes that there is a lot of upside in the index as the Federal Reserve continues to cut lower interest rates. As China looks to recover its weak economy through a series of stimulus measures, Miller expects the nation's growth to impact US investments: "What's really needed is to get consumers in China to regain their confidence and start spending again. We look at luxury goods as sort of one of the easy views on what's China spending. We own a lot of multinationals, from Apple (AAPL) to Nike (NKE), that all do better when China is doing better. So we see this in small ways in a lot of US investments too." Miller views Nike as one of her top retail picks following the leadership shake-up. She calls the company "one of the most valuable brands in the world," and with the stock's decline over the last few years, investors can get it at a discount. She expects to see a "turnaround story" in Nike's fundamentals, and hopes to see new leadership return the company to its competitive position. For more expert insight and the latest market action, click here to watch this full episode of Wealth! This post was written by Melanie Riehl

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  • September 25, 2024

Rate cuts will continue to 'juice this bull market': Strategist

US stocks (^DJI,^GSPC, ^IXIC) are losing some steam after the S&P 500 notched its 41st record-high close of the year. However, Carson Group chief market strategist Ryan Detrick believes the post-rate-cut rally is here to stay. He joins Morning Brief to lay out his case. Detrick believes that the Federal Reserve should have cut interest rates before September, explaining, "Inflation is last year's problem. So we don't need interest rates over 5% right now." While the labor market is slowing, he notes that initial jobless claims hit a four-month low last week.  "So are things perfect? No. Is the economy slowing down? Yes. Are we going into a recession? No, we don't think so. And we think these rate cuts are going to continue to kind of juice this bull market, honestly help this economy going forward," he tells Yahoo Finance. He highlights that the Federal Reserve has cut rates when the S&P 500 was near all-time highs. In 1980, the Federal Reserve cut interest rates 20 times within 2% of the index's all-time high. "Are we going to have two back-to-back 20% years? It's looking like it. Will we have three? Probably not. But at the same time, double-digit returns this time into next year if the economy hangs in there, we think it's possible," Detrick argues. He adds that small- and mid-cap stocks historically outperform when the Fed kicks off its rate-cutting cycle, and believes that investors could see 20% returns this time next year. Thus, he encourages investors to have diversified portfolios and rebalance every three to six months. He explains, "Don't always chase a shiny object... We've been neutral technology most of this year. Three, four months ago, people thought we were crazy to say that. There are some really stretched valuations in technology, doesn't mean we don't like it. Again, we're neutral, but there's some other areas like financials (XLF), like industrials (XLI), small caps (^RUT), mid caps (^RUI), that are pretty cheap historically, and those areas we're overweight." With the presidential election just a month and a half away, Detrick warns that October will be a volatile month. He notes that markets do not like uncertainty, thus, it will likely stabilize after the election. He adds, "The good news for investors out there, November historically is very strong in an election year, and December is too. So if we get some rockiness in October, that's OK." For more expert insight and the latest market action, click here to watch this full episode of Morning Brief. This post was written by Melanie Riehl

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