Investment Learning

  • September 20, 2024

Analyst outlines best options market plays post-triple witching

Friday’s market close marked the end of a “triple witching” session where $5.1 trillion in stock index futures, stock index options, and stock options expire simultaneously. September’s triple witching comes the same week as the Federal Reserve kicks off its rate-cutting cycle and a rebalancing of the S&P 500 (^GSPC).  eToro US investment and options analyst Bret Kenwell joins Julie Hyman and Josh Lipton to discuss the options playbook after the big day for options traders. “Today was one of the four big expiration dates of the year when it comes to the options market, and you saw that action leading up to today's session with so much back and forth," Kenwell tells Yahoo Finance. “We had a late day pop in stocks, and a lot of that plays into the expiration, but I think what's really interesting is when you look at the seasonality in September, it tends to be pretty bad for US stocks, and when you really dial into that seasonality, you see a lot of it comes in the so-called back half of mid-month…so that leaves the door open at least to see some choppiness, some profit taking, or some outright seasonal weakness kind of going into the end of the quarter.” Kenwell says he’s expecting strength in the tech sector after “tech has sort of fallen by the wayside amid all this, you know, breadth expansion...suddenly it's gone from the favorite stocks, the leadership group to being, I think it's the fourth or fifth best performer of the year.” Kenwell says there were “a lot of put sales into some of the Magnificent Seven names or a lot of the semiconductor leaders” during downturns earlier in the month. He adds “I don't know that that's necessarily the best way for a retail investor to play. It's probably a more reasonable way to play at this point would be by either buying calls or if they wanted to reduce that cost and limit their upside a bit. Call spread would be a great way to get into it.” 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 Naomi Buchanan.

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  • September 19, 2024

Could rate cuts spur more Big Tech spending into AI?

While equities pop in Thursday's session — an almost delayed reaction to yesterday's interest rate decision by the Federal Reserve — how are tech stocks poised to operate in this new rate easing cycle? The Futurum Group Chief Market Strategist Cory Johnson sits down with the Market Domination team to cover what Fed rates mean for the tech sector as they invest more into artificial intelligence. "There is a confidence that companies have to invest money in tech and in AI in particular. They've always been spending money on tech, but spending money on AI, figuring out what data they've got, figuring out where there's value, and companies of all kinds are doing that work right now." Johnson shares his outlook on tech names outside of the Magnificent Seven. For more expert insight and the latest market action, click here to watch this full episode of Market Domination. This post was written by Luke Carberry Mogan.

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  • September 19, 2024

Take a barbell approach to Mag 7, tech stocks: Citi strategist

Tech stocks rallied after the Federal Reserve cut rates 50 basis points, with some of the Magnificent Seven names like Tesla (TSLA) and Nvidia (NVDA) leading the charge. Citi head of US equity strategy Scott Chronert joins Seana Smith and Madison Mills on Catalysts to discuss how to play the tech sector. “It's a buy the news, sell the news reaction to the Fed,” Chronert says. “The leadership this quarter has really been those areas of the market that are perceived beneficiaries of lower rates. So real estate, utilities, even the homebuilder ETFs have been hitting recent highs. In the meantime, tech is still lagging where it was last time the index was through 5,600." “Essentially what you have here… is that a bit of a profit taking on the news in those areas that have been perceived as rate sensitive. And, at the same time, a catch-up move in that mega-cap growth cohort that ultimately does benefit from lower interest rates, but has been a relative laggard thus far this quarter. All told, what you've got is an index moving higher.” Taking a look at the Magnificent 7, Chronert outlines Citi’s view on the group: “We've been arguing for the better part of this year that they're becoming more idiosyncratic in their behavior.” He explains that Nvidia, Apple (AAPL), and Microsoft (MSFT) — who control over 6% of the index — "those companies are going to be important to index price action and I think you're seeing that today. But, what we're focused on from this barbell angle is we want to be holders of those, but when you look at the rate of increase in this and forward-year earnings expectations, it's been a stair-step function for over a year now. It's beginning to decelerate.” For more expert insight and the latest market action, click here to watch this full episode of Catalysts. This post was written by Naomi Buchanan.

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  • September 19, 2024

Mortgage rates fall to their lowest level since February 2023

The average rate on a 30-year fixed mortgage has declined to 6.09%, according to the latest data from Freddie Mac. Yahoo Finance Senior Housing Reporter Claire Boston joins Market Domination to break down why mortgage rates have dropped to their lowest level since February 2023. 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 19, 2024

An end to the housing market's lock-in effect may be in sight

As the Federal Reserve has kicked off its rate easing cycle, Chase Home Lending head of refinance and home equity Nina Gidwaney joins Wealth! to discuss how home buyers and owners should be considering their mortgages. Gidwaney believes that now is a good time for homeowners to consider getting a lower mortgage rate. "If rates go down below 6%, about 4.7 million customers would become in the money for a refinance opportunity. And that's a significant amount of customers who may have bought a home in the last 2 or 3 years and are sitting on that higher rate... and could take advantage of a lower payment," she explains. The lock-in effect has put pressure on the housing market as owners with low mortgage rates are holding off on listing their homes. However, as interest rates and mortgage rates come down, Gidwaney believes the lock-in effect could break up. She tells Yahoo Finance that prospective homebuyers "will start to be willing to purchase a home and be willing to take on a higher rate. And people have to move. They have to sell their home and they have to do other things in their life. So I think it's a great time for customers to start to do that." As the Fed's rate-cutting cycle is largely already priced into mortgage rates, she advises consumers not to try to time the market when looking to buy a home. Instead, she encourages them to speak with mortgage professionals to ensure they receive the best possible rate. Home prices hit a record high in June, and with many choosing to stay in their homes for longer, Gidwaney believes that homeowners should leverage their increased equity: "With mortgage rates the lowest that they've been basically all year, it is a very good time for customers to consider taking that equity and getting a cash-out [refinance], consolidating some of their higher-interest debt, like their credit card or auto loan debt, reducing their overall credit profile. It is a very good time, also, for customers to think about getting a HELOC [home equity line of credit] and using that home equity to their advantage." 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 19, 2024

US existing home sales fall 2.5% in August

US existing home sales fell by 2.5% in the month of August, nearly double the 1.3% decline economists originally forecasted. Catalysts hosts Madison Mills and Seana Smith examine the housing data out from the National Association of Realtors (NAR), noting the 0.7% month-over-month climb in housing inventory and the anticipated impact of the Federal Reserve's interest rate-cutting cycle. For more expert insight and the latest market action, click here to watch this full episode of Catalysts. This post was written by Luke Carberry Mogan.

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