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Tag: Exchange Traded Funds

  • Stocks close lower, S&P and Dow post first weekly loss in 3 weeks after historic U.S. downgrade

    Stocks close lower, S&P and Dow post first weekly loss in 3 weeks after historic U.S. downgrade

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    US. stocks closed lower Friday, capping off a volatile week that finished with losses after Fitch took away its top AAA ratings for the U.S. and government bond yields embarked on a wild ride. The Dow Jones Industrial Average
    DJIA,
    -0.43%
    fell about 150 points, or 0.4% on Friday, ending near 35,065, according to preliminary FactSet data. The S&P 500 index
    SPX,
    -0.53%
    shed 0.5% and the Nasdaq Composite Index closed 0.4% lower. For the week, the Dow posted a 1.1% decline, the S&P 500 a 2.3% drop and the Nasdaq shed 2.9% since Monday, according to FactSet. Investors were focused on July jobs data released on Friday for clues to the health of the economy and potential next moves by the Federal Reserve on rates. The 10-year Treasury yield
    TMUBMUSD10Y,
    4.045%
    swung almost 13 basis points lower on Friday to 4.06%, after briefly climbing to about 4.2% earlier in the week, according to FactSet data.

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  • Dow scores 11th day of gains, books longest win streak in six years

    Dow scores 11th day of gains, books longest win streak in six years

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    U.S. stocks closed higher, with the Dow posting its longest win streak in over six years, according to Dow Jones Market Data. The Dow Jones Industrial Average
    DJIA,
    +0.52%
    gained about 184 points, or 0.5%, ending near 35,411, according to preliminary FactSet data. With 11 straight sessions of gains, it was the blue-chip gauge’s longest streak of win since Feb. 27, 2017, according to Dow Jones Market Data. The S&P 500 index
    SPX,
    +0.40%
    advanced 0.4%, with the energy sector leading the way higher, and the Nasdaq Composite Index
    COMP,
    +0.19%
    ended up 0.2%. Stocks have been charging higher in 2023 despite the dramatic pace of rate hikes from the Federal Reserve since last year. Focus is on Wednesday’s Fed rate decision, with U.S. central bankers expected to raise rates by another 25 basis points to a 5.25%-5.5% range, potentially marking the last in this cycle as its inflation fight appears to be pay off. Energy prices rose Monday, with U.S. West Texas Intermediate crude for September
    CL00,
    +0.13%
    delivery ending at $78.74 a barrel, the highest for a front-month contract in three months, according to Dow Jones Market Data.

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  • ‘Oppenheimer’ gives stock investors another reason to be bullish about nuclear energy

    ‘Oppenheimer’ gives stock investors another reason to be bullish about nuclear energy

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    One of the hottest movies of the summer is the staggeringly good biopic “Oppenheimer,” about the man who oversaw the frantic race to develop the atomic bomb during World War II. 

    The atom bomb dropped on Hiroshima, Japan on Aug 6, 1945 was a fission-style device. This also happens to be the same basic physics behind nuclear reactors that are in use today. It’s a reminder that technology can be, at its essence, agnostic: Whether it is used for malevolent or benevolent purposes (in nuclear fission’s instance, an instrument of death or clean, carbon-free electricity) depends upon the intent of the user. 

    Fission reactors generate about 10% of the world’s electricity today. The United States gets even more of its electricity this way, about a fifth.

    These percentages are likely to rise as global demand for electricity — and concerns about global warming and climate change — rise. This will present opportunities for long-term oriented investors. The lion’s share of this demand — about 70%, says the Paris-based International Energy Agency (IEA), will come from India, which the United Nations says is now the world’s most populous country, China, and Southeast Asia. Put another way, “the world’s growing demand for electricity is set to accelerate, adding more than double Japan’s current electricity consumption over the next three years,” says Fatih Birol, the IEA’s executive director.

    While fossil fuels remain the dominant source of electricity generation worldwide — the Central Intelligence Agency estimates that it provides about 70% of America’s electricity, 71% of India’s and 62% of China’s, for example—the IEA report says future demand will be met almost exclusively from two sources: renewables and nuclear power. “We are close to a tipping point for power sector emissions,” the IEA says. “Governments now need to enable low-emissions sources to grow even faster and drive down emissions so that the world can ensure secure electricity supplies while reaching climate goals.”

    “ The Biden administration is a big booster of nuclear energy. ”

    It’s helpful that the Biden administration is a big booster of nuclear energy, which the White House sees as an integral part of its broader effort to move the U.S. economy away from fossil fuels. The Department of Energy says that the country’s 93 reactors generate more than half of America’s carbon-free electricity. But price pressures from wind, solar and natural gas (which the feds call “relatively clean” even though it emits about 60% of coal’s carbon levels) have putseveral reactors out of business in recent years. 

    The bipartisan infrastructure bill that Biden signed into law in November 2021 includes $6 billion, spread out over several years, for the so-called Civil Nuclear Credit Program, designed to keep reactors — and the high-paying jobs that come with them — running. If a plant were to close, it would “result in an increase in air pollutants because other types of power plants with higher air pollutants typically fill the void left by nuclear facilities,” the administration says. U.S. Energy Secretary Jennifer Granholm has said the Biden administration is “using every tool available” to get the country powered by clean energy by 2035.

    The private sector is beginning to stir. Last week, Maryland-based X-Energy said it would build up to 12 reactors in Central Washington state, for Energy Northwest, a public utility. These wouldn’t be the behemoth-type reactors we’re used to seeing, but “advanced small, nuclear reactors.” X-Energy, which is privately held,  has also been selected by Dow
    DOW,
    -1.40%
    to construct a similar facility in Texas.  

    Other companies are also rolling out new technology to meet demand. Nuclear fusion — a breakthrough in that it creates more energy than the Oppenheimer-era fission model and at a lower cost — is likely to be the basis for reactors in the years ahead; the Washington, D.C.-based Fusion Industry Association thinks the first fusion power plant could come online by 2030. After seven rounds of funding, one fusion company, Seattle-based Helion Energy, is currently valued at around $3.6 billion, and appears headed for a public offering.    

    Here too, the Biden administration is getting involved. In May, the Department of Energy announced $46 million in funding for eight other fusion companies. “We have generated energy by drawing power from the sun above us. Fusion offers the potential to create the power of the sun right here on Earth,” says Granholm.  

    There are several opportunities here for long-term investors. You can pick your way through any number of publicly held companies, including more traditional utilities, or spread your bet across the industry through a handful of exchange-traded funds. The largest of these is the Global X Uranium Fund
    URA,
    +0.78%    ,
    with about $1.6 billion in assets. It’s up about 9% year-to-date. The VanEck Uranium + Nuclear Energy Fund
    NLR,
    +0.41%
     is up almost 10% and sports a 1.8% dividend yield. These are respectable year-t0-date returns, even though they lag the S&P 500
    SPX,
    +0.32%
    (up close to 19%) by a wide margin. 

    More: Net-zero by 2050: Will it be costly to decarbonize the global economy?

    Also read: Fukushima’s disaster led to a “lost decade” for nuclear markets. Russia, low carbon goals help stage a comeback.

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  • Retail bets on zero day options are growing, but they may come at a price

    Retail bets on zero day options are growing, but they may come at a price

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    It’s a sophisticated trading strategy that’s becoming more accessible to retail investors.

    The strategy: Zero days-to-expiration options — which is essentially a one-day bet on the direction of the markets.

    And CBOE Global Markets CEO Ed Tilly is in the thick of it. His company offers them all five weekdays.

    “It’s really become attractive and garnered a lot of interest in being able to express that opinion [on the market] in the short term,” Tilley told CNBC’s “ETF Edge” earlier this week.

    Zero days-to-expiration options are contracts that expire the same day they’re traded. Tilly believes these options are appealing to investors by allowing them to invest at the shortest duration of time left in a contract.

    “At the end of the trading day, the next result of that trade is settled in cash — not physically delivered like a stock or an ETF,” he said.

    Most effective as a tool for pros?

    Simplify Asset Management also offers these zero day-to-expiration options. Michael Green, the firm’s chief strategist and portfolio manager, also notes they’ve become especially attractive to individuals.

    “About a third of [our] trades are coming from retail, and about two-thirds are coming from institutional,” he said.

    Despite growing retail interest, Green emphasizes zero days-to-expiration options may be most effective as a tool for pros.

    “We use the phrase sophisticated retail investors, and I think there’s actually a really important distinction there,” Green said. “In general, those who are buying options on a consistent basis are doing more speculation than they actually are being sophisticated in terms of a return profile. It tends to be a losing bet.”

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  • Here’s why Wall Street has fallen out of love with Tesla — for now

    Here’s why Wall Street has fallen out of love with Tesla — for now

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    Late on Wednesday, Tesla Inc.
    TSLA,
    -1.10%
    reported that quarterly sales were up 47% from a year earlier. But the stock tumbled 10% on Thursday.

    Tesla’s shares are still up 113% this year. The company is among a group of 13 in the S&P 500 that stand out with high growth expectations for sales, earnings and free cash flow through 2025.

    But less than half of analysts polled by FactSet rate Tesla a buy. Emily Bary explains what they are worried about.

    Traders have placed large short bets against Tesla and two of its rival EV makers — Rivian Automotive Inc.
    RIVN,
    -2.09%
    and Nio Inc.
    NIO,
    +2.52%    .
    Claudia Assis looks into how well those trades have been working out.

    Cody Willard explains why he remains confident that Tesla and Rivian will dominate the EV market over the long term.

    Related coverage:

    Here’s what may propel U.S. stocks for years.

    Chipotle Mexican Grill is among 14 stocks named by Michael Brush for consideration by investors looking to ride along with long-term improvement of U.S. labor productivity.


    AP

    The S&P 500
    SPX,
    +0.03%
    has returned 19% this year, following its 18% decline in 2022. On the same basis, with dividends reinvested, the benchmark index is still down 2% since the end of 2021.

    What is going on? Michael Brush believes that a high level of corporate investment in new technology and equipment is setting the stage for a long phase of earnings growth for U.S. companies. He shares four developments behind the coming productivity boom and 14 stocks expected to benefit from it.

    A signal for the stock-market’s health


    Getty Images

    The Dow Jones Industrial Average
    DJIA,
    +0.01%
    is up 6% this year. The venerable index has trailed the S&P 500, but its closing level of 35,255.18 on Thursday was only 4% shy of its record close a 36,799.65 on Jan. 4, 2022. Joseph Adinolfi explains Dow Theory, which according to technical analysts is sending a strong bullish signal for the stock market.

    Other opinions about market sentiment:

    Even if you have resisted the idea of a Roth IRA, you may soon be forced to have one

    This year if you are age 50 or older and are already maxing-out your contribution to a 401(K), 403(B) or other qualified employer-sponsored tax-deferred retirement plan at $22,500, you can make an additional “catch up” tax deductible contribution of $7,500 for a total of $30,000. But starting in 2024, the catch up contribution will no longer be tax deductible if you earn at least $145,000 a year. You can still make the contribution with after-tax money into a Roth 401(K) account that your plan administrator may already have set up for you.

    Alessandra Malito provides more details and news about employers’ efforts to delay the rule’s implementation.

    Beth Pinker writes the Fix My Portfolio column. This week she digs into Roth IRA conversions, through which you can simplify your taxes down the line.

    A hot vote in Spain

    The center of Madrid on July 15, 2023. A brutal heat wave could affect turnout for the country’s general election on July 23.


    Uncredited

    Barbara Kollmeyer reports from Spain about a highly contested election on Sunday, with controversy over the government’s policies during the pandemic, parties’ social policies and the possibility of a coalition government that might rattle financial markets.

    Meta vs. Alphabet

    Shares of Meta Platforms Inc. and Alphabet Inc. trade only slightly higher than the S&P 500 on a forward price-to-earnings bases, while Nvidia Corp., Microsoft Corp. and Apple Inc. trade much higher.


    FactSet

    Leslie Albrecht looks at Meta Platforms Inc.
    META,
    -2.73%    ,
    which is Facebook’s holding company and has a hit on its hands with the new Threads social-media platform, and Google holding company Alphabet Inc.
    GOOGL,
    +0.69%    ,
    to consider which stock is a better buy.

    Brett Arends: ‘I used to work at Nvidia. The stock I got is now half my portfolio. Should I sell?’

    The Ratings Game

    In The Ratings Game column, MarketWatch reporters track analysts’ thoughts about various stocks. Here’s a sampling of this week’s coverage:

    You don’t know every bad factor causing air travel to be nothing but harassment

    Getting there is half the fun.


    Getty Images

    The U.S. flying scene — from shortages of equipment and labor (and runways) to ill-staffed air-traffic control towers — is a well-known nightmare for U.S. travelers. But there is more to the story. Jeremy Binckes looks into other factors that may surprise you and cause great inconvenience this summer.

    The Federal Reserve is expected to raise interest rates again next week

    The Federal Open Market Committee will meet next Tuesday and Wednesday, to be immediately followed by a policy announcement. Economists expect the central to raise the federal-funds rate by another quarter point. The question is whether or not this will end the Fed’s inflation-fighting rate cycle.

    More coverage of the Fed:

    How much would you pay for 100% downside protection in the stock market?


    MarketWatch illustration/iStockphoto

    Over the past 30 years, the SPDR S&P 500 ETF Trust
    SPY,

    has returned 1,650%, for an average annual return of 10%, with dividends reinvested, according to FactSet. But it hasn’t been a smooth ride. The ETF, which tracks the benchmark S&P 500, fell 18% last year and 37% during 2008, for example. And there have been even larger declines if the analysis isn’t confined to calendar years.

    But can you ride through market declines? Many studies have shown that most investors who try to time the market sell after a decline has started and buy back in well after a recovery is under way, which means their long-term performance can suffer significantly.

    In this week’s ETF Wrap column (and emailed newsletter), Isabel Wang describes a new buffered fund that can give you 100% downside protection over a two-year period, in return for a cap on your potential gains in the stock market. Here’s the price you would pay for the protection.

    The World Cup games have started

    Hannah Wilkinson scored the home team’s first goal against Norway during the first World Cup game in Auckland, New Zealand, on July 20.


    Getty Images

    The Women’s World Cup began Thursday with an upset victory by New Zealand over Norway.

    James Rogers reports on what is expected to be a much easier environment for FIFA and corporate sponsors than that of last year’s Men’s World Cup in Qatar.

    U.S. Soccer Federation President Cindy Parlow Cone participated in MarketWatch’s Best New Ideas in Money podcast and spoke about the long-term effort to achieve equal treatment for women soccer players.

    More coverage of the World Cup:

    Want more from MarketWatch? Sign up for this and other newsletters to get the latest news and advice on personal finance and investing.

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  • Cathie Wood’s ARK funds dump $26 million more in Coinbase stock, shed $13 million more of Tesla shares

    Cathie Wood’s ARK funds dump $26 million more in Coinbase stock, shed $13 million more of Tesla shares

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    Funds associated with Cathie Wood’s ARK Investment continued to cull shares of Coinbase Global Inc. and Tesla Inc. on Monday, according to recent trade disclosures.

    The ARK Fintech Innovation ETF
    ARKF,
    +1.58%
    dumped 76,788 Coinbase shares
    COIN,
    +0.23%
    on the day, while the ARK Innovation ETF
    ARKK,
    +2.29%
    sold 127,266 and the ARK Next Generation Internet ETF
    ARKW,
    +2.23%
    sold 44,784 shares.

    Those were worth $26.3 million based on Coinbase’s Monday closing price of $105.55, and the sales follow ARK’s move to dump about $50 million in Coinbase’s stock Friday.

    Coinbase represents 0.78% of the Fintech Innovation ETF, along with 0.15% of the Innovation ETF and 0.30% of the Next Generation Internet ETF. ARK disclosed the transactions and weightings in the daily trade notifications it posts to its website.

    Read: Coinbase’s spectacular stock surge after Ripple ruling sparks fierce debate

    Meanwhile, the ARK Innovation ETF shed 38,329 Tesla shares
    TSLA,
    +3.20%
    on Monday, while the ARK Next Generation Internet ETF sold 6,855. Those shares were worth $13.1 million based on Tesla’s Monday closing level of $290.38. Tesla represents about 0.12% of both funds as they continue to unload shares.

    Don’t miss: Tesla is looking at its best sales quarter ever

    ARK scooped up 455 shares of Meta Platforms Inc.
    META,
    +0.57%
    within its Next Generation Internet ETF and bought up 3,729 shares within the ARK Innovation ETF. That amounted to $1.3 million worth of stock based on Meta’s $310.62 Monday close.

    Two ARK funds bought a combined $790 million in Robinhood Markets Inc.’s stock
    HOOD,
    +0.89%    ,
    with the fintech fund scooping up 25,641 shares and the Next Generation Internet ETF buying 37,630 shares. ARK added 4,608 shares of SoFi Technologies Inc.
    SOFI,
    +4.41%
    to the fintech fund, worth $43,683 based on Monday’s close.

    See also: SoFi’s stock catches another downgrade as analyst says it ‘needs to be valued more like a bank’

    ARK was also active in shares of Twilio Inc.
    TWLO,
    -0.63%    ,
    buying 15,702 within the Fintech Innovation ETF, 133,499 within the Innovation ETF and 22,748 within the Next Generation Internet ETF. That amounted to $11.4 million in Twilio’s stock based on Monday’s $66.47 closing price.

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  • Dow scores 6th day of wins to start busy week for earnings

    Dow scores 6th day of wins to start busy week for earnings

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    U.S. stocks finished at new highs for the year on Monday to kick off a busy week for corporate earnings, with the Nasdaq leading the way up. The Dow Jones Industrial Average
    DJIA,
    +0.22%
    rose about 76 points, or 0.2%, ending near 34,585, based on preliminary FactSet data. The S&P 500 index
    SPX,
    +0.39%
    gained 0.4% and the Nasdaq Composite Index
    COMP,
    +0.93%
    closed up 0.9%. That was the Dow’s sixth straight day of wins and marked the highest close since April 2022 for all three major stock indexes, according to Dow Jones Market Data. Equities have rallied as the U.S. economy remains resilient in the face of sharply higher interest rates, keeping investors hopeful about a soft landing, instead of a recession. Treasury Secretary Janet Yellen said on Monday that she doesn’t anticipate a U.S. recession, in an interview with Bloomberg television. After several big banks reported on Friday, second-quarter earnings results continue with Tesla,
    TSLA,
    +3.20%
    Morgan Stanley
    MS,
    +0.69%    ,
    Goldman Sachs
    GS,
    +0.31%    ,
    Netflix
    NFLX,
    +1.84%
    and more on deck.

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  • Gold should be dead, but somehow it’s still adding value

    Gold should be dead, but somehow it’s still adding value

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    Why isn’t gold dead yet?

    It hasn’t served a vital economic function since the government stopped treating it as money back in 1971. Actually, you could argue it stopped being necessary long before that.

    Yes, some people prefer it in jewelry. It is used in some technological equipment, and sometimes, still, in dentistry. But so what? According to authoritative data from the World Gold Council, even all those uses only account for about half of the world’s supply each year. Logically, this should mean that there is a gigantic glut of gold and that its price would be in free fall.

    But it isn’t. Gold is beating U.S. stocks and bonds this month. And this isn’t even a rarity. I’ve run some numbers and have found a couple of things that could be very important to retirees, and for all of us suckers saving for retirement.

    Even though, according to traditional financial theory, they really make no sense at all.

    Don’t miss: Gold headed for best week since March after U.S. inflation reports

    Also see: Why gold will beat the stock market in the coming weeks

    The first thing is that over the past century including some gold in your portfolio alongside stocks and bonds has genuinely added value. It has produced higher average returns, less volatility and fewer of those disastrous “lost decades” where your portfolio ended up whistling Dixie.

    The second thing is that this peculiarity has been showing no signs of letting up in recent years or decades — even though, if anything, gold makes even less sense today than it used to.

    Let me explain.

    As usual, I’ve tapped the excellent database maintained by the NYU Stern School of Business, which tracks asset values going back to 1928.

    Over that period, a conventional so-called balanced portfolio invested 60% in the S&P 500
    SPY,
    -0.06%
    index of large-company stocks and 40% in U.S. 10-year Treasury bonds
    TMUBMUSD10Y,
    3.832%
    has generated an average return of 4.9% a year in “real” terms, meaning above inflation.

    A portfolio that’s 60% invested in the S&P 500, 30% in the bonds and 10% in gold
    GC00,
    -0.26%
    earned a slightly higher average, 5.1% a year in real terms. But the volatility was lower: The portfolio that included the gold had a lower standard deviation of returns, and a much higher “median” return, meaning the middlemost return if you ranked all the years from best to worst. The portfolio including gold beat the traditional one by five full percentage points in total over the typical 10-year period, and failed to keep up with inflation for 10 years on only five occasions — half as often as the portfolio consisting exclusively of stocks and bonds.

    Nor is this just about olden times. The portfolio including 10% gold has beaten the traditional 60/40 by an average of 0.4 percentage point a year since President Richard Nixon finally killed the gold standard in 1971. And it has beaten the traditional portfolio by the same amount, an average of four-tenths of a percentage point, so far this millennium. (The 60/40 portfolio has done better if you start measuring only in 1980, as that ignores the golden 1970s but includes the long bear market for gold of the 1980s and 1990s.)

    And gold has added value in five of the last seven years (while in the other two it was effectively a tie).

    It’s not so much that gold is a great long-term investment on its own. It’s that gold has seemed to shine when others, specifically stocks and bonds, have failed. And it still does. It held up during the crash of 1929-32. But it also held up during the crash in 2002. And in 2008. And 2020.

    A financial expert told me this was “hindsight bias.” But so is most financial analysis.

    When your financial adviser tells you what you might reasonably expect from large stocks, small stocks, international stocks, real estate and so forth in the decades ahead, he or she is basing that on history. (In some cases this has been downright hilarious, as when advisers said you should still expect “average” historical returns of 5% a year from Treasurys, even when they had only a 2% yield.)

    I’m danged if I know why. But so far this year, once again, you’ve been better off in a portfolio of 60% stocks, 30% bonds and 10% gold than in just 60% stocks and 40% bonds. Make of it what you will.

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  • Worried that stocks are too expensive? This value approach can highlight bargains.

    Worried that stocks are too expensive? This value approach can highlight bargains.

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    At a time when many investors seem euphoric, others are warning that stock valuations have once again turned frothy. It may pay to take a look back at valuation and performance and consider your own risk tolerance.

    A value-based approach that offers lower volatility and good long-term returns can be expected to be less flashy than one focused on the hottest technology stocks. But depending on how much it bothers you when the stock market gyrates, it may be a better way for you to invest. Lower volatility might help you to avoid the type of emotional reaction that can lead to selling into a declining market or attempting to time the market, both of which tend to be losing strategies.

    Aaron Dunn is a co-head of the value equity team at Eaton Vance, which is based in Boston and is a unit of Morgan Stanley. During an interview, he explained how he and Brad Galko, who co-heads the team, select stocks for the Eaton Vance Focused Value Opportunities Fund. The fund’s performance benchmark is the Russell 1000 Value Index
    RLV,
    +1.08%    .

    First, let’s take a broad look at how aggregate forward price-to-earnings ratios have moved for exchange-traded funds tracking several broad indexes over the past 10 years:


    FactSet

    The valuations are lower than their 2020 peaks. But for all but one, the valuations still appear to be high when compared with their 10-year averages:

    ETF

    		 Ticker

    		 Current forward P/E

    		 10-year average forward P/E

    		 Current valuation to 10-year average
    SPDR S&P 500 ETF Trust

    		 SPY,
    +0.64%         		19.06

    		 15.93

    		 120%
    iShares Russell 1000 ETF

    		 IWB,
    +0.80%         		18.94

    		 16.02

    		 118%
    iShares Russell 1000 Value ETF

    		 IWD,
    +1.07%         		14.33

    		 13.94

    		 103%
    iShares Russell 1000 Growth ETF

    		 IWF,
    +0.50%         		26.63

    		 19.00

    		 140%
    Source: FactSet

    All of the listed ETFs listed here are trading well above their 10-year average P/E valuations except the iShares Russell 1000 Value ETF, which is only slightly higher. These numbers back the notion that the broad market is expensive and that a value approach may be more reasonable. It is also worth keeping in mind that during 2022, when the SPDR S&P 500 ETF Trust
    SPY,
    +0.64%
    declined 18.2% and the iShares Russell 1000 ETF
    IWB,
    +0.80%
    fell 19.2%, the iShares Russell 1000 Value ETF
    IWD,
    +1.07%
    pulled back 7.7% and the Eaton Vance Focused Value Opportunity Fund’s Class I shares were down only 3.3%, all with dividends reinvested.

    If we look at 10-year total returns, the nonvalue indexes, so heavily weighted to the largest technology-oriented companies, have been excellent performers for investors who could remain committed through thick and thin:


    FactSet

    Fund

    		 Ticker

    		 3-year average annual return

    		 5-year average annual return

    		 10-year average annual return
    SPDR S&P 500 ETF Trust

    		 SPY,
    +0.64%         		13.2%

    		 11.4%

    		 12.3%
    iShares Russell 1000 ETF

    		 IWB,
    +0.80%         		12.5%

    		 11.0%

    		 12.1%
    iShares Russell 1000 Growth ETF

    		 IWF,
    +0.50%         		11.2%

    		 14.0%

    		 15.0%
    iShares Russell 1000 Value ETF

    		 IWD,
    +1.07%         		13.7%

    		 7.3%

    		 8.7%
    Eaton Vance Value Opportunities Fund – Class I

    		 EIFVX,
    +0.92%         		14.8%

    		 8.7%

    		 9.7%
    Source: FactSet

    For five and 10 years, the growth-oriented approaches have shined. But for three years, which includes the 2022 disruption, the Eaton Vance Value Opportunities Fund has fared best, even outperforming its benchmark.

    A selective approach to value

    The Eaton Vance Focused Value Opportunity Fund’s Class I
    EIFVX,
    +0.92%
    shares are rated four stars (out of five) within Morningstar’s Large Value fund category. The fund’s Class A
    EAFVX,
    +0.93%
    shares are rated three stars. The difference is that the Class I shares, which are typically distributed through investment advisers, have annual expenses of 0.74% of assets under management, while the Class A shares have an expense ratio of 0.99%. You can purchase Class I shares directly through brokerage platforms for a $50 fee.

    Dunn said that when selecting stocks for the fund, he and Galko take a bottom-up approach to identify quality companies. The want to see high returns on invested capital (ROIC) over the long term, as well as a “good competitive position” for a company and a strong management team.

    They also prefer companies with low debt. “We do not want to buy overlevered companies and be in a situation where we are diluting through equity raises and putting capital at risk,” he said.

    Dunn added that he and Galko look closely at free cash flow generation. A company’s free cash flow is its remaining cash flow after capital expenditures. This is money that can be used to fund expansion, acquisitions, dividend increases or share buybacks, or for other corporate purposes.

    “Philosophically, what this results in is that we hold up well in markets such as last year’s. And we find upside in stocks trading below intrinsic value,” he said.

    “We focus on finding ideas where there is a good skew for upside relative to downside,” he added.

    According to Morningstar, the fund’s active share when compared with IWD is high, at 91.45%. Active share is a measure of how much an actively managed fund differs in investment exposure from its benchmark index. If you are paying more for active management than you would to invest in an index fund, active share is something to consider. If it is low, you might be overpaying for a “closet indexer.” You can read about how Morningstar assesses active shares here.

    The fund is concentrated, typically holding between 25 and 45 companies.

    According to Morningstar’s most recent data, these were the fund’s top 10 holdings (out of 28 stocks) as of May 31:

    Company

    		 Ticker

    		 % of Eaton Vance Focused Value Opportunity Fund

    		 Forward P/E

    		 2023 total return
    Alphabet Inc. Class A

    		 GOOGL,
    +0.59%         		5.0%

    		 19.6

    		 32%
    Micron Technology Inc.

    		 MU,
    +1.79%         		4.8%

    		 N/A

    		 25%
    American International Group Inc.

    		 AIG,
    +1.15%         		4.3%

    		 8.1

    		 -7%
    Reinsurance Group of America Inc.

    		 RGA,
    -0.34%         		4.2%

    		 8.0

    		 1%
    Bristol Myers Squibb Co.

    		 BMY,
    +0.50%         		4.1%

    		 7.7

    		 -11%
    Wells Fargo & Co.

    		 WFC,
    +0.99%         		4.0%

    		 8.9

    		 4%
    ConocoPhillips

    		 COP,
    +2.96%         		4.0%

    		 10.5

    		 -10%
    Constellation Brands Inc. Class A

    		 STZ,
    +0.30%         		3.9%

    		 20.4

    		 9%
    NextEra Energy Inc.

    		 NEE,
    +0.67%         		3.8%

    		 21.9

    		 -13%
    Charles Schwab Corp.

    		 SCHW,
    -0.43%         		3.8%

    		 16.0

    		 -30%
    Source: FactSet

    Click the tickers for more about each company, fund or index.

    Click here for Tomi Kilgore’s detailed guide to the wealth of information available for free on the MarketWatch quote page.

    There is no forward price-to-earnings ratio for Micron Technology Inc.
    MU,
    +1.79%    ,
    because the company’s combined EPS for the next 12 months are expected to be negative.

    Micron is a company in transition, caught up in diplomatic conflict between the U.S. and China, whose government directed some manufacturers in May to stop purchasing memory chips made by the company. Then again, in June, Micron highlighted its “commitment to China” when announcing a new investment in its plant in Xi’an.

    Read: Micron recovery debated by analysts as bottom is called in memory-chip market

    Dunn said downside for Micron’s stock was “mitigated” because of the company’s relatively low debt. He also said that as companies continue to adopt more cloud services and deploy artificial-intelligence technology, demand for memory chips will increase.

    While there is no current forward P/E for Micron, the stock always trades at low valuations relative to most other large tech companies. Dunn touted Micron’s strong cash flow and said the stock was “underappreciated” and remained “an interesting play on cloud and AI.”

    While it is not among the top 10 holdings listed above, Dunn highlighted Dollar Tree Inc.
    DLTR,
    +1.80%
    as an example of the type of value stock he favors. The company “was not well run” following its acquisition of Family Dollar in 2015. But he has been impressed with its more recent turnaround efforts, including improvements in how products are shipped to stores, better efficiency and “a lot of work going on with culture, how they operate, how they treat employees [and] adding some shelf space to move more product.”

    It is interesting to see NextEra Energy Inc.
    NEE,
    +0.67%
    among the fund’s largest holdings. This has been quite a strong grower over the past 10 years, with a total return of 346% as the owner of Florida Power & Light has grown along with its customer base and has become a leader in the build-out of solar-power generation.

    Dunn said the company is “still growing in the mid-single digits. For a utility company, that is a strong profile.”

    When discussing Alphabet Inc.
    GOOGL,
    +0.59%    ,
    the fund’s largest holding as of May 31, Dunn said that “it is really an advertising business with other businesses around it” and that its P/E valuation was “not extremely taxing.” He said Alphabet had been “less aggressive with cost cutting” than other technology giants and added that the company’s “targeted search” through Google and other properties, such as YouTube, “probably provides a better return on investment than broadcast advertising, and that really is the key.”

    Don’t miss: This stock investing strategy has blown away the S&P 500. Here’s a way to refine it for quality.

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  • Commodities Sizzled, Then Fizzled. What’s Next. 

    Commodities Sizzled, Then Fizzled. What’s Next. 

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    The Commodity Rally Has Paused. What’s Next for Oil, Copper, and Producers’ Stocks.

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  • EV stocks get a broad boost after Tesla, Rivian, Nio report upbeat deliveries data

    EV stocks get a broad boost after Tesla, Rivian, Nio report upbeat deliveries data

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    Shares of electric vehicle makers got a broad boost Monday, after upbeat delivery and production data from a host of companies, including industry leader Tesla Inc. and those based in China.

    The Global X Autonomous and Electric Vehicles exchange-traded fund
    DRIV,
    +1.08%
    jumped as much as 1.7% intraday, before paring gains to close up 1.1%. It has climbed 5.7% amid a five-day win streak. The ETF outperformed the broader stock market by a wide margin, as the S&P 500 index
    SPX,
    +0.12%
    inched up 0.1% and the Nasdaq Composite
    COMP,
    +0.21%
    edged up 0.2%.

    The ETF’s most-active component was Tesla’s stock
    TSLA,
    +6.90%    ,
    which climbed 6.9% to $279.82, the highest close since Sept. 28, 2022. It has run up 16.1% amid a five-day win streak.

    The rally comes after Tesla revealed over the weekend a blowout deliveries report, in which the EV leader said it delivered a record 466,000 vehicles in the most recent quarter, well above expectations of 449,000.

    The ETF’s second-most active member was Rivian Automotive Inc.’s stock
    RIVN,
    +17.41%    ,
    which shot up 17.4% to its highest close since Feb. 17, and rocketed 45.4% amid a five-day win streak.

    The company reported second-quarter EV production that was more than triple that of a year ago, and deliveries that nearly tripled.

    Nio Inc.’s U.S.-listed stock
    NIO,
    +3.51%
    rallied 3.5% to $10.03, the first close above the $10 mark since March 31, after the Shanghai-based EV maker reported June deliveries that jumped 74% from May, but were down 17.4% from a year ago.

    Among its China-based peers, the U.S.-listed shares of Xpeng Inc.
    XPEV,
    +4.17%
    advanced 4.2% to the highest close since Sept. 26, 2022, of Li Auto Inc.
    LI,
    +3.42%
    hiked up 3.4% to the highest close since July 21, 2022 and of Boyd Co. Ltd.
    BYDDY,
    +3.07%
    rose 3.1%.

    Elsewhere, Lucid Group Inc. shares
    LCID,
    +7.26%
    charged 7.3% higher to a record sixth-straight gain and the highest close since May 31, as the EV sector’s rally helped offset an effective downgrade at Citi Research.

    Mullen Automotive Inc.’s stock
    MULN,
    -6.31%
    bucked the trend, as it sank 6.3% toward a record low close of 10.1 cents, even after the EV maker reported last week that it recorded revenue for the first time, and that it was in the “best financial position” in its history.

    In an interview on YouTube channel “Financial Journey,” as disclosed on Friday, Mullen Chief Executive Officer David Michery said he doesn’t believe the stock’s price reflects the true value of the company.

    He said he expects manufacturing of the Mullen One class 1 last-mile delivery cargo vans to begin in August with “sellable” vehicles available in September.

    For the Mullen Three class 3 trucks, with a gross vehicle Weight Rating (GVWR) of 11,000 pounds, Michery said manufacturing will start “right around the corner” in July, with sellable vehicles in August and September.

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  • S&P 500 scores best day in almost two weeks as tech shares march higher

    S&P 500 scores best day in almost two weeks as tech shares march higher

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    U.S. stocks jumped on Tuesday, with the S&P 500 scoring its best daily gain in almost two weeks as technology shares climbed and housing data pointed to continued resilience in the U.S. economy, despite the Federal Reserve’s sharply higher interest rates. The Dow Jones Industrial Average
    DJIA,
    +0.63%
    rose about 211 points, or 0.6%, ending near 33,926, according to preliminary FactSet data. The S&P 500 index
    SPX,
    +1.15%
    gained 1.1%, posting its best daily percentage gain since June 15, according to FactSet data. The Nasdaq Composite Index
    COMP,
    +1.65%
    rose 1.7%. Stocks appeared poised to resume a tech-fueled rally that has the S&P 500 up 14% on the year so far and the Nasdaq about 29.5% higher. The S&P 500’s information technology sector jumped 2% Tuesday, while Communication Services rose 1.1%. Bolstering the tone, new home sales surged 12.2% in May, while the S&P CoreLogic Case-Shiller 20-city house-price index climbed in April.

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  • Dow gives back earlier gains, stocks end lower after Russia’s brief rebellion

    Dow gives back earlier gains, stocks end lower after Russia’s brief rebellion

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    U.S. stocks closed lower Monday, after Russia on the weekend was rocked by a brief revolt from the Wagner mercenary force. The Dow Jones Industrial Average
    DJIA,
    -0.04%
    fell about 11 points, or less than 0.1%, ending near 33,715, according to preliminary FactSet data, giving up earlier gains in the final moments of trade. The S&P 500 index
    SPX,
    -0.45%
    fell 0.4%, while the Nasdaq Composite Index
    COMP,
    -1.16%
    closed down 1.2%. Stocks have been struggling to extend a recent rally driven by a handful of technology stocks that earlier in June lifted major indexes to their highest levels in more than a year. Investors and oil markets were on edge Monday after a brief mutiny in Russia over the weekend raised concerns about potential disruptions to global oil supplies. U.S. crude prices edged higher Monday, with West Texas Intermediate oil for August
    CL00,
    +0.53%

    CLQ23,
    +0.53%
    ending slightly below $70 a barrel.

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  • Cathie Wood Sold More Tesla Stock. She Might Not Be Done.

    Cathie Wood Sold More Tesla Stock. She Might Not Be Done.

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    Cathie Wood Sold More Tesla Stock. She Might Not Be Done.

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  • BlackRock is applying for a spot bitcoin ETF. Here’s why it matters to the crypto industry.

    BlackRock is applying for a spot bitcoin ETF. Here’s why it matters to the crypto industry.

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    BlackRock, the world’s largest asset manager, has filed an application for a spot bitcoin exchange-traded fund.

    There are currently no such products in the U.S. The SEC approved several bitcoin BTCUSD futures-based ETFs in the past, but has yet to greenlight anything that is backed by bitcoin itself.

    BlackRock BLK will tap Coinbase Global…

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  • Debt ceiling deal done? Here’s what’s next for bond ETF investors

    Debt ceiling deal done? Here’s what’s next for bond ETF investors

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    With an agreement on the debt ceiling easing concerns on the macro level, the aftereffects of avoiding default could pose new challenges for bond exchange-traded fund investors.

    “Rates have been lower than you would think in the Treasury bill market,” Howard Lutnick, chairman and CEO of BGC Partners, told CNBC’s Bob Pisani on “ETF Edge” on Wednesday.

    “Now [The Fed] is going to hit it with trillion dollars of sales that will make short-term Treasury rates rise,” he said. “And that will feel like an interest rate hike.”

    Lutnick explained that the strain from the Fed’s sell-off will incentivize the central bank to pause on another interest rate hike. Additionally, the trillion dollars taken out of the regional banking system and placed into money market funds added pressure on big and systemic banks, he said, increasing the Fed’s constraint.

    “The Fed is not raising [rates], don’t buy it,” Lutnick said. “They’re not raising.”

    While the effect is positive for investors worried about additional hikes, raising the debt ceiling over the next year could expedite a drain on global liquidity.

    “Low rates push people to take risk on [and] go buy stocks,” Lutnick said. “Now you have people saying, ‘Hey, maybe I should just put my money in Treasurys. I get 5% take no risk.’ And that’s money coming out of the stock market.”

    As money market yields continue to rise, Lutnick said he sees capital continuing to flow out of equities and into money market funds and Treasury bond ETFs.

    “You’re going to see the stock market go sideways, but the bond market is going to continue to draw in money and get a lot of power,” Lutnick said.

    But as investors brace for an influx of Treasury securities to enter the market, Tradeweb CEO Billy Hult stressed the importance of finding liquidity in the marketplace to get a sense of how the government bond market is functioning.

    “The most sophisticated players that live and breathe in my space are oriented toward creating ETF technology around liquidity,” Hult said in the same segment. “That market is exceptionally solid.”

    Hult explained that the incorporation of greater transparency, price efficiency and technology into fixed income funds has helped expedite the development of the bond marketplace. In turn, he said, investor interest in bonds and Treasurys will ultimately be expressed through ETFs.

    “That’s not going to change,” Hult said. It’s the easier more liquid way of expressing a view.”

    Disclaimer

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  • ‘Not just a fad’: Firm launches fund designed to capitalize on A.I. boom

    ‘Not just a fad’: Firm launches fund designed to capitalize on A.I. boom

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    A major ETF firm provider is betting the artificial intelligence boom is just starting.

    Roundhill Investments launched the Generative AI & Technology ETF (CHAT) less than 20 days ago. It’s the first-ever exchange-traded fund designed to track companies involved in generative AI and other related technologies.

    “These companies, we believe, are not just a fad. They’re powering something that could be as ubiquitous as the internet itself,” the firm’s chief strategy officer, Dave Mazza, told “ETF Edge” this week. “We’re not talking about hopes and dreams [or] some theme or fad that could happen 30 years in the future which may change the world.”

    Mazza notes the fund includes not just pure play AI companies like C3.ai but also large-cap tech companies such as Microsoft and AI chipmaker Nvidia.

    Nvidia is the fund’s top holding at 8%, according to the company website. Its shares are up almost 42% over the past two months. Since the beginning of the year, Nvidia stock has soared 169%.

    “This [AI] is an area that’s going to get a lot of attention,” said Mazza.

    His bullish forecast comes amid concerns AI is a price bubble that will pop and take down the Big Tech rally.

    In a recent interview on CNBC’s “Fast Money,” Richard Bernstein Advisors’ Dan Suzuki — a Big Tech bear since June 2021 — compared the AI rally to the dot-com bubble in the late 1990s.

    “People jump from narrative to narrative,” the firm’s deputy chief investment officer said on Wednesday. “I love the technology. I think the applications will be huge. That doesn’t mean it’s a good investment.”

    The CHAT ETF is up more than 8% since it started trading on May 18.

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  • Japan is in a ‘Goldilocks’ position, Credit Suisse says. Here’s how to play it

    Japan is in a ‘Goldilocks’ position, Credit Suisse says. Here’s how to play it

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  • Consumers are starting to fire up China’s pandemic-battered economy, two ETF experts find

    Consumers are starting to fire up China’s pandemic-battered economy, two ETF experts find

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    China’s pandemic-battered economy is starting to see consumers open their wallets wider, according to KraneShares’ Brendan Ahern.

    “We’re seeing the incremental rebound from the Chinese consumer,” the firm’s chief investment officer told “ETF Edge” this week. “[But] it’s not like turning on a light switch.”

    The National Bureau of Statistics of China reports retail sales have been increasing since last November.

    Ahern, who’s involved with the firm’s China-focused ETFs, expects quarterly earnings for Chinese companies to improve with each consecutive quarter — a forecast that may already be unfolding.

    Tech giants Baidu and Tencent beat revenue expectations for the fiscal first quarter of 2023. Alibaba, on the other hand, missed revenue estimates.

    “We’re actually hearing that for many of the companies … in the management calls, they’re speaking to how Q2 already is outpacing Q1, which outpaced Q4 of last year,” Ahern said.

    China’s reopening is also anticipated to have a positive impact on the airline industry.

    Singapore Airlines, Japan’s All Nippon Airways and Japan Airlines all noted demand from China as a factor in future earnings while reporting net profits earlier this month for the financial year ended March 2023.

    GraniteShares’ Will Rhind sees a similar growth trajectory.

    “Domestic travel [is] rebounding … but we’ve yet to see that from the international sector,” the ETF provider’s CEO said. “It will come, but maybe just not yet.”

    Rhind told CNBC in a special interview later in the week that international travel from China could start to rebound this summer following a sluggish start.

    His forecast comes as a government-backed epidemiologist said the country’s new Covid wave could infect 65 million a week by the end of next month.

    Rhind believes the recent Covid surge won’t affect the reopening’s trajectory, adding past lockdowns seen across China are “very, very much unlikely to be repeated.”

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  • Greek stocks surge after commanding victory by ruling conservatives

    Greek stocks surge after commanding victory by ruling conservatives

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    Greek stocks surged on Monday after an unexpectedly easy victory for the ruling conservative party.

    The Greek Athex Composite
    GD,
    +6.09%
    jumped 7%, following the landslide victory of the conservative party led by Prime Minister Kyriakos Mitsotakis. The U.S.-listed Global X MSCI Greece ETF
    GREK,
    +7.50%
    rose 6% in premarket action.

    Mitsotakis’s New Democracy was leading the left-leaning Syriza party by more than 20 percentage points. Even so, it doesn’t look like it will have an outright majority, though the winning party under Greek rules gets bonus seats in a second round, which is likely to be held in either late June or early July.

    From the archives (June 2012): Polarized Greece heads to the polls amid financial crisis

    The victory was unexpectedly large following a railway disaster and a wiretap scandal.

    The yield on the 10-year Greek government bond
    TMBMKGR-10Y,
    3.876%
    fell 20 basis points to 3.81%.

    Greece is on the verge of obtaining an investment-grade rating and achieved a positive primary balance — that is, a budget minus interest costs — last year.

    Thanks to the financial assistance it’s received, the weighted average maturity of Greek debt was 17.5 years, according to Greece’s public-debt management agency, making it less susceptible to the rise in European Central Bank interest rates than other countries.

    According to Goldman Sachs, the Greek debt-to-GDP ratio will fall by almost 10 percentage points in the next three years.

    Market Extra (April 2015): Charts show current version of Greek crisis nothing like 2012, so far

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